DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2015

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

We have made certain reclassifications in our consolidated financial statements to reflect discontinued operations related to WRECO which was previously reported under the Real Estate segment and Unallocated Items.

OPERATIONS INCLUDED IN DISCONTINUED OPERATIONS

Divestiture of WRECO

On July 7, 2014, we completed the following set of transactions resulting in our homebuilding and real estate development business becoming wholly-owned by TRI Pointe Homes, Inc. (TRI Pointe):

• the distribution of shares of WRECO to our shareholders in exchange for 59 million shares of our common stock; and

• the merger of WRECO into a special purpose subsidiary of TRI Pointe, with WRECO surviving the merger and becoming a wholly-owned subsidiary of TRI Pointe.

Collectively, these transactions are referred to as the “Real Estate Divestiture”.

During June 2014, our wholly-owned subsidiary, WRECO, issued $900 million of unsecured and unsubordinated senior debt obligations. The net proceeds after deducting the discount, underwriting fees and issuance costs were $870 million. At the close of the Real Estate Divestiture in July 2014, WRECO used $744 million of the debt proceeds to repay intercompany debt and interest to Weyerhaeuser Company. The newly issued debt, remaining proceeds and other WRECO assets and liabilities, including $5 million cash on hand, were acquired by TRI Pointe when WRECO became a wholly-owned subsidiary of TRI Pointe at the closing of the transaction. Additionally, $32 million related to the adjustment amount payable pursuant to the terms of the transaction agreement was paid to TRI Pointe. Our net cash proceeds in connection with the Real Estate Divestiture totaled $707 million.

Prior to the distribution of WRECO shares to our shareholders, WRECO was a wholly-owned subsidiary. Concurrent with the distribution to shareholders, WRECO ceased being a subsidiary.

The following table presents the components of the net gain on divestiture:

DOLLAR AMOUNTS IN MILLIONS
	2014
Proceeds:
Common shares tendered (58,813,151 shares at $33.22 per share)	$	1,954
Cash	707
	2,661
Less:
Net book value of contributed assets	(1,671		)
Transaction costs, net of reimbursement	(18		)
	(1,689		)
Gain on WRECO divestiture	$	972

The net gain on the Real Estate Divestiture of $972 million is not taxable and was recognized in 2014 in discontinued operations.

NET EARNINGS FROM DISCONTINUED OPERATIONS

Sales and Net Earnings from Discontinued Operations

	2014(1)			2013
Net sales from discontinued operations	$	573		$	1,275
Income from discontinued operations	42			114
Income taxes	(16		)	(42		)
Net income from operations	26			72
Net gain on divestiture	972			—
Net earnings from discontinued operations	998			72
(1) Discontinued operations in 2014 covered only 188 days.

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.

CARRYING VALUE OF ASSETS AND LIABILITES OF DISCONTINUED OPERATIONS

The following table shows carrying values for assets and liabilities classified as discontinued operations as of December 31, 2013.

Carrying Value of Assets and Liabilities of Discontinued Operations

DOLLAR AMOUNTS IN MILLIONS
	December 31, 2013
Assets
Cash and cash equivalents	$	5
Receivables, less discounts and allowances	51
Prepaid expenses	11
Total current assets	67
Property and equipment, net	15
Real estate in process of development and for sale	851
Land being processed for development	596
Investments in and advances to equity affiliates	21
Deferred tax assets	136
Other assets	96
Total noncurrent assets	1,715
Total assets	$	1,782
Liabilities
Accounts payable	$	41
Accrued liabilities	113
Total current liabilities	154
Long-term debt (nonrecourse to the company) held by variable interest entities	5
Other liabilities	27
Total noncurrent liabilities	32
Total liabilities	$	186
Noncontrolling interests	$	34