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Weyerhaeuser News Release

Weyerhaeuser Reports Fourth Quarter, Full Year Results

FEDERAL WAY, Wash., February 3, 2012 Weyerhaeuser Company (NYSE: WY) today reported net earnings of $65 million for the fourth quarter, or 12 cents per diluted share, on net sales from continuing operations of $1.6 billion. This compares with net earnings of $171 million, or 32 cents per diluted share, on net sales from continuing operations of $1.5 billion for the same period last year.

Earnings for the fourth quarter of 2011 include net after-tax charges of $12 million for restructuring and asset impairments. Excluding these items, the company reported net earnings of $77 million, or 14 cents per diluted share. This compares with net earnings before special items of $52 million in the fourth quarter of 2010.

For the full year 2011, Weyerhaeuser reported net earnings of $331 million, or $0.61 per diluted share, on net sales from continuing operations of $6.2 billion. This compares with net earnings of $1.281 billion on net sales from continuing operations of $6.0 billion for the full year 2010. Earnings for the full year 2010 include $1.064 billion from income tax adjustments related to Weyerhaeuser's conversion to a Real Estate Investment Trust (REIT).

“In 2011 we took full advantage of opportunities to improve our performance in a weaker than expected US housing market,” said Dan Fulton, president and chief executive officer. “In Timberlands, we used our long term competitive strength in the Asian export markets to capitalize on emerging Chinese demand. Cellulose Fibers leveraged strong customer relationships and excellent operational performance to deliver a second consecutive year of record financial results. Our Real Estate business maintained profitability despite challenging market conditions, and Wood Products generated improved results. Through the sale of our hardwoods and Westwood Shipping Lines businesses we sharpened our strategic direction, and we remain focused on improving performance to generate superior sustainable returns for our shareholders in 2012.”

WEYERHAEUSER FINANCIAL HIGHLIGHTS

2011

2010

(millions, except per share data)

3Q

4Q

4Q

Net sales

 

 

 

From continuing operations

$1,569

$1,615

$1,516

   From discontinued operations (1)

$83

$0

$148

Total net sales

$1,652

$1,615

$1,664

Net earnings

 

 

 

From continuing operations

$133

$65

$171

   From discontinued operations (1)

$24

$0

$0

Net earnings

$157

$65

$171

Weighted average shares outstanding, diluted

540

538

538

Earnings per diluted share

 

 

 

From continuing operations

$0.25

$0.12

$0.32

   From discontinued operations (1)

$0.04

$0.00

$0.00

Earnings per diluted share

$0.29

$0.12

$0.32

Net earnings before special items

$66

$77

$52

Earnings per diluted share before special items

$0.12

$0.14

$0.10

Net cash from operations

$117

$147

$225

Net change in cash and cash equivalents

$90

($18)

$99

Cash and cash equivalents at end of period

$971

$953

$1,467

 TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)

3Q 2011

4Q 2011

Change

Net sales

$252

$274

$22

Contribution to pre-tax earnings before special items

$62

$70

$8

Pre-tax gain from special items

$0

$0

$0

GAAP contribution to pre-tax earnings

$62

$70

$8

 4Q 2011 Performance - The segment's earnings improved $8 million in the fourth quarter compared with the third. Earnings from disposition of non-strategic timberlands increased $17 million to $21 million, compared with $4 million in the third quarter. Average selling prices for Western logs declined due to weaker Chinese export demand. These declines were partially offset by increased log sales volumes and slightly higher selling prices in the South. Fee harvest volumes rose, primarily in the South. Silviculture and road costs were lower, and fuel costs increased.

1Q 2012 Outlook - Excluding earnings from disposition of non-strategic timberlands, Weyerhaeuser expects slightly higher earnings from the Timberlands segment in the first quarter. The company anticipates increased fee harvest volumes in the West and slightly improved average selling prices due to a higher percentage of export logs sold to Japan. Weyerhaeuser also anticipates higher fuel costs and seasonally higher silviculture expenses.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

3Q 2011

4Q 2011

Change

Net sales

 

 

 

From continuing operations

$603

$542

($61)

From discontinued operations

$27

$0

($27)

Total net sales

$630

$542

($88)

Charge to pre-tax earnings before special items

 

 

 

From continuing operations

($43)

($61)

($18)

From discontinued operations

($4)

$0

$4

Total charge to pre-tax earnings before special items

($47)

($61)

($14)

Pre-tax charge from special items

($46)

($19)

$27

GAAP charge to pre-tax earnings

($93)

($80)

$13

4Q 2011 Performance - Results from continuing operations declined $18 million compared with the third quarter. Selling prices and volumes were seasonally lower for most products. The segment reduced operating rates to match weaker market demand, resulting in higher per unit manufacturing costs.

Fourth quarter includes special charges of $19 million for restructuring and asset impairments. Third quarter included special charges of $46 million related to restructuring, asset impairments, and sale of the hardwoods operations. Weyerhaeuser completed the sale of the hardwoods operations in the third quarter.

1Q 2012 Outlook - Excluding special items, Weyerhaeuser anticipates a smaller loss from the Wood Products segment in the first quarter.  The company expects slightly higher selling prices for lumber and oriented strand board and increased sales volumes across all product lines. Unit manufacturing costs should decline due to seasonally improved operating rates.

CELLULOSE FIBERS

FINANCIAL HIGHLIGHTS (millions)

3Q 2011

4Q 2011

Change

Net sales

$503

$523

$20

Contribution to pre-tax earnings before special items

$135

$134

($1)

Pre-tax gain from special items

$0

$0

$0

GAAP contribution to pre-tax earnings

$135

$134

($1)

 4Q 2011 Performance - Fourth quarter earnings declined $1 million compared with third quarter.  Average selling prices for pulp declined throughout the fourth quarter. By the end of the quarter, commodity prices for Northern bleached softwood kraft (NBSK) pulp had fallen to levels last seen in the first quarter of 2010. The effect of the price decline was mostly offset by increased sales volumes. There were no annual maintenance outages in the third or fourth quarter.

1Q 2012 Outlook - Weyerhaeuser expects substantially lower earnings from the Cellulose Fibers segment in the first quarter. The company anticipates considerably lower average selling prices for pulp and significantly higher maintenance costs due to scheduled annual maintenance outages. Weyerhaeuser expects seasonally higher energy costs and increased fiber and chemical costs.

REAL ESTATE

FINANCIAL HIGHLIGHTS (millions)

3Q 2011

4Q 2011

Change

Net sales

$211

$276

$65

Contribution to pre-tax earnings before special items

$10

$41

$31

Pre-tax gain from special items

$0

$0

$0

GAAP contribution to pre-tax earnings

$10

$41

$31

4Q 2011 Performance - Earnings increased $31 million compared with the third quarter.  Home closings increased 15 percent to 582 single-family homes. Average margins on homes closed improved due to mix. Fourth quarter includes earnings of $19 million from the sale of land and lots. There were no significant earnings from land and lot sales in the third quarter.

1Q 2012 Outlook - Weyerhaeuser anticipates a loss from single-family homebuilding operations in the first quarter. The company expects a seasonal decline in home closing volume and lower average margins due to mix.

CORPORATE AND OTHER

FINANCIAL HIGHLIGHTS (millions)

3Q 2011

4Q 2011

Change

Charge to pre-tax earnings before special items

 

 

 

From continuing operations

($16)

($22)

($6)

From discontinued operations

($4)

$0

$4

Total charge to pre-tax earnings before special items

($20)

($22)

($2)

Pre-tax gain from special items

$58

$0

($58)

GAAP contribution (charge) to pre-tax earnings

$38

($22)

($60)

Corporate and Other results from continuing operations declined $6 million compared with the third quarter, as gains on foreign exchange were more than offset by increased charges for share-based compensation and other items.

Third quarter results included pre-tax gains of $58 million from special items, primarily the sale of Westwood Shipping Lines.

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. Additional information about us is available at http://www.weyerhaeuser.com.

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