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1、CARBON DIOXIDE+WATER+SUNLIGHTCHLOROPHYLLGLUCOSE+OXYGENWEYERHAEUSER 2007 ANNUAL REPORT AND FORM 10-KITS CALLED PHOTOSYNTHESISTHERE IS A FORMULA FOR SUCCESS AT WEYERHAEUSER.AND ITS THE BASIS FOR NEARLY ALL LIFE ON THIS PLANET,INCLUDING THE LIFE AT THE CORE OF THIS COMPANY TREES.WE KNOW HOW TO MAKE THE
2、 MOST OF THIS FORMULA.OUR FOCUS ON SCIENCE AND TECHNOLOGY IS UNIQUE IN THE INDUSTRY.WERE EXPERTS AT MANAGING SUSTAINABLE FORESTS,AND WE UNDERSTAND HOW TO USE THIS RESOURCE TO FIND INNOVATIVE SOLUTIONS FOR A CHANGING WORLD.HERES HOW WE DO IT.WOOD PRODUCTSthat we manufacture optimizethe natural streng
3、th of wood fi ber to improve performance and minimize waste.We use proprietary combinations of sound-WWWWWeWex-ray,laser and mechanical technologies wawawaw v v vev v,x-ra ax-ratailed information about the structuralto o o o r re eve e e eal dedede eta a atataof our products,such as density,ch h h h
4、ararar rararacacteteri r ststst tic c c c cs s o o ofrp-resistance.Were expertsststststs rerere ere engng g g gthth a a a a andndndndn w wararp prp of wood,right down toi i i in the propepepepepert rt rt rt rt r ie ie e ie ie es s s s s s os o,and we make the the cellularar r r l l le e eve el,knowl
5、edge.most t t t of f f f that k kHOMESnenenenenen e edede e t t t thahahah h h h t t t soso o ososoli li lid,d,d,d d,r r r rel el l el el elia ia ia a iab b bl bl bl b e e e e e ststst trurur r ct ct ct ct tururu u u eses s t t t t th h hthh h heaeae eae e e t t ananana a a a d d dcac n w wiw wiwtht
6、hththt ststststststananananand d wiwiwiwiwiw ndndndnd s s s s s stototototormrmrmrmms,s,s s,h h h h h hs al al l alsosososos s w w w w w w w w wanana t t t t t a a a a a a a aeaeart rthqhquauauauaua akekekekekes.s.s.s s.H H H H Hommmmmeoeoeoeoeoeownw wnererers s s s s es,s,s,s,s,s,s,s,s s s s s s s
7、s su u ucucu u u u u u u h h asasasasa as sa a a l l arara ar ra a gegege e e,rarangnge e ofof a aeses ses s sththththth ht etetetetetic ic c i i f f f feaeaeaeatututututurererere es s sesor-to-co-ceilingn ngng gngng gng g g w w w w w windodod dododod d do o o owswswsw ws.o-ceopop p penen n n n spap
8、ap p ceces s anana d d d d d fl fl oo o ooo o or-r-r-t tor-tcated design propro o o o o o ogrgrgrgrgrgrgr rg amamammmmmmmms s s s s ththththt atatatat tproWeWWeWeWeW h av v v ve e e e e e soso ophphphph hp is is is is sti ti t ticacatetecatemine how our wood products bes bebe e e estst t t t fi fifi
9、 t t s bedededededetetermrmrmm n in n ine e e h hoh hohmine howtogether into fl exible,high-performance e esystems that meet these demands.We pass that knowledge on to builders so they can build safe,strong,afford-able,beautiful homes.LUMBERSTRANDSENGINEERED LUMBER&PANEL PRODUCTSVENEERHOMESFLEXIBLE
10、HOME DESIGNSTSFORESTSTht,carbon dioxideusus s se e e e e susus susunl nl n nl nlig ig ig ig ig ig ighth ht t tht,c cht,cand water to grow.Weyerhaeuser ana a d wate e er r r r td water tnnovation to grow stronger,straighter ususesesese e i i is.Advances in planting and pruningtr tr t eeeee e e s s sw
11、e can yield more and better trees on memeanan n n n n n n n n n w w wberland we manage.And promising new th ht e e e e e e e t ti ti i imbmbmmmmbologies,such as replicating embryos from techchch h hnonol l olde variety of our fi nest trees and inserting a wided dethem into biodegradable seed casings
12、,tht t thcreate the potential to inexpensively grow large amounts of high-quality seedlings destined for target end-uses.THERE IS NO OTHER RESOURCE THAT CAN DO AS MUCH AS TREES,and there is no other company in North America with the capacity and technology to do as much with trees as Weyerhaeuser.Ta
13、ke a look at how we put every part of our trees to good use.BY RELEASING THE POTENTIAL INSIDE EVERY TREETREESLOGSPHOTOSYNTHESIS6 CO2 2 +6 H+6 H2 2O OO2CO2C6 6H1212O6 6+6 O2 2sunlightchlorophyllCARBONCREDITSH20ENERGY isoduced in med in many ways at ced in mprp p o o orhaeuser.For years,weve usedweve
14、used dweve use eWeWeyey rhrhmasssuch as bark and ligninasbi bi bi b b omommmmmomoma amarenewable source of power in our mills a a rerereand for the grid.But exciting possibilitiesalso lie in the creation of biofuels to replace transpor tation fuels.Growing switchgrass,a potential source of ethanol,o
15、n theland between the trees on our timberlands is one opportunity were exploring.BOXES AND BAGSABSORBENT PRODUCTSFUELTEXTILESEVERYDAYPRODUCTSTREESWOOD RESIDUALSCHIPSCELLULOSEFIBERSMEDICINALPRODUCTSEVERYDAYPRODUCTS,such as boxes,bags and diapers,are well-known uses of cellulose fi ber.But other produ
16、cuctctc s s ucthat contain cellulose might surprise you,u,u,s s s s su ucucucucuch h h h uas safety glasses and tool handles,w whwhwhic ic ich h h ararare e ewmade from cellulose acetate.Paint,tootototothphphphphp pasasasasastetetetetete a a a a andndndndnd otaspirin also use cellulose to thicken an
17、 n nd d d d d b bi bi b b b ndnd.NoNoNoNoNo ow w w w w wanadvances in technology are making it t p posos s s soi sibl ble e fofofofor r rtcellulose-based materials to be dev vevev v velo o opepepepe ep d d d d d d asas a a a a a evsubstitute for those made with p p p petetetetetrororororole le le e
18、leumumu u umu.pIn fact,most things we currentl l l l l ly y y y y ththththththin in in in nk k k k k ofofofofof f las being made from plastic cou u u u uld ld o o o o o oneneneneneneouday be made from trees s.sAND FINDING SOLUTIONS FOR PEOPLE AND THE PLANETESTEXTILESEScan de using all kinds of be e
19、m madade e uade userials,including trees.rararaw w w mateed LyowebOuOuOuOur r r r papapapatente e e eTM process,for es technology similar to thatex x xamamampl ple,e e t t takakake e eshetic plastic and applies it toused d d d f fororor s s synynynynth hththBy dissolving fi bers in a solventcec c ll
20、 lulos s se e e fi fififibebebeber.r.r.B B B Bg them through a tiny hole,fi neand sp pin in nni n n n ngng g g gare produced to make a soft,th h hrerere eadadads a a abonding fabric that can be usedse e elf-b bo o o obofor products such as wipesand fi lters.INTERCROPPLANTINGDEARSHAREHOLDER,PHOTOSYNT
21、HESIS IS INDEED AT THE HEART OF ALL WE DO HERE AT WEYERHAEUSER.YET BECAUSE IT TAKES DECADES FOR THIS REMARKABLE PROCESS TO CREATE MATURE TREES,THERE EXISTS A PERCEPTION THAT OUR BUSINESS ALSO MOVES SLOWLY.NOTHING COULD BE FARTHER FROM THE TRUTH.THIS IS A TIME OF UNPRECEDENTED AND DYNAMIC CHANGE,AND
22、AT WEYERHAEUSER,INNOVATION CONTINUES TO PROPEL US FORWARD.LOOKING BACK:A YEAR OF TOUGH MARKETS,DECISIVE ACTIONOur 2007 performance refl ects diffi cult market conditions but also reveals our ability to create shareholder value.The most signifi cant event of the year occurred in the fi rst quarter,wh
23、en we closed the groundbreaking spin-split merger that combined our fi ne paper assets with Domtar to create the largest fi ne paper producer in North America.This innovative transaction produced$1.35 billion in cash for Weyerhaeuser,which we used to pay down debt.It also enabled us to reduce our ou
24、tstanding shares by more than 25 million.Our remaining Cellulose Fibers business is now better positioned to leverage research and development expertise,boost mill effi ciencies and margins,and capitalize on a strong worldwide market for absorbent pulp.We followed this value-creating deal with the a
25、nnouncement that we are conducting a strategic review of our Containerboard,Packaging and Recycling business.We are pleased with the range of options that our board is able to consider and look forward to concluding the process.Plummeting housing starts posed a signifi cant challenge to our homebuil
26、ding and wood products businesses last yearand we dont expect conditions to signifi cantly improve in 2008.Despite this,our Real Estate business sustained leading fi nancial perfor-mance among large homebuilders by relying on targeted strategies in each of its select markets and by taking swift acti
27、on to prepare for weaker business conditions.Meanwhile,our iLevel organization took aggressive action to balance production with customer demand throughout the year and will continue to do so as needed in the coming months.This business is streamlined,focused and well positioned to take full advanta
28、ge of a housing rebound,which we anticipate based on favorable demographic trends over the long term.To maximize value from our timberlands,we continue to consider a range of options,including ongoing support of the industry in its effort to pass the TREE Act of 2007tax-reform legislation that would
29、 provide immediate value to investors.Signifi cant progress was made in 2007,with a one-year provision of the TREE Act passed in both the House Energy and the Senate Farm bills.With this progress,along with the TREE Acts strong bipartisan and broad regional support,we are well positioned for enactme
30、nt in 2008.We continue to position our timber portfolio for growth in South America and remain intensely focused on realizing all potential revenue from owning timberlands,beyond planting and harvesting trees.Finally,a number of leadership changes made last year refl ects the deep pool of talent wev
31、e cultivated to propel our company toward continued success.In the fi rst quarter,Tom Gideon was appointed senior vice president,Containerboard,Packaging and Recycling,succeeding Jim Keller,who retired after 32 years with the company.Mike Branson stepped in to fi ll Toms previous position as senior
32、vice president of Timberlands.In the second quarter,Patty Bedient was appointed executive vice president and chief fi nancial offi cer,succeeding Dick Taggart,who retired after 33 years with the company.And in the fourth quarter,we announced Dan Fulton would take over my duties as president,Weyerhae
33、user Company,at the beginning of 2008.He now oversees all our operations and a number of staff functions and is working closely with Rich Hanson to prepare for his planned retirement later this year.In addition,Debra Cafaro was elected to our board and adds a wealth of real estate and broad business
34、 knowledge to the breadth of skills on our board.LOOKING AHEAD:CAPITALIZING ON INVENTIVE SOLUTIONS,UNIQUE EXPERTISE The world continues to demand different and better products.People want safe,reliable shelter and products that make life easier.Businesses want innovative solutions that help them bec
35、ome more effi cient and profi table.And we all seek sustainable,visionary products that anticipate what peopleand our planetwill need in the future.Our response to this challenge can be summed up with two words:trees and innovation.We have a strong track record of taking deliberate action to create
36、shareholder value in the best possible way,wherever opportunity is present.Sometimes this means applying our industry-leading expertise to fi nd new ways to use every part of the tree and the land it grows on.Youve seen some outstanding examples in the fi rst few pages of this report.Sometimes it me
37、ans having the market knowledge and foresight to restructure a business,discover a more effi cient or profi table way to operate it or,if necessary,sell,close or scale it back.Sometimes it means creating a brand new approach to maximizing value from divestiture.The recent announcement of our intenti
38、on to partner with Chevron is a perfect example of our innovative thinking.Our expertise in large-scale forest management and cellulose conversion matches well with Chevrons expertise in energy production and markets.We expect this partnership to hasten the development of cellulosic ethanol as a ren
39、ewable nonfood-based fuel for cars and trucksan endeavor that represents not only innovative leadership in the faceof one of the worlds most pressing needs but also an extraordinary opportunity to unlock additional value from our core timberlands.Our ability to fi nd creative solutions also applies
40、to the way we report our sustainability performance.Weve taken steps to become more transparent and timely by launching a comprehensive website,where stakeholders will have easy access to current information about our practices,policies and results.Last year,we set a number of sustainability goals,i
41、ncluding drafting a policy that confi rms our commitment to human rights,which is now complete.We also analyzed our water consumption at primary mills and are identifying opportunities for improvement.Productcertifi cation remains a top priority,with 94 percent of our North American forest products
42、currently certifi ed to sustainable forestry standards.And we continue to support wide adoption of green-building practices by taking a leadership role in the development of a National Green Building Standard by the National Association of Home Builders.Our progress on these fronts and in other crit
43、ical sustainability areas will be reported throughout the year at a leader in our industry,we have a responsibility to continually set stretch goals in all these areas and then exceed them.In doing so,our shareholders will benefi t from the value we create,and customers,partners,communities and empl
44、oyees can be confi dent in the sustainability of our company and the forests from which we derive value.This brings us back,as always,to the trees.They remain our core resource,our chief expertise and our greatest competitive advantage.By focusing on innovation,we will continue to unlock a whole new
45、 world of potential in our forests and ensure that shareholders receive the full benefi ts of these holdings.We have the formula for success,and with it we will not only weather change but also turn it into opportunity.Steven R.RogelChairman and Chief Executive Offi cerOUR STRATEGYAND RESULTSLAST YE
46、AR,WE TOOK STEPS TO MAKE OUR 10-K MORE READABLE.THIS YEAR,WEVE MOVED THE DIAL EVEN FARTHER.WED LIKE TO HEAR WHAT YOU THINK.CONTACT US AT IRWEYERHAEUSER.COM.INSIDE,YOULL LEARN ABOUT WHAT WE DO,WHERE WE DO IT AND HOW WERE DOING.YOULL READ ABOUT THE RISKS WE FACE,THE FACTORS THAT DRIVE OUR BUSINESSES A
47、ND HOW WE INTEND TO SUCCEED.WE KNOW THIS INFORMATION IS IMPORTANT TO YOU,SO WERE CONTINUING TO IMPROVE HOW WE SHARE IT.THIS YEAR,WEVE REVAMPED OUR NOTES AND ADDED MORE CHARTS AND GRAPHS.Weyerhaeuser 2007 Annual Report and Form 10-KUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FO
48、RM 10-KX ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED DECEMBER 30,2007or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROMTOCOMMISSION FILE NUMBER 1-4825WEYERHAEUSER CO
49、MPANYA WASHINGTON CORPORATION91-0470860(IRS EMPLOYER IDENTIFICATION NO.)FEDERAL WAY,WASHINGTON 98063-9777 TELEPHONE(253)924-2345SECURITIES REGISTERED PURSUANT TO SECTION 12(B)OF THE ACT:TITLE OF EACH CLASSNAME OF EACH EXCHANGE ON WHICH REGISTERED:Common Shares($1.25 par value)Chicago Stock ExchangeN
50、ew York Stock ExchangeExchangeable Shares(no par value)Toronto Stock ExchangeIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the SecuritiesAct.X Yes NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
51、 Section 15(d)of theAct.Yes X NoIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file suchreports),and(2
52、)has been subject to such filing requirements for the past 90 days.X Yes NoIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and willnot be contained,to the best of registrants knowledge,in definitive proxy or information stateme
53、nts incorporated by reference inPart III of this Form 10-K or any amendment to this Form 10-K.XIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,or a non-accelerated filer.Large accelerated filer XAccelerated filer Non-accelerated filer Indicate by check
54、 mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes X NoAs of June 29,2007,the aggregate market value of the registrants common stock held by non-affiliates of the registrant was$16,643,213,266 based on the closing sale price as reported on the New York Stock Exc
55、hange Composite Price Transactions.As of February 1,2008,209,554,028 shares of the registrants common stock($1.25 par value)were outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Notice of 2008 Annual Meeting of Shareholders and Proxy Statement for the companys Annual Meeting of Share-h
56、olders to be held April 17,2008,are incorporated by reference into Part II and III.TABLE OF CONTENTSPART IITEM 1.OUR BUSINESS.1WE CAN TELL YOU MORE.1WHO WE ARE.1OUR BUSINESS SEGMENTS.1OUR HISTORY.1COMPETITION IN OUR MARKETS.1SALES OUTSIDE THE U.S.2SHAPING OUR BUSINESS.2OUR EMPLOYEES.2WHAT WE DO.3TIM
57、BERLANDS.3WOOD PRODUCTS.6CELLULOSE FIBERS.10FINE PAPER.12CONTAINERBOARD,PACKAGING&RECYCLING.13REAL ESTATE.16CORPORATE AND OTHER.18NATURAL RESOURCES AND ENVIRONMENTAL MATTERS.19ENDANGERED SPECIES PROTECTIONS.19REGULATIONS AFFECTING FORESTRY PRACTICES.19FOREST CERTIFICATION STANDARDS.19WHAT THESE REGU
58、LATIONS&CERTIFICATION PROGRAMSMEAN TO US.19REGULATIONS AND FOREST CERTIFICATION IN CANADA.19CANADIAN ABORIGINAL RIGHTS.20POLLUTION CONTROL REGULATIONS.20ENVIRONMENTAL CLEANUP.20REGULATION OF AIR EMISSIONS IN THE U.S.20REGULATION OF AIR EMISSIONS IN CANADA.21POTENTIAL CHANGES IN POLLUTION REGULATION.
59、21FORWARD LOOKING STATEMENTS.22ITEM 1A.RISK FACTORS.23RISKS RELATED TO OUR INDUSTRIES AND BUSINESS.23CYCLICAL INDUSTRIES.23SUBSTITUTION.23CHANGES IN PRODUCT MIX OR PRICING.24INTENSE COMPETITION.24AVAILABILITY OF RAW MATERIALS AND ENERGY.24TRANSPORTATION.24MATERIAL DISRUPTION OF MANUFACTURING.24CAPIT
60、AL REQUIREMENTS.25ENVIRONMENTAL LAWS AND REGULATIONS.25LEGAL PROCEEDINGS.26CURRENCY EXCHANGE RATES.26EXPORT TAXES.26CHANGES IN CREDIT RATINGS.27NATURAL DISASTERS.27RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK.27STOCK PRICE VOLATILITY.27RISKS RELATED TO THE DOMTAR TRANSACTION.27ITEM 1B.UNRESOLVED S
61、TAFF COMMENTS.28ITEM 2.PROPERTIES.28ITEM 3.LEGAL PROCEEDINGS.28ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.28PART IIITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATEDSTOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES.29ITEM 6.SELECTED FINANCIAL DATA.31ITEM 7.MANAGEMENTS DISC
62、USSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS.32WHAT YOU WILL FIND IN THIS MD&A.32ECONOMIC AND MARKET CONDITIONS AFFECTING OUROPERATIONS.32HOW ECONOMIC AND MARKET CONDITIONS AFFECTED OUROPERATIONS.32FINANCIAL PERFORMANCE SUMMARY.33RESULTS OF OPERATIONS.34CONSOLIDATED RESULTS.34
63、TIMBERLANDS.37WOOD PRODUCTS.39CELLULOSE FIBERS.41FINE PAPER.43CONTAINERBOARD,PACKAGING&RECYCLING.44REAL ESTATE.46CORPORATE AND OTHER.48INTEREST EXPENSE.49INCOME TAXES.49LIQUIDITY AND CAPITAL RESOURCES.50WHERE WE GET CASH.50HOW WE USE CASH.52OFF-BALANCE SHEET ARRANGEMENTS.53ENVIRONMENTAL MATTERS,LEGA
64、L PROCEEDINGS AND OTHERCONTINGENCIES.53ACCOUNTING MATTERS.54CRITICAL ACCOUNTING POLICIES.54PROSPECTIVE ACCOUNTING PRONOUNCEMENTS.56ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET RISK.57LONG-TERM DEBT OBLIGATIONS.57OUR USE OF DERIVATIVES.57COMMODITY FUTURES,SWAPS AND COLLARS.57ITEM 8.FI
65、NANCIAL STATEMENTS AND SUPPLEMENTARY DATA.58REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM.58CONSOLIDATED STATEMENT OF EARNINGS.59CONSOLIDATED BALANCE SHEET.60CONSOLIDATED STATEMENT OF CASH FLOWS.62CONSOLIDATED STATEMENT OF SHAREHOLDERS INTEREST ANDCOMPREHENSIVE INCOME.64INDEX FOR NOTES TO C
66、ONSOLIDATED FINANCIAL STATEMENTS.65NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.66ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ONACCOUNTING AND FINANCIAL DISCLOSURE.113ITEM 9A.CONTROLS AND PROCEDURES.113EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.113CHANGES IN INTERNAL CONTROLS.113MANAGEM
67、ENTS REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING.113REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM.114ITEM 9B.OTHER INFORMATION NOT APPLICABLE.PART IIIITEM 10.DIRECTORS AND EXECUTIVE OFFICERS.115ITEM 11.EXECUTIVE AND DIRECTOR COMPENSATION.119ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEF
68、ICIAL OWNERS ANDMANAGEMENT AND RELATED STOCKHOLDER MATTERS.119ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.119ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES.119PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.120EXHIBITS.120SIGNATURES.121REPORT OF INDEPENDENT REGISTERED PUBLIC ACC
69、OUNTINGFIRM ON FINANCIAL STATEMENT SCHEDULE.122FINANCIAL STATEMENT SCHEDULE.123CERTIFICATIONS.124COMPANY OFFICERS.128PART IOUR BUSINESSWe are an integrated forest products company.We grow andharvest trees,build homes and make wood and paper productsessential to everyday lives.Our goal is to do this
70、safely,profit-ably and responsibly.Our business has offices or operations in 13 countries and hascustomers worldwide.We manage 22 million acres of forests,and in 2007,we generated$16.3 billion in net sales and rev-enues.This portion of our Annual Report and Form 10-K providesdetailed information abo
71、ut who we are,what we do and wherewe are headed.Unless otherwise specified,current informationreported in this Form 10-K is as of the end of 2007,or is forthe fiscal year,ended December 30,2007.We break out financial information such as revenues,earningsand assets by the business segments that form
72、our company.We also discuss the development of our company and thegeographic areas where we do business.We report our financial results and condition in two groups:Weyerhaeuser our forest products-based operations,princi-pally the growing and harvesting of timber and the manu-facture,distribution an
73、d sale of forest products.Real Estate our real estate development and constructionoperations and our other real estate related activities.Throughout this Form 10-K,unless specified otherwise,refer-ences to“we”,“our”,and“us”refer to the consolidated com-pany,including both Weyerhaeuser and Real Estat
74、e.WE CAN TELL YOU MOREAVAILABLE INFORMATIONWe meet the information reporting requirements of the Secu-rities Exchange Act of 1934 by filing periodic reports,proxystatements and other information with the Securities andExchange Commission(SEC).These reports and statements information about our compan
75、ys business,financial resultsand other matters are available at:the SEC internet site www.sec.gov;the SECs Public Conference Room,100 F Street NE,Wash-ington,D.C.20549,1-800-SEC-0330;andour internet site .When we file the information electronically with the SEC,it isalso added to our internet site.W
76、HO WE AREOUR BUSINESS SEGMENTSIn the Consolidated Results section of Managements Dis-cussion and Analysis of Financial Condition and Results ofOperations,you will find our overall performance results for ourbusiness segments:Timberlands;Wood Products;Cellulose Fibers;Fine Paper;Containerboard,Packag
77、ing and Recycling;Real Estate;andCorporate and Other.Detailed financial information about our business segmentsand our geographic locations is in Note 2:Business Segmentsand Note 24:Geographic Areas of Notes to Consolidated Finan-cial Statements as well as further in this section and in theManagemen
78、ts Discussion and Analysis of Financial Conditionand Results of Operations.OUR HISTORYWe started out as Weyerhaeuser Timber Company,incorporatedin the state of Washington in January 1900 when FrederickWeyerhaeuser and 15 partners bought 900,000 acres oftimberland.In the 107 years since then,we have
79、worked to bethe best forest products company in the world.Our innovations and accomplishments through the yearsinclude:establishing the nations first certified tree farm in 1941;hand-planting 18.4 million seedlings through a foot or moreof ash to transform 68,000 acres of devastated,heat-blastedland
80、scape left from the Mount St.Helens eruption in 1980 into new forests that will be ready for harvesting in 2020;andmaking our forests among the most productive in the worldby using our High Yield Forestry program an approach thatcombines economic benefits with a concern for habitat,wild-life,water q
81、uality and other forest values.COMPETITION IN OUR MARKETSOur major markets both domestic and foreign are highlycompetitive,with numerous companies selling similar products.Many of our products also compete against substitutes forwood and wood-fiber products.In real estate development andother relate
82、d activities,we compete against numerous regionaland national firms.We compete in our markets primarilythrough price,product quality and service levels.Weyerhaeuser Company 2007 Annual Report and Form 10-K1Our business segments compete based on the following strat-egies:Timberlands is extracting max
83、imum value for each acre.Wood Products is delivering integrated solutions to the resi-dential construction and industrial markets.Cellulose Fibers is concentrating primarily on value-addedpulp products.Containerboard,Packaging and Recycling is focusing itspackaging products and services in selected
84、market seg-ments where we meet customer requirements at the lowestcost for our supply chain.Weyerhaeuser Real Estate Company is delivering its uniquevalue propositions and is looking for growth opportunities intarget markets.International operations,in the Corporate and Other seg-ment,is expanding o
85、ur position as a low cost softwood andhardwood timber grower.Our Fine Paper segment was divested in a 2007 transactionwith Domtar,Inc.SALES OUTSIDE THE U.S.In 2007,18 percent or$3.1 billion of our total consolidatedsales and revenues including sales from discontinued oper-ations were to customers ou
86、tside the U.S.That included:$2.0 billion of exports from the U.S.;$0.6 billion of Canadian export and domestic sales;and$0.5 billion of other foreign sales.In 2006,17 percent or$3.8 billion of our total consolidatedsales and revenues,including sales from discontinued oper-ations,were to customers ou
87、tside the U.S.That included:$1.9 billion of exports from the U.S.;$1.3 billion of Canadian export and domestic sales;and$0.6 billion of other foreign sales.SHAPING OUR BUSINESSWe strategically manage our portfolio to enhance shareholderreturns.This ongoing process includes making key acquisitionsto
88、complement existing product lines or achieving greater scalein key operations.It also means that we exit businesses thatdo not fit our long-term strategic direction and divest ourselvesof nonstrategic assets.Key acquisition in recent years have included:MacMillan Bloedel Limited in 1999;Trus Joist I
89、nternational in 2000;Willamette Industries in 2002;andMaracay Homes in 2006.In March 2007,we completed the following set of transactions:a series of transfers and other transactions resulting in ourfine paper business and related assets becoming wholly-owned by Domtar Corporation;the distribution of
90、 shares of Domtar Corporation to our share-holders in exchange for 25 million shares of our commonstock;andthe acquisition of Domtar,Inc.,an unaffiliated Canadiancorporation,by Domtar Corporation.Collectively,these transactions are referred to as the“DomtarTransaction.”In June 2007,we sold our Canad
91、ian wood products distributioncenters.Other recent dispositions have included:Coastal British Columbia operations and timberlands(B.C.Coastal)in 2005;French composite panel operations in 2005;andNorth American and Irish composite panel operations in2006.We continue to reinvest in our businesses thro
92、ugh a variety ofcapital projects.In 2007 our capital expenditures excludingacquisitions and our Real Estate business segment totaled$706 million.We expect these investments will:optimize our existing operations;allow us to use energy more efficiently;andincrease our competitiveness.We are also focus
93、ed on:growing our Timberlands,Wood Products and Real Estatebusinesses;structuring business and corporate overhead(selling,generaland administrative expense)to support achieving our com-petitive performance goals;andretaining and attracting talent critical to executing our strat-egies.OUR EMPLOYEESWe
94、 have approximately 37,900 employees.This numberincludes:36,400 employed by our corporate operations and businesssegments,not including our Real Estate segment;and1,500 employed by our Real Estate segment.Of these employees,approximately 12,000 are members ofunions covered by multi-year collective b
95、argaining agreements.2WHAT WE DOThis section provides information about how we grow and har-vest trees,manufacture and sell products made from them,and build and sell homes.For each of our business segments,we provide details about what we do,where we do it,how muchwe sell and where we are headed.TI
96、MBERLANDSOur Timberlands business segment manages 6.4 million acresof private commercial forestland in the U.S.We own 5.7 millionof those acres and lease the other 700,000 acres.In addition,we have renewable,long-term licenses on 15.1 million acres offorestland located in five Canadian provinces.Inf
97、ormation in thetables below includes data from all of the segments businessunits as of the end of 2007.WHAT WE DOWe grow and harvest trees for use as lumber and other woodand building products.We also export logs to other countrieswhere they are made into products.After harvest,we typicallyplant see
98、dlings to reforest the harvested areas using the mosteffective regeneration method for the site and species.Wemonitor and care for the new trees as they grow to maturity.Weseek to sustain and maximize the timber supply from our forest-lands while keeping the health of our environment a key priority.
99、We are recognized as a leading forest manager.The goal of our Timberlands business is to maximize returns byselling logs and stumpage to internal and external customers.We focus on solid softwood and use intensive silviculture toimprove forest productivity and returns while managing theforests on a
100、sustainable basis to meet both customer and pub-lic expectations.We capture additional value from our land andtimber through the lease or sale of minerals,oil,gas,recre-ation and communications sites;sales of higher-and-better-useproperty;and the sale of other nontimber products.Timberlands Products
101、 and RevenuesMAIN PRODUCTS ANDREVENUESHOW THEYRE USEDLogsMade into lumber,other wood and buildingproducts,and pulpOther revenuesNonstrategic timber-landsMinerals,oil and gasSold to other landownersSold into energy marketsWHERE WE DO ITWe manage a balanced portfolio of timberlands assets locatedprima
102、rily in North America.In the U.S.we own and managesustainable forests in nine states for use in wood productsmanufacturing.We own or lease:4.2 million acres in the southern U.S.;and2.2 million acres in the Pacific Northwest.In addition,we have renewable,long-term licenses on15.1 million acres of for
103、estland located in five Canadian prov-inces.In Canada,forests generally are owned and administeredby provincial governments.We also own and manage forestlands in the Southern Hemi-sphere.The results of these international operations arereported in the Corporate and Other segment.Our worldwide timber
104、 inventory is approximately 268 millioncunits.One cunit equals 100 cubic feet of solid wood.Theamount of timber inventory does not translate into an amountof lumber or panel products because the quantity of end prod-ucts:varies according to the species,size and quality of the tim-ber;andwill change
105、through time as the mix of these variablesadjusts.As a result,there is no standard for converting cubic feet ofsolid wood into board feet of lumber or square feet of panelproducts.Weyerhaeuser Company 2007 Annual Report and Form 10-K3Summary of 2007 Timber Inventory and TimberlandLocationsGEOGRAPHIC
106、 AREAMILLIONSOF CUNITSTHOUSANDS OF ACRES AT DECEMBER 30,2007TOTALINVENTORYFEEOWNERSHIPLONG-TERMLEASESLICENSEARRANGE-MENTSTOTALACRESU.S.West622,2202,220South493,4267284,154Total U.S.1115,6467286,374CanadaAlberta1045,2255,225British Columbia92,3552,355New Brunswick2177177Ontario122,5982,598Saskatchewa
107、n284,6994,699Total Canada15515,05415,054Subtotal NorthAmerica2665,64672815,05421,428International(1)(2)229925324Total2685,94575315,05421,752(1)International represents timberlands outside of North America,the results of which arereported in the Corporate and Other segment.(2)Includes Weyerhaeuser pe
108、rcentage ownership of timberlands owned and managedthrough joint venturesOur Timberlands annual fee depletion represents the harvest ofthe timber assets that we own.Depletion is a method ofexpensing the fee timber asset based on the harvest or timbersales volume.The decline in fee depletion from 200
109、4 through2006 reflects the disposition of our B.C.Coastal operations inMay 2005,and the decline in fee depletion from 2006 to 2007reflects the Domtar Transaction in March 2007.The 2007 harvest volume by region was 55 percent in theSouth and 45 percent in the West.Five-Year Summary of Timberlands Pro
110、duction(1)(2)PRODUCTION IN THOUSANDS20072006200520042003Fee depletion cunits8,1448,4508,7309,0139,428(1)Reflects the divestiture of the companys B.C.Coastal operations in May 2005 and theDomtar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fi
111、scalyears 2003 through 2005 and 2007.HOW MUCH WE SELLOur net sales to unaffiliated customers declined 10 percent in2007 to slightly under$1 billion,with 2006 slightly exceeding$1 billion.Five-Year Summary of Net Sales for Timberlands(1)(2)NET SALES IN MILLIONS OF DOLLARS20072006200520042003To unaffi
112、liatedcustomers:Logs$659$781$761$822$730Other products251235286280264Subtotal9101,0161,0471,102994Intersegment sales1,3281,6751,7941,6221,605Total$2,238$2,691$2,841$2,724$2,599(1)Reflects the divestiture of the companys B.C.Coastal operations in May 2005 and theDomtar Transaction in March 2007.(2)Fi
113、scal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.Five-Year Trend for Total Net Sales in Timberlands(1)(2)NET SALES IN MILLIONS OF DOLLARS20032004200520062007$2,500$3,000$2,000$1,500$1,000$500$-2,5992,7242,8412,6912,238(1)Reflects the div
114、estiture of the companys B.C.Coastal operations in May 2005 and the Domtar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscal years 2003 through 2005 and 2007.Sales to unaffiliated customers(bottom)Intersegment sales(top)Percentage of 2007
115、Net Sales in TimberlandsLOGSOTHER PRODUCTSINTERSEGMENT SALES59%30%11%4Log Sales VolumesLogs sold to unaffiliated customers in 2007 declined 355,000cunits,or 10 percent,from 2006.Sales volumes from Canadadropped 177,000 in 2007.This reduction in volume was dueprimarily to the Domtar Transaction in Ma
116、rch 2007.Other fac-tors that may affect our log sales volume include the following:Domestic grade log sales depend on lumber usage,which isinfluenced by and depends on housing starts and repair andremodel activity.In addition,sales to unaffiliated customerscan fluctuate based on the needs of our own
117、 mills as well asthe availability of logs from outside markets and our owntimberlands.Domestic fiber log sales fluctuate as a result of the demandfor chips by pulp and containerboard mills.Export log sales depend on the level of housing starts inJapan,as that is where most of our North American expo
118、rtlogs are sold.All of our domestic and export logs are sold to unaffiliatedcustomers or transferred at market prices to our internal millsby sales and marketing staff within our Timberlands businessunits.Five-Year Summary of Log Sales Volumes to UnaffiliatedCustomers for Timberlands(1)(2)SALES VOLU
119、MES IN THOUSANDS20072006200520042003Logs cunits3,0813,4363,5523,9204,125(1)Reflects the divestiture of the companys B.C.Coastal operations in May 2005 and theDomtar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 a
120、nd 2007.Log PricesAverage log price realizations in 2007 were down as comparedwith 2006,primarily due to lower export and domestic logprices.Our log prices are affected by the supply of and demandfor grade and fiber logs,which are influenced by all of the fac-tors described above.Five-Year Summary o
121、f Selected Published Export Log Prices(#2 Sawlog Bark On$/MBF)2006200520042003SELECTED PUBLISHED PRODUCT PRICES7678337807807074334424393863542007COASTAL-DOUGLAS FIR-LONGVIEWCOASTAL-HEMLOCKWHERE WERE HEADEDOur strategies for achieving continued success include:managing forests on a sustainable basis
122、to meet customerand public expectations;reducing the time it takes to realize returns by practicingintensive forest management and focusing on the mostadvantageous markets;efficiently delivering fiber to internal supply chains;building long-term relationships with external customers whorely on a con
123、sistent supply of high-quality raw material;continuously reviewing our portfolio to create the greatestvalue for the company;andinvesting in technology and advances in silviculture toimprove yields and timber quality.Weyerhaeuser Company 2007 Annual Report and Form 10-K5WOOD PRODUCTSWe are one of th
124、e largest manufacturers and distributors ofwood products in North America.WHAT WE DOWe provide the residential structural frame market withaccess to a family of high-quality softwood lumber,engineered lumber,structural panels and other specialtyproducts.We deliver innovative homebuilding solutions t
125、o help our cus-tomers quickly and efficiently meet their customers needs.We sell our products and services primarily through our ownsales organizations and distribution facilities,and wesupplement our product offerings with building materials thatwe purchase from other manufacturers.We sell certain
126、of our products into the repair and remodelmarket through the wood preserving and home improvementwarehouse channels.We export our engineered building materials and industrialhardwood products to Europe and Asia.We make and sell hardwood and softwood lumber and panelsto manufacturers of furniture an
127、d cabinetry in more than 40countries.We acquire our raw materials at market price from our Timber-lands business segment and from third parties.Wood ProductsPRODUCTSHOW THEYRE USEDSoftwood lumberStructural framing for residential and commercialstructuresEngineered lumberSolid sectionI-joistsFloor an
128、d roof joists,and headers and beams forresidential and commercial structuresStructural panelsOriented strand board(OSB)PlywoodStructural sheathing,sub-flooring,and stair treadfor residential and commercial structures;recreational vehicle flooring;furniture andcabinetsVeneerIntermediate raw material
129、for plywood andengineered lumber manufacturingHardwood lumberFurniture,pallets,ties,moldings,panels,cabinets,architectural millwork,components,andretail boardsOther productsComplementary building products such as cedarand composite decking,siding,insulation,rebar,engineered lumber connectors and log
130、sWHERE WE DO ITWe have 71 manufacturing facilities in the U.S.and Canada.Wedistribute through a combination of Weyerhaeuser and third partylocations.Information about the locations,capacities and actualproduction of our manufacturing facilities is included below.Principal Manufacturing LocationsBrok
131、en out by major products,locations of our principal manu-facturing facilities are:Softwood Lumber U.S.Alabama,Arkansas,Louisiana,Mississippi,NorthCarolina,Oklahoma,Oregon and Washington Canada Alberta and British ColumbiaEngineered Lumber U.S.Alabama,Georgia,Kentucky,Louisiana,Minnesota,Oregon and W
132、est Virginia Canada British Columbia and OntarioOriented Strand Board:U.S.Louisiana,Michigan,North Carolina and WestVirginia Canada Alberta,New Brunswick,Ontario andSaskatchewanPlywood and Veneer U.S.Alabama,Arkansas,Louisiana,Oregon andWashington Canada SaskatchewanHardwood Lumber U.S.Michigan,Oreg
133、on,Washington and Wisconsin Canada British ColumbiaSummary of 2007 Wood Products CapacitiesCAPACITIES IN MILLIONSPRODUCTIONCAPACITYNUMBER OFFACILITIESSoftwood lumber board feet6,00028Engineered solid section cubic feet5611Engineered I-Joists lineal feet5456Oriented strand board square feet(3/8”)4,26
134、09Plywood square feet(3/8”)4602Veneer square feet(3/8”)1,4657Hardwood lumber board feet35086Five-Year Summary of Wood Products Production(1)(2)PRODUCTION IN MILLIONS20072006200520042003Softwood lumber board feet5,4906,3556,9867,1877,113Engineered solidsection cubic feet(3)2841414234Engineered I-Jois
135、ts lineal feet(3)339473483504437Oriented strandboard squarefeet(3/8”)3,4284,1664,0784,0814,170Plywood squarefeet(3/8”)(4)4239001,1551,6281,708Veneer squarefeet(3/8”)(4)(5)1,1501,7391,9792,3862,199Composite panels square feet(3/4”)6661,0801,066988Hardwood lumber board feet294324364349373(1)Reflects t
136、he divestitures of the companys B.C.coastal operations in May 2005,North Ameri-can composite panel operations in July 2006,and the Domtar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.(3)Weyerhaeuser eng
137、ineered I-Joist facilities may also produce engineered solid section.(4)All Weyerhaeuser plywood facilities also produce veneer.(5)Veneer production represents lathe production and includes volumes that are used toproduce plywood and engineered lumber products by company mills.HOW MUCH WE SELLRevenu
138、es of our Wood Products business segment come fromsales to wood products dealers,do-it-yourself retailers,build-ers,and industrial users.We provide products and services tothe residential construction market under the iLevel and Trus-Joist brands.In 2007 our net sales were$5.7 billion com-pared with
139、$7.9 billion in 2006.Five-Year Summary of Net Sales for Wood Products(1)(2)NET SALES IN MILLIONS OF DOLLARS20072006200520042003Softwood lumber$2,241$2,997$3,624$3,915$3,281Engineered solidsection608794833701542EngineeredI-Joists467670704645517Oriented strandboard5899391,1641,3901,109Plywood366529735
140、929784Veneer4442444439Compositepanels82357497501393Hardwoodlumber355398390365350Other products9471,1761,2871,2851,125Total$5,699$7,902$9,278$9,775$8,140(1)Reflects the divestitures of the companys B.C.coastal operations in May 2005,North Ameri-can composite panel operations in July 2006,and the Domt
141、ar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.Five-Year Trend for Total Net Sales in Wood Products(1)(2)NET SALES IN MILLIONS OF DOLLARS$10,000$8,000$6,000$4,000$2,000$-9,2789,7758,1407,9025,699200720
142、06200520042003(1)Reflects the divestitures of the companys B.C.coastal operations in May 2005,North American composite panel operations in July 2006,and the Domtar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscal years 2003 through 2005 a
143、nd 2007.Percentage of 2007 Net Sales in Wood ProductsSOFTWOOD LUMBERPLYWOODORIENTED STRAND BOARDHARDWOOD LUMBERENGINEERED I-JOISTSENGINEERED SOLID SECTIONOTHER PRODUCTS19%11%7%39%10%6%8%Wood Products VolumeThe volume of wood products sold in 2007 declined from 2006primarily because of the reduction
144、in production capacitythrough the sale or closure of a number of facilities and pro-duction curtailments in response to market conditions in 2006and 2007.The sales and closures include:the sale of our 16 Canadian distribution centers and the saleor closure of 8 U.S.distribution centers;the sale of o
145、ur Elma,Washington plywood facility;the permanent or indefinite closures of three Canadian OSBmills and four engineered lumber mills;the closure of our Okanagan Falls,British Columbia lumbermill;andthe closure of our Dodson,Louisiana plywood line.Weyerhaeuser Company 2007 Annual Report and Form 10-K
146、7Five-Year Summary of Sales Volume for Wood Products(1)(2)SALES VOLUMES IN MILLIONS20072006200520042003Softwood lumberboard feet6,5387,8718,6508,8908,981Engineered solidsectioncubic feet3036383732Engineered I-Joistslineal feet338456484496447Oriented strandboard squarefeet(3/8”)3,4664,0963,9484,2134,
147、361Plywood squarefeet(3/8”)1,0491,6632,1802,6292,665Veneer squarefeet(3/8”)262215231225239Compositepanels squarefeet(3/4”)1218021,2291,2341,162Hardwood lumberboard feet363412427417435(1)Reflects the divestiture of the companys B.C.Coastal operations in May 2005,NorthAmerican composite panel operatio
148、ns in July 2006,and the Domtar Transaction in March2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.Wood Products PricesPrices for wood products in 2007 declined from 2006.The fol-lowing factors influence prices for wood produc
149、ts:Overall demand for structural wood products used in newresidential construction and the repair and remodel of exist-ing homes affects prices.Residential construction is affectedby the rate of household formation and other demographicfactors,mortgage interest rates,the need for replacement ofexist
150、ing housing stock,and the demand for secondary orvacation homes.Repair and remodel activity is affected bythe size and age of existing housing inventory.Seasonality can affect prices,as residential constructionslows during winter months and increases during spring andsummer.The availability of suppl
151、y of commodity building products suchas lumber and plywood affect prices.A number of factors canaffect supply,including weather,raw material quality andavailability,and availability of rail and truck transportation.Proprietary-grade products and services can command higherprices.Our ability to diffe
152、rentiate our products and servicesfrom other manufacturers and create demand for them in themarketplace tends to generate higher prices.Five-Year Summary of Selected Published Lumber Prices$/MBF20032004200520062007SELECTED PUBLISHED PRODUCT PRICES34745940635128230740635528423133038742132927924236132
153、22652202x4 DOUGLAS FIR(GREEN)2x4 SOUTHERN YELLOW PINE(KILN DRIED)2x4 SPRUCE-PINE-FIR(KILN DRIED)2x4 DOUGLAS FIR(KILN DRIED)Five-Year Summary of Selected Published Oriented StrandBoard Prices$/MSF2007200620052004OSB(7/16”-24/16”)NORTH CENTRAL PRICE295374323218162SELECTED PUBLISHED PRODUCT PRICES2003F
154、ive-Year Summary of Selected Published Plywood Prices(12”CDX)$/MSF20032004200520062007SELECTED PUBLISHED PRODUCT PRICESWESTSOUTH3443413864483673232793534033358WHERE WERE HEADEDOur strategies for achieving continued success vary by busi-ness.During 2007,we delivered on our commitment to provideproduc
155、ts and services to the residential construction market.Our strategies for continued success include:delivering innovative home-building solutions to dealers sothey can quickly and efficiently meet their customersneeds;leveraging technology to improve our processes and sys-tems to provide our custome
156、rs with performance-basedproprietary products;achieving operating excellence throughout the deliverychain;and taking advantage of our size,scale,expertise,and breadthof products that make us unique in serving the residentialstructural-frame marketplace.In our Hardwood and Industrial Products busines
157、s our strat-egy is to meet the growing international demands of custom-ers by aligning our global supply chain and strengthening ourindustrial wood products sales capability.In all businesses within our Wood Products segment we con-tinue to improve or remove underperforming and nonstrategicassets fr
158、om our system and focus investments on strategicgoals.Weyerhaeuser Company 2007 Annual Report and Form 10-K9CELLULOSE FIBERSOur cellulose fibers(pulp)products are distributed through aglobal direct sales network,and liquid packaging products aresold directly to carton and food product packaging conv
159、erters inNorth America and Asia.We also have a 50 percent interest inNorth Pacific Paper Corporation(NORPAC)a joint venture withNippon Paper Industries that produces newsprint and highbrightness publication papers.WHAT WE DOWe are one of the worlds largest softwood market pulpproducers.We provide ce
160、llulose fibers for targeted specialty markets,working closely with our customers to develop unique orspecialized applications.We manufacture liquid packaging board used primarily for theproduction of containers for liquid products.Our joint venture,NORPAC,makes high-quality newsprint andhigh brightn
161、ess publication papers.NORPAC activity is notincluded in the information that follows.Cellulose Fibers ProductsPRODUCTSHOW THEYRE USEDPulpFluff pulp(Southernsoftwood kraft fiber)Papergrade pulp(Southern and Northernsoftwood kraft fiber)Specialty chemicalcellulose pulpUsed in sanitary disposable prod
162、ucts thatrequire bulk,softness and absorbencyUsed in products that include printing and writ-ing papers and tissueUsed in textiles,absorbent products,specialtypackaging,specialty applications and propri-etary high-bulking fibersLiquid packaging boardConverted into containers to hold liquid materials
163、such as milk,juice and teaOther productsSlush pulpWet lap pulpUsed in the manufacture of paper productsWHERE WE DO ITWe have four pulp mills in strategic locations in the southernpart of the U.S.and one pulp mill in Canada.Our liquid pack-aging mill and our NORPAC joint venture newsprint manufactur-
164、ing facility are located in Washington state.Principal Manufacturing LocationsBroken out by major product,locations of our principal manu-facturing facilities are:Pulp U.S.Georgia,Mississippi,and North Carolina Canada AlbertaLiquid Packaging Board U.S.WashingtonSummary of 2007 Cellulose Fibers Capac
165、itiesCAPACITIES IN THOUSANDSPRODUCTIONCAPACITYNUMBER OFFACILITIESPulp air-dry metric tons1,7505Liquid packaging board tons2701Five-Year Summary of Cellulose Fibers Production(1)(2)PRODUCTION IN THOUSANDS20072006200520042003Pulp air-dry metrictons1,8512,5882,5022,5462,522Liquid packagingboard tons283
166、282264266261(1)Reflects Domtar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.HOW MUCH WE SELLRevenues of our Cellulose Fibers segment come from sales tocustomers who use the products for further manufact
167、uring ordistribution,and for direct use.In 2007,our net sales wereapproximately$1.8 billion compared with$2.0 billion in 2006.Five-Year Summary of Net Sales for Cellulose Fibers(1)(2)NET SALES IN MILLIONS OF DOLLARS20072006200520042003Pulp$1,478$1,657$1,482$1,471$1,275Liquidpackagingboard24722920320
168、8198Otherproducts10770514315Total$1,832$1,956$1,736$1,722$1,488(1)Reflects Domtar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.10Five-Year Trend for Total Net Sales in Cellulose Fibers(1)(2)NET SALES IN
169、 MILLIONS OF DOLLARS20072006200520042003$2,000$1,500$1,000$500$-1,4881,7221,7361,8321,956(1)Reflects Domtar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscal years 2003 through 2005 and 2007.Percentage of 2007 Net Sales in Cellulose Fibers
170、PULPLIQUID PACKAGING BOARDOTHER PRODUCTS81%13%6%Pulp VolumesOur sales volume of cellulose fiber products in 2007 was2.1 million tons a decrease of 21 percent compared with2006 due to the divesture of five production facilities during theyear.Factors that affect sales volumes for cellulose fiber prod
171、-ucts include:growth of the world gross domestic product;anddemand for paper production and diapers.Five-Year Summary of Sales Volume for Cellulose Fibers(1)(2)SALES VOLUMES IN THOUSANDS20072006200520042003Pulp air-dry metrictons2,0702,6212,5022,5582,414Liquid packagingboard tons286275258276256(1)Re
172、flects the Domtar Transaction in March 2007.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.Pulp PricesOur pulp prices in 2007 increased compared with 2006 due to:the relative weakness of the U.S.dollar;level of demand;andthe world
173、 economic environment.Five-Year Summary of Selected Published Pulp Prices$/TON20032004200520062007NORTHERN BLEACHED KRAFT PULP-AIR DRY METRIC-U.S.721646640553SELECTED PUBLISHED PRODUCT PRICES823WHERE WERE HEADEDOur strategies for achieving continued success include:focusing our Cellulose Fibers busi
174、nesses on value-added pulpproducts;focusing research and development resources on new waysto expand and improve the range of applications for cellulosefiber,including chemically modified fibers to enhanceperformance and on new product opportunities for liquidpackaging and newsprint;providing our cus
175、tomers with access to our technicalexpertise;improving our cost-competitiveness through operationalexcellence and noncapital solutions;andfocusing capital investments on new and improved productcapabilities and cost-reduction opportunities.Weyerhaeuser Company 2007 Annual Report and Form 10-K11FINE
176、PAPEROn March 7,2007,the companys fine paper operations andrelated assets were divested in the Domtar Transaction.As aresult,the 52 week period ended December 30,2007,includesnine weeks of fine paper operations.Subsequent to the firstquarter of 2007,we no longer have results of operations forthe Fin
177、e Paper segment.Five-Year Summary of Net Sales for Fine Paper(1)NET SALES IN MILLIONS OF DOLLARS20072006200520042003Paper$432$2,470$2,417$2,226$2,182Coatedgroundwood26171180156140Otherproducts(2)1431141Total$459$2,645$2,600$2,393$2,363(1)Fiscal year 2006 includes 53 weeks of operations compared with
178、 52 weeks in fiscalyears 2003 through 2005.2007 includes nine weeks of operations prior to the divest-ure of the Fine Paper business.(2)Other products for 2003 includes pulp sales from integrated mills(mills with both pulpand paper production).Subsequent to 2003,pulp sales from integrated mills arer
179、ecorded in the Cellulose Fibers segment.Five-Year Summary of Sales Volume for Fine Paper(1)SALES VOLUMES IN THOUSANDS20072006200520042003Paper tons(2)4612,7492,9962,8762,822Coated groundwood tons38234232243234Paper converting tons3181,9321,9641,8391,847(1)Fiscal year 2006 includes 53 weeks of operat
180、ions compared with 52 weeks in fiscalyears 2003 through 2005.2007 includes nine weeks of operations prior to the divest-ure of the Fine Paper business.(2)Paper sales include unprocessed rolls and converted paper volumes.Five-Year Summary of Fine Paper Production(1)PRODUCTION IN THOUSANDS200720062005
181、20042003Paper tons(2)4442,7963,0603,0062,833Coatedgroundwood tons43230234240239Paper converting tons3181,9311,9501,8381,785(1)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005.2007 includes nine weeks of operations prior to the divest-ure of the
182、 Fine Paper business.(2)Paper production includes unprocessed rolls and converted paper volumes.12CONTAINERBOARD,PACKAGING AND RECYCLINGOur Containerboard,Packaging and Recycling business seg-ment manufactures a wide range of packaging products andservices.We also operate an extensive wastepaper col
183、lectionsystem through which we collect and broker recovered paper(recycled fiber)to company mills and worldwide customers.WHAT WE DOWe use a vertically integrated,full fiber-cycle strategy in deliver-ing packaging products and services.This means that we:produce the material linerboard and medium us
184、ed tomanufacture boxes and other packaging;manufacture boxes and other packaging;andrecycle used packaging and paper in combination with otherresource material to create new linerboard and medium.We participate in the fresh produce markets and,as a result,aportion of our business is seasonal.Contain
185、erboard,Packaging and Recycling ProductsPRODUCTSHOW THEYRE USEDContainerboardLinerboardMediumWhite top linerboardKraft bag paperUsed to produce corrugated packaging and Kraftbags and sacksPackagingBoxes,Tri-WallLaminated binsSheetsCorrugated packaging for the transport ofproducts and a wide variety
186、of other usesRecyclingUsed corrugated con-tainersUsed office paperOther recyclablematerialsUsed in the manufacture of paper and otherproductsKraft bags and sacksSacks used for groceries in retail,bags used forfast foodOther productsSpaceKraftand bulkpackagingInks and platesRetail centersPreprinted l
187、inerboardUsed primarily to transport high density prod-ucts such as liquids,chemicals and bulk foodsPrinting for corrugated packagingDesign and project services for display,point-of-purchase and retail needsUsed to produce enhanced graphics packagingWHERE WE DO ITOur plants and facilities are locate
188、d throughout the U.S.andMexico near major customer locations and our products aresold globally.Our operations include 106 manufacturing facili-ties and 10 specialty packaging plants.Information about thelocations,capacities and actual production of our manufactur-ing facilities is included below.Pri
189、ncipal Manufacturing LocationsBroken out by major products,locations of our principal manu-facturing facilities are:Containerboard U.S.Alabama,California,Iowa,Kentucky,Louisiana,Oklahoma and Oregon Mexico XalapaPackaging U.S.Alabama,Arizona,Arkansas,California,Colorado,Florida,Georgia,Hawaii,Illinoi
190、s,Indiana,Iowa,Kansas,Kentucky,Maryland,Michigan,Minnesota,Mississippi,Missouri,Nebraska,New Jersey,New York,North Carolina,Ohio,Oklahoma,Oregon,Tennessee,Texas,Virginia,Washington and Wisconsin Mexico Ixtac,Mexico City,Monterrey and Silao,Specialty Packaging U.S.California,Georgia,Illinois,Indiana,
191、Kentucky,NorthCarolina,Ohio and OregonRecycling U.S.Arizona,California,Colorado,Illinois,Iowa,Kansas,Maryland,Minnesota,Nebraska,North Carolina,Oregon,Tennessee,Texas,Utah,Virginia and WashingtonKraft Bags and Sacks U.S.California,North Carolina,Oregon and TexasSummary of 2007 Containerboard,Packagi
192、ng and RecyclingCapacitiesCAPACITIES IN THOUSANDSPRODUCTIONCAPACITYNUMBER OFFACILITIESContainerboard tons6,3009Packaging MSF100,70074Recycling tonsN/A19Kraft bags and sacks tons1994Five-year Summary of Containerboard,Packaging andRecycling Production(1)PRODUCTION IN THOUSANDS20072006200520042003Cont
193、ainerboardtons(2)6,1066,2606,2686,2916,003Packaging MSF(3)77,22179,85178,08977,82277,830Recycling tons(4)6,6556,8296,7436,7186,216Kraft bagsand sacks tons9382889498(1)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.(2)Containerboard p
194、roduction represents machine production and includes volumes thatare further processed into packaging and kraft bags and sacks by company facilities.(3)Packaging production capacity is based on corrugator production.(4)Recycling production includes volumes processed in Weyerhaeuser recycling facilit
195、iesthat are consumed by company facilities and brokered volumes.Weyerhaeuser Company 2007 Annual Report and Form 10-K13HOW MUCH WE SELLOur capability,expertise and performance have made us one ofthe worlds largest developers,producers and suppliers ofpackaging products and services.In 2007,our net s
196、ales were$5.2 billion compared with$4.9 billion in 2006.Five-Year Summary of Net Sales for Containerboard,Packaging and Recycling(1)NET SALES IN MILLIONS OF DOLLARS20072006200520042003Containerboard$457$377$395$368$304Packaging4,0193,9313,7103,5843,544Recycling413345352347247Kraft bagsand sacks96888
197、38080Otherproducts183171167156147Total$5,168$4,912$4,707$4,535$4,322(1)Fiscal year 2006 includes 53 weeks of operations compared to 52 weeks in fiscal years2003 through 2005 and 2007.Five-Year Trend for Total Net Sales in Containerboard,Packaging and Recycling(1)NET SALES IN MILLIONS OF DOLLARS20032
198、004200520062007$5,000$4,0004,3224,5354,7075,1684,912$3,000$2,000$1,000$-(1)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscal years 2003 through 2005 and 2007.Percentage Breakdown of 2007 Net Sales in Containerboard,Packaging and RecyclingCONTAINERBOARDPACKAGINGRECYCLI
199、NGKRAFT BAGS AND SACKSOTHER PRODUCTS3%2%78%8%9%Containerboard,Packaging and Recycling VolumesWe are the second-largest producer of corrugated packagingproducts in North America.We produce approximately 6.1 million short tons of container-board per year,and we convert the majority to packaging inour
200、manufacturing facilities.Our manufacturing facilities can produce 101 billion squarefeet of corrugated packaging annually.Our recycling operation annually collects nearly 6.7 milliontons of used corrugated boxes and paper,and we consume amajority in our manufacturing operations.Factors that affect s
201、ales volumes of containerboard,packagingand recycling products and services include:the level of industrial activity in North America;growth in retail segments and markets,which is affected bychanges in consumer spending;the level of production of durable and nondurable goods,including fresh produce
202、,fresh protein and processed foods;growth in demand for high-performance containerboard andpackaging in industrial countries;andgrowth in demand for high-quality recovered fiber partic-ularly in China for use in the manufacture of paper andcontainerboard.Our volume of containerboard sales increased
203、in 2007 as aresult of a rise in export sales,compensating for the decline inpackaging volume.Our packaging sales declined in 2007because of the closure of eight plants and the sale of two oth-ers in 2006 and due to the effect of cold weather and E.coli onproduce markets during the first quarter of 2
204、007.Our salesvolume in the kraft bag market increased in 2007 as thestart-up of a new facility in the second quarter of 2007 morethan offset the closure of another bag plant in 2006.Five-Year Summary of Sales Volume for Containerboard,Packaging and Recycling(1)SALES VOLUMES IN THOUSANDS2007200620052
205、0042003Containerboard tons9578561,0461,001890Packaging MSF73,57274,86773,63172,88572,741Recycling tons2,5802,8752,7282,6942,290Kraft bags andsacks tons99898995100(1)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2002 through 2005 and 2007.14Containerboard,Pack
206、aging and Recycling PricesThe factors that affect selling prices for our containerboard,packaging and recycling products and services vary.Containerboard and recycled fiber prices reflect the relativelevel of supply and demand for these materials in local andinternational markets.Supply is affected
207、by capacity in theindustry and demand is a direct result of economic activity.Packaging prices are negotiated between buyers and sellers,as each box is generally designed to meet a particular cus-tomers need.Packaging prices are also affected by supply and demanddynamics as well as changes in prices
208、 for paper and otherproduction raw materials.Five-year Summary of Selected Published Containerboard,Packaging and Recycling Prices$/TON20032004200520062007SELECTED PUBLISHED PRODUCT PRICESLINEBOARD-42 LB.-EASTERN U.S.RECYCLING-OLD CORRUGATED CONTAINERS(OCC)41141451748861807063102LINEBOARD-42 LB.-EAS
209、TERN U.S.366WHERE WERE HEADEDDuring 2007,this segment continued to refine its businessmodel implemented in 2006:shifting from a plant-focusedmanagement model to a customer-focused,integrated supply-chain model.Our strategies for achieving continued successinclude:optimizing and aligning the business
210、 supply chain from acustomer-back perspective;developing and producing innovative,cost-effective solutionsto meet our customers needs for packaging that both pro-tects their products through the distribution channel andcommunicates to the people who buy these products;aligning our asset base to meet
211、 customer needs;andtargeting market segments,and customers within thosesegments,that will increase margins and enable the busi-ness to earn the cost of capital.Our research and development activity in this segment isfocused in two primary areas;recyclable products that wouldreplace waxed corrugated
212、package products,and radio-frequency identification(RFID)for corrugated packages.We arecommercializing our line of recyclable wax-replacement productscalled Clima Series and have demonstrated success in apply-ing RFID tags to corrugated boxes.The proposed banning of plastic grocery bags in several m
213、ajormunicipalities offers the potential to further expand the kraftbag market.Strategic ReviewOn May 4,2007 we announced that our board of directors hadauthorized a process to consider a broad range of strategicalternatives for our Containerboard,Packaging and Recyclingbusiness.Alternatives range fr
214、om continuing to hold and oper-ate the assets to a possible sale or business combination.Asof the date of this filing,this strategic review is ongoing.Weyerhaeuser Company 2007 Annual Report and Form 10-K15REAL ESTATEOur Real Estate business segment includes our wholly-ownedsubsidiary,Weyerhaeuser R
215、eal Estate Company(WRECO),andother real estate-related activities.WRECOs operations areconcentrated in select,high-growth metropolitan areas in theU.S.WHAT WE DOThe Real Estate segment is focused on:constructing single-family housing;developing residential lots for our use and for sale;andmaking res
216、idential real estate investments with institutionalinvestors.Real Estate Products and ActivitiesPRODUCTSHOW THEYRE USEDSingle-family housingResidential livingLand developmentResidential lots and land for construction andsale,master planned communitiesOtherResidential homebuilding related investments
217、WHERE WE DO ITOur operations are concentrated in the U.S.,including select,metropolitan areas:Single-Family Housing and Land Development Arizona,California,Maryland,Nevada,Oregon,Texas,Vir-ginia and WashingtonReal Estate Investment Management Offices Arizona,California,Colorado,Illinois,Nevada,Virgi
218、nia andWashingtonHOW MUCH WE SELLWe are one of the top 20 homebuilding companies in the U.S.as measured by annual single-family home closings.Our revenues decreased from$3.3 billion in 2006 to$2.4 bil-lion in 2007,primarily due to a 24 percent decline in single-family closings.The decline is the res
219、ult of a general housing-market downturn,caused by excess supply and slow demand.This was worsened by the changing mortgage market whichresulted in tightened credit standards.The following factors affect revenues from our Real Estatebusiness segment:Market prices of the homes that we construct for s
220、ale mayvary.The product mix and geographic mix of sales vary based onthe following:We build in a variety of geographic locations.Market con-ditions vary by geography which affects total revenues.We provide homes at a range of price points to meet ourtarget customers needs,from entry-level products i
221、nWashington to ocean view homes in Southern Californiaand waterfront homes in Maryland.The mix of these salesaffects total revenues.We build both traditional single-family,detached homesand attached products such as town homes and con-dominiums.The mix of price points at which these prod-ucts sell c
222、reates variability in our revenue from period toperiod.Land and lot sales are a component of our master-planneddevelopment activities.These sales do not occur evenly fromyear to year,but average approximately 5 percent to 15percent of total Real Estate revenues annually.From time to time,we sell apa
223、rtment buildings that we haveconstructed.Five-Year Summary of Revenue for Real Estate(1)(2)REVENUE IN MILLIONS OF DOLLARS20072006200520042003Single-familyhousing$2,079$2,951$2,686$2,193$1,730Landdevelopment213310202284237Other6774271862Total$2,359$3,335$2,915$2,495$2,029(1)Reflects the acquisition o
224、f Maracay Homes in February 2006.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.Five-Year Trend for Total Net Sales in Real Estate(1)(2)NET SALES IN MILLIONS OF DOLLARS20072006200520042003$5,000$4,000$3,000$2,000$1,000$-(1)Reflect
225、s the acquisition of Maracay Homes in February 2006.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscal years 2003 through 2005 and 2007.2,4952,0292,9153,3352,35916Percentage Breakdown of 2007 Net Sales in Real EstateSINGLE-FAMILY HOMESOTHER88%9%3%LAND DEVELOPMENTFiv
226、e-Year Summary of Single-Family Unit Statistics(1)(2)SINGLE-FAMILY UNIT STATISTICS20072006200520042003Homes sold4,1524,5415,6855,3755,005Homes closed4,4275,8365,6475,2644,626Homes sold butnot closed1,2241,4992,4102,3722,261Single-familygross margin(%)15.4%26.5%32.8%29.7%25.7%(1)Reflects the acquisit
227、ion of Maracay Homes in February 2006.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.WHERE WERE HEADEDOur strategies for achieving continued success include:delivering quality homes to satisfied customers a principlewe measure thr
228、ough“willingness to refer”rates from surveysof every homebuyer;focusing on new market areas where demand for new single-family housing and master-planned communities is high;creating different and distinct value propositions that target aspecific market niche in each of our chosen geographies;expand
229、ing into adjacent markets where our local value propo-sitions fit;replicating best practices developed in each geographic area;andleveraging our size to improve supply agreements,and attractand retain a highly-talented workforce.Weyerhaeuser Company 2007 Annual Report and Form 10-K17CORPORATE AND OT
230、HEROur Corporate and Other segment includes:our international operations,which include distribution andconverting facilities located outside North America;governance related corporate support activities and companywide initiatives such as major system and infrastructuredeployments;andtransportation
231、operations including Westwood Shipping Linesand five short line railroads.We may also record one time gains or charges in the Corporateand Other segment related to dispositions or events that arenot related to an individual operating segment.WHAT WE DOInternational operations in this segment general
232、ly are con-ducted by wholly owned subsidiaries or joint ventures for whichwe are the managing partner.Our international assets consistprincipally of forest plantations,forest licenses and convertingassets.Our transportation operations provide services to our manu-facturing operations and to third pa
233、rties.WHERE WE DO ITOur international operations are primarily located in Australia,Uruguay and Brazil.As part of our strategic restructuring of ourinternational holdings,we took the following actions in ourinternational operations during the last three years,we:sold our French composite panels oper
234、ations Dec.2005;sold our Irish composite panels operation Nov.2006,restructured our investment in our Uruguay joint ventures inpreparation for a partitioning of the assets to the joint ven-ture owners June 2007;andsold our investment in our New Zealand joint venture,NelsonForests Oct.2007.See Note 7
235、:Equity Affiliates in Notes to Consolidated FinancialStatements for more information related to our joint ventures.Our transportation operations include our marine operationsthat operate between North America and Asia and our railroadoperations located in the western and southern U.S.HOW MUCH WE SEL
236、LSales and revenues for our Corporate and Other segmentcomes primarily from our international operations and marinetransportation.In 2007,our net sales were$444 millioncompared with$484 million in 2006.The decline in revenuesis primarily due to the sale of the Irish composite panel oper-ation in Nov
237、ember 2006.Factors that affect revenues in our international operationsinclude:overall demand for wood products used in residential con-struction and remodeling of existing homes in Australia,Europe and Japan;andenvironmental concerns,particularly in Europe,related toendangered tropical hardwoods,wh
238、ich increases demand forthe type of sustainable plantation wood we grow in SouthAmerica.Factors that affect revenues in our transportation operationsinclude:international trade levels between North America and its trad-ing partners in Asia;the profile of our competition within our shipping lanes;and
239、overall demand for wood and packaging products.Five-Year Summary of Revenue for Corporate and Other(1)(2)REVENUE IN MILLIONS OF DOLLARS20072006200520042003International woodproducts$218$283$389$381$319Transportation223198203194173Other338Total$444$484$600$575$492(1)Reflects the divestiture of our Fr
240、ench composite panels operations in December 2005and our Irish composite panels operation in November 2006.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscalyears 2003 through 2005 and 2007.Five-Year Trend for Total Net Sales in Corporate and Other(1)(2)NET SALES IN
241、 MILLIONS OF DOLLARS$500$600$400$300$200$100$-20072006200520042003(1)Reflects the divestiture of our French composite panels operations in December 2005 and our Irish composite panels operation in November 2006.(2)Fiscal year 2006 includes 53 weeks of operations compared with 52 weeks in fiscal year
242、s 2003 through 2005 and 2007.492575600484444WHERE WERE HEADEDOur strategies for achieving continued success in our interna-tional operations include:establishing a position as one of the largest,lowest-cost,global softwood and hardwood timber growers;andproducing plantation hardwood and softwood raw
243、 materialsand finished products for structural and appearance uses inthe global marketplace.18NATURAL RESOURCE AND ENVIRONMENTALMATTERSGrowing and harvesting timber is subject to numerous laws andregulations to protect the environment,nontimber resourcessuch as wildlife and water,and other social va
244、lues.Changes inthose laws and regulations can significantly affect local orregional timber harvest levels and market values of timber-based raw materials.ENDANGERED SPECIES PROTECTIONSIn the U.S.,a number of fish and wildlife species that inhabitgeographic areas near or within our timberlands have b
245、eenlisted as threatened or endangered under the federal Endan-gered Species Act(ESA)or similar state laws.Some of theselisted species include the northern spotted owl,the marbledmurrelet,a number of salmon species,bull trout and steelheadtrout in the Pacific Northwest and the red-cockaded wood-pecke
246、r,gopher tortoise and American burying beetle in theSoutheast.Additional species or populations may be listed as aresult of pending or future citizen petitions or may be initiatedby federal or state agencies.Federal and state requirements to protect habitat for threat-ened and endangered species hav
247、e resulted in restrictions ontimber harvest on some timberlands,including some of ourtimberlands.Additional listings of fish and wildlife species asendangered,threatened or sensitive under the ESA and similarstate laws as well as regulatory actions taken by federal orstate agencies to protect habita
248、t for these species may,in thefuture,result in additional restrictions on our timber harvestsand other forest management practices.They also couldincrease our operating costs and affect timber supply andprices in general.REGULATIONS AFFECTING FORESTRY PRACTICESIn the U.S.,regulations established by
249、the federal,state andlocal governments or agencies to protect water quality andwetlands could affect our future harvests and forest manage-ment practices on some of our timberlands.Forest practiceacts in some states in the U.S.increasingly affect present orfuture harvest and forest management activi
250、ties.For example,in some states,these acts limit the size of clearcuts,requiresome timber to be left unharvested to protect water quality andfish and wildlife habitat,regulate construction and maintenanceof forest roads,require reforestation following timber harvestand contain procedures for state a
251、gencies to review andapprove proposed forest practice activities.Some states andlocal governments regulate certain forest practices throughvarious permit programs.Each state in which we own timber-lands has developed best management practices to reduce theeffects of forest practices on water quality
252、 and aquatic hab-itats.Additional and more stringent regulations may be adoptedby various state and local governments to achieve water-qualitystandards under the federal Clean Water Act,protect fish andwildlife habitats or achieve other public policy objectives.FOREST CERTIFICATION STANDARDSWe opera
253、te in the U.S.under the Sustainable Forestry Ini-tiative.This is a certification standard designed to supple-ment government regulatory programs with voluntary landownerinitiatives to further protect certain public resources and values.The Sustainable Forestry Initiativeis an independent stan-dard,o
254、verseen by a governing board consisting of conservationorganizations,academia,the forest industry,and large andsmall forest landowners.Compliance with the SustainableForestry Initiativemay result in some increases in our operat-ing costs and curtailment of our timber harvests in some areas.WHAT THES
255、E REGULATIONS AND CERTIFICATIONPROGRAMS MEAN TO USThe regulatory and nonregulatory forest management programsdescribed above have increased our operating costs,resultedin changes in the value of timber and logs from our timber-lands,and contributed to increases in the prices paid for woodproducts an
256、d wood chips during periods of high demand.Thesekinds of programs also can make it more difficult for us torespond to rapid changes in markets,extreme weather or otherunexpected circumstances.One additional effect may be furtherreductions in the usage of or substitution of other products forlumber a
257、nd plywood.We believe that these kinds of programshave not had,and in 2008 will not have,a significant effect onthe total harvest of timber in the U.S.or any major U.S.region.However,these kinds of programs may have such an effect inthe future.We expect we will not be disproportionately affectedby t
258、hese programs as compared with typical owners of com-parable timberlands.We also expect that these programs willnot significantly disrupt our planned operations over large areasor for extended periods.REGULATIONS AND FOREST CERTIFICATION INCANADAOur forest operations in Canada are carried out on pub
259、lic forest-lands under forest licenses.All forest operations are subject toforest practices and environmental regulations,and operationsunder licenses also are subject to contractual requirementsbetween us and the relevant province designed to protect envi-ronmental and other social values.In Canada
260、,the federal Spe-cies at Risk Act(SARA)was enacted in 2002.SARA enactedprotective measures for species identified as being at risk andfor critical habitat.To date,SARA has not had a significanteffect on our operations;however,it is anticipated that SARAwill,over time,result in some additional restri
261、ctions on timberharvests and other forest management practices and increaseWeyerhaeuser Company 2007 Annual Report and Form 10-K19some operating costs for operators of forestlands in Canada.For these reasons,SARA is expected to affect timber supplyand prices in the future.In Canada,we participate in
262、 the Canadian Standards Associa-tion Sustainable Forest Management System standard,a volun-tary certification system that further protects certain publicresources and values.Compliance with this standard will resultin some increases in our operating costs and curtailment of ourtimber harvests in som
263、e areas in Canada.CANADIAN ABORIGINAL RIGHTSMany of the Canadian forestlands also are subject to the con-stitutionally protected treaty or common-law rights of theaboriginal peoples of Canada in the British Columbia province.Most of British Columbia(B.C.)is not covered by treaties andas a result the
264、 claims of B.C.s aboriginal peoples relating toforest resources are largely unresolved,although many aborigi-nal groups are actively engaged in treaty discussions with thegovernments of B.C.and Canada.Final or interim resolution ofclaims brought by aboriginal groups is expected to result inadditiona
265、l restrictions on the sale or harvest of timber and mayincrease operating costs and affect timber supply and prices inCanada.We believe that such claims will not have a significanteffect on our total harvest of timber or production of forestproducts in 2008,although they may have such an effect in t
266、hefuture.POLLUTION CONTROL REGULATIONSOur operations also are subject to federal,state and provincial,and local pollution controls with regard to air,water and land;solid and hazardous waste management;disposal andremediation laws;and regulations in all areas in which we haveoperations.We also are s
267、ubject to market demands withrespect to chemical content of some of our products and ouruse of recycled fiber.Compliance with these laws,regulationsand demands usually involves capital expenditures as well asadditional operating costs.We cannot easily quantify the futureamounts of capital expenditur
268、es we might have to make tocomply with these laws,regulations and demands,or theeffects on our operating costs,because in some instances,compliance standards have not been developed or have notbecome final or definitive.In addition,when we make changesin operations to comply with regulatory standard
269、s,we frequentlyare making changes for other purposes as well.These pur-poses might include the extension of facility life,increase incapacity,changes in raw material requirements,or increase ineconomic value of assets or products.It is difficult to isolate the environmental component of mostmanufact
270、uring capital projects,but we estimate that our capitalexpenditures for environmental compliance were approximately$14 million in 2007(approximately 2 percent of total capitalexpenditures,excluding acquisitions and Real Estate).Basedon our understanding of current regulatory requirements in theU.S.a
271、nd Canada,we expect that capital expenditures for envi-ronmental compliance will be approximately$24 million in2008(approximately 4 percent of expected total capitalexpenditures,excluding acquisitions and Real Estate).ENVIRONMENTAL CLEANUPWe are involved in the environmental investigation orremediat
272、ion of numerous sites,which we presently own orformerly owned.Of these sites,we may have the sole obligationto remediate or may share that obligation with one or moreparties.In some instances several parties have joint and sev-eral obligations to remediate.Some sites are Superfund siteswhere we have
273、 been named as a potentially responsible party.Our liability with respect to these various sites ranges frominsignificant to substantial.The amount of liability depends onthe quantity,toxicity and nature of materials at the site anddepends on the number and economic viability of the otherresponsible
274、 parties.We spent approximately$10 million in 2007 and expect tospend approximately$10 million in 2008 on environmentalremediation of these sites.It is our policy to accrue forenvironmental remediation costs when we determine it is prob-able that such an obligation exists and can reasonably estimate
275、the amount of the obligation.We currently believe it is reason-ably possible that our costs to remediate all the identified sitesmay exceed our current accruals of$27 million.The excessamounts required may be insignificant or could range,in theaggregate,up to approximately$37 million over several ye
276、ars.This estimate of the upper end of the range of reasonablypossible additional costs is much less certain than the esti-mates we currently are using to determine how much to accrue.The estimate of the upper range also uses assumptions lessfavorable to us among the range of reasonably possible out-
277、comes.REGULATION OF AIR EMISSIONS IN THE U.S.The United States Environmental Protection Agency(U.S.EPA)has promulgated regulations for air emissions from pulp andpaper manufacturing facilities.These regulations cover hazard-ous air pollutants that require use of maximum achievable con-trol technolog
278、y(MACT)and controls for pollutants thatcontribute to smog and haze.Due to a recent D.C.Circuit Courtdecision,the U.S.EPA MACT standards for air emissions fromindustrial boilers and certain wood products emissions unitswere vacated.The U.S.EPA must promulgate new MACT stan-dards for these sources.We
279、anticipate that we might spend asmuch as$20 million over the next few years to comply with theMACT standards.We cannot currently quantify the amount ofcapital we will need in the future to comply with new regulationsbeing developed by the U.S.EPA or Canadian environmental20agencies because final rul
280、es have not been promulgated.However,at this time we anticipate that compliance with thenew regulations will not result in capital expenditures in anyyear that are material in relation to our annual capitalexpenditures.We recently adopted a goal of reducing greenhouse gas(GHG)emissions by 40 percent
281、 by 2020 compared with our emissionsin 2000,assuming a comparable portfolio and regulations.Weintend to achieve this goal by increasing energy efficiency andby using systems that enable substitution of greenhousegas-neutral,biomass fuels for high-priced fossil fuels.As eachof our power and recovery
282、boilers reaches its design life spanover the next 14 years,we may replace the boiler with astate-of-the-art system.During 2007,we completed the divest-ment of our fine paper operations and related assets in theDomtar Transaction.The transaction removed several highgreenhouse gas-emitting operations
283、from the companys portfo-lio of manufacturing.In accord with generally accepted,volun-tary GHG accounting standards,we adjusted our baseline year2000 values and subsequent year greenhouse gas inventoryvalues to reflect these changes.We continue with our plannedreplacements of recovery and power boil
284、er units in accord withour budgeted capital expenditure programs.These replace-ments will allow an increase in the amount of energy obtainedfrom the biomass byproducts created in the pulping process.We also anticipate being able to reduce the purchase of electricpower by up to 50 percent through imp
285、rovements in energy effi-ciency and by increasing the use of combined heat and powertechnology.In April 2007,the U.S.Supreme Court ruled that greenhousegases are pollutants that can be subject to regulation under theU.S.Clean Air Act.As a result of this ruling,the U.S.EPA mayregulate greenhouse gas
286、emissions.Some U.S.state govern-ments also have released policy proposals that indicate theymay regulate GHG emissions in the future.It is not yet known when and to what extent these U.S.federaland state policy activities may come into force or how anyfuture federal and state greenhouse gas regulato
287、ry programsmay relate to each other.A multistate and federal greenhousegas emissions reduction trading system may be put in place inthe future with potentially significant implications for U.S.busi-nesses.We believe these measures have not had,and in 2008will not have,a significant effect on Weyerha
288、eusers U.S.oper-ations although they may have such an effect in the future.Weexpect we will not be disproportionately affected by thesemeasures as compared with typical owners of comparableoperations.We also expect that these measures will not sig-nificantly disrupt our planned operations.REGULATION
289、 OF AIR EMISSIONS IN CANADAWe also are actively participating in negotiations between theForest Products Association of Canada and Natural ResourcesCanada to define industry obligations for complying with Cana-das national plan for reducing greenhouse gas emissions overthe next several years.During
290、2007,we continued our workwith international,national and regional policy makers in theirefforts to develop technically sound and economically viablepolicies,practices and procedures for measuring,reporting andmanaging greenhouse gas emissions.In April 2007,the Canadian federal government proposed a
291、regulatory framework for air emissions that adopts someaspects of the Kyoto Protocol.The federal framework calls formandatory reductions in greenhouse gas emissions for heavyindustrial emissions producers,among other measures,to beput in place by 2010.Canadian provincial governments also areworking
292、on emissions-reduction strategies.It is not yet knownwhat strategies or requirements will come into force or how anyprovincial and federal plans that may be put into place willrelate to each other.A Canadian emissions trading system maybe put in place in the future with potentially significantimplic
293、ations for Canadian businesses.We believe these meas-ures have not had,and in 2008 will not have,a significanteffect on Weyerhaeusers Canadian operations although theymay have such an effect in the future.We expect we will not bedisproportionately affected by these measures as comparedwith typical o
294、wners of comparable operations.We also expectthat these measures will not significantly disrupt our plannedoperations.POTENTIAL CHANGES IN POLLUTION REGULATIONThe U.S.EPA has repealed the regulations promulgated in2000 that would have required states to develop total max-imum daily load(TMDL)allocat
295、ions for pollutants in water bod-ies determined to be water-quality-impaired.However,statescontinue to promulgate TMDL requirements.The state TMDLrequirements may set limits on pollutants that may be dis-charged to a body of water or set additional requirements,suchas best management practices for n
296、onpoint sources,includingtimberland operations,to reduce the amounts of pollutants.Itis not possible to estimate the capital expenditures that maybe required for the company to meet pollution allocationsacross the various proposed state TMDL programs until a spe-cific TMDL is promulgated.Weyerhaeuse
297、r Company 2007 Annual Report and Form 10-K21FORWARD-LOOKING STATEMENTSThis report contains statements concerning our future resultsand performance that are forward-looking statements accordingto the Private Securities Litigation Reform Act of 1995.Thesestatements:use forward-looking terminology;are
298、based on various assumptions we make;andmay not be accurate because of risks and uncertainties sur-rounding the assumptions that we make.Factors listed in this section as well as other factors notincluded may cause our actual results to differ from ourforward-looking statements.There is no guarantee
299、 that any ofthe events anticipated by our forward-looking statements willoccur.If any of the events occurs,there is no guarantee whateffect it will have on our operations or financial condition.We will not update our forward-looking statements after thedate of this report.FORWARD-LOOKING TERMINOLOGY
300、Some forward-looking statements discuss our plans,strategiesand intentions.They use words such as expects,may,will,believes,should,approximately,anticipates,estimates,andplans.In addition,these words may use the positive or negativeor a variation of those terms.STATEMENTSWe make forward-looking stat
301、ements of our expectations regard-ing:our markets in the first quarter of 2008;earnings and performance of our business segments duringthe first quarter of 2008;demand and pricing for our products during the first quarterof 2008;lower timber fee harvest volumes and higher costs in thewest as well as
302、 fewer sales of nonstrategic timberlands dur-ing the first quarter of 2008;losses from operations in Wood Products as a result of con-tinuing poor market conditions;increases in manufacturing costs in Cellulose Fibers busi-nesses due to scheduled annual maintenance outages;decline of packaging shipm
303、ents;increases in prices for OCC and wood chips;reduced land sales in the first quarter of 2008;higher energy costs;effect of capital expenditures on our operations;results of execution of our business strategies;andnew home sales and closings.In addition,we also base our forward-looking statements
304、on theexpected effect of:foreign exchange rates,primarily Canadian and the euro;adverse litigation outcomes and the adequacy of reserves;regulations;changes in accounting principles;contributions to pension plans;projected benefit payments;projected tax rates;loss of tax credits;andother related mat
305、ters.RISKS,UNCERTAINTIES AND ASSUMPTIONSThe major risks and uncertainties and assumptions that wemake that affect our business include,but are not limited to:general economic conditions,including the level of interestrates,strength of the U.S.dollar and housing starts;market demand for our products,
306、which is related to thestrength of the various U.S.business segments;energy prices;raw material prices;chemical prices;performance of our manufacturing operations includingunexpected maintenance requirements;successful execution of our internal performance plans andcost reduction initiatives;level o
307、f competition from domestic and foreign producers;forestry,land use,environmental and other governmentalregulations;weather;loss from fires,floods,windstorms,pest infestations andother natural disasters;transportation costs;legal proceedings;performance of pension fund investments and derivatives;ch
308、anges in accounting principles;the effect of timing of retirements and changes in the marketprice of our common stock on charges for share-basedcompensation;andthe other factors described under“Risk Factors.”EXPORTING ISSUESWe are a large exporter,affected by changes in:economic activity in Europe a
309、nd Asia especially Japan;currency exchange rates particularly the relative value ofthe U.S.dollar to the euro and the Canadian dollar;andrestrictions on international trade or tariffs imposed onimports.22RISK FACTORSWe are subject to certain risks and events that,if one or moreof them occur,could ad
310、versely affect our business,our finan-cial condition and our results of operations and the tradingprice of our common stock.You should consider the following risk factors,in addition to theother information presented in this report and the mattersdescribed in“Forward-Looking Statements,”as well as t
311、heother reports and registration statements we file from time totime with the SEC,in evaluating us,our business,and aninvestment in our securities.The risks below are not the only risks we face.Additional risksnot currently known to us or that we currently deem immaterialalso may adversely affect ou
312、r business.RISKS RELATED TO OUR INDUSTRIES ANDBUSINESSCYCLICAL INDUSTRIESThe industries in which we operate are highly cyclical.Fluctua-tions in the prices of and the demand for our products couldresult in smaller profit margins and lower sales volumes.Our businesses are highly cyclical.Historically
313、,economic andmarket shifts,fluctuations in capacity and changes in foreigncurrency exchange rates and mortgage interest rates have cre-ated cyclical changes in prices,sales volume and margins forour products.The length and magnitude of industry cycles havevaried over time and by product but generall
314、y reflect changes inmacroeconomic conditions and levels of industry capacity.Many of our products are commodities that are widely availablefrom other producers.Because commodity products have fewdistinguishing properties from producer to producer,competi-tion for these products is based primarily on
315、 price,which isdetermined by supply relative to demand.The overall levels of demand for the products we manufactureand distribute,and consequently our sales and profitability,reflect fluctuations in levels of end-user demand,which dependin part on general macroeconomic conditions in North Americaand
316、 worldwide,and local economic conditions,and competitionfrom substitute products.Changes in the following are some of the factors that mayadversely affect our businesses and the results of operations:industrial,nondurable goods production;consumer spending;employment levels;job growth;population gro
317、wth;new home construction and repair and remodeling activity;consumer confidence;interest rates;andcurrency exchange rates.Industry supply of logs,pulp,paper,packaging and wood prod-ucts also is subject to fluctuation,as changing industry con-ditions may cause producers to idle or permanently closei
318、ndividual machines or entire mills or to decrease harvestinglevels.In addition,to avoid substantial cash costs in con-nection with idling or closing a mill,some producers choose tocontinue to operate at a loss,which could prolong weak pricesdue to oversupply.Oversupply also may result from producers
319、introducing new capacity or increasing harvest levels inresponse to favorable short-term pricing trends.Industry supply of pulp,paper and containerboard also are influ-enced by overseas production capacity,which has grown inrecent years and is expected to continue to grow.While theweakness of the U.
320、S.dollar has mitigated the levels of importsin recent years,imports of pulp,paper and containerboard fromoverseas may increase,resulting in lower prices.Prices for our products are affected by many factors outside ofour control,and we will have little influence over the timing andextent of price cha
321、nges,which often are volatile.Becausemarket conditions beyond our control determine the prices forour commodity products,the price for any one or more of theseproducts may fall below our cash production costs,requiring useither to incur cash losses on product sales or cease pro-duction at one or mor
322、e of our manufacturing facilities or curtailharvest levels.Our profitability with respect to these productsdepends on managing our costs,particularly raw material andenergy costs,which represent significant components of ouroperating costs and can fluctuate based upon factors beyondour control,as de
323、scribed below.If the prices of or demand forour products declines,if our raw material or energy costsincrease,or both,our sales and profitability could be materiallyand adversely affected.SUBSTITUTIONSome of our products are vulnerable to declines in demanddue to competing technologies or materials.
324、Our products may compete with nonfiber-based alternatives orwith alternative products in certain market segments.Forexample,plastic packaging may be used as an alternative toour corrugated packaging business products;and plastic,wood/plastic or composite materials may be used by buildersas alternati
325、ves to the products produced by our wood productsbusinesses such as lumber,veneer,plywood and orientedstrand.Changes in prices for oil,chemicals and wood-basedWeyerhaeuser Company 2007 Annual Report and Form 10-K23fiber can change the competitive position of our products rela-tive to available alter
326、natives and could increase substitution ofthose products for our products.As the use of these alter-natives grows,demand for our products may further decline.CHANGES IN PRODUCT MIX OR PRICINGOur results of operation and financial condition could be mate-rially adversely affected by changes in produc
327、t mix or pricing.Our results may be affected by a change in our sales mix.Ouroutlook assumes a certain volume and product mix of sales.Ifactual results vary from this projected volume and product mixof sales,our operations and our results could be negativelyaffected.Our outlook also assumes we will
328、be successful inimplementing previously announced price increases as well asfuture price increases.Delays in acceptance of price increasescould negatively affect our results.Moreover,price discounting,if required to maintain our competitive position,could result inlower than anticipated price realiz
329、ations.INTENSE COMPETITIONWe face intense competition in our markets,and the failure tocompete effectively could have a material adverse effect onour business,financial condition and results of operations.We compete with North American and,for many of our productlines,global producers,some of which
330、may have greater finan-cial resources and lower production costs than we do.The prin-cipal basis for competition is selling price.Our ability tomaintain satisfactory margins depends in large part on our abil-ity to control our costs.Our industries are also particularlysensitive to other factors incl
331、uding innovation,design,qualityand service,with varying emphasis on these factors dependingon the product line.To the extent that one or more of ourcompetitors become more successful with respect to any keycompetitive factor,our ability to attract and retain customerscould be materially adversely af
332、fected.We cannot assure youthat we will be able to compete effectively and maintain currentlevels of sales and profitability.If we are unable to competeeffectively,such failure could have a material adverse effect onour business,financial condition and results of operations.AVAILABILITY OF RAW MATER
333、IALS AND ENERGYOur business and operations could be materially adverselyaffected by changes in the cost or availability of raw materialsand energy.We rely heavily on certain raw materials(principally wood fiberand chemicals)and energy sources(principally natural gas,electricity,coal and fuel oil)in our manufacturing processes.Our ability to increase earnings has been,and will continue tobe,affecte