DISCONTINUED OPERATIONS AND OTHER DIVESTITURES

OPERATIONS DIVESTED

On October 12, 2016, we announced the exploration of strategic alternatives for our Uruguay timberlands and manufacturing operations, which was part of our Timberlands business segment. On June 2, 2017, the Weyerhaeuser Board of Directors approved an equity purchase agreement with a consortium led by BTG Pactual's Timberland Investment Group (TIG), including other long-term investors, pursuant to which the Company agreed to sell, in exchange for $403 million in cash, all of its equity interest in the subsidiaries that collectively owned and operated its Uruguayan timberlands and manufacturing operations.

On September 1, 2017, we completed the sale of our Uruguay timberlands and manufacturing operations for $403 million of cash proceeds. Due to the impairment of our Uruguayan operations recorded during second quarter 2017 (refer to Note 17: Charges for Integration and Restructuring, Closures and Asset Impairments), no material gain or loss was recorded as a result of this sale. As of December 31, 2017, no assets or liabilities related to Uruguayan operations remain on the Consolidated Balance Sheet.

The sale of our Uruguayan operations was not considered a strategic shift that had or will have a major effect on our operations or financial results and therefore did not meet the requirements for presentation as 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:


•	sale of our Cellulose Fibers liquid packaging board business to Nippon Paper Industries Co., Ltd for $285 million in cash proceeds, which closed on August 31, 2016;


•	sale of our Cellulose Fibers printing papers joint venture to One Rock Capital Partners, LLC for $42 million in cash proceeds, which closed on November 1, 2016; and


•	sale of our Cellulose Fibers pulp business to International Paper for $2.2 billion in cash proceeds, which closed on December 1, 2016.

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. Cellulose Fibers was previously disclosed as a separate reportable business segment. Retained indirect corporate overhead costs previously allocated to Cellulose Fibers are now reported as part of Unallocated Items.

We used $1.7 billion of the after-tax proceeds from the sale of our Cellulose Fibers business segment for repayment of debt during 2016.

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



DOLLAR AMOUNTS IN MILLIONS
	2016
Proceeds, net of cash and cash equivalents disposed of	$	2,486
Less:
Net book value of assets and liabilities disposed of	(1,678		)
Transaction costs, net of reimbursement	(19		)
	(1,697		)
Pretax gain on Cellulose Fibers divestitures	789
Income taxes	(243		)
Net gain on Cellulose Fibers divestitures	$	546

NET EARNINGS FROM DISCONTINUED OPERATIONS

Sales and Net Earnings from Discontinued Operations



DOLLAR AMOUNTS IN MILLIONS
	2016⁽¹⁾			2015⁽²⁾
Total net sales	$	1,537		$	1,860
Costs of products sold	1,283			1,573
Gross margin	254			287
Selling expenses	12			14
General and administrative expenses	29			30
Research and development expenses	5			6
Charges for integration and restructuring, closures and asset impairments⁽³⁾	63			2
Other operating income, net	(27		)	(26		)
Operating income	172			261
Equity loss from joint venture	(4		)	(105		)
Interest expense, net of capitalized interest	(5		)	(6		)
Earnings from discontinued operations before income taxes	163			150
Income taxes	(97		)	(55		)
Net earnings from operations	66			95
Net gain on divestiture of Cellulose Fibers	546			—
Net earnings from discontinued operations	$	612		$	95
(1) Discontinued operations in 2016 includes 335 days of the pulp business, 305 days of our printing papers joint venture operations, and 244 days of the liquid packaging board business. (2) Discontinued operations in 2015 includes a full year of the Cellulose Fibers business segment operations. (3) 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.

Results of discontinued operations exclude certain general corporate overhead costs that have been allocated to and are included in contribution to earnings for the operating segments.

CARRYING VALUE OF ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS

As all discontinued operations were sold during 2016, no assets or liabilities remain as of December 31, 2017, or December 31, 2016.

CASH FLOWS FROM DISCONTINUED OPERATIONS

Cash Flows from Discontinued Operations



DOLLAR AMOUNTS IN MILLIONS
	2016⁽¹⁾		2015⁽²⁾
Net cash provided by (used in) operating activities	$	196	$	429
Net cash provided by (used in) investing activities	$	2,356	$	(118	)
(1) Discontinued operations in 2016 includes 335 days of the pulp business, 305 days of our printing papers joint venture operations, and 244 days of the liquid packaging board business, and the cash flows associated with the CF divestitures. (2) Discontinued operations in 2015 includes a full year of the Cellulose Fibers business segment operations.

RELATED PARTY TRANSACTIONS WITH PRINTING PAPERS JOINT VENTURE

Prior to November 1, 2016, we held a 50 percent ownership interest in North Pacific Paper Corporation (NORPAC), our printing papers joint venture, which we considered a related party. We provided goods and services to NORPAC, including raw materials and support services. The amount paid to Weyerhaeuser by this joint venture for goods and services were:


•	$126 million in 2016 and


•	$197 million in 2015.