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Weyerhaeuser Net Earnings Increase to $790 Million for 2007

FEDERAL WAY, Wash.-(Business Wire)-February 8, 2008 - Weyerhaeuser Company (NYSE:WY) today reported net earnings of $790 million for 2007, or $3.59 per diluted share, on net sales of $16.3 billion. This compares with net earnings of $453 million for 2006, or $1.84 per diluted share, on net sales of $18.7 billion.

For the fourth quarter 2007, Weyerhaeuser reported a net loss of 63 million, or 30 cents per diluted share, on net sales of $3.9 billion. Last year, Weyerhaeuser reported fourth quarter net earnings of $507 million, or $2.12 per diluted share, on net sales of $4.8 billion. -0- *T SIGNIFICANT FOURTH QUARTER 2007 AFTER-TAX ITEMS After-Tax Gain Gain (Charge) per (Charge) diluted share ($ millions) (cents) Real Estate impairments ($85) (40) Wood Products closures, restructuring and asset impairments ($73) (35) True-up deferred taxes on Domtar transaction ($22) (10) Sales of operating facilities and New Zealand joint venture $27 13 Canadian federal tax rate and Mexican tax law changes $13 6 Corporate restructuring, Packaging closure and Timberlands wind storm casualty loss charges ($13) (6) Excluding these items, the company earned $90 million, or 42 cents per diluted share, in the fourth quarter 2007. *T -0- *T SIGNIFICANT FOURTH QUARTER 2006 AFTER-TAX ITEMS After-Tax Gain Gain (Charge) per (Charge) diluted share ($ millions) (cents) Canadian softwood lumber duty refund $227 95 Alder antitrust litigation reserve reversal $58 24 Sale of composite panels assets in Ireland $43 18 Asset impairments and closure costs, primarily in Wood Products ($36) (15) Real Estate impairments ($13) (5) Excluding these items, the company earned $228 million, or 95 cents per diluted share, in the fourth quarter of 2006. *T

"Two-thousand seven was a challenging year for our industry and another busy one for Weyerhaeuser," said Steven R. Rogel, chairman and chief executive officer. "We continued implementing international repositioning and growth strategies in timberlands, improved our Containerboard Packaging business operating performance and focused our Cellulose Fibers business on specialty grades of pulp. In addition, we completed our Fine Paper transaction with Domtar, which created meaningful value for our shareholders.

"But the continuing erosion of the U.S. housing market created very unfavorable market conditions for our Timberlands, Wood Products and Real Estate businesses," Rogel said. "Despite difficult market conditions, which we expect to continue through 2008, Weyerhaeuser remains focused on managing through the downturn and positioning the company to take full advantage of stronger markets once conditions improve." -0- *T SUMMARY OF FOURTH QUARTER FINANCIAL HIGHLIGHTS Millions (except per share data) 4Q 2007 4Q 2006 Change (13 weeks) (14 weeks) Net earnings (loss) ($63) $507 ($570) Earnings (loss) per diluted share ($0.30) $2.12 ($2.42) Net sales $3,937 $4,799 ($862) *T -0- *T SUMMARY OF ANNUAL FINANCIAL HIGHLIGHTS Millions (except per share data) 2007 2006 Change (52 weeks) (53 weeks) Net earnings $790 $453 $337 Earnings per diluted share $3.59 $1.84 $1.75 Net sales $16,308 $18,671 ($2,363) *T

2006 sales have been recast to exclude the fine paper business and related assets of the March 2007 Domtar transaction. These results are reported as discontinued operations. -0- *T SEGMENT RESULTS FOR FOURTH QUARTER (Contributions to Pre-Tax Earnings) Millions 4Q 2007 4Q 2006 Change (13 weeks) (14 weeks) Timberlands $152 $167 ($15) Wood Products ($313) $205 ($518) Cellulose Fibers $80 $58 $22 Fine Paper $0 $61 ($61) Containerboard, Packaging and Recycling $99 $71 $28 Real Estate $22 $293 ($271) TIMBERLANDS 4Q 2007 3Q 2007 Change Contribution to pre-tax earnings (millions) $152 $165 ($13) *T

4Q 2007 Performance - Excluding the fourth quarter items noted below, fourth quarter contribution to earnings decreased $30 million from the third quarter.

Fourth quarter included the following pre-tax items: a gain of $27 million on the sale of a Washington log export facility and a charge of $10 million for casualty losses resulting from a severe December wind storm on the West Coast.

In the West, log prices declined significantly in both export and domestic markets and volumes were modestly lower compared with third quarter. Prices were slightly lower in the South. Logging costs increased due to lower fee harvest and higher fuel costs. Fewer fourth quarter sales of non-strategic timberlands also contributed to lower earnings.

1Q 2008 Outlook - Weyerhaeuser expects Timberlands earnings to be lower in the first quarter of 2008 compared with fourth quarter of 2007. The continued weakness in the housing market, particularly in California, and the effect of the December storm are expected to negatively affect Western operations. The company also anticipates fewer sales of non-strategic timberlands in the first quarter. -0- *T WOOD PRODUCTS 4Q 2007 3Q 2007 Change Contribution to pre-tax earnings (millions) ($313) ($131) ($182) *T

4Q 2007 Performance - Excluding the pre-tax items noted below, the segment's net loss from operations increased $109 million from the third quarter.

Fourth quarter 2007 includes charges of $98 million for facility closures, asset impairments and restructuring costs.

Third quarter 2007 includes charges of $25 million for facility closures, asset impairments and restructuring costs.

U.S. single-family housing starts declined 16% in the fourth quarter and continued to negatively affect segment results. Average prices and sales volumes for building products declined.

1Q 2008 Outlook - Weyerhaeuser expects no improvement in market conditions in first quarter 2008, and expects to incur significant losses in the Wood Products segment. The company will continue to balance production to demand, which may result in further production curtailments and mill closures. -0- *T CELLULOSE FIBERS 4Q 2007 3Q 2007 Change Contribution to pre-tax earnings (millions) $80 $79 $1 *T

4Q 2007 Performance - Average pulp price realizations increased as a result of continued high demand and the weakening U.S. dollar. Shipment volumes were up slightly and costs for annual maintenance outages declined. These benefits were primarily offset by higher chemical and energy costs.

1Q 2008 Outlook - Weyerhaeuser expects slightly lower earnings for the segment in the first quarter of 2008. The company anticipates market conditions for this segment will remain favorable and prices for both pulp and liquid packaging are expected to increase. However, these benefits are expected to be more than offset by higher costs and lower production associated with annual maintenance outages. In addition, the company expects higher chemical, fiber and energy costs. -0- *T CONTAINERBOARD, PACKAGING AND RECYCLING 4Q 2007 3Q 2007 Change Contribution to pre-tax earnings (millions) $99 $104 ($5) *T

4Q 2007 Performance - During the fourth quarter, average packaging and containerboard price realizations increased. Packaging shipments declined seasonally and containerboard production volumes decreased as the company matched its supply with customer demand. Energy costs increased due to seasonally higher consumption and higher prices for natural gas. Wood chip costs continued to increase.

1Q 2008 Outlook - Weyerhaeuser expects first quarter earnings for the segment to be lower than fourth quarter. Packaging shipments are expected to decline as a result of exiting low-margin business and from seasonally lower demand. Packaging and containerboard price realizations are expected to improve. The company expects higher fiber and energy costs in the first quarter. -0- *T REAL ESTATE 4Q 2007 3Q 2007 Change Contribution to pre-tax earnings (millions) $22 $60 ($38) *T

4Q 2007 Performance - Excluding the pre-tax items noted below, the segment's earnings increased $60 million from third quarter.

Fourth quarter 2007 includes charges of $121 million for the impairment of assets and investments.

Third quarter 2007 includes asset impairment charges of $23 million.

Gains from land sales increased $49 million. The segment's homebuilding operations had seasonally higher closings of 1,244 units, a 9 percent increase over third quarter. Net sales (orders) for the period were 595 units, a decrease of 19 percent from third quarter. The backlog of homes sold, but not closed, was 1,224 units, a decrease of 35 percent compared to third quarter.

1Q 2008 Outlook - Weyerhaeuser expects a loss from this segment due to difficult market conditions for selling new homes, a seasonal reduction in single-family closings, and lower single-family margins. The backlog of homes sold, but not closed, represents approximately three months of single-family sales. Weyerhaeuser does not anticipate any significant land or lot sales in first quarter 2008.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest forest products companies, was incorporated in 1900. In 2007, sales were $16.3 billion. It has offices or operations in 13 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.

EARNINGS CALL INFORMATION

The company will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on Feb. 8 to discuss fourth quarter results.

To access the conference call from within North America, dial 1-800-218-0530 at least 15 minutes prior to the call. Those calling from outside North America should dial 1-303-275-2170. Replays will be available for one week at 1-800-405-2236 (access code - 11105215#) from within North America and at 1-303-590-3000 (access code - 11105215#) from outside North America.

The call is being webcast through Weyerhaeuser's Internet site at http://investor.weyerhaeuser.com by clicking on the "Q4 2007 Earnings Conference Call" link.

The webcast is available through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at http://www.fulldisclosure.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected site, StreetEvents (http://www.streetevents.com).

FORWARD-LOOKING STATEMENT

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 expectations for first quarter 2008 regarding the company's markets, earnings and performance of the company's business segments, price realizations, demand, sales volumes and pricing for the company's products, continued difficult housing markets, lower timber fee harvest volumes and higher costs in the West, losses from operations in Wood Products as a result of the continued poor market conditions, increases in manufacturing costs in Cellulose Fiber due to annual maintenance outages in certain facilities, decline of packaging shipments, reduced land sales, product mix, increases in prices for OCC and fiber, higher chemical and energy costs, operating postures and related matters. 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;

— Raw material prices;

— Chemical prices;

— Performance of the company's manufacturing operations including unexpected maintenance requirements;

— The successful execution of internal performance plans and cost reduction initiatives;

— The level of competition from domestic and foreign producers;

— The effect of forestry, land use, environmental and other governmental regulations, and changes in accounting regulations;

— The effect of weather;

— The risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;

— Transportation costs;

— Legal proceedings;

— The effect of timing of retirements and changes in the market price of company stock on charges for stock-based compensation; and

— Performance of pension fund investments and related derivatives.

The company is also a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan, and by changes 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. These and other factors could cause or contribute to actual results differing materially from such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will occur, or if any of them occurs, what effect they will have on the company's results of operations or financial condition. The company expressly declines any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the date of this news release. -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) —————————- CONSOLIDATED EARNINGS REVISED (1) —————————- —————————- (in millions) Q1 Q2 —————————- —————————- April 1, March 26, July 1, June 25, 2007 2006 2007 2006 —————————- —————————- Net sales and revenues: Weyerhaeuser $ 3,404 $ 3,761 $ 3,775 $ 4,121 Real Estate and Related Assets 487 690 559 746 —————————- —————————- Total net sales and revenues 3,891 4,451 4,334 4,867 —————————- —————————- Costs and expenses: Weyerhaeuser: Costs of products sold (2) 2,785 2,947 3,085 3,190 Depreciation, depletion and amortization 232 233 223 231 Selling expenses 109 100 109 117 General and administrative expenses 200 235 199 205 Research and development expenses (3) 16 16 18 15 Charges (reversals) for restructuring (4) 3 (1) 2 18 Charges for closure of facilities (5) 5 2 19 5 Impairment of goodwill (6) 22 - - - Refund of countervailing and anti-dumping duties - - - - Other operating costs (income), net (7) (8) 21 31 5 (26) —————————- —————————- 3,393 3,563 3,660 3,755 —————————- —————————- Real Estate and Related Assets: Costs and operating expenses (9) 379 482 415 553 Depreciation and amortization 6 3 5 4 Selling expenses 41 37 45 43 General and administrative expenses 28 30 27 35 Other operating costs (income), net (4) (3) 4 3 Impairment of long- lived assets - - 12 3 —————————- —————————- 450 549 508 641 —————————- —————————- Total costs and expenses 3,843 4,112 4,168 4,396 —————————- —————————- Operating income 48 339 166 471 Interest expense and other: Weyerhaeuser: Interest expense incurred (10) (131) (128) (179) (129) Less: interest capitalized 30 16 29 20 Interest income and other 20 19 25 15 Equity in income (loss) of affiliates (11) (1) 3 1 6 Real Estate and Related Assets: Interest expense incurred (12) (14) (16) (14) Less: interest capitalized 12 14 16 14 Interest income and other (12) 3 10 1 3 Equity in income of unconsolidated entities (13) 18 21 12 15 —————————- —————————- Earnings (loss) from continuing operations before income taxes (13) 280 55 401 Income taxes (2) (14) (3) (100) (18) (92) —————————- —————————- Earnings (loss) from continuing operations (16) 180 37 309 Earnings (loss) from discontinued operations, net of taxes (15) 736 (756) (5) (11) —————————- ————- ————- Net earnings (loss) (2) $ 720 $ (576) $ 32 $ 298 =================== =================== Basic net earnings (loss) per share: Continuing operations $ (0.07) $ 0.73 $ 0.17 $ 1.24 Discontinued operations 3.16 (3.07) (0.02) (0.04) —————————- —————————- Net earnings (loss) per share $ 3.09 $ (2.34) $ 0.15 $ 1.20 =================== =================== Diluted net earnings (loss) per share: Continuing operations $ (0.07) $ 0.73 $ 0.17 1.23 Discontinued operations 3.16 (3.06) (0.02) (0.04) —————————- —————————- Net earnings (loss) per share $ 3.09 $ (2.33) $ 0.15 $ 1.19 =================== =================== Dividends paid per share $ 0.60 $ 0.50 $ 0.60 $ 0.50 =================== =================== Weighted average shares outstanding (in thousands): Basic 233,242 245,794 217,688 248,147 Diluted 233,242 246,970 218,743 249,194 Common and exchangeable shares outstanding at end of period (in thousands) 217,726 247,555 217,759 248,269 —————————- —————————- STATISTICAL INFORMATION (unaudited) CONSOLIDATED EARNINGS —————————- —————————- (in millions) Q3 Q4 —————————- —————————- Sept. 30, Sept. 24, Dec. 30, Dec. 31, 2007 2006 2007 2006 —————————- —————————- Net sales and revenues: Weyerhaeuser $ 3,548 $ 3,805 $ 3,222 $ 3,649 Real Estate and Related Assets 598 749 715 1,150 —————————- —————————- Total net sales and revenues 4,146 4,554 3,937 4,799 —————————- —————————- Costs and expenses: Weyerhaeuser: Costs of products sold (2) 2,845 3,038 2,660 3,007 Depreciation, depletion and amortization 230 231 215 252 Selling expenses 102 111 102 123 General and administrative expenses 184 214 188 241 Research and development expenses (3) 18 23 19 15 Charges (reversals) for restructuring (4) 16 4 16 - Charges for closure of facilities (5) 19 15 81 50 Impairment of goodwill (6) 1 - 7 - Refund of countervailing and anti-dumping duties - - - (344) Other operating costs (income), net (7) (8) 1 (36) (34) (105) —————————- —————————- 3,416 3,600 3,254 3,239 —————————- —————————- Real Estate and Related Assets: Costs and operating expenses (9) 451 539 507 764 Depreciation and amortization 6 10 6 8 Selling expenses 45 44 48 56 General and administrative expenses 26 30 18 29 Other operating costs (income), net (4) (2) 2 (1) Impairment of long- lived assets 23 14 93 19 —————————- —————————- 547 635 674 875 —————————- —————————- Total costs and expenses 3,963 4,235 3,928 4,114 —————————- —————————- Operating income 183 319 9 685 Interest expense and other: Weyerhaeuser: Interest expense incurred (10) (131) (126) (133) (136) Less: interest capitalized 29 21 30 27 Interest income and other 20 17 18 19 Equity in income (loss) of affiliates (11) 5 - (3) (2) Real Estate and Related Assets: Interest expense incurred (16) (12) (13) (15) Less: interest capitalized 16 12 13 15 Interest income and other (12) 1 7 (6) 10 Equity in income of unconsolidated entities (13) 8 14 (13) 8 —————————- —————————- Earnings (loss) from continuing operations before income taxes 115 252 (98) 611 Income taxes (2) (14) (41) (86) 54 (202) —————————- —————————- Earnings (loss) from continuing operations 74 166 (44) 409 Earnings (loss) from discontinued operations, net of taxes (15) 27 58 (19) 98 —————————- —————————- Net earnings (loss) (2) $ 101 $ 224 $ (63) $ 507 =================== =================== Basic net earnings (loss) per share: Continuing operations $ 0.34 $ 0.67 $ (0.21) $ 1.72 Discontinued operations 0.13 0.24 (0.09) 0.40 —————————- —————————- Net earnings (loss) per share $ 0.47 $ 0.91 $ (0.30) $ 2.12 =================== =================== Diluted net earnings (loss) per share: Continuing operations $ 0.34 $ 0.67 $ (0.21) $ 1.72 Discontinued operations 0.13 0.24 $ (0.09) 0.40 —————————- —————————- Net earnings (loss) per share $ 0.47 $ 0.91 $ (0.30) $ 2.12 =================== =================== Dividends paid per share $ 0.60 $ 0.60 $ 0.60 $ 0.60 =================== =================== Weighted average shares outstanding (in thousands): Basic 215,154 247,428 211,135 238,824 Diluted 215,828 247,900 211,135 239,525 Common and exchangeable shares outstanding at end of period (in thousands) 211,106 242,929 211,147 238,008 —————————- —————————- STATISTICAL INFORMATION (unaudited) CONSOLIDATED EARNINGS —————————- (in millions) Year-to-date —————————- Dec. 30, Dec. 31, 2007 2006 —————————- Net sales and revenues: Weyerhaeuser $ 13,949 $ 15,336 Real Estate and Related Assets 2,359 3,335 —————————- Total net sales and revenues 16,308 18,671 —————————- Costs and expenses: Weyerhaeuser: Costs of products sold (2) 11,375 12,182 Depreciation, depletion and amortization 900 947 Selling expenses 422 451 General and administrative expenses 771 895 Research and development expenses (3) 71 69 Charges (reversals) for restructuring (4) 37 21 Charges for closure of facilities (5) 124 72 Impairment of goodwill (6) 30 - Refund of countervailing and anti-dumping duties - (344) Other operating costs (income), net (7) (8) (7) (136) —————————- 13,723 14,157 —————————- Real Estate and Related Assets: Costs and operating expenses (9) 1,752 2,338 Depreciation and amortization 23 25 Selling expenses 179 180 General and administrative expenses 99 124 Other operating costs (income), net (2) (3) Impairment of long-lived assets 128 36 —————————- 2,179 2,700 —————————- Total costs and expenses 15,902 16,857 —————————- Operating income 406 1,814 Interest expense and other: Weyerhaeuser: Interest expense incurred (10) (574) (519) Less: interest capitalized 118 84 Interest income and other 83 70 Equity in income (loss) of affiliates (11) 2 7 Real Estate and Related Assets: Interest expense incurred (57) (55) Less: interest capitalized 57 55 Interest income and other (12) (1) 30 Equity in income of unconsolidated entities (13) 25 58 —————————- Earnings (loss) from continuing operations before income taxes 59 1,544 Income taxes (2) (14) (8) (480) —————————- Earnings (loss) from continuing operations 51 1,064 Earnings (loss) from discontinued operations, net of taxes (15) 739 (611) —————————- Net earnings (loss) (2) $ 790 $ 453 =================== Basic net earnings (loss) per share: Continuing operations $ 0.23 $ 4.35 Discontinued operations 3.37 (2.50) —————————- Net earnings (loss) per share $ 3.60 $ 1.85 =================== Diluted net earnings (loss) per share: Continuing operations $ 0.23 $ 4.33 Discontinued operations $ 3.36 (2.49) —————————- Net earnings (loss) per share $ 3.59 $ 1.84 =================== Dividends paid per share $ 2.40 $ 2.20 =================== Weighted average shares outstanding (in thousands): Basic 219,305 244,931 Diluted 220,277 245,780 Common and exchangeable shares outstanding at end of period (in thousands) 211,147 238,008 —————————- *T -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) FOOTNOTES TO CONSOLIDATED EARNINGS (in millions) (1) The first quarter of 2007 results have been revised to reflect an adjustment to reduce the net gain on the Domtar Transaction by $35 million after-tax. This adjustment is included in discontinued operations. (2) The following adjustments were made to 2006 quarterly results to apply a new accounting pronouncement to expense planned major maintenance costs as incurred: —————— Year-to-date ———- ———- ———- ———- —————— Q1 2006 Q2 2006 Q3 2006 Q4 2006 2006 ———- ———- ———- ———- —————— Cellulose Fibers $ (5) $ (10) $ 13 $ 2 $ - Fine Paper 7 (10) 6 (3) - Containerboard, Packaging, and Recycling 4 (5) 1 - - ———- ———- ———- ———- —————— 6 (25) 20 (1) - Income taxes (2) 9 (7) - - ———- ———- ———- ———- —————— Net earnings (loss) $ 4 $ (16) $ 13 $ (1) $ - ======= ======= ======= ======= ============ (3) The third quarter of 2006 includes a $9 million charge related to the acquisition of OrganicID, a research and development company. (4) The third quarter of 2007 includes a charge of $7 million related to the restructuring of administrative functions. The fourth quarter of 2007 includes a charge of $14 million related to the restructuring of wood products operations. The second quarter of 2006 includes an $18 million charge related to the restructuring of the Containerboard, Packaging, and Recycling business model. (5) See detail of closure charges by segment on page 4. (6) The first quarter of 2007 includes a charge of $22 million for the impairment of goodwill associated with Canadian wood products distribution facilities and the fourth quarter of 2007 includes a charge of $7 million associated with U.S. wood products distribution facilities. —————- —————- —————- Q1 Q1 Q2 Q2 Q3 Q3 2007 2006 2007 2006 2007 2006 —————- —————- —————- (7) Includes net foreign exchange gains (losses), primarily from fluctuations in Canadian and New Zealand exchange rates: $ 7 $(26) $ 29 $ 21 $ 2 $ 17 —————- —————- —————- —————— Year-to-date ———————- —————— Q4 2007 Q4 2006 2007 2006 ———————- —————— (7) Includes net foreign exchange gains (losses), primarily from fluctuations in Canadian and New Zealand exchange rates: $ 7 $ 15 $ 45 $ 27 ———————- —————— (8) (a) The first, second and fourth quarters of 2007 include $34 million, $12 million, and $6 million, respectively, in asset impairments related to wood products facilities. (b) The second quarter also includes a $29 million gain on the sale of a previously closed box plant site, a $40 million charge for legal settlements and a contract termination, and $6 million in additional charges related to the sale of Canadian Wood Products distribution facilities. (c) The third quarter of 2007 includes gains of $9 million on the sale of previously closed facility sites, a $4 million charge for a legal settlement, and charges of $13 million to transition to a new IT service provider. (d) The fourth quarter of 2007 includes a charge of $10 million for storm-related casualty losses, a gain of $27 million on the sale of an export facility, and gains of $12 million on sales of operations including our New Zealand joint venture. (e) The third quarter of 2006 includes $23 million of income related to a reduction of the reserve for hardboard siding claims and charges of $7 million for the impairment of fixed assets related to production curtailments. (f) The fourth quarter of 2006 includes $95 million of income related to a reversal of the reserve for alder litigation claims. (9) (a) The fourth quarter of 2007 includes income of $11 million for a warranty reserve adjustment. (b) The first quarter of 2006 includes income of $8 million related to a warranty insurance recovery. (10) The second quarter of 2007 includes a $42 million charge related to the early extinguishment of debt. (11) The third quarter of 2006 includes a $2 million charge related to the impairment of investments in equity affiliates. (12) The fourth quarter of 2007 includes loan impairments of $9 million. (13) The first, second and fourth quarters of 2007 include loan and equity impairments of $2, $1 and $19 million, respectively, or $22 million year-to-date. (14) (a) The fourth quarter of 2007 includes a one-time tax benefit of $22 million related to a reduction in the Canadian federal income tax rate and a one-time charge of $9 million related to a change in Mexican federal income tax laws. (b) The second quarter of 2006 includes a one-time tax benefit of $48 million related to a change in Texas state income tax law, a reduction in the Canadian federal income tax rate and a deferred tax adjustment related to the Medicare Part D subsidy. (15) Discontinued operations includes the net operating results of the operations of the fine paper business and related assets and the North American and European composite panels operations. (a) The first quarter of 2007 includes a pre-tax gain of $629 million and related tax benefit of $92 million, the second quarter of 2007 includes pre-tax charges of $4 million, and the fourth quarter of 2007 includes a pre-tax charge of $19 million and related tax expense of $3 million related to the distribution of the fine paper business and related assets to Weyerhaeuser shareholders. (b) The third quarter of 2007 includes pre-tax income of $43 million from the settlement of litigation associated with an Ontario fine paper mill. (c) The first and second quarters of 2006 include charges of $746 million and $3 million, respectively, for the impairment of goodwill associated with the fine paper business. (d) The third quarter of 2006 includes a pre-tax gain of $51 million and related tax expense of $18 million associated with the sale of the North American composite panels operations and an $8 million charge to write off additional goodwill associated with the coastal British Columbia operations. (e) The fourth quarter of 2006 includes a pre-tax gain of $45 million and related tax expense of $4 million associated with the sale of the Irish composite panels operations. *T -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) NET SALES AND REVENUES: (1) (2) ————————— ———————— (in millions) Q1 Q2 ————————— ———————— April 1, March 26, July 1, June 25, 2007 2006 2007 2006 ————————— ———————— Timberlands: Logs $ 170 $ 201 $ 172 $ 198 Other products 63 62 39 71 ————————— ———————— 233 263 211 269 ————————— ———————— Wood Products: Softwood lumber 574 782 647 857 Plywood 100 135 106 147 Veneer 9 13 14 13 Composite panels 24 121 24 140 Oriented strand board 152 287 153 273 Hardwood lumber 90 99 99 105 Engineered I-Joists 117 169 147 202 Engineered solid section 155 204 185 231 Logs 6 7 4 5 Other products 243 256 283 327 ————————— ———————— 1,470 2,073 1,662 2,300 ————————— ———————— Cellulose Fibers: Pulp 405 394 370 402 Liquid packaging board 56 46 72 62 Other products 21 13 28 16 ————————— ———————— 482 453 470 480 ————————— ———————— Fine Paper: (2) Paper 432 613 - 601 Coated groundwood 26 40 - 44 Other products 1 1 - 1 ————————— ———————— 459 654 - 646 ————————— ———————— Containerboard, Packaging and Recycling: Containerboard 119 82 109 84 Packaging 951 911 1,043 1,002 Recycling 94 80 103 85 Bags 23 20 23 20 Other products 39 34 49 46 ————————— ———————— 1,226 1,127 1,327 1,237 ————————— ———————— Real Estate and Related Assets 487 690 559 746 Corporate and Other 97 116 105 117 Less: sales of discontinued operations (563) (925) - (928) ————————— ———————— $3,891 $4,451 $4,334 $4,867 ================== ================ NET SALES AND REVENUES: (1) (2) —————————- ————————- (in millions) Q3 Q4 —————————- ————————- Sept. 30, Sept. 24, Dec. 30, Dec. 31, 2007 2006 2007 2006 —————————- ————————- Timberlands: Logs $ 168 $ 200 $ 149 $ 182 Other products 81 46 68 56 —————————- ————————- 249 246 217 238 —————————- ————————- Wood Products: Softwood lumber 580 733 440 625 Plywood 89 134 71 113 Veneer 13 9 8 7 Composite panels 20 71 14 25 Oriented strand board 151 203 133 176 Hardwood lumber 89 96 77 98 Engineered I-Joists 124 162 79 137 Engineered solid section 155 190 113 169 Logs 3 5 4 6 Other products 225 302 179 268 —————————- ————————- 1,449 1,905 1,118 1,624 —————————- ————————- Cellulose Fibers: Pulp 345 404 358 457 Liquid packaging board 61 59 58 62 Other products 30 19 28 22 —————————- ————————- 436 482 444 541 —————————- ————————- Fine Paper: (2) Paper - 604 - 652 Coated groundwood - 42 - 45 Other products - 2 - - —————————- ————————- - 648 - 697 —————————- ————————- Containerboard, Packaging and Recycling: Containerboard 99 92 130 119 Packaging 1,015 997 1,010 1,021 Recycling 106 89 110 91 Bags 23 23 27 25 Other products 50 44 45 47 —————————- ————————- 1,293 1,245 1,322 1,303 —————————- ————————- Real Estate and Related Assets 598 749 715 1,150 Corporate and Other 121 123 121 128 Less: sales of discontinued operations - (844) - (882) —————————- ————————- $ 4,146 $ 4,554 $ 3,937 $ 4,799 =================== ================= NET SALES AND REVENUES: (1) (2) ————————- (in millions) Year-to-date ————————- Dec. 30, Dec. 31, 2007 2006 ————————- Timberlands: Logs $ 659 $ 781 Other products 251 235 ————————- 910 1,016 ————————- Wood Products: Softwood lumber 2,241 2,997 Plywood 366 529 Veneer 44 42 Composite panels 82 357 Oriented strand board 589 939 Hardwood lumber 355 398 Engineered I-Joists 467 670 Engineered solid section 608 794 Logs 17 23 Other products 930 1,153 ————————- 5,699 7,902 ————————- Cellulose Fibers: Pulp 1,478 1,657 Liquid packaging board 247 229 Other products 107 70 ————————- 1,832 1,956 ————————- Fine Paper: (2) Paper 432 2,470 Coated groundwood 26 171 Other products 1 4 ————————- 459 2,645 ————————- Containerboard, Packaging and Recycling: Containerboard 457 377 Packaging 4,019 3,931 Recycling 413 345 Bags 96 88 Other products 183 171 ————————- 5,168 4,912 ————————- Real Estate and Related Assets 2,359 3,335 Corporate and Other 444 484 Less: sales of discontinued operations (563) (3,579) ————————- $16,308 $18,671 ================= (1) The fourth quarter of 2006 includes 14 weeks of operations compared to 13 weeks in all other quarters. (2) First quarter 2007 results include 9 weeks of operations for the fine paper business and related assets, prior to the distribution of these assets to Weyerhaeuser shareholders. *T -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS: ————————— (in millions) REVISED (1) ————————— ———————— Q1 Q2 ————————— ———————— April 1, March 26, July 1, June 25, 2007 2006 2007 2006 ————————— ———————— Timberlands (2) (3) (6) $ 175 $ 198 $ 142 $ 224 Wood Products (2) (3) (7) (167) 117 (123) 131 Cellulose Fibers (2) (3) (5) 22 (5) 48 23 Fine Paper (2) (3) (5) (8) 20 (756) - (20) Containerboard, Packaging and Recycling (2) (3) (5) (9) 67 26 112 69 Real Estate and Related Assets (3) (10) 58 172 64 123 Corporate and Other (2) (3) (4) (11) 580 (102) (44) (40) ————————— ———————— $ 755 $ (350) $ 199 $ 510 ================== ================ CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS: (in millions) —————————- ————————- Q3 Q4 —————————- ————————- Sept. 30, Sept. 24, Dec. 30, Dec. 31, 2007 2006 2007 2006 —————————- ————————- Timberlands (2) (3) (6) $ 165 $ 178 $ 152 $ 167 Wood Products (2) (3) (7) (131) 11 (313) 205 Cellulose Fibers (2) (3) (5) 79 66 80 58 Fine Paper (2) (3) (5) (8) - 68 - 61 Containerboard, Packaging and Recycling (2) (3) (5) (9) 104 97 99 71 Real Estate and Related Assets (3) (10) 60 135 22 293 Corporate and Other (2) (3) (4) (11) (16) (78) (52) (3) —————————- ————————- $ 261 $ 477 $ (12) $ 852 =================== ================= CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS: (in millions) ————————- Year-to-date ————————- Dec. 30, Dec. 31, 2007 2006 ————————- Timberlands (2) (3) (6) $ 634 $ 767 Wood Products (2) (3) (7) (734) 464 Cellulose Fibers (2) (3) (5) 229 142 Fine Paper (2) (3) (5) (8) 20 (647) Containerboard, Packaging and Recycling (2) (3) (5) (9) 382 263 Real Estate and Related Assets (3) (10) 204 723 Corporate and Other (2) (3) (4) (11) 468 (223) ————————- $1,203 $1,489 ================= *T -0- *T FOOTNOTES TO CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS (in millions) (1)The first quarter of 2007 results have been revised to reflect an adjustment to reduce the pre-tax gain on the Domtar Transaction by $53 million. This adjustment is included in Corporate and Other. ———————- ———————- ———————- (2)Closure charges by segment: Q1 2007 Q1 2006 Q2 2007 Q2 2006 Q3 2007 Q3 2006 ———————- ———————- ———————- Timberlands $ - $ - $ - $ - $ - $ - Wood Products 3 - 15 1 19 10 Cellulose Fibers - (1) - - (1) 1 Fine Paper 2 - - 11 - 3 Containerboard, Packaging and Recycling 2 2 3 5 - 3 Corporate and Other - - 1 - 1 26 ———————- ———————- ———————- $ 7 $ 1 $ 19 $ 17 $ 19 $ 43 =============== =============== =============== —————— Year-to-date ———————- —————— (2)Closure charges by segment: Q4 2007 Q4 2006 2007 2006 ———————- —————— Timberlands $ - $ 1 $ - $ 1 Wood Products 78 48 115 59 Cellulose Fibers - (3) (1) (3) Fine Paper - 1 2 15 Containerboard, Packaging and Recycling 4 4 9 14 Corporate and Other (1) - 1 26 ———————- —————— $ 81 $ 51 $ 126 $112 =============== ============ The above closure charges include costs incurred within the company's discontinued operations. ———————- ———————- ———————- (3)Share-based compensation charges (income) recognized by segment: Q1 2007 Q1 2006 Q2 2007 Q2 2006 Q3 2007 Q3 2006 ———————- ———————- ———————- Timberlands $ 1 $ 1 $ - $ - $1 $ - Wood Products 2 2 2 - 1 - Cellulose Fibers 2 1 - - - - Fine Paper - - - - - 1 Containerboard, Packaging and Recycling 1 2 2 (1) 1 1 Real Estate and Related Assets 2 - 1 2 - - Corporate and Other 14 15 5 (5) - 1 ———————- ———————- ———————- $22 $ 21 $10 $(4) $3 $ 3 =============== =============== =============== ———————- ———————- ———————- Q1 2007 Q1 2006 Q2 2007 Q2 2006 Q3 2007 Q3 2006 ———————- ———————- ———————- (4)Net foreign exchange gains (losses) included in Corporate and Other: $ 7 $(26) $34 $20 $2 $17 ———————- ———————- ———————- —————— Year-to-date ———————- —————— (3)Share-based compensation charges (income) recognized by segment: Q4 2007 Q4 2006 2007 2006 ———————- —————— Timberlands $- $ - $ 2 $ 1 Wood Products 1 1 6 3 Cellulose Fibers 1 1 3 2 Fine Paper - - - 1 Containerboard, Packaging and Recycling 1 - 5 2 Real Estate and Related Assets 1 - 4 2 Corporate and Other 2 7 21 18 ———- ———- ———- —— $6 $ 9 $41 $29 ======= ======= ======= ==== —————— Year-to-date ———————- —————— Q4 2007 Q4 2006 2007 2006 ———————- ———- —— (4)Net foreign exchange gains (losses) included in Corporate and Other: $6 $14 $49 $25 ———————- —————— (5)See detail of quarterly adjustments made to apply a new accounting pronouncement to expense planned major maintenance costs as incurred on page 2. *T -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) FOOTNOTES TO CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS (CONTINUED) (in millions) (6) Additional Timberlands notes: 2007: (a) The fourth quarter includes a charge of $10 million for storm-related casualty losses and a gain of $27 million on the sale of an export facility. (7) Additional Wood Products notes: 2007: (a) The first quarter includes charges of $22 million for the impairment of goodwill associated with Canadian distribution facilities and $34 million in asset impairments related to wood products facilities. (b) The second quarter includes a charge of $17 million for expected settlement of litigation. (c) The second quarter includes charges of $12 million in asset impairments related to wood products facilities and $6 million in additional charges related to the sale of Canadian distribution facilities. (d) The third quarter includes $7 million of income from the sale of a veneer facility and a previously closed distribution center site. (e) The third quarter includes charges of $4 million for the settlement of litigation, $4 million for restructuring activities and $1 million in goodwill impairment. (f) The fourth quarter includes charges of $14 million for restructuring activities, $7 million in goodwill impairments and $6 million in asset impairments. (g) The fourth quarter includes a gain of $3 million on the sale of a facility. 2006: (h) The third quarter includes $23 million of income related to a reduction of the reserves for hardboard siding claims. (i) The third quarter includes a $51 million gain on the sale of the company's North American composite panels operations. (j) The third quarter includes charges of $7 million for the impairment of fixed assets related to production curtailments. (k) The fourth quarter includes $34