REVENUE RECOGNITION

12 Months Ended

Dec. 31, 2019

Revenue From Contract With Customer [Abstract]

NOTE 3: REVENUE RECOGNITION

A majority of our revenue is derived from sales of delivered logs and manufactured wood products. We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which we adopted on January 1, 2018, using the cumulative effect method. The adoption of the new revenue recognition guidance did not materially affect our Consolidated Statement of Operations, Consolidated Balance Sheet or Consolidated Statement of Cash Flows.

PERFORMANCE OBLIGATIONS

A performance obligation, as defined in ASC Topic 606, is a promise in a contract to transfer a distinct good or service to a customer. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue at the point in time, or over the period, in which the performance obligation is satisfied.

Performance obligations associated with delivered log sales are typically satisfied when the logs are delivered to our customers’ mills or delivered to an ocean vessel in the case of export sales. Performance obligations associated with the sale of wood products are typically satisfied when the products are shipped. We have elected, as an accounting policy, to treat shipping and handling that is performed after a customer obtains control of the product as an activity required to fulfill the promise to transfer the good; therefore we will not evaluate this requirement as a separate performance obligation.

Customers are generally invoiced shortly after logs are delivered or after wood products are shipped, with payment generally due within a month or less of the invoice date. ASC Topic 606 requires entities to consider significant financing components of contracts with customers, though allows for the use of a practical expedient when the period between satisfaction of a performance obligation and payment receipt is one year or less. Given the nature of our revenue transactions, we have elected to utilize this practical expedient.

Performance obligations associated with real estate sales are generally met when placed into escrow and all conditions of closing have been satisfied.

CONTRACT ESTIMATES

Substantially all of our performance obligations are satisfied as of a point in time. Therefore, there is little judgment in determining when control transfers for our business segments as described above.

The transaction price for log sales generally equals the amount billed to our customer for logs delivered during the accounting period. For the limited number of log sales subject to a long-term supply agreement, the transaction price is variable but is known at the time of billing. For wood products sales, the transaction price is generally the amount billed to the customer for the products shipped but may be reduced slightly for estimated cash discounts and rebates.

There are no significant contract estimates related to the real estate business.

CONTRACT BALANCES

In general, customers are billed and a receivable is recorded as we ship and/or deliver wood products and logs. We generally receive payment shortly after products have been received by our customers. Contract asset and liability balances are immaterial.

For real estate sales, the company receives the entire consideration in cash at closing.

MAJOR PRODUCTS

A Reconciliation of Revenue Recognized by our Major Products:

DOLLAR AMOUNTS IN MILLIONS
	2019		2018		2017
Net sales to unaffiliated customers:
Timberlands segment⁽¹⁾
Delivered logs:
West
Domestic sales	$	375	$	503	$	473
Export grade sales		365		484		442

Subtotal West		740		987		915
South		640		625		616
North⁽²⁾		92		99		95
Other⁽³⁾		—		—		23

Subtotal delivered logs sales		1,472		1,711		1,649
Stumpage and pay-as-cut timber		42		59		73
Recreational and other lease revenue		61		59		59
Other⁽⁴⁾		43		44		112

Net sales attributable to Timberlands segment		1,618		1,873		1,893
Real Estate & ENR segment
Real estate		225		229		208
Energy and natural resources		88		77		72

Net sales attributable to Real Estate & ENR segment		313		306		280
Wood Products segment⁽¹⁾
Structural lumber		1,892		2,258		2,058
Oriented strand board		632		891		904
Engineered solid section		510		521		500
Engineered I-joists		323		336		336
Softwood plywood		161		200		176
Medium density fiberboard		166		177		183
Complementary building products		602		584		541
Other⁽⁵⁾		337		330		325

Net sales attributable to Wood Products segment		4,623		5,297		5,023

Total	$	6,554	$	7,476	$	7,196

(1)

In 2019, we changed the way we report our Canadian Forestlands operations. As a result, we no longer report related intersegment sales in the Timberlands segment and we now record the minimal associated third-party log sales in the Wood Products segment. These collective transactions did not contribute any earnings to the Timberlands or Wood Products segment. We have conformed prior year presentations with the current year.

(2)	In November 2019, we sold our Michigan timberlands. Refer to Note 4: Divestitures and Assets Held for Sale for further information on this divestiture.

(3)	Other delivered logs included sales from timberlands managed for the Twin Creeks Venture. Our management agreement for the Twin Creeks Venture began in April 2016 and terminated in December 2017. For additional information see Note 8: Related Parties.

(4)

Other Timberlands sales includes sales of seeds and seedlings from our nursery operations as well as wood chips. Prior to our Uruguay operations being divested in September 2017, sales from these operations were included within this amount as well. Refer to Note 4: Divestitures and Assets Held for Sale for further information on this divestiture.

(5)	Other Wood Products sales include wood chips, other byproducts and third-party residual log sales from our Canadian Forestlands operations.