x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Washington | 91-0470860 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
33663 Weyerhaeuser Way South Federal Way, Washington | 98063-9777 | |
(Address of principal executive offices) | (Zip Code) |
PART I | FINANCIAL INFORMATION | |
ITEM 1. | FINANCIAL STATEMENTS: | |
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II | OTHER INFORMATION | |
ITEM 1. | ||
ITEM 1A. | ||
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | NA |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | NA |
ITEM 5. | OTHER INFORMATION | NA |
ITEM 6. |
WEYERHAEUSER COMPANY | ||
Date: | August 5, 2011 | |
By: | /s/ JERALD W. RICHARDS | |
Jerald W. Richards | ||
Chief Accounting Officer |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
JUNE 30, 2011 | JUNE 30, 2010 | JUNE 30, 2011 | JUNE 30, 2010 | ||||||||||||
Net sales and revenues | $ | 1,610 | $ | 1,641 | $ | 3,032 | $ | 2,924 | |||||||
Cost of products sold | 1,343 | 1,314 | 2,520 | 2,416 | |||||||||||
Gross margin | 267 | 327 | 512 | 508 | |||||||||||
Selling, general and administrative expenses | 145 | 162 | 317 | 318 | |||||||||||
Research and development expenses | 7 | 8 | 14 | 16 | |||||||||||
Charges for restructuring, closures and impairments | 7 | 4 | 11 | 6 | |||||||||||
Other operating income, net (Note 6) | (19 | ) | (2 | ) | (193 | ) | (72 | ) | |||||||
Operating income | 127 | 155 | 363 | 240 | |||||||||||
Interest income and other | 9 | 12 | 20 | 54 | |||||||||||
Interest expense, net of capitalized interest (Note 9) | (117 | ) | (155 | ) | (210 | ) | (261 | ) | |||||||
Earnings from continuing operations before income taxes | 19 | 12 | 173 | 33 | |||||||||||
Income taxes (Note 13) | 4 | (4 | ) | (52 | ) | (42 | ) | ||||||||
Earnings (loss) from continuing operations | 23 | 8 | 121 | (9 | ) | ||||||||||
Earnings (loss) from discontinued operations, net of income taxes (Note 2) | (13 | ) | 6 | (12 | ) | 5 | |||||||||
Net earnings (loss) | 10 | 14 | 109 | (4 | ) | ||||||||||
Less: net earnings attributable to noncontrolling interests | — | — | — | (2 | ) | ||||||||||
Net earnings (loss) attributable to Weyerhaeuser common shareholders | $ | 10 | $ | 14 | $ | 109 | $ | (6 | ) | ||||||
Earnings (loss) per share attributable to Weyerhaeuser common shareholders, basic and diluted (Note 4): | |||||||||||||||
Continuing operations | $ | 0.04 | $ | 0.04 | $ | 0.22 | $ | (0.05 | ) | ||||||
Discontinued operations | (0.02 | ) | 0.03 | (0.02 | ) | 0.02 | |||||||||
Net earnings (loss) per share | $ | 0.02 | $ | 0.07 | $ | 0.20 | $ | (0.03 | ) | ||||||
Dividends paid per share | $ | 0.15 | $ | 0.05 | $ | 0.30 | $ | 0.10 | |||||||
Weighted average shares outstanding (in thousands) (Note 4): | |||||||||||||||
Basic | 538,599 | 211,600 | 537,873 | 211,521 | |||||||||||
Diluted | 541,095 | 212,103 | 540,790 | 211,521 |
JUNE 30, 2011 | DECEMBER 31, 2010 | ||||||
ASSETS | |||||||
Forest Products: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 877 | $ | 1,466 | |||
Receivables, less allowances of $8 and $8 | 533 | 451 | |||||
Inventories (Note 7) | 513 | 478 | |||||
Prepaid expenses | 115 | 81 | |||||
Deferred tax assets | 167 | 113 | |||||
Total current assets | 2,205 | 2,589 | |||||
Property and equipment, less accumulated depreciation of $6,834 and $6,784 | 3,083 | 3,217 | |||||
Construction in progress | 137 | 123 | |||||
Timber and timberlands at cost, less depletion charged to disposals | 3,987 | 4,035 | |||||
Investments in and advances to equity affiliates | 191 | 194 | |||||
Goodwill | 40 | 40 | |||||
Other assets | 511 | 363 | |||||
Restricted assets held by special purpose entities | 915 | 915 | |||||
11,069 | 11,476 | ||||||
Real Estate: | |||||||
Cash and cash equivalents | 4 | 1 | |||||
Receivables, less discounts and allowances of $2 and $3 | 36 | 51 | |||||
Real estate in process of development and for sale | 535 | 517 | |||||
Land being processed for development | 988 | 974 | |||||
Investments in and advances to equity affiliates | 15 | 16 | |||||
Deferred tax assets | 263 | 266 | |||||
Other assets | 121 | 120 | |||||
Consolidated assets not owned | 8 | 8 | |||||
1,970 | 1,953 | ||||||
Total assets | $ | 13,039 | $ | 13,429 |
JUNE 30, 2011 | DECEMBER 31, 2010 | ||||||
LIABILITIES AND EQUITY | |||||||
Forest Products: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 326 | $ | 340 | |||
Accrued liabilities (Note 8) | 712 | 734 | |||||
Total current liabilities | 1,038 | 1,074 | |||||
Long-term debt (Note 9) | 4,192 | 4,710 | |||||
Deferred income taxes | 533 | 366 | |||||
Deferred pension and other postretirement benefits | 835 | 930 | |||||
Other liabilities | 412 | 393 | |||||
Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities | 774 | 772 | |||||
Commitments and contingencies (Note 12) | |||||||
7,784 | 8,245 | ||||||
Real Estate: | |||||||
Long-term debt (Note 9) | 318 | 350 | |||||
Other liabilities | 193 | 212 | |||||
Consolidated liabilities not owned | 8 | 8 | |||||
Commitments and contingencies (Note 12) | |||||||
519 | 570 | ||||||
Total liabilities | 8,303 | 8,815 | |||||
Equity: | |||||||
Weyerhaeuser shareholders’ interest: | |||||||
Common shares: $1.25 par value; authorized 1,360,000,000 shares; issued and outstanding: 538,639,584 and 535,975,518 shares | 673 | 670 | |||||
Other capital | 4,607 | 4,552 | |||||
Retained earnings | 116 | 181 | |||||
Cumulative other comprehensive loss (Note 11) | (662 | ) | (791 | ) | |||
Total Weyerhaeuser shareholders’ interest | 4,734 | 4,612 | |||||
Noncontrolling interests | 2 | 2 | |||||
Total equity | 4,736 | 4,614 | |||||
Total liabilities and equity | $ | 13,039 | $ | 13,429 |
YEAR-TO-DATE ENDED | |||||||
JUNE 30, 2011 | JUNE 30, 2010 | ||||||
Cash flows from operations: | |||||||
Net earnings (loss) | $ | 109 | $ | (4 | ) | ||
Noncash charges (credits) to earnings (loss): | |||||||
Depreciation, depletion and amortization | 243 | 252 | |||||
Deferred income taxes, net | 26 | 90 | |||||
Pension and other postretirement benefits (Note 10) | 43 | (11 | ) | ||||
Share-based compensation expense | 17 | 12 | |||||
Equity in loss of equity affiliates | 3 | 3 | |||||
Charges for impairment of assets | 12 | 3 | |||||
Net gains on dispositions of assets and operations | (185 | ) | (93 | ) | |||
Foreign exchange transaction gains (Note 6) | (8 | ) | — | ||||
Change in: | |||||||
Receivables less allowances | (69 | ) | (115 | ) | |||
Receivable for taxes | 1 | 551 | |||||
Inventories | (31 | ) | (25 | ) | |||
Real estate and land | (34 | ) | (37 | ) | |||
Prepaid expenses | (14 | ) | (7 | ) | |||
Accounts payable and accrued liabilities | (75 | ) | (53 | ) | |||
Deposits on land positions and other assets | (4 | ) | (3 | ) | |||
Pension contributions | (5 | ) | (138 | ) | |||
Other | (22 | ) | (58 | ) | |||
Net cash from operations | 7 | 367 | |||||
Cash flows from investing activities: | |||||||
Property and equipment | (74 | ) | (78 | ) | |||
Timberlands reforestation | (19 | ) | (20 | ) | |||
Redemption of short-term investments | — | 47 | |||||
Proceeds from sale of assets and operations | 196 | 130 | |||||
Repayments from pension trust | — | 146 | |||||
Other | (5 | ) | (11 | ) | |||
Cash from investing activities | 98 | 214 | |||||
Cash flows from financing activities: | |||||||
Notes, commercial paper borrowings and revolving credit facilities, net | — | (3 | ) | ||||
Cash dividends | (161 | ) | (21 | ) | |||
Change in book overdrafts | 2 | (12 | ) | ||||
Payments on debt (Note 9) | (550 | ) | (565 | ) | |||
Exercises of stock options | 37 | — | |||||
Other | (19 | ) | (3 | ) | |||
Cash from financing activities | (691 | ) | (604 | ) | |||
Net change in cash and cash equivalents | (586 | ) | (23 | ) | |||
Cash and cash equivalents at beginning of period | 1,467 | 1,869 | |||||
Cash and cash equivalents at end of period | $ | 881 | $ | 1,846 | |||
Cash paid (received) during the year for: | |||||||
Interest, net of amount capitalized of $17 and $11 | $ | 247 | $ | 273 | |||
Income taxes | $ | 15 | $ | (445 | ) |
NOTE 1: | ||
NOTE 2: | ||
NOTE 3: | ||
NOTE 4: | ||
NOTE 5: | ||
NOTE 6: | ||
NOTE 7: | ||
NOTE 8: | ||
NOTE 9: | ||
NOTE 10: | ||
NOTE 11: | ||
NOTE 12: | ||
NOTE 13: |
• | majority-owned domestic and foreign subsidiaries and |
• | variable interest entities in which we are the primary beneficiary. |
• | 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. |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | JUNE 30, 2011 | JUNE 30, 2010 | |||||||||||
Net sales: | |||||||||||||||
Hardwoods | $ | 97 | $ | 103 | $ | 195 | $ | 193 | |||||||
Westwood Shipping Lines | 66 | 61 | 124 | 107 | |||||||||||
Total net sales from discontinued operations | $ | 163 | $ | 164 | $ | 319 | $ | 300 | |||||||
Income (loss) from operations: | |||||||||||||||
Hardwoods | $ | (8 | ) | $ | 8 | $ | (8 | ) | $ | 11 | |||||
Westwood Shipping Lines | 2 | 1 | 4 | (3 | ) | ||||||||||
Other discontinued operations | (13 | ) | — | (13 | ) | — | |||||||||
Total income (loss) from discontinued operations | (19 | ) | 9 | (17 | ) | 8 | |||||||||
Income taxes | 6 | (3 | ) | 5 | (3 | ) | |||||||||
Net earnings (loss) from discontinued operations | $ | (13 | ) | $ | 6 | $ | (12 | ) | $ | 5 |
JUNE 30, 2011 | DECEMBER 31, 2010 | ||||||
ASSETS | |||||||
Receivables, less allowances | $ | 42 | $ | 36 | |||
Inventories | 63 | 63 | |||||
Prepaid expenses | 8 | 7 | |||||
Total current assets | 113 | 106 | |||||
Property and equipment, net | 40 | 43 | |||||
Other assets | 16 | 15 | |||||
Total assets | $ | 169 | $ | 164 | |||
Liabilities | |||||||
Accounts payable | $ | 8 | $ | 8 | |||
Accrued liabilities | 25 | 24 | |||||
Total current liabilities | $ | 33 | $ | 32 |
• | seven primary hardwood mills with a total capacity of 300 million board feet, |
• | four concentration yards, |
• | three remanufacturing plants, |
• | one log merchandising yard and |
• | sales offices in the U.S., Canada, Japan, China and Hong Kong. |
• | 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; and |
• | Real Estate – which includes real estate development, construction and sales. |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | JUNE 30, 2011 | JUNE 30, 2010 | |||||||||||
Sales to and revenues from unaffiliated customers: | |||||||||||||||
Timberlands | $ | 288 | $ | 225 | $ | 518 | $ | 427 | |||||||
Wood Products | 702 | 789 | 1,326 | 1,393 | |||||||||||
Cellulose Fibers | 526 | 468 | 1,032 | 878 | |||||||||||
Real Estate | 191 | 257 | 351 | 408 | |||||||||||
Corporate and Other | 66 | 66 | 124 | 118 | |||||||||||
1,773 | 1,805 | 3,351 | 3,224 | ||||||||||||
Less sales of discontinued operations | (163 | ) | (164 | ) | (319 | ) | (300 | ) | |||||||
1,610 | 1,641 | 3,032 | 2,924 | ||||||||||||
Intersegment sales: | |||||||||||||||
Timberlands | 134 | 123 | 325 | 294 | |||||||||||
Wood Products | 24 | 20 | 45 | 36 | |||||||||||
Corporate and Other | 5 | 5 | 8 | 9 | |||||||||||
163 | 148 | 378 | 339 | ||||||||||||
Total sales and revenues | 1,773 | 1,789 | 3,410 | 3,263 | |||||||||||
Intersegment eliminations | (163 | ) | (148 | ) | (378 | ) | (339 | ) | |||||||
Total | $ | 1,610 | $ | 1,641 | $ | 3,032 | $ | 2,924 | |||||||
Net contribution to earnings: | |||||||||||||||
Timberlands | $ | 112 | $ | 70 | $ | 353 | $ | 151 | |||||||
Wood Products | (61 | ) | (3 | ) | (97 | ) | (22 | ) | |||||||
Cellulose Fibers | 80 | 74 | 166 | 93 | |||||||||||
Real Estate | 8 | 27 | 7 | 58 | |||||||||||
Corporate and Other | (22 | ) | 8 | (63 | ) | 20 | |||||||||
117 | 176 | 366 | 300 | ||||||||||||
Interest expense, net of capitalized interest | (117 | ) | (155 | ) | (210 | ) | (261 | ) | |||||||
Income before income taxes (continuing and discontinued operations) | — | 21 | 156 | 39 | |||||||||||
Income taxes (continuing and discontinued operations) | 10 | (7 | ) | (47 | ) | (45 | ) | ||||||||
Net earnings (loss) attributable to Weyerhaeuser common shareholders | $ | 10 | $ | 14 | $ | 109 | $ | (6 | ) |
• | $0.02 during second quarter and $0.20 during first half 2011, respectively: and |
• | $0.07 during second quarter and $(0.03) during first half 2010, respectively. |
• | weighted average number of our outstanding common shares and |
• | the effect of our outstanding dilutive potential common shares. |
• | outstanding stock options, |
• | restricted stock units or |
• | performance share units. |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES | JUNE 30, 2010 | JUNE 30, 2010 | |||||
Net earnings (loss) attributable to Weyerhaeuser common shareholders | $ | 14 | $ | (6 | ) | ||
Diluted earnings (loss) per share: | |||||||
As reported | $ | 0.07 | $ | (0.03 | ) | ||
Pro forma | $ | 0.03 | $ | (0.01 | ) | ||
Diluted weighted average shares outstanding: | |||||||
As reported | 212,103 | 211,521 | |||||
Pro forma | 536,423 | 535,840 |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||
SHARES IN THOUSANDS | JUNE 30, 2011 | JUNE 30, 2010 | JUNE 30, 2011 | JUNE 30, 2010 | |||||||
Stock options | 24,197 | 10,122 | 24,197 | 12,793 | |||||||
Restricted stock units | — | — | — | 734 | |||||||
Performance share units | 476 | — | 476 | — |
• | options vest ratably over 4 years; |
• | options vest or continue to vest in the event of death, disability, or retirement at an age of at least 62; |
• | options 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 |
• | options stop vesting for all other situations including early retirement prior to age 62. |
OPTIONS | |||
Expected volatility | 38.56 | % | |
Expected dividends | 2.48 | % | |
Expected term (in years) | 5.73 | ||
Risk-free rate | 2.65 | % | |
Weighted average grant date fair value | $ | 7.54 |
• | restricted stock units vest ratably over 4 years; |
• | restricted stock units immediately vest in the event of death while employed or disability; |
• | restricted stock units partially vest upon retirement at an age of at least 62 or job elimination depending on the employment period after grant date; and |
• | restricted stock units will be forfeited upon termination of employment in all other situations including early retirement prior to age 62. |
• | Weyerhaeuser’s cash flow during the first year and |
• | Weyerhaeuser’s relative total shareholder return (TSR) ranking in the S&P 500 during the first two years. |
• | units vest 50 percent, 25 percent and 25 percent on the second, third and fourth anniversaries of the grant date, respectively, as long as the individual remains employed by the company; |
• | units fully vest in the event of death while employed or disability; |
• | units partially vest upon retirement at an age of at least 62 or job elimination depending on the employment period after grant date; and |
• | units will be forfeited upon termination of employment in all other situations including early retirement prior to age 62. |
Performance Share Units | |||
Performance period | 2/9/2011 – 2/9/2013 | ||
Valuation date closing stock price | $ | 24.32 | |
Expected dividends | 2.47 | % | |
Risk-free rate | 0.12% - 0.80% | ||
Volatility | 28.65% - 35.74% |
JUNE 30, 2011 | |||
Expected volatility | 38.71 | % | |
Expected dividends | 2.74 | % | |
Expected term (in years) | 2.63 | ||
Risk-free rate | 0.81 | % | |
Weighted average fair value | $ | 4.54 |
• | includes both recurring and occasional income and expense items and |
• | can fluctuate from year to year. |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | JUNE 30, 2011 | JUNE 30, 2010 | |||||||||||
Gain on sale of non-strategic timberlands | $ | — | $ | — | $ | (152 | ) | $ | — | ||||||
Gain on disposition of assets | (4 | ) | (11 | ) | (8 | ) | (60 | ) | |||||||
Foreign exchange losses (gains), net | (1 | ) | 10 | (8 | ) | — | |||||||||
Land management income | (7 | ) | (6 | ) | (13 | ) | (12 | ) | |||||||
Litigation expense | 1 | 10 | — | 11 | |||||||||||
Environmental remediation expense (Note 12) | 12 | 2 | 12 | 2 | |||||||||||
Other, net | (7 | ) | (12 | ) | (11 | ) | (18 | ) | |||||||
(6 | ) | (7 | ) | (180 | ) | (77 | ) | ||||||||
Less discontinued operations | (13 | ) | 5 | (13 | ) | 5 | |||||||||
Total other operating income, net | $ | (19 | ) | $ | (2 | ) | $ | (193 | ) | $ | (72 | ) |
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | DECEMBER 31, 2010 | |||||
Logs and chips | $ | 72 | $ | 66 | |||
Lumber, plywood, panels and engineered lumber | 185 | 164 | |||||
Pulp and paperboard | 147 | 157 | |||||
Other products | 91 | 79 | |||||
Materials and supplies | 140 | 133 | |||||
$ | 635 | $ | 599 | ||||
Less LIFO reserve | (122 | ) | (121 | ) | |||
Total | $ | 513 | $ | 478 |
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | DECEMBER 31, 2010 | |||||
Wages, salaries and severance pay | $ | 162 | $ | 165 | |||
Pension and postretirement | 70 | 70 | |||||
Vacation pay | 50 | 50 | |||||
Income taxes | 80 | 65 | |||||
Taxes – Social Security and real and personal property | 35 | 28 | |||||
Interest | 98 | 110 | |||||
Customer rebates and volume discounts | 46 | 63 | |||||
Deferred mineral income | 9 | 20 | |||||
Other | 162 | 163 | |||||
Total | $ | 712 | $ | 734 |
JUNE 30, 2011 | DECEMBER 31, 2010 | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | CARRYING VALUE | FAIR VALUE (LEVEL 2) | CARRYING VALUE | FAIR VALUE (LEVEL 2) | |||||||||||
Long-term debt (including current maturities): | |||||||||||||||
Forest Products | $ | 4,192 | $ | 4,491 | $ | 4,710 | $ | 5,029 | |||||||
Real Estate | $ | 318 | $ | 327 | $ | 350 | $ | 360 |
• | 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 short-term nature of these instruments, |
• | carrying short-term investments at expected net realizable value and |
• | the allowance for doubtful accounts. |
PENSION | |||||||||||||||
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | JUNE 30, 2011 | JUNE 30, 2010 | |||||||||||
Service cost | $ | 13 | $ | 11 | $ | 25 | $ | 22 | |||||||
Interest cost | 70 | 70 | 139 | 138 | |||||||||||
Expected return on plan assets | (106 | ) | (114 | ) | (211 | ) | (223 | ) | |||||||
Amortization of actuarial loss | 34 | 16 | 69 | 31 | |||||||||||
Amortization of prior service costs | 3 | 5 | 7 | 9 | |||||||||||
Loss due to curtailment and special termination benefits | — | — | 1 | 3 | |||||||||||
Total net periodic benefit costs (credits) | $ | 14 | $ | (12 | ) | $ | 30 | $ | (20 | ) |
OTHER POSTRETIREMENT BENEFITS | |||||||||||||||
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | JUNE 30, 2011 | JUNE 30, 2010 | |||||||||||
Service cost | $ | — | $ | 1 | $ | 1 | $ | 1 | |||||||
Interest cost | 6 | 6 | 12 | 13 | |||||||||||
Amortization of actuarial loss | 4 | 1 | 7 | 6 | |||||||||||
Amortization of prior service credits | (5 | ) | (6 | ) | (11 | ) | (11 | ) | |||||||
Adjustments | — | — | 4 | — | |||||||||||
Total net periodic benefit costs | $ | 5 | $ | 2 | $ | 13 | $ | 9 |
• | $20 million increase in the pension asset; |
• | $86 million decrease in the liability for deferred pension; |
• | $38 million increase in the liability for deferred income taxes; and |
• | $68 million net decrease in cumulative other comprehensive loss, which resulted in an increase in total Weyerhaeuser shareholders' interest. |
• | be required to contribute approximately $80 million to our Canadian registered and nonregistered pension plans; |
• | contribute $19 million to our U.S. nonqualified pension plans and have no required contribution to the U.S. qualified plan; and |
• | make benefit payments of $44 million to our U.S. and Canadian other postretirement plans. |
QUARTER ENDED | YEAR-TO-DATE ENDED | ||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | JUNE 30, 2011 | JUNE 30, 2010 | |||||||||||
Consolidated net earnings (loss) | $ | 10 | $ | 14 | $ | 109 | $ | (4 | ) | ||||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation adjustments | 2 | (27 | ) | 22 | (2 | ) | |||||||||
Actuarial gains, net of tax | 96 | 81 | 110 | 83 | |||||||||||
Prior service credits, net of tax | (4 | ) | (11 | ) | (3 | ) | (9 | ) | |||||||
Total other comprehensive income | 94 | 43 | 129 | 72 | |||||||||||
Total comprehensive income | 104 | 57 | 238 | 68 | |||||||||||
Less: comprehensive income attributable to noncontrolling interests | — | — | — | (2 | ) | ||||||||||
Comprehensive income attributable to Weyerhaeuser common shareholders | $ | 104 | $ | 57 | $ | 238 | $ | 66 |
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | DECEMBER 31, 2010 | |||||
Foreign currency translation adjustments | $ | 441 | $ | 419 | |||
Net pension and other postretirement benefit loss not yet recognized in earnings | (1,248 | ) | (1,358 | ) | |||
Prior service credit not yet recognized in earnings | 142 | 145 | |||||
Unrealized gains on available-for-sale securities | 3 | 3 | |||||
Total | $ | (662 | ) | $ | (791 | ) |
• | legal proceedings and |
• | environmental matters. |
• | is subject to a great many variables and |
• | cannot be predicted with any degree of certainty. |
• | 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. |
• | site remediation, |
• | asset retirement obligations, |
• | regulation of air emissions in the U.S. and |
• | regulation of water in the U.S. |
• | 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. |
• | new information on any site concerning implementation of remediation alternatives, |
• | updates on prior cost estimates and new sites and |
• | costs incurred to remediate sites. |
• | 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. |
• | assumed we will not bear the entire cost of remediation of every site, |
• | took into account the ability of other potentially responsible parties to participate and |
• | considered each party’s financial condition and probable contribution on a per-site basis. |
• | 9.8 percent for 2011 and |
• | 37.8 percent for 2010. |
DOLLAR AMOUNTS IN MILLIONS | |||
First Quarter 2011: | |||
Income taxes on a non-strategic timberlands gain discussed in Note 6 | $ | (56 | ) |
Second Quarter 2011: | |||
Tax benefit on early extinguishment of debt discussed in Note 9 | $ | 10 | |
First Quarter 2010: | |||
Medicare Part D subsidy charge | $ | (28 | ) |
State tax law and rate changes charge | $ | (3 | ) |
• | use forward-looking terminology, |
• | are based on various assumptions we make and |
• | may not be accurate because of risks and uncertainties surrounding the assumptions that we make. |
• | lower selling prices and harvests volumes in the West, seasonally higher silviculture and road expenses, reduced earnings from dispositions of non-strategic timberlands and significantly lower earnings in our Timberlands segment; |
• | lower selling prices for lumber and oriented strand board, lower sales volume across most products lines, offset by lower log costs and modest cost improvements and a comparable loss in our Wood Products segment excluding the hardwoods transaction; |
• | substantially lower maintenance costs and improved production, partially offset by lower selling prices for pulp, somewhat higher shipment volumes, seasonally lower energy costs and significantly higher earnings in our Cellulose Fibers segment; and |
• | slightly higher earnings from single-family homebuilding operations and a seasonal increase in home sale closings, continued strong margins and flat to slightly lower selling prices in our Real Estate segment. |
• | the economy; |
• | foreign exchange rates, primarily the Canadian dollar and Euro; |
• | adverse litigation outcomes and the adequacy of reserves; |
• | regulations; |
• | changes in accounting principles; |
• | the effect of implementation or retrospective application of accounting methods; |
• | contributions to pension plans; |
• | projected benefit payments; |
• | projected tax rates; |
• | IRS audit outcomes and timing of settlements; and |
• | other related matters. |
• | general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages, strength of the U.S. dollar; |
• | market demand for our products, which is related to the strength of the various business segments and economic conditions; |
• | performance of our manufacturing operations, including maintenance requirements; |
• | raw material prices; |
• | energy prices; |
• | transportation costs; |
• | successful execution of our internal performance plans, including restructurings and cost reduction initiatives; |
• | level of competition from domestic and foreign producers; |
• | the effect of the Japanese tsunami on demand for company products; |
• | the effect of weather; |
• | the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters; |
• | 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 our common stock on charges for share-based compensation; |
• | changes in accounting principles; |
• | performance of pension fund investments and related derivatives; and |
• | other factors described under “Risk Factors” in our annual report on Form 10-K. |
• | economic activity in Europe and Asia – particularly Japan and China; |
• | currency exchange rates – particularly the relative value of the U.S. dollar to the Canadian dollar, Euro and Yen; and |
• | restrictions on international trade or tariffs imposed on imports. |
• | Price realizations refer to net selling prices – this includes selling price plus freight, minus normal sales deductions. |
• | Net contribution to earnings can be positive or negative and refers to earnings (loss) attributable to Weyerhaeuser shareholders before interest expense and income taxes. |
• | Net sales and revenues and operating income (loss) included in Consolidated Results below exclude the results of discontinued operations. |
• | Net sales and revenues and contribution (charge) to earnings reported in the individual segment discussions that follow include the results of discontinued operations. Refer to Note 2: Discontinued Operations for a discussion of which segments include the results of our discontinued operations. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||||||||
Net sales and revenues | $ | 1,610 | $ | 1,641 | $ | (31 | ) | $ | 3,032 | $ | 2,924 | $ | 108 | ||||||||||
Operating income | $ | 127 | $ | 155 | $ | (28 | ) | $ | 363 | $ | 240 | $ | 123 | ||||||||||
Earnings (loss) of discontinued operations, net of tax | $ | (13 | ) | $ | 6 | $ | (19 | ) | $ | (12 | ) | $ | 5 | $ | (17 | ) | |||||||
Net earnings (loss) attributable to Weyerhaeuser common shareholders | $ | 10 | $ | 14 | $ | (4 | ) | $ | 109 | $ | (6 | ) | $ | 115 | |||||||||
Net earnings (loss) per share attributable to Weyerhaeuser common shareholders, basic and diluted | $ | 0.02 | $ | 0.07 | $ | (0.05 | ) | $ | 0.20 | $ | (0.03 | ) | $ | 0.23 |
• | Net sales and revenues decreased $31 million – 2 percent – during second quarter and increased $108 million – 4 percent – during first half. |
• | Net earnings decreased $4 million – 29 percent – during second quarter and increased $115 million during first half. |
• | decreased price realizations for oriented stranded board (OSB) and structural lumber – refer to the Wood Products segment discussion; and |
• | decreased number of homes closed – refer to the Real Estate segment discussion. |
• | increased pulp prices and volumes sold – refer to the Cellulose Fibers segment discussion; |
• | increased volumes sold of OSB and structural lumber – refer to the Wood Products segment discussion; and |
• | increased log prices and volumes sold – refer to the Timberlands segment discussion. |
• | lower OSB and structural lumber price realizations – refer to the Wood Products segment discussion; and |
• | increased raw materials and other operating costs – refer to the Timberlands, Wood Products and Cellulose Fibers segment discussions. |
• | higher pulp price realizations – refer to the Cellulose Fibers segment discussion; |
• | reduction in our net interest expense – refer to the interest expense discussion; and |
• | increased export and domestic log prices in the West and increased harvest levels in the West and South – refer to the Timberlands segment discussion. |
• | recognition of a gain on sale of 82,000 acres of non-strategic timberlands in 2011 – refer to the Timberlands segment discussion; and |
• | recognition of a tax charge in 2010 related to the federal tax law change for Medicare Part D subsidies – refer to the income tax discussion. |
• | recognition of a gain on the sale of certain British Columbia forest licenses and associated rights in 2010 – refer to the Wood Products segment discussion; and |
• | recognition of gains on the sale of partnership interests in 2010 – refer to the Real Estate segment discussion. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||||||||
Net sales and revenues to unaffiliated customers: | |||||||||||||||||||||||
Logs: | |||||||||||||||||||||||
West | $ | 152 | $ | 125 | $ | 27 | $ | 262 | $ | 207 | $ | 55 | |||||||||||
South | 49 | 37 | 12 | 90 | 64 | 26 | |||||||||||||||||
Canada | 1 | — | 1 | 8 | 9 | (1 | ) | ||||||||||||||||
Subtotal logs sales and revenues | 202 | 162 | 40 | 360 | 280 | 80 | |||||||||||||||||
Pay as cut timber sales | 8 | 9 | (1 | ) | 16 | 17 | (1 | ) | |||||||||||||||
Timberlands exchanges(1) | 39 | 13 | 26 | 60 | 48 | 12 | |||||||||||||||||
Higher and better-use land sales(1) | 2 | 7 | (5 | ) | 6 | 12 | (6 | ) | |||||||||||||||
Minerals, oil and gas | 15 | 16 | (1 | ) | 29 | 31 | (2 | ) | |||||||||||||||
Products from international operations(2) | 21 | 17 | 4 | 38 | 32 | 6 | |||||||||||||||||
Other products | 1 | 1 | — | 9 | 7 | 2 | |||||||||||||||||
Subtotal net sales and revenues to unaffiliated customers | 288 | 225 | 63 | 518 | 427 | 91 | |||||||||||||||||
Intersegment sales: | |||||||||||||||||||||||
United States | 107 | 101 | 6 | 219 | 205 | 14 | |||||||||||||||||
Other | 27 | 22 | 5 | 106 | 89 | 17 | |||||||||||||||||
Subtotal intersegment sales | 134 | 123 | 11 | 325 | 294 | 31 | |||||||||||||||||
Total sales and revenues | $ | 422 | $ | 348 | $ | 74 | $ | 843 | $ | 721 | $ | 122 | |||||||||||
Net contribution to earnings | $ | 112 | $ | 70 | $ | 42 | $ | 353 | $ | 151 | $ | 202 |
(1) | Dispositions of higher and better use timberland and non-strategic timberlands are conducted through Forest Products subsidiaries. |
(2) | Includes logs, plywood and hardwood lumber harvested or produced by our international operations, primarily in South America. |
• | Western log sales increased by $27 million due to increased sales volumes of 9 percent and increased price realizations of 12 percent driven by strong export demand. |
• | Land exchanges and higher and better-use land sales increased by $21 million. |
• | Southern log sales increased by $12 million due to increased sales volumes of 46 percent driven by increased harvest levels and increased sales of logs to third parties. |
• | $6 million increase due to higher log and chip prices in the West and |
• | $5 million increase due to increased Canadian log and chip sales volumes. |
• | $20 million increase due to land exchanges and higher and better-use land sales; |
• | $19 million increase primarily due to higher domestic and export prices in the West; and |
• | $18 million increase primarily due to increased harvest levels of 24 percent in the West and 25 percent in the South. |
• | $11 million increase in operating costs primarily due to higher silviculture and fuel costs and |
• | $5 million decrease due to lower prices for logs in the South. |
• | Western log sales increased by $55 million due to increased sales volumes of 10 percent and increased price realizations of 15 percent driven by strong export demand. |
• | Southern log sales increased by $26 million due to increased sales volumes of 52 percent driven by increased harvest levels and increased sales of logs to third parties. |
• | Land exchanges and higher and better-use land sales increased by $6 million. |
• | $17 million increase due to increased Canadian log and chip sales volumes and |
• | $14 million increase due to higher log and chip prices in the West. |
• | $152 million pretax gain on the first quarter 2011 sale of 82,000 acres of non-strategic timberlands in southwestern Washington; |
• | $45 million increase primarily due to higher domestic and export prices in the West; |
• | $23 million increase primarily due to increased harvest levels of 18 percent in the West and 13 percent in the South; and |
• | $8 million increase due to land exchanges and higher and better-use land sales. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN THOUSANDS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||
Third party log sales – cubic meters: | |||||||||||||||||
West | 1,391 | 1,276 | 115 | 2,486 | 2,251 | 235 | |||||||||||
South | 1,211 | 827 | 384 | 2,216 | 1,461 | 755 | |||||||||||
Canada | 23 | 15 | 8 | 217 | 274 | (57 | ) | ||||||||||
International | 79 | 68 | 11 | 151 | 146 | 5 | |||||||||||
Total | 2,704 | 2,186 | 518 | 5,070 | 4,132 | 938 | |||||||||||
Fee depletion – cubic meters: | |||||||||||||||||
West | 1,747 | 1,404 | 343 | 3,358 | 2,835 | 523 | |||||||||||
South | 2,355 | 1,881 | 474 | 4,535 | 4,021 | 514 | |||||||||||
International | 221 | 89 | 132 | 319 | 181 | 138 | |||||||||||
Total | 4,323 | 3,374 | 949 | 8,212 | 7,037 | 1,175 |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||||||||
Net sales and revenues: | |||||||||||||||||||||||
Structural lumber | $ | 290 | $ | 308 | $ | (18 | ) | $ | 550 | $ | 549 | $ | 1 | ||||||||||
Engineered solid section | 71 | 79 | (8 | ) | 133 | 145 | (12 | ) | |||||||||||||||
Engineered I-joists | 48 | 49 | (1 | ) | 81 | 97 | (16 | ) | |||||||||||||||
Oriented strand board | 89 | 116 | (27 | ) | 174 | 182 | (8 | ) | |||||||||||||||
Softwood plywood | 16 | 23 | (7 | ) | 33 | 39 | (6 | ) | |||||||||||||||
Hardwood lumber | 63 | 64 | (1 | ) | 121 | 118 | 3 | ||||||||||||||||
Other products produced | 41 | 38 | 3 | 83 | 73 | 10 | |||||||||||||||||
Other products purchased for resale | 84 | 112 | (28 | ) | 151 | 190 | (39 | ) | |||||||||||||||
Total | $ | 702 | $ | 789 | $ | (87 | ) | $ | 1,326 | $ | 1,393 | $ | (67 | ) | |||||||||
Net contribution to earnings | $ | (61 | ) | $ | (3 | ) | $ | (58 | ) | $ | (97 | ) | $ | (22 | ) | $ | (75 | ) |
• | Structural lumber average price realizations decreased 14 percent. |
• | OSB average price realizations decreased 33 percent. |
• | Other Products purchased for resale decreased as a result of exiting a composite decking product line. |
• | Structural lumber shipment volumes increased 9 percent. |
• | OSB shipment volumes increased 14 percent. |
• | $82 million decrease due to sales price realizations, primarily for OSB and structural lumber; |
• | $12 million increase in charges for restructuring, closure and asset impairments; and |
• | $8 million increase in log costs as domestic prices increased in the West driven by strong export demand. |
• | $28 million decrease in manufacturing costs primarily due to increased operating rates and |
• | $16 million decrease in selling and administrative costs primarily due to previous cost reduction efforts. |
• | Structural lumber average price realizations decreased 8 percent. |
• | OSB average price realizations decreased 22 percent. |
• | Engineered I-joists shipment volumes decreased 25 percent. |
• | Engineered solid section shipment volumes decreased 15 percent. |
• | Other Products purchased for resale decreased as a result of exiting a composite decking product line. |
• | Structural lumber shipment volumes increased 9 percent. |
• | OSB shipment volumes increased 22 percent. |
• | Engineered solid section average price realizations increased 7 percent. |
• | Engineered I-joists average price realizations increased 11 percent. |
• | $77 million decreased due to sales price realizations, primarily for OSB and structural lumber; |
• | $40 million pretax gain on the sale of certain British Columbia forest licenses and associated rights in 2010; |
• | $20 million increase in log costs as domestic prices increased in the West driven by strong export demand; and |
• | $13 million increase in charges for restructuring, closure and asset impairments, of which $9 million relates to the sale of our hardwoods operations. |
• | $44 million decrease in manufacturing costs primarily due to increased operating rates and |
• | $31 million decrease in selling and administrative costs primarily due to previous cost reduction efforts. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||
Structural lumber – board feet | 963 | 884 | 79 | 1,788 | 1,645 | 143 | |||||||||||
Engineered solid section – cubic feet | 4 | 4 | — | 7 | 8 | (1 | ) | ||||||||||
Engineered I-joists – lineal feet | 38 | 41 | (3 | ) | 64 | 85 | (21 | ) | |||||||||
Oriented strand board – square feet (3/8”) | 498 | 437 | 61 | 943 | 771 | 172 | |||||||||||
Softwood plywood – square feet (3/8”) | 61 | 75 | (14 | ) | 124 | 135 | (11 | ) | |||||||||
Hardwood lumber – board feet | 73 | 76 | (3 | ) | 142 | 142 | — |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||
Structural lumber – board feet | 903 | 846 | 57 | 1,796 | 1,647 | 149 | |||||||||||
Engineered solid section – cubic feet | 3 | 4 | (1 | ) | 7 | 8 | (1 | ) | |||||||||
Engineered I-joists – lineal feet | 34 | 41 | (7 | ) | 64 | 82 | (18 | ) | |||||||||
Oriented strand board – square feet (3/8”) | 518 | 468 | 50 | 1,012 | 846 | 166 | |||||||||||
Softwood plywood – square feet (3/8”) | 48 | 64 | (16 | ) | 101 | 112 | (11 | ) | |||||||||
Hardwood lumber – board feet | 62 | 61 | 1 | 120 | 120 | — |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||||||||
Net sales and revenues: | |||||||||||||||||||||||
Pulp | $ | 409 | $ | 354 | $ | 55 | $ | 807 | $ | 675 | $ | 132 | |||||||||||
Liquid packaging board | 93 | 90 | 3 | 178 | 161 | 17 | |||||||||||||||||
Other products | 24 | 24 | — | 47 | 42 | 5 | |||||||||||||||||
Total | $ | 526 | $ | 468 | $ | 58 | $ | 1,032 | $ | 878 | $ | 154 | |||||||||||
Net contribution to earnings | $ | 80 | $ | 74 | $ | 6 | $ | 166 | $ | 93 | $ | 73 |
• | Pulp price realizations increased by $104 per ton – 12 percent – primarily due to tight global softwood pulp inventories; |
• | Sales volumes for pulp increased 13,000 tons – 3 percent; and |
• | Liquid packaging board price realizations increased by $103 per ton – 9 percent – due to a favorable mix shift to coated board sales and an increase in market price. |
• | $44 million increase due to higher pulp price realizations; and |
• | $8 million improvement in liquid packaging board price realizations. |
• | $29 million increase in operating costs, maintenance, freight, and the effect on Canadian operating costs of the weakening U.S. dollar compared to the Canadian dollar; and |
• | $15 million increase in fiber and chemical cost due to rising prices. |
• | Pulp price realizations increased by $127 per ton – 16 percent – primarily due to tight global softwood pulp inventories; |
• | Sales volumes for pulp increased 27,000 tons – 3 percent; and |
• | Liquid packaging board price realizations increased by $98 per ton – 9 percent – due to a favorable mix shift to coated board sales and an increase in market price. |
• | $110 million increase due to higher pulp price realizations; |
• | $15 million improvement in liquid packaging board price realizations; and |
• | $6 million increase in other product realizations. |
• | $41 million increase in operating costs, maintenance, freight, and the effect on Canadian operating costs of the weakening U.S. dollar compared to the Canadian dollar; and |
• | $18 million increase primarily due to fiber and chemical cost as a result from rising prices. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN THOUSANDS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||
Pulp – air-dry metric tons | 426 | 413 | 13 | 862 | 835 | 27 | |||||||||||
Liquid packaging board – tons | 77 | 83 | (6 | ) | 151 | 150 | 1 |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||
VOLUMES IN THOUSANDS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||
Pulp – air-dry metric tons | 410 | 414 | (4 | ) | 847 | 851 | (4 | ) | |||||||||
Liquid packaging board – tons | 80 | 81 | (1 | ) | 147 | 150 | (3 | ) |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||||||||
Net sales and revenues: | |||||||||||||||||||||||
Single-family housing | $ | 180 | $ | 233 | $ | (53 | ) | $ | 332 | $ | 376 | $ | (44 | ) | |||||||||
Land | 11 | 23 | (12 | ) | 18 | 30 | (12 | ) | |||||||||||||||
Other | — | 1 | (1 | ) | 1 | 2 | (1 | ) | |||||||||||||||
Total | $ | 191 | $ | 257 | $ | (66 | ) | $ | 351 | $ | 408 | $ | (57 | ) | |||||||||
Net contribution to earnings | $ | 8 | $ | 27 | $ | (19 | ) | $ | 7 | $ | 58 | $ | (51 | ) |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | ||||||||||||||||||
Homes sold | 521 | 491 | 30 | 1,056 | 1,111 | (55 | ) | ||||||||||||||||
Homes closed | 459 | 625 | (166 | ) | 822 | 1,018 | (196 | ) | |||||||||||||||
Homes sold but not closed (backlog) | 673 | 743 | (70 | ) | 673 | 743 | (70 | ) | |||||||||||||||
Cancellation rate | 16.2 | % | 21.8 | % | (5.6 | )% | 13.9 | % | 20.2 | % | (6.3 | )% | |||||||||||
Buyer traffic | 14,885 | 17,501 | (2,616 | ) | 27,789 | 40,159 | (12,370 | ) | |||||||||||||||
Average price of homes closed | $ | 391,000 | $ | 371,000 | $ | 20,000 | $ | 404,000 | $ | 369,000 | $ | 35,000 | |||||||||||
Single-family gross margin – excluding impairments (%)(1) | 22.4 | % | 23.9 | % | (1.5 | )% | 22.0 | % | 22.2 | % | (0.2 | )% |
(1) | Single-family gross margin equals revenue less cost of sales and period costs (other than impairments and deposit write-offs). |
• | Home closings declined 27 percent to 459 in second quarter 2011 from 625 in second quarter 2010. |
• | Revenues from land and lot sales decreased $12 million. Land and lot sales are a routine part of our land development business, but they do not occur evenly throughout the year. |
• | $15 million decrease in contribution from single-family operations, primarily due to fewer home closings and |
• | $9 million decrease in contribution from land and lot sales. |
• | Home closings declined 19 percent to 822 in 2011 from 1,018 in 2010. |
• | Revenues from land and lot sales decreased $12 million. |
• | $33 million decrease in contribution from the sale of partnership interests - 2010 first quarter included the sale of interests in two commercial partnerships, |
• | $16 million decrease in contribution from single-family operations due to fewer home closings and |
• | $11 million decrease in contribution from land and lot sales. |
• | $6 million increase in contribution from single-family operations resulting from higher margins due to the higher average price of homes closed. The gross margin percentage of approximately 22 percent was comparable year over year. |
• | $4 million decrease in selling, general and administrative expenses. |
QUARTER ENDED | AMOUNT OF CHANGE | YEAR-TO-DATE ENDED | AMOUNT OF CHANGE | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | JUNE 30, 2011 | JUNE 30, 2010 | 2011 VS. 2010 | |||||||||||||||||
Net sales and revenues | $ | 66 | $ | 66 | $ | — | $ | 124 | $ | 118 | $ | 6 | |||||||||||
Net contribution to earnings | $ | (22 | ) | $ | 8 | $ | (30 | ) | $ | (63 | ) | $ | 20 | $ | (83 | ) |
• | $25 million increase in pension and postretirement costs primarily due to the amortization of deferred pension losses and |
• | $11 million increase in environmental remediation expense related to discontinued operations. |
• | $53 million increase in pension and postretirement costs primarily due to the amortization of deferred pension losses; |
• | $12 million due to a 15 percent increase in our stock price in first half 2011, which resulted in higher share-based compensation expense; and |
• | $11 increase in environmental remediation expense related to discontinued operations. |
• | $117 million during second quarter and $210 million during first half 2011. |
• | $155 million during second quarter and $261 million during first half 2010. |
• | 9.8 percent for 2011 and |
• | 37.8 percent for 2010. |
DOLLAR AMOUNTS IN MILLIONS | |||
First Quarter 2011: | |||
Income taxes on a non-strategic timberlands gain | $ | (56 | ) |
Second Quarter 2011: | |||
Tax benefit on early extinguishment of debt | $ | 10 | |
First Quarter 2010: | |||
Medicare Part D subsidy charge | $ | (28 | ) |
State tax law and rate changes charge | $ | (3 | ) |
• | protect the interests of our shareholders and lenders and |
• | have access at all times to all major financial markets. |
• | viewing the capital structure of Forest Products separately from that of Real Estate given the very different nature of their assets and business activity and |
• | minimizing liquidity risk by managing a combination of maturing short-term and long-term debt. |
• | basic earnings capacity and |
• | liquidity characteristics of their respective assets. |
• | cash received from customers; |
• | cash paid to employees, suppliers and others; |
• | cash paid for interest on our debt; and |
• | cash paid for taxes. |
• | $7 million in 2011 and |
• | $367 million in 2010. |
• | Net cash inflows related to income taxes decreased $460 million. We paid taxes of $15 million in 2011 and received income tax refunds of $445 million in 2010. |
• | Cash paid to employees, suppliers and others increased approximately $65 million. |
• | Increased price realizations and sales volumes from our Cellulose Fibers and Timberlands segments and |
• | Increased sales volumes from our Wood Products segment. |
• | acquisitions of property, equipment, timberlands and reforestation; |
• | investments in or distribution from equity affiliates; |
• | proceeds from sale of assets and operations; and |
• | purchases and redemptions of short-term investments. |
YEAR-TO-DATE ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | JUNE 30, 2011 | JUNE 30, 2010 | |||||
Timberlands | $ | 28 | $ | 35 | |||
Wood Products | 14 | 7 | |||||
Cellulose Fibers(1) | 49 | 58 | |||||
Corporate and Other | 1 | 1 | |||||
Real Estate | 1 | 1 | |||||
Total | $ | 93 | $ | 102 |
(1) | 2010 includes the exercise of an option to acquire liquid packaging board extrusion equipment for $21 million, including assumption of liabilities of $4 million. |
• | future economic conditions, |
• | weather and |
• | timing of equipment purchases. |
• | $42 million for the sale of Wood Products assets, |
• | $40 million for the sale of British Columbia forest licenses and associated rights, |
• | $33 million for the sale of partnership interests in our Real Estate segment and |
• | $15 million for the sale of other non-strategic assets. |
• | issuances and payment of long-term debt, |
• | borrowings and payments under revolving lines of credit, |
• | changes in our book overdrafts, |
• | proceeds from stock offerings and option exercises and |
• | payment of cash dividends. |
• | $550 million in first half 2011 and |
• | $568 million in first half 2010. |
• | had no borrowings outstanding under the credit facility and |
• | were in compliance with the credit facility covenants. |
• | a minimum defined net worth of $3.0 billion, |
• | a defined debt-to-total-capital ratio of 65 percent or less and |
• | ownership of, or long-term leases on, no less than four million acres of timberlands. |
• | total Weyerhaeuser shareholders’ interest, |
• | excluding accumulated comprehensive income (loss) related to pension and postretirement benefits, |
• | minus Weyerhaeuser Company’s investment in subsidiaries in our Real Estate segment or other unrestricted subsidiaries. |
• | total Weyerhaeuser Company (excluding WRECO) debt |
• | plus total defined net worth. |
• | a defined net worth of $5 billion and |
• | a defined debt-to-total-capital ratio of 46.0 percent. |
• | a minimum capital base of $100 million, |
• | a defined debt-to-total-capital ratio of 80 percent or less and |
• | Weyerhaeuser Company or a subsidiary must own at least 79 percent of WRECO. |
• | total WRECO shareholders’ interest, |
• | minus intangible assets, |
• | minus WRECO’s investment in joint ventures and partnerships. |
• | total WRECO debt – including any intercompany debt |
• | plus outstanding WRECO guarantees and letters of credit. |
• | total WRECO defined debt and |
• | total WRECO defined net worth. |
• | a capital base of $844 million and |
• | a defined debt-to-total-capital ratio of 52.5 percent. |
• | $161 million in 2011 and |
• | $21 million in 2010. |
12. | Statements regarding computation of ratios |
31. | Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended |
32. | Certification pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) |
100.INS | XBRL Instance Document |
100.SCH | XBRL Taxonomy Extension Schema Document |
100.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
100.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
100.LAB | XBRL Taxonomy Extension Label Linkbase Document |
100.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
YEAR-TO-DATE ENDED | |||||||
JUNE 30, 2011 | JUNE 30, 2010 | ||||||
Available earnings: | |||||||
Earnings from continuing operations before interest expense, amortization of debt expense and income taxes | $ | 369 | $ | 260 | |||
Add: interest portion of rental expense | 8 | 15 | |||||
Add: undistributed (earnings) loss of equity affiliates and income attributable to noncontrolling interests in subsidiaries | 6 | (28 | ) | ||||
Available earnings | $ | 383 | $ | 247 | |||
Fixed charges: | |||||||
Interest expense incurred: | |||||||
Weyerhaeuser Company and subsidiaries, excluding Weyerhaeuser Real Estate Company and other related subsidiaries | $ | 186 | $ | 208 | |||
Weyerhaeuser Real Estate Company and other related subsidiaries | 12 | 14 | |||||
Subtotal | 198 | 222 | |||||
Less: intercompany interest | (2 | ) | (3 | ) | |||
Total interest expense incurred | 196 | 219 | |||||
Amortization of debt expense | 4 | 4 | |||||
Interest portion of rental expense | 8 | 15 | |||||
Total fixed charges | $ | 208 | $ | 238 | |||
Ratio of earnings to fixed charges | 1.84 | 1.04 |
QUARTER ENDED | |||||||
JUNE 30, 2011 | JUNE 30, 2010 | ||||||
Available earnings: | |||||||
Earnings from continuing operations before interest expense, amortization of debt expense and income taxes | $ | 358 | $ | 245 | |||
Add: interest portion of rental expense | 7 | 13 | |||||
Add: undistributed loss of equity affiliates and attributable to noncontrolling interests in subsidiaries | 5 | 9 | |||||
Add: undistributed earnings before income taxes of Weyerhaeuser Real Estate Company and other related subsidiaries | (6 | ) | (57 | ) | |||
Available earnings | $ | 364 | $ | 210 | |||
Fixed charges: | |||||||
Interest expense incurred | $ | 186 | $ | 208 | |||
Amortization of debt expense | 4 | 4 | |||||
Interest portion of rental expense | 7 | 13 | |||||
Total fixed charges | $ | 197 | $ | 225 | |||
Ratio of earnings to fixed charges | 1.85 | — | |||||
Coverage deficiency | $ | — | $ | (15 | ) |
1. | I have reviewed this quarterly report on Form 10-Q of Weyerhaeuser Company. |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 5, 2011 | |
/s/ DANIEL S. FULTON | ||
Daniel S. Fulton President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Weyerhaeuser Company. |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 5, 2011 | |
/s/ PATRICIA M. BEDIENT | ||
Patricia M. Bedient Executive Vice President and Chief Financial Officer |
/s/ DANIEL S. FULTON | ||
Daniel S. Fulton President and Chief Executive Officer | ||
Dated: | August 5, 2011 | |
/s/ PATRICIA M. BEDIENT | ||
Patricia M. Bedient Executive Vice President and Chief Financial Officer | ||
Dated: | August 5, 2011 |
CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)
In Millions, except Share data |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Common shares, par value | $ 1.25 | $ 1.25 |
Common shares, authorized | 1,360,000,000 | 1,360,000,000 |
Common shares, issued | 538,639,584 | 535,975,518 |
Common shares, outstanding | 538,639,584 | 535,975,518 |
Forest Products:
|
||
Receivables, allowances | $ 8 | $ 8 |
Property and equipment, accumulated depreciation | 6,834 | 6,784 |
Real Estate:
|
||
Receivables, discounts and allowances | $ 2 | $ 3 |
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES (Detail) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
Other discontinued operations:
|
Jun. 30, 2011
Minimum
|
Dec. 31, 2010
Minimum
|
Jun. 30, 2011
Maximum
|
Dec. 31, 2010
Maximum
|
|
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Accrued estimated remediation costs | $ 37 | $ 37 | |||||||
Environmental remediation expense | 12 | 2 | 12 | 2 | |||||
Environmental remediation expense of discontinued operations | 11 | ||||||||
Asset Retirement Obligations | 67 | 67 | |||||||
Remediation costs for all identified sites may exceed our reserves | 100 | ||||||||
Estimated cost that might spend over the next few years to comply with maximum achievable control technology (MACT) standards | $ 30 | $ 30 | $ 45 | $ 100 |
SHARE-BASED COMPENSATION (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Weighted Average Assumptions Used in Estimating Value of Stock Options Granted | Weighted Average Assumptions Used in Estimating the Value of Stock Options Granted in First Half 2011
|
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Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted | Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in First Half 2011
|
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Weighted Average Assumptions Used to Re-measure Value of Stock Appreciation Rights | Weighted Average Assumptions Used to Remeasure the Value of Stock Appreciation Rights as of June 30, 2011
|
Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jul. 29, 2011
|
|
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | WEYERHAEUSER CO | |
Entity Central Index Key | 0000106535 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 538,667,211 |
FAIR VALUE OF FINANCIAL INSTRUMENTS - Debt Maturities (Details) (Real Estate, USD $)
In Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2011
|
|
Real Estate
|
||
Debt Instrument [Line Items] | ||
Maturities of Senior Debt | $ 30 | $ 32 |
ACCRUED LIABILITIES (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
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Forest Products Accrued Liabilities | Forest Products accrued liabilities were comprised of the following:
|
FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Details (Details) (Notes Due [Member], USD $)
In Millions, unless otherwise specified |
1 Months Ended |
---|---|
Jun. 30, 2011
|
|
Notes Due [Member]
|
|
Extinguishment of Debt [Line Items] | |
Exercised right to call 6.75% notes due in 2012 | $ 518 |
Debt Instrument, Interest Rate, Stated Percentage | 6.75% |
Gains (Losses) on Extinguishment of Debt | $ 26 |
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OTHER OPERATING INCOME, NET
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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OTHER OPERATING INCOME, NET | OTHER OPERATING INCOME, NET Other operating income, net:
Items Included in Other Operating Income, Net
Foreign exchange gains result from changes in exchange rates primarily related to our Canadian operations. Land management income consists primarily of income derived from leasing, renting and granting easement and rights of way on our timberlands. The $152 million pretax gain on sale of non-strategic timberlands resulted from the sale of 82,000 acres in southwestern Washington. First half 2010 included a pretax gain of $40 million from the sale of certain British Columbia forest licenses and associated rights and $10 million from the sale of closed facilities. |
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The estimated fair values and carrying values of our long-term debt consisted of the following:
|
OTHER OPERATING INCOME, NET - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Component of Other Operating Cost and Expense [Line Items] | ||||
Pre-tax gain on sale of non-strategic timberlands | $ 0 | $ 0 | $ 152 | $ 0 |
Pre-tax gains from sale of certain British Columbia forest licenses and associated rights | 40 | |||
Pre-tax gain from sale of closed facilities | $ 10 | |||
South Western Washington
|
||||
Component of Other Operating Cost and Expense [Line Items] | ||||
Non-strategic timberlands sold | 82,000 |
INVENTORIES (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Forest Products Inventories | Forest Products inventories include raw materials, work-in-process and finished goods.
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COMPREHENSIVE INCOME (LOSS)
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Jun. 30, 2011
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COMPREHENSIVE INCOME (LOSS) | COMPREHENSIVE INCOME (LOSS) Items included in our comprehensive income consisted of the following:
The net actuarial gain recognized in first half 2011 includes a change in the estimated fair value of pension plan assets and liabilities as of December 31, 2010. See Note 10: Pension and Other Postretirement Benefit Plans. Cumulative Other Comprehensive Loss Items included in our cumulative other comprehensive loss are:
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DISCONTINUED OPERATIONS
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Jun. 30, 2011
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Our discontinued operations for the quarter and year-to-date periods ended June 30, 2011, and June 30, 2010, include the operations of our hardwoods and Westwood Shipping Lines operations. The following table summarizes the components of net sales and net earnings from discontinued operations.
Results of discontinued operations exclude certain general corporate overhead costs that have been allocated to and are included in contribution to earnings for the operating segments. Other discontinued operations relate to current period charges for liabilities of businesses we have sold or divested in prior years and are included in the Corporate and Other segment. During second quarter 2011 we increased our reserve for estimated future environmental remediation costs and recognized an $11 million charge associated with discontinued operations. See Note 12: Legal Proceedings, Commitments and Contingencies for more information. Our Consolidated Balance Sheet includes the following assets and liabilities of our hardwoods and Westwood Shipping Lines operations as of June 30, 2011 and December 31, 2010.
ANNOUNCED SALE OF HARDWOODS During June 2011, we entered into a purchase and sale agreement to sell the assets of our hardwoods operations to American Industrial Partners and expect to receive consideration of $108 million, of which $25 million is a note receivable. The purchase price is subject to adjustments for working capital levels. We reduced our hardwoods assets to their fair value less selling costs which resulted in the recognition of a $9 million impairment in second quarter 2011. An additional $10 million pension curtailment charge was recognized subsequent to quarter end when the transaction closed on August 1, 2011. The following operating assets are included as part of the transaction:
ANNOUNCED SALE OF WESTWOOD SHIPPING LINES During June 2011, we entered into a purchase and sale agreement to sell all outstanding shares of Westwood Shipping Lines to J-WesCo of Japan for $53 million in cash, subject to adjustments for working capital levels at closing. As of June 30, 2011, the net carrying value of these assets was approximately $10 million. The transaction is subject to regulatory approval and is expected to close in the third quarter. |
NET EARNINGS (LOSS) PER SHARE - Additional Information (Detail) (USD $)
In Billions, except Share data in Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
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Jun. 30, 2010
|
Sep. 30, 2010
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Sep. 01, 2010
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Earnings Per Share Disclosure [Line Items] | ||||||
Basic and diluted earnings per share attributable to Weyerhaeuser common shareholders | $ 0.02 | $ 0.07 | $ 0.20 | $ (0.03) | ||
Special dividend paid | $ 5.6 | |||||
Special dividend, number of common shares issued | 324 | |||||
Special dividend, payment date | Sep. 01, 2010 | |||||
Performance share units | Maximum
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Earnings Per Share Disclosure [Line Items] | ||||||
Final number of shares awarded of each grant's target | 150.00% | 150.00% |
ACCRUED LIABILITIES
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ACCRUED LIABILITIES | ACCRUED LIABILITIES Forest Products accrued liabilities were comprised of the following:
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INCOME TAXES
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INCOME TAXES | INCOME TAXES As a REIT, we are generally not subject to corporate level tax on income of the REIT that is distributed to shareholders. We will, however, be subject to corporate taxes on built-in-gains (the excess of fair market value over tax basis at January 1, 2010) on sales of real property (other than standing timber) held by the REIT during the first 10 years following the REIT conversion. We also will continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which principally includes our manufacturing businesses, our real estate development business and the portion of our timberlands segment income included in the TRS. The provision for income taxes is based on the current estimate of the annual effective tax rate. Our 2011 income tax rate excluding discrete items is lower than the statutory rate, primarily due to the tax benefits of being a REIT. Our 2010 income tax rate is higher than the statutory rate, primarily due to the effect of state and foreign income taxes on a low pretax earnings base. Tax benefits of being a REIT were not reflected in our first half 2010 income tax rate. Our effective income tax rates from continuing operations excluding discrete items were:
Discrete items excluded from the calculation of our effective income tax rates include:
Due to the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act, we will no longer be able to claim an income tax deduction for prescription drug benefits provided to retirees and reimbursed under the Medicare Part D subsidy beginning in 2013. Accounting rules required the effect of the change to be recorded in first quarter 2010, the period that the law was enacted. |
FAIR VALUE OF FINANCIAL INSTRUMENTS
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Fair Value Disclosures [Text Block] | The estimated fair values and carrying values of our long-term debt consisted of the following:
To estimate the fair value of long-term debt, we used the following valuation approaches:
The inputs to the valuations are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date. At the beginning of June 2011, we exercised our right to call approximately $518 million of 6.75 percent notes due in 2012. We recognized a pretax charge in second quarter 2011 of $26 million, which included early retirement premiums, unamortized debt issuance costs and other miscellaneous charges in connection with the early extinguishment of debt. This charge is included in interest expense in the Consolidated Statement of Operations. Real Estate debt maturities were $30 million for second quarter and $32 million for year-to-date 2011. 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:
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DISCONTINUED OPERATIONS - Balance Sheet By Disposal Groups, Including Discontinued Operations (Details) (USD $)
In Millions |
Jun. 30, 2011
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Dec. 31, 2010
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Balance Sheet By Disposal Groups, Including Discontinued Operations [Line Items] | ||
Receivables, less allowances | $ 42 | $ 36 |
Inventories | 63 | 63 |
Prepaid expenses | 8 | 7 |
Total current assets | 113 | 106 |
Property and equipment, net | 40 | 43 |
Other assets | 16 | 15 |
Total assets | 169 | 164 |
Accounts payable | 8 | 8 |
Accrued liabilities | 25 | 24 |
Total current liabilities | $ 33 | $ 32 |
INVENTORIES
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INVENTORIES | INVENTORIES Forest Products inventories include raw materials, work-in-process and finished goods.
The LIFO – the last-in, first-out method – inventory reserve applies to major inventory products held at our U.S. domestic locations. These inventory products include grade and fiber logs, chips, lumber, plywood, oriented strand board, hardwood lumber, pulp and paperboard. |
COMPREHENSIVE INCOME (LOSS) - Items Included in Cumulative Other Comprehensive Loss (Detail) (USD $)
In Millions |
Jun. 30, 2011
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Dec. 31, 2010
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Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Foreign currency translation adjustments | $ 441 | $ 419 |
Net pension and other postretirement benefit loss not yet recognized in earnings | (1,248) | (1,358) |
Prior service credit not yet recognized in earnings | 142 | 145 |
Unrealized gains on available-for-sale securities | 3 | 3 |
Total | $ (662) | $ (791) |
CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) (USD $)
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Jun. 30, 2011
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Jun. 30, 2010
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Interest, amount capitalized | $ 17 | $ 11 |
BUSINESS SEGMENTS
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BUSINESS SEGMENTS | BUSINESS SEGMENTS We are principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate development and construction. Our principal business segments are:
We sold our hardwoods operations in a transaction that closed on August 1, 2011. The hardwoods results are included in our Wood Products segment for all periods presented in this report. Corporate and Other includes results of our transportation operations, certain gains or charges that are not related to an individual operating segment and the portion of items such as share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses and other general and administrative expenses that are not allocated to the business segments. We sold our five short line railroads at the end of 2010. We entered into an agreement to sell Westwood Shipping Lines, our last transportation business, in a transaction that is subject to regulatory approval and is expected to close in the third quarter. Westwood results are included in Corporate and Other for all periods presented in this report. An analysis and reconciliation of our business segment information to the respective information in the Consolidated Financial Statements is as follows:
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SHARE-BASED COMPENSATION - Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted (Detail) (Performance share units, USD $)
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Jun. 30, 2011
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Performance share units
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance period | 2/9/2011 – 2/9/2013 |
Valuation date closing stock price | $ 24.32 |
Expected dividends | 2.47% |
Risk-free rate minimum | 0.12% |
Risk-free rate maximum | 0.80% |
Volatility minimum | 28.65% |
Volatility maximum | 35.74% |
COMPREHENSIVE INCOME (LOSS) - Items Included in Comprehensive Income (Loss) (Detail) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Consolidated net earnings (loss) | $ 10 | $ 14 | $ 109 | $ (4) |
Other comprehensive income: | ||||
Foreign currency translation adjustments | 2 | (27) | 22 | (2) |
Actuarial gains, net of tax | 96 | 81 | 110 | 83 |
Prior service credits, net of tax | (4) | (11) | (3) | (9) |
Total other comprehensive income | 94 | 43 | 129 | 72 |
Total comprehensive income | 104 | 57 | 238 | 68 |
Less: comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | (2) |
Comprehensive income attributable to Weyerhaeuser common shareholders | $ 104 | $ 57 | $ 238 | $ 66 |
NET EARNINGS (LOSS) PER SHARE
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NET EARNINGS (LOSS) PER SHARE | NET EARNINGS (LOSS) PER SHARE Our basic and diluted earnings (loss) per share attributable to Weyerhaeuser shareholders were:
Basic earnings per share is net earnings divided by the weighted average number of our outstanding common shares. Diluted earnings per share is net earnings divided by the sum of the:
Dilutive potential common shares include:
We use the treasury stock method to calculate the effect of our outstanding dilutive potential common shares. Share-based payment awards that are contingently issuable upon the achievement of specified performance or market conditions are included in our diluted earnings per share calculation in the period in which the conditions are satisfied. To implement our decision to be taxed as a REIT, we distributed our accumulated earnings and profits to our shareholders, determined under federal income tax provisions, as a “Special Dividend.” At the election of each shareholder, the Special Dividend was paid in cash or Weyerhaeuser common shares. The Special Dividend of $5.6 billion was paid September 1, 2010 and included approximately 324 million common shares. The stock portion of the Special Dividend was treated as the issuance of new shares for accounting purposes and affects our earnings (loss) per share only for periods after the distribution. Prior periods are not restated. The required treatment results in earnings (loss) per share that is less than would have been the case had the common shares not been issued. Reflected below are pro forma results giving effect to the common stock distribution for diluted earnings per common share for the quarter and year-to-date ended June 30, 2010, as if the common stock distribution had occurred at the beginning of the period. Pro Forma 2010 Diluted Earnings per Share to Reflect Special Dividend
SHARES EXCLUDED FROM DILUTIVE EFFECT The following shares were not included in the computation of diluted earnings (loss) per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods. Potential Shares Not Included in the Computation of Diluted Earnings (Loss) per Share
The higher number of options in 2011 is primarily due to our Long-Term Incentive Compensation Plan requiring outstanding stock options to be adjusted as a result of the Special Dividend. During 2011, performance share units were granted under our performance share plan. These are disclosed in the above table at the potential maximum amount of shares that may be issued, which is 150 percent of the granted shares. See Note 5: Share-Based Compensation for more information. |
OTHER OPERATING INCOME, NET (Detail) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Component of Other Operating Cost and Expense [Line Items] | ||||
Gain on sale of non-strategic timberlands | $ 0 | $ 0 | $ (152) | $ 0 |
Gain on disposition of assets | (4) | (11) | (8) | (60) |
Foreign exchange losses (gains), net | (1) | 10 | (8) | 0 |
Land management income | (7) | (6) | (13) | (12) |
Litigation expense | 1 | 10 | 0 | 11 |
Environmental remediation expense (Note 12) | 12 | 2 | 12 | 2 |
Other, net | (7) | (12) | (11) | (18) |
Other operating (income) expense including discontinuing operations | (6) | (7) | (180) | (77) |
Less discontinued operations | (13) | 5 | (13) | 5 |
Total other operating income, net | $ (19) | $ (2) | $ (193) | $ (72) |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables)
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Components of Net Periodic Benefit Credits (Costs) | The components of net periodic benefit costs (credits) are:
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DISCONTINUED OPERATIONS - Additional Information (Details) (USD $)
In Millions |
3 Months Ended | ||
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Sep. 30, 2011
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Jun. 30, 2011
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Aug. 01, 2011
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Hardwoods:
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration received from sale of business and operating facilities | $ 108 | ||
Note receivable | 25 | ||
Long-lived asset impairment charges | 9 | ||
Loss due to curtailment and special termination benefits | 10 | ||
Westwood Shipping Lines:
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from sale of business | 53 | ||
Net carrying value of assets | 10 | ||
Other discontinued operations:
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Environmental remediation expense | $ 11 |
SHARE-BASED COMPENSATION - Weighted Average Assumptions Used to Remeasure the Value of Stock Appreciation Rights (Detail) (Stock appreciation rights, USD $)
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Jun. 30, 2011
years
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Stock appreciation rights
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 38.71% |
Expected dividends | 2.74% |
Expected term (in years) | 2.63 |
Risk-free rate | 0.81% |
Weighted average fair value | $ 4.54 |
INCOME TAXES (Tables)
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Items Excluded from Effective Income Tax Rates | tems excluded from the calculation of our effective income tax rates include:
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LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES
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LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES | LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES This note provides details about our:
LEGAL PROCEEDINGS We are party to legal matters generally incidental to our business. The ultimate outcome of any legal proceeding:
However, whenever probable losses from litigation could reasonably be determined – we believe that we have established adequate reserves. In addition, we believe the ultimate outcome of the legal proceedings:
Current Year Claim On April 25, 2011, a complaint was filed in the United States District Court for the Western District of Washington on behalf of a person alleged to be a participant in the company’s U.S. Retirement Plan for salaried employees. The complaint alleges violations of the Employee Retirement Security Act (ERISA) with respect to the management of the plan’s assets and seeks certification as a class action. The company believes that its pension plans have been consistently managed in full compliance with established fiduciary standards and is vigorously contesting the claim. The company has filed a motion to dismiss the claim. ENVIRONMENTAL MATTERS Our environmental matters include:
Site Remediation Under the Comprehensive Environmental Response Compensation and Liability Act – commonly known as the Superfund – and similar state laws, we:
As of June 30, 2011, our total accrual for future estimated remediation costs on the active Superfund sites and other sites for which we are responsible was $37 million. This includes a $12 million increase to the reserve that was accrued in second quarter 2011, of which $11 million is included in our results from discontinued operations. We change our accrual to reflect:
We believe it is reasonably possible – based on currently available information and analysis – that remediation costs for all identified sites may exceed our accrual by up to $100 million. 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:
In estimating our current accruals and the possible range of additional future costs, we:
We have not recorded any amounts for potential recoveries from insurance carriers. Asset Retirement Obligations We have obligations associated with the retirement of tangible long-lived assets consisting primarily of reforestation obligations related to forest management licenses in Canada and obligations to close and cap landfills. As of June 30, 2011, our total accruals for these obligations was $67 million. The accruals have not changed materially since the end of 2010. Some of our sites have asbestos containing materials. We have met our current legal obligation to identify and manage these materials. In situations where we cannot reasonably determine when asbestos containing materials might be removed from the sites, we have not recorded an accrual because the fair value of the obligation cannot be reasonably estimated. Regulation of Air Emissions in the U.S. In March 2011, the United States Environmental Protection Agency (EPA) published a set of final rules that require use of maximum achievable control technology (MACT) for industrial boilers. As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010, we had previously estimated that we might spend as much as $30 million to $100 million over the next few years to comply with the MACT standards as they were described in the proposed rule. After reviewing the final rules, we now estimate that we might spend as much as $30 million to $45 million over the next few years to comply with the MACT standards. The EPA has stated that they intend to reconsider portions of the final rules in the coming months. Depending on the final outcome of the reconsideration process, our cost projection may change. Regulation of Water in the U.S. As a result of litigation (some of which is ongoing), additional federal or state permits may be required in the future under the federal Clean Water Act in one or more of the states in which we operate in relation to pollution discharges from forest roads and other drainage features on forest land and the application of pesticides, including herbicides, on forest lands. Such permits, which have not yet been developed, may entail additional costs. However, we do not expect a disproportionate effect on Weyerhaeuser as compared to comparable operations of other forest landowners. |
SHARE-BASED COMPENSATION
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SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION In first half 2011, we granted 1,941,686 stock options, 720,120 restricted stock units, 325,736 performance share units, and 52,869 stock appreciation rights. In addition, 279,308 outstanding restricted stock unit awards vested during first half 2011. A total of 2,662,393 shares of common stock were issued as a result of restricted stock unit vesting and stock option exercises. STOCK OPTIONS The weighted average exercise price of all of the stock options granted in first half 2011 was $24.16. The vesting and post-termination vesting terms for stock options granted in the first half of 2011 were as follows:
Weighted Average Assumptions Used in Estimating the Value of Stock Options Granted in First Half 2011
RESTRICTED STOCK UNITS The weighted average fair value of the restricted stock units granted in first half 2011 was $23.94. The vesting provisions for restricted stock units granted in 2011 were as follows:
PERFORMANCE SHARE UNITS In 2011, as part of a new long-term incentive compensation strategy intended to tie executive compensation more closely to company performance, we granted a target number of performance share units to executives. Performance share units will be converted into shares of Weyerhaeuser stock – to the extent earned – at the end of a four-year timeframe that combines performance and market conditions with vesting requirements. The final number of shares awarded will range from 0 percent to 150 percent of each grant’s target, depending upon actual company performance. The ultimate number of Performance Share Units earned is based on two measures:
At the end of the performance period, performance share unit payouts would be in shares of our stock. Performance share units granted in 2011 and that are earned vest as follows:
The weighted average grant date fair value of the performance share units was $25.52. Since the award contains a market condition, the effect of the market condition is reflected in the grant date fair value which is estimated using a Monte Carlo simulation model. This model estimates the TSR ranking of the company among the S&P 500 index over the 2 year performance period. Compensation expense is based on the estimated probable number of earned awards and recognized over the four-year vesting period on an accelerated basis. Generally, compensation expense would be reversed if the performance condition is not met unless the requisite service period has been achieved. Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in First Half 2011
STOCK APPRECIATION RIGHTS Stock appreciation rights are remeasured to reflect the fair value at each reporting period. The following table shows the weighted average assumptions applied to all outstanding stock appreciation rights as of June 30, 2011. Weighted Average Assumptions Used to Remeasure the Value of Stock Appreciation Rights as of June 30, 2011
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DISCONTINUED OPERATIONS (Tables)
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | The following table summarizes the components of net sales and net earnings from discontinued operations.
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Balance Sheet By Disposal Groups, Including Discontinued Operations [Table Text Block] | Our Consolidated Balance Sheet includes the following assets and liabilities of our hardwoods and Westwood Shipping Lines operations as of June 30, 2011 and December 31, 2010.
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SHARE-BASED COMPENSATION - Weighted Average Assumptions Used in Estimating the Value of Stock Options Granted (Detail) (Stock options, USD $)
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Jun. 30, 2011
years
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Stock options
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 38.56% |
Expected dividends | 2.48% |
Expected term (in years) | 5.73 |
Risk-free rate | 2.65% |
Weighted average grant date fair value | $ 7.54 |
COMPREHENSIVE INCOME (LOSS) (Tables)
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Items Included in Comprehensive Income (Loss) | Items included in our comprehensive income consisted of the following:
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Items Included in Cumulative Other Comprehensive Loss | Items included in our cumulative other comprehensive loss are:
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NET EARNINGS (LOSS) PER SHARE (Tables)
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Pro Forma Results Giving Effect to Common Stock Distribution for Diluted Earnings Per Common Share | Reflected below are pro forma results giving effect to the common stock distribution for diluted earnings per common share for the quarter and year-to-date ended June 30, 2010, as if the common stock distribution had occurred at the beginning of the period. Pro Forma 2010 Diluted Earnings per Share to Reflect Special Dividend
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Potential Shares Not Included in the Computation of Diluted Earnings per Share | Potential Shares Not Included in the Computation of Diluted Earnings (Loss) per Share
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INVENTORIES (Detail) (Forest Products, USD $)
In Millions |
Jun. 30, 2011
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Dec. 31, 2010
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Inventory Disclosure [Line Items] | ||
Other products | $ 91 | $ 79 |
Materials and supplies | 140 | 133 |
Subtotal | 635 | 599 |
Less LIFO reserve | (122) | (121) |
Total | 513 | 478 |
Logs and Chips
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Inventory Disclosure [Line Items] | ||
Forest Products inventories | 72 | 66 |
Lumber, Plywood, Panels and Engineered Lumber
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Inventory Disclosure [Line Items] | ||
Forest Products inventories | 185 | 164 |
Pulp and Paperboard
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Inventory Disclosure [Line Items] | ||
Forest Products inventories | $ 147 | $ 157 |
OTHER OPERATING INCOME, NET (Tables)
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Items Included in Other Operating Income, Net | Items Included in Other Operating Income, Net
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BASIS OF PRESENTATION
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1: BASIS OF PRESENTATION We are a corporation that has elected to be taxed as a real estate investment trust (REIT). As a REIT, we expect to derive most of our REIT income from investments in timberlands, including the sale of standing timber through pay-as-cut sales contracts. REIT income can be distributed to shareholders without first paying corporate level tax, substantially eliminating the double taxation on income. A significant portion of our timberland segment earnings receives this favorable tax treatment. We are, however, subject to corporate taxes on built-in-gains (the excess of fair market value over tax basis at January 1, 2010) on sales of real property (other than standing timber) held by the REIT during the first 10 years following the REIT conversion. We also will continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which principally includes our manufacturing businesses, our real estate development business and our non-qualified timberland segment income. Our consolidated financial statements provide an overall view of our results and financial condition. They include our accounts and the accounts of entities we control, including:
They do not include our intercompany transactions and accounts, which are eliminated, and noncontrolling interests are presented as a separate component of equity. We account for investments in and advances to unconsolidated equity affiliates using the equity method, with taxes provided on undistributed earnings. This means that we record earnings and accrue taxes in the period earnings are recognized by our unconsolidated equity affiliates. We report our financial condition in two groups:
Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” “we” and “our” refer to the consolidated company, including both Forest Products and Real Estate. The accompanying unaudited Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Except as otherwise disclosed in these Notes to Consolidated Financial Statements, such adjustments are of a normal, recurring nature. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements; certain disclosures normally provided in accordance with accounting principles generally accepted in the United States have been omitted. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2010. RECLASSIFICATIONS We have reclassified certain balances and results from the prior year to be consistent with our 2011 reporting. This makes year-to-year comparisons easier. Our reclassifications had no effect on net earnings (loss) or Weyerhaeuser shareholders’ interest. The reclassifications include changes to the way we classify certain transactions as operating, investing or financing on our Consolidated Statement of Cash Flows and to present the results of operations discontinued in 2011 separately on our Consolidated Statement of Operations. Note 2: Discontinued Operations provides information about our discontinued operations. |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
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PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The components of net periodic benefit costs (credits) are:
FAIR VALUE OF PENSION PLAN ASSETS We estimate the fair value of pension plan assets based upon the information available during the year-end reporting process. In some cases, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. When the differences are significant, we revise the year-end estimated fair value of pension plan assets to incorporate year-end net asset values reflected in audited financial statements received after we have filed our annual report on Form 10-K. Based on the final valuations as of December 31, 2010, the fair value of pension assets increased in second quarter 2011 by $138 million, or 2.9 percent. Our consolidated balance sheet as of June 30, 2011, has been adjusted to reflect the net funded status of our pension plans that would have been recorded as of December 31, 2010, if the final asset valuations and participant information had been available to us as of the end of 2010. Based on this information we recorded the following adjustments during second quarter 2011:
EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS During 2011 we expect to:
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