x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Washington | 91-0470860 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
33663 Weyerhaeuser Way South Federal Way, Washington | 98063-9777 | |
(Address of principal executive offices) | (Zip Code) |
PART I | FINANCIAL INFORMATION | |
ITEM 1. | FINANCIAL STATEMENTS: | |
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II | OTHER INFORMATION | |
ITEM 1. | ||
ITEM 1A. | ||
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | NA |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | NA |
ITEM 4. | MINE SAFETY DISCLOSURES | NA |
ITEM 5. | OTHER INFORMATION | NA |
ITEM 6. | ||
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES | JUNE 30, 2012 | JUNE 30, 2011 | JUNE 30, 2012 | JUNE 30, 2011 | |||||||||||
Net sales and revenues | $ | 1,793 | $ | 1,610 | $ | 3,287 | $ | 3,032 | |||||||
Cost of products sold | 1,516 | 1,343 | 2,806 | 2,520 | |||||||||||
Gross margin | 277 | 267 | 481 | 512 | |||||||||||
Selling, general and administrative expenses | 142 | 145 | 292 | 317 | |||||||||||
Research and development expenses | 8 | 7 | 15 | 14 | |||||||||||
Charges for restructuring, closures and impairments | 4 | 7 | 16 | 11 | |||||||||||
Other operating income, net (Note 6) | (53 | ) | (19 | ) | (119 | ) | (193 | ) | |||||||
Operating income | 176 | 127 | 277 | 363 | |||||||||||
Interest income and other | 11 | 9 | 23 | 20 | |||||||||||
Interest expense, net of capitalized interest | (86 | ) | (117 | ) | (173 | ) | (210 | ) | |||||||
Earnings from continuing operations before income taxes | 101 | 19 | 127 | 173 | |||||||||||
Income taxes (Note 13) | (17 | ) | 4 | (2 | ) | (52 | ) | ||||||||
Earnings from continuing operations | 84 | 23 | 125 | 121 | |||||||||||
Loss from discontinued operations, net of income taxes (Note 4) | — | (13 | ) | — | (12 | ) | |||||||||
Net earnings attributable to Weyerhaeuser common shareholders | $ | 84 | $ | 10 | $ | 125 | $ | 109 | |||||||
Earnings (loss) per share attributable to Weyerhaeuser common shareholders, basic and diluted (Note 3): | |||||||||||||||
Continuing operations | $ | 0.16 | $ | 0.04 | $ | 0.23 | $ | 0.22 | |||||||
Discontinued operations | — | (0.02 | ) | — | (0.02 | ) | |||||||||
Net earnings per share | $ | 0.16 | $ | 0.02 | $ | 0.23 | $ | 0.20 | |||||||
Dividends paid per share | $ | 0.15 | $ | 0.15 | $ | 0.30 | $ | 0.30 | |||||||
Weighted average shares outstanding (in thousands) (Note 3): | |||||||||||||||
Basic | 537,966 | 538,599 | 537,667 | 537,873 | |||||||||||
Diluted | 540,033 | 541,095 | 539,880 | 540,790 |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | JUNE 30, 2012 | JUNE 30, 2011 | |||||||||||
Net earnings attributable to Weyerhaeuser common shareholders | $ | 84 | $ | 10 | $ | 125 | $ | 109 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation adjustments | (12 | ) | 2 | (1 | ) | 22 | |||||||||
Actuarial gains, net of tax expense of $8, $49, $21 and $57 | 25 | 96 | 48 | 110 | |||||||||||
Prior service costs, net of tax benefit of $19, $0, $49 and $1 | (36 | ) | (4 | ) | (106 | ) | (3 | ) | |||||||
Unrealized gains on available-for-sale securities | (1 | ) | — | — | — | ||||||||||
Total other comprehensive income (loss) | (24 | ) | 94 | (59 | ) | 129 | |||||||||
Comprehensive income attributable to Weyerhaeuser common shareholders | $ | 60 | $ | 104 | $ | 66 | $ | 238 |
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES | JUNE 30, 2012 | DECEMBER 31, 2011 | |||||
ASSETS | |||||||
Forest Products: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 857 | $ | 950 | |||
Receivables, less allowances of $4 and $6 | 494 | 490 | |||||
Inventories (Note 7) | 487 | 476 | |||||
Prepaid expenses | 86 | 68 | |||||
Deferred tax assets | 100 | 81 | |||||
Total current assets | 2,024 | 2,065 | |||||
Property and equipment, less accumulated depreciation of $6,693 and $6,550 | 2,770 | 2,901 | |||||
Construction in progress | 208 | 145 | |||||
Timber and timberlands at cost, less depletion charged to disposals | 3,963 | 3,978 | |||||
Investments in and advances to equity affiliates | 187 | 192 | |||||
Goodwill | 40 | 40 | |||||
Other assets | 435 | 444 | |||||
Restricted assets held by special purpose entities | 916 | 916 | |||||
10,543 | 10,681 | ||||||
Real Estate: | |||||||
Cash and cash equivalents | 4 | 3 | |||||
Receivables, less discounts and allowances of $6 and $2 | 38 | 41 | |||||
Real estate in process of development and for sale | 581 | 555 | |||||
Land being processed for development | 959 | 936 | |||||
Investments in and advances to equity affiliates | 20 | 21 | |||||
Deferred tax assets | 238 | 240 | |||||
Other assets | 89 | 113 | |||||
Consolidated assets not owned | 3 | 8 | |||||
1,932 | 1,917 | ||||||
Total assets | $ | 12,475 | $ | 12,598 |
JUNE 30, 2012 | DECEMBER 31, 2011 | ||||||
LIABILITIES AND EQUITY | |||||||
Forest Products: | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt (Note 9) | $ | 184 | $ | 12 | |||
Accounts payable | 360 | 336 | |||||
Accrued liabilities (Note 8) | 576 | 593 | |||||
Total current liabilities | 1,120 | 941 | |||||
Long-term debt (Note 9) | 4,005 | 4,181 | |||||
Deferred income taxes | 92 | 93 | |||||
Deferred pension and other postretirement benefits | 1,429 | 1,467 | |||||
Other liabilities | 400 | 408 | |||||
Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities | 778 | 776 | |||||
7,824 | 7,866 | ||||||
Real Estate: | |||||||
Long-term debt (Note 9) | 283 | 285 | |||||
Other liabilities | 171 | 172 | |||||
Consolidated liabilities not owned | — | 8 | |||||
454 | 465 | ||||||
Commitments and contingencies (Note 12) | |||||||
Total liabilities | 8,278 | 8,331 | |||||
Equity: | |||||||
Weyerhaeuser shareholders’ interest: | |||||||
Common shares: $1.25 par value; authorized 1,360,000,000 shares; issued and outstanding: 537,526,343 and 536,425,400 shares | 672 | 671 | |||||
Other capital | 4,620 | 4,595 | |||||
Retained earnings | 132 | 176 | |||||
Cumulative other comprehensive loss (Note 11) | (1,238 | ) | (1,179 | ) | |||
Total Weyerhaeuser shareholders’ interest | 4,186 | 4,263 | |||||
Noncontrolling interests | 11 | 4 | |||||
Total equity | 4,197 | 4,267 | |||||
Total liabilities and equity | $ | 12,475 | $ | 12,598 |
YEAR-TO-DATE ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | |||||
Cash flows from operations: | |||||||
Net earnings | $ | 125 | $ | 109 | |||
Noncash charges (credits) to earnings: | |||||||
Depreciation, depletion and amortization | 226 | 243 | |||||
Deferred income taxes, net | 7 | 26 | |||||
Pension and other postretirement benefits (Note 10) | (58 | ) | 43 | ||||
Share-based compensation expense | 18 | 17 | |||||
Charges for impairment of assets | 12 | 3 | |||||
Net gains on dispositions of assets | (17 | ) | (176 | ) | |||
Foreign exchange transaction (gains) losses (Note 6) | 2 | (8 | ) | ||||
Change in: | |||||||
Receivables less allowances | (23 | ) | (69 | ) | |||
Receivable for taxes | 16 | (27 | ) | ||||
Inventories | (12 | ) | (31 | ) | |||
Real estate and land | (48 | ) | (34 | ) | |||
Prepaid expenses | (20 | ) | (14 | ) | |||
Accounts payable and accrued liabilities | 9 | (23 | ) | ||||
Deposits on land positions and other assets | 22 | (4 | ) | ||||
Pension and postretirement contributions | (68 | ) | (37 | ) | |||
Other | 16 | 9 | |||||
Net cash from operations | 207 | 27 | |||||
Cash flows from investing activities: | |||||||
Property and equipment | (122 | ) | (74 | ) | |||
Timberlands reforestation | (17 | ) | (19 | ) | |||
Proceeds from sale of assets | 24 | 196 | |||||
Other | — | (5 | ) | ||||
Cash from investing activities | (115 | ) | 98 | ||||
Cash flows from financing activities: | |||||||
Cash dividends | (161 | ) | (161 | ) | |||
Change in book overdrafts | (20 | ) | (18 | ) | |||
Payments on debt | (6 | ) | (550 | ) | |||
Exercises of stock options | 7 | 37 | |||||
Other | (4 | ) | (19 | ) | |||
Cash from financing activities | (184 | ) | (711 | ) | |||
Net change in cash and cash equivalents | (92 | ) | (586 | ) | |||
Cash and cash equivalents at beginning of period | 953 | 1,467 | |||||
Cash and cash equivalents at end of period | $ | 861 | $ | 881 | |||
Cash paid (received) during the period for: | |||||||
Interest, net of amount capitalized of $11 and $17 | $ | 168 | $ | 247 | |||
Income taxes | $ | (15 | ) | $ | 15 |
NOTE 1: | ||
NOTE 2: | ||
NOTE 3: | ||
NOTE 4: | ||
NOTE 5: | ||
NOTE 6: | ||
NOTE 7: | ||
NOTE 8: | ||
NOTE 9: | ||
NOTE 10: | ||
NOTE 11: | ||
NOTE 12: | ||
NOTE 13: |
• | majority-owned domestic and foreign subsidiaries and |
• | variable interest entities in which we are the primary beneficiary. |
• | Forest Products – our forest products-based operations, principally the growing and harvesting of timber, the manufacture, distribution and sale of forest products and corporate governance activities; and |
• | Real Estate – our real estate development and construction operations. |
• | We changed the way we classify certain transactions as operating or financing on our Consolidated Statement of Cash Flows. |
• | Results of operations discontinued in 2011 are presented separately on our Consolidated Statement of Operations. Note 4: Discontinued Operations provides information about our discontinued operations. |
• | We now report the elimination of intersegment profit on inventory and the LIFO reserve in Unallocated Items. Previously these company-level adjustments were recorded in the business segments. This provides a better understanding of business operating results. |
• | Timberlands – which includes logs; timber; minerals, oil and gas; and international wood products; |
• | Wood Products – which includes softwood lumber, engineered lumber, structural panels and building materials distribution; |
• | Cellulose Fibers – which includes pulp, liquid packaging board and an equity interest in a newsprint joint venture; and |
• | Real Estate – which includes real estate development, construction and sales. |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | JUNE 30, 2012 | JUNE 30, 2011 | |||||||||||
Sales to and revenues from unaffiliated customers: | |||||||||||||||
Timberlands | $ | 262 | $ | 288 | $ | 512 | $ | 518 | |||||||
Wood Products | 776 | 605 | 1,410 | 1,131 | |||||||||||
Cellulose Fibers | 459 | 526 | 932 | 1,032 | |||||||||||
Real Estate | 296 | 191 | 433 | 351 | |||||||||||
1,793 | 1,610 | 3,287 | 3,032 | ||||||||||||
Intersegment sales: | |||||||||||||||
Timberlands | 146 | 134 | 336 | 325 | |||||||||||
Wood Products | 20 | 21 | 40 | 41 | |||||||||||
166 | 155 | 376 | 366 | ||||||||||||
Total sales and revenues | 1,959 | 1,765 | 3,663 | 3,398 | |||||||||||
Intersegment eliminations | (166 | ) | (155 | ) | (376 | ) | (366 | ) | |||||||
Total | $ | 1,793 | $ | 1,610 | $ | 3,287 | $ | 3,032 | |||||||
Net contribution to earnings from continuing operations: | |||||||||||||||
Timberlands | $ | 77 | $ | 118 | $ | 147 | $ | 359 | |||||||
Wood Products | 36 | (54 | ) | 23 | (86 | ) | |||||||||
Cellulose Fibers | 36 | 85 | 84 | 177 | |||||||||||
Real Estate | 15 | 8 | 7 | 7 | |||||||||||
164 | 157 | 261 | 457 | ||||||||||||
Unallocated items(1) | 23 | (21 | ) | 39 | (74 | ) | |||||||||
Net contribution to earnings from discontinued operations | — | (19 | ) | — | (17 | ) | |||||||||
Net contribution to earnings | 187 | 117 | 300 | 366 | |||||||||||
Interest expense, net of capitalized interest | (86 | ) | (117 | ) | (173 | ) | (210 | ) | |||||||
Income before income taxes (continuing and discontinued operations) | 101 | — | 127 | 156 | |||||||||||
Income taxes (continuing and discontinued operations) | (17 | ) | 10 | (2 | ) | (47 | ) | ||||||||
Net earnings attributable to Weyerhaeuser common shareholders | $ | 84 | $ | 10 | $ | 125 | $ | 109 |
(1) | Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation; pension and postretirement costs; foreign exchange transaction gains and losses associated with financing; and the elimination of intersegment profit in inventory and the LIFO reserve. |
• | $0.16 during second quarter and $0.23 during first half 2012, respectively; and |
• | $0.02 during second quarter and $0.20 during first half 2011, respectively. |
• | weighted average number of our outstanding common shares and |
• | the effect of our outstanding dilutive potential common shares. |
• | outstanding stock options, |
• | restricted stock units and |
• | performance share units. |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||
SHARES IN THOUSANDS | JUNE 30, 2012 | JUNE 30, 2011 | JUNE 30, 2012 | JUNE 30, 2011 | |||||||
Stock options | 21,992 | 24,197 | 21,992 | 24,197 | |||||||
Performance share units | 537 | 476 | 537 | 476 |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2011 | |||||
Net sales: | |||||||
Hardwoods | $ | 97 | $ | 195 | |||
Westwood Shipping Lines | 66 | 124 | |||||
Total net sales from discontinued operations | $ | 163 | $ | 319 | |||
Income (loss) from operations: | |||||||
Hardwoods | $ | 1 | $ | 1 | |||
Westwood Shipping Lines | 2 | 4 | |||||
Other discontinued operations | (13 | ) | (13 | ) | |||
Total loss from discontinued operations | (10 | ) | (8 | ) | |||
Income taxes | 3 | 2 | |||||
Net loss from operations | (7 | ) | (6 | ) | |||
Charges related to hardwoods sale (after-tax) | (6 | ) | (6 | ) | |||
Net loss from discontinued operations | $ | (13 | ) | $ | (12 | ) |
• | options vest ratably over 4 years; |
• | options vest or continue to vest in the event of death, disability, or retirement at an age of at least 62; |
• | options continue vesting for one year in the event of involuntary termination when the retirement criteria for full or continued vesting have not been met; and |
• | options stop vesting for all other situations including early retirement prior to age 62. |
OPTIONS | |||
Expected volatility | 40.41 | % | |
Expected dividends | 2.94 | % | |
Expected term (in years) | 5.33 | ||
Risk-free rate | 1.01 | % | |
Weighted average grant date fair value | $ | 5.72 |
• | restricted stock units vest ratably over 4 years; |
• | restricted stock units immediately vest in the event of death while employed or disability; |
• | restricted stock units partially vest upon retirement at an age of at least 62 or job elimination depending on the employment period after grant date; and |
• | restricted stock units will be forfeited upon termination of employment in all other situations including early retirement prior to age 62. |
• | units vest 50 percent, 25 percent and 25 percent on the second, third and fourth anniversaries of the grant date, respectively, as long as the individual remains employed by the company; |
• | units fully vest in the event of death while employed or disability; |
• | units partially vest upon retirement at an age of at least 62 or job elimination depending on the employment period after grant date; and |
• | units will be forfeited upon termination of employment in all other situations including early retirement prior to age 62. |
Performance Share Units | ||||||
Performance period | 1/1/2012 – 12/31/2013 | |||||
Valuation date closing stock price | $ | 20.56 | ||||
Expected dividends | 2.92 | % | ||||
Risk-free rate | 0.08 | % | – | 0.32 | % | |
Volatility | 34.66 | % | – | 34.86 | % |
JUNE 30, 2012 | |||
Expected volatility | 35.76 | % | |
Expected dividends | 2.68 | % | |
Expected term (in years) | 2.36 | ||
Risk-free rate | 0.38 | % | |
Weighted average fair value | $ | 4.66 |
• | includes both recurring and occasional income and expense items and |
• | can fluctuate from year to year. |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | JUNE 30, 2012 | JUNE 30, 2011 | |||||||||||
Gain on sale of non-strategic timberlands | $ | — | $ | — | $ | — | $ | (152 | ) | ||||||
Gain on postretirement plan amendment (Note 10) | (51 | ) | — | (103 | ) | — | |||||||||
Gain on disposition of assets | (7 | ) | (4 | ) | (8 | ) | (8 | ) | |||||||
Foreign exchange (gains) losses, net | 9 | (1 | ) | 2 | (8 | ) | |||||||||
Land management income | (6 | ) | (7 | ) | (12 | ) | (13 | ) | |||||||
Other, net | 2 | (7 | ) | 2 | (12 | ) | |||||||||
Total other operating income, net | $ | (53 | ) | $ | (19 | ) | $ | (119 | ) | $ | (193 | ) |
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | DECEMBER 31, 2011 | |||||
Logs and chips | $ | 70 | $ | 68 | |||
Lumber, plywood, panels and engineered lumber | 142 | 134 | |||||
Pulp and paperboard | 161 | 181 | |||||
Other products | 81 | 76 | |||||
Materials and supplies | 137 | 137 | |||||
591 | 596 | ||||||
Less LIFO reserve | (104 | ) | (120 | ) | |||
Total | $ | 487 | $ | 476 |
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | DECEMBER 31, 2011 | |||||
Wages, salaries and severance pay | $ | 110 | $ | 136 | |||
Pension and postretirement | 64 | 63 | |||||
Vacation pay | 46 | 44 | |||||
Income taxes | 13 | 13 | |||||
Taxes – Social Security and real and personal property | 33 | 29 | |||||
Interest | 99 | 99 | |||||
Customer rebates and volume discounts | 36 | 54 | |||||
Deferred income | 62 | 59 | |||||
Other | 113 | 96 | |||||
Total | $ | 576 | $ | 593 |
JUNE 30, 2012 | DECEMBER 31, 2011 | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | CARRYING VALUE | FAIR VALUE (LEVEL 2) | CARRYING VALUE | FAIR VALUE (LEVEL 2) | |||||||||||
Long-term debt (including current maturities): | |||||||||||||||
Forest Products | $ | 4,189 | $ | 4,922 | $ | 4,193 | $ | 4,579 | |||||||
Real Estate | $ | 283 | $ | 284 | $ | 285 | $ | 291 |
• | market approach – based on quoted market prices for the same types and issues of our debt; or |
• | income approach – based on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt. |
• | the short-term nature of these instruments, |
• | carrying short-term investments at expected net realizable value and |
• | the allowance for doubtful accounts. |
PENSION | |||||||||||||||
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | JUNE 30, 2012 | JUNE 30, 2011 | |||||||||||
Service cost | $ | 12 | $ | 13 | $ | 26 | $ | 25 | |||||||
Interest cost | 66 | 70 | 131 | 139 | |||||||||||
Expected return on plan assets | (105 | ) | (106 | ) | (210 | ) | (211 | ) | |||||||
Amortization of actuarial loss | 45 | 34 | 87 | 69 | |||||||||||
Amortization of prior service cost | 2 | 3 | 4 | 7 | |||||||||||
Loss due to curtailment and special termination benefits | — | — | — | 1 | |||||||||||
Total net periodic benefit cost | $ | 20 | $ | 14 | $ | 38 | $ | 30 |
OTHER POSTRETIREMENT BENEFITS | |||||||||||||||
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | JUNE 30, 2012 | JUNE 30, 2011 | |||||||||||
Service cost | $ | 1 | $ | — | $ | 1 | $ | 1 | |||||||
Interest cost | 3 | 6 | 7 | 12 | |||||||||||
Amortization of actuarial loss | 3 | 4 | 7 | 7 | |||||||||||
Amortization of prior service credit | (57 | ) | (5 | ) | (115 | ) | (11 | ) | |||||||
Other | — | — | 4 | 4 | |||||||||||
Total net periodic benefit cost (credit) | $ | (50 | ) | $ | 5 | $ | (96 | ) | $ | 13 |
• | $23 million increase in the liability for deferred pension; |
• | $9 million decrease in the liability for deferred income taxes; and |
• | $14 million net increase in cumulative other comprehensive loss, which resulted in a decrease in total Weyerhaeuser shareholders' interest. |
• | make approximately $87 million of required contributions to our Canadian registered and nonregistered pension plans in 2012; |
• | contribute approximately $20 million to our U.S. nonqualified pension plans in 2012; and |
• | make U.S. and Canadian other postretirement benefit payments of approximately $42 million in 2012. |
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | DECEMBER 31, 2011 | |||||
Foreign currency translation adjustments | $ | 410 | $ | 411 | |||
Net pension and other postretirement benefit loss not yet recognized in earnings | (1,773 | ) | (1,821 | ) | |||
Prior service credit not yet recognized in earnings | 121 | 227 | |||||
Unrealized gains on available-for-sale securities | 4 | 4 | |||||
Total | $ | (1,238 | ) | $ | (1,179 | ) |
• | legal proceedings and |
• | environmental matters. |
• | is subject to a great many variables and |
• | cannot be predicted with certainty. |
• | could have a material adverse effect on our results of operations, cash flows or financial position in any given quarter or year; but |
• | will not have a material adverse effect on our long-term results of operations, cash flows or financial position. |
• | site remediation and |
• | asset retirement obligations. |
• | are a party to various proceedings related to the cleanup of hazardous waste sites and |
• | have been notified that we may be a potentially responsible party related to the cleanup of other hazardous waste sites for which proceedings have not yet been initiated. |
DOLLAR AMOUNTS IN MILLIONS | |||
First Quarter 2012: | |||
Income taxes on postretirement plan amendment discussed in Note 10 | $ | (18 | ) |
State income tax settlements | $ | 8 | |
Second Quarter 2012: | |||
Income taxes on postretirement plan amendment discussed in Note 10 | $ | (18 | ) |
Income tax settlements | $ | (3 | ) |
First Quarter 2011: | |||
Income taxes on a non-strategic timberlands gain discussed in Note 6 | $ | (56 | ) |
Second Quarter 2011: | |||
Tax benefit on early extinguishment of debt discussed in Note 9 | $ | 10 |
• | are based on various assumptions we make and |
• | may not be accurate because of risks and uncertainties surrounding the assumptions that we make. |
• | slightly lower export log realizations, lower domestic selling prices for Western logs, somewhat lower Southern log price realizations, higher earnings from the disposition of non-strategic timberlands, and comparable earnings in our Timberlands segment; |
• | flat to slightly lower sales volumes, seasonally softer sales realizations, increased log costs in Canada, flat log costs in the South, declining log costs in the West, and solidly profitable results in our Wood Products segment; |
• | weaker selling prices for pulp, higher pulp sales volumes, improved productivity, lower annual maintenance expense, reduced chemical and energy and fiber costs, slightly higher freight expense, and significantly higher earnings in our Cellulose Fiber segment; and |
• | higher home closing volume, slightly lower average selling prices, gross margins of approximately 20 percent, increased selling expenses, and increased earnings from single-family homebuilding operations in our Real Estate segment. |
• | the economy; |
• | regulations; |
• | adverse litigation outcomes and the adequacy of reserves; |
• | changes in accounting principles; |
• | contributions to pension plans; |
• | projected benefit payments; |
• | projected tax rates and credits; and |
• | other related matters. |
• | 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 our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; |
• | performance of our manufacturing operations, including maintenance requirements; |
• | the successful execution of our internal performance plans, including restructurings and cost reduction initiatives; |
• | the level of competition from domestic and foreign producers; |
• | the effect of weather; |
• | the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters; |
• | raw material prices; |
• | energy prices; |
• | transportation costs; |
• | the effect of forestry, land use, environmental and other governmental regulations; |
• | federal tax policies; |
• | legal proceedings; |
• | performance of pension fund investments and related derivatives; |
• | the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation; |
• | changes in accounting principles; and |
• | other factors described under “Risk Factors” in our annual report on Form 10-K. |
• | economic activity in Europe and Asia – particularly Japan and China; |
• | currency exchange rates – particularly the relative value of the U.S. dollar to the euro and Canadian dollar and the relative value of the euro and yen; and |
• | restrictions on international trade or tariffs imposed on imports. |
• | Price realizations refer to net selling prices – this includes selling price plus freight, minus normal sales deductions. |
• | Net contribution to earnings can be positive or negative and refers to earnings (loss) attributable to Weyerhaeuser shareholders before interest expense and income taxes. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||||||||
Net sales and revenues | $ | 1,793 | $ | 1,610 | $ | 183 | $ | 3,287 | $ | 3,032 | $ | 255 | |||||||||||
Operating income | $ | 176 | $ | 127 | $ | 49 | $ | 277 | $ | 363 | $ | (86 | ) | ||||||||||
Loss from discontinued operations, net of tax | $ | — | $ | (13 | ) | $ | 13 | $ | — | $ | (12 | ) | $ | 12 | |||||||||
Net earnings attributable to Weyerhaeuser common shareholders | $ | 84 | $ | 10 | $ | 74 | $ | 125 | $ | 109 | $ | 16 | |||||||||||
Net earnings per share attributable to Weyerhaeuser common shareholders, basic and diluted | $ | 0.16 | $ | 0.02 | $ | 0.14 | $ | 0.23 | $ | 0.20 | $ | 0.03 |
• | Wood Products segment sales increased $171 million, primarily due to higher sales volumes across all major product lines and improved selling prices for lumber, oriented strand board (OSB) and plywood; and |
• | Real Estate segment sales increased $105 million, primarily due to the sale of a 3,200 acre master planned community in Houston, Texas. |
• | Cellulose Fibers segment sales decreased $67 million, primarily due to lower pulp price realizations; and |
• | Timberlands segment sales decreased $26 million, primarily due to a decrease in timberlands exchanges and lower mineral, oil and gas revenue partially offset by increased sales in our international operations. |
• | a $51 million pretax gain recognized in 2012 related to a previously announced postretirement plan amendment; and |
• | a $31 million decrease in interest expense due to lower charges associated with the early extinguishment of debt and lower interest due to a lower level of debt. |
• | Wood Products segment sales increased $279 million, primarily due to higher sales volumes across all major product lines and improved selling prices for lumber, OSB and plywood; and |
• | Real Estate segment sales increased $82 million, primarily due to the sale of a 3,200 acre master planned community in Houston, Texas. |
• | a $103 million pretax gain recognized in 2012 related to a previously announced postretirement plan amendment; |
• | a $50 million decrease in income taxes due to the change in discrete tax items and lower income in our TRS in year-to-date 2012 compared to our TRS in year-to-date 2011; |
• | a $37 million decrease in interest expense due to lower charges associated with the early extinguishment of debt and lower interest due to a lower level of debt; and |
• | a $25 million decrease in selling, general and administrative expenses as the result of previous cost reduction efforts and lower share-based compensation expense. |
• | a pretax gain of $152 million on the sale of 82,000 acres of non-strategic timberlands in 2011; and |
• | gross margin decreased $31 million, primarily due to lower pulp price realizations in our Cellulose Fibers segment and fewer timberlands exchanges and higher and better-use land sales in our Timberlands segment partially offset by higher price realizations of lumber, OSB and plywood in our Wood Products segment. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||||||||
Net sales and revenues to unaffiliated customers: | |||||||||||||||||||||||
Logs: | |||||||||||||||||||||||
West | $ | 146 | $ | 152 | $ | (6 | ) | $ | 276 | $ | 262 | $ | 14 | ||||||||||
South | 56 | 49 | 7 | 106 | 90 | 16 | |||||||||||||||||
Canada | 2 | 1 | 1 | 9 | 8 | 1 | |||||||||||||||||
Subtotal logs sales and revenues | 204 | 202 | 2 | 391 | 360 | 31 | |||||||||||||||||
Pay as cut timber sales | 9 | 8 | 1 | 20 | 16 | 4 | |||||||||||||||||
Timberlands exchanges(1) | 7 | 39 | (32 | ) | 15 | 60 | (45 | ) | |||||||||||||||
Higher and better-use land sales(1) | 5 | 2 | 3 | 9 | 6 | 3 | |||||||||||||||||
Minerals, oil and gas | 7 | 15 | (8 | ) | 14 | 29 | (15 | ) | |||||||||||||||
Products from international operations(2) | 29 | 21 | 8 | 54 | 38 | 16 | |||||||||||||||||
Other products | 1 | 1 | — | 9 | 9 | — | |||||||||||||||||
Subtotal net sales and revenues to unaffiliated customers | 262 | 288 | (26 | ) | 512 | 518 | (6 | ) | |||||||||||||||
Intersegment sales: | |||||||||||||||||||||||
United States | 115 | 107 | 8 | 227 | 219 | 8 | |||||||||||||||||
Other | 31 | 27 | 4 | 109 | 106 | 3 | |||||||||||||||||
Subtotal intersegment sales | 146 | 134 | 12 | 336 | 325 | 11 | |||||||||||||||||
Total sales and revenues | $ | 408 | $ | 422 | $ | (14 | ) | $ | 848 | $ | 843 | $ | 5 | ||||||||||
Net contribution to earnings | $ | 77 | $ | 118 | $ | (41 | ) | $ | 147 | $ | 359 | $ | (212 | ) |
(1) | Sales of higher and better use timberland and non-strategic timberlands are conducted through Forest Products subsidiaries. |
(2) | Includes logs, plywood and hardwood lumber harvested or produced by our international operations, primarily in South America. |
• | a $32 million decrease in timberlands exchanges; |
• | an $8 million decrease in minerals, oil and gas revenue primarily due to lower natural gas prices; and |
• | Western log sales decreased $6 million primarily due to lower export and domestic log prices, partially offset by increased sales volumes of 12 percent. |
• | an $8 million increase in sales from our international operations due to a 16 percent increase in plywood prices and a 42 percent increase in plywood sales volumes; and |
• | Southern log sales increased $7 million due to increased sales volumes of 12 percent as a result of increased third party demand. |
• | a $24 million decrease due to fewer timberlands exchanges and higher and better-use land sales; |
• | a $16 million decrease due to lower export and domestic log prices in the West; and |
• | a $7 million decrease in mineral income as a result of lower natural gas prices. |
• | a $45 million decrease in timberlands exchanges; and |
• | a $15 million decrease in minerals, oil and gas revenue primarily due to lower natural gas prices. |
• | Southern log sales increased by $16 million due to increased sales volumes of 17 percent as a result of increased harvest levels in response to increased third party demand. |
• | Sales from our international operations increased by $16 million, primarily due to increased plywood prices of 16 percent and plywood sales volumes of 47 percent. |
• | Western log sales increased by $14 million primarily due to increased sales volumes of 15 percent. Increased export sales to Japan and domestic sales volumes were partially offset by lower export sales to China and domestic prices. |
• | a $152 million decrease due to the sale of 82,000 acres of non-strategic timberlands in 2011; |
• | a $34 million decrease due to fewer timberlands exchanges and higher and better-use land sales; |
• | a $22 million decrease as the mix of export log sales compared to domestic log sales decreased in the West and domestic log prices were lower in both the West and South; |
• | a $14 million decrease in mineral income as a result of lower natural gas prices; and |
• | operating costs increased $11 million, primarily due to higher fuel, logging and road costs. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN THOUSANDS | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||
Third party log sales – cubic meters: | |||||||||||||||||
West | 1,551 | 1,391 | 160 | 2,859 | 2,486 | 373 | |||||||||||
South | 1,354 | 1,211 | 143 | 2,582 | 2,216 | 366 | |||||||||||
Canada | 54 | 23 | 31 | 259 | 217 | 42 | |||||||||||
International | 82 | 79 | 3 | 160 | 151 | 9 | |||||||||||
Total | 3,041 | 2,704 | 337 | 5,860 | 5,070 | 790 | |||||||||||
Fee harvest volumes – cubic meters: | |||||||||||||||||
West | 1,831 | 1,747 | 84 | 3,510 | 3,358 | 152 | |||||||||||
South | 2,788 | 2,355 | 433 | 5,502 | 4,535 | 967 | |||||||||||
International | 161 | 221 | (60 | ) | 333 | 319 | 14 | ||||||||||
Total | 4,780 | 4,323 | 457 | 9,345 | 8,212 | 1,133 |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||||||||
Net sales and revenues: | |||||||||||||||||||||||
Structural lumber | $ | 370 | $ | 290 | $ | 80 | $ | 661 | $ | 550 | $ | 111 | |||||||||||
Engineered solid section | 70 | 64 | 6 | 135 | 117 | 18 | |||||||||||||||||
Engineered I-joists | 49 | 48 | 1 | 90 | 81 | 9 | |||||||||||||||||
Oriented strand board | 138 | 86 | 52 | 249 | 168 | 81 | |||||||||||||||||
Softwood plywood | 26 | 15 | 11 | 49 | 30 | 19 | |||||||||||||||||
Other products produced | 44 | 36 | 8 | 86 | 71 | 15 | |||||||||||||||||
Other products purchased for resale | 79 | 66 | 13 | 140 | 114 | 26 | |||||||||||||||||
Net sales and revenues from continuing operations | $ | 776 | $ | 605 | $ | 171 | $ | 1,410 | $ | 1,131 | $ | 279 | |||||||||||
Net contribution to earnings from continuing operations | 36 | (54 | ) | 90 | 23 | (86 | ) | 109 | |||||||||||||||
Net contribution to earnings from discontinued operations | — | (8 | ) | 8 | — | (8 | ) | 8 | |||||||||||||||
Net contribution to earnings | $ | 36 | $ | (62 | ) | $ | 98 | $ | 23 | $ | (94 | ) | $ | 117 |
• | Structural lumber shipment volumes increased 10 percent and average price realization increased 16 percent. |
• | OSB shipment volumes increased 33 percent and average price realizations increased 21 percent. |
• | Engineered solid section shipment volumes increased 22 percent. |
• | Softwood plywood shipment volumes increased 40 percent and average price realizations increased 25 percent. |
• | Other products produced increased 22 percent. |
• | Other products purchased for resale increased 20 percent. |
• | a $77 million increase as higher lumber, OSB and plywood price realizations more than offset lower prices for engineered I-joists and engineered solid section; |
• | manufacturing costs decreased $13 million, primarily due to increased operating rates; |
• | log costs decreased $7 million, primarily due to lower domestic prices in the West; |
• | by-product sales increased $7 million as the result of higher lumber production volumes; and |
• | 2011 included an $8 million loss from discontinued operations. |
• | Structural lumber shipment volumes increased 11 percent and average price realization increased 8 percent. |
• | OSB shipment volumes increased 32 percent and average price realizations increased 12 percent. |
• | Engineered solid section shipment volumes increased 29 percent. |
• | Engineered I-joists shipment volumes increased 13 percent. |
• | Softwood plywood shipment volumes increased 33 percent and average price realizations increased 23 percent. |
• | Other products produced increased 21 percent. |
• | Other products purchased for resale increased 23 percent. |
• | an $82 million increase as higher lumber, OSB and plywood price realizations more than offset lower prices for engineered I-joists and engineered solid section; |
• | manufacturing costs decreased $24 million, primarily due to increased operating rates; |
• | by-product sales increased $15 million as the result of higher lumber production volumes; |
• | a $10 million increase in sales volumes across all products; |
• | log costs decreased $10 million, primarily due to lower domestic prices in the West and South; and |
• | 2011 included an $8 million loss from discontinued operations. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||
Structural lumber – board feet | 1,056 | 963 | 93 | 1,993 | 1,789 | 204 | |||||||||||
Engineered solid section – cubic feet | 3.9 | 3.2 | 0.7 | 7.5 | 5.8 | 1.7 | |||||||||||
Engineered I-joists – lineal feet | 40 | 38 | 2 | 72 | 64 | 8 | |||||||||||
Oriented strand board – square feet (3/8”) | 643 | 484 | 159 | 1,208 | 916 | 292 | |||||||||||
Softwood plywood – square feet (3/8”) | 81 | 58 | 23 | 154 | 116 | 38 |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||
Structural lumber – board feet | 1,004 | 903 | 101 | 1,962 | 1,796 | 166 | |||||||||||
Engineered solid section – cubic feet | 3.8 | 3.7 | 0.1 | 7.5 | 7.3 | 0.2 | |||||||||||
Engineered I-joists – lineal feet | 37 | 34 | 3 | 71 | 64 | 7 | |||||||||||
Oriented strand board – square feet (3/8”) | 626 | 518 | 108 | 1,227 | 1,012 | 215 | |||||||||||
Softwood plywood – square feet (3/8”) | 50 | 48 | 2 | 101 | 101 | — |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||||||||
Net sales and revenues: | |||||||||||||||||||||||
Pulp | $ | 348 | $ | 409 | $ | (61 | ) | $ | 715 | $ | 807 | $ | (92 | ) | |||||||||
Liquid packaging board | 90 | 93 | (3 | ) | 173 | 178 | (5 | ) | |||||||||||||||
Other products | 21 | 24 | (3 | ) | 44 | 47 | (3 | ) | |||||||||||||||
Total | $ | 459 | $ | 526 | $ | (67 | ) | $ | 932 | $ | 1,032 | $ | (100 | ) | |||||||||
Net contribution to earnings | $ | 36 | $ | 85 | $ | (49 | ) | $ | 84 | $ | 177 | $ | (93 | ) |
• | a $60 million decrease due to lower pulp price realizations and |
• | a $5 million decrease due to increased fiber and chemical costs. |
• | Pulp price realizations decreased $117 per ton – 13 percent – resulting from global uncertainties and a weak euro, while worldwide inventory levels normalized; and |
• | Sales volumes for liquid packaging board decreased 5,000 tons – 3 percent. |
• | a $102 million decrease due to lower pulp price realizations and |
• | a $12 million decrease due to increased fiber and chemical costs. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN THOUSANDS | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||
Pulp – air-dry metric tons | 425 | 426 | (1 | ) | 874 | 862 | 12 | ||||||||||
Liquid packaging board – tons | 76 | 77 | (1 | ) | 146 | 151 | (5 | ) |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN THOUSANDS | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||
Pulp – air-dry metric tons | 417 | 410 | 7 | 855 | 847 | 8 | |||||||||||
Liquid packaging board – tons | 78 | 80 | (2 | ) | 143 | 147 | (4 | ) |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | |||||||||||||||||
Net sales and revenues: | |||||||||||||||||||||||
Single-family housing | $ | 190 | $ | 180 | $ | 10 | $ | 321 | $ | 332 | $ | (11 | ) | ||||||||||
Land | 105 | 11 | 94 | 108 | 18 | 90 | |||||||||||||||||
Other | 1 | — | 1 | 4 | 1 | 3 | |||||||||||||||||
Total | $ | 296 | $ | 191 | $ | 105 | $ | 433 | $ | 351 | $ | 82 | |||||||||||
Net contribution to earnings | $ | 15 | $ | 8 | $ | 7 | $ | 7 | $ | 7 | $ | — |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | JUNE 30, 2012 | JUNE 30, 2011 | 2012 VS. 2011 | ||||||||||||||||||
Homes sold | 764 | 521 | 243 | 1,461 | 1,056 | 405 | |||||||||||||||||
Homes closed | 508 | 459 | 49 | 857 | 822 | 35 | |||||||||||||||||
Homes sold but not closed (backlog) | 1,033 | 673 | 360 | 1,033 | 673 | 360 | |||||||||||||||||
Cancellation rate | 15.4 | % | 16.2 | % | (0.8 | )% | 12.9 | % | 13.9 | % | (1.0 | )% | |||||||||||
Traffic | 17,677 | 14,885 | 2,792 | 31,949 | 27,789 | 4,160 | |||||||||||||||||
Average price of homes closed (in thousands) | $ | 374 | $ | 391 | $ | (17 | ) | $ | 375 | $ | 404 | $ | (29 | ) | |||||||||
Single-family gross margin – excluding impairments (%)(1) | 19.5 | % | 22.4 | % | (2.9 | )% | 18.6 | % | 22.0 | % | (3.4 | )% |
(1) | Single-family gross margin equals revenue less cost of sales and period costs (other than impairments and deposit write-offs). |
• | Revenues from land and lot sales increased $94 million. 2012 included the sale of a 3,200 acre master planned community in Houston, Texas. Land and lot sales are a routine part of our land development business but they do not occur evenly from period to period. |
• | Single-family housing revenues increased $10 million. Home closings increased 11 percent to 508 in 2012 from 459 in 2011, but the average price of homes closed decreased 4 percent to $374,000 in 2012 from $391,000 in 2011. |
• | an $8 million increase in contribution from land and lot sales; and |
• | a $2 million improvement in selling, general and administrative expenses. |
• | a $9 million increase in contribution from land and lot sales; and |
• | a $5 million improvement in selling, general and administrative expenses. |
• | $23 million during second quarter and $39 million during first half 2012. |
• | $(32) million during second quarter and $(83) million during first half 2011. |
• | recognized gains of $51 million during second quarter 2012 and $103 million during first half 2012 related to a previously announced postretirement plan amendment; and |
• | second quarter and first half 2011 included an $11 million charge for environmental remediation expense related to discontinued operations. |
• | $86 million during second quarter and $173 million during first half 2012. |
• | $117 million during second quarter and $210 million during first half 2011. |
DOLLAR AMOUNTS IN MILLIONS | |||
First Quarter 2012: | |||
Income taxes on postretirement plan amendment discussed in Note 10 | $ | (18 | ) |
State income tax settlements | $ | 8 | |
Second Quarter 2012: | |||
Income taxes on postretirement plan amendment discussed in Note 10 | $ | (18 | ) |
Income tax settlements | $ | (3 | ) |
First Quarter 2011: | |||
Income taxes on a non-strategic timberlands gain discussed in Note 6 | $ | (56 | ) |
Second Quarter 2011: | |||
Tax benefit on early extinguishment of debt discussed in Note 9 | $ | 10 |
• | protect the interests of our shareholders and lenders and |
• | have access at all times to all major financial markets. |
• | viewing the capital structure of Forest Products separately from that of Real Estate given the very different nature of their assets and business activity and |
• | minimizing liquidity risk by managing timing of debt maturities. |
• | basic earnings capacity and |
• | liquidity characteristics of their respective assets. |
• | cash received from customers; |
• | cash paid to employees, suppliers and others; |
• | cash paid for interest on our debt; |
• | cash paid for pension and postretirement contributions; and |
• | cash paid for taxes. |
• | $207 million in 2012 and |
• | $27 million in 2011. |
• | Cash paid to employees, suppliers and others decreased approximately $117 million. Cash paid decreased due to the sale of discontinued operations in third quarter 2011 partially offset by increases in cash paid in our Wood Products segment due to increased production rates. |
• | Cash paid for interest decreased $79 million, primarily due to the early retirement of $518 million of debt in second quarter 2011. We paid interest of $168 million in first half 2012 compared to $247 million in first half 2011. |
• | Net cash inflows related to income taxes increased $30 million. We received income tax refunds of $15 million in first half 2012 and paid income taxes of $15 million in first half 2011. |
• | Pension and postretirement contributions increased $31 million, due almost entirely to the timing of contributions to the Canadian registered and nonregistered pension plans. Contributions to the Canadian plans in 2012 are expected to be comparable to 2011, but will be spread more evenly over the year. |
• | Cash we received from customers decreased approximately $18 million. Cash received decreased due to the sale of discontinued operations in third quarter 2011 and decreased sales in our Cellulose Fibers segment partially offset by increased sales in our Wood Products segment and a land sale completed in second quarter 2012 in our Real Estate segment, from which we received approximately $98 million in cash. |
• | make approximately $87 million of required contributions to our Canadian registered and nonregistered pension plans in 2012; |
• | contribute approximately $20 million to our U.S. nonqualified pension plans in 2012; and |
• | make U.S. and Canadian other postretirement benefit payments of approximately $42 million in 2012. |
• | acquisitions of property, equipment, timberlands and reforestation; |
• | investments in or distribution from equity affiliates; and |
• | proceeds from sale of assets and operations. |
YEAR-TO-DATE ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2012 | JUNE 30, 2011 | |||||
Timberlands | $ | 27 | $ | 28 | |||
Wood Products | 21 | 12 | |||||
Cellulose Fibers | 89 | 49 | |||||
Real Estate | 1 | 1 | |||||
Unallocated Items | 1 | 1 | |||||
Discontinued operations | — | 2 | |||||
Total | $ | 139 | $ | 93 |
• | issuances and payment of long-term debt, |
• | borrowings and payments under revolving lines of credit, |
• | changes in our book overdrafts, |
• | proceeds from stock offerings and option exercises and |
• | payment of cash dividends and repurchasing stock. |
• | $6 million in first half 2012, and |
• | $550 million in first half 2011. |
• | had no borrowings outstanding under the credit facility and |
• | were in compliance with the credit facility covenants. |
• | a minimum defined net worth of $3.0 billion; |
• | a defined debt-to-total-capital ratio of 65 percent or less; and |
• | ownership of, or long-term leases on, no fewer than four million acres of timberlands. |
• | total Weyerhaeuser shareholders’ interest, |
• | excluding accumulated comprehensive income (loss) related to pension and postretirement benefits, |
• | minus Weyerhaeuser Company’s investment in subsidiaries in our Real Estate segment or other unrestricted subsidiaries. |
• | total Weyerhaeuser Company (excluding WRECO) debt |
• | plus total defined net worth. |
• | a defined net worth of $4.9 billion and |
• | a defined debt-to-total-capital ratio of 46.2 percent. |
• | a minimum capital base of $100 million, |
• | a defined debt-to-total-capital ratio of 80 percent or less and |
• | Weyerhaeuser Company or a subsidiary must own at least 79 percent of WRECO. |
• | total WRECO shareholders’ interest, |
• | minus intangible assets, |
• | minus WRECO’s investment in joint ventures and partnerships. |
• | total WRECO debt – including any intercompany debt |
• | plus outstanding WRECO guarantees and letters of credit. |
• | total WRECO defined debt and |
• | total WRECO defined net worth. |
• | a capital base of $856 million and |
• | a defined debt-to-total-capital ratio of 50.0 percent. |
• | $7 million in 2012 and |
• | $37 million in 2011. |
12 | Statements regarding computation of ratios |
31 | Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended |
32 | Certification pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) |
100.INS | XBRL Instance Document |
100.SCH | XBRL Taxonomy Extension Schema Document |
100.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
100.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
100.LAB | XBRL Taxonomy Extension Label Linkbase Document |
100.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
WEYERHAEUSER COMPANY | ||
Date: | August 3, 2012 | |
By: | /s/ JERALD W. RICHARDS | |
Jerald W. Richards | ||
Chief Accounting Officer |