Weyerhaeuser Co WY
Q4 2011 Earnings Call Transcript

Operator: Anthony Pettinari, Citi.

Anthony Pettinari - Citi: In Wood Products your initial goal last year was to be cash positive and obviously, the market became much more challenging later in the year. Can you share with us how you are thinking about the Wood Products business reaching cash flow positive or being operating income positive in 2012?

Daniel S. Fulton - President and CEO: As you know, we ended up in 2011 encountering a more difficult market than 2020. Nevertheless, we made a significant number of improvements as I noted throughout the year, both in improving operating costs, as well as reducing SG&A, which helped to offset declines in prices and increases in costs, such as logs and freight. As we look forward into 2012, we continue with the ongoing improvements in every single one of our businesses. As I noted, we are focused on improving revenues where we have the opportunities to obtain higher prices for certain products, we are adding new customers, our efforts in terms of cost production touch every single one of our operating businesses, lumber, oriented strand board, engineered Wood Products and distribution. At this point given our outlook for housing at the level that we are projecting today, we have an expectation that for the full year we would be EBITDA positive, cash flow neutral. We continue to, as I noted in my remarks, use all leverage that we have. I'm encouraged by the improvement and our focus continues to be to improve profitability at today's level of starts and then be able to take advantage of the upside leverage that comes with an improving market.

Anthony Pettinari - Citi: Just a question on capital expenditures, I think on the last call you had guided to about $100 million in the quarter, which would have brought you closer to that $250 million to $270 million range that you had earlier guided too. I guess you ended up a little bit short of that and I was just wondering if you could give us any color on any projects or investments that maybe you've slowed back or pushed back a little?

Daniel S. Fulton - President and CEO: It's fundamentally timing difference, Anthony, and we haven't change the scope of the products or the projects as we move in to 2012. Our CapEx continues to include reforestation expense, we will work in the woods in order to open up lands for harvest and the most significant capital expenditures continue to be in our Cellulose Fibers business, where we focus our improvements on projects that reduce costs, that have the added benefit in many cases of improving volume and continue to move us forward towards a maintenance schedule in our Cellulose Fibers facilities where we will be stretching out what has been our annual maintenance over the next two to three years to an 18-month schedule.

Operator: Chip Dillon, Vertical Research Partners.

Chip Dillon - Vertical Research Partners: First question is on the – if you could just give us a roadmap to think about pulp, I am sorry, for the Cellulose business this year. Especially given the downtime, I know you normally, I believe have that heaviest in the second and the third as sort of when you let it rip so to speak, and should we a similar pattern this year? If you look at last year the profits sequentially in the first were off about 38% without the prices falling. So I would guess you are expecting it to be a deeper drop in the first quarter this year even though we're seeing signs of it turning up later, if you could comment on that as well I'd appreciate it.