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OTHER OPERATING COSTS, NET
9 Months Ended
Sep. 30, 2020
Other Income [Abstract]  
OTHER OPERATING COSTS, NET

NOTE 16: OTHER OPERATING COSTS, NET

Other operating costs, net were comprised of the following:

 

 

 

QUARTER ENDED

 

 

YEAR-TO-DATE ENDED

 

DOLLAR AMOUNTS IN MILLIONS

 

SEPTEMBER 2020

 

 

SEPTEMBER 2019

 

 

SEPTEMBER 2020

 

 

SEPTEMBER 2019

 

Foreign exchange losses (gains), net

 

$

(2

)

 

$

1

 

 

$

3

 

 

$

2

 

Litigation expense, net

 

 

7

 

 

 

25

 

 

 

9

 

 

 

59

 

Research and development expenses

 

 

1

 

 

 

1

 

 

 

4

 

 

 

4

 

Timber casualty loss

 

 

80

 

 

 

 

 

 

80

 

 

 

 

Other, net

 

 

6

 

 

 

6

 

 

 

17

 

 

 

20

 

Total other operating costs, net

 

$

92

 

 

$

33

 

 

$

113

 

 

$

85

 

 

Timber Casualty Loss

In September 2020, forest fires in the state of Oregon, commonly referred to as the Holiday Farm, Beachie Creek, Riverside, and Archie Creek fires, spread from adjacent lands onto portions of our Oregon timberland properties. Based on interpretation of satellite imagery and aerial photography, we estimate that the fires have had some impact on approximately 125,000 acres of our Oregon timberlands. Our initial assessments indicate that the extent of damage varies from tract to tract based on topographical conditions, rate of fire spread, age of the timber and other circumstances. Based on these initial assessments, we expect that the majority of merchantable timber, even if affected by the fires, is likely salvageable if we are able to harvest it within a reasonable period of time. We anticipate that the majority of pre-merchantable timber affected by the fires will not be able to be salvaged.

For the quarter ended September 30, 2020, we have recorded a timber casualty loss of $80 million which represents the estimated book value of timber and related assets that cannot be salvaged based on the information available at this time. The loss is attributable to our Timberlands segment and is recorded within “Other operating costs, net” in the Consolidated Statement of Operations. As salvage efforts continue and as we are able to complete on-site assessments of timber within the fire perimeter, it is reasonably possible that this estimate could increase by as much as $30 million to $40 million.