INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

Domestic and Foreign Earnings (Loss) From Continuing Operations Before Income Taxes

Domestic and Foreign Earnings (Loss) From Continuing Operations Before Income Taxes

DOLLAR AMOUNTS IN MILLIONS
	2012			2011			2010
Domestic earnings	$	450		$	341		$	96
Foreign loss	(11		)	(84		)	(14		)
Total	$	439		$	257		$	82

Provision (Benefit) for Income Taxes From Continuing Operations

Provision (Benefit) for Income Taxes From Continuing Operations

DOLLAR AMOUNTS IN MILLIONS
	2012			2011			2010
Current:
Federal	$	(69	)	$	(73	)	$	53
State	(11		)	16			3
Foreign	26			8			9
	(54		)	(49		)	65
Deferred:
Federal	39			11			(1,180		)
State	4			(11		)	(69		)
Foreign	66			(13		)	(8		)
	109			(13		)	(1,257		)
Total income tax provision (benefit)	$	55		$	(62	)	$	(1,192	)

Effective Income Tax Rate Applicable to Continuing Operations

Effective Income Tax Rate Applicable to Continuing Operations

DOLLAR AMOUNTS IN MILLIONS
	2012			2011			2010
U.S. federal statutory income tax	$	154		$	90		$	29
State income taxes, net of federal tax benefit	6			4			4
REIT income not subject to federal income tax	(94		)	(80		)	(37		)
Foreign taxes	8			20			4
Federal income tax credits	—			(4		)	(4		)
Medicare Part D subsidy	—			—			26
Provision for unrecognized tax benefits	(6		)	(7		)	(3		)
REIT conversion benefit	—			—			(1,064		)
Cellulosic biofuel producer credit	—			—			(149		)
Repatriation of Canadian earnings	—			(76		)	—
State income tax settlement	(10		)	—			—
Other, net	(3		)	(9		)	2
Total income tax provision (benefit)	$	55		$	(62	)	$	(1,192	)
Effective income tax rate	12.5		%	(23.3		)%	N/M*
* Not meaningful

Deferred Income Tax Assets (Liabilities) Related to Continuing Operations by Category

Deferred Income Tax Assets (Liabilities) Related to Continuing Operations by Category

DOLLAR AMOUNTS IN MILLIONS
	DECEMBER 31, 2012		DECEMBER 31, 2011
Forest Products:
Current	$	65	$	81
Noncurrent - domestic	106		(129		)
Noncurrent - foreign	83		36
Real Estate	202		240
Net deferred tax assets	$	456	$	228

Items included in Our Deferred Income Tax Assets (Liabilities)

Items Included in Our Deferred Income Tax Assets (Liabilities)

DOLLAR AMOUNTS IN MILLIONS
	DECEMBER 31, 2012			DECEMBER 31, 2011
Postretirement benefits	$	144		$	134
Pension	521			337
Real estate impairments	115			141
State tax credits	59			57
Net operating loss carryforwards	187			162
Cellulosic biofuel producers credit	240			240
Other	336			369
Gross deferred tax assets	1,602			1,440
Valuation allowance	(144		)	(139		)
Net deferred tax assets	1,458			1,301
Property, plant and equipment	(577		)	(610		)
Timber installment notes	(240		)	(277		)
Other	(185		)	(186		)
Deferred tax liabilities	(1,002		)	(1,073		)
Net deferred tax assets	$	456		$	228

Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits

Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits

DOLLAR AMOUNTS IN MILLIONS
	DECEMBER 31, 2012			DECEMBER 31, 2011
Balance at beginning of year	$	251		$	180
Additions based on tax positions related to current year	—			1
Additions for tax positions of prior years	2			91
Reductions for tax positions of prior years	(21		)	(11		)
Foreign currency translation	—			(2		)
Settlements	(53		)	(2		)
Lapse of statute	(2		)	(6		)
Balance at end of year	$	177		$	251