SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) X OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1995 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 (206) 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 Tokyo Stock Exchange Rights to Purchase Cumulative New York Stock Exchange Preference Shares, Fourth Series 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. [ ]. As of February 23, 1996, 198,070,891 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 $8,913,190,095. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Annual Report to Shareholders for the fiscal year ended December 31, 1995 are incorporated by reference into Parts I, II and IV. Portions of the Notice of 1996 Annual Meeting of Shareholders and Proxy Statement are incorporated by reference into Part III.
Weyerhaeuser Company and Subsidiaries TABLE OF CONTENTS <TABLE> <CAPTION> PART I Page ------ <S> <C> 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 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 </TABLE> 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 growing and harvesting of timber and the manufacture, distribution and sale of forest products, real estate development and construction, and financial services. Its principal business segments include timberlands and wood products; pulp, paper and packaging; real estate; and financial services. Information with respect to the description and general development of the company's business, included on pages 35 through 39, Description of the Business of the Company, contained in the company's 1995 Annual Report to Shareholders, is incorporated herein by reference. Financial information with respect to industry segments, included in Note 19 of Notes to Financial Statements contained in the company's 1995 Annual Report to Shareholders, is incorporated herein by reference. Timberlands and Wood Products The company owns approximately 5.3 million acres of commercial forestland in the United States (49% in the South and 51% in the Pacific Northwest), most of it highly productive and located extremely well to serve both domestic and international markets. The company has, additionally, long-term license arrangements in Canada covering approximately 18.9 million acres (of which 14 million acres are considered to be productive forestland). The combined total timber inventory on these U.S. and Canadian lands is approximately 244 million cunits (a cunit is 100 cubic feet of solid wood), of which approximately 75% is softwood species. 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 31, 1995 --------- ------------------------------------------ Millions Fee Long-term License of Cunits Ownership Leases Arrangements Total --------- --------- ---------- ------------ ------ <S> <C> <C> <C> <C> <C> Geographic Area Washington 44 1,492 - - 1,492 Oregon 18 1,217 - - 1,217 Southern 28 2,593 171 - 2,764 --------- --------- ---------- ------------ ------ Total United States 90 5,302 171 - 5,473 --------- --------- ---------- ------------ ------ Canada Alberta 91 - - 6,846 6,846 British Columbia 10 35 - 3,572 3,607 Saskatchewan 53 - - 8,457 8,457 --------- --------- ---------- ------------ ------ Total Canada 154 35 - 18,875 18,910 --------- --------- ---------- ------------ ------ TOTAL 244 5,337 171 18,875 24,383 ========= ========= ========== ============ ====== </TABLE> <TABLE> <CAPTION> Thousands of Acres Thousands of Acres Millions of ------------------------ ------------------ Seedlings Stocking Harvested Planted Planted Control Fertilization --------- ------- --------- --------- ------------- <S> <C> <C> <C> <C> <C> 1995 Activity Washington 27.5 28.4 15.8 1.5 55.9 Oregon 12.8 11.9 5.2 1.7 33.5 Southern 49.0 45.5 20.5 3.8 189.8 --------- ------- --------- --------- ------------- Total United States 89.3 85.8 41.5 7.0 279.2 ========= ======= ========= ========= ============= </TABLE> 3
Weyerhaeuser Company and Subsidiaries PART I Item 1. Business - Continued - ----------------------------- On February 28, 1996, the company signed an agreement to acquire ownership and long-term leases to 661,200 acres of private commercial forestland and two sawmills in southeastern Louisiana and southern Mississippi from Cavenham Forest Industries, a subsidiary of Hansen Plc, for $500 million. The company's wood products businesses produce and sell softwood lumber, plywood and veneer; composite panels; oriented strand board; hardboard; hardwood lumber and plywood; doors; treated products; logs; chips and timber. These products are sold primarily through the company's own sales organizations. Building materials are sold to wholesalers, retailers and industrial users. Sales volumes by major product class are as follows (millions): <TABLE> <CAPTION> 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ <S> <C> <C> <C> <C> <C> Raw materials - cubic ft. 535 564 547 545 538 Softwood lumber - board ft. 4,515 4,402 4,230 3,440 3,269 Softwood plywood and veneer - sq. ft. (3/8") 2,324 2,685 2,435 2,227 2,135 Composite panels - sq. ft. (3/4") 648 660 626 590 685 Oriented strand board - sq. ft. (3/8") 1,931 1,803 1,672 1,484 1,205 Hardboard - sq. ft. (7/16") 201 167 140 133 114 Hardwood lumber - board ft. 293 254 240 218 219 Engineered wood products - lineal ft. 128 71 47 - - Hardwood doors (thousands) 648 617 556 514 525 </TABLE> Selected product prices: <TABLE> <CAPTION> 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ <S> <C> <C> <C> <C> <C> Export logs (#2 sawlog-bark on) - $/MBF Cascade - Douglas fir $1,365 $1,168 $1,224 $ 930 $ 686 Coastal - Hemlock 750 804 831 562 530 Coastal - Douglas fir 1,217 1,085 1,104 858 633 Lumber (common) - $/MBF 2x4 Douglas fir (kiln dried) 332 408 418 295 250 2x4 Douglas fir (green) 308 364 383 261 224 2x4 Southern yellow pine (kiln dried) 364 419 397 285 237 2x4 Spruce-pine-fir (kiln dried) 251 343 334 231 187 Plywood (1/2" CDX) - $/MSF West 331 334 321 281 220 South 301 298 282 249 192 Oriented strand board (7/16"-24/16) North Central price - $/MSF 245 265 236 217 147 </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; Newsprint, which manufactures newsprint at the company's North Pacific Paper Corporation mill and markets it to West Coast and Japanese newspaper publishers; 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, which is 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; Recycling, which operates an extensive wastepaper collection system and markets it to company mills and worldwide customers; and Chemicals, which produces chlorine, caustic and tall oil, which are used principally by the company's pulp, paper and packaging operations. In 1993, the Personal Care Products business, which manufactured disposable diapers marketed under the private-label brands of many of North America's largest retailers was sold through an initial public offering of stock. Sales volumes by major product class are as follows (thousands): <TABLE> <CAPTION> 1995 1994 1993 1992 1991 ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> Pulp - air-dry metric tons 2,060 2,068 1,886 1,238 1,433 Newsprint - metric tons 663 638 609 575 450 Paper - tons 1,006 998 990 966 869 Paperboard - tons 230 201 222 238 234 Containerboard - tons 259 254 290 318 418 Packaging - MSF 34,342 34,483 31,386 29,414 26,525 Recycling - tons 1,467 985 851 778 735 Personal care products - standard cases - - - 17,017 14,929 </TABLE> Selected product prices (per ton): <TABLE> <CAPTION> 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ <S> <C> <C> <C> <C> <C> Pulp - NBKP-air-dry metric-U.S. $883 $566 $445 $551 $568 Paper - uncoated free sheet-U.S. 946 617 627 630 713 Linerboard - 42 lb.-Eastern U.S. 505 367 295 343 330 Newsprint - metric - West Coast U.S. 662 460 435 433 549 OCC 128 78 27 30 39 ONP 99 46 16 13 16 </TABLE> 5
Weyerhaeuser Company and Subsidiaries PART I Item 1. Business - Continued - ----------------------------- Real Estate The company, through its real estate subsidiary, Weyerhaeuser Real Estate Company, is engaged primarily in developing single-family housing and residential lots for sale, including the development of master-planned communities. Operations are mainly concentrated in selected metropolitan areas in Southern California, Nevada, Washington, Texas, Maryland and Virginia. Volumes sold: <TABLE> <CAPTION> 1995 1994 1993 1992 1991 ----- ----- ----- ----- ----- <S> <C> <C> <C> <C> <C> Single-family units (1) 3,114 3,934 3,879 3,917 4,410 Multi-family units (1) 117 475 1,141 60 317 Lots (1) 1,628 2,157 1,372 2,762 1,138 Commercial space (thousand sq. ft.) - 389 88 142 269 </TABLE> (1) Includes one-half of joint venture sales. Financial Services The company, through its financial services subsidiary, Weyerhaeuser Financial Services, Inc., is involved in a range of financial services. The principal operating unit is Weyerhaeuser Mortgage Company, which has origination offices in 14 states, with a servicing portfolio of $11 billion involving approximately 136,000 loans throughout the country. Mortgages are resold in the secondary market through mortgage-backed securities to financial institutions and investors. Through its insurance services organization, it also offers a broad line of property, life and disability insurances. GNA Corporation, a subsidiary that specialized in the sale of life insurance annuities and mutual funds to the customers of financial institutions, was sold in April 1993. Republic Federal Savings & Loan Association, a subsidiary that operated in Southern California, was dissolved in 1992. Volume information (millions): <TABLE> <CAPTION> 1995 1994 1993 1992 1991 ------- ------- ------- ------- ------- <S> <C> <C> <C> <C> <C> Loan servicing portfolio $10,952 $11,300 $ 8,400 $ 9,800 $10,600 Single-family loan originations 2,196 2,763 4,405 3,380 2,496 </TABLE> 6
Weyerhaeuser Company and Subsidiaries PART I Item 2. Properties - ------------------- Timberlands and Wood Products Facilities and annual production are summarized by major product class as follows (millions): <TABLE> <CAPTION> Number Production of Capacity Facilities 1995 1994 1993 1992 1991 ---------- ---------- ----- ----- ----- ----- ----- <S> <C> <C> <C> <C> <C> <C> <C> Logs - cubic ft. - - 914 671 673 749 782 Softwood lumber - board ft. 3,483 27 3,419 3,249 3,135 2,782 2,687 Softwood plywood and veneer - sq. ft. (3/8") 1,337 8 1,292 1,249 1,188 1,125 966 Composite panels - sq. ft. (3/4") 607 6 583 594 564 540 493 Oriented strand board - sq. ft. (3/8") 1,670 5 1,654 1,568 1,443 1,234 1,208 Hardboard - sq. ft. (7/16") 130 1 124 122 120 118 90 Hardwood lumber - board ft. 409 11 278 229 221 210 196 Hardwood doors (thousands) 717 1 643 597 522 469 448 </TABLE> Principal manufacturing facilities are located as follows: Softwood lumber and plywood Hardwood lumber Alabama, Arkansas, Georgia, Idaho, Arkansas, Oklahoma, Oregon, Mississippi, North Carolina, Pennsylvania, Washington and Oklahoma, Oregon, Washington and Wisconsin Alberta, British Columbia and Saskatchewan, Canada Hardwood doors Wisconsin Composite panels Georgia, North Carolina, Oregon and Wisconsin Oriented strand board Michigan, North Carolina and Alberta, Canada Hardboard Oregon 7
Weyerhaeuser Company and Subsidiaries PART I Item 2. Properties - Continued - ------------------------------- Pulp, Paper and Packaging Facilities and annual production are summarized by major product class as follows (thousands): <TABLE> <CAPTION> Number of Production Facil- Capacity ilities 1995 1994 1993 1992 1991 ---------- -------- ------ ------ ------ ------ ------ <S> <C> <C> <C> <C> <C> <C> <C> Pulp - air-dry metric tons 2,130 8 2,159 2,041 2,096 1,506 1,527 Newsprint - metric tons 690 1 687 651 618 588 461 Paper - tons 1,075 5 1,060 982 1,007 971 889 Paperboard - tons 220 1 229 189 217 229 238 Containerboard - tons 2,540 5 2,329 2,357 2,269 2,240 2,224 Packaging - MSF 48,000 45 36,041 36,020 32,795 31,040 27,583 Recycling - tons - 36 2,754 2,042 1,847 1,692 1,415 Personal care products - standard cases - - - - - 16,743 14,902 </TABLE> Principal manufacturing facilities are located as follows: Pulp Containerboard Georgia, Mississippi, North Carolina, North Carolina, Oklahoma, Oregon Washington and Alberta, British and Washington Columbia and Saskatchewan, Canada Packaging Newsprint Arizona, California, Connecticut, Washington Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Paper Michigan, Minnesota, Mississippi, Mississippi, North Carolina, Missouri, Nebraska, New Jersey, Washington, Wisconsin and New York, North Carolina, Ohio, Saskatchewan, Canada Oregon, Tennessee, Texas, Virginia, Washington and Wisconsin Paperboard Washington Recycling Arizona, California, Colorado, Georgia, Illinois, Indiana, Iowa, Kansas, Maryland, Minnesota, Nebraska, New Jersey, North Carolina, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington and British Columbia, Canada Chemicals Georgia, Mississippi, North Carolina, Oklahoma, Washington and Saskatchewan, Canada 8
Weyerhaeuser Company and Subsidiaries PART I Item 2. Properties - Continued - ------------------------------- Real Estate <TABLE> <CAPTION> Principal Operations Primary States of Operations Primary Activities - ----------------------------------------------------------------------------- <S> <C> <C> Land Management Arkansas, North Carolina Residential and and Washington commercial land development Pardee Construction California and Nevada Single-family and Company multi-family housing and land development The Quadrant Washington Single-family housing, Corporation residential and commercial land development, commercial building and commercial property management Scarborough Florida Residential and Constructors, Inc. commercial land development Trendmaker Homes, Inc. Texas Single-family housing and residential land development Winchester Homes, Inc. Maryland and Virginia Single-family housing and residential land development Weyerhaeuser Real Washington Parent company Estate Co. </TABLE> Financial Services <TABLE> <CAPTION> Principal Operations Primary States of Operations Primary Activities - ------------------------------------------------------------------------------ <S> <C> <C> Weyerhaeuser Mortgage Branches in 14 states with Mortgage lending and Company major concentrations in servicing, insurance California, Hawaii, Nevada and investment sales and Texas and service Mortgage Securities California Mortgage securities Corporations Weyerhaeuser California Real estate investment Financial sales and service Investments, Inc. Weyerhaeuser Venture Arizona, California, Equity investments and Co. Nevada, Oregon and participating loans in Washington residential real estate Weyerhaeuser Delaware Parent company Financial Services, Inc. </TABLE> 9
Weyerhaeuser Company and Subsidiaries PART I Item 3. Legal Proceedings - -------------------------- Trial began in May 1992 in a federal income tax refund case that the company filed in July 1989 in the United States Claims Court. The complaint seeks a refund of federal income taxes that the company contends it overpaid in 1977 through 1983. The alleged overpayments are the result of the disallowance of certain timber casualty losses and certain deductions claimed by the company arising from export transactions. The refund sought was approximately $29 million, plus statutory interest from the dates of the alleged overpayments. The company settled the portion of the case relating to export transactions and received a tax refund of approximately $10 million, plus statutory interest. In September 1994, the United States Court of Federal Claims issued an opinion on the casualty loss issues which will result in the allowance of additional tax refunds of approximately $2 million, plus statutory interest. The company has appealed the decision. On March 6, 1992, the company filed a complaint in the Superior Court for King County, Washington, against a number of insurance companies. The complaint seeks a declaratory judgment that the insurance companies named as defendants are obligated under the terms and conditions of the policies sold by them to the company to defend the company and to pay, on the company's behalf, certain claims asserted against the company. The claims relate to alleged environmental damage to third-party sites and to some of the company's own property to which allegedly toxic material was delivered or on which allegedly toxic material was placed in the past. Since December 1992, the company has agreed to settlements with all but one of the defendants. In July 1993, the trial court dismissed 14 of the 35 sites named in the complaint. In May 1994, the Washington State Supreme Court reversed the trial court's dismissal of those sites. Trial on two sites against the sole remaining defendant began in October 1994 and resulted in a jury verdict which awarded damages to the company with respect to one of the sites. Trial on several additional sites began in February 1996 and is continuing. The company received from the Lane County, Oregon Regional Air Pollution Control Authority (LRAPA) a draft Notice of Violation which seeks penalties for alleged Prevention of Significant Deterioration (PSD) violations at the company's Springfield, Oregon, particleboard operations. LRAPA informed the company in July 1995 that it will withdraw its draft Notice of Violation (NOV) and will not seek fines or penalties. On September 15, 1995, however, LRAPA issued a revised draft NOV (the Revised Draft NOV), which alleged that the Springfield particleboard facility had violated a condition of its Air Contaminant Discharge Permit (ACDP). The allegations in the Revised Draft NOV are based upon the same facts and circumstances relied upon by LRAPA in the prior draft NOV. The company has contested LRAPA's issuance of the Revised Draft NOV. The company has undertaken a review of its 10 major pulp and paper facilities to evaluate the facilities' compliance with PSD regulations, and has disclosed the potential of PSD compliance issues to seven state agencies and the Environmental Protection Agency (EPA). The company is currently working with the states to negotiate settlements for the alleged violations. In April 1995, EPA Region X issued a Notice of Violation to the company and to North Pacific Paper Corporation (NORPAC), a joint venture in which the company has an 80 percent ownership interest. The Notice of Violation addresses alleged PSD violations at NORPAC's Longview, Washington, newsprint manufacturing facility. A settlement with the State of Washington that resolves all PSD issues at the Longview/NORPAC complex was entered on January 26, 1996. The company also entered into a settlement with the State of Oklahoma regarding the resolution of alleged PSD violations at the company's Valliant, Oklahoma, containerboard manufacturing facility on November 14, 1995. The company has entered into Special Orders by Consent (SOCs) with the State of North Carolina to resolve alleged PSD issues at its New Bern, North Carolina, pulp mill and its Plymouth, North Carolina, pulp and paper complex. The Washington State Department of Ecology investigated the accidental release of chorine, chlorine dioxide and non-condensable gasses in July 1994 at the company's pulp mill in Longview, and issued a $10 thousand penalty for the chlorine release and a $5 thousand penalty for the non-condensable gasses release which have been paid by the company. In June 1995, EPA issued an Administrative Complaint against the company, seeking penalties of $225 thousand and alleging a failure to timely report the chlorine release. The company has appealed. 10
Weyerhaeuser Company and Subsidiaries PART I Item 3. Legal Proceedings - Continued - -------------------------------------- On April 9, 1993, the company entered into a Stipulated Final Order (SFO) with the Oregon Department of Environmental Quality for alleged air emissions in excess of permit levels and PSD noncompliance at the company's North Bend, Oregon, containerboard facility. The SFO establishes a compliance schedule for installing control technology. A supplemental SFO assessed upfront penalties of $247 thousand and penalties of $500 per day until compliance is demonstrated. The SFO required demonstrated compliance by December 1993 and a historical evaluation of the facility's PSD status. The company submitted an initial PSD review to the state in December 1993. A revised report was delivered to the state in March 1995. On November 2, 1992, an action was filed against the company in the Circuit Court for the First Judicial District of Hinds County, Mississippi, on behalf of a purported class of riparian property owners in Mississippi and Alabama whose properties are located on the Tennessee Tombigbee Waterway, Aliceville Lake, Cedar Creek and the Magoway Creek. The complaint seeks $1 billion in compensatory and punitive damages for diminution in property value, personal injuries and mental anguish allegedly resulting from the discharge of purported hazardous substances, including dioxins and furans, by the company's pulp and paper mill in Columbus, Mississippi, and the alleged fraudulent concealments of such discharge. The complaint also seeks an injunction prohibiting future releases and the removal of hazardous substances allegedly released in the past. On August 20, 1993, a companion action was filed in Greene County, Alabama, on behalf of a similar purported class of riparian owners with essentially the same claims as the Mississippi case. By order dated April 5, 1995, venue of the Alabama action was transferred to Sumter County, Alabama. On January 20, 1995, the court in the Alabama action certified a class of all persons who, as of the date the action commenced, were riparian owners, lessees and licensees of properties located on the Tennessee Tombigbee Waterway in Greene, Sumter, Pickens and Marengo counties, Alabama, and Lowndes and Noxubee counties, Mississippi, to determine whether the company is liable to the members of the class for compensatory and/or punitive damages and to determine the amount of punitive damages, if any, to be awarded to the class as a whole. By order dated April 12, 1995, as orally amended on February 1, 1996, the geographical boundaries of the class were amended to run from below the Columbus mill's wastewater discharge pipe just above the confluence of the Black Warrior River and the Tennessee Tombigbee Waterway. The class is estimated to range from approximately 1,000 to 1,500 members. Neither the Mississippi action nor the Alabama action is presently scheduled for trial. The company is also a party to various proceedings relating to the clean-up 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 generally incidental to its business. Although the final outcome of any legal proceeding 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 the legal proceedings discussed herein, 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 legal proceedings 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 31, 1995. 11
Weyerhaeuser Company and Subsidiaries PART II Item 5. Market Price of and Dividends on the Registrant's Common - ---------------------------------------------------------------------- Equity and Related Stockholder Matters - -------------------------------------- Information with respect to market information, stockholders and dividends included in Notes 20 and 21 of Notes to Financial Statements in the company's 1995 Annual Report to Shareholders, is incorporated herein by reference. Item 6. Selected Financial Data - -------------------------------- Information with respect to selected financial data included in Note 21 of Notes to Financial Statements in the company's 1995 Annual Report to Shareholders, is incorporated herein by reference. Item 7. Management's Discussion and Analysis of Financial Condition - --------------------------------------------------------------------- and Results of Operations - ------------------------- On February 28, 1996, the company signed an agreement to acquire ownership and long-term leases to 661,200 acres of private commercial forestland and two sawmills in southeastern Louisiana and southern Mississippi from Cavenham Forest Industries, a subsidiary of Hansen Plc, for $500 million. This acquisition is not expected to have a significant impact on the company's financial position or liquidity. In the fourth quarter of 1995, pulp and paper prices began to weaken dramatically as customers reduced purchases in order to reduce excess inventories. These prices continued to decline in the first quarter of 1996. This will result in significantly lower operating earnings in the company's pulp, paper and packaging segment. This price weakness is expected to continue until the excess inventory situation corrects itself. Additional information with respect to Management's Discussion and Analysis included on pages 7, 14-17, 19, 24-27 and 32-44; contained in the company's 1995 Annual Report to Shareholders, is incorporated herein by reference. Item 8. Financial Statements and Supplementary Information - ----------------------------------------------------------- Financial statements and supplementary information, contained in the company's 1995 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 44 Consolidated Statement of Earnings 45 Consolidated Balance Sheet 46-47 Consolidated Statement of Cash Flows 48-49 Consolidated Statement of Shareholders' Interest 50 Notes to Financial Statements 51-69 Selected Quarterly Financial Information 67 </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 1 through 4 of the Notice of 1996 Annual Meeting of Shareholders and Proxy Statement dated March 4, 1996 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 54 John W. Creighton, Jr. President 63 Richard C. Gozon Executive Vice President 57 Steven R. Hill Senior Vice President 48 Mack L. Hogans Senior Vice President 47 Norman E. Johnson Senior Vice President 62 Thomas M. Luthy Senior Vice President 58 William C. Stivers Senior Vice President 57 </TABLE> Item 11. Executive Compensation - -------------------------------- Information with respect to executive compensation included on pages 5 through 13 of the Notice of 1996 Annual Meeting of Shareholders and Proxy Statement dated March 4, 1996 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 4 and 5 of the Notice of 1996 Annual Meeting of Shareholders and Proxy Statement dated March 4, 1996 is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions - -------------------------------------------------------- Information with respect to certain relationships and related transactions included on page 22 of the Notice of 1996 Annual Meeting of Shareholders and Proxy Statement dated March 4, 1996 is incorporated herein by reference. 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, contained in the company's 1995 Annual Report to Shareholders, are incorporated in Part II, Item 8 of this Form 10-K by reference. <TABLE> <CAPTION> Page Number(s) Financial Statement Schedules 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, contained in the company's 1995 Annual Report to Shareholders and incorporated herein by reference. Exhibits: 3 - Articles of Incorporation and Bylaws 10 - Material Contracts (a) Agreement with N. E. Johnson (b) Agreement with W. R. Corbin (c) Agreement with R. C. Gozon 11 - Statement Re: Computation of Per Share Earnings (incorporated by reference to Note 1 of the 1995 Weyerhaeuser Company Annual Report to Shareholders) 13 - Portions of the 1995 Weyerhaeuser Company 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 November 28, 1995, and February 14, 1996, respectively, reporting information under Item 5, Other Events. 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 15, 1996. Weyerhaeuser Company /s/ John W. Creighton, Jr. -------------------------- John W. Creighton, Jr. President 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 15, 1996. /s/ John W. Creighton, Jr. /s/ Don C. Frisbee - -------------------------- ------------------ John W. Creighton, Jr. Don C. Frisbee President, Principal Executive Director Officer and Director /s/ P. M. Hawley /s/ George H. Weyerhaeuser ------------------ - -------------------------- Philip M. Hawley George H. Weyerhaeuser Director Chairman of the Board and Director /s/ Martha R. Ingram /s/ William C. Stivers -------------------- - ---------------------- Martha R. Ingram William C. Stivers Director Principal Financial Officer /s/ John Kieckhefer /s/ Kenneth J. Stancato ------------------- - ----------------------- John I. Kieckhefer Kenneth J. Stancato Director Principal Accounting Officer /s/ William D. Ruckelshaus /s/ William Clapp -------------------------- - ----------------- William D. Ruckelshaus William Clapp Director Diretor /s/ Richard H. Sinkfield /s/ W. John Driscoll ------------------------ - -------------------- Richard H. Sinkfield W. John Driscoll Director 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 12, 1996. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed on page 14 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 12, 1996 16
Weyerhaeuser Company and Subsidiaries FINANCIAL STATEMENT SCHEDULES <TABLE> <CAPTION> Schedule II - Valuation and Qualifying Accounts For the three years ended December 31, 1995 Dollar amounts in millions Balance at Charged Deductions Balance Beginning to from at End Description of Period Income Reserve of Period - ----------- ---------- ------- --------- --------- <S> <C> <C> <C> <C> Weyerhaeuser Reserve deducted from related asset accounts: Doubtful accounts - Accounts receivable 1995 $ 10 $ 2 $ 3 $ 9 ======== ======== ========= ======== 1994 $ 10 $ 4 $ 4 $ 10 ======== ======== ========= ======== 1993 $ 10 $ 7 $ 7 $ 10 ======== ======== ========= ======== Real Estate and Financial Services Reserves and allowances deducted from related asset accounts: Receivables 1995 $ 4 $ 1 $ (2)(1) $ 7 ======== ======== ========= ======== 1994 $ 7 $ 1 $ 4 $ 4 ======== ======== ========= ======== 1993 $ 6 $ 1 $ - $ 7 ======== ======== ========= ======== Mortgage loans receivable 1995 $ 8 $ - $ 6 $ 2 ======== ======== ========= ======== 1994 $ 4 $ 4 $ - $ 8 ======== ======== ========= ======== 1993 $ 19 $ 9 $ 24(2) $ 4 ======== ======== ========= ======== Real estate in process of development and for sale 1995 $ 53 $ - $ 32 $ 21 ======== ======== ========= ======== 1994 $ 56 $ 7 $ 10 $ 53 ======== ======== ========= ======== 1993 $ 77 $ 4 $ 25 $ 56 ======== ======== ========= ======== Land being processed for development 1995 $ 19 $ - $ 1 $ 18 ======== ======== ========= ======== 1994 $ 19 $ 3 $ 3 $ 19 ======== ======== ========= ======== 1993 $ 28 $ - $ 9 $ 19 ======== ======== ========= ======== Investment in and advances to joint ventures and limited partnerships 1995 $ 49 $ - $ 11 $ 38 ======== ======== ========= ======== 1994 $ 57 $ 2 $ 10 $ 49 ======== ======== ========= ======== 1993 $ 66 $ 9 $ 18 $ 57 ======== ======== ========= ======== </TABLE> (1) Includes allowances transferred in on partnership notes that were consolidated. (2) Includes reserves transferred from loans to real estate. 17
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 and Eastern Railroad Company Arkansas 100 Fisher Lumber Company California 100 Golden Triangle Railroad Mississippi 100 Green Arrow Motor Express Company Delaware 100 J.H. Hamlen & Son, Inc. Arkansas 100 Mississippi & Skuna Valley Railroad Company Mississippi 100 Mountain Tree Farm Company Washington 50 North Pacific Paper Corporation Delaware 80 NORPAC Sales Corporation Guam 100 Oregon, California & Eastern Railway Company Nevada 100 Pacific Veneer, Ltd. Washington 90 Shemin Nurseries, Inc. Delaware 100 Texas, Oklahoma & Eastern Railroad Company Oklahoma 100 United Structures, Inc. California 100 Westwood Shipping Lines, Inc. Washington 100 Weycomp Claims Management Service, Inc. Texas 100 Weyerhaeuser Construction Company Washington 100 Weyerhaeuser Financial Services, Inc. Delaware 100 CMO Finance Corp. Nevada 100 MJ Finance Corporation California 100 Mortgage Securities II Corporation Nevada 100 Mortgage Securities III Corporation Nevada 100 Mortgage Securities IV Corporation Nevada 100 R4 Participant Corporation Nevada 100 ver Bes' Insurance Company Vermont 100 de Bes' Insurance Ltd. Bermuda 100 Weyerhaeuser Mortgage Company California 100 Mason-McDuffie Mortgage Corporation Delaware 100 Mason-McDuffie Service Corporation California 100 Westwood Associates California 100 Westwood Insurance Agency California 100 Westwood Insurance Agency of Arizona, Inc. Arizona 100 WMC Mortgage Co. International California 100 WMC Finance Corp. I California 100 </TABLE> 18
Weyerhaeuser Company and Subsidiaries Exhibit 22 Subsidiaries of the Registrant - Continued <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 Gudig Abfall, Inc. California 100 Kachura Finance Corp. California 100 Laurel Real Estate Development, Inc. California 100 McGNT Finance Corp. California 100 Pass-Through Finance Corp. California 100 RFS Development Corporation California 100 RFS Finance Corp. California 100 RFS Insurance Agency California 100 RFS Service Corporation California 100 R. J. Plaza II, Inc. Nevada 100 Trimark Development Company California 100 Trimark Realty Advisors, Inc. California 100 Woodland Hills Properties-W., Inc. Nevada 100 Monthill, Inc. California 100 Placer Business Center, Inc. California 100 Terman Properties, Inc. California 100 WVC II, Inc. Nevada 100 Weyerhaeuser Venture Company Nevada 100 Las Positas Land Co. California 100 WAMCO, Inc. Nevada 100 Weyerhaeuser Realty Investors, Inc. Washington 100 Weyerhaeuser Forestlands International, Inc. Washington 100 Weyerhaeuser International, Inc. Washington 100 Weyerhaeuser Canada Ltd. Canada 100 Saskatoon Chemicals Ltd. Canada 100 Weyerhaeuser Saskatchewan Ltd. Canada 100 Weyerhaeuser China, Ltd. Washington 100 Weyerhaeuser GMBH Germany 100 Weyerhaeuser (Far East) Limited Hong Kong 100 Weyerhaeuser Italia, S.r.l. Italy 100 Weyerhaeuser Japan Ltd. Japan & Delaware 100 Weyerhaeuser Korea, Ltd. Korea 100 Weyerhaeuser Taiwan Ltd. Delaware 100 Weyerhaeuser, S.A. Panama 100 </TABLE> 19
Weyerhaeuser Company and Subsidiaries Exhibit 22 Subsidiaries of the Registrant - Continued <TABLE> <CAPTION> Percentage State or Ownership of Country of Immediate Name Incorporation Parent - ------------------------------------------- ------------- ------------ <S> <C> <C> Weyerhaeuser International Sales Corp. Guam 100% Weyerhaeuser (Mexico) Inc. Washington 100 Weyerhaeuser Midwest, Inc. Washington 100 Weyerhaeuser Overseas Finance Co. 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 The Quadrant Corporation Washington 100 Quadrant Real Estate Services, Inc. Washington 100 South Jersey Assets, Inc. New Jersey 100 Scarborough Constructors, Inc. Florida 100 TMI, Inc. Texas 100 Weyerhaeuser Real Estate Company of Nevada Nevada 100 Winchester Homes, Inc. Delaware 100 SC-WHI, Inc. Delaware 100 The Wray Company Arizona 100 </TABLE> 20
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 No. 33-52789 on Form S-3 and Nos. 33-60527, 33- 60531, 33-60529, 33-60521, 33-60525, 33-60519, 33-25928, 33-24385, 33-24979, 33-31622, 33-34460, 33-47392, 2-88109 and 333-01565 on Form S-8. ARTHUR ANDERSEN LLP Seattle, Washington, March 15, 1996 21