10-K 1 wy-123113x10k.htm 10-K WY-12.31.13-10K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013
or
[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM                      TO                     
COMMISSION FILE NUMBER 1-4825
WEYERHAEUSER COMPANY
A WASHINGTON CORPORATION
91-0470860
(IRS EMPLOYER IDENTIFICATION NO.)
33663 WEYERHAEUSER WAY SOUTH, FEDERAL WAY, WASHINGTON 98063-9777 TELEPHONE (253) 924-2345
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS
 
NAME OF EACH EXCHANGE ON WHICH REGISTERED:
Common Shares ($1.25 par value)
 
Chicago Stock Exchange
 
 
New York Stock Exchange
6.375% Mandatory Convertible Preference Shares, Series A ($1.00 par value)
 
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  [X] Yes  [   ] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  [   ] Yes  [X] No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  [X] Yes  [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  [X] Yes  [   ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  [X]    Accelerated filer  [   ]    Non-accelerated filer  [   ]    Smaller reporting company  [   ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  [   ] Yes  [X] No
As of June 30, 2013, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $16.2 billion based on the closing sale price as reported on the New York Stock Exchange Composite Price Transactions.
As of January 31, 2014, 583,829,677 shares of the registrant’s common stock ($1.25 par value) were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Notice of 2014 Annual Meeting of Shareholders and Proxy Statement for the company’s Annual Meeting of Shareholders to be held April 10, 2014, are incorporated by reference into Part II and III.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K



TABLE OF CONTENTS
PART I
 
 
ITEM 1.
 
 
 
 
 
 
 
 
   OUR EMPLOYEES
 
 
   TIMBERLANDS
 
   WOOD PRODUCTS
 
 
   REAL ESTATE
 
EXECUTIVE OFFICERS OF THE REGISTRANT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 1A.
 
 
 
 
 
 
 
 
   SUBSTITUTION
 
 
 
 
•   STRATEGIC INITIATIVES
 
 
 
 
 
•   PEOPLE
 
 
 
 
   EXPORT TAXES
 
 
 
•   REAL ESTATE TRANSACTION
 
 
 
ITEM 1B.
ITEM 2.
ITEM 3.
ITEM 4.
MINE SAFETY DISCLOSURES — NOT APPLICABLE
 
PART II
 
 
ITEM 5.

ITEM 6.

ITEM 7.

 

 

 

 

 

 
   TIMBERLANDS

 

 

 
   REAL ESTATE

 

 

 
   INCOME TAXES

 

 

 

 
   FINANCING

 

 

 

 

 

ITEM 7A.

 

ITEM 8.

 

 

 

 

 

 

 

 

ITEM 9.

ITEM 9A.

 

 

 

 

ITEM 9B.
OTHER INFORMATION — NOT APPLICABLE
 
 
 
 
PART III
 
 
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11.

ITEM 12.

ITEM 13.

ITEM 14.

 
 
 
PART IV
 
 
ITEM 15.

 

 

 
 
 
 
CERTIFICATIONS
110

 
COMPANY OFFICERS
113




OUR BUSINESS
We are one of the world's largest private owners of timberlands. We own or control nearly 7 million acres of timberlands, primarily in the U.S., and manage another 14 million acres under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood and specialty cellulose fibers products, and we develop real estate, primarily as a builder of single-family homes. Our company is a real estate investment trust (REIT).
We are committed to operate as a sustainable company and are listed on the Dow Jones World Sustainability Index. We focus on increasing energy and resource efficiency, reducing greenhouse gas emissions, reducing water consumption, conserving natural resources, and offering products that meet human needs with superior sustainability attributes. We operate with world class safety results, understand and address the needs of the communities in which we operate, and present ourselves transparently.
In 2013, we generated $8.5 billion in net sales and employed approximately 13,700 people who serve customers worldwide.
This portion of our Annual Report and Form 10-K provides detailed information about who we are, what we do and where we are headed. Unless otherwise specified, current information reported in this Form 10-K is as of the fiscal year ended December 31, 2013.
We break out financial information such as revenues, earnings and assets by the business segments that form our company. We also discuss the development of our company and the geographic areas where we do business.
Throughout this Form 10-K, unless specified otherwise, references to “we,” “our,” “us” and “the company” refer to the consolidated company.

WE CAN TELL YOU MORE
AVAILABLE INFORMATION
We meet the information-reporting requirements of the Securities Exchange Act of 1934 by filing periodic reports, proxy statements and other information with the Securities and Exchange Commission (SEC). These reports and statements — information about our company’s business, financial results and other matters — are available at:
the SEC Internet site — www.sec.gov;
the SEC’s Public Conference Room, 100 F St. N.E., Washington, D.C., 20549, (800) SEC-0330; and
our Internet site — www.weyerhaeuser.com.
When we file the information electronically with the SEC, it also is added to our Internet site.

WHO WE ARE
We started out as Weyerhaeuser Timber Company, incorporated in the state of Washington in January 1900, when Frederick Weyerhaeuser and 15 partners bought 900,000 acres of timberland. Today, we are working to grow a truly great company for our shareholders, customers and employees by striving to deliver quality products that our customers want and will pay for, at the lowest possible cost.

REAL ESTATE INVESTMENT TRUST (REIT) ELECTION
Starting with our 2010 fiscal year, we elected to be taxed as a REIT. We expect to derive most of our REIT income from investments in timberlands, including the sale of standing timber through pay-as-cut sales contracts. REIT income can be distributed to shareholders without first paying corporate level tax, substantially eliminating the double taxation on income. A significant portion of our timberland segment earnings receives this favorable tax treatment. We are, however, subject to corporate taxes on built-in-gains (the excess of fair market value over tax basis at January 1, 2010) on sales of real property (other than standing timber) held by the REIT during the first 10 years following the REIT conversion. We continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which principally includes our manufacturing businesses, our real estate development and single-family home building operations and the portion of our Timberlands segment income included in the TRS.
 
OUR BUSINESS SEGMENTS
In the Consolidated Results section of Management’s Discussion and Analysis of Financial Condition and Results of Operations, you will find our overall performance results for our business segments:
Timberlands,
Wood Products,
Cellulose Fibers and
Real Estate.
Detailed financial information about our business segments and our geographic locations is in Note 2: Business Segments and Note 23: Geographic Areas in the Notes to Consolidated Financial Statements, as well as in this section and in the Management’s Discussion and Analysis of Financial Condition and Results of Operations.

EFFECT OF MARKET CONDITIONS
The health of the U.S. housing market strongly affects our Real Estate, Wood Products and Timberlands segments. Real Estate focuses on building single family homes. Wood Products primarily sells into the new residential building and repair and remodel markets. Demand for logs from our Timberlands segment is affected by the production of wood-based building products as well as export demand. Cellulose Fibers is primarily affected by global demand and the relative strength of the U.S. dollar.


 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 1



COMPETITION IN OUR MARKETS
We operate in highly competitive domestic and foreign markets, with numerous companies selling similar products. Many of our products also face competition from substitutes for wood and wood-fiber products. In real estate development, our competitors include numerous regional and national firms. We compete in our markets primarily through price, product quality and service levels. We are relentlessly focused on improving operational excellence to ensure a competitive cost structure and producing quality products customers want and are wiling to pay for.
Our business segments’ competitive strategies are as follows:
Timberlands — Extract maximum value from each acre we own or manage.
Wood Products — Deliver high-quality lumber, structural panels, engineered wood products and complementary products for residential applications.
Cellulose Fibers — Concentrate on value-added pulp products.
Real Estate — Deliver unique value propositions in target markets.

SALES OUTSIDE THE U.S.
In 2013, $2.5 billion — 29 percent — of our total consolidated sales from continuing operations were to customers outside the U.S. Exports from the U.S. increased $209 million, or 12 percent, primarily due to higher log export prices and volumes in our Timberlands segment and higher pulp sales volumes in our Cellulose Fibers segment. The table below shows sales outside the U.S. for the last three years.
SALES OUTSIDE THE U.S. IN MILLIONS OF DOLLARS
  
2013

2012

2011

Exports from the U.S.
$
1,891

$
1,682

$
1,775

Canadian export and domestic sales
488

348

363

Other foreign sales
114

92

70

Total
$
2,493

$
2,122

$
2,208

Percent of total sales
29
%
30
%
36
%

OUR EMPLOYEES
We have approximately 13,700 employees. This number includes:
12,850 employed in North America and
850 employed by our operations outside of North America.
Of these employees, approximately 3,560 are members of unions covered by multi-year collective-bargaining agreements. More information about these agreements is in Note 10: Pension and Other Postretirement Benefit Plans in the Notes to Consolidated Financial Statements.

WHAT WE DO
This section provides information about how we:
grow and harvest trees,
manufacture and sell products made from them,
build and sell homes and
develop land.
For each of our business segments, we provide details about what we do, where we do it, how much we sell and where we are headed.

TIMBERLANDS
Our Timberlands business segment manages 6.9 million acres of private commercial forestland worldwide. We own 6.2 million of those acres and have long-term leases on the other 0.7 million acres. In addition, we have renewable, long-term licenses on 13.9 million acres of forestland located in four Canadian provinces. The tables presented in this section include data from this segment's business units as of the end of 2013.
WHAT WE DO
Forestry Management
Our Timberlands business segment:
grows and harvests trees for use as lumber, other wood and building products and pulp and paper;
exports logs to other countries where they are made into products;
plants seedlings to reforest harvested areas using the most effective regeneration method for the site and species (in parts of Canada natural regeneration is employed);
monitors and cares for the new trees as they grow to maturity; and
seeks to sustain and maximize the timber supply from our forestlands while keeping the health of our environment a key priority.
Our goal is to maximize returns by selling logs and stumpage to internal and external customers. We focus on solid wood and use intensive silviculture to improve forest productivity and returns while managing our forests on a sustainable basis to meet customer and public expectations.
Sustainable Forestry Practices
We are committed to responsible environmental stewardship wherever we operate, managing forests to produce financially mature timber while protecting the ecosystem services they provide. Our working forests include places with unique environmental, cultural, historical or recreational

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 2



value. To protect their unique qualities, we follow regulatory requirements, voluntary standards and implement the Sustainable Forestry Initiative® (SFI) standard. Independent auditing of all of the forests we own or manage in the United States and Canada certifies that we meet the SFI standard. Our forestlands in Uruguay are Forest Stewardship Council (FSC) certified or managed to the Uruguayan national forestry management standard designed to meet the Program for the Endorsement of Forest Certification (PEFC).
Canadian Forestry Operations
In Canada, we have licenses to operate forestlands that provide raw material for our manufacturing units in various provinces. When we harvest trees, we pay the provinces at stumpage rates set by the government, which generally are based on prevailing market prices. We transfer logs to our manufacturing units at cost, which means that we do not generate any profit in the Timberlands segment from the harvest of timber from the licensed acres in Canada.
Other Values From Our Timberlands
In the United States, we actively manage mineral, oil and gas leases on our land and use geologic databases to identify and market opportunities for commercial mineral and geothermal development. We recognize leasing revenue over the terms of agreements with customers. Revenue primarily comes from:
royalty payments on oil and gas production;
upfront bonus payments from oil and gas leasing and exploration activity;
royalty payments on hard minerals (rock, sand and gravel);
geothermal lease and option revenues; and
the sale of mineral assets.
In managing mineral resources, we generate revenue related to our ownership of the minerals and, separately, related to our ownership of the surface. The ownership of mineral rights and surface acres may be held by two separate parties. Materials that can be mined from the surface, and whose value comes from factors other than their chemical composition, typically belong to the surface owner. Examples of surface materials include rock, sand, gravel, dirt and topsoil. The mineral owner holds the title to commodities that derive value from their unique chemical composition. Examples of mineral rights include oil, gas, coal (even if mined at the surface) and precious metals. If the two types of rights conflict, then mineral rights generally are superior to surface rights. A third type of land right is geothermal, which can belong to either the surface or mineral owner. We routinely reserve mineral and geothermal rights when selling surface timberlands acreage.
Timberlands Products
PRODUCTS
HOW THEY’RE USED
Logs
Logs are made into lumber, other wood and building products and pulp and paper products.
Timberlands
Timberland tracts are exchanged to improve our timberland portfolio or are sold to third parties by our land development subsidiary within this segment.
Timber
Standing timber is sold to third parties.
Minerals, oil and gas
Minerals, oil and gas are sold into construction and energy markets.
Other products
Other products includes seed and seedlings, recreational leases, as well as plywood and hardwood lumber produced by our international operations, primarily in South America.
HOW WE MEASURE OUR PRODUCT
We report Timberlands data in cubic meters. Cubic meters measure the total volume of wood fiber in a tree or log that we can sell. Cubic meter volume is determined from the large and small-end diameters and length and provides a more consistent and comparative measure of timber and log volume among operating regions, species, size and seasons of the year than other units of measure.
We also use two other units of measure when transacting business including:
thousand board feet (MBF) — used in the West to measure the expected lumber recovery from a tree or log, but this measure does not include taper or recovery of non-lumber residual products; and
green tons — used in the South to measure weight, but factors used for conversion to product volume can vary by species, size, location and season.
Both measures are accurate in the regions where they are used, but they do not provide a meaningful basis for comparisons between the regions.
The conversion rate for MBF to cubic meters varies based on several factors including diameter, length and taper of the timber. The average conversion rate for MBF to cubic meters is approximately 6.7 cubic meters per MBF.
The conversion rate from green tons to cubic meters also varies based on the season harvested and the specific gravity of the wood for the region where the timber is grown. An average conversion rate for green tons to cubic meters is approximately 0.825 cubic meters per green ton.
WHERE WE DO IT
Our timberlands assets are located primarily in North America. In the U.S. we own and manage sustainable forests in nine states for use in wood products and pulp and paper manufacturing. We own or lease:
4.0 million acres in the southern U.S. (Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Oklahoma and Texas); and
2.6 million acres in the Pacific Northwest (Oregon and Washington).
Our international operations are located primarily in Uruguay. In Uruguay we own 300,000 acres and have long-term leases on 26,000 acres. In China we had a joint venture where we managed 44,000 acres of timberland. We sold our interest in this joint venture during 2012.
In addition, we have renewable, long-term licenses on 13.9 million acres of forestland owned by the provincial government of four Canadian provinces.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 3



Our total timber inventory — including timber on owned and leased land in our U.S. and international operations — is approximately 334 million cubic meters. The timber inventory on licensed lands in Canada is approximately 453 million cubic meters. The amount of timber inventory does not translate into an amount of lumber or panel products because the quantity of end products:
varies according to the species, size and quality of the timber; and
will change through time as the mix of these variables adjust.
The species, size and grade of the trees affects the relative value of our timberlands.
We maintain our timber inventory in an integrated resource inventory and geographic information system (“GIS”). The resource inventory component of the system is proprietary and is largely based on internally developed technologies, including growth and yield models developed by our research and development organization. The GIS component is based on GIS software that is viewed as the standard in our industry.
Timber inventory data collection and verification techniques include the use of industry standard field sampling procedures as well as proprietary remote sensing technologies in some geographies where they generate improved estimates. The data is collected and maintained at the timber stand level.
DISCUSSION OF OPERATIONS BY GEOGRAPHY
Summary of 2013 Timber Inventory and Timberland Locations
United States
GEOGRAPHIC AREA
MILLIONS
OF CUBIC
METERS

THOUSANDS OF ACRES AT
DECEMBER 31, 2013
 
  
TOTAL
INVENTORY

FEE
OWNERSHIP

LONG-
TERM
LEASES

TOTAL
ACRES

U.S.:
 
 
 
 
West
199

2,597


2,597

South
135

3,370

651

4,021

Total U.S.
334

5,967

651

6,618

We provide a constant year round flow of logs to internal and third-party customers. We sell grade logs to mills that manufacture a diverse range of products including lumber, plywood and veneer. We also sell chips and fiber logs to pulp, paper and oriented strand board mills. Our timberlands are well located to take advantage of road, logging and transportation systems for efficient delivery of logs to these customers.
Western United States
Our Western acres are well situated to serve the wood product markets in Oregon and Washington. In addition, our location on the West Coast provides access to higher-value export markets for Douglas fir and whitewood logs in Japan, China and Korea. The size and quality of our Western timberlands, coupled with their proximity to several deep-water port facilities, positions us to meet the needs of Pacific Rim log markets.
Our lands are composed primarily of Douglas fir, a species highly valued for its structural strength. Our coastal lands also contain whitewood and have a higher proportion of whitewood than our interior holdings. Our management systems, which provide us a competitive operating advantage, range from research and forestry, to technical planning models, mechanized harvesting and marketing and logistics.
On July 23, 2013, we purchased 100 percent of the equity interests in Longview Timber LLC (Longview Timber) for $1.58 billion cash and assumed debt of $1.07 billion, for an aggregate purchase price of $2.65 billion. Longview Timber was a privately-held Delaware limited liability company engaged in the ownership and management of approximately 645,000 acres of timberlands in Oregon and Washington. We believe Longview Timber has productive lands with favorable age class distribution that will provide us with optionality for harvest. More information on this transaction can be found in Note 3: Longview Timber Purchase in the Notes to Consolidated Financial Statements.
2013 WESTERN U.S. INVENTORY BY SPECIES

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 4



2013 WESTERN U.S. INVENTORY BY AGE / SPECIES
The average age of timber harvested in 2013 was 53 years. Most of our U.S. timberland is intensively managed for timber production, but some areas are conserved for environmental, historical, recreational or cultural reasons. Some of our older trees are protected in acreage set aside for conservation, and some are not yet logged due to harvest rate regulations. While over the long term our average harvest age will decrease in accordance with our sustainable forestry practices, we will only harvest approximately 1.5 percent of our Western acreage each year.
Southern United States
Our Southern acres predominantly contain southern yellow pine and encompass timberlands in seven states.
We intensively manage our timber plantations using forestry research and planning systems to optimize grade log production. We also actively manage our land to capture revenues from our oil, gas and hard minerals resources. We do this while providing quality habitat for a range of animals and birds, which is in high demand for recreational purposes. We lease more than 94 percent of our acres to the public and state wildlife agencies for recreational purposes.
2013 SOUTHERN U.S. INVENTORY BY SPECIES
2013 SOUTHERN U.S. INVENTORY BY AGE / SPECIES
The average age of timber harvested in 2013 was 32 years for southern yellow pine. In accordance with our sustainable forestry practices, we harvest approximately 3.0 percent to 3.5 percent of our acreage each year in the South.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 5



International
GEOGRAPHIC AREA
MILLIONS
OF CUBIC
METERS

THOUSANDS OF ACRES AT
DECEMBER 31, 2013
 
  
TOTAL
INVENTORY

FEE
OWNERSHIP

LONG-TERM
LEASES

TOTAL
ACRES

Uruguay
9

298

25

323

Our forestland acres in Uruguay are split approximately 50 percent loblolly pine and 50 percent eucalyptus. Loblolly pine comprises more of our timber inventory due to its older age. On average, the timber in Uruguay is in the second third of its rotation age. It is entering into that part of the growth rotation when we will see increased volume accretion. About 95 percent of the area to be planted has been afforested to date.
2013 INTERNATIONAL INVENTORY BY SPECIES (URUGUAY)
In Uruguay, the target rotation ages are 21 to 22 years for pine and 14 to 17 years for eucalyptus. We manage both species to a grade (appearance) regime.
We also operate a plywood mill in Uruguay with a production capacity of 210,000 cubic meters. Production volume reached 192,000 cubic meters in 2013.
In Brazil, Weyerhaeuser is a managing partner in a joint venture. We own 67 percent and Fibria Celulose SA owns 33 percent. A hardwood sawmill with 55,000 cubic meters of capacity produces high-value eucalyptus (Lyptus®) lumber and related appearance wood products. The mill’s production in 2013 was 48,500 cubic meters.
Canada — Licensed Timberlands
GEOGRAPHIC AREA
MILLIONS
OF CUBIC
METERS

THOUSANDS OF ACRES AT
DECEMBER 31, 2013

  
TOTAL
INVENTORY
LICENSED
STANDING VOLUME

TOTAL
LICENSE
ARRANGEMENTS

Canada:
 
 
Alberta
274

5,304

British Columbia
38

1,012

Ontario
39

2,573

Saskatchewan
102

4,968

Total Canada
453

13,857

We lease and license forestland in Canada from the provincial government to secure the volume for our manufacturing units in the various provinces. When the volume is harvested, we pay the province at stumpage rates set by the government and generally based on prevailing market prices. The harvested logs are transferred to our manufacturing facilities at cost (stumpage plus harvest, haul and overhead costs less any margin on selling logs to third parties). Any conversion profit is recognized at the respective mill in either the Cellulose Fibers or Wood Products segment.
Five-Year Summary of Timberlands Production
PRODUCTION IN THOUSANDS
  
2013

2012

2011

2010

2009

Fee depletion – cubic meters:
 

 
 
 
 
West
8,907

7,170

6,595

5,569

6,359

South
11,596

11,488

9,738

8,197

8,996

International
818

763

854

349

503

Total
21,321

19,421

17,187

14,115

15,858

Our Timberlands annual fee depletion represents the harvest of the timber assets we own. Depletion is a method of expensing the cost of establishing the fee timber asset base over the harvest or timber sales volume. The increase in fee depletion from 2011 through 2013 reflects improving market conditions. The increase in fee depletion in the West in 2013 also reflects the purchase of Longview Timber.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 6



Five-Year Summary of Timberlands Production - Percentage of Grade and Fiber
PERCENTAGE OF GRADE AND FIBER
  
 
2013

2012

2011

2010

2009

West
Grade
90
%
90
%
90
%
92
%
90
%
Fiber
10
%
10
%
10
%
8
%
10
%
South
Grade
57
%
59
%
58
%
55
%
55
%
Fiber
43
%
41
%
42
%
45
%
45
%
International
Grade
60
%
67
%
55
%
65
%
65
%
Fiber
40
%
33
%
45
%
35
%
35
%
Total
Grade
69
%
71
%
70
%
70
%
70
%
Fiber
31
%
29
%
30
%
30
%
30
%
HOW MUCH WE SELL
Our net sales to unaffiliated customers over the last two years were:
$1.3 billion in 2013 — up 25 percent from 2012; and
$1.1 billion in 2012.
Our intersegment sales over the last two years were:
$799 million in 2013 — up 17 percent from 2012; and
$683 million in 2012.
Five-Year Summary of Net Sales for Timberlands
NET SALES IN MILLIONS OF DOLLARS
  
2013

2012

2011

2010

2009

To unaffiliated customers:
 
 
 
 
 
Logs:
 
 
 
 
 
West
$
828

$
559

$
545

$
414

$
329

South
256

233

196

145

144

Canada
19

19

17

17

13

Total
1,103

811

758

576

486

Pay as cut timber sales
9

13

7

8

8

Chip sales
9

18

19

16

15

Timberlands sales and exchanges(1)
65

59

77

109

66

Higher and better use land sales(1)
19

22

25

22

11

Minerals, oil and gas
32

31

53

60

62

Products from international operations(2)
90

106

86

65

44

Other products
16

17

19

18

22

Subtotal sales to unaffiliated customers
1,343

1,077

1,044

874

714

Intersegment sales:
 
 
 
 
 
United States
518

447

424

409

392

Other
281

236

222

194

145

Subtotal intersegment sales
799

683

646

603

537

Total
$
2,142

$
1,760

$
1,690

$
1,477

$
1,251

(1)   Significant dispositions of higher and better use timberland and some non-strategic timberlands are made through subsidiaries.
(2)   Products include logs, plywood and hardwood lumber harvested or produced by our international operations, primarily in South America.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 7



Five-Year Trend for Total Net Sales in Timberlands
Percentage of 2013 Sales to Unaffiliated Customers
Log Sales Volumes
Logs sold to unaffiliated customers in 2013 increased 2.1 million cubic meters — 17 percent — from 2012.
Sales volumes in the West increased 1.8 million cubic meters — 31 percent — primarily due to strong export and domestic demand and the purchase of Longview Timber. Our western sales to unaffiliated customers generally are higher-grade logs sold into the export market and domestic-grade logs sold to West Coast sawmills.
Sales to unaffiliated customers in the South increased 313 thousand cubic meters — 6 percent — primarily due to increased harvest levels and increased sales of logs to third parties. Our southern sales volumes to unaffiliated customers generally are lower-grade fiber logs sold to pulp or containerboard mills. We use most of our high-grade logs in our own converting facilities.
Sales volumes from Canada decreased 20 thousand cubic meters — 4 percent — in 2013. This decrease in volume to unaffiliated customers primarily was due to increased internal mill demand.
Sales volumes from our international operations increased 14 thousand cubic meters — 4 percent — in 2013. This increase in volume was mainly due to increased domestic demand in Uruguay.
We sell three grades of logs — domestic grade, domestic fiber and export. Factors that may affect log sales in each of these categories include:
domestic grade log sales — lumber usage, primarily for housing starts and repair and remodel activity, the needs of our own mills and the availability of logs from both outside markets and our own timberlands;
domestic fiber log sales — demand for chips by pulp and containerboard mills; and
export log sales — the level of housing starts in Japan and construction in China.
Our sales volumes include logs purchased in the open market and all our domestic and export logs that are sold to unaffiliated customers or transferred at market prices to our internal mills by the sales and marketing staff within our Timberlands business units.
Five-Year Summary of Log Sales Volumes to Unaffiliated Customers for Timberlands
SALES VOLUMES IN THOUSANDS
  
2013

2012

2011

2010

2009

Logs – cubic
meters:
 
 
 
 
 
West
7,708

5,898

5,267

4,476

4,479

South
5,888

5,575

4,879

3,357

3,536

Canada
511

531

479

507

409

International
357

343

314

283

305

Total
14,464

12,347

10,939

8,623

8,729


 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 8



Log Prices
The majority of our log sales to unaffiliated customers involve sales to domestic sawmills and the export market. Log prices in the following tables are on a delivered (mill) basis:
Five-Year Summary of Published Domestic Log Prices (#2 Sawlog Bark On — $/MBF)
Five-Year Summary of Export Log Prices (#2 Sawlog Bark On — $/MBF)
Our log prices are affected by the supply of and demand for grade and fiber logs and are influenced by the same factors that affect log sales. Export log prices are particularly affected by the Japanese housing market.
Our average 2013 log realizations in the West increased from 2012 — primarily due to stronger demand for logs in the Chinese market and a tightening log supply in the domestic market. Our average 2013 log realizations in the South increased from 2012 — primarily due to improved demand for logs in the South.
Minerals and Energy Products
Mineral revenue increased slightly in 2013 from increases in royalty revenue resulting from improvements in natural gas prices, construction aggregates, and industrial minerals.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 9



WHERE WE’RE HEADED
Our competitive strategies include:
maximizing cash flow through operational excellence
– positioning ourselves as one of the largest, lowest-cost growers of softwood timber;
– reducing the time it takes to realize returns by practicing intensive forest management and focusing on the most advantageous markets;
– efficiently delivering high quality raw materials to external customers and internal supply chains;
– investing in technology and advances in silviculture to improve yields and timber quality;
– leveraging our mineral ownership position;
capturing the full value of the Longview Timber acquisition;
continuously reviewing our portfolio of land holdings to create the greatest value for the company; and
positioning ourselves to take advantage of new market opportunities that may be created by energy and climate change legislation and regulation.

WOOD PRODUCTS
We are a large manufacturer and distributor of wood products primarily in North America and Asia.
WHAT WE DO
Our wood products segment:
provides a family of high-quality softwood lumber, engineered lumber, structural panels and other specialty products to the residential, multi-family and light commercial markets;
sells our products and services primarily through our own sales organizations and distribution facilities as well as building materials that we purchase from other manufacturers;
sells certain products into the repair and remodel market through the wood preserving and home-improvement warehouse channels; and
exports our softwood lumber, oriented strand board (OSB) and engineered building materials to Asia.
Wood Products
PRODUCTS
HOW THEY’RE USED
Structural lumber
Structural framing for new residential, repair and remodel, treated applications, industrial and commercial structures
Engineered lumber
• Solid section
• I-joists
Floor and roof joists, and headers and beams for residential, multi-family and commercial structures
Structural panels
• Oriented strand board (OSB)
• Softwood plywood
Structural sheathing, subflooring and stair tread for residential, multi-family and commercial structures
Other products
Complementary building products such as cedar, decking, siding, insulation, rebar and engineered lumber connectors
WHERE WE DO IT
We operate manufacturing facilities in the United States and Canada. We distribute through a combination of Weyerhaeuser and third-party locations. Information about the locations, capacities and actual production of our manufacturing facilities is included below.
Principal Manufacturing Locations
Locations of our principal manufacturing facilities as of December 31, 2013, by major product group were:
Structural lumber
– U.S. — Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Oklahoma, Oregon and Washington
– Canada — Alberta and British Columbia
Engineered lumber
– U.S. — Alabama, Louisiana, Oregon and West Virginia
– Canada — British Columbia and Ontario
Oriented strand board
– U.S. — Louisiana, Michigan, North Carolina and West Virginia
– Canada — Alberta and Saskatchewan
Softwood plywood
– U.S. — Arkansas and Louisiana

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 10



Summary of 2013 Wood Products Capacities
CAPACITIES IN MILLIONS
  
PRODUCTION
CAPACITY

NUMBER OF
FACILITIES

Structural lumber – board feet
4,614

18

Engineered solid section – cubic feet
32

6

Engineered I-joists – lineal feet
304

3

Oriented strand board – square feet (3/8”)
3,015

6

Softwood plywood – square feet (3/8”)
460

2

Capacities include one facility closed throughout 2013 that produces engineered solid section and I-joists products.
Production capacities listed represent annual production volume under normal operating conditions and producing a normal product mix for each individual facility. Production capacities do not include any capacity for facilities that were sold or permanently closed as of the end of 2013.
During 2013, we decided to permanently close our Colbert, Georgia engineered lumber facility and reopen in 2014 our Evergreen, Alabama engineered lumber facility. Both facilities were previously indefinitely closed.
Additionally, our hardwoods operations were sold in 2011 and are excluded from our Wood Product's results below. More information about this sale is included in Note 5: Discontinued Operations in the Notes to Consolidated Financial Statements.
Five-Year Summary of Wood Products Production
PRODUCTION IN MILLIONS
  
2013

2012

2011

2010

2009

Structural lumber – board feet
4,084

3,846

3,528

3,289

3,098

Engineered solid section – cubic feet(1)
18.0

15.4

13.4

14.5

11.3

Engineered I-joists – lineal feet(1)
168

147

122

133

109

Oriented strand board – square feet (3/8”)
2,723

2,511

2,127

1,721

1,448

Softwood plywood – square feet (3/8”)(2)
241

214

197

212

150

(1)   Weyerhaeuser engineered I-joist facilities also may produce engineered solid section.
(2)   All Weyerhaeuser plywood facilities also produce veneer.
HOW MUCH WE SELL
Revenues of our Wood Products segment come from sales to wood products dealers, do-it-yourself retailers, builders and industrial users. In 2013, Wood Products net sales were $4.0 billion, an increase of 31 percent, compared with $3.1 billion in 2012.
Five-Year Summary of Net Sales for Wood Products
NET SALES IN MILLIONS OF DOLLARS
  
2013

2012

2011

2010

2009

Structural lumber
$
1,873

$
1,400

$
1,087

$
1,044

$
846

Engineered solid section
353

279

235

246

219

Engineered I-joists
247

190

161

171

162

Oriented strand board
809

612

354

319

226

Softwood plywood
144

115

66

65

50

Other products produced
171

167

142

125

130

Other products purchased for resale
412

295

231

254

289

Total
$
4,009

$
3,058

$
2,276

$
2,224

$
1,922

Five-Year Trend for Total Net Sales in Wood Products

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 11



Percentage of 2013 Net Sales in Wood Products
Wood Products Volume
The volume of structural lumber, OSB, and engineered lumber sold in 2013 increased from 2012 due to increased operating capacity, targeted capital improvements and new product offerings.
Five-Year Summary of Sales Volume for Wood Products
SALES VOLUMES IN MILLIONS
  
2013

2012

2011

2010

2009

Structural lumber – board feet
4,436

4,031

3,586

3,356

3,317

Engineered solid section – cubic feet
18.2

15.4

12.3

13.1

12.2

Engineered I-joists – lineal feet
177

152

128

145

139

Oriented strand board – square feet (3/8”)
2,772

2,508

1,977

1,547

1,386

Softwood Plywood – square feet (3/8”)
402

340

249

237

200

Wood Products Prices
Prices for commodity wood products — Structural lumber, OSB and Plywood — increased in 2013 from 2012.
In general, the following factors influence prices for wood products:
Demand for wood products used in residential and multi-family construction and the repair and remodel of existing homes affects prices. Residential construction is influenced by factors such as population growth and other demographics, the level of employment, consumer confidence, consumer income, availability of financing and interest rate levels, and the supply and pricing of existing homes on the market. Repair and remodel activity is affected by the size and age of existing housing inventory and access to home equity financing and other credit.
The availability of supply of commodity building products such as structural lumber, OSB and plywood affects prices. A number of factors can influence supply, including changes in production capacity and utilization rates, weather, raw material supply and availability of transportation.
The North American housing market continued to show sustained improvement in 2013. This improvement led to increased demand and resulted in improved pricing for commodity wood products in 2013. The following graphs reflect product price trends for the past five years.
Five-Year Summary of Published Lumber Prices — $/MBF

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 12



Five-Year Summary of Published Oriented Strand Board Prices — $/MSF
WHERE WE’RE HEADED
Our competitive strategies include:
reduce controllable manufacturing costs through operational excellence;
maintain a value-added product mix;
leverage our brand and reputation as the preferred provider of quality building products; and
pursue disciplined, profitable sales growth including increasing in geographies outside of North America.

CELLULOSE FIBERS
Our cellulose fibers segment is one of the world’s largest producers of absorbent fluff pulp used in products such as diapers. We also manufacture liquid packaging board and other pulp products. We have a 50 percent interest in North Pacific Paper Corporation (NORPAC) — a joint venture with Nippon Paper Industries that produces newsprint and high-brightness publication papers.
WHAT WE DO
Our cellulose fibers segment:
provides cellulose fibers for absorbent products in markets around the world;
works closely with our customers to develop unique or specialized applications;
manufactures liquid packaging board used primarily for the production of containers for liquid products; and
is largely energy self sufficient, with 83 percent of its energy derived from black liquor produced at the mills and biomass.
Cellulose Fibers Products
PRODUCTS
HOW THEY’RE USED
Pulp
• Fluff pulp (Southern softwood kraft fiber)
• Softwood papergrade pulp
• Specialty chemical cellulose pulp
• Used in sanitary disposable products that require bulk, softness and absorbency
• Used in products that include printing and writing papers and tissue
• Used in textiles, absorbent products, specialty packaging, specialty applications and proprietary high-bulking fibers
Liquid packaging board
Converted into containers to hold liquids such as milk, juice and tea
Other products
• Slush pulp
• Wet lap pulp
Used in the manufacture of paper products
WHERE WE DO IT
Our cellulose fibers (pulp) products are distributed through a global direct sales network, and our liquid packaging products are sold directly to carton and food product packaging converters in North America and Asia. Locations of our principal manufacturing facilities by major product group are:
Pulp Manufacturing
- U.S. - Georgia (2), Mississippi and North Carolina
- Canada - Alberta
Pulp Converting
- U.S. - Mississippi
- Poland (began converting in first quarter 2013)
Liquid packaging board
- U.S. - Washington

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 13



Summary of 2013 Cellulose Fibers Capacities
CAPACITIES IN THOUSANDS
  
PRODUCTION
CAPACITY

NUMBER OF
FACILITIES

Pulp – air-dry metric tons
1,848

5

Liquid packaging board – tons
315

1

Production capacities listed represent annual production volume under normal operating conditions and producing a normal product mix for each individual facility.
Five-Year Summary of Cellulose Fibers Production
PRODUCTION IN THOUSANDS
  
2013

2012

2011

2010

2009

Pulp – air-dry metric tons
1,815

1,773

1,769

1,774

1,629

Liquid packaging board – tons
307

292

307

316

282

HOW MUCH WE SELL
Revenues of our Cellulose Fibers segment come from sales to customers who use the products for further manufacturing or distribution and for direct use. Our net sales were $1.9 billion in 2013, comparable to $1.9 billion in 2012.
Five-Year Summary of Net Sales for Cellulose Fibers
NET SALES IN MILLIONS OF DOLLARS
  
2013

2012

2011

2010

2009

Pulp
$
1,501

$
1,433

$
1,617

$
1,489

$
1,148

Liquid packaging board
326

332

346

337

290

Other products
75

89

95

85

73

Total
$
1,902

$
1,854

$
2,058

$
1,911

$
1,511

Five-Year Trend for Total Net Sales in Cellulose Fibers
Percentage of 2013 Net Sales in Cellulose Fibers
Pulp Volumes
Our sales volumes of cellulose fiber products were 1.9 million tons in 2013 and 1.8 million tons in 2012.
Factors that affect sales volumes for cellulose fiber products include:
growth of the world gross domestic product and
demand for absorbent hygiene products and paper.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 14



Five-Year Summary of Sales Volume for Cellulose Fibers
SALES VOLUMES IN THOUSANDS
  
2013

2012

2011

2010

2009

Pulp – air-dry metric tons
1,866

1,762

1,756

1,714

1,697

Liquid packaging board – tons
305

289

297

311

288

Pulp Prices
Our average pulp prices in 2013 decreased slightly compared with 2012. The improvement in northern bleached softwood kraft (NBSK) markets was more than offset by decreases in viscose and fluff realizations as a result of market supply greater than demand. NBSK is considered the benchmark softwood pulp price and generally the starting point price for other softwood pulps including southern bleached softwood kraft and fluff.
Five-Year Summary of Published NBSK Pulp Prices — $/ADMT
WHERE WE’RE HEADED
Our competitive strategies include:
improving cost-competitiveness through operational excellence;
focusing capital investments on product quality, cost reduction and green energy opportunities; and
driving growth of higher margin products
– pursuing new products that expand and improve the range of applications for cellulose fibers
– increasing sales of specialty chemical cellulose pulp
– growing with global customers.

REAL ESTATE
Our Real Estate business segment includes our wholly-owned subsidiary Weyerhaeuser Real Estate Company (WRECO) and its subsidiaries.
WHAT WE DO
The Real Estate segment focuses on:
constructing single-family housing and
developing residential lots for our use and for sale.
Real Estate Products and Activities
PRODUCTS
HOW THEY’RE USED
Single-family housing
Residential living
Land
Residential lots and land for construction and sale, master-planned communities with mixed-use property
On June 16, 2013, we announced that our Board of Directors authorized the exploration of strategic alternatives with respect to Weyerhaeuser
Real Estate Company (WRECO), our homebuilding and real estate development business. The Board indicated that it intended to consider a
broad range of alternatives including, but not limited to, continuing to operate WRECO, or a merger, sale or spin-off of the business. On
November 4, 2013, we announced that we had entered into a transaction agreement dated as of November 3, 2013 with TRI Pointe Homes, Inc.
(TRI Pointe). Pursuant to the transaction agreement, WRECO will be divested through a Reverse Morris Trust transaction and ultimately become
a wholly owned subsidiary of TRI Pointe. More information on this transaction can be found in Note 4: Real Estate Divestiture in the Notes to
Consolidated Financial Statements
and on our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 4,
2013.
During fourth quarter 2013 we recorded a $356 million non-cash impairment charge relating to a large master-planned community located north of Las Vegas, Nevada (the "Coyote Springs Property), which is excluded from the transaction agreement with Tri Pointe Homes, Inc., as a result of management determining that our strategy for development will differ from the prior development plan. Of this amount, $343 million was recorded in our Real Estate segment and $13 million in Unallocated Items. The fair value of the property was primarily based on an independent appraisal that was determined using both other observable inputs (Level 2) related to other market transactions and significant unobservable inputs (Level 3) such as the timing and amounts of future cash flows related to the development of the property, timing and amounts of proceeds from acreage sales, access to water for use on the property and discount rates applicable to the future cash flows.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 15



WHERE WE DO IT
Our operations are concentrated in metropolitan areas in Arizona, California, Maryland, Nevada, Texas, Virginia and Washington.
Controlled Lots by Primary Market as of December 31, 2013
PRIMARY MARKETS
NUMBER OF LOTS AT
DECEMBER 31, 2013

Arizona
2,307

California
17,056

Maryland and Virginia
3,193

Nevada(1)
1,920

Texas
1,753

Washington
1,384

Total controlled lots
27,613

(1) Nevada excludes 10,686 owned lots and 56,413 lots under option for the Coyote Springs Property which is excluded from the transaction agreement with TRI Pointe Homes, Inc. and was impaired in 2013 due to a change in our strategy for development.
Our lots are controlled through both ownership and the use of options and are in various stages of development. Of the total lots we have under control, approximately 17 percent of them are intended for sale to other builders.
HOW MUCH WE SELL
We are one of the top 20 homebuilding companies in the United States as measured by annual single-family home closings.
Our revenues increased to $1.3 billion in 2013, up 19 percent, compared with $1.1 billion in 2012. Revenues from single-family housing increased $349 million, or 40 percent, as a result of a 27 percent increase in home closings. Revenues from land and lot sales decreased $141 million. 2012 included the sale of a 3,200-acre master planned community in Houston, Texas and the sale of commercial acreage and multi-family lots in southern California.
The following factors affect revenues in our Real Estate business segment:
The market prices of the homes that we build varies.
The product and geographic mix of sales varies based on the following:
– The markets where we build vary by geography.
– We build homes that range in price points to meet our target customers’ needs, from first-time to semi-custom homes based on geography.
– The mix of price points, which differ for traditional, single-family detached homes and attached products such as townhomes and condominiums.
Land and lot sales are a component of our activities. These sales do not occur evenly from year to year and may range from approximately 5 percent to 20 percent of total Real Estate revenues annually.
From time to time, we sell apartment buildings and other income producing properties.
Five-Year Summary of Net Sales for Real Estate
REVENUE IN MILLIONS OF DOLLARS
  
2013

2012

2011

2010

2009

Single-family housing
$
1,219

$
870

$
768

$
842

$
832

Land
52

193

67

64

68

Other
4

7

3

17

4

Total
$
1,275

$
1,070

$
838

$
923

$
904

Five-Year Trend for Total Net Sales in Real Estate

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 16



Percentage Breakdown of 2013 Net Sales in Real Estate
Five-Year Summary of Single-Family Unit Statistics
SINGLE-FAMILY UNIT STATISTICS
  
2013

2012

2011

2010

2009

Homes sold
3,048

2,659

1,902

1,914

2,269

Homes closed
2,939

2,314

1,912

2,125

2,177

Homes sold but not closed (backlog)
883

774

429

439

650

Cancellation rate
15.4
%
14.9
%
15.7
%
19.9
%
23.3
 %
Buyer traffic
68,466

64,410

50,125

68,430

65,781

Average price of homes closed
$
415,000

$
376,000

$
402,000

$
396,000

$
382,000

Single-family gross margin (%)(1)
22.0
%
20.3
%
22.0
%
22.3
%
(9.9
)%
Single-family gross margin - excluding impairments (%)(2)
22.2
%
20.7
%
23.3
%
23.7
%
17.5
 %
(1)   Single-family gross margin equals revenue less cost of sales and period costs.
(2)   Single-family gross margin - excluding impairments equals revenue less cost of sales and period costs (other than impairments, deposit write-offs and project abandonments).
WHERE WERE HEADED
Our competitive strategies include:
offering customer-driven, distinct value propositions to specific market niches in each of our targeted geographies;
delivering quality homes to satisfied customers - measured, in part, by willingness to refer rates from independent surveys of homebuyers;
replicating best practices developed in each geographic area; and
optimizing value from our land portfolio, through both internal absorption of lots for homebuilding and sales to third parties.


 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 17



EXECUTIVE OFFICERS OF THE REGISTRANT
Patricia M. Bedient, 60, has been executive vice president and chief financial officer since 2007. She was senior vice president, Finance and Strategic Planning, from February 2006 to 2007. She served as vice president, Strategic Planning, from 2003, when she joined the company, to 2006. Prior to joining the company, she was a partner with Arthur Andersen LLP (Independent Accountant) from 1987 to 2002 and served as the managing partner for the Seattle office and as the partner in charge of the firms forest products practice from 1999 to 2002. She is on the Board of Directors for Alaska Air Group and also serves as a Board member of Oregon State University and Overlake Hospital Medical Center. She is a CPA and member of the American Institute of CPAs.
Adrian M. Blocker, 57, has been senior vice president, Lumber, since August 21, 2013. He joined Weyerhaeuser in May 2013 as vice president, Lumber. Prior to that role, he served as CEO of the Wood Products Council and Chairman. Throughout his career in the industry, he held numerous leadership positions at West Fraser, International Paper and Champion International focused on forest management, fiber procurement, consumer packaging, strategic planning, business development and manufacturing.
Srinivasan Chandrasekaran, 64, has been senior vice president, Cellulose Fibers, since 2006. He was vice president, Manufacturing, Cellulose Fibers, from 2005 to 2006; vice president and mill manager at the Kamloops, British Columbia, cellulose fiber mill from 2003 to 2005; and vice president and mill manager at the Kingsport, Tennessee, paper mill from 2002 to 2003. He joined Weyerhaeuser in 2002 with the company’s acquisition of Willamette Industries Inc., where he served in a number of leadership positions.
John A. Hooper, 59, has been senior vice president, Human Resources, since July 2008. He was vice president, Human Resources Operations, from 2006 to 2008; Human Resources director from 2003 to 2006; and strategic projects consultant from 2001, when he joined the company, until 2003. Prior to joining the company, he was a management consultant specializing in leadership effectiveness, human resources strategy and change management from 1986 to 2001. From 1979 to 1986, he held leadership positions in Eaton Corp. and Tektronix.
Rhonda Hunter, 51, has been senior vice president Timberlands, since January 1, 2014. Prior to her current position, she was vice president, Southern Timberlands, from 2010 to 2014. She held a number of leadership positions in the Southern

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 18



Timberlands organization with experience in inventory and planning, regional timberlands management, environmental and work systems, finance, and land acquisition. She joined Weyerhaeuser in 1987 as an accountant.
Sandy D. McDade, 62, has been senior vice president and general counsel since September 2006. He was senior vice president, Industrial Wood Products and International, from 2005 to 2006; senior vice president, Canada, from 2003 to 2005; vice president, Strategic Planning, from 2000 to 2003; and corporate secretary from 1993 to 2000. He joined Weyerhaeuser in 1980 and worked as a corporate and transaction lawyer until 2000.
Peter M. Orser, 57, has been president, Weyerhaeuser Real Estate Company, a subsidiary of the company, since October 1, 2010. Prior to becoming president, Weyerhaeuser Real Estate Company, Mr. Orser was president, Quadrant Corporation, a subsidiary of the company, from 2003 to 2010. He was executive vice president, Quadrant Corporation, from 2001 to 2003; residential senior vice president, Quadrant Corporation, from 1996 to 2001; vice president, Community Development, from 1992 to 1995; and held various leadership positions with Quadrant Corporation from 1987, when he joined the company, to 1992.
Doyle R. Simons, 50, was elected president and chief executive officer effective August 1. 2013. He served as director of the Company since 2012, was appointed as chief executive officer elect and an executive officer of the Company effective June 17, 2013. He served as chairman and chief executive officer of Temple-Inland, Inc. from 2008 until February 2012 when it was acquired by International Paper Company. Previously, he held various management positions with Temple-Inland, including executive vice president from 2005 through 2007 and chief administrative officer from 2003 to 2005. Prior to joining the company in 1992, he practiced real estate and banking law with Hutcheson and Grundy, L.L.P. He also serves on the Board of Fiserv, Inc. He has extensive experience in managing forest products companies and capital intensive industries, with strong skills in corporate finance, executive compensation, and strategic planning.
Catherine I. Slater, 50, has been senior vice president, Oriented Strand Board, Engineered Lumber Products and Distribution, since August 21, 2013. She was vice president, Oriented Strand Board (OSB) from 2011 to 2013. Prior to that role, she held a number of other leadership roles in the company’s Wood Products segment, including vice president for both engineered wood products manufacturing and veneer technologies. Before joining the Wood Products team, she held numerous positions in the company’s Cellulose Fibers business, including leadership roles at the Flint River and Port Wentworth, Ga., pulp mills, and leadership oversight for the company’s operations in Alberta, which included the pulp, timberlands, OSB, lumber, and engineered lumber. Prior to joining Weyerhaeuser in 1992, she held several leadership roles at Procter and Gamble.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 19



NATURAL RESOURCE AND ENVIRONMENTAL MATTERS
We are subject to a multitude of laws and regulations in the operations of our businesses. We also participate in voluntary certification of our timberlands to assure that we sustain their values including the protection of wildlife and water quality. Changes in law and regulation, or certification processes, can significantly affect our business.

REGULATIONS AFFECTING FORESTRY PRACTICES
In the United States, regulations established by federal, state and local governments or agencies to protect water quality and wetlands could affect future harvests and forest management practices on some of our timberlands. Forest practice laws and regulations that affect present or future harvest and forest management activities in certain states include:
limits on the size of clearcuts,
requirements that some timber be left unharvested to protect water quality and fish and wildlife habitat,
regulations regarding construction and maintenance of forest roads,
rules requiring reforestation following timber harvest, and
various related permit programs.
Each state in which we own timberlands has developed best management practices to reduce the effects of forest practices on water quality and aquatic habitats. Additional and more stringent regulations may be adopted by various state and local governments to achieve water-quality standards under the federal Clean Water Act, protect fish and wildlife habitats, or achieve other public policy objectives.
In Canada, our forest operations are carried out on public forestlands under forest licenses with the provinces. All forest operations are subject to:
forest practices and environmental regulations, and
license requirements established by contract between us and the relevant province designed to:
- protect environmental values, and
- encourage other stewardship values.
On May 18, 2010, 21 member companies of the Forest Products Association of Canada (FPAC), including Weyerhaeusers Canadian subsidiary, announced the signing of a Canadian Boreal Forest Agreement (CBFA) with nine environmental organizations. The CBFA applies to approximately 72 million hectares of public forests licensed to FPAC members and, when fully implemented, is expected to lead to the conservation of significant areas of Canadas boreal forest and protection of boreal species at risk, in particular woodland caribou. CBFA signatories continue to work on management plans with provincial governments, and seek the participation of aboriginal and local communities in advancing the goals of the CBFA. Progress under the CBFA is measured and reported on by an independent auditor.

ENDANGERED SPECIES PROTECTIONS
In the United States, a number of fish and wildlife species that inhabit geographic areas near or within our timberlands have been listed as threatened or endangered under the federal Endangered Species Act (ESA) or similar state laws, including:
the northern spotted owl, the marbled murrelet, a number of salmon species, bull trout and steelhead trout in the Pacific Northwest,
several freshwater mussel and sturgeon species, and
the red-cockaded woodpecker, gopher tortoise, gopher frog and American burying beetle in the South or Southeast.
Additional species or populations may be listed as threatened or endangered as a result of pending or future citizen petitions or petitions initiated by federal or state agencies. In addition, significant citizen litigation seeks to compel the federal agencies to designate "critical habitat" for ESA-listed species, and many cases have resulted in settlements under which designations will be implemented over time. Such designations may adversely affect some management activities and options. Restrictions on timber harvests can result from:
federal and state requirements to protect habitat for threatened and endangered species,
regulatory actions by federal or state agencies to protect these species and their habitat, and
citizen suits under the ESA.

Such actions could increase our operating costs and affect timber supply and prices in general. To date, we do not believe that these measures have had, and we do not believe that in 2014 they will have, a significant effect on our harvesting operations. We anticipate that likely future actions will not disproportionally affect Weyerhaeuser as compared with comparable operations of U.S. competitors.
In Canada:
The federal Species at Risk Act (SARA) requires protective measures for species identified as being at risk and for critical habitat,
Environment Canada announced a series of western science studies in 2010 that, with other landscape information, are designed to
identify critical habitat, and
The Canadian Minister of the Environment released for comment in 2011 a strategy for the recovery of the boreal population of woodland caribou under the SARA. The next step in boreal caribou recovery is the development of range plans and action plans by the provinces and territories, working with Environment Canada, aboriginal communities and stakeholders.

The identification and protection of habitat and the implementation of range plans and land use action plans may, over time, result in additional restrictions on timber harvests and other forest management practices that could increase operating costs for operators of forestlands in Canada. To date, we do not believe that these Canadian measures have had, and we do not believe that in 2014 they will have, a significant effect on our harvesting operations. We anticipate that likely future measures will not disproportionally affect Weyerhaeuser as compared with similar operations of Canadian competitors.


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FOREST CERTIFICATION STANDARDS
We operate in North America under the Sustainable Forestry Initiative (SFI®). This is a certification standard designed to supplement government regulatory programs with voluntary landowner initiatives to further protect certain public resources and values. SFI® is an independent standard, overseen by a governing board consisting of:
conservation organizations,
academia,
the forest industry, and
large and small forest landowners.
Ongoing compliance with SFI® may result in some increases in our operating costs and curtailment of our timber harvests in some areas. There also is competition from other private certification systems, primarily the Forest Stewardship Council (FSC), coupled with efforts by supporters to further those systems by persuading customers of forest products to require products certified to their preferred system. Certain features of the FSC system could impose additional operating costs on timberland management. Because of the considerable variation in FSC standards, and variability in how those standards are interpreted and applied, if sufficient marketplace demand develops for products made from raw materials sourced from other than SFI-certified forests, we could incur substantial additional costs for operations and be required to reduce harvest levels.

WHAT THESE REGULATIONS AND CERTIFICATION PROGRAMS MEAN TO US
The regulatory and nonregulatory forest management programs described above have:
increased our operating costs,
resulted in changes in the value of timber and logs from our timberlands,
contributed to increases in the prices paid for wood products and wood chips during periods of high demand,
sometimes made it more difficult for us to respond to rapid changes in markets, extreme weather or other unexpected circumstances, and
potentially encouraged further reductions in the use of, or substitution of other products for, lumber, oriented strand board, and plywood.
We believe that these kinds of programs have not had, and in 2014 will not have, a significant effect on the total harvest of timber in the United States or Canada. However, these kinds of programs may have such an effect in the future. We expect we will not be disproportionately affected by these programs as compared with typical owners of comparable timberlands. We also expect that these programs will not significantly disrupt our planned operations over large areas or for extended periods.

CANADIAN ABORIGINAL RIGHTS
Many of the Canadian forestlands are subject to the constitutionally protected treaty or common-law rights of aboriginal peoples of Canada. Most of British Columbia (B.C.) is not covered by treaties, and as a result the claims of B.C.s aboriginal peoples relating to forest resources are
largely unresolved, although many aboriginal groups are engaged in treaty discussions with the governments of B.C. and Canada.
Final or interim resolution of claims brought by aboriginal groups is expected to result in:
additional restrictions on the sale or harvest of timber,
potential increase in operating costs, and
impact to timber supply and prices in Canada.
We believe that such claims will not have a significant effect on our total harvest of timber or production of forest products in 2014, although they may have such an effect in the future. In 2008, FPAC, of which we are a member, signed a Memorandum of Understanding with the Assembly of First Nations, under which the parties agree to work together to strengthen Canadas forest sector through economic-development initiatives and business investments, strong environmental stewardship and the creation of skill-development opportunities particularly targeted to aboriginal youth.

POLLUTION-CONTROL REGULATIONS
Our operations are subject to various laws and regulations, including:
federal,
state,
provincial, and
local pollution controls.
These laws and regulations, as well as market demands, impose controls with regard to:
air, water and land,
solid and hazardous waste management,
disposal and remediation, and
the chemical content of some of our products.
Compliance with these laws, regulations and demands usually involves capital expenditures as well as additional operating costs. We cannot easily quantify the future amounts of capital expenditures we might have to make to comply with these laws, regulations and demands or the effects on our operating costs because in some instances compliance standards have not been developed or have not become final or definitive. In addition, it is difficult to isolate the environmental component of most manufacturing capital projects.
Our capital projects typically are designed to:
enhance safety,
extend the life of a facility,
increase capacity,
increase efficiency,
change raw material requirements,
increase the economic value of assets or products, and
comply with regulatory standards.

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We had no material capital expenditures relating primarily to environmental compliance in 2013. Based on our understanding of current regulatory requirements in the U.S. and Canada, we expect approximately $10 million of capital expenditures relating primarily to environmental compliance in 2014.

ENVIRONMENTAL CLEANUP
We are involved in the environmental investigation or remediation of numerous sites. Of these sites:
we may have the sole obligation to remediate,
we may share that obligation with one or more parties,
several parties may have joint and several obligations to remediate, or
we may have been named as a potentially responsible party for sites designated as U.S. Superfund sites.
Our liability with respect to these various sites ranges from insignificant to substantial. The amount of liability depends on:
the quantity, toxicity and nature of materials at the site, and
the number and economic viability of the other responsible parties.
We spent approximately $6 million in 2013 and expect to spend approximately $6 million in 2014 on environmental remediation of these sites.
It is our policy to accrue for environmental-remediation costs when we:
determine it is probable that such an obligation exists, and
can reasonably estimate the amount of the obligation.
We currently believe it is reasonably possible that our costs to remediate all the identified sites may exceed our current accruals of $30 million. The excess amounts required may be insignificant or could range, in the aggregate, up to $101 million over several years. This estimate of the upper end of the range of reasonably possible additional costs is much less certain than the estimates we currently are using to determine how much to accrue. The estimate of the upper range also uses assumptions less favorable to us among the range of reasonably possible outcomes.

REGULATION OF AIR EMISSIONS IN THE U.S.
The United States Environmental Protection Agency (EPA) had promulgated regulations for air emissions from:
pulp and paper manufacturing facilities,
wood products facilities and
industrial boilers.
These regulations cover:
hazardous air pollutants that require use of maximum achievable control technology (MACT); and
controls for pollutants that contribute to smog, haze and more recently, greenhouse gases.
In 2011 and 2013, EPA issued new MACT standards for industrial boilers and process heaters and in 2012 completed a technology and residual risk review for the MACT standards applicable to pulping and bleaching operations at pulp and paper manufacturing facilities. As a result of these recent final actions by the EPA, we expect we might spend as much as $25 million to $45 million over the next several years to comply with the MACT standards.
The EPA must still promulgate:
technology and residual risk review standards for additional operations at pulp and paper manufacturing facilities and
supplemental MACT standards for plywood, lumber and composite wood products facilities.
We cannot currently quantify the amount of capital we will need in the future to comply with new regulations being developed by the EPA because final rules have not been promulgated.
In 2007, the U.S. Supreme Court ruled that greenhouse gases are pollutants that can be subject to regulation under the Clean Air Act. As a result, the EPA:
promulgated regulations in 2009 for reporting greenhouse gas emissions that are applicable to our manufacturing operations;
issued a final rule in 2010 that applies to our manufacturing operations on a project-by-project basis that would limit the growth in greenhouse gas emissions from new projects meeting certain emission thresholds; and
initiated in 2011 efforts to further develop independent scientific analysis and rulemaking on how biomass emissions should be treated.
The EPA also issued a final rule deferring until mid-2014 greenhouse gas permitting requirements for carbon dioxide emissions from biomass. The U.S. Court of Appeals for the District of Columbia Circuit vacated this rule in August 2013. However, the court has withheld putting its decision into effect pending a decision in a U.S. Supreme Court review of the 2010 greenhouse gas emissions rule referenced above. The impacts of this decision are uncertain while the other litigation is unresolved and until EPA issues the final rules regarding how biomass emissions will be regulated.
It is unclear what the effect of EPAs greenhouse gas regulations will be on our operations until final rules regarding biomass emissions are promulgated.
To address concerns about greenhouse gases as a pollutant, we:
closely monitor legislative, regulatory and scientific developments pertaining to climate change;
adopted in 2006, as part of the Company's sustainability program, a goal of reducing greenhouse gas emissions by 40 percent by 2020 compared with our emissions in 2000, assuming a comparable portfolio and regulations;
determined to achieve this goal by increasing energy efficiency and using more greenhouse gas-neutral, biomass fuels instead of fossil fuels;
issued a final rule revision for portions of the GHG mandatory reporting rule in November 2013 that will apply to the 2013 data year reporting due in March 2014; and
reduced greenhouse gas emissions by approximately 28 percent considering changes in the asset portfolio according to 2012 data, compared to our 2000 baseline.

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Additional factors that could affect greenhouse gas emissions in the future include:
policy proposals by state governments regarding regulation of greenhouse gas emissions,
Congressional legislation regulating greenhouse gas emissions within the next several years and
establishment of a multistate or federal greenhouse gas emissions reduction trading systems with potentially significant implications for all U.S. businesses.
It is not yet known when and to what extent these policy activities may come into force or how they may relate to each other in the future.
We believe these measures have not had, and in 2014 will not have, a significant effect on our operations, although they may have such an effect in the future. We expect we will not be disproportionately affected by these measures as compared with typical owners of comparable operations. We maintain an active forestry research program to track and understand any potential effect from actual climate change related parameters that could affect the forests we own and manage and do not anticipate any disruptions to our planned operations.

REGULATION OF AIR EMISSIONS IN CANADA
The Canadian federal government has proposed an air quality management system (AQMS) as a comprehensive approach for improving air quality in Canada. On October 11, 2012, most Canadian provincial and territorial jurisdictions agreed to begin implementing the AQMS. The federal proposed AQMS includes:
ambient air quality standards for outdoor air quality management across the country,
a framework for air zone air management within provinces and territories that targets specific sources of air emissions,
regional airsheds that facilitate coordinated action across borders,
industrial sector based emission requirements that set a base level of performance for major industries in Canada, and
improved intergovernmental collaboration to reduce emissions from the transportation sector.

Environment Canada is developing a Greenhouse Gas Emission Framework that is expected to be proposed in 2015 with implementation in 2020. The framework will put in place a national, sector-based greenhouse gas reduction program applicable to a number of industries, including pulp and paper manufacturing.
All Canadian provincial governments:
have greenhouse gas reporting requirements,
are working on reduction strategies, and
together with the Canadian federal government, are considering new or revised emission standards.
In addition, British Columbia has adopted a carbon tax and Alberta has a mandatory GHG emission reduction regulation. Our Grande Prairie cellulose fiber mill generates and sells carbon credits.
We believe these measures have not had, and in 2014 will not have, a significant effect on our operations, although they may have such an effect in the future. We expect we will not be disproportionately affected by these measures as compared with typical owners of comparable operations. We also expect that these measures will not significantly disrupt our planned operations.

REGULATION OF AIR EMISSIONS IN URUGUAY AND POLAND
The European Unions Clean Air Programme includes new air quality objectives that Poland and other E.U. countries will implement over the coming years, up through 2030. Some provinces in Uruguay have established air quality monitoring networks and ambient air objectives have been proposed for the region where our Los Piques mill is located.
We believe these measures have not had, and in 2014 will not have, a significant effect on our operations, although they may have such an effect in the future. We expect we will not be disproportionately affected by these measures as compared with typical owners of comparable operations. We also expect that these measures will not significantly disrupt our planned operations.

REGULATION OF WATER
In the U.S., as a result of litigation under the federal Clean Water Act, additional federal or state permits are now required in some states for the application of pesticides, including herbicides, on forest lands. Those permits have entailed additional costs. In addition, there is continuing litigation in the federal courts that may result in permit requirements for pollution discharges from forest roads and other drainage features on forest land, which would entail additional costs for forest landowners including Weyerhaeuser. Finally, the federal regulatory agencies are considering expanding the definition of waters subject to federal Clean Water Act jurisdiction, which could increase the scope and number of permits required for forestry-related activities and entail additional costs for Weyerhaeuser and other forest landowners in the U.S.
In 2014, the EPA is expected to issue final regulations on water intakes for the protection of aquatic resources. It is unclear what the effect, if any, of EPAs water intake regulations will be on our U.S. pulp operations until final rules are promulgated.
In 2014, the Washington state Department of Ecology (WA DOE) is expected to propose rules to update the Human Health Water Quality Criteria for the protection of human health. It is unclear what the effect, if any, of the WA DOE regulations will have on our manufacturing operations in Washington state. On November 25, 2013, amendments to the Canadian federal Fisheries Act came into force. The amendments change the focus from habitat protection to fisheries protection and increase penalties. Uruguay’s national policy for water includes river basin planning, management and water use permits. Wastewater discharge authorization is required for industry. In response to an E.U. Water Framework Directive, Poland is to develop, by end of 2015, a water management plan for every river basin, to reduce total nitrogen and phosphorous loads in Municipal waste water by 75 percent.


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POTENTIAL CHANGES IN POLLUTION REGULATION
State governments continue to promulgate total maximum daily load (TMDL) requirements for pollutants in water bodies that do not meet state or EPA water quality standards. State TMDL requirements may:
set limits on pollutants that may be discharged to a body of water; or
set additional requirements, such as best management practices for nonpoint sources, including timberland operations, to reduce the amounts of pollutants.
It is not possible to estimate the capital expenditures that may be required for us to meet pollution allocations across the various proposed state TMDL programs until a specific TMDL is promulgated.
In Canada, various levels of government have been working to address water issues including use, quality and management. Recent areas of focus include water allocation, regional watershed protection, protection of drinking water, water pricing and a national water quality index.
We established a goal in May 2008 to reduce water use at our cellulose fibers mills 20 percent by 2012, using a 2007 baseline. We achieved a 19 percent water use reduction in 2012 compared to our 2007 baseline.


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FORWARD-LOOKING STATEMENTS
This report contains statements concerning our future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements:
are based on various assumptions we make, and
may not be accurate because of risks and uncertainties surrounding the assumptions we make.
Factors listed in this section, as well as other factors not included, may cause our actual results to differ from our forward-looking statements. There is no guarantee that any of the events anticipated by our forward-looking statements will occur. Or if any of the events occur, there is no guarantee what effect it will have on our operations or financial condition.
We will not update our forward-looking statements after the date of this report.
FORWARD-LOOKING TERMINOLOGY
Some forward-looking statements discuss our plans, strategies and intentions. They use words such as expects, may, will, believes, should, approximately, anticipates, estimates, projects, intends, and plans. In addition, these words may use the positive or negative or other variations of those terms.
STATEMENTS
We make forward-looking statements in this report, including with respect to estimated tax rates, future dividends, future pretax charges, expected results of litigation and the sufficiency of litigation reserves, anticipated effects of regulatory rulemaking, our expected capital expenditures for 2014, our expectations relating to pension contributions and benefit payments, additional optionality for future harvests as a result of the Longview Timber acquisition and recognition of certain tax benefits in the future. Such forward-looking statements also include statements regarding the proposed transaction with TRI Pointe relating to our homebuilding and real estate development business, the anticipated timing and benefits of such transaction, assets that may be excluded from such transaction, and tax implications relating to such transaction.
In addition, we base our forward-looking statements on the expected effect of:
the economy,
regulations,
adverse litigation outcomes and the adequacy of reserves,
changes in accounting principles,
contributions to pension plans,
projected benefit payments,
projected tax rates and credits, and
other related matters.
RISKS, UNCERTAINTIES AND ASSUMPTIONS
Major risks and uncertainties, and assumptions that we make, that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:
the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages and strength of the U.S. dollar;
market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
performance of our manufacturing operations, including maintenance requirements;
level of competition from domestic and foreign producers;
raw material availability and prices;
the effect of weather;
the risk of loss from fires, floods, windstorms, hurricanes, pest infestations and other natural disasters;
energy prices;
the successful execution of our internal plans and strategic initiatives;
transportation costs;
federal tax policies;
the effect of forestry, land use, environmental and other governmental regulations;
legal proceedings;
performance of pension fund investments and related derivatives;
the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation;
changes in accounting principles;
our ability to successfully integrate operations of Longview Timber and realize expected benefits from the acquisition;
our and TRI Pointe's ability to complete the transaction relating to our homebuilding and real estate development business, as described above, on the anticipated terms and schedule, including the ability to obtain shareholder and regulatory approvals and the anticipated tax treatment of the transactions and related transactions; and
other factors described under Risk Factors.
EXPORTING ISSUES
We are a large exporter, affected by changes in:
economic activity in Europe and Asia, especially Japan and China;
currency exchange rates, particularly the relative value of the U.S. dollar to the euro and the Canadian dollar, and the relative value of the euro to the yen; and
restrictions on international trade or tariffs imposed on imports.

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RISK FACTORS
We are subject to certain risks and events that, if one or more of them occur, could adversely affect our business, our financial condition, our results of operations and the trading price of our common stock.
You should consider the following risk factors, in addition to the other information presented in this report and the matters described in “Forward-Looking Statements,” as well as the other reports and registration statements we file from time to time with the SEC, in evaluating us, our business and an investment in our securities.
The risks below are not the only risks we face. Additional risks not currently known to us or that we currently deem immaterial also may adversely affect our business.

RISKS RELATED TO OUR INDUSTRIES AND BUSINESS

MACROECONOMIC CONDITIONS
The industries in which we operate are sensitive to macroeconomic conditions and consequently highly cyclical.
The overall levels of demand for the products we manufacture and distribute reflect fluctuations in levels of end-user demand which consequently impact our sales and profitability. End-user demand depends in part on general macroeconomic conditions in North America and worldwide as well as on local economic conditions. Current economic conditions in the United States reflect growth below historical trends, moderately improving consumer confidence and general business uncertainty, fueled by fiscal concerns within the U.S. as well as global economic issues such as slowing growth and rising inflation in emerging countries. The homebuilding industry (including our Real Estate business), has recently experienced increased demand for new homes resulting in falling inventories, which contributed to some improvement in selling prices for new and existing homes. This improvement is highly dependent on continued improvement in the overall economy, the relative health of which has been subject to the numerous shocks and obstacles, including those mentioned earlier. Our Wood Products segment is highly dependent on the strength of the homebuilding industry. The decline in home construction activity over the past several years, which occurred as a result of the credit bubble and recession, resulted in depressed prices of and demand for wood products and building materials. This was reflected in lower prices and demand for logs and reduced harvests in our Timberland segment. The length and magnitude of industry cycles have varied over time and by product, but generally reflect changes in macroeconomic conditions. Those conditions improved recently for some sectors such as homebuilding and wood products, while other sectors such as cellulose fibers have been adversely impacted by the slowdown in global economic growth, as this is a major driver of demand for products made from cellulose fibers.

COMMODITY PRODUCTS
Many of our products are commodities that are widely available from other producers.
Because commodity products have few distinguishing properties from producer to producer, competition for these products is based primarily on price, which is determined by supply relative to demand and competition from substitute products. Prices for our products are affected by many factors outside of our control, and we have no influence over the timing and extent of price changes, which often are volatile. Our profitability with respect to these products depends, in part, on managing our costs, particularly raw material and energy costs, which represent significant components of our operating costs and can fluctuate based upon factors beyond our control. Prices of and demand for many of our products have fluctuated significantly in recent quarters, while many of our raw material or energy costs have increased. As a result, both sales and profitability are subject to volatility due to market forces beyond our control.

INDUSTRY SUPPLY OF LOGS, WOOD PRODUCTS AND PULP
Excess supply of products may adversely affect prices and margins.
Oversupply of products also may result from producers introducing new capacity or increasing harvest levels in response to favorable short-term pricing trends. Industry supplies of pulp also are influenced by overseas production capacity, which has grown in recent years and is expected to continue to grow. While the weakness of the U.S. dollar in recent years has improved the companys competitive position, the recent strengthening of the U.S. dollar and decreases in demand for consumer products in emerging markets may result in lower prices. Continuation of these factors could materially and adversely affect sales volumes and margins of our operations..

HOMEBUILDING MARKET AND ECONOMIC RISKS
High unemployment, low demand and low levels of consumer confidence can adversely affect our business and results of operations.
Many of our businesses are dependent upon the health of the U.S. housing market. Demand for homes is sensitive to changes in economic conditions such as the level of employment, consumer confidence, consumer income, the availability of financing and interest rate levels. The legacy of the housing bubble, its collapse and ensuing credit crisis has been one of tightened credit requirements and a reduced number of mortgage loans available for financing home purchases. Credit conditions have begun to ease, but remain significantly more restrictive than prior to the housing bubble. Demand for new homes also has been adversely affected by factors such as continued high unemployment and weak consumer confidence. Additionally, rising student loan debt among younger adults is limiting access to mortgage financing and home ownership. Foreclosure rates and distress sales of houses, while still at elevated levels, have fallen and are less of an impact compared to the years immediately following the housing collapse.
Homebuyers ability to qualify for and obtain affordable mortgages could be affected by changes in government sponsored entities and private mortgage insurance companies supporting the mortgage market.
The federal government has historically had a significant role in supporting mortgage lending through its sponsorship of Fannie Mae and Freddie Mac. As a result of turbulence in the credit markets and mortgage finance industry in the last few years, the effect of the federal governments conservatorship of these government sponsored entities on the short-term and long-term demand for new housing remains unclear. The liquidity provided to the mortgage industry by Fannie Mae and Freddie Mac, both of which purchase home mortgages and mortgage-backed securities originated by mortgage lenders, is critical to the housing market. There have been significant concerns about the future purpose of Fannie Mae and Freddie Mac and a number of proposals to curtail their activities over time are under review. Any limitations or restrictions on the availability

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of financing by these entities could adversely affect interest rates, mortgage financing, and increase the effective cost of our homes, which could reduce demand for our homes and adversely affect our results of operations.
Changes in mortgage interest expense and real estate tax regulations could harm our future sales and earnings.
Significant costs of homeownership include mortgage interest expense and real estate taxes, both of which are generally deductible for an individuals federal and, in some cases, state income taxes. Any changes to income tax laws by the federal government or a state government to eliminate or substantially reduce these income tax deductions, as has been considered from time to time, would increase the after-tax cost of owning a home. Increases in real estate taxes by local governmental authorities also increase the cost of homeownership. Any such increases to the cost of homeownership could adversely affect the demand for and sales prices of new homes.

CAPITAL MARKETS
Deterioration in economic conditions and the credit markets could adversely affect our access to capital.
Upset financial or credit market conditions can impair the companys ability to borrow money or otherwise access credit markets on terms acceptable to us, which may, among other impacts, reduce our ability to take advantage of growth and expansion opportunities. Similarly, our customers may be unable to borrow money to fund their operations. Similarly, deteriorating or volatile market conditions could have an adverse effect on our customers and suppliers and their ability to purchase our products or sell products to us.

CHANGES IN CREDIT RATINGS
Changes in credit ratings issued by nationally recognized rating organizations could adversely affect our cost of financing and have an adverse effect on the market price of our securities.
Credit rating agencies rate our debt securities on factors that include our operating results, actions that we take, their view of the general outlook for our industry and their view of the general outlook for the economy. Actions taken by the rating agencies can include maintaining, upgrading or downgrading the current rating or placing the company on a watch list for possible future downgrading. Downgrading the credit rating of our debt securities or placing us on a watch list for possible future downgrading could limit our access to the credit markets, increase our cost of financing, and have an adverse effect on the market price of our securities.

SUBSTITUTION
Some of our products are vulnerable to declines in demand due to competing technologies or materials.
Our products may compete with nonfiber-based alternatives or with alternative products in certain market segments. For example, plastic, wood/plastic or composite materials may be used by builders as alternatives to the products produced by our Wood Products businesses such as lumber, veneer, plywood and oriented strand board. Changes in prices for oil, chemicals and wood-based fiber can change the competitive position of our products relative to available alternatives and could increase substitution of those products for our products. As the use of these alternatives grows, demand for our products may further decline.

CHANGES IN PRODUCT MIX OR PRICING
Our results of operations and financial condition could be materially adversely affected by changes in product mix or pricing.
Our results may be adversely affected by a change in our product mix or pricing. If we are not successful in implementing previously announced or future price increases, or plans to move customers to higher-priced products, or if there are delays in acceptance of price increases or failure of customers to accept higher-priced products our results of operations and financial condition could be materially adversely affected. Moreover, price discounting, if required to maintain our competitive position, could result in lower than anticipated price realizations.

INTENSE COMPETITION
We face intense competition in our markets, and the failure to compete effectively could have a material adverse effect on our business, financial condition and results of operations.
We compete with North American and, for many of our product lines, global producers, some of which may have greater financial resources and lower production costs than we do. The principal basis for competition for many of our products is selling price. Our ability to maintain satisfactory margins depends in large part on our ability to control our costs. Our industries also are particularly sensitive to other factors including innovation, design, quality and service, with varying emphasis on these factors depending on the product line. To the extent that one or more of our competitors become more successful with respect to any key competitive factor, our ability to attract and retain customers could be materially adversely affected. If we are unable to compete effectively, such failure could have a material adverse effect on our business, financial condition and results of operations.
Another emerging form of competition is between brands of sustainably produced products; customer demand for certain brands could reduce competition among buyers for our products or cause other adverse effects.
In North America, our forests are third party-certified to the Sustainable Forestry Initiative (SFI®) standard. Some of our customers have expressed a preference in certain of our product lines for products made from raw materials sourced from forests certified to different standards, including standards of the Forest Stewardship Council (FSC). If and to the extent that this preference becomes a customer requirement, there may be reduced demand and lower prices for our products relative to competitors who can supply products sourced from forests certified to competing certification standards. If we seek to comply with such other standards, we could incur materially increased costs for our operations or be required to reduce harvest levels. FSC, in particular, employs standards that are geographically variable and could cause a material reduction in the harvest levels of some of our timberlands, most notably in the Pacific Northwest.


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MATERIAL DISRUPTION OF MANUFACTURING
A material disruption at one of our manufacturing facilities could prevent us from meeting customer demand, reduce our sales or negatively affect our results of operation and financial condition.
Any of our manufacturing facilities, or any of our machines within an otherwise operational facility, could cease operations unexpectedly due to a number of events, including:
unscheduled maintenance outages,
prolonged power failures,
equipment failure,
a chemical spill or release,
explosion of a boiler,
the effect of a drought or reduced rainfall on its water supply,
labor difficulties,
disruptions in the transportation infrastructure, including roads, bridges, railroad tracks and tunnels,
fires, floods, windstorms, earthquakes, hurricanes or other catastrophes,
terrorism or threats of terrorism,
governmental regulations, and
other operational problems.
Any such downtime or facility damage could prevent us from meeting customer demand for our products or require us to make unplanned capital expenditures. If one of these machines or facilities were to incur significant downtime, our ability to meet our production targets and satisfy customer requirements could be impaired, resulting in lower sales and income.

STRATEGIC INITIATIVES
Our business and financial results may be adversely impacted if we are unable to successfully execute on important strategic initiatives.
There can be no assurance that we will be able to successfully implement important strategic initiatives in accordance with our expectations, which may result in an adverse impact on our business and financial results. These strategic initiatives are designed to improve our results of operations and drive long-term shareholder value, and include, among others: maximizing cash flow through operational excellence; reducing costs to achieve industry-leading cost structure; and innovating in higher-margin products.

CAPITAL REQUIREMENTS
Our operations require substantial capital.
The company has substantial capital requirements for expansion and repair or replacement of existing facilities or equipment. Although we maintain our production equipment with regular scheduled maintenance, key pieces of equipment may need to be repaired or replaced periodically. The costs of repairing or replacing such equipment and the associated downtime of the affected production line could have a material adverse effect on our financial condition, results of operations and cash flows.
We believe our capital resources will be adequate to meet our current projected operating needs, capital expenditures and other cash requirements. If for any reason we are unable to provide for our operating needs, capital expenditures and other cash requirements on economic terms, we could experience a material adverse effect on our business, financial condition, results of operations and cash flows.

ENVIRONMENTAL LAWS AND REGULATIONS
We could incur substantial costs as a result of compliance with, violations of, or liabilities under applicable environmental laws and other laws and regulations.
We are subject to a wide range of general and industry-specific laws and regulations relating to the protection of the environment, including those governing:
air emissions,
wastewater discharges,
harvesting and other silvicultural activities,
forestry operations and endangered species habitat protection,
surface water management,
the storage, management and disposal of hazardous substances and wastes,
the cleanup of contaminated sites,
landfill operation and closure obligations,
building codes, and
health and safety matters.
For example, the U.S. Environmental Protection Agency (EPA) is in the process of implementing final rules regulating greenhouse gases that apply to our operations on a project-by-project basis and may be applied to carbon dioxide emissions from biomass. These and similar laws and regulations in the U.S. and Canada will require us to obtain authorizations from and comply with the authorization requirements of the appropriate governmental authorities, which have considerable discretion over the terms and timing of permits.
We have incurred, and we expect to continue to incur, significant capital, operating and other expenditures complying with applicable environmental laws and regulations and as a result of remedial obligations. We also could incur substantial costs, such as civil or criminal fines, sanctions and enforcement actions (including orders limiting our operations or requiring corrective measures, installation of pollution control equipment or other remedial actions), cleanup and closure costs, and third-party claims for property damage and personal injury as a result of violations of, or liabilities under, environmental laws and regulations.
As the owner and operator of real estate, including in our homebuilding business, we may be liable under environmental laws for cleanup, closure and other damages resulting from the presence and release of hazardous substances on or from our properties or operations. In

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 28



addition, surface water management regulations may present liabilities and are subject to change. The amount and timing of environmental expenditures is difficult to predict, and in some cases, our liability may exceed forecasted amounts or the value of the property itself. The discovery of additional contamination or the imposition of additional cleanup obligations at our sites or third-party sites may result in significant additional costs. Any material liability we incur could adversely affect our financial condition or preclude us from making capital expenditures that otherwise would benefit our business.
We also anticipate public policy developments at the state, federal and international level regarding climate change and energy access, security and competitiveness. We expect these developments to address emission of carbon dioxide, renewable energy and fuel standards, and the monetization of carbon. Compliance with regulations that implement new public policy in these areas might require significant expenditures. These developments may also include mandated changes to energy use and building codes which could affect our homebuilding practices. Enactment of new environmental laws or regulations or changes in existing laws or regulations, or the interpretation of these laws or regulations, might require significant expenditures. We also anticipate public policy developments at the state, federal and international level regarding taxes, health care and a number of other areas that could require significant expenditures.

CURRENCY EXCHANGE RATES
We will be affected by changes in currency exchange rates.
We have manufacturing operations in Canada, Poland, Uruguay and Brazil. We are also a large exporter and compete with producers of products very similar to ours. Therefore, we are affected by changes in the strength of the U.S. dollar relative to the Canadian dollar, euro and yen, and the strength of the euro relative to the yen.

AVAILABILITY OF RAW MATERIALS AND ENERGY
Our business and operations could be materially adversely affected by changes in the cost or availability of raw materials and energy.
We rely heavily on certain raw materials (principally wood fiber and 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 to be, affected by changes in the costs and availability of such raw materials and energy sources. We may not be able to fully offset the effects of higher raw material or energy costs through hedging arrangements, price increases, productivity improvements or cost-reduction programs.

PEOPLE
Our business is dependent upon attracting, retaining and developing key personnel.
We believe that our success depends, to a significant extent, upon our ability to attract, retain and develop key senior management and operations management personnel. Our failure to recruit, retain, and develop these key personnel could adversely affect our financial condition or results of operations.

TRANSPORTATION
We depend on third parties for transportation services and increases in costs and the availability of transportation could materially adversely affect our business and operations.
Our business depends on the transportation of a large number of products, both domestically and internationally. We rely primarily on third parties for transportation of the products we manufacture or distribute as well as delivery of our raw materials. In particular, a significant portion of the goods we manufacture and raw materials we use are transported by railroad or trucks, which are highly regulated.
If any of our third-party transportation providers were to fail to deliver the goods we manufacture or distribute in a timely manner, we may be unable to sell those products at full value, or at all. Similarly, if any of these providers were to fail to deliver raw materials to us in a timely manner, we may be unable to manufacture our products in response to customer demand. In addition, if any of these third parties were to cease operations or cease doing business with us, we may be unable to replace them at reasonable cost.
Any failure of a third-party transportation provider to deliver raw materials or finished products in a timely manner could harm our reputation, negatively affect our customer relationships and have a material adverse effect on our financial condition and results of operation.
In addition, an increase in transportation rates or fuel surcharges could materially adversely affect our sales and profitability.

REIT STATUS AND TAX IMPLICATIONS
If we fail to remain qualified as a REIT, our taxable income would be subject to tax at corporate rates and we would not be able to deduct dividends to shareholders.
In any taxable year in which we fail to qualify as a REIT, unless we are entitled to relief under the Internal Revenue Code:
We would not be allowed to deduct dividends to shareholders in computing our taxable income.
We would be subject to federal and state income tax on our taxable income at regular corporate rates.
We also would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification.
Qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code to our operations and the determination of various factual matters and circumstances not entirely within our control. There are only limited judicial or administrative interpretations of these provisions. Although we operate in a manner consistent with the REIT qualification rules, we cannot assure you that we are or will remain so qualified.
In addition, federal and state tax laws are constantly under review by persons involved in the legislative process, the Internal Revenue Service, the United States Department of the Treasury, and state taxing authorities. Changes to the tax law could adversely affect our shareholders. We cannot predict with certainty whether, when, in what forms, or with what effective dates, the tax laws applicable to us or our shareholders may be changed.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 29



Certain of our business activities are subject to corporate-level income tax and potentially subject to prohibited transactions tax.
Under the Internal Revenue Code, REITs generally must engage in the ownership and management of income producing real estate. For the Company, this generally includes owning and managing a timberland portfolio for the production and sale of standing timber. Accordingly, the manufacture and sale by us of wood products, the harvesting and sale of logs, and the development or sale of certain timberlands, the manufacture and sale of pulp products, the development of real estate, the building and sale of single-family houses and the development and sale of land and lots for real estate development are conducted through one or more of our wholly-owned taxable REIT subsidiaries (TRSs) because such activities could generate non-qualifying REIT income and could constitute prohibited transactions. Prohibited transactions are defined by the Internal Revenue Code generally to be sales or other dispositions of property to customers in the ordinary course of a trade or business. By conducting our business in this manner we believe that we satisfy the REIT requirements of the Internal Revenue Code and are not subject to the 100 percent tax that could be imposed if a REIT were to conduct a prohibited transaction. The net income of our TRSs is subject to corporate-level income tax.
The extent of our use of our TRS may affect the price of our common shares relative to the share price of other REITs.
We conduct a significant portion of our business activities through one or more TRSs. Our use of our TRSs enables us to engage in non-REIT qualifying business activities such as the sale of logs, production and sale of wood products and pulp products, real estate development and single-family home sales, and sale of HBU property. Our TRSs are subject to corporate-level tax. Therefore, we pay income taxes on the income generated by our TRSs. Under the Code, no more than 25 percent of the value of the gross assets of a REIT may be represented by securities of one or more TRS. This limitation may affect our ability to increase the size of our TRSs operations. Furthermore, our use of TRSs may cause the market to value our common shares differently than the shares of other REITs, which may not use TRSs as extensively as we use them.
We may be limited in our ability to fund distributions using cash generated through our taxable REIT subsidiaries.
The ability of the REIT to receive dividends from our TRS is limited by the rules with which we must comply to maintain our status as a REIT. In particular, at least 75 percent of gross income for each taxable year as a REIT must be derived from passive real estate sources including sales of our standing timber and other types of qualifying real estate income and no more than 25 percent of our gross income may consist of dividends from our TRS and other non-real estate income.
This limitation on our ability to receive dividends from our TRSs may affect our ability to fund cash distributions to our shareholders using cash flows from our TRSs. The net income of our TRSs is not required to be distributed, and income that is not distributed will not be subject to the REIT income distribution requirement.
Our cash dividends are not guaranteed and may fluctuate.
Generally, REITs are required to distribute 90 percent of their ordinary taxable income and 95 percent of their net capital gains income. Capital gains may be retained by the REIT, but would be subject to income taxes. If capital gains are retained rather than distributed, our shareholders would be notified and they would be deemed to have received a taxable distribution, with a refundable credit for any federal income tax paid by the REIT. Accordingly, we believe that we are not required to distribute material amounts of cash since substantially all of our taxable income is treated as capital gains income. Our Board of Directors, in its sole discretion, determines the amount of quarterly dividends to be provided to our shareholders based on consideration of a number of factors. These factors include, but are not limited to, our results of operations, cash flow and capital requirements, economic conditions, tax considerations, borrowing capacity and other factors, including debt covenant restrictions that may impose limitations on cash payments, future acquisitions and divestitures, harvest levels, changes in the price and demand for our products and general market demand for timberlands including those timberland properties that have higher and better uses. Consequently, our dividend levels may fluctuate.
We may not be able to complete desired like-kind exchange transactions for timberlands and real estate we sell.
When we sell timberlands and real estate, we generally seek to match these sales with the acquisition of suitable replacement timberlands. This allows us like-kind exchange treatment for these transactions under section 1031 and related regulations of the Code. This matching of sales and purchases provides us with significant tax benefits, most importantly the deferral of any gain on the property sold until ultimate disposition of the replacement property. While we attempt to complete like-kind exchanges wherever practical, we may not be able to do so in all instances due to various factors, including the lack of availability of suitable replacement property on acceptable terms and our inability to complete a qualifying like-kind exchange transaction within the time frames required by the Code. The inability to obtain like-kind exchange treatment would result in the payment of taxes with respect to the property sold, and a corresponding reduction in earnings and cash available for distribution to shareholders as dividends.

LEGAL PROCEEDINGS
We are a party to a number of legal proceedings, and adverse judgments in certain legal proceedings could have a material adverse effect on our financial condition.
The costs and other effects of pending litigation against us and related insurance recoveries cannot be determined with certainty. Although the disclosure in Note 17: Legal Proceedings, Commitments and Contingencies of Notes to Consolidated Financial Statements contains managements current views of the effect such litigation will have on our financial results, there can be no assurance that the outcome of such proceedings will be as expected.
It is possible that there could be adverse judgments against us in some or all major litigation against us and that we could be required to take a charge and make cash payments for all or a portion of any damage award. Any such charge or cash payment could materially and adversely affect our results of operations or cash flows for the quarter or year in which we record or pay it.


 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 30



EXPORT TAXES
We may be required to pay significant export taxes or countervailing and anti-dumping duties for exported products.
We may experience reduced revenues and margins on some of our businesses as a result of export taxes or countervailing and anti-dumping duty assessments. International trade disputes occur frequently and can be taken to an International Trade Court for resolution of unfair trade practices between countries. For example, there have been many disputes and subsequent trade agreements regarding sales of softwood lumber between Canada and the United States. The current Softwood Lumber Act signed in October 2006 requires our Canadian softwood lumber facilities to pay an export tax when the price of lumber is at or below a threshold price. The export tax could be as high as 22.5 percent if a province exceeds its total allotted export share. It is possible that additional countervailing duty and antidumping tariffs, or similar type tariffs could be imposed on us in the future. We may experience reduced revenues and margins in any business that is subject to such tariffs or to the terms of the settlements of such international disputes. These tariffs or settlement terms could have a material adverse effect on our business, financial results and financial condition, including facility closures or impairments of assets.

NATURAL DISASTERS
Our business and operations could be adversely affected by weather, fire, infestation or natural disasters.
Our timberlands assets may be damaged by adverse weather, severe wind and rainstorms, fires, pest infestation or other natural disasters. Because our manufacturing processes primarily use wood fiber, in many cases from our own timberlands, in the event of material damage to our timberlands, our operations could be disrupted or our production costs could be increased. As is typical in the forestry industry, we do not insure against losses of timber, including losses due to these causes.

ACQUISITION OF LONGVIEW TIMBER LLC
We may fail to realize the full benefits anticipated as a result of the acquisition of Longview Timber LLC.
There are a number of risks and uncertainties relating to our recent acquisition of Longview Timber LLC. The ultimate success of the acquisition will depend, in part, on our ability to realize the anticipated business opportunities and growth prospects from combining our businesses with those of Longview Timber. We may not fully realize our expected business opportunities, synergies and growth prospects. Integrating operations may require significant efforts and expenditures from us. We may also be required to make unanticipated capital expenditures or investments in order to maintain, improve or sustain the operations or assets of Longview Timber or take write-offs or impairment charges or recognize amortization expenses resulting from the acquisition and may be subject to unanticipated or unknown liabilities relating to Longview Timber and its business. If any of these factors limit our ability to fully integrate the businesses successfully or on a timely basis, the expectations of future results of operations following the acquisition might not be met.

REAL ESTATE TRANSACTION
The Real Estate transaction may not be completed on the terms or timeline currently contemplated, or at all.
On November 4, 2013, we announced that the Company and Weyerhaeuser Real Estate Company, an indirect wholly owned subsidiary of the Company (WRECO), had entered into a Transaction Agreement dated November 3, 2013 with TRI Pointe Homes, Inc. ("TRI Pointe") and one of TRI Pointes subsidiaries (Merger Sub). Pursuant to the Transaction Agreement, Weyerhaeuser Company will distribute all the shares of common stock of WRECO to its shareholders (i) on a pro rata basis, (ii) in an exchange offer or (iii) in a combination thereof (the Distribution). Immediately following the Distribution, Merger Sub will merge with and into WRECO (the Merger), with WRECO surviving the Merger and becoming a wholly owned subsidiary of TRI Pointe.
The consummation of the transaction is subject to numerous conditions, including (i) consummation of certain financings and transactions contemplated by the Transaction Agreement, (ii) the receipt of TRI Pointe stockholder approval, (iii) the receipt of applicable regulatory approvals, (iv) the receipt of certain tax opinions, and (v) other customary closing conditions. We can make no assurances that the transaction will be consummated on the terms or timeline currently contemplated, or at all. We have and will continue to expend significant management time and resources and incur significant expenses due to legal, advisory and financial services fees related to the transaction.

RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK

STOCK-PRICE VOLATILITY
The market price of our common stock may be influenced by many factors, some of which are beyond our control, including those described above under "Risks Related to our Industries and Business" and the following:
actual or anticipated fluctuations in our operating results or our competitors' operating results,
announcements by us or our competitors of new products, capacity changes, significant contracts, acquisitions or strategic investments,
our growth rate and our competitors growth rates,
the financial market and general economic conditions,
changes in stock market analyst recommendations regarding us, our competitors or the forest products industry generally, or lack of analyst coverage of our common stock,
sales of our common stock by our executive officers, directors and significant stockholders or sales of substantial amounts of common stock,
changes in accounting principles, and
changes in tax laws and regulations.
In addition, there has been significant volatility in the market price and trading volume of securities of companies operating in the forest products industry that often has been unrelated to the operating performance of particular companies.
Some companies that have had volatile market prices for their securities have had securities litigation brought against them. If litigation of this type is brought against us, it could result in substantial costs and would divert managements attention and resources.


 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 31



PREFERENCE SHARES
Our common shares will rank junior to our mandatory convertible preference shares with respect to dividends and amounts payable in the event of our liquidation.
Our common shares will rank junior to our mandatory convertible preference shares with respect to the payment of dividends and amounts payable in the event of our liquidation, dissolution or winding-up. This means that, unless full cumulative dividends have been paid or set aside for payment on all outstanding mandatory convertible preference shares for all past dividend periods and the then current dividend period, no dividends may be declared or paid on our common shares. Likewise, in the event of our voluntary or involuntary liquidation, dissolution or winding-up, no distribution of our assets may be made to holders of our common shares until we have paid to holders of the mandatory convertible preference shares a liquidation preference equal to $50.00 per share plus accrued and unpaid dividends.
Certain provisions in the mandatory convertible preference shares could delay or prevent an otherwise beneficial takeover or takeover attempt of us and, therefore, the ability of holders to exercise their rights associated with a potential fundamental change.
Certain provisions in our mandatory convertible preference shares could make it more difficult or more expensive for a third party to acquire us. For example, if a fundamental change were to occur on or prior to July 1, 2016, holders of the mandatory convertible preference shares may have the right to convert their mandatory convertible preference shares, in whole or in part, at an increased conversion rate and will also be entitled to receive a fundamental change dividend make-whole amount equal to the present value of all remaining dividend payments on their mandatory convertible preference shares. These features of the mandatory convertible preference shares could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management.

UNRESOLVED STAFF COMMENTS
There are no unresolved comments that were received from the SEC staff relating to our periodic or current reports under the Securities Exchange Act of 1934.

PROPERTIES
Details about our facilities, production capacities and locations are found in the Our Business — What We Do section of this report.
For details about our Timberlands properties, go to Our Business/What We Do/Timberlands/Where We Do It.
For details about our Wood Products properties, go to Our Business/What We Do/Wood Products/Where We Do It.
For details about our Cellulose Fibers properties, go to Our Business/What We Do/Cellulose Fibers/Where We Do It.
For details about our Real Estate properties, go to Our Business/What We Do/Real Estate/Where We Do It.

LEGAL PROCEEDINGS


 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 32



MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock trades on the following exchanges under the symbol WY:
New York Stock Exchange and
Chicago Stock Exchange
As of December 31, 2013, there were 8,859 holders of record of our common shares. Dividend-per-share data and the range of closing market prices for our common stock for each of the four quarters in 2013 and 2012 are included in Note 24: Selected Quarterly Financial Information (unaudited) in the Notes to Consolidated Financial Statements.
INFORMATION ABOUT SECURITIES AUTHORIZED FOR ISSUANCE UNDER OUR EQUITY COMPENSATION PLAN
 
NUMBER OF
SECURITIES TO BE
ISSUED UPON
EXERCISE OF
OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS

WEIGHTED
AVERAGE EXERCISE
PRICE OF
OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS

NUMBER OF
SECURITIES
REMAINING AVAILABLE
FOR FUTURE ISSUANCE
UNDER EQUITY
COMPENSATION PLANS
(EXCLUDING
SECURITIES TO BE ISSUED UPON EXERCISE)

Equity compensation plans approved by security holders(1)
20,397,209

$
23.12

19,902,470

Equity compensation plans not approved by security holders
N/A

N/A

N/A

Total
20,397,209

$
23.12

19,902,470

(1)   Includes 1,546,348 restricted stock units and 1,101,523 performance share units. Because there is no exercise price associated with restricted stock units and performance share units, such stock units are not included in the weighted average price calculation.
INFORMATION ABOUT COMMON STOCK REPURCHASES
We did not repurchase any common shares in 2013 or 2012. During 2011, we repurchased 1,199,800 shares of common stock for $20 million under the 2008 stock repurchase program. On August 11, 2011, our Board of Directors terminated the 2008 stock repurchase program and approved the 2011 stock repurchase program under which we are authorized to repurchase up to $250 million of outstanding shares. During 2011, we repurchased 1,089,824 shares of common stock for $17 million under the 2011 program. As of December 31, 2013, we had remaining authorization of $233 million for future share repurchases.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
Weyerhaeuser Company, S&P 500 and S&P Global Timber & Forestry Index
Performance Graph Assumptions
Assumes $100 invested on December 31, 2008 in Weyerhaeuser common stock, the S&P 500 Index and the S&P Global Timber & Forestry Index.
Total return assumes dividends received are reinvested at month end.
Measurement dates are the last trading day of the calendar year shown.
 

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 33



SELECTED FINANCIAL DATA
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
PER COMMON SHARE
  
2013

2012

2011

2010

2009

Diluted earnings (loss) from continuing operations attributable to Weyerhaeuser common shareholders
$
0.95

0.71

0.59

3.96

(2.38
)
Diluted earnings (loss) from discontinued operations attributable to Weyerhaeuser common shareholders(1)


0.02

0.03

(0.20
)
Diluted net earnings (loss) attributable to Weyerhaeuser common shareholders
$
0.95

0.71

0.61

3.99

(2.58
)
Dividends paid per common share
$
0.81

0.62

0.60

26.61

0.60

Weyerhaeuser shareholders’ interest (end of year)
$
11.64

7.50

7.95

8.60

19.13

FINANCIAL POSITION
  
2013

2012

2011

2010

2009

Total assets
$
14,498

12,592

12,634

13,464

15,319

Total long-term debt
$
4,891

4,291

4,478

5,060

5,686

Weyerhaeuser shareholders’ interest
$
6,795

4,070

4,263

4,612

4,044

Percent earned on average Weyerhaeuser shareholders’ interest
9.9
%
9.2
%
7.5
%
29.6
%
(12.3
)%
OPERATING RESULTS
  
2013

2012

2011

2010

2009

Net sales
$
8,529

7,059

6,216

5,954

5,068

Earnings (loss) from continuing operations
$
563

384

319

1,274

(525
)
Discontinued operations, net of income taxes(1)


12

9

(43
)
Net earnings (loss)
563

384

331

1,283

(568
)
Net loss (earnings) attributable to noncontrolling interest

1


(2
)
23

Net earnings (loss) attributable to Weyerhaeuser
563

385

331

1,281

(545
)
Dividends on preference shares
(23
)




Net earnings (loss) attributable to Weyerhaeuser common shareholders
$
540

385

331

1,281

(545
)
CASH FLOWS
  
2013

2012

2011

2010

2009

Net cash from operations
$
1,004

581

291

689

(203
)
Cash from investing activities
$
(1,829
)
(192
)
122

164

276

Cash from financing activities
$
762

(444
)
(927
)
(1,255
)
(498
)
Net change in cash and cash equivalents
$
(63
)
(55
)
(514
)
(402
)
(425
)
STATISTICS (UNAUDITED)
  
2013

2012

2011

2010

2009

Number of employees
13,700

13,200

12,800

14,250

14,888

Number of common shareholder accounts at year-end
8,859

9,227

9,724

10,050

10,577

Number of common shares outstanding at year-end (thousands)
583,548

542,393

536,425

535,976

211,359

Weighted average common shares outstanding – diluted (thousands)
571,239

542,310

539,879

321,096

211,342

(1)


To implement our decision to be taxed as a REIT, we distributed to our shareholders our accumulated earnings and profits, determined under federal income tax provisions, as a “Special Dividend.” On September 1, 2010, we paid a dividend of $5.6 billion which included the Special Dividend and the regular quarterly dividend of approximately $11 million. At the election of each shareholder, the Special Dividend was paid in cash or Weyerhaeuser common shares. The number of common shares issued was approximately 324 million. The stock portion of the Special Dividend was treated as the issuance of new shares for accounting purposes and affects our earnings per share only for periods after the distribution. Prior periods are not restated. The required treatment results in earnings per share that is less than would have been the case had the common shares not been issued.

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 34



MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

WHAT YOU WILL FIND IN THIS MD&A
 
Our MD&A includes the following major sections:
economic and market conditions affecting our operations;
financial performance summary;
results of our operations — consolidated and by segment;
liquidity and capital resources — where we discuss our cash flows;
off-balance sheet arrangements;
environmental matters, legal proceedings and other contingencies; and
accounting matters — where we discuss critical accounting policies and areas requiring judgments and estimates.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS
In 2013, the U.S. economy continued to advance at a sluggish pace. Growth in the U.S. economy was hindered by fiscal issues which included the fiscal cliff, sequestration and a budget impasse which caused a partial shutdown of the government for 16 days. Private sector growth was an area of comparative strength, but not without incident, as hints of tapering of the Federal Reserve asset purchases caused an abrupt rise in interest rates which rattled markets. These factors significantly affected the economy, limiting anticipated improvements in key economic indicators. The U.S. housing market, while affected by these factors, continued to show signs of improvement in 2013 as lower inventories of new and existing homes led to increases in new home construction and rises in home values. The strength of the U.S. housing market strongly affects our Real Estate, Wood Products and Timberlands segments.
Real Estate focuses on building single-family homes. As published by the U.S. Census Bureau, total U.S. housing starts for 2013 were 923 thousand units, with single family units accounting for 618 thousand of the total. This represents a 15 percent increase in single family starts from 2012, which was 535 thousand units. Multifamily construction also increased in 2013 to 305 thousand units compared with 246 thousand in 2012. While a significant improvement, current housing demand remains well below 1 million or more single family starts, the typical level during the 15-year period of 1992-2007. In 2013, new home sales in the U.S. averaged 430 thousand units. This level represents a 17 percent increase over 2012.
Wood Products primarily sells into the new residential building and repair and remodel markets. Demand for wood products has continued to improve as housing starts have increased. This has resulted in higher prices than those observed in 2012. Prices for most commodity wood products were higher in 2013, with the greatest increases observed in Douglas fir lumber and oriented strand board (OSB). Higher prices led to improved industry operating rates for lumber and OSB. Despite the improvement, demand for both lumber and panels remain below peak levels.
Demand for logs from our Timberlands segment is affected by the production of wood-based building products as well as export demand. In the South, several years of deferred harvest due to weak demand have created increased inventories and as a result southern pine log prices were modestly higher in 2013 while western log prices, helped by resurgent demand from China and Japan, increased more substantially in 2013.
Cellulose Fibers is primarily affected by global demand and the relative strength of the U.S. dollar. The U.S. dollar was relatively stable compared to most global currencies during 2013 with some notable exceptions. The volatility which characterized the Euro in 2012 was mostly absent in 2013. The U.S. dollar weakened slightly against the euro for much of 2013, which improved our pulp mills competitiveness against competitors with euro denominated costs and had a positive effect on Cellulose Fibers pricing. Demand in the key global economies of Europe and China improved from 2012.



 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 35



FINANCIAL PERFORMANCE SUMMARY
Net Sales by Segment
Contribution (Charge) to Pretax Earnings by Segment, Excluding Discontinued Operations

 WEYERHAEUSER COMPANY > 2013 ANNUAL REPORT AND FORM 10-K 36



RESULTS OF OPERATIONS
In reviewing our results of operations, it is important to understand these terms:
Sales realizations refer to net selling prices — this includes selling price plus freight minus normal sales deductions.
Net contribution to earnings can be positive or negative and refers to earnings (loss) attributable to Weyerhaeuser shareholders before interest expense and income taxes.

CONSOLIDATED RESULTS
HOW WE DID IN 2013
Summary of Financial Results
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
  
  
  
  
AMOUNT OF CHANGE
 
  
2013

2012

2011

2013
vs.
2012

2012
vs.
2011

Net sales
$
8,529

$
7,059

$
6,216

$
1,470

$
843

Operating income
$
747

$
735

$
594

$
12

$
141

Earnings from discontinued operations, net of tax
$

$

$
12

$

$
(12
)
Net earnings attributable to Weyerhaeuser common shareholders
$
540

$
385

$
331

$
155

$
54

Basic earnings per share attributable to Weyerhaeuser common shareholders
$
0.95

$
0.71

$
0.62

$
0.24

$
0.09

Diluted earnings per share attributable to Weyerhaeuser common shareholders
$
0.95

$
0.71