8-K 1 f8kjan23.txt 8K 2003 YEAR END 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 January 23, 2004 ---------------------------------- (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 TABLE OF CONTENTS Item 12. Results of Operations and Financial Condition --------------------------------- SIGNATURES ---------- Item 12. Results of Operations and Financial Condition On January 23, 2004, Weyerhaeuser Company issued a press release as follows: FEDERAL WAY, Wash.-- Weyerhaeuser Company (NYSE: WY) today reported fourth quarter net earnings of $92 million, or 41 cents per share, on net sales of $5.1 billion. This compares with $126 million, or 57 cents per share, on net sales of $4.7 billion for the fourth quarter of 2002. Fourth quarter 2003 earnings include the following after-tax items: * A charge of $29 million, or 14 cents per share, for closure of facilities. * A charge of $17 million, or 8 cents per share, for integration and restructuring activities. * A charge of $5 million, or 2 cents per share, associated with the settlement of litigation. * A gain of $40 million, or 18 cents per share, on the sale of timberlands in Tennessee and the Carolinas. Fourth quarter 2002 earnings include the following after-tax items: * Gains of $95 million, or 42 cents per share, on the sale of timberlands in Washington state net of costs associated with the closure of related Wood Products and Timberlands operations, a reduction in depreciation resulting from an adjustment to the preliminary purchase price allocation for the Willamette acquisition and the benefit from insurance proceeds covering a business disruption. * Charges of $57 million, or 26 cents per share, for the termination of the former MacMillan Bloedel pension plan for U.S. employees, acquisition and integration of Willamette Industries and the closure of other facilities. Net sales in 2003 were $19.9 billion compared with $18.5 billion in 2002. For the full year 2003, Weyerhaeuser reported net earnings of $277 million, or $1.25 per share, compared with $241 million, or $1.09 per share for the full year 2002. Significant 2003 accomplishments: * Reduced Weyerhaeuser Company debt, excluding Real Estate and Related Assets, by approximately $1.1 billion to $11.6 billion. Total company debt, which includes Real Estate and Related Assets, was reduced by approximately $1.1 billion to $12.5 billion at year-end. Weyerhaeuser continues to make excellent progress toward achieving its target financial ratios. * Captured $300 million in synergies from the Willamette acquisition in half the projected time. -- Sold approximately 444,000 acres of non-strategic timberlands. -- Reduced capital spending, excluding Real Estate and Related Assets, to approximately $626 million, a 35 percent decrease from $960 million the prior year. -- Continued to rationalize the company's manufacturing system by closing 12 facilities. In addition, Weyerhaeuser significantly improved the productivity of its remaining manufacturing operations. "Thanks to the hard work of our employees, during 2003 we successfully completed the integration of Willamette, captured the synergies and continued to reduce debt despite very challenging economic conditions," said Steven R. Rogel, chairman, president and chief executive officer. "Continuing consolidation and a changing customer base are driving significant changes within the forest products industry. These changes underscore the importance of the strategies we pursued in 2003 to aggressively reduce costs, increase productivity, and maintain strong relationships with our customers and suppliers. We're pleased with the progress we made this year, but we recognize that we must constantly improve if we are going to successfully respond to these market challenges. "In 2004, we plan to become even more efficient and to continue working closely with customers to meet their needs," Rogel said. "This will mean developing the most productive manufacturing system in the industry. We'll also continue reducing debt and maximizing our return on assets to position Weyerhaeuser to compete successfully in our evolving industry." SUMMARY OF FOURTH QUARTER FINANCIAL HIGHLIGHTS Millions (except per share data) 4Q 2003 4Q 2002 Change Net earnings $92 $126 ($34) Earnings per share $0.41 $0.57 ($0.16) Net sales $5,145 $4,718 $427 SUMMARY OF 2003 FINANCIAL HIGHLIGHTS Millions (except per share data) 2003 2002 Change Net earnings $277 241 $36 Earnings per share $1.25 $1.09 $0.16 Net sales $19,873 $18,521 $1,352 SEGMENT RESULTS FOR FOURTH QUARTER 2003 (Contributions to Pre-Tax Earnings) Millions 4Q 2003 4Q 2002 Change Timberlands $185 $300 ($115) Wood Products $111 ($75) $186 Pulp and Paper ($67) $86 ($153) Containerboard, Packaging and Recycling $32 $114 ($82) Real Estate and Related Assets $109 $81 $28 TIMBERLANDS 4Q 2003 3Q 2003 Change Contribution to earnings (millions) $185 $143 $42 Excluding the pre-tax gain of $61 million in the fourth quarter on the sale of non-strategic timberlands in Tennessee and the Carolinas, fourth quarter earnings were down slightly from third quarter. Stronger log prices and improved export markets in the West were offset by lower seasonal fee harvest and lower domestic sales volumes. Log prices in the South remained flat, but lower seasonal fee harvest caused a reduction in earnings. First quarter earnings are expected to be higher than the fourth quarter -- adjusted for the sale of non-strategic timberlands in the fourth quarter -- due to higher domestic log sales volumes and prices in the West, and higher planned fee harvest in the South. WOOD PRODUCTS 4Q 2003 3Q 2003 Change Contribution to earnings (millions) $111 $151 ($40) The net reduction in earnings from the third quarter was due primarily due to volatile prices for wood products. Prices increased for oriented strand board and plywood before declining sharply late in the quarter. Declines in Western lumber prices, lower volumes and higher raw material costs reduced lumber results. Higher OSB prices negatively affected margins for engineered wood products. The late quarter decline in structural panel prices negatively affected earnings in the company's building products distribution centers. Wood Products recognized pre-tax charges of $13 million in the fourth quarter compared with $31 million in the third quarter for the closure of facilities. The segment also incurred $22 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. This compares to $25 million in the third quarter. For the year, Weyerhaeuser incurred $97 million in countervailing and anti-dumping duties. First quarter results are expected to be lower than fourth quarter due primarily to price decreases in lumber and structural panels. The company expects the Canadian softwood lumber issue to continue to affect earnings. PULP AND PAPER 4Q 2003 3Q 2003 Change Contribution (charge) to earnings (millions) ($67) ($18) ($49) A weak paper market combined with pre-tax charges of $30 million associated with the closure of the paper machine at Longview, Wash., resulted in significantly lower earnings compared with the prior quarter. Paper prices were slightly lower during the quarter. To balance supply to demand, the paper business took 96,000 tons of market-related downtime during the quarter. Pulp earnings were steady as higher pulp prices were mostly offset by higher manufacturing costs. First quarter losses are expected to narrow from fourth quarter due to increased demand for fine paper and improving softwood pulp prices. CONTAINERBOARD, PACKAGING AND RECYCLING 4Q 2003 3Q 2003 Change Contribution to earnings (millions) $32 $42 ($10) Excluding pre-tax charges of $40 million in the third quarter associated with the closure of facilities and settlement of litigation, fourth quarter earnings were down $50 million from third quarter. Prices for boxes and containerboard declined through the quarter. Packaging volumes declined seasonally, but were higher than levels a year ago. Manufacturing costs rose modestly during the quarter. The mills took 71,000 tons of market-related downtime to adjust production to the seasonal decline in shipments. Earnings in the first quarter are expected to be down slightly due primarily to higher raw material costs for old corrugated containers (OCC). This is expected to be partially offset by anticipated containerboard price increases late in the quarter. Volumes should improve seasonally and year-over-year. Increases in operating rates are expected to result in lower manufacturing costs. REAL ESTATE AND RELATED ASSETS 4Q 2003 3Q 2003 Change Contribution to earnings (millions) $109 $97 $12 A continued strong housing market, low interest rates and a quarterly record for closings produced increased earnings from the prior quarter. Continued strong markets are expected to produce first quarter earnings that are comparable to fourth quarter. The company currently has a backlog of approximately six months of homes sold, but not closed. OTHER The company will hold a live conference call at 7 a.m. PST (10 a.m. EST) on Jan. 23 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 prior to the start of the conference call. Those wishing to access the call from outside North America should dial 1-706-643-3795. Supporting slides are available at http://www.weyerhaeuser.com by clicking "Listen to Our Webcast and View Supporting Slides." 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 4861240) within North America and at 1-706-645-9291 (access code 4861240) from outside North America. Weyerhaeuser Company, one of the world's largest integrated forest products companies, was incorporated in 1900. In 2003, sales were $19.9 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 debt reduction, continued savings, increasing productivity in the manufacturing system, management of asset base, the company's markets in the first quarter; and expected earnings and performance of the company's business segments during the first quarter. 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; 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; fires, floods and other natural disasters; and legal proceedings. 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 dumping duties imposed on the company's softwood lumber shipments from Canada to the United States. These and other factors that could cause or contribute to actual results differing materially from such forward looking statements are discussed in greater detail in the company's Securities and Exchange Commission filings. WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) CONSOLIDATED EARNINGS (1) Q1 Q2 Q3 March March June June Sept. Sept. (in millions) 30, 31, 29, 30, 28, 29, 2003 2002 2003 2002 2003 2002 Net sales and revenues: Weyerhaeuser (2) $4,169 $3,595 $4,498 $4,501 $4,650 $4,422 Real estate and related assets 445 396 432 421 534 468 Total net sales and revenues 4,614 3,991 4,930 4,922 5,184 4,890 Costs and expenses: Weyerhaeuser: Costs of products sold 3,322 2,831 3,611 3,519 3,598 3,576 Depreciation, amortization and fee stumpage 321 264 313 311 320 304 Selling expenses 107 103 111 116 117 116 General and administrative expenses 231 186 232 231 249 201 Research and development expenses 12 12 12 13 10 11 Taxes other than payroll and income taxes 47 38 48 53 45 48 Charges for integration and restructuring 29 2 25 23 24 17 Charges for closure of facilities 22 27 12 28 48 -- Other operating costs, net (3) (4) 37 4 (205) (27) 16 19 4,128 3,467 4,159 4,267 4,427 4,292 Real estate and related assets: Costs and operating expenses 330 291 316 317 406 359 Depreciation and amortization 3 2 2 1 3 1 Selling expenses 24 21 25 24 27 23 General and administrative expenses 14 10 14 11 15 14 Taxes other than payroll and income taxes 1 1 1 1 -- 1 Other operating costs, net (7) (8) -- 2 2 6 365 317 358 356 453 404 Total costs and expenses 4,493 3,784 4,517 4,623 4,880 4,696 Operating income 121 207 413 299 304 194 Interest expense and other: Weyerhaeuser: Interest expense incurred (5) (208) (178) (205) (222) (200) (214) Less interest capitalized 5 4 6 16 3 16 Equity in income (loss) of affiliates (5) (4) 3 (2) (3) (6) Interest income and other 6 5 6 6 3 9 Real estate and related assets: Interest expense incurred (14) (13) (13) (13) (13) (12) Less interest capitalized 14 13 13 13 13 12 Equity in income of Unconsolidated entities 5 6 7 6 11 10 Interest income and other 11 6 8 8 6 11 Earnings before income taxes and cumulative effect of a change in accounting principle (65) 46 238 111 124 20 Income taxes 22 (16) (81) (39) (42) (7) Earnings before cumulative effect of a change in accounting principle (43) 30 157 72 82 13 Cumulative effect of a change in accounting principle, net of applicable taxes of $6 (6) (11) -- -- -- -- -- Net earnings (loss) $(54) $30 $157 $72 $82 $13 Basic and diluted net earnings (loss) per share: Net earnings (loss) before cumulative effect of a change in accounting principle $(0.19) $0.14 $0.71 $0.32 $0.37 $0.06 Cumulative effect of a change in accounting principle (0.05) -- -- -- -- -- Net earnings (loss) $(0.24) $0.14 $0.71 $0.32 $0.37 $0.06 Dividends paid per share $0.40 $0.40 $0.40 $0.40 $0.40 $0.40 WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) CONSOLIDATED EARNINGS (1) Q4 Year ended (in millions) Dec. 28, Dec. 29, Dec. 28, Dec. 29, 2003 2002 2003 2002 Net sales and revenues: Weyerhaeuser (2) $4,527 $4,253 $17,844 $16,771 Real estate and related assets 618 465 2,029 1,750 Total net sales and revenues 5,145 4,718 19,873 18,521 Costs and expenses: Weyerhaeuser: Costs of products sold 3,547 3,285 14,078 13,211 Depreciation, amortization and fee stumpage 353 335 1,307 1,214 Selling expenses 122 115 457 450 General and administrative expenses 238 229 950 847 Research and development expenses 17 16 51 52 Taxes other than payroll and income taxes 45 39 185 178 Charges for integration and restructuring 25 30 103 72 Charges for closure of facilities 45 40 127 95 Other operating costs, net (3) (4) (92) (135) (244) (139) 4,300 3,954 17,014 15,980 Real estate and related assets: Costs and operating expenses 464 359 1,516 1,326 Depreciation and amortization 3 7 11 11 Selling expenses 31 22 107 90 General and administrative expenses 20 13 63 48 Taxes other than payroll and income taxes 1 1 3 4 Other operating costs, net (4) (1) (9) (1) 515 401 1,691 1,478 Total costs and expenses 4,815 4,355 18,705 17,458 Operating income 330 363 1,168 1,063 Interest expense and other: Weyerhaeuser: Interest expense incurred (5) (202) (207) (815) (821) Less interest capitalized 5 14 19 50 Equity in income (loss) of affiliates (1) (1) (6) (13) Interest income and other 2 8 17 28 Real estate and related assets: Interest expense incurred (13) (15) (53) (53) Less interest capitalized 13 15 53 53 Equity in income of unconsolidated entities (3) 9 20 31 Interest income and other 8 8 33 33 Earnings before income taxes and cumulative effect of a change in accounting principle 139 194 436 371 Income taxes (47) (68) (148) (130) Earnings before cumulative effect of a change in accounting principle 92 126 288 241 Cumulative effect of a change in accounting principle, net of applicable taxes of $6 (6) -- -- (11) -- Net earnings (loss) $92 $126 $277 $241 Basic and diluted net earnings (loss) per share: Net earnings (loss) before cumulative effect of a change in accounting principle $0.41 $0.57 $1.30 $1.09 Cumulative effect of a change in accounting principle -- -- (0.05) -- Net earnings (loss) $0.41 $0.57 $1.25 $1.09 Dividends paid per share $0.40 $0.40 $1.60 $1.60 (1) Certain reclassifications have been made to conform prior period data with the current presentation. (2) The first, second, third and fourth quarters of 2003 include charges of $24 million, $26 million, $25 million, and $22 million, respectively, or a total of $97 million for the year for countervailing and anti-dumping duties and related costs. 2002 first quarter includes $13 million of charges for countervailing and anti-dumping duties and related costs and a credit of $18 million for the reversal of countervailing and anti-dumping duties accrued in 2001. The 2002 second quarter includes $7 million of charges for countervailing and anti-dumping duties and related costs, a credit of $29 million for the reversal of charges accrued in 2001 and a credit of $13 million for charges accrued in the first quarter of 2002. The 2002 third and fourth quarters include charges of $31 million and $26 million, respectively, for countervailing and anti-dumping duties and related costs. The 2002 impact of countervailing and anti-dumping duties and related costs is a net charge of $17 million which includes current year charges of $64 million and $47 million of credits related to the reversal of charges accrued in 2001. (3) 2003 first, second, third and fourth quarters include net foreign exchange gains (losses) of $35 million, $47 million, ($4) million, and $30 million, respectively, for a total net gain of $108 million for the year. 2002 includes $33 million in net foreign exchange gains. Gains of $8 million, $27 million and $14 million are included in the first, second and fourth quarters, respectively. A loss of $16 million is included in the third quarter. (4) The first quarter of 2003 includes a $79 million charge for a lawsuit involving the market for Pacific Northwest alder logs. 2003 second quarter includes a $144 million gain on the sales of timberlands in Washington state and a $25 million gain for the settlement of an insurance claim relating to the Cemwood litigation. 2003 third quarter includes a $23 million charge associated with the settlement of a class action linerboard antitrust lawsuit. 2003 fourth quarter includes a $61 million gain on the sales of timberlands in Tennessee and the Carolinas and an $8 million charge associated with the settlement of litigation related to workers compensation claims. 2002 fourth quarter includes a $117 million gain on the sale of timberlands in Washington state. (5) 2002 first quarter includes a $35 million charge to write off debt issue costs in connection with the refinancing of debt in connection with the acquisition of Willamette Industries. (6) Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, was adopted as of the beginning of 2003. Results for 2002 were not impacted by the change in accounting principle. WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) Q1 Q2 Q3 Net sales and revenues March March June June Sept. Sept. (in millions): 30, 31, 29, 30, 28, 29, 2003 2002 2003 2002 2003 2002 Timberlands: Raw materials (logs, timber and chips) $203 $142 $213 $184 $212 $193 Other products 21 19 24 21 18 18 224 161 237 205 230 211 Wood Products: Softwood lumber 752 692 846 901 890 845 Plywood and veneer 174 158 182 203 228 195 Oriented strand board, composite and other panels 257 240 331 320 445 217 Hardwood lumber 80 76 86 81 75 72 Engineered lumber products 254 253 308 315 329 324 Raw materials (logs, timber and chips) 81 106 82 129 72 120 Other products 174 176 221 198 213 184 1,772 1,701 2,056 2,147 2,252 1,957 Pulp and Paper: Pulp 309 280 321 297 333 300 Paper 596 416 546 563 530 590 Coated groundwood 36 30 32 30 39 32 Liquid packaging board 47 40 52 51 50 37 Other products 10 6 7 10 6 8 998 772 958 951 958 967 Containerboard, Packaging and Recycling: Containerboard 77 73 81 90 73 101 Packaging 879 758 922 935 898 909 Recycling 60 48 63 51 60 67 Bags 20 10 20 20 19 22 Other products 33 10 35 34 40 28 1,069 899 1,121 1,130 1,090 1,127 Real Estate and Related Assets 445 396 432 421 534 468 Corporate and Other 106 62 126 68 120 160 $4,614 $3,991 $4,930 $4,922 $5,184 $4,890 Contribution (charge) Q1 Q2 Q3 to earnings(1): March March June June Sept. Sept. (in millions) 30, 31, 29, 30, 28, 29, 2003 2002 2003 2002 2003 2002 Timberlands (2) $149 $107 $300 $162 $143 $133 Wood Products (3) (4) (5) (150) 9 (53) 64 151 (18) Pulp and Paper (6) (7) 10 1 (7) (15) (18) 10 Containerboard, Packaging and Recycling (8) (9) 80 58 108 75 42 88 Real Estate and Related Assets (10) 95 91 91 79 97 85 Corporate and Other (11) (12) (13) (46) (46) (2) (48) (94) (80) $138 $220 $437 $317 $321 $218 WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) Net sales and revenues (in millions): Q4 Year ended Dec. 28, Dec. 29, Dec. 28, Dec. 29, 2003 2002 2003 2002 Timberlands: Raw materials (logs, timber and chips) $207 $254 $835 $773 Other products 26 39 89 97 233 293 924 870 Wood Products: Softwood lumber 793 748 3,281 3,186 Plywood and veneer 239 178 823 734 Oriented strand board, composite and other panels 469 251 1,502 1,028 Hardwood lumber 79 77 320 306 Engineered lumber products 288 256 1,179 1,148 Raw materials (logs, timber and chips) 86 117 321 472 Other products 210 160 818 718 2,164 1,787 8,244 7,592 Pulp and Paper: Pulp 342 319 1,305 1,196 Paper 510 594 2,182 2,163 Coated groundwood 33 34 140 126 Liquid packaging board 49 51 198 179 Other products 14 10 37 34 948 1,008 3,862 3,698 Containerboard, Packaging and Recycling: Containerboard 73 86 304 350 Packaging 845 864 3,544 3,466 Recycling 64 63 247 229 Bags 21 23 80 75 Other products 39 20 147 92 1,042 1,056 4,322 4,212 Real Estate and Related Assets 618 465 2,029 1,750 Corporate and Other 140 109 492 399 $5,145 $4,718 $19,873 $18,521 Contribution (charge) to earnings(1): Q4 Year ended (in millions) Dec. 28, Dec. 29, Dec. 28, Dec. 29, 2003 2002 2003 2002 Timberlands (2) $185 $300 $777 $702 Wood Products (3) (4) (5) 111 (75) 59 (20) Pulp and Paper (6) (7) (67) 86 (82) 82 Containerboard, Packaging and Recycling (8) (9) 32 114 262 335 Real Estate and Related Assets (10) 109 81 392 336 Corporate and Other (11) (12) (13) (34) (119) (176) (293) $336 $387 $1,232 $1,142 (1) Certain reclassifications have been made to conform prior period data with the current presentation. (2) 2003 second quarter includes a $144 million gain on the sales of timberlands in Washington state. 2003 fourth quarter includes a $61 million gain on the sale of timberlands in Tennessee and the Carolinas. 2002 fourth quarter includes a $117 million gain on the sale of timberlands in Washington state. (3) The first, second, third and fourth quarters of 2003 include charges of $24 million, $26 million, $25 million, and $22 million, respectively, or a total of $97 million for the year for countervailing and anti-dumping duties and related costs. 2002 first quarter includes $13 million of charges for countervailing and anti-dumping duties and related costs and a credit of $18 million for the reversal of countervailing and anti-dumping duties accrued in 2001. The 2002 second quarter includes $7 million of charges for countervailing and anti-dumping duties and related costs, a credit of $29 million for the reversal of charges accrued in 2001 and a credit of $13 million for charges accrued in the first quarter of 2002. The 2002 third and fourth quarters include charges of $31 million and $26 million, respectively, for countervailing and anti-dumping duties and related costs. The 2002 impact of countervailing and anti-dumping duties and related costs is a net charge of $17 million which includes current year charges of $64 million and $47 million of credits related to the reversal of charges accrued in 2001. (4) The first quarter of 2003 includes a $79 million charge for a lawsuit involving the market for Pacific Northwest alder logs. (5) 2003 first, second, third and fourth quarters include costs for the closure of facilities of $22 million, $11 million, $31 million, and $14 million, respectively. 2003 second quarter also includes a charge of $16 million to recognize impairment associated with an impending facility sale that closed in the fourth quarter of 2003. 2002 includes closure costs of $51 million ($17 million in the first quarter and $34 million in the fourth quarter). (6) 2002 includes $12 million in net business disruption costs associated with the recovery boiler explosion at the Plymouth, N.C., paper facility. Costs of $22 million and $30 million are included in the second and third quarters, respectively. Net recoveries of $40 million are included in the fourth quarter. (7) 2003 second quarter includes $3 million of closure costs. 2003 fourth quarter includes $30 million of closure costs. 2002 fourth quarter results include an $8 million benefit resulting from adjustments to closure reserves established in 2001. (8) The third quarter of 2003 includes a $23 million charge associated with the settlement of a class action linerboard antitrust lawsuit. (9) 2003 second quarter includes the reversal of an accrual for closure charges of $2 million. 2003 third and fourth quarters include closure costs of $17 million and $1 million, respectively. 2002 includes closure costs of $52 million ($10 million in the first quarter, $28 million in the second quarter and $14 million in the fourth quarter). (10) 2003 first quarter includes gains of $8 million for the sale of two office buildings and $10 for the sale of an apartment complex. 2003 second quarter includes a gain of $12 million for the sale of commercial property. 2002 includes $21 million in gains from sales of apartment complexes, including $7 million in the second quarter and $14 million in the third quarter. (11) 2003 second quarter includes a $6 million charge to reflect the final settlement in connection with the termination of the former MacMillan Bloedel pension plan for U.S. employees. 2002 results include a $35 million charge in the fourth quarter related to the termination of this pension plan. (12) 2003 second quarter includes a $25 million gain for the settlement of an insurance claim relating to the Cemwood litigation. 2003 fourth quarter includes an $8 million charge for the settlement of litigation related to workers compensation claims. (13) 2003 results include net foreign exchange gains (losses) of $35 million in the first quarter, $46 million in the second quarter, ($4) million in the third quarter, and $30 million in the fourth quarter, for a net 2003 gain of $107 million. 2002 results include net foreign exchange gains (losses) of $8 million in the first quarter, $27 million in the second quarter, ($17 million) in the third quarter and $14 million in the fourth quarter, for a 2002 net gain of $32 million. 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 March March June June Sept. Sept. 30, 31, 29, 30, 28, 29, 2003 2002 2003 2002 2003 2002 Timberlands (millions): Raw materials - cubic feet 96 67 110 102 102 91 Wood Products (millions): Softwood lumber - board feet 2,175 1,845 2,385 2,262 2,298 2,362 Plywood and veneer - square feet (3/8") 726 624 760 815 744 792 Composite panels - square feet (3/4") 278 308 317 445 313 95 Oriented strand board - square feet (3/8") 1,025 945 1,206 1,095 1,129 1,117 Hardwood lumber - board feet 106 108 113 113 103 104 Raw materials - cubic feet 128 143 118 164 112 161 Pulp and Paper (thousands): Pulp - air-dry metric tons 623 563 596 618 632 561 Paper - tons 737 546 690 717 707 749 Coated groundwood - tons 61 48 55 49 64 55 Liquid packaging board - tons 60 53 67 61 64 47 Paper converting - tons 502 375 472 488 478 499 Containerboard, Packaging and Recycling (thousands) Containerboard - tons 221 209 233 260 214 283 Packaging - MSF 17,752 15,001 18,577 19,285 18,545 18,553 Recycling - tons 593 604 566 552 538 539 Kraft bags and sacks - tons 25 13 24 26 25 26 Total production volumes: Q1 Q2 Q3 March March June June Sept. Sept. 30, 31, 29, 30, 28, 29, 2003 2002 2003 2002 2003 2002 Timberlands (millions): Logs - cubic feet 182 153 152 191 147 164 Wood Products (millions): Softwood lumber - board feet 1,842 1,530 1,825 1,702 1,742 1,728 Plywood and veneer - square feet (3/8") 672 471 557 649 596 638 Composite panels - square feet (3/4") 231 218 252 183 253 235 Oriented strand board - square feet (3/8") 1,011 957 1,051 944 1,061 1,115 Hardwood lumber - board feet 115 96 111 99 109 107 Pulp and Paper (thousands): Pulp - air-dry metric tons 654 607 619 492 604 630 Paper - tons 757 510 712 667 706 704 Coated groundwood - tons 62 48 55 60 61 43 Liquid packaging board - tons 56 63 68 67 72 31 Paper converting - tons 516 353 479 496 472 502 Containerboard, Packaging and Recycling (thousands) Containerboard - tons 1,429 1,250 1,568 1,600 1,512 1,621 Packaging - MSF 18,977 16,174 19,955 20,521 19,865 19,596 Recycling - tons 1,528 1,387 1,644 1,588 1,507 1,551 Kraft bags and sacks - tons 25 13 25 25 23 27 WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) Third party sales volumes: Q4 Year ended Dec. 28, Dec. 29, Dec. 28, Dec. 29, 2003 2002 2003 2002 Timberlands (millions): Raw materials - cubic feet 105 110 413 370 Wood Products (millions): Softwood lumber - board feet 2,123 2,154 8,981 8,623 Plywood and veneer - square feet (3/8") 674 672 2,904 2,903 Composite panels - square feet (3/4") 302 299 1,210 1,147 Oriented strand board - square feet (3/8") 1,304 1,048 4,664 4,205 Hardwood lumber - board feet 105 102 427 427 Raw materials - cubic feet 130 127 488 595 Pulp and Paper (thousands): Pulp - air-dry metric tons 628 636 2,479 2,378 Paper - tons 688 730 2,822 2,742 Coated groundwood - tons 54 58 234 210 Liquid packaging board - tons 65 68 256 229 Paper converting - tons 430 497 1,882 1,859 Containerboard, Packaging and Recycling (thousands) Containerboard - tons 222 231 890 983 Packaging - MSF 17,867 17,491 72,741 70,330 Recycling - tons 593 597 2,290 2,292 Kraft bags and sacks - tons 26 28 100 93 Total production volumes: Q4 Year ended Dec. 28, Dec. 29, Dec. 28, Dec. 29, 2003 2002 2003 2002 Timberlands (millions): Logs - cubic feet 148 155 629 663 Wood Products (millions): Softwood lumber - board feet 1,704 1,871 7,113 6,831 Plywood and veneer - square feet (3/8") 586 520 2,411 2,278 Composite panels - square feet (3/4") 252 228 988 864 Oriented strand board - square feet (3/8") 1,047 1,033 4,170 4,049 Hardwood lumber - board feet 106 104 441 406 Pulp and Paper (thousands): Pulp - air-dry metric tons 645 552 2,522 2,281 Paper - tons 658 730 2,833 2,611 Coated groundwood - tons 61 59 239 210 Liquid packaging board - tons 65 66 261 227 Paper converting - tons 415 493 1,882 1,844 Containerboard, Packaging and Recycling (thousands) Containerboard - tons 1,494 1,533 6,003 6,004 Packaging - MSF 19,033 18,809 77,830 75,100 Recycling - tons 1,537 1,566 6,216 6,092 Kraft bags and sacks - tons 25 28 98 93 WEYERHAEUSER COMPANY STATISTICAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) (in millions) March 30, June 29, Sept. 28, Dec. 28, Dec. 29, Assets 2003 2003 2003 2003 2002 Weyerhaeuser Current assets: Cash and short-term investments $59 $47 $57 $171 $115 Receivables, less allowances 1,573 1,671 1,661 1,484 1,413 Inventories 2,167 2,093 1,959 1,911 1,941 Prepaid expenses 455 427 436 455 419 Total current assets 4,254 4,238 4,113 4,021 3,888 Property and equipment 12,228 12,274 12,235 12,243 12,278 Construction in progress 709 669 514 403 687 Timber and timberlands at cost, less fee stumpage charged to disposals 4,450 4,454 4,440 4,287 4,402 Investments in and advances to equity affiliates 538 564 560 603 578 Goodwill 3,191 3,224 3,221 3,237 3,131 Deferred pension and other assets 1,337 1,349 1,300 1,311 1,285 26,707 26,772 26,383 26,105 26,249 Real estate and related assets 1,989 2,065 2,064 2,004 1,970 Total assets $28,696 $28,837 $28,447 $28,109 $28,219 Liabilities and Shareholders' Interest Weyerhaeuser Current liabilities: Notes payable and commercial paper $321 $238 $155 $4 $2 Current maturities of long-term debt 595 594 92 90 786 Accounts payable 975 1,046 975 1,041 983 Accrued liabilities 1,162 1,192 1,214 1,390 1,223 Total current liabilities 3,053 3,070 2,436 2,525 2,994 Long-term debt 12,129 11,866 12,120 11,503 11,907 Deferred income taxes, pension, other postretirement benefits and other liabilities 5,541 5,612 5,632 5,671 5,346 20,723 20,548 20,188 19,699 20,247 Real estate and related assets Notes payable and commercial paper 115 130 100 1 63 Long-term debt 764 762 762 893 814 Other liabilities 466 491 476 407 472 1,345 1,383 1,338 1,301 1,349 Total liabilities 22,068 21,931 21,526 21,000 21,596 Shareholders' interest 6,628 6,906 6,921 7,109 6,623 Total liabilities and shareholders' interest $28,696 $28,837 $28,447 $28,109 $28,219 STATEMENT OF CASH FLOWS Q1 Q2 Q3 March March June June Sept. Sept. SELECTED INFORMATION (unaudited) 30, 31, 29, 30, 28, 29, (in millions) 2003 2002 2003 2002 2003 2002 (Weyerhaeuser only, excludes real estate & related assets) Net cash from operations $(126) $(90) $397 $379 $557 $268 Cash paid for property and equipment (128) (158) (172) (288) (146) (237) Cash paid for timberlands reforestation (14) (12) (5) (8) (6) (6) Cash received from issuances of debt 1 13,001 -- 100 12 26 Revolving credit facilities, notes and commercial paper borrowings, net 599 30 (333) (150) 166 122 Payments on debt (251) (6,593) (14) (97) (509) (159) STATEMENT OF CASH FLOWS Q4 Year ended SELECTED INFORMATION (unaudited) Dec. 28, Dec. 29, Dec. 28, Dec. 29, (in millions) 2003 2002 2003 2002 (Weyerhaeuser only, excludes real estate & related assets) Net cash from operations $819 $701 $1,647 $1,258 Cash paid for property and equipment (146) (241) (592) (924) Cash paid for timberlands reforestation (9) (10) (34) (36) Cash received from issuances of debt 31 1,015 44 14,142 Revolving credit facilities, notes and commercial paper borrowings, net (750) (230) (318) (228) Payments on debt (50) (1,375) (824) (8,224) 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/ Steven J. Hillyard Its: Vice President and Chief Accounting Officer Date: January 23, 2004