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WHO WE ARE
Our Business Segments In the Consolidated Results section of Management’s Discussion and Analysis of Financial Condition and Results of Operations, you will find our overall performance results for our business segments: • Timberlands; • Wood Products; • Cellulose Fibers; • Fine Paper; • Containerboard, Packaging and Recycling; • Real Estate; and • Corporate and Other. Detailed financial information about our business segments and our geographic locations is in Note 2: Business Segments and Note 24: Geographic Areas of Notes to Consolidated Financial Statements as well as further in this section and in the Management’s Discussion and Analysis of Financial Condition and Results of Operations. Our History We started out as Weyerhaeuser Timber Company, incorporated in the state of Washington in January 1900 when Frederick Weyerhaeuser and 15 partners bought 900,000 acres of timberland. In the 107 years since then, we have worked to be the best forest products company in the world. Our innovations and accomplishments through the years include: • establishing the nation’s first certified tree farm in 1941; • hand-planting 18.4 million seedlings through a foot or more of ash to transform 68,000 acres of devastated, heat-blasted landscape – left from the Mount St. Helens eruption in 1980 – into new forests that will be ready for harvesting in 2020; and • making our forests among the most productive in the world by using our High Yield Forestry program – an approach that combines economic benefits with a concern for habitat, wildlife, water quality and other forest values. Competition in Our Markets Our major markets – both domestic and foreign – are highly competitive, with numerous companies selling similar products. Many of our products also compete against substitutes for wood and wood-fiber products. In real estate development and other related activities, we compete against numerous regional and national firms. We compete in our markets primarily through price, product quality and service levels. Our business segments compete based on the following strategies: • Timberlands is extracting maximum value for each acre. • Wood Products is delivering integrated solutions to the residential construction and industrial markets. • Cellulose Fibers is concentrating primarily on value-added pulp products. • Containerboard, Packaging and Recycling is focusing its packaging products and services in selected market segments where we meet customer requirements at the lowest cost for our supply chain. • Weyerhaeuser Real Estate Company is delivering its unique value propositions and is looking for growth opportunities in target markets. • International operations, in the Corporate and Other segment, is expanding our position as a low cost softwood and hardwood timber grower. Our Fine Paper segment was divested in a 2007 transaction with Domtar, Inc. Sales Outside the U.S. In 2007, 18 percent – or $3.1 billion – of our total consolidated sales and revenues including sales from discontinued operations were to customers outside the U.S. That included: • $2.0 billion of exports from the U.S.; • $0.6 billion of Canadian export and domestic sales; and • $0.5 billion of other foreign sales. In 2006, 17 percent – or $3.8 billion – of our total consolidated sales and revenues, including sales from discontinued operations, were to customers outside the U.S. That included: • $1.9 billion of exports from the U.S.; • $1.3 billion of Canadian export and domestic sales; and • $0.6 billion of other foreign sales. Shaping Our Business We strategically manage our portfolio to enhance shareholder returns. This ongoing process includes making key acquisitions to complement existing product lines or achieving greater scale in key operations. It also means that we exit businesses that do not fit our long-term strategic direction and divest ourselves of nonstrategic assets. Key acquisition in recent years have included: • MacMillan Bloedel Limited in 1999; • Trus Joist International in 2000; • Willamette Industries in 2002; and • Maracay Homes in 2006. In March 2007, we completed the following set of transactions: • a series of transfers and other transactions resulting in our fine paper business and related assets becoming wholly-owned by Domtar Corporation; • the distribution of shares of Domtar Corporation to our shareholders in exchange for 25 million shares of our common stock; and • the acquisition of Domtar, Inc., an unaffiliated Canadian corporation, by Domtar Corporation. Collectively, these transactions are referred to as the “Domtar Transaction.” In June 2007, we sold our Canadian wood products distribution centers. Other recent dispositions have included: • Coastal British Columbia operations and timberlands (B.C. Coastal) in 2005; • French composite panel operations in 2005; and • North American and Irish composite panel operations in 2006. We continue to reinvest in our businesses through a variety of capital projects. In 2007 our capital expenditures – excluding acquisitions and our Real Estate business segment – totaled $706 million. We expect these investments will: • optimize our existing operations; • allow us to use energy more efficiently; and • increase our competitiveness. We are also focused on: • growing our Timberlands, Wood Products and Real Estate businesses; • structuring business and corporate overhead (selling, general and administrative expense) to support achieving our competitive performance goals; and • retaining and attracting talent critical to executing our strategies. Our Employees We have approximately 37,900 employees. This number includes: • 36,400 employed by our corporate operations and business segments, not including our Real Estate segment; and • 1,500 employed by our Real Estate segment. Of these employees, approximately 12,000 are members of unions covered by multi-year collective bargaining agreements. |