Weyerhaeuser Reports Second Quarter Results

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Jul 27, 2012, 03:01 ET

FEDERAL 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 HIGHLIGHTS	2012	2012	2011
(millions, except per share data)	1Q	2Q	2Q
Net sales from continuing operations	$1,494	$1,793	$1,610

Net earnings⁽¹⁾	$41	$84	$10
Weighted average shares outstanding, diluted	540	540	541
Earnings per diluted share ⁽¹⁾	$0.08	$0.16	$0.02

Net earnings before special items	$9	$47	$32
Earnings per diluted share before special items	$0.02	$0.09	$0.06

Net cash from operations	($60)	$267	$114
Net 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 2012	2Q 2012	Change
Net sales	$250	$262	$12
Contribution to pre-tax earnings	$70	$77	$7

2Q 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 2012	2Q 2012	Change
Net sales	$634	$776	$142
Contribution (charge) to pre-tax earnings before special items	(13)	30	$43
Pre-tax special items	—	6	6
GAAP contribution (charge) to pre-tax earnings	($13)	$36	$49

2Q 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 2012	2Q 2012	Change
Net 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 2012	2Q 2012	Change
Net sales	$137	$296	$159
Contribution (charge) to pre-tax earnings	($8)	$15	$23

2Q 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 ITEMS

Special 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 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 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 INFORMATION

Weyerhaeuser 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 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 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) 924-2058
		Media - Anthony Chavez (253) 924-7148

				Exhibit 99.2
Weyerhaeuser Company
Q2.2012 Analyst Package
Preliminary results, subject to audit
Consolidated Statement of Operations

in millions	Q1	Q2		Year-to-date
	March 31, 2012	June 30, 2012	June 30, 2011	June 30, 2012	June 30, 2011
Net sales and revenues	$ 1,494	$ 1,793	$ 1,610	$ 3,287	$ 3,032
Cost of products sold	1,290	1,516	1,343	2,806	2,520
Gross margin	204	277	267	481	512
Selling, general and administrative expenses	150	142	145	292	317
Research and development expenses	7	8	7	15	14
Charges for restructuring, closures and impairments	12	4	7	16	11
Other operating income, net	(66)	(53)	(19)	(119)	(193)
Operating income	101	176	127	277	363
Interest income and other	12	11	9	23	20
Interest expense, net of capitalized interest	(87)	(86)	(117)	(173)	(210)
Earnings from continuing operations before income taxes	26	101	19	127	173
Income taxes	15	(17)	4	(2)	(52)
Earnings from continuing operations	41	84	23	125	121
Loss from discontinued operations, net of income taxes	-	-	(13)	-	(12)
Net earnings attributable to Weyerhaeuser common shareholders	$ 41	$ 84	$ 10	$ 125	$ 109


Per Share Information

	Q1	Q2		Year-to-date
	March 31, 2012	June 30, 2012	June 30, 2011	June 30, 2012	June 30, 2011
Earnings (loss) per share attributable to Weyerhaeuser common shareholders, basic and diluted:
Continuing operations	$ 0.08	$ 0.16	$ 0.04	$ 0.23	$ 0.22
Discontinued operations	-	-	(0.02)	-	(0.02)
Net earnings per share	$ 0.08	$ 0.16	$ 0.02	$ 0.23	$ 0.20
Dividends paid per share	$ 0.15	$ 0.15	$ 0.15	$ 0.30	$ 0.30
Weighted average shares outstanding (in thousands):
Basic	537,368	537,966	538,599	537,667	537,873
Diluted	539,728	540,033	541,095	539,880	540,790
Common shares outstanding at end of period (in thousands)	537,409	537,526	538,640	537,526	538,640

Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions	Q1	Q2		Year-to-date
	March 31, 2012	June 30, 2012	June 30, 2011	June 30, 2012	June 30, 2011
Operating income	$ 101	$ 176	$ 127	$ 277	$ 363
Depreciation, depletion and amortization	113	113	118	226	239
Special items	(38)	(57)	-	(95)	(152)
Capitalized interest included in cost of products sold	3	19	7	22	12
EBITDA, excluding special items*	$ 179	$ 251	$ 252	$ 430	$ 462

Weyerhaeuser Company
Q2.2012 Analyst Package
Preliminary results, subject to audit
Consolidated Balance Sheet

in millions	March 31, 2012	June 30, 2012	December 31, 2011
	March 31, 2012	June 30, 2012	December 31, 2011
ASSETS
Forest Products:
Current assets:
Cash and cash equivalents	$ 726	$ 857	$ 950
Receivables, less allowances	503	494	490
Inventories	517	487	476
Prepaid expenses	80	86	68
Deferred tax assets	113	100	81
Total current assets	1,939	2,024	2,065
Property and equipment, net	2,829	2,770	2,901
Construction in progress	192	208	145
Timber and timberlands at cost, less depletion charged to disposals	3,970	3,963	3,978
Investments in and advances to equity affiliates	189	187	192
Goodwill	40	40	40
Other assets	442	435	444
Restricted assets held by special purpose entities	914	916	916
	10,515	10,543	10,681
Real Estate:
Cash and cash equivalents	2	4	3
Receivables, less allowances	30	38	41
Real estate in process of development and for sale	606	581	555
Land being processed for development	943	959	936
Investments in and advances to equity affiliates	19	20	21
Deferred tax assets	246	238	240
Other assets	113	89	113
Consolidated assets not owned	-	3	8
	1,959	1,932	1,917
Total assets	$ 12,474	$ 12,475	$ 12,598

LIABILITIES AND EQUITY
Forest Products:
Current liabilities:
Current maturities of long-term debt	$ 167	$ 184	$ 12
Accounts payable	343	360	336
Accrued liabilities	536	576	593
Total current liabilities	1,046	1,120	941
Long-term debt	4,026	4,005	4,181
Deferred income taxes	108	92	93
Deferred pension and other postretirement benefits	1,470	1,429	1,467
Other liabilities	407	400	408
Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities	775	778	776
	7,832	7,824	7,866
Real Estate:
Long-term debt	283	283	285
Other liabilities	154	171	172
Consolidated liabilities not owned	-	-	8
	437	454	465
Total liabilities	8,269	8,278	8,331
Equity:
Total Weyerhaeuser shareholders' interest	4,197	4,186	4,263
Noncontrolling interests	8	11	4
Total equity	4,205	4,197	4,267
Total liabilities and equity	$ 12,474	$ 12,475	$ 12,598

Weyerhaeuser Company
Q2.2012 Analyst Package
Preliminary results, subject to audit
Consolidated Statement of Cash Flows

in millions	Q1	Q2		Year-to-date
	March 31, 2012	June 30, 2012	June 30, 2011	June 30, 2012	June 30, 2011
Cash flows from operations:
Net earnings	$ 41	$ 84	$ 10	$ 125	$ 109
Noncash charges (credits) to income:
Depreciation, depletion and amortization	113	113	120	226	243
Deferred income taxes, net	(6)	13	(13)	7	26
Pension and other postretirement benefits	(28)	(30)	19	(58)	43
Share-based compensation expense	10	8	3	18	17
Charges for impairment of assets	8	4	2	12	3
Net 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)	28	35	(12)	(31)
Real estate and land	(55)	7	(32)	(48)	(34)
Prepaid expenses	(8)	(12)	(4)	(20)	(14)
Accounts payable and accrued liabilities	(56)	65	15	9	(23)
Deposits on land positions and other assets	-	22	(4)	22	(4)
Pension and postretirement contributions	(35)	(33)	(18)	(68)	(37)
Other	17	(1)	19	16	9
Net cash from operations	(60)	267	114	207	27

Cash flows from investing activities:
Property and equipment	(54)	(68)	(39)	(122)	(74)
Timberlands reforestation	(10)	(7)	(7)	(17)	(19)
Proceeds from sale of assets	6	18	3	24	196
Other	1	(1)	(10)	-	(5)
Cash from investing activities	(57)	(58)	(53)	(115)	98

Cash flows from financing activities:
Cash dividends	(81)	(80)	(80)	(161)	(161)
Change in book overdrafts	(29)	9	1	(20)	(18)
Payments on debt	(2)	(4)	(548)	(6)	(550)
Exercises of stock options	5	2	3	7	37
Other	(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 period	953	728	1,463	953	1,467
Cash and cash equivalents at end of period	$ 728	$ 861	$ 881	$ 861	$ 881
Cash paid (received) during the year for:
Interest, net of amount capitalized	$ 114	$ 54	$ 91	$ 168	$ 247
Income taxes	$ (10)	$ (5)	$ 13	$ (15)	$ 15

Weyerhaeuser Company			Total Company Statistics
Q2.2012 Analyst Package
Preliminary results, subject to audit

Special Items Included in Net Earnings

in millions	Q1	Q2		Year-to-date
	March 31, 2012	June 30, 2012	June 30, 2011	June 30, 2012	June 30, 2011
Net earnings	$ 41	$ 84	$ 10	$ 125	$ 109
Gain on sale of 82,000 acres of non-strategic timberlands	-	-	-	-	(96)
Loss on early extinguishment of debt	-	-	16	-	16
Restructuring, impairments and other charges	10	-	-	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	-	6
Net earnings before special items	$ 9	$ 47	$ 32	$ 56	$ 35

	Q1	Q2		Year-to-date
	March 31, 2012	June 30, 2012	June 30, 2011	June 30, 2012	June 30, 2011
Net earnings per diluted share	$ 0.08	$ 0.16	$ 0.02	$ 0.23	$ 0.20
Gain on sale of 82,000 acres of non-strategic timberlands	-	-	-	-	(0.18)
Loss on early extinguishment of debt	-	-	0.03	-	0.03
Restructuring, impairments and other charges	0.02	-	-	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	-	0.01
Net earnings before special items per diluted share	$ 0.02	$ 0.09	$ 0.06	$ 0.10	$ 0.06

Selected Total Company Items, Excluding Discontinued Operations

in millions	Q1	Q2		Year-to-date
	March 31, 2012	June 30, 2012	June 30, 2011	June 30, 2012	June 30, 2011
Depreciation, depletion and amortization:
Cost of products sold	$ 102	$ 103	$ 105	$ 205	$ 210
Selling, general and administrative expenses	11	10	13	21	29
Total depreciation, depletion and amortization	$ 113	$ 113	$ 118	$ 226	$ 239

Pension and postretirement costs:
Pension and postretirement costs allocated to business segments	$ 13	$ 13	$ 15	$ 26	$ 25
Pension and postretirement costs not allocated	7	7	3	14	15
Total company pension and postretirement costs	$ 20	$ 20	$ 18	$ 40	$ 40

Total 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 Company				Timberlands Segment
Q2.2012 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations

in millions		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Sales to and revenues from unaffiliated customers		$ 250	$ 262	$ 288	$ 512	$ 518
Intersegment sales		190	146	134	336	325
Total net sales and revenues		440	408	422	848	843
Cost of products sold		353	313	290	666	610
Gross margin		87	95	132	182	233
Selling, general and administrative expenses		25	23	24	48	47
Research and development expenses		4	5	4	9	8
Other operating income, net		(11)	(10)	(13)	(21)	(179)
Operating income		69	77	117	146	357
Interest income and other		1	-	1	1	2
Net contribution to earnings (see note 1)		$ 70	$ 77	$ 118	$ 147	$ 359

Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Operating income		$ 69	$ 77	$ 117	$ 146	$ 357
Depreciation, depletion and amortization		35	34	36	69	67
Special items		-	-	-	-	(152)
EBITDA, excluding special items*		$ 104	$ 111	$ 153	$ 215	$ 272


Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)

		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Gain on sale of 82,000 acres of non-strategic timberlands		$ -	$ -	$ -	$ -	$ 152

Selected Segment Items

		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Total 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 Statistics

		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Third Party Net Sales and Revenue (millions)	Logs:
	West	$ 130	$ 146	$ 152	$ 276	$ 262
	South	50	56	49	106	90
	Canada	7	2	1	9	8
	Total Logs	187	204	202	391	360
	Pay as cut timber sales	11	9	8	20	16
	Timberlands exchanges	8	7	39	15	60
	Higher and better use land sales	4	5	2	9	6
	Minerals, oil and gas	7	7	15	14	29
	Products from international operations	25	29	21	54	38
	Other products	8	1	1	9	9
	Total	$ 250	$ 262	$ 288	$ 512	$ 518
Logs Third Party Sales Realizations (per cubic meter)	West	$ 99.10	$ 94.47	$ 109.42	$ 96.59	$ 105.36
	South	$ 40.48	$ 41.15	$ 40.59	$ 40.83	$ 40.88
	Canada	$ 36.35	$ 34.66	$ 42.79	$ 36.00	$ 35.55
	International	$ 22.97	$ 23.53	$ 37.78	$ 23.26	$ 30.36
Logs Third Party Sales Volumes (cubic meters, thousands)	West	1,308	1,551	1,391	2,859	2,486
	South	1,228	1,354	1,211	2,582	2,216
	Canada	205	54	23	259	217
	International	78	82	79	160	151
	Total	2,819	3,041	2,704	5,860	5,070
Logs Fee Harvest Volumes (cubic meters, thousands)	West	1,679	1,831	1,747	3,510	3,358
	South	2,714	2,788	2,355	5,502	4,535
	International	172	161	221	333	319
	Total	4,565	4,780	4,323	9,345	8,212

Weyerhaeuser Company				Wood Products Segment
Q2.2012 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations

in millions		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Sales to and revenues from unaffiliated customers		$ 634	$ 776	$ 605	$ 1,410	$ 1,131
Intersegment sales		20	20	21	40	41
Total net sales and revenues		654	796	626	1,450	1,172
Cost of products sold		611	708	630	1,319	1,162
Gross margin		43	88	(4)	131	10
Selling, general and administrative expenses		50	50	49	100	99
Research and development expenses		1	1	1	2	2
Charges for restructuring, closures and impairments		1	2	4	3	6
Other operating costs (income), net		5	(1)	(4)	4	(9)
Operating income (loss)		(14)	36	(54)	22	(88)
Interest income and other		1	-	-	1	2
Net 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 millions		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Operating income (loss)		$ (14)	$ 36	$ (54)	$ 22	$ (88)
Depreciation, depletion and amortization		34	33	37	67	78
Special items		-	(6)	-	(6)	-
EBITDA, excluding special items*		$ 20	$ 63	$ (17)	$ 83	$ (10)


Segment Special Items Included in Net Contribution to Earnings (Pre-Tax)

		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Gain 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 Items

		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Total 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 Statistics

in millions, except for third-party sales realizations		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Structural Lumber (board feet)	Third Party Net Sales and Revenue	$ 291	$ 370	$ 290	$ 661	$ 550
	Third Party Sales Realizations	$ 311.00	$ 349.91	$ 300.84	$ 331.63	$ 307.50
	Third Party Sales Volumes	937	1,056	963	1,993	1,789
	Production Volumes	958	1,004	903	1,962	1,796
Engineered Solid Section (cubic feet)	Third Party Net Sales and Revenue	$ 65	$ 70	$ 64	$ 135	$ 117
	Third Party Sales Realizations	$ 1,830.07	$ 1,789.35	$ 2,005.03	$ 1,808.83	$ 2,014.70
	Third Party Sales Volumes	3.6	3.9	3.2	7.5	5.8
	Production Volumes	3.7	3.8	3.7	7.5	7.3
Engineered I-joists (lineal feet)	Third Party Net Sales and Revenue	$ 41	$ 49	$ 48	$ 90	$ 81
	Third Party Sales Realizations	$ 1,284.98	$ 1,210.80	$ 1,258.14	$ 1,243.80	$ 1,261.55
	Third Party Sales Volumes	32	40	38	72	64
	Production Volumes	34	37	34	71	64
Oriented Strand Board (square feet 3/8')	Third Party Net Sales and Revenue	$ 111	$ 138	$ 86	$ 249	$ 168
	Third Party Sales Realizations	$ 196.89	$ 213.97	$ 177.22	$ 205.98	$ 183.61
	Third Party Sales Volumes	565	643	484	1,208	916
	Production Volumes	601	626	518	1,227	1,012
Softwood Plywood (square feet 3/8')	Third Party Net Sales and Revenue	$ 23	$ 26	$ 15	$ 49	$ 30
	Third Party Sales Realizations	$ 309.26	$ 331.56	$ 264.54	$ 320.93	$ 260.32
	Third Party Sales Volumes	73	81	58	154	116
	Production Volumes	51	50	48	101	101

Weyerhaeuser Company				Cellulose Fibers Segment
Q2.2012 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations

in millions		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Total net sales and revenues		$ 473	$ 459	$ 526	$ 932	$ 1,032
Cost of products sold		407	404	417	811	811
Gross margin		66	55	109	121	221
Selling, general and administrative expenses		24	22	24	46	46
Research and development expenses		2	2	2	4	4
Other operating income, net		(9)	(4)	(3)	(13)	(8)
Operating income		49	35	86	84	179
Interest income and other		(1)	1	(1)	-	(2)
Net contribution to earnings (see note 1)		$ 48	$ 36	$ 85	$ 84	$ 177

Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Operating income		$ 49	$ 35	$ 86	$ 84	$ 179
Depreciation, depletion and amortization		37	36	36	73	73
EBITDA, excluding special items*		$ 86	$ 71	$ 122	$ 157	$ 252


Selected Segment Items

		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Total 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 Statistics

		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Pulp (air-dry metric tons)	Third Party Net Sales and Revenue (millions)	$ 367	$ 348	$ 409	$ 715	$ 807
	Third Party Sales Realizations	$ 818.42	$ 818.88	$ 960.04	$ 818.65	$ 935.81
	Third Party Sales Volumes (thousands)	449	425	426	874	862
	Production Volumes (thousands)	438	417	410	855	847
Liquid Packaging Board (tons)	Third Party Net Sales and Revenue (millions)	$ 83	$ 90	$ 93	$ 173	$ 178
	Third Party Sales Realizations	$ 1,181.34	$ 1,176.32	$ 1,194.46	$ 1,178.72	$ 1,171.86
	Third Party Sales Volumes (thousands)	70	76	77	146	151
	Production Volumes (thousands)	65	78	80	143	147

Weyerhaeuser Company				Real Estate Segment
Q2.2012 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations

in millions		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Total net sales and revenues		$ 137	$ 296	$ 191	$ 433	$ 351
Cost of products sold		113	248	147	361	273
Gross margin		24	48	44	72	78
Selling, general and administrative expenses		32	34	36	66	71
Charges for restructuring, closures and impairments		1	1	1	2	2
Other operating income, net		-	(1)	-	(1)	-
Operating income (loss)		(9)	14	7	5	5
Interest income and other		1	1	1	2	2
Net contribution to earnings		$ (8)	$ 15	$ 8	$ 7	$ 7

Earnings before Interest, Tax, Depreciation, Depletion and Amortization, Excluding Special Items*

in millions		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Operating income (loss)		$ (9)	$ 14	$ 7	$ 5	$ 5
Depreciation, depletion and amortization		2	3	3	5	6
Capitalized interest included in cost of products sold		3	14	6	17	10
EBITDA, excluding special items*		$ (4)	$ 31	$ 16	$ 27	$ 21


Selected Segment Items

		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Cash spent for capital expenditures		$ (1)	$ -	$ -	$ (1)	$ (1)

Segment Statistics

		Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Net sales and revenues:
Single-family housing		$ 131	$ 190	$ 180	$ 321	$ 332
Land		3	105	11	108	18
Other		3	1	-	4	1
Total net sales and revenue		$ 137	$ 296	$ 191	$ 433	$ 351
Single-family homes sold		697	764	521	1,461	1,056
Single-family homes closed		349	508	459	857	822
Single-family homes sold but not closed (backlog)		777	1,033	673	1,033	673
Single-family cancellation rate		10.1 %	15.4 %	16.2 %	12.9 %	13.9 %
Single-family buyer traffic		14,272	17,677	14,885	31,949	27,789
Single-family average price of homes closed (in thousands)		$ 376	$ 374	$ 391	$ 375	$ 404
Single-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 Company			Unallocated Items
Q2.2012 Analyst Package
Preliminary results, subject to audit

Unallocated 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 Earnings

in millions	Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Unallocated 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)	7
Elimination of intersegment profit in inventory and LIFO ⁽¹⁾	(12)	(2)	(10)	(14)	(20)
Other	30	35	(12)	65	(25)
Operating income (loss)	6	14	(29)	20	(90)
Interest income and other	10	9	8	19	16
Net contribution to earnings from continuing operations	16	23	(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 millions	Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Operating income (loss)	$ 6	$ 14	$ (29)	$ 20	$ (90)
Depreciation, depletion and amortization	5	7	6	12	15
Special items	(38)	(51)	-	(89)	-
Capitalized interest included in cost of products sold	-	5	1	5	2
EBITDA, excluding special items*	$ (27)	$ (25)	$ (22)	$ (52)	$ (73)


Unallocated Special Items Included in Net Contribution to Earnings (Pre-Tax)

	Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Gain on postretirement plan amendment	$ 52	$ 51	$ -	$ 103	$ -
Restructuring, impairments and other charges	(14)	-	-	(14)	-
Total	$ 38	$ 51	$ -	$ 89	$ -

Unallocated Selected Items

	Q1.2012	Q2.2012	Q2.2011	YTD.2012	YTD.2011
Total 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.