SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO X SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 26, 1999, or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _________ Commission File Number 1-4825 WEYERHAEUSER COMPANY A Washington Corporation (IRS Employer Identification No. 91-0470860) Tacoma, Washington 98477 Telephone (253) 924-2345 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange on Title of Each Class Which Registered - --------------------------------------- ----------------------------- Common Shares ($1.25 par value) Chicago Stock Exchange New York Stock Exchange Pacific Stock Exchange Exchangeable Shares (no par value) Toronto Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]. As of February 25, 2000, 227,658,988 shares of the registrant's common stock ($1.25 par value) were outstanding and the aggregate market value of the registrant's voting shares held by non-affiliates was approximately $11,226,434,000. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Annual Report to Shareholders for the fiscal year ended December 26, 1999, are incorporated by reference into Parts I, II and IV. Portions of the Notice of 2000 Annual Meeting of Shareholders and Proxy Statement are incorporated by reference into Part III.
Weyerhaeuser Company and Subsidiaries TABLE OF CONTENTS - ------------------------------------------------------------------------- PART I Page ---- Item 1. Business 3 Item 2. Properties 7 Item 3. Legal Proceedings 10 Item 4. Submission of Matters to a Vote of Security Holders 11 PART II Item 5. Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters 12 Item 6. Selected Financial Data 12 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 12 Item 8. Financial Statements and Supplementary Information 12 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 12 PART III Item 10. Directors and Executive Officers of the Registrant 13 Item 11. Executive Compensation 13 Item 12. Security Ownership of Certain Beneficial Owners and Management 13 Item 13. Certain Relationships and Related Transactions 13 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 14 Signatures 15 Report of Independent Public Accountants on Financial Statement Schedules 16 Schedule II Valuation and Qualifying Accounts 17 2
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- 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 and the manufacture, distribution and sale of forest products, real estate development and construction, and other real estate related activities. Its business segments are timberlands; wood products; pulp, paper and packaging; and real estate and related assets. Information with respect to the description and general development of the company's business, included on pages 42 through 46, Description of the Business of the Company, contained in the company's 1999 Annual Report to Shareholders, is incorporated herein by reference. Financial information with respect to industry segments and geographical areas, included in Notes 20 and 21 of Notes to Financial Statements contained in the company's 1999 Annual Report to Shareholders, is incorporated herein by reference. Timberlands The company is engaged in the management of 5.9 million acres of company-owned and .5 million acres of leased commercial forestland in the United States and British Columbia, most of it highly productive and located extremely well to serve both domestic and international markets. The standing timber inventory on these lands is approximately 96 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. To sustain the timber supply from its fee timberlands, the company 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. <TABLE> <CAPTION> Inventory Thousands of Acres at December 26, 1999 --------- ------------------------------------------ Millions Long- of Fee term License Cunits Ownership Leases Arrangements Total --------- ----------- ------ ------------ --------- Geographic Area <S> <C> <C> <C> <C> <C> United States West 52 1,960 - - 1,960 South 44 3,290 495 - 3,785 --------- ----------- ------ ------------ --------- Total United States 96 5,250 495 - 5,745 --------- ----------- ------ ------------ --------- Canada(1) Alberta 99 - - ,515 7,515 British Columbia 158 663 - 5,749 6,412 New Brunswick 1 - - 177 177 Ontario 52 1 - 6,538 6,539 Saskatchewan 116 - - 12,807 12,807 --------- ----------- ------ ------------ --------- Total Canada 426 664 - 32,786 33,450(2) --------- ----------- ------ ------------ --------- TOTAL 522 5,914 495 32,786 39,195 ========= =========== ====== ============ ========= </TABLE> <TABLE> <CAPTION> Millions of Thousands of Acres ------------------------ Thousands of Acres Seedlings Stocking --------------------- Harvested(3) Planted Planted Control Fertilization ------------ ------- ----------- -------- ------------- 1999 Activity <S> <C> <C> <C> <C> <C> United States West 33.7 35.1 18.5 8.5 83.8 South 59.0 54.7 30.8 1.9 399.8 ------------ ------- ----------- -------- ------------- Total United States 92.7 89.8 49.3 10.4 483.6 ------------ ------- ----------- -------- ------------- Canada British Columbia 1.0 - - - 5.0 ------------ ------- ----------- -------- ------------- TOTAL 93.7 89.8 49.3 10.4 488.6 ============ ======= =========== ======== ============= _______________________________ (1) Managed by Canadian operations. (2) Includes approximately 23 million acres of productive forestland. (3) Includes 1.3 thousand acres of right-of-way and other harvest that does not require planting. 3
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- Item 1. Business - Continued - ----------------------------- </TABLE> <TABLE> <CAPTION> Sales volumes (millions): 1999 1998 1997 1996 1995 ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> Raw materials - cubic ft. 287 259 235 254 254 </TABLE> <TABLE> <CAPTION> Selected product prices: 1999 1998 1997 1996 1995 ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> Export logs (#2 sawlog-bark on) - $/MBF Cascade - Douglas fir $ 829 $ 807 $ 978 $1,330 $1,365 Coastal - Hemlock 532 519 628 611 750 Coastal - Douglas fir 828 808 981 1,246 1,217 </TABLE> Wood Products The company's wood products businesses produce and sell softwood lumber, plywood and veneer; oriented strand board, composite and other panels; hardwood lumber; doors and treated products. These products are sold primarily through the company's own sales organizations. Building materials are sold to wholesalers, retailers and industrial users. The raw materials required to produce these products are purchased from third parties, transferred at market price from the company's timberlands, or obtained from long-term licensing arrangements. Sales volumes by major product are as follows (millions): <TABLE> <CAPTION> 1999 1998 1997 1996 1995 ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> Softwood lumber - board ft. 5,734 4,995 4,869 4,745 4,515 Softwood plywood and veneer - sq. ft. (3/8") 1,902 1,842 2,042 2,172 2,324 Composite panels - sq. ft. (3/4") 410 586 551 604 648 Oriented strand board - sq. ft. (3/8") 2,716 2,697 2,462 2,083 1,931 Hardwood lumber - board ft. 397 339 362 349 293 Doors (thousands) 720 789 730 652 648 Raw materials - cubic ft. 305 315 325 304 260 </TABLE> <TABLE> <CAPTION> Selected product prices: 1999 1998 1997 1996 1995 ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> Lumber (common) - $/MBF 2x4 Douglas fir (kiln dried) $ 408 $ 340 $ 418 $ 422 $ 332 2x4 Douglas fir (green) 384 315 381 386 308 2x4 Southern yellow pine (kiln dried) 413 395 453 422 364 2x4 Spruce-pine-fir (kiln dried) 342 288 354 351 251 Plywood (1/2" CDX) - $/MSF West 369 305 312 307 331 South 320 280 261 256 301 Oriented strand board (7/16"-24/16) North Central price - $/MSF 262 203 142 184 245 </TABLE> 4
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- Item 1. Business - Continued - ----------------------------- Pulp, Paper and Packaging The company's pulp, paper and packaging businesses include: Pulp, which manufactures chemical wood pulp for world markets; Paper, which manufactures and markets a range of both coated and uncoated fine papers through paper merchants and printers; Containerboard Packaging, which manufactures linerboard and corrugating medium, primarily used in the production of corrugated packaging, and manufactures and markets industrial and agricultural packaging; Paperboard, which manufactures and markets bleached paperboard, used for production of liquid containers, to West Coast and Pacific Rim customers; and Recycling, which operates an extensive wastepaper collection system and markets it to company mills and worldwide customers. Sales volumes by major product are as follows (thousands): <TABLE> <CAPTION> 1999 1998 1997 1996 1995 ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> Pulp - air-dry metric tons 2,273 2,012 1,982 1,868 2,060 Paper - tons(1) 1,460 1,181 1,146 1,007 1,006 Paperboard - tons 248 236 243 205 230 Containerboard - tons 576 323 389 346 259 Packaging - MSF 46,483 44,299 44,508 42,323 34,342 Newsprint - metric tons(2) - 62 684 629 663 Recycling - tons 2,785 2,546 2,229 2,011 1,467 </TABLE> <TABLE> <CAPTION> Selected product prices (per ton): 1999 1998 1997 1996 1995 ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> Pulp - NBKP-air-dry metric-U.S. $ 520 $ 516 $ 566 $ 579 $ 883 Paper - uncoated free sheet-U.S. 646 665 740 745 946 Linerboard - 42 lb.-Eastern U.S. 383 354 326 367 505 Newsprint - metric-West Coast U.S. 512 588 550 636 662 Recycling - old corrugated containers 67 54 76 53 128 Recycling - old newsprint 33 22 15 18 99 </TABLE> _______________________________ (1) Reflects the acquisition of the Dryden, Ontario, fine paper mill in October 1998. (2) Reflects the ownership restructuring of the North Pacific Paper Corporation (NORPAC) newsprint facility from a fully consolidated subsidiary to an equity affiliate in February 1998. 5
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- Item 1. Business - Continued - ----------------------------- Real Estate and Related Assets The company's real estate and related assets businesses are principally engaged in real estate development and construction through the company's real estate subsidiary, Weyerhaeuser Real Estate Company, and in other real estate related activities through the company's financial services subsidiary, Weyerhaeuser Financial Services, Inc. Development and construction consists of developing single-family housing and residential lots for sale, including the development of master-planned communities. Volume information: <TABLE> <CAPTION> 1999 1998 1997 1996 1995 ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> Units sold: Single-family units(1) 3,561 3,089 2,914 2,773 3,114 Multi-family units(1) - 276 324 234 117 Residential lots(1) 4,297 2,455 1,988 2,522 1,628 Amounts in millions: Loan servicing portfolio(2) $ - $ - $ - $4,354 $10,952 Single-family loan originations(2) $ - $ - $1,168 $3,436 $ 2,196 </TABLE> _______________________________ (1) Includes one-half of joint venture sales. (2) Reflects the sale of the company's wholly-owned subsidiary, Weyerhaeuser Mortgage Company, in the second quarter of 1997. 6
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- Item 2. Properties - -------------------- Timberlands Timberlands annual log production (in millions): <TABLE> <CAPTION> 1999 1998 1997 1996 1995 ------ ------ ------ ------ ------ <S> <C> <C> <C> <C> <C> Logs - cubic ft. 521 495 476 412 420 Fee harvest - cubic ft. 634 585 541 496 518 </TABLE> Wood Products Production capacities, facilities and annual production, which reflect the sale of the Composite Products business in the second quarter of 1999 and the acquisition of MacMillan Bloedel in November 1999, are summarized by major product as follows (millions): <TABLE> <CAPTION> Production Number of Capacity Facilities 1999 1998 1997 1996 1995 ---------- ---------- ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> <C> <C> Softwood lumber - board ft. 5,452 37 4,532 4,025 3,968 3,701 3,419 Softwood plywood and veneer - sq. ft. (3/8") 1,371 8 1,065 960 1,092 1,243 1,292 Composite panels - sq. ft. (3/4") 228 3 281 510 478 535 583 Oriented strand board - sq. ft. (3/8") 3,365 9 2,452 2,179 2,041 1,687 1,654 Hardwood lumber - board ft. 386 12 376 342 345 333 278 Doors (thousands) 850 1 732 788 740 646 643 Logs - cubic ft. - - 572 526 519 500 494 </TABLE> Principal manufacturing facilities are located as follows: Softwood lumber and plywood Hardwood lumber Alabama, Arkansas, Georgia, Arkansas, Michigan, Louisiana, Mississippi, Oklahoma, Oregon, North Carolina, Oklahoma, Oregon, Pennsylvania, Washington and Washington; Alberta, British Columbia, Wisconsin Ontario and Saskatchewan, Canada ; and Durango, Mexico Doors Wisconsin Oriented strand board Michigan, North Carolina, West Virginia; Alberta, New Brunswick, Ontario and Saskatchewan, Canada Composite panels Wisconsin; British Columbia, Canada; and Durango, Mexico 7
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- Item 2. Properties-Continued - ----------------------------- Pulp, Paper and Packaging Production capacities, facilities and annual production, which reflect the acquisition of MacMillan Bloedel in November 1999, are summarized by major product as follows (thousands): <TABLE> <CAPTION> Production Number of Capacity Facilities 1999 1998 1997 1996 1995 ---------- ---------- ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> <C> <C> Pulp - air-dry metric tons 2,285 9 2,219 2,061 1,973 2,004 2,159 Paper - tons(1) 1,595 6 1,511 1,235 1,128 1,034 1,060 Paperboard - tons 230 1 251 237 231 206 229 Containerboard - tons 3,694 7 2,622 2,291 2,381 2,331 2,329 Packaging - MSF 66,000 64 48,758 46,410 46,488 44,471 36,041 Newsprint - metric tons(2) - - - 69 704 631 687 Recycling - tons - 24 4,287 3,833 3,655 3,428 2,754 </TABLE> Principal manufacturing facilities are located as follows: Pulp Packaging Georgia, Mississippi, North Arizona, Arkansas, California, Carolina, Washington and Colorado, Connecticut, Florida, Alberta, British Columbia, Georgia, Hawaii, Illinois, Ontario and Saskatchewan, Canada Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Paper Minnesota, Mississippi, Mississippi, North Carolina, Missouri, Nebraska, New Jersey, Washington, Wisconsin and New York, North Carolina, Ohio, Ontario and Saskatchewan, Canada Oregon, Tennessee, Texas, Virginia, Washington, Wisconsin Paperboard and Guanajuato, Mexico Washington Recycling Containerboard Arizona, California, Colorado, Alabama, Kentucky, North Illinois, Iowa, Kansas, Carolina, Oklahoma, Oregon and Maryland, Minnesota, Nebraska, Ontario, Canada North Carolina, Oklahoma, Oregon, Tennessee, Texas, Utah, Virginia and Washington _______________________________ (1) Reflects the acquisition of the Dryden, Ontario, Canada, fine paper facility in October 1998. (2) Reflects the ownership restructuring of the North Pacific Paper Corporation (NORPAC) newsprint facility from a fully consolidated subsidiary to an equity affiliate in February 1998. 8
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- Item 2. Properties-Continued - ----------------------------- Real Estate and Related Assets Single-family housing Commercial development California, Maryland, Nevada, California, Florida, Maryland Texas, Virginia and Washington and Washington Residential land development Real estate investments Arkansas, California, Florida, Arizona, California, Colorado, Georgia, Maryland, Nevada, North Nevada, Oregon and Washington Carolina, Texas, Virginia and Washington Mortgage securities Washington 9
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- Item 3. Legal Proceedings - -------------------------- The company conducted a review of its 10 major pulp and paper facilities to evaluate the facilities' compliance with federal Prevention of Significant Deterioration (PSD) regulations. The results of the reviews were disclosed to seven state agencies and the Environmental Protection Agency (EPA) during 1994 and 1995. All PSD compliance issues identified in the review have been resolved, except for PSD issues at the company's Springfield, Oregon, containerboard facility. A final decision is expected to be made by the Lane Regional Air Pollution Control Authority (Lane County, Oregon) concerning alleged PSD and permit violations at the company's Springfield, Oregon, containerboard manufacturing facility upon issuance of the facility's Title V permit in 2000. In addition, the company is conducting a review of one pulp and paper facility and two wood products facilities that were recently acquired to evaluate their compliance with PSD and new source review regulations. In June 1998, a lawsuit was filed against the company in Superior Court, San Francisco County, California, on behalf of a purported class of individuals and entities that own property in the United States on which exterior hardboard siding manufactured by the company has been installed since 1981. The action alleges the company manufactured and distributed defective hardboard siding, breached express warranties and consumer protection statutes and failed to disclose to consumers the alleged defective nature of its hardboard siding. The action seeks compensatory and punitive damages, costs and reasonable attorney fees. In December 1998, the complaint was amended narrowing the purported class to individuals and entities in the state of California. In February 1999, the court entered an order certifying the class. The company has been unable thus far to obtain a reversal of the certification. In September 1998, a lawsuit purporting to be a class action involving hardboard siding was filed against the company in Superior Court, King County, Washington. The complaint was amended, in January 1999, to allege a class consisting of individuals and entities that own homes or other structures in the United States on which exterior hardboard siding manufactured by the company at its former Klamath Falls, Oregon, facility has been installed since January 1981. The amended complaint alleges the company manufactured defective hardboard siding, engaged in unfair trade practices and failed to disclose to customers the alleged defective nature of its hardboard siding. The amended complaint seeks compensatory damages, punitive or treble damages, restitution, attorney fees, costs of the suit and such other relief as may be appropriate. In July 1999, the company's motion for summary judgment was granted in this case. The plaintiffs filed a petition for reconsideration which was denied in January 2000. The plaintiffs have appealed this decision. A lawsuit was filed against the company in District Court, Johnson County, Texas, in June 1999. The case purports to be a class action on behalf of persons who own structures in the state of Texas with exterior hardboard siding manufactured by the company. The complaint alleges defective design, misrepresentation, negligence, breach of express warranty and fraudulent concealment. The complaint seeks unspecified compensatory damages. In July 1999, a lawsuit was filed against the company in the Court of Common Pleas, Beaufort County, South Carolina. The suit purports to be filed on behalf of all owners of residential structures or other buildings with hardboard siding manufactured by the company. The complaint alleges breach of express and implied warranties, defective design and manufacture, fraud and violation of South Carolina's unfair trade practices act. The plaintiffs seek compensatory damages, treble damages and attorneys' fees. The company is a defendant in two other cases, one in Iowa and the other in Oregon, that purport to be statewide class actions with similar allegations. The company is a defendant in approximately 25 other hardboard siding cases primarily involving multi-family structures and residential developments. 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 purports to be a class action on behalf of purchasers of corrugated containers during the period 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 purports to be a class action on behalf of purchasers of corrugated sheets during the period October 1993 through November 1995. Both suits seek damages, including treble damages, under the antitrust laws. 10
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- Item 3. Legal Proceedings-Continued - ------------------------------------ In May 1999, the Equity Committee ("the Committee") in the Paragon Trade Brands, Inc. 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 Equity Committee seeks to assert 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, seeking damages in excess of $420 million against the company. Subsidiaries of the company, formerly known as MacMillan Bloedel Limited and MacMillan Bloedel (USA) Inc., have agreed to settle a class action suit involving claims in the United States (excluding Colorado) alleging the failure of cement fiber roofing products previously manufactured by American Cemwood Corporation, a company owned by MacMillan Bloedel (USA) Inc. The proposed settlement would create a fund of $105 million, consisting of $65 million in cash and $40 million guaranteed recovery by the class from certain insurance carriers. The settlement is subject to court approval in May 2000. The company has established reserves for liabilities and legal defense costs it believes are probable and reasonably estimable with respect to the proposed settlement and pending suits and claims. 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 is also a party to other legal proceedings and environmental matters generally incidental to its business. Although the final outcome of any legal proceeding or environmental matter is subject to a great many variables and cannot be predicted with any degree of certainty, the company presently believes that any ultimate outcome resulting from these proceedings and matters, or all of them combined, would not have a material effect on the company's current financial position, liquidity or results of operations; however, in any given future reporting period, such proceedings or matters could have a material effect on results of operations. 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 26, 1999. 11
Weyerhaeuser Company and Subsidiaries PART I - ------------------------------------------------------------------------- Item 5. Market Price of and Dividends on the Registrant's Common Equity - ------------------------------------------------------------------------ and Related Stockholder Matters - ------------------------------- Information with respect to market prices, stockholders and dividends included in Notes 22 and 23 of Notes to Financial Statements in the company's 1999 Annual Report to Shareholders, is incorporated herein by reference. Item 6. Selected Financial Data - -------------------------------- Information with respect to selected financial data included in Note 23 of Notes to Financial Statements in the company's 1999 Annual Report to Shareholders, is incorporated herein by reference. 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 10, 24-31 and 42-54 of the company's 1999 Annual Report to Shareholders, is incorporated herein by reference. Subsequent Event - On February 23, 2000, the company announced that its board of directors has authorized the repurchase of up to 12 million shares, or about five percent, of its outstanding common stock. Item 7A. Quantitative and Qualitative Disclosures About Market Risk - -------------------------------------------------------------------- Information with respect to market risk of financial instruments included on page 52 of the company's 1999 Annual Report to Shareholders, is incorporated herein by reference. Item 8. Financial Statements and Supplementary Information - ----------------------------------------------------------- Financial statements and supplementary information, included in the company's 1999 Annual Report to Shareholders are incorporated herein by reference. <TABLE> <CAPTION> Page(s) in Annual Report to Shareholders ------------- <S> <C> Report of Independent Public Accountants 54 Consolidated Statement of Earnings 55 Consolidated Balance Sheet 56-57 Consolidated Statement of Cash Flows 58-59 Consolidated Statement of Shareholders' Interest 60 Notes to Financial Statements 61-81 Selected Quarterly Financial Information (Unaudited) 79 </TABLE> Item 9. Changes in and Disagreements with Accountants on Accounting - --------------------------------------------------------------------- and Financial Disclosure - ------------------------ Not applicable. 12
Weyerhaeuser Company and Subsidiaries PART III - ------------------------------------------------------------------------- Item 10. Directors and Executive Officers of the Registrant - ------------------------------------------------------------ Information with respect to Directors of the company included on pages 2 through 5 of the Notice of 2000 Annual Meeting of Shareholders and Proxy Statement dated March 6, 2000, is incorporated herein by reference. The executive officers of the company are as follows: <TABLE> <CAPTION> Name Title Age ---- ----- --- <S> <C> <C> William R. Corbin Executive Vice President 58 C. William Gaynor Senior Vice President 59 Richard C. Gozon Executive Vice President 61 Richard E. Hanson Senior Vice President 56 Steven R. Hill Senior Vice President 52 Mack L. Hogans Senior Vice President 51 Steven R. Rogel President 57 William C. Stivers Executive Vice President 61 George H. Weyerhaeuser, Jr. Senior Vice President 46 </TABLE> Item 11. Executive Compensation - -------------------------------- Information with respect to executive compensation included on pages 5 through 15 of the Notice of 2000 Annual Meeting of Shareholders and Proxy Statement dated March 6, 2000, is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management - ------------------------------------------------------------------------ Information with respect to security ownership of certain beneficial owners and management included on pages 6 and 7 of the Notice of 2000 Annual Meeting of Shareholders and Proxy Statement dated March 6, 2000, is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions - -------------------------------------------------------- Not applicable. 13
Weyerhaeuser Company and Subsidiaries PART IV - ------------------------------------------------------------------------- Item 14. 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 public accountants, included in the company's 1999 Annual Report to Shareholders, are incorporated in Part II, Item 8 of this Form 10-K by reference. <TABLE> <CAPTION> Page Financial Statement Schedules Number(s) in Form 10-K --------- <S> <C> Report of Independent Public Accountants on Financial Statement Schedules 16 Schedule II - Valuation and Qualifying Accounts 17 </TABLE> 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 1999 Annual Report to Shareholders and incorporated herein by reference. Exhibits: 3 - (i) Articles of Incorporation (ii) Bylaws (incorporated by reference to 1998 Form 10-K filed with the Securities and Exchange Commission on March 12, 1999 - Commission File Number 1-4825) 10 - Material Contracts (a) Agreement with W. R. Corbin (incorporated by reference to 1998 Form 10-K filed with the Securities and Exchange Commission on March 12, 1999 - Commission File Number 1-4825) (b) Agreement with R. C. Gozon (incorporated by reference to 1995 Form 10-K filed with the Securities and Exchange Commission on March 15, 1996 - Commission File Number 1-4825) (c) Agreement with S. R. Rogel (incorporated by reference to 1997 Form 10-K filed with the Securities and Exchange Commission on March 13,1998 - Commission File Number 1-4825) (d) Merger Agreement dated June 20, 1999, among Weyerhaeuser Company and Weyerhaeuser Exchangeco Limited and MacMillan Bloedel Limited, including the Plan of Arrangement (incorporated by reference to the Weyerhaeuser Company Registration Statement No. 333-84127) (e) Form of Executive Severance Agreement 11 - Statement Re: Computation of Per Share Earnings (incorporated by reference to Note 2 of the company's 1999 Annual Report to Shareholders) 13 - Portions of the company's 1999 Annual Report to Shareholders specifically incorporated by reference herein 22 - Subsidiaries of the Registrant 23 - Consent of Independent Public Accountants 27 - Financial Data Schedules Reports on Form 8-K The registrant filed reports on Form 8-K dated January 7, January 21, April 14, June 22, July 16, September 21, and October 15, 1999, and January 24, 2000, reporting information under Item 5, Other Events. The registrant filed a report on Form 8-K dated November 9, 1999, which was subsequently amended on January 10, 2000, reporting information under Item 2, Acquisition or Disposition of Assets, and Item 7, Financial Statements and Exhibits. 14
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 10, 2000. 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 10, 2000. /s/ Steven R. Rogel /s/ John Kieckhefer - ------------------------------------- --------------------------- Steven R. Rogel John I. Kieckhefer President, Principal Executive Director Officer, Director and Chairman of the Board /s/ William C. Stivers /s/ Arnold G. Langbo - ------------------------------------- --------------------------- William C. Stivers Arnold G. Langbo Principal Financial Officer Director /s/ Kenneth J. Stancato /s/ Donald F. Mazankowski - ------------------------------------- --------------------------- Kenneth J. Stancato Donald F. Mazankowski Principal Accounting Officer Director /s/ W. John Driscoll /s/ William D. Ruckelshaus - ------------------------------------- --------------------------- W. John Driscoll William D. Ruckelshaus Director Director /s/ R. F. Haskayne /s/ Richard H. Sinkfield - ------------------------------------- --------------------------- Richard F. Haskayne Richard H. Sinkfield Director Director /s/ Robert J. Herbold /s/ James N. Sullivan - ------------------------------------- --------------------------- Robert J. Herbold James N. Sullivan Director Director /s/ Martha R. Ingram /s/ George H. Weyerhaeuser - ------------------------------------- --------------------------- Martha R. Ingram George H. Weyerhaeuser Director Director /s/ Clayton K. Yeutter --------------------------- Clayton K. Yeutter Director 15
Weyerhaeuser Company and Subsidiaries FINANCIAL STATEMENT SCHEDULES - ------------------------------------------------------------------------- Report of Independent Public Accountants on Financial Statement Schedules To Weyerhaeuser Company: We have audited in accordance with generally accepted auditing standards, 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 9, 2000. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule shown on page 17 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 9, 2000 16
Weyerhaeuser Company and Subsidiaries FINANCIAL STATEMENT SCHEDULES - ------------------------------------------------------------------------- <TABLE> <CAPTION> Schedule II - Valuation and Qualifying Accounts For the three years ended December 26, 1999 Dollar amounts in millions Deductions Balance from/ Balance at Charged (Additions at Beginning to to) End of Description of Period Income Reserve Period - ----------- --------- ------- ----------- ------- <S> <C> <C> <C> <C> Weyerhaeuser Reserve deducted from related asset accounts: Doubtful accounts - Accounts receivable 1999 $ 5 $ 6 $ 1(1) $ 10 ======== ======= =========== ======= 1998 $ 6 $ 4 $ 5 $ 5 ======== ======= =========== ======= 1997 $ 7 $ 5 $ 6 $ 6 ======== ======= =========== ======= Real Estate and Related Assets Reserves and allowances deducted from related asset accounts: Receivables 1999 $ 6 $ 2 $ 1(2) $ 7 ======== ======= =========== ======= 1998 $ 6 $ 1 $ 1 $ 6 ======== ======= =========== ======= 1997 $ 9 $ - $ 3 $ 6 ======== ======= =========== ======= Mortgage-related financial Instruments 1999 $ 9 $ - $ 6 $ 3 ======== ======= =========== ======= 1998 $ 27 $ - $ 18(3) $ 9 ======== ======= =========== ======= 1997 $ 7 $ 13 $ (7)(4) $ 27 ======== ======= =========== ======= Investments in and advances to joint ventures and limited partnerships 1999 $ 4 $ - $ 1(5) $ 3 ======== ======= =========== ======= 1998 $ 6 $ 3 $ 5 $ 4 ======== ======= =========== ======= 1997 $ 27 $ - $ 21 $ 6 ======== ======= =========== ======= </TABLE> _______________________________ (1) Includes additional allowances of $4 million in the MacMillan Bloedel acquisition. (2) Includes allowances transferred from partnership investments. (3) Includes allowances transferred to other assets. (4) Includes allowances transferred in from other liabilities. (5) Includes the net of allowances transferred to receivables and from other assets. 17
Weyerhaeuser Company and Subsidiaries EXHIBITS INDEX - ------------------------------------------------------------------------- Exhibits: 3 - (i) Articles of Incorporation (ii) Bylaws (incorporated by reference to 1998 Form 10-K filed with the Securities and Exchange Commission on March 12, 1999 - Commission File Number 1-4825) 10 - Material Contracts (a) Agreement with W. R. Corbin (incorporated by reference to 1998 Form 10-K filed with the Securities and Exchange Commission on March 12, 1999 - Commission File Number 1-4825) (b) Agreement with R. C. Gozon (incorporated by reference to 1995 Form 10-K filed with the Securities and Exchange Commission on March 15, 1996 - Commission File Number 1-4825) (c) Agreement with S. R. Rogel (incorporated by reference to 1997 Form 10-K filed with the Securities and Exchange Commission on March 13,1998 - Commission File Number 1-4825) (d) Merger Agreement dated June 20, 1999, among Weyerhaeuser Company and Weyerhaeuser Exchangeco Limited and MacMillan Bloedel Limited, including the Plan of Arrangement (incorporated by reference to the Weyerhaeuser Company Registration Statement No. 333-84127) (e) Form of Executive Severance Agreement 11 - Statement Re: Computation of Per Share Earnings (incorporated by reference to Note 2 of the company's 1999 Annual Report to Shareholders) 13 - Portions of the company's 1999 Annual Report to Shareholders specifically incorporated by reference herein 22 - Subsidiaries of the Registrant 23 - Consent of Independent Public Accountants 27 - Financial Data Schedules 18
Weyerhaeuser Company and Subsidiaries Exhibit 22 Subsidiaries of the Registrant - ------------------------------------------------------------------------- <TABLE> <CAPTION> Percentage State or Ownership of Country of Immediate Name Incorporation Parent ---- ------------- ------------ <S> <C> <C> Columbia & Cowlitz Railway Company Washington 100% DeQueen & Eastern Railroad Company Arkansas 100 Dynetherm, Inc. Alabama 100 Fisher Lumber Company California 100 Golden Triangle Railroad Mississippi 100 Green Arrow Motor Express Company Delaware 100 Gryphon Asset Management, Inc. Delaware 100 Mississippi & Skuna Valley Railroad Company Mississippi 100 Mountain Tree Farm Company Washington 50 North Pacific Paper Corporation Delaware 50 Norpac Sales Corporation Guam 100 Norpac Resources Inc. Delaware 100 Pacific Veneer, Ltd. Washington 100 SCA Weyerhaeuser Packaging Holding Company British Asia Limited Virgin Islands 50 Texas, Oklahoma & Eastern Railroad Company Oklahoma 100 TJ International, Inc. Delaware 100 Norco Windows, Inc. Wisconsin 100 TJI Global, Inc. Barbados 100 Trus Joist MacMillan Limited Partnership Delaware 51 Trus Joist MacMillan Limited British 100 Columbia TJM Australia Pty. Limited Australia 100 TJM Europe Limited United Kingdom 100 TJM Europe SPRL Belgium 100 TJM Facilities Corporation Delaware 100 Trus Joint MacMillan Ltd., YK Japan 100 Trus Joist Corporation Delaware 100 Trus Joist (Western) Ltd. New Brunswick 100 Trus Joist Japan Co., Ltd. Japan 100 United Structures, Inc. California 100 Westwood Shipping Lines, Inc. Washington 100 Weycomp Claims Management Services, Inc. Texas 100 Weyerhaeuser Company of Nevada Nevada 100 Weyerhaeuser Construction Company Washington 100 Weyerhaeuser de Mexico, S.A. de C.V. Mexico 100 Weyerhaeuser del Bajio, S.A. de C.V. Mexico 100 Weyerhaeuser Financial Services, Inc. Delaware 100 CMO Finance Corp. Nevada 100 MJ Finance Corporation California 100 Mortgage Securities III Corporation Nevada 100 R4 Participant Corporation Nevada 100 ver Bes' Insurance Company Vermont 100 de Bes' Insurance Ltd. Bermuda 100 </TABLE> 19
Weyerhaeuser Company and Subsidiaries Exhibit 22 Subsidiaries of the Registrant - ------------------------------------------------------------------------- <TABLE> <CAPTION> Percentage State or Ownership of Country of Immediate Name Incorporation Parent ---- ------------- ------------ <S> <C> <C> Weyerhaeuser Financial Investments, Inc. Nevada 100% Abfall Finance Corp. California 100 Brookview, Inc. Nevada 100 The Giddings Mortgage Investment Company California 100 Pass-Through Finance Corp. California 100 RFS Finance Corp. California 100 Trimark Development Company California 100 Trimark Realty Advisors, Inc. California 100 WFI Servicing Company Nevada 100 Woodland Hills Properties-W, Inc. Nevada 100 Weyerhaeuser Venture Company Nevada 100 Las Positas Land Co. California 100 WAMCO, Inc. Nevada 100 Weyerhaeuser Forestlands International, Inc. Washington 100 Weyerhaeuser International, Inc. Washington 100 The Capricorn Corporation Philippines 100 Weyerhaeuser Canada Ltd. Canada 100 Princeton Co-Generation (VCC) Corp. Canada 90 Wapawekka Lumber Ltd. Canada 51 Weyerhaeuser (Barbados) SRL Barbados 100 Marlborough Capital Corp. SRL Barbados 100 Weyerhaeuser (BVI) Ltd. British Virgin Islands 100 Weyerhaeuser New Zealand Holdings Inc. New Zealand 100 Nelson Forest Products Company New Zealand 100 Weyerhaeuser New Zealand Inc. New Zealand 100 Weyerhaeuser Saskatchewan Ltd. Canada 100 Weyerhaeuser Holdings Limited British Columbia 100 Weyerhaeuser Company Limited Canada 100 486286 British Columbia Ltd. British Columbia 50 Altair Property and Casualty Corporation British Columbia 100 Canadian Maas River Investment N.V. Curacao 100 Weyerhaeuser (Ireland) Ireland 100 Chatham Forest Products Ltd. New Brunswick 100 Eagle Forest Products Limited Partnership New Brunswick 100 Forest Industries Flying Tankers Limited British Columbia 58 Green Forest Lumber Limited Ontario 100 Monterra Lumber Mills Limited Ontario 83 Weyerhaeuser (Bridgetown) Limited Barbados 100 Weyerhaeuser (UK) Limited England 100 MacMillan Bloedel K.K. Japan 100 </TABLE> 20
Weyerhaeuser Company and Subsidiaries Exhibit 22 Subsidiaries of the Registrant - ------------------------------------------------------------------------- <TABLE> <CAPTION> Percentage State or Ownership of Country of Immediate Name Incorporation Parent ---- ------------- ------------ <S> <C> <C> MacMillan Bloedel Pembroke Limited Partnership Ontario 100% MacMillan Guadiana, S.A. de C.V. Mexico 100 Marine Leasings Limited British Columbia 27 Mid-Island Reman Inc. British Columbia 49 Saskfor Holdings Inc. Saskatchewan 50 Saskfor MacMillan Limited British Columbia 100 Sturgeon Falls Repulping Limited Ontario 50 Sturgeon Falls Limited Partnership Ontario 100 Weyerhaeuser (Carlisle) Ltd. Barbados 100 Camarin Limited Barbados 100 Weyerhaeuser (Ewen) Limited British Columbia 100 Weyerhaeuser (Australia) Pty. Ltd. Australia 100 Weyerhaeuser (Nanaimo) Ltd. British Columbia 100 Weyerhaeuser (Northumberland) Limited New Brunswick 100 Weyerhaeuser (North Superior) Limited Ontario 100 Weyerhaeuser (Ottawa) Limited Canada 100 Weyerhaeuser Wawa OSB Limited Partnership Ontario 100 Weyerhaeuser China, Ltd. Washington 100 Weyerhaeuser GMBH Germany 100 Weyerhaeuser (Asia) Limited Hong Kong 100 Weyerhaeuser Japan Ltd. Japan 100 Weyerhaeuser Japan Ltd. Delaware 100 Weyerhaeuser Korea Ltd. Korea 100 Weyerhaeuser, S.A. Panama 100 Weyerhaeuser Taiwan Ltd. Delaware 100 Weyerhaeuser International Sales Corp. Guam 100 Weyerhaeuser (Mexico) Inc. Washington 100 Weyerhaeuser Midwest, Inc. Washington 100 Weyerhaeuser Overseas Finance Co. Delaware 100 Weyerhaeuser International Finance Company Delaware 100 Weyerhaeuser Company Nova Scotia Nova Scotia 100 Weyerhaeuser Raw Materials, Inc. Delaware 100 Weyerhaeuser Real Estate Company Washington 100 Centennial Homes, Inc. Texas 100 Midway Properties, Inc. North Carolina 100 Pardee Construction Company California 100 Marmont Realty Company California 100 Pardee Construction Company of Nevada Nevada 100 Pardee Investment Company California 100 Parvada, Inc. Nevada 100 </TABLE> 21
Weyerhaeuser Company and Subsidiaries Exhibit 22 Subsidiaries of the Registrant - ------------------------------------------------------------------------- <TABLE> <CAPTION> Percentage State or Ownership of Country of Immediate Name Incorporation Parent ---- ------------- ------------ <S> <C> <C> The Quadrant Corporation Washington 100% Quadrant Real Estate Services, Inc. Washington 100 South Jersey Assets, Inc. New Jersey 100 Scarborough Constructors, Inc. Florida 100 Silverthorn Country Club, Inc. Florida 100 TMI, Inc. Texas 100 Weyerhaeuser Real Estate Company of Nevada Nevada 100 Weyerhaeuser Realty Investors, Inc. Washington 100 Winchester Homes, Inc. Delaware 100 SC - WHI, Inc. Delaware 100 Weyerhaeuser Sales Company Nevada 100 Weyerhaeuser Servicios, S.A. de C.V. Mexico 100 Weyerhaeuser (U.S.A.) Inc. Delaware 100 American Cemwood Corporation Oregon 100 MacMillan Bloedel Paper Sales Inc. Delaware 100 MB Administrative Services Inc. Delaware 100 Weyerhaeuser (Alabama) Inc. Alabama 100 Weyerhaeuser (Delaware) Inc. Delaware 100 Weyerhaeuser Distribution Inc. Alabama 100 Weyerhaeuser Clarion Limited Partnership Pennsylvania 100 Trus Joist MacMillan Limited Partnership Delaware 49 Weyerhaeuser Packaging Inc. Alabama 100 MacMillan Bloedel FSC Ltd. Barbados 100 Weyerhaeuser Timberlands Inc. Alabama 100 Weyerhaeuser (Pennsylvania) Inc. Delaware 100 The Wray Company Arizona 100 </TABLE> 22
Weyerhaeuser Company and Subsidiaries Exhibit 23 Consent of Independent Public Accountants - ------------------------------------------------------------------------- As independent public accountants, we hereby consent to the incorporation of our reports included and incorporated by reference in this Form 10-K, into Weyerhaeuser Company's previously filed Registration Statement Nos. 333-36753 and 333-84127 on Form S-3 and Nos. 33-60527, 333-10165, 333-01565, 333-56673, 333-74311 and 333- 89925 on Form S-8. ARTHUR ANDERSEN LLP Seattle, Washington, March 10, 2000