Weyerhaeuser (WY) 10-Q 7 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Trading Symbol	WY
Entity Registrant Name	WEYERHAEUSER CO
Entity Central Index Key	0000106535
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		211,603,533

CONSOLIDATED STATEMENT OF OPERA

CONSOLIDATED STATEMENT OF OPERATIONS (USD $)
In Millions, except Share data in Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Net sales and revenues	$1,419	$1,275
Costs and expenses:
Costs and Expenses, Total	1,335	1,605
Operating income (loss)	84	(330)
Interest expense and other:
Earnings (loss) before income taxes	20	(442)
Income tax benefit (provision) (Note 12)	(38)	176
Net loss	(18)	(266)
Less: (income) loss attributable to noncontrolling interests	(2)	2
Net loss attributable to Weyerhaeuser common shareholders	(20)	(264)
Basic and diluted earnings (loss) per share attributable to Weyerhaeuser common shareholders (Note 4)	-0.1	-1.25
Dividends paid per share	0.05	0.25
Weighted average shares outstanding (in thousands) (Note 4)
Basic	211,440	211,298
Diluted	211,440	211,298
Forest Products:
Net sales and revenues	1,268	1,103
Costs and expenses:
Costs of products sold	1,008	978
Depreciation and amortization	116	122
Selling expenses	34	43
General and administrative expenses	82	96
Research and development expenses	8	13
Charges for restructuring and closures (Note 6)		82
Impairment of goodwill and other assets (Note 6)	1	18
Other operating costs (income), net (Note 7)	(71)	6
Costs and Expenses, Total	1,178	1,358
Interest expense and other:
Interest expense incurred	(106)	(108)
Less: interest capitalized	1	2
Interest income and other	9	14
Equity in income (loss) of equity affiliates	(6)	3
Real Estate:
Net sales and revenues	151	172
Costs and expenses:
Costs and operating expenses	121	151
Depreciation and amortization	3	4
Selling expenses	15	22
General and administrative expenses	16	28
Other operating costs (income), net (Note 7)	1
Impairment of long-lived assets and other related charges (Note 8)	1	42
Costs and Expenses, Total	157	247
Interest expense and other:
Interest expense incurred	(6)	(7)
Less: interest capitalized	5	7
Interest income and other	3	1
Equity in income of equity affiliates	36	2
Impairment of investments and other related charges (Note 8)		($26)

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Current assets:
Assets, Total	$15,175	$15,250
Current liabilities:
Liabilities, Total	11,118	11,196
Weyerhaeuser shareholders' interest:
Common shares: $1.25 par value; authorized 400,000,000 shares; issued and outstanding: 211,557,320 and 211,358,955 shares	264	264
Other capital	1,789	1,786
Retained earnings	2,628	2,658
Cumulative other comprehensive loss (Note 13)	(635)	(664)
Total Weyerhaeuser shareholders' interest	4,046	4,044
Noncontrolling interest	11	10
Total equity	4,057	4,054
Total liabilities and equity	15,175	15,250
Forest Products:
Current assets:
Cash and cash equivalents	2,143	1,862
Short-term investments	1	49
Receivables, less allowances of $12 and $12	462	370
Receivables for taxes	34	602
Receivable from pension trust (Note 12)	96	146
Inventories (Note 9)	515	447
Prepaid expenses	93	82
Deferred tax assets	136	109
Total current assets	3,480	3,667
Property and equipment, less accumulated depreciation of $6,743 and $6,682	3,539	3,611
Construction in progress	69	52
Timber and timberlands at cost, less depletion charged to disposals	4,016	4,010
Investments in and advances to equity affiliates	192	197
Goodwill	40	40
Deferred pension and other assets	904	756
Restricted assets held by special purpose entities	914	915
Assets, Total	13,154	13,248
Current liabilities:
Notes payable and commercial paper	1	4
Current maturities of long-term debt (Note 11)	3	3
Accounts payable	329	317
Accrued liabilities (Note 10)	603	631
Total current liabilities	936	955
Long-term debt (Note 11)	5,281	5,281
Deferred income taxes	1,578	1,538
Deferred pension, other postretirement benefits and other liabilities	1,942	2,000
Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities	767	768
Commitments and contingencies (Note 14)
Liabilities, Total	10,504	10,542
Real Estate:
Current assets:
Cash and cash equivalents	17	7
Receivables, less discounts and allowances of $2 and $2	34	32
Real estate in process of development and for sale	611	598
Land being processed for development	942	917
Investments in and advances to equity affiliates	18	17
Deferred tax assets	271	299
Other assets	122	126
Consolidated assets not owned	6	6
Assets, Total	2,021	2,002
Current liabilities:
Long-term debt (Note 11)	390	402
Other liabilities	224	252
Commitments and contingencies (Note 14)
Liabilities, Total	$614	$654

CONSOLIDATED BALANCE SHEET (Par

CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)
In Millions, except Share data	Mar. 31, 2010	Dec. 31, 2009
Common shares, par value	1.25	1.25
Common shares, authorized	400,000,000	400,000,000
Common shares, issued	211,557,320	211,358,955
Common shares, outstanding	211,557,320	211,358,955
Forest Products:
Receivables, allowances	$12	$12
Property and equipment, accumulated depreciation	6,743	6,682
Real Estate:
Receivables, discounts and allowances	$2	$2

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
	3 Months Ended Mar. 31, 2010		3 Months Ended Mar. 31, 2009
Cash flows from operations:
Net earnings (loss)	($18,000,000)		($266,000,000)
Noncash charges (credits) to income:
Depreciation, depletion and amortization	119,000,000		126,000,000
Deferred income taxes, net	34,000,000		11,000,000
Pension and other postretirement benefits (Note 12)	(1,000,000)		(15,000,000)
Share-based compensation expense	6,000,000		6,000,000
Equity in (income) loss of equity affiliates	3,000,000		(5,000,000)
Litigation charges			20,000,000
Charges for impairment of assets (Notes 6 and 8)	2,000,000		86,000,000
Net gains on dispositions of assets and operations	(83,000,000)
Foreign exchange transaction (gains) losses (Note 7)	(10,000,000)		4,000,000
Decrease (increase) in working capital:
Receivables less allowances	(87,000,000)		54,000,000
Income taxes receivables	568,000,000		(200,000,000)
Inventories, real estate and land	(101,000,000)		37,000,000
Prepaid expenses	(12,000,000)		1,000,000
Accounts payable and accrued liabilities	(43,000,000)		(255,000,000)
Deposits on land positions	3,000,000		(3,000,000)
Intercompany advances		[1]		[1]
Pension contributions	(127,000,000)		(8,000,000)
Other	(63,000,000)		(29,000,000)
Net cash from operations	190,000,000		(436,000,000)
Cash flows from investing activities:
Property and equipment	(46,000,000)		(56,000,000)
Timberlands reforestation	(13,000,000)		(15,000,000)
Acquisition of timberlands	(9,000,000)		(7,000,000)
Redemption of short-term investments	47,000,000		46,000,000
Distributions from (investments in and advances to) equity affiliates	1,000,000		(1,000,000)
Proceeds from sale of assets and operations	115,000,000		8,000,000
Repayments from (loan to) pension trust (Note 12)	50,000,000		(85,000,000)
Intercompany advances		[1]		[1]
Other	(7,000,000)		8,000,000
Cash from investing activities	138,000,000		(102,000,000)
Cash flows from financing activities:
Notes, commercial paper borrowings and revolving credit facilities, net	(3,000,000)
Cash dividends	(11,000,000)		(53,000,000)
Change in book overdrafts	(4,000,000)		(42,000,000)
Payments on debt	(17,000,000)		(1,000,000)
Exercises of stock options	1,000,000
Repurchase of common stock			(2,000,000)
Intercompany advances		[1]		[1]
Other	(3,000,000)		(2,000,000)
Cash from financing activities	(37,000,000)		(100,000,000)
Net change in cash and cash equivalents	291,000,000		(638,000,000)
Cash and cash equivalents at beginning of period	1,869,000,000		2,294,000,000
Cash and cash equivalents at end of period	2,160,000,000		1,656,000,000
Cash paid (received) during the year for:
Interest, net of amount capitalized	153,000,000		161,000,000
Income taxes	(576,000,000)		53,000,000
Forest Products:
Cash flows from operations:
Net earnings (loss)	(38,000,000)		(204,000,000)
Noncash charges (credits) to income:
Depreciation, depletion and amortization	116,000,000		122,000,000
Deferred income taxes, net	7,000,000		12,000,000
Pension and other postretirement benefits (Note 12)	(1,000,000)		(15,000,000)
Share-based compensation expense	5,000,000		5,000,000
Equity in (income) loss of equity affiliates	6,000,000		(3,000,000)
Litigation charges			20,000,000
Charges for impairment of assets (Notes 6 and 8)	1,000,000		18,000,000
Net gains on dispositions of assets and operations	(50,000,000)
Foreign exchange transaction (gains) losses (Note 7)	(10,000,000)		4,000,000
Decrease (increase) in working capital:
Receivables less allowances	(91,000,000)		45,000,000
Income taxes receivables	568,000,000		(200,000,000)
Inventories, real estate and land	(65,000,000)		31,000,000
Prepaid expenses	(11,000,000)		3,000,000
Accounts payable and accrued liabilities	(20,000,000)		(217,000,000)
Deposits on land positions
Intercompany advances		[1]		[1]
Pension contributions	(127,000,000)		(8,000,000)
Other	(66,000,000)		(28,000,000)
Net cash from operations	224,000,000		(415,000,000)
Cash flows from investing activities:
Property and equipment	(45,000,000)		(53,000,000)
Timberlands reforestation	(13,000,000)		(15,000,000)
Acquisition of timberlands	(9,000,000)		(7,000,000)
Redemption of short-term investments	47,000,000		46,000,000
Distributions from (investments in and advances to) equity affiliates	(2,000,000)
Proceeds from sale of assets and operations	82,000,000		8,000,000
Repayments from (loan to) pension trust (Note 12)	50,000,000		(85,000,000)
Intercompany advances	(38,000,000)	[1]	(22,000,000)	[1]
Other	(2,000,000)		8,000,000
Cash from investing activities	70,000,000		(120,000,000)
Cash flows from financing activities:
Notes, commercial paper borrowings and revolving credit facilities, net	(3,000,000)
Cash dividends	(11,000,000)		(53,000,000)
Change in book overdrafts	3,000,000		(42,000,000)
Payments on debt			(1,000,000)
Exercises of stock options	1,000,000
Repurchase of common stock			(2,000,000)
Intercompany advances		[1]		[1]
Other	(3,000,000)		(2,000,000)
Cash from financing activities	(13,000,000)		(100,000,000)
Net change in cash and cash equivalents	281,000,000		(635,000,000)
Cash and cash equivalents at beginning of period	1,862,000,000		2,288,000,000
Cash and cash equivalents at end of period	2,143,000,000		1,653,000,000
Cash paid (received) during the year for:
Interest, net of amount capitalized	151,000,000		161,000,000
Income taxes	(576,000,000)		53,000,000
Real Estate:
Cash flows from operations:
Net earnings (loss)	20,000,000		(62,000,000)
Noncash charges (credits) to income:
Depreciation, depletion and amortization	3,000,000		4,000,000
Deferred income taxes, net	27,000,000		(1,000,000)
Pension and other postretirement benefits (Note 12)
Share-based compensation expense	1,000,000		1,000,000
Equity in (income) loss of equity affiliates	(3,000,000)		(2,000,000)
Litigation charges
Charges for impairment of assets (Notes 6 and 8)	1,000,000		68,000,000
Net gains on dispositions of assets and operations	(33,000,000)
Foreign exchange transaction (gains) losses (Note 7)
Decrease (increase) in working capital:
Receivables less allowances	4,000,000		9,000,000
Income taxes receivables
Inventories, real estate and land	(36,000,000)		6,000,000
Prepaid expenses	(1,000,000)		(2,000,000)
Accounts payable and accrued liabilities	(23,000,000)		(38,000,000)
Deposits on land positions	3,000,000		(3,000,000)
Intercompany advances	(16,000,000)	[1]	(41,000,000)	[1]
Pension contributions
Other	3,000,000		(1,000,000)
Net cash from operations	(50,000,000)		(62,000,000)
Cash flows from investing activities:
Property and equipment	(1,000,000)		(3,000,000)
Timberlands reforestation
Acquisition of timberlands
Redemption of short-term investments
Distributions from (investments in and advances to) equity affiliates	3,000,000		(1,000,000)
Proceeds from sale of assets and operations	33,000,000
Repayments from (loan to) pension trust (Note 12)
Intercompany advances		[1]		[1]
Other	(5,000,000)
Cash from investing activities	30,000,000		(4,000,000)
Cash flows from financing activities:
Notes, commercial paper borrowings and revolving credit facilities, net
Cash dividends
Change in book overdrafts	(7,000,000)
Payments on debt	(17,000,000)
Exercises of stock options
Repurchase of common stock
Intercompany advances	54,000,000	[1]	63,000,000	[1]
Other
Cash from financing activities	30,000,000		63,000,000
Net change in cash and cash equivalents	10,000,000		(3,000,000)
Cash and cash equivalents at beginning of period	7,000,000		6,000,000
Cash and cash equivalents at end of period	17,000,000		3,000,000
Cash paid (received) during the year for:
Interest, net of amount capitalized	2,000,000
Income taxes
[1]Intercompany loans and advances represent payments and receipts between Forest Products and Real Estate and are classified as operating, investing or financing based on the perspective of each entity and the characteristics of the underlying cash flows. Intercompany loans and advances are eliminated and do not appear in the consolidated cash flows above.

BASIS OF PRESENTATION

BASIS OF PRESENTATION
	3 Months Ended Mar. 31, 2010
BASIS OF PRESENTATION	NOTE 1: BASIS OF PRESENTATION Our consolidated financial statements provide an overall view of our results and financial condition. They include our accounts and the accounts of entities that we control, including: majority-owned domestic and foreign subsidiaries and variable interest entities in which we are the primary beneficiary. They do not include our intercompany transactions and accounts, which are eliminated. 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 that the earnings are recognized by our unconsolidated equity affiliates. We report our financial results and condition in two groups: Forest Products our forest products-based operations, principally the growing and harvesting of timber, the manufacture, distribution and sale of forest products and corporate governance activities; and Real Estate our real estate development and construction operations. 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; as such 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 Managements Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December31, 2009. RECLASSIFICATIONS We have reclassified certain balances and results from the prior year for consistency with our 2010 reporting. This makes year-to-year comparisons easier. Our reclassifications had no effect on net earnings (loss) or Weyerhaeuser shareholders interest.

ACCOUNTING PRONOUNCEMENTS

ACCOUNTING PRONOUNCEMENTS
	3 Months Ended Mar. 31, 2010
ACCOUNTING PRONOUNCEMENTS	NOTE 2: ACCOUNTING PRONOUNCEMENTS ACCOUNTING CHANGES WE IMPLEMENTED IN 2010 Variable Interest Entities (VIE) In June 2009, the Financial Accounting Standards Board (FASB) issued guidance that amends existing consolidation guidance for VIEs by: changing the required approach for identifying the primary beneficiary of a VIE by replacing the quantitative-based risks and rewards calculation with a qualitative approach that focuses on identifying who has the power to direct activities that significantly affect an entitys economic performance, requiring additional reconsideration events when determining whether an entity is a VIE to include loss of power from voting or similar rights to direct the activities that significantly affect the entitys economic performance, requiring ongoing assessment of whether an enterprise is the primary beneficiary of a VIE and requiring additional disclosures over involvement with a VIE. Our adoption of this guidance in first quarter 2010 did not have a material effect on our results of operations, financial position or cash flows. Distributions to Shareholders with Components of Stock and Cash The FASB issued guidance clarifying that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is considered a share issuance to be reflected in earnings per share prospectively. Our adoption of this guidance did not affect our results of operations, financial position or cash flows. This guidance would apply to a distribution of earnings and profits to shareholders as part of a conversion to a real estate investment trust (REIT). See Managements Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Other Liquidity Related Disclosures for more information regarding our conversion to a REIT.

BUSINESS SEGMENTS

BUSINESS SEGMENTS
	3 Months Ended Mar. 31, 2010
BUSINESS SEGMENTS	NOTE 3: 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: Timberlands which includes logs; timber; minerals, oil and gas; and international wood products; Wood Products which includes softwood lumber, engineered lumber, structural panels, hardwood lumber and building materials distribution; Cellulose Fibers which includes pulp, liquid packaging board and an equity interest in a newsprint joint venture; Real Estate which includes real estate development, construction and sales; and Corporate and Other which includes governance, corporate support activities and transportation. We also may record one-time gains or charges in the Corporate and Other segment related to dispositions or events that are not related to an individual operating segment. An analysis and reconciliation of our business segment information to the respective information in the Consolidated Financial Statements is as follows: QUARTERENDED DOLLARAMOUNTSINMILLIONS MARCH31, 2010 MARCH31, 2009 Sales to and revenues from unaffiliated customers: Timberlands $ 202 $ 157 Wood Products 604 542 Cellulose Fibers 410 364 Real Estate 151 172 Corporate and Other 52 40 1,419 1,275 Intersegment sales: Timberlands 171 171 Wood Products 16 18 Corporate and Other 4 3 191 192 Total sales and revenues 1,610 1,467 Intersegment eliminations (191 ) (192 ) Total $ 1,419 $ 1,275 Net contribution to earnings:(1) Timberlands $ 81 $ 40 Wood Products (19 ) (266 ) Cellulose Fibers 19 31 Real Estate 31 (96 ) Corporate and Other 12 (43 ) 124 (334 ) Interest expense (112 ) (115 ) Less: capitalized interest 6 9 Income (loss) before income taxes 18 (440 ) Income tax benefit (expense) (38 ) 176 Net loss attributable to Weyerhaeuser common shareholders $ (20 ) $ (264 ) (1) During first quarter 2010, we changed the methodology for allocating corporate costs to the business segments. The amounts presented for first quarter 2009 were not reclassified. Had 2009 been presented using the same methodology, net contribution to earnings would have decreased $4 million for Timberlands, $8million for Wood Products, $4 million for Cellulose Fibers and $1 million for Real Estate, and increased by $17 million for Corporate and Other.

NET EARNINGS

NET EARNINGS (LOSS) PER SHARE
	3 Months Ended Mar. 31, 2010
NET EARNINGS (LOSS) PER SHARE	NOTE 4: NET EARNINGS (LOSS) PER SHARE Our basic and diluted earnings (loss) per share attributable to Weyerhaeuser shareholders were: $(0.10) for the quarter ended March31, 2010 and $(1.25) for the quarter ended March31, 2009. Basic earnings per share is net earnings divided by the weighted average number of our outstanding common shares. Diluted earnings per share is net earnings divided by the sum of the: weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares. Dilutive potential common shares may include: outstanding stock options, restricted stock units or performance share units. We use the treasury stock method to calculate the effect of our outstanding dilutive potential common shares. SHARES EXCLUDED FROM DILUTIVE EFFECT The following shares were not included in the computation of diluted earnings (loss) per share for the quarters ended March31, 2010, and March31, 2009, due to our net loss position. However, 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 (Loss) per Share QUARTER ENDED SHARESINTHOUSANDS MARCH31, 2010 MARCH31, 2009 Stock options 12,933 11,180 Restricted stock units 736 671 Performance share units 220 Share Repurchase Program In December 2008, we announced a stock repurchase program under which we are authorized to repurchase up to $250 million of outstanding common shares. We repurchased a total of 66,691 shares of common stock for approximately $2 million under the program during first quarter 2009. All common stock purchases under the program were made in open-market transactions. We have not repurchased any more common shares since first quarter 2009.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION
	3 Months Ended Mar. 31, 2010
SHARE-BASED COMPENSATION	NOTE 5: SHARE-BASED COMPENSATION In first quarter 2010, we granted 1,264,337 stock options, 71,160 stock appreciation rights and 334,495 restricted stock units. In addition, 229,703 outstanding restricted stock unit awards vested during first quarter 2010. A total of 203,417 shares of common stock were issued as a result of restricted stock unit vesting and stock option exercises. STOCK OPTIONS Most of the stock options were granted with the following standard vesting and post-termination vesting terms: options vest ratably over 4 years; options granted prior to 2010 either vest or continue to vest in the event of death, disability, retirement or involuntary termination; and options granted in 2010: either vest or continue to vest in the event of death, disability, retirement at an age of at least 65 or age 62-64 with at least 10 years of service, or involuntary termination when the retirement criteria for full or continued vesting have been met; continue vesting for one year in the event of involuntary termination when the retirement criteria for full or continued vesting have not been met; and stop vesting for all other situations including early retirement prior to age 62 or at age 62-64 with fewer than 10 years of service. The weighted average exercise price of all of the stock options granted in first quarter 2010 was $39.29. Weighted Average Assumptions Used in Estimating the Value of Stock Options Granted in First Quarter 2010 10-YEARSTANDARD OPTIONS Expected volatility 37.62 % Expected dividends 0.51 % Expected term (in years) 5.16 Risk-free rate 2.52 % Weighted average grant date fair value $ 14.01 STOCK APPRECIATION RIGHTS Stock appreciation rights represent liability-classified awards that 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 March31, 2010. Weighted Average Assumptions Used to Remeasure the Value of Stock Appreciation Rights as of March31, 2010 MARCH31, 2010 Expected volatility 39.20 % Expected dividends 0.44 % Expected term (in years) 3.21 Risk-free rate 1.69 % Weighted average fair value $ 9.47 RESTRICTED STOCK UNITS The weighted average fair value of the restricted stock units granted in first quarter 2010 was $39.65. The post-termination vesting provisions for restricted stock units granted in 2010 were as follows: restricted stock units vest ratably over 4 years; and restricted stock units will be forfeited upon termination of employment for any reason, including retirement or involuntary termination.

CHARGES FOR FOREST PRODUCTS RES

CHARGES FOR FOREST PRODUCTS RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS
	3 Months Ended Mar. 31, 2010
CHARGES FOR FOREST PRODUCTS RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS	NOTE 6: CHARGES FOR FOREST PRODUCTS RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS We review the carrying value of our assets whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable through future operations.These events or changes in circumstances may include, but are not limited to: decisions made to curtail, close,sell or restructure operations; changes in the expected use of assets; and significant or prolonged adverse changes in financial markets and economic conditions in markets in which we operate. Charges for Forest Products restructuring, closures and asset impairmentsfor the quarters ended March31, 2010, and March31, 2009, include: QUARTERENDED DOLLARAMOUNTSINMILLIONS MARCH31, 2010 MARCH31, 2009 Restructuring and closure charges: Termination benefits $ (1 ) $ 66 Pension and postretirement charges 9 Other restructuring and closure costs 1 7 Charges for restructuring and closures $ $ 82 Asset impairments: Long-lived assets $ 1 $ 11 Goodwill 3 Other assets 4 Impairment of goodwill and other assets $ 1 $ 18 The charges recognized during first quarter 2009, are primarily related to the Wood Products closures and curtailments, corporate restructuring activities and additional costs recognized in connection with previously announced facility closures. Asset impairment charges in 2009 include $9 million for software costs and $2 million related to a Wood Products distribution facility site. The fair value of the site was determined based on a brokers quote classified as a Level 2 input in the fair value hierarchy. Goodwill impairment charges recognized in first quarter 2009 relate to goodwill in our hardwoods and industrial wood products reporting unit. Changes in accrued termination benefits related to restructuring and facility closures during the quarter ended March31, 2010, were as follows: DOLLAR AMOUNTS IN MILLIONS Accrued severance as of December31, 2009 $ 20 Payments (9 ) Accrued severance as of March31, 2010 $ 11 The majority of the accrued severance balance as of March31, 2010, is expected to be paid by the end of 2010.

OTHER OPERATING COSTS

OTHER OPERATING COSTS (INCOME), NET
	3 Months Ended Mar. 31, 2010
OTHER OPERATING COSTS (INCOME), NET	NOTE 7: OTHER OPERATING COSTS (INCOME), NET Other operating costs (income), net: exclude our Real Estate operations, include both recurring and occasional income and expense items and can fluctuate from year to year. Various Income and Expense Items Included in Forest Products Other Operating Costs (Income), Net QUARTERENDED DOLLAR AMOUNTS IN MILLIONS MARCH31, 2010 MARCH31, 2009 Litigation expense, net $ 1 $ 18 Gain on disposition of assets (49 ) (2 ) Foreign exchange (gains) losses, net (10 ) 4 Land management income (6 ) (4 ) Other, net (7 ) (10 ) Total other operating costs (income), net $ (71 ) $ 6 Litigation expense, net, included $20 million during first quarter 2009 to establish a reserve for an agreement to settle alder litigation. First quarter 2010 included pre-tax gains of $40 million from the sale of certain British Columbia forest licenses and associated rights, $4 million from the sale of a sawmill, and $2 million from the sale of a closed box plant.

REAL ESTATE ASSET IMPAIRMENTS A

REAL ESTATE ASSET IMPAIRMENTS AND OTHER RELATED CHARGES
	3 Months Ended Mar. 31, 2010
REAL ESTATE ASSET IMPAIRMENTS AND OTHER RELATED CHARGES	NOTE 8: REAL ESTATE ASSET IMPAIRMENTS AND OTHER RELATED CHARGES We review homebuilding long-lived assets and investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. These assets are stated at cost unless events or circumstances trigger an impairment review. If a triggering event occurs and the assets carrying amount is not recoverable, we record an impairment loss, which is the difference between the assets book value and fair value. The determination of fair value is based on appraisals and market pricing of comparable assets when that information is available, or the discounted value of estimated future net cash flows from these assets. During first quarter 2009, unfavorable market conditions caused us to re-evaluate our strategy to develop certain projects, reduce sales prices, increase customer incentives, or reassess the recoverability of our investments, which triggered impairment charges. Asset impairments are recorded as adjustments to the cost basis of inventory and investments. Total Real Estate Impairment and Other Investment-Related Charges QUARTERENDED DOLLAR AMOUNTS IN MILLIONS MARCH31, 2010 MARCH31, 2009 Real estate impairments $ 1 $ 15 Write-off of pre-acquisition costs 24 Other impairment related charges 3 Total impairments of long-lived assets and other related charges 1 42 Impairments of investments and other related charges 26 Total impairments and other related charges $ 1 $ 68 The write-off of pre-acquisition costs primarily relates to forfeited deposits on options to purchase land. The first quarter 2009 charge represents the forfeiture of deposits on two projects that were planned for development of approximately 3,300 residential lots. As of March31, 2010, we control approximately 63,000 lots under option. Impairments of investments and other related charges relate to loans and investments in equity affiliates. There may be individual homes or parcels of land that are held for sale within a community that is held for development. Impairment charges recognized as a result of adjusting individual held-for-sale assets within a community to estimated fair value less cost to sell are included in the total impairment charges below. Fair Value Measurements Using DOLLAR AMOUNTS IN MILLIONS Number of Projects Tested for Recoverability Number of Projects Impaired Impairment Charges Recognized Fair Value of Impaired Projects Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) First Quarter 2010 12 2 $ 1 $ 7 $ 5 $ 2 First Quarter 2009 59 9 $ 15 $ 17 $ 9 $ 8 The significant unobservable inputs (Level 3) reported above are discounted future cash flows of the projects and investments. We use present value techniques based on discounting the estimated cash flows at a rate commensurate with the inherent risks associated with the assets and related estimated cash flow

INVENTORIES

INVENTORIES
	3 Months Ended Mar. 31, 2010
INVENTORIES	NOTE 9: INVENTORIES Forest Products inventories include raw materials, work-in-process and finished goods. DOLLAR AMOUNTS IN MILLIONS MARCH31, 2010 DECEMBER31, 2009 Logs and chips $ 65 $ 33 Lumber, plywood, panels and engineered lumber 126 102 Pulp and paperboard 91 80 Other products 97 97 Materials and supplies 136 135 Total $ 515 $ 447

ACCRUED LIABILITIES

ACCRUED LIABILITIES
	3 Months Ended Mar. 31, 2010
ACCRUED LIABILITIES	NOTE 10: ACCRUED LIABILITIES Forest Products accrued liabilities were comprised of the following: DOLLAR AMOUNTS IN MILLIONS MARCH31, 2010 DECEMBER31, 2009 Wages, salaries and severance pay $ 135 $ 125 Pension and postretirement 85 84 Vacation pay 53 51 Taxes Social Security and real and personal property 31 31 Interest 75 121 Customer rebates and volume discounts 38 42 Deferred mineral income 23 31 Other 163 146 Total $ 603 $ 631

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS
	3 Months Ended Mar. 31, 2010
FAIR VALUE OF FINANCIAL INSTRUMENTS	NOTE 11: FAIR VALUE OF FINANCIAL INSTRUMENTS This note provides details about our: debt and other financial instruments. FAIR VALUE OF DEBT The fair value of our long-term debt was $5.9 billion as of March31, 2010. The estimated fair values and carrying values consisted of the following: MARCH31, 2010 DECEMBER31, 2009 DOLLAR AMOUNTS IN MILLIONS CARRYINGVALUE FAIRVALUE CARRYINGVALUE FAIRVALUE Financial Liabilities: Long-term debt (including current maturities) Forest Products $ 5,284 $ 5,512 $ 5,284 $ 5,256 Real Estate $ 390 $ 387 $ 402 $ 398 To estimate the fair value of long-term debt, we used the following valuation approaches: market approach based on quoted market prices for the same types and issues of our debt; or income approach based on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt. 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: the short-term nature of these instruments, carrying short-term investments at expected net realizable value and the allowance for doubtful accounts. We also have long-term investments that are classified as available-for-sale securities. These securities carrying values approximate their fair values.

PENSION AND OTHER POSTRETIREMEN

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
	3 Months Ended Mar. 31, 2010
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS	NOTE 12: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS We recognized net pension credits of $8 million and other postretirement benefit costs of $7 million, for net credits of $1 million during first quarter 2010. This compares to net pension credits of $10 million and other postretirement benefit credits of $5 million, for total credits of $15 million during first quarter 2009. The components of net periodic benefit credits (costs) are: PENSION OTHER POSTRETIREMENT BENEFITS QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH31, 2010 MARCH31, 2009 MARCH31, 2010 MARCH31, 2009 Service cost $ (11 ) $ (29 ) $ $ (1 ) Interest cost (68 ) (69 ) (7 ) (9 ) Expected return on plan assets 109 125 Amortization of loss (15 ) (4 ) (5 ) (4 ) Amortization of prior service credits (costs) (4 ) (6 ) 5 21 Loss due to curtailment and special termination benefits (3 ) (7 ) (2 ) Total net periodic benefit credits (costs) $ 8 $ 10 $ (7 ) $ 5 First quarter 2010 curtailment and special termination benefits are primarily related to the sale of Wood Products facilities announced in fourth quarter 2009. FAIR VALUE OF PENSION PLAN ASSETS As disclosed in our Annual Report on Form 10-K for the year ended December31, 2009, the value reported for our pension plan assets at the end of 2009 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 2010. The final adjustments could affect net pension benefit (expense) depending on the magnitude of the adjustment. RECEIVABLE FROM PENSION TRUST In first quarter 2010, the pension trust repaid $50 million of the short-term loans made in 2008 and 2009, bringing the total receivable from the pension trust down to $96 million. The remaining $96 million balance was repaid in April 2010. EXPECTED PENSION FUNDING At the end of 2009, we reported that we intended to make a voluntary contribution of approximately $100 million to our U.S. qualified pension plans for the 2009 year by September15, 2010.We contributed $100 million to our U.S. qualified pension plans in first quarter 2010.The contribution reduced 2009 taxable income, thereby increasing the amount of the 2009 operating loss refund that we received in first quarter 2010. The contribution also decreased the amount of earnings and profits that would have to be distributed in 2010 in order to convert to a real estate investment trust. The company estimates the required 2010 contribution could be as much as $20 million, which would be due by September15, 2011. MEDICARE PART D We recorded a $28 million charge in first quarter 2010 as a result of the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act. The charge is included in income tax benefit (provisio

COMPREHENSIVE INCOME

COMPREHENSIVE INCOME (LOSS)
	3 Months Ended Mar. 31, 2010
COMPREHENSIVE INCOME (LOSS)	NOTE 13: COMPREHENSIVE INCOME (LOSS) Our comprehensive income attributable to Weyerhaeuser common shareholders, net of tax, was $9 million for the quarter ended March31, 2010. Items Included in Our Comprehensive Income (Loss) QUARTERENDED DOLLAR AMOUNTS IN MILLIONS MARCH31, 2010 MARCH31, 2009 Consolidated net loss $ (18 ) $ (266 ) Other comprehensive income (loss): Foreign currency translation adjustments 25 (22 ) Actuarial net gains (losses), net of tax 2 (155 ) Prior service credits, net of tax 2 6 Reclassification of net gains on cash flow hedges, net of tax (1 ) Total other comprehensive income (loss) 29 (172 ) Total comprehensive income (loss) 11 (438 ) Less: Comprehensive (income) loss attributable to noncontrolling interests (2 ) 2 Comprehensive income (loss) attributable to Weyerhaeuser common shareholders $ 9 $ (436 ) Cumulative Other Comprehensive Loss Our cumulative other comprehensive loss, net of tax, was $635 million as of March31, 2010. Items Included in Our Cumulative Other Comprehensive Loss DOLLAR AMOUNTS IN MILLIONS MARCH31, 2010 DECEMBER31, 2009 Foreign currency translation adjustments $ 414 $ 389 Net pension and other postretirement benefit loss not yet recognized in earnings (1,190 ) (1,192 ) Prior service credit not yet recognized in earnings 138 136 Unrealized gains on available-for-sale securities 3 3 Total $ (635 ) $ (664 )

LEGAL PROCEEDINGS, COMMITMENTS

LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES
	3 Months Ended Mar. 31, 2010
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES	NOTE 14: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES This note provides details about our: legal proceedings and environmental matters. LEGAL PROCEEDINGS We are party to legal matters generally incidental to our business. The ultimate outcome of any legal proceeding: is subject to a great many variables and cannot be predicted with any degree of certainty. 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: could have a material adverse effect on our results of operations, cash flows or financial position in any given quarter or year; but will not have a material adverse effect on our long-term results of operations, cash flows or financial position. ENVIRONMENTAL MATTERS The issues we have concerning environmental matters are: site remediation and asbestos management. Site Remediation Under the Comprehensive Environmental Response Compensation and Liability Act commonly known as the Superfund and similar state laws, we: are a party to various proceedings related to the cleanup of hazardous waste sites and have been notified that we may be a potentially responsible party related to the cleanup of other hazardous waste sites for which proceedings have not yet been initiated. Our Established Reserves. We have established reserves for estimated remediation costs on the active Superfund sites and other sites for which we are responsible. Changes in the Reserve for Environmental Remediation DOLLAR AMOUNTS IN MILLIONS Reserve balance as of December31, 2009 $ 31 Reserve charges and adjustments, net 1 Payments (3 ) Reserve balance as of March31, 2010 $ 29 Total active sites as of March31, 2010 56 The changes in our reserves for remediation costs reflect: new information on any site concerning implementation of remediation alternatives, updates on prior cost estimates and new sites and costs incurred to remediate sites. Estimates. We believe it is reasonably possible based on currently available information and analysis that remediation costs for all identified sites may exceed our reserves by up to $95 million. The increase in potential remediation costs of $65 million this quarter is due to the bankruptcy of a potentially responsible party with whom we are co-responsible for site remediation. That estimate in which those additional costs may be incurred over several years is the upper end of the range of reasonably possible additional costs. The estimate: is much less certain than the estimates on which our accruals currently are based and uses assumptions that are less favorable to us among the range of reasonably possible outcomes. In estimating our current accruals and the possible range of additional future costs, we: assumed we will not bear the entire cost of remediation of every site,

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS
	3 Months Ended Mar. 31, 2010
SUBSEQUENT EVENTS	NOTE 15: SUBSEQUENT EVENTS At the annual meeting of shareholders on April15, 2010, our shareholders approved amendments to the companys articles of incorporation to increase the number of shares of common stock the company is authorized to issue up to1.36 billion shares from 400million shares and to impose ownership and transfer restrictions, which limit the number of shares any person or entity may own, including those attributed to it under the attribution provisions of the Internal Revenue Code, to no more than 9.8 percent of the aggregate value of the outstanding shares of any class or series of Weyerhaeuser equity shares. The amendments will be filed and become effective only if the companys Directors elect to declare a dividend of the companys accumulated earnings and profits (Special Dividend) so that WeyerhaeuserCompany would be eligible to convert to a real estate investment trust.The Special Dividend, if declared, would be paid in a combination of stock and cash and is estimated to be approximately $5.5 billion to $5.7 billion. The board intends to cap the cash portion of the payout at 10 percent, or approximately $550 to $570 million, assuming a 2010 conversion.Shareholders also approved the issuance of up to 960million shares of common stockto be used to pay out the Special Dividend, if declared.