This excerpt taken from the WY 10-K filed Feb 27, 2009.
The upheaval in financial markets during fourth quarter of 2008 was accompanied by accelerated deterioration of housing markets. In addition, declining demand in emerging Asian markets, primarily China, adversely affected our Cellulose Fibers operations.
In connection with the preparation of its financial statements for the year ended December 31, 2008, management determined the market conditions had triggered asset impairments in some of the companys business segments. The company recognized goodwill impairments of $733 million in the Wood Products segment and $94 million in the Cellulose Fibers segment, pre-tax asset impairments and other real estate-related charges of $474 million in the Real Estate segment, and a charge of $22 million to write off capitalized interest related to impaired Real Estate homebuilding assets in the Corporate and Other segment in the fourth quarter of 2008. The goodwill impairments are not deductible for income tax purposes. See Managements Discussion and Analysis and Note 8: Goodwill and Note 22: Real Estate and Investment Impairments and Charges in the Notes to Consolidated Financial Statements for more information.
The company expects that none of the impairment charges will result in future cash expenditures.
This excerpt taken from the WY 10-Q filed Nov 9, 2007.
In April 2007, the Canadian federal government proposed a regulatory framework for air emissions that adopts some aspects of the Kyoto Protocol. The federal framework calls for mandatory reductions in greenhouse gas emissions for heavy industrial emissions producers to be put in place by 2010 among other measures. Canadian provincial governments also are working on emissions reduction strategies. It is not yet known what strategies or requirements will come into force or how any provincial and federal plans that may be put into place will relate to each other. It is also expected that a Canadian emissions trading system will be put in place in the future with potentially significant implications for Canadian businesses. We believe that these measures have not had, and in 2007 will not have, a significant effect on Weyerhaeusers Canadian operations although they may have such an effect in the future. We expect we will not be disproportionately affected by these measures as compared with typical owners of comparable operations. We also expect that these measures will not significantly disrupt our planned operations.
This excerpt taken from the WY 10-Q filed Aug 9, 2007.
In April 2007, the Canadian federal government proposed a regulatory framework for air emissions that adopts some aspects of the Kyoto Protocol. The federal framework calls for mandatory reductions in greenhouse gas emissions for heavy industrial emissions producers to be put in place by 2010 among other measures. Canadian provincial governments also are working on emissions reduction strategies. It is not yet known what strategies or requirements will come into force or how any provincial and federal plans that may be put into place will relate to each other. It is also expected that a Canadian emissions trading system will be put in place in the future with potentially significant implications for Canadian businesses. We believe that these measures have not had, and in 2007 will not have, a significant effect on Weyerhaeuser's Canadian operations although they may have such an effect in the future. We expect we will not be disproportionately affected by these measures as compared with typical owners of comparable operations. We also expect that these measures will not significantly disrupt our planned operations.
This excerpt taken from the WY 8-K filed Jan 22, 2007.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. For measurement purposes, the following assumptions were used for the annual rate of increase in the per capita cost of covered health care benefits:
A one percent change in assumed health care cost trend rates would have the following effects:
In addition to the company-sponsored pension and postretirement plans discussed above, approximately 3,700 employees are covered by union-administered multi-employer pension plans to which the company makes negotiated contributions based generally on fixed amounts per hour per employee. Contributions to these plans were approximately $13 million in 2005 and 2004, and $16 million in 2003.
The company also sponsors multiple postretirement plans for its U.S. employees. Medical plans have various levels of coverage and plan participant contributions. Life insurance plans are noncontributory. Canadian employees are covered under multiple postretirement plans that provide medical and life insurance benefits.
The company sponsors various defined contribution plans for U.S. and Canadian salaried and hourly employees. The basis for determining plan contributions varies by plan. The amounts contributed to the plans for participating employees were approximately $61 million, $57 million, and $58 million in 2005, 2004 and 2003, respectively.
This excerpt taken from the WY 10-Q filed Nov 3, 2006.
Weyerhaeuser Company and Domtar, Inc. Combination
On August 23, 2006, the company and Domtar, Inc., a Canadian corporation, announced they entered into agreements providing for a combination of the companys fine paper business and related assets and Domtar. The transaction will be effected in multiple steps. Pursuant to the first step, the company will transfer to a wholly-owned subsidiary of the company (Newco) certain of the companys fine paper assets and related assets in exchange for all issued and outstanding equity of the subsidiary and the assumption of certain liabilities of the company. Immediately following the transfer, the company will transfer to a second wholly-owned subsidiary of the company (Spinco), all of the issued and outstanding equity interests of Newco in exchange for $1.35 billion in cash and shares of Spincos common stock. The cash payment will come from the proceeds of a new senior unsecured credit facility between Spinco and a syndicate of banks. The company will distribute all the issued and outstanding shares of Spinco common stock to the companys shareholders. The distribution may be effected, at the companys election, as a pro rata dividend (spin-off), as an exchange offer (split-off) or as a combination of both. Following the distribution, Spinco and Domtar will consummate a plan of arrangement in accordance with the Canada Business Corporation Act that will result in Spinco indirectly owning all of the outstanding shares of Domtar common stock. The company will use the proceeds of the $1.35 billion cash payment received from Spinco to pay down debt.
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals from U.S. and Canadian antitrust authorities, the receipt of a revenue ruling from the Internal Revenue Service and the approval of the transaction by the shareholders and optionholders of Domtar, Inc. The transaction is expected to close during the first quarter of 2007.
Natural Resource and Environmental Matters
The company has recently adopted a goal of reducing greenhouse gas emissions by 40 percent by 2020 relative to its emissions in 2000, assuming a comparable portfolio and regulations. The company intends to achieve this goal by increasing energy efficiency and by using systems that enable substitution of greenhouse gas-neutral, biomass fuels for high-priced fossil fuels. During 2006, the company completed the planned replacement of two recovery boilers as part of its budgeted capital expenditures. As each of the companys power and recovery boilers reaches its design life span over the next 14 years, it may be replaced with a state-of-the-art system, which will allow an increase in the amount of energy obtained from the biomass by-products created in the pulping process: wood bark, lignin (the natural substance that binds wood fibers) and other organic compounds in spent pulping liquors. The company also expects to be able to reduce the purchase of electric power by up to fifty percent through improvements in energy efficiency and by increasing the use of combined heat and power (CHP) technology. This will help to further reduce operating costs.
This excerpt taken from the WY 10-K filed Feb 22, 2006.
On October 4, 2005, the company announced an indefinite closure of the pulp and paper mill in Prince Albert, Saskatchewan. The Prince Albert paper mill was permanently closed in January 2006. The Prince Albert pulp mill is being offered for sale and will continue operating until spring 2006 to minimize risk of damage caused by cold winter weather. The Big River sawmill sells chips and hog fuel to the Prince Albert pulp mill and is not expected to have a market for such residuals if the Prince Albert pulp mill were to close.
As disclosed in Form 8-K dated December 15, 2005, the company estimated that the pretax charges required for the Prince Albert pulp and paper mill and the Big River sawmill would be $361 million to $367 million. In connection with the preparation of its financial statements for the year ended December 25, 2005, the company reassessed the probability of the sale of the pulp mill and concluded that additional charges of $100 million, including impairment charges of $71 million and termination benefits of $29 million, were required. As a result, in the fourth quarter of 2005, the company recognized total pretax impairment charges of $429 million and total charges for termination benefits that will likely require future cash expenditures of approximately $38 million for the Prince Albert pulp and paper mill and the Big River sawmill.
This excerpt taken from the WY 10-Q filed Aug 4, 2005.
Natural Resource and Environmental Matters
On May 30, 2005, the company sold almost all of its forest licenses and privately held timberland in western British Columbia (B.C.) to Brascan Corporation of Toronto, Canada. The transaction included 258,000 hectares (635,000 acres) of private timberlands and the annual harvesting rights to 3.6 million cubic meters of timber that is subject to public timber leases. The sale also included five softwood sawmills, with a combined annual production of 690 million board feet, and two remanufacturing facilities. Weyerhaeuser maintains a significant presence in Canada and British Columbia following the sale, and will continue to employ about 7,000 Canadian employees. As a result of the sale, Brascan assumed responsibility with respect to an objection brought by the Lyackson First Nation to a proposed subdivision by the company of privately owned lands on Valdes Island in B.C on the basis that the Lyackson First Nations aboriginal interests had not been sufficiently addressed. Also as a result of the sale, Brascan assumed responsibility with respect to a petition by the Hupacasath First Nation for a declaration that the province had failed to meaningfully consult with them before deciding to remove private lands formerly owned by the company from a company Tree Farm License, and that they have aboriginal interests in these lands.
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