Weyerhaeuser's goal of ending the year cash neutral is 'a challenge'

By Aleesia Forni

Columbus, Ohio, Sept. 15 - Weyerhaeuser Co.'s goal of being cash neutral this year will prove to be a "challenge," chief executive officer Dan Fulton said during a presentation at the UBS Global Paper and Forest Products Conference.

"We were a cash user in the first quarter in [the wood products business], and that's because of the seasonal build in working capital that would normally take place in the industry in the first quarter in order to get ready for a building season that quite frankly hasn't played out as, I think, anyone in the industry had hoped," Fulton said.

Chief financial officer Patty Bedient added that the company is currently cash positive in its wood products business, excluding its hardwoods business, for the first two months of the third quarter.

The company had a cash balance of roughly $880 million as of June 30 and a targeted dividend payout ratio of 75% of funds available for distribution.

Given the current outlook, Bedient said the 2011 payout ratio could exceed this target.

"We remain focused on returning cash to shareholders," Bedient said.

Weyerhaeuser is a Federal Way, Wash.-based forest products company.

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