Item 1. Business
Weyerhaeuser Company (the company) was incorporated in the state of Washington in January 1900 as Weyerhaeuser Timber Company. It is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate development and construction. Its principal business segments are Timberlands; Wood Products; Pulp and Paper; Containerboard, Packaging and Recycling; and Real Estate and Related Assets. Throughout this document, the term “company” refers to Weyerhaeuser Company and all of its majority-owned domestic and foreign subsidiaries. The term “Weyerhaeuser” refers to the forest products-based operations and excludes the Real Estate and Related Assets operations.
Information with respect to the description and general development of the company’s business, included on pages 14 through 23 and 26 through 29, Description of the Business of the Company, contained in the company’s 2003 Annual Report to Shareholders, is incorporated herein by reference.
Financial information with respect to industry segments and geographical areas, included in Notes 22 and 23 of Notes to Financial Statements contained in the company’s 2003 Annual Report to Shareholders, is incorporated herein by reference.
Timberlands
Weyerhaeuser is engaged in the management of 6.7 million acres of company-owned and .8 million acres of leased commercial forestland in North America, most of it highly productive and located extremely well to serve both domestic and international markets. Weyerhaeuser also has renewable, long-term licenses on 29.9 million acres of forestland located in five provinces throughout Canada that are managed by our Canadian operations. The standing timber inventory on these lands is approximately 493 million cunits (a cunit is 100 cubic feet of solid wood). The relationship between cubic measurement and the quantity of end products that may be produced from timber varies according to the species, size and quality of timber, and will change through time as the mix of these variables changes. The end products are generally measured in board feet for lumber and square feet for panel products. To sustain the timber supply from its fee timberlands, Weyerhaeuser is engaged in extensive planting, suppression of nonmerchantable species, precommercial and commercial thinning, fertilization, and operational pruning, all of which increase the yield from its fee timberland acreage.
(1)
International represents timberlands outside of North America, the activities of which are reported in the Corporate and Other segment.
(2)
Includes Weyerhaeuser percentage ownership of timberlands owned and managed through joint ventures.
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Item 1. Business - continued
Wood Products
Weyerhaeuser’s wood products businesses produce and sell softwood lumber, plywood and veneer, oriented strand board and composite panels, hardwood lumber, and engineered lumber products. These products are sold primarily through the company’s own sales organizations and building materials distribution business. The raw materials required to produce these products are purchased from third parties, transferred at market price from Weyerhaeuser’s Timberlands segment, or obtained from long-term licensing arrangements. Building materials, including products not produced by Weyerhaeuser, such as treated products, are sold to wholesalers, retailers and industrial users.
(1)
Includes 6.7 thousand acres of right-of-way and other harvest that does not require planting.
(2)
Represents acres planted with seedlings. In Canada, natural regeneration is also used to reforest areas that have been harvested.
(3)
International represents timberlands outside of North America, the activities of which are reported in the Corporate and Other segment.
(4)
Includes Weyerhaeuser percentage ownership of timberlands owned and managed through joint ventures.
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Item 1. Business - continued
Pulp and Paper
Weyerhaeuser’s pulp and paper businesses include: Pulp, which includes the manufacture of papergrade, absorbent, dissolving and specialty pulp grades which are marketed worldwide; and Paper, which manufactures a range of both coated and uncoated papers and business forms marketed through our own sales force and through paper merchants and printers.
In addition, through its investment in North Pacific Paper Corporation, Weyerhaeuser has a 50 percent interest in NORPAC, a joint venture that owns a newsprint manufacturing facility in Washington state.
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Item 1. Business - continued
Containerboard, Packaging and Recycling
Weyerhaeuser’s containerboard, packaging and recycling businesses include: Containerboard, which manufactures linerboard, corrugating medium and kraft paper, primarily used to produce corrugated boxes at Weyerhaeuser’s packaging facilities and also marketed to domestic and foreign customers through our sales force and agents; Packaging, which manufactures industrial and agricultural packaging marketed through our own sales force; and Recycling, which operates an extensive wastepaper collection system and markets it to company mills and worldwide customers. The segment also operates facilities that manufacture paper bags, preprint linerboard, inks and printing plates.
Real Estate and Related Assets
The Real Estate and Related Assets segment includes Weyerhaeuser Real Estate Company (WRECO), a wholly-owned subsidiary, and the company’s other real estate related activities. WRECO is primarily engaged in developing single-family housing and residential lots for sale, including development of master-planned communities. Operations are concentrated mainly in selected metropolitan areas in southern California, Nevada, Washington, Texas, Maryland and Virginia. Additionally, WRECO is an investor and investment manager for institutional investors in residential real estate.
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Item 1. Business - continued
Available Information
The company is subject to the information reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) and the company files periodic reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”) relating to the company’s business, financial results and other matters. The reports, proxy statements and other information the company files may be inspected and copied at prescribed rates at the SEC’s Public Reference Room at 450 Fifth Street NW, Washington, D.C. 20549. You may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that contains reports, proxy statements and other information regarding issuers like the company that file electronically with the SEC. The address of the SEC’s internet site is www.sec.gov. The company also posts its reports, proxy statements and other information that are transmitted electronically to the SEC on the company’s internet site as soon as reasonably practicable after such material is filed with, or furnished to, the SEC and such information is available free of charge. The company’s internet site is www.weyerhaeuser.com.
Weyerhaeuser Company and Subsidiaries
PART I
Item 2.
Item 2. Properties
Timberlands
Timberlands annual log production, which reflects the acquisition of Willamette Industries (Willamette) in February 2002:
Wood Products
Production capacities, facilities and annual production, which reflect the acquisitions of Willamette in February 2002 and MacMillan Bloedel in November 1999, are summarized by major product as follows:
Principal manufacturing facilities are located as follows:
Lumber and plywood
Engineered lumber
Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, Oregon, South Carolina, Washington; Alberta, British Columbia, Ontario and Saskatchewan, Canada
Alabama, California, Georgia, Kentucky, Louisiana, Minnesota, Ohio, Oregon, West Virginia; Alberta, British Columbia and Ontario, Canada; and New South Wales, Australia
Oriented strand board
Hardwood lumber
Louisiana, Michigan, North Carolina, West Virginia; Alberta, New Brunswick, Ontario and Saskatchewan, Canada
Arkansas, Michigan, Oklahoma, Oregon, Pennsylvania, Washington, Wisconsin; and British Columbia, Canada
Composite panels
Arkansas, Louisiana, Oregon and South Carolina
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Item 2. Properties - continued
Pulp and Paper
Production capacities, facilities and annual production, which reflect the acquisitions of Willamette in February 2002 and MacMillan Bloedel in November 1999, are summarized by major product as follows:
Principal manufacturing facilities are located as follows:
Pulp
Liquid packaging board
Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Washington; Alberta, British Columbia, Ontario and Saskatchewan, Canada
Washington
Paper
Paper converting
Kentucky, North Carolina, Pennsylvania, South Carolina, Tennessee, and Wisconsin; Ontario and Saskatchewan, Canada
California, Indiana, Kentucky, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Washington, Wisconsin; Ontario and Saskatchewan, Canada
Coated groundwood
Mississippi
Containerboard, Packaging and Recycling
Production capacities, facilities and annual production, which reflect the acquisitions of Willamette in February 2002 and MacMillan Bloedel in November 1999, are summarized by major product as follows:
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Item 2. Properties - continued
Principal manufacturing facilities are located as follows:
Containerboard
Recycling
Alabama, California, Iowa, Kentucky, Louisiana, North Carolina, Oklahoma, Oregon; Xalapa, Mexico
Arizona, California, Colorado, Illinois, Iowa, Kansas, Maryland, Minnesota, Nebraska, North Carolina, Oregon, Tennessee, Texas, Utah, Virginia and Washington
Packaging
Kraft bags and sacks
Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Tennessee, Texas, Virginia, Washington, Wisconsin; and Guanajuato, Ixtac, Mexico City and Tehuacan, Mexico
California, Missouri, Oregon, and Texas
Real Estate and Related Assets
Real estate operations are located as follows:
Single-family housing
Commercial projects
California, Maryland, Nevada, Texas, Virginia and Washington
California
Residential land development
Real estate investments
California, Maryland, Nevada, Texas, Virginia and Washington
Arizona, California, Colorado, Florida, Idaho, Maryland, Nevada, Oregon, Utah, Virginia and Washington
Commercial and retail land development
California, Texas and Washington
Weyerhaeuser Company and Subsidiaries
PART I
Item 3.
Item 3. Legal Proceedings
Legal Proceedings
Hardboard Siding Claims. The company announced in June 2000 it had entered into a proposed nationwide settlement of its hardboard siding class action cases and, as a result, took a charge of $130 million before taxes to cover the estimated cost of the settlement and related claims. The court approved the settlement in December 2000. An appeal from the settlement was denied in March 2002, and the settlement is now binding on all parties. In the third quarter of 2001, the company reassessed the adequacy of the reserve and increased the reserve by an additional $43 million. The company incurred claims and related costs in the amount of $11 million in 2003, $11 million in 2002 and $37 million in 2001 and charged these costs against the reserve. As of December 28, 2003, the company had approximately $83 million in reserves remaining for hardboard siding claims. While the company believes that the reserve balances established for these matters are adequate, the company is unable to estimate at this time the amount of additional charges, if any, that may be required for these matters in the future.
The settlement class consists of all persons who own or owned structures in the United States on which the company’s hardboard siding had been installed from January 1, 1981, through December 31, 1999. This is a claims-based settlement, which means that the claims will be paid as submitted over a nine-year period. An independent adjuster will review each claim submitted and determine whether it qualifies for payment under the terms of the settlement agreement. The following table presents an analysis of the claims activity related to the hardboard siding class action cases:
The increase in the average damage award paid in 2003 was due primarily to the existence of more awards for multi-family structures and fewer awards for single family residences in 2003 than in 2002 or 2001.
The company negotiated settlements with its insurance carriers for recovery of $52 million of costs related to these claims. The company has received the full $52 million in recoveries from its insurance carriers.
The company is a defendant in state trial court in three cases that are outside of the settlement involving primarily multi-family structures and residential developments. One of those cases was settled in January 2004, and the impact was not significant. The company anticipates that other individuals and entities that have opted out of the settlement may file lawsuits against the company. In January 2002, a jury returned a verdict in favor of the company in a lawsuit involving hardboard siding manufactured by the company and installed by a developer in a residential development located in Modesto, California. The verdict has been appealed and is not included in the three cases mentioned at the state court level.
Antitrust Litigation. In May 1999, two civil antitrust lawsuits were filed against the company in U.S. District Court, Eastern District of Pennsylvania. Both suits name as defendants several other major containerboard and packaging producers. The complaint in the first case alleges the defendants conspired to fix the price of linerboard and that the alleged conspiracy had the effect of increasing the price of corrugated containers. The suit requested class certification for purchasers of corrugated containers during the period from October 1993 through November 1995. The complaint in the second case alleges that the company conspired to manipulate the price of linerboard and thereby the price of corrugated sheets. The suit requested class certification for purchasers of corrugated sheets during the period October 1993 through November 1995. Both suits seek damages, including treble damages, under the antitrust laws. No specific damage amounts have been claimed. In September 2001, the district court certified both classes. Class certification was upheld on appeal and class members were given until June 9, 2003, to opt out of the class. Approximately 165 members of the classes have opted out and filed lawsuits against the company in federal and state courts. In September 2003, the company, Georgia-Pacific and International Paper filed a motion with the court requesting preliminary approval of a $68 million settlement of the class action litigation. Weyerhaeuser’s portion was approximately $23 million before taxes. The company recognized an after-tax charge of $15 million, or 7 cents per share, in the third quarter of 2003. The court granted final approval of the settlement in December 2003. Since no objections were filed, the settlement is final and binding on the companies and class members. The company has not recorded a reserve for the opt-out cases and is unable to estimate at this time the amount of charges, if any, that may be required for this matter in the future.
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Item 3. Legal Proceedings - continued
In December 2000, a lawsuit was filed against the company in U.S. District Court in Oregon alleging that from 1996 to present, the company had monopoly power or attempted to gain monopoly power in the Pacific Northwest market for alder logs and finished alder lumber. In August 2001, the complaint was amended to add an additional plaintiff. Prior to trial, one of the plaintiffs withdrew from the litigation. In April 2003, the jury returned a verdict in favor of one of the plaintiffs in the amount of $26 million, which was automatically trebled to $79 million under the antitrust laws. The company took a pretax charge of $79 million in its first quarter 2003 results. The company’s motion for a judgment notwithstanding the verdict was denied in July 2003. The company has appealed the matter to the U.S. Court of Appeals for the Ninth Circuit. While the company believes that the reserve balance established for this matter is adequate, the company is unable to estimate at this time the amount of additional charges, if any, which may be required for this matter in the future.
In April 2003, two separate lawsuits were filed in U.S. District Court in Oregon alleging that the company violated antitrust laws by monopolizing the markets for alder sawlogs and finished alder lumber. In June 2003, amended complaints were filed in both matters. The first suit (the Westwood case) was brought by four separate corporations located in Oregon and Washington that allege that between 1999 and the present, they suffered damages and asked the court to award damages, after trebling, of $101 million. Plaintiffs’ request for a temporary restraining order prohibiting the company from certain alder log-buying practices was denied by the court. The complaint also requests divestiture of a number of alder sawmills in Oregon, Washington and British Columbia. In July 2003, the company filed a motion to dismiss based on the insufficiencies in the pleadings. The judge directed the plaintiffs to correct deficiencies in the pleadings but refused to dismiss the case. The company renewed its motion to dismiss after review of the amended complaint. In November 2003, the court granted the company’s motion to dismiss the amended complaint because it failed to state a claim under the federal antitrust laws. The judge gave the plaintiffs five business days to file a new complaint to correct the deficiencies in the amended complaint. In November 2003 the court allowed a third amended complaint to be filed. The court also ruled that Weyerhaeuser would be precluded from litigating whether it attempted to and did willfully acquire and maintain monopoly power over alder sawlogs in the Pacific Northwest through anti-competitive conduct between 1996 and 2001. The court also precluded Weyerhaeuser from contesting that its conduct did not cause the prevailing plaintiff in the alder case that is on appeal material antitrust injury. We believe the court’s rulings are wrong as a matter of law and filed a motion to certify the matter for immediate appellate review by the Court of Appeals for the Ninth Circuit or, in the alternative, for reconsideration by the trial court. The trial court denied both motions in December 2003. The case is scheduled to go to trial on March 9, 2004. We have recently received information from plaintiffs seeking a range of damages, after trebling, of between $81 million and $118 million. The second suit was brought by Coast Mountain Hardwoods, Inc., a Canadian company that sold its assets to the company in 2000. In its proposed third amended complaint, the plaintiff alleges two causes of action, one for attempted monopolization of alder saw log and finished lumber markets, and a second cause of action for fraud and breach of fiduciary duty. On the antitrust cause of action, plaintiff seeks damages, after trebling, in the amount of $90 million (plus attorney’s fees, costs and disbursements). On the fraud and breach of fiduciary cause of action, plaintiff seeks compensatory damages in the amount of $30 million and punitive damages of $300 million. There is no trebling associated with the second cause of action. Request for divestiture of the company’s Northwest Hardwoods Division, a portion of its alder sawmills in British Columbia, Oregon and Washington; and certain forest licenses acquired in Canada have been dropped from the complaint. The company filed a motion to dismiss on the basis that the case should be heard in Canada rather than the United States because it involves an acquisition approved by Canadian regulatory bodies. The motion to dismiss was denied in October 2003. The company filed a motion for summary judgment on all antitrust claims. The court denied this motion in February 2004. Trial of this case is scheduled to begin on June 1, 2004. In June 2003, an alder antitrust complaint was filed in U.S. District Court in Oregon by Washington Alder, an alder sawmill located in Washington. The complaint alleges monopolization of the alder log and lumber markets from 1998 to present and seeks damages, after trebling, of $32 million. The company filed a motion to dismiss based on insufficiencies in the pleadings. In November 2003, the court granted the company’s motion to dismiss the amended complaint because it failed to state a claim under the federal antitrust laws. The judge gave the plaintiff five business days to file a new complaint to correct the deficiencies in the amended complaint. In November 2003, a second amended complaint was filed. In December 2003, the court denied our motion to consolidate this matter with the Westwood case and trial is scheduled to begin on May 11, 2004. Although the company denies liability and is vigorously defending these follow-on cases, all of the follow-on cases will be presided over by the same judge who presided in the case that is on appeal and the judge has issued a number of rulings adverse to the company, including a ruling in the Westwood case precluding the company from contesting key issues that were decided against the company in the alder lawsuit on appeal. Accordingly, the company recognizes that the company is not likely to prevail at the trial court level in these cases and intends to appeal any adverse judgments in these cases. The company has not recorded reserves related to these lawsuits and is unable to estimate at this time the amount of charges, if any, that may be required for these lawsuits in the future.
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Item 3. Legal Proceedings - continued
Paragon Trade Brands, Inc., Litigation. In May 1999, the Equity Committee (Committee) in the Paragon Trade Brands, Inc. (Paragon), bankruptcy proceeding filed a motion in U.S. Bankruptcy Court for the Northern District of Georgia for authority to prosecute claims against the company in the name of the debtor’s estate. Specifically, the Committee asserted that the company breached certain warranties in agreements entered into between Paragon and the company in connection with Paragon’s public offering of common stock in January 1993. The Committee seeks to recover damages sustained by Paragon as a result of two patent infringement cases, one brought by Procter & Gamble and the other by Kimberly-Clark. In September 1999, the court authorized the Committee to commence an adversary proceeding against the company. The Committee commenced this proceeding in October 1999. Pursuant to a reorganization of Paragon, the litigation claims representative for the bankruptcy estate became the plaintiff in the proceeding. In June 2002, the Bankruptcy Court issued an oral opinion granting the plaintiff’s motion for partial summary judgment, holding the company liable to plaintiff for breaches of warranty and denying the company’s motion for summary judgment. In October 2002, the Bankruptcy Court issued a written order confirming the June oral opinion. In November 2002, the company filed a motion for reconsideration with the Bankruptcy Court. In June 2003, the judge issued an oral ruling denying the motion for reconsideration and set an October 30, 2003, trial date for determination of the damages. In September 2003, the U.S. District Court declined to grant discretionary review of the bankruptcy court’s partial summary judgment decision on liability. The damages phase of the case began on October 30, 2003, and was concluded on December 16, 2003. The bankruptcy court initially asked both parties to present findings of fact and conclusions of law by the end of January 2004 but then extended the date to February 9, 2004. The damages requested by the plaintiff have changed. In October 1999, the plaintiff was seeking damages in excess of $420 million. In its proposed findings of fact and conclusions of law, the plaintiff requested damages in the range of $675 to $832 million, primarily as a result of a new request for prejudgment interest. The company believes the plaintiff is not entitled to prejudgment interest under applicable law. The amount of damages, if any, the company may ultimately be exposed to is dependent on many unknown factors such as how the damages issues remaining to be decided by the bankruptcy court are resolved; whether an appeal to the U.S. District Court and/or Court of Appeals for the 11th Circuit is successful; the outcome of any retrial ordered by an appellate court; and whether a summary judgment in favor of the company on liability is ordered by an appellate court. The company has not established a reserve for this matter and is unable to estimate at this time the amount of charges, if any, that may be required in the future. The company plans to appeal the partial summary judgment decision on liability and any damages award on completion of the damages phase of the trial.
Other Litigation. The company is a party to other matters generally incidental to its business in addition to the matters described above.
Summary. Although the final outcome of any legal proceeding is subject to a great many variables and cannot be predicted with any degree of certainty, management currently believes that adequate reserves have been established for probable losses from litigation when the amount could be reasonably determined. Management further believes that the ultimate outcome of these legal proceedings could be material to operating results or cash flows in any given quarter or year but will not have a material adverse effect on the company’s long-term results of operations, liquidity or financial position.
Countervailing and Anti-dumping Duties
In April of 2001, the Coalition for Fair Lumber Imports (Coalition) filed two petitions with the U.S. Department of Commerce (Department) and the International Trade Commission (ITC), claiming that production of softwood lumber in Canada was being subsidized by Canada and that imports from Canada were being “dumped” into the U.S. market (sold at less than fair value). The Coalition asked that countervailing duty (CVD) and anti-dumping tariffs be imposed on softwood lumber imported from Canada.
In March 2002, the Department confirmed its preliminary finding that certain Canadian provinces were subsidizing logs by failing to collect full market price for stumpage. The Department established a final CVD rate of 18.79 percent. In the anti-dumping proceedings, the Department found that the six Canadian manufacturers examined, including the company, were engaged in sales at less than fair value and set cash deposit rates ranging from 2.18 percent to 12.44 percent. The company’s deposit rate was set at 12.39 percent. Because of statutory limitations that affected timing, the bonds covering duties following the preliminary determinations were released by the United States. The resulting reversal of accrued expenses was included in earnings during 2002.
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Item 3. Legal Proceedings - continued
In May 2002, the ITC confirmed its earlier ruling that U.S. industry is threatened by subsidized and dumped imports. As a result, the company has made cash deposits relating to the CVD and anti-dumping actions at the rate of approximately $25 to $30 million a quarter. Following is a summary of the CVD and anti-dumping amounts recorded in the company’s statement of earnings:
In June 2003, the Department began the process of an annual review to determine whether the company had engaged in dumping and whether Canada continued to subsidize softwood logs and, if so, the dumping duty and CVD to impose. It is expected that final verification and determination should be complete in late 2004. The determination will be subject to further review if appealed. The annual review process will be conducted for a period of five years. In 2007, both the countervailing duty and anti-dumping orders will be automatically reviewed in a “sunset” proceeding to determine whether dumping will continue or a countervailing subsidy is likely to recur.
The Canadian Government, the company and other Canadian companies appealed the Department’s (anti-dumping and CVD) and the ITC’s (injury) 2002 determinations in separate appeals under the North American Free Trade Agreement (NAFTA). The panel convened to review the Department’s findings on anti-dumping ruled that the Department must change its methodology for computing differences in merchandise when there is no product sold domestically that is similar to the exported product and, as a result, “comparable” products are used to calculate whether dumping is occurring. The panel convened to review the CVD decision ruled that cross-border comparisons are an invalid method to determine and measure subsidies. Finally, the panel convened to review the ITC finding of a threat of injury found that the ITC’s findings were not supported by the record and ordered the ITC to reconsider the findings. If the ITC fails to support its findings of threat of injury, the deposits collected to date would be refunded.
With the support of provincial governments, the federal government of Canada also moved for review by dispute settlement panels under the World Trade Organization (WTO) and those reviews are currently in process. One WTO panel has also issued an opinion finding that cross-border comparisons to determine and measure subsidies are not proper. In addition, the WTO appeals body has affirmed a panel ruling against the United States that the so-called “Byrd Amendment,” which gives U.S. firms cash from anti-dumping and countervailing duties applied on foreign imports, is inconsistent with U.S. international obligations. The U.S. administration has recommended that the law be changed to comply with that ruling, but whether or when Congress will implement that recommendation is uncertain.
In December 2003, the Department issued a decision on the remand from the NAFTA Panel in the CVD investigation. If the decision on remand is not further appealed or altered, it would have the effect of reducing the applicable CVD deposit rate to 13.3 percent. In addition, the WTO appellate body recently issued a decision in the CVD case, and a WTO panel is expected to issue a decision shortly in the anti-dumping case. It is not possible to predict whether these decisions will be appealed or their impact on Weyerhaeuser’s business at this time.
It is difficult to predict the net effect final duties will have on the company. In the event that final rates differ from the depository rates, ultimate charges may be higher or lower than those recorded to date. The company is unable to estimate at this time the amount of additional charges or reversals that may be necessary for this matter in the future. The U.S. and Canadian governments continue to discuss ways to settle the softwood lumber dispute, but there can be no assurance that they will be able to reach agreement or the terms and conditions of any agreement.
Weyerhaeuser Company and Subsidiaries
PART I
Item 3. Legal Proceedings - continued
Environmental Matters
In April 1999, Willamette’s Johnsonburg, Pennsylvania, paper and pulp mill received a notice of violation (NOV) from the U.S. Environmental Protection Agency (EPA) for alleged violations of the Clean Air Act (CAA). Management has met with federal and state officials to resolve the matters alleged in the NOV and will continue to work with officials to narrow issues in dispute. Management believes that it is reasonably possible that a settlement will be reached at a future date, that may involve payment of a penalty of up to approximately $1 million and the installation of pollution control equipment.
The company is also a party to various proceedings relating to the cleanup of hazardous waste sites under the Comprehensive Environmental Response Compensation and Liability Act, commonly known as “Superfund,” and similar state laws. The EPA and/or various state agencies have notified the company that it may be a potentially responsible party with respect to other hazardous waste sites as to which no proceedings have been instituted against the company. The company has established reserves for remediation costs on all of the approximately 73 active sites across its operations as of the end of 2003 totaling $51 million, down from $54 million at the end of 2002. This decrease reflects the incorporation of new information on all sites concerning remediation alternatives, updates on prior cost estimates and new sites, less the costs incurred to remediate these sites during this period. The company accrued remediation costs of $14 million in 2003 and $18 million in 2002. In 2001, the company reduced the accruals by $8 million. The company incurred remediation costs of $8 million in 2003, $9 million in 2002 and $14 million in 2001 and charged these costs against the reserve. Additionally, the company adopted the provisions of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, as of the beginning of 2003. Because the asset retirement obligations associated with landfills are accounted for separately, the company reduced its remediation cost accrual by $9 million as of the date it adopted the provisions of Statement 143. Based on currently available information and analysis, the company believes that it is reasonably possible that costs associated with all identified sites may exceed current accruals by amounts that may prove insignificant or that could range, in the aggregate, up to approximately $70 million over several years. This estimate of the upper end of the range of reasonably possible additional costs is much less certain than the estimates upon which accruals are currently based, and utilizes assumptions less favorable to the company among the range of reasonably possible outcomes. In estimating both its current accruals for environmental remediation and the possible range of additional future costs, the company has assumed that it will not bear the entire cost of remediation of every site to the exclusion of other known potentially responsible parties who may be jointly and severally liable. The ability of other potentially responsible parties to participate has been taken into account, based generally on each party’s financial condition and probable contribution on a per-site basis.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year ended December 28, 2003.
Weyerhaeuser Company and Subsidiaries
PART II
Item 5.
Item 5. Market Price for Registrant’s Common Equity and Related Stockholder Matters
Information with respect to market prices, stockholders and dividends included in Notes 24 and 25 of Notes to Financial Statements in the company’s 2003 Annual Report to Shareholders, is incorporated herein by reference.
Following is information about securities authorized for issuance under the company’s equity compensation plans:
Item 6.
Item 6. Selected Financial Data
Information with respect to selected financial data included in Note 25 of Notes to Financial Statements in the company’s 2003 Annual Report to Shareholders is incorporated herein by reference.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Information with respect to Management’s Discussion and Analysis included on pages 30-41 of the company’s 2003 Annual Report to Shareholders, is incorporated herein by reference.
The company’s expectations of segment performance in the first quarter of 2004 follow.
Timberlands
The company expects that the Timberlands segment’s contribution to earnings in the first quarter of 2004 will be higher than the fourth quarter of 2003, excluding the 2003 pretax gains on the sale on nonstrategic timberlands in the Carolinas and Tennessee, due primarily to higher domestic log sales volumes and prices in the West and higher seasonal fee harvest in the South.
Wood Products
Lumber and OSB prices increased early in the first quarter of 2004 as customers began accumulating inventories in anticipation of a strong building season. The increase in OSB prices was particularly sharp. High OSB prices will adversely impact first quarter earnings for the engineered lumber products business, but will be partially offset by first quarter price increases. Lumber and OSB prices are sensitive to weather-related disruptions, however the company expects these disruptions to be minimal in the first quarter. Woods Product’s prices have remained strong throughout the first quarter and first quarter earnings for the segment are expected to be above fourth quarter 2003 levels. The company expects Wood Products’ earnings to continue to be adversely affected by the Canadian softwood lumber issue.
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PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued
Pulp and Paper
Pulp and Paper’s loss is expected to narrow in the first quarter of 2004 due to increased demand for fine paper, reduced downtime and improving softwood pulp markets. The company has implemented price increases for pulp and has announced additional price increases for both pulp and paper in the first quarter of 2004. In addition, the company will continue to focus on inventory management to match supply with demand and will assess rationalization, as necessary.
Containerboard, Packaging and Recycling
Earnings for this segment in the first quarter of 2004 are expected to be down from the fourth quarter of 2003 due primarily to lower average box prices in the first quarter, which reflect the impact of fourth quarter 2003 index price declines, and higher raw material costs. The company announced a price increase of $40 per ton on containerboard effective March 1, 2004, and an additional $10 per ton increase, effective April 1, 2004. The Company has also announced box price increases to reflect higher containerboard prices. However, because of various customer contract provisions, impacts of the price increase are not expected to be realized until the second quarter. Volumes are expected to improve seasonally and year-over-year during the first quarter of 2004, and increases in operating rates are expected to result in lower manufacturing costs during the first quarter of 2004. In addition, the company will continue to focus on inventory management to match supply with demand and will assess rationalization, as necessary.
Real Estate and Related Assets
First quarter earnings for Real Estate and Related Assets are expected to be comparable to fourth quarter of 2003, as markets are expected to remain strong. Real Estate and Related Assets has a backlog of approximately six months of homes sold, but not closed.
Forward-Looking Statements
Some information included in this report contains statements concerning the company’s future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of these forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “will,” “expects,” “may,” “should,” “approximately,” “anticipates,” “indicates,” “plans,” and “estimates,” and the negative or other variations of those terms with comparable terminology or by discussions of strategy, plans or intentions. In particular, some of these forward-looking statements deal with the impact of forest management programs and sustainable forest management systems, the anticipated impact of the Canadian federal species at risk act (SARA), the expected impact of the resolution of Canadian aboriginal land claims, projected capital expenditures for environmental compliance and other capital expenditures, projected environmental remediation expenses, expected contributions to first quarter 2004 earnings by, or the narrowing of first quarter 2004 losses for, some of the company’s business segments, expectations regarding first quarter 2004 operating results and market conditions, including expectations regarding sales, volumes, prices and demand for some of the company’s products and raw materials, expectations regarding operating rates, manufacturing costs and backlog and the anticipated reduction in downtime in the Pulp and Paper segment, projected debt reduction and return to historical debt ratios, expected rate of return on pension plan assets, projected effects of reduction in returns and assumed discount rates on pension expense, expected contributions to pension plans, intent regarding dividend payments, expectations regarding the outcome of pending litigation, expectations regarding the adequacy of litigation reserves, expectations regarding the adequacy of the company’s capital resources and liquidity to post any appeal bonds or to pay any damage awards required in connection with pending or future litigation, and similar matters. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to:
•
The effect of general economic conditions, including the level of interest rates and housing starts;
•
Market demand for the company’s products, which may be tied to the relative strength of various business segments;
•
Energy prices and raw material costs;
•
Performance of the company’s manufacturing operations;
•
Successful execution of internal performance plans;
Weyerhaeuser Company and Subsidiaries
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued
•
The level of competition from domestic and foreign producers;
•
The effect of forestry, land use, environmental and other governmental regulations;
•
Risk of loss from fires, floods and other natural disasters;
•
The outcome of legal proceedings, including requirements that the company record charges, establish reserves or pay damages; and
•
Performance of pension fund investments.
The company is also a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan, and by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Euro and the Canadian dollar, and restrictions on international trade or tariffs imposed on imports, including the countervailing and anti-dumping duties imposed on the company’s softwood lumber shipments from Canada to the United States. These and other factors could cause or contribute to actual results differing materially from such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will occur, or if any of them occurs, what effect they will have on the company’s results of operations or financial condition. The company expressly declines any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the date of this report.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Information with respect to market risk of financial instruments included on pages 38-39 of the company’s 2003 Annual Report to Shareholders is incorporated herein by reference.
Item 8.
Item 8. Financial Statements and Supplementary Information
Financial statements and supplementary information, included in the company’s 2003 Annual Report to Shareholders, are incorporated herein by reference.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Information with respect to changes in accountants included under the heading “Relationships with Independent Public Accountants” in the company’s Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2004 Annual Meeting of Shareholders to be held April 13, 2004, is incorporated herein by reference.
Weyerhaeuser Company and Subsidiaries
PART II
Item 9A.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The company’s principal executive officer and principal financial officer have evaluated the effectiveness of the company’s disclosure controls and procedures as of the end of the period covered by this annual report on Form 10-K. Disclosure controls are controls and other procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s (SEC) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Based on their evaluation, the company’s principal executive officer and principal financial officer believe the controls and procedures in place are effective to ensure that information required to be disclosed complies with the SEC’s rules and forms.
Changes in Internal Controls
There were no changes in the company’s internal control over financial reporting that occurred during the company’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.
Weyerhaeuser Company and Subsidiaries
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
Information with respect to Directors of the company included under the headings “Nominees for Election - Terms Expire in 2007,” “Continuing Directors - Terms to Expire in 2005” and “Continuing Directors - Terms to Expire in 2006” in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2004 Annual Meeting of Shareholders to be held April 13, 2004, is incorporated herein by reference. Information with regard to executive officers of the company contained in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2004 Annual Meeting of Shareholders to be held April 13, 2004, under headings “Section 16(a) Beneficial Ownership Reporting Compliance,” “Certain Relationships and Related Party Transactions” and “Change in Control and Severance Agreements” is incorporated herein by reference.
The executive officers of the company are as follows:
Marvin D. Cooper has been senior vice president, Pulp, Paper and Containerboard Manufacturing and Engineering, since February 2002. Prior to joining the company, he was executive vice president, Pulp and Paper Mills, for Willamette Industries, Inc. from 1998 until Willamette was acquired by the company. He was senior vice president, Pulp and Paper Mills for Willamette from 1997 to 1998. Prior to 1997, he held a number of management positions at Willamette in its pulp and fine paper businesses. He joined Willamette in 1980.
William R. Corbin has been executive vice president, Wood Products, since 1999. From 1995 to 1999, he was executive vice president, Timberlands and Distribution, and from 1992, when he joined the company, to 1995 he was executive vice president, Wood Products.
Richard E. Hanson has been executive vice president and Chief Operating Officer since February 2003. He was executive vice president, Timberlands from 2002 to 2003 and was senior vice president, Timberlands, from 1999 to 2002. He was vice president, Western Timberlands, from 1996 to 1998. He joined Weyerhaeuser in 1970 and has held numerous management positions in timberlands, wood products and paper businesses.
Mack L. Hogans has been senior vice president, Corporate Affairs, since 1995 and was vice president of Government Affairs from 1990 to 1995. He was the director of Government Affairs and public policy issues management from 1986 to 1990. He joined Weyerhaeuser in 1979 and has been a forester, branch manager for the Building Materials business and a government affairs manager.
James R. Keller has been senior vice president, Containerboard, Packaging and Recycling, since February 2002. From 1997 to 2002, he was vice president and general manager, Containerboard, Packaging and Recycling. He joined Weyerhaeuser in 1974 and has held numerous management positions in containerboard, newsprint and liquid packaging board, shipping containers and timberlands.
Weyerhaeuser Company and Subsidiaries
PART III
Item 10. Directors and Executive Officers of the Registrant - continued
Sandy D. McDade has been senior vice president, Canada, since March 2003. He was vice president, Strategic Planning from 2000 to 2003 and corporate secretary from 1993 to 2000. He joined Weyerhaeuser in 1980 and worked as a corporate and transaction lawyer until 2000.
Susan M. Mersereau has been senior vice president, Information Technology and Chief Information Officer since February 2003. She was vice president, Organizational Effectiveness for Containerboard, Packaging and Recycling from 1998 to 2003, vice president, Business Services and Aviation from 1992 to 1998, and vice president, Weyerhaeuser Information Systems from 1988 to 1992. She joined Weyerhaeuser in 1980 as a program manager and has held various information system management positions.
Michael R. Onustock has been senior vice president, Pulp and Paper, since February 2002. Prior to joining the company, he was executive vice president, Pulp and Fine Paper Marketing for Willamette Industries, Inc. from 1989 until Willamette was acquired by the company. He was vice president, Paper Group, for Willamette from 1980 to 1988. Prior to 1980, he held a number of management positions at Willamette in its pulp, paper and board businesses. He joined Willamette in 1973 following 11 years as containerboard sales manager with Boise Cascade.
Edward P. Rogel has been senior vice president, Human Resources since July 2003. He was vice president, Human Resources Operations from 2000 to 2003. He joined Weyerhaeuser in 1969 and has held numerous human resources positions with Weyerhaeuser in timberlands, wood products and pulp businesses, in addition to holding corporate-wide responsibilities.
Steven R. Rogel’s biography may be found on page 2 of the Notice of 2004 Annual Meeting of Shareholders and Proxy Statement for the company’s 2004 Annual Meeting of Shareholders to be held April 13, 2004, which is incorporated herein by reference.
Richard J. Taggart has been executive vice president and Chief Financial Officer since April 2003. He started his career with Weyerhaeuser in 1974 as a project manager in Wood Products. After leaving Weyerhaeuser in 1985, he became the head of finance for the U.S. subsidiary of CANFOR, a Canadian forest products company. Since rejoining Weyerhaeuser in 1990, he has served as finance and planning director for Engineered Fiber Products; vice president, Investor Relations; vice president and treasurer; and vice president, Finance.
Jack P. Taylor has been senior vice president, Timberlands since February 2003. He was vice president, Western Timberlands from 1999 to 2003. He joined Weyerhaeuser in 1969 and has worked in a variety of forestry, timberlands operations and raw materials management positions.
George H. Weyerhaeuser, Jr. has been senior vice president, Technology, since 1998 and was president and chief executive officer of Weyerhaeuser Canada Ltd., a subsidiary of the company, from 1993 to 1998. From 1990 to 1993, he was vice president, Manufacturing, Pulp, Paper and Packaging. He joined Weyerhaeuser in 1978 and has held various positions, including sawmill supervisor, vice president and mill manager for Containerboard, Pulp, Paper and Packaging.
Audit Committee Financial Expert
The Audit Committee of the Board of Directors consists of William D. Ruckelshaus, Robert J. Herbold, Martha R. Ingram and Donald F. Mazankowski. Each member is independent as defined under the New York Stock Exchange rules. The Board of Directors has determined that each Audit Committee member has sufficient knowledge in financial and accounting matters to serve on the Committee and that William D. Ruckelshaus is an “audit committee financial expert” as defined by SEC rules.
Weyerhaeuser Company and Subsidiaries
PART III
Item 11.
Item 11. Executive Compensation
Information with respect to executive compensation contained in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2004 Annual Meeting of Shareholders to be held April 13, 2004, under the headings “Directors’ Compensation,” “Compensation Committee Report on Executive Management Compensation,” “Compensation Committee Interlocks and Insider Participation” is incorporated herein by reference.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information with respect to security ownership of certain beneficial owners and management contained in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2004 Annual Meeting of Shareholders to be held April 13, 2004, under the heading “Beneficial Ownership of Common Shares” is incorporated herein by reference.
Item 13.
Item 13. Certain Relationships and Related Transactions
Information with regard to certain relationships and related transactions contained in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2004 Annual Meeting of Shareholders to be held April 13, 2004, under the headings “Certain Relationships and Related Party Transactions” is incorporated herein by reference.
Item 14.
Item 14. Principal Accountant Fees and Services
Information with respect to principal accountant fees and services in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2004 Annual Meeting of Shareholders to be held April 13, 2004, under the heading “Relationships with Independent Public Accountants” is incorporated herein by reference.
Code of Ethics
The company has adopted a code of ethics that applies to all employees, including the principal executive officer, principal financial officer and principal accounting officer. The code of ethics has been filed as Exhibit 14 of this Form 10-K and is available on the company’s website at www.weyerhaeuser.com. A copy of the code of ethics is available upon request.
Corporate Governance Guidelines
The company has adopted corporate governance guidelines. The company’s corporate governance guidelines are available on the company’s website at www.weyerhaeuser.com. A copy of the corporate governance guidelines is available upon request.
Weyerhaeuser Company and Subsidiaries
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Financial Statements
The consolidated financial statements of the company, together with the report of independent auditors, included in the company’s 2003 Annual Report to Shareholders, are incorporated in Part II, Item 8 of this Form 10-K by reference.
Page Number(s)
Financial Statement Schedules
in Form 10-K
Independent Auditors’ Reports on Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts
All other financial statement schedules have been omitted because they are not applicable or the required information is included in the consolidated financial statements, or the notes thereto, in the company’s 2003 Annual Report to Shareholders and incorporated herein by reference.
Weyerhaeuser Company and Subsidiaries
PART IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K - continued
-
Statement Re: Computation of Per Share Earnings (incorporated by reference to Note 2 of Notes to Financial Statements in the company’s 2003 Annual Report to Shareholders)
-
Statements regarding computation of ratios
-
Portions of the company’s 2003 Annual Report to Shareholders specifically incorporated by reference herein
-
Code of Business Conduct and Ethics
-
Subsidiaries of the Registrant
-
Independent Auditors’ Consent
-
Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
-
Certification pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)
-
2001 Report of Independent Public Accountants
Reports on Form 8-K
The registrant furnished reports on Form 8-K dated October 24, 2003 and January 23, 2004, reporting information under Item 12, Results of Operations and Financial Condition.
Weyerhaeuser Company and Subsidiaries
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 5, 2004.
Weyerhaeuser Company
/s/ Steven R. Rogel
Steven R. Rogel
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities indicated on March 5, 2004.
/s/ Steven R. Rogel
/s/ Arnold G. Langbo
Steven R. Rogel
Arnold G. Langbo
Principal Executive Officer,
Director
Director and Chairman of the Board
/s/ Richard J. Taggart
/s/ Donald F. Mazankowski
Richard J. Taggart
Donald F. Mazankowski
Principal Financial Officer
Director
/s/ Steven J. Hillyard
/s/ N. W. Piasecki
Steven J. Hillyard
Nicole W. Piasecki
Principal Accounting Officer
Director
/s/ R. F. Haskayne
/s/ William Ruckelshaus
Richard F. Haskayne
William D. Ruckelshaus
Director
Director
/s/ Robert J. Herbold
/s/ Richard H. Sinkfield
Robert J. Herbold
Richard H. Sinkfield
Director
Director
/s/ Martha R. Ingram
/s/ James N. Sullivan
Martha R. Ingram
James N. Sullivan
Director
Director
/s/ John I. Kieckhefer
/s/ Clayton Yeutter
John I. Kieckhefer
Clayton K. Yeutter
Director
Director
Weyerhaeuser Company and Subsidiaries
FINANCIAL STATEMENT SCHEDULES
Independent Auditors’ Report
The Board of Directors and Shareholders of Weyerhaeuser Company:
Under date of February 11, 2004, we reported on the consolidated balance sheets of Weyerhaeuser Company and subsidiaries as of December 28, 2003, and December 29, 2002, and the related consolidated statements of earnings, cash flows and shareholders’ interest for each of the years in the two-year period then ended, which report is incorporated by reference in this annual report on Form 10-K. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedule in this Form 10-K for the years ended December 28, 2003, and December 29, 2002. This financial statement schedule is the responsibility of the company’s management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth herein.
The consolidated financial statements of Weyerhaeuser Company and subsidiaries as of December 30, 2001, and for the year then ended, were audited by other auditors who have ceased operations. As described in Note 4 to the consolidated financial statements, those financial statements have been revised to include the transitional disclosures required by Statement of Financial Accounting Standards No. 142, Goodwill and other Intangible Assets, which was adopted by the company as of December 31, 2001. Further, as described in Note 22 to the consolidated financial statements, the company changed the composition of its reportable segments in 2003 and 2002, and the amounts in the 2001 financial statements relating to reportable segments have been restated to conform to the 2003 composition of reportable segments. We audited the 2001 adjustments to Note 4 and the adjustments that were applied to restate the disclosures for reportable segments reflected in the 2001 financial statements. In our opinion, the 2001 disclosure in Note 22 is appropriate and the 2001 adjustments to Note 4 are appropriate and have been properly applied. However, we were not engaged to audit, review or apply any procedures to the 2001 financial statements of the company other than with respect to such disclosures and adjustments, and accordingly, we do not express an opinion or any form of assurance on the 2001 financial statements taken as a whole.
As discussed in Note 1 to the consolidated financial statements, Weyerhaeuser Company and subsidiaries adopted the provisions of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, in 2003.
/s/ KPMG LLP
Seattle, Washington
February 11, 2004
Weyerhaeuser Company and Subsidiaries
FINANCIAL STATEMENT SCHEDULES
This report is a copy of the audit report previously issued by Arthur Andersen LLP in connection with Weyerhaeuser Company’s filing on Form 10-K for the year ended December 30, 2001. This report has not been reissued by Arthur Andersen LLP in connection with this filing, and the page reference within this report has not been revised. Schedule II - Valuation and Qualifying Accounts is located on page 28 of this filing.
Report of Independent Public Accountants on Financial Statement Schedules
To Weyerhaeuser Company:
We have audited in accordance with auditing standards generally accepted in the United States, the financial statements included in Weyerhaeuser Company’s annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 11, 2002. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule shown on page 19 is the responsibility of the company’s management and is presented for purposes of complying with the Securities and Exchange Commission’s rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Seattle, Washington
February 11, 2002
Weyerhaeuser Company and Subsidiaries
FINANCIAL STATEMENT SCHEDULES
Schedule II - Valuation and Qualifying Accounts
For the three years ended December 28, 2003
Dollar amounts in millions
(1)
Includes allowances transferred to partnership investments.
(2)
Includes allowances transferred to accrued liabilities.
(3)
Includes allowances transferred from receivables.
Weyerhaeuser Company and Subsidiaries
-
Statement Re: Computation of Per Share Earnings (incorporated by reference to Note 2 of Notes to Financial Statements in the company’s 2003 Annual Report to Shareholders)
-
Statements regarding computation of ratios
-
Portions of the company’s 2003 Annual Report to Shareholders specifically incorporated by reference herein
-
Code of Business Conduct and Ethics
-
Subsidiaries of the Registrant
Weyerhaeuser Company and Subsidiaries
Exhibits - continued
-
Independent Auditors’ Consent
-
Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
-
Certification pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)
-
2001 Report of Independent Public Accountants