e10-k405
Table of Contents

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 30, 2001 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)

Federal Way, Washington 98063-9777
Telephone (253) 924-2345
 
Securities registered pursuant to Section 12(b) of the Act:

     
Title of Each Class   Name of Each Exchange on 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 1, 2002, 216,679,968 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 $12,552,271,000.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Shareholders for the fiscal year ended December 30, 2001, are incorporated by reference into Parts I, II and IV.

Portions of the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2002 Annual Meeting of Shareholders to be held April 16, 2002 are incorporated by reference into Part III.

 

TABLE OF CONTENTS

PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART III
Item 5. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Information
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
SIGNATURES
EXHIBIT INDEX
EXHIBIT 10(F)
EXHIBIT 13
EXHIBIT 21

Table of Contents

Weyerhaeuser Company and Subsidiaries

TABLE OF CONTENTS

           
  Page No.
 
Part I
 
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   14  
Item 12. Security Ownership of Certain Beneficial Owners and Management   14
Item 13. Certain Relationships and Related Transactions   14  
 
Part IV
 
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K   15  
 
  Signatures   17
 
  Report of Independent Public Accountants on Financial Statement Schedules   18  
  Schedule II      Valuation and Qualifying Accounts   19
 
 

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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 18 through 24 and 26 through 30, Description of the Business of the Company, contained in the company’s 2001 Annual Report to Shareholders, is incorporated herein by reference.

Financial information with respect to industry segments and geographical areas, included in Notes 23 and 24 of Notes to Financial Statements contained in the company’s 2001 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 North America, most of it highly productive and located extremely well to serve both domestic and international markets. The company also has renewable, long-term licenses on 32.6 million acres of forestland located in five provinces throughout Canada that are managed by our Canadian operations. The standing timber inventory on these lands is approximately 400 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.

                                           
      Inventory   Thousands of Acres at December 30, 2001
     
 
      Millions   Fee   Long-term   License        
      of Cunits   Ownership   Leases   Arrangements   Total
     
 
 
 
 
Geographic Area
                                        
United States
                                        
 
West
     51       1,927       —       —       1,927  
 
South
     46       3,344       489       —       3,833  
       
     
     
     
     
 
Total United States
     97       5,271       489       —       5,760  
       
     
     
     
     
 
Canada
                                        
 
Alberta
     99       —       —       7,500       7,500  
 
British Columbia
     130       663       —       6,049       6,712  
 
New Brunswick
     1       —       —       177       177  
 
Ontario
     71       1       —       6,665       6,666  
 
Saskatchewan
     2       —       —       12,214       12,214  
       
     
     
     
     
 
Total Canada
     303       664       —       32,605 (1)     33,269  
       
     
     
     
     
 
International(2)
     3       183       25       77       285  
       
     
     
     
     
 
TOTAL
     403       6,118       514       32,682       39,314  
       
     
     
     
     
 

(1)   Includes approximately 23 million acres of productive forestland.
(2)   Includes Weyerhaeuser percentage ownership of timberlands owned and managed through joint ventures.
 

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PART I

Item 1. Business — continued

                                           
                              Thousands of Acres
      Thousands of Acres   Millions of  
     
  Seedlings   Stocking
      Harvested(1)   Planted   Planted   Control   Fertilization
     
 
 
 
 
2001 Activity
                                        
United States
                                        
 
West
     38.1       35.3       18.8       6.9       104.2  
 
South
     98.4       69.2       38.7       3.3       472.1  
       
     
     
     
     
 
Total United States
     136.5       104.5       57.5       10.2       576.3  
       
     
     
     
     
 
Canada
                                        
 
Alberta
     26.3       19.8       11.9       10.2       —  
 
British Columbia
     32.5       38.5       18.9       0.4       35.7  
 
Ontario
     28.2       31.6       23.4       0.4       —  
 
Saskatchewan
     35.8       13.0       7.3       3.0       —  
       
     
     
     
     
 
Total Canada
     122.8       102.9       61.5       14.0       35.7  
       
     
     
     
     
 
International(2)
     4.7       19.6       8.6       10.2       9.8  
       
     
     
     
     
 
TOTAL
     264.0       227.0       127.6       34.4       621.8  
       
     
     
     
     
 
                                         
Sales volumes (millions):   2001   2000   1999   1998   1997
 
 
 
 
 
Raw materials — cubic ft.
     542       640       287       259       235  
                                           
Selected product prices:   2001   2000   1999   1998   1997
 
 
 
 
 
Export logs (#2 sawlog-bark on) — $/MBF
                                        
 
Cascade — Douglas fir
   $ 844     $ 925     $ 829     $ 807     $ 978  
 
Coastal — Hemlock
     398       545       532       519       628  
 
Coastal — Douglas fir
     774       925       828       808       981  

Wood Products

The company’s wood products businesses produce and sell softwood lumber, plywood and veneer; oriented strand board, composite and other panels; engineered lumber; hardwood lumber 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.

(1)   Includes 2.1 thousand acres of right-of-way and other harvest that does not require planting.
(2)   Includes Weyerhaeuser percentage ownership of timberlands owned and managed through joint ventures.
 

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PART I

Item 1. Business— continued

                                         
Sales volumes (millions)(1):   2001   2000   1999   1998   1997
 
 
 
 
 
Softwood lumber — board ft.
     7,196       7,303       5,734       4,995       4,869  
Softwood plywood and veneer — sq. ft. (3/8")
     1,897       2,133       1,902       1,842       2,042  
Composite panels — sq. ft. (3/4")
     253       379       410       586       551  
Oriented strand board — sq. ft. (3/8")
     3,738       3,634       2,716       2,697       2,462  
Hardwood lumber — board ft.
     413       423       397       339       362  
Raw materials — cubic ft.
     309       369       305       315       325  
                                           
Selected product prices:   2001   2000   1999   1998   1997
 
 
 
 
 
Lumber (common) — $/MBF
                                        
 
2x4 Douglas fir (kiln dried)
   $ 334     $ 341     $ 408     $ 340     $ 418  
 
2x4 Douglas fir (green)
     297       314       384       315       381  
 
2x4 Southern yellow pine (kiln dried)
     325       339       413       395       453  
 
2x4 Spruce-pine-fir (kiln dried)
     250       257       342       288       354  
Plywood (1/2" CDX) — $/MSF
                                        
 
West
     294       300       369       305       312  
 
South
     263       264       320       280       261  
Oriented strand board (7/16"-24/16)
                                        
 
North Central price — $/MSF
     160       206       262       203       142  

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 (thousands) (1):   2001   2000   1999   1998   1997
 
 
 
 
 
Pulp — air-dry metric tons
     2,113       2,129       2,273       2,012       1,982  
Paper — tons(2)
     1,507       1,589       1,460       1,181       1,146  
Paperboard — tons
     243       255       248       236       243  
Containerboard — tons
     883       1,055       576       323       389  
Packaging — MSF
     49,533       53,602       46,483       44,299       44,508  
Newsprint — metric tons(3)
     —       —       —       62       684  
Recycling — tons
     2,837       3,177       2,785       2,546       2,229  

(1)   Reflects the acquisition of MacMillan Bloedel in November 1999.
(2)   Reflects the acquisition of the Dryden, Ontario, fine paper mill in October 1998.
(3)   Reflects the change in ownership of the North Pacific Paper Corporation (NORPAC) newsprint facility from a fully consolidated subsidiary to an equity affiliate in February 1998.
 

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PART I

Item 1. Business — continued

                                         
Selected product prices (per ton):   2001   2000   1999   1998   1997
 
 
 
 
 
Pulp — NBKP-air-dry metric-U.S.
   $ 531     $ 681     $ 520     $ 516     $ 566  
Paper — uncoated free sheet-U.S.
     695       730       646       665       740  
Linerboard — 42 lb.-Eastern U.S.
     424       453       383       354       326  
Newsprint — metric-West Coast U.S.
     576       562       512       588       550  
Recycling — old corrugated containers
     40       79       67       54       76  
Recycling — old newsprint
     36       57       33       22       15  

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:

                                           
      2001   2000   1999   1998   1997
     
 
 
 
 
Units closed:
                                        
 
Single-family units(1)
     3,651       3,369       3,561       3,089       2,914  
 
Multi-family units(1)
     160       216       —       276       324  
 
Residential lots(1)
     1,103       1,391       4,297       2,455       1,988  
 
                                        
Amounts in millions:
                                        
 
Single-family loan originations(2)
   $ —     $ —     $ —     $ —     $ 1,168  

(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.
 

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PART I

Item 2. Properties

Timberlands

Timberlands annual log production (in millions):

                                         
    2001   2000   1999   1998   1997
   
 
 
 
 
Logs — cubic ft.
     665       792       521       495       476  
Fee depletion — cubic ft.
     767       721       634       585       541  

Wood Products

Production capacities, facilities and annual production, which reflect the acquisition of MacMillan Bloedel in November 1999 and the sale of the Marshfield Door business in 2000, are summarized by major product as follows (millions):

                                                         
            Number                                        
    Production   of                                        
    Capacity   Facilities   2001   2000   1999   1998   1997
   
 
 
 
 
 
 
Softwood lumber — board ft.
     5,997       37       5,381       5,645       4,532       4,025       3,968  
Softwood plywood and veneer — sq. ft. (3/8")
     1,589       9       1,099       1,340       1,065       960       1,092  
Composite panels — sq. ft. (3/4") (1)
     120       2       93       206       281       510       478  
Oriented strand board — sq. ft. (3/8")
     4,025       9       3,443       3,438       2,452       2,179       2,041  
Hardwood lumber — board ft.
     436       13       410       397       376       342       345  
Logs — cubic ft.
     —       —       499       490       572       526       519  

Principal manufacturing facilities are located as follows:

Softwood lumber and plywood(2)

Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, Oregon, Washington; Alberta, British Columbia, Ontario and Saskatchewan, Canada; and Durango, Mexico

Oriented strand board

Michigan, North Carolina, West Virginia; Alberta, New Brunswick, Ontario and Saskatchewan, Canada

Composite panels(2)

British Columbia, Canada; and Durango, Mexico

Engineered lumber

Alabama, California, Georgia, Kentucky, Louisiana, Minnesota, Ohio, Oregon, West Virginia; Alberta, British Columbia and Ontario, Canada

Hardwood lumber

Arkansas, Michigan, Oklahoma, Oregon, Pennsylvania, Washington, Wisconsin; and British Columbia, Canada

(1)   Reflects sale of Marshfield, Wisconsin mill in 2000.
(2)   Durango, Mexico facility sold in January 2002.
 

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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):

                                                         
            Number                                        
    Production   of                                        
    Capacity   Facilities   2001   2000   1999   1998   1997
   
 
 
 
 
 
 
Pulp — air-dry metric tons
     2,350       9       2,140       2,282       2,219       1,971       2,063  
Paper — tons(1)
     1,649       6       1,455       1,603       1,511       1,235       1,128  
Paperboard — tons
     260       1       240       261       251       237       231  
Containerboard — tons(2)
     4,219       8       3,699       3,578       2,622       2,291       2,381  
Packaging — MSF(2)
     72,000       60       52,202       56,694       48,758       46,410       46,488  
Newsprint — metric tons(3)
     —       —       —       —       —       69       704  
Recycling — tons
     —       23       4,726       4,448       4,287       3,833       3,655  

Principal manufacturing facilities are located as follows:

Pulp

Georgia, Mississippi, North Carolina, Washington; Alberta, British Columbia, Ontario and Saskatchewan, Canada

Paper

Mississippi, North Carolina, Washington, Wisconsin; Ontario and Saskatchewan, Canada

Paperboard

Washington

Containerboard

Alabama, Iowa, Kentucky, North Carolina, Oklahoma, Oregon; and Ontario, Canada

Packaging

Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oregon, Tennessee, Texas, Virginia, Washington, Wisconsin; and Guanajuato, Mexico

Recycling

Arizona, California, Colorado, Illinois, Iowa, Kansas, Maryland, Minnesota, Nebraska, 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 acquisition of MacMillan Bloedel in November 1999.
(3)   Reflects the change in ownership of the North Pacific Paper Corporation (NORPAC) newsprint facility from a fully consolidated subsidiary to an equity affiliate in February 1998.
 

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PART I

Item 2. Properties - continued

Real Estate and Related Assets

Single-family housing

California, Maryland, Nevada, Texas, Virginia and Washington

Residential land development

California, Maryland, Nevada, Texas, Virginia and Washington

Mortgage securities

Washington

Commercial development

California and Washington

Real estate investments

Arizona, California, Colorado, Nevada, Oregon and Washington
 

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Weyerhaeuser Company and Subsidiaries

PART I

Item 3. Legal Proceedings

The company entered into a class action settlement of hardboard siding claims against the company that was approved by the Superior Court, San Francisco County, California, in December 2000. The settlement class consists of all persons who own or owned structures in the United States on which the company’s hardboard siding had been installed from January 1, 1981 through December 31, 1999. In February 2001, two named intervenors and objectors filed a notice of appeal from the order granting final approval to the class action settlement. The company has established reserves to cover the estimated cost of the settlement and related costs. At the end of the fourth quarter of 2001, the company is a defendant in 14 cases involving primarily multi-family structures and residential developments. The company anticipates that other individuals and entities that have opted out of the settlement may file lawsuits against the company. In January 2002, a jury returned a verdict in favor of the company in a lawsuit involving hardboard siding manufactured by the company and installed by a developer in a residential development located in Modesto, California.

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. In October 2000, the court denied motions to dismiss the suits that had been filed by the company and the other defendants. The company and other defendants have appealed the class certification decision to the 3rd Circuit Court of Appeals.

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 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. Both the Committee and the company have filed motions for summary judgment, which are pending.

Following the expiration of a five-year agreement between the United States and Canada, on April 2, 2001, the Coalition for Fair Lumber Imports (Coalition) filed a petition with the U.S. Department of Commerce (Department) and the International Trade Commission (ITC), claiming that imports of softwood lumber from Canada were being subsidized by Canada and were being “dumped” into the U.S. market (sold at less than fair value). The Coalition asked that countervailing duty (CVD) and antidumping tariffs be imposed on softwood lumber imported from Canada. In August 2001, the Department issued a preliminary finding that certain Canadian provinces were subsidizing logs by collecting below-market stumpage payments and declared a preliminary CVD rate of 19.3 percent retroactive to May 18, 2001. The preliminary CVD expired on December 15, 2001. The company has accrued for the estimated cost of the CVD. The Department also requested that Weyerhaeuser and five other Canadian companies provide data for the antidumping investigation. In its preliminary ruling issued on October 30, 2001, the Department found that the company had engaged in dumping and set a preliminary “dumping margin” for the company of 11.93 percent. The company intends to contest the Department’s finding that it has engaged in dumping but will now post a bond or cash to cover the estimated amount for the duties that would be collected in the event it is finally determined that dumping did occur. As of December 30, 2001, the company had accrued $50 million based on the preliminary CVD rate and antidumping margin. A final ruling on both the CVD and antidumping cases, which is expected during the second quarter of 2002, will contain the determination of whether to make the CVD and antidumping duties final and, if so, at what levels. The Department would then conduct periodic reviews over the following five years to determine whether the company had engaged in dumping and whether Canada continued to subsidize softwood logs and, if

 

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PART I

Item 3. Legal Proceedings - continued

so, the dumping margin and CVD to impose. At the end of five years, both the countervailing duty and antidumping orders would be automatically reviewed in a “sunset” proceeding to determine whether dumping or a countervailing subsidy would be likely to continue or recur. The company believes that the controversy has created some volatility and uncertainty in the marketplace but has not had a material adverse effect on our results of operations. There can be no assurance, however, that if a permanent CVD or antidumping duty is imposed, it will not have a material adverse effect on the company’s results of operations in the future.

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 Environmental Protection Agency (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 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 30, 2001.

 

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PART II

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 25 and 26 of Notes to Financial Statements in the company’s 2001 Annual Report to Shareholders, is incorporated herein by reference.

Item 6. Selected Financial Data

Information with respect to selected financial data included in Note 26 of Notes to Financial Statements in the company’s 2001 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 28-37 of the company’s 2001 Annual Report to Shareholders, is incorporated herein by reference.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

Information with respect to market risk of financial instruments included on pages 35-36 of the company’s 2001 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 2001 Annual Report to Shareholders, are incorporated herein by reference.

         
    Page(s) in
    Annual Report
    to Shareholders
   
Report of Independent Public Accountants
     38  
Consolidated Statement of Earnings
     39  
Consolidated Balance Sheet
     40-41  
Consolidated Statement of Cash Flows
     42-43  
Consolidated Statement of Shareholders’ Interest
     44  
Notes to Financial Statements
     45-69  
Selected Quarterly Financial Information (Unaudited)
     67  

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

 

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PART III

Item 10.  Directors and Executive Officers of the Registrant

Information with respect to Directors of the company included on pages 2 through 4 of the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2002 Annual Meeting of Shareholders to be held April 16, 2002, is incorporated herein by reference. Information with regard to executive officers of the company contained in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2002 Annual Meeting of Shareholders to be held April 16, 2002, under headings “Section 16(a) Beneficial Ownership Reporting Compliance” and “Change in Control and Severance Agreements” is incorporated herein by reference.

The executive officers of the company are as follows:

             
Name   Title   Age
 
 
Marvin D. Cooper   Senior Vice President     58  
William R. Corbin   Executive Vice President     60  
C. William Gaynor   Senior Vice President     61  
Richard C. Gozon   Executive Vice President     63  
Richard E. Hanson   Executive Vice President     58  
Steven R. Hill   Senior Vice President     54  
Mack L. Hogans   Senior Vice President     53  
James R. Keller   Senior Vice President     52  
Michael R. Onustock   Senior Vice President     62  
Steven R. Rogel   President     59  
William C. Stivers   Executive Vice President     63  
George H. Weyerhaeuser, Jr.   Senior Vice President     48  

Marvin D. Cooper has been senior vice president, Pulp, Paper and Containerboard Manufacturing and Engineering, since February 2002. He has been executive vice president, Pulp and Paper Mills, for Willamette Industries, Inc., an affiliate of the company, from 1998 and was senior vice president, Pulp and Paper Mills for Willamette from 1997 to 1998. Prior to 1997, he held a number of management positions at Willamette in its pulp and fine paper businesses. He joined Willamette in 1980.

William R. Corbin has been executive vice president, Wood Products, since 1999. From 1995 to 1999, he was executive vice president, Timberlands and Distribution, and from 1992, when he joined the company, to 1995 he was executive vice president, Wood Products.

C. William Gaynor has been senior vice president, Canada, of Weyerhaeuser since 1999 and has been president and chief executive officer of Weyerhaeuser Company Limited, a subsidiary of the company, since 1998. He joined the company in 1974 and has held numerous management positions and served as vice president and general manager — Saskatchewan Division of Weyerhaeuser Canada Ltd., the predecessor of Weyerhaeuser Company Limited, from 1987 to 1998.

Richard C. Gozon has been executive vice president, Pulp, Paper and Packaging, since 1994 when he joined the company. Prior to joining Weyerhaeuser, he was president and chief operating officer of Alco Standard Corporation (a distributor of paper and office equipment).

Richard E. Hanson has been executive vice president, Timberlands, since February 2002 and was senior vice president, Timberlands, since 1999. He was vice president, Western Timberlands, from 1996 to 1998. He joined Weyerhaeuser in 1970 and has held numerous management positions in the timberlands, wood products and paper businesses.

Steven R. Hill has been senior vice president, Human Resources, since 1990 and was vice president, Human Resources, from 1986 to 1990. He joined Weyerhaeuser as a forester in 1968, and joined Corporate Human Resources in 1980.

 

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PART III

Item 10. Directors and Executive Officers of the Registrant — continued

Mack L. Hogans has been senior vice president, Corporate Affairs, since 1995 and was vice president of Government Affairs from 1990 to 1995. He was the director of Government Affairs and public policy issues management from 1986 to 1990. He joined Weyerhaeuser in 1979 and has been a forester, branch manager for the Building Materials business and a government affairs manager.

James R. Keller has been senior vice president, Containerboard Packaging and Recycling, since February 18, 2002. From 1997 to 2002, he was vice president and general manager, Containerboard Packaging and Recycling. He joined Weyerhaeuser in 1974 and has held numerous management positions in containerboard, newsprint and bleached paperboard, shipping containers and timberlands.

Michael R. Onustock has been senior vice president, Pulp and White Paper, since February 18, 2002. He has been executive vice president, Pulp and Fine Paper Marketing for Willamette Industries, Inc., an affiliate of the company, since 1989 and was vice president, Paper Group, for Willamette from 1980 to 1988. Prior to 1980, he held a number of management positions at Willamette in its pulp, paper and board businesses. He joined Willamette in 1973 following 11 years as containerboard sales manager with Boise Cascade.

Steven R. Rogel’s biography may be found on page 4 of the Notice of 2002 Annual Meeting of Shareholders and Proxy Statement for the company’s 2002 Annual Meeting of Shareholders to be held April 16, 2002, which is incorporated herein by reference.

William C. Stivers has been executive vice president and chief financial officer since 1998 and was senior vice president and chief financial officer from 1990 to 1998. He joined the company in 1970 and has held numerous management positions in finance with both the company and its subsidiaries.

George H. Weyerhaeuser, Jr. has been senior vice president, Technology, since 1998 and was president and chief executive officer of Weyerhaeuser Canada Ltd. from 1993 to 1998. From 1990 to 1993, he was vice president, Manufacturing, Pulp, Paper and Packaging. He joined Weyerhaeuser in 1978 and has held various positions, including sawmill supervisor, vice president and mill manager for Containerboard, Pulp, Paper and Packaging.

Item 11. Executive Compensation

Information with respect to executive compensation contained in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2002 Annual Meeting of Shareholders to be held April 16, 2002, under the headings “Directors’ Compensation,” “Compensation Committee Report on Executive Management Compensation,” “Compensation Committee Interlocks and Insider Participation” and at pages 12 through 15, 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 contained in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2002 Annual Meeting of Shareholders to be held April 16, 2002 under the heading “Beneficial Ownership of Common Shares” is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

Information with respect to certain relationships and related transactions contained in the Notice of Annual Meeting of Shareholders and Proxy Statement for the company’s 2002 Annual Meeting of Shareholders to be held April 16, 2002 under the heading “Transactions and Relationships” is incorporated herein by reference.

 

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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 2001 Annual Report to Shareholders, are incorporated in Part II, Item 8 of this Form 10-K by reference.

         
    Page Number(s)
Financial Statement Schedules   in Form 10-K
 
Report of Independent Public Accountants on Financial Statement Schedules
     18  
Schedule II — Valuation and Qualifying Accounts
     19  

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 2001 Annual Report to Shareholders and incorporated herein by reference.

Exhibits:

             
3   -   (i)   Articles of Incorporation (incorporated by reference to 1999 Form 10-K filed with the Securities and Exchange Commission on March 10, 2000 — Commission File Number 1-4825)
        (ii)   Bylaws (incorporated by reference to 2000 Form 10-K filed with the Securities and Exchange Commission on March 16, 2001 — 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 (incorporated by reference to 1999 Form 10-K filed with the Securities and Exchange Commission on March 10, 2000 - Commission File Number 1-4825)
        (f)   Description of the Weyerhaeuser Company Option Exercise/Share Purchase Program
        (g)   Agreement and Plan of Merger dated as of January 28, 2002, by and among Weyerhaeuser Company, a Washington corporation, Company Holdings, Inc., a Washington corporation and a wholly owned subsidiary of Weyerhaeuser Company, and Willamette Industries, Inc., an Oregon corporation (incorporated by reference to Exhibit (a)(5)(QQQ) to Amendment No. 70 to Schedule TO filed by Weyerhaeuser Company and Company Holdings, Inc. on January 29, 2002)
        (h)   364-Day Revolving Credit Facility Agreement, dated as of February 8, 2002, among Weyerhaeuser Company, Weyerhaeuser Real Estate Company, the Lenders named therein, JPMorgan Chase Bank, as administrative agent, Morgan Stanley Senior Funding, Inc., as syndication agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex. Brown Inc., as co-documentation agents (incorporated by reference to Exhibit (b)(5) to Amendment No. 73 to Schedule TO filed by Weyerhaeuser Company and Company Holdings, Inc. on February 11, 2002)
 

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PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K — continued

             
10   -   Material Contracts — continued
        (i)   Bridge Revolving Credit Facility Agreement, dated as of February 8, 2002, among Weyerhaeuser Company, the Lenders named therein, JPMorgan Chase Bank, as administrative agent, Morgan Stanley Senior Funding, Inc., as syndication agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex. Brown Inc., as co-documentation agents (incorporated by reference to Exhibit (b)(6) to Amendment No. 73 to Schedule TO filed by Weyerhaeuser Company and Company Holdings, Inc. on February 11, 2002)
        (j)   Competitive Advance and Revolving Credit Facility Agreement, dated as of February 8, 2002, among Weyerhaeuser Company, the Lenders named therein, JPMorgan Chase Bank, as administrative agent, Morgan Stanley Senior Funding, Inc., as syndication agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex. Brown Inc., as co-documentation agents (incorporated by reference to Exhibit (b)(7) to Amendment No. 73 to Schedule TO filed by Weyerhaeuser Company and Company Holdings, Inc. on February 11, 2002)
11   -   Statement Re: Computation of Per Share Earnings (incorporated by reference to Note 2 of Notes to Financial Statements in the company’s 2001 Annual Report to Shareholders)
13   -   Portions of the company’s 2001 Annual Report to Shareholders specifically incorporated by reference herein
21   -   Subsidiaries of the Registrant
23   -   Consent of Independent Public Accountants

Reports on Form 8-K

The registrant filed reports on Form 8-K dated October 3, 2001; October 25, 2001; January 24, 2002; January 29, 2002; and February 26, 2002 reporting information under Item 5, Other Events.

 

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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 February 27, 2002.

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 February 27, 2002.

     
/s/ Steven R. Rogel   /s/ John I. Kieckhefer
 
Steven R. Rogel
President, Principal Executive Officer,
Director and Chairman of the Board		   John I. Kieckhefer
Director
 
/s/ William C. Stivers   /s/ Arnold G. Langbo
 
William C. Stivers
Principal Financial Officer		   Arnold G. Langbo
Director
 
/s/ Steven J. Hillyard   /s/ Donald F. Mazankowski
 
Steven J. Hillyard
Principal Accounting Officer		   Donald F. Mazankowski
Director
 
/s/ W. John Driscoll   /s/ William D. Ruckelshaus
 
W. John Driscoll
Director		   William D. Ruckelshaus
Director
 
/s/ R. F. Haskayne   /s/ Richard H. Sinkfield
 
Richard F. Haskayne
Director		   Richard H. Sinkfield
Director
 
/s/ Robert J. Herbold   /s/ James N. Sullivan
 
Robert J. Herbold
Director		   James N. Sullivan
Director
 
/s/ Martha R. Ingram  
 
Martha R. Ingram
Director		   Clayton K. Yeutter
Director
 

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FINANCIAL STATEMENT SCHEDULES

Report of Independent Public Accountants on Financial Statement Schedules

To Weyerhaeuser Company:

We have audited in accordance with auditing standards generally accepted in the United States, the financial statements included in Weyerhaeuser Company’s annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 11, 2002. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule shown on page 19 is the responsibility of the company’s management and is presented for purposes of complying with the Securities and Exchange Commission’s rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

  ARTHUR ANDERSEN LLP

Seattle, Washington,
February 11, 2002

 

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FINANCIAL STATEMENT SCHEDULES

Schedule II - Valuation and Qualifying Accounts

For the three years ended December 30, 2001
Dollar amounts in millions

                                     
                      Deductions        
      Balance at           from/   Balance at
      Beginning   Charged to   (Additions to)   End of
Description   of Period   Income   Reserve   Period
 
 
 
 
Weyerhaeuser
                                
Reserve deducted from related asset accounts:
                                
Doubtful accounts — Accounts receivable
                                
 
2001
   $ 5     $ 16     $ 13     $ 8  
     
     
     
     
 
 
2000
   $ 10     $ 4     $ 9     $ 5  
     
     
     
     
 
 
1999
   $ 5     $ 6     $ 1 (1)   $ 10  
     
     
     
     
 
Real Estate and Related Assets
                                
Reserves and allowances deducted from related asset accounts:
                                
Receivables
                                
 
2001
   $ 5     $ 1     $ 1 (2)   $ 5  
     
     
     
     
 
 
2000
   $ 7     $ —     $ 2     $ 5  
     
     
     
     
 
 
1999
   $ 6     $ 2     $ 1 (3)   $ 7  
     
     
     
     
 
Mortgage-related financial instruments
                                
 
2001
   $ 3     $ —     $ 1 (4)   $ 2  
     
     
     
     
 
 
2000
   $ 3     $ —     $ —     $ 3  
     
     
     
     
 
 
1999
   $ 9     $ —     $ 6     $ 3  
     
     
     
     
 
Investments in unconsolidated entities
                                
 
2001
   $ 1     $ —     $ (1 )(5)   $ 2  
     
     
     
     
 
 
2000
   $ 3     $ —     $ 2     $ 1  
     
     
     
     
 
 
1999
   $ 4     $ —     $ 1 (6)   $ 3  
     
     
     
     
 

(1)   Includes additional allowances of $4 million in the MacMillan Bloedel acquisition.
(2)   Includes allowances transferred to partnership investments.
(3)   Includes allowances transferred from partnership investments.
(4)   Includes allowances transferred to accrued liabilities.
(5)   Includes allowances transferred from receivables.
(6)   Includes the net of allowances transferred to receivables from other assets.
 

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EXHIBIT INDEX

Exhibits:

             
3   -   (iii)   Articles of Incorporation (incorporated by reference to 1999 Form 10-K filed with the Securities and Exchange Commission on March 10, 2000 — Commission File Number 1-4825)
  (iv)   Bylaws (incorporated by reference to 2000 Form 10-K filed with the Securities and Exchange Commission on March 16, 2001 — 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 (incorporated by reference to 1999 Form 10-K filed with the Securities and Exchange Commission on March 10, 2000 - Commission File Number 1-4825)
        (f)   Description of the Weyerhaeuser Company Option Exercise/Share Purchase Program
        (g)   Agreement and Plan of Merger dated as of January 28, 2002, by and among Weyerhaeuser Company, a Washington corporation, Company Holdings, Inc., a Washington corporation and a wholly owned subsidiary of Weyerhaeuser Company, and Willamette Industries, Inc., an Oregon corporation (incorporated by reference to Exhibit (a)(5)(QQQ) to Amendment No. 70 to Schedule TO filed by Weyerhaeuser Company and Company Holdings, Inc. on January 29, 2002)
        (h)   364-Day Revolving Credit Facility Agreement, dated as of February 8, 2002, among Weyerhaeuser Company, Weyerhaeuser Real Estate Company, the Lenders named therein, JPMorgan Chase Bank, as administrative agent, Morgan Stanley Senior Funding, Inc., as syndication agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex. Brown Inc., as co-documentation agents (incorporated by reference to Exhibit (b)(5) to Amendment No. 73 to Schedule TO filed by Weyerhaeuser Company and Company Holdings, Inc. on February 11, 2002)
        (i)   Bridge Revolving Credit Facility Agreement, dated as of February 8, 2002, among Weyerhaeuser Company, the Lenders named therein, JPMorgan Chase Bank, as administrative agent, Morgan Stanley Senior Funding, Inc., as syndication agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex. Brown Inc., as co-documentation agents (incorporated by reference to Exhibit (b)(6) to Amendment No. 73 to Schedule TO filed by Weyerhaeuser Company and Company Holdings, Inc. on February 11, 2002)
        (j)   Competitive Advance and Revolving Credit Facility Agreement, dated as of February 8, 2002, among Weyerhaeuser Company, the Lenders named therein, JPMorgan Chase Bank, as administrative agent, Morgan Stanley Senior Funding, Inc., as syndication agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex. Brown Inc., as co-documentation agents (incorporated by reference to Exhibit (b)(7) to Amendment No. 73 to Schedule TO filed by Weyerhaeuser Company and Company Holdings, Inc. on February 11, 2002)
11   -   Statement Re: Computation of Per Share Earnings (incorporated by reference to Note 2 of Notes to Financial Statements in the company’s 2001 Annual Report to Shareholders)
13   -   Portions of the company’s 2001 Annual Report to Shareholders specifically incorporated by reference herein
21   -   Subsidiaries of the Registrant
 

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EXHIBIT INDEX

     23   –   Consent of Independent Public Accountants

 

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