Weyerhaeuser Reports Second Quarter Results

- Earnings from continuing operations before special items rise nearly 65 percent compared with first quarter

- Divestiture of homebuilding business completed on July 7, 2014

News provided by

Aug 01, 2014, 03:00 ET

FEDERAL WAY, Wash., Aug. 1, 2014 /PRNewswire/ --Weyerhaeuser Company (NYSE: WY) today reported second quarter net earnings to common shareholders of $280 million, or 47 cents per diluted share, on net sales from continuing operations of $2.0 billion. This compares with net earnings of $196 million, or 35 cents per diluted share, on net sales from continuing operations of $1.9 billion for the same period last year.

Earnings for second quarter 2014 include after-tax earnings of $22 million from discontinued operations. Discontinued operations relate to Weyerhaeuser Real Estate Company (WRECO), which was combined with TRI Pointe Homes, Inc. (TRI Pointe) through a Reverse Morris Trust transaction on July 7, 2014. Second quarter results also include net after-tax gains of $24 million from special items, primarily related to a postretirement plan amendment. Excluding discontinued operations and special items, the company reported net earnings of $234 million, or 40 cents per diluted share. This compares with net earnings from continuing operations before special items of $183 million, or 33 cents per diluted share, for second quarter 2013 and $143 million, or 24 cents per diluted share, for first quarter 2014.

"The strong results for each of our businesses in the second quarter reflect our relentless focus on operational excellence," said Doyle Simons, president and chief executive officer. "Through the recent divestiture of our homebuilding business and last year's Longview Timber acquisition, we have created a focused forest products company committed to driving operational improvements and fully capitalizing on the continued measured recovery in U.S. housing markets and the overall economy.

WEYERHAEUSER FINANCIAL HIGHLIGHTS	2014	2014	2013
(millions, except per share data)	1Q	2Q	2Q
Net sales from continuing operations	$1,736	$1,964	$1,874
Net earnings attributable to Weyerhaeuser common shareholders⁽¹⁾	$183	$280	$196
Weighted average shares outstanding, diluted⁽²⁾	589	590	558
Earnings per diluted share	$0.31	$0.47	$0.35
Earnings per diluted share from continuing operations	$0.29	$0.43	$0.33
Net earnings from continuing operations before special items⁽³⁾	$143	$234	$183
Earnings per diluted share from continuing operations before special items	$0.24	$0.40	$0.33
Net change in cash and cash equivalents⁽⁴⁾	($53)	$68	$1,723
Cash and cash equivalents at end of period	$777	$845	$2,358

⁽¹⁾ Includes net earnings from discontinued operations.

⁽²⁾ Weyerhaeuser's weighted average common shares outstanding increased during the third quarter of 2013 following the issuance of common shares in conjunction with the acquisition of Longview Timber LLC.

⁽³⁾ Special items for the second quarter of 2014 include a gain on a postretirement plan amendment and restructuring charges related to the company's SG&A cost reduction initiative. First quarter included similar items as well as a gain on a non-strategic asset sale.

⁽⁴⁾ Net change in cash and equivalents excludes discontinued operations for all quarters and for the second quarter of 2013 includes $1,450 million from issuance of common and mandatory convertible preference shares related to the acquisition of Longview Timber LLC.

TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)	1Q 2014	2Q 2014	Change
Net sales	$377	$397	$20
Contribution to pre-tax earnings	$164	$170	$6

2Q 2014 Performance - Western sales volumes increased due to continued steady demand for domestic and Chinese export logs, partially offset by reduced Japanese demand. Average sales realizations for Western logs declined slightly in domestic and most export markets. Logging and road costs increased seasonally. In the South, slightly higher average log price realizations were partially offset by lower fee harvest volumes due to wet weather. Earnings from disposition of non-strategic timberlands increased by $20 million compared with the first quarter.

3Q 2014 Outlook - Weyerhaeuser anticipates significantly lower earnings from the Timberlands segment in the third quarter, primarily due to seasonality and lower earnings from disposition of non-strategic timberlands. In the West, the company expects seasonally lower sales volumes and prices for domestic and export logs. In the South, the company anticipates higher silviculture and road costs, largely offset by increased fee harvest volumes.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)	1Q 2014	2Q 2014	Change
Net sales	$898	$1,077	$179
Contribution to pre-tax earnings	$64	$102	$38

2Q 2014 Performance - Sales volumes rose seasonally across all product lines, and average selling prices for engineered wood products increased. These improvements were partially offset by lower average realizations for lumber and oriented strand board. Per unit manufacturing costs decreased compared with first quarter due to continued operational improvements and increased production volumes in lumber and engineered wood products. Earnings from engineered wood products improved significantly in the second quarter.

3Q 2014 Outlook - Weyerhaeuser expects comparable earnings from the Wood Products segment in the third quarter. The company anticipates slightly lower average realizations for lumber and oriented strand board, offset by lower Western log costs and improved price realizations for engineered wood products.

CELLULOSE FIBERS

FINANCIAL HIGHLIGHTS (millions)	1Q 2014	2Q 2014	Change
Net sales	$461	$490	$29
Contribution to pre-tax earnings	$54	$91	$37

2Q 2014 Performance - Average price realizations for pulp and liquid packaging board improved compared with the first quarter, and sales volumes increased. Mill operating performance was strong, and maintenance costs declined due to fewer scheduled annual outage days.

3Q 2014 Outlook - Weyerhaeuser plans an extended outage at its liquid packaging board facility for scheduled maintenance and capital improvements. The company also expects increased scheduled maintenance outage days within its pulp mill system. As a result, Weyerhaeuser anticipates significantly lower earnings from the Cellulose Fibers segment.

DISCONTINUED OPERATIONS

FINANCIAL HIGHLIGHTS (millions)	1Q 2014	2Q 2014	Change
Net sales	$248	$317	$69
Earnings from discontinued operations, net of tax	$10	$22	$12

On July 7, 2014, Weyerhaeuser completed the divestiture of WRECO through the combination of WRECO and TRI Pointe in a Reverse Morris Trust transaction. Discontinued Operations includes certain items previously reported in the Real Estate segment and Unallocated Items.

2Q 2014 Performance - Earnings from discontinued operations improved compared with first quarter, primarily due to a seasonal increase in home closings.

3Q 2014 Outlook - Third quarter results will include a net gain of approximately $1 billion on the divestiture of WRECO.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control nearly 7 million acres of timberlands, primarily in the U.S., and manage another 14 million acres under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood and cellulose fibers products. Our company is a real estate investment trust. In 2013, our continuing operations generated $7.3 billion in sales and employed approximately 13,000 people who serve customers worldwide. We are listed on the Dow Jones World Sustainability Index. Our common 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 August 1 to discuss second quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on August 1.

To join the conference call from within North America, dial 877-296-9413 (access code: 23990484) at least 15 minutes prior to the call. Those calling from outside North America should dial 706-679-2458 (access code: 23990484). Replays will be available for two weeks at 855-859-2056 (access code: 23990484) from within North America and at 404-537-3406 (access code: 23990484) from outside North America.

FORWARD LOOKING STATEMENTS

This news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on various assumptions and may not be accurate because of risks and uncertainties surrounding these assumptions. Factors listed below, as well as other factors, may cause actual results to differ significantly from these forward-looking statements. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on company operations or financial condition. The company will not update these forward-looking statements after the date of this news release.

Some forward-looking statements discuss the company's plans, strategies and intentions. They use words such as "expects," "may," "will," "believes," "should," "approximately," "anticipates," "estimates," and "plans." In addition, these words may use the positive or negative or other variations of those terms.

This release contains forward-looking statements regarding the company's expectations during the third quarter of 2014, including with respect to earnings, domestic and export log prices, fee harvest levels and realizations, expenses, including road and silviculture costs, dispositions of non-strategic timberlands, prices and realizations across the Wood Products product lines, log costs, maintenance time and expenses, and gains on the divestiture of the WRECO business.

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 level of competition from domestic and foreign producers;
the successful execution of internal performance plans, including restructurings and cost reduction initiatives;
raw material prices;
energy prices;
the effect of weather;
the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
transportation availability and 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.

Weyerhaeuser Company				Exhibit 99.2
Q2.2014 Analyst Package
Preliminary results, subject to audit
Consolidated Statement of Operations

in millions	Q1	Q2		Year-to-date
	March 31, 2014	June 30, 2014	June 30, 2013	June 30, 2014	June 30, 2013
Net Sales	$ 1,736	$ 1,964	$ 1,874	$ 3,700	$ 3,629
Cost of products sold	1,361	1,499	1,453	2,860	2,825
Gross margin	375	465	421	840	804
Selling expenses	28	27	31	55	64
General and administrative expenses	88	88	96	176	201
Research and development expenses	7	7	8	14	15
Charges for restructuring, closures and impairments	19	8	3	27	6
Other operating income, net	(75)	(65)	(10)	(140)	(28)
Operating income	308	400	293	708	546
Interest income and other	9	11	8	20	18
Interest expense, net of capitalized interest	(83)	(83)	(80)	(166)	(162)
Earnings from continuing operations before income taxes	234	328	221	562	402
Income taxes	(50)	(59)	(36)	(109)	(75)
Earnings from continuing operations	184	269	185	453	327
Earnings from discontinued operations, net of income taxes	10	22	13	32	15
Net earnings	194	291	198	485	342
Dividends on preference shares	(11)	(11)	(2)	(22)	(2)
Net earnings attributable to Weyerhaeuser common shareholders	$ 183	$ 280	$ 196	$ 463	$ 340

Per Share Information

	Q1	Q2		Year-to-date
	March 31, 2014	June 30, 2014	June 30, 2013	June 30, 2014	June 30, 2013
Earnings per share attributable to Weyerhaeuser common shareholders, basic:
Continuing operations	$ 0.29	$ 0.44	$ 0.33	$ 0.73	$ 0.59
Discontinued operations	0.02	0.04	0.02	0.06	0.03
Net earnings per share	$ 0.31	$ 0.48	$ 0.35	$ 0.79	$ 0.62
Earnings per share attributable to Weyerhaeuser common shareholders, diluted:
Continuing operations	$ 0.29	$ 0.43	$ 0.33	$ 0.73	$ 0.58
Discontinued operations	0.02	0.04	0.02	0.06	0.03
Net earnings per share	$ 0.31	$ 0.47	$ 0.35	$ 0.79	$ 0.61
Dividends paid per common share	$ 0.22	$ 0.22	$ 0.20	$ 0.44	$ 0.37
Weighted average shares outstanding (in thousands):
Basic	584,915	586,061	552,855	585,491	549,159
Diluted	589,312	589,766	557,588	589,542	554,301
Common shares outstanding at end of period (in thousands)	584,961	586,697	577,874	586,698	577,874

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*

in millions	Q1	Q2		Year-to-date
	March 31, 2014	June 30, 2014	June 30, 2013	June 30, 2014	June 30, 2013
Net earnings	$ 194	$ 291	$ 198	$ 485	$ 342
Earnings from discontinued operations, net of income taxes	(10)	(22)	(13)	(32)	(15)
Interest income and other	(9)	(11)	(8)	(20)	(18)
Interest expense, net of capitalized interest	83	83	80	166	162
Income taxes	50	59	36	109	75
Operating income	308	400	293	708	546
Depreciation, depletion and amortization	123	122	108	245	217
Non-operating pension and postretirement costs (credits)	(10)	(11)	10	(21)	20
Special items	(49)	(39)	—	(88)	—
Adjusted EBITDA*	$ 372	$ 472	$ 411	$ 844	$ 783
* Non-GAAP measure - see page 8 for definition.

Weyerhaeuser Company
Q2.2014 Analyst Package
Preliminary results, subject to audit
Consolidated Balance Sheet

in millions	March 31, 2014	June 30, 2014	December 31, 2013
	March 31, 2014	June 30, 2014	December 31, 2013
ASSETS
Current assets:
Cash and cash equivalents	$ 777	$ 845	$ 830
Receivables, less allowances	543	590	518
Receivables for taxes	34	37	101
Inventories	626	596	542
Prepaid expenses	101	106	117
Deferred tax assets	186	128	130
Current assets of discontinued operations	48	988	88
Total current assets	2,315	3,290	2,326
Property and equipment, net	2,596	2,599	2,689
Construction in progress	140	157	112
Timber and timberlands at cost, less depletion charged to disposals	6,574	6,571	6,580
Investments in and advances to equity affiliates	189	188	190
Goodwill	40	40	42
Deferred tax assets	1	—	5
Other assets	354	419	324
Restricted financial investments held by variable interest entities	615	615	615
Noncurrent assets of discontinued operations	1,762	1,827	1,694
Total assets	$ 14,586	$ 15,706	$ 14,577

LIABILITIES AND EQUITY
Current liabilities:
Notes payable	$ 2	$ —	$ 2
Accounts payable	365	335	343
Accrued liabilities	582	597	629
Current liabilities of discontinued operations	123	137	154
Total current liabilities	1,072	1,069	1,128
Long-term debt	4,891	4,891	4,891
Long-term debt (nonrecourse to the company) held by variable interest entities	511	511	511
Deferred income taxes	387	410	285
Deferred pension and other postretirement benefits	471	422	516
Other liabilities	334	334	382
Noncurrent liabilities of discontinued operations	35	926	32
Total liabilities	7,701	8,563	7,745
Equity:
Total Weyerhaeuser shareholders' interest	6,852	7,092	6,795
Noncontrolling interests	3	2	3
Noncontrolling interests in discontinued operations	30	49	34
Total equity	6,885	7,143	6,832
Total liabilities and equity	$ 14,586	$ 15,706	$ 14,577

Weyerhaeuser Company
Q2.2014 Analyst Package
Preliminary results, subject to audit
Consolidated Statement of Cash Flows

in millions	Q1	Q2		Year-to-date
	March 31, 2014	June 30, 2014	June 30, 2013	June 30, 2014	June 30, 2013
Cash flows from operations:
Net earnings	$ 194	$ 291	$ 198	$ 485	$ 342
Noncash charges (credits) to income:
Depreciation, depletion and amortization	126	126	111	252	223
Deferred income taxes, net	36	89	23	125	49
Pension and other postretirement benefits	(47)	(44)	28	(91)	52
Share-based compensation expense	9	11	10	20	22
Charges for impairment of assets	—	1	2	1	3
Net gains on dispositions of assets	(25)	(21)	(14)	(46)	(21)
Foreign exchange transaction (gains) losses	14	(12)	4	2	8
Change in:
Receivables less allowances	(1)	(47)	45	(48)	(120)
Receivable for taxes	67	(3)	22	64	52
Inventories	(88)	34	32	(54)	(36)
Real estate and land	(72)	(35)	(62)	(107)	(121)
Prepaid expenses	3	(3)	(1)	—	(14)
Accounts payable and accrued liabilities	(80)	(17)	34	(97)	(32)
Deposits on land positions and other assets	12	(4)	(9)	8	(10)
Pension and postretirement contributions	(33)	(30)	(32)	(63)	(69)
Other	(6)	(14)	(17)	(20)	(15)
Net cash from operations	109	322	374	431	313

Cash flows from investing activities:
Property and equipment	(51)	(83)	(47)	(134)	(82)
Timberlands reforestation	(14)	(11)	(8)	(25)	(21)
Proceeds from sale of assets	19	1	8	20	14
Payments of liabilities held by special purpose entities	—	—	22	—	22
Other	—	—	(4)	—	(4)
Cash from investing activities	(46)	(93)	(29)	(139)	(71)

Cash flows from financing activities:
Net proceeds from issuance of common shares	—	—	781	—	781
Net proceeds from issuance of preference shares	—	—	669	—	669
Net proceeds from issuance of Weyerhaeuser Real Estate Company (WRECO) debt	—	887	—	887	—
Deposit of WRECO debt proceeds into escrow	—	(887)	—	(887)	—
Cash dividends on common shares	(129)	(128)	(109)	(257)	(202)
Cash dividends on preference shares	—	(11)	—	(11)	—
Change in book overdrafts	(6)	—	4	(6)	7
Payments on debt	—	—	(21)	—	(177)
Exercises of stock options	15	39	51	54	132
Other	2	(1)	3	1	12
Cash from financing activities	(118)	(101)	1,378	(219)	1,222

Net change in cash and cash equivalents	(55)	128	1,723	73	1,464
Cash and cash equivalents at beginning of period	835	780	639	835	898
Cash and cash equivalents at end of period	$ 780	$ 908	$ 2,362	$ 908	$ 2,362
Cash paid (received) during the year for:
Interest, net of amount capitalized	$ 101	$ 52	$ 55	$ 153	$ 166
Income taxes	$ (50)	$ 5	$ (4)	$ (45)	$ (6)

Weyerhaeuser Company			Total Company Statistics
Q2.2014 Analyst Package
Preliminary results, subject to audit
Special Items Included in Net Earnings

in millions	Q1	Q2		Year-to-date
	March 31, 2014	June 30, 2014	June 30, 2013	June 30, 2014	June 30, 2013
Net earnings attributable to Weyerhaeuser common shareholders	$ 183	$ 280	$ 196	$ 463	$ 340
Restructuring, impairments and other charges	13	5	—	18	—
Gain on sale of non-strategic asset	(14)	—	—	(14)	—
Gain on postretirement plan amendment	(29)	(29)	—	(58)	—
Net earnings attributable to Weyerhaeuser common shareholders before special items	153	256	196	409	340
Earnings from discontinued operations, net of income taxes	(10)	(22)	(13)	(32)	(15)
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders before special items	$ 143	$ 234	$ 183	$ 377	$ 325

	Q1	Q2		Year-to-date
	March 31, 2014	June 30, 2014	June 30, 2013	June 30, 2014	June 30, 2013
Net earnings per diluted share attributable to Weyerhaeuser common shareholders	$ 0.31	$ 0.47	$ 0.35	$ 0.79	$ 0.61
Restructuring, impairments and other charges	0.02	0.01	—	0.03	—
Gain on sale of non-strategic asset	(0.02)	—	—	(0.02)	—
Gain on postretirement plan amendment	(0.05)	(0.04)	—	(0.10)	—
Net earnings per diluted share attributable to Weyerhaeuser common shareholders before special items	0.26	44.00	0.35	0.70	0.61
Earnings from discontinued operations, net of income taxes	(0.02)	(0.04)	(0.02)	(0.06)	(0.03)
Net earnings from continuing operations per diluted share attributable to Weyerhaeuser common shareholders before special items	$ 0.24	$ 0.40	$ 0.33	$ 0.64	$ 0.58

Selected Total Company Items

in millions	Q1	Q2		Year-to-date
	March 31, 2014	June 30, 2014	June 30, 2013	June 30, 2014	June 30, 2013
Depreciation, depletion and amortization:
Cost of products sold	$ 117	$ 117	$ 102	$ 234	$ 205
Selling, general and administrative expenses	6	5	6	$ 11	12
Total depreciation, depletion and amortization	$ 123	$ 122	$ 108	$ 245	$ 217

Pension and postretirement costs:
Pension and postretirement costs allocated to business segments	$ 10	$ 12	$ 14	$ 22	$ 27
Pension and postretirement costs (credits) not allocated	(10)	(12)	10	$ (22)	20
Total company pension and postretirement costs	$ —	$ —	$ 24	$ —	$ 47

Total increase in working capital⁽¹⁾	$ (170)	$ 49	$ 161	$ (121)	$ (173)
Cash spent for capital expenditures	$ (63)	$ (92)	$ (53)	$ (155)	$ (99)
⁽¹⁾Working capital does not include cash balances.

Weyerhaeuser Company				Timberlands Segment
Q2.2014 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations

in millions		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Sales to unaffiliated customers		$ 377	$ 397	$ 333	$ 774	$ 626
Intersegment sales		238	186	166	424	390
Total net sales		615	583	499	1,198	1,016
Cost of products sold		431	399	365	830	760
Gross margin		184	184	134	368	256
Selling expenses		2	2	2	4	5
General and administrative expenses		26	23	25	49	50
Research and development expenses		4	3	5	7	9
Charges for restructuring, closures and impairments		—	—	—	—	2
Other operating income, net		(12)	(14)	(11)	(26)	(26)
Operating income		164	170	113	334	216
Interest income and other		—	—	1	—	2
Net contribution to earnings		$ 164	$ 170	$ 114	$ 334	$ 218

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*

in millions		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Operating income		$ 164	$ 170	$ 113	$ 334	$ 216
Depreciation, depletion and amortization		52	51	34	103	70
Adjusted EBITDA*		$ 216	$ 221	$ 147	$ 437	$ 286
* Non-GAAP measure - see page 8 for definition.

Selected Segment Items

		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Total increase in working capital⁽¹⁾		$ (29)	$ (15)	$ (21)	$ (44)	$ (31)
Cash spent for capital expenditures		$ (19)	$ (18)	$ (18)	$ (37)	$ (36)
⁽¹⁾Working capital does not include cash balances.

Segment Statistics

		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Third Party Net Sales (millions)	Logs:
	West	$ 257	$ 261	$ 208	$ 518	$ 385
	South	62	60	65	122	126
	Canada	6	1	2	7	9
	Total logs	325	322	275	647	520
	Chip sales	3	2	2	5	5
	Timberlands exchanges	4	28	14	32	16
	Higher and better use land sales	3	7	5	10	8
	Minerals, oil and gas	7	8	9	15	17
	Products from international operations	24	26	22	50	44
	Other products	11	4	6	15	16
	Total	$ 377	$ 397	$ 333	$ 774	$ 626
Logs Third Party Sales Realizations (per cubic meter)	West	$ 0.11	$ 109.13	$ 115.11	$ 111.71	$ 110.44
	South	$ 0.04	$ 45.16	$ 43.47	$ 45.02	$ 43.47
	Canada	$ 0.04	$ 38.04	$ 36.38	$ 35.75	$ 36.57
	International	$ 0.02	$ 16.27	$ 25.00	$ 16.64	$ 24.54
Logs Third Party Sales Volumes (cubic meters, thousands)	West	2,246	2,390	1,812	4,636	3,486
	South	1,385	1,339	1,507	2,724	2,906
	Canada	156	30	38	186	242
	International	147	139	77	286	145
	Total	3,934	3,898	3,434	7,832	6,779
Logs Fee Harvest Volumes (cubic meters, thousands)	West	2.875	2.888	1,921	5,763	3,916
	South	2.866	2.715	2,828	5,581	5,661
	International	0.249	0.249	167	498	364
	Total	5,990	5,852	4,916	11.842	9.941

Weyerhaeuser Company				Wood Products Segment
Q2.2014 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations

in millions		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Sales to unaffiliated customers		$ 898	$ 1,077	$ 1,065	$ 1,975	$ 2,053
Intersegment sales		19	21	18	40	36
Total net sales		917	1,098	1,083	2,015	2,089
Cost of products sold		791	939	884	1,730	1,654
Gross margin		126	159	199	285	435
Selling expenses		25	23	24	48	50
General and administrative expenses		37	30	36	67	72
Research and development expenses		1	2	1	3	2
Charges for restructuring, closures and impairments		—	2	1	2	1
Other operating costs (income), net		(1)	—	1	(1)	(4)
Operating income		64	102	136	166	314
Interest income and other		—	—	—	—	—
Net contribution to earnings		$ 64	$ 102	$ 136	$ 166	$ 314

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*

in millions		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Operating income		$ 64	$ 102	$ 136	$ 166	$ 314
Depreciation, depletion and amortization		29	30	31	59	62
Adjusted EBITDA*		$ 93	$ 132	$ 167	$ 225	$ 376
* Non-GAAP measure - see page 8 for definition.

Selected Segment Items

		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Total decrease (increase) in working capital⁽¹⁾		$ (137)	$ 29	$ 75	$ (108)	$ (119)
Cash spent for capital expenditures		$ (18)	$ (38)	$ (16)	$ (56)	$ (26)
⁽¹⁾Working capital does not include cash balances.

Segment Statistics

in millions, except for third-party sales realizations		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Structural Lumber (board feet)	Third party net sales	$ 427	$ 515	$ 502	$ 942	$ 953
	Third party sales realizations	$ 432	$ 427	$ 434	$ 429	$ 437
	Third party sales volumes⁽¹⁾	989	1,206	1,156	2,195	2,181
	Production volumes	1,009	1,081	1,053	2,090	2,074
	Outside purchase volumes	78	82	77	160	179
Engineered Solid Section (cubic feet)	Third party net sales	$ 90	$ 114	$ 84	$ 204	$ 166
	Third party sales realizations	$ 1,959	$ 1,976	$ 1,920	$ 1,968	$ 1,885
	Third party sales volumes⁽¹⁾	4.6	5.8	4.4	10.4	8.8
	Production volumes	4.9	5.7	4.6	10.6	9.2
	Outside purchase volumes	1.8	0.5	0.4	2.3	1.3
Engineered I-joists (lineal feet)	Third party net sales	$ 59	$ 81	$ 60	$ 140	$ 116
	Third party sales realizations	$ 1,454	$ 1,470	$ 1,358	$ 1,463	$ 1,330
	Third party sales volumes⁽¹⁾	40	55	44	95	87
	Production volumes	44	55	42	99	86
	Outside purchase volumes	1	3	1	4	4
Oriented Strand Board (square feet 3/8')	Third party net sales	$ 148	$ 159	$ 224	$ 307	$ 460
	Third party sales realizations	$ 230	$ 226	$ 332	$ 228	$ 345
	Third party sales volumes⁽¹⁾	641	706	675	1,347	1,332
	Production volumes	657	681	663	1,338	1,325
	Outside purchase volumes	53	51	56	104	124
Softwood Plywood (square feet 3/8')	Third party net sales	$ 30	$ 35	$ 41	$ 65	$ 77
	Third party sales realizations	$ 332	$ 348	$ 378	$ 340	$ 374
	Third party sales volumes⁽¹⁾	90	102	108	192	207
	Production volumes	59	60	63	119	124
	Outside purchase volumes	33	36	33	69	75
⁽¹⁾Volumes include sales of internally produced products and products purchased for resale primarily through our distribution business.

Weyerhaeuser Company				Cellulose Fibers Segment
Q2.2014 Analyst Package
Preliminary results, subject to audit

Segment Statement of Operations

in millions		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Total net sales		$ 461	$ 490	$ 476	$ 951	$ 950
Cost of products sold		390	381	394	771	818
Gross margin		71	109	82	180	132
Selling expenses		4	4	5	8	9
General and administrative expenses		20	20	21	40	41
Research and development expenses		2	2	2	4	4
Other operating income, net		(9)	(8)	(5)	(17)	(12)
Operating income		54	91	59	145	90
Interest income and other		—	—	(2)	—	(2)
Net contribution to earnings		$ 54	$ 91	$ 57	$ 145	$ 88

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*

in millions		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Operating income		$ 54	$ 91	$ 59	$ 145	$ 90
Depreciation, depletion and amortization		38	39	39	77	78
Adjusted EBITDA*		$ 92	$ 130	$ 98	$ 222	$ 168
* Non-GAAP measure - see page 8 for definition.

Selected Segment Items

		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Total decrease (increase) in working capital⁽¹⁾		$ 31	$ (37)	$ 12	$ (6)	$ 5
Cash spent for capital expenditures		$ (26)	$ (35)	$ (17)	$ (61)	$ (34)
⁽¹⁾Working capital does not include cash balances.

Segment Statistics

		Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Pulp (air-dry metric tons)	Third party net sales (millions)	$ 363	$ 383	$ 369	$ 746	$ 740
	Third party sales realizations	$ 825	$ 845	$ 797	$ 835	$ 797
	Third party sales volumes (thousands)	440	454	462	894	929
	Production volumes (thousands)	459	467	463	926	908
Liquid Packaging Board (tons)	Third party net sales (millions)	$ 80	$ 87	$ 86	$ 167	$ 171
	Third party sales realizations	$ 1,122	$ 1,165	$ 1,079	$ 1,144	$ 1,079
	Third party sales volumes (thousands)	71	75	81	146	159
	Production volumes (thousands)	78	79	77	157	155

Weyerhaeuser Company			Unallocated Items
Q2.2014 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 outstanding borrowings and the elimination of intersegment profit in inventory and the LIFO reserve.

Contribution to Earnings

in millions	Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Unallocated corporate function expenses	$ (2)	$ (1)	$ (3)	$ (3)	$ (6)
Unallocated share-based compensation	3	(6)	5	(3)	(2)
Unallocated pension & postretirement credits (costs)	55	56	(10)	111	(20)
Foreign exchange gains (losses)	(15)	13	(4)	(2)	(8)
Elimination of intersegment profit in inventory and LIFO	(19)	(1)	8	(20)	(16)
Other	4	(24)	(12)	(20)	(23)
Operating income (loss)	26	37	(16)	63	(75)
Interest income and other	9	11	10	20	19
Net contribution to earnings from continuing operations⁽¹⁾	$ 35	$ 48	$ (6)	$ 83	$ (56)
⁽¹⁾We have reclassified certain results from the prior periods to present the results of operations discontinued in 2014 separately. Our reclassifications had no effect on net earnings or Weyerhaeuser shareholders' interest.

Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization*

in millions	Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Operating income (loss)	$ 26	$ 37	$ (16)	$ 63	$ (75)
Depreciation, depletion and amortization	4	2	4	6	7
Non-operating pension and postretirement costs (credits)	(10)	(11)	10	(21)	20
Special items	(49)	(39)	—	(88)	—
Adjusted EBITDA*	$ (29)	$ (11)	$ (2)	$ (40)	$ (48)
* Non-GAAP measure - see below for definition.

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

	Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Gain on postretirement plan amendment	$ 45	$ 45	$ —	$ 90	$ —
Restructuring, impairments and other charges	(18)	(6)	—	(24)	—
Gain on sale of non-strategic asset	22	—	—	22	—
Total	$ 49	$ 39	$ —	$ 88	$ —

Unallocated Selected Items

	Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Total increase in working capital⁽¹⁾	$ (35)	$ 72	$ 95	$ 37	$ (28)
Cash spent for capital expenditures	$ —	$ (1)	$ (2)	$ (1)	$ (3)
⁽¹⁾Working capital does not include cash balances.

*Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, pension and postretirement costs not allocated to business segments (primarily interest cost, expected return on plan assets, amortization of actuarial loss and amortization of prior service cost/credit), special items and discontinued operations. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.

Weyerhaeuser Company			Discontinued Operations
Q2.2014 Analyst Package
Preliminary results, subject to audit

Discontinued operations relate to WRECO, which was combined with TRI Pointe Homes, Inc. through a Reverse Morris Trust transaction on July 7, 2014. It was previously reported under the Real Estate segment and Unallocated Items.

Discontinued Operations Statement of Operations

in millions	Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Total net sales	$ 248	$ 317	$ 267	$ 565	$ 463
Income from operations	$ 16	$ 27	$ 19	$ 43	$ 23
Income taxes	(6)	(5)	(6)	(11)	(8)
Net earnings from discontinued operations	$ 10	$ 22	$ 13	$ 32	$ 15

Discontinued Operations Selected Items

	Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Cash from operations	$ (28)	$ 133	$ (56)	$ 105	$ (127)
Cash spent for capital expenditures	$ (2)	$ (2)	$ (2)	$ (4)	$ (4)

Discontinued Operations Statistics

	Q1.2014	Q2.2014	Q2.2013	YTD.2014	YTD.2013
Net sales:
Single-family housing	$ 242	$ 310	$ 257	$ 552	$ 440
Land	3	7	10	10	21
Other	3	—	—	3	2
Total net sales	$ 248	$ 317	$ 267	$ 565	$ 463
Single-family homes closed	508	628	636	1,136	1,099
Single-family average price of homes closed (in thousands)	$ 476	$ 493	$ 405	$ 485	$ 400
Single-family gross margin⁽¹⁾	20.9 %	21.6 %	21.6 %	21.3 %	20.7 %
⁽¹⁾Single-family gross margin equals revenue less cost of sales and period costs.