TITLE OF EACH CLASS
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NAME OF EACH EXCHANGE ON WHICH REGISTERED:
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Common Shares ($1.25 par value)
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Chicago Stock Exchange
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New York Stock Exchange
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6.375% Mandatory Convertible Preference Shares, Series A ($1.00 par value)
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New York Stock Exchange
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PART I
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ITEM 1.
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ITEM 1A.
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PEOPLE
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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MINE SAFETY DISCLOSURES — NOT APPLICABLE
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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OTHER INFORMATION — NOT APPLICABLE
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PART III
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS
AND CORPORATE GOVERNANCE
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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113
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WE CAN TELL YOU MORE
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•
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the SEC website — www.sec.gov;
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•
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the SEC’s Public Conference Room, 100 F St. N.E., Washington, D.C., 20549, (800) SEC-0330; and
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•
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our website — www.weyerhaeuser.com.
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WHO WE ARE
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•
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Timberlands,
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•
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Wood Products and
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•
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Cellulose Fibers.
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•
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Timberlands — Extract maximum value from each acre we own or manage.
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•
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Wood Products — Deliver high-quality lumber, structural panels, engineered wood products and complementary building products for residential, multi-family, industrial and light commercial applications at competitive costs.
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•
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Cellulose Fibers — Concentrate on value-added pulp products and low cost manufacturing assets.
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SALES OUTSIDE THE U.S. IN MILLIONS OF DOLLARS
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|||||||||
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2015
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2014
|
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2013
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|
|||
Exports from the U.S.
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$
|
1,719
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$
|
1,892
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$
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1,891
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Canadian export and domestic sales
|
400
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472
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488
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|
|||
Other foreign sales
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144
|
|
150
|
|
114
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|
|||
Total
|
$
|
2,263
|
|
$
|
2,514
|
|
$
|
2,493
|
|
Percent of total sales
|
32
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%
|
34
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%
|
29
|
%
|
•
|
11,700
employed in North America and
|
•
|
900
employed by our operations outside of North America.
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WHAT WE DO
|
•
|
grow and harvest trees and
|
•
|
manufacture and sell products made from them.
|
•
|
grows and harvests trees to be converted into lumber, other wood and building products and pulp and paper;
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•
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exports logs to other countries where they are made into products;
|
•
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plants seedlings to reforest harvested areas using the most effective regeneration method for the site and species (in parts of Canada natural regeneration is employed);
|
•
|
monitors and cares for the planted trees as they grow to maturity; and
|
•
|
strives to sustain and maximize the timber supply from our timberlands while keeping the health of our environment a key priority.
|
•
|
royalty payments on oil and gas production;
|
•
|
bonus payments from oil and gas leasing and exploration activity;
|
•
|
royalty payments on hard minerals (rock, sand and gravel);
|
•
|
geothermal lease and option revenues; and
|
•
|
the sale of mineral assets.
|
PRODUCTS
|
HOW THEY’RE USED
|
Logs
|
Logs are made into lumber, other wood and building products, and pulp and paper products.
|
Timberlands
|
Timberland tracts are sold or exchanged to maximize value or improve our timberland portfolio.
|
Timber
|
Standing timber is sold to third parties.
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Minerals, oil and gas
|
Minerals, oil and gas are sold into construction and energy markets.
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Other products
|
Seed and seedlings grown in the U.S. and plywood produced at our mill in Uruguay are sold to third parties. U.S. timberlands are leased to the public for recreational purposes.
|
•
|
Thousand board feet (MBF) — used in the West to measure the expected lumber recovery from a tree or log. This measure does not include taper or recovery of non-lumber residual products.
|
•
|
Hundred cubic feet (CCF) — used in the West to measure the volume of a log. The measure does not include any calculation for expected lumber recovery.
|
•
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Green tons (GT) — used in the South to measure weight; factors used for conversion to product volume can vary by species, size, location and season.
|
•
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4.0 million
acres in the southern U.S. (Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Oklahoma and Texas); and
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•
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2.6 million
acres in the Pacific Northwest (Oregon and Washington).
|
•
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varies according to the species, size and quality of the timber; and
|
•
|
will change through time as the mix of these variables adjust.
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GEOGRAPHIC AREA
|
MILLIONS OF CUBIC METERS AT
DECEMBER 31, 2015 |
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TOTAL
INVENTORY
|
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Uruguay:
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Pine
|
8
|
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Eucalyptus
|
4
|
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Total International
|
12
|
|
•
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Alberta — 3,906 thousand cubic meters,
|
•
|
British Columbia — 804 thousand cubic meters,
|
•
|
Ontario — 146 thousand cubic meters and
|
•
|
Saskatchewan — 788 thousand cubic meters.
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FEE HARVEST VOLUMES IN THOUSANDS
|
||||||||||
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2015
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2014
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2013
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2012
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2011
|
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Fee harvest volume – cubic meters:
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|
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|
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West
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11,130
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11,173
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8,907
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7,170
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6,595
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South
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11,568
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11,676
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11,596
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11,488
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9,738
|
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International
|
889
|
|
990
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818
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763
|
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854
|
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Total
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23,587
|
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23,839
|
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21,321
|
|
19,421
|
|
17,187
|
|
•
|
$1.4 billion
in
2015
— down
10 percent
from
2014
; and
|
•
|
$1.5 billion
in
2014
.
|
•
|
$830 million
in
2015
— down
4 percent
from
2014
; and
|
•
|
$867 million
in
2014
.
|
NET SALES IN MILLIONS OF DOLLARS
|
|||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|||||
To unaffiliated customers:
|
|
|
|
|
|
||||||||||
Logs:
|
|
|
|
|
|
||||||||||
West
|
$
|
830
|
|
$
|
972
|
|
$
|
828
|
|
$
|
559
|
|
$
|
545
|
|
South
|
241
|
|
257
|
|
256
|
|
233
|
|
196
|
|
|||||
Canada
|
24
|
|
22
|
|
19
|
|
19
|
|
17
|
|
|||||
Total
|
1,095
|
|
1,251
|
|
1,103
|
|
811
|
|
758
|
|
|||||
Chip sales
|
15
|
|
12
|
|
9
|
|
18
|
|
19
|
|
|||||
Timberlands sales and exchanges
(1)
|
62
|
|
52
|
|
65
|
|
59
|
|
77
|
|
|||||
Higher and better use land sales
(1)
|
14
|
|
19
|
|
19
|
|
22
|
|
25
|
|
|||||
Minerals, oil and gas
|
26
|
|
32
|
|
32
|
|
31
|
|
53
|
|
|||||
Products from international operations
(2)
|
87
|
|
96
|
|
90
|
|
106
|
|
86
|
|
|||||
Other products
|
51
|
|
35
|
|
25
|
|
30
|
|
26
|
|
|||||
Subtotal sales to unaffiliated customers
|
1,350
|
|
1,497
|
|
1,343
|
|
1,077
|
|
1,044
|
|
|||||
Intersegment sales:
|
|
|
|
|
|
||||||||||
United States
|
559
|
|
576
|
|
518
|
|
447
|
|
424
|
|
|||||
Other
|
271
|
|
291
|
|
281
|
|
236
|
|
222
|
|
|||||
Subtotal intersegment sales
|
830
|
|
867
|
|
799
|
|
683
|
|
646
|
|
|||||
Total
|
$
|
2,180
|
|
$
|
2,364
|
|
$
|
2,142
|
|
$
|
1,760
|
|
$
|
1,690
|
|
(1) Significant dispositions of higher and better use timberland and some nonstrategic timberlands are made through subsidiaries.
(2) Products include logs, plywood and hardwood lumber harvested or produced by our international operations. Includes sales from our operations in Uruguay, Brazil (sold in 2014) and China (sold in 2012).
|
•
|
Sales volumes in the West decreased
0.3 million
cubic meters —
3 percent
— primarily due to lower export sales to China and Korea.
|
•
|
Sales to unaffiliated customers in the South decreased
378 thousand
cubic meters —
7 percent
— primarily due to lower fee log harvest production.
|
•
|
Sales volumes from Canada increased
95 thousand
cubic meters —
16 percent
— in
2015
. The increase in volume to unaffiliated customers was primarily due to an increase in delivered log sales versus stumpage sales.
|
•
|
Sales volumes from our international operations increased
44 thousand
cubic meters —
7 percent
— in
2015
. The increase in volume was primarily due to increased fiber log sales in Uruguay.
|
•
|
domestic grade log sales — lumber usage, primarily for housing starts and repair and remodel activity, the needs of our own mills and the availability of logs from both outside markets and our own timberlands;
|
•
|
domestic fiber log sales — demand for chips by pulp, containerboard mills, and OSB mills; and
|
•
|
export log sales — the level of housing starts in Japan and construction in China.
|
•
|
continuing to capitalize on our scale operations, silviculture expertise and sustainability practices;
|
•
|
maximizing cash flow through operational excellence initiatives such as merchandising for value, harvest and transportation efficiencies, and flexing harvest to seasonal and short term opportunities;
|
•
|
sustaining our export and domestic market access, infrastructure and strong customer relationships; and
|
•
|
increasing non-timber revenue streams.
|
•
|
provides a family of high-quality softwood lumber, engineered wood products, structural panels and other specialty products to the residential, multi-family, industrial, light commercial and repair and remodel markets;
|
•
|
distributes our products as well as complementary building products that we purchase from other manufacturers; and
|
•
|
exports our softwood lumber, oriented strand board (OSB) and engineered wood products primarily to Asia.
|
PRODUCTS
|
HOW THEY’RE USED
|
Structural lumber
|
Structural framing for new residential, repair and remodel, treated applications, industrial and commercial structures
|
Engineered wood products
• Solid section
• I-joists
|
Floor and roof joists, and headers and beams for residential, multi-family and commercial structures
|
Structural panels
• OSB
• Softwood plywood
|
Structural sheathing, subflooring and stair tread for residential, multi-family and commercial structures
|
Other products
|
Wood chips and other byproducts
|
Complimentary building products
|
Complementary building products such as cedar, decking, siding, insulation and rebar sold in our distribution facilities
|
•
|
Structural lumber
|
•
|
Engineered wood products
|
•
|
Oriented strand board
|
•
|
Softwood plywood
|
PRODUCTION IN MILLIONS
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
Structural lumber – board feet
|
4,252
|
|
4,152
|
|
4,084
|
|
3,846
|
|
3,528
|
|
Engineered solid section – cubic feet
(1)
|
20.9
|
|
20.4
|
|
18.0
|
|
15.4
|
|
13.4
|
|
Engineered I-joists – lineal feet
(1)
|
185
|
|
182
|
|
168
|
|
147
|
|
122
|
|
Oriented strand board – square feet (3/8”)
|
2,847
|
|
2,749
|
|
2,723
|
|
2,511
|
|
2,127
|
|
Softwood plywood – square feet (3/8”)
(2)
|
248
|
|
252
|
|
241
|
|
214
|
|
197
|
|
(1) Weyerhaeuser engineered I-joist facilities also may produce engineered solid section.
(2) All Weyerhaeuser plywood facilities also produce veneer.
|
NET SALES IN MILLIONS OF DOLLARS
|
|||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|||||
Structural lumber
|
$
|
1,741
|
|
$
|
1,901
|
|
$
|
1,873
|
|
$
|
1,400
|
|
$
|
1,087
|
|
Engineered solid section
|
428
|
|
402
|
|
353
|
|
279
|
|
235
|
|
|||||
Engineered I-joists
|
284
|
|
277
|
|
247
|
|
190
|
|
161
|
|
|||||
Oriented strand board
|
595
|
|
610
|
|
809
|
|
612
|
|
354
|
|
|||||
Softwood plywood
|
129
|
|
143
|
|
144
|
|
115
|
|
66
|
|
|||||
Other products produced
|
189
|
|
176
|
|
171
|
|
167
|
|
142
|
|
|||||
Complementary building products
|
506
|
|
461
|
|
412
|
|
295
|
|
231
|
|
|||||
Total
|
$
|
3,872
|
|
$
|
3,970
|
|
$
|
4,009
|
|
$
|
3,058
|
|
$
|
2,276
|
|
SALES VOLUMES IN MILLIONS
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
Structural lumber – board feet
|
4,588
|
|
4,463
|
|
4,436
|
|
4,031
|
|
3,586
|
|
Engineered solid section – cubic feet
|
21.3
|
|
20.0
|
|
18.2
|
|
15.4
|
|
12.3
|
|
Engineered I-joists – lineal feet
|
188
|
|
184
|
|
177
|
|
152
|
|
128
|
|
Oriented strand board – square feet (3/8”)
|
2,972
|
|
2,788
|
|
2,772
|
|
2,508
|
|
1,977
|
|
Softwood Plywood – square feet (3/8”)
|
381
|
|
395
|
|
402
|
|
340
|
|
249
|
|
Sales volumes include sales of internally produced products and complementary building products sold primarily through our distribution centers.
|
•
|
Demand for wood products used in residential and multi-family construction and the repair and remodel of existing homes affects prices. Residential construction is influenced by factors such as population growth and other demographics, the level of employment, consumer confidence, consumer income, availability of financing and interest rate levels, and the supply and pricing of existing homes on the market. Repair and remodel activity is affected by the size and age of existing housing inventory and access to home equity financing and other credit.
|
•
|
The availability of supply of commodity building products such as structural lumber, OSB and plywood affects prices. A number of factors can influence supply, including changes in production capacity and utilization rates, weather, raw material supply and availability of transportation.
|
•
|
reduce controllable manufacturing costs through operational excellence and capital execution;
|
•
|
maintain a value-added product mix;
|
•
|
leverage our brand and reputation as the preferred provider of quality building products; and
|
•
|
pursue disciplined, profitable sales growth.
|
•
|
provides cellulose fibers for absorbent products in markets around the world;
|
•
|
works closely with our customers to develop unique or specialized applications;
|
•
|
manufactures liquid packaging board used primarily for the production of containers for liquid products; and
|
•
|
is largely energy self sufficient, with over 80 percent of its energy derived from black liquor produced at the mills and biomass.
|
PRODUCTS
|
HOW THEY’RE USED
|
Pulp
• Fluff pulp (Southern softwood kraft fiber)
• Softwood papergrade pulp
• Specialty chemical cellulose pulp
|
• Used in sanitary disposable products that require bulk, softness and absorbency
• Used in products that include printing and writing papers and tissue
• Used in textiles, absorbent products, specialty packaging, specialty applications and proprietary high-bulking fibers
|
Liquid packaging board
|
Converted into containers to hold liquids such as milk, juice and tea
|
Other products
• Slush pulp
• Wet lap pulp
|
Used in the manufacture of paper products
|
•
|
Pulp Manufacturing
|
•
|
Pulp Converting
|
•
|
Liquid packaging board
|
CAPACITIES IN THOUSANDS
|
||||
|
PRODUCTION
CAPACITY
|
|
NUMBER OF
FACILITIES
|
|
Pulp – air-dry metric tons
|
1,870
|
|
5
|
|
Liquid packaging board – metric tons
|
315
|
|
1
|
|
NET SALES IN MILLIONS OF DOLLARS
|
|||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|||||
Pulp
|
$
|
1,499
|
|
$
|
1,559
|
|
$
|
1,501
|
|
$
|
1,433
|
|
$
|
1,617
|
|
Liquid packaging board
|
305
|
|
310
|
|
326
|
|
332
|
|
346
|
|
|||||
Other products
|
56
|
|
67
|
|
75
|
|
89
|
|
95
|
|
|||||
Total
|
$
|
1,860
|
|
$
|
1,936
|
|
$
|
1,902
|
|
$
|
1,854
|
|
$
|
2,058
|
|
•
|
growth of the world gross domestic product,
|
•
|
demand for absorbent hygiene products and paper and
|
•
|
relative strength of the U.S. dollar.
|
SALES VOLUMES IN THOUSANDS
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
Pulp – air-dry metric tons
|
1,821
|
|
1,826
|
|
1,866
|
|
1,762
|
|
1,756
|
|
Liquid packaging board – metric tons
|
255
|
|
249
|
|
277
|
|
262
|
|
269
|
|
•
|
profitably growing with long-term strategic customers;
|
•
|
developing enhanced products for existing and new markets;
|
•
|
continued execution of operational excellence initiatives such as manufacturing reliability and quality management systems; and
|
•
|
focusing capital investments on cost reduction, green energy opportunities and product quality.
|
EXECUTIVE OFFICERS OF THE REGISTRANT
|
NATURAL RESOURCE AND ENVIRONMENTAL MATTERS
|
•
|
limits on the size of clearcuts,
|
•
|
requirements that some timber be left unharvested to protect water quality and fish and wildlife habitat,
|
•
|
regulations regarding construction and maintenance of forest roads,
|
•
|
rules requiring reforestation following timber harvest, and
|
•
|
various related permit programs.
|
•
|
forest practices and environmental regulations
,
and
|
•
|
license requirements established by contract between us and the relevant province designed to:
|
•
|
the northern spotted owl, the marbled murrelet, a number of salmon species, bull trout and steelhead trout in the Pacific Northwest,
|
•
|
several freshwater mussel and sturgeon species, and
|
•
|
the red-cockaded woodpecker, gopher tortoise, gopher frog, American burying beetle and Northern long-eared bat in the South or Southeast.
|
•
|
federal and state requirements to protect habitat for threatened and endangered species,
|
•
|
regulatory actions by federal or state agencies to protect these species and their habitat, and
|
•
|
citizen suits under the ESA.
|
•
|
The federal Species at Risk Act (SARA) requires protective measures for species identified as being at risk and for critical habitat, pursuant to SARA, Environment Canada continues to identify and assess species deemed to be at risk and their critical habitat
,
and
|
•
|
in October 2012, the Canadian Minister of the Environment released a strategy for the recovery of the boreal population of woodland caribou under the SARA. The population and distribution objectives for boreal caribou across Canada are to (1) maintain the current status of existing, self-sustaining local caribou populations and (2) stabilize and achieve self-sustaining status for non-self-sustaining local caribou populations. Critical habitat for boreal caribou is identified for all boreal caribou ranges, except for northern Saskatchewan’s Boreal Shield range (SK1) where additional information is required for that population. Species assessment and recovery plans are developed in consultation with aboriginal communities and stakeholders.
|
•
|
conservation organizations,
|
•
|
academia,
|
•
|
the forest industry
,
and
|
•
|
large and small forest landowners.
|
•
|
increased our operating costs,
|
•
|
resulted in changes in the value of timber and logs from our timberlands,
|
•
|
contributed to increases in the prices paid for wood products and wood chips during periods of high demand,
|
•
|
sometimes made it more difficult for us to respond to rapid changes in markets, extreme weather or other unexpected circumstances, and
|
•
|
potentially encouraged further reductions in the use of, or substitution of other products for, lumber, oriented strand board, and plywood.
|
•
|
additional restrictions on the sale or harvest of timber,
|
•
|
potential increase in operating costs, and
|
•
|
impact to timber supply and prices in Canada.
|
•
|
federal,
|
•
|
state,
|
•
|
provincial, and
|
•
|
local pollution controls.
|
•
|
air, water and land,
|
•
|
solid and hazardous waste management,
|
•
|
waste disposal,
|
•
|
remediation of contaminated sites, and
|
•
|
the chemical content of some of our products.
|
•
|
enhance safety,
|
•
|
extend the life of a facility,
|
•
|
increase capacity,
|
•
|
increase efficiency,
|
•
|
facilitate raw material changes and handling requirements,
|
•
|
increase the economic value of assets or products, and
|
•
|
comply with regulatory standards.
|
•
|
we may have the sole obligation to remediate,
|
•
|
we may share that obligation with one or more parties,
|
•
|
several parties may have joint and several obligations to remediate, or
|
•
|
we may have been named as a potentially responsible party for sites designated as U
.
S
.
Superfund sites.
|
•
|
the quantity, toxicity and nature of materials at the site, and
|
•
|
the number and economic viability of the other responsible parties.
|
•
|
determine it is probable that such an obligation exists, and
|
•
|
can reasonably estimate the amount of the obligation.
|
•
|
pulp and paper manufacturing facilities,
|
•
|
wood products facilities, and
|
•
|
industrial boilers.
|
•
|
hazardous air pollutants that require use of maximum achievable control technology (MACT); and
|
•
|
controls for pollutants that contribute to smog, haze and more recently, greenhouse gases.
|
•
|
technology and residual risk review standards for additional operations at pulp and paper manufacturing facilities and
|
•
|
supplemental MACT standards for plywood, lumber and composite wood products facilities.
|
•
|
closely monitor legislative, regulatory and scientific developments pertaining to climate change;
|
•
|
adopted in 2006, as part of the Company's sustainability program, a goal of reducing greenhouse gas emissions by 40 percent by 2020 compared with our emissions in 2000, assuming a comparable portfolio and regulations;
|
•
|
determined to achieve this goal by increasing energy efficiency and using more greenhouse gas-neutral, biomass fuels instead of fossil fuels; and
|
•
|
reduced greenhouse gas emissions by approximately 25 percent considering changes in the asset portfolio according to 2014 data, compared to our 2000 baseline.
|
•
|
policy proposals by federal or state governments regarding regulation of greenhouse gas emissions,
|
•
|
Congressional legislation regulating greenhouse gas emissions within the next several years and
|
•
|
establishment of a multistate or federal greenhouse gas emissions reduction trading systems with potentially significant implications for all U.S. businesses.
|
•
|
ambient air quality standards for outdoor air quality management across the country,
|
•
|
a framework for air zone air management within provinces and territories that targets specific sources of air emissions,
|
•
|
regional airsheds that facilitate coordinated action across borders,
|
•
|
industrial sector based emission requirements that set a national base level of performance for major industries in Canada, and
|
•
|
improved intergovernmental collaboration to reduce emissions from the transportation sector.
|
•
|
have greenhouse gas reporting requirements
,
|
•
|
are working on reduction strategies
,
and
|
•
|
together with the Canadian federal government, are considering new or revised emission standards.
|
•
|
In 2013, amendments to the Canadian Federal Fisheries Act came into force. These amendments change the focus from habitat protection to fisheries protection and increase penalties. We expect further changes to these regulations in 2016, but we cannot predict the scope or potential impact, if any, on our operations.
|
•
|
Uruguay's national policy for water includes regulation of river basin planning, management and water use permits. Wastewater discharge authorization is required for industry, including our Los Piques mill.
|
•
|
In response to an European Union Water Framework Directive, in 2015 Polish authorities announced their intention to develop a water management plan to reduce total nitrogen and phosphorous loads in municipal waste water by 75 percent. The plan could impact our Poland facility, although it is unclear what effect, if any, the water management plan may have on our operation in Poland until the plan is complete.
|
•
|
set limits on pollutants that may be discharged to a body of water; or
|
•
|
set additional requirements, such as best management practices for nonpoint sources, including timberland operations, to reduce the amounts of pollutants.
|
FORWARD-LOOKING STATEMENTS
|
•
|
are based on various assumptions we make, and
|
•
|
may not be accurate because of risks and uncertainties surrounding the assumptions we make.
|
•
|
the effect of general economic conditions, including employment rates, interest rate levels, housing starts, availability of financing for home mortgages and strength of the U.S. dollar;
|
•
|
market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
|
•
|
performance of our manufacturing operations, including maintenance requirements;
|
•
|
potential disruptions in our manufacturing operations;
|
•
|
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 the Cellulose Fibers business;
|
•
|
the successful execution of our internal plans and strategic initiatives, including restructurings and cost reduction initiatives;
|
•
|
raw material availability and prices;
|
•
|
the effect of weather;
|
•
|
the risk of loss from fires, floods, windstorms, hurricanes, pest infestations 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 factors described under Risk Factors.
|
•
|
economic activity in Europe and 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 cost of shipping and transportation.
|
RISKS RELATED TO OUR INDUSTRIES AND BUSINESS
|
•
|
unscheduled maintenance outages,
|
•
|
prolonged power failures,
|
•
|
equipment failure,
|
•
|
a chemical spill or release,
|
•
|
explosion of a boiler,
|
•
|
fires, floods, windstorms, earthquakes, hurricanes or other severe weather conditions or catastrophes,
affecting the production of goods or the supply of raw materials (including fiber),
|
•
|
the effect of drought or reduced rainfall on water supply,
|
•
|
labor difficulties,
|
•
|
disruptions in transportation infrastructure, including roads, bridges, rail, tunnels, shipping and port facilities,
|
•
|
terrorism or threats of terrorism,
|
•
|
governmental regulations, and
|
•
|
other operational problems.
|
•
|
air emissions,
|
•
|
wastewater discharges,
|
•
|
harvesting and other silvicultural activities,
|
•
|
forestry operations and endangered species habitat protection,
|
•
|
surface water management,
|
•
|
the storage, management and disposal of hazardous substances and wastes,
|
•
|
the cleanup of contaminated sites,
|
•
|
landfill operation and closure obligations,
|
•
|
building codes, and
|
•
|
health and safety matters.
|
•
|
We would not be allowed to deduct dividends to shareholders in computing our taxable income.
|
•
|
We would be subject to federal and state income tax on our taxable income at applicable corporate rates.
|
•
|
We also would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification.
|
•
|
We may be required, under certain circumstances, to pay a termination fee of $250 million.
|
•
|
We may be required to reimburse Plum Creek for all reasonable documented out-of-pocket fees and expenses incurred in connection with the Merger Agreement and the merger up to a maximum of $40 million.
|
•
|
We may experience negative reactions from the financial markets or from our customers, suppliers or employees.
|
•
|
We may be subject to litigation related to failure to complete the merger or to enforcement proceedings to perform our obligations under the Merger Agreement.
|
RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
|
•
|
actual or anticipated fluctuations in our operating results or our competitors' operating results,
|
•
|
announcements by us or our competitors of new products, capacity changes, significant contracts, acquisitions or strategic investments,
|
•
|
our growth rate and our competitors
’
growth rates,
|
•
|
general economic conditions,
|
•
|
conditions in the financial markets,
|
•
|
changes in stock market analyst recommendations regarding us, our competitors or the forest products industry generally, or lack of analyst coverage of our common stock,
|
•
|
sales of our common stock by our executive officers, directors and significant stockholders,
|
•
|
sales or repurchases of substantial amounts of common stock,
|
•
|
changes in accounting principles, and
|
•
|
changes in tax laws and regulations.
|
•
|
For details about our Timberlands properties, go to
Our Business/What We Do/Timberlands/Where We Do It
.
|
•
|
For details about our Wood Products properties, go to
Our Business/What We Do/Wood Products/Where We Do It
.
|
•
|
For details about our Cellulose Fibers properties, go to
Our Business/What We Do/Cellulose Fibers/Where We Do It
.
|
•
|
New York Stock Exchange and
|
•
|
Chicago Stock Exchange
|
|
NUMBER OF
SECURITIES TO BE
ISSUED UPON
EXERCISE OF
OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS
|
|
WEIGHTED
AVERAGE EXERCISE
PRICE OF
OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS
|
|
NUMBER OF
SECURITIES
REMAINING AVAILABLE
FOR FUTURE ISSUANCE
UNDER EQUITY
COMPENSATION PLANS
(EXCLUDING
SECURITIES TO BE ISSUED UPON EXERCISE)
|
|
|
Equity compensation plans approved by security holders
(1)
|
14,935,316
|
|
$
|
22.74
|
|
17,317,903
|
|
Equity compensation plans not approved by security holders
|
N/A
|
|
N/A
|
|
N/A
|
|
|
Total
|
14,935,316
|
|
$
|
22.74
|
|
17,317,903
|
|
(1) Includes 1,104,621 restricted stock units and 685,535 performance share units. Because there is no exercise price associated with restricted stock units and performance share units, excluding these stock units the weighted average exercise price calculation would be $25.83.
|
|
TOTAL NUMBER OF SHARES (OR UNITS) PURCHASED
|
|
AVERAGE PRICE PAID PER SHARE (OR UNIT)
|
|
TOTAL NUMBER OF SHARES (OR UNITS) PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OF PROGRAMS
|
|
MAXIMUM NUMBER (OR APPROXIMATE DOLLAR VALUE) OF SHARES (OR UNITS) THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS
(1)(2)
|
|
||
Common Stock Repurchases During First Quarter:
|
|
|
|
|
||||||
January
|
228,429
|
|
$
|
35.85
|
|
228,429
|
|
$
|
488,348,381
|
|
February
|
3,038,219
|
|
$
|
35.21
|
|
3,038,219
|
|
$
|
381,369,837
|
|
March
|
4,074,918
|
|
$
|
33.69
|
|
4,074,918
|
|
$
|
244,089,600
|
|
Total repurchases during first quarter
|
7,341,566
|
|
$
|
34.39
|
|
7,341,566
|
|
$
|
244,089,600
|
|
Common Stock Repurchases During Second Quarter:
|
|
|
|
|
||||||
April
|
1,949,315
|
|
$
|
31.84
|
|
1,949,315
|
|
$
|
182,017,591
|
|
May
|
1,570,276
|
|
$
|
31.81
|
|
1,570,276
|
|
$
|
132,064,000
|
|
June
|
1,322,926
|
|
$
|
31.76
|
|
1,322,926
|
|
$
|
90,047,982
|
|
Total repurchases during second quarter
|
4,842,517
|
|
$
|
31.81
|
|
4,842,517
|
|
$
|
90,047,982
|
|
Common Stock Repurchases During Third Quarter:
|
|
|
|
|
||||||
July
|
—
|
|
—
|
|
—
|
|
$
|
90,047,982
|
|
|
August
|
145,720
|
|
$
|
28.00
|
|
145,720
|
|
$
|
585,967,414
|
|
September
|
3,112,428
|
|
$
|
27.56
|
|
3,112,428
|
|
$
|
500,190,226
|
|
Total repurchases during third quarter
|
3,258,148
|
|
$
|
27.58
|
|
3,258,148
|
|
$
|
500,190,226
|
|
Common Stock Repurchases During Fourth Quarter:
|
|
|
|
|
||||||
October
|
616,265
|
|
$
|
28.76
|
|
616,265
|
|
$
|
482,469,449
|
|
November
|
130,930
|
|
$
|
30.75
|
|
130,930
|
|
$
|
478,442,984
|
|
December
|
—
|
|
$
|
—
|
|
—
|
|
$
|
478,442,984
|
|
Total repurchases during fourth quarter
|
747,195
|
|
$
|
29.11
|
|
747,195
|
|
$
|
478,442,984
|
|
Total common stock repurchases during 2015
|
16,189,426
|
|
$
|
32.00
|
|
16,189,426
|
|
$
|
478,442,984
|
|
(1) On August 13, 2014, our board of directors approved a stock repurchase program under which we were authorized to repurchase up to $700 million of outstanding shares (the 2014 Repurchase Program). The 2014 stock repurchase program replaced the prior 2011 stock repurchase program. During 2014, we repurchased $203 million of outstanding shares under the 2014 Repurchase Program. During 2015, we completed the 2014 Repurchase Program by purchasing $497 million of outstanding shares. All common stock purchases under the stock repurchase program were made in open-market transactions.
(2) On August 27, 2015, our board of directors approved a new share repurchase program of up to $500 million of outstanding shares (the 2015 Repurchase Program), commencing upon completion of the 2014 Repurchase Program. During 2015, we repurchased $22 million of outstanding shares under the 2015 Repurchase Program. All common stock purchases under the stock repurchase program were made in open-market transactions.
|
•
|
Assumes $100 invested on
December 31, 2010
in Weyerhaeuser common stock, the S&P 500 Index and the S&P Global Timber & Forestry Index.
|
•
|
Total return assumes dividends received are reinvested at month end.
|
•
|
Measurement dates are the last trading day of the calendar year shown.
|
PER COMMON SHARE
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|
Diluted earnings from continuing operations attributable to Weyerhaeuser common shareholders
|
$
|
0.89
|
|
1.40
|
|
0.82
|
|
0.58
|
|
0.50
|
|
Diluted earnings from discontinued operations attributable to Weyerhaeuser common shareholders
(1)
|
—
|
|
1.78
|
|
0.13
|
|
0.13
|
|
0.11
|
|
|
Diluted net earnings attributable to Weyerhaeuser common shareholders
|
$
|
0.89
|
|
3.18
|
|
0.95
|
|
0.71
|
|
0.61
|
|
Dividends paid per common share
|
$
|
1.20
|
|
1.02
|
|
0.81
|
|
0.62
|
|
0.60
|
|
Weyerhaeuser shareholders’ interest (end of year)
|
$
|
9.54
|
|
10.11
|
|
11.64
|
|
7.50
|
|
7.95
|
|
FINANCIAL POSITION
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|
Total assets
|
$
|
12,486
|
|
13,265
|
|
14,372
|
|
12,609
|
|
12,523
|
|
Total long-term debt
|
$
|
4,891
|
|
4,891
|
|
4,891
|
|
4,291
|
|
4,478
|
|
Weyerhaeuser shareholders’ interest
|
$
|
4,869
|
|
5,304
|
|
6,795
|
|
4,070
|
|
4,263
|
|
Percent earned on average Weyerhaeuser shareholders’ interest
|
9.1
|
%
|
29.5
|
%
|
9.9
|
%
|
9.2
|
%
|
7.5
|
%
|
|
OPERATING RESULTS
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|
Net sales
|
$
|
7,082
|
|
7,403
|
|
7,254
|
|
5,989
|
|
5,378
|
|
Earnings from continuing operations
|
$
|
506
|
|
828
|
|
491
|
|
312
|
|
270
|
|
Discontinued operations, net of income taxes
(1)
|
—
|
|
998
|
|
72
|
|
72
|
|
61
|
|
|
Net earnings
|
506
|
|
1,826
|
|
563
|
|
384
|
|
331
|
|
|
Net loss (earnings) attributable to noncontrolling interest
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
Net earnings attributable to Weyerhaeuser
|
506
|
|
1,826
|
|
563
|
|
385
|
|
331
|
|
|
Dividends on preference shares
|
(44
|
)
|
(44
|
)
|
(23
|
)
|
—
|
|
—
|
|
|
Net earnings attributable to Weyerhaeuser common shareholders
|
$
|
462
|
|
1,782
|
|
540
|
|
385
|
|
331
|
|
CASH FLOWS
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|
Net cash from operations
|
$
|
1,064
|
|
1,088
|
|
1,004
|
|
581
|
|
291
|
|
Cash from investing activities
|
(487
|
)
|
361
|
|
(1,829
|
)
|
(192
|
)
|
122
|
|
|
Cash from financing activities
|
(1,145
|
)
|
(704
|
)
|
762
|
|
(444
|
)
|
(927
|
)
|
|
Net change in cash and cash equivalents
|
$
|
(568
|
)
|
745
|
|
(63
|
)
|
(55
|
)
|
(514
|
)
|
STATISTICS (UNAUDITED)
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|
Number of employees
|
12,600
|
|
12,800
|
|
13,700
|
|
13,200
|
|
12,800
|
|
|
Number of common shareholder accounts at year-end
|
7,700
|
|
8,248
|
|
8,859
|
|
9,227
|
|
9,724
|
|
|
Number of common shares outstanding at year-end (thousands)
|
510,483
|
|
524,474
|
|
583,548
|
|
542,393
|
|
536,425
|
|
|
Weighted average common shares outstanding – diluted (thousands)
|
519,618
|
|
560,899
|
|
571,239
|
|
542,310
|
|
539,879
|
|
(1)
|
WHAT YOU WILL FIND IN THIS MD&A
|
•
|
economic and market conditions affecting our operations;
|
•
|
financial performance summary;
|
•
|
results of our operations — consolidated and by segment;
|
•
|
liquidity and capital resources — where we discuss our cash flows;
|
•
|
off-balance sheet arrangements;
|
•
|
environmental matters, legal proceedings and other contingencies; and
|
•
|
accounting matters — where we discuss critical accounting policies and areas requiring judgments and estimates.
|
ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS
|
FINANCIAL PERFORMANCE SUMMARY
|
RESULTS OF OPERATIONS
|
•
|
Sales realizations refer to net selling prices — this includes selling price plus freight minus normal sales deductions.
|
•
|
Net contribution to earnings refers to earnings (loss) attributable to Weyerhaeuser shareholders before interest expense and income taxes.
|
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
|
|||||||||||||||
|
|
|
|
AMOUNT OF CHANGE
|
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
vs. 2014 |
|
2014
vs. 2013 |
|
|||||
Net sales
|
$
|
7,082
|
|
$
|
7,403
|
|
$
|
7,254
|
|
$
|
(321
|
)
|
$
|
149
|
|
Operating income
|
$
|
919
|
|
$
|
1,320
|
|
$
|
634
|
|
$
|
(401
|
)
|
$
|
686
|
|
Earnings from discontinued operations, net of tax
|
$
|
—
|
|
$
|
998
|
|
$
|
72
|
|
$
|
(998
|
)
|
$
|
926
|
|
Net earnings attributable to Weyerhaeuser common shareholders
|
$
|
462
|
|
$
|
1,782
|
|
$
|
540
|
|
$
|
(1,320
|
)
|
$
|
1,242
|
|
Basic earnings per share attributable to Weyerhaeuser common shareholders
|
$
|
0.89
|
|
$
|
3.20
|
|
$
|
0.95
|
|
$
|
(2.31
|
)
|
$
|
2.25
|
|
Diluted earnings per share attributable to Weyerhaeuser common shareholders
|
$
|
0.89
|
|
$
|
3.18
|
|
$
|
0.95
|
|
$
|
(2.29
|
)
|
$
|
2.23
|
|
•
|
lower Timberlands segment sales — $147 million — primarily due to lower average log sales realizations and export sales volumes in the West, and lower log sales volumes in the South;
|
•
|
lower Wood Products segment sales — $98 million — primarily due to decreased structural lumber and OSB average realizations, partially offset by higher structural lumber, OSB, and engineered solid section sales volumes and higher sales of complementary building products; and
|
•
|
lower Cellulose Fibers segment sales — $76 million — primarily due to lower pulp and liquid packaging board average sales realizations.
|
•
|
earnings from discontinued operation recognized in 2014 — $998 million. There were no earnings from discontinued operations in 2015;
|
•
|
lower gross margin — $252 million — primarily due to lower average sales realizations in lumber and OSB in our Wood Products segment, lower average log sales realizations and sales volumes in our Timberlands segment, and lower average sales realizations for pulp and liquid packaging board, and higher operating costs due to scheduled maintenance outages and the West Coast port slowdown in our Cellulose Fibers segment;
|
•
|
lower other operating income — $219 million — primarily due to a $151 million pretax gain recognized in 2014 related to a previously announced postretirement plan amendment, a $22 million pretax gain recognized in 2014 on the sale of a landfill in Washington State, $14 million of Plum Creek merger-related costs in 2015, and a $13 million noncash impairment charge related to a nonstrategic asset sale in 2015; and
|
•
|
losses from an equity affiliate in 2015 — $105 million — primarily due to an $84 million noncash asset impairment recorded by an equity affiliate in the fourth quarter 2015.
|
•
|
lower income taxes — $188 million — primarily due to lower earnings in our Taxable REIT Subsidiary (TRS) in 2015, an income tax benefit recognized in the fourth quarter 2015 related to a noncash asset impairment recorded by an equity affiliate and the expiration of the company's built-in-gains tax period as a result of a change in U.S. tax legislation; and
|
•
|
lower general and administrative expenses — $49 million.
|
•
|
Timberlands segment sales increased $154 million, primarily due to higher log prices and increased sales volumes in the West, including our acquired Longview Timber holdings.
|
•
|
Cellulose Fibers segment sales increased $34 million primarily due to higher sales realizations for pulp.
|
•
|
a $926 million increase in earnings from discontinued operations, primarily due to a $972 million net gain on the Real Estate Divestiture recognized in 2014;
|
•
|
a $333 million decrease in charges for restructuring, closure and asset impairments primarily related to a noncash impairment charge relating to a large master-planned community north of Las Vegas, Nevada which was retained by Weyerhaeuser in the divestiture of Weyerhaeuser Real Estate Company (WRECO);
|
•
|
a $206 million increase in gross margin in our Timberlands and Cellulose Fibers segments, primarily due to higher sales realizations and owning Longview Timber for a full year;
|
•
|
a $166 million increase in other operating income, primarily due to a $151 million pretax gain recognized in 2014 related to a previously announced postretirement plan amendment; and
|
•
|
a $79 million decrease in our selling, general and administrative expenses.
|
•
|
a $356 million change in income taxes from a benefit in 2013 to an expense in 2014 primarily related to a previously unrecognized tax benefit recorded in 2013 and higher earnings in our Taxable REIT Subsidiary (TRS) in 2014; and
|
•
|
a $140 million decrease in gross margin in our Wood Products segment, primarily due to lower sales realizations in OSB.
|
•
|
lower average log sales realizations in the West — $106 million and
|
•
|
lower sales volumes in the West and South — $46 million.
|
•
|
lower operating costs, primarily due to lower logging and silviculture costs in the South and lower log purchases in the West — $68 million;
|
•
|
higher average sales realizations in the South — $13 million; and
|
•
|
lower selling, general and administrative expenses — $11 million.
|
•
|
higher sales volume in the United States including the increase related to acquired Longview Timber holdings, and higher log prices in our legacy Western and Southern timberlands — $58 million; and
|
•
|
higher log and chip sales volumes in Canada — $10 million.
|
•
|
an $87 million increase as a result of owning Longview Timber for a full year;
|
•
|
a $59 million increase due to higher log prices in our legacy Western timberlands and Southern timberlands;
|
•
|
a $20 million increase due to higher sales volumes in our legacy Western timberlands; and
|
•
|
a $12 million decrease in selling, general and administrative expenses, excluding Longview Timber.
|
•
|
higher structural lumber sales volumes — 3 percent,
|
•
|
higher OSB sales volumes — 7 percent,
|
•
|
higher engineered solid section sales volumes — 6 percent and
|
•
|
higher sales of complementary building products — 10 percent.
|
•
|
lower average sales realizations in lumber and OSB — $258 million and
|
•
|
pretax restructuring charges related to the closure of four distribution centers — $8 million.
|
•
|
lower unit manufacturing costs due to lower resin and other input costs, higher operating rates, and lower translated Canadian operating costs due to the strengthening of the U.S. dollar — $96 million;
|
•
|
lower log costs due to decreasing log prices and lower translated Canadian costs due to the strengthening of the U.S. dollar— $45 million;
|
•
|
lower general and administrative expenses — $28 million;
|
•
|
lower freight costs due to declining fuel prices — $18 million and
|
•
|
higher sales volumes across most product lines — $17 million.
|
•
|
higher engineered solid section shipment volumes — 10 percent, and average sales realizations — 4 percent;
|
•
|
higher sales of complementary building products — 12 percent;
|
•
|
higher engineered I-joists average sales realizations — 8 percent, and shipment volumes — 4 percent; and
|
•
|
higher structural lumber average sales realizations — 1 percent, and shipment volumes — 1 percent.
|
•
|
lower OSB sales realizations — $204 million and
|
•
|
higher log costs — $47 million.
|
•
|
lower lumber manufacturing costs primarily due to aggressive cost control — $40 million;
|
•
|
higher average sales realizations in engineered wood products and lumber — $35 million;
|
•
|
higher margins in our distribution business — $31 million;
|
•
|
lower selling, general and administrative expenses — $15 million;
|
•
|
higher shipment volumes primarily in engineered wood products and our distribution business — $10 million; and
|
•
|
an impairment charge in 2013 related to the decision to permanently close an engineered wood products facility — $9 million.
|
•
|
pulp average sales realizations decreased $31 per ton — 4 percent;
|
•
|
liquid packaging board average sales realizations decreased $48 per ton — 4 percent; and
|
•
|
other products sales volumes decreased 12 percent.
|
•
|
losses from an equity affiliate — $105 million — primarily due to an $84 million noncash asset impairment recorded in the fourth quarter 2015;
|
•
|
lower pulp average sales realizations — $58 million;
|
•
|
higher operating costs primarily due to scheduled maintenance outages and the West Coast port slowdown — $46 million;
|
•
|
lower liquid packaging board average sales realizations — $18 million; and
|
•
|
higher fiber costs — $13 million.
|
•
|
lower energy and chemical costs — $28 million,
|
•
|
lower translated Canadian operating costs due to the strengthening of the U.S. dollar — $27 million and
|
•
|
lower selling, general and administrative expenses — $10 million.
|
•
|
higher pulp and liquid packaging board sales realizations — $108 million and
|
•
|
lower translated Canadian operating costs due to the strengthening of the U.S. dollar — $14 million.
|
•
|
higher energy costs primarily due to reduced electricity sales and higher fuel prices — $13 million and
|
•
|
higher maintenance costs due to a scheduled machine rebuild in our liquid packaging board facility and pulp planned maintenance outages — $13 million.
|
•
|
$13 million noncash impairment charge recognized in first quarter 2015 related to a nonstrategic asset that was sold in second quarter 2015 which is recorded in "Other" above and "Charges for restructuring, closures, and impairments" in our
Consolidated Statement of Operations
. See
Note 18: Charges for Restructuring, Closures and Asset Impairments
in the
Notes to Consolidated Financial Statements
for more information.
|
•
|
$14 million Plum Creek merger-related costs which are recorded in "Other" above and "Other operating income, net" in our
Consolidated Statement of Operations
.
|
•
|
$151 million pretax gain related to a previously announced postretirement plan amendment which is recorded in "Unallocated pension and postretirement credits (costs)" above. See
Note 9: Pension and Other Postretirement Benefit Plans
in the
Notes to Consolidated Financial Statements
for more information.
|
•
|
$39 million in charges related to our selling, general and administrative cost reduction initiative which is recorded in "Other" above.
|
•
|
$22 million pretax gain on the sale of a landfill in Washington State, which is recorded in "Other" above and "Other operating income, net" in our
Consolidated Statement of Operations
. See
Note 19: Other Operating Income, Net
in the
Notes to Consolidated Financial Statements
for more information.
|
•
|
$347 million
in
2015
,
|
•
|
$344 million
in
2014
and
|
•
|
$369 million
in
2013
.
|
•
|
$(3) million
in
2015
,
|
•
|
$185 million
in
2014
and
|
•
|
$(171) million in
2013
.
|
AMOUNTS PER SHARE
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Preference - capital gain distribution
|
$
|
3.19
|
|
$
|
3.19
|
|
$
|
1.66
|
|
Common - capital gain distribution
|
$
|
1.20
|
|
$
|
1.02
|
|
$
|
0.81
|
|
LIQUIDITY AND CAPITAL RESOURCES
|
•
|
protect the interests of our shareholders and lenders and
|
•
|
have access at all times to major financial markets.
|
•
|
cash received from customers;
|
•
|
cash paid to employees and suppliers;
|
•
|
cash paid for interest on our debt; and
|
•
|
cash paid or received for taxes.
|
•
|
$1,064 million
in
2015
,
|
•
|
$1,088 million
in
2014
and
|
•
|
$1,004 million
in
2013
.
|
•
|
Cash received from customers decreased $296 million as sales decreased in our Timberlands, Wood Products, and Cellulose Fibers segments.
|
•
|
Net cash outflows related to income taxes decreased $66 million. We paid income taxes of $14 million in 2015 and received tax refunds of $52 million in 2014.
|
•
|
Cash paid for interest increased $28 million, primarily due to interest received related to tax refunds in 2014.
|
•
|
Cash received from customers increased $180 million as sales increased in our Timberlands and Cellulose Fibers segments.
|
•
|
Net cash inflows related to income taxes increased $70 million. We received income tax refunds of $52 million in 2014 and paid $18 million in 2013.
|
•
|
Cash paid for interest decreased $43 million, primarily due to interest received related to tax refunds in 2014 and refinancing of debt in 2013.
|
•
|
contributed
$33 million
for our Canadian registered plan in accordance with minimum funding rules and respective provincial regulations;
|
•
|
contributed to or made benefit payments for our Canadian nonregistered pension plans of
$3 million
;
|
•
|
made benefit payments of
$24 million
for our U.S. nonqualified pension plans; and
|
•
|
made benefit payments of
$23 million
for our U.S. and Canadian other postretirement plans.
|
•
|
be required to contribute approximately
$16 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
$19 million
for our U.S. nonqualified pension plans; and
|
•
|
make benefit payments of
$22 million
for our U.S. and Canadian other postretirement plans.
|
•
|
acquisitions of property, equipment, timberlands and reforestation;
|
•
|
investments in or distribution from equity affiliates;
|
•
|
proceeds from sale of assets and operations; and
|
•
|
purchases and redemptions of short-term investments.
|
•
|
$(487) million
in
2015
,
|
•
|
$361 million
in
2014
and
|
•
|
$(1,829) million
in
2013
.
|
•
|
net proceeds from the Real Estate Divestiture, net of cash divested in 2014; and
|
•
|
higher capital spending in 2015.
|
•
|
the acquisition of Longview Timber in 2013;
|
•
|
net proceeds from the Real Estate Divestiture, net of cash divested in 2014; and
|
•
|
higher capital spending in 2014.
|
•
|
future economic conditions,
|
•
|
environmental regulations,
|
•
|
changes in the composition of our business,
|
•
|
weather and
|
•
|
timing of equipment purchases.
|
•
|
$19 million
in
2015
,
|
•
|
$28 million
in
2014
and
|
•
|
$20 million
in
2013
.
|
•
|
issuances and payments of long-term debt,
|
•
|
borrowings and payments under revolving lines of credit,
|
•
|
changes in book overdrafts,
|
•
|
proceeds from stock offerings and option exercises and
|
•
|
payments of cash dividends and repurchasing stock.
|
•
|
$(1,145) million
in
2015
,
|
•
|
$(704) million
in
2014
and
|
•
|
$762 million
in
2013
.
|
•
|
29 million
common shares on
June 24, 2013
, at the price of
$27.75
per share for net proceeds of
$781 million
;
|
•
|
4.4 million
common shares on
July 8, 2013
, at the price of
$27.75
per share for net proceeds of
$116 million
, in connection with the exercise of an overallotment option; and
|
•
|
13.8 million
of our 6.375 percent Mandatory Convertible Preference Shares, Series A, par value
$1.00
and liquidation preference of
$50.00
per share on
June 24, 2013
, for net proceeds of
$669 million
.
|
•
|
had no borrowings outstanding under our credit facility and
|
•
|
was in compliance with the credit facility covenants.
|
•
|
a minimum defined net worth of $3.0 billion;
|
•
|
a defined debt-to-total-capital ratio of 65 percent or less; and
|
•
|
ownership of, or long-term leases on, no less than four million acres of timberlands.
|
•
|
total Weyerhaeuser shareholders’ interest,
|
•
|
excluding accumulated comprehensive income (loss) related to pension and postretirement benefits,
|
•
|
minus Weyerhaeuser Company’s investment in our unrestricted subsidiaries.
|
•
|
total Weyerhaeuser Company debt
|
•
|
plus total defined net worth.
|
•
|
a defined net worth of $6.3 billion and
|
•
|
a defined debt-to-total-capital ratio of 44 percent.
|
•
|
$34 million
in
2015
,
|
•
|
$119 million
in
2014
and
|
•
|
$162 million
in
2013
.
|
•
|
$619 million
in
2015
,
|
•
|
$563 million
in
2014
and
|
•
|
$458 million
in
2013
.
|
•
|
an increase in our quarterly dividend from 17 cents per share to 20 cents per share in April 2013;
|
•
|
an increase in our quarterly dividend from 20 cents per share to 22 cents per share in August 2013;
|
•
|
an increase in our quarterly dividend from 22 cents per share to 29 cents per share in August 2014; and
|
•
|
an increase in our quarterly dividend from 29 cents per share to 31 cents per share in August 2015.
|
•
|
85.88 cents per share in August 2013 and
|
•
|
79.69 cents per share in October 2013; February, April, August and October 2014; and February, May, August and October 2015.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||||||||
|
|
|
PAYMENTS DUE BY PERIOD
|
|
|||||||||||
|
TOTAL
|
|
LESS THAN
1 YEAR
|
|
1–3
YEARS
|
|
3–5
YEARS
|
|
MORE THAN
5 YEARS
|
|
|||||
Long-term debt obligations
|
$
|
4,896
|
|
$
|
—
|
|
$
|
343
|
|
$
|
1,050
|
|
$
|
3,503
|
|
Interest
(1)
|
3,380
|
|
321
|
|
619
|
|
554
|
|
1,886
|
|
|||||
Operating lease obligations
|
210
|
|
27
|
|
47
|
|
31
|
|
105
|
|
|||||
Purchase obligations
(2)
|
146
|
|
84
|
|
41
|
|
4
|
|
17
|
|
|||||
Harvest commitments
(3)
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|||||
Employee-related obligations
(4)
|
486
|
|
155
|
|
56
|
|
41
|
|
91
|
|
|||||
Liabilities related to unrecognized tax benefits
(5)
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Total
|
$
|
9,126
|
|
$
|
587
|
|
$
|
1,106
|
|
$
|
1,680
|
|
$
|
5,603
|
|
(1) Amounts presented for interest payments assume that all long-term debt obligations outstanding as of December 31, 2015 will remain outstanding until maturity, and interest rates on variable-rate debt in effect as of December 31, 2015 will remain in effect until maturity.
(2) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude arrangements that the company can cancel without penalty.
(3) Harvest commitments are purchased at market value and can be resold at market value in the future.
(4) The timing of certain of these payments will be triggered by retirements or other events. These payments can include workers' compensation, deferred compensation and banked vacation, among other obligations. When the timing of payment is uncertain, the amounts are included in the total column only. Minimum pension funding is required by established funding standards and estimates are not made beyond 2016. Estimated payments of contractually obligated postretirement benefits are not included due to the uncertainty of payment timing.
(5) We have recognized total liabilities related to unrecognized tax benefits of $7 million as of December 31, 2015, including interest of $1 million. The timing of payments related to these obligations is uncertain; however, none of this amount is expected to be paid within the next year.
|
OFF-BALANCE SHEET ARRANGEMENTS
|
•
|
surety bonds,
|
•
|
letters of credit and guarantees and
|
•
|
information regarding variable interest entities.
|
ENVIRONMENTAL MATTERS, LEGAL PROCEEDINGS AND OTHER CONTINGENCIES
|
ACCOUNTING MATTERS
|
•
|
historical experience and
|
•
|
assumptions we believe are appropriate and reasonable under current circumstances.
|
•
|
pension and postretirement benefit plans;
|
•
|
potential impairments of long-lived assets; and
|
•
|
legal, environmental and product liability reserves.
|
•
|
expected long-term rate of return on plan assets,
|
•
|
discount rates,
|
•
|
anticipated trends in health care costs,
|
•
|
assumed increases in salaries and
|
•
|
mortality rates.
|
•
|
actual pension fund performance,
|
•
|
level of lump sum distributions,
|
•
|
plan changes and amendments,
|
•
|
changes in plan participation or coverage and
|
•
|
portfolio changes and restructuring.
|
•
|
expected long-term rate of return and
|
•
|
discount rates.
|
•
|
the net compounded annual return of
8.0 percent
achieved by our U.S. pension trust investment strategy the past 5 years and
|
•
|
current and expected valuation levels in the global equity and credit markets.
|
•
|
$24 million for our U.S. qualified pension plans and
|
•
|
$4 million for our Canadian registered pension plans.
|
•
|
4.5 percent
for our U.S. pension plans — compared with
4.1 percent
at
December 31, 2014
;
|
•
|
4.0 percent
for our U.S. postretirement plans — compared with
3.6 percent
at
December 31, 2014
;
|
•
|
4.0 percent
for our Canadian pension plans — compared with
3.9 percent
at
December 31, 2014
; and
|
•
|
3.9 percent
for our Canadian postretirement plans — compared with
3.8 percent
at
December 31, 2014
.
|
•
|
$35 million for our U.S. qualified pension plans and
|
•
|
$5 million for our Canadian registered pension plans.
|
•
|
future cash flows,
|
•
|
residual values and
|
•
|
fair values of the assets.
|
•
|
probability of alternative outcomes,
|
•
|
product pricing,
|
•
|
raw material costs,
|
•
|
product sales and
|
•
|
discount rate.
|
•
|
it becomes probable that we will have to make payments and
|
•
|
the amount of loss can be reasonably estimated.
|
•
|
historical experience,
|
•
|
judgments about the potential actions of third party claimants and courts and
|
•
|
recommendations of legal counsel.
|
PERFORMANCE MEASURES
|
LONG-TERM DEBT OBLIGATIONS
|
•
|
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
|
||||||||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
THEREAFTER
|
|
TOTAL
|
|
FAIR VALUE
|
|
||||||||
Fixed-rate debt
|
$
|
—
|
|
$
|
281
|
|
$
|
62
|
|
$
|
500
|
|
$
|
—
|
|
$
|
3,503
|
|
$
|
4,346
|
|
$
|
5,070
|
|
Average interest rate
|
—
|
%
|
6.95
|
%
|
7.00
|
%
|
7.38
|
%
|
—
|
%
|
7.09
|
%
|
7.12
|
%
|
N/A
|
|
||||||||
Variable-rate debt
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
550
|
|
$
|
—
|
|
$
|
550
|
|
$
|
550
|
|
Average interest rate
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
2.07
|
%
|
—
|
%
|
2.07
|
%
|
N/A
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
CONSOLIDATED STATEMENT OF OPERATIONS
|
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Net sales
|
$
|
7,082
|
|
$
|
7,403
|
|
$
|
7,254
|
|
Costs of products sold
|
5,694
|
|
5,763
|
|
5,716
|
|
|||
Gross margin
|
1,388
|
|
1,640
|
|
1,538
|
|
|||
Selling expenses
|
113
|
|
112
|
|
125
|
|
|||
General and administrative expenses
|
289
|
|
338
|
|
404
|
|
|||
Research and development expenses
|
24
|
|
27
|
|
33
|
|
|||
Charges for restructuring, closures and impairments
(Note 18)
|
25
|
|
44
|
|
377
|
|
|||
Other operating costs (income), net
(Note 19)
|
18
|
|
(201
|
)
|
(35
|
)
|
|||
Operating income
|
919
|
|
1,320
|
|
634
|
|
|||
Earnings (loss) from equity affiliates
(Note 8)
|
(105
|
)
|
(1
|
)
|
1
|
|
|||
Interest income and other
|
36
|
|
38
|
|
54
|
|
|||
Interest expense, net of capitalized interest
|
(347
|
)
|
(344
|
)
|
(369
|
)
|
|||
Earnings from continuing operations before income taxes
|
503
|
|
1,013
|
|
320
|
|
|||
Income taxes
(Note 20)
|
3
|
|
(185
|
)
|
171
|
|
|||
Earnings from continuing operations
|
506
|
|
828
|
|
491
|
|
|||
Earnings from discontinued operations, net of income taxes
(Note 3)
|
—
|
|
998
|
|
72
|
|
|||
Net earnings
|
506
|
|
1,826
|
|
563
|
|
|||
Dividends on preference shares
|
(44
|
)
|
(44
|
)
|
(23
|
)
|
|||
Net earnings attributable to Weyerhaeuser common shareholders
|
$
|
462
|
|
$
|
1,782
|
|
$
|
540
|
|
Basic earnings per share attributable to Weyerhaeuser common shareholders
(Note 5)
:
|
|
|
|
||||||
Continuing operations
|
$
|
0.89
|
|
$
|
1.41
|
|
$
|
0.82
|
|
Discontinued operations
|
—
|
|
1.79
|
|
0.13
|
|
|||
Net earnings per share
|
$
|
0.89
|
|
$
|
3.20
|
|
$
|
0.95
|
|
Diluted earnings per share attributable to Weyerhaeuser common shareholders
(Note 5)
:
|
|
|
|
||||||
Continuing operations
|
$
|
0.89
|
|
$
|
1.40
|
|
$
|
0.82
|
|
Discontinued operations
|
—
|
|
1.78
|
|
0.13
|
|
|||
Net earnings per share
|
$
|
0.89
|
|
$
|
3.18
|
|
$
|
0.95
|
|
Dividends paid per common share
|
$
|
1.20
|
|
$
|
1.02
|
|
$
|
0.81
|
|
Weighted average shares outstanding (in thousands)
(Note 5)
:
|
|
|
|
||||||
Basic
|
516,371
|
|
556,705
|
|
566,329
|
|
|||
Diluted
|
519,618
|
|
560,899
|
|
571,239
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Comprehensive income:
|
|
|
|
||||||
Net earnings
|
$
|
506
|
|
$
|
1,826
|
|
$
|
563
|
|
Other comprehensive income (loss):
|
|
|
|
||||||
Foreign currency translation adjustments
|
(97
|
)
|
(50
|
)
|
(59
|
)
|
|||
Changes in unamortized net pension and other postretirement benefit gain (loss), net of tax expense (benefit) of $131 in 2015, ($323) in 2014, and $480 in 2013
|
282
|
|
(554
|
)
|
902
|
|
|||
Changes in unamortized prior service credit (cost), net of tax expense (benefit) of ($1) in 2015, ($64) in 2014 and $23 in 2013
|
(4
|
)
|
(103
|
)
|
27
|
|
|||
Unrealized gains on available-for-sale securities
|
—
|
|
—
|
|
2
|
|
|||
Total comprehensive income attributable to Weyerhaeuser shareholders
|
$
|
687
|
|
$
|
1,119
|
|
$
|
1,435
|
|
CONSOLIDATED BALANCE SHEET
|
ASSETS
|
|
|
||||
DOLLAR AMOUNTS IN MILLIONS
|
||||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$
|
1,012
|
|
$
|
1,580
|
|
Receivables, less discounts and allowances of $3 and $3
|
487
|
|
525
|
|
||
Receivables for taxes
|
30
|
|
25
|
|
||
Inventories
(Note 6)
|
568
|
|
595
|
|
||
Prepaid expenses
|
77
|
|
80
|
|
||
Total current assets
|
2,174
|
|
2,805
|
|
||
Property and equipment, less accumulated depreciation of $6,294 and $6,324
(Note 7)
|
2,586
|
|
2,623
|
|
||
Construction in progress
|
195
|
|
131
|
|
||
Timber and timberlands at cost, less depletion charged to disposals
|
6,480
|
|
6,530
|
|
||
Investments in and advances to equity affiliates
(Note 8)
|
74
|
|
188
|
|
||
Goodwill
|
40
|
|
40
|
|
||
Deferred tax assets
(Note 20)
|
4
|
|
44
|
|
||
Other assets
|
318
|
|
289
|
|
||
Restricted financial investments held by variable interest entities
(Note 10)
|
615
|
|
615
|
|
||
Total assets
|
$
|
12,486
|
|
$
|
13,265
|
|
LIABILITIES AND EQUITY
|
||||||
Current liabilities:
|
|
|
||||
Accounts payable
|
326
|
|
331
|
|
||
Accrued liabilities
(Note 11)
|
549
|
|
587
|
|
||
Total current liabilities
|
875
|
|
918
|
|
||
Long-term debt (
Notes 13
and
14
)
|
4,891
|
|
4,891
|
|
||
Long-term debt (nonrecourse to the company) held by variable interest entities
(Note 10)
|
511
|
|
511
|
|
||
Deferred income taxes
(Note 20)
|
86
|
|
14
|
|
||
Deferred pension and other postretirement benefits
(Note 9)
|
987
|
|
1,319
|
|
||
Other liabilities
|
267
|
|
308
|
|
||
Commitments and contingencies
(Note 15)
|
|
|
||||
Total liabilities
|
7,617
|
|
7,961
|
|
||
Equity:
|
|
|
||||
Weyerhaeuser shareholders’ interest (
Notes 16
and
17
):
|
|
|
||||
Mandatory convertible preference shares, series A: $1.00 par value; $50.00 liquidation; authorized 40,000,000 shares; issued and outstanding: 13,799,711 and 13,800,000 shares
(Note 4)
|
14
|
|
14
|
|
||
Common shares: $1.25 par value; authorized 1,360,000,000 shares; issued and outstanding: 510,483,285 and 524,474,315 shares
(Note 4)
|
638
|
|
656
|
|
||
Other capital
(Note 4)
|
4,080
|
|
4,519
|
|
||
Retained earnings
|
1,349
|
|
1,508
|
|
||
Cumulative other comprehensive loss
|
(1,212
|
)
|
(1,393
|
)
|
||
Total equity
|
4,869
|
|
5,304
|
|
||
Total liabilities and equity
|
$
|
12,486
|
|
$
|
13,265
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Cash flows from operations:
|
|
|
|
||||||
Net earnings
|
$
|
506
|
|
$
|
1,826
|
|
$
|
563
|
|
Noncash charges (credits) to income:
|
|
|
|
||||||
Depreciation, depletion and amortization
|
479
|
|
500
|
|
472
|
|
|||
Deferred income taxes, net
(Note 20)
|
—
|
|
205
|
|
(29
|
)
|
|||
Pension and other postretirement benefits
(Note 9)
|
42
|
|
(152
|
)
|
101
|
|
|||
Share-based compensation expense
(Note 17)
|
31
|
|
40
|
|
42
|
|
|||
Charges for impairment of assets
(Note 18)
|
15
|
|
2
|
|
372
|
|
|||
(Earnings) loss from equity affiliates
|
105
|
|
1
|
|
(1
|
)
|
|||
Net gains on dispositions of assets and operations
(1)
(Note 3)
|
(38
|
)
|
(1,050
|
)
|
(58
|
)
|
|||
Foreign exchange transaction losses
(Note 19)
|
47
|
|
27
|
|
7
|
|
|||
Change in, net of acquisition:
|
|
|
|
||||||
Receivables less allowances
|
17
|
|
29
|
|
(27
|
)
|
|||
Receivable for taxes
|
(5
|
)
|
76
|
|
(6
|
)
|
|||
Inventories
|
10
|
|
(66
|
)
|
(13
|
)
|
|||
Real estate and land
|
—
|
|
(133
|
)
|
(166
|
)
|
|||
Prepaid expenses
|
3
|
|
17
|
|
(26
|
)
|
|||
Accounts payable and accrued liabilities
|
(35
|
)
|
(98
|
)
|
(51
|
)
|
|||
Deposits on land positions and other assets
|
—
|
|
15
|
|
(18
|
)
|
|||
Pension and postretirement contributions / benefit payments
|
(83
|
)
|
(101
|
)
|
(137
|
)
|
|||
Other
|
(30
|
)
|
(50
|
)
|
(21
|
)
|
|||
Net cash from operations
|
1,064
|
|
1,088
|
|
1,004
|
|
|||
Cash flows from investing activities:
|
|
|
|
||||||
Property and equipment
|
(443
|
)
|
(354
|
)
|
(261
|
)
|
|||
Timberlands reforestation
|
(40
|
)
|
(41
|
)
|
(32
|
)
|
|||
Acquisition of timberlands
|
(36
|
)
|
—
|
|
—
|
|
|||
Acquisition of Longview Timber LLC, net of cash acquired
(Note 4)
|
—
|
|
—
|
|
(1,581
|
)
|
|||
Net proceeds from Real Estate Divestiture, net of cash divested
(Note 3)
|
—
|
|
707
|
|
—
|
|
|||
Proceeds from sale of assets and operations
|
19
|
|
28
|
|
20
|
|
|||
Net proceeds of investments held by special purpose entities
(Note 10)
|
—
|
|
—
|
|
22
|
|
|||
Other
|
13
|
|
21
|
|
3
|
|
|||
Cash from investing activities
|
(487
|
)
|
361
|
|
(1,829
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
||||||
Net proceeds from issuance of common shares
(Note 4)
|
—
|
|
—
|
|
897
|
|
|||
Net proceeds from issuance of preference shares
(Note 4)
|
—
|
|
—
|
|
669
|
|
|||
Net proceeds from issuance of debt
(Note 13)
|
—
|
|
—
|
|
1,044
|
|
|||
Net proceeds from issuance of Weyerhaeuser Real Estate Company (WRECO) debt
(Note 3)
|
—
|
|
887
|
|
—
|
|
|||
Deposit of WRECO debt proceeds into escrow
(Note 3)
|
—
|
|
(887
|
)
|
—
|
|
|||
Cash dividends on common shares
|
(619
|
)
|
(563
|
)
|
(458
|
)
|
|||
Cash dividends on preference shares
|
(44
|
)
|
(44
|
)
|
(23
|
)
|
|||
Change in book overdrafts
|
—
|
|
(17
|
)
|
7
|
|
|||
Payments on debt
(Note 13)
|
—
|
|
—
|
|
(1,567
|
)
|
|||
Exercises of stock options
|
34
|
|
119
|
|
162
|
|
|||
Repurchase of common stock
(Note 16)
|
(518
|
)
|
(203
|
)
|
—
|
|
|||
Other
|
2
|
|
4
|
|
31
|
|
|||
Cash from financing activities
|
(1,145
|
)
|
(704
|
)
|
762
|
|
|||
Net change in cash and cash equivalents
|
(568
|
)
|
745
|
|
(63
|
)
|
|||
Cash and cash equivalents at beginning of year
|
1,580
|
|
835
|
|
898
|
|
|||
Cash and cash equivalents at end of year
|
$
|
1,012
|
|
$
|
1,580
|
|
$
|
835
|
|
Cash paid (received) during the year for:
|
|
|
|
||||||
Interest, net of amounts capitalized of $7 in 2015, $13 in 2014 and $21 in 2013
|
$
|
347
|
|
$
|
319
|
|
$
|
366
|
|
Income taxes
|
$
|
14
|
|
$
|
(37
|
)
|
$
|
8
|
|
Noncash investing and financing activity:
|
|
|
|
||||||
Acquisition of Longview Timber LLC, debt assumed
(Note 4)
|
$
|
—
|
|
$
|
—
|
|
$
|
1,070
|
|
Common shares tendered in WRECO divestiture
(Note 3)
|
$
|
—
|
|
$
|
1,954
|
|
$
|
—
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Mandatory convertible preference shares, series A:
|
|
|
|
|
|||||
Balance at beginning of year
|
$
|
14
|
|
$
|
14
|
|
$
|
—
|
|
New issuance
|
—
|
|
—
|
|
14
|
|
|||
Balance at end of year
|
$
|
14
|
|
$
|
14
|
|
$
|
14
|
|
Common shares:
|
|
|
|
|
|||||
Balance at beginning of year
|
$
|
656
|
|
$
|
729
|
|
$
|
678
|
|
New issuance
|
—
|
|
—
|
|
42
|
|
|||
Shares tendered
(Note 3)
|
—
|
|
(73
|
)
|
—
|
|
|||
Issued for exercise of stock options
|
2
|
|
7
|
|
9
|
|
|||
Share repurchases
|
(20
|
)
|
(7
|
)
|
—
|
|
|||
Balance at end of year
|
$
|
638
|
|
$
|
656
|
|
$
|
729
|
|
Other capital:
|
|
|
|
||||||
Balance at beginning of year
|
$
|
4,519
|
|
$
|
6,444
|
|
$
|
4,731
|
|
New issuance
|
—
|
|
—
|
|
1,509
|
|
|||
Shares tendered
(Note 3)
|
—
|
|
(1,881
|
)
|
—
|
|
|||
Exercise of stock options
|
32
|
|
112
|
|
152
|
|
|||
Repurchase of common shares
|
(498
|
)
|
(196
|
)
|
—
|
|
|||
Share-based compensation
|
32
|
|
35
|
|
42
|
|
|||
Other transactions, net
|
(5
|
)
|
5
|
|
10
|
|
|||
Balance at end of year
|
$
|
4,080
|
|
$
|
4,519
|
|
$
|
6,444
|
|
Retained earnings:
|
|
|
|
||||||
Balance at beginning of year
|
$
|
1,508
|
|
$
|
294
|
|
$
|
219
|
|
Net earnings attributable to Weyerhaeuser
|
506
|
|
1,826
|
|
563
|
|
|||
Dividends on common shares
(Note 16)
|
(621
|
)
|
(568
|
)
|
(465
|
)
|
|||
Cash dividends on preference shares
(Note 16)
|
(44
|
)
|
(44
|
)
|
(23
|
)
|
|||
Balance at end of year
|
$
|
1,349
|
|
$
|
1,508
|
|
$
|
294
|
|
Cumulative other comprehensive loss:
|
|
|
|
||||||
Balance at beginning of year
|
$
|
(1,393
|
)
|
$
|
(686
|
)
|
$
|
(1,558
|
)
|
Annual changes – net of tax:
|
|
|
|
||||||
Foreign currency translation adjustments
|
(97
|
)
|
(50
|
)
|
(59
|
)
|
|||
Changes in unamortized net pension and other postretirement benefit loss
(Note 9)
|
282
|
|
(554
|
)
|
902
|
|
|||
Changes in unamortized prior service credit (cost)
(Note 9)
|
(4
|
)
|
(103
|
)
|
27
|
|
|||
Unrealized gains on available-for-sale securities
|
—
|
|
—
|
|
2
|
|
|||
Balance at end of year
|
$
|
(1,212
|
)
|
$
|
(1,393
|
)
|
$
|
(686
|
)
|
Total Weyerhaeuser shareholders’ interest:
|
|
|
|
||||||
Balance at end of year
|
$
|
4,869
|
|
$
|
5,304
|
|
$
|
6,795
|
|
Noncontrolling interests:
|
|
|
|
||||||
Balance at beginning of year
|
$
|
—
|
|
$
|
37
|
|
$
|
43
|
|
New consolidations, de-consolidations and other transactions
|
—
|
|
(37
|
)
|
(6
|
)
|
|||
Balance at end of year
|
$
|
—
|
|
$
|
—
|
|
$
|
37
|
|
Total equity:
|
|
|
|
||||||
Balance at end of year
|
$
|
4,869
|
|
$
|
5,304
|
|
$
|
6,832
|
|
INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE 1:
|
||
NOTE 2:
|
||
NOTE 3:
|
||
NOTE 4:
|
ACQUISITIONS
|
|
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:
|
||
NOTE 18:
|
||
NOTE 19:
|
OTHER OPERATING COSTS (INCOME), NET
|
|
NOTE 20:
|
||
NOTE 21:
|
||
NOTE 22:
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
•
|
our election to be taxed as a real estate investment trust,
|
•
|
how we report our results,
|
•
|
changes in how we report our results and
|
•
|
how we account for various items.
|
•
|
consolidated financial statements,
|
•
|
our business segments,
|
•
|
foreign currency translation,
|
•
|
estimates, and
|
•
|
fair value measurements.
|
•
|
majority-owned domestic and foreign subsidiaries and
|
•
|
variable interest entities in which we are the primary beneficiary.
|
•
|
growing and harvesting timber; and
|
•
|
manufacturing, distributing and selling products made from trees.
|
SEGMENT
|
PRODUCTS AND SERVICES
|
Timberlands
|
Logs, timber, minerals, oil and gas and international wood products
|
Wood Products
|
Softwood lumber, engineered wood products, structural panels and building materials distribution
|
Cellulose Fibers
|
Pulp, liquid packaging board and an equity interest in a newsprint joint venture
|
•
|
pricing products transferred between our business segments at current market values and
|
•
|
allocating joint conversion and common facility costs according to usage by our business segment product lines.
|
•
|
assets and liabilities — at the exchange rates in effect as of our balance sheet date; and
|
•
|
revenues and expenses — at average monthly exchange rates throughout the year.
|
•
|
reported amounts of assets, liabilities and equity;
|
•
|
disclosure of contingent assets and liabilities; and
|
•
|
reported amounts of revenues and expenses.
|
•
|
long-lived assets (asset groups) measured at fair value for an impairment assessment,
|
•
|
reporting units measured at fair value in the first step of a goodwill impairment test,
|
•
|
nonfinancial assets and nonfinancial liabilities measured at fair value in the second step of a goodwill impairment assessment,
|
•
|
assets acquired and liabilities assumed in a business acquisition and
|
•
|
asset retirement obligations initially measured at fair value.
|
•
|
Level 1 — Inputs are quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 — Inputs are:
|
•
|
Level 3 — Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.
|
•
|
accounting changes made upon our adoption of new accounting guidance and
|
•
|
our reclassification of certain balances and results from prior years to make them consistent with our current reporting.
|
•
|
capital investments,
|
•
|
financing our business and
|
•
|
operations.
|
•
|
Improvements to and replacements of major units of property are capitalized.
|
•
|
Maintenance, repairs and minor replacements are expensed.
|
•
|
Depreciation is calculated using a straight-line method at rates based on estimated service lives.
|
•
|
Logging roads are generally amortized — as timber is harvested — at rates based on the volume of timber estimated to be removed.
|
•
|
Cost and accumulated depreciation of property sold or retired are removed from the accounts and the gain or loss is included in earnings.
|
•
|
reforestation,
|
•
|
depletion and
|
•
|
forest management in Canada.
|
•
|
15
years in the South and
|
•
|
30
years in the West.
|
•
|
fertilization,
|
•
|
vegetation and insect control,
|
•
|
pruning and precommercial thinning,
|
•
|
property taxes and
|
•
|
interest.
|
•
|
regulatory and environmental constraints,
|
•
|
our management strategies,
|
•
|
inventory data improvements,
|
•
|
growth rate revisions and recalibrations and
|
•
|
known dispositions and inoperable acres.
|
•
|
granted by the provincial governments;
|
•
|
granted for initial periods of
15
to
25
years; and
|
•
|
renewable provided we meet reforestation, operating and management guidelines.
|
•
|
varies from province to province,
|
•
|
is tied to product market pricing and
|
•
|
depends upon the allocation of land management responsibilities in the license.
|
•
|
appraisals,
|
•
|
market pricing of comparable assets,
|
•
|
discounted value of estimated cash flows from the asset and
|
•
|
replacement values of comparable assets.
|
•
|
using a fair-value-based approach and
|
•
|
at least annually — at the beginning of the fourth quarter.
|
•
|
future tax consequences due to differences between the carrying amounts for financial purposes and the tax bases of certain items and
|
•
|
operating loss and tax credit carryforwards.
|
•
|
determine when the differences between the carrying amounts and tax bases of affected items are expected to be recovered or resolved and
|
•
|
use enacted tax rates expected to apply to taxable income in those years.
|
•
|
cost of benefits provided in exchange for employees’ services rendered during the year;
|
•
|
interest cost of the obligations;
|
•
|
expected long-term return on fund assets;
|
•
|
gains or losses on plan settlements and curtailments;
|
•
|
amortization of prior service costs and plan amendments over the average remaining service period of the active employee group covered by the plans or the average remaining life expectancy in situations where the plan participants affected by the plan amendment are inactive; and
|
•
|
amortization of cumulative unrecognized net actuarial gains and losses — generally in excess of 10 percent of the greater of the benefit obligation or market-related value of plan assets at the beginning of the year — over the average remaining service period of the active employee group covered by the plans or the average remaining life expectancy in situations where the plan participants are inactive.
|
•
|
Salaried employee benefits are based on each employee’s highest monthly earnings for five consecutive years during the final 10 years before retirement.
|
•
|
Hourly and union employee benefits generally are stated amounts for each year of service.
|
•
|
Union employee benefits are set through collective-bargaining agreements.
|
•
|
U.S. pension plans — according to the Employee Retirement Income Security Act of 1974; and
|
•
|
Canadian pension plans — according to the applicable provincial pension act and the Income Tax Act.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||||||||
|
TIMBERLANDS
|
|
WOOD
PRODUCTS
|
|
CELLULOSE
FIBERS
|
|
UNALLOCATED ITEMS
(1)
AND INTERSEGMENT ELIMINATIONS
|
|
CONSOLIDATED
|
|
|||||
Sales to unaffiliated customers
|
|||||||||||||||
2015
|
$
|
1,350
|
|
$
|
3,872
|
|
$
|
1,860
|
|
$
|
—
|
|
$
|
7,082
|
|
2014
|
$
|
1,497
|
|
$
|
3,970
|
|
$
|
1,936
|
|
$
|
—
|
|
$
|
7,403
|
|
2013
|
$
|
1,343
|
|
$
|
4,009
|
|
$
|
1,902
|
|
$
|
—
|
|
$
|
7,254
|
|
Intersegment sales
|
|||||||||||||||
2015
|
$
|
830
|
|
$
|
82
|
|
$
|
—
|
|
$
|
(912
|
)
|
$
|
—
|
|
2014
|
$
|
867
|
|
$
|
80
|
|
$
|
—
|
|
$
|
(947
|
)
|
$
|
—
|
|
2013
|
$
|
799
|
|
$
|
71
|
|
$
|
—
|
|
$
|
(870
|
)
|
$
|
—
|
|
Contribution (charge) to earnings from continuing operations
|
|||||||||||||||
2015
|
$
|
549
|
|
$
|
258
|
|
$
|
119
|
|
$
|
(76
|
)
|
$
|
850
|
|
2014
|
$
|
613
|
|
$
|
327
|
|
$
|
291
|
|
$
|
126
|
|
$
|
1,357
|
|
2013
|
$
|
470
|
|
$
|
441
|
|
$
|
200
|
|
$
|
(422
|
)
|
$
|
689
|
|
(1) 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, and the elimination of intersegment profit in inventory and the LIFO reserve.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||||||||
|
TIMBERLANDS
|
|
WOOD
PRODUCTS
|
|
CELLULOSE
FIBERS
|
|
UNALLOCATED
ITEMS
|
|
CONSOLIDATED
|
|
|||||
Depreciation, depletion and amortization
|
|||||||||||||||
2015
|
$
|
209
|
|
$
|
106
|
|
$
|
154
|
|
$
|
10
|
|
$
|
479
|
|
2014
|
$
|
207
|
|
$
|
119
|
|
$
|
155
|
|
$
|
12
|
|
$
|
493
|
|
2013
|
$
|
166
|
|
$
|
123
|
|
$
|
156
|
|
$
|
13
|
|
$
|
458
|
|
Net pension and postretirement cost (credit)
(1)
|
|||||||||||||||
2015
|
$
|
9
|
|
$
|
27
|
|
$
|
17
|
|
$
|
(11
|
)
|
$
|
42
|
|
2014
|
$
|
10
|
|
$
|
24
|
|
$
|
11
|
|
$
|
(45
|
)
|
$
|
—
|
|
2013
|
$
|
10
|
|
$
|
28
|
|
$
|
18
|
|
$
|
40
|
|
$
|
96
|
|
Charges for restructuring, closures and impairments
(2)
|
|||||||||||||||
2015
|
$
|
—
|
|
$
|
10
|
|
$
|
—
|
|
$
|
15
|
|
$
|
25
|
|
2014
|
$
|
1
|
|
$
|
2
|
|
$
|
—
|
|
$
|
41
|
|
$
|
44
|
|
2013
|
$
|
2
|
|
$
|
13
|
|
$
|
—
|
|
$
|
362
|
|
$
|
377
|
|
Earnings (loss) from equity affiliates
|
|||||||||||||||
2015
|
$
|
—
|
|
$
|
—
|
|
$
|
(105
|
)
|
$
|
—
|
|
$
|
(105
|
)
|
2014
|
$
|
—
|
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
—
|
|
$
|
(1
|
)
|
2013
|
$
|
—
|
|
$
|
—
|
|
$
|
3
|
|
$
|
(2
|
)
|
$
|
1
|
|
Capital expenditures
|
|||||||||||||||
2015
|
$
|
75
|
|
$
|
287
|
|
$
|
118
|
|
$
|
3
|
|
$
|
483
|
|
2014
|
$
|
74
|
|
$
|
190
|
|
$
|
123
|
|
$
|
4
|
|
$
|
391
|
|
2013
|
$
|
73
|
|
$
|
113
|
|
$
|
92
|
|
$
|
5
|
|
$
|
283
|
|
Investments in and advances to equity affiliates and unconsolidated entities
|
|||||||||||||||
2015
|
$
|
—
|
|
$
|
—
|
|
$
|
74
|
|
$
|
—
|
|
$
|
74
|
|
2014
|
$
|
—
|
|
$
|
—
|
|
$
|
188
|
|
$
|
—
|
|
$
|
188
|
|
2013
|
$
|
—
|
|
$
|
—
|
|
$
|
190
|
|
$
|
—
|
|
$
|
190
|
|
Total assets
(3)
|
|||||||||||||||
2015
|
$
|
7,260
|
|
$
|
1,541
|
|
$
|
1,984
|
|
$
|
1,701
|
|
$
|
12,486
|
|
2014
|
$
|
7,327
|
|
$
|
1,430
|
|
$
|
2,214
|
|
$
|
2,294
|
|
$
|
13,265
|
|
2013
|
$
|
7,578
|
|
$
|
1,326
|
|
$
|
2,299
|
|
$
|
3,169
|
|
$
|
14,372
|
|
(1) Net pension and postretirement cost (credit) excludes special items, as well as the recognition of curtailments, settlements and special termination benefits due to closures, restructuring or divestitures. See
Note 9: Pension and Other Postretirement Benefit Plans
for more information.
(2) See Note 18: Charges for Restructuring, Closures and Asset Impairments for more information
(3) Unallocated Items total assets includes assets of discontinued operations in 2013.
|
•
|
the distribution of shares of WRECO to our shareholders in exchange for
59 million
shares of our common stock; and
|
•
|
the merger of WRECO into a special purpose subsidiary of TRI Pointe, with WRECO surviving the merger and becoming a wholly-owned subsidiary of TRI Pointe.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||
|
2014
|
|
|
Proceeds:
|
|
||
Common shares tendered (58,813,151 shares at $33.22 per share)
|
$
|
1,954
|
|
Cash
|
707
|
|
|
|
2,661
|
|
|
Less:
|
|
||
Net book value of contributed assets
|
(1,671
|
)
|
|
Transaction costs, net of reimbursement
|
(18
|
)
|
|
|
(1,689
|
)
|
|
Gain on WRECO divestiture
|
$
|
972
|
|
DOLLAR AMOUNTS IN MILLIONS
|
|||
|
December 31, 2013
|
|
|
Assets
|
|
||
Cash and cash equivalents
|
$
|
5
|
|
Receivables, less discounts and allowances
|
51
|
|
|
Prepaid expenses
|
11
|
|
|
Total current assets
|
67
|
|
|
Property and equipment, net
|
15
|
|
|
Real estate in process of development and for sale
|
851
|
|
|
Land being processed for development
|
596
|
|
|
Investments in and advances to equity affiliates
|
21
|
|
|
Deferred tax assets
|
136
|
|
|
Other assets
|
96
|
|
|
Total noncurrent assets
|
1,715
|
|
|
Total assets
|
$
|
1,782
|
|
Liabilities
|
|
||
Accounts payable
|
$
|
41
|
|
Accrued liabilities
|
113
|
|
|
Total current liabilities
|
154
|
|
|
Long-term debt (nonrecourse to the company) held by variable interest entities
|
5
|
|
|
Other liabilities
|
27
|
|
|
Total noncurrent liabilities
|
32
|
|
|
Total liabilities
|
$
|
186
|
|
Noncontrolling interests
|
$
|
34
|
|
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
|
|||
|
2013
|
|
|
Net sales
|
$
|
7,371
|
|
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders
|
$
|
485
|
|
Net earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, basic
|
$
|
0.84
|
|
Net earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, diluted
|
$
|
0.83
|
|
•
|
29 million
common shares on
June 24, 2013
, at the price of
$27.75
per share for net proceeds of
$781 million
;
|
•
|
4.4 million
common shares on
July 8, 2013
, at the price of
$27.75
per share for net proceeds of
$116 million
, in connection with the exercise of an overallotment option; and
|
•
|
13.8 million
of our 6.375 percent Mandatory Convertible Preference Shares, Series A, par value
$1.00
and liquidation preference of
$50.00
per share on
June 24, 2013
, for net proceeds of
$669 million
. See
Note 16: Shareholders' Interest
for more information.
|
•
|
$0.89
in
2015
,
|
•
|
$3.20
in
2014
and
|
•
|
$0.95
in
2013
.
|
•
|
$0.89
in
2015
,
|
•
|
$3.18
in
2014
and
|
•
|
$0.95
in
2013
.
|
•
|
how we calculate basic and diluted net earnings per share and
|
•
|
shares excluded from dilutive effect.
|
•
|
weighted average number of our outstanding common shares and
|
•
|
the effect of our outstanding dilutive potential common shares.
|
•
|
outstanding stock options,
|
•
|
restricted stock units,
|
•
|
performance share units and
|
•
|
preference shares.
|
Shares in thousands
|
2015
|
|
2014
|
|
2013
|
|
Stock options
|
5,016
|
|
—
|
|
4,618
|
|
Performance share units
|
155
|
|
—
|
|
—
|
|
Preference Shares
|
25,307
|
|
24,988
|
|
24,865
|
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
LIFO inventories:
|
|
|
||||
Logs and chips
|
$
|
15
|
|
$
|
9
|
|
Lumber, plywood and panels
|
48
|
|
55
|
|
||
Pulp and paperboard
|
111
|
|
122
|
|
||
Other products
|
11
|
|
11
|
|
||
FIFO or moving average cost inventories:
|
|
|
||||
Logs and chips
|
38
|
|
38
|
|
||
Lumber, plywood, panels and engineered wood products
|
75
|
|
80
|
|
||
Pulp and paperboard
|
32
|
|
35
|
|
||
Other products
|
90
|
|
96
|
|
||
Materials and supplies
|
148
|
|
149
|
|
||
Total
|
$
|
568
|
|
$
|
595
|
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||
|
RANGE OF LIVES
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Property and equipment, at cost:
|
|
|
|
||||
Land
|
N/A
|
$
|
121
|
|
$
|
127
|
|
Buildings and improvements
|
10–40
|
1,208
|
|
1,220
|
|
||
Machinery and equipment
|
2–25
|
6,675
|
|
6,706
|
|
||
Roads
|
10–20
|
624
|
|
609
|
|
||
Other
|
3–10
|
252
|
|
285
|
|
||
Total cost
|
|
8,880
|
|
8,947
|
|
||
Allowance for depreciation and amortization
|
|
(6,294
|
)
|
(6,324
|
)
|
||
Property and equipment, net
|
|
$
|
2,586
|
|
$
|
2,623
|
|
•
|
Timberlands —
15 years
;
|
•
|
Wood products manufacturing facilities —
20 years
; and
|
•
|
Pulp mills —
25 years
.
|
•
|
$314 million
in
2015
,
|
•
|
$332 million
in
2014
and
|
•
|
$332 million
in
2013
.
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Current assets
|
$
|
89
|
|
$
|
123
|
|
Noncurrent assets
|
$
|
101
|
|
$
|
413
|
|
Current liabilities
|
$
|
25
|
|
$
|
30
|
|
Noncurrent liabilities
|
$
|
6
|
|
$
|
109
|
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Net sales
|
$
|
462
|
|
$
|
501
|
|
$
|
534
|
|
Operating income (loss)
|
$
|
(311
|
)
|
$
|
(2
|
)
|
$
|
3
|
|
Net income (loss)
|
$
|
(197
|
)
|
$
|
—
|
|
$
|
3
|
|
•
|
$197 million
in
2015
,
|
•
|
$195 million
in
2014
and
|
•
|
$203 million
in
2013
.
|
•
|
$46 million
at
December 31, 2015
; and
|
•
|
$75 million
at
December 31, 2014
.
|
•
|
types of plans we sponsor,
|
•
|
significant transactions and events affecting plans we sponsor,
|
•
|
funded status of plans we sponsor,
|
•
|
pension assets,
|
•
|
activity of plans we sponsor and
|
•
|
actuarial assumptions.
|
•
|
qualified — plans that qualify under the Internal Revenue Code; and
|
•
|
nonqualified — plans for select employees that provide additional benefits not qualified under the Internal Revenue Code.
|
•
|
registered — plans that are registered under the Income Tax Act and applicable provincial pension acts; and
|
•
|
nonregistered — plans for select employees that provide additional benefits that may not be registered under the Income Tax Act or provincial pension acts.
|
•
|
We recognized a
$9 million
charge in third quarter 2014 for curtailments and special termination benefits. Of this amount,
$6 million
is included in the net gain on the Real Estate Divestiture and is presented in "Earnings from discontinued operations, net of income taxes" in our
Consolidated Statement of Operations
. The remaining
$3 million
is included in "Charges for restructuring, closures and impairments" in our
Consolidated Statement of Operations
.
|
•
|
The funded status of our U.S. qualified pension plan was reduced by
$291 million
primarily as a result of a decline in the discount rate used to calculate the projected benefit obligation and also due to asset performance and curtailment and special terminations. The discount rate used to remeasure the pension plans’ liabilities was changed from a rate of
4.9 percent
at December 31, 2013 to rates reflective of current bond rates on the remeasurement date. A discount rate of
4.4 percent
was used as of July 7, 2014. There was no change to the expected rate of return assumption.
|
•
|
Deferred tax liabilities decreased
$108 million
.
|
•
|
Total equity decreased
$183 million
for changes in "Cumulative other comprehensive loss", reflecting the net effect of the items discussed above. Amounts deferred in cumulative other comprehensive loss will be amortized into net periodic pension cost (credits) in future periods.
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||||||||
|
PENSION
|
OTHER
POSTRETIREMENT
BENEFITS
|
||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
||||
Reconciliation of projected benefit obligation:
|
|
|
|
|
||||||||
Projected benefit obligation beginning of year
|
$
|
6,698
|
|
$
|
5,834
|
|
$
|
303
|
|
$
|
321
|
|
Service cost
|
57
|
|
53
|
|
—
|
|
1
|
|
||||
Interest cost
|
265
|
|
271
|
|
9
|
|
10
|
|
||||
Plan participants’ contributions
|
—
|
|
—
|
|
9
|
|
13
|
|
||||
Actuarial (gains) losses
|
(309
|
)
|
1,006
|
|
(34
|
)
|
4
|
|
||||
Foreign currency translation
|
(159
|
)
|
(87
|
)
|
(15
|
)
|
(7
|
)
|
||||
Benefits paid (includes lump sum settlements)
|
(342
|
)
|
(391
|
)
|
(32
|
)
|
(44
|
)
|
||||
Plan amendments and other
|
(1
|
)
|
1
|
|
—
|
|
2
|
|
||||
Special/contractual termination benefits
|
—
|
|
7
|
|
—
|
|
—
|
|
||||
Plan transfer/Acquisitions
|
2
|
|
4
|
|
—
|
|
3
|
|
||||
Projected benefit obligation at end of year
|
$
|
6,211
|
|
$
|
6,698
|
|
$
|
240
|
|
$
|
303
|
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||||||||
|
PENSION
|
OTHER
POSTRETIREMENT
BENEFITS
|
||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
||||
Fair value of plan assets at beginning of year (estimated)
|
$
|
5,643
|
|
$
|
5,614
|
|
$
|
—
|
|
$
|
—
|
|
Adjustment for final fair value of plan assets
|
57
|
|
53
|
|
—
|
|
—
|
|
||||
Actual return on plan assets
|
226
|
|
368
|
|
—
|
|
—
|
|
||||
Foreign currency translation
|
(155
|
)
|
(75
|
)
|
—
|
|
—
|
|
||||
Employer contributions and benefit payments
|
60
|
|
70
|
|
23
|
|
31
|
|
||||
Plan participants’ contributions
|
—
|
|
—
|
|
9
|
|
13
|
|
||||
Plan transfer/Acquisitions
|
2
|
|
4
|
|
—
|
|
—
|
|
||||
Benefits paid (includes lump sum settlements)
|
(342
|
)
|
(391
|
)
|
(32
|
)
|
(44
|
)
|
||||
Fair value of plan assets at end of year (estimated)
|
$
|
5,491
|
|
$
|
5,643
|
|
$
|
—
|
|
$
|
—
|
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||||||||
|
PENSION
|
OTHER
POSTRETIREMENT
BENEFITS
|
||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
||||
Noncurrent assets
|
$
|
70
|
|
$
|
8
|
|
$
|
—
|
|
$
|
—
|
|
Current liabilities
|
(21
|
)
|
(21
|
)
|
(22
|
)
|
(26
|
)
|
||||
Noncurrent liabilities
|
(769
|
)
|
(1,042
|
)
|
(218
|
)
|
(277
|
)
|
||||
Funded status
|
$
|
(720
|
)
|
$
|
(1,055
|
)
|
$
|
(240
|
)
|
$
|
(303
|
)
|
•
|
$5.5 billion
in projected benefit obligations,
|
•
|
$5.4 billion
in accumulated benefit obligations and
|
•
|
assets with a fair value of
$4.7 billion
.
|
•
|
$6.6 billion
in projected benefit obligations,
|
•
|
$6.5 billion
in accumulated benefit obligations and
|
•
|
assets with a fair value of
$5.6 billion
.
|
•
|
$6.1 billion
at
December 31, 2015
; and
|
•
|
$6.5 billion
at
December 31, 2014
.
|
•
|
U.S. Pension Trust — funds our U.S. qualified pension plans;
|
•
|
Canadian Pension Trust — funds our Canadian registered pension plans; and
|
•
|
Retirement Compensation Arrangements — fund a portion of our Canadian nonregistered pension plans.
|
•
|
directly in a diversified mix of nontraditional investments; and
|
•
|
indirectly through derivatives to promote effective use of capital, increase returns and manage associated risk.
|
•
|
cash and short-term investments,
|
•
|
hedge funds,
|
•
|
private equity,
|
•
|
real estate fund investments and
|
•
|
common and preferred stocks.
|
•
|
equity index derivatives,
|
•
|
fixed income derivatives and
|
•
|
swaps and other derivative instruments.
|
•
|
returns earned on our direct investments and
|
•
|
returns earned on the derivatives we use.
|
•
|
50 percent to our investments in a portfolio of equities; and
|
•
|
50 percent to a noninterest-bearing refundable tax account held by the Canada Revenue Agency — as required by Canadian tax rules.
|
•
|
selection and diversification of managers and strategies,
|
•
|
use of limited-liability vehicles,
|
•
|
diversification and
|
•
|
constraining risk profiles to predefined limits on the percentage of pension trust assets that can be invested in certain categories.
|
•
|
diversification of counterparties,
|
•
|
predefined settlement and margining provisions and
|
•
|
documented agreements.
|
|
December 31, 2015
|
|
December 31, 2014
|
|
Fixed income
|
13.1
|
%
|
12.2
|
%
|
Hedge funds
|
62.7
|
|
60.6
|
|
Private equity and related funds
|
23.0
|
|
25.3
|
|
Real estate and related funds
|
1.2
|
|
1.4
|
|
Common and preferred stock and equity index instruments
|
0.1
|
|
0.7
|
|
Accrued liabilities
|
(0.1
|
)
|
(0.2
|
)
|
Total
|
100.0
|
%
|
100.0
|
%
|
|
December 31, 2015
|
|
December 31, 2014
|
|
Cash and cash equivalents
|
55.9
|
%
|
52.8
|
%
|
Equities
|
44.1
|
|
47.2
|
|
Total
|
100.0
|
%
|
100.0
|
%
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||||||||
2015
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||
Pension trust investments:
|
|
|
|
|
|
|||||||
Fixed income instruments
|
$
|
668
|
|
$
|
46
|
|
$
|
—
|
|
714
|
|
|
Hedge funds
|
87
|
|
(37
|
)
|
3,388
|
|
3,438
|
|
||||
Private equity and related funds
|
—
|
|
—
|
|
1,267
|
|
1,267
|
|
||||
Real estate and related funds
|
—
|
|
—
|
|
67
|
|
67
|
|
||||
Common and preferred stock and equity index instruments
|
—
|
|
3
|
|
—
|
|
3
|
|
||||
Total pension trust investments
|
$
|
755
|
|
$
|
12
|
|
$
|
4,722
|
|
$
|
5,489
|
|
Accrued liabilities, net
|
|
|
|
(8
|
)
|
|||||||
Pension trust net assets
|
|
|
|
5,481
|
|
|||||||
Canadian nonregistered plan assets:
|
|
|
|
|
||||||||
Cash
|
$
|
6
|
|
$
|
—
|
|
$
|
—
|
|
6
|
|
|
Investments
|
4
|
|
—
|
|
—
|
|
4
|
|
||||
Total Canadian nonregistered plan assets
|
$
|
10
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10
|
|
Total plan assets
|
|
|
|
$
|
5,491
|
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||||||||
2014
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||
Pension trust investments:
|
|
|
|
|
|
|||||||
Fixed income instruments
|
$
|
646
|
|
$
|
36
|
|
$
|
3
|
|
685
|
|
|
Hedge funds
|
103
|
|
(22
|
)
|
3,333
|
|
3,414
|
|
||||
Private equity and related funds
|
—
|
|
3
|
|
1,422
|
|
1,425
|
|
||||
Real estate and related funds
|
—
|
|
—
|
|
82
|
|
82
|
|
||||
Common and preferred stock and equity index instruments
|
25
|
|
12
|
|
—
|
|
37
|
|
||||
Total pension trust investments
|
$
|
774
|
|
$
|
29
|
|
$
|
4,840
|
|
$
|
5,643
|
|
Accrued liabilities, net
|
|
|
|
(13
|
)
|
|||||||
Pension trust net investments
|
|
|
|
5,630
|
|
|||||||
Canadian nonregistered plan assets:
|
|
|
|
|
||||||||
Cash
|
$
|
7
|
|
$
|
—
|
|
$
|
—
|
|
7
|
|
|
Investments
|
6
|
|
—
|
|
—
|
|
6
|
|
||||
Total Canadian nonregistered plan assets
|
$
|
13
|
|
$
|
—
|
|
$
|
—
|
|
$
|
13
|
|
Total plan assets
|
|
|
|
$
|
5,643
|
|
DOLLAR AMOUNTS IN MILLIONS
|
|
|
||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Equity index instruments
|
$
|
13
|
|
$
|
13
|
|
Forward contracts
|
(51
|
)
|
(32
|
)
|
||
Swaps
|
492
|
|
436
|
|
||
Total
|
$
|
454
|
|
$
|
417
|
|
DOLLAR AMOUNTS IN MILLIONS
|
|
|
||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Equity index instruments
|
$
|
500
|
|
$
|
361
|
|
Forward contracts
|
523
|
|
535
|
|
||
Swaps
|
2,058
|
|
1,824
|
|
||
Total
|
$
|
3,081
|
|
$
|
2,720
|
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||||||||||||||
|
PENSION
|
OTHER POSTRETIREMENT
BENEFITS
|
||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|
||||||
Net periodic benefit cost (credit):
|
|
|
|
|
|
|
||||||||||||
Service cost
(1)
|
$
|
57
|
|
$
|
53
|
|
$
|
64
|
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
Interest cost
|
265
|
|
271
|
|
244
|
|
9
|
|
10
|
|
12
|
|
||||||
Expected return on plan assets
|
(476
|
)
|
(467
|
)
|
(439
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of actuarial loss
|
182
|
|
125
|
|
221
|
|
10
|
|
12
|
|
14
|
|
||||||
Amortization of prior service cost (credit)
(2)
|
4
|
|
5
|
|
7
|
|
(9
|
)
|
(161
|
)
|
(23
|
)
|
||||||
Recognition of curtailments, settlements and special termination benefits due to closures, restructuring or divestitures
(1)
|
—
|
|
9
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
(4
|
)
|
—
|
|
||||||
Net periodic benefit cost (credit)
|
$
|
32
|
|
$
|
(4
|
)
|
$
|
97
|
|
$
|
10
|
|
$
|
(142
|
)
|
$
|
4
|
|
(1)
Service cost includes $2 million in 2014 and $4 million in 2013 for employees that were part of the Real Estate Divestiture. These charges are included in our results of discontinued operations. Curtailment and special termination benefits are related to involuntary terminations, due to restructuring activities, as well as the Real Estate Divestiture.
(2) During fourth quarter 2013, the decision was ratified to eliminate Company funding of the Post-Medicare Health Reimbursement Account (HRA) for certain salaried retirees after 2014. This change was communicated to affected retirees during January 2014. As a result, we recognized a pretax gain of $151 million in 2014 from this plan amendment.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
PENSION
|
|
OTHER POSTRETIREMENT BENEFITS
|
|
TOTAL
|
|
|||
Net actuarial loss
|
$
|
152
|
|
$
|
9
|
|
$
|
161
|
|
Prior service cost (credit)
|
4
|
|
(8
|
)
|
(4
|
)
|
|||
Net effect cost
|
$
|
156
|
|
$
|
1
|
|
$
|
157
|
|
•
|
be required to contribute approximately
$16 million
for our Canadian registered plan;
|
•
|
be required to contribute or make benefit payments for our Canadian nonregistered plans of
$3 million
; and
|
•
|
make benefit payments of approximately
$19 million
for our U.S. nonqualified pension plans.
|
DOLLAR AMOUNTS IN MILLIONS
|
|
|
||||
|
PENSION
|
|
OTHER
POSTRETIREMENT
BENEFITS
|
|
||
2016
|
$
|
334
|
|
$
|
22
|
|
2017
|
$
|
340
|
|
$
|
21
|
|
2018
|
$
|
347
|
|
$
|
20
|
|
2019
|
$
|
354
|
|
$
|
19
|
|
2020
|
$
|
360
|
|
$
|
19
|
|
2021-2025
|
$
|
1,858
|
|
$
|
81
|
|
•
|
discount rates in the U.S. and Canada, including discount rates used to value lump sum distributions;
|
•
|
rates of compensation increases for our salaried and hourly employees in the U.S. and Canada; and
|
•
|
estimated percentages of eligible retirees who will elect lump sum payments of benefits.
|
•
|
discount rates in the U.S. and Canada, including discount rates used to value lump sum distributions;
|
•
|
expected returns on our plan assets;
|
•
|
rates of compensation increases for our salaried and hourly employees in the U.S. and Canada; and
|
•
|
estimated percentages of eligible retirees who will elect lump sum payments of benefits.
|
|
PENSION
|
OTHER
POSTRETIREMENT
BENEFITS
|
||||
|
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
Discount rates:
|
|
|
|
|
|
|
United States
|
4.10%
|
4.90% for the first half of 2014 and 4.40% for the second half of 2014
|
3.70%
|
3.60%
|
4.00%
|
3.00%
|
Salaried – lump sum distributions (U.S. salaried and nonqualified plan only)
(1)
|
PPA Table
|
PPA Table
|
PPA phased
Table |
N/A
|
N/A
|
N/A
|
Canada
|
3.90%
|
4.70%
|
4.10%
|
3.80%
|
4.60%
|
4.00%
|
Expected return on plan assets:
|
|
|
|
|
|
|
Qualified/registered plans
|
9.00%
|
9.00%
|
9.00%
|
|
|
|
Nonregistered plans (Canada only)
|
3.50%
|
3.50%
|
3.50%
|
|
|
|
Rate of compensation increase:
|
|
|
|
|
|
|
Salaried:
|
|
|
|
|
|
|
United States
|
2.50% for 2015 and 3.50% thereafter
|
2.50% for 2014
and 3.50% thereafter |
2.50% for 2013
and 3.50% thereafter |
N/A
|
N/A
|
N/A
|
Canada
|
2.50% for 2015
and 3.50% thereafter |
2.50% for 2014
and 3.50% thereafter |
2.50% for 2013
and 3.50% thereafter |
N/A
|
N/A
|
N/A
|
Hourly:
|
|
|
|
|
|
|
United States
|
3.00%
|
3.00%
|
3.00%
|
N/A
|
N/A
|
N/A
|
Canada
|
3.25%
|
3.25%
|
3.25%
|
N/A
|
N/A
|
N/A
|
Election of lump sum distributions (U.S. salaried and nonqualified plans only)
|
60.00%
|
60.00%
|
56.00%
|
N/A
|
N/A
|
N/A
|
(1) PPA Phased Table: Interest and mortality assumptions as mandated by Pension Protection Act of 2006 including the phase out of the prior interest rate basis in 2013.
|
•
|
qualified and registered pension plans and
|
•
|
nonregistered plans.
|
•
|
a
7.2 percent
assumed return from direct investments and
|
•
|
a
1.7 percent
assumed return from derivatives.
|
•
|
requires a high degree of judgment,
|
•
|
uses our historical fund returns as a base and
|
•
|
places added weight on more recent pension plan asset performance.
|
•
|
historical experience and
|
•
|
future return expectations.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Direct investments
|
$
|
175
|
|
$
|
258
|
|
$
|
568
|
|
Derivatives
|
51
|
|
110
|
|
240
|
|
|||
Total
|
$
|
226
|
|
$
|
368
|
|
$
|
808
|
|
•
|
6.3 percent
in the U.S. and
|
•
|
5.6 percent
in Canada.
|
|
2015
|
2014
|
||||||
|
U.S.
|
|
CANADA
|
|
U.S.
|
|
CANADA
|
|
Weighted health care cost trend rate assumed for next year
|
7.20% for Pre Medicare and 4.50% for HRA
|
|
5.00
|
%
|
6.30
|
%
|
5.60
|
%
|
Rate to which cost trend rate is assumed to decline (ultimate trend rate)
|
4.50
|
%
|
4.30
|
%
|
4.50
|
%
|
4.30
|
%
|
Year that the rate reaches the ultimate trend rate
|
2036
|
|
2028
|
|
2029
|
|
2028
|
|
AS OF DECEMBER 31, 2015 (DOLLAR AMOUNTS IN MILLIONS)
|
||||||
|
1% INCREASE
|
|
1% DECREASE
|
|
||
Effect on total service and interest cost components
|
less than $1
|
|
less than $(1)
|
|
||
Effect on accumulated postretirement benefit obligation
|
$
|
10
|
|
$
|
(8
|
)
|
•
|
a percentage of the employer contributions paid into the plan on the eligible employee's behalf or
|
•
|
a formula considering an eligible employee's service, the total contributions paid on their behalf plus a benefit based on the value of an eligible employee's account.
|
•
|
Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
|
•
|
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
|
•
|
If we choose to stop participating in some of the multiemployer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
|
•
|
$4 million
in
2015
,
|
•
|
$4 million
in
2014
and
|
•
|
$4 million
in
2013
.
|
•
|
$21 million
in
2015
,
|
•
|
$20 million
in
2014
and
|
•
|
$20 million
in
2013
.
|
•
|
Assets of the SPEs are not available to satisfy our liabilities or obligations.
|
•
|
Liabilities of the SPEs are not our liabilities or obligations.
|
•
|
Interest expense on SPE notes of:
|
•
|
Interest income on SPE investments of:
|
•
|
$253 million
in
2019
and
|
•
|
$362 million
in
2020
.
|
•
|
$209 million
in
2019
and
|
•
|
$302 million
in
2020
.
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Wages, salaries and severance pay
|
$
|
150
|
|
$
|
161
|
|
Pension and postretirement
|
44
|
|
47
|
|
||
Vacation pay
|
46
|
|
47
|
|
||
Taxes – Social Security and real and personal property
|
24
|
|
24
|
|
||
Interest
|
104
|
|
105
|
|
||
Customer rebates and volume discounts
|
46
|
|
46
|
|
||
Deferred income
|
52
|
|
75
|
|
||
Other
|
83
|
|
82
|
|
||
Total
|
$
|
549
|
|
$
|
587
|
|
•
|
lines of credit and
|
•
|
other letters of credit and surety bonds.
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Letters of credit
|
$
|
47
|
|
$
|
44
|
|
Surety bonds
|
$
|
113
|
|
$
|
231
|
|
•
|
long-term debt and the portion due within one year and
|
•
|
long-term debt maturities.
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
6.95% debentures due 2017
|
$
|
281
|
|
$
|
281
|
|
7.00% debentures due 2018
|
62
|
|
62
|
|
||
7.375% notes due 2019
|
500
|
|
500
|
|
||
Variable rate term loan credit facility matures 2020
|
550
|
|
550
|
|
||
9.00% debentures due 2021
|
150
|
|
150
|
|
||
7.125% debentures due 2023
|
191
|
|
191
|
|
||
4.625% notes due 2023
|
500
|
|
500
|
|
||
8.50% debentures due 2025
|
300
|
|
300
|
|
||
7.95% debentures due 2025
|
136
|
|
136
|
|
||
7.70% debentures due 2026
|
150
|
|
150
|
|
||
7.35% debentures due 2026
|
62
|
|
62
|
|
||
7.85% debentures due 2026
|
100
|
|
100
|
|
||
6.95% debentures due 2027
|
300
|
|
300
|
|
||
7.375% debentures due 2032
|
1,250
|
|
1,250
|
|
||
6.875% debentures due 2033
|
275
|
|
275
|
|
||
Industrial revenue bonds, rates from 6.7% to 6.8%, due 2022
|
88
|
|
88
|
|
||
Other
|
1
|
|
1
|
|
||
|
4,896
|
|
4,896
|
|
||
Less unamortized discounts
|
(5
|
)
|
(5
|
)
|
||
Total
|
$
|
4,891
|
|
$
|
4,891
|
|
Portion due within one year
|
$
|
—
|
|
$
|
—
|
|
•
|
debt and
|
•
|
other financial instruments.
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||||||||
|
DECEMBER 31, 2015
|
|
DECEMBER 31, 2014
|
|
||||||||
|
CARRYING
VALUE
|
|
FAIR VALUE
(LEVEL 2)
|
|
CARRYING
VALUE
|
|
FAIR VALUE
(LEVEL 2)
|
|
||||
Long-term debt (including current maturities)
|
$
|
4,891
|
|
$
|
5,620
|
|
$
|
4,891
|
|
$
|
5,922
|
|
•
|
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.
|
•
|
the short-term nature of these instruments,
|
•
|
carrying short-term investments at expected net realizable value and
|
•
|
the allowance for doubtful accounts.
|
•
|
legal proceedings,
|
•
|
environmental matters and
|
•
|
commitments and other contingencies.
|
•
|
site remediation and
|
•
|
asset retirement obligations.
|
•
|
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.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||
Reserve balance as of December 31, 2014
|
$
|
29
|
|
Reserve charges and adjustments, net
|
15
|
|
|
Payments
|
(7
|
)
|
|
Reserve balance as of December 31, 2015
|
$
|
37
|
|
Total active sites as of December 31, 2015
|
38
|
|
•
|
new information on any site concerning implementation of remediation alternatives,
|
•
|
updates on prior cost estimates and new sites and
|
•
|
costs incurred to remediate sites.
|
•
|
is much less certain than the estimates on which our accruals currently are based, and
|
•
|
uses assumptions that are less favorable to us among the range of reasonably possible outcomes.
|
•
|
assumed we will not bear the entire cost of remediation of every site,
|
•
|
took into account the ability of other potentially responsible parties to participate, and
|
•
|
considered each party
’
s financial condition and probable contribution on a per-site basis.
|
•
|
guarantees of debt and performance,
|
•
|
purchase obligations for goods and services and
|
•
|
operating leases.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||
|
DECEMBER 31, 2015
|
|
|
2016
|
$
|
84
|
|
2017
|
$
|
33
|
|
2018
|
$
|
8
|
|
2019
|
$
|
2
|
|
2020
|
$
|
2
|
|
Thereafter
|
$
|
17
|
|
•
|
are enforceable and legally binding,
|
•
|
specify all significant terms and
|
•
|
cannot be canceled without penalty.
|
•
|
fixed or minimum quantities to be purchased,
|
•
|
fixed, minimum or variable price provisions, and
|
•
|
an approximate timing for the transaction.
|
•
|
stumpage and log purchases,
|
•
|
energy and
|
•
|
other service and supply contracts.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Rent expense
|
$
|
31
|
|
$
|
32
|
|
$
|
38
|
|
•
|
various equipment, including logging equipment, lift trucks, automobiles and office equipment; and
|
•
|
office and wholesale space.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||
|
DECEMBER 31, 2015
|
|
|
2016
|
$
|
27
|
|
2017
|
$
|
26
|
|
2018
|
$
|
21
|
|
2019
|
$
|
17
|
|
2020
|
$
|
14
|
|
Thereafter
|
$
|
105
|
|
•
|
preferred and preference shares,
|
•
|
common shares,
|
•
|
share-repurchase programs and
|
•
|
cumulative other comprehensive income (loss).
|
•
|
dividend rates,
|
•
|
redemption rights,
|
•
|
conversion terms,
|
•
|
sinking-fund provisions,
|
•
|
values in liquidation and
|
•
|
voting rights.
|
•
|
new shares are issued,
|
•
|
stock options are exercised,
|
•
|
restricted stock units or performance share units vest,
|
•
|
stock-equivalent units are paid out,
|
•
|
shares are tendered,
|
•
|
shares are repurchased or
|
•
|
shares are canceled.
|
IN THOUSANDS
|
||||||
|
2015
|
|
2014
|
|
2013
|
|
Outstanding at beginning of year
|
524,474
|
|
583,548
|
|
542,393
|
|
New issuance
(Note 4)
|
—
|
|
—
|
|
33,350
|
|
Shares tendered
(Note 3)
|
—
|
|
(58,813
|
)
|
—
|
|
Stock options exercised
|
1,592
|
|
5,134
|
|
7,209
|
|
Issued for restricted stock units
|
365
|
|
451
|
|
462
|
|
Issued for performance shares
|
242
|
|
217
|
|
134
|
|
Repurchased
|
(16,190
|
)
|
(6,063
|
)
|
—
|
|
Outstanding at end of year
|
510,483
|
|
524,474
|
|
583,548
|
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||||||||||||||
|
|
PENSION
|
OTHER POSTRETIREMENT BENEFITS
|
|
|
||||||||||||||||
|
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 January 1, 2014
|
$
|
354
|
|
$
|
(1,066
|
)
|
$
|
(19
|
)
|
$
|
(111
|
)
|
$
|
150
|
|
$
|
6
|
|
$
|
(686
|
)
|
Other comprehensive income (loss) before reclassifications
|
(50
|
)
|
(1,008
|
)
|
1
|
|
(6
|
)
|
(12
|
)
|
—
|
|
(1,075
|
)
|
|||||||
Income taxes
|
—
|
|
369
|
|
—
|
|
1
|
|
7
|
|
—
|
|
377
|
|
|||||||
Net other comprehensive income (loss) before reclassifications
|
(50
|
)
|
(639
|
)
|
1
|
|
(5
|
)
|
(5
|
)
|
—
|
|
(698
|
)
|
|||||||
Amounts reclassified from cumulative other comprehensive income (loss)
(1)
|
—
|
|
125
|
|
5
|
|
12
|
|
(161
|
)
|
—
|
|
(19
|
)
|
|||||||
Income taxes
|
—
|
|
(43
|
)
|
(2
|
)
|
(4
|
)
|
59
|
|
—
|
|
10
|
|
|||||||
Net amounts reclassified from cumulative other comprehensive income (loss)
|
—
|
|
82
|
|
3
|
|
8
|
|
(102
|
)
|
—
|
|
(9
|
)
|
|||||||
Total other comprehensive income (loss)
|
(50
|
)
|
(557
|
)
|
4
|
|
3
|
|
(107
|
)
|
—
|
|
(707
|
)
|
|||||||
Beginning balance as of January 1, 2015
|
304
|
|
(1,623
|
)
|
(15
|
)
|
(108
|
)
|
43
|
|
6
|
|
(1,393
|
)
|
|||||||
Other comprehensive income (loss) before reclassifications
|
(97
|
)
|
184
|
|
2
|
|
37
|
|
(2
|
)
|
—
|
|
124
|
|
|||||||
Income taxes
|
—
|
|
(52
|
)
|
—
|
|
(12
|
)
|
—
|
|
—
|
|
(64
|
)
|
|||||||
Net other comprehensive income (loss) before reclassifications
|
(97
|
)
|
132
|
|
2
|
|
25
|
|
(2
|
)
|
—
|
|
60
|
|
|||||||
Amounts reclassified from cumulative other comprehensive income (loss)
(1)
|
—
|
|
182
|
|
4
|
|
10
|
|
(9
|
)
|
—
|
|
187
|
|
|||||||
Income taxes
|
—
|
|
(63
|
)
|
(2
|
)
|
(4
|
)
|
3
|
|
—
|
|
(66
|
)
|
|||||||
Net amounts reclassified from cumulative other comprehensive income (loss)
|
—
|
|
119
|
|
2
|
|
6
|
|
(6
|
)
|
—
|
|
121
|
|
|||||||
Total other comprehensive income (loss)
|
(97
|
)
|
251
|
|
4
|
|
31
|
|
(8
|
)
|
—
|
|
181
|
|
|||||||
Ending balance as of December 31, 2015
|
$
|
207
|
|
$
|
(1,372
|
)
|
$
|
(11
|
)
|
$
|
(77
|
)
|
$
|
35
|
|
$
|
6
|
|
$
|
(1,212
|
)
|
(1) Actuarial losses and prior service credits (costs) are included in the computation of net periodic benefit costs (credits). See
Note: 9 Pension and Other Postretirement Benefit Plans
.
|
•
|
$31 million
in
2015
,
|
•
|
$40 million
in
2014
and
|
•
|
$42 million
in
2013
.
|
•
|
$3 million
in
2014
and
|
•
|
$5 million
in
2013
.
|
•
|
our Long-Term Incentive Compensation Plan (2013 Plan),
|
•
|
how we account for share-based awards,
|
•
|
tax benefits of share-based awards,
|
•
|
types of share-based compensation and
|
•
|
unrecognized share-based compensation.
|
•
|
stock options,
|
•
|
stock appreciation rights,
|
•
|
restricted stock,
|
•
|
restricted stock units,
|
•
|
performance shares and
|
•
|
performance share units.
|
•
|
An individual participant may receive a grant of up to
2 million
shares in any one calendar year.
|
•
|
The exercise price is required to be the market price on the date of the grant.
|
•
|
An individual participant may receive a grant of up to
1 million
shares annually.
|
•
|
No participant may be granted awards that exceed
$10 million
earned in a 12 month period.
|
•
|
issue new stock into the marketplace and
|
•
|
generally do not repurchase shares in connection with issuing new awards.
|
•
|
all options, restricted stock units, and performance share units outstanding at
December 31, 2015
under the 2013 Plan and 2004 Plan; and
|
•
|
all remaining options, restricted stock units, and performance share units that could be granted under the 2013 Plan.
|
•
|
use a fair-value-based measurement for share-based awards, and
|
•
|
recognize the cost of share-based awards in our consolidated financial statements.
|
•
|
Awards that vest upon retirement — the required service period ends on the date an employee is eligible for retirement, including early retirement.
|
•
|
Awards that continue to vest following job elimination or the sale of a business — the required service period ends on the date the employment from the company is terminated.
|
•
|
$8 million
in
2015
,
|
•
|
$11 million
in
2014
, and
|
•
|
$10 million
in
2013
.
|
•
|
$1 million
in
2014
and
|
•
|
$2 million
in
2013
.
|
•
|
restricted shares and restricted share units vest,
|
•
|
performance shares and performance share units vest,
|
•
|
stock options are exercised and
|
•
|
stock appreciation rights are exercised.
|
•
|
$4 million
in
2015
,
|
•
|
$10 million
in
2014
and
|
•
|
$13 million
in
2013
.
|
•
|
$2 million
in
2014
and
|
•
|
$2 million
in
2013
.
|
•
|
stock options,
|
•
|
restricted stock units,
|
•
|
performance share units,
|
•
|
stock appreciation rights and
|
•
|
deferred compensation stock equivalent units.
|
•
|
vest over four years of continuous service and
|
•
|
must be exercised within 10 years of the grant-date.
|
•
|
vest ratably over four years;
|
•
|
vest or continue to 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 is forfeited if retirement occurs before the one year anniversary of the grant;
|
•
|
continue to vest for one year in the event of involuntary termination when the retirement criteria has not been met; and
|
•
|
stop vesting for all other situations including early retirement prior to age 62.
|
•
|
historical data — for option exercise time and employee terminations;
|
•
|
a Monte-Carlo simulation — for how long we expect granted options to be outstanding; and
|
•
|
the U.S. Treasury yield curve — for the risk-free rate. We use a yield curve over a period matching the expected term of the grant.
|
•
|
implied volatilities from traded options on our stock,
|
•
|
historical volatility of our stock and
|
•
|
other factors.
|
|
2015
GRANTS |
|
2014
GRANTS |
|
2013
GRANTS |
|
|||
Expected volatility
|
25.92
|
%
|
31.71
|
%
|
38.00
|
%
|
|||
Expected dividends
|
3.28
|
%
|
2.92
|
%
|
2.23
|
%
|
|||
Expected term (in years)
|
4.77
|
|
4.97
|
|
4.97
|
|
|||
Risk-free rate
|
1.54
|
%
|
1.57
|
%
|
0.92
|
%
|
|||
Weighted average grant-date fair value
|
$
|
5.85
|
|
$
|
6.62
|
|
$
|
8.40
|
|
•
|
are eligible for retirement;
|
•
|
will become eligible for retirement during the vesting period; or
|
•
|
whose employment is terminated during the vesting period due to job elimination or the sale of a business.
|
|
OPTIONS
(IN
THOUSANDS)
|
WEIGHTED
AVERAGE
EXERCISE
PRICE
|
|
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL
TERM
(IN YEARS)
|
AGGREGATE
INTRINSIC
VALUE (IN
MILLIONS)
|
|
||
Outstanding at December 31, 2014
|
12,285
|
$
|
24.19
|
|
|
|
||
Granted
|
2,123
|
$
|
35.40
|
|
|
|
||
Exercised
|
(1,376)
|
$
|
24.46
|
|
|
|
||
Forfeited or expired
|
(269)
|
$
|
31.34
|
|
|
|
||
Outstanding at December 31, 2015
(1)
|
12,763
|
$
|
25.88
|
|
5.20
|
$
|
65
|
|
Exercisable at December 31, 2015
|
8,442
|
$
|
22.78
|
|
3.62
|
$
|
62
|
|
(1) As of December 31, 2015, there were approximately 1,034 thousand stock options that had met the requisite service period and will be released as identified in the grant terms.
|
•
|
$13 million
in
2015
,
|
•
|
$55 million
in
2014
and
|
•
|
$61 million
in
2013
.
|
•
|
$14 million
in
2015
,
|
•
|
$16 million
in
2014
and
|
•
|
$14 million
in
2013
.
|
•
|
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 is forfeited 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 has not been met; and
|
•
|
will be forfeited upon termination of employment in all other situations including early retirement prior to age 62.
|
|
STOCK UNITS
(IN THOUSANDS)
|
WEIGHTED
AVERAGE
GRANT-DATE
FAIR VALUE
|
|
|
Nonvested at December 31, 2014
|
1,227
|
$
|
28.06
|
|
Granted
|
433
|
$
|
35.41
|
|
Vested
|
(489)
|
$
|
26.70
|
|
Forfeited
|
(67)
|
$
|
31.11
|
|
Nonvested at December 31, 2015
(1)
|
1,104
|
$
|
31.37
|
|
(1) As of December 31, 2015, there were approximately 232 thousand restricted stock units that had met the requisite service period and will be released as identified in the grant terms.
|
•
|
$30.14
in
2014
and
|
•
|
$30.54
in
2013
.
|
•
|
$14 million
in
2015
,
|
•
|
$16 million
in
2014
and
|
•
|
$14 million
in
2013
.
|
•
|
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 is forfeited 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 be forfeited upon termination of employment in all other situations including early retirement prior to age 62.
|
•
|
Weyerhaeuser’s cash flow during the first year determined the initial number of units earned and
|
•
|
Weyerhaeuser’s relative total shareholder return (TSR) ranking in the S&P 500 during the first two years is used to adjust the initial number of units earned up or down by
20 percent
.
|
•
|
vest 50 percent, 25 percent and 25 percent on the second, third and fourth anniversaries of the grant-date, respectively, 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 is forfeited 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 has not been met; and
|
•
|
will be forfeited upon termination of employment in all other situations including early retirement prior to age 62.
|
|
2015
GRANTS |
|
2014
GRANTS |
|
2013
GRANTS |
|
|||
Performance period
|
1/1/2015 – 12/31/2017
|
|
1/1/2014 – 12/31/2015
|
|
1/1/2013 – 12/31/2014
|
|
|||
Valuation date closing stock price
|
$
|
35.41
|
|
$
|
30.16
|
|
$
|
30.48
|
|
Expected dividends
|
3.26
|
%
|
2.91
|
%
|
2.23
|
%
|
|||
Risk-free rate
|
0.05% - 1.07%
|
|
0.03% - 0.79%
|
|
0.09% - 0.46%
|
|
|||
Volatility
|
16.33% - 20.89%
|
|
20.74% - 23.53%
|
|
22.09% - 29.57%
|
|
|||
Weighted average grant-date fair value
|
$
|
34.75
|
|
$
|
30.62
|
|
$
|
31.59
|
|
|
GRANTS (IN
THOUSANDS)
|
|
WEIGHTED
AVERAGE
GRANT-DATE
FAIR VALUE
|
|
|
Nonvested at December 31, 2014
|
890
|
|
$
|
29.46
|
|
Granted at target
|
239
|
|
$
|
34.75
|
|
Vested
|
(395
|
)
|
$
|
29.08
|
|
Forfeited
|
(23
|
)
|
$
|
31.34
|
|
Performance adjustment
|
(31
|
)
|
$
|
30.62
|
|
Nonvested at December 31, 2015
(1)
|
680
|
|
$
|
31.42
|
|
(1) As of December 31, 2015, there were approximately 134 thousand performance share units that had met the requisite service period and will be released as identified in the grant terms.
|
•
|
$9 million
in
2015
|
•
|
$7 million
in
2014
|
•
|
$5 million
in
2013
|
•
|
receives the benefit as a cash award and
|
•
|
does not purchase the underlying stock.
|
|
2015
GRANTS |
|
2014
GRANTS |
|
2013
GRANTS |
|
|||
Expected volatility
|
22.10
|
%
|
18.20
|
%
|
24.02
|
%
|
|||
Expected dividends
|
4.20
|
%
|
3.21
|
%
|
2.81
|
%
|
|||
Expected term (in years)
|
1.94
|
|
1.32
|
|
1.16
|
|
|||
Risk-free rate
|
0.99
|
%
|
0.45
|
%
|
0.19
|
%
|
|||
Weighted average fair value
|
$
|
6.96
|
|
$
|
12.70
|
|
$
|
8.68
|
|
|
RIGHTS
(IN
THOUSANDS)
|
|
WEIGHTED
AVERAGE
EXERCISE
PRICE
|
|
AVERAGE
REMAINING
CONTRACTUAL
TERM
(IN YEARS)
|
AGGREGATE
INTRINSIC
VALUE (IN
MILLIONS)
|
|
||
Outstanding at December 31, 2014
|
417
|
|
$
|
22.85
|
|
|
|
||
Granted
|
58
|
|
$
|
35.40
|
|
|
|
||
Exercised
|
(79
|
)
|
$
|
23.91
|
|
|
|
||
Forfeited or expired
|
(14
|
)
|
$
|
31.01
|
|
|
|
||
Outstanding at December 31, 2015
|
382
|
|
$
|
24.25
|
|
4.34
|
$
|
14
|
|
Exercisable at December 31, 2015
|
289
|
|
$
|
21.63
|
|
2.98
|
$
|
11
|
|
•
|
$1 million
in
2015
,
|
•
|
$2 million
in
2014
and
|
•
|
$4 million
in
2013
.
|
•
|
may choose to defer all or part of their bonus into stock-equivalent units;
|
•
|
may choose to defer part of their salary, except for executive officers; and
|
•
|
receive a 15 percent premium if the deferral is for at least five years.
|
•
|
receive a portion of their annual retainer fee in the form of restricted stock units, which vest over one year and may be deferred into stock-equivalent units;
|
•
|
may choose to defer some or all of the remainder of their annual retainer fee into stock-equivalent units; and
|
•
|
do not receive a premium for their deferrals.
|
•
|
liability-classified awards and
|
•
|
re-measured to fair value at every reporting date.
|
•
|
1,003,053
as of
December 31, 2015
;
|
•
|
944,966
as of
December 31, 2014
; and
|
•
|
915,160
as of
December 31, 2013
.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Restructuring and closure charges:
|
|
|
|
||||||
Termination benefits
|
$
|
4
|
|
$
|
27
|
|
$
|
1
|
|
Pension and postretirement charges
|
—
|
|
3
|
|
—
|
|
|||
Other restructuring and closure costs
|
6
|
|
12
|
|
4
|
|
|||
Charges for restructuring and closures
|
10
|
|
42
|
|
5
|
|
|||
Impairment of long-lived assets
|
15
|
|
2
|
|
372
|
|
|||
Total charges for restructuring, closures and impairments
|
$
|
25
|
|
$
|
44
|
|
$
|
377
|
|
DOLLAR AMOUNTS IN MILLIONS
|
|||
Accrued severance as of December 31, 2014
|
$
|
10
|
|
Charges
|
4
|
|
|
Payments
|
(9
|
)
|
|
Accrued severance as of December 31, 2015
|
$
|
5
|
|
•
|
2015 — We recognized an impairment charge of
$13 million
related to a nonstrategic asset held in Unallocated Items. The fair value of the asset was determined using significant unobservable inputs (Level 3) based on a discounted cash flow model. The asset was subsequently sold for no gain during 2015.
|
•
|
2013 — charges include:
|
•
|
includes both recurring and occasional income and expense items and
|
•
|
can fluctuate from year to year.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Gain on postretirement plan amendment
(Note 9)
|
$
|
—
|
|
$
|
(151
|
)
|
$
|
—
|
|
Gain on disposition of nonstrategic assets
|
(12
|
)
|
(27
|
)
|
(19
|
)
|
|||
Foreign exchange losses, net
|
47
|
|
27
|
|
7
|
|
|||
Land management income
|
(37
|
)
|
(34
|
)
|
(28
|
)
|
|||
Litigation expense, net
|
23
|
|
9
|
|
16
|
|
|||
Plum Creek merger-related costs
|
14
|
|
—
|
|
—
|
|
|||
Other, net
|
(17
|
)
|
(25
|
)
|
(11
|
)
|
|||
Total
|
$
|
18
|
|
$
|
(201
|
)
|
$
|
(35
|
)
|
•
|
earnings before income taxes,
|
•
|
provision for income taxes,
|
•
|
effective income tax rate,
|
•
|
deferred tax assets and liabilities and
|
•
|
unrecognized tax benefits.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Domestic earnings
|
$
|
421
|
|
$
|
970
|
|
$
|
198
|
|
Foreign earnings
|
82
|
|
43
|
|
122
|
|
|||
Total
|
$
|
503
|
|
$
|
1,013
|
|
$
|
320
|
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Current:
|
|
|
|
|
|
|
|||
Federal
|
$
|
3
|
|
$
|
(26
|
)
|
$
|
(80
|
)
|
State
|
(1
|
)
|
12
|
|
(18
|
)
|
|||
Foreign
|
(5
|
)
|
3
|
|
(21
|
)
|
|||
|
(3
|
)
|
(11
|
)
|
(119
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
|||
Federal
|
(30
|
)
|
178
|
|
(79
|
)
|
|||
State
|
2
|
|
6
|
|
6
|
|
|||
Foreign
|
28
|
|
12
|
|
21
|
|
|||
|
—
|
|
196
|
|
(52
|
)
|
|||
Total income tax provision (benefit)
|
$
|
(3
|
)
|
$
|
185
|
|
$
|
(171
|
)
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
U.S. federal statutory income tax
|
$
|
176
|
|
$
|
354
|
|
$
|
112
|
|
State income taxes, net of federal tax benefit
|
1
|
|
14
|
|
7
|
|
|||
REIT income not subject to federal income tax
|
(158
|
)
|
(161
|
)
|
(101
|
)
|
|||
REIT benefit from change to tax law
|
(13
|
)
|
—
|
|
—
|
|
|||
Foreign taxes
|
—
|
|
(2
|
)
|
(8
|
)
|
|||
Provision for unrecognized tax benefits
|
(7
|
)
|
(4
|
)
|
(193
|
)
|
|||
Repatriation of Canadian earnings
|
—
|
|
—
|
|
21
|
|
|||
Domestic production activities deduction
|
—
|
|
—
|
|
(13
|
)
|
|||
Other, net
|
(2
|
)
|
(16
|
)
|
4
|
|
|||
Total income tax provision (benefit)
|
$
|
(3
|
)
|
$
|
185
|
|
$
|
(171
|
)
|
Effective income tax rate
|
(0.5
|
)%
|
18.3
|
%
|
(53.4
|
)%
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Net noncurrent deferred tax asset
|
4
|
|
44
|
|
||
Net noncurrent deferred tax liability
|
(86
|
)
|
(14
|
)
|
||
Net deferred tax asset (liability)
|
$
|
(82
|
)
|
$
|
30
|
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Postretirement benefits
|
$
|
80
|
|
$
|
101
|
|
Pension
|
260
|
|
369
|
|
||
State tax credits
|
56
|
|
56
|
|
||
Net operating loss carryforwards
|
59
|
|
86
|
|
||
Cellulosic biofuel producers credit
|
78
|
|
100
|
|
||
Other
|
203
|
|
223
|
|
||
Gross deferred tax assets
|
736
|
|
935
|
|
||
Valuation allowance
|
(72
|
)
|
(72
|
)
|
||
Net deferred tax assets
|
664
|
|
863
|
|
||
Property, plant and equipment
|
(496
|
)
|
(523
|
)
|
||
Timber installment notes
|
(180
|
)
|
(180
|
)
|
||
Other
|
(70
|
)
|
(130
|
)
|
||
Deferred tax liabilities
|
(746
|
)
|
(833
|
)
|
||
Net deferred tax asset (liability)
|
$
|
(82
|
)
|
$
|
30
|
|
•
|
net operating loss and credit carryforwards,
|
•
|
valuation allowances and
|
•
|
reinvestment of undistributed earnings.
|
•
|
U.S. REIT -
$433 million
, which expire from
2030
through
2035
,
|
•
|
U.S. TRS -
$29 million
, which expires in
2035
,
|
•
|
State -
$299 million
, which expire from
2024
through
2035
; and
|
•
|
Foreign -
$142 million
, which expire from
2016
through
2032
.
|
•
|
U.S. TRS -
$93 million
, which expire from
2019
through
2035
,
|
•
|
State -
$43 million
, which expire from
2016
through
2029
, and
$46 million
, which do not expire; and
|
•
|
Foreign -
$6 million
, which expire from
2016
through
2032
.
|
DOLLAR AMOUNTS IN MILLIONS
|
||||||
|
DECEMBER 31,
2015 |
|
DECEMBER 31,
2014 |
|
||
Balance at beginning of year
|
$
|
11
|
|
$
|
26
|
|
Settlements
|
(4
|
)
|
—
|
|
||
Lapse of statute
|
(1
|
)
|
(15
|
)
|
||
Balance at end of year
|
$
|
6
|
|
$
|
11
|
|
•
|
sales to unaffiliated customers,
|
•
|
export sales from the U.S., and
|
•
|
long-lived assets.
|
•
|
pulp, liquid packaging board, logs, lumber and wood chips to Japan;
|
•
|
pulp, logs and lumber to other Pacific Rim countries; and
|
•
|
pulp and plywood to Europe.
|
FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, 2014
(DOLLAR AMOUNTS IN MILLIONS)
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
|||
Sales to unaffiliated customers:
|
|
|
|
||||||
U.S.
|
$
|
4,819
|
|
$
|
4,889
|
|
$
|
4,761
|
|
Japan
|
612
|
|
682
|
|
758
|
|
|||
China
|
397
|
|
477
|
|
453
|
|
|||
Canada
|
353
|
|
424
|
|
418
|
|
|||
Europe
|
308
|
|
328
|
|
298
|
|
|||
South America
|
82
|
|
87
|
|
80
|
|
|||
Other foreign countries
|
511
|
|
516
|
|
486
|
|
|||
Total
|
$
|
7,082
|
|
$
|
7,403
|
|
$
|
7,254
|
|
Export sales from the U.S.:
|
|
|
|
||||||
Japan
|
$
|
558
|
|
$
|
620
|
|
$
|
676
|
|
China
|
333
|
|
416
|
|
411
|
|
|||
Other
|
828
|
|
856
|
|
804
|
|
|||
Total
|
$
|
1,719
|
|
$
|
1,892
|
|
$
|
1,891
|
|
•
|
goodwill,
|
•
|
timber and timberlands and
|
•
|
property and equipment, including construction in progress.
|
DOLLAR AMOUNTS IN MILLIONS
|
|||||||||
|
December 31,
2015 |
|
December 31,
2014 |
|
December 31,
2013 |
|
|||
Long-lived assets:
|
|
|
|
||||||
U.S.
(1)
|
$
|
8,187
|
|
$
|
8,069
|
|
$
|
8,116
|
|
Canada
|
460
|
|
579
|
|
652
|
|
|||
Other foreign countries
|
654
|
|
676
|
|
670
|
|
|||
Total
|
$
|
9,301
|
|
$
|
9,324
|
|
$
|
9,438
|
|
(1) Includes assets of discontinued operations in 2013.
|
DOLLAR AMOUNTS IN MILLIONS EXCEPT PER-SHARE FIGURES
|
|||||||||||||||
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
(1)
|
Fourth
Quarter
|
Full Year
|
||||||||||
2015:
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,721
|
|
$
|
1,807
|
|
$
|
1,820
|
|
$
|
1,734
|
|
$
|
7,082
|
|
Operating income
|
$
|
200
|
|
$
|
243
|
|
$
|
259
|
|
$
|
217
|
|
$
|
919
|
|
Earnings from continuing operations before income taxes
|
$
|
120
|
|
$
|
157
|
|
$
|
175
|
|
$
|
51
|
|
$
|
503
|
|
Net earnings
|
$
|
101
|
|
$
|
144
|
|
$
|
191
|
|
$
|
70
|
|
$
|
506
|
|
Net earnings attributable to Weyerhaeuser common shareholders
|
$
|
90
|
|
$
|
133
|
|
$
|
180
|
|
$
|
59
|
|
$
|
462
|
|
Basic net earnings per share attributable to Weyerhaeuser common shareholders
|
$
|
0.17
|
|
$
|
0.26
|
|
$
|
0.35
|
|
$
|
0.11
|
|
$
|
0.89
|
|
Diluted net earnings per share attributable to Weyerhaeuser common shareholders
|
$
|
0.17
|
|
$
|
0.26
|
|
$
|
0.35
|
|
$
|
0.11
|
|
$
|
0.89
|
|
Dividends paid per share
|
$
|
0.29
|
|
$
|
0.29
|
|
$
|
0.31
|
|
$
|
0.31
|
|
$
|
1.20
|
|
Market prices - high/low
|
$37.04 - $32.74
|
|
$33.19 - $31.06
|
|
$32.34 - $26.76
|
|
$32.72 - $26.73
|
|
$37.04 - $26.73
|
|
|||||
2014:
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,736
|
|
$
|
1,964
|
|
$
|
1,915
|
|
$
|
1,788
|
|
$
|
7,403
|
|
Operating income
|
$
|
308
|
|
$
|
400
|
|
$
|
318
|
|
$
|
294
|
|
$
|
1,320
|
|
Earnings from continuing operations before income taxes
|
$
|
234
|
|
$
|
328
|
|
$
|
237
|
|
$
|
214
|
|
$
|
1,013
|
|
Net earnings
|
$
|
194
|
|
$
|
291
|
|
$
|
1,164
|
|
$
|
177
|
|
$
|
1,826
|
|
Net earnings attributable to Weyerhaeuser common shareholders
|
$
|
183
|
|
$
|
280
|
|
$
|
1,153
|
|
$
|
166
|
|
$
|
1,782
|
|
Basic net earnings per share attributable to Weyerhaeuser common shareholders
|
$
|
0.31
|
|
$
|
0.48
|
|
$
|
2.17
|
|
$
|
0.32
|
|
$
|
3.20
|
|
Diluted net earnings per share attributable to Weyerhaeuser common shareholders
|
$
|
0.31
|
|
$
|
0.47
|
|
$
|
2.15
|
|
$
|
0.31
|
|
$
|
3.18
|
|
Dividends paid per share
|
$
|
0.22
|
|
$
|
0.22
|
|
$
|
0.29
|
|
$
|
0.29
|
|
$
|
1.02
|
|
Market prices - high/low
|
$31.59 - $28.63
|
|
$33.26 - $27.48
|
|
$34.60 - $31.09
|
|
$36.88 - $31.61
|
|
$36.88 - $27.48
|
|
|||||
(1) Third Quarter 2014 includes a $972 million net gain on the Real Estate Divestiture recognized in 2014. See
Note 3: Discontinued Operations
for more information.
|
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
|
CHANGES IN INTERNAL CONTROL
|
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
EXHIBITS
|
|
|||
2
|
—
|
Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
|
|
|
|
(a)
|
Stock Purchase Agreement, dated as of June 14, 2013, by and among Longview Timber Holdings, Corp., the securityholders listed on the signature pages thereto, Weyerhaeuser Columbia Holding Co., LLC and Weyerhaeuser Company (incorporated by reference to Current Report on Form 8-K filed with the Securities and Exchange Commission June 17, 2013 — Commission File Number 1-4825)
|
|
|
(b)
|
Transaction Agreement, dated as of November 3, 2013, among Weyerhaeuser Company, Weyerhaeuser Real Estate Company, TRI Pointe Homes, Inc. and Topaz Acquisition, Inc. (incorporated by reference to Current Report on Form 8-K filed with the Securities and Exchange Commission November 4, 2013 — Commission File Number 1-4825)
|
|
|
(c)
|
Agreement and Plan of Merger, dated as of November 6, 2015, between Weyerhaeuser Company and Plum Creek Timber Company, Inc. (incorporated by reference to Current Report on Form 8-K filed with the Securities and Exchange Commission November 9, 2015 - Commission File Number 1-4825)
|
3
|
—
|
Articles of Incorporation
|
|
|
|
(a)
|
Articles of Incorporation (incorporated by reference to Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission May 6, 2011 — Commission File Number 1-4825 and Current Report on Form 8-K filed with the Securities and Exchange Commission June 20, 2013 — Commission File Number 1-4825)
|
|
|
(b)
|
Bylaws (incorporated by reference to Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission May 6, 2011 — Commission File Number 1-4825)
|
4
|
—
|
Instruments Defining the Rights of Security Holders, Including Indentures
|
|
|
|
(a)
|
Indenture dated as of April 1, 1986 between Weyerhaeuser Company and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank and Chemical Bank), a national banking association, as Trustee (incorporated by reference from the Registration Statement on Form S‑3, Registration No. 333-36753).
|
|
|
(b)
|
First Supplemental Indenture dated as of February 15, 1991 between Weyerhaeuser Company and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank and Chemical Bank), a national banking association, as Trustee (incorporated by reference from the Registration Statement on Form S‑3, Registration No. 33-52982).
|
|
|
(c)
|
Second Supplemental Indenture dated as of February 1, 1993 between Weyerhaeuser Company and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank and Chemical Bank), a national banking association, as Trustee (incorporated by reference from the Registration Statement on Form S‑3, Registration No. 33-59974).
|
|
|
(d)
|
Third Supplemental Indenture dated as of October 22, 2001 between Weyerhaeuser Company and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank and Chemical Bank), a national banking association, as Trustee (incorporated by reference from the Registration Statement on Form S-3, Registration No. 333-72356).
|
|
|
(e)
|
Fourth Supplemental Indenture dated as of March 12, 2002 between Weyerhaeuser Company and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank and Chemical Bank), a national banking association, as Trustee (incorporated by reference from the Registration Statement on Form S-4, Registration No. 333-82376).
|
10
|
—
|
Material Contracts
|
|
|
|
(a)
|
Form of Executive Change of Control Agreement (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission February 13, 2015 — Commission File Number 1-4825) *
|
|
|
(b)
|
Form of Executive Severance Agreement (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission March 9, 2015 — Commission File Number 1-4825) *
|
|
|
(c)
|
Weyerhaeuser Company 2013 Long-Term Incentive Plan (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission February 19, 2013 — Commission File Number 1-4825) *
|
|
|
(d)
|
Form of Weyerhaeuser Company 2013 Long-Term Incentive Plan Stock Option Award Terms and Conditions (incorporated by reference to Current Report on Form 8-K filed with the Securities and Exchange Commission April 16, 2013 — Commission File Number 1-4825) *
|
|
|
(e)
|
Form of Weyerhaeuser Company 2013 Long-Term Incentive Plan Performance Share Unit Award Terms and Conditions (incorporated by reference to Current Report on Form 8-K filed with the Securities and Exchange Commission April 16, 2013 — Commission File Number 1-4825) *
|
|
|
(f)
|
Form of Weyerhaeuser Company 2013 Long-Term Incentive Plan Performance Share Unit Award Terms and Conditions (incorporated by reference to Current Report on Form 8-K filed with the Securities and Exchange Commission
December 22, 2014 — Commission File Number 1-4825) *
|
|
|
(g)
|
Form of Weyerhaeuser Company 2013 Long Term Incentive Plan Performance Share Unit Award Terms and Conditions (incorporated by reference to Current Report on Form 8-K filed with the Securities and Exchange Commission January 22, 2016 — Commission File Number 1-4825) *
|
SIGNATURES
|
WEYERHAEUSER COMPANY
|
|
/s/ DOYLE R. SIMONS
|
Doyle R. Simons
|
President and Chief Executive Officer
|
/s/ DOYLE R. SIMONS
|
|
/s/ JOHN I. KIECKHEFER
|
Doyle R. Simons
Principal Executive Officer and Director
|
|
John I. Kieckhefer
Director
|
|
|
|
/s/ PATRICIA M. BEDIENT
|
|
/s/ WAYNE W. MURDY
|
Patricia M. Bedient
Principal Financial Officer
|
|
Wayne W. Murdy
Director |
|
|
|
/s/ JEANNE M. HILLMAN
|
|
/s/ NICOLE W. PIASECKI
|
Jeanne M. Hillman
Principal Accounting Officer
|
|
Nicole W. Piasecki
Director
|
|
|
|
/s/ DAVID P. BOZEMAN
|
|
/s/ D. MICHAEL STEUERT
|
David P. Bozeman
Director
|
|
D. Michael Steuert
Director
|
|
|
|
/s/ DEBRA A. CAFARO
|
|
/s/ KIM WILLIAMS
|
Debra A. Cafaro
Director
|
|
Kim Williams
Director
|
|
|
|
/s/ MARK A. EMMERT
|
|
/s/ CHARLES R. WILLIAMSON
|
Mark A. Emmert
Director
|
|
Charles R. Williamson
Chairman of the Board and Director
|
1.
|
Name and Purpose
. The name of this plan is the "2011 Fee Deferral Plan for Directors of Weyerhaeuser Company" (the "Plan"). Its purpose is to provide non‑employee Directors of the Company with increased flexibility in timing the receipt of Fees earned as a Director and to assist the Company in attracting and retaining qualified individuals to serve as Directors.
|
2.
|
Definitions.
Whenever used in the Plan, the following terms shall have the meanings set forth below:
|
(a)
|
"Beneficiary" means the beneficiary or beneficiaries appointed by a Director to receive payment of the Director’s Deferred Fees after the Director's death. The appointment shall be made on a form to be supplied by the Company and may be revoked or superseded at any time. In the absence of such appointment, or if the appointed beneficiary or beneficiaries fail to survive the Director, the Director’s beneficiary shall be the Director's estate.
|
(b)
|
"Board" means the Board of Directors of the Company, provided that no member of the Board shall participate in or cast a vote with respect to any matter which specifically relates to that individual, as opposed to relating to the Directors as a group.
|
(c)
|
"Committee" means the Compensation Committee of the Board. The Committee makes recommendations to the Board, when appropriate, with respect to matters arising under the Plan.
|
(d)
|
"Commencement Date" means (i) a Director’s Separation from Service or (ii) a date that is one to five years following a Director’s Separation from Service, as elected by the Director.
|
(e)
|
"Common Shares" means the shares of common stock, $1.25 par value, of the Company.
|
(f)
|
"Company" means Weyerhaeuser Company.
|
(g)
|
"Deferral Period" means that period of time from the end of the date on which Fees would have been paid but for deferral under the Plan (or, in the case of Fees paid in the form of RSUs, from the end of the date of grant of such RSUs) until the time when such Fees are paid.
|
(h)
|
"Deferred Fees" means any Voluntarily Deferred Fees and Designated Stock Equivalents that have been deferred pursuant to the Plan, as well as any RSUs granted to a Director, together with any earnings or other appreciation thereon. All Deferred Fees are subject to the restrictions on transfer set forth in Subparagraph 7(d).
|
(i)
|
"Designated Stock Equivalents" means Fees deferred by a Director pursuant to Subparagraph 4(d)(iii).
|
(j)
|
"Director" for purposes of the Plan means a person serving on the Board who is not an Employee of the Company or any of its subsidiaries.
|
(k)
|
"Effective Date" has the meaning set forth in Paragraph 10.
|
(l)
|
"Employee" means a person who is classified by the Company as actively employed by the Company and who is compensated on a salaried basis as reflected on the Company's or any of its subsidiaries' payroll records.
|
(m)
|
"Fees" mean the fees payable to a Director by the Company as an annual "retainer" upon his or her election or reelection to the Board and chairing a Committee of the Board, but not fees payable for extended travel at the request of the Board or a Committee of the Board or reimbursement for expenses.
|
(n)
|
"Interest Rate Deferral" has the meaning set forth in Subparagraph 4(b)(i).
|
(o)
|
"Plan Year" means the calendar year in which the Fees are earned.
|
(p)
|
"RSU" shall mean a restricted stock unit granted to a Director in accordance with Subparagraph 4(d), each of which is equivalent in value to one Common Share.
|
(q)
|
"Section 409A" means Section 409A of the Internal Revenue Code of 1986, as amended, and regulations and other guidance promulgated thereunder.
|
(r)
|
"Separation from Service" means the failure to be reelected to, or the resignation or retirement from, the Board as a Director for any reason, provided, that if the Director continues to provide services for the Company or a subsidiary or affiliate in any capacity, the Director shall have a Separation from Service only if the Director has a “separation from service” within the meaning of Section 409A.
|
(s)
|
"Specified Employee" means a Director who, as of the date of the Director's Separation from Service for any reason, is a key employee of the Company. The Director is a key employee if the Director meets the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code Section 416(i)(5)) at any time during the twelve-month period ending on a Specified Employee identification date as determined under Code section 409A. If the Director is a key employee as of December 31, the Director shall be treated as a Specified Employee for the entire twelve-month period beginning on the next following April 1.
|
(t)
|
"Stock Equivalent" means a deferred unit of account which is equivalent in value to one Common Share of the Company.
|
(u)
|
"Stock Equivalent Deferral" means Fees deferred as Stock Equivalents pursuant to Subparagraph 4(b)(ii) or 4(d)(iii).
|
(v)
|
"Trading Day" means a day that the New York Stock Exchange is open for business.
|
(w)
|
"Voluntarily Deferred Fees" means Fees that are deferred pursuant to Subparagraph 4(b).
|
3.
|
Participation in the Plan
. Any individual who is a Director may participate in the Plan.
|
4.
|
Payment or Deferral of Fees
. Payment of Fees shall be made as follows:
|
(a)
|
Immediate Payment
. Except for Fees deferred pursuant to Subparagraph (b) below and Fees paid in the form of RSUs pursuant to Subparagraph (d) below, payment of Fees to a Director shall be made in cash and in full as soon as practicable following the time when the Fees are earned; provided that the annual "retainer" is deemed earned immediately following the Company's annual meeting of shareholders or other shareholder meeting at which Directors are elected, or in the case of newly appointed Directors, immediately following such appointment.
|
(b)
|
Voluntarily Deferred Fees
. Except as provided in Subparagraph (d) below for Fees paid in the form of RSUs, a Director may elect to defer receipt of a percentage of all of his or her Fees earned in any Plan Year in accordance with this Subparagraph (b). The procedure for this election is set forth in Subparagraph (c) below. Two forms of Voluntarily Deferred Fees are provided for.
|
(i)
|
"Interest Rate Deferral" ‑ This form of deferral provides for the payment of the amount to be deferred with interest, commencing with the Commencement Date elected by the Director, in the form of a lump sum or annual installments over up to 20 years, as elected by the Director. Details as to the amount and timing of payments are set forth in Paragraph 5.
|
(ii)
|
"Stock Equivalent Deferral" ‑ This form of deferral provides for the payment of the amount to be deferred, increased or decreased by reference to the market price and dividend history of Common Shares, commencing with the Commencement Date elected by the Director, in the form of a lump sum or annual installments over up to 20 years, as elected by the Director. Details as to the amount and timing of payments are set forth in Paragraph 6.
|
(c)
|
Election Procedure
. A Director shall notify the Company in writing on or prior to the December 31 preceding each Plan Year of his or her election to defer the receipt of a percentage or all of any Fees described in Subparagraph (b) that are to be earned starting in the Plan Year about to commence; provided, however, that a Director who is newly elected or appointed to the Board after the commencement of a Plan Year may notify the Company of such deferral election at any time prior to the effective date of his or her election or appointment provided that the requirements of Treas. Reg. § 1.409A-2(a)(7) (or any successor provision) are satisfied. Any Fees or part thereof which the Director has not elected to defer shall be paid as provided in Subparagraph (a) above. Each notice to defer shall:
|
(i)
|
state the percentage of the Fees to be deferred;
|
(ii)
|
designate the percentage of the total amount to be deferred as an Interest Rate Deferral and the percentage of the total amount to be deferred as a Stock Equivalent Deferral; and
|
(iii)
|
state the Commencement Date for payment of the Voluntarily Deferred Fees and the number of years (from one to 20) elected for payment.
|
(d)
|
Fees Paid in the Form of RSUs
. In the event that the Board designates that any Fee to be paid to a Director shall be paid in the form of RSUs, the following provisions shall apply:
|
(i)
|
Grant of RSUs
. Grants of RSUs under the Plan shall be evidenced by a written or electronic instrument that shall contain such terms, conditions, limitations and restrictions as the Board, upon recommendation by the Committee, shall deem advisable and that are not inconsistent with the Plan. The number of RSUs and fractions thereof granted to a Director shall be determined by dividing the amount of Fees to be paid in the form of RSUs by the average of the high and low price of a
|
(ii)
|
Adjustments
. A Director’s RSUs shall be credited with dividend equivalents in the same manner as set forth with respect to Stock Equivalents in Subparagraph 6(b) and shall be subject to adjustment in the same manner as set forth in Subparagraph 6(d). Any additional RSUs credited to a Director pursuant to this provision shall be subject to the same terms, conditions, limitations and restrictions as the original grant of RSUs as set forth in the instrument evidencing the award.
|
(iii)
|
Designated Stock Equivalents
. Notwithstanding the foregoing, a Director may elect to defer the settlement of a percentage of his or her RSUs in accordance with the procedures set forth below.
|
(I)
|
Any such deferrals shall be credited to the Director’s account under the Plan on the date of grant of such RSUs in the form of an equal number of Stock Equivalents (referred to herein as "Designated Stock Equivalents"), which shall thereafter be subject to the investment, forfeiture and payment provisions of Paragraphs 6 and 7 of the Plan as well as this Subparagraph 4(d)(iii). Any RSUs or part thereof which the Director does not elect to defer shall be settled as provided in the instrument evidencing the award.
|
(II)
|
A Director shall notify the Company in writing on or prior to the December 31 preceding each Plan Year of his or her election to defer the settlement of a percentage of the RSUs to be granted and starting to be earned in the Plan Year about to commence; provided, however, that a Director who is newly elected or appointed to the Board after the commencement of a Plan Year may notify the Company of such deferral election at any time prior to the effective date of his or her election or appointment provided that the requirements of Treas. Reg. § 1.409A-2(a)(7) (or any successor provision) are satisfied. Each notice to defer shall:
|
(1)
|
state the percentage of the RSUs to be deferred as Designated Stock Equivalents; and
|
(2)
|
state the Commencement Date for the payment of the Designated Stock Equivalents and the number of years (from one to 20) elected for payment.
|
(III)
|
An election to defer RSUs in the form of Designated Stock Equivalents shall be irrevocable. Should a Director make a deferral election but fail to make a payment election for any Designated Stock Equivalents, such Designated Stock Equivalents shall be payable in a single lump sum payment following the Director's Separation from Service as if the Director had elected Separation from Service as the Commencement Date.
|
(IV)
|
A Director shall be entitled to receive payments with respect to Designated Stock Equivalents as provided in Subparagraph 6(c).
|
(V)
|
The provisions of the Plan, including those relating to Voluntarily Deferred Fees, shall apply to Designated Stock Equivalents to the extent they are not inconsistent with this Subparagraph (d)(iii).
|
5.
|
Interest Rate Deferral
.
|
(a)
|
Accounts
. Any Voluntarily Deferred Fees designated as Interest Rate Deferrals shall be credited to a Director's account as of the day it would otherwise have been paid in cash and shall thereafter accrue interest at a rate to be designated from time to time by the Board, with such interest to be compounded monthly.
|
(b)
|
Payments
. A Director shall be entitled to receive cash payments with respect to Fees deferred under the Interest Rate Deferral option together with interest accrued to the date of payment in each year of the applicable period as elected under Subparagraph 4(c); provided, however, that in the event payments commence based on a Director's Separation from Service, no payment shall be made earlier than six months after the date of such Separation from Service if the Director is then a Specified Employee, in which case any suspended payment shall occur on the earliest date permitted by this Subparagraph and Section 409A. The amount of cash to be paid each year with respect to the amount of Interest Rate Deferrals from any Plan Year shall be computed by multiplying a fraction, the numerator of which is one and the denominator of which is the number of years remaining in the applicable payment period for such Interest Rate Deferrals, by the remaining portion of such Interest Rate Deferrals plus accrued interest on such Deferred Fees (e.g., 1/10th is paid in the first year of a ten-year payment period; 1/9th of the remaining balance in the second year, 1/8th of the remaining balance in the third year, etc., over the ten years).
|
6.
|
Stock Equivalent Deferral
.
|
(a)
|
Accounts
. Any Voluntarily Deferred Fees designated as Stock Equivalents shall be divided by the average of the high and low price of the Common Shares on the New York Stock Exchange on the date such Fees would otherwise have been paid in cash to determine the number of deferred Stock Equivalents or fractions thereof credited to a Director's account. Any Designated Stock Equivalents shall be equal in number to the number of RSUs a Director elects to defer, but shall, along with any increments thereto pursuant to Subparagraph 6(b) or (d) below, continue to be subject to the forfeiture provisions (but not the payment provisions) of the instrument evidencing the award of the RSUs granted under Subparagraph 4(d)(i) in the same manner as if no deferral election had been made. Any Stock Equivalent Deferrals shall be promptly credited to a Director's account.
|
(b)
|
Dividend Equivalents
. All such deferred Stock Equivalents shall be credited with an amount equivalent to each dividend declared on Common Shares. The amount of such dividend equivalents shall be divided by the price per share of common stock of the Company on the payable date for such dividend to determine the number of additional deferred Stock Equivalents or fractions thereof to be credited to a Director's account.
|
(c)
|
Payments
.
|
(i)
|
Payment with respect to any Stock Equivalent Deferrals credited to a Director’s account shall be made the in form of Common Shares, equal in number to the number of Stock Equivalents with respect to which payment is being made, plus cash for any fractional shares. Payments of such Deferred Fees shall be made following the Commencement Date elected by a Director; provided, however, no payment shall be made earlier than six months after the date of a Director’s Separation from Service if
|
(ii)
|
In the event a Director has elected payment of such Stock Equivalent Deferrals over a number of years rather than as a lump sum, the number of Common Shares to be paid each year shall be computed by multiplying a fraction, the numerator of which is one and the denominator of which is the number of years remaining in the elected payment period, by the remaining number of Stock Equivalents credited to the Director's account, to determine the number of Stock Equivalents for which payment is to be made.
|
(d)
|
Change in Common Shares
. In the event, at any time or from time to time, of a stock dividend, stock split, reverse stock split, combination or exchange of shares, recapitalization, merger, consolidation, change in control or other change in the Company's structure, the Committee shall make proportional adjustments in the number of Stock Equivalents credited to a Director’s account. Any such adjustments made by the Committee shall be conclusive and binding for all purposes of the Plan.
|
(e)
|
Price per Share
. The term "price per share" shall refer to the closing price of the common stock of the Company on the New York Stock Exchange on the Trading Day in question.
|
7.
|
General Provisions Related to Deferred Fees
.
|
(a)
|
Date of Payments
. Payments with respect to Interest Rate Deferrals and Stock Equivalent Deferrals shall be made annually prior to March 15 based on the election made by a Director. Payments with respect to Interest Rate Deferrals generally shall be made in January of each year. Payments with respect to Stock Equivalents generally shall be made in February of each year. If the Commencement Date elected by a Director occurs during a year, payments shall begin in January or February, as applicable, of the following year.
|
(b)
|
Segregation of Funds
. The Company shall be under no obligation to segregate any Deferred Fees during the Deferral Period. Such unsegregated funds are subject to the claims of the Company's general creditors during the Deferral Period.
|
(c)
|
Payment on Death
. In the event of a Director’s death, all of the Director’s Interest Rate Deferrals and Stock Equivalent Deferrals under the Plan, including any unpaid installments, shall be paid to the Director’s Beneficiary in a lump sum in the calendar year immediately following the year of the Director’s death.
|
(d)
|
Restrictions on Deferred Fees
. No Director's interest in any Deferred Fees is assignable, either by voluntary or involuntary assignment or by operation of law. No part of any Deferred Fees, regardless of the form thereof, may be paid over, loaned, sold, assigned, transferred, discounted, pledged as collateral for a loan or in any other way encumbered until the end of the Deferral Period with respect to such Deferred Fees.
|
8.
|
Administration and Amendment of the Plan
.
|
(a)
|
Powers of the Committee
. Full power and authority to construe and interpret the Plan shall be vested in the Committee as, from time to time, constituted by the Board. The Committee shall have the authority to modify any of the terms, conditions, limitations and restrictions relating to any Fees under the Plan in any manner not inconsistent with the Plan. Decisions hereunder by the Committee shall be final, conclusive and binding on all parties, including each Director and the Company.
|
(b)
|
Expenses of the Plan
. The expenses of administering the Plan shall be borne by the Company.
|
(c)
|
Amendment and Termination
. The Board in its sole discretion may (i) amend, suspend or terminate the Plan, (ii) supplement or replace the Plan with other Deferred Fees plans, and (iii) modify any provisions of the Plan and the terms, conditions, limitations and restrictions relating to any Fees under the Plan in any manner not inconsistent with the Plan.
|
(d)
|
Directors' Rights
. No amendment, suspension or termination of the Plan shall affect any deferral already made, and in the event of any such change, any Deferred Fees credited to a Director's account shall be paid as provided herein. No Director shall have any right or interest in the Plan or its continuance or in his or her continued participation in the Plan, other than in the Deferred Fees credited to his or her account. The existence of the Plan does not extend to any Director a right to continued Director status with the Company, and each Director is deemed to have agreed to the terms herein.
|
9.
|
Notice to the Plan Recordkeeper
. Any notice required to be furnished by a Director to the Plan recordkeeper shall be deemed to be provided if sent via fax or other electronic delivery method or via first class mail, in accordance with information and instructions communicated by the Plan recordkeeper to the Directors from time to time.
|
10.
|
Effective Date
. The Plan is effective as of November 1, 2010. The Plan applies to Fees earned in 2011 and subsequent years that are subject to deferral elections made on or after November 1, 2010 or designated by the Board as Stock Equivalents. The Plan is most recently amended and restated effective January 1, 2016.
|
11.
|
No Acceleration.
The acceleration of the time or schedule of any payment due under the Plan is generally prohibited. The Board may, however, accelerate certain distributions under the Plan to the extent permitted under Section 409A.
|
12.
|
Miscellaneous
.
|
(a)
|
Rights Unsecured
. The rights of a Director or his or her Beneficiary to receive a payment hereunder shall be an unsecured claim against the general assets of the Company, and neither the Director nor his or her Beneficiary shall have any rights in or against any amount credited to his or her account or any other specific assets of the Company. The Plan at all times shall be considered entirely unfunded for tax purposes. Any funds set aside by the Company for the purpose of meeting its obligations under the Plan, including any amounts held by a trustee, shall continue for all purposes to be part of the general assets of the Company and shall be available to the Company's general creditors in the event of the Company's bankruptcy or insolvency. The Company's obligation under the Plan shall be that of an unfunded and unsecured promise to pay benefits in the future. The Plan shall not be subject to any mistake of fact claim.
|
(b)
|
Taxes
. The Company or any other payer may withhold from a benefit payment under the Plan or from any other compensation payable by the Company to the Director any federal, state or local taxes required by law to be withheld with respect to a deferral, payment or accrual under the Plan, and shall report such payments and other Plan-related information to the appropriate governmental agencies as required under applicable law.
|
(c)
|
No Guarantee of Tax Consequences
. None of the Company, the Board, the Committee or any other person guarantees that any particular federal or state income, payroll, personal property or other tax consequence shall occur because of participation in the Plan. A Director should consult with professional tax advisors regarding all questions relative to the tax consequences arising from participation in the Plan.
|
(d)
|
Successors and Assigns
. The terms and conditions of the Plan, as amended and in effect from time to time, shall be binding on the Company's successors and assigns, including, without limitation, any entity into which the Company may be merged or with which the Company may be consolidated.
|
(e)
|
Applicable Law and Venue
. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving effect to the choice or conflicts of law provisions thereof. The Company intends that the Plan constitutes, and shall be construed and administered as, an unfunded plan of deferred compensation. In addition, the Plan is intended to comply with the requirements of Section 409A, including any official guidance issued thereunder. Notwithstanding any other provision, the Plan shall be interpreted, operated and administered in a manner consistent with this intention to the extent the Board deems necessary to comply with such requirements of Section 409A and to avoid the imposition of any additional tax thereunder. In addition, notwithstanding anything in Subparagraph 8(d) to the contrary, the Plan shall be deemed to be amended, and any deferrals and distributions hereunder shall be deemed to be modified, to the extent necessary to comply with such requirements of Section 409A. If the Company or any Director or Beneficiary initiates litigation related to the Plan, the venue for such action shall be King County, Washington.
|
Title:
|
SVP, Human Resources and Investor Relations
|
DOLLAR AMOUNTS IN MILLIONS
|
|
|
|
|
|
||||||||||
|
Year Ended
|
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|||||
Available earnings:
|
|
|
|
|
|
||||||||||
Earnings from continuing operations before interest expense, amortization of debt expense and income taxes
|
$
|
850
|
|
$
|
1,357
|
|
$
|
689
|
|
$
|
667
|
|
$
|
573
|
|
Add: interest portion of rental expense
|
10
|
|
10
|
|
13
|
|
12
|
|
13
|
|
|||||
Add (deduct): undistributed losses (earnings) of equity affiliates and noncontrolling interest in income of subsidiaries
|
105
|
|
5
|
|
(7
|
)
|
(1
|
)
|
3
|
|
|||||
Available earnings
|
$
|
965
|
|
$
|
1,372
|
|
$
|
695
|
|
$
|
678
|
|
$
|
589
|
|
Fixed charges:
|
|
|
|
|
|
||||||||||
Interest expense incurred
|
348
|
|
351
|
|
343
|
|
347
|
|
362
|
|
|||||
Amortization of debt expense
|
5
|
|
6
|
|
7
|
|
6
|
|
7
|
|
|||||
Interest portion of rental expense
|
10
|
|
10
|
|
13
|
|
12
|
|
13
|
|
|||||
Total fixed charges
|
363
|
|
367
|
|
363
|
|
365
|
|
382
|
|
|||||
Dividends on preference shares
(1)
|
44
|
|
54
|
|
23
|
|
—
|
|
—
|
|
|||||
Total fixed charges and preference dividends
|
$
|
407
|
|
$
|
421
|
|
$
|
386
|
|
$
|
365
|
|
$
|
382
|
|
Ratio of earnings to fixed charges
|
2.66
|
|
3.74
|
|
1.91
|
|
1.86
|
|
1.54
|
|
|||||
Ratio of earnings to combined fixed charges and preference dividends
|
2.37
|
|
3.26
|
|
1.80
|
|
1.86
|
|
1.54
|
|
|||||
(1) The preference security dividend has been calculated without adjustment for income taxes as a result of the negative effective tax rate in 2013.
|
Name
|
State or
Country of
Incorporation
|
Weyerhaeuser Columbia Timberlands LLC
|
Delaware
|
Weyerhaeuser NR Company
|
Washington
|
North Pacific Paper Corporation
|
Delaware
|
Norpac Resources LLC
|
Delaware
|
ver Bes' Insurance Company
|
Vermont
|
Weyerhaeuser Asset Management LLC
|
Delaware
|
Weyerhaeuser Employment Services Company
|
Washington
|
Weyerhaeuser Export Company
|
Delaware
|
Weyerhaeuser EU Holdings, Inc.
|
Delaware
|
Weyerhaeuser Poland sp.zo.o.
|
Poland
|
Weyerhaeuser Realty Investors, Inc.
|
Washington
|
Weyerhaeuser International, Inc.
|
Washington
|
Weyerhaeuser (Asia) Limited
|
Hong Kong
|
Weyerhaeuser China, Ltd.
|
Washington
|
Weyerhaeuser Company Limited
|
Canada
|
317298 Saskatchewan Ltd.
|
Saskatchewan
|
Weyerhaeuser (Annacis) Limited
|
British Columbia
|
Weyerhaeuser (Carlisle) Ltd.
|
Barbados
|
Camarin Limited
|
Barbados
|
Weyerhaeuser International Holdings Limited
|
British Virgin Islands
|
Colonvade S.A.
|
Uruguay
|
Vandora S.A.
|
Uruguay
|
Weyerhaeuser Productos S.A.
|
Uruguay
|
WHC LLC
|
Washington
|
Colonvade S.R.L.
|
Uruguay
|
Weyerhaeuser (Hong Kong) Limited
|
Hong Kong
|
Weyerhaeuser Japan Ltd.
|
Japan
|
Weyerhaeuser Japan Ltd.
|
Delaware
|
Weyerhaeuser Korea Ltd.
|
Korea
|
Weyerhaeuser Products Limited
|
United Kingdom
|
WREDCO I LLC
|
Delaware
|
WREDCO II LLC
|
Delaware
|
Weyerhaeuser Sales Europe, Inc.
|
Delaware
|
Weyerhaeuser SC Company
|
Washington
|
WY Carolina Holdings LLC
|
Delaware
|
WY Georgia Holdings 2004 LLC
|
Delaware
|
WY Tennessee Holdings LLC
|
Delaware
|
Weyerhaeuser Uruguay S.R.L.
|
Uruguay
|
WYU LLC
|
Washington
|
Weyerhaeuser Uruguay S.R.L
|
Uruguay
|
1.
|
I have reviewed this annual report on Form 10-K 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 that 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:
|
February 17, 2016
|
|
|
|
/s/ DOYLE R. SIMONS
|
|
Doyle R. Simons
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K 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 that 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:
|
February 17, 2016
|
|
|
|
/s/ PATRICIA M. BEDIENT
|
|
Patricia M. Bedient
Executive Vice President and Chief Financial Officer
|
|
/S/ DOYLE R. SIMONS
|
|
Doyle R. Simons
|
|
President and Chief Executive Officer
|
|
|
Dated:
|
February 17, 2016
|
|
|
|
/S/ PATRICIA M. BEDIENT
|
|
Patricia M. Bedient
|
|
Executive Vice President and Chief Financial Officer
|
|
|
Dated:
|
February 17, 2016
|