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) | |
220 Occidental Avenue South Seattle, Washington | 98104-7800 | |
(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. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 5. | ||
ITEM 6. | ||
QUARTER ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES | MARCH 2017 | MARCH 2016 | |||||
Net sales | $ | 1,693 | $ | 1,405 | |||
Costs of products sold | 1,272 | 1,103 | |||||
Gross margin | 421 | 302 | |||||
Selling expenses | 22 | 23 | |||||
General and administrative expenses | 87 | 79 | |||||
Research and development expenses | 4 | 5 | |||||
Charges for integration and restructuring, closures and asset impairments (Note 15) | 13 | 111 | |||||
Other operating costs (income), net (Note 16) | 2 | (55 | ) | ||||
Operating income | 293 | 139 | |||||
Equity earnings from joint ventures (Note 7) | — | 5 | |||||
Non-operating pension and other postretirement benefit (costs) credits | (22 | ) | 14 | ||||
Interest income and other | 9 | 9 | |||||
Interest expense, net of capitalized interest | (99 | ) | (95 | ) | |||
Earnings from continuing operations before income taxes | 181 | 72 | |||||
Income taxes (Note 17) | (24 | ) | (11 | ) | |||
Earnings from continuing operations | 157 | 61 | |||||
Earnings from discontinued operations, net of income taxes (Note 3) | — | 20 | |||||
Net earnings | 157 | 81 | |||||
Dividends on preference shares (Note 5) | — | (11 | ) | ||||
Net earnings attributable to Weyerhaeuser common shareholders | $ | 157 | $ | 70 | |||
Earnings per share attributable to Weyerhaeuser common shareholders, basic and diluted (Note 5): | |||||||
Continuing operations | $ | 0.21 | $ | 0.08 | |||
Discontinued operations | — | 0.03 | |||||
Net earnings per share | $ | 0.21 | $ | 0.11 | |||
Dividends paid per share | $ | 0.31 | $ | 0.31 | |||
Weighted average shares outstanding (in thousands) (Note 5): | |||||||
Basic | 750,665 | 632,004 | |||||
Diluted | 754,747 | 634,872 |
QUARTER ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | |||||
Net earnings | $ | 157 | $ | 81 | |||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments | 2 | 41 | |||||
Actuarial gains, net of tax expense of $26 and $8 | 29 | 10 | |||||
Prior service costs, net of tax expense of $0 and $1 | (1 | ) | (2 | ) | |||
Unrealized gains on available-for-sale securities | 1 | — | |||||
Total other comprehensive income | 31 | 49 | |||||
Total comprehensive income | $ | 188 | $ | 130 |
DOLLAR AMOUNTS IN MILLIONS | MARCH 31, 2017 | DECEMBER 31, 2016 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 455 | $ | 676 | |||
Receivables, less discounts and allowances of $2 and $1 | 472 | 390 | |||||
Receivables for taxes | 10 | 84 | |||||
Inventories (Note 6) | 386 | 358 | |||||
Prepaid expenses and other current assets | 142 | 114 | |||||
Total current assets | 1,465 | 1,622 | |||||
Property and equipment, less accumulated depreciation of $3,346 and $3,306 | 1,544 | 1,562 | |||||
Construction in progress | 230 | 213 | |||||
Timber and timberlands at cost, less depletion charged to disposals | 14,218 | 14,299 | |||||
Minerals and mineral rights, less depletion | 317 | 319 | |||||
Investments in and advances to joint ventures (Note 7) | 56 | 56 | |||||
Goodwill | 40 | 40 | |||||
Deferred tax assets | 287 | 293 | |||||
Other assets | 229 | 224 | |||||
Restricted financial investments held by variable interest entities | 615 | 615 | |||||
Total assets | $ | 19,001 | $ | 19,243 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt (Note 11) | $ | 343 | $ | 281 | |||
Accounts payable | 227 | 233 | |||||
Accrued liabilities (Note 9) | 452 | 692 | |||||
Total current liabilities | 1,022 | 1,206 | |||||
Long-term debt (Note 11) | 6,263 | 6,329 | |||||
Long-term debt (nonrecourse to the company) held by variable interest entities | 511 | 511 | |||||
Deferred pension and other postretirement benefits (Note 8) | 1,287 | 1,322 | |||||
Deposit from contribution of timberlands to related party (Note 7) | 422 | 426 | |||||
Other liabilities | 281 | 269 | |||||
Total liabilities | 9,786 | 10,063 | |||||
Commitments and contingencies (Note 12) | |||||||
Equity: | |||||||
Common shares: $1.25 par value; authorized 1,360,000,000 shares; issued and outstanding: 751,410,510 and 748,528,131 shares | 939 | 936 | |||||
Other capital | 8,340 | 8,282 | |||||
Retained earnings | 1,364 | 1,421 | |||||
Cumulative other comprehensive loss (Note 13) | (1,428 | ) | (1,459 | ) | |||
Total equity | 9,215 | 9,180 | |||||
Total liabilities and equity | $ | 19,001 | $ | 19,243 |
QUARTER ENDED | ||||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | ||||||
Cash flows from operations: | ||||||||
Net earnings | $ | 157 | $ | 81 | ||||
Noncash charges (credits) to earnings: | ||||||||
Depreciation, depletion and amortization | 133 | — | 142 | |||||
Basis of real estate sold | 14 | — | 17 | |||||
Deferred income taxes, net | 3 | — | 18 | |||||
Gains on sales of non-strategic assets | (7 | ) | (41 | ) | ||||
Pension and other postretirement benefits (Note 8) | 32 | — | 4 | |||||
Share-based compensation expense | 10 | — | 24 | |||||
Equity (earnings) loss from joint ventures (Note 7) | — | — | (3 | ) | ||||
Foreign exchange transaction (gains) losses (Note 16) | 3 | — | (13 | ) | ||||
Change in: | ||||||||
Receivables less allowances | (70 | ) | — | (47 | ) | |||
Receivable/payable for taxes | (36 | ) | — | 10 | ||||
Inventories | (28 | ) | — | (43 | ) | |||
Prepaid expenses | (9 | ) | — | (1 | ) | |||
Accounts payable and accrued liabilities | (137 | ) | — | (70 | ) | |||
Pension and postretirement contributions (Note 8) | (22 | ) | — | (17 | ) | |||
Distributions received from joint ventures | — | — | 5 | |||||
Other | (8 | ) | — | (19 | ) | |||
Net cash from operations | 35 | 47 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures for property and equipment | (52 | ) | — | (57 | ) | |||
Capital expenditures for timberlands reforestation | (23 | ) | — | (16 | ) | |||
Acquisition of timberlands | — | — | (6 | ) | ||||
Proceeds from sale of non-strategic assets | 8 | — | 70 | |||||
Distributions received from joint ventures | — | — | 24 | |||||
Cash and cash equivalents acquired in Plum Creek merger (Note 4) | — | — | 9 | |||||
Other | (1 | ) | — | |||||
Cash from (used in) investing activities | (68 | ) | 24 | |||||
Cash flows from financing activities: | ||||||||
Cash dividends on common shares | (233 | ) | — | (241 | ) | |||
Proceeds from issuance of long-term debt | — | — | 1,098 | |||||
Payments of debt | — | — | (720 | ) | ||||
Repurchase of common stock (Note 5) | — | — | (798 | ) | ||||
Proceeds from exercise of stock options | 55 | 4 | ||||||
Other | (10 | ) | — | (11 | ) | |||
Cash used in financing activities | (188 | ) | (668 | ) | ||||
Net change in cash and cash equivalents | (221 | ) | (597 | ) | ||||
Cash and cash equivalents from continuing operations at beginning of period | 676 | 1,011 | ||||||
Cash and cash equivalents from discontinued operations at beginning of period | — | 1 | ||||||
Cash and cash equivalents at beginning of period | 676 | 1,012 | ||||||
Cash and cash equivalents from continuing operations at end of period | 455 | 411 | ||||||
Cash and cash equivalents from discontinued operations at end of period | — | 4 | ||||||
Cash and cash equivalents at end of period | $ | 455 | $ | 415 | ||||
Cash paid (received) during the period for: | ||||||||
Interest, net of amount capitalized of $3 and $2 | $ | 120 | $ | 125 | ||||
Income taxes | $ | 59 | $ | (13 | ) |
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: | ||
NOTE 14: | ||
NOTE 15: | ||
NOTE 16: | ||
NOTE 17: |
• | majority-owned domestic and foreign subsidiaries and |
• | variable interest entities in which we are the primary beneficiary. |
• | Timberlands – which includes logs, timber and leased recreational access; |
• | Real Estate & ENR – which includes sales of timberlands; rights to explore for and extract hard minerals, oil and gas production and coal; and equity interests in our Real Estate Development Ventures (as defined and described in Note 7: Related Parties); and |
• | Wood Products – which includes softwood lumber, engineered wood products, structural panels, medium density fiberboard and building materials distribution. |
QUARTER ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | |||||
Sales to unaffiliated customers: | |||||||
Timberlands | $ | 486 | $ | 387 | |||
Real Estate & ENR | 53 | 39 | |||||
Wood Products | 1,154 | 979 | |||||
1,693 | 1,405 | ||||||
Intersegment sales: | |||||||
Timberlands | 202 | 222 | |||||
Wood Products | — | 22 | |||||
202 | 244 | ||||||
Total sales | 1,895 | 1,649 | |||||
Intersegment eliminations | (202 | ) | (244 | ) | |||
Total | $ | 1,693 | $ | 1,405 | |||
Net contribution to earnings: | |||||||
Timberlands | $ | 148 | $ | 129 | |||
Real Estate & ENR(1) | 26 | 15 | |||||
Wood Products | 172 | 87 | |||||
346 | 231 | ||||||
Unallocated items(2) | (66 | ) | (64 | ) | |||
Net contribution to earnings | 280 | 167 | |||||
Interest expense, net of capitalized interest | (99 | ) | (95 | ) | |||
Earnings from continuing operations before income taxes | 181 | 72 | |||||
Income taxes | (24 | ) | (11 | ) | |||
Earnings from continuing operations | 157 | 61 | |||||
Earnings from discontinued operations, net of income taxes | — | 20 | |||||
Net earnings | 157 | 81 | |||||
Dividends on preference shares | — | (11 | ) | ||||
Net earnings attributable to Weyerhaeuser common shareholders | $ | 157 | $ | 70 |
(1) | The Real Estate & ENR segment includes the equity earnings from, investments in and advances to our Real Estate Development Ventures (as defined and described in Note 7: Related Parties), which are accounted for under the equity method. |
(2) | Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses associated with financing, the elimination of intersegment profit in inventory and the LIFO reserve. As a result of reclassifying our former Cellulose Fibers segment as discontinued operations, Unallocated items also includes retained indirect corporate overhead costs previously allocated to the former segment. Additionally, amounts shown for 2016 include equity earnings from our former Timberland Venture. As of August 31, 2016, the Timberland Venture became a fully consolidated, wholly-owned subsidiary and therefore eliminated our equity method investment at that time. |
• | sale of our Cellulose Fibers liquid packaging board business to Nippon Paper Industries Co., Ltd, which closed on August 31, 2016; |
• | sale of our Cellulose Fibers printing papers joint venture to One Rock Capital Partners, LLC, which closed on November 1, 2016; and |
• | sale of our Cellulose Fibers pulp business to International Paper, which closed on December 1, 2016. |
QUARTER ENDED | |||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2016 | ||
Total net sales | $ | 430 | |
Costs of products sold | 386 | ||
Gross margin | 44 | ||
Selling expenses | 4 | ||
General and administrative expenses | 9 | ||
Research and development expenses | 1 | ||
Charges for integration and restructuring, closures and asset impairments(1) | 6 | ||
Other operating income, net | (9 | ) | |
Operating income | 33 | ||
Equity loss from joint venture | (2 | ) | |
Interest expense, net of capitalized interest | (2 | ) | |
Earnings from discontinued operations before income taxes | 29 | ||
Income taxes | (9 | ) | |
Net earnings from discontinued operations | $ | 20 |
(1) | Charges for integration and restructuring, closures and asset impairments consist of costs related to our strategic evaluation of the Cellulose Fibers businesses and transaction-related costs. |
QUARTER ENDED | |||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2016 | ||
Net cash provided by (used in) operating activities | $ | 66 | |
Net cash provided by (used in) investing activities | $ | (22 | ) |
QUARTER ENDED | |||
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES | MARCH 2016 | ||
Net sales | $ | 1,561 | |
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders | $ | 144 | |
Earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, basic and diluted | $ | 0.18 |
• | $0.21 during first quarter 2017 and |
• | $0.11 during first quarter 2016. |
QUARTER ENDED | |||||
SHARES IN THOUSANDS | MARCH 2017 | MARCH 2016 | |||
Weighted average number of outstanding common shares – basic | 750,665 | 632,004 | |||
Dilutive potential common shares: | |||||
Stock options | 2,981 | 2,060 | |||
Restricted stock units | 547 | 409 | |||
Performance share units | 554 | 399 | |||
Total effect of outstanding dilutive potential common shares | 4,082 | 2,868 | |||
Weighted average number of outstanding common shares – dilutive | 754,747 | 634,872 |
QUARTER ENDED | |||||
SHARES IN THOUSANDS | MARCH 2017 | MARCH 2016 | |||
Stock options | 1,432 | 6,215 | |||
Performance share units | 568 | 534 | |||
Preference shares | — | 25,307 |
DOLLAR AMOUNTS IN MILLIONS | MARCH 31, 2017 | DECEMBER 31, 2016 | |||||
LIFO Inventories: | |||||||
Logs | $ | 12 | $ | 18 | |||
Lumber, plywood and panels | 60 | 51 | |||||
Other products | 24 | 20 | |||||
FIFO or moving average cost inventories: | |||||||
Logs | 41 | 21 | |||||
Lumber, plywood, panels and engineered wood products | 76 | 71 | |||||
Other products | 85 | 92 | |||||
Materials and supplies | 88 | 85 | |||||
Total | $ | 386 | $ | 358 |
• | our Real Estate Development Ventures, which are accounted for using the equity method and |
• | our Twin Creeks Venture. |
DOLLAR AMOUNTS IN MILLIONS | |||
Balance at December 31, 2016 | $ | 426 | |
Lease payments to Twin Creeks Venture | (5 | ) | |
Distributions from Twin Creeks Venture | 1 | ||
Balance at March 31, 2017 | $ | 422 |
PENSION | |||||||
QUARTER ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | |||||
Service cost(1) | $ | 10 | $ | 13 | |||
Interest cost | 66 | 68 | |||||
Expected return on plan assets | (102 | ) | (123 | ) | |||
Amortization of actuarial loss | 55 | 38 | |||||
Amortization of prior service cost | 1 | 1 | |||||
Accelerated pension costs included in Plum Creek merger-related costs (Note 15) | — | 5 | |||||
Total net periodic benefit cost - pension | $ | 30 | $ | 2 |
(1) | Service cost includes $4 million for the quarter ended March 31, 2016, for employees that were part of our Cellulose Fibers divestitures. These charges are included in our results of discontinued operations. |
OTHER POSTRETIREMENT BENEFITS | |||||||
QUARTER ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | |||||
Interest cost | $ | 2 | $ | 2 | |||
Amortization of actuarial loss | 2 | 2 | |||||
Amortization of prior service credit | (2 | ) | (2 | ) | |||
Total net periodic benefit cost - other postretirement benefits | $ | 2 | $ | 2 |
• | be required to contribute approximately $19 million for our Canadian registered plan; |
• | be required to contribute or make benefit payments for our Canadian nonregistered plans of $3 million; |
• | make benefit payments of $26 million for our U.S. nonqualified pension plans; and |
• | make benefit payments of $21 million for our U.S. and Canadian other postretirement plans. |
DOLLAR AMOUNTS IN MILLIONS | MARCH 31, 2017 | DECEMBER 31, 2016 | |||||
Wages, salaries and severance pay | $ | 97 | $ | 178 | |||
Pension and other postretirement benefits | 48 | 49 | |||||
Vacation pay | 36 | 33 | |||||
Taxes – Social Security and real and personal property | 25 | 20 | |||||
Interest | 89 | 120 | |||||
Customer rebates and volume discounts | 25 | 39 | |||||
Deferred income | 30 | 40 | |||||
Accrued income taxes | 31 | 139 | |||||
Other | 71 | 74 | |||||
Total | $ | 452 | $ | 692 |
MARCH 31, 2017 | DECEMBER 31, 2016 | ||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | CARRYING VALUE | FAIR VALUE (LEVEL 2) | CARRYING VALUE | FAIR VALUE (LEVEL 2) | |||||||||||||
Long-term debt (including current maturities): | |||||||||||||||||
Fixed rate | $ | 6,057 | $ | 7,017 | $ | 6,061 | $ | 6,925 | |||||||||
Variable rate | 549 | 550 | 549 | 550 | |||||||||||||
Total Debt | $ | 6,606 | $ | 7,567 | $ | 6,610 | $ | 7,475 |
• | market approach – based on quoted market prices we received 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. |
• | 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. |
PENSION | OTHER POSTRETIREMENT BENEFITS | ||||||||||||||||||||
DOLLAR AMOUNTS IN MILLIONS | Foreign currency translation adjustments | Actuarial losses | Prior service costs | Actuarial losses | Prior service credits | Unrealized gains on available-for-sale securities | Total | ||||||||||||||
Beginning balance as of December 31, 2016 | $ | 232 | $ | (1,651 | ) | $ | (9 | ) | $ | (67 | ) | $ | 29 | $ | 7 | $ | (1,459 | ) | |||
Other comprehensive income (loss) before reclassifications | 2 | (2 | ) | — | — | — | 1 | 1 | |||||||||||||
Income taxes | — | (6 | ) | — | — | — | — | (6 | ) | ||||||||||||
Net other comprehensive income (loss) before reclassifications | 2 | (8 | ) | — | — | — | 1 | (5 | ) | ||||||||||||
Amounts reclassified from cumulative other comprehensive income (loss)(1) | — | 55 | 1 | 2 | (2 | ) | — | 56 | |||||||||||||
Income taxes | — | (19 | ) | (1 | ) | (1 | ) | 1 | — | (20 | ) | ||||||||||
Net amounts reclassified from cumulative other comprehensive income (loss) | — | 36 | — | 1 | (1 | ) | — | 36 | |||||||||||||
Total other comprehensive income (loss) | 2 | 28 | — | 1 | (1 | ) | 1 | 31 | |||||||||||||
Ending balance as of March 31, 2017 | $ | 234 | $ | (1,623 | ) | $ | (9 | ) | $ | (66 | ) | $ | 28 | $ | 8 | $ | (1,428 | ) | |||
(1) Actuarial losses and prior service credits (cost) are components of net periodic benefit costs (credits). See Note 8: Pension and Other Postretirement Benefit Plans. |
SHARES IN THOUSANDS | Granted | Vested | |||
Restricted Stock Units (RSUs) | 763 | 662 | |||
Performance Share Units (PSUs) | 348 | 142 |
• | vest ratably over four years; |
• | immediately vest in the event of death while employed or disability; |
• | continue to vest upon retirement at an age of at least 62, but a portion of the grant forfeits if retirement occurs before the one year anniversary of the grant; |
• | continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met; and |
• | will forfeit upon termination of employment in all other situations including early retirement prior to age 62. |
• | our relative total shareholder return (TSR) ranking measured against the S&P 500 over a three year period and |
• | our relative TSR ranking measured against an industry peer group of companies over a three year period. |
• | vest 100 percent on the third anniversary of the grant date as long as the individual remains employed by the company; |
• | fully vest in the event the participant dies or becomes disabled while employed; |
• | continue to vest upon retirement at an age of at least 62, but a portion of the grant forfeits if retirement occurs before the one year anniversary of the grant; |
• | continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met and the employee has met the second anniversary of the grant date; and |
• | will forfeit upon termination of employment in all other situations including early retirement prior to age 62. |
Performance Share Units | ||||||
Performance period | 1/1/2017 - 12/31/2019 | |||||
Valuation date average stock price (1) | $ | 32.79 | ||||
Expected dividends | 3.74 | % | ||||
Risk-free rate | 0.68 | % | – | 1.55 | % | |
Expected volatility | 22.71 | % | – | 24.07 | % |
QUARTER ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | |||||
Integration and restructuring charges related to our merger with Plum Creek: | |||||||
Termination benefits | $ | 6 | $ | 45 | |||
Acceleration of share-based compensation related to qualifying terminations | — | 19 | |||||
Acceleration of pension benefits related to qualifying terminations | — | 5 | |||||
Professional services | 3 | 39 | |||||
Other integration and restructuring costs | 3 | 2 | |||||
Total integration and restructuring charges related to our merger with Plum Creek | 12 | 110 | |||||
Charges related to closures and other restructuring activities: | |||||||
Termination benefits | 1 | — | |||||
Other closures and restructuring costs | — | 1 | |||||
Total charges related to closures and other restructuring activities | 1 | 1 | |||||
Total charges for integration and restructuring, closures and impairments | $ | 13 | $ | 111 |
DOLLAR AMOUNTS IN MILLIONS | |||
Accrued severance as of December 31, 2016 | $ | 26 | |
Charges | 7 | ||
Payments | (14 | ) | |
Accrued severance as of March 31, 2017 | $ | 19 |
• | includes both recurring and occasional income and expense items and |
• | can fluctuate from year to year. |
QUARTER ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | |||||
Gain on disposition of nonstrategic assets | $ | (7 | ) | $ | (36 | ) | |
Foreign exchange losses (gains), net | 3 | (13 | ) | ||||
Litigation expense, net | 3 | 3 | |||||
Other, net | 3 | (9 | ) | ||||
Total other operating costs (income), net | $ | 2 | $ | (55 | ) |
• | the effect of general economic conditions, including employment rates, interest rate levels, housing starts, general availability of financing for home mortgages and the relative strength of the U.S. dollar; |
• | market demand for the company's products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions; |
• | changes in currency exchange rates and restrictions on international trade; |
• | performance of our manufacturing operations, including maintenance and capital requirements; |
• | potential disruptions in our manufacturing operations; |
• | the level of competition from domestic and foreign producers; |
• | our ability to successfully realize the expected benefits from the merger with Plum Creek; |
• | the results of our strategic alternatives review of our operations in Uruguay; |
• | the successful execution of our internal plans and strategic initiatives, including restructuring and cost reduction initiatives; |
• | raw material availability and prices; |
• | the effect of weather; |
• | the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters; |
• | energy prices; |
• | transportation and labor availability and costs; |
• | federal tax policies; |
• | the effect of forestry, land use, environmental and other governmental regulations; |
• | legal proceedings; |
• | performance of pension fund investments and related derivatives; |
• | 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; and |
• | other risks and uncertainties identified in our 2016 Annual Report on Form 10-K, which are incorporated herein by reference, as well as those set forth from time to time in our other public statements and other reports and filings with the SEC. |
• | economic activity in Asia, especially Japan and China; |
• | currency exchange rates – particularly the relative value of the U.S. dollar to the euro and the Canadian dollar, and the relative value of the euro to the yen; and |
• | restrictions on international trade, tariffs imposed on imports and the availability and costs of shipping and transportation. |
• | Sales realizations for Timberlands and Wood Products refer to net selling prices – this includes selling price plus freight, minus normal sales deductions. Real Estate transactions are presented at the contract sales price before commissions and closing costs, net of any credits. |
• | Net contribution to earnings does not include interest expense and income taxes. |
QUARTER ENDED | AMOUNT OF CHANGE | ||||||||||
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES | MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | ||||||||
Net sales | $ | 1,693 | $ | 1,405 | $ | 288 | |||||
Costs of products sold | 1,272 | 1,103 | 169 | ||||||||
Operating income | 293 | 139 | 154 | ||||||||
Earnings of discontinued operations, net of tax | — | 20 | (20 | ) | |||||||
Net earnings attributable to Weyerhaeuser common shareholders | 157 | 70 | 87 | ||||||||
Earnings per share attributable to Weyerhaeuser shareholders, basic and diluted | $ | 0.21 | $ | 0.11 | $ | 0.10 |
• | Timberlands sales to unaffiliated customers increased $99 million – 26 percent – primarily due to higher delivered logs sales volumes. The higher volumes are primarily attributable to: |
◦ | the addition of a full quarter of Plum Creek operations; as well as |
◦ | the completion of the sales of our former Cellulose Fibers businesses. Upon completion of the sales of our former Cellulose Fibers businesses, chips and logs previously sold to Cellulose Fibers were sold to unaffiliated customers. |
• | Real Estate & ENR sales to unaffiliated buyers increased $14 million – 36 percent – primarily due to an increase in average price realized per timberland acre and increased ENR sales volume attributable to the operations acquired in our merger with Plum Creek. These increases were partially offset by a decrease in volume of timberland acres sold. |
• | Wood Products sales to unaffiliated customers increased $175 million – 18 percent – primarily due to increased oriented strand board, lumber, and plywood average sales realizations and increased plywood and medium density fiberboard sales volumes attributable to the operations acquired in our merger with Plum Creek. Additionally, upon completion of the sales of our former Cellulose Fibers businesses, chips previously sold to Cellulose Fibers are sales to unaffiliated customers. |
• | Timberlands segment costs of products sold increased $60 million, primarily due to: |
◦ | increased sales volumes as described above and higher depletion rates for timberlands in the West and South as a result of the Plum Creek acquisition, which were measured at fair value as of the merger date; and |
◦ | increased silviculture and reforestation costs, which is attributable to the significant increase in our timberlands holdings resulting from the merger. |
• | Wood Products segment costs of products sold increased $64 million primarily due to increased sales volume as described above. |
• | Intercompany eliminations of costs of products sold decreased $41 million, therefore increasing consolidated cost of products. This reduction in intercompany costs of products sold is primarily due to the completion of the sales of our former Cellulose Fibers businesses. Chips and logs previously sold to Cellulose Fibers are now sales to unaffiliated customers and therefore we no longer eliminate the related cost of products sold. |
• | increased net sales and costs of products sold explained above and |
• | decreased charges recognized related to our merger with Plum Creek – $98 million. |
• | a pretax gain recognized in first quarter 2016 related to the sale of our Federal Way, Washington headquarters campus – $36 million – and |
• | our noncash foreign exchange on debt held by our Canadian entity changed from a foreign exchange gain of $13 million in first quarter 2016 to a foreign exchange loss of $3 million in first quarter 2017 – for a total change of $16 million. |
• | an increase in non-operating pension and other postretirement costs due to a decrease in the expected return on our plan assets and an increase in the amortization of actuarial losses – $36 million – and |
• | a $13 million increase in income taxes from continuing operations attributable to increased earnings generated by our TRSs. |
QUARTER ENDED | AMOUNT OF CHANGE | ||||||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | ||||||||
Net sales to unaffiliated customers: | |||||||||||
Delivered logs(1): | |||||||||||
West | $ | 225 | $ | 215 | $ | 10 | |||||
South | 148 | 101 | 47 | ||||||||
North | 27 | 13 | 14 | ||||||||
Other | 20 | 7 | 13 | ||||||||
Subtotal delivered logs sales | 420 | 336 | 84 | ||||||||
Stumpage and pay-as-cut timber | 12 | 15 | (3 | ) | |||||||
Uruguay operations(2) | 19 | 16 | 3 | ||||||||
Recreational and other lease revenue | 14 | 6 | 8 | ||||||||
Other | 21 | 14 | 7 | ||||||||
Subtotal net sales to unaffiliated customers | 486 | 387 | 99 | ||||||||
Intersegment sales: | |||||||||||
United States | 130 | 144 | (14 | ) | |||||||
Other | 72 | 78 | (6 | ) | |||||||
Subtotal intersegment sales | 202 | 222 | (20 | ) | |||||||
Total sales | $ | 688 | $ | 609 | $ | 79 | |||||
Costs of products sold | $ | 519 | $ | 459 | $ | 60 | |||||
Operating income and Net contribution to earnings | $ | 148 | $ | 129 | $ | 19 |
(1) | The West region includes Washington and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and the timberlands of the Twin Creeks Venture that we manage. |
(2) | Includes logs, plywood and hardwood lumber harvested or produced by our international operations in Uruguay. |
• | a $47 million increase in Southern log sales as a result of a 54 percent increase in delivered logs sales volumes primarily attributable to legacy Plum Creek operations, partially offset by a 5 percent decrease in average sales realizations for delivered logs; |
• | a $14 million increase in Northern log sales attributable to a full quarter of legacy Plum Creek operations in 2017 versus a partial quarter in 2016; |
• | a $10 million increase in Western log sales primarily attributable to a 4 percent increase in average sales realization for delivered logs. |
• | a 41 percent increase in sales volumes attributable to the operations acquired in our merger with Plum Creek; |
• | higher depletion rates for timberlands in the West and South as a result of the Plum Creek acquisition, which were measured at fair value as of the merger date; |
• | the addition of a full quarter of depletion related to the timberlands in the North, as opposed to a partial quarter in the first quarter of 2016; and |
• | increased silviculture and reforestation costs, which is attributable to the significant increase in our timberlands holdings resulting from the merger. |
QUARTER ENDED | AMOUNT OF CHANGE | |||||||
VOLUMES IN THOUSANDS (1)(2) | MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | |||||
Third party log sales – tons: | ||||||||
West | 2,157 | 2,133 | 24 | |||||
South | 4,293 | 2,781 | 1,512 | |||||
North | 454 | 210 | 244 | |||||
Uruguay | 90 | 146 | (56 | ) | ||||
Other | 510 | 169 | 341 | |||||
Total | 7,504 | 5,439 | 2,065 | |||||
Fee harvest volumes – tons: | ||||||||
West | 2,657 | 2,801 | (144 | ) | ||||
South | 6,373 | 5,030 | 1,343 | |||||
North | 622 | 260 | 362 | |||||
Uruguay | 265 | 299 | (34 | ) | ||||
Other | 371 | — | 371 | |||||
Total | 10,288 | 8,390 | 1,898 |
(1) | The West region includes Washington and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin, and Montana. Other includes our Canadian operations and the timberlands of the Twin Creeks Venture that we manage. |
(2) | Western logs are primarily transacted in thousand board feet (MBF) but are converted to ton equivalents for external reporting purposes. |
QUARTER ENDED | AMOUNT OF CHANGE | ||||||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | ||||||||
Net sales to unaffiliated buyers: | |||||||||||
Real estate | $ | 37 | $ | 30 | $ | 7 | |||||
Energy and natural resources | 16 | 9 | 7 | ||||||||
Total | $ | 53 | $ | 39 | $ | 14 | |||||
Costs of products sold | $ | 20 | $ | 20 | $ | — | |||||
Operating income | $ | 26 | $ | 15 | $ | 11 | |||||
Equity earnings from joint venture | — | — | — | ||||||||
Net contribution to earnings | $ | 26 | $ | 15 | $ | 11 |
• | Net real estate sales increased $7 million – 23 percent – attributable to an increase in average price realized per acre due to mix of properties sold. This increase was partially offset by decreases in volume of acres sold. |
• | Net energy and natural resources sales increased $7 million – 78 percent, due primarily to increases in sales volumes attributable to the operations acquired in our merger with Plum Creek. |
• | Lower basis of real estate sold, which is attributable to the mix of Weyerhaeuser and Plum Creek legacy properties sold. |
• | Energy and natural resources costs of products sold increased proportionately to the increase in ENR sales volumes. |
QUARTER ENDED | AMOUNT OF CHANGE | ||||||||||
MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | |||||||||
Acres sold | 13,257 | 15,225 | (1,968 | ) | |||||||
Average price per acre | $ | 2,403 | $ | 1,980 | $ | 423 |
QUARTER ENDED | AMOUNT OF CHANGE | ||||||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | ||||||||
Net sales: | |||||||||||
Structural lumber | $ | 478 | $ | 419 | $ | 59 | |||||
Engineered solid section | 117 | 109 | 8 | ||||||||
Engineered I-joists | 73 | 66 | 7 | ||||||||
Oriented strand board | 203 | 163 | 40 | ||||||||
Softwood plywood | 44 | 35 | 9 | ||||||||
Medium density fiberboard | 47 | 17 | 30 | ||||||||
Other products produced | 70 | 49 | 21 | ||||||||
Complementary building products | 122 | 121 | 1 | ||||||||
Total | $ | 1,154 | $ | 979 | $ | 175 | |||||
Costs of products sold | $ | 926 | $ | 862 | $ | 64 | |||||
Operating income and Net contribution to earnings | $ | 172 | $ | 87 | $ | 85 |
• | a $59 million increase in lumber sales, attributable to a 13 percent increase in average sales realizations; |
• | a $40 million increase in oriented strand board sales, attributable to a 23 percent increase in average sales realizations; |
• | a $30 million increase in medium density fiberboard sales attributable to a full quarter of legacy Plum Creek operations in 2017 versus a partial quarter in 2016 and a 4 percent increase in average sales realizations; |
• | a $21 million increase in other products produced, primarily attributable to increased chip sales, which were previously sold to our former Cellulose Fibers segment and were intersegment sales during first quarter 2016. Upon completion of the sales of our former Cellulose Fibers businesses, chips previously sold to Cellulose Fibers are sales to unaffiliated customers. |
• | a $9 million increase in plywood sales, attributable to a 19 percent increase in average sales realizations and a 7 percent increase in sales volumes. |
QUARTER ENDED | AMOUNT OF CHANGE | |||||||
VOLUMES IN MILLIONS(1) | MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | |||||
Structural lumber – board feet | 1,158 | 1,152 | 6 | |||||
Engineered solid section – cubic feet | 6.2 | 5.5 | 0.7 | |||||
Engineered I-joists – lineal feet | 49 | 44 | 5 | |||||
Oriented strand board – square feet (3/8”) | 769 | 759 | 10 | |||||
Softwood plywood – square feet (3/8”) | 118 | 110 | 8 | |||||
Medium density fiberboard – square feet (3/4”) | 59 | 23 | 36 |
(1) | Sales volumes include sales of internally produced products and products purchased for resale primarily through our distribution business. |
QUARTER ENDED | AMOUNT OF CHANGE | |||||||
VOLUMES IN MILLIONS | MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | |||||
Structural lumber – board feet: | ||||||||
Production | 1,152 | 1,129 | 23 | |||||
Outside purchase | 49 | 56 | (7 | ) | ||||
Total | 1,201 | 1,185 | 16 | |||||
Engineered solid section – cubic feet: | ||||||||
Production | 6.3 | 5.6 | 0.7 | |||||
Outside purchase | — | — | — | |||||
Total | 6.3 | 5.6 | 0.7 | |||||
Engineered I-joists – lineal feet: | ||||||||
Production | 50 | 46 | 4 | |||||
Outside purchase | 2 | 1 | 1 | |||||
Total | 52 | 47 | 5 | |||||
Oriented strand board – square feet (3/8”): | ||||||||
Production | 758 | 749 | 9 | |||||
Outside purchase | 98 | 57 | 41 | |||||
Total | 856 | 806 | 50 | |||||
Softwood plywood – square feet (3/8”): | ||||||||
Production | 97 | 88 | 9 | |||||
Outside purchase | 19 | 20 | (1 | ) | ||||
Total | 116 | 108 | 8 | |||||
Medium density fiberboard – square feet (3/4"): | ||||||||
Production | 56 | 25 | 31 | |||||
Outside purchase | — | — | — | |||||
Total | 56 | 25 | 31 |
QUARTER ENDED | AMOUNT OF CHANGE | ||||||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | ||||||||
Unallocated corporate function expense | $ | (19 | ) | $ | (17 | ) | $ | (2 | ) | ||
Unallocated share-based compensation | (6 | ) | (2 | ) | (4 | ) | |||||
Unallocated pension service costs | (2 | ) | (2 | ) | — | ||||||
Foreign exchange gain (loss) | (3 | ) | 13 | (16 | ) | ||||||
Elimination of intersegment profit in inventory and LIFO | (6 | ) | (6 | ) | — | ||||||
Gains on sales of non-strategic assets | 3 | 36 | (33 | ) | |||||||
Plum Creek merger- and integration-related costs | (12 | ) | (110 | ) | 98 | ||||||
Other | (8 | ) | (4 | ) | (4 | ) | |||||
Operating income (loss) | (53 | ) | (92 | ) | 39 | ||||||
Equity earnings from joint venture(1) | — | 5 | (5 | ) | |||||||
Non-operating pension and other postretirement benefit (costs) credits (2) | (22 | ) | 14 | (36 | ) | ||||||
Interest income and other | 9 | 9 | — | ||||||||
Net contribution to earnings | $ | (66 | ) | $ | (64 | ) | $ | (2 | ) |
(1) | First quarter 2016 includes equity earnings from our Timberland Venture, which effective August 31, 2016, is consolidated as a wholly-owned subsidiary. |
• | charges recognized in first quarter 2016 related to our merger with Plum Creek (refer to Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments) – $98 million; |
• | a pretax gain recognized in first quarter 2016 related to the sale of our Federal Way, Washington headquarters campus, which is recorded in "Other operating costs (income), net" in our Consolidated Statement of Operations – $36 million; |
• | a change from a gain in first quarter 2016 to a loss in first quarter 2017 on foreign exchange related to debt held by our Canadian entity – $16 million; and |
• | an increase in non-operating pension and other postretirement costs due to a decrease in the expected return on our plan assets and an increase in the amortization of actuarial losses – $36 million. |
• | $99 million for the first quarter 2017 and |
• | $95 million for the first quarter 2016. |
• | $24 million for the first quarter 2017 and |
• | $11 million for the first quarter 2016. |
• | protect the interests of our shareholders and lenders and |
• | have access at all times to all major financial markets. |
• | $35 million in 2017 and |
• | $47 million in 2016. |
• | decreased operating cash flows from discontinued operations – $66 million; |
• | an increase in cash paid for income taxes of $72 million; |
• | an increase in pension and postretirement contributions - $5 million; and |
• | a decrease in distributions received from joint ventures - $5 million. |
• | $(68) million in 2017 and |
• | $24 million in 2016. |
• | proceeds received in 2016 from the sale of our Federal Way, Washington headquarters campus – $70 million – and |
• | distributions received from joint ventures during 2016 – $24 million. |
QUARTER ENDED | |||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | |||||
Timberlands | $ | 30 | $ | 20 | |||
Real Estate & ENR | — | — | |||||
Wood Products | 44 | 29 | |||||
Unallocated Items | 1 | 2 | |||||
Discontinued operations | — | 22 | |||||
Total | $ | 75 | $ | 73 |
• | capital allocation priorities, |
• | future economic conditions, |
• | environmental regulations, |
• | changes in the composition of our business, |
• | weather and |
• | timing of equipment purchases. |
• | $188 million in 2017 and |
• | $668 million in 2016. |
• | repayment of Plum Creek's line of credit and term loan outstanding at the merger date in 2016 – $720 million –, and |
• | decrease in cash paid to repurchase common shares – $798 million. |
• | $55 million in 2017 and |
• | $4 million in 2016. |
• | $233 million in 2017 and |
• | $241 million in 2016. |
QUARTER ENDED | AMOUNT OF CHANGE | ||||||||||
DOLLAR AMOUNTS IN MILLIONS | MARCH 2017 | MARCH 2016 | 2017 VS. 2016 | ||||||||
Adjusted EBITDA by Segment: | |||||||||||
Timberlands | $ | 242 | $ | 199 | $ | 43 | |||||
Real Estate & ENR | 43 | 34 | 9 | ||||||||
Wood Products | 207 | 117 | 90 | ||||||||
492 | 350 | 142 | |||||||||
Unallocated Items | (38 | ) | (14 | ) | (24 | ) | |||||
Total | $ | 454 | $ | 336 | $ | 118 |
DOLLAR AMOUNTS IN MILLIONS | Timberlands | Real Estate & ENR | Wood Products | Unallocated Items | Total | ||||||||||||||
Adjusted EBITDA by Segment: | |||||||||||||||||||
Net earnings | $ | 157 | |||||||||||||||||
Earnings from discontinued operations, net of income taxes | — | ||||||||||||||||||
Interest expense, net of capitalized interest | 99 | ||||||||||||||||||
Income taxes | 24 | ||||||||||||||||||
Net contribution to earnings | $ | 148 | $ | 26 | $ | 172 | $ | (66 | ) | $ | 280 | ||||||||
Equity earnings from joint ventures | — | — | — | — | — | ||||||||||||||
Non-operating pension and other postretirement benefit (costs) credits | — | — | — | 22 | 22 | ||||||||||||||
Interest income and other | — | — | — | (9 | ) | (9 | ) | ||||||||||||
Operating income (loss) | 148 | 26 | 172 | (53 | ) | 293 | |||||||||||||
Depreciation, depletion and amortization | 94 | 3 | 35 | 1 | 133 | ||||||||||||||
Basis of real estate sold | — | 14 | — | — | 14 | ||||||||||||||
Unallocated pension service costs | — | — | — | 2 | 2 | ||||||||||||||
Special items(1) | — | — | — | 12 | 12 | ||||||||||||||
Adjusted EBITDA | $ | 242 | $ | 43 | $ | 207 | $ | (38 | ) | $ | 454 |
(1) | Special items include: $12 million of Plum Creek merger-related costs. |
DOLLAR AMOUNTS IN MILLIONS | Timberlands | Real Estate & ENR | Wood Products | Unallocated Items | Total | ||||||||||||||
Adjusted EBITDA by Segment: | |||||||||||||||||||
Net earnings | $ | 81 | |||||||||||||||||
Earnings from discontinued operations, net of income taxes | (20 | ) | |||||||||||||||||
Interest expense, net of capitalized interest | 95 | ||||||||||||||||||
Income taxes | 11 | ||||||||||||||||||
Net contribution to earnings | $ | 129 | $ | 15 | $ | 87 | $ | (64 | ) | $ | 167 | ||||||||
Equity earnings from joint ventures | — | — | — | (5 | ) | (5 | ) | ||||||||||||
Non-operating pension and other postretirement benefit costs (credits) | — | — | — | (14 | ) | (14 | ) | ||||||||||||
Interest income and other | — | — | — | (9 | ) | (9 | ) | ||||||||||||
Operating income (loss) | 129 | 15 | 87 | (92 | ) | 139 | |||||||||||||
Depreciation, depletion and amortization | 70 | 2 | 30 | 2 | 104 | ||||||||||||||
Basis of real estate sold | — | 17 | — | — | 17 | ||||||||||||||
Unallocated pension service costs | — | — | — | 2 | 2 | ||||||||||||||
Special items(1) | — | — | — | 74 | 74 | ||||||||||||||
Adjusted EBITDA | $ | 199 | $ | 34 | $ | 117 | $ | (14 | ) | $ | 336 |
(1) | Special items include: a $36 million gain on the sale of nonstrategic assets and $110 million of Plum Creek merger-related costs. |
• | scheduled principal repayments for the next five years and after; |
• | weighted average interest rates for debt maturing in each of the next five years and after; and |
• | estimated fair values of outstanding obligations. |
DOLLAR AMOUNTS IN MILLIONS | ||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | THEREAFTER | TOTAL | FAIR VALUE | |||||||||||||||||
Fixed-rate debt (1) | $ | 281 | $ | 62 | $ | 500 | $ | — | $ | 719 | $ | 4,450 | $ | 6,012 | $ | 7,017 | ||||||||
Average interest rate | 6.95 | % | 7.00 | % | 7.38 | % | — | % | 5.60 | % | 6.39 | % | 6.41 | % | N/A | |||||||||
Variable-rate debt (1) | $ | — | $ | — | $ | — | $ | 550 | $ | — | $ | — | $ | 550 | $ | 550 | ||||||||
Average interest rate | — | % | — | % | — | % | 2.01 | % | — | % | — | % | 2.01 | % | N/A |
10.1 | Revolving Credit Facility Agreement dated as of March 6, 2017, among Weyerhaeuser Company, as Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as Co-Administrative Agent, and Wells Fargo Bank, National Association, as Co-Administrative Agent and Paying Agent (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, File No. 1-4825, filed on March 10, 2017) |
12.1 | |
31.1 | |
32.1 | |
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 |
WEYERHAEUSER COMPANY | ||
Date: | April 28, 2017 | |
By: | /s/ Jeanne M. Hillman | |
Jeanne M. Hillman | ||
Vice President and Chief Accounting Officer |
YEAR-TO-DATE ENDED | |||||||
MARCH 2017 | MARCH 2016 | ||||||
Available earnings: | |||||||
Earnings from continuing operations before interest expense, amortization of debt expense and income taxes | $ | 280 | $ | 168 | |||
Add: interest portion of rental expense | 4 | 4 | |||||
Add: distributed income of equity affiliates | — | — | |||||
Add: undistributed (income) losses of equity affiliates and income attributable to noncontrolling interests in subsidiaries | — | 24 | |||||
Available earnings | $ | 284 | $ | 196 | |||
Fixed charges: | |||||||
Interest expense and other financial charges | $ | 102 | $ | 98 | |||
Interest portion of rental expense | 4 | 4 | |||||
Total fixed charges | 106 | 102 | |||||
Dividends on preference shares (pretax) | — | 14 | |||||
Total fixed charges and preference dividends | $ | 106 | $ | 116 | |||
Ratio of earnings to fixed charges | 2.68 | 1.92 | |||||
Ratio of earnings to combined fixed charges and preference dividends | 2.68 | 1.69 |
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: | April 28, 2017 | |
/s/ DOYLE R. SIMONS | ||
Doyle R. Simons 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: | April 28, 2017 | |
/s/ RUSSELL S. HAGEN | ||
Russell S. Hagen Senior Vice President and Chief Financial Officer |
/s/ DOYLE R. SIMONS | ||
Doyle R. Simons President and Chief Executive Officer | ||
Dated: | April 28, 2017 | |
/s/ RUSSELL S. HAGEN | ||
Russell S. Hagen Senior Vice President and Chief Financial Officer | ||
Dated: | April 28, 2017 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 21, 2017 |
|
Document Information [Line Items] | ||
Entity Registrant Name | WEYERHAEUSER CO | |
Trading Symbol | WY | |
Entity Central Index Key | 0000106535 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 751,932,664 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Net earnings | $ 157 | $ 81 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 2 | 41 |
Actuarial gains, net of tax expense of $26 and $8 | 29 | 10 |
Prior service costs, net of tax expense of $0 and $1 | (1) | (2) |
Unrealized gains on available-for-sale securities | 1 | 0 |
Total other comprehensive income | 31 | 49 |
Total comprehensive income | $ 188 | $ 130 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions |
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Mar. 31, 2017 |
Mar. 31, 2016 |
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Tax expense (benefit) of actuarial gains (losses) | $ 26 | $ 8 |
Tax expense (benefit) of prior service credits (costs) | $ 0 | $ 1 |
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
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Receivables, allowances | $ 2 | $ 1 |
Property and equipment, accumulated depreciation | $ 3,346 | $ 3,306 |
Common shares, par value | $ 1.25 | $ 1.25 |
Common shares, authorized | 1,360,000,000 | 1,360,000,000 |
Common shares, issued | 751,410,510 | 748,528,131 |
Common shares, outstanding | 751,410,510 | 748,528,131 |
CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions |
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Mar. 31, 2016 |
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Interest, amount capitalized | $ 3 | $ 2 |
BASIS OF PRESENTATION |
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BASIS OF PRESENTATION | BASIS OF PRESENTATION We are a corporation that has elected to be taxed as a real estate investment trust (REIT). We expect to derive most of our REIT income from investments in timberlands, including the sale of standing timber. As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our taxable REIT subsidiaries (TRSs), which includes our Wood Products segment and portions of our Timberlands and Real Estate, Energy and Natural Resources (Real Estate & ENR) segments. 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. 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. Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” “we,” “the company” and “our” refer to the consolidated company. 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 information and footnote disclosures normally included in our annual Consolidated Financial Statements have been condensed or omitted. These quarterly 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, 2016. Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year. RECLASSIFICATIONS We have reclassified certain balances and results from the prior year to be consistent with our 2017 reporting. This makes year-to-year comparisons easier. Our reclassifications had no effect on consolidated net earnings or equity. Our reclassifications present 1) our adoption of new accounting pronouncements and 2) the results of discontinued operations separately from results of continuing operations on our Consolidated Statement of Operations, Consolidated Balance Sheet and in the related footnotes. Note 3: Discontinued Operations provides information about our discontinued operations. NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, a comprehensive new revenue recognition model that requires an entity to recognize revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, which deferred the effective date for an additional year. In March 2016, FASB issued ASU 2016-08, which does not change the core principle of the guidance; however, it does clarify the implementation guidance on principal versus agent considerations. In April 2016, FASB issued ASU 2016-10, which clarifies two aspects of ASU 2014-09: identifying performance obligations and the licensing implementation guidance. In May 2016, FASB issued ASU 2016-12, which amends ASU 2014-09 to provide improvements and practical expedients to the new revenue recognition model. In December 2016, the FASB issued ASU 2016-20, which amends ASU 2014-09 for technical corrections and to correct for unintended application of the guidance. Finally, in February 2017, FASB issued ASU 2017-05, which clarifies the scope of ASC 610-20 and impacts accounting for partial sales of nonfinancial assets. The company expects to adopt and implement the new revenue recognition guidance effective January 1, 2018. The new standard is required to be applied retrospectively to each prior reporting period presented (full retrospective transition method) or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application (cumulative effect method). We expect to adopt using the cumulative effect method. We expect that the adoption of the new revenue recognition guidance will not materially impact our operating results, balance sheet, cash flows or financial reporting aside from adding expanded disclosures. In July 2015, FASB issued ASU 2015-11, which simplifies the measurement of inventories valued under most methods, including our inventories valued under FIFO – the first-in, first-out – and moving average cost methods. Inventories valued under LIFO – the last-in, first-out method – are excluded. Under this new guidance, inventories valued under these methods would be valued at the lower of cost or net realizable value, with net realizable value defined as the estimated selling price less reasonable costs to sell the inventory. The new guidance is effective prospectively for fiscal periods starting after December 15, 2016, and early adoption is permitted. We adopted on January 1, 2017, and determined this pronouncement does not have a material impact on our consolidated financial statements and related disclosures. In February 2016, FASB issued ASU 2016-02, which requires lessees to recognize assets and liabilities for the rights and obligations created by those leases and requires both capital and operating leases to be recognized on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. We expect to adopt on January 1, 2019, and are evaluating the impact on our consolidated financial statements and related disclosures. In October 2016, FASB issued ASU 2016-16, which requires immediate recognition of the income tax consequences upon intra-entity transfers of assets other than inventory. The new guidance is effective for annual periods beginning after December 15, 2017, and early adoption is permitted. We adopted this accounting standard on January 1, 2017. As a result of this adoption, our opening balance sheet was adjusted through retained earnings to include a deferred tax asset of $22 million for prior period intra-entity transfers. Adoption of this standard did not have a material impact on our Consolidated Statement of Cash Flows or Consolidated Statement of Operations. In March 2017, FASB issued ASU 2017-07, which requires that an employer report the service cost component of pension and other postretirement benefit costs in the Consolidated Statement of Operations in the same line item or items as other compensation costs arising from services rendered by the pertinent employees. This requirement is consistent with how we have historically presented our pension service costs. The other requirement of this ASU is to present the remaining components of pension and other postretirement benefit costs (i.e., interest, expected return on plan assets, amortization of actuarial gains or losses, and amortization of prior service credits or costs) in the Consolidated Statement of Operations separately from the service cost component and outside a subtotal of income from operations. The new guidance is effective for annual periods beginning after December 15, 2017, and early adoption is permitted. We have adopted this accounting standard as of January 1, 2017. As a result, we have reclassified amounts related to other components of pension and other post retirement benefit costs from their prior financial statements captions ("Costs of products sold," "General and administrative expenses," and "Other operating costs (income), net") into a new financial statement caption titled "Non-operating pension and other postretirement benefit (costs) credits" in our Consolidated Statement of Operations. The adoption of this ASU does not impact "Net earnings," nor does it impact our Consolidated Balance Sheet. |
BUSINESS SEGMENTS |
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BUSINESS SEGMENTS | BUSINESS SEGMENTS Reportable business segments are determined based on the company’s management approach. The management approach, as defined by FASB ASC 280, “Segment Reporting,” is based on the way the chief operating decision maker organizes the segments within a company for making decisions about resources to be allocated and assessing their performance. We are principally engaged in growing and harvesting timber; manufacturing, distributing, and selling products made from trees; maximizing the value of every acre we own through the sale of higher and better use (HBU) properties; and monetizing reserves of minerals, oil, gas, coal, and other natural resources on our timberlands. The following is a brief description of each of our reportable business segments and activities:
Discontinued operations as presented herein consist of the operations of our former Cellulose Fibers segment. All periods presented have been revised to separate the results of discontinued operations from the results of our continuing operations. Refer to Note 3: Discontinued Operations for more information regarding our discontinued operations. On October 12, 2016, we announced the exploration of strategic alternatives for our timberlands and manufacturing operations in Uruguay. We intend to consider a broad range of alternatives, including continuing to hold and operate the business, or a sale. The related assets and liabilities of our Uruguay operations have not met the criteria for classification as "held for sale" and are not included in our results of discontinued operations. An analysis and reconciliation of our business segment information to the respective information in the Consolidated Statements of Operations is as follows:
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DISCONTINUED OPERATIONS (Notes) |
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DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS During 2016, we entered into three separate transactions to sell our Cellulose Fibers business. As a result of these transactions, the company recognized a pretax gain on disposition of $789 million and total cash proceeds of $2.5 billion in the second half of 2016. These transactions consisted of:
The results of operations for our pulp and liquid packaging board businesses, along with our interest in our printing papers joint venture, were reclassified to discontinued operations during our 2016 reporting year. These results have been summarized in "Earnings from discontinued operations, net of income taxes" on our Consolidated Statement of Operations for each period presented. We did not reclassify our Consolidated Statement of Cash Flows to reflect discontinued operations. The following table presents net earnings from discontinued operations. As all discontinued operations were sold in 2016, no assets or liabilities remain as of March 31, 2017 or December 31, 2016.
Cash flows from discontinued operations for the three months ended March 31, 2016 are as follows:
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MERGER WITH PLUM CREEK (Notes) |
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MERGER WITH PLUM CREEK | MERGER WITH PLUM CREEK On February 19, 2016, we merged with Plum Creek Timber Company, Inc. (Plum Creek). Plum Creek was a REIT that primarily owned and managed timberlands in the United States. Plum Creek also produced wood products, developed opportunities for mineral and other natural resource extraction, and sold real estate properties. The acquisition of total assets of $10.0 billion was a noncash investing and financing activity comprised of $6.4 billion in equity consideration transferred and $3.6 billion of liabilities assumed. Summarized unaudited pro forma information that presents combined amounts as if this merger occurred at the beginning of 2016 is as follows:
Pro forma net earnings attributable to Weyerhaeuser common shareholders exclude $131 million non-recurring merger-related costs (net of tax) incurred in the quarter ended March 31, 2016. Pro forma data may not be indicative of the results that would have been obtained had these events occurred at the beginning of the periods presented, nor is it intended to be a projection of future results. |
NET EARNINGS PER SHARE |
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NET EARNINGS PER SHARE | NET EARNINGS PER SHARE AND SHARE REPURCHASES NET EARNINGS PER SHARE Our basic and diluted earnings per share attributable to Weyerhaeuser shareholders were:
Basic earnings per share is net earnings available to common shareholders divided by the weighted average number of our outstanding common shares, including stock equivalent units where there is no circumstance under which those shares would not be issued. Diluted earnings per share is net earnings available to common shareholders divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares:
We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units. 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. We issued 13.8 million 6.375 percent Mandatory Convertible Preference Shares, Series A on June 24, 2013, the majority of which remained outstanding through June 30, 2016. Preference Shares outstanding during the quarter ended March 31, 2016, were considered antidilutive and were not considered participating. On July 1, 2016, all outstanding 6.375 percent Mandatory Convertible Preference Shares, Series A (Preference Shares) converted into Weyerhaeuser common shares at a rate of 1.6929 Weyerhaeuser common shares per Preference Share. There were no preference shares outstanding as of March 31, 2017. Potential Shares Not Included in the Computation of Diluted Earnings per Share The following shares were not included in the computation of diluted earnings 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.
STOCK REPURCHASE PROGRAM The 2016 Share Repurchase Authorization was approved in November 2015 by our Board of Directors and authorized management to repurchase up to $2.5 billion of outstanding shares. During first quarter 2017, we did not repurchase any shares. As of March 31, 2017, we had remaining authorization of $500 million for future stock repurchases. |
INVENTORIES |
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INVENTORIES | INVENTORIES Inventories include raw materials, work-in-process and finished goods.
LIFO – the last-in, first-out method – applies to major inventory products held at our U.S. domestic locations. The FIFO – the first-in, first-out method – or moving average cost methods apply to the balance of our domestic raw material and product inventories as well as for all material and supply inventories and all foreign inventories. If we used FIFO for all LIFO inventories, our stated inventories would have been higher by $71 million as of March 31, 2017, and December 31, 2016. |
RELATED PARTIES (Notes) |
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RELATED PARTIES | RELATED PARTIES This note provides details about our transactions with related parties. Our related parties consist of:
Real Estate Development Ventures WestRock-Charleston Land Partners, LLC (WR-CLP) is a limited liability company which holds residential and commercial real estate development properties, currently under development (Class A Properties) and higher-value timber and development lands (Class B Properties) (referred to collectively as the Real Estate Development Ventures). Our share of the equity earnings are included in the net contribution to earnings of our Real Estate & ENR segment. The carrying amount of our investment in WR-CLP is $56 million at March 31, 2017 and December 31, 2016. We record our share of net earnings within "Equity earnings from joint ventures" in our Consolidated Statement of Operations in the period which earnings are recorded by the affiliates. We did not have any equity earnings from joint ventures during first quarter 2017. Twin Creeks Venture On April 1, 2016, we contributed approximately 260,000 acres of our southern timberlands with an agreed-upon value of approximately $560 million to Twin Creeks Timber, LLC (Twin Creeks Venture), in exchange for cash of approximately $440 million and a 21 percent ownership interest. In conjunction with contributing to the venture, we entered into a separate agreement to manage the timberlands owned by the Twin Creeks Venture, including harvesting activities, marketing and log sales activities, and replanting and silviculture activities. This management agreement guarantees the Twin Creeks Venture an annual return equal to 3 percent of the contributed value of the managed timberlands in the form of minimum quarterly payments from Weyerhaeuser. We are also required to annually distribute 75 percent of any profits earned by us in excess of the minimum quarterly payments. The management agreement is cancellable at any time by Twin Creeks Timber, LLC, and otherwise will expire on April 1, 2019. Changes in our "Deposit from contribution of timberlands to related party" balance during first quarter 2017 were as follows:
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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:
On January 1, 2017, we adopted ASU 2017-07, which affects where components of pension and other postretirement costs are presented on the Consolidated Statement of Operations. Refer to Note 1: Basis of Presentation for further information. FAIR VALUE OF PENSION PLAN ASSETS AND OBLIGATION 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. We update the year-end estimated fair value of pension plan assets to incorporate year-end net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K. We expect to complete the valuation of our pension plan assets during second quarter 2017. The final adjustments could affect net pension periodic benefit cost. EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS In 2017 we expect to:
We do not anticipate making a contribution to our U.S. qualified pension plans for 2017. |
ACCRUED LIABILITIES |
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ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities were comprised of the following:
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LINES OF CREDIT LINES OF CREDIT |
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Debt Disclosure [Abstract] | |
LINES OF CREDIT | LINES OF CREDIT During March 2017, we entered into a new $1.5 billion five-year senior unsecured revolving credit facility that expires in March 2022. This replaces a $1 billion senior unsecured revolving credit facility that was set to expire September 2018. The entire amount is available to Weyerhaeuser Company. Borrowings are at LIBOR plus a spread or at other interest rates mutually agreed upon between the borrower and the lending banks. There were no borrowings or repayments under our available credit facilities in first quarter 2017. |
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FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair values and carrying values of our long-term debt consisted of the following:
To estimate the fair value of fixed rate long-term debt, we used the following valuation approaches:
We believe that our variable rate long-term debt instruments have net carrying values that approximate their fair values with only insignificant differences. The inputs to these 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. FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS We believe that our other financial instruments, including cash and cash equivalents, short-term investments, mutual fund investments held in grantor trusts, receivables, and payables, have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to the short-term nature of these instruments and the allowance for doubtful accounts. |
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES |
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LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES | LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES LEGAL PROCEEDINGS We are party to various legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceeding that management believes could have a material adverse effect on our long-term consolidated financial position, results of operations or cash flows. See Note 17: Income Taxes for a discussion of a tax proceeding involving Plum Creek REIT's 2008 U.S. federal income tax return. ENVIRONMENTAL MATTERS Site Remediation Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) – commonly known as the Superfund – and similar state laws, we:
We have received notification from the Environmental Protection Agency (the EPA) and have acknowledged that we are a potentially responsible party in a portion of the Kalamazoo River Superfund site in southwest Michigan. Our involvement in the remediation site is based on our former ownership of the Plainwell, Michigan mill located within the remediation site. Several other companies also operated upstream pulp mills within the remediation site. We are currently cooperating with the other parties to jointly implement an administrative order issued by the EPA on April 14, 2016 with respect to a portion of the site comprising a stretch of the river approximately 1.7 miles long referred to as the Otsego Township Dam Area. We do not expect to incur material losses related to the implementation of this administrative order; however, we may incur additional costs, as yet not specified, in connection with remediation tasks resulting from other areas of the site. The company, along with others, was named as a defendant by Georgia-Pacific Consumer Products LP, Fort James Corporation and Georgia Pacific LLC in an action seeking contribution under CERCLA for remediation costs relating to the site. The trial has been concluded but a decision on cost contribution and allocation has not yet been rendered by the Court. As of March 31, 2017, our total accrual for future estimated remediation costs on the active Superfund sites and other sites for which we are responsible was approximately $48 million. These reserves are recorded in "Accrued liabilities" (current) and "Other liabilities" (noncurrent) on our Consolidated Balance Sheet. 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 March 31, 2017, our accrued balance for these obligations was $31 million. These obligations are recorded in "Accrued liabilities" (current) and "Other liabilities" (noncurrent) on our Consolidated Balance Sheet. The accruals have not changed materially since the end of 2016. Some of our sites have materials containing asbestos. We have met our current legal obligation to identify and manage these materials. In situations where we cannot reasonably determine when materials containing asbestos might be removed from the sites, we have not recorded an accrual because the fair value of the obligation cannot be reasonably estimated. |
CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS) |
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CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS) | CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS) Changes in amounts included in our cumulative other comprehensive income (loss) by component are:
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SHARE-BASED COMPENSATION |
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SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-based compensation activity in first quarter 2017 included the following:
A total of 2.9 million shares of common stock were issued as a result of RSU vesting, PSU vesting and stock option exercises. RESTRICTED STOCK UNITS The weighted average fair value of the RSUs granted in 2017 was $32.79. The vesting provisions for RSUs granted in 2017 were as follows:
PERFORMANCE SHARE UNITS The weighted average grant date fair value of PSUs granted in 2017 was $37.93. The final number of shares granted in 2017 will range from 0 percent to 150 percent of each grant's target, depending upon actual company performance. The ultimate number of PSUs earned is based on two measures:
The vesting provisions for PSUs granted in 2017 were as follows:
Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2017
(1) Calculated as an average of the high and low prices on grant date. STOCK OPTIONS We did not grant any stock options in first quarter 2017 and do not expect any grants to occur during the remainder of 2017. STOCK APPRECIATION RIGHTS We did not grant any stock appreciation rights in first quarter 2017 and do not expect any grants to occur during the remainder of 2017. VALUE MANAGEMENT AWARDS Value Management Awards (VMAs) are relative performance equity incentive awards granted to certain former employees of Plum Creek and assumed by the company in connection with the Plum Creek merger. In accordance with the terms of the merger, all VMAs outstanding on December 31, 2017 will vest at “target” level performance of $100 per unit and will be paid in the first quarter of 2018. The VMAs are classified and accounted for as liabilities, as they will be settled in cash upon vesting. The expense recognized over the remaining performance period will equal the cash value of an award as of the last day of the performance period multiplied by the number of awards that are earned. Expense for VMAs will continue to be recognized over the remaining service period unless a qualifying termination occurs. A qualifying termination of any holder of a VMA award before December 31, 2017 will accelerate vesting and expense recognition in the period that the qualifying termination occurs. |
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS |
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CHARGES FOR RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS | CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS
During 2017, we incurred and accrued for termination benefits (primarily severance) and non-recurring professional services costs directly attributable to our merger with Plum Creek. During 2016, we incurred and accrued for termination benefits (primarily severance), accelerated share-based payment costs, and accelerated pension benefits based upon actual and expected qualifying terminations of certain employees as a result of restructuring decisions made subsequent to the merger. We also incurred non-recurring professional services costs for investment banking, legal and consulting, and certain other fees directly attributable to our merger with Plum Creek. Changes in accrued severance related to restructuring during the year-to-date period ended March 31, 2017, were as follows:
Accrued severance is recorded within the "Wages, salaries and severance pay" component of "Accrued liabilities" on our Consolidated Balance Sheet as detailed in Note 9: Accrued Liabilities. The majority of the accrued severance balance as of March 31, 2017, is expected to be paid within one year. |
OTHER OPERATING COSTS (INCOME), NET |
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OTHER OPERATING COSTS (INCOME), NET | OTHER OPERATING COSTS (INCOME), NET Other operating costs (income), net:
ITEMS INCLUDED IN OTHER OPERATING COSTS (INCOME), NET
Gain on disposition of nonstrategic assets included a $36 million pretax gain recognized in first quarter 2016 on the sale of our Federal Way, Washington headquarters campus. Foreign exchange losses (gains) result from changes in exchange rates, primarily related to our Canadian operations. |
INCOME TAXES |
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INCOME TAXES | INCOME TAXES As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our wholly-owned TRSs, which includes our Wood Products segment and portions of our Timberlands and Real Estate & ENR segments' earnings. The quarterly provision for income taxes is based on the current estimate of the annual effective tax rate. Our 2017 estimated annual effective tax rate for our TRSs is approximately 31 percent, which is lower than the U.S. domestic statutory federal tax rate primarily due to lower foreign tax rates applicable to foreign earnings. ONGOING IRS MATTER In connection with the merger with Plum Creek, we acquired equity interests in Southern Diversified Timber, LLC, a timberland joint venture (Timberland Venture) with an affiliate of Campbell Global LLC (TCG Member). On August 31, 2016, the Timberland Venture redeemed TCG Member's interest and became a fully consolidated, wholly-owned subsidiary of Weyerhaeuser. We received a Notice of Final Partnership Administrative Adjustment (FPAA), dated July 20, 2016, from the Internal Revenue Service (IRS) in regard to Plum Creek REIT’s 2008 U.S. federal income tax treatment of the transaction forming the Timberland Venture. The IRS is asserting that the transfer of the timberlands to the Timberland Venture was a taxable transaction to the company at the time of the transfer rather than a nontaxable capital contribution. We have filed a petition in the U.S. Tax Court and will vigorously contest this adjustment. In the event that we are unsuccessful in this tax litigation, we could be required to recognize and distribute gain to shareholders of approximately $600 million and pay built-in gains tax of approximately $100 million. We would also be required to pay interest on both of those amounts, which would be substantial. We expect that as much as 80 percent of any such distribution could be made with our common stock, and shareholders would be subject to tax on the distribution at the applicable capital gains tax rate. Alternatively, we could elect to retain the gain and pay corporate-level tax to minimize interest costs to the company. Although the outcome of this process cannot be predicted with certainty, we are confident in our position based on U.S. tax law and believe we will be successful in defending it. Accordingly, no reserve has been recorded related to this matter. |
BASIS OF PRESENTATION (Policies) |
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Consolidation, Policy | 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. 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. |
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Reclassification, Policy | RECLASSIFICATIONS We have reclassified certain balances and results from the prior year to be consistent with our 2017 reporting. This makes year-to-year comparisons easier. Our reclassifications had no effect on consolidated net earnings or equity. Our reclassifications present 1) our adoption of new accounting pronouncements and 2) the results of discontinued operations separately from results of continuing operations on our Consolidated Statement of Operations, Consolidated Balance Sheet and in the related footnotes. Note 3: Discontinued Operations provides information about our discontinued operations. |
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New Accounting Pronouncements, Policy | NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, a comprehensive new revenue recognition model that requires an entity to recognize revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, which deferred the effective date for an additional year. In March 2016, FASB issued ASU 2016-08, which does not change the core principle of the guidance; however, it does clarify the implementation guidance on principal versus agent considerations. In April 2016, FASB issued ASU 2016-10, which clarifies two aspects of ASU 2014-09: identifying performance obligations and the licensing implementation guidance. In May 2016, FASB issued ASU 2016-12, which amends ASU 2014-09 to provide improvements and practical expedients to the new revenue recognition model. In December 2016, the FASB issued ASU 2016-20, which amends ASU 2014-09 for technical corrections and to correct for unintended application of the guidance. Finally, in February 2017, FASB issued ASU 2017-05, which clarifies the scope of ASC 610-20 and impacts accounting for partial sales of nonfinancial assets. The company expects to adopt and implement the new revenue recognition guidance effective January 1, 2018. The new standard is required to be applied retrospectively to each prior reporting period presented (full retrospective transition method) or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application (cumulative effect method). We expect to adopt using the cumulative effect method. We expect that the adoption of the new revenue recognition guidance will not materially impact our operating results, balance sheet, cash flows or financial reporting aside from adding expanded disclosures. In July 2015, FASB issued ASU 2015-11, which simplifies the measurement of inventories valued under most methods, including our inventories valued under FIFO – the first-in, first-out – and moving average cost methods. Inventories valued under LIFO – the last-in, first-out method – are excluded. Under this new guidance, inventories valued under these methods would be valued at the lower of cost or net realizable value, with net realizable value defined as the estimated selling price less reasonable costs to sell the inventory. The new guidance is effective prospectively for fiscal periods starting after December 15, 2016, and early adoption is permitted. We adopted on January 1, 2017, and determined this pronouncement does not have a material impact on our consolidated financial statements and related disclosures. In February 2016, FASB issued ASU 2016-02, which requires lessees to recognize assets and liabilities for the rights and obligations created by those leases and requires both capital and operating leases to be recognized on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. We expect to adopt on January 1, 2019, and are evaluating the impact on our consolidated financial statements and related disclosures. In October 2016, FASB issued ASU 2016-16, which requires immediate recognition of the income tax consequences upon intra-entity transfers of assets other than inventory. The new guidance is effective for annual periods beginning after December 15, 2017, and early adoption is permitted. We adopted this accounting standard on January 1, 2017. As a result of this adoption, our opening balance sheet was adjusted through retained earnings to include a deferred tax asset of $22 million for prior period intra-entity transfers. Adoption of this standard did not have a material impact on our Consolidated Statement of Cash Flows or Consolidated Statement of Operations. In March 2017, FASB issued ASU 2017-07, which requires that an employer report the service cost component of pension and other postretirement benefit costs in the Consolidated Statement of Operations in the same line item or items as other compensation costs arising from services rendered by the pertinent employees. This requirement is consistent with how we have historically presented our pension service costs. The other requirement of this ASU is to present the remaining components of pension and other postretirement benefit costs (i.e., interest, expected return on plan assets, amortization of actuarial gains or losses, and amortization of prior service credits or costs) in the Consolidated Statement of Operations separately from the service cost component and outside a subtotal of income from operations. The new guidance is effective for annual periods beginning after December 15, 2017, and early adoption is permitted. We have adopted this accounting standard as of January 1, 2017. As a result, we have reclassified amounts related to other components of pension and other post retirement benefit costs from their prior financial statements captions ("Costs of products sold," "General and administrative expenses," and "Other operating costs (income), net") into a new financial statement caption titled "Non-operating pension and other postretirement benefit (costs) credits" in our Consolidated Statement of Operations. The adoption of this ASU does not impact "Net earnings," nor does it impact our Consolidated Balance Sheet. |
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Earnings Per Share, Policy | We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units. 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. |
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Fair Value of Financial Instruments, Policy | To estimate the fair value of fixed rate long-term debt, we used the following valuation approaches:
We believe that our variable rate long-term debt instruments have net carrying values that approximate their fair values with only insignificant differences. The inputs to these 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. |
BUSINESS SEGMENTS (Tables) |
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Reconciliation of Revenue from Segments to Consolidated | An analysis and reconciliation of our business segment information to the respective information in the Consolidated Statements of Operations is as follows:
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DISCONTINUED OPERATIONS (Tables) |
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Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table presents net earnings from discontinued operations. As all discontinued operations were sold in 2016, no assets or liabilities remain as of March 31, 2017 or December 31, 2016.
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Schedule of Disposal Groups Including Discontinued Operations Cash Flows [Table Text Block] | Cash flows from discontinued operations for the three months ended March 31, 2016 are as follows:
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MERGER WITH PLUM CREEK (Tables) |
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Unaudited Pro Forma Information | Summarized unaudited pro forma information that presents combined amounts as if this merger occurred at the beginning of 2016 is as follows:
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NET EARNINGS PER SHARE (Tables) |
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Dilutive Potential Common Shares | Diluted earnings per share is net earnings available to common shareholders divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares:
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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 per Share The following shares were not included in the computation of diluted earnings 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.
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INVENTORIES (Tables) |
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Inventories | Inventories include raw materials, work-in-process and finished goods.
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RELATED PARTIES (Tables) |
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Schedule of Changes in Deposit of Timberlands to Related Party | Changes in our "Deposit from contribution of timberlands to related party" balance during first quarter 2017 were as follows:
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PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables) |
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Components of Net Periodic Benefit Costs (Credits) | The components of net periodic benefit costs (credits) are:
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ACCRUED LIABILITIES (Tables) |
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Accrued Liabilities | Accrued liabilities were comprised of the following:
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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
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Estimated Fair Values and Carrying Values of Long-Term Debt | The estimated fair values and carrying values of our long-term debt consisted of the following:
|
CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
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Items included in cumulative other comprehensive income (loss) | Changes in amounts included in our cumulative other comprehensive income (loss) by component are:
|
SHARE-BASED COMPENSATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation Activity | Share-based compensation activity in first quarter 2017 included the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2017
(1) Calculated as an average of the high and low prices on grant date. |
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Items Included in Our Restructuring, Closure and Asset Impairment Charges |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in accrued severance related to restructuring | Changes in accrued severance related to restructuring during the year-to-date period ended March 31, 2017, were as follows:
|
OTHER OPERATING COSTS (INCOME), NET (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Items Included in Other Operating Costs (Income), Net | ITEMS INCLUDED IN OTHER OPERATING COSTS (INCOME), NET
|
BASIS OF PRESENTATION Additional Information (Details) $ in Millions |
Jan. 01, 2017
USD ($)
|
---|---|
ASU 2016-16 | |
Deferred Tax Assets | $ 22 |
DISCONTINUED OPERATIONS Earnings from Discontinued Operations, Net of Tax (Detail) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Total net sales | $ 430 |
Costs of products sold | 386 |
Gross margin | 44 |
Selling expenses | 4 |
General and administrative expenses | 9 |
Research and development expenses | 1 |
Charges for integration and restructuring, closures and asset impairments(1) | 6 |
Other operating income, net | (9) |
Operating income | 33 |
Equity loss from joint venture | (2) |
Interest expense, net of capitalized interest | (2) |
Earnings from discontinued operations before income taxes | 29 |
Income taxes | (9) |
Net earnings from discontinued operations | $ 20 |
DISCONTINUED OPERATIONS Cash Flows from Discontinued Operations (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Net cash provided by (used in) operating activities | $ 66 |
Net cash provided by (used in) investing activities | $ (22) |
DISCONTINUED OPERATIONS Additional Details (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Mar. 31, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets of discontinued operations | $ 0 | $ 0 |
Total liabilities of discontinued operations | 0 | $ 0 |
Cellulose Fibers | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net gain on divestiture of business | 789 | |
Proceeds from divestiture of business | $ 2,500 |
MERGER WITH PLUM CREEK Unaudited Pro Forma Information (Details) - Plum Creek $ / shares in Units, $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
$ / shares
| |
Business Acquisition [Line Items] | |
Net sales | $ | $ 1,561 |
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders | $ | $ 144 |
Earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, basic | $ / shares | $ 0.18 |
Earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, diluted | $ / shares | $ 0.18 |
MERGER WITH PLUM CREEK Additional Information (Details) - Plum Creek - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Feb. 19, 2016 |
Mar. 31, 2016 |
|
Business Acquisition [Line Items] | ||
Total assets acquired | $ 10,000 | |
Consideration transferred | 6,400 | |
Total liabilities assumed | $ 3,600 | |
Non-recurring merger-related costs | $ 131 |
NET EARNINGS PER SHARE Dilutive Potential Common Shares (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Basic | 750,665 | 632,004 |
Dilutive potential common shares | 4,082 | 2,868 |
Diluted | 754,747 | 634,872 |
Stock options | ||
Dilutive potential common shares | 2,981 | 2,060 |
Restricted stock units | ||
Dilutive potential common shares | 547 | 409 |
Performance share units | ||
Dilutive potential common shares | 554 | 399 |
NET EARNINGS PER SHARE Potential Shares Not Included in the Computation of Diluted Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares not included in the computation of diluted earnings per share | 1,432 | 6,215 |
Performance share units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares not included in the computation of diluted earnings per share | 568 | 534 |
Preference shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares not included in the computation of diluted earnings per share | 0 | 25,307 |
NET EARNINGS PER SHARE Additional Information (Details) $ / shares in Units, $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2017
USD ($)
$ / shares
shares
|
Mar. 31, 2016
$ / shares
|
Jul. 01, 2016 |
Nov. 08, 2015
USD ($)
|
Jun. 24, 2013
shares
|
|
Earnings Per Share, Basic | $ / shares | $ 0.21 | $ 0.11 | |||
Earnings Per Share, Diluted | $ / shares | $ 0.21 | $ 0.11 | |||
Preference shares conversion ratio | 1.6929 | ||||
Stock repurchase program, authorized repurchase amount | $ | $ 2,500 | ||||
Share repurchase program, shares repurchased | shares | 0 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ | $ 500 | ||||
6.375 percent Mandatory Convertible Preference Shares, Series A | |||||
Preference shares, outstanding | shares | 0 | 13,800,000 |
INVENTORIES Inventories (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory [Line Items] | ||
Total | $ 386 | $ 358 |
Logs | ||
Inventory [Line Items] | ||
LIFO inventories | 12 | 18 |
FIFO or moving average cost inventories | 41 | 21 |
Lumber, plywood and panels | ||
Inventory [Line Items] | ||
LIFO inventories | 60 | 51 |
Lumber, plywood, panels and engineered wood products | ||
Inventory [Line Items] | ||
FIFO or moving average cost inventories | 76 | 71 |
Other products | ||
Inventory [Line Items] | ||
LIFO inventories | 24 | 20 |
FIFO or moving average cost inventories | 85 | 92 |
Materials and supplies | ||
Inventory [Line Items] | ||
FIFO or moving average cost inventories | $ 88 | $ 85 |
INVENTORIES Additional information (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory [Line Items] | ||
Increase in inventory amount if FIFO would have been used | $ 71 | $ 71 |
RELATED PARTIES Schedule of Changes in Deposit of Timberlands to Related Party (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Related Party Transaction [Line Items] | |
Balance at December 31, 2016 | $ 426 |
Balance at March 31, 2017 | 422 |
Twin Creeks Venture | |
Related Party Transaction [Line Items] | |
Balance at December 31, 2016 | 426 |
Lease payments to Twin Creeks Venture | (5) |
Distributions from Twin Creeks Venture | 1 |
Balance at March 31, 2017 | $ 422 |
RELATED PARTIES Additional Information (Details) |
3 Months Ended | |||
---|---|---|---|---|
Apr. 01, 2016
USD ($)
a
|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Schedule of Equity Method Investments [Line Items] | ||||
Investments in and advances to joint ventures | $ 56,000,000 | $ 56,000,000 | ||
Equity earnings from joint ventures | 0 | $ 5,000,000 | ||
Real Estate Development Ventures | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investments in and advances to joint ventures | 56,000,000 | $ 56,000,000 | ||
Equity earnings from joint ventures | $ 0 | |||
Twin Creeks Venture | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Contributed acres of timberlands to venture | a | 260,000 | |||
Agreed-upon value of acres contributed | $ 560,000,000 | |||
Proceeds from contribution of timberlands to related party | $ 440,000,000 | |||
Ownership interest | 21.00% | |||
Guaranteed annual return | 3.00% | |||
Percentage of profit in excess of guaranteed annual return | 75.00% |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Components of Net Periodic Benefit Costs (Credits) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost(1) | $ 10 | $ 13 |
Interest cost | 66 | 68 |
Expected return on plan assets | (102) | (123) |
Amortization of actuarial loss | 55 | 38 |
Amortization of prior service cost (credit) | 1 | 1 |
Accelerated pension costs included in Plum Creek merger-related costs (Note 15) | 0 | 5 |
Total net periodic benefit cost (credit) | 30 | 2 |
Other Postretirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 2 | 2 |
Amortization of actuarial loss | 2 | 2 |
Amortization of prior service cost (credit) | (2) | (2) |
Total net periodic benefit cost (credit) | $ 2 | 2 |
Discontinued Operations [Member] | Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost(1) | $ 4 |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Additional Information (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Registered Canadian Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2017 | $ 19 |
Non Registered Canadian Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2017 | 3 |
U.S. Non-Qualified Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2017 | 26 |
U.S. and Canadian Other Postretirement Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2017 | 21 |
U.S. Qualified Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2017 | $ 0 |
ACCRUED LIABILITIES Accrued Liabilities (Detail) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Wages, salaries and severance pay | $ 97 | $ 178 |
Pension and other postretirement benefits | 48 | 49 |
Vacation pay | 36 | 33 |
Taxes – Social Security and real and personal property | 25 | 20 |
Interest | 89 | 120 |
Customer rebates and volume discounts | 25 | 39 |
Deferred income | 30 | 40 |
Accrued income taxes | 31 | 139 |
Other | 71 | 74 |
Total | $ 452 | $ 692 |
LINES OF CREDIT Additional Information (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Line of credit, maximum borrowing capacity | $ 1,500 |
Line of credit, expiration date | Mar. 31, 2022 |
Borrowings from lines of credit | $ 0 |
Repayments of lines of credit | 0 |
Prior Credit Facility | |
Line of credit, maximum borrowing capacity | $ 1,000 |
Line of credit, expiration date | Sep. 30, 2018 |
FAIR VALUE OF FINANCIAL INSTRUMENTS Estimated Fair Values and Carrying Values of Long-Term Debt (Detail) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, including current maturities | $ 6,606 | $ 6,610 |
Fair Value, Inputs, Level 2 | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, fair value | 7,567 | 7,475 |
Fixed interest rate | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, including current maturities | 6,057 | 6,061 |
Fixed interest rate | Fair Value, Inputs, Level 2 | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, fair value | 7,017 | 6,925 |
Variable interest rate | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, including current maturities | 549 | 549 |
Variable interest rate | Fair Value, Inputs, Level 2 | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, fair value | $ 550 | $ 550 |
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES Additional Information (Details) $ in Millions |
Mar. 31, 2017
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Line Items] | |
Accrued estimated remediation costs | $ 48 |
Asset retirement obligations | $ 31 |
SHARE-BASED COMPENSATION Schedule of Share-Based Compensation Activity (Details) shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2017
shares
| |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted | 763 |
Vested | 662 |
Performance share units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted | 348 |
Vested | 142 |
SHARE-BASED COMPENSATION Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted (Details) - Performance share units |
3 Months Ended |
---|---|
Mar. 31, 2017
$ / shares
Rate
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance period | 1/1/2017 - 12/31/2019 |
Valuation date average stock price (1) | $ / shares | $ 32.79 |
Expected dividends | 3.74% |
Risk-free rate minimum | 0.68% |
Risk-free rate maximum | 1.55% |
Expected volatility minimum | 22.71% |
Expected volatility maximum | 24.07% |
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS Changes in accrued severance related to integration and restructuring (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Accrued severance as of December 31, 2016 | $ 26 |
Charges | 7 |
Payments | (14) |
Accrued severance as of March 31, 2017 | $ 19 |
OTHER OPERATING COSTS (INCOME), NET Items Included in Other Operating Costs (Income), Net (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Gain on disposition of nonstrategic assets | $ (7) | $ (36) |
Foreign exchange losses (gains), net | 3 | (13) |
Litigation expense, net | 3 | 3 |
Other expense, net | 3 | |
Other (income), net | (9) | |
Total other operating costs (income), net | $ 2 | $ (55) |
OTHER OPERATING COSTS (INCOME), NET Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Gain on disposition of nonstrategic assets | $ 7 | $ 36 |
INCOME TAXES Additional Information (Detail) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
Rate
| |
Estimated annual effective tax rate for our Taxable REIT Subsidiary | Rate | 31.00% |
Gain from potential tax adjustment | $ 600 |
Tax liability from potential adjustment | $ 100 |
Maximum | |
Percentage of gain distributed in common stock | 80.00% |
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