Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 23, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | WEYERHAEUSER CO | |
Trading Symbol | WY | |
Entity Central Index Key | 106,535 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 754,829,417 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net sales | $ 1,872 | $ 1,709 | $ 5,373 | $ 4,769 |
Costs of products sold | 1,374 | 1,328 | 3,982 | 3,702 |
Gross margin | 498 | 381 | 1,391 | 1,067 |
Selling expenses | 22 | 22 | 66 | 67 |
General and administrative expenses | 75 | 80 | 238 | 253 |
Research and development expenses | 4 | 5 | 12 | 14 |
Charges for integration and restructuring, closures and asset impairments (Note 15) | 14 | 16 | 178 | 141 |
Charges for product remediation (Note 16) | 190 | 0 | 240 | 0 |
Other operating costs (income), net (Note 17) | (12) | (3) | 2 | (56) |
Operating income | 205 | 261 | 655 | 648 |
Equity earnings from joint ventures (Note 7) | 1 | 9 | 1 | 21 |
Non-operating pension and other postretirement benefit (costs) credits | (16) | 13 | (46) | 37 |
Interest income and other | 11 | 15 | 29 | 34 |
Interest expense, net of capitalized interest | (98) | (114) | (297) | (323) |
Earnings from continuing operations before income taxes | 103 | 184 | 342 | 417 |
Income taxes (Note 18) | 27 | (22) | (31) | (64) |
Earnings from continuing operations | 130 | 162 | 311 | 353 |
Earnings from discontinued operations, net of income taxes (Note 3) | 0 | 65 | 0 | 123 |
Net earnings | 130 | 227 | 311 | 476 |
Dividends on preference shares (Note 5) | 0 | 0 | 0 | (22) |
Net earnings attributable to Weyerhaeuser common shareholders | $ 130 | $ 227 | $ 311 | $ 454 |
Earnings per share attributable to Weyerhaeuser common shareholders, basic (Note 5): | ||||
Income (Loss) from Continuing Operations, Per Basic Share | $ 0.17 | $ 0.22 | $ 0.41 | $ 0.47 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | 0 | 0.08 | 0 | 0.17 |
Earnings Per Share, Basic | 0.17 | 0.30 | 0.41 | 0.64 |
Earnings per share attributable to Weyerhaeuser common shareholders, diluted (Note 5) | ||||
Income (Loss) from Continuing Operations, Per Diluted Share | 0.17 | 0.21 | 0.41 | 0.46 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | 0 | 0.09 | 0 | 0.18 |
Earnings Per Share, Diluted | 0.17 | 0.30 | 0.41 | 0.64 |
Dividends paid per share | $ 0.31 | $ 0.31 | $ 0.93 | $ 0.93 |
Weighted average shares outstanding (in thousands) (Note 5): | ||||
Basic | 753,535 | 749,587 | 752,301 | 708,395 |
Diluted | 756,903 | 754,044 | 756,058 | 712,205 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net earnings | $ 130 | $ 227 | $ 311 | $ 476 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 24 | (5) | 35 | 34 |
Actuarial gains, net of tax expense of $12, $15, $62 and $40 | 18 | 29 | 90 | 70 |
Prior service costs, net of tax benefit of $0, $0, $1 and $0 | (1) | (1) | (5) | (3) |
Unrealized gains on available-for-sale securities | 1 | 0 | 2 | 1 |
Total other comprehensive income | 42 | 23 | 122 | 102 |
Total comprehensive income | $ 172 | $ 250 | $ 433 | $ 578 |
CONSOLIDATED STATEMENT OF COMP4
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Tax expense (benefit) of actuarial gains (losses) | $ 12 | $ 15 | $ 62 | $ 40 |
Tax expense (benefit) of prior service credits (costs) | $ 0 | $ 0 | $ (1) | $ 0 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 497 | $ 676 |
Receivables, less discounts and allowances of $1 and $1 | 485 | 390 |
Receivables for taxes | 65 | 84 |
Inventories (Note 6) | 340 | 358 |
Prepaid expenses and other current assets | 130 | 114 |
Total current assets | 1,517 | 1,622 |
Property and equipment, less accumulated depreciation of $3,417 and $3,306 | 1,534 | 1,562 |
Construction in progress | 225 | 213 |
Timber and timberlands at cost, less depletion charged to disposals | 13,627 | 14,299 |
Minerals and mineral rights, less depletion | 312 | 319 |
Investments in and advances to joint ventures (Note 7) | 33 | 56 |
Goodwill | 40 | 40 |
Deferred tax assets | 240 | 293 |
Other assets | 259 | 224 |
Restricted financial investments held by variable interest entities | 615 | 615 |
Total assets | 18,402 | 19,243 |
Liabilities | ||
Current maturities of long-term debt (Note 10) | 62 | 281 |
Accounts payable | 259 | 233 |
Accrued liabilities (Note 9) | 702 | 692 |
Total current liabilities | 1,023 | 1,206 |
Long-term debt (Note 10) | 5,933 | 6,329 |
Long-term debt (nonrecourse to the company) held by variable interest entities | 511 | 511 |
Deferred pension and other postretirement benefits (Note 8) | 1,201 | 1,322 |
Deposit from contribution of timberlands to related party (Note 7) | 416 | 426 |
Other liabilities | 273 | 269 |
Total liabilities | 9,357 | 10,063 |
Commitments and contingencies (Note 12) | ||
Equity: | ||
Common shares: $1.25 par value; authorized 1,360,000,000 shares; issued and outstanding: 753,050,533 and 748,528,131 shares | 941 | 936 |
Other capital | 8,391 | 8,282 |
Retained earnings | 1,050 | 1,421 |
Cumulative other comprehensive loss (Note 13) | (1,337) | (1,459) |
Total equity | 9,045 | 9,180 |
Total liabilities and equity | $ 18,402 | $ 19,243 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Receivables, allowances | $ 1 | $ 1 |
Property and equipment, accumulated depreciation | $ 3,393 | $ 3,306 |
Common shares, par value | $ 1.25 | $ 1.25 |
Common shares, authorized | 1,360,000,000 | 1,360,000,000 |
Common shares, issued | 753,050,533 | 748,528,131 |
Common shares, outstanding | 753,050,533 | 748,528,131 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operations: | ||
Net earnings | $ 311 | $ 476 |
Noncash charges (credits) to earnings: | ||
Depreciation, depletion and amortization | 394 | 428 |
Basis of real estate sold | 48 | 49 |
Deferred income taxes, net | 9 | 96 |
Pension and other postretirement benefits (Note 8) | 72 | 5 |
Share-based compensation expense | 29 | 53 |
Charges for impairment of assets | 153 | 23 |
Equity (earnings) loss from joint ventures (Note 7) | (1) | (18) |
Net gains on disposition of assets and operations | (15) | (121) |
Foreign exchange transaction (gains) losses (Note 17) | 0 | (11) |
Change in: | ||
Receivables less allowances | (113) | (96) |
Receivable/payable for taxes | (116) | 37 |
Inventories | 4 | 49 |
Prepaid expenses | (9) | (3) |
Accounts payable and accrued liabilities | 184 | 61 |
Pension and postretirement contributions (Note 8) | (59) | (83) |
Distributions of earnings received from joint ventures (Note 7) | 1 | 5 |
Other | (45) | (64) |
Net cash from operations | 847 | 886 |
Cash flows from investing activities: | ||
Capital expenditures for property and equipment | (213) | (260) |
Capital expenditures for timberlands reforestation | (46) | (43) |
Acquisition of timberlands | 0 | (10) |
Proceeds from sale of assets and operations | 423 | 379 |
Proceeds from contribution of timberlands to related party | 0 | 440 |
Distributions of investment received from joint ventures (Note 7) | 23 | 34 |
Cash and cash equivalents acquired in Plum Creek merger (Note 4) | 0 | 9 |
Other | 5 | 42 |
Cash from investing activities | 192 | 591 |
Cash flows from financing activities: | ||
Cash dividends on common shares | (699) | (700) |
Cash dividends on preference shares | 0 | (22) |
Proceeds from issuance of long-term debt (Note 10) | 225 | 1,698 |
Proceeds from borrowing on line of credit (Note 10) | 100 | 0 |
Payments of long-term debt (Note 10) | (831) | (723) |
Payments of line of credit (Note 10) | (100) | 0 |
Repurchase of common stock | 0 | (2,003) |
Proceeds from exercise of stock options | 89 | 48 |
Other | (2) | (8) |
Cash used in financing activities | (1,218) | (1,710) |
Net change in cash and cash equivalents | (179) | (233) |
Cash and cash equivalents from continuing operations at beginning of period | 676 | 1,011 |
Cash and cash equivalents from discontinued operations at beginning of period | 0 | 1 |
Cash and cash equivalents at beginning of period | 1,012 | |
Cash and cash equivalents from continuing operations at end of period | 497 | 769 |
Cash and cash equivalents from discontinued operations at end of period | 0 | 10 |
Cash and cash equivalents at end of period | 779 | |
Cash paid (received) during the period for: | ||
Interest, net of amount capitalized of $6 and $5 | 315 | 367 |
Income taxes | $ 129 | $ (26) |
CONSOLIDATED STATEMENT OF CASH8
CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Interest, amount capitalized | $ 6 | $ 5 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION We are a corporation that has elected to be taxed as a real estate investment trust (REIT). We expect to derive most of our REIT income from investments in timberlands, including the sale of standing timber. As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our taxable REIT subsidiaries (TRSs), which includes our Wood Products segment and portions of our Timberlands and Real Estate, Energy and Natural Resources (Real Estate & ENR) segments. Our consolidated financial statements provide an overall view of our results and financial condition. They include our accounts and the accounts of entities we control, including: • majority-owned domestic and foreign subsidiaries and • variable interest entities in which we are the primary beneficiary. They do not include our intercompany transactions and accounts, which are eliminated. We account for investments in and advances to unconsolidated equity affiliates using the equity method, with taxes provided on undistributed earnings. This means that we record earnings and accrue taxes in the period earnings are recognized by our unconsolidated equity affiliates. Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” “we,” “the company” and “our” refer to the consolidated company. The accompanying unaudited Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Except as otherwise disclosed in these Notes to Consolidated Financial Statements, such adjustments are of a normal, recurring nature. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements. Certain information and footnote disclosures normally included in our annual Consolidated Financial Statements have been condensed or omitted. These quarterly Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2016 . Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year. RECLASSIFICATIONS We have reclassified certain balances and results from the prior year to be consistent with our 2017 reporting. This makes year-to-year comparisons easier. Our reclassifications had no effect on consolidated net earnings or equity. Our reclassifications present the adoption of new accounting pronouncements on our Consolidated Statement of Operations and in the related footnotes. Refer to discussion of new accounting pronouncements below. NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, a comprehensive new revenue recognition model that requires an entity to recognize revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, which deferred the effective date for an additional year. In March 2016, FASB issued ASU 2016-08, which does not change the core principle of the guidance; however, it does clarify the implementation guidance on principal versus agent considerations. In April 2016, FASB issued ASU 2016-10, which clarifies two aspects of ASU 2014-09: identifying performance obligations and the licensing implementation guidance. In May 2016, FASB issued ASU 2016-12, which amends ASU 2014-09 to provide improvements and practical expedients to the new revenue recognition model. In December 2016, the FASB issued ASU 2016-20, which amends ASU 2014-09 for technical corrections and to correct for unintended application of the guidance. In February 2017, FASB issued ASU 2017-05, which clarifies the scope of ASC 610-20 and impacts accounting for partial sales of nonfinancial assets. The company expects to adopt and implement the new revenue recognition guidance effective January 1, 2018. The new standard is required to be applied retrospectively to each prior reporting period presented (full retrospective transition method) or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application (cumulative effect method). We expect to adopt using the cumulative effect method. We expect that the adoption of the new revenue recognition guidance will not materially impact our operating results, balance sheet, or cash flows. We expect an impact to our financial reporting from adding expanded disclosures. In July 2015, FASB issued ASU 2015-11, which simplifies the measurement of inventories valued under most methods, including our inventories valued under FIFO – the first-in, first-out – and moving average cost methods. Inventories valued under LIFO – the last-in, first-out method – are excluded. Under this new guidance, inventories valued under these methods would be valued at the lower of cost or net realizable value, with net realizable value defined as the estimated selling price less reasonable costs to sell the inventory. We adopted ASU 2015-11 on January 1, 2017, and determined this pronouncement does not have a material impact on our consolidated financial statements and related disclosures. In February 2016, FASB issued ASU 2016-02, which requires lessees to recognize assets and liabilities for the rights and obligations created by those leases and requires both capital and operating leases to be recognized on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. We expect to adopt ASU 2016-02 on January 1, 2019, and are evaluating the impact on our consolidated financial statements and related disclosures. In October 2016, FASB issued ASU 2016-16, which requires immediate recognition of the income tax consequences upon intra-entity transfers of assets other than inventory. The new guidance is effective for annual periods beginning after December 15, 2017, and early adoption is permitted. We adopted this accounting standard on January 1, 2017. As a result of this adoption, our opening balance sheet was adjusted through "Retained earnings" to include a deferred tax asset of $22 million for prior period intra-entity transfers. Adoption of this standard did not have a material impact on our Consolidated Statement of Cash Flows or Consolidated Statement of Operations . In March 2017, FASB issued ASU 2017-07, which requires that an employer report the service cost component of pension and other postretirement benefit costs in the Consolidated Statement of Operations in the same line item or items as other compensation costs arising from services rendered by the pertinent employees. This requirement is consistent with how we have historically presented our pension service costs. The other requirement of ASU 2017-07 is to present the remaining components of pension and other postretirement benefit costs (i.e., interest, expected return on plan assets, amortization of actuarial gains or losses, and amortization of prior service credits or costs) in the Consolidated Statement of Operations separately from the service cost component and outside a subtotal of income from operations. The new guidance is effective for annual periods beginning after December 15, 2017, and early adoption is permitted. We adopted this accounting standard as of January 1, 2017. As a result, we reclassified amounts related to other components of pension and other post retirement benefit costs from their prior financial statements captions ("Costs of products sold," "General and administrative expenses," and "Other operating costs (income), net") into a new financial statement caption titled "Non-operating pension and other postretirement benefit (costs) credits" in our Consolidated Statement of Operations . The adoption of ASU 2017-07 did not impact "Net earnings," nor did it impact our Consolidated Balance Sheet . |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended |
Sep. 30, 2017 | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS Reportable business segments are determined based on the company’s "management approach," as defined by FASB ASC 280, “Segment Reporting.” The management approach is based on the way the chief operating decision maker organizes the segments within a company for making decisions about resources to be allocated and assessing their performance. We are principally engaged in growing and harvesting timber; manufacturing, distributing, and selling products made from trees; maximizing the value of every acre we own through the sale of higher and better use (HBU) properties; and monetizing reserves of minerals, oil, gas, coal, and other natural resources on our timberlands. The following is a brief description of each of our reportable business segments and activities: • Timberlands – which includes logs, timber and leased recreational access; • Real Estate & ENR – which includes sales of timberlands; rights to explore for and extract hard minerals, oil and gas production and coal; and equity interests in our Real Estate Development Ventures (as defined and described in Note 7: Related Parties ); and • Wood Products – which includes softwood lumber, engineered wood products, structural panels, medium density fiberboard and building materials distribution. An analysis and reconciliation of our business segment information to the respective information in the Consolidated Statements of Operations is as follows: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Sales to unaffiliated customers: Timberlands $ 491 $ 484 $ 1,446 $ 1,342 Real Estate & ENR 82 48 181 125 Wood Products 1,299 1,177 3,746 3,302 1,872 1,709 5,373 4,769 Intersegment sales: Timberlands 179 216 544 631 Wood Products — 17 — 61 179 233 544 692 Total sales 2,051 1,942 5,917 5,461 Intersegment eliminations (179 ) (233 ) (544 ) (692 ) Total $ 1,872 $ 1,709 $ 5,373 $ 4,769 Net contribution to earnings: Timberlands (1) $ 131 $ 122 $ 267 $ 376 Real Estate & ENR (2) 47 15 96 42 Wood Products (3) 40 170 389 413 218 307 752 831 Unallocated items (4) (17 ) (9 ) (113 ) (91 ) Net contribution to earnings 201 298 639 740 Interest expense, net of capitalized interest (98 ) (114 ) (297 ) (323 ) Earnings from continuing operations before income taxes 103 184 342 417 Income taxes 27 (22 ) (31 ) (64 ) Earnings from continuing operations 130 162 311 353 Earnings from discontinued operations, net of income taxes (5) — 65 — 123 Net earnings 130 227 311 476 Dividends on preference shares — — — (22 ) Net earnings attributable to Weyerhaeuser common shareholders $ 130 $ 227 $ 311 $ 454 (1) Net contribution to earnings for the Timberlands segment includes a noncash pretax impairment charge of $147 million , recorded during second quarter 2017. This impairment was a result of our agreement to sell our Uruguayan operations, which was announced in June 2017 and completed on September 1, 2017. Refer to Note 3: Discontinued Operations and Other Divestitures for more information regarding this transaction. (2) The Real Estate & ENR segment includes the equity earnings from, investments in and advances to our Real Estate Development Ventures (as defined and described in Note 7: Related Parties ), which are accounted for under the equity method. (3) Net contribution to earnings for the Wood Products segment includes pretax charges of $190 million and $240 million incurred in the quarter and year-to-date period ended September 30, 2017, respectively, to accrue for estimated costs to remediate an issue with certain I-joists coated with our Flak Jacket® Protection product. Refer to Note 16: Charges for Product Remediation for additional details. (4) 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. Additionally, amounts shown for 2016 include equity earnings from our former Timberland Venture. As of August 31, 2016, the Timberland Venture became a fully consolidated, wholly-owned subsidiary and therefore eliminated our equity method investment at that time. (5) Discontinued operations as presented herein consist of the operations of our former Cellulose Fibers segment. Refer to Note 3: Discontinued Operations and Other Divestitures for more information regarding our discontinued operations. |
DISCONTINUED OPERATIONS AND OTH
DISCONTINUED OPERATIONS AND OTHER DIVESTITURES DISCONTINUED OPERATIONS AND OTHER DIVESTITURES | 9 Months Ended |
Sep. 30, 2017 | |
DISCONTINUED OPERATIONS AND OTHER DIVESTITURES | DISCONTINUED OPERATIONS AND OTHER DIVESTITURES OPERATIONS DIVESTED On October 12, 2016, we announced the exploration of strategic alternatives for our Uruguay timberlands and manufacturing operations, which was part of our Timberlands business segment. On June 2, 2017, the Weyerhaeuser Board of Directors approved an equity purchase agreement with a consortium led by BTG Pactual's Timberland Investment Group (TIG), including other long-term investors, pursuant to which the Company agreed to sell, in exchange for $403 million in cash, all of its equity interest in the subsidiaries that collectively owned and operated its Uruguayan timberlands and manufacturing operations. On September 1, 2017, we completed the sale of our Uruguay timberlands and manufacturing operations for approximately $403 million of cash proceeds. Due to the impairment of our Uruguayan operations recorded during second quarter 2017 (refer to Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments ), no material gain or loss was recorded as a result of this sale. As of September 30, 2017 , no assets or liabilities related to our Uruguayan operations remain on the Consolidated Balance Sheet . The sale of our Uruguayan operations was not considered a strategic shift that had or will have a major effect on our operations or financial results, and therefore did not meet the requirements for presentation as discontinued operations. DISCONTINUED OPERATIONS During 2016, we entered into three separate transactions to sell our Cellulose Fibers business. As a result of these transactions, the company recognized a pretax gain on disposition of $789 million and total cash proceeds of $2.5 billion in the second half of 2016. These transactions consisted of: • sale of our Cellulose Fibers liquid packaging board business to Nippon Paper Industries Co., Ltd, which closed on August 31, 2016; • sale of our Cellulose Fibers printing papers joint venture to One Rock Capital Partners, LLC, which closed on November 1, 2016; and • sale of our Cellulose Fibers pulp business to International Paper, which closed on December 1, 2016. The results of operations for our pulp and liquid packaging board businesses, along with our interest in our printing papers joint venture, were reclassified to discontinued operations during our 2016 reporting year. These results have been summarized in "Earnings from discontinued operations, net of income taxes" on our Consolidated Statement of Operations for each period presented. We did not reclassify our Consolidated Statement of Cash Flows to reflect discontinued operations. The following table presents net earnings from discontinued operations. As all discontinued operations were sold in 2016, no assets or liabilities remain as of September 30, 2017 , or December 31, 2016 . QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2016 SEPTEMBER 2016 Total net sales $ 420 $ 1,306 Costs of products sold 350 1,110 Gross margin 70 196 Selling expenses 3 10 General and administrative expenses 7 24 Research and development expenses — 3 Charges for integration and restructuring, closures and asset impairments (1) 13 44 Other operating income, net (2 ) (21 ) Operating income 49 136 Equity loss from joint venture — (3 ) Interest expense, net of capitalized interest (2 ) (5 ) Earnings from discontinued operations before income taxes 47 128 Income taxes (23 ) (46 ) Net earnings from operations 24 82 Net gain on divestiture of Liquid Packaging Board 41 41 Net earnings from discontinued operations $ 65 $ 123 (1) Charges relate to our strategic evaluation of the Cellulose Fibers businesses and transaction-related costs. Cash flows from discontinued operations for the three and nine months ended September 30, 2016 , are as follows: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2016 SEPTEMBER 2016 Net cash provided by operating activities $ 58 $ 192 Net cash provided by investing activities $ 259 $ 225 |
MERGER WITH PLUM CREEK MERGER W
MERGER WITH PLUM CREEK MERGER WITH PLUM CREEK | 9 Months Ended |
Sep. 30, 2017 | |
MERGER WITH PLUM CREEK | MERGER WITH PLUM CREEK On February 19, 2016, we merged with Plum Creek Timber Company, Inc. (Plum Creek). Plum Creek was a REIT that primarily owned and managed timberlands in the United States. Plum Creek also produced wood products, developed opportunities for mineral and other natural resource extraction, and sold real estate properties. The acquisition of total assets of $10.0 billion was a noncash investing and financing activity comprised of $6.4 billion in equity consideration transferred and $3.6 billion of liabilities assumed. Summarized unaudited pro forma information that presents combined amounts as if this merger occurred at the beginning of 2016 is as follows: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES SEPTEMBER 2016 SEPTEMBER 2016 Net sales $ 1,709 $ 4,925 Net earnings from continuing operations attributable to Weyerhaeuser common shareholders $ 172 $ 438 Earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, basic and diluted $ 0.23 $ 0.58 Pro forma "Net earnings from continuing operations attributable to Weyerhaeuser common shareholders" excludes $10 million and $144 million of non-recurring merger-related costs (net of tax) incurred in the quarter and year-to-date ended September 30, 2016 , respectively. Pro forma data may not be indicative of the results that would have been obtained had these events occurred at the beginning of the periods presented, nor is it intended to be a projection of future results. |
NET EARNINGS PER SHARE
NET EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
NET EARNINGS PER SHARE | NET EARNINGS PER SHARE Our basic and diluted earnings per share attributable to Weyerhaeuser shareholders were: • $0.17 during third quarter 2017 and $0.41 during year-to-date 2017 ; and • $0.30 during third quarter 2016 and $0.64 during year-to-date 2016 . Basic earnings per share is net earnings available to common shareholders divided by the weighted average number of our outstanding common shares, including stock equivalent units where there is no circumstance under which those shares would not be issued. Diluted earnings per share is net earnings available to common shareholders divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares: QUARTER ENDED YEAR-TO-DATE ENDED SHARES IN THOUSANDS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Weighted average number of outstanding common shares – basic 753,535 749,587 752,301 708,395 Dilutive potential common shares: Stock options 2,437 3,185 2,754 2,660 Restricted stock units 551 814 529 723 Performance share units 380 458 474 427 Total effect of outstanding dilutive potential common shares 3,368 4,457 3,757 3,810 Weighted average number of outstanding common shares – dilutive 756,903 754,044 756,058 712,205 We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units. Share-based payment awards that are contingently issuable upon the achievement of specified performance or market conditions are included in our diluted earnings per share calculation in the period in which the conditions are satisfied. Potential Shares Not Included in the Computation of Diluted Earnings per Share The following shares were not included in the computation of diluted earnings per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods. QUARTER ENDED YEAR-TO-DATE ENDED SHARES IN THOUSANDS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Stock options 1,381 1,835 1,381 1,835 Performance share units 556 361 556 361 Mandatory Convertible Preference Shares We issued 13.8 million 6.375 percent Mandatory Convertible Preference Shares, Series A on June 24, 2013 , the majority of which remained outstanding through June 30, 2016. On July 1, 2016, all outstanding 6.375 percent Mandatory Convertible Preference Shares, Series A (Preference Shares) converted into Weyerhaeuser common shares at a rate of 1.6929 Weyerhaeuser common shares per Preference Share. There were no preference shares outstanding as of December 31, 2016 , or September 30, 2017 . |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2017 | |
INVENTORIES | INVENTORIES Inventories include raw materials, work-in-process and finished goods. DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 30, DECEMBER 31, LIFO Inventories: Logs $ 5 $ 18 Lumber, plywood and panels 44 51 Medium density fiberboard 11 10 Other products 14 10 FIFO or moving average cost inventories: Logs 19 21 Lumber, plywood, panels and engineered wood products 81 71 Other products 81 92 Materials and supplies 85 85 Total $ 340 $ 358 LIFO – the last-in, first-out method – applies to major inventory products held at our U.S. domestic locations. The FIFO – the first-in, first-out method – or moving average cost methods apply to the balance of our domestic raw material and product inventories as well as for all material and supply inventories and all foreign inventories. If we used FIFO for all LIFO inventories, our stated inventories would have been higher by $70 million as of September 30, 2017 , and $71 million as of December 31, 2016 . |
RELATED PARTIES RELATED PARTIES
RELATED PARTIES RELATED PARTIES | 9 Months Ended |
Sep. 30, 2017 | |
RELATED PARTIES | RELATED PARTIES This note provides details about our transactions with related parties. Our related parties consist of: • our Real Estate Development Ventures (as defined below), which are accounted for using the equity method and • our Twin Creeks Venture. Real Estate Development Ventures WestRock-Charleston Land Partners, LLC (WR-CLP) is a limited liability company which holds residential and commercial real estate development properties, currently under development (Class A Properties) and higher-value timber and development lands (Class B Properties) (Class A Properties and Class B Properties referred to collectively as the Real Estate Development Ventures). Our share of the equity earnings of WR-CLP is included in the net contribution to earnings of our Real Estate & ENR segment. The carrying amount of our investment in WR-CLP is $33 million at September 30, 2017 , and $56 million at December 31, 2016 . The change in our investment in WR-CLP during 2017 is due to a $23 million cash return of investment received during 2017 . Additionally, we had $1 million of equity earnings from the joint ventures during third quarter and year-to-date 2017 . These equity earnings were distributed during third quarter 2017. We record our share of net earnings within "Equity earnings from joint ventures" in our Consolidated Statement of Operations in the period which earnings are recorded by the affiliates. Twin Creeks Venture On April 1, 2016, we contributed approximately 260,000 acres of our southern timberlands with an agreed-upon value of approximately $560 million to Twin Creeks Timber, LLC (Twin Creeks Venture), in exchange for cash of approximately $440 million and a 21 percent ownership interest. In conjunction with contributing to the venture, we entered into separate agreements to manage the timberlands owned by the Twin Creeks Venture, including harvesting activities, marketing and log sales activities, and replanting and silviculture activities. These management agreements guaranteed the Twin Creeks Venture an annual return equal to 3 percent of the contributed value of the managed timberlands in the form of minimum quarterly payments from Weyerhaeuser. We were also required to annually distribute 75 percent of any profits earned by us in excess of the minimum quarterly payments. The management agreement was cancellable at any time by Twin Creeks Timber, LLC, or otherwise would expire on April 1, 2019. Subsequent to the quarter ended September 30, 2017, but prior to the issuance of these financial statements, we announced the redemption of our 21 percent ownership interest in the Twin Creeks Venture for $108 million in cash. We do not expect to recognize a material gain or loss on the redemption of our ownership interest. Effective December 31, 2017, we will also terminate the agreements under which we have managed the Twin Creeks timberlands. Following termination of these agreements, Weyerhaeuser will have no further responsibilities or obligations related to Twin Creeks. In conjunction with the redemption and termination discussed above, we have also entered into an agreement to sell 100,000 acres of our timberlands to Twin Creeks for $203 million . The sale, which will include 80,000 acres of timberlands in Mississippi and 20,000 acres in Georgia, is expected to close by the end of fourth quarter 2017. Changes in our "Deposit from contribution of timberlands to related party" balance during 2017 were as follows: DOLLAR AMOUNTS IN MILLIONS Balance as of December 31, 2016 $ 426 Lease payments to Twin Creeks Venture (13 ) Distributions from Twin Creeks Venture 3 Balance at September 30, 2017 $ 416 |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2017 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The components of net periodic benefit costs (credits) are: PENSION QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Service cost (1) $ 9 $ 13 $ 26 $ 37 Interest cost 66 70 198 207 Expected return on plan assets (101 ) (125 ) (306 ) (371 ) Amortization of actuarial loss 48 39 145 117 Amortization of prior service cost 1 1 3 3 Accelerated pension costs included in Plum Creek merger-related costs (Note 15) — — — 5 Total net periodic benefit cost (credit) - pension $ 23 $ (2 ) $ 66 $ (2 ) (1) Service cost includes $3 million and $10 million for the quarter and year-to-date ended September 30, 2016 , respectively, for employees that were part of our Cellulose Fibers divestitures. These charges are included in our results of discontinued operations. OTHER POSTRETIREMENT BENEFITS QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Interest cost $ 2 $ 2 $ 6 $ 7 Amortization of actuarial loss 2 2 6 6 Amortization of prior service credit (2 ) (2 ) (6 ) (6 ) Total net periodic benefit cost - other postretirement benefits $ 2 $ 2 $ 6 $ 7 On January 1, 2017, we adopted ASU 2017-07, which affects where components of pension and other postretirement costs are presented on the Consolidated Statement of Operations . Refer to Note 1: Basis of Presentation for further information. FAIR VALUE OF PENSION PLAN ASSETS AND OBLIGATION We estimate the fair value of pension plan assets based upon the information available during the year-end reporting process. In some cases, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We update the year-end estimated fair value of pension plan assets to incorporate year-end net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K. During second quarter 2017 , we recorded an increase in the fair value of the pension assets of $17 million , or less than 1 percent. We also updated our census data that is used to estimate our projected benefit obligation for our pension plans. As a result of that update, during second quarter 2017 , we recorded a decrease to the projected benefit obligation of $10 million , or less than 1 percent. The net effect was a $27 million improvement in the funded status compared to December 31, 2016. EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS In 2017 we expect to: • be required to contribute approximately $23 million for our Canadian registered plan; • be required to contribute or make benefit payments for our Canadian nonregistered plans of $3 million ; • make benefit payments of $26 million for our U.S. nonqualified pension plans; and • make benefit payments of $21 million for our U.S. and Canadian other postretirement plans. We do not anticipate making a contribution to our U.S. qualified pension plans in 2017 . |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2017 | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities were comprised of the following: DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 30, DECEMBER 31, Wages, salaries and severance pay $ 132 $ 178 Pension and other postretirement benefits 48 49 Vacation pay 35 33 Taxes – Social Security and real and personal property 38 20 Interest 85 120 Customer rebates and volume discounts 46 39 Deferred income 60 40 Accrued income taxes 4 139 Product remediation accrual (Note 16) 179 — Other 75 74 Total $ 702 $ 692 |
LONG-TERM DEBT AND LINES OF CRE
LONG-TERM DEBT AND LINES OF CREDIT LONG-TERM DEBT AND LINES OF CREDIT | 9 Months Ended |
Sep. 30, 2017 | |
LONG-TERM DEBT AND LINES OF CREDIT | LONG-TERM DEBT AND LINES OF CREDIT During March 2017, we entered into a new $1.5 billion five-year senior unsecured revolving credit facility that expires in March 2022 . This replaced a $1 billion senior unsecured revolving credit facility that was set to expire September 2018 . The entire amount is available to Weyerhaeuser Company. Borrowings are at LIBOR plus a spread or at other interest rates mutually agreed upon between the borrower and the lending banks. As of September 30, 2017 , there were no borrowings outstanding. During July 2017, we prepaid a $550 million variable-rate term loan originally set to mature in 2020 (2020 term loan). The 2020 term loan was prepaid using available cash of $325 million as well as borrowing proceeds from a new $225 million variable-rate term loan set to mature in 2026 (2026 term loan). During August 2017, we paid our $281 million 6.95% debentures, originally set to mature in August 2017 . |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair values and carrying values of our long-term debt consisted of the following: SEPTEMBER 30, DECEMBER 31, DOLLAR AMOUNTS IN MILLIONS CARRYING VALUE FAIR VALUE (LEVEL 2) CARRYING VALUE FAIR VALUE (LEVEL 2) Long-term debt (including current maturities): Fixed rate $ 5,771 $ 6,872 $ 6,061 $ 6,925 Variable rate 224 225 549 550 Total Debt $ 5,995 $ 7,097 $ 6,610 $ 7,475 To estimate the fair value of fixed rate long-term debt, we used the following valuation approaches: • 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. We believe that our variable rate long-term debt instruments have net carrying values that approximate their fair values with only insignificant differences. The inputs to these valuations are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date. FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS We believe that our other financial instruments, including cash and cash equivalents, short-term investments, mutual fund investments held in grantor trusts, receivables, and payables, have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to the short-term nature of these instruments and the allowance for doubtful accounts. |
LEGAL PROCEEDINGS, COMMITMENTS
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES | LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES LEGAL PROCEEDINGS We are party to various legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceeding that management believes could have a material adverse effect on our long-term consolidated financial position, results of operations or cash flows. See Note 18: Income Taxes for a discussion of a tax proceeding involving Plum Creek's 2008 U.S. federal income tax return. ENVIRONMENTAL MATTERS Site Remediation Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) – commonly known as the Superfund – and similar state laws, we: • 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. We have received notification from the Environmental Protection Agency (the EPA) and have acknowledged that we are a potentially responsible party in a portion of the Kalamazoo River Superfund site in southwest Michigan. Our involvement in the remediation site is based on our former ownership of the Plainwell, Michigan mill located within the remediation site. Several other companies also operated upstream pulp mills within the remediation site. We are currently cooperating with the other parties to jointly implement an administrative order issued by the EPA on April 14, 2016, with respect to a portion of the site comprising a stretch of the river approximately 1.7 miles long referred to as the Otsego Township Dam Area. We do not expect to incur material losses related to the implementation of this administrative order; however, we may incur additional costs, as yet not specified, in connection with remediation tasks resulting from other areas of the site. The company, along with others, was named as a defendant by Georgia-Pacific Consumer Products LP, Fort James Corporation and Georgia-Pacific LLC in an action seeking contribution under CERCLA for remediation costs relating to the site. The trial has been concluded but a decision on cost contribution and allocation has not yet been rendered by the Court. As of September 30, 2017 , our total accrual for future estimated remediation costs on the active Superfund sites and other sites for which we are responsible was approximately $46 million . These reserves are recorded in "Accrued liabilities" (current) and "Other liabilities" (noncurrent) on our Consolidated Balance Sheet . Asset Retirement Obligations We have obligations associated with the retirement of tangible long-lived assets consisting primarily of reforestation obligations related to forest management licenses in Canada and obligations to close and cap landfills. As of September 30, 2017 , our accrued balance for these obligations was $30 million . These obligations are recorded in "Accrued liabilities" (current) and "Other liabilities" (noncurrent) on our Consolidated Balance Sheet . The accruals have not changed materially since the end of 2016 . Some of our sites have materials containing asbestos. We have met our current legal obligation to identify and manage these materials. In situations where we cannot reasonably determine when materials containing asbestos might be removed from the sites, we have not recorded an accrual because the fair value of the obligation cannot be reasonably estimated. PRODUCT REMEDIATION CONTINGENCY In July 2017, the company announced it was implementing a solution to address concerns regarding our TJI® Joists with Flak Jacket® Protection product. The company has determined that an odor in certain newly constructed homes is related to a recent formula change to the Flak Jacket coating that included a formaldehyde-based resin. This issue is isolated to Flak Jacket product manufactured after December 1, 2016, and does not affect any of the company’s other products. We recorded a pretax charge of $190 million and $240 million in the quarter and year-to-date period ended September 30, 2017, respectively, to accrue for remediation costs. Refer to Note 16: Charges for Product Remediation for further information. |
CUMULATIVE OTHER COMPREHENSIVE
CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2017 | |
CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS) | CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS) Changes in amounts included in our cumulative other comprehensive income (loss) by component are: PENSION OTHER POSTRETIREMENT BENEFITS DOLLAR AMOUNTS IN MILLIONS Foreign currency translation adjustments Actuarial losses Prior service costs Actuarial losses Prior service credits Unrealized gains on available-for-sale securities Total Beginning balance as of December 31, 2016 $ 232 $ (1,651 ) $ (9 ) $ (67 ) $ 29 $ 7 $ (1,459 ) Other comprehensive income (loss) before reclassifications 35 1 (3 ) — — 2 35 Income taxes — (10 ) 1 — — — (9 ) Net other comprehensive income (loss) before reclassifications 35 (9 ) (2 ) — — 2 26 Amounts reclassified from cumulative other comprehensive income (loss) (1) — 145 3 6 (6 ) — 148 Income taxes — (49 ) (1 ) (3 ) 1 — (52 ) Net amounts reclassified from cumulative other comprehensive income (loss) — 96 2 3 (5 ) — 96 Total other comprehensive income (loss) 35 87 — 3 (5 ) 2 122 Ending balance as of September 30, 2017 $ 267 $ (1,564 ) $ (9 ) $ (64 ) $ 24 $ 9 $ (1,337 ) (1) Actuarial losses and prior service credits (cost) are components of net periodic benefit costs (credits). See Note 8: Pension and Other Postretirement Benefit Plans . |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-based compensation activity during year-to-date 2017 included the following: SHARES IN THOUSANDS Granted Vested Restricted Stock Units (RSUs) 763 710 Performance Share Units (PSUs) 348 160 A total of 4.5 million shares of common stock were issued as a result of RSU vesting, PSU vesting and stock option exercises. RESTRICTED STOCK UNITS The weighted average fair value of the RSUs granted in 2017 was $32.79 . The vesting provisions for RSUs granted in 2017 were as follows: • 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 criteria has not been met; and • will be entirely forfeited upon termination of employment in all other situations including early retirement prior to age 62. PERFORMANCE SHARE UNITS The weighted average grant date fair value of PSUs granted in 2017 was $37.93 . The final number of shares granted in 2017 will range from 0 percent to 150 percent of each grant's target, depending upon actual company performance. The ultimate number of PSUs earned is based on two measures: • 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. The vesting provisions for PSUs granted in 2017 were as follows: • vest 100 percent on the third anniversary of the grant date if 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 entirely forfeited upon termination of employment in all other situations including early retirement prior to age 62. Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2017 Performance Share Units Performance period 1/1/2017 - 12/31/2019 Valuation date average stock price (1) $ 32.79 Expected dividends 3.74 % Risk-free rate 0.68 % – 1.55 % Expected volatility 22.71 % – 24.07 % (1) Calculated as an average of the high and low prices on grant date. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS We granted no stock options or stock appreciation rights during 2017 , nor do we expect to make any such grants during the remainder of 2017 . VALUE MANAGEMENT AWARDS Value Management Awards (VMAs) are relative performance equity incentive awards granted to certain former employees of Plum Creek and assumed by the company in connection with the Plum Creek merger. In accordance with the terms of the merger, all VMAs outstanding on December 31, 2017, will vest at “target” level performance of $100 per unit and will be paid in the first quarter of 2018. The VMAs are classified and accounted for as liabilities, as they will be settled in cash upon vesting. The expense recognized over the remaining performance period will equal the cash value of an award as of the last day of the performance period multiplied by the number of awards that are earned. Expense for VMAs will continue to be recognized over the remaining service period unless a qualifying termination occurs. A qualifying termination of any holder of a VMA award before December 31, 2017, will accelerate vesting and expense recognition in the period that the qualifying termination occurs. |
CHARGES FOR INTEGRATION AND RES
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |
CHARGES FOR RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS | CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Integration and restructuring charges related to our merger with Plum Creek: Termination benefits $ — $ 4 $ 6 $ 52 Acceleration of share-based compensation and pension related benefits related to qualifying terminations — — — 26 Professional services 5 6 10 45 Other integration and restructuring costs 1 4 4 9 Total integration and restructuring charges related to our merger with Plum Creek 6 14 20 132 Charges related to closures and other restructuring activities: Termination benefits — 1 2 4 Other closures and restructuring costs 2 1 3 3 Total charges related to closures and other restructuring activities 2 2 5 7 Impairments of long-lived assets 6 — 153 2 Total charges for integration and restructuring, closures and impairments $ 14 $ 16 $ 178 $ 141 INTEGRATION, RESTRUCTURING AND CLOSURES During 2017 , we incurred and accrued for termination benefits (primarily severance) and non-recurring professional services costs directly attributable to our merger with Plum Creek. During 2016 , we incurred and accrued for termination benefits (primarily severance), accelerated share-based payment costs, and accelerated pension benefits based upon qualifying terminations of certain employees as a result of restructuring decisions made subsequent to the merger. We also incurred non-recurring professional services costs for investment banking, legal and consulting, and certain other fees directly attributable to our merger with Plum Creek. Changes in accrued severance related to restructuring during the year-to-date period ended September 30, 2017 , were as follows: DOLLAR AMOUNTS IN MILLIONS Accrued severance as of December 31, 2016 $ 26 Charges 8 Payments (20 ) Accrued severance as of September 30, 2017 $ 14 Accrued severance is recorded within the "Wages, salaries and severance pay" component of "Accrued liabilities" on our Consolidated Balance Sheet as detailed in Note 9: Accrued Liabilities . The majority of the accrued severance balance as of September 30, 2017 , is expected to be paid within one year. IMPAIRMENTS OF LONG-LIVED ASSETS In second quarter 2017, we recognized an impairment charge to the timberlands and manufacturing assets of our Uruguayan operations. On June 2, 2017, our Board of Directors approved an agreement to sell all of the Company's equity in the Uruguayan operations to a consortium led by BTG Pactual's Timberland Investment Group (TIG.) As a result of this agreement, the related assets met the criteria to be classified as held for sale at June 30, 2017. This designation required us to record the related assets at fair value, less an amount of estimated selling costs, and thus recognize a $147 million noncash pretax impairment charge. This amount was recorded in the Timberlands segment. The fair value of the related assets was primarily based on the agreed upon cash purchase price of $403 million . On September 1, 2017, we announced the completion of the sale. Refer to Note 3: Discontinued Operations and Other Divestitures for further details of the Uruguayan operations sale. Additionally, in September 2017, we recognized an impairment charge of $6 million related to a non-strategic asset in our Wood Products segment. The fair value of the asset was determined using a contract value associated with a pending asset sale. |
CHARGES FOR PRODUCT REMEDIATION
CHARGES FOR PRODUCT REMEDIATION (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
CHARGES FOR PRODUCT REMEDIATION | CHARGES FOR PRODUCT REMEDIATION In July 2017, the company announced it was implementing a solution to address concerns regarding our TJI® Joists with Flak Jacket® Protection product. The company has determined that an odor in certain newly constructed homes is related to a recent formula change to the Flak Jacket coating that included a formaldehyde-based resin. This issue is isolated to Flak Jacket product manufactured after December 1, 2016, and does not affect any of the company’s other products. The company also announced it will cover the cost to either remediate or replace affected joists. The company estimates that approximately 2,400 homes are affected. The company recorded a liability of $50 million in second quarter 2017 based on the preliminary information that was available at that time. As remediation work has progressed, the company has obtained additional information and experience about the scope of the required remediation efforts and associated costs. Accordingly, we have adjusted our liability to account for the higher than originally expected cost per home for remediation, a modest increase in the estimated number of homes affected, as well as additional homebuilder and homeowner reimbursements. We recorded pretax charges of $190 million and $240 million in the quarter and year-to-date period ended September 30, 2017, respectively, to accrue for expected costs associated with the remediation. The charges are attributable to our Wood Products segment and were recorded in "Charges for product remediation," on the Consolidated Statement of Operations. As of September 30, 2017, $61 million has been paid out in relation to our remediation efforts. The remaining accrual of $179 million is recorded in "Accrued liabilities" on the Consolidated Balance Sheet . The company ultimately expects a significant portion of the total expense will be covered by insurance, however , as of the date of these financial statements no amounts related to potential recoveries have been recorded. |
OTHER OPERATING COSTS (INCOME),
OTHER OPERATING COSTS (INCOME), NET | 9 Months Ended |
Sep. 30, 2017 | |
OTHER OPERATING COSTS (INCOME), NET | OTHER OPERATING COSTS (INCOME), NET Other operating costs (income), net: • includes both recurring and occasional income and expense items and • can fluctuate from year to year. ITEMS INCLUDED IN OTHER OPERATING COSTS (INCOME), NET QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Gain on disposition of non-strategic assets (1) $ (5 ) $ (8 ) $ (14 ) $ (54 ) Foreign exchange losses (gains), net (2) (3 ) 1 — (11 ) Litigation expense, net 8 2 14 23 Other, net (12 ) 2 2 (14 ) Total other operating costs (income), net $ (12 ) $ (3 ) $ 2 $ (56 ) (1) Gain on disposition of non-strategic assets included a $36 million pretax gain recognized in the first quarter of 2016 on the sale of our Federal Way, Washington headquarters campus. The remaining gains on disposition of non-strategic assets includes sales such as redundant offices and nurseries. (2) Foreign exchange losses (gains) result from changes in exchange rates, primarily related to our Canadian operations. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
INCOME TAXES | INCOME TAXES As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our wholly-owned TRSs, which includes our Wood Products segment and portions of our Timberlands and Real Estate & ENR segments' earnings. The quarterly provision for income taxes is based on the current estimate of the annual effective tax rate. Our 2017 estimated annual effective tax rate for our TRSs is approximately 34 percent , which is lower than the U.S. domestic statutory federal tax rate primarily due to lower foreign tax rates applicable to foreign earnings. ONGOING IRS MATTER In connection with the merger with Plum Creek, we acquired equity interests in Southern Diversified Timber, LLC, a timberland joint venture (Timberland Venture) with an affiliate of Campbell Global LLC (TCG Member). On August 31, 2016, the Timberland Venture redeemed TCG Member's interest and became a fully consolidated, wholly-owned subsidiary of Weyerhaeuser. We received a Notice of Final Partnership Administrative Adjustment (FPAA), dated July 20, 2016, from the Internal Revenue Service (IRS) in regard to Plum Creek’s 2008 U.S. federal income tax treatment of the transaction forming the Timberland Venture. The IRS is asserting that the transfer of the timberlands to the Timberland Venture was a taxable transaction to Plum Creek at the time of the transfer rather than a nontaxable capital contribution. We have filed a petition in the U.S. Tax Court and will vigorously contest this adjustment. In the event that we are unsuccessful in this tax litigation, we could be required to recognize and distribute gain to shareholders of approximately $600 million and pay built-in gains tax of approximately $100 million . We would also be required to pay interest on both of those amounts, which would be substantial. As much as 80 percent of any such gain distribution could be made with our common stock, and shareholders would be subject to tax on the distribution at the applicable capital gains tax rate. Alternatively, we could elect to retain the gain and pay corporate-level tax to minimize interest costs to the company. Although the outcome of this process cannot be predicted with certainty, we are confident in our position based on U.S. tax law and believe we will be successful in defending it. Accordingly, no reserve has been recorded related to this matter. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Consolidation, Policy | Our consolidated financial statements provide an overall view of our results and financial condition. They include our accounts and the accounts of entities we control, including: • majority-owned domestic and foreign subsidiaries and • variable interest entities in which we are the primary beneficiary. They do not include our intercompany transactions and accounts, which are eliminated. We account for investments in and advances to unconsolidated equity affiliates using the equity method, with taxes provided on undistributed earnings. This means that we record earnings and accrue taxes in the period earnings are recognized by our unconsolidated equity affiliates. |
Reclassification, Policy | RECLASSIFICATIONS We have reclassified certain balances and results from the prior year to be consistent with our 2017 reporting. This makes year-to-year comparisons easier. Our reclassifications had no effect on consolidated net earnings or equity. Our reclassifications present the adoption of new accounting pronouncements on our Consolidated Statement of Operations and in the related footnotes. |
New Accounting Pronouncements, Policy | NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, a comprehensive new revenue recognition model that requires an entity to recognize revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, which deferred the effective date for an additional year. In March 2016, FASB issued ASU 2016-08, which does not change the core principle of the guidance; however, it does clarify the implementation guidance on principal versus agent considerations. In April 2016, FASB issued ASU 2016-10, which clarifies two aspects of ASU 2014-09: identifying performance obligations and the licensing implementation guidance. In May 2016, FASB issued ASU 2016-12, which amends ASU 2014-09 to provide improvements and practical expedients to the new revenue recognition model. In December 2016, the FASB issued ASU 2016-20, which amends ASU 2014-09 for technical corrections and to correct for unintended application of the guidance. In February 2017, FASB issued ASU 2017-05, which clarifies the scope of ASC 610-20 and impacts accounting for partial sales of nonfinancial assets. The company expects to adopt and implement the new revenue recognition guidance effective January 1, 2018. The new standard is required to be applied retrospectively to each prior reporting period presented (full retrospective transition method) or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application (cumulative effect method). We expect to adopt using the cumulative effect method. We expect that the adoption of the new revenue recognition guidance will not materially impact our operating results, balance sheet, or cash flows. We expect an impact to our financial reporting from adding expanded disclosures. In July 2015, FASB issued ASU 2015-11, which simplifies the measurement of inventories valued under most methods, including our inventories valued under FIFO – the first-in, first-out – and moving average cost methods. Inventories valued under LIFO – the last-in, first-out method – are excluded. Under this new guidance, inventories valued under these methods would be valued at the lower of cost or net realizable value, with net realizable value defined as the estimated selling price less reasonable costs to sell the inventory. We adopted ASU 2015-11 on January 1, 2017, and determined this pronouncement does not have a material impact on our consolidated financial statements and related disclosures. In February 2016, FASB issued ASU 2016-02, which requires lessees to recognize assets and liabilities for the rights and obligations created by those leases and requires both capital and operating leases to be recognized on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. We expect to adopt ASU 2016-02 on January 1, 2019, and are evaluating the impact on our consolidated financial statements and related disclosures. In October 2016, FASB issued ASU 2016-16, which requires immediate recognition of the income tax consequences upon intra-entity transfers of assets other than inventory. The new guidance is effective for annual periods beginning after December 15, 2017, and early adoption is permitted. We adopted this accounting standard on January 1, 2017. As a result of this adoption, our opening balance sheet was adjusted through "Retained earnings" to include a deferred tax asset of $22 million for prior period intra-entity transfers. Adoption of this standard did not have a material impact on our Consolidated Statement of Cash Flows or Consolidated Statement of Operations . In March 2017, FASB issued ASU 2017-07, which requires that an employer report the service cost component of pension and other postretirement benefit costs in the Consolidated Statement of Operations in the same line item or items as other compensation costs arising from services rendered by the pertinent employees. This requirement is consistent with how we have historically presented our pension service costs. The other requirement of ASU 2017-07 is to present the remaining components of pension and other postretirement benefit costs (i.e., interest, expected return on plan assets, amortization of actuarial gains or losses, and amortization of prior service credits or costs) in the Consolidated Statement of Operations separately from the service cost component and outside a subtotal of income from operations. The new guidance is effective for annual periods beginning after December 15, 2017, and early adoption is permitted. We adopted this accounting standard as of January 1, 2017. As a result, we reclassified amounts related to other components of pension and other post retirement benefit costs from their prior financial statements captions ("Costs of products sold," "General and administrative expenses," and "Other operating costs (income), net") into a new financial statement caption titled "Non-operating pension and other postretirement benefit (costs) credits" in our Consolidated Statement of Operations . The adoption of ASU 2017-07 did not impact "Net earnings," nor did it impact our Consolidated Balance Sheet . |
Earnings Per Share, Policy | We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units. Share-based payment awards that are contingently issuable upon the achievement of specified performance or market conditions are included in our diluted earnings per share calculation in the period in which the conditions are satisfied. |
Fair Value of Financial Instruments, Policy | To estimate the fair value of fixed rate long-term debt, we used the following valuation approaches: • 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. We believe that our variable rate long-term debt instruments have net carrying values that approximate their fair values with only insignificant differences. The inputs to these valuations are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date. |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Reconciliation of Revenue from Segments to Consolidated | An analysis and reconciliation of our business segment information to the respective information in the Consolidated Statements of Operations is as follows: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Sales to unaffiliated customers: Timberlands $ 491 $ 484 $ 1,446 $ 1,342 Real Estate & ENR 82 48 181 125 Wood Products 1,299 1,177 3,746 3,302 1,872 1,709 5,373 4,769 Intersegment sales: Timberlands 179 216 544 631 Wood Products — 17 — 61 179 233 544 692 Total sales 2,051 1,942 5,917 5,461 Intersegment eliminations (179 ) (233 ) (544 ) (692 ) Total $ 1,872 $ 1,709 $ 5,373 $ 4,769 Net contribution to earnings: Timberlands (1) $ 131 $ 122 $ 267 $ 376 Real Estate & ENR (2) 47 15 96 42 Wood Products (3) 40 170 389 413 218 307 752 831 Unallocated items (4) (17 ) (9 ) (113 ) (91 ) Net contribution to earnings 201 298 639 740 Interest expense, net of capitalized interest (98 ) (114 ) (297 ) (323 ) Earnings from continuing operations before income taxes 103 184 342 417 Income taxes 27 (22 ) (31 ) (64 ) Earnings from continuing operations 130 162 311 353 Earnings from discontinued operations, net of income taxes (5) — 65 — 123 Net earnings 130 227 311 476 Dividends on preference shares — — — (22 ) Net earnings attributable to Weyerhaeuser common shareholders $ 130 $ 227 $ 311 $ 454 (1) Net contribution to earnings for the Timberlands segment includes a noncash pretax impairment charge of $147 million , recorded during second quarter 2017. This impairment was a result of our agreement to sell our Uruguayan operations, which was announced in June 2017 and completed on September 1, 2017. Refer to Note 3: Discontinued Operations and Other Divestitures for more information regarding this transaction. (2) The Real Estate & ENR segment includes the equity earnings from, investments in and advances to our Real Estate Development Ventures (as defined and described in Note 7: Related Parties ), which are accounted for under the equity method. (3) Net contribution to earnings for the Wood Products segment includes pretax charges of $190 million and $240 million incurred in the quarter and year-to-date period ended September 30, 2017, respectively, to accrue for estimated costs to remediate an issue with certain I-joists coated with our Flak Jacket® Protection product. Refer to Note 16: Charges for Product Remediation for additional details. (4) 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. Additionally, amounts shown for 2016 include equity earnings from our former Timberland Venture. As of August 31, 2016, the Timberland Venture became a fully consolidated, wholly-owned subsidiary and therefore eliminated our equity method investment at that time. (5) Discontinued operations as presented herein consist of the operations of our former Cellulose Fibers segment. Refer to Note 3: Discontinued Operations and Other Divestitures for more information regarding our discontinued operations. |
DISCONTINUED OPERATIONS AND O29
DISCONTINUED OPERATIONS AND OTHER DIVESTITURES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Earnings from Discontinued Operations, Net of Tax | The following table presents net earnings from discontinued operations. As all discontinued operations were sold in 2016, no assets or liabilities remain as of September 30, 2017 , or December 31, 2016 . QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2016 SEPTEMBER 2016 Total net sales $ 420 $ 1,306 Costs of products sold 350 1,110 Gross margin 70 196 Selling expenses 3 10 General and administrative expenses 7 24 Research and development expenses — 3 Charges for integration and restructuring, closures and asset impairments (1) 13 44 Other operating income, net (2 ) (21 ) Operating income 49 136 Equity loss from joint venture — (3 ) Interest expense, net of capitalized interest (2 ) (5 ) Earnings from discontinued operations before income taxes 47 128 Income taxes (23 ) (46 ) Net earnings from operations 24 82 Net gain on divestiture of Liquid Packaging Board 41 41 Net earnings from discontinued operations $ 65 $ 123 (1) Charges relate to our strategic evaluation of the Cellulose Fibers businesses and transaction-related costs. |
Cash Flows from Discontinued Operations | Cash flows from discontinued operations for the three and nine months ended September 30, 2016 , are as follows: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2016 SEPTEMBER 2016 Net cash provided by operating activities $ 58 $ 192 Net cash provided by investing activities $ 259 $ 225 |
MERGER WITH PLUM CREEK (Tables)
MERGER WITH PLUM CREEK (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Unaudited Pro Forma Information | Summarized unaudited pro forma information that presents combined amounts as if this merger occurred at the beginning of 2016 is as follows: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES SEPTEMBER 2016 SEPTEMBER 2016 Net sales $ 1,709 $ 4,925 Net earnings from continuing operations attributable to Weyerhaeuser common shareholders $ 172 $ 438 Earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, basic and diluted $ 0.23 $ 0.58 |
NET EARNINGS PER SHARE (Tables)
NET EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Dilutive Potential Common Shares | Diluted earnings per share is net earnings available to common shareholders divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares: QUARTER ENDED YEAR-TO-DATE ENDED SHARES IN THOUSANDS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Weighted average number of outstanding common shares – basic 753,535 749,587 752,301 708,395 Dilutive potential common shares: Stock options 2,437 3,185 2,754 2,660 Restricted stock units 551 814 529 723 Performance share units 380 458 474 427 Total effect of outstanding dilutive potential common shares 3,368 4,457 3,757 3,810 Weighted average number of outstanding common shares – dilutive 756,903 754,044 756,058 712,205 |
Potential Shares Not Included in the Computation of Diluted Earnings per Share | Potential Shares Not Included in the Computation of Diluted Earnings per Share The following shares were not included in the computation of diluted earnings per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods. QUARTER ENDED YEAR-TO-DATE ENDED SHARES IN THOUSANDS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Stock options 1,381 1,835 1,381 1,835 Performance share units 556 361 556 361 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventories | Inventories include raw materials, work-in-process and finished goods. DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 30, DECEMBER 31, LIFO Inventories: Logs $ 5 $ 18 Lumber, plywood and panels 44 51 Medium density fiberboard 11 10 Other products 14 10 FIFO or moving average cost inventories: Logs 19 21 Lumber, plywood, panels and engineered wood products 81 71 Other products 81 92 Materials and supplies 85 85 Total $ 340 $ 358 |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transaction [Line Items] | |
Schedule of Changes in Deposit of Timberlands to Related Party | Changes in our "Deposit from contribution of timberlands to related party" balance during 2017 were as follows: DOLLAR AMOUNTS IN MILLIONS Balance as of December 31, 2016 $ 426 Lease payments to Twin Creeks Venture (13 ) Distributions from Twin Creeks Venture 3 Balance at September 30, 2017 $ 416 |
PENSION AND OTHER POSTRETIREM34
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Components of Net Periodic Benefit Costs (Credits) | The components of net periodic benefit costs (credits) are: PENSION QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Service cost (1) $ 9 $ 13 $ 26 $ 37 Interest cost 66 70 198 207 Expected return on plan assets (101 ) (125 ) (306 ) (371 ) Amortization of actuarial loss 48 39 145 117 Amortization of prior service cost 1 1 3 3 Accelerated pension costs included in Plum Creek merger-related costs (Note 15) — — — 5 Total net periodic benefit cost (credit) - pension $ 23 $ (2 ) $ 66 $ (2 ) (1) Service cost includes $3 million and $10 million for the quarter and year-to-date ended September 30, 2016 , respectively, for employees that were part of our Cellulose Fibers divestitures. These charges are included in our results of discontinued operations. OTHER POSTRETIREMENT BENEFITS QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Interest cost $ 2 $ 2 $ 6 $ 7 Amortization of actuarial loss 2 2 6 6 Amortization of prior service credit (2 ) (2 ) (6 ) (6 ) Total net periodic benefit cost - other postretirement benefits $ 2 $ 2 $ 6 $ 7 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities | Accrued liabilities were comprised of the following: DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 30, DECEMBER 31, Wages, salaries and severance pay $ 132 $ 178 Pension and other postretirement benefits 48 49 Vacation pay 35 33 Taxes – Social Security and real and personal property 38 20 Interest 85 120 Customer rebates and volume discounts 46 39 Deferred income 60 40 Accrued income taxes 4 139 Product remediation accrual (Note 16) 179 — Other 75 74 Total $ 702 $ 692 |
FAIR VALUE OF FINANCIAL INSTR36
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Estimated Fair Values and Carrying Values of Long-Term Debt | The estimated fair values and carrying values of our long-term debt consisted of the following: SEPTEMBER 30, DECEMBER 31, DOLLAR AMOUNTS IN MILLIONS CARRYING VALUE FAIR VALUE (LEVEL 2) CARRYING VALUE FAIR VALUE (LEVEL 2) Long-term debt (including current maturities): Fixed rate $ 5,771 $ 6,872 $ 6,061 $ 6,925 Variable rate 224 225 549 550 Total Debt $ 5,995 $ 7,097 $ 6,610 $ 7,475 |
CUMULATIVE OTHER COMPREHENSIV37
CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Items included in cumulative other comprehensive income (loss) | Changes in amounts included in our cumulative other comprehensive income (loss) by component are: PENSION OTHER POSTRETIREMENT BENEFITS DOLLAR AMOUNTS IN MILLIONS Foreign currency translation adjustments Actuarial losses Prior service costs Actuarial losses Prior service credits Unrealized gains on available-for-sale securities Total Beginning balance as of December 31, 2016 $ 232 $ (1,651 ) $ (9 ) $ (67 ) $ 29 $ 7 $ (1,459 ) Other comprehensive income (loss) before reclassifications 35 1 (3 ) — — 2 35 Income taxes — (10 ) 1 — — — (9 ) Net other comprehensive income (loss) before reclassifications 35 (9 ) (2 ) — — 2 26 Amounts reclassified from cumulative other comprehensive income (loss) (1) — 145 3 6 (6 ) — 148 Income taxes — (49 ) (1 ) (3 ) 1 — (52 ) Net amounts reclassified from cumulative other comprehensive income (loss) — 96 2 3 (5 ) — 96 Total other comprehensive income (loss) 35 87 — 3 (5 ) 2 122 Ending balance as of September 30, 2017 $ 267 $ (1,564 ) $ (9 ) $ (64 ) $ 24 $ 9 $ (1,337 ) (1) Actuarial losses and prior service credits (cost) are components of net periodic benefit costs (credits). See Note 8: Pension and Other Postretirement Benefit Plans . |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of Share-based Compensation Activity | Share-based compensation activity during year-to-date 2017 included the following: SHARES IN THOUSANDS Granted Vested Restricted Stock Units (RSUs) 763 710 Performance Share Units (PSUs) 348 160 |
Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted | Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2017 Performance Share Units Performance period 1/1/2017 - 12/31/2019 Valuation date average stock price (1) $ 32.79 Expected dividends 3.74 % Risk-free rate 0.68 % – 1.55 % Expected volatility 22.71 % – 24.07 % (1) Calculated as an average of the high and low prices on grant date. |
CHARGES FOR INTEGRATION AND R39
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |
Items Included in Our Restructuring, Closure and Asset Impairment Charges | QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Integration and restructuring charges related to our merger with Plum Creek: Termination benefits $ — $ 4 $ 6 $ 52 Acceleration of share-based compensation and pension related benefits related to qualifying terminations — — — 26 Professional services 5 6 10 45 Other integration and restructuring costs 1 4 4 9 Total integration and restructuring charges related to our merger with Plum Creek 6 14 20 132 Charges related to closures and other restructuring activities: Termination benefits — 1 2 4 Other closures and restructuring costs 2 1 3 3 Total charges related to closures and other restructuring activities 2 2 5 7 Impairments of long-lived assets 6 — 153 2 Total charges for integration and restructuring, closures and impairments $ 14 $ 16 $ 178 $ 141 |
Changes in Accrued Severance related to Restructuring | Changes in accrued severance related to restructuring during the year-to-date period ended September 30, 2017 , were as follows: DOLLAR AMOUNTS IN MILLIONS Accrued severance as of December 31, 2016 $ 26 Charges 8 Payments (20 ) Accrued severance as of September 30, 2017 $ 14 |
OTHER OPERATING COSTS (INCOME40
OTHER OPERATING COSTS (INCOME), NET (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Items Included in Other Operating Costs (Income), Net | ITEMS INCLUDED IN OTHER OPERATING COSTS (INCOME), NET QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS SEPTEMBER 2017 SEPTEMBER 2016 SEPTEMBER 2017 SEPTEMBER 2016 Gain on disposition of non-strategic assets (1) $ (5 ) $ (8 ) $ (14 ) $ (54 ) Foreign exchange losses (gains), net (2) (3 ) 1 — (11 ) Litigation expense, net 8 2 14 23 Other, net (12 ) 2 2 (14 ) Total other operating costs (income), net $ (12 ) $ (3 ) $ 2 $ (56 ) (1) Gain on disposition of non-strategic assets included a $36 million pretax gain recognized in the first quarter of 2016 on the sale of our Federal Way, Washington headquarters campus. The remaining gains on disposition of non-strategic assets includes sales such as redundant offices and nurseries. (2) Foreign exchange losses (gains) result from changes in exchange rates, primarily related to our Canadian operations. |
BASIS OF PRESENTATION Additiona
BASIS OF PRESENTATION Additional Information (Details) $ in Millions | Jan. 01, 2017USD ($) |
ASU 2016-16 | |
Deferred Tax Assets | $ 22 |
BUSINESS SEGMENTS Reconciliatio
BUSINESS SEGMENTS Reconciliation from Segment Totals to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||
Sales to unaffiliated customers | $ 1,872 | $ 1,709 | $ 5,373 | $ 4,769 | ||
Intersegment sales | 179 | 233 | 544 | 692 | ||
Third party and intersegment revenue, net | 2,051 | 1,942 | 5,917 | 5,461 | ||
Net contribution to earnings | 201 | 298 | 639 | 740 | ||
Interest expense, net of capitalized interest | (98) | (114) | (297) | (323) | ||
Earnings from continuing operations before income taxes | 103 | 184 | 342 | 417 | ||
Income taxes | 27 | (22) | (31) | (64) | ||
Earnings from continuing operations | 130 | 162 | 311 | 353 | ||
Earnings from discontinued operations, net of income taxes (5) | 0 | 65 | 0 | 123 | ||
Net earnings | 130 | 227 | 311 | 476 | ||
Dividends on preference shares | 0 | 0 | 0 | (22) | ||
Net earnings attributable to Weyerhaeuser common shareholders | 130 | 227 | 311 | 454 | ||
Charges for impairment of assets | 153 | 23 | ||||
Charges for product remediation | (190) | 0 | (240) | 0 | ||
Intersegment eliminations | ||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||
Intersegment sales | (179) | (233) | (544) | (692) | ||
Operating segments | ||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||
Net contribution to earnings | 218 | 307 | 752 | 831 | ||
Unallocated items | ||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||
Net contribution to earnings | (17) | (9) | (113) | (91) | ||
Timberlands | ||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||
Sales to unaffiliated customers | 491 | 484 | 1,446 | 1,342 | ||
Intersegment sales | 179 | 216 | 544 | 631 | ||
Net contribution to earnings | 131 | 122 | 267 | 376 | ||
Charges for impairment of assets | $ 147 | |||||
RE & ENR | ||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||
Sales to unaffiliated customers | 82 | 48 | 181 | 125 | ||
Net contribution to earnings | 47 | 15 | 96 | 42 | ||
Wood Products | ||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||
Sales to unaffiliated customers | 1,299 | 1,177 | 3,746 | 3,302 | ||
Intersegment sales | 0 | 17 | 0 | 61 | ||
Net contribution to earnings | 40 | $ 170 | 389 | $ 413 | ||
Charges for product remediation | $ (190) | $ (50) | $ (240) |
DISCONTINUED OPERATIONS AND O43
DISCONTINUED OPERATIONS AND OTHER DIVESTITURES Earnings from Discontinued Operations, Net of Tax (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total net sales | $ 420 | $ 1,306 | ||
Costs of products sold | 350 | 1,110 | ||
Gross margin | 70 | 196 | ||
Selling expenses | 3 | 10 | ||
General and administrative expenses | 7 | 24 | ||
Research and development expenses | 0 | 3 | ||
Charges for integration and restructuring, closures and asset impairments(1) | 13 | 44 | ||
Other operating income, net | (2) | (21) | ||
Operating income | 49 | 136 | ||
Disposal Group, Including Discontinued Operation, Equity Income (Loss) from Joint Venture | 0 | (3) | ||
Interest expense, net of capitalized interest | (2) | (5) | ||
Earnings from discontinued operations before income taxes | 47 | 128 | ||
Income taxes | (23) | (46) | ||
Net earnings from operations | 24 | 82 | ||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | 41 | 41 | ||
Earnings from discontinued operations, net of income taxes (Note 3) | $ 0 | $ 65 | $ 0 | $ 123 |
DISCONTINUED OPERATIONS AND O44
DISCONTINUED OPERATIONS AND OTHER DIVESTITURES Cash Flows from Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net cash provided by operating activities | $ 58 | $ 192 |
Net cash provided by investing activities | $ 259 | $ 225 |
DISCONTINUED OPERATIONS AND O45
DISCONTINUED OPERATIONS AND OTHER DIVESTITURES Additional Details (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | |
Uruguayan Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Disposal Group, Including Discontinued Operation, Assets | $ 0 | ||
Proceeds from divestiture of businesses | $ 403 | ||
Disposal Group, Including Discontinued Operation, Liabilities | 0 | ||
Cellulose Fibers | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Disposal Group, Including Discontinued Operation, Assets | $ 0 | 0 | |
Net gain on divestiture of business | 789 | ||
Proceeds from divestiture of businesses | 2,500 | ||
Disposal Group, Including Discontinued Operation, Liabilities | $ 0 | $ 0 |
MERGER WITH PLUM CREEK Unaudite
MERGER WITH PLUM CREEK Unaudited Pro Forma Information (Details) - Plum Creek - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||
Net sales | $ 1,709 | $ 4,925 |
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders | $ 172 | $ 438 |
Earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, basic | $ 0.23 | $ 0.58 |
Earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, diluted | $ 0.23 | $ 0.58 |
MERGER WITH PLUM CREEK Addition
MERGER WITH PLUM CREEK Additional Information (Details) - Plum Creek - USD ($) $ in Millions | Feb. 19, 2016 | Sep. 30, 2016 | Sep. 30, 2016 |
Business Acquisition [Line Items] | |||
Total assets acquired | $ 10,000 | ||
Consideration transferred | 6,400 | ||
Total liabilities assumed | $ 3,600 | ||
Non-recurring merger-related costs | $ 10 | $ 144 |
NET EARNINGS PER SHARE Dilutive
NET EARNINGS PER SHARE Dilutive Potential Common Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic | 753,535 | 749,587 | 752,301 | 708,395 |
Dilutive potential common shares | 3,368 | 4,457 | 3,757 | 3,810 |
Diluted | 756,903 | 754,044 | 756,058 | 712,205 |
Stock options | ||||
Dilutive potential common shares | 2,437 | 3,185 | 2,754 | 2,660 |
Restricted stock units | ||||
Dilutive potential common shares | 551 | 814 | 529 | 723 |
Performance share units | ||||
Dilutive potential common shares | 380 | 458 | 474 | 427 |
NET EARNINGS PER SHARE Potentia
NET EARNINGS PER SHARE Potential Shares Not Included in the Computation of Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential shares not included in the computation of diluted earnings per share | 1,381 | 1,835 | 1,381 | 1,835 |
Performance share units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential shares not included in the computation of diluted earnings per share | 556 | 361 | 556 | 361 |
NET EARNINGS PER SHARE Addition
NET EARNINGS PER SHARE Additional Information (Details) shares in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017$ / sharesshares | Sep. 30, 2016$ / shares | Sep. 30, 2017$ / sharesshares | Sep. 30, 2016$ / shares | Dec. 31, 2016shares | Jul. 01, 2016 | Jun. 24, 2013shares | |
Net earnings per share, basic and diluted | $ / shares | $ 0.17 | $ 0.30 | $ 0.41 | $ 0.64 | |||
Preference shares conversion ratio | 1.6929 | ||||||
6.375 percent Mandatory Convertible Preference Shares, Series A | |||||||
Preferred stock, shares outstanding | 13.8 | ||||||
6.375 percent Mandatory Convertible Preference Shares, Series A | 6.375 percent Mandatory Convertible Preference Shares, Series A | |||||||
Preferred stock, shares outstanding | 0 | 0 | 0 |
INVENTORIES Inventories (Detail
INVENTORIES Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Total | $ 340 | $ 358 |
Logs | ||
Inventory [Line Items] | ||
LIFO inventories | 5 | 18 |
FIFO or moving average cost inventories | 19 | 21 |
Lumber, plywood and panels | ||
Inventory [Line Items] | ||
LIFO inventories | 44 | 51 |
Medium density fiberboard | ||
Inventory [Line Items] | ||
LIFO inventories | 11 | 10 |
Lumber, plywood, panels and engineered wood products | ||
Inventory [Line Items] | ||
FIFO or moving average cost inventories | 81 | 71 |
Other products | ||
Inventory [Line Items] | ||
LIFO inventories | 14 | 10 |
FIFO or moving average cost inventories | 81 | 92 |
Materials and supplies | ||
Inventory [Line Items] | ||
FIFO or moving average cost inventories | $ 85 | $ 85 |
INVENTORIES Additional informat
INVENTORIES Additional information (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Increase in inventory amount if FIFO would have been used | $ 70 | $ 71 |
RELATED PARTIES Schedule of Cha
RELATED PARTIES Schedule of Changes in Deposit of Timberlands to Related Party (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Related Party Transaction [Line Items] | |
Balance as of December 31, 2016 | $ 426 |
Balance at September 30, 2017 | 416 |
Twin Creeks Venture | |
Related Party Transaction [Line Items] | |
Lease payments to Twin Creeks Venture | (13) |
Distributions from Twin Creeks Venture | 3 |
Balance at September 30, 2017 | $ 416 |
RELATED PARTIES Additional Info
RELATED PARTIES Additional Information (Details) $ in Millions | Apr. 01, 2016USD ($)a | Dec. 31, 2017USD ($)a | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Related Party Transaction [Line Items] | |||||||
Equity earnings from joint ventures (Note 7) | $ 1 | $ 9 | $ 1 | $ 21 | |||
Proceeds from contribution of timberlands to related party | $ 0 | 440 | |||||
Document Period End Date | Sep. 30, 2017 | ||||||
Distributions received from joint ventures, return of capital | $ 23 | $ 34 | |||||
Investments in and advances to joint ventures | 33 | 33 | $ 56 | ||||
Real Estate Development Ventures | |||||||
Related Party Transaction [Line Items] | |||||||
Equity earnings from joint ventures (Note 7) | 1 | 1 | |||||
Distributions received from joint ventures, return of capital | 23 | ||||||
Investments in and advances to joint ventures | $ 33 | $ 33 | $ 56 | ||||
Twin Creeks Venture | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of profit in excess of guaranteed annual return | 75.00% | ||||||
Guaranteed annual return | 3.00% | ||||||
Ownership interest | 21.00% | ||||||
Proceeds from contribution of timberlands to related party | $ 440 | ||||||
Agreed-upon value of acres contributed | $ 560 | ||||||
Contributed acres of timberlands to venture | a | 260,000 | ||||||
Subsequent Event [Member] | Twin Creeks Venture | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from Sale of Property, Plant, and Equipment | $ 203 | ||||||
Proceeds from Sale of Interest in Partnership Unit | $ 108 | ||||||
Sale of Timberland acreage | a | 100,000 | ||||||
Mississippi | Subsequent Event [Member] | Twin Creeks Venture | |||||||
Related Party Transaction [Line Items] | |||||||
Sale of Timberland acreage | a | 80,000 | ||||||
Georgia | Subsequent Event [Member] | Twin Creeks Venture | |||||||
Related Party Transaction [Line Items] | |||||||
Sale of Timberland acreage | a | 20,000 |
PENSION AND OTHER POSTRETIREM55
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Components of Net Periodic Benefit Costs (Credits) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Document Period End Date | Sep. 30, 2017 | |||
Pension | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost(1) | $ 9 | $ 13 | $ 26 | $ 37 |
Interest cost | 66 | 70 | 198 | 207 |
Expected return on plan assets | (101) | (125) | (306) | (371) |
Amortization of actuarial loss | 48 | 39 | 145 | 117 |
Amortization of prior service cost | 1 | 1 | 3 | 3 |
Accelerated pension costs included in Plum Creek merger-related costs (Note 15) | 0 | 0 | 0 | 5 |
Total net periodic benefit cost (credit) | 23 | (2) | 66 | (2) |
Other Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 2 | 2 | 6 | 7 |
Amortization of actuarial loss | 2 | 2 | 6 | 6 |
Amortization of prior service cost | (2) | (2) | (6) | (6) |
Total net periodic benefit cost (credit) | $ 2 | 2 | $ 6 | 7 |
Discontinued Operations [Member] | Pension | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost(1) | $ 3 | $ 10 |
PENSION AND OTHER POSTRETIREM56
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Period Increase (Decrease) | $ 17 | |
Defined Benefit Plan, Benefit Obligation, Period Increase (Decrease) | (10) | |
Defined Benefit Plan Funded Status Period Increase (Decrease) | $ 27 | |
U.S. and Canadian Other Postretirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected contribution to benefit plans during 2017 | $ 21 | |
Registered Canadian Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected contribution to benefit plans during 2017 | 23 | |
Non Registered Canadian Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected contribution to benefit plans during 2017 | 3 | |
U.S. Non-Qualified Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected contribution to benefit plans during 2017 | 26 | |
U.S. Qualified Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected contribution to benefit plans during 2017 | $ 0 |
ACCRUED LIABILITIES Accrued Lia
ACCRUED LIABILITIES Accrued Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Wages, salaries and severance pay | $ 132 | $ 178 |
Pension and other postretirement benefits | 48 | 49 |
Vacation pay | 35 | 33 |
Taxes – Social Security and real and personal property | 38 | 20 |
Interest | 85 | 120 |
Customer rebates and volume discounts | 46 | 39 |
Deferred income | 60 | 40 |
Accrued income taxes | 4 | 139 |
Product remediation accrual | 179 | 0 |
Other | 75 | 74 |
Total | $ 702 | $ 692 |
LONG-TERM DEBT AND LINES OF C58
LONG-TERM DEBT AND LINES OF CREDIT Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Jul. 25, 2017 | Mar. 31, 2017 | |
Line of credit, expiration date | Mar. 31, 2022 | ||
Line of credit, maximum borrowing capacity | $ 1,500 | ||
Revolving line of credit, outstanding balance | $ 0 | ||
Prior Credit Facility | |||
Line of credit, expiration date | Sep. 30, 2018 | ||
Line of credit, maximum borrowing capacity | $ 1,000 | ||
6.95% debenture [Member] | |||
Line of credit, expiration date | Aug. 31, 2017 | ||
Repayments of debt | $ 281 | ||
Variable rate term loan, matures 2020 | |||
Long-term debt outstanding | $ 550 | ||
Repayments of debt | 325 | ||
New variable rate term loan, matures 2026 | |||
Proceeds from issuance of debt | $ 225 |
FAIR VALUE OF FINANCIAL INSTR59
FAIR VALUE OF FINANCIAL INSTRUMENTS Estimated Fair Values and Carrying Values of Long-Term Debt (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, including current maturities | $ 5,995 | $ 6,610 |
Fair Value, Inputs, Level 2 | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, fair value | 7,097 | 7,475 |
Fixed interest rate | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, including current maturities | 5,771 | 6,061 |
Fixed interest rate | Fair Value, Inputs, Level 2 | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, fair value | 6,872 | 6,925 |
Variable interest rate | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, including current maturities | 224 | 549 |
Variable interest rate | Fair Value, Inputs, Level 2 | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, fair value | $ 225 | $ 550 |
LEGAL PROCEEDINGS, COMMITMENT60
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Line Items] | ||||
Accrued estimated remediation costs | $ 46 | $ 46 | ||
Asset retirement obligations | 30 | 30 | ||
Charges for product remediation | $ (190) | $ 0 | $ (240) | $ 0 |
CUMULATIVE OTHER COMPREHENSIV61
CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS) Items Included in Cumulative Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Beginning balance | $ (1,459) | |||
Other comprehensive income (loss) before reclassifications | 35 | |||
Income taxes | (9) | |||
Net other comprehensive income (loss) before reclassifications | 26 | |||
Amounts reclassified from cumulative other comprehensive income (loss)(1) | 148 | |||
Income taxes | (52) | |||
Net amounts reclassified from cumulative other comprehensive income (loss) | 96 | |||
Total other comprehensive income | $ 42 | $ 23 | 122 | $ 102 |
Ending balance | (1,337) | (1,337) | ||
Foreign currency translation adjustments | ||||
Beginning balance | 232 | |||
Other comprehensive income (loss) before reclassifications | 35 | |||
Income taxes | 0 | |||
Net other comprehensive income (loss) before reclassifications | 35 | |||
Amounts reclassified from cumulative other comprehensive income (loss)(1) | 0 | |||
Income taxes | 0 | |||
Net amounts reclassified from cumulative other comprehensive income (loss) | 0 | |||
Total other comprehensive income | 35 | |||
Ending balance | 267 | 267 | ||
Actuarial losses | Pension | ||||
Beginning balance | (1,651) | |||
Other comprehensive income (loss) before reclassifications | 1 | |||
Income taxes | (10) | |||
Net other comprehensive income (loss) before reclassifications | (9) | |||
Amounts reclassified from cumulative other comprehensive income (loss)(1) | 145 | |||
Income taxes | (49) | |||
Net amounts reclassified from cumulative other comprehensive income (loss) | 96 | |||
Total other comprehensive income | 87 | |||
Ending balance | (1,564) | (1,564) | ||
Actuarial losses | Other Postretirement Benefits | ||||
Beginning balance | (67) | |||
Other comprehensive income (loss) before reclassifications | 0 | |||
Income taxes | 0 | |||
Net other comprehensive income (loss) before reclassifications | 0 | |||
Amounts reclassified from cumulative other comprehensive income (loss)(1) | 6 | |||
Income taxes | (3) | |||
Net amounts reclassified from cumulative other comprehensive income (loss) | 3 | |||
Total other comprehensive income | 3 | |||
Ending balance | (64) | (64) | ||
Prior service costs | Pension | ||||
Beginning balance | (9) | |||
Other comprehensive income (loss) before reclassifications | (3) | |||
Income taxes | 1 | |||
Net other comprehensive income (loss) before reclassifications | (2) | |||
Amounts reclassified from cumulative other comprehensive income (loss)(1) | 3 | |||
Income taxes | (1) | |||
Net amounts reclassified from cumulative other comprehensive income (loss) | 2 | |||
Total other comprehensive income | 0 | |||
Ending balance | (9) | (9) | ||
Prior service costs | Other Postretirement Benefits | ||||
Beginning balance | 29 | |||
Other comprehensive income (loss) before reclassifications | 0 | |||
Income taxes | 0 | |||
Net other comprehensive income (loss) before reclassifications | 0 | |||
Amounts reclassified from cumulative other comprehensive income (loss)(1) | (6) | |||
Income taxes | 1 | |||
Net amounts reclassified from cumulative other comprehensive income (loss) | (5) | |||
Total other comprehensive income | (5) | |||
Ending balance | 24 | 24 | ||
Unrealized gains on available-for-sale securities | ||||
Beginning balance | 7 | |||
Other comprehensive income (loss) before reclassifications | 2 | |||
Income taxes | 0 | |||
Net other comprehensive income (loss) before reclassifications | 2 | |||
Amounts reclassified from cumulative other comprehensive income (loss)(1) | 0 | |||
Income taxes | 0 | |||
Net amounts reclassified from cumulative other comprehensive income (loss) | 0 | |||
Total other comprehensive income | 2 | |||
Ending balance | $ 9 | $ 9 |
SHARE-BASED COMPENSATION Schedu
SHARE-BASED COMPENSATION Schedule of Share-Based Compensation Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2017shares | |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted | 763 |
Vested | 710 |
Performance share units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted | 348 |
Vested | 160 |
SHARE-BASED COMPENSATION Weight
SHARE-BASED COMPENSATION Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted (Details) - Performance share units | 9 Months Ended |
Sep. 30, 2017$ / sharesRate | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance period | 1/1/2017 - 12/31/2019 |
Valuation date average stock price (1) | $ / shares | $ 32.79 |
Expected dividends | 3.74% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free rate minimum | 0.68% |
Expected volatility minimum | 22.71% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free rate maximum | 1.55% |
Expected volatility maximum | 24.07% |
SHARE-BASED COMPENSATION Additi
SHARE-BASED COMPENSATION Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares issued during period | 4,500,000 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of units granted | $ 32.79 | |
Granted | 763,000 | |
Performance share units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of units granted | $ 37.93 | |
Granted | 348,000 | |
Performance share units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Final number of shares awarded of each grant's target | 0.00% | |
Performance share units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Final number of shares awarded of each grant's target | 150.00% | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options granted | 0 | |
Stock appreciation rights | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted | 0 | |
Value management awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target level vesting rate | $ 100 |
CHARGES FOR INTEGRATION AND R65
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS Items Included in Our Integration and Restructuring, Closure and Asset Impairment Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Charges related to integration and restructuring | ||||
Termination benefits | $ 8 | |||
Impairments of long-lived assets | 153 | $ 23 | ||
Total charges for integration and restructuring, closures and impairments | $ 14 | $ 16 | 178 | 141 |
Plum Creek | ||||
Charges related to integration and restructuring | ||||
Termination benefits | 0 | 4 | 6 | 52 |
Acceleration of share-based compensation and pension related benefits related to qualifying terminations | 0 | 0 | 0 | 26 |
Professional services | 5 | 6 | 10 | 45 |
Other integration and restructuring costs | 1 | 4 | 4 | 9 |
Total integration and restructuring charges related to our merger with Plum Creek | 6 | 14 | 20 | 132 |
Other | ||||
Charges related to integration and restructuring | ||||
Termination benefits | 0 | 1 | 2 | 4 |
Other closures and restructuring costs | 2 | 1 | 3 | 3 |
Total charges for integration and restructuring, closures and impairments | 2 | 2 | 5 | 7 |
Continuing Operations [Member] | ||||
Charges related to integration and restructuring | ||||
Impairments of long-lived assets | $ 6 | $ 0 | $ 153 | $ 2 |
CHARGES FOR INTEGRATION AND R66
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS Changes in Accrued Severance related to Restructuring (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Accrued severance as of December 31, 2016 | $ 26 |
Charges | 8 |
Payments | (20) |
Accrued severance as of September 30, 2017 | $ 14 |
CHARGES FOR INTEGRATION AND R67
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Impairments of long-lived assets | $ 153 | $ 23 | ||
Uruguayan Operations | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairments of long-lived assets | $ 147 | |||
Proceeds from divestiture of businesses | $ 403 | |||
Non-strategic assets | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairments of long-lived assets | $ 6 |
CHARGES FOR PRODUCT REMEDIATI68
CHARGES FOR PRODUCT REMEDIATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Line Items] | ||||||
Charges for product remediation | $ (190) | $ 0 | $ (240) | $ 0 | ||
Charges for product remediation, payments | 61 | |||||
Product remediation accrual | 179 | 179 | $ 0 | |||
Wood Products | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Charges for product remediation | $ (190) | $ (50) | $ (240) |
OTHER OPERATING COSTS (INCOME69
OTHER OPERATING COSTS (INCOME), NET Items Included in Other Operating Costs (Income), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Gain on disposition of non-strategic assets (1) | $ (5) | $ (8) | $ (36) | $ (14) | $ (54) |
Foreign exchange losses (gains), net (2) | (3) | 1 | 0 | (11) | |
Litigation expense, net | 8 | 2 | 14 | 23 | |
Other expense, net | 2 | 2 | |||
Other (income), net | (12) | (14) | |||
Total other operating costs (income), net | $ (12) | $ (3) | $ 2 | $ (56) |
INCOME TAXES Additional Informa
INCOME TAXES Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)Rate | |
Estimated annual effective tax rate for our Taxable REIT Subsidiary | Rate | 34.00% |
Gain from potential tax adjustment | $ 600 |
Tax liability from potential adjustment | $ 100 |
Maximum | |
Percentage of gain distributed in common stock | 80.00% |