| • FORM 10-Q • WEYERHAEUSER COMPANY ANNUAL INCENTIVE PLAN FOR SALARIED EMPLOYEES • STATEMENTS REGARDING COMPUTATION OF RATIOS • SECTION 302 CEO AND CFO CERTIFICATION • SECTION 906 CEO AND CFO CERTIFICATION • XBRL INSTANCE DOCUMENT • XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT • XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT • XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT • XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT • XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________________________ FORM 10-Q __________________________________________________
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012 or
FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 1-4825 __________________________________________________ WEYERHAEUSER COMPANY __________________________________________________
(253) 924-2345 (Registrant’s telephone number, including area code) __________________________________________________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. o Yes x No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No As of April 27, 2012, 537,451,746 shares of the registrant’s common stock ($1.25 par value) were outstanding. TABLE OF CONTENTS
FINANCIAL INFORMATION CONSOLIDATED STATEMENT OF OPERATIONS (DOLLAR AMOUNTS IN MILLIONS EXCEPT PER-SHARE FIGURES) (UNAUDITED)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (DOLLAR AMOUNTS IN MILLIONS) (UNAUDITED)
See accompanying Notes to Consolidated Financial Statements. 1 CONSOLIDATED BALANCE SHEET (DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES) (UNAUDITED)
See accompanying Notes to Consolidated Financial Statements 2 CONSOLIDATED BALANCE SHEET (CONTINUED)
See accompanying Notes to Consolidated Financial Statements. 3 CONSOLIDATED STATEMENT OF CASH FLOWS (DOLLAR AMOUNTS IN MILLIONS) (UNAUDITED)
See accompanying Notes to Consolidated Financial Statements. 4 INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011 NOTE 1: BASIS OF PRESENTATION We are a corporation that has elected to be taxed as a real estate investment trust (REIT). We expect to derive most of our REIT income from investments in timberlands, including the sale of standing timber through pay-as-cut sales contracts. REIT income can be distributed to shareholders without first paying corporate level tax, substantially eliminating the double taxation on income. A significant portion of our timberland segment earnings receives this favorable tax treatment. We are, however, subject to corporate taxes on built-in-gains (the excess of fair market value over tax basis at January 1, 2010) on sales of real property (other than standing timber) held by the REIT during the first 10 years following the REIT conversion. We also will continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which principally includes our manufacturing businesses, our real estate development business and the portion of our Timberlands segment income included in the TRS. Our consolidated financial statements provide an overall view of our results and financial condition. They include our accounts and the accounts of entities we control, including:
They do not include our intercompany transactions and accounts, which are eliminated, and noncontrolling interests are presented as a separate component of equity. We account for investments in and advances to unconsolidated equity affiliates using the equity method, with taxes provided on undistributed earnings. This means that we record earnings and accrue taxes in the period earnings are recognized by our unconsolidated equity affiliates. We report our financial condition in two groups:
Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” “we” and “our” refer to the consolidated company, including both Forest Products and Real Estate. The accompanying unaudited Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Except as otherwise disclosed in these Notes to Consolidated Financial Statements, such adjustments are of a normal, recurring nature. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements; certain disclosures normally provided in accordance with accounting principles generally accepted in the United States have been omitted. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2011. Results of operations for interim periods should not be regarded as necessarily indicative of the results that may be expected for the full year. RECLASSIFICATIONS We have reclassified certain balances and results from the prior year to be consistent with our 2012 reporting. This makes year-to-year comparisons easier. Our reclassifications had no effect on net earnings or Weyerhaeuser shareholders’ interest. The reclassifications include changes to the way we classify certain transactions as operating or financing on our Consolidated Statement of Cash Flows and to present the results of operations discontinued in 2011 separately on our Consolidated Statement of Operations. Note 4: Discontinued Operations provides information about our discontinued operations. 6 NOTE 2: BUSINESS SEGMENTS We are principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate development and construction. Our principal business segments are:
We have disposed of various businesses and operations that are excluded in the segment results below. See Note 4: Discontinued Operations for information regarding our discontinued operations. An analysis and reconciliation of our business segment information to the respective information in the Consolidated Financial Statements is as follows:
(1) Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation; pension and postretirement costs; and foreign exchange transaction gains and losses associated with financing. 7 NOTE 3: NET EARNINGS PER SHARE Our basic and diluted earnings per share attributable to Weyerhaeuser shareholders were:
Basic earnings per share is net earnings divided by the weighted average number of our outstanding common shares, including stock equivalent units where there is no circumstance under which those shares would not be issued. Diluted earnings per share is net earnings divided by the sum of the:
Dilutive potential common shares can include:
We use the treasury stock method to calculate the effect of our outstanding dilutive potential common shares. Share-based payment awards that are contingently issuable upon the achievement of specified performance or market conditions are included in our diluted earnings per share calculation in the period in which the conditions are satisfied. SHARES EXCLUDED FROM DILUTIVE EFFECT The following shares were not included in the computation of diluted earnings per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods. Potential Shares Not Included in the Computation of Diluted Earnings per Share
8 NOTE 4: DISCONTINUED OPERATIONS There are no operations classified as discontinued for the quarter ended March 31, 2012. Discontinued operations for the quarter ended March 31, 2011 include our hardwoods and Westwood Shipping Lines operations, both of which were sold in third quarter 2011. The following table summarizes the components of net sales and net earnings from discontinued operations.
Results of discontinued operations exclude certain general corporate overhead costs that have been allocated to and are included in contribution to earnings for the operating segments. NOTE 5: SHARE-BASED COMPENSATION In first quarter 2012, we granted 1,908,786 stock options, 702,098 restricted stock units, 344,237 performance share units, and 52,304 stock appreciation rights. In addition, 372,783 outstanding restricted stock unit awards vested during first quarter 2012. A total of 946,549 shares of common stock were issued as a result of restricted stock unit vesting and stock option exercises. STOCK OPTIONS The weighted average exercise price of all of the stock options granted in 2012 was $20.42. The vesting and post-termination vesting terms for stock options granted in 2012 were as follows:
Weighted Average Assumptions Used in Estimating the Value of Stock Options Granted in 2012
9 RESTRICTED STOCK UNITS The weighted average fair value of the restricted stock units granted in 2012 was $20.42. The vesting provisions for restricted stock units granted in 2012 were as follows:
PERFORMANCE SHARE UNITS The weighted average grant date fair value of performance share units granted in 2012 was $21.71. The vesting provisions for performance share units granted in 2012 and that are earned were as follows:
Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted 2012
STOCK APPRECIATION RIGHTS Stock appreciation rights are remeasured to reflect the fair value at each reporting period. The following table shows the weighted average assumptions applied to all outstanding stock appreciation rights as of March 31, 2012. Weighted Average Assumptions Used to Remeasure the Value of Stock Appreciation Rights as of March 31, 2012
The vesting and post-termination vesting terms for stock appreciation rights granted in 2012 are the same as for stock options described above. 10 DEFERRED COMPENSATION STOCK EQUIVALENT UNITS During first quarter 2012, the directors' deferred compensation plan was amended to allow the directors to elect to receive payments of amounts deferred into stock equivalent units in cash or stock. Elections to receive these deferred amounts in stock resulted in the issuance of 40,889 shares. The number of common shares to be issued in the future to directors who elected common share payments is 468,185. NOTE 6: OTHER OPERATING INCOME, NET Other operating income, net:
Items Included in Other Operating Income, Net
The $152 million pretax gain on sale of non-strategic timberlands resulted from the sale of 82,000 acres in southwestern Washington. Foreign exchange gains result from changes in exchange rates, primarily related to our Canadian operations. Land management income consists primarily of income derived from leasing, renting and granting easement and rights of way on our timberlands. NOTE 7: INVENTORIES Forest Products inventories include raw materials, work-in-process and finished goods.
The LIFO – the last-in, first-out method – inventory reserve applies to major inventory products held at our U.S. domestic locations. These inventory products include grade and fiber logs, chips, lumber, plywood, oriented strand board, pulp and paperboard. 11 NOTE 8: ACCRUED LIABILITIES Forest Products accrued liabilities were comprised of the following:
NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair values and carrying values of our long-term debt consisted of the following:
To estimate the fair value of long-term debt, we used the following valuation approaches:
The inputs to the valuations are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date. FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS We believe that our other financial instruments, including cash, short-term investments, receivables, and payables, have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to:
12 NOTE 10: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The components of net periodic benefit costs (credits) are:
During fourth quarter 2011, we ratified amendments to our postretirement medical and life insurance benefit plans for U.S. salaried employees that reduced or eliminated certain benefits that were available to both past and present employees. In first quarter 2012, the company recognized a gain of $52 million due to these benefit changes. This gain is included in other operating income and reflected in the amortization of prior service credit in the table above. FAIR VALUE OF PENSION PLAN ASSETS As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011, the value reported for our pension plan assets at the end of 2011 was estimated. Additional information regarding the year-end values generally becomes available to us during the first half of the following year. We expect to complete the valuation of our pension plan assets during second quarter 2012. The final adjustments could affect net pension periodic benefit cost. EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011, we expect to:
13 NOTE 11: CUMULATIVE OTHER COMPREHENSIVE LOSS Items included in our cumulative other comprehensive loss are:
The change in prior service credit not yet recognized in earnings includes the amortization of a $52 million gain recognized in first quarter 2012 as the result of previously announced benefit changes. See Note 10: Pension and Other Postretirement Benefit Plans. NOTE 12: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES This note provides details about our:
LEGAL PROCEEDINGS We are party to legal matters generally incidental to our business. The ultimate outcome of any legal proceeding:
However, whenever probable losses from litigation could reasonably be determined – we believe that we have established adequate reserves. In addition, we believe the ultimate outcome of the legal proceedings:
ENVIRONMENTAL MATTERS Our environmental matters include:
Site Remediation Under the Comprehensive Environmental Response Compensation and Liability Act – commonly known as the Superfund – and similar state laws, we:
As of March 31, 2012, our total accrual for future estimated remediation costs on the active Superfund sites and other sites for which we are responsible was $33 million. There have not been material changes to the accrual since the end of 2011. 14 Asset Retirement Obligations We have obligations associated with the retirement of tangible long-lived assets consisting primarily of reforestation obligations related to forest management licenses in Canada and obligations to close and cap landfills. As of March 31, 2012, our total accruals for these obligations was $69 million. The accruals have not changed materially since the end of 2011. Some of our sites have asbestos containing materials. We have met our current legal obligation to identify and manage these materials. In situations where we cannot reasonably determine when asbestos containing materials might be removed from the sites, we have not recorded an accrual because the fair value of the obligation cannot be reasonably estimated. NOTE 13: INCOME TAXES As a REIT, we generally are not subject to corporate level tax on income of the REIT that is distributed to shareholders. We will, however, be subject to corporate taxes on built-in-gains (the excess of fair market value over tax basis at January 1, 2010) on sales of real property (other than standing timber) held by the REIT during the first 10 years following the REIT conversion. We also will continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which principally includes our manufacturing businesses, our real estate development business and the portion of our Timberlands segment income included in the TRS. The 2012 provision for income taxes is based on the year-to-date effective tax rate that applies to our TRS. Our 2012 estimated annual effective tax rate, excluding discrete items, differs from the U.S. statutory rate, primarily due to lower tax rates applicable to non-U.S. results. Our estimated annual effective income tax rate from continuing operations applicable to our TRS, excluding discrete items, is 25 percent for 2012. The tax rate for the quarter differs from the estimated annual effective tax rate, primarily due to a different mix of non-U.S. earnings or losses in the quarter relative to the annual period. Discrete items excluded from the calculation of our effective income tax rates include:
15 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”) FORWARD-LOOKING STATEMENTS This report contains statements concerning our future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements:
Factors listed in this section – as well as other factors not included – may cause our actual results to differ significantly from our forward-looking statements. There is no guarantee that any of the events anticipated by our forward-looking statements will occur. Or if any of the events occur, there is no guarantee what effect they will have on our operations or financial condition. We will not update our forward-looking statements after the date of this report. FORWARD-LOOKING TERMINOLOGY Some forward-looking statements discuss our plans, strategies and intentions. They use words such as expects, may, will, believes, should, approximately, anticipates, estimates, and plans. In addition, these words may use the positive or negative or other variations of those terms. STATEMENTS We make forward-looking statements of our expectations regarding second quarter 2012, including:
We base our forward-looking statements on a number of factors, including the expected effect of:
16 RISKS, UNCERTAINTIES AND ASSUMPTIONS The major risks and uncertainties – and assumptions that we make – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:
EXPORTING ISSUES We are a large exporter, affected by changes in:
17 RESULTS OF OPERATIONS In reviewing our results of operations, it is important to understand these terms:
In reviewing our results of operations, it is important to understand net sales and revenues and operating income included in Consolidated Results and individual segment discussions below exclude the results of discontinued operations. Refer to Note 4: Discontinued Operations. In the following discussion, unless otherwise noted, references to increases or decreases in income and expense items, price realizations, shipment volumes, and net contributions to earnings are based on the quarter ended March 31, 2012, compared to the quarter ended March 31, 2011. CONSOLIDATED RESULTS How We Did in First Quarter 2012 NET SALES AND REVENUES / OPERATING INCOME / NET EARNINGS – WEYERHAEUSER COMPANY Here is a comparison of net sales and revenues to unaffiliated customers, operating income and net earnings for the quarters ended March 31, 2012 and 2011:
Comparing First Quarter 2012 with First Quarter 2011 Net sales and revenues Net sales and revenues increased $72 million – 5 percent – primarily due to the following:
These increases were partially offset by:
18 Net earnings attributable to Weyerhaeuser common shareholders Our net earnings attributable to Weyerhaeuser common shareholders decreased $58 million – 59 percent – primarily due to:
These decreases in our earnings were partially offset by:
TIMBERLANDS How We Did in First Quarter 2012 Here is a comparison of net sales and revenues to unaffiliated customers, intersegment sales, and net contribution to earnings for the quarters ended March 31, 2012 and 2011: NET SALES AND REVENUES / NET CONTRIBUTION TO EARNINGS – TIMBERLANDS
______________________________
19 Comparing First Quarter 2012 with First Quarter 2011 Net sales and revenues – unaffiliated customers Net sales and revenues to unaffiliated customers increased $20 million – 9 percent – primarily from the following:
The above items were partially offset by a $13 million decrease in timberland exchanges. Net contribution to earnings Net contribution to earnings decreased $170 million – 71 percent – primarily from:
The above items were partially offset by a $15 million increase due to increased market demand for logs in the West and an increased harvest level of 24 percent in the South. Our Outlook We expect modestly higher earnings from the Timberlands segment in second quarter. We expect higher log sales volumes and slightly improved domestic prices for Western logs, partially offset by an overall increase in fuel costs and seasonally higher silviculture expenses in the West and South. THIRD-PARTY LOG SALES VOLUMES AND FEE HARVEST VOLUMES
20 WOOD PRODUCTS How We Did in First Quarter 2012 Here is a comparison of net sales and revenues to unaffiliated customers and net contribution to earnings for the quarters ended March 31, 2012 and 2011: NET SALES AND REVENUES / NET CONTRIBUTION TO EARNINGS – WOOD PRODUCTS
Comparing First Quarter 2012 with First Quarter 2011 Overall performance in our Wood Products segment improved year over year. We continue to focus on reducing costs and increasing revenues by broadening our customer base, introducing new products and improving our operational capabilities. These improvement efforts and slightly better market conditions, have resulted in higher production rates in all primary product lines. Net sales and revenues Net sales and revenues increased $108 million – 21 percent – primarily from the following:
The above items were partially offset by a decrease of 10 percent in engineered solid section average price realizations. Net contribution to earnings Net contribution to earnings increased $14 million – 39 percent – primarily from:
21
These increases were partially offset by a $12 million increase in freight expense due to higher shipment volumes and fuel costs. Our Outlook We anticipate approximately breakeven results from the Wood Products segment in second quarter. We expect higher sales volumes across all product lines and improved selling prices for lumber. THIRD-PARTY SALES VOLUMES
TOTAL PRODUCTION VOLUMES
CELLULOSE FIBERS How We Did in First Quarter and Year-to-Date 2012 Here is a comparison of net sales and revenues to unaffiliated customers and net contribution to earnings for the quarters ended March 31, 2012 and 2011: NET SALES AND REVENUES / NET CONTRIBUTION TO EARNINGS – CELLULOSE FIBERS
22 Comparing First Quarter 2012 with First Quarter 2011 Net sales and revenues Net sales and revenues decreased $33 million – 7 percent – primarily due to:
These decreases were partially offset by an increase in sales volumes for pulp of 13,000 tons – 3 percent. Net contribution to earnings Net contribution to earnings decreased $42 million – 49 percent – primarily due to:
These decreases were partially offset by:
Our Outlook We expect slightly higher earnings from the Cellulose Fibers segment in second quarter due to improved selling prices for pulp, partly offset by higher planned annual maintenance expense. THIRD-PARTY SALES VOLUMES
TOTAL PRODUCTION VOLUMES
23 REAL ESTATE How We Did First Quarter 2012 Here is a comparison of net sales and revenues and net contribution to earnings for the quarters ended March 31, 2012 and 2011: NET SALES AND REVENUES / NET CONTRIBUTION TO EARNINGS – REAL ESTATE
Here is a comparison of key statistics related to our single-family operations for the quarters ended March 31, 2012 and 2011: SUMMARY OF SINGLE-FAMILY STATISTICS
______________________________
Comparing First Quarter 2012 with First Quarter 2011 Net sales and revenues Net sales and revenues decreased $23 million – 14 percent – primarily due to:
Net contribution to earnings Net contribution to earnings decreased $7 million primarily due to a $10 million decrease in contribution from single-family closings.
24
Our Outlook We expect a slight profit from the Real Estate segment in second quarter. A land sale completed in April 2012 will contribute approximately $10 million to earnings. We anticipate a small loss from single family homebuilding operations. Home closings should increase seasonally. UNALLOCATED ITEMS Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation; pension and postretirement costs; and foreign exchange transaction gains and losses associated with financing. Unallocated items were:
The $69 million change in unallocated items is primarily due to:
Partially offsetting these increases is a $9 million increase in restructuring and impairment costs primarily related to previously closed Wood Products facilities. INTEREST EXPENSE Our net interest expense incurred was:
Interest expense incurred decreased due to a lower level of debt. INCOME TAXES As a REIT, we generally are not subject to corporate level tax on income of the REIT that is distributed to shareholders. We will, however, be subject to corporate taxes on built-in-gains (the excess of fair market value over tax basis at January 1, 2010) on sales of real property (other than standing timber) held by the REIT during the first 10 years following the REIT conversion. We also will continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which principally includes our manufacturing businesses, our real estate development business and the portion of our Timberlands segment income included in the TRS. The 2012 provision for income taxes is based on the year-to-date effective tax rate that applies to our TRS. Our 2012 estimated annual effective tax rate, excluding discrete items, differs from the U.S. statutory rate, primarily due to lower tax rates applicable to non-U.S. results. Our estimated annual effective income tax rate from continuing operations applicable to our TRS, excluding discrete items, is 25 percent for 2012. The tax rate for the quarter differs from the estimated annual effective tax rate, primarily due to a different mix of non-U.S. earnings or losses in the quarter relative to the annual period. 25 Discrete items excluded from the calculation of our effective income tax rates include:
LIQUIDITY AND CAPITAL RESOURCES We are committed to maintaining a sound and conservative capital structure which enables us to:
Two important elements of our policy governing capital structure include:
The amount of debt and equity for Forest Products and Real Estate will reflect the following:
CASH FROM OPERATIONS Cash from operations includes:
Consolidated net cash used in our operations was:
Comparing 2012 with 2011 Net cash from operations increased $27 million in 2012 as compared with 2011, primarily due to the following:
26 Partially offsetting the above increases was a decrease in cash, primarily due to the following:
Subsequent to quarter end, our Real Estate segment completed a land sale and received approximately $100 million in cash. Expected Pension Contributions and Benefit Payments As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011, we expect to:
CASH FROM INVESTING ACTIVITIES Cash from investing activities can include:
Summary of Capital Spending by Business Segment
We anticipate that our net capital expenditures for 2012 – excluding acquisitions – will be around $290 million. Proceeds from the Sale of Nonstrategic Assets Proceeds received from the sale of nonstrategic assets in 2011 included $192 million for the sale of 82,000 acres of non-strategic timberlands in southwestern Washington. 27 CASH FROM FINANCING ACTIVITIES Cash from financing activities can include:
Revolving credit facility Weyerhaeuser Company and Weyerhaeuser Real Estate Company (WRECO) have a $1.0 billion 4-year revolving credit facility that expires in June 2015. WRECO can borrow up to $50 million under this facility. Neither of the entities is a guarantor of the borrowing of the other under this credit facility. There were no net proceeds from the issuance of debt or from borrowings (repayments) under our available credit facility in first quarter 2012 or 2011. Debt covenants As of March 31, 2012 Weyerhaeuser Company and WRECO:
Weyerhaeuser Company Covenants Key covenants related to Weyerhaeuser Company include the requirement to maintain:
Weyerhaeuser Company’s defined net worth is comprised of:
Total Weyerhaeuser Company capitalization is comprised of:
As of March 31, 2012, Weyerhaeuser Company had:
28 Weyerhaeuser Real Estate Company Covenants Key covenants related to WRECO's revolving credit facility and medium-term notes include the requirement to maintain:
WRECO’s defined net worth is:
Total WRECO defined debt is:
Total WRECO capitalization is defined as:
As of March 31, 2012, WRECO had:
Option Exercises We received cash proceeds from the exercise of stock options of:
Paying dividends We paid dividends of $81 million in first quarters 2012 and 2011. On April 12, 2012, our board of directors declared a regular dividend of 15 cents per share payable June 1, 2012, to shareholders of record at the close of business May 11, 2012. CRITICAL ACCOUNTING POLICIES There have been no significant changes during first quarter 2012 to our critical accounting policies presented in our 2011 Annual Report on Form 10-K. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK No changes occurred during first quarter 2012 that had a material effect on the information relating to quantitative and qualitative disclosures about market risk that was provided in the company’s Annual Report on Form 10-K for the year ended December 31, 2011. 29 CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Disclosure controls are controls and other procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure. The company’s principal executive officer and principal financial officer have concluded that the company’s disclosure controls and procedures were effective as of March 31, 2012, based on an evaluation of the company’s disclosure controls and procedures as of that date. CHANGES IN INTERNAL CONTROLS No changes occurred in the company’s internal control over financial reporting during first quarter 2012 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting. LEGAL PROCEEDINGS Refer to “Notes to Consolidated Financial Statements – Note 12: Legal Proceedings, Commitments and Contingencies.” RISK FACTORS There have been no significant changes during first quarter 2012 to risk factors presented in our 2011 Annual Report on Form 10-K. EXHIBITS
30 Signature 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 thereunto duly authorized.
31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||