Weyerhaeuser Reports Third Quarter Results

Weyerhaeuser Company (NYSE: WY) today reported net earnings of $1.116
billion for the third quarter, or $3.50 per diluted share, on net sales
of $1.7 billion.

This compares with essentially break-even results on net sales of $1.4
billion for the same period last year.

Earnings for the third quarter of 2010 include $1.035 billion from
income tax adjustments, primarily related to the reversal of deferred
taxes as a result of Weyerhaeuser′s conversion to a real estate
investment trust (REIT). Excluding the income tax adjustments, the
company reported net earnings of $81 million, or 25 cents per diluted
share, in the third quarter of 2010, a $137 million increase compared
with the $56 million loss before special items reported in the third
quarter of 2009.

Calculations of third quarter 2010 earnings per share are based upon
approximately 318 million weighted average shares, on a diluted basis,
compared with 212 million shares in second quarter 2010. Weyerhaeuser′s
shares outstanding increased to approximately 536 million shares as of
the end of the third quarter, or 537 million shares on a diluted basis,
following the company′s Sept. 1 payment of a previously announced
special dividend. The dividend consisted of approximately 324 million
shares of common stock and $560 million in cash in conjunction with the
company′s conversion to a REIT.

'Cellulose Fibers reported a record performance, as it benefited from
stronger production levels, lower costs and higher prices,? said Dan
Fulton, president and chief executive officer. 'Meanwhile, the work done
by our real estate business to restructure its operations and product
offerings resulted in an operating profit despite challenging market
conditions. It′s obvious, however, that the overall housing market
remains in an uncertain state as the expiration of the housing tax
credit led to a precipitous drop in prices and volume for our Wood
Products business. The housing market also affects our Timberlands
business, where we continue to defer harvest due to lower log demand.?

* Segment earnings for the third quarter of 2009 included the following
pre-tax items:

• 
  Timberlands: a gain of $163 million on sale of 140,000 acres of
  non-strategic timberlands
  
• 
  Cellulose Fibers: a gain of $122 million related to alternative fuel
  mixture credits
  
• 
  Real Estate: charges of $55 million for asset impairments and
  restructuring
  

3Q 2010 Performance ? The segment′s earnings increased in the
third quarter compared with the second, as increased income from
disposition of non-strategic timberlands was partially offset by lower
earnings from operations.

Third quarter included pre-tax gains of $34 million from disposition of
non-strategic timberlands, compared with $14 million in the second
quarter. Earnings from operations declined due to lower log price
realizations, primarily in the west, and seasonally higher road and
silviculture expenses. Weyerhaeuser continues to defer timber harvest.

4Q 2010 Outlook ? Excluding the disposition of non-strategic
timberlands, Weyerhaeuser expects fourth quarter operating earnings from
the segment to be lower than third quarter. The company expects lower
log price realizations, primarily in the west, and seasonally lower
harvest volumes. The company also anticipates increased silviculture
costs.

3Q 2010 Performance ? The dramatically weaker market conditions
the company experienced in the latter half of the second quarter
persisted throughout the third quarter. Quarterly average sales
realizations for lumber declined 18 percent in the third quarter
compared with the second, while oriented strand board realizations
declined 30 percent. Sales volumes for engineered wood products fell by
more than 20 percent. Operating rates for oriented strand board and
engineered lumber mills declined.

Second quarter results included pre-tax gains of $8 million from the
sale of assets. Excluding this item, the segment′s results declined by
$89  million compared with the second quarter.

4Q 2010 Outlook ? Weyerhaeuser expects a comparable loss from the
segment in the fourth quarter compared with the third quarter. The
company anticipates seasonally lower volumes across all product lines
and modestly lower price realizations, offset by lower log costs.

3Q 2010 Performance ? The segment′s earnings improved
substantially in the third quarter compared with the second due to
higher average price realizations, significantly lower maintenance costs
and strong operating performance by all mills. There were no annual
maintenance outages in the third quarter, compared with three in the
second quarter.

4Q 2010 Outlook ? Weyerhaeuser expects fourth quarter earnings
from the segment to be lower than third quarter due to lower average
pulp price realizations and increased scheduled maintenance.

3Q 2010 Performance ? Earnings from the segment declined in the
third quarter compared with the second, as lower earnings from land and
lot sales were partially offset by increased income from single-family
homebuilding operations.

Single-family homebuilding operations earned $16 million in the third
quarter, compared with $14 million in the second quarter. These amounts
include income from partnerships of $7 million in the third quarter and
$3 million in the second quarter. Home sale closings declined 20 percent
to 501 single-family homes. Margins on homes closed improved slightly
due to mix.

Third quarter included gains of $4 million on the sale of land and lots,
compared with $13 million in the second quarter.

4Q 2010 Outlook ? Weyerhaeuser expects slightly lower earnings
from single-family homebuilding operations in the fourth quarter, with
additional single-family home closings offset by somewhat lower margins.
Weyerhaeuser does not anticipate any significant land and lot sales in
the fourth quarter.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world′s largest forest products
companies, began operations in 1900. We grow and harvest trees, build
homes and make a range of forest products essential to everyday lives.
We manage our timberland on a sustainable basis in compliance with
internationally recognized forestry standards. At the end of 2009, we
employed approximately 14,900 employees in 10 countries. We have
customers worldwide and generated $5.5 billion in sales in 2009. Our
stock trades on the New York Stock exchange under the symbol WY.
Additional information about us is available at http://www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m.
Eastern) on Oct. 29 to discuss third quarter results.

To access the conference call from within North America, dial (877)
296-9413 (access code ? 53832852) at least 15 minutes prior to the call.
Those calling from outside North America should dial 1-(706) 679-2458
(access code ? 53832852). Replays will be available for one week at
(800) 642-1687 (access code ? 53832852) from within North America and at
1-(706) 645-9291 (access code ? 53832852) from outside North America.

The call is being webcast through Weyerhaeuser′s Internet site at http://investor.weyerhaeuser.com
and is accessible by selecting the 'Q3 2010 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 STATEMENTS

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. These
statements are based on various assumptions and may not be accurate
because of risks and uncertainties surrounding these assumptions.
Factors listed below, as well as other factors, may cause actual results
to differ significantly from these forward-looking statements. There is
no guarantee that any of the events anticipated by these forward-looking
statements will occur. If any of the events occur, there is no guarantee
what effect they will have on company operations or financial condition.
The company will not update these forward-looking statements after the
date of this news release.

Some forward-looking statements discuss the company′s 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.

This release contains forward-looking statements regarding the company′s
expectations during the fourth quarter of 2010, including lower log
prices and harvest volumes in Timberlands; seasonally lower sales and
realizations across product lines in the Wood Products segment;
increased scheduled maintenance and lower average pulp price
realizations in the Cellulose Fiber segment; and lower margins offset by
seasonally higher home closings in our single-family homebuilding
operations.

Major risks, uncertainties and assumptions that affect the company′s
businesses and may cause actual results to differ from these
forward-looking statements, include, but are not limited to:

• 
  the effect of general economic conditions, including employment rates,
  housing starts, interest rate levels, availability of financing for
  home mortgages, and strength of the U.S. dollar;
  
• 
  market demand for the company′s products, which is related to the
  strength of the various U.S. business segments and economic conditions;
  
• 
  performance of the company′s manufacturing operations, including
  maintenance requirements;
  
• 
  raw material prices;
  
• 
  energy prices;
  
• 
  transportation costs;
  
• 
  the level of competition from domestic and foreign producers;
  
• 
  the effect of weather;
  
• 
  the risk of loss from fires, floods, windstorms, hurricanes, pest
  infestation and other natural disasters;
  
• 
  the successful execution of internal performance plans, including
  restructurings and cost reduction initiatives;
  
• 
  federal tax policies;
  
• 
  the effect of forestry, land use, environmental and other governmental
  regulations;
  
• 
  legal proceedings;
  
• 
  the effect of timing of retirements and changes in the market price of
  company stock on charges for stock-based compensation;
  
• 
  changes in accounting principles;
  
• 
  performance of pension fund investments and related derivatives; and
  
• 
  other factors described under 'Risk Factors? in the Company′s annual
  report on Form  10-K.
  

The company also is a large exporter and is affected by changes in
economic activity in Europe and Asia, particularly Japan and China. It
also is affected by changes in currency exchange rates, particularly the
relative value of the U.S. dollar to the euro and the Canadian dollar.
Restrictions on international trade or tariffs imposed on imports also
may affect the company.