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BUSINESS SEGMENTS
 3 Months Ended
Mar. 31, 2017
BUSINESS SEGMENTS
BUSINESS SEGMENTS

Reportable business segments are determined based on the company’s management approach. The management approach, as defined by FASB ASC 280, “Segment Reporting,” is based on the way the chief operating decision maker organizes the segments within a company for making decisions about resources to be allocated and assessing their performance.

We are principally engaged in growing and harvesting timber; manufacturing, distributing, and selling products made from trees; maximizing the value of every acre we own through the sale of higher and better use (HBU) properties; and monetizing reserves of minerals, oil, gas, coal, and other natural resources on our timberlands. The following is a brief description of each of our reportable business segments and activities:
•
Timberlands – which includes logs, timber and leased recreational access;
•
Real Estate & ENR – which includes sales of timberlands; rights to explore for and extract hard minerals, oil and gas production and coal; and equity interests in our Real Estate Development Ventures (as defined and described in Note 7: Related Parties); and
•
Wood Products – which includes softwood lumber, engineered wood products, structural panels, medium density fiberboard and building materials distribution.
Discontinued operations as presented herein consist of the operations of our former Cellulose Fibers segment. All periods presented have been revised to separate the results of discontinued operations from the results of our continuing operations. Refer to Note 3: Discontinued Operations for more information regarding our discontinued operations.

On October 12, 2016, we announced the exploration of strategic alternatives for our timberlands and manufacturing operations in Uruguay. We intend to consider a broad range of alternatives, including continuing to hold and operate the business, or a sale. The related assets and liabilities of our Uruguay operations have not met the criteria for classification as "held for sale" and are not included in our results of discontinued operations.

An analysis and reconciliation of our business segment information to the respective information in the Consolidated Statements of Operations is as follows:
 
QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS
MARCH 2017
 
MARCH 2016
Sales to unaffiliated customers:
 
 
 
Timberlands
$
486

 
$
387

Real Estate & ENR
53

 
39

Wood Products
1,154

 
979

 
1,693

 
1,405

Intersegment sales:
 
 
 
Timberlands
202

 
222

Wood Products
—

 
22

 
202

 
244

Total sales
1,895

 
1,649

Intersegment eliminations
(202
)
 
(244
)
Total
$
1,693

 
$
1,405

Net contribution to earnings:
 
 
 
Timberlands
$
148

 
$
129

Real Estate & ENR(1)
26

 
15

Wood Products
172

 
87

 
346

 
231

Unallocated items(2)
(66
)
 
(64
)
Net contribution to earnings
280

 
167

Interest expense, net of capitalized interest
(99
)
 
(95
)
Earnings from continuing operations before income taxes
181

 
72

Income taxes
(24
)
 
(11
)
Earnings from continuing operations
157

 
61

Earnings from discontinued operations, net of income taxes
—

 
20

Net earnings
157

 
81

Dividends on preference shares
—

 
(11
)
Net earnings attributable to Weyerhaeuser common shareholders
$
157

 
$
70



(1)
The Real Estate & ENR segment includes the equity earnings from, investments in and advances to our Real Estate Development Ventures (as defined and described in Note 7: Related Parties), which are accounted for under the equity method.
(2)
Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses associated with financing, the elimination of intersegment profit in inventory and the LIFO reserve. As a result of reclassifying our former Cellulose Fibers segment as discontinued operations, Unallocated items also includes retained indirect corporate overhead costs previously allocated to the former segment. Additionally, amounts shown for 2016 include equity earnings from our former Timberland Venture. As of August 31, 2016, the Timberland Venture became a fully consolidated, wholly-owned subsidiary and therefore eliminated our equity method investment at that time.