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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 3, 2006
 
(Date of earliest event report)
WEYERHAEUSER COMPANY
 
(Exact name of registrant as specified in charter)
         
Washington   1-4825   91-0470860
         
(State or other   (Commission   (IRS Employer
jurisdiction of   File Number)   Identification
incorporation or       Number)
organization)        
Federal Way, Washington 98063-9777
 
(Address of principal executive offices)
(zip code)
Registrant’s telephone number, including area code:
(253) 924-2345
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

 

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C., 20549
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On February 3, 2006, Weyerhaeuser Company issued a press release stating the following:
Weyerhaeuser Reports Net Earnings of $733 Million for 2005,
Or $2.98 per Diluted Share, on Net Sales of $22.6 Billion
FEDERAL WAY, Wash. (Feb. 3, 2006) — Weyerhaeuser Company (NYSE: WY) today reported net earnings of $733 million for 2005, or $2.98 per diluted share, on net sales of $22.6 billion. This compares with net earnings of $1.3 billion, or $5.43 per diluted share, on net sales of $21.9 billion for the full year 2004.
For the fourth quarter 2005, Weyerhaeuser reported a net loss of $211 million, or 86 cents per diluted share, on net sales of $5.9 billion. Last year, Weyerhaeuser reported fourth quarter net earnings of $199 million, or 82 cents per diluted share, on net sales of $5.7 billion.
The loss for fourth quarter 2005 included the following after-tax items:
•   Charges of $438 million, or $1.78 per diluted share, for closure of facilities.
 
•   Charges of $32 million, or 13 cents per diluted share, for additional asset impairment charges.
 
•   A charge of $25 million, or 10 cents per diluted share, associated with the settlement of litigation.
 
•   A loss of $10 million, or 4 cents per diluted share, for early extinguishment of debt.
 
•   A gain of $34 million, or 13 cents per diluted share, on the sale of the company’s French composite panels assets.
 
•   Income of $28 million, or 12 cents per diluted share, for the cumulative effect of a change to begin capitalizing Weyerhaeuser interest to assets of Weyerhaeuser Real Estate Company.
Fourth quarter 2004 earnings include the following after-tax items:
•   A loss of $34 million, or 14 cents per diluted share, for early extinguishment of debt.
 
•   A gain of $24 million, or 10 cents per diluted share, for gains on the sale of facilities.
 
•   A charge of $19 million, or 8 cents per diluted share, for the impairment of assets in the company’s French composite panels business.
 
•   A charge of $16 million, or 7 cents per diluted share, recognized in connection with a change in the method of estimating workers’ compensation liabilities.
 
•   A charge of $15 million, or 6 cents per diluted share, for the net book value of technology donated to a university.
During 2005, Weyerhaeuser’s ongoing strategic review resulted in the following significant actions:
•   Selling its British Columbia coastal operations, French composite panels business and a laminated beam facility;
 
•   Announcing its intention to sell its North American and Irish composite panels assets, a pulp facility, three corrugated sheet plants and a specialty packaging plant; and

 

 

•   Closing a paper facility, a specialty pulp mill, a fine paper machine, a containerboard machine, a large-log sawmill, seven corrugated converting plants, two hardwood facilities, a bag plant, an I-joist facility and a veneer and plywood facility.
“Despite extremely challenging business conditions, we took significant steps in 2005 to make us more competitive and position us to generate greater returns while returning cash to shareholders,” said Steven R. Rogel, chairman, president and chief executive officer. “Our strong cash flow allowed us to pay down debt to our target levels, implement a 25 percent increase in our dividend and initiate a stock buy back program. We also began reorganizing our wood products, containerboard and packaging businesses into integrated supply chains and continued to grow our real estate business. In 2006, we will continue to confront the challenges our businesses face with the goal of creating a stronger company.”
SUMMARY OF FOURTH QUARTER FINANCIAL HIGHLIGHTS
                         
Millions (except per share data)   4Q 2005     4Q 2004     Change  
Net earnings (loss)
     ($211 )   $ 199       ($410 )
Earnings (loss) per diluted share
     ($0.86 )   $ 0.82       ($1.68 )
Net sales
   $ 5,868     $ 5,685     $ 183  
SUMMARY OF ANNUAL FINANCIAL HIGHLIGHTS
                         
Millions (except per share data)   2005     2004     Change  
Net earnings
   $ 733     $ 1,283       ($550 )
Earnings per diluted share
   $ 2.98     $ 5.43       ($2.45 )
Net sales
   $ 22,629     $ 21,931     $ 698  
SEGMENT RESULTS FOR FOURTH QUARTER
(Contributions to Pre-Tax Earnings)
                         
Millions   4Q 2005     4Q 2004     Change  
Timberlands
   $ 183     $ 217       ($34 )
Wood Products
   $ 26     $ 72       ($46 )
Cellulose Fiber and White Papers
     ($477 )   $ 35       ($512 )
Containerboard, Packaging and Recycling
     ($188 )   $ 81       ($269 )
Real Estate and Related Assets
   $ 250     $ 217     $ 33  
TIMBERLANDS
                         
    4Q 2005     3Q 2005     Change  
Contribution to pre-tax earnings (millions)
   $ 183     $ 191       ($8 )
Fourth quarter earnings decreased slightly from the third quarter due primarily to salvage costs associated with hurricane Katrina and continued high fuel costs for logging and hauling. Fourth quarter results also include $3 million of pre-tax timberland severance costs due to the announced closure of the Prince Albert pulp and paper facility in Saskatchewan, Canada.
The continued strength of domestic and export log prices should produce first quarter earnings that are similar to fourth quarter 2005.

 

 

WOOD PRODUCTS
                         
    4Q 2005     3Q 2005     Change  
Contribution to pre-tax earnings (millions)
   $ 26     $ 124       ($98 )
Earnings in the fourth quarter include $91 million of pre-tax charges associated with the closure of a plywood mill at Wright City, Oklahoma, the closure of a lumber mill at Aberdeen, Washington, and the potential closure of a lumber mill at Big River, Saskatchewan. Third quarter earnings included $6 million of pre-tax charges associated with facility closures.
Excluding the charges, earnings decreased $13 million from the third quarter. Demand for structural panels increased following the hurricanes and caused panel prices to surge early in the quarter, but panel prices returned to normal seasonal levels late in the quarter. Prices and volume for softwood lumber declined due to seasonal factors. Shipment volumes for engineered lumber products also declined on average from the third quarter.
Manufacturing costs for panels increased in the fourth quarter largely due to a significant rise in natural gas prices. Manufacturing costs for engineered lumber products increased due to the higher prices for oriented strand board.
The company incurred $16 million in countervailing and anti-dumping duties and related costs on Canadian softwood lumber the company sold into the United States in the fourth quarter, compared with $19 million in the third quarter. Starting in December, the company is paying a combined duty rate of 13.1 percent, down from the 25.9 percent rate that was in effect since December 2004. At this new rate, the segment expects to incur approximately $10 million per quarter in duties and related costs.
Weyerhaeuser expects lower first quarter 2006 earnings compared with fourth quarter 2005 earnings before special charges. During the first quarter, demand for wood products should follow the normal seasonal trends with pricing remaining similar to fourth quarter levels. The company expects manufacturing expenses to increase due to higher energy and raw material costs.
CELLULOSE FIBER AND WHITE PAPERS
                         
    4Q 2005     3Q 2005     Change  
Contribution (charge) to pre-tax earnings (millions)
     ($477 )     ($2 )     ($475 )
In the fourth quarter, Weyerhaeuser recorded $427 million of pre-tax charges related to the announced closures of the Prince Albert pulp and paper operations and a paper machine at Dryden. Manufacturing costs continued to escalate due to higher energy, freight, chemical and raw material costs. Prices for fine paper and pulp remained unchanged. Fine paper volumes increased modestly while pulp experienced a normal seasonal decline in shipments.
Announced first quarter price increases for market pulp and fine paper should result in improved earnings in the first quarter 2006 despite continued cost pressures.
CONTAINERBOARD, PACKAGING AND RECYCLING
                         
    4Q 2005     3Q 2005     Change  
Contribution (charge) to pre-tax earnings (millions)
     ($188 )   $ 36       ($224 )
Fourth quarter earnings include a pre-tax charge of $130 million related to the closure of several facilities and a pre-tax charge of $38 million related to a settlement of linerboard antitrust lawsuits. Earnings, excluding charges, decreased significantly from the third quarter due to lower box prices coupled with higher energy and transportation costs. Costs for old corrugated containers (OCC) were lower in fourth quarter.
The company expects higher pricing, increased box shipments and lower OCC costs to result in improved first quarter earnings for the segment.

 

 

REAL ESTATE AND RELATED ASSETS
                         
    4Q 2005     3Q 2005     Change  
Contribution to pre-tax earnings (millions)
   $ 250     $ 145     $ 105  
Fourth quarter earnings increased from third quarter primarily due to the expected strong single-family home closings and higher single-family margins, partially offset by a $33 million pre-tax impairment charge related to unimproved land in Northern California.
The backlog of homes sold, but not closed, at the end of the fourth quarter was comparable to year-ago levels. Weyerhaeuser expects lower first quarter 2006 earnings due to a normal seasonal decline in single-family home closings.
OTHER
The company will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on Feb. 3 to discuss the fourth quarter results.
To access the conference call, listeners calling from within North America should dial 1-888-221-5699 at least 15 minutes before the start of the conference call. Those wishing to access the call from outside North America should dial 1-706-643-3795. Replays of the call will be available for one week following completion of the live call and can be accessed at 1-800-642-1687 (access code — 3890458) within North America and at 1-706-645-9291 (access code — 3890458) from outside North America.
The call is being web cast and can be accessed through Weyerhaeuser’s Internet site at http://investor.weyerhaeuser.com by clicking on the “Q4 2005 Earnings Conference Call” link.
The web cast also is being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com, Thomson/CCBN’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson’s password-protected event management site, StreetEvents (www.streetevents.com).
Weyerhaeuser Company, one of the world’s largest integrated forest products companies, was incorporated in 1900. In 2005, sales were $22.6 billion. It has offices or operations in 18 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. Additional information about Weyerhaeuser’s businesses, products and practices is available at http://www.weyerhaeuser.com.
###
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. Some of these forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “may,” “will,” “believes,” “should,” “approximately,” anticipates,” “estimates,” and “plans,” and the negative or other variations of those terms or comparable terminology or by discussions of strategy, plans or intentions. In particular, some of these forward-looking statements deal with expectations regarding the company’s markets in the first quarter 2006; expected earnings and performance of the company’s business segments during the first quarter 2006, demand and pricing for the company’s products in the first quarter 2006, higher raw material, energy, chemical, transportation and manufacturing costs in the first quarter 2006, seasonal slowdowns in single-family home closings in the first quarter of 2006, and related matters. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to:
•   The effect of general economic conditions, including the level of interest rates and housing starts;

 

 

•   Market demand for the company’s products, which may be tied to the relative strength of various U.S. business segments;
 
•   Energy prices;
 
•   Raw material prices;
 
•   Chemical prices;
 
•   Performance of the company’s manufacturing operations;
 
•   The successful execution of internal performance plans;
 
•   The level of competition from domestic and foreign producers;
 
•   The effect of forestry, land use, environmental and other governmental regulations, and changes in accounting regulations;
 
•   The effect of weather;
 
•   The risk of loss from fires, floods and other natural disasters;
 
•   Transportation costs;
 
•   Legal proceedings; and
 
•   Performance of pension fund investments and related derivatives.
The company is also a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan, and by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Euro and the Canadian dollar, and restrictions on international trade or tariffs imposed on imports, including the countervailing and anti-dumping duties imposed on the company’s softwood lumber shipments from Canada to the United States. These and other factors could cause or contribute to actual results differing materially from such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will occur, or if any of them occurs, what effect they will have on the company’s results of operations or financial condition. The company expressly declines any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the date of this news release.

 

 

WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
                                                                                 
CONSOLIDATED EARNINGS   Q1   Q2   Q3   Q4   Year ended
     (in millions)   March 27,   March 28,   June 26,   June 27,   Sept. 25,   Sept. 26,   Dec. 25,   Dec. 26,   Dec. 25,   Dec. 26,
    2005   2004   2005   2004   2005   2004   2005   2004   2005   2004
                     
 
                                                                                
Net sales and revenues:
                                                                                
Weyerhaeuser (1)
   $ 4,716     $ 4,418     $ 5,160     $ 5,179     $ 4,986     $ 5,065     $ 4,852     $ 4,774     $ 19,714     $ 19,436  
Real Estate and Related Assets
     655       469       648       524       596       591       1,016       911       2,915       2,495  
                     
Total net sales and revenues
     5,371       4,887       5,808       5,703       5,582       5,656       5,868       5,685       22,629       21,931  
                     
 
                                                                                
Costs and expenses:
                                                                                
Weyerhaeuser:
                                                                                
Costs of products sold
     3,621       3,408       3,947       3,766       3,912       3,735       3,980       3,706       15,460       14,615  
Depreciation, depletion and amortization
     323       315       325       316       327       314       332       318       1,307       1,263  
Selling expenses
     117       119       118       121       118       122       108       119       461       481  
General and administrative expenses
     223       238       217       233       236       225       223       246       899       942  
Research and development expenses
     14       12       12       13       18       13       17       17       61       55  
Taxes other than payroll and income taxes
     46       48       48       47       69       51       16       48       179       194  
Charges for integration and restructuring
     5       15       4       13       2       8       10       3       21       39  
Charges for closure of facilities
     5       4       3       —       29       13       656       0       693       17  
Other operating costs, net (2)(3)
     9       17       (40 )     43       (32 )     (300 )     3       7       (60 )     (233 )
                     
 
     4,363       4,176       4,634       4,552       4,679       4,181       5,345       4,464       19,021       17,373  
                     
 
                                                                                
Real Estate and Related Assets:
                                                                                
Costs and operating expenses
     426       321       441       381       401       414       677       647       1,945       1,763  
Depreciation and amortization
     3       2       4       4       4       3       5       5       16       14  
Selling expenses
     33       27       36       30       36       31       46       37       151       125  
General and administrative expenses
     24       17       25       19       27       19       28       26       104       81  
Taxes other than payroll and income taxes
     1       1       —       —       1       1       1       —       3       2  
Other operating costs, net
     —       1       (2 )     1       (2 )     (19 )     1       —       (3 )     (17 )
Impairment of long-lived assets
     —       —       —       —       —       —       33       —       33       —  
                     
 
     487       369       504       435       467       449       791       715       2,249       1,968  
                     
Total costs and expenses
     4,850       4,545       5,138       4,987       5,146       4,630       6,136       5,179       21,270       19,341  
                     
 
                                                                                

 

 

                                                                                 
CONSOLIDATED EARNINGS   Q1   Q2   Q3   Q4   Year ended
     (in millions)   March 27,   March 28,   June 26,   June 27,   Sept. 25,   Sept. 26,   Dec. 25,   Dec. 26,   Dec. 25,   Dec. 26,
    2005   2004   2005   2004   2005   2004   2005   2004   2005   2004
                     
 
                                                                                
Operating income
     521       342       670       716       436       1,026       (268 )     506       1,359       2,590  
 
                                                                                
Interest expense and other:
                                                                                
Weyerhaeuser:
                                                                                
Interest expense incurred (4)
     (196 )     (195 )     (179 )     (218 )     (193 )     (184 )     (171 )     (241 )     (739 )     (838 )
Less interest capitalized
     —       3       2       1       3       0       4       5       9       9  
Interest income and other
     27       3       20       5       143       7       24       9       214       24  
Equity in income (loss) of affiliates (5)
     —       —       4       7       2       4       (12 )     3       (6 )     14  
Real Estate and Related Assets:
                                                                                
Interest expense incurred
     (14 )     (15 )     (14 )     (14 )     (13 )     (14 )     (14 )     (14 )     (55 )     (57 )
Less interest capitalized
     14       15       14       14       13       14       14       14       55       57  
Interest income and other
     5       11       (2 )     9       4       1       5       10       12       31  
Equity in income of unconsolidated entities
     10       9       13       20       14       12       20       11       57       52  
                     
 
                                                                                
Earnings before income taxes
     367       173       528       540       409       866       (398 )     303       906       1,882  
Income taxes (6)
     (128 )     (57 )     (229 )     (183 )     (120 )     (293 )     153       (94 )     (324 )     (627 )
                     
Earnings from continuing operations
     239       116       299       357       289       573       (245 )     209       582       1,255  
Earnings from discontinued operations, net of taxes (7)
     —       5       121       12       (4 )     21       34       (10 )     151       28  
                     
Net earnings
   $ 239     $ 121     $ 420     $ 369     $ 285     $ 594     $ (211 )   $ 199     $ 733     $ 1,283  
                     
 
                                                                                
Basic net earnings per share:
                                                                                
Continuing operations
   $ 0.98     $ 0.52     $ 1.23     $ 1.52     $ 1.17     $ 2.37     $ (1.00 )   $ 0.86     $ 2.38     $ 5.33  
Discontinued operations
     —       0.02       0.49       0.05       (0.01 )     0.09       0.14       (0.04 )     0.62       0.12  
                     
Net earnings per share
   $ 0.98     $ 0.54     $ 1.72     $ 1.57     $ 1.16     $ 2.46     $ (0.86 )   $ 0.82     $ 3.00     $ 5.45  
                     
 
                                                                                

 

 

                                                                                 
CONSOLIDATED EARNINGS   Q1   Q2   Q3   Q4   Year ended
     (in millions)   March 27,   March 28,   June 26,   June 27,   Sept. 25,   Sept. 26,   Dec. 25,   Dec. 26,   Dec. 25,   Dec. 26,
    2005   2004   2005   2004   2005   2004   2005   2004   2005   2004
                     
 
                                                                                
Diluted net earnings per share:
                                                                                
Continuing operations
   $ 0.98     $ 0.52     $ 1.22     $ 1.52     $ 1.17     $ 2.36     $ (1.00 )   $ 0.86     $ 2.36     $ 5.31  
Discontinued operations
     —       0.02       0.49       0.05       (0.01 )     0.09       0.14       (0.04 )     0.62       0.12  
                     
Net earnings per share
   $ 0.98     $ 0.54     $ 1.71     $ 1.57     $ 1.16     $ 2.45     $ (0.86 )   $ 0.82     $ 2.98     $ 5.43  
                     
 
                                                                                
Dividends paid per share
   $ 0.40     $ 0.40     $ 0.50     $ 0.40     $ 0.50     $ 0.40     $ 0.50     $ 0.40     $ 1.90     $ 1.60  
                     
 
                                                                                
Weighted average shares outstanding (in thousands)
                                                                                
Basic
     242,863       223,728       244,702       234,494       245,009       241,621       245,215       242,114       244,447       235,453  
Diluted
     244,185       225,072       245,881       235,475       246,190       242,649       246,198       243,472       245,559       236,546  
 
(1)   The first, second, third and fourth quarters of 2005 include charges of $22 million, $27 million, $19 million and $16 million, respectively, or $84 million year-to-date, for countervailing and anti-dumping duties and related costs. The first, second, third and fourth quarters of 2004 include charges of $26 million, $34 million, $31 million and $27 million, respectively, or $118 million year-to-date, for countervailing and anti-dumping duties and related costs.
 
(2)   The first, second, third and fourth quarters of 2005 include net foreign exchange gains (losses) of $13 million, ($13) million, $37 million and ($21) million, respectively, for a year-to-date net gain of $16 million. The first, second, third and fourth quarters of 2004 include net foreign exchange gains (losses) of ($9) million, ($7) million, $16 million and $27 million, respectively, for a total year-to-date net gain of $27 million. These gains and losses result primarily from fluctuations in Canadian and New Zealand exchange rates.
 
(3)   The first quarter of 2005 includes a $12 million charge for the settlement of a linerboard antitrust lawsuit. The second quarter of 2005 includes an $18 million charge related to alder litigation and $57 million of income related to the recognition of a deferred gain from previous timberlands sales. The third quarter of 2005 includes a $115 million gain on the sale of an investment in a joint venture. The fourth quarter of 2005 includes a $38 million charge for the settlement of linerboard antitrust litigation and $43 million of income for the cumulative effect of a change to begin capitalizing Weyerhaeuser interest to assets of Weyerhaeuser Real Estate Company. The first quarter of 2004 includes a $49 million charge for the settlement of lawsuits involving the market for Pacific Northwest alder logs and a $33 million gain on the sale of an oriented strand board mill in Slave Lake, Alberta. The second quarter of 2004 includes a $16 million charge resulting from an adverse judgment in a lawsuit involving the market for Pacific Northwest alder logs. The third quarter of 2004 includes a $271 million gain on the sale of timberlands in Georgia, and a $20 million gain due to the reduction of the reserve for hardboard siding claims. The fourth quarter of 2004 includes a net gain of $36 million on the sale of facilities, and charges of $24 million recognized in connection with a change in the method of estimating workers’ compensation liabilities and $23 million for the net book value of technology donated to a university.
 
(4)   The third and fourth quarters of 2005 include charges of $21 million and $15 million, respectively, for the early extinguishment of debt. The second and fourth quarters of 2004 include charges of $21 million and $52 million, respectively, for the early extinguishment of debt.
 
(5)   The fourth quarter of 2005 includes a $15 million charge related to the impairment of an investment in an equity affiliate.
 
(6)   The second quarter of 2005 includes a charge of $44 million related to the repatriation of $1.1 billion of eligible Canadian earnings under the provisions of the American Jobs Creation Act of 2004. The third quarter of 2005 includes a one-time tax benefit of $14 million related to a change in the Ohio state income tax law.
 
(7)   Includes the net operating results of the company’s coastal British Columbia and French composites operations. The second quarter of 2005 includes a gain of $110 million, including a tax benefit of $46 million, related to the sale of the coastal British Columbia operations. The third quarter of 2005 includes a $1 million charge related to the termination of pension plans associated with these operations. The fourth quarter of 2005 includes a pretax gain of $57 million and related tax expense of $23 million associated with the sale of the French composites operations. The third quarter of 2004 includes a $25 million gain from a tenure reallocation agreement with the British Columbia government. The fourth quarter of 2004 includes a $29 million charge for the impairment of assets in the French composites operations.

 

 

WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
                                                                                 
Net sales and revenues (in millions):   Q1   Q2   Q3   Q4   Year ended
    March 27,   March 28,   June 26,   June 27,   Sept. 25,   Sept. 26,   Dec. 25,   Dec. 26,   Dec. 25,   Dec. 26,
    2005   2004   2005   2004   2005   2004   2005   2004   2005   2004
                     
Timberlands:
                                                                                
Logs
   $ 182     $ 193     $ 195     $ 211     $ 188     $ 197     $ 196     $ 221     $ 761     $ 822  
Other products
     82       58       63       66       65       51       76       105       286       280  
                     
 
     264       251       258       277       253       248       272       326       1,047       1,102  
                     
Wood Products:
                                                                                
Softwood lumber
     892       819       1,032       1,106       889       1,089       811       901       3,624       3,915  
Plywood
     183       221       196       263       184       237       172       208       735       929  
Veneer
     13       11       10       12       9       11       12       10       44       44  
Composite panels
     120       108       132       133       122       138       123       122       497       501  
OSB
     288       338       306       456       267       341       303       255       1,164       1,390  
Hardwood lumber
     94       90       102       100       95       89       99       86       390       365  
Engineered I-Joists
     160       134       213       178       202       189       181       177       756       678  
Engineered Solid Section
     190       148       241       194       244       203       221       189       896       734  
Logs
     27       23       24       38       6       32       5       32       62       125  
Other products
     272       255       339       312       326       315       290       280       1,227       1,162  
                     
 
     2,239       2,147       2,595       2,792       2,344       2,644       2,217       2,260       9,395       9,843  
                     
Cellulose Fiber and White Papers:
                                                                                
Pulp
     376       339       355       371       381       381       370       380       1,482       1,471  
Paper
     599       535       611       538       604       583       603       570       2,417       2,226  
Coated groundwood
     42       36       47       37       45       39       46       44       180       156  
Liquid packaging board
     47       49       52       53       50       53       54       53       203       208  
Other products
     14       10       12       13       16       15       12       16       54       54  
                     
 
     1,078       969       1,077       1,012       1,096       1,071       1,085       1,063       4,336       4,115  
                     

 

 

                                                                                 
Net sales and revenues (in millions):   Q1   Q2   Q3   Q4   Year ended
    March 27,   March 28,   June 26,   June 27,   Sept. 25,   Sept. 26,   Dec. 25,   Dec. 26,   Dec. 25,   Dec. 26,
    2005   2004   2005   2004   2005   2004   2005   2004   2005   2004
                     
Containerboard, Packaging and Recycling:
                                                                                
Containerboard
     117       81       101       80       86       94       91       113       395       368  
Packaging
     898       853       969       918       929       916       914       897       3,710       3,584  
Recycling
     92       80       92       91       87       87       81       89       352       347  
Bags
     22       19       21       18       20       20       20       23       83       80  
Other products
     34       33       40       34       47       43       46       46       167       156  
                     
 
     1,163       1,066       1,223       1,141       1,169       1,160       1,152       1,168       4,707       4,535  
                     
Real Estate and Related Assets
     655       469       648       524       596       591       1,016       911       2,915       2,495  
Corporate and Other
     149       135       151       147       146       135       154       158       600       575  
 
                                                                                
Less sales of discontinued operations
     (177 )     (150 )     (144 )     (190 )     (22 )     (193 )     (28 )     (201 )     (371 )     (734 )
                     
 
   $ 5,371     $ 4,887     $ 5,808     $ 5,703     $ 5,582     $ 5,656     $ 5,868     $ 5,685     $ 22,629     $ 21,931  
                     
                                                                                 
Contribution (charge) to earnings:   Q1   Q2   Q3   Q4   Year ended
     (in millions)   March 27,   March 28,   June 26,   June 27,   Sept. 25,   Sept. 26,   Dec. 25,   Dec. 26,   Dec. 25,   Dec. 26,
    2005   2004   2005   2004   2005   2004   2005   2004   2005   2004
                     
Timberlands (1)(2)
   $ 200     $ 159     $ 210     $ 201     $ 191     $ 450     $ 183     $ 217     $ 784     $ 1,027  
Wood Products (3)(4)(5)(6)
     131       173       204       448       124       362       26       72       485       1,055  
Cellulose Fiber and White Papers (7)
     19       (25 )     16       14       (2 )     80       (477 )     35       (444 )     104  
Containerboard, Packaging and Recycling (8)(9)
     48       24       99       62       36       82       (188 )     81       (5 )     249  
Real Estate and Related Assets (10)
     183       120       156       118       145       155       250       217       734       610  
Corporate and Other (11)(12)(13)
     (17 )     (76 )     99       (67 )     101       (45 )     33       (83 )     216       (271 )
                     
 
   $ 564     $ 375     $ 784     $ 776     $ 595     $ 1,084     $ (173 )   $ 539     $ 1,770     $ 2,774  
                     
 
(1)   The 2004 third quarter includes a $271 million gain on the sale of timberlands in Georgia and a $5 million gain from a tenure reallocation agreement with the British Columbia government.
 
(2)   The first quarter of 2005 includes $3 million of charges related to the closure of facilities. The third quarter of 2005 includes a $5 million loss related to hurricane damage. The fourth quarter of 2005 includes charges of $3 million related to the closure of facilities and $6 million for losses associated with hurricane damage.
 
(3)   The first, second, third and fourth quarters of 2005 include charges of $22 million, $27 million, $19 million and $16 million, respectively, or $84 million year-to-date, for countervailing and anti-dumping duties and related costs. The first, second, third and fourth quarters of 2004 include charges of $26 million, $34 million, $31 million and $27 million, respectively, or $118 million year-to-date, for countervailing and anti-dumping duties and related costs.

 

 

(4)   The second quarter of 2005 includes an $18 million charge related to alder litigation. The third quarter of 2005 includes $9 million of income related to the reduction of reserves for alder litigation and an insurance settlement related to product liability claims. The first quarter of 2004 includes a $49 million charge for the settlement of lawsuits involving the market for Pacific Northwest alder logs. The second quarter of 2004 includes a $16 million charge resulting from an adverse judgment in a lawsuit involving the market for Pacific Northwest alder logs. The third quarter of 2004 includes a $20 million gain due to the reduction of the reserve for hardboard siding claims.
 
(5)   The second quarter of 2005 includes a $6 million gain related to a tenure reallocation agreement with the British Columbia government. The third quarter of 2004 includes a $20 million gain from a tenure reallocation agreement with the British Columbia government.
 
(6)   The first, second, third and fourth quarters of 2005 include charges of $1 million, $1 million, $6 million and $91 million, respectively, associated with the closure of facilities. The first quarter of 2004 includes a credit of $2 million for the reversal of closure costs accrued in prior years and a $33 million gain on the sale of an oriented strand board mill in Slave Lake, Alberta. The second quarter of 2004 includes a $5 million net loss on the sale of facilities. The third quarter of 2004 includes a $2 million net gain on the sale or closure of facilities. The fourth quarter of 2004 includes charges of $3 million for the closure of facilities and a gain of $36 million on the sale of facilities.
 
(7)   The third and fourth quarters of 2005 include net charges of $22 million and $427 million, respectively, related to facility closures. The second quarter of 2004 includes a $2 million asset impairment charge related to assets held for sale.
 
(8)   The first and fourth quarters of 2005 include charges of $12 million and $38 million, respectively, associated with the settlement of linerboard antitrust lawsuits. The third quarter of 2005 includes a $1 million loss related to hurricane damage.
 
(9)   The first, second, third and fourth quarters of 2005 include charges of $4 million, $2 million, $1 million and $130 million, respectively, for the closure of facilities. The first quarter of 2004 includes closure costs of $3 million. The second quarter of 2004 includes a net gain of $1 million on the sales of a facility and a joint venture investment. The third quarter of 2004 includes closure costs of $12 million, including a pension termination charge of $9 million related to a closure that occurred in a previous year. The fourth quarter of 2004 includes a credit of $3 million for the reversal of closure costs accrued in prior years.
 
(10)   The first, second, third and fourth quarters of 2005 include net gains (losses) on land and lot sales of $57 million, $21 million, ($1) and $2 million, respectively. The fourth quarter of 2005 also includes a $33 million charge for the impairment of unimproved land. The first quarter of 2004 includes a $22 million gain on a land sale. The third quarter of 2004 includes a gain of $18 million on the sale of a multi-family site. The fourth quarter of 2004 includes a $24 million net gain on land and lot sales.
 
(11)   The second quarter of 2005 includes a $64 million pretax gain on the sale of the company’s operations in coastal British Columbia and $57 million of income related to the recognition of a deferred gain from previous timberlands sales. The third quarter of 2005 includes a $115 million gain on the sale of an investment in a joint venture. The fourth quarter of 2005 includes a $57 million gain on the sale of the company’s French composites operations and $43 million of income for the cumulative effect of a change to begin capitalizing Weyerhaeuser interest to assets of Weyerhaeuser Real Estate Company. The fourth quarter of 2004 includes a $7 million gain for the settlement of an insurance claim relating to the Cemwood litigation.
 
(12)   The fourth quarter of 2005 includes charges of $15 million related to the impairment of an investment in an equity affiliate and a $5 million charge related to the closure of facilities. The fourth quarter of 2004 includes charges of $29 million for the impairment of assets in the company’s French composites operations, $24 million recognized in connection with a change in the method of estimating workers’ compensation liabilities and $23 million for the net book value of technology donated to a university.
 
(13)   The first, second, third and fourth quarters of 2005 include net foreign exchange gains (losses) of $13 million, ($12) million, $38 million and ($20) million, respectively, for a year-to-date net gain of $19 million. The first, second, third and fourth quarters of 2004 include net foreign exchange gains (losses) of ($10) million, ($6) million, $16 million and $26 million, respectively, for a $26 million net gain year-to-date. These gains and losses result primarily from fluctuations in Canadian and New Zealand exchange rates.

 

 

WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)
Third party sales volumes:
                                                                                 
    Q1     Q2     Q3     Q4     Year ended  
    March 27,     March 28,     June 26,     June 27,     Sept. 25,     Sept. 26,     Dec. 25,     Dec. 26,     Dec. 25,     Dec. 26,  
    2005     2004     2005     2004     2005     2004     2005     2004     2005     2004  
                     
Timberlands (thousands):
                                                                                
Logs — cunits
     864       1,044       863       954       886       904       939       1,018       3,552       3,920  
 
                                                                                
Wood Products (millions):
                                                                                
Softwood lumber — board feet
     2,057       2,054       2,355       2,393       2,179       2,299       2,059       2,144       8,650       8,890  
Plywood — square feet (3/8”)
     537       642       600       668       558       672       485       647       2,180       2,629  
Veneer — square feet (3/8”)
     60       55       59       60       51       55       61       55       231       225  
Composite panels — square feet (3/4”)
     299       301       317       324       308       315       305       294       1,229       1,234  
Oriented strand board — square feet (3/8”)
     908       981       1,041       1,143       1,008       1,078       991       1,011       3,948       4,213  
Hardwood lumber — board feet
     102       103       114       117       105       102       106       95       427       417  
Engineered I-Joists — LF
     108       108       138       132       125       133       113       123       484       496  
Engineered Solid Section — CF
     9       8       10       10       10       10       9       9       38       37  
Logs — cunits (in thousands)
     187       170       177       279       41       237       46       248       451       934  
 
                                                                                
Cellulose Fiber and White Papers (thousands):
                                                                                
Pulp — air-dry metric tons
     629       624       587       642       653       633       633       659       2,502       2,558  
Paper — tons
     736       741       742       718       757       737       761       680       2,996       2,876  
Coated groundwood — tons
     58       59       62       61       56       60       56       63       232       243  
Liquid packaging board — tons
     60       66       65       72       64       69       69       69       258       276  
Paper converting — tons
     475       467       494       459       494       470       501       443       1,964       1,839  
 
                                                                                
Containerboard, Packaging and Recycling (thousands):
                                                                                
Containerboard — tons
     295       250       259       221       238       245       254       285       1,046       1,001  
Packaging — MSF
     17,354       18,146       18,600       18,917       18,560       18,287       19,117       17,535       73,631       72,885  
Recycling — tons
     692       678       695       701       665       645       676       670       2,728       2,694  
Kraft bags and sacks — tons
     23       24       22       23       22       23       22       25       89       95  
 
                                                                                
Real Estate and Related Assets:
                                                                                
Single-family homes sold
     1,378       1,506       1,525       1,564       1,608       1,313       1,174       992       5,685       5,375  
Single-family homes closed
     1,189       1,065       1,279       1,216       1,257       1,345       1,922       1,638       5,647       5,264  
Single-family homes sold but not closed at end of period
     2,561       2,702       2,807       3,050       3,158       3,018       2,410       2,372       2,410       2,372  

 

 

Total production volumes:
                                                                                 
    Q1     Q2     Q3     Q4     Year ended  
    March 27,     March 28,     June 26,     June 27,     Sept. 25,     Sept. 26,     Dec. 25,     Dec. 26,     Dec. 25,     Dec. 26,  
    2005     2004     2005     2004     2005     2004     2005     2004     2005     2004  
                     
Timberlands (thousands):
                                                                                
Fee Depletion — cunits
     2,248       2,265       2,231       2,404       2,098       2,189       2,153       2,155       8,730       9,013  
 
                                                                                
Wood Products (millions):
                                                                                
Softwood lumber — board feet
     1,821       1,760       1,869       1,881       1,651       1,819       1,645       1,727       6,986       7,187  
Plywood — square feet (3/8”)
     303       422       302       405       296       405       254       396       1,155       1,628  
Veneer — square feet (3/8”) (1)
     517       585       529       609       486       592       447       600       1,979       2,386  
Composite panels — square feet (3/4”)
     267       268       282       281       268       272       263       245       1,080       1,066  
Oriented strand board — square feet (3/8”)
     1,007       1,031       1,019       1,056       1,017       1,022       1,035       972       4,078       4,081  
Hardwood lumber — board feet
     92       89       96       96       91       84       85       80       364       349  
Engineered I-Joists — LF
     133       110       132       124       108       136       110       134       483       504  
Engineered Solid Section — CF
     11       9       10       11       10       11       10       10       41       42  
 
                                                                                
Cellulose Fiber and White Papers (thousands):
                                                                                
Pulp — air-dry metric tons
     621       619       614       636       663       652       604       639       2,502       2,546  
Paper — tons (2)
     763       743       752       736       765       766       780       761       3,060       3,006  
Coated groundwood — tons
     55       55       59       61       60       62       60       62       234       240  
Liquid packaging board — tons
     60       61       64       67       69       71       71       67       264       266  
Paper converting — tons
     475       460       487       442       483       471       505       465       1,950       1,838  
 
                                                                                
Containerboard, Packaging and Recycling (thousands):
                                                                                
Containerboard — tons (3)
     1,503       1,503       1,581       1,598       1,597       1,604       1,587       1,586       6,268       6,291  
Packaging — MSF
     18,628       19,493       19,915       20,208       19,416       19,473       20,130       18,648       78,089       77,822  
Recycling — tons (4)
     1,624       1,607       1,673       1,707       1,716       1,703       1,730       1,701       6,743       6,718  
Kraft bags and sacks — tons
     23       24       22       23       21       23       22       24       88       94  
 
(1)   Veneer production represents lathe production and includes volumes that are further processed into plywood and engineered lumber products by company mills.
 
(2)   Paper production includes unprocessed rolls and converted paper volumes.
 
(3)   Containerboard production represents machine production and includes volumes that are further processed into packaging and kraft bags and sacks by company facilities.
 
(4)   Recycling production includes volumes processed in Weyerhaeuser recycling facilities that are consumed by company facilities and brokered volumes.

 

 

WEYERHAEUSER COMPANY
STATISTICAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEET (unaudited)
          (in millions)
                                         
    March 27,     June 26,     Sept. 25,     Dec. 25,     Dec. 26,  
    2005     2005     2005     2005     2004  
Assets
                                        
 
                                        
Weyerhaeuser
                                        
Current assets:
                                        
Cash and short-term investments
   $ 402     $ 1,704     $ 885     $ 818     $ 1,044  
Receivables, less allowances
     1,816       1,987       1,948       1,727       1,534  
Inventories
     2,109       2,004       1,977       1,917       1,876  
Prepaid expenses
     633       611       580       414       588  
Assets of discontinued operations
     1,166       41       38       —       1,183  
 
                              
Total current assets
     6,126       6,347       5,428       4,876       6,225  
Property and equipment
     11,439       11,170       11,089       10,510       11,661  
Construction in progress
     323       451       544       533       268  
Timber and timberlands at cost, less depletion charged to disposals
     3,712       3,709       3,691       3,705       3,733  
Investments in and advances to equity affiliates
     491       495       496       486       489  
Goodwill
     2,997       2,977       2,988       2,982       2,996  
Deferred pension and other assets
     1,197       1,249       1,309       1,314       1,201  
Restricted assets held by special purpose entities
     914       916       914       916       909  
 
                              
 
     27,199       27,314       26,459       25,322       27,482  
 
                              
 
                                        
Real Estate and Related Assets
                                        
Cash and short-term investments
     5       11       4       286       153  
Receivables, less allowances
     60       57       49       42       43  
Real estate and land for sale and development
     2,083       2,333       2,288       2,222       1,947  
Other assets
     323       278       357       357       329  
 
                              
 
     2,471       2,679       2,698       2,907       2,472  
 
                              
 
                                        
Total assets
   $ 29,670     $ 29,993     $ 29,157     $ 28,229     $ 29,954  
 
                              

 

 

                                         
    March 27,     June 26,     Sept. 25,     Dec. 25,     Dec. 26,  
    2005     2005     2005     2005     2004  
Liabilities and Shareholders’ Interest
                                        
 
                                        
Weyerhaeuser
                                        
Current liabilities:
                                        
Notes payable and commercial paper
   $ 2     $ 2     $ 3     $ 3     $ 3  
Current maturities of long-term debt
     95       225       182       189       488  
Accounts payable
     1,122       1,198       1,144       1,241       1,130  
Accrued liabilities
     1,311       1,654       1,560       1,622       1,431  
Liabilities of discontinued operations
     301       30       27       —       292  
 
                              
Total current liabilities
     2,831       3,109       2,916       3,055       3,344  
Long-term debt
     9,263       8,926       8,010       7,604       9,277  
Deferred income taxes
     4,355       4,320       4,396       4,035       4,351  
Deferred pension, other postretirement benefits and other liabilities
     1,492       1,558       1,583       1,591       1,497  
Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities
     820       784       783       764       815  
 
                              
 
     18,761       18,697       17,688       17,049       19,284  
 
                              
 
                                        
Real Estate and Related Assets
                                        
Notes payable and commercial paper
     2       5       3       7       2  
Long-term debt
     869       854       852       851       867  
Other liabilities
     533       588       488       522       546  
 
                              
 
     1,404       1,447       1,343       1,380       1,415  
 
                              
Total liabilities
     20,165       20,144       19,031       18,429       20,699  
 
                                        
Shareholders’ interest
     9,505       9,849       10,126       9,800       9,255  
 
                              
 
                                        
Total liabilities and shareholders’ interest
   $ 29,670     $ 29,993     $ 29,157     $ 28,229     $ 29,954  
 
                              

 

 

STATEMENT OF CASH FLOWS
SELECTED INFORMATION (unaudited)
          (in millions)
                                                                                 
    Q1     Q2     Q3     Q4     Year ended  
    March 27,     March 28,     June 26,     June 27,     Sept. 25,     Sept. 26,     Dec. 25,     Dec. 26,     Dec. 25,     Dec. 26,  
    2005     2004     2005     2004     2005     2004     2005     2004     2005     2004  
                     
(Weyerhaeuser only, excludes Real Estate & Related Assets)
                                                                                
Net cash from operations
   $ (203 )   $ (89 )   $ 713     $ 787     $ 441     $ 592     $ 669     $ 745     $ 1,620     $ 2,035  
Cash paid for property and equipment
     (117 )     (79 )     (196 )     (80 )     (220 )     (93 )     (310 )     (222 )     (843 )     (474 )
Cash paid for timberlands reforestation
     (12 )     (12 )     (6 )     (6 )     (6 )     (5 )     (8 )     (7 )     (32 )     (30 )
Cash received from issuances of debt
     —       —       1       —       —       —       —       1       1       1  
Revolving credit facilities, notes and commercial paper borrowings, net
     19       67       23       (80 )     (40 )     (6 )     170       35       172       16  
Payments on debt
     (404 )     (60 )     (206 )     (813 )     (965 )     (253 )     (603 )     (742 )     (2,178 )     (1,868 )
Proceeds from equity offering
     —       —       —       954       —       —       —       —       —       954  
Proceeds from the sale of operations
     —       —       1,107       —       —       —       102       —       1,209       —  

 

 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  WEYERHAEUSER COMPANY
 		  
  By:   /s/ Jeanne Hillman   
  Its: Vice President and   
    Controller   
 
Date: February 3, 2006