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: 2006091920060919170902ACCESSION
NUMBER:0000950124-06-005369CONFORMED SUBMISSION TYPE:8-KPUBLIC
DOCUMENT COUNT:17CONFORMED PERIOD OF REPORT:20060919ITEM
INFORMATION:Results of Operations and Financial ConditionITEM
INFORMATION:Financial Statements and ExhibitsFILED AS OF
DATE:20060919DATE AS OF CHANGE:20060919
FILER:
COMPANY DATA:COMPANY CONFORMED NAME:WEYERHAEUSER COCENTRAL INDEX
KEY:0000106535STANDARD INDUSTRIAL CLASSIFICATION:LUMBER & WOOD
PRODUCTS (NO FURNITURE) [2400]IRS NUMBER:910470860STATE OF
INCORPORATION:WAFISCAL YEAR END:1226
FILING VALUES:FORM TYPE:8-KSEC ACT:1934 ActSEC FILE
NUMBER:001-04825FILM NUMBER:061098576
BUSINESS ADDRESS:STREET 1:33663 WEYERHAEUSER WAY
SOUTHCITY:FEDERAL WAYSTATE:WAZIP:98003BUSINESS PHONE:2539242345
MAIL ADDRESS:STREET 1:33663 WEYERHAEUSER WAY SOUTHCITY:FEDERAL
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8-K1v23740e8vk.htmFORM 8-K
e8vk
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section13 or 15(d) of the
Securities Exchange Act of 1934
September19, 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)
Registrants telephone number, including area code:
(253)924-2345
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy thefiling obligation of the
registrant under any of the following provisions:
o Written communications pursuant to Rule425 under the
Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule14a-12 under the Exchange
Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule14d-2(b) under
the Exchange Act (17 CFR240.14d-2(b))
o Pre-commencement communications pursuant to Rule13e-4(c) under
the Exchange Act (17 CFR240.13e-4(c))
TABLE OF CONTENTS
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITIONITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITSSIGNATURESEXHIBIT 99.1EXHIBIT
99.2
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C., 20549
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On September19, 2006 Steve Rogel, Chairman, President and
Chief Executive Officer and PattyBedient, Sr. Vice President,
Finance and Strategic Planning of Weyerhaeuser Companyparticipated
in the UBS Global Paper and Forest Products Conference.The script
of the presentations is furnished as Exhibit 99.1. A copy of the
presentation slidesis furnished as Exhibit99.2 to this report.
These exhibits and a webcast of thepresentations are available on
the Companys website.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) The following items are filed as exhibits to this
report:
Exhibit99.1 UBS Global Paper and Forest Products Conference
script ofSteve Rogel and Patty Bedientdated September19, 2006
Exhibit99.2 UBS Global Paper and Forest Products Conference
presentation slidesdated September19, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has dulycaused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
WEYERHAEUSER COMPANY
By /s/ Jeanne Hillman
Its: Vice President and Chief Accounting Officer
Date: September19, 2006
EX-99.12v23740exv99w1.htmEXHIBIT 99.1
exv99w1
Exhibit99.1
STEVENR. ROGEL/ PATTY BEDIENT
UBS Conference
September19, 2006
[Rogel presentation.]
Thank you, Rich.
Its a pleasure to be here and to have the opportunity to
discuss Weyerhaeusers commitment tocreating shareholder value and
the steps weve taken over the past year to deliver on
thatcommitment.
But before I can discuss those accomplishments, I have to ask
you to review the forward-lookingdisclosure associated with this
presentation. I wont ask you to read this eye chart on the
screen,but I do encourage you to review it in your printed version
because this presentation containsforward-looking statements.
Ill start our presentation today with a review of our key
accomplishments this year. Then, Illturn the program over to Patty
Bedient, our senior vice president of finance and
strategicplanning, to provide more insight to our portfolio and
what you can expect from Weyerhaeuser goingforward. Patty also will
provide an outlook on the economic conditions affecting our
businesses andthen update our third quarter guidance. Ill conclude
with a discussion of how the new Domtarcreates value for our
Weyerhaeuser shareholders.
You may remember the commitments we made to our shareholders
last year, but let me quickly reviewthem.
First, we said wed execute new strategies in wood products,
packaging and cellulose fiber to fullyrealize their financial
potential. We currently have a leadership position in each of
thesebusinesses that we believe we can further leverage and improve
operating performance. However, wecannot take an operate as usual
approach if these businesses are to realize their potential
inchanging markets. So, to improve performance weve made some bold
changes to each of them.
This work resulted in a completely new business model for our
Containerboard, Packaging andRecycling business. I am pleased to
say that this new business model is beginning to
produceresults.
We also introduced our iLevel strategy that represents an
entirely new way of serving theresidential wood products market.
This new approach not only changed how were organized to servethis
market, it also resulted in one of the most significant culture
changes that I have witnessedin my career.
To help us execute our business strategy, we needed to narrow
the portfolio of businesses that weoperate. One step in this
process involved the divestiture of our Composite Panels business.
Thesewere very successful and well-run operations, but they lacked
the scale and scope we felt necessaryfor long-term success in our
portfolio. Selling these assets is a win-win situation. For us, we
geta more focused portfolio. For the facilities involved, they now
have the opportunity to play asignificant role in companies that
are committed to growing their composites business.
Of course, the recent Domtar transaction advances our strategy
in a number of ways. As Patty willdiscuss, the transfer of our
papergrade pulp facilities to Domtar allows us to increase our
focuson the high-value absorbent fiber products remaining in this
business segment. For many years, wehave said that our strategy
placed greater emphasis on this market because of its growth
potentialand pricing stability. In addition, our research and
development expertise gives us a significantadvantage in meeting
the unique needs of our consumer products customers.
The strategy for our timberlands business is unchanged. This
business continues to generate strongoperating returns and will do
so for the foreseeable future. However, timberlands held in a
CCorporation are taxed at higher rates than other forms of
ownership. Thats why weve joined othersin our industry to support
legislation to provide more uniform tax treatment. This
legislationenjoys bi-partisan support with 146 sponsors in the
House and 32 in the Senate.
As part of our strategy, we are committed to investing in
growth in real estate and timberlands.Our real estate business
acquired Maracay Homes giving us a strong position in the Phoenix
andTucson markets,which have significant long-term growth
potential. Although we are seeing a slowdown in the housingmarket,
Patty will point out why we see ongoing opportunity in the regions
where we operate. Wecontinue to look for similar opportunities in
other high growth target markets.
During the year, we also grew our Timberlands business by
adding to our position in South America.We are extremely pleased
with the potential of our partnership ventures in Uruguay and the
strongposition it gives us in an area known for its fast growth
rates. Our Uruguay investment involvesplantation forests growing
loblolly pine and eucalyptus for use as high-value saw and plywood
logtimber.
To maximize the value of our investment in the Uruguay
plantations, we are developing manufacturingcapabilities as these
plantations mature. Just this year, we began implementing that
strategy byconstructing our first joint venture plywood mill in
Uruguay. I should point out that this millopened on time, under
budget, and with a very safe construction and operating record a
tribute toour engineers and the team in Uruguay. In the future, we
will expand our manufacturing capabilitiesto include facilities to
produce solid lumber and other products for use by customers
worldwide.
To fulfill our commitment to return value to shareholders, we
took three major steps. First, weincreased our quarterly dividend
by 20percent to 60 cents pershare. This was the second dividend
increase undertaken in a little over a year and demonstrates the
faith our board has in our abilityto deliver strong cash
flow.
Our second step in this area was to execute our program to
repurchase 18million shares ofoutstanding stock, which our Board
authorized last October. Now that we have announced the
Domtartransaction, we can continue with our repurchase
program.
The third piece of our commitment to return value to
shareholders is the transforming transactionwe announced with
Domtar last month. The combination of our fine paper assets with
Domtar instantlycreates the new leader in fine paper. It allows
Weyerhaeuser shareholders theopportunity to participate in the
upside potential of this powerful combination. This transactionalso
allows Weyerhaeuser to focus more closely on our remaining
businesses.
I will talk more about this new market leader later, but I
would now like to turn the program overto Patty Bedient, who will
discuss our post-transaction portfolio, its opportunities and
itsoutlook.
Patty.
[Bedient presentation.]
Thanks Steve and good afternoon.
Let me start with a high level review of what our first half
performance would have looked likewithout the assets that
Weyerhaeuser will be including in the Domtar transaction.
You can see that these assets produced roughly $1.5billion in
revenue, $124million in EBITDA andhad capital expenditures of about
$42million.
Using the YTD June2006 revenue, this chart updates our
portfolio excluding the fine paper businessand the related
commodity paper grade pulp.
Because this presentation includes only our external revenue
the importance of our timberlandsegment at 6% is understated. We
transfer a portion of our timber to our converting operations
atmarket prices and those transfers get eliminated for third party
reporting.
In addition, during the second half of this year, we will
complete the divestiture of our compositepanels business, which is
included here in the wood products segment.
These businesses are focused on executing our chosen
strategies. We believe that this portfolioenables Weyerhaeuser
Company to grow and add value for our shareholders over the long
term.
During the remainder of my remarks I want to briefly review
the strategic direction for each ofthese businesses, touch on our
economic outlook for the remainder of 2006 and update our
guidancefor 3rd quarter earnings.
Timberlands
Let me start with timberlands. We continue to optimize our
portfolio by extracting more value fromthe acre. Our advanced
silvicultural methods have generated superior returns and stable
cashflows. As Steve has already mentioned, growth in our
timberlands business has also taken onincreased focus in South
America where we have begun to purchase timber in our wholly
ownedsubsidiary, which is in addition to our existing joint venture
investments.
The timberlands business has not experienced such a
significant downturn as the wood productsbusiness. In the third
quarter, domestic log prices in the West and South are softening,
althoughnot to the extent of the decline in wood product prices as
Ill discuss in a minute.
Third quarter volumes will be down seasonally compared to the
second quarter in the West and alsoas sawmill curtailments begin to
impact wood flows. In the South, prices will be down somewhat
butthis will be offset by increased fee harvest levels compared to
the second quarter. As a result weexpect earnings in the South to
be similar to second quarter levels.
UBSConference
Export shipments and sales realizations are stable and are
expected to be comparable with thesecond quarter.
As we discussed on our earnings call, land sales will be lower
in the third quarter compared to thesecond. And overall, we expect
timberland earnings in the third quarter to be lower than
thesecond.
WRECO
While the overall general economy has continued to grow
throughout 2006, there is no question thatpast interest rate hikes
by the Federal Reserve have cooled the housing market nationwide.
We havebeen anticipating this for more than a year.
About a year ago, new home sales nationally began to show
signs of slowing from record levels.With slower new sales and an
increase in cancellations, the inventory of new homes on the
marketnationwide has risen significantly. With slower expected
sales as the markets go through a periodof adjustment, it will take
time to work off this backlog.
Although national statistics are important, our real estate
business operates regionally, and ourown markets are at different
stages of their individual market cycles.
We continue to see positive year-over-year improvements in the
Pacific North West and in Houston,but the once hot markets of
Southern California, Las Vegas, Phoenix and Washington, DC have
cooled an adjustment in part that reflects the impact of investor
activity.
We remain bullish on the residential housing market over the
long term, and we are optimistic thatwe will continue to be one of
the stronger performers during this downturn. Our
long-rangeoptimism is based on the attractive demographic trends
and job growth we have discussed at priorconferences especially in
the markets where we operate.
In addition, our Real Estate business has one of the most
seasoned management teams. Our seniorleaders have a wealth of
experience and this team has seen downturns before and knows how to
managethrough them. We will continue to look for ways to
opportunistically grow our real estate segmentin our target
markets.
While our real estate business will produce another strong
year in 2006, it will not match therecord performance of 2005, as
margins decline from their cyclic highs.
Our outlook for 3rd quarter is that earnings should be
comparable to the 2ndquarter. This is consistent with the guidance
provided on our last earnings call. Our backlogcurrently stands at
4.5months.
Wood Products
The wood products market has reflected the decline in single
family housing starts. We expectsingle family starts will drop to
an annual rate of 1.4million by year end, down from a peak
of1.8.
In our residential wood products segment we have seen
significant declines in end product pricesfor most of our product
lines. Lumber and OSB have been the most severely impacted.
Average lumber sales realizations for the 3rd quarter are
expected to declineapproximately 8% compared to the second quarter
and volumes are expected to decrease by almost asmuch.
OSB average sales realizations for the third quarter are
expected to be down approximately 19%compared to the second
quarter. Shipment volumes are also expected to be down compared to
thesecond quarter as a result of the press replacement at our
Sutton, West Virginia plant andmaintenance downtime.
Engineered lumber prices are expected to be fairly flat
compared to the second quarter althoughunder significant price
pressure. Timberstrand and parallam production costs are
anticipated toincrease in the third quarter as compared to the
second quarter as result of extended maintenanceshutdowns as well
as some market related downtime.
Excluding the gain on the sale of our composite panels
business, these factors will result inlosses for our residential
wood products business in the third quarter of this year.
However,capacity curtailments are occurring across the industry as
the market adjusts.
We are focused on executing our iLevel strategy, which is
already beginning to bear fruit. We havecombined our 5 separate
businesses into one organization, marking one of the most
significantinternal restructurings completed at Weyerhaeuser. This
organization is focused on deliveringintegrated solutions that
optimize the structural frame for new construction. These
solutionsinclude panelized floor, wall and roof systems.
Solutions that enable builders to operate more efficiently by
reducing job site waste and shortencycle times are being met with
favorable response from homebuilders who are experiencing
compressedmargins. Also, our solutions-based software enables us to
design differentiated framing solutionsthat use our extensive
family of wood products including our value added engineered
products.
This segment also includes our industrial wood products
business. As Steve mentioned earlier, weenvision increasing our
supply of high value appearance grades coming from South America.
Giventhe success of our recent plywood mill start up and the
positive results of our marketing efforts,we plan to grow
manufacturing in this geography.
UBSConference
CBPR
Like the rest of our portfolio, our containerboard packaging
business has been implementing changesthat will improve their
returns.
This year we have taken decisive action to balance supply with
demand by closing high-cost,non-strategic facilities. This included
the 350,000 ton liner machine at Plymouth, North Carolinaand
removing 3.6billion square feet of box plant production capacity.
These steps have improvedour box plant utilization rate to 76% with
a target of 90%.
We have transformed our business model, including an
organizational realignment, which is now inplace.
We have reorganized our sales and marketing functions. We have
created 6 market segments that aremanaged as profit centers, each
with established return targets. In addition, we are continuing
tomove away from published index pricing as our contracts come up
for renewal.
The sole focus of our integrated supply chain organization is
to meet our customer requirements atthe lowest delivered cost. Our
containerboard manufacturing mills have been integrated with
ourpackaging converting operations. In contrast to our individual
box plant centric model of thepast, our system is now operating
with regional supply teams optimizing zones of three to
fiveplants.
Although we are still early in the implementation, our actions
are yielding results. Box plantcosts, exclusive of fiber, are down
5% in 2006 for the first six months, versus 2005 with ayear-end
target of 10%.
Last year, we said that the fundamental demand indicators for
corrugated packaging should bepositive through 2006. This has
certainly been the case, as nondurable goods production and
boxshipments are expected to grow at least 2% this year. Since
nondurable goods account for about 80%of box shipments, consumer
spending in this area is a primary driver for the packaging
business.
As we discussed on the second quarter conference call, we have
continued to implement thepreviously announced price increases
during the 3rd quarter. This has resulted inimproved prices for
both domestic containerboard sales as well as packaging
prices.
Volumes for the third quarter will be down compared to the
second quarter based on normal seasonalslowing as well as the
negative impact on our produce business as a result of hotter than
normaltemperatures on the West Coast.
In addition, higher fiber costs including OCC and chips due to
sawmill curtailments, will adverselyaffect earnings in the third
quarter compared to the second.
As a result of these factors we now anticipate earning in the
quarter to be roughly comparable tosecond quarter levels in this
segment.
Cellulose Fiber
Ill wrap up my review of the portfolio with Cellulose Fiber.
We are on track to complete theclosure of our Cosmopolis,
Washington specialty pulp mill later this month as we have
previouslyannounced. Once we have completed the transaction with
Domtar, which is anticipated to be sometimein the first quarter of
2007, we will have narrowed our focus in this segment to value
addedproducts.
Our Cellulose Fiber business will consist of 5 mills with
1.7million metric tons of capacity.Four of the mills produce
southern softwood cellulose fiber for absorbent products. Demand in
thismarket is growing and historically these products have higher
and more stable pricing thancommodity paper-grade pulp.
Our fifth mill, located in Grand Prairie, Alberta,
manufactures product for the premium towel andtissue markets. This
pulp is highly valued for the strength of its northern softwood
fiber.
The outlook for this business remains strong through 2006.
Third quarter results will besignificantly improved compared to the
second consistent with the guidance on our second quarterearnings
call.
Financial Priorities
Steve will talk more about our transaction with Domtar in a
minute, but before I turn the podiumback to him, I want to touch on
our financial priorities.
We are committed to maintaining our target capital structure
of debt to total capital of 35 to 40%where deferred taxes are
included as a form of permanent capital.
We will use the cash proceeds from the Domtar transaction
which will be received at closing toreduce debt.
With the announcement of the Domtar transaction we can now be
in the market to complete ourpreviously authorized 18million share
repurchase program.
We also intend to fund selective growth opportunities. And, we
will continue our disciplinedcapital spending.
Now Ill turn the program back to Steve...
[RogelPresentation]
UBS Conference
Thank you, Patty.
Patty has just given you a close look at the post-transaction
Weyerhaeuser. As she discussed, thisportfolio includes businesses
that have the scale and growth opportunities for us to
furtherenhance shareholder value. In addition, the fine paper
transaction gives us a greater ability tofocus on key strategic
priorities such as the transformation of our containerboard
business. Italso provides us with over $1.3billion in cash for debt
repayment.
But it also achieves something else very significant for
Weyerhaeuser shareholders. By structuringthis as a tax-free
transaction for Weyerhaeuser and its shareholders, we have created
an efficientopportunity for them to benefit from this combination
and to participate in the significant upsideof the
transaction.
We are excited about the prospects for the new Domtar. By
combining both of our fine papersystems, we have created a company
with all of the characteristics that we believe are necessary
toeffectively compete in the marketplace and create value for
shareholders. The new Domtar will havethe scale and focus necessary
for success beyond what eitherWeyerhaeusers Fine Paper business or
Domtar could achieve on its own. In fact, it should come asno
surprise that these are precisely some of the characteristics we
have worked hard to achieve inour own portfolio.
The new Domtar can offer its customers a wider range of
products and increased servicealternatives. For shareholders, this
leadership position presents significant opportunities.Raymond
Royer and his experienced team drawn from both companies, have
identified annualtransaction synergies estimated at
$200million.
I am confident that the new Domtar will be able to leverage
its immediate leadership position. Thenew Domtar boasts some of the
most modern and efficient machines in the business, but as
important,it has the leadership and workforce capable of taking it
to the next level. These people are amongthe best in the business.
They understand their markets and they know how to maximize
returns.
In conclusion, we at Weyerhaeuser are focusing our attention
on our remaining strategic prioritiesto enhance shareholder
value.
We are executing our business strategy to improve performance by
ourcommitment to a portfolio of businesses that have scale and
growth;
We are clearly defining our strategic priorities including
investing inselective growth opportunities; and
We are focused on execution and delivery in order to ensure
returningvalue to shareholders.
Thank you and well now open the floor to questions.
EX-99.23v23740exv99w2.htmEXHIBIT 99.2
exv99w2
Exhibit99.2
UBS Global Paper &
Forest Products Conference
Steve Rogel, Chairman, President
and Chief Executive Officer
Patty Bedient, Senior Vice President,
Finance and Strategic Planning
New York City
September 19, 2006
Forward-looking Statement
This presentation contains statements concerning the company's
and "new Domtar's" future growth, results of operations,
performance andbusiness prospects and opportunities that are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of1995. 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 comparableterminology or by discussions of strategy,
plans or intentions. In particular, some of these forward-looking
statements deal with expectationsregarding the company's markets in
the third quarter 2006; expected earnings and performance of the
company's business segments during thethird quarter 2006; benefits,
savings and synergies of the merger between Domtar and
Weyerhaeuser's paper business, including future financialand
operating results, the "new Domtar's" plans, objectives,
expectations and intentions, the markets for the "new Domtar's"
products, the futuredevelopment of the "new Domtar's" business, and
the contingencies and uncertainties to which the "new Domtar" may
be subject; demand andpricing for the company's products in the
third quarter 2006; reduced harvest and sales activity from normal
seasonal shutdowns, softeningdomestic log prices and lower sales of
non-strategic properties in the third quarter 2006; slowing of the
residential construction markets;significantly lower prices for
lumber, oriented strand board, and some engineered lumber products
in the third quarter 2006; the expected closing ofthe sale of the
Irish composite mill during the fourth quarter 2006; continued
demand for containerboard packaging and decreases in
manufacturingcosts in the company's box plants; reduction in
scheduled annual maintenance outages and improved operating
performance in the Cellulose Fiberand White Paper segment; and
related matters and other statements that are not historical facts.
These statements reflect management's currentbeliefs and are based
on information currently available to management. Forward-looking
statements are necessarily based upon a number ofestimates and
assumptions that, while considered reasonable by management, are
inherently subject to known and unknown risks, uncertaintiesand
assumptions that may cause actual results to differ materially from
those projected, including, but not limited to the effect of
general economicconditions, including the level of interest rates
and housing starts; market demand for the company's products, which
may be tied to the relativestrength of various U.S. business
segments; energy prices; raw material prices; chemical prices;
performance of the company's manufacturingoperations including
unexpected maintenance requirements and;the ability to realize
anticipated cost savings; the successful execution of
internalperformance plans; the level of competition from domestic
and foreign producers; the effect of forestry, land use,
environmental and othergovernmental regulations, and changes in
accounting regulations; the effect of weather; the risk of loss
from fires, floods, windstorms, hurricanesand other natural
disasters; transportation costs; legal proceedings; the effect of
timing of retirements and changes in the market price of
companystock 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 incurrency exchange rates, particularly the relative value
of the U.S. dollar to the Euro and the Canadian dollar, and
restrictions on international tradeor tariffs imposed on imports,
including the countervailing and anti-dumping duties imposed on the
company's softwood lumber shipments fromCanada to the United
States. These and other factors could cause or contribute to actual
results differing materially from such forward-lookingstatements
and, accordingly, no assurances can be given that any of the events
anticipated by the forward-looking statements will occur, or if
anyof them occurs, what effect they will have on the company's
results of operations or financial condition. The company expressly
declines anyobligation to publicly revise any forward-looking
statements that have been made to reflect the occurrence of events
after the date of thispresentation.
2006 Accomplishments to Date
Executing business strategy to improveperformance
Implemented new business model for Containerboard,Packaging and
Recycling business
Launched iLevel brand and implemented strategy
Completed divestiture of Composite businesses
Focused cellulose fiber strategy on value-addedproducts
Developing support for industry's timber taxlegislation
2006 Accomplishments (cont'd)
Investing for growth
Acquired Maracay Homes
Purchased timberlands and started-up industrialplywood facility
in Uruguay
Returning value to shareholders
Increased dividend 20% to $0.60 per share
Executing 18 million share repurchase program
Creating new leader in fine paper through value-enhancing
transaction with Domtar
Transaction Impacts on Weyerhaeuser
1) Includes Discontinued Operations sales of $198 million
2) See GAAP reconciliation slide (Appendix 1)
3) Excludes WRECO capital spending (unaudited) 1st Half 2006As
Reported 1st Half 2006 Pro Forma Assuming Transaction Revenue (1)
$11.171 Billion $9.674 Billion EBITDA (2) $1.526 Billion $1.402
Billion Capital Spending (3) $387 Million $345 Million
Weyerhaeuser Post Transaction Portfolio
WRECO 15%
Revenue: $9.7 Billion - YTD June 2006
Timberlands 6%
Wood
Products
45%
Cellulose Fiber 8%
Containerboard,
Packaging &Recycling
24%
Other 2%
Note: Pro forma, unaudited, estimated
Core Business Strategies Optimize and grow Internal and external
growth opportunities in demographically attractive markets
Residential
Industrial
iLevel - New residential structural frame focus Integrated
solutions for the production builder Five businesses to one Single
point of contact
High value appearance grades Transformed business modelBalance
supply with demandMarket segments as profit centersIntegrated
regional supply organizationdelivers at lowest cost Value-added,
differentiated products
Timberlands
WRECO
Wood Products
Containerboard /Packaging
Cellulose Fiber
Financial Priorities
Maintain Weyerhaeuser's target capital structure
Reduce debt with proceeds of fine papertransaction, as required
for the transaction to betax-free
Complete the previously authorized 18 million sharerepurchase
program
Fund selective growth in certain businesses
Continue capital spending discipline
Transformative Transaction to CreateFine Paper Leader - the New
Domtar
Leadership position in Fine Paper market withenhanced scale and
asset quality
Competitive cost profile
Annual transaction synergies estimated at
$200 million
Experienced leadership and workforce
Executing business strategy to improveperformance
Investing for growth
Returning value to shareholders
Weyerhaeuser:
Creating Shareholder Value
Appendix 1: GAAP Reconciliation for WeyerhaeuserEBITDA without
Fine Paper and Related Assets
Steven R. Rogel
Chairman, President and
Chief Executive Office
In 1966 he began his career with St. Regis Paper Company, where
he worked until 1970. From 1970 to 1972 hewas assistant manager at
St. Anne-Nackawic Pulp and Paper in Nackawic, N.B., Canada. He
joined Willamettein 1972 as technical director at the company's
operations in Albany, Oregon. He was named president and
chiefexecutive officer of Willamette in 1995 and served in that
position until joining Weyerhaeuser Company inDecember 1997.
Rogel received his bachelor of science degree in chemical
engineering in 1965 from the University ofWashington in Seattle. He
completed the executive education programs at Dartmouth College and
theMassachusetts Institute of Technology in 1982 and 1989,
respectively.
He serves on various boards, including the American Forest &
Paper Association and the World Forestry Center.He is a director of
the Kroger Company, Union Pacific Corporation, Vice President of
Administration for theWestern Region Boy Scouts of America and
co-chair of the Wood Promotion Network.
Steven R. Rogel was elected chairman, president and chief
executive officer ofWeyerhaeuser Company on April 20, 1999. Prior
to assuming the title ofchairman, Rogel served as president and
chief executive officer and a memberof the board of directors since
December 1, 1997.
Patricia M. Bedient
Senior Vice President,
Finance and Strategic Planning
Patricia M. Bedient was appointed senior vice president, finance
and strategicplanning in February 2006. From February 2003 to 2006
she served as vicepresident, strategic planning. In her new role
she will manage the integration ofall company planning processes,
including financial planning and budgeting,investment evaluation
and investment direction setting.
Prior to joining the company, Bedient was with Arthur Andersen
LLP for 27 years, where she served a number ofclients in the forest
products, manufacturing, distribution and educational service
industries. She began hercareer with Arthur Andersen in Portland,
Oregon, becoming a partner in 1987. In 1993 she transferred to
theBoise, Idaho, office. From 1999-2002 she served as the managing
partner for the Seattle office and as thepartner in charge of the
firm's forest products practice.
Patty attended Oregon State University where she received a
bachelor of science degree in businessadministration, with a
concentration in accounting and finance.
Bedient is a certified public accountant and is a member of the
American Institute of CPAs and the WashingtonSociety of CPAs.
She currently serves on the board of directors of Alaska Air
Group, the Weyerhaeuser Company Foundation, theOregon State
University Foundation board of trustees, the advisory board for the
University of WashingtonSchool of Business, and the San Francisco
regional advisory board for FM Global.
She has served on the boards of the World Forestry Center, the
Forest History Society, and the Forest ResearchLab advisory
committee, Oregon State University. She has also served as past
president, City Club of Portland;past chair, board of regents, St.
Mary's Academy of Portland; past vice chair, Boise Chamber of
Commerce; andpast treasurer for both United Way of Ada County,
Idaho, and Alliance for Education in Seattle.
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