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Weyerhaeuser swings to fourth quarter profit

Feb. 9, 2007 - Weyerhaeuser Company today reported net earnings of $395 million for 2006, or $1.61 per diluted share, on net sales of $21.9 billion. This compares with net earnings of $733 million, or $2.98 per diluted share, on net sales of $22 billion for 2005.

For the fourth quarter 2006, Weyerhaeuser reported net earnings of $450 million, or $1.88 per diluted share, on net sales of $5.7 billion. Last year, Weyerhaeuser reported a fourth quarter net loss of $211 million, or 86 cents per diluted share, on net sales of $5.7 billion.

Fourth quarter 2006 earnings include 14 weeks of results compared to 13 weeks for the same quarter last year and contain the following after-tax items:

  • A gain of $227 million, or 95 cents per diluted share, for the refund of countervailing and anti-dumping duties on Canadian softwood lumber sold in the United States.
  • A gain of $43 million, or 18 cents per diluted share, from the sale of the company's composite panels assets in Ireland.
  • Charges of $36 million, or 15 cents per diluted share, for asset impairments and costs associated with closure of facilities, primarily in Wood Products.
  • Charges of $13 million, or 5 cents per diluted share, for impairment of real estate assets.

The loss for fourth quarter 2005 included the following after-tax items:

  • Charges of $438 million, or $1.78 per diluted share, for facility closures primarily in the Fine Paper, Cellulose Fiber and Containerboard businesses
  • Charges of $32 million, or 13 cents per diluted share, for asset impairment charges, including a charge associated with a California land development.
  • 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 composite panels assets in France.
  • 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.

During fourth quarter 2006, Weyerhaeuser repurchased 5.5 million shares of common stock. As of the end of the fourth quarter, Weyerhaeuser has repurchased 11 million shares of the 18 million-share repurchase previously authorized by the company's board of directors.

"This past year was a time of ongoing dynamic change as we took steps to further improve shareholder value," said Steven R. Rogel, chairman, president and chief executive officer. "These efforts included our work to significantly restructure containerboard packaging and wood products, two of our major segments. To focus our portfolio, we entered into an agreement to combine our fine paper business and related assets with Domtar and began the complex process of implementing this landmark transaction. As part of our growth strategy, we expanded our real estate business and increased our timberlands position in South America. We continue to improve our efficiency by implementing significant changes in how we manage our supply chains and continuing to migrate to a single information technology platform. While we haven't finished our work on many of these efforts, and we may not see their full benefit for several quarters, our continued focus on these initiatives will benefit our shareholders despite challenging market conditions."

DOMTAR TRANSACTION

On Feb. 2, Weyerhaeuser announced an offer to its shareholders for the exchange of some or all of their shares of Weyerhaeuser common stock or exchangeable shares of Weyerhaeuser Company Limited for shares of Domtar Corp. common stock.

The exchange is expected to be tax-free to participating Weyerhaeuser shareholders for U.S. federal income tax purposes. The offer will expire at 12:00 midnight, New York City time, on March 2, unless extended or terminated.

As previously announced on Aug. 23, Weyerhaeuser and Domtar Inc. (NYSE: DTC; TSE) entered into a definitive agreement to combine Weyerhaeuser's fine paper business and related assets with Domtar Inc. to form Domtar Corp., which will become North America's largest producer of fine paper.

The Registration Statement on Form S-4 and S-1 filed by Weyerhaeuser with the Securities and Exchange Commission more fully describes the terms and conditions of the exchange offer.

SOURCE: Weyerhaeuser Company




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