OTHER OPERATING COSTS, NET

12 Months Ended

Dec. 31, 2020

Other Income [Abstract]

OTHER OPERATING COSTS, NET

NOTE 19: OTHER OPERATING COSTS, NET

Other operating costs, net:

• includes both recurring and non-recurring income and expense items and

• can fluctuate from year to year.

Income and Expense Items Included in Other Operating Costs, Net

DOLLAR AMOUNTS IN MILLIONS
	2020			2019			2018
Environmental remediation insurance recoveries	$	—		$	—		$	(5	)
Foreign exchange losses (gains), net (1)		7			2			(3	)
Gain on disposition of nonstrategic assets		(4	)		(4	)		(5	)
Litigation expense, net		11			63			35
Research and development expenses		5			6			8
Timber casualty loss		80			—			—
Other, net(2)		35			28			52
Total other operating costs, net	$	134		$	95		$	82

(1) Foreign exchange gains and losses result from changes in exchange rates primarily related to our U.S. dollar denominated cash and debt balances that are held by our Canadian subsidiary. 

(2) Other, net includes environmental remediation charges. See Note 14: Legal Proceedings, Commitments and Contingencies for more information.

TIMBER CASUALTY LOSS

In September 2020, forest fires in the state of Oregon, commonly referred to as the Holiday Farm, Beachie Creek, Riverside, and Archie Creek fires, spread from adjacent lands onto portions of our Oregon timberland properties. Based on interpretation of satellite imagery and aerial photography, as well as limited on-site assessments, we estimate that the fires affected approximately 125,000 acres of our Oregon timberlands. Our assessments have indicated that the extent of damage varies from tract to tract based on topographical conditions, rate of fire spread, age of the timber and other circumstances. Based on these assessments, we expect that the majority of merchantable timber, even if affected by the fires, is likely salvageable if harvested within a reasonable period of time. We believe the majority of pre-merchantable timber affected by the fires will not be able to be salvaged.

We recorded a timber casualty loss of $80 million in third quarter 2020 which represented the estimated book value of timber and related assets that could not be salvaged based on the information available at that time. Since that time, we have performed on-site assessments for a limited portion of our affected timberlands and have also developed revised harvest plans to incorporate salvage activity. The additional information obtained has not resulted in a change to the estimated loss previously recorded. The loss is attributable to our Timberlands segment and is recorded within “Other operating costs, net” in the Consolidated Statement of Operations. As salvage efforts continue and as we are able to complete additional on-site assessments of timber within the fire perimeter, it is reasonably possible that this estimate could increase by as much as $30 million to $40 million.