e8vk

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

October 25, 2006

(Date of earliest event report)

WEYERHAEUSER COMPANY

(Exact name of registrant as specified in charter)


Washington	1-4825	91-0470860
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification Number)

Federal Way, Washington 98063-9777

(Address of principal executive offices)
(zip code)

Registrant’s telephone number, including area code:
(253) 924-2345

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS


	ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
	ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURES
EXHIBIT 99.1
EXHIBIT 99.2

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C., 20549

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On October 25, 2006, Weyerhaeuser Company issued a press release announcing its financial results for the fiscal quarter ended September 24, 2006. Copies of the press release and the exhibits thereto are furnished as Exhibits 99.1 and 99.2 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) The following items are filed as exhibits to this report:

99.1 Press release, dated October 25, 2006 issued by Weyerhaeuser Company

99.2 Exhibits to Press release, dated October 25, 2006 issued by Weyerhaeuser Company

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/ Jeanne Hillman
	Its: Vice President and
Date: October 25, 2006	Chief Accounting Officer

EX-99.1 2 v24341exv99w1.htm EXHIBIT 99.1 exv99w1

Exhibit 99.1


For immediate release For more information contact:		Media — Bruce Amundson (253) 924-3047 Analysts — Kathryn McAuley (253) 924-2058


Weyerhaeuser Reports Third Quarter Net Earnings of $211 Million, Or 85 Cents per Diluted Share, on Net Sales of $5.3 Billion

FEDERAL WAY, Wash. (Oct. 25, 2006) — Weyerhaeuser Company (NYSE: WY) today reported third quarter net earnings of $211 million, or 85 cents per diluted share, on net sales of $5.3 billion. This compares with $285 million, or $1.16 per diluted share, on net sales of $5.4 billion for the third quarter 2005.

Third quarter 2006 earnings include the following after-tax items:

•

A gain of $31 million, or 13 cents per diluted share, from the sale of the North American composites business.

•

A gain of $15 million, or 6 cents per diluted share, due to a reduction of the reserve for hardboard siding claims.

•

A charge of $25 million, or 10 cents per diluted share, for the additional impairment of assets related to the closure of the Prince Albert, Saskatchewan facility and the write-off of additional goodwill associated with the former BC Coastal business.

•

A charge of $18 million, or 7 cents per diluted share, for asset impairments and costs associated with facility closures or curtailments, primarily in the Wood Products segment.

•

A charge of $9 million, or 4 cents per diluted share, for impairment of real estate assets.

•

A charge of $6 million, or 2 cents per diluted share, related to the previously announced acquisition of OrganicID, a research and development company.

Third quarter 2005 earnings include the following after-tax items:

•

A gain of $75 million, or 31 cents per diluted share, for the sale of MAS Capital Management Partners, LP, a joint venture.

•

A charge of $19 million, or 8 cents per diluted share, for closure of facilities.

•

A loss of $14 million, or 6 cents per diluted share, for the early extinguishment of debt.

During third quarter 2006, Weyerhaeuser repurchased 5.3 million shares of common stock. As of the end of the third quarter, Weyerhaeuser has repurchased a total of 5.5 million shares of the 18 million-share repurchase previously authorized by the company’s board of directors.

“We anticipated the downturn in the housing market and transformed Weyerhaeuser into a more focused company to position it to be a strong performer during this market cycle,” said Steven R. Rogel, chairman, president and chief executive officer. “While anticipated, the housing market decline was more abrupt and drove wood products prices and demand into a deeper plunge than expected. We are taking the necessary actions to match our production to demand and over the long-term, remain confident about the residential housing market. We have the right strategies and combination of businesses to succeed and add value for shareholders.

“Our cellulose fiber, white papers and packaging businesses showed continued improved performance during the quarter,” Rogel said. “Some of this was the result of stronger pricing, but we also benefited from the decisive action we have taken to improve the ability of these businesses to meet customer demand. Such steps take time, but we are starting to benefit from the long-term changes they are creating within Weyerhaeuser.”


SUMMARY OF THIRD QUARTER FINANCIAL HIGHLIGHTS
Millions (except per share data)	3Q 2006		3Q 2005		Change
Net earnings	$	211	$	285		($74	)
Earnings per diluted share	$	0.85	$	1.16		($0.31	)
Net sales	$	5,328	$	5,432		($104	)


SEGMENT RESULTS FOR THIRD QUARTER
(Contributions to Pre-Tax Earnings)
Millions	3Q 2006		3Q 2005			Change
Timberlands	$	178	$	191			($13	)
Wood Products	$	11	$	124			($113	)
Cellulose Fiber and White Papers	$	115		($2	)	$	117
Containerboard, Packaging and Recycling	$	96	$	36		$	60
Real Estate and Related Assets	$	135	$	145			($10	)

TIMBERLANDS

3Q 2006

2Q 2006

Change


Contribution to pre-tax earnings (millions)		$	178			$	224				($46	)

Third quarter earnings decreased from second quarter 2006 due to the timing of sales of non-strategic properties, seasonally reduced fee harvest levels and the adverse effect of falling lumber prices on domestic log prices. Third quarter costs benefited from the absence of salvage logging expense with the completion of the Hurricane Katrina cleanup in the second quarter.

Weyerhaeuser expects lower fourth quarter earnings for the segment compared with the third quarter due to decreased demand for lumber which will result in lower domestic log prices.


WOOD PRODUCTS
3Q 2006			2Q 2006		Change
Contribution to pre-tax earnings (millions)	$	11	$	131		($120	)

Third quarter contribution to earnings included a $51 million gain on the sale of the company’s North American composites business, $23 million of income related to a reduction in the reserve for hardboard siding claims, and charges of $17 million for the impairment of fixed assets associated with mill closures and curtailments. Excluding these items, contribution to earnings decreased $177 million from the second quarter.

Lower prices and volumes contributed to the lower earnings. Weaker prices in lumber, plywood and oriented strand board caused by normal seasonal declines in demand and the weakening housing market were significant factors in the earnings decline. Lower wood product shipment volumes and the loss of ongoing earnings from the North American composites business, which Weyerhaeuser sold in late July, also contributed to the decline. Manufacturing costs did not vary significantly from quarter to quarter.

Weyerhaeuser expects the segment to continue to operate at a loss in the fourth quarter.

The company incurred $7 million in countervailing and anti-dumping duties and related costs on Canadian softwood lumber the company sold into the United States in the third quarter of 2006. The Canadian softwood lumber agreement became effective on Oct. 12, and at current price levels, the company will pay a 15 percent tax on lumber produced by its Canadian mills exported to the United States. This compares to the duty deposit rate of 13.13 percent in effect since December 2005. The company expects to receive a refund of duty based on the outcome of the new agreement.


CELLULOSE FIBER AND WHITE PAPERS
	3Q 2006		2Q 2006		Change
Contribution to pre-tax earnings (millions)	$	115	$	23	$	92

Fine paper and cellulose fiber products experienced stronger market conditions in the third quarter, resulting in the realization of higher prices. Sales volumes for fine paper and cellulose fiber declined slightly in the third quarter because of the second-quarter closures of a paper machine at Dryden, Ontario and the Prince Albert, Saskatchewan pulp mill.

Third quarter manufacturing costs for fine paper and cellulose fiber decreased significantly from the second quarter when the company incurred shutdowns for annual mill maintenance, capital upgrades and power interruptions. Productivity improved in the third quarter and energy, chemicals and maintenance costs decreased.

Weyerhaeuser expects fourth quarter earnings for the segment to be similar to third quarter.


CONTAINERBOARD, PACKAGING AND RECYCLING
	3Q 2006		2Q 2006		Change
Contribution to pre-tax earnings (millions)	$	96	$	74	$	22

Third quarter 2006 results included charges of $6 million for costs associated with facility closures and workforce reductions related to the continued implementation of the segment’s new business model. Second quarter 2006 results included charges of $18 million for restructuring costs associated with implementing the segment’s new business model and charges of $5 million related to facility closures. Excluding these items, third quarter earnings improved $5 million compared with the second quarter.

During the third quarter, the company completed the implementation of the previously announced price increases for containerboard and packaging. Significantly higher costs for old corrugated containerboard (OCC), rising wood chip costs and a seasonal decline in packaging shipments to the produce market segment partially offset the effect from higher prices. In addition, packaging volumes were down as the company exited certain low-margin business.

Weyerhaeuser expects fourth quarter earnings for the segment to be comparable with third quarter results. Shipments are expected to increase and OCC costs are expected to decline from third quarter levels. Rapidly rising wood chip costs, primarily on the West Coast, and seasonally higher energy usage are expected to offset higher packaging shipments and lower OCC costs.


REAL ESTATE AND RELATED ASSETS
	3Q 2006		2Q 2006		Change
Contribution to pre-tax earnings (millions)	$	135	$	123	$	12

Third quarter single-family home closing volume was comparable to the second quarter. Higher prices for single-family homes closed and lower overhead contributed to the third quarter earnings increase, partially offset by $14 million in impairment charges for two real estate projects.

Closing volumes were greater than new sales in the third quarter, decreasing the backlog of homes sold, but not closed, to approximately 4.5 months’ sales.

Weyerhaeuser expects earnings from real estate and related assets to increase in the fourth quarter because of seasonally higher closing volumes, which are expected to be partially offset by lower margins. The company expects fourth quarter earnings to be substantially below last year’s fourth quarter performance.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world’s largest integrated forest products companies, was incorporated in 1900. In 2005, sales were $22.6 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.

###

EARNINGS CALL INFORMATION

The company will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on Oct. 25 to discuss third quarter results.

To access the conference call from within North America, dial 1-888-221-5699 at least 15 minutes prior to the call. Those calling from outside North America should dial 1-706-643-3795. Replays will be available for one week at 1-800-642-1687 (access code — 2336060) from within North America and at 1-706-645-9291 (access code — 2336060) from outside North America.

The call is being webcast through Weyerhaeuser’s Internet site at http://investor.weyerhaeuser.com by clicking on the “Q3 2006 Earnings Conference Call” link.

The webcast is available through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at http://www.fulldisclosure.com, Thomson/CCBN’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson’s password-protected site, StreetEvents (http://www.streetevents.com).

FORWARD LOOKING STATEMENT

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 the company’s markets in the fourth quarter 2006; expected earnings and performance of the company’s business segments during the fourth quarter 2006, demand and pricing for the company’s products in the fourth quarter 2006, lower domestic log prices in the fourth quarter 2006, lower prices and reduced shipment volumes for lumber, oriented strand board, and engineered lumber products in the fourth quarter 2006, higher wood products manufacturing costs due to lower production volumes in the fourth quarter 2006, expected refunds of softwood lumber duties, seasonal increases in real estate earnings, higher raw material and energy costs in the fourth quarter 2006 and related matters. 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;

•

Raw material prices;

•

Chemical prices;

•

Performance of the company’s manufacturing operations including unexpected maintenance requirements;

•

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 policies and regulations, and changes in accounting regulations;

•

The effect of weather;

•

The risk of loss from fires, floods, windstorms, hurricanes and other natural disasters;

•

Transportation costs;

•

Legal proceedings;

•

The effect of timing of retirements and changes in the market price of company stock on charges for stock-based compensation; and

•

Performance of pension fund investments and related derivatives.

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. These and other factors could cause or contribute to actual results differing materially from such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will occur, or if any of them occurs, what effect they will have on the company’s results of operations or financial condition. The company expressly declines any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the date of this news release.

EX-99.2 3 v24341exv99w2.htm EXHIBIT 99.2 exv99w2

Exhibit 99.2

WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)

CONSOLIDATED EARNINGS
(in millions)


	Q1						Q2						Q3						Year-to-date						Q4			Year Ended
	March 26,			March 27,			June 25,			June 26,			Sept. 24,			Sept. 25,			Sept. 24,			Sept. 25,			Dec. 25,			Dec. 25,
	2006			2005			2006			2005			2006			2005			2006			2005			2005			2005
Net sales and revenues:
Weyerhaeuser ⁽¹⁾	$	4,566		$	4,577		$	4,911		$	5,017		$	4,579		$	4,836		$	14,056		$	14,430		$	4,700		$	19,130
Real Estate and Related Assets		690			655			746			648			749			596			2,185			1,899			1,016			2,915

Total net sales and revenues		5,256			5,232			5,657			5,665			5,328			5,432			16,241			16,329			5,716			22,045


Costs and expenses:
Weyerhaeuser:
Costs of products sold ⁽²⁾		3,612			3,504			3,815			3,833			3,590			3,800			11,017			11,137			3,832			14,969
Depreciation, depletion and amortization		306			316			305			319			305			320			916			955			326			1,281
Selling expenses		109			115			125			116			123			116			357			347			106			453
General and administrative expenses		255			221			223			215			234			234			712			670			221			891
Research and development expenses ⁽³⁾		16			14			15			12			21			18			52			44			17			61
Taxes other than payroll and income taxes		44			44			46			44			43			45			133			133			16			149
Charges for restructuring ⁽⁴⁾		—			5			18			4			4			2			22			11			10			21
Charges for closure of facilities		1			5			17			3			43			29			61			37			656			693
Impairment of goodwill ⁽⁵⁾		746			—			3			—			—			—			749			—			—			—
Other operating costs, net ^{(6) (7)}		31			9			(23	)		(40	)		(34	)		(32	)		(26	)		(63	)		3			(60	)

		5,120			4,233			4,544			4,506			4,329			4,532			13,993			13,271			5,187			18,458


Real Estate and Related Assets:
Costs and operating expenses ⁽⁸⁾		481			426			552			441			537			401			1,570			1,268			677			1,945
Depreciation and amortization		3			3			4			4			10			4			17			11			5			16
Selling expenses		37			33			43			36			44			36			124			105			46			151
General and administrative expenses		30			24			34			25			30			27			94			76			28			104
Taxes other than payroll and income taxes		1			1			2			—			2			1			5			2			1			3
Other operating costs, net		(3	)		—			3			(2	)		(2	)		(2	)		(2	)		(4	)		1			(3	)
Impairment of long-lived assets		—			—			3			—			14			—			17			—			33			33

		549			487			641			504			635			467			1,825			1,458			791			2,249

Total costs and expenses		5,669			4,720			5,185			5,010			4,964			4,999			15,818			14,729			5,978			20,707


Operating income		(413	)		512			472			655			364			433			423			1,600			(262	)		1,338

Interest expense and other:
Weyerhaeuser:
Interest expense incurred ⁽⁹⁾		(152	)		(196	)		(152	)		(179	)		(149	)		(193	)		(453	)		(568	)		(171	)		(739	)
Less: interest capitalized ⁽²⁾		16			—			20			2			21			3			57			5			4			9
Interest income and other		19			27			15			20			17			143			51			190			24			214
Equity in income (loss) of affiliates ⁽¹⁰⁾		3			—			6			4			—			2			9			6			(12	)		(6	)
Real Estate and Related Assets:
Interest expense incurred		(14	)		(14	)		(14	)		(14	)		(12	)		(13	)		(40	)		(41	)		(14	)		(55	)
Less: interest capitalized		14			14			14			14			12			13			40			41			14			55
Interest income and other		10			5			3			(2	)		7			4			20			7			5			12
Equity in income of unconsolidated entities ⁽¹¹⁾		21			10			15			13			14			14			50			37			20			57

Earnings (loss) before income taxes		(496	)		358			379			513			274			406			157			1,277			(392	)		885
Income tax (expense) benefit ⁽¹²⁾		(87	)		(125	)		(82	)		(225	)		(89	)		(119	)		(258	)		(469	)		151			(318	)

Earnings (loss) from continuing operations		(583	)		233			297			288			185			287			(101	)		808			(241	)		567
Earnings (loss) from discontinued operations, net of taxes ⁽¹³⁾		3			6			17			132			26			(2	)		46			136			30			166

Net earnings (loss)	$	(580	)	$	239		$	314		$	420		$	211		$	285		$	(55	)	$	944		$	(211	)	$	733


Basic net earnings (loss) per share:
Continuing operations	$	(2.37	)	$	0.96		$	1.20		$	1.18		$	0.75		$	1.17		$	(0.41	)	$	3.31		$	(0.98	)	$	2.32
Discontinued operations		0.01			0.02			0.07			0.54			0.10			(0.01	)		0.19			0.55			0.12			0.68

Net earnings (loss) per share	$	(2.36	)	$	0.98		$	1.27		$	1.72		$	0.85		$	1.16		$	(0.22	)	$	3.86		$	(0.86	)	$	3.00


Diluted net earnings (loss) per share:
Continuing operations	$	(2.37	)	$	0.96		$	1.19		$	1.17		$	0.75		$	1.17		$	(0.41	)	$	3.30		$	(0.98	)	$	2.31
Discontinued operations		0.01			0.02			0.07			0.54			0.10			(0.01	)		0.19			0.55			0.12			0.67

Net earnings (loss) per share	$	(2.36	)	$	0.98		$	1.26		$	1.71		$	0.85		$	1.16		$	(0.22	)	$	3.85		$	(0.86	)	$	2.98


Dividends paid per share	$	0.50		$	0.40		$	0.50		$	0.50		$	0.60		$	0.50		$	1.60		$	1.40		$	0.50		$	1.90


Weighted average shares outstanding (in thousands)
Basic		245,794			242,863			248,147			244,702			247,428			245,009			247,123			244,191			245,215			244,447
Diluted		245,794			244,185			249,194			245,881			247,900			246,190			247,123			245,354			246,198			245,559

PRELIMINARY RESULTS - SUBJECT TO AUDIT

WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)

FOOTNOTES TO CONSOLIDATED EARNINGS
(in millions)


							Year-to-date			Year Ended
	Q1 2006	Q1 2005	Q2 2006	Q2 2005	Q3 2006	Q3 2005	Q3 2006	Q3 2005	Q4 2005	2005
(1) Countervailing and anti-dumping duties and related costs:	$11	$22	$10	$27	$7	$19	$28	$68	$16	$84

(2)		Weyerhaeuser capitalized interest on Weyerhaeuser Real Estate Company (WRECO) assets in the first, second and third quarters of 2006 in the amount of $14 million, $15 million and $17 million, respectively. Weyerhaeuser cost of products sold includes $7 million, $7 million and $8 million for the first, second and third quarters of 2006, respectively, to expense previously capitalized interest in connection with the sale of WRECO assets. See Footnote 7 for 2005 information.

(3)		The third quarter of 2006 includes a $9 million charge related to the acquisition of in-process research and development.

(4)		The second quarter of 2006 includes an $18 million charge related to the restructuring of the Containerboard, Packaging and Recycling business model.

(5)		The first and second quarters of 2006 include charges of $746 million and $3 million, respectively, for the impairment of goodwill associated with the fine paper business.


							Year-to-date			Year Ended
	Q1 2006	Q1 2005	Q2 2006	Q2 2005	Q3 2006	Q3 2005	Q3 2006	Q3 2005	Q4 2005	2005
(6) Net foreign exchange gains (losses), primarily from fluctuations in Canadian and New Zealand exchange rates:	$(26)	$13	$21	$(13)	$17	$37	$12	$37	$(21)	$16

(7)		The third quarter of 2006 includes $23 million of income related to a reduction in the reserves for hardboard siding claims and charges of $7 million for the impairment of fixed assets related to production curtailments. The first quarter of 2005 includes a $12 million charge related to the settlement of a linerboard antitrust lawsuit. The second quarter of 2005 includes an $18 million charge related to alder litigation and $57 million of income related to the recognition of a deferred gain from previous timberlands sales. The third quarter of 2005 includes a $115 million gain on the sale of an investment in a joint venture. The fourth quarter of 2005 includes a $38 million charge related to the settlement of linerboard antitrust litigation and $43 million of income related to the cumulative effect of a change to begin capitalizing Weyerhaeuser interest to assets of WRECO.

(8)		The first quarter of 2006 includes income of $8 million related to a warranty insurance recovery.

(9)		The third and fourth quarters of 2005 include charges of $21 million and $15 million, respectively, related to the early extinguishment of debt.

(10)		The third quarter of 2006 includes a $2 million charge and the fourth quarter of 2005 includes a $15 million charge related to the impairments of investments in equity affiliates.

(11)		The first quarter of 2006 includes recognition of $9 million of deferred income in connection with partnership restructurings.

(12)		The second quarter of 2006 includes a one-time tax benefit of $48 million related to a change in Texas state income tax law, a reduction in the Canadian federal income tax rate and a deferred tax adjustment related to the Medicare Part D subsidy. The second quarter of 2005 includes a charge of $44 million related to the repatriation of $1.1 billion of eligible Canadian earnings under the provisions of the American Jobs Creation Act of 2004. The third quarter of 2005 includes a one-time tax benefit of $14 million related to a change in the Ohio state income tax law.

(13)		Discontinued operations includes the net operating results of the company’s coastal British Columbia operations and its North American and European composites operations. The third quarter of 2006 includes a pretax gain of $51 million and related tax expense of $20 million associated with the sale of the North American composites operations and an $8 million charge to write off additional goodwill associated with the coastal British Columbia operations. The second quarter of 2005 includes a gain of $110 million, including a tax benefit of $46 million, related to the sale of the coastal British Columbia operations. The fourth quarter of 2005 includes a pretax gain of $57 million and related tax expense of $23 million associated with the sale of the French composites operations.

PRELIMINARY RESULTS - SUBJECT TO AUDIT

WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)

Net sales and revenues (in millions):


	Q1						Q2						Q3						Year-to-date						Q4			Year Ended
	March 26,			March 27,			June 25,			June 26,			Sept. 24,			Sept. 25,			Sept. 24,			Sept. 25,			Dec. 25,			Dec. 25,
	2006			2005			2006			2005			2006			2005			2006			2005			2005			2005
Timberlands:
Logs	$	201		$	182		$	198		$	195		$	200		$	188		$	599		$	565		$	196		$	761
Other products		62			82			71			63			46			65			179			210			76			286

		263			264			269			258			246			253			778			775			272			1,047

Wood Products:
Softwood lumber		782			892			857			1,032			733			889			2,372			2,813			811			3,624
Plywood		135			183			147			196			134			184			416			563			172			735
Veneer		13			13			13			10			9			9			35			32			12			44
Composite panels		121			120			140			132			71			122			332			374			123			497
OSB		287			288			273			306			203			267			763			861			303			1,164
Hardwood lumber		99			94			105			102			96			95			300			291			99			390
Engineered I-Joists		169			150			202			202			162			186			533			538			165			703
Engineered Solid Section		204			179			231			228			190			226			625			633			200			833
Logs		7			27			5			24			5			6			17			57			5			62
Other products		256			270			327			340			302			325			885			935			290			1,225

		2,073			2,216			2,300			2,572			1,905			2,309			6,278			7,097			2,180			9,277

Cellulose Fiber and White Papers:
Pulp		394			376			402			355			404			381			1,200			1,112			370			1,482
Paper		613			599			601			611			604			604			1,818			1,814			603			2,417
Coated groundwood		40			42			44			47			42			45			126			134			46			180
Liquid packaging board		46			47			62			52			59			50			167			149			54			203
Other products		14			14			17			12			21			16			52			42			12			54

		1,107			1,078			1,126			1,077			1,130			1,096			3,363			3,251			1,085			4,336

Containerboard, Packaging and Recycling:
Containerboard		82			117			84			101			92			86			258			304			91			395
Packaging		911			898			1,002			969			997			929			2,910			2,796			914			3,710
Recycling		80			92			85			92			89			87			254			271			81			352
Bags		20			22			20			21			23			20			63			63			20			83
Other products		34			34			46			40			44			47			124			121			46			167

		1,127			1,163			1,237			1,223			1,245			1,169			3,609			3,555			1,152			4,707


Real Estate and Related Assets		690			655			746			648			749			596			2,185			1,899			1,016			2,915

Corporate and Other		116			149			117			151			123			146			356			446			154			600

Less: sales of discontinued operations		(120	)		(293	)		(138	)		(264	)		(70	)		(137	)		(328	)		(694	)		(143	)		(837	)

	$	5,256		$	5,232		$	5,657		$	5,665		$	5,328		$	5,432		$	16,241		$	16,329		$	5,716		$	22,045

Contribution (charge) to pre-tax earnings:
(in millions)


	Q1						Q2					Q3						Year-to-date					Q4			Year Ended
	March 26,			March 27,			June 25,			June 26,		Sept. 24,			Sept. 25,			Sept. 24,			Sept. 25,		Dec. 25,			Dec. 25,
	2006			2005			2006			2005		2006			2005			2006			2005		2005			2005
Timberlands ^{(1) (2)} ⁽⁴⁾	$	198		$	200		$	224		$	210	$	178		$	191		$	600		$	601	$	183		$	784
Wood Products ^{(1) (2) (5)}		117			131			131			204		11			124			259			459		26			485
Cellulose Fiber and White Papers ^{(1) (2) (6)}		(763	)		19			23			16		115			(2	)		(625	)		33		(477	)		(444	)
Containerboard, Packaging and Recycling ^{(1) (2) (7)}		22			48			74			99		96			36			192			183		(188	)		(5	)
Real Estate and Related Assets ⁽²⁾ ⁽⁸⁾		172			183			123			156		135			145			430			484		250			734
Corporate and Other ^{(1) (2) (3) (9)}		(102	)		(17	)		(40	)		99		(78	)		101			(220	)		183		33			216

	$	(356	)	$	564		$	535		$	784	$	457		$	595		$	636		$	1,943	$	(173	)	$	1,770

PRELIMINARY RESULTS - SUBJECT TO AUDIT

WEYERHAEUSER COMPANY
STATISTICAL INFORMATION (unaudited)

FOOTNOTES TO CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS
(in millions)


														Year-to-date						Year Ended
	Q1 2006			Q1 2005		Q2 2006		Q2 2005		Q3 2006		Q3 2005		Q3 2006		Q3 2005		Q4 2005		2005
(1) Closure charges by segment:
Timberlands	$	—		$	3	$	—	$	—	$	—	$	—	$	—	$	3	$	3	$	6
Wood Products		—			1		1		1		10		6		11		8		91		99
Cellulose Fiber and White Papers		(1	)		—		11		—		4		22		14		22		427		449
Containerboard, Packaging and Recycling		2			4		5		2		3		1		10		7		130		137
Corporate and Other		—			—		—		—		26		—		26		—		5		5

	$	1		$	8	$	17	$	3	$	43	$	29	$	61	$	40	$	656	$	696

The above closure charges for the first quarter and full year 2005 include $3 million of costs incurred within the company’s discontinued operations. The third quarter of 2006 includes a $26 million charge in the Corporate and Other segment for the impairment of corporate assets related to the Prince Albert pulp and paper facility.


															Year-to-date							Year Ended
	Q1 2006		Q1 2005		Q2 2006			Q2 2005			Q3 2006		Q3 2005		Q3 2006		Q3 2005			Q4 2005		2005
(2) Share-based compensation charges
(income) recognized by segment:
Timberlands	$	1	$	—	$	—		$	—		$	—	$	—	$	1	$	—		$	—	$	—
Wood Products		2		—		—			—			—		—		2		—			—		—
Cellulose Fiber and White Papers		1		—		—			—			1		—		2		—			—		—
Containerboard, Packaging and Recycling		2		—		(1	)		—			1		—		2		—			—		—
Real Estate and Related Assets		—		—		1			—			—		—		1		—			—		—
Corporate and Other		15		2		(4	)		(6	)		1		3		12		(1	)		12		11

	$	21	$	2	$	(4	)	$	(6	)	$	3	$	3	$	20	$	(1	)	$	12	$	11


															Year-to-date							Year Ended
	Q1 2006		Q1 2005		Q2 2006			Q2 2005			Q3 2006		Q3 2005		Q3 2006		Q3 2005			Q4 2005		2005
(3) Net foreign
exchange gains (losses) included in Corporate and Other:	$(26)		$13		$20			$(12)			$17		$38		$11		$39				$(20)		$19

(4)

Additional Timberlands notes:

(a)

Hurricane related losses were $5 million in third quarter 2005 and $6 million in fourth quarter 2005.

(5)

Additional Wood Products notes:

	(a)		Refer to footnote 1 to Consolidated Earnings regarding countervailing duty and anti-dumping costs included in Wood Products.

	(b)		The third quarter of 2006 includes $23 million of income related to a reduction in the hardboard siding claims reserves. The second quarter of 2005 includes an $18 million charge related to alder litigation. The third quarter of 2005 includes $9 million of income related to the reduction of reserves for alder litigation and an insurance settlement related to product liability claims.

	(c)		The third quarter of 2006 includes a $51 million gain on the sale of the company’s North American composites operations.

	(d)		The third quarter of 2006 includes charges of $7 million for the impairment of fixed assets related to production curtailments.

	(e)		The second quarter of 2005 includes a $6 million gain related to a tenure reallocation agreement with the British Columbia government.

(6)

Additional Cellulose Fiber and White Papers notes:

(a)

The first and second quarters of 2006 include charges of $746 million and $3 million, respectively, for the impairment of goodwill associated with the fine paper business.

(7)

Additional Containerboard, Packaging and Recycling notes:

	(a)		The second quarter of 2006 includes a charge of $18 million related to the restructuring of the Containerboard, Packaging and Recycling business model.

	(b)		The first and fourth quarters of 2005 include charges of $12 million and $38 million, respectively, associated with the settlement of linerboard antitrust lawsuits.

	(c)		The third quarter of 2005 had a charge of $1 million related to hurricane damage.

(8)

Additional Real Estate and Related Assets notes:

(a)

The first quarter of 2006 includes income of $8 million related to a warranty insurance recovery and income of $9 million related to recognition of deferred income in connection with partnership restructurings.

(b)

The first, second and third quarters of 2006 includes net gains (losses) on land and lot sales of $33 million, ($1) million and $0, respectively. The first, second, third and fourth quarters of 2005 include net gains (losses) on land and lot sales of $57 million, $21 million, ($1) and $2 million, respectively. The fourth quarter of 2005 also includes a $33 million charge for the impairment of unimproved land.

(c)

The second and third quarters of 2006 include charges for the impairment of assets of $3 million and $14 million, respectively.

(9)

Additional Corporate and Other notes:

	(a)		The third quarter of 2006 includes a $2 million charge and the fourth quarter of 2005 includes a $15 million charge related to the impairments of investments in equity affiliates.

	(b)		The third quarter of 2006 includes a $9 million charge related to the acquisition of in-process research and development.

	(c)		The third quarter of 2006 includes an $8 million charge to write off additional goodwill associated with coastal British Columbia operations.

	(d)		The second quarter of 2005 includes a $64 million pretax gain on the sale of the company’s operations in coastal British Columbia and $57 million of income related to the recognition of a deferred gain from previous timberlands sales. The third quarter of 2005 includes a $115 million gain on the sale of an investment in a joint venture. The fourth quarter of 2005 includes a $57 million gain on the sale of the company’s French composites operations and $43 million of income for the cumulative effect of a change to begin capitalizing Weyerhaeuser interest to assets of Weyerhaeuser Real Estate Company.

PRELIMINARY RESULTS - SUBJECT TO AUDIT

WEYERHAEUSER COMPANY

STATISTICAL INFORMATION (unaudited)

Third party sales volumes:


	Q1				Q2				Q3				Year-to-date				Q4		Year Ended
	March 26,		March 27,		June 25,		June 26,		Sept. 24,		Sept. 25,		Sept. 24,		Sept. 25,		Dec. 25,		Dec. 25,
	2006		2005		2006		2005		2006		2005		2006		2005		2005		2005
Timberlands (thousands):
Logs — cunits		935		864		808		863		850		886		2,593		2,613		939		3,552

Wood Products (millions):
Softwood lumber — board feet		1,921		2,057		2,113		2,355		1,974		2,179		6,008		6,591		2,059		8,650
Plywood — square feet (3/8")		389		537		458		600		437		558		1,284		1,695		485		2,180
Veneer — square feet (3/8")		61		60		63		59		48		51		172		170		61		231
Composite panels — square feet (3/4")		302		299		324		317		139		308		765		924		305		1,229
Oriented strand board — square feet (3/8")		1,000		908		1,069		1,041		989		1,008		3,058		2,957		991		3,948
Hardwood lumber — board feet		103		102		110		114		100		105		313		321		106		427
Engineered I-Joists — lineal feet		114		108		137		138		110		125		361		371		113		484
Engineered Solid Section — cubic feet		9		9		11		10		9		10		29		29		9		38
Logs — cunits (in thousands)		55		187		46		177		26		41		127		405		46		451

Cellulose Fiber and White Papers (thousands):
Pulp — air-dry metric tons		651		629		647		587		625		653		1,923		1,869		633		2,502
Paper — tons		753		736		662		742		641		757		2,056		2,235		761		2,996
Coated groundwood — tons		52		58		59		62		59		56		170		176		56		232
Liquid packaging board — tons		56		60		71		65		72		64		199		189		69		258
Paper converting — tons		511		475		474		494		462		494		1,447		1,463		501		1,964

Containerboard, Packaging and Recycling (thousands):
Containerboard — tons		211		295		189		259		202		238		602		792		254		1,046
Packaging — MSF		18,342		17,354		19,168		18,600		18,425		18,560		55,935		54,514		19,117		73,631
Recycling — tons		733		692		719		695		678		665		2,130		2,052		676		2,728
Kraft bags and sacks — tons		20		23		20		22		22		22		62		67		22		89

Real Estate and Related Assets:
Single-family homes sold		1,472		1,378		1,325		1,525		906		1,608		3,703		4,511		1,174		5,685
Single-family homes closed		1,161		1,189		1,483		1,279		1,439		1,257		4,083		3,725		1,922		5,647
Single-family homes sold but not closed at end of period		3,105		2,561		2,947		2,807		2,414		3,158		2,414		3,158		2,410		2,410

Total production volumes:


	Q1				Q2				Q3				Year-to-date				Q4		Year Ended
	March 26,		March 27,		June 25,		June 26,		Sept. 24,		Sept. 25,		Sept. 24,		Sept. 25,		Dec. 25,		Dec. 25,
	2006		2005		2006		2005		2006		2005		2006		2005		2005		2005
Timberlands (thousands):
Fee Depletion — cunits		2,132		2,248		2,083		2,231		2,040		2,098		6,255		6,577		2,153		8,730

Wood Products (millions):
Softwood lumber — board feet		1,663		1,821		1,650		1,869		1,559		1,651		4,872		5,341		1,645		6,986
Plywood — square feet (3/8")		241		303		245		302		237		296		723		901		254		1,155
Veneer — square feet (3/8") ⁽¹⁾		455		517		455		529		494		486		1,404		1,532		447		1,979
Composite panels — square feet (3/4")		278		267		288		282		100		268		666		817		263		1,080
Oriented strand board — square feet (3/8")		1,073		1,007		1,062		1,019		1,009		1,017		3,144		3,043		1,035		4,078
Hardwood lumber — board feet		82		92		83		96		82		91		247		279		85		364
Engineered I-Joists — LF		121		133		136		132		130		108		387		373		110		483
Engineered Solid Section — CF		11		11		12		10		10		10		33		31		10		41

Cellulose Fiber and White Papers (thousands):
Pulp — air-dry metric tons		676		621		588		614		660		663		1,924		1,898		604		2,502
Paper — tons⁽²⁾		724		763		672		752		675		765		2,071		2,280		780		3,060
Coated groundwood — tons		56		55		56		59		59		60		171		174		60		234
Liquid packaging board — tons		61		60		75		64		73		69		209		193		71		264
Paper converting — tons		498		475		461		487		485		483		1,444		1,445		505		1,950

Containerboard, Packaging and Recycling (thousands):
Containerboard — tons ⁽³⁾		1,575		1,503		1,533		1,581		1,544		1,597		4,652		4,681		1,587		6,268
Packaging — MSF		19,550		18,628		20,290		19,915		19,341		19,416		59,181		57,959		20,130		78,089
Recycling — tons ⁽⁴⁾		1,716		1,624		1,684		1,673		1,641		1,716		5,041		5,013		1,730		6,743
Kraft bags and sacks — tons		19		23		20		22		18		21		57		66		22		88


(1)		Veneer production represents lathe production and includes volumes that are further processed into plywood and engineered lumber products by company mills.

(2)		Paper production includes unprocessed rolls and converted paper volumes.

(3)		Containerboard production represents machine production and includes volumes that are further processed into packaging and kraft bags and sacks by company facilities.

(4)		Recycling production includes volumes processed in Weyerhaeuser recycling facilities that are consumed by company facilities and brokered volumes.

PRELIMINARY RESULTS - SUBJECT TO AUDIT

WEYERHAEUSER COMPANY
STATISTICAL INFORMATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in millions)


	March 26,		June 25,		Sept. 24,		Dec. 25,
	2006		2006		2006		2005
Assets
Weyerhaeuser
Current assets:
Cash and short-term investments	$	105	$	113	$	114	$	818
Receivables, less allowances		1,807		1,920		1,816		1,707
Inventories		2,036		1,899		1,983		1,885
Prepaid expenses		433		427		440		414
Assets of discontinued operations		222		219		88		223

Total current assets		4,603		4,578		4,441		5,047
Property and equipment		10,124		10,107		9,926		10,345
Construction in progress		640		607		640		527

Timber and timberlands at cost, less fee stumpage charged to disposals		3,702		3,696		3,665		3,705
Investments in and advances to equity affiliates		475		479		490		486
Goodwill		2,235		2,243		2,254		2,982
Deferred pension and other assets		1,284		1,303		1,265		1,314
Restricted assets held by special purpose entities		914		916		914		916

		23,977		23,929		23,595		25,322


Real Estate and Related Assets
Cash and short-term investments		39		36		13		286
Receivables, less allowances		143		141		145		42
Real estate in process of development and for sale		1,341		1,590		1,636		1,055
Land being processed for development		1,298		1,282		1,355		1,037
Investments in unconsolidated entities, less reserves		60		66		74		61
Other assets		353		420		422		296
Assets not owned, consolidated under FIN 46R		170		154		132		130

		3,404		3,689		3,777		2,907

Total assets	$	27,381	$	27,618	$	27,372	$	28,229


Liabilities and Shareholders’ Interest

Weyerhaeuser
Current liabilities:
Notes payable and commercial paper	$	1	$	2	$	222	$	3
Current maturities of long-term debt		693		551		492		381
Accounts payable		1,181		1,210		1,142		1,227
Accrued liabilities		1,252		1,326		1,098		1,622
Liabilities of business held for sale		22		19		18		25

Total current liabilities		3,149		3,108		2,972		3,258
Long-term debt		6,938		7,075		7,082		7,404
Deferred income taxes		3,998		3,909		3,848		4,032
Deferred pension, other postretirement benefits and other liabilities		1,651		1,674		1,628		1,591
Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities		763		765		762		764

		16,499		16,531		16,292		17,049

Real Estate and Related Assets
Notes payable and commercial paper		63		125		385		3
Long-term debt		878		628		601		851
Other liabilities		568		707		766		417
Liabilities not owned, consolidated under FIN 46R		144		127		107		109

		1,653		1,587		1,859		1,380

Total liabilities		18,152		18,118		18,151		18,429
Shareholders’ interest		9,229		9,500		9,221		9,800

Total liabilities and shareholders’ interest	$	27,381	$	27,618	$	27,372	$	28,229

STATEMENT OF CASH FLOWS
SELECTED INFORMATION (unaudited)

(in millions)

(Weyerhaeuser only, excludes Real Estate & Related Assets)


	Q1						Q2						Q3						Year-to-date						Q4			Year Ended
	March 26,			March 27,			June 25,			June 26,			Sept. 24,			Sept. 25,			Sept. 24,			Sept. 25,			Dec. 25,			Dec. 25,
	2006			2005			2006			2005			2006			2005			2006			2005			2005			2005
Net cash from operations	$	(209	)	$	(203	)	$	565		$	723		$	95		$	452		$	451		$	972		$	648		$	1,620
Cash paid for property and equipment	$	(182	)	$	(117	)	$	(184	)	$	(196	)	$	(173	)	$	(220	)	$	(539	)	$	(533	)	$	(310	)	$	(843	)
Cash paid for timberlands reforestation	$	(12	)	$	(12	)	$	(9	)	$	(6	)	$	(6	)	$	(6	)	$	(27	)	$	(24	)	$	(8	)	$	(32	)
Cash received from issuances of debt	$	—		$	—		$	—		$	1		$	3		$	—		$	3		$	1		$	—		$	1
Revolving credit facilities, notes and commercial paper borrowings, net	$	(68	)	$	19		$	19		$	23		$	195		$	(40	)	$	146		$	2		$	170		$	172
Payments on debt	$	(158	)	$	(404	)	$	(10	)	$	(206	)	$	(58	)	$	(986	)	$	(226	)	$	(1,596	)	$	(603	)	$	(2,178	)
Proceeds from the sale of operations	$	—		$	—		$	—		$	1,107		$	187		$	—		$	187		$	1,107		$	102		$	1,209
Repurchases of common stock	$	—		$	—		$	—		$	—		$	(332	)	$	—		$	(332	)	$	—		$	(11	)	$	(11	)

PRELIMINARY RESULTS - SUBJECT TO AUDIT

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