SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
April 25, 2003
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(Date of earliest event report)
WEYERHAEUSER COMPANY
(Exact name of registrant as specified in charter)
Washington 1-4825 91-0470860
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(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
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SIGNATURES
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C., 20549
ITEM 12 - RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On April 25, 2003, Weyerhaeuser Company a press release stating the
following:
FEDERAL WAY, Wash.--April 25, 2003--Weyerhaeuser Company (NYSE:WY) today
reported a loss for the first quarter of $54 million, or 24 cents per share,
which includes after-tax charges of $11 million, or 5 cents per share, for the
cumulative effect of a required change in the accounting principle relating to
asset retirement obligations; $52 million, or 23 cents per share, for a lawsuit
involving Pacific Northwest alder logs; $19 million, or 8 cents per share,
associated with integration and restructuring activities; and $15 million, or 7
cents per share, for the closure of facilities.
Last year, Weyerhaeuser reported first quarter net earnings of $30 million, or
14 cents per share, that included an after-tax charge of $23 million for costs
associated with the bridge financing of the acquisition of Willamette
Industries, an after-tax charge of $17 million for the closure of facilities,
and an after-tax benefit of $12 million for the reversal of previously-accrued
countervailing duties.
During the first quarter of 2003, the company experienced tough market
conditions for all of its lines of business, except real estate and Timberlands.
Weyerhaeuser also incurred approximately $24 million in countervailing and anti
dumping duties and related costs on Canadian softwood lumber the company imports
into the United States compared with the $26 million Weyerhaeuser incurred in
the prior quarter. During the first quarter of 2003, Weyerhaeuser benefited from
the synergies of the Willamette acquisition and continued to experience
improvements in manufacturing performance.
At the end of the first quarter, Weyerhaeuser estimates it has achieved an
annualized run rate of $261 million in pre-tax synergies. The company is
confident it will achieve $300 million in pre-tax annual synergies sooner than
expected.
Comments from Steven R. Rogel, chairman, president and chief executive officer,
on first quarter results:
"This was an extremely difficult quarter, and our results reflect the
challenging business conditions we faced. But it also was a quarter that
demonstrates the progress we're making toward creating a more efficient
Weyerhaeuser. Although increased energy costs, weak building material prices and
sluggish economic conditions offset the improvements we've made, we're extremely
pleased with our increasing manufacturing efficiency and continued progress
toward our synergy goal. In the coming quarters, we expect to see additional
benefits from the steps we've already taken. Our focus remains on reducing our
debt, disciplined capital spending and the adherence to the improvement
initiatives we have in place. We will continue to do whatever is necessary to
further improve our company's ability to perform well regardless of market
conditions. This may require us to make additional difficult decisions regarding
the ongoing operation of some of our facilities."
SUMMARY OF FIRST QUARTER FINANCIAL HIGHLIGHTS
Millions (except per share data) 1Q 2003 1Q 2002 Change
Net earnings (loss)....................($54).........$30.........($84)
Earnings (loss) per share............($0.24).......$0.14.......($0.38)
Net sales............................$4,614.......$3,991.........$623
SEGMENT RESULTS FOR FIRST QUARTER 2003
(Contributions to Pre-Tax Earnings)
Millions 1Q 2003 1Q 2002 Change
Timberlands..................................$149......$107.......$42
Wood Products...............................($150).......$9.....($159)
Pulp and Paper................................$10........$1........$9
Containerboard, Packaging and Recycling.......$80.......$58.......$22
Real estate and related assets................$95.......$91........$4
TIMBERLANDS
1Q 2003 4Q 2002 Change
Contribution to earnings (millions)........$149......$300.......($151)
Excluding the fourth quarter pre-tax gain of $117 million from the sale of
115,000 acres of Washington state timberlands, first quarter earnings were
slightly lower than the fourth quarter.
Second quarter earnings from operations are expected to be similar to the first
quarter. Slightly lower prices are expected to offset higher volumes in both the
export and domestic markets. During the quarter, Weyerhaeuser also expects to
book an estimated pre-tax gain of $143 million on the sale of timberlands in
Western Washington to Hancock Timber Resources. Proceeds will be used to help
pay down the debt associated with the Willamette acquisition.
WOOD PRODUCTS
1Q 2003 4Q 2002 Change
Contribution (charge) to earnings (millions)...($150)....($75)...($75)
First quarter results include a $79 million pre-tax charge to cover damages
awarded by a jury on April 18 in U.S. District Court in Oregon. Excluding this
charge, operating losses were comparable to the fourth quarter loss due to
depressed prices and severe weather in the East that were offset by improved
operating efficiencies.
As part of the company's focus on improving the efficiency of its operations
Weyerhaeuser announced the closure of its Millport, Ala., plywood mill. The
company said it would continue to review its Wood Products portfolio and make
adjustments if necessary to improve its efficiency. In addition, the company
took downtime at five mills due to raw material constraints in the South.
Second quarter results for Wood Products are expected to be better than first
quarter due to seasonal increases in demand for lumber, engineered lumber, and
panels. Weyerhaeuser will continue to be adversely affected by countervailing
and anti-dumping duties, and related costs on Canadian softwood lumber the
company imports into the United States.
PULP AND PAPER
1Q 2003 4Q 2002 Change
Contribution to earnings (millions).........$10........$86.......($76)
Softening fine paper prices and increased energy, transportation and fiber costs
offset higher prices for pulp. As a result, earnings were lower than the prior
quarter. In addition, fourth quarter results for 2002 benefited from $40 million
pre-tax in business interruption insurance recoveries related to a boiler outage
in Plymouth, N.C.
Second quarter earnings are expected to be higher than first quarter due to
higher pulp prices and lower energy costs. The company will take an estimated
40,000 tons of fine paper downtime to offset increased production efficiencies
and perform normal maintenance.
CONTAINERBOARD, PACKAGING AND RECYCLING
1Q 2003 4Q 2002 Change
Contribution to earnings (millions)..........$80.......$114......($34)
Due to improved manufacturing efficiencies and flat demand, the company took
141,000 tons of downtime in containerboard to balance production with orders and
40,000 tons for normal maintenance. In addition, higher energy costs adversely
affected the quarter. This resulted in weaker first quarter earnings compared
with the fourth quarter.
Second quarter earnings are expected to be higher than first quarter due to
modestly improving market conditions and seasonal increases in demand for
packaging. Increasing costs for old corrugated containers (OCC) will partially
offset the effects of the seasonal improvements in markets. The company expects
to take approximately 68,000 tons of downtime during the quarter.
REAL ESTATE AND RELATED ASSETS
1Q 2003 4Q 2002 Change
Contribution to earnings (millions).........$95.........$81.......$14
First quarter results increased from fourth quarter levels due to the sale of an
apartment project and two office buildings. The backlog of homes sold, but not
closed, increased slightly to nearly six months.
Second quarter earnings are expected to be lower due to planned second quarter
closings of single-family housing shifting into the second half of the year.
OTHER
The company will hold a live conference call at 7 a.m. PDT (10 a.m. EDT) on
April 25 to discuss the first quarter results.
To access the conference call, listeners calling from within North America
should dial 888/789-0089 at least 15 minutes prior to the start of the
conference call. Those wishing to access the call from outside North America
should dial 416/695-5259. Replays of the call will be available for 48 hours
following completion of the live call and can be accessed at 866/518-1010 within
North America and at 1-416-252-1143 from outside North America.
The call may also be accessed through Weyerhaeuser's Internet site at
www.weyerhaeuser.com by clicking on the "Listen to our conference call" link.
Weyerhaeuser Company, one of the world's largest integrated forest products
companies, was incorporated in 1900. In 2002, sales were $18.5 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 expected
synergies from the Willamette acquisition, expected improvements in
manufacturing performance, downtime; expected earnings and performance of the
company's business segments during the second quarter, anticipated debt
reduction, anticipated capital spending and expected timberland sales. 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; the company's ability to successfully
integrate and manage acquired businesses and to realize anticipated cost savings
and synergies from this acquisition; the ability of acquired businesses to
perform in accordance with the company's expectations; legal proceedings;
performance of pension fund assets; and uncertainties related
to closure of timberland sales. 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.
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
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Its: Vice President and
Chief Accounting Officer
Date: April 25, 2003