Weyerhaeuser Report

Transcription

Weyerhaeuser Report

LOOK FOR PROOF
WEYERHAEUSER COMPANY 2006 SUSTAINABILITY PERFORMANCE REPORT
For more information, please visit www.weyerhaeuser.com.
LOOK
FOR
PROOF
WEYERHAEUSER COMPANY
2006 SUSTAINABILITY PERFORMANCE REPORT
WEYERHAEUSER
AT A GLANCE
ONLINE VERSION OF THIS REPORT
TOTAL SALES AND REVENUES
In 2006, our total net sales and revenues were $21.9 billion. Here’s how
that breaks down by business segment.
2% 5%
15%
22%
35%
Weyerhaeuser grows and harvests trees, builds homes, and makes forest products essential
to everyday lives. Our company, headquartered in Federal Way, Wash., was founded in 1900
and now has offices or operations in 18 countries, with customers worldwide. At the end
of 2006, we employed approximately 46,700 people. In 2006, we ranked 90th on Fortune
magazine’s list of America’s largest corporations.
This report is also available on our website.
The online version at www.weyerhaeuser.com/
sustainability/06report features more information about topics, as referenced throughout
the report. Also see our Company Overview
online with stories about how we are creating
sustainable solutions to the world’s challenges
at http://investor.weyerhaeuser.com.
CONTACT INFORMATION
Business
Description
Key Customers
2006 Operating Stats
Timberlands
Manages forests on a
sustainable basis by
growing and harvesting
trees on a renewable
cycle.
Weyerhaeuser facilities.
Other log processors
in the United States
and around the world.
• Harvest rate: 1%
21%
• Trees planted:
133.8 million
• Acres managed:
- 6.4 million
(United States)
Timberlands
We welcome your comments about this
report. E-mail us at environment_contact@
weyerhaeuser.com, or write directly to:
Sara Kendall
Vice President, Environment,
Health and Safety
Weyerhaeuser Company
P.O. Box 9777
Federal Way, WA 98063-9777
- 26.8 million (Canada)
Wood Products
Cellulose Fibers
& White Papers
Wood
Products
Manufactures and distributes a variety of
building products, such
as lumber and engineered wood, for homes
and other structures.
Structural frame
construction.
Repair and remodel.
Furniture and
cabinetry.
Industrial
construction.
• Softwood lumber
FORWARD-LOOKING STATEMENTS
facilities: 32
• Engineered lumber
facilities: 18
• Veneer facilities: 8
• Oriented strand
board facilities: 9
• Hardwood lumber
facilities: 8
• Plywood facilities: 3
• Distribution locations:
851
Containerboard
Packaging
and Recycling2
Produces boxes and
bags that move food
and products to consumers, and collects and
recycles wastepaper to
make new products.
Manufacturers,
producers and retailers
that ship and/or sell
durable and nondurable
goods in North America.
• Containerboard
This report contains statements concerning
the company’s future results and performance
that are forward-looking statements within
the meaning of the Private Securities Litigation
Reform Act of 1995. Some of these forwardlooking statements can be identified by the
use of forward-looking terminology such as
“expects,” “may,” “will,” “believes,” “should,”
“approximately,” “anticipates,” “estimates”
and “plans” and the negative or other variations of those terms or comparable terminology
or by discussions of goals, strategy, plans or
intentions. In particular, some of these forward-looking statements deal with expectations
regarding the way we will conduct business;
reduction in greenhouse gas emissions by
2020; the impact of forest management programs and sustainable forest management
systems; reductions in recordable incident
rates; reduction in energy use (including use
of purchased electricity); reduction in air and
water pollution; use of biomass; reduction in
water use; reduction in chemical use; increase
in diversity; return on net assets; building of
three new state-of-the-art softwood lumber
mills; the potential for the Cellulose Fibers
business and new products; outlook for WRECO
during the current real estate cycle; cost savings from restructuring of transportation and
warehousing organizations and implementation
of a common integrated technology platform;
contributions to pension funds in 2007; alignment of climate change management strategy
to meet likely future regulatory obligations;
requests for customer input; and similar matters. The accuracy of such statements is subject to a number of risks, uncertainties and
assumptions that may cause actual results to
differ materially from those projected, including,
but not limited to, the effect of general eco-
Containerboard
Packaging & Recycling
Real Estate
Other
MARKETS OUTSIDE THE UNITED STATES
In 2006, 17 percent of our total net
sales and revenue were from customers
outside the United States. Here’s how
that $3.6 billion breaks down by country
and region.
32%
15%
21%
Europe
Canada
Other
plants: 75
• Bag or specialty
plants: 14
• Recycling facilities: 19
32%
Japan
plants: 9
• Packaging/box
Cellulose
Fibers
and White
Papers3
Makes innovative products to serve the growing
absorbent pulp market.
Produces liquid
packaging and newsprint
products.
Absorbent product
manufacturers worldwide.
Carton and food product
packaging converters.
Newspapers
and publishers.
• Pulp mills: 103
Real Estate
Provides shelter by
developing land
and building homes.
Single-family home
buyers in select U.S.
geographies.
• Homes built
• Paper facilities: 213
• Liquid packaging
facility: 1
• Newsprint joint
venture: 1
and delivered:
5,836
1. In 2006, we announced the intent to sell 26 distribution locations.
2. In May 2007, we announced that we are considering a broad range of strategic alternatives for our Containerboard Packaging and Recycling business.
3. In early 2007, we completed the Domtar transaction, which combined our fine paper and related assets
with Domtar Inc. to form a new company. Those facilities no longer with Weyerhaeuser are included in the data
and descriptions in the table above, as well as in the metrics shown throughout this report. The facilities were
part of our operations through 2006 year-end. They are also included in the net sales and revenues pie charts,
which are based on data in our 2006 Form 10-K.
nomic conditions, including the level of interest
rates and housing starts; market demand for
the company’s products, which may be tied to
the relative strength of various U.S. business
segments; energy prices; raw material prices;
chemical prices; performance of the company’s
manufacturing operations; the successful execution of internal performance plans and initiatives; the level of competition from domestic
and foreign producers; the effect of forestry,
land use, environmental and other governmental policies and regulations, and changes in
accounting regulations; the effect of weather;
the risk of loss from fires, floods, windstorms,
hurricanes, pest infestation and other natural
disasters; transportation costs; legal proceedings; the effect of timing of retirements and
changes in the market price of company stock
on charges for stock-based compensation;
and performance of pension fund investments
and related derivatives.
The company is also a large exporter and
is affected by changes in economic activity in
Europe and Asia, particularly Japan, and by
changes in currency exchange rates, particularly the relative value of the U.S. dollar to the
Euro and the Canadian dollar, and restrictions
on international trade or tariffs imposed on
imports. These and other factors could cause
or contribute to actual results differing materially from such forward-looking statements and,
accordingly, no assurances can be given that
any of the events anticipated by the forwardlooking statements will occur or, if any of
them occurs, what effect they will have on the
company’s results of operations or financial
condition. The company expressly declines any
obligation to publicly revise any forward-looking
statements that have been made to reflect
the occurrence of events after the date of this
news release.
Designed by: Lesley Feldman
Photography by: Dave Putnam
Printing by: Cenveo
Printed on SFI-certified Domtar 100 lb. Recycled Cougar Cover and 70 lb. Recycled Cougar
Opaque Text. Soy-based inks, which are more
easily separated from the paper fiber in the
repulping process, were used in printing this
report. The entire report can be recycled in
most high-grade office paper recycling programs.
Thank you for recycling.
A MESSAGE FROM
STEVEN R. ROGEL, CHAIRMAN,
PRESIDENT AND CEO
Steven R. Rogel, Chairman, President
and CEO, Weyerhaeuser Company
THE NEED FOR SUSTAINABLE SOLUTIONS TO THE WORLD’S CHALLENGES HAS
NEVER BEEN GREATER. WEYERHAEUSER PEOPLE MEET THESE NEEDS BY
MANAGING OUR BUSINESS IN A SUSTAINABLE WAY. IN THIS REPORT, YOU’LL FIND
FACTS AND DATA THAT DEMONSTRATE HOW WE DO IT — BY CONSERVING
RESOURCES, BUILDING RELATIONSHIPS, AND USING INNOVATION TO MAKE THE
MOST OUT OF EVERY TREE WE HARVEST.
In early 2007, we introduced a refreshed Roadmap
for Success that features a new vision statement for
our company: “We release the potential in trees to
solve important problems for people and the planet.”
This statement not only reflects the work our people
do each day, but it also strengthens the link between
sustainability and our goals. For the first time, we’ve
explicitly stated sustainability as a key behavior on
our Roadmap: We will lead and manage our company
in a sustainable and responsible way.
We are now displaying our progress in specific areas
of sustainability using a “dashboard” — a visual
you will see at the start of each section in this report.
Our businesses display their performance on critical
measures through dashboards. Using a three-point
scale of exceeds, achieves or below, we rate our performance in key areas, such as product certification,
safety and shareholder return. This gives you a snapshot of our sustainability performance across the
company. Information within each section then provides more context to explain the rating.
Not only are we taking a more disciplined approach,
but we’re also actively searching for innovative ways
to meet demand and create ongoing, sustainable
prosperity. In April 2007, we announced the creation
of a biofuels alliance with Chevron Corporation. The
letter of intent between our companies establishes a
joint effort to assess the feasibility of commercializing
biofuel production from cellulose-based sources. We
will focus on researching and developing technology
that can transform wood fiber and other nonfood
sources of cellulose into economical, clean-burning
biofuels for cars and trucks. Working together, we
can create new, sustainable sources of biofuel for
transportation.
Even more meaningful than our own measures of sustainability, is continued recognition by parties such as
the Dow Jones Sustainability Index and Storebrand
for our leading environmental and social performance.
But there is still more work to do. Our efforts will
continue in 2007 and beyond to find sustainable ways
to meet the needs of our customers. We will draw
on our expertise and partnerships to reach our goals.
Trees and human ingenuity are equally precious,
sustainable resources, and we are committed to
growing both.
STEVEN R. ROGEL
Chairman, President and CEO
1
CONTENTS
SECTION 1: SHAREHOLDER VALUE
Business Strategies
Timberlands
iLevel
Real Estate
Fine Paper
Absorbent Fibers
Containerboard
Making the Most of Size and Scale
Timber Tax
Assisting Employees When Jobs Are Eliminated
Significant Events in 2006
Returning Cash to Shareholders
Financial Highlights
Net Sales and Revenues
Earnings
Earnings Per Share
Capital Expenditures
Total Contributions
Total Costs and Expenses
Common and Exchangeable Shares
Return on Shareholders’ Interest
Investing in Infrastructure
SECTION 2: SUSTAINABLE SYSTEMS
Sustainability Systems Analysis
Sustainability Integrated Into Vision and Policies
Systems to Help Manage Risks
Progress Toward Goals
Revised Environment, Health and Safety Policies
Environmental Systems
Environmental Core Policy
Environmental Management Systems
Self-Audits
Responsible Sourcing
Certification Standards
Sustainable Forestry Standard
Wood-Procurement Policy
Environmental Compliance
Incidents and Penalties
Capital Spending
Environmental Remediation
5
5
5
5
6
6
6
6
6
7
7
6–7
7
8
8
8
8
8
8
8
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8
11
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12
14
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14
15
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16–17
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18
Health and Safety Systems
Health and Safety Core Policy
Health and Safety Strategy
Record Keeping
Stakeholder Engagement
Market Campaigns
Grassy Narrows
Rainforest Action Network
Awards and Recognition
Inclusion on Socially Responsible Indices
18
18
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21
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SECTION 3: EMPLOYEE WELL-BEING
23
Employer of Choice
Safety
Recordable Incident Rate
Safety Performance
Fatalities
Injury Analysis
Senior Management Visits
Awards and Recognition
Employee Health
Employment Data
Competitive Benefits
Health Connection
Pension Investments Perform
Training and Development
Performance-Driven Culture
- Employee Compensation
Diversity
Profile and Placement Rate
Building Relationships with Indigenous Peoples
Supplier Diversity
Managing Suppliers
Sourcing Talent to Achieve Results
Employee Representation
Labor Relations
Human Rights
23
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25
25
26–28
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SECTION 4: ENVIRONMENTAL FOOTPRINT
33
Managing Forests Sustainably
Intensively Managed Forests
Map of Timberlands Ownership
33
33
34
Protecting Old Growth Forests
Protecting Threatened and Endangered Species
Seattle Audubon Files Suit
Forestry Research Spending
Special Sites
Plantation-Grown Fiber
Opposing Illegal Logging
Boreal Forest Management
Promoting Sustainable Forestry
Forest Certification
Raw Material Sources
Solid Waste Management
Energy Use and Climate Change
Greenhouse Gas Reduction
Financial Implications, Risks and
Opportunities of Climate Change
Air Quality
Water Quality
Water Use and Conservation
Transportation
Reducing Chemical Risk
Environmental Release Inventories
Emissions Data
35
35
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SECTION 5: PRODUCT RESPONSIBILITY
51
Paper Recovery and Recycling
Sustainable Forestry Product Labeling
Life-Cycle Assessments
Green Building
Weyerhaeuser Green Building Activities
Green Building Standards
Health and Safety of Our Products
Compliance
Nanotechnology
Genetic Engineering
Responsible Marketing and Communications
51
52
52
52
52
54
54
55
55
55
55
44
44
44
45
46
47
49
Giving Supports Local and Global Communities
Disaster Relief
CARE
Effect on Local Communities
Forestry Education and Research
The Nature Conservancy
Ducks Unlimited
Recognition
58
58
58
59
59
59
59
59
SECTION 7: CORPORATE GOVERNANCE
61
Board Structure and Independence
Governance and Sustainability Matters
Board Responsibility
Board Qualifications
Recommendations
Compensation
Avoiding Conflicts of Interest
Preventing Corruption and Bribery
Ethics
Anti-Competitive Behavior
Participating in the Political Process
Campaign Contributions
Important Issues
Externally Endorsed Principles
S.E.E. Change
ISM Principles of Social Responsibility
WBCSD Sustainable Forestry Principles
International Conference of Forest Products
AF&PA Principles
SFI Principles
ISO 14001
61
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66–67
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68
68
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68
68
68
68
68
About This Report
GRI Index
Glossary
69
70
72
NOTES:
SECTION 6: CITIZENSHIP
57
Contributions
Volunteer Hours and Projects
57
57
1. All statements reflect operational performance for 2006, including the
company’s fine paper business and related assets that were transferred to
Domtar Corporation in March 2007, except where noted.
2. This report is also available on our website. The online version at
www.wy.com/sustainability/06report features more information about
many topics, as referenced throughout the report.
PERFORM
SECTION 1
SHAREHOLDER
VALUE
Jim Overton, inventory forester,
looks through a laser range finder at
our tree farm in Springfield, Ore.
EVERYTHING WE DO DEPENDS ON OUR ABILITY TO MAKE
QUALITY PRODUCTS THAT OUR CUSTOMERS NEED. BY SUSTAINING OUR OVERALL BUSINESS VITALITY, WE’RE ABLE TO PROVIDE
JOBS, PAY TAXES, SUPPORT OUR OPERATING COMMUNITIES,
AND IMPROVE OUR ENVIRONMENTAL PERFORMANCE.
BUSINESS STRATEGIES
We continually assess the long-term performance of each of our businesses. We
monitor the ability of each business to
earn more than its cost of capital over a
business cycle, compete effectively, and
grow. We use these criteria to adjust our
business portfolio, making prompt and
disciplined decisions.
In 2006, we continued to make significant
changes to ensure our long-term success.
The following describes the challenges
each of our businesses face and the
actions we’re taking to stay competitive.
WE’RE CREATING VALUE IN OUR CORE
BUSINESS — TIMBERLANDS
Our timberlands business continues to
thrive despite the pressures on the housing market, which, as expected, significantly slowed demand for wood products.
In 2006, we continued to find new ways
to reduce cost, increase cash flow, and
extract the most value from each acre of
forest we manage.
For example, in the Southern United States,
we’re dispatching log trucks from a central
location to maximize loads and save fuel
costs, and we’ve extended our harvesting
hours to make better use of logging equipment. In the West, we’re getting more
out of our small logs by sending them to
the mills that are best able to extract maxi-
mum product value from them, and we’re
increasing the productivity of log processors. Across the business, we capture nontimber value from our land through actions such as leasing the rights to deposits
of minerals, oil and gas. We continually
assess the long-term timber-growing value
of each acre and sell those acres that
have a higher and better use. And this year,
we implemented an integrated fiber planning process that allows us to more efficiently deliver fiber to internal and external
customers.
TOTAL SHAREHOLDER RETURN
Our TSR is calculated using a formula
based on stock appreciation and dividends
over a specific period, assuming dividends
are reinvested in stock. We compare
our performance with the S&P 500 Index.
See Page 8 for more information
ACHIEVES
WE LAUNCHED iLEVEL™
iLevel, our new brand for our residential
wood products business, delivers innovative solutions to the structural frame
market. By simplifying home construction
for builders with value-adding products and
services, we’re positioning ourselves for
increased profitability and customer loyalty
over the long term. Although we currently
face a cyclical downturn in the U.S. housing
market, we expect to realize long-term
benefits when demand for housing in the
United States rebounds.
To position us for success in the current
business climate and beyond, we strategically strengthened our residential wood
products portfolio with the announcements
that we would permanently close five facilities and build, or rebuild, three new stateof-the-art softwood lumber mills. As we work
5
2006 SUSTAINABILITY REPORT
SIGNIFICANT EVENTS COMPLETED
IN 2006
through the difficult wood products market
in 2007, we’ll continue to align our portfolio
with chosen market segments.
Sales
•
•
•
•
U.S. composite panels business
Composite panel facility, Ireland
2 corrugated sheet plants (AR, LA)
Single-face packaging plant (OH)
Closures
•
•
•
•
•
•
•
•
•
•
•
•
•
•
5 box plants (OH, NY, AR, NC, IL)
Corrugated sheet plant (TN)
2 packaging sheet feeders (AR, TX)
Bag plant (MO)
Containerboard machine (NC)
3 plywood facilities (AR, OR–2)
4 softwood lumber facilities
(OR–2, SK–2)1
Veneer facility (OR)
Trus Joist I-Joist line (KY)
Pulp facility (WA)
2 paper machines (ON, SK)2
Wood room operation (ON)2
Paper converting operation (SK)2
Pulp mill (SK)2
Acquisitions
•
•
•
•
Maracay Homes (AZ)
Budres Lumber Company Inc. (MI)
OrganicID (CO)
PSA Composites LLC (WA)
Other
• Opened new plywood mill in
Uruguay (Los Piques joint venture)
• Purchased 78,000 acres of
timberlands in Uruguay
WE STRATEGICALLY INVESTED IN OUR
REAL ESTATE BUSINESSES
Our Weyerhaeuser Real Estate Company
subsidiary had a challenging year with
the decline in housing demand across the
United States. Still, we generated financial
returns among the highest in the industry
on modestly higher home-closing activity
compared with 2005, and we continued to
grow in size and breadth. For example, we
acquired Maracay Homes in Phoenix, Ariz.,
expanded Quadrant Homes and Pardee
Homes into adjacent markets, and introduced niche product lines, such as Camberley Homes in the Washington, D.C., area.
Although some markets in which we operate remain relatively healthy, the outlook
for the coming year looks challenging for
the industry overall. During this period, our
real estate companies will maintain flexibility by taking action, when appropriate, to
minimize inventory, slow the pace of land
acquisition, and manage pricing pressure.
We expect that over this cycle, WRECO will
remain an industry leader with a strong
and growing presence in our target markets.
WE ARE NO LONGER IN THE
FINE PAPER BUSINESS
1. Big River Lumber, Saskatchewan, closed
in April 2006 and then was included
in the Domtar combination in 2007.
2. Dryden, Ontario, and Prince Albert,
Saskatchewan, were closed in 2006
and then were included in the Domtar
combination in 2007.
On March 7, 2007, we completed the
transaction to combine our fine paper assets with Domtar Inc., creating the largest
fine paper producer in North America.
For Weyerhaeuser, this resulted in $1.35
billion in tax-free cash, which we will use
to pay down debt. We also retired 25
million of our outstanding shares through
the exchange offering of Weyerhaeuser
shares for shares in the new Domtar.
WE’RE SERVING THE GROWING
ABSORBENT FIBERS MARKET
Our cellulose fibers facilities are concentrating on serving the growing, global
market for absorbent fibers. We intend to
increase the earnings of this business by
bringing to market new products that have
the potential for high growth and margin,
6
SECTION 1 SHAREHOLDER VALUE
developing new markets, strengthening
our position in existing markets, and taking
advantage of our leading technical expertise and global direct sales structure. For
example, we’re working to bring to market a
new patented technology for products such
as stronger, softer, biodegradable wipes.
To support this growth effort, the business
made significant operational improvements
by reducing cost and adopting streamlined, market-driven business processes.
We’re finding new opportunities
to bring cellulose-based solutions
to market.
OUR CONTAINERBOARD PACKAGING
AND RECYCLING BUSINESS IS UNDER REVIEW
In early 2006, we began transforming
our containerboard packaging and recycling
business to move from a plant-centric
model into a customer-focused, supply chain
design. The sales and marketing organization, or demand side, now works as
a single team with customers in six market
segments. The manufacturing organization,
or supply side, allocates customer orders
to the most advantageous mix of facilities to make and deliver on-spec, on-time
products at the lowest total delivered
cost. This gives the business a more direct
connection with customers, allows more
efficient use of assets, and ensures better
decisions about the products it should
offer.
In May 2007, we announced that our containerboard packaging and recycling business is under review, which could result in
alternatives ranging from continuing to
hold and operate the assets to a possible
sale or combination. During this review,
the business will continue to execute its
strategy.
WE’RE MAKING THE MOST OF OUR
SIZE AND SCALE
Last year, we began work to adopt standard, repeatable, customer-focused business processes across the company.
We also centralized our transportation and
warehousing organization, a move we expect to produce sustained cost savings.
ASSISTING EMPLOYEES WHEN JOBS ARE ELIMINATED
In 2006, the total number of employees at Weyerhaeuser decreased by about
6 percent (or 3,200 jobs), primarily as a result of closing or selling facilities
and reorganizing within business units. Weyerhaeuser attempts to ease the
transition of involuntary terminations through several actions:
• We notify employees as far in advance as possible, and follow all applicable
laws and regulations regarding required notice periods.
• We offer a variety of severance benefits, including severance pay and job-search
assistance.
• Whenever possible, we place affected employees in positions elsewhere within
the company.
SIGNIFICANT EVENTS ANNOUNCED
IN 2006
Sales
• Selected U.S. and Canadian wood
products distribution facilities
Closures
• Plywood mill (SK)
• 3 softwood lumber sawmills (OR–2, WA)
• Strand technology facility (NB)
• Box plant (CA)
Other
And in 2007, we’ll continue implementing
a common integrated information technology platform that we expect to generate substantial companywide benefits.
ADVANCING TIMBER TAX
LEGISLATION IN THE U.S. CONGRESS
The American Forest & Paper Association,
together with Weyerhaeuser, is seeking
passage of timber tax policy legislation that
will help make the U.S. forest products
industry more internationally competitive.
In 2006, Weyerhaeuser supported the
Timber Tax Act (H.R. 3883, S. 1791). The
legislation had bipartisan sponsorship
of 143 U.S. representatives and 30 U.S.
senators. The Timber Tax Act was included in two bills (H.R. 5638, H.R. 5970)
passed by the U.S. House; however, it ultimately did not become law.
In 2007, Senators Blanche Lincoln (D-Ark.)
and Gordon Smith (R-Ore.) have reintroduced the timber tax legislation (S. 402).
In the House, Rep. Artur Davis (D-Ala.) and
Rep. Kevin Brady (R-Texas) are leading
sponsors of similar legislation — the Timber Revitalization and Economic Enhancement Act of 2007 (H.R. 1937). As of press
time, Weyerhaeuser continues to work
through the AF&PA and Congress to have
this bipartisan legislation signed into law in
2007.
The U.S. forest products industry is facing
significant overseas competition and increased risk of loss of jobs. The U.S. tax
code puts the U.S. timber industry at a disadvantage against its international competition. According to a PriceWaterhouseCoopers
study, U.S. income tax of corporate investments in timber is the second highest
among seven competing nations, with an
effective tax rate of 37 percent, which is
16 percentage points above the median tax
rate of 22 percent.
• Combination of fine paper and related
assets with Domtar Inc.
• Building two new sawmills (OR, WA)
Under current law, timber gain on individuals is taxable at the maximum capital
gains rate of 15 percent, while long-term
timber gain of corporations — including
Weyerhaeuser — is taxable at the regular
corporate income tax rate, currently 35 percent. The bipartisan tax legislation would
effectively treat all long-term gain the same
and bring about more uniform tax treatment
for timber.
WE REMAIN COMMITTED TO
RETURNING CASH TO SHAREHOLDERS
In June 2006, we increased our dividend
by 20 percent, the second increase in as
many years. We also repurchased 11 million shares as part of our 18 million share
repurchase program. We continue to repurchase stock under the original authorization
by our board of directors. These actions
were a direct result of our ability to generate strong free cash flow.
Our total shareholder return is calculated
using a formula based on stock appreciation and dividends over a specific period,
assuming dividends are reinvested in
stock. This measure is one way the market
7
2006 TOTAL SHAREHOLDER RETURN
2006 FINANCIAL HIGHLIGHTS
(Dollar amounts in millions except per-share figures)
20
2006
2005
Change
$21,896
$22,046
-6.8%
Net earnings
$453
$733
-38.2%
Basic net earnings per share
$1.85
$3.00
-38.3%
Diluted net earnings per share
$1.84
$2.98
-38.3%
$26,862
$28,229
-4.8%
$849
$875
-3.0%
$15.6
$15.9
-1.9%
Total costs and expenses
$20,704
$20,756
-0.3%
Common and exchangeable shares
outstanding (in thousands)
238,008
245,184
-2.9%
$38.17
$39.97
-4.5%
4.8%
7.7%
-37.7%
$75.09 – 55.35
$71.52 – $61.12
–
Net sales and revenues
15
15.78%
10
10.17%
5
Total assets
0
Weyerhaeuser
S&P 500
Capital expenditures
(Weyerhaeuser only, excluding acquisitions)
Total contributions
(Weyerhaeuser Company Foundation
and direct company contributions)
FIVE-YEAR COMPOUNDED TOTAL
SHAREHOLDER RETURN
10
8
Book value per share
8.65%
Return on shareholders’ interest
6
6.19%
Common stock price range
6.19%
4
2
For more information, see the company’s 2006 Annual Report and Form 10-K, posted online at
investor.weyerhaeuser.com.
0
Weyerhaeuser
S&P 500
values our financial results, strategies,
prospects, asset value and management.
We compare our one-year and five-year compounded TSR performance with the Standard & Poor’s 500 Index. For the purposes
of our dashboard measure, we receive a
“below” rating if we underperform the index
during both time frames, we receive an
“achieves” rating if we outperform the index in one time frame, and we receive
an “exceeds” rating if we perform better
than the index in both time frames. In 2006,
we underperformed the S&P 500 in the
one-year time frame and outperformed it
in the five-year time frame, resulting in an
overall “achieves” rating.
INVESTING IN INFRASTRUCTURE
FOR THE GOOD OF MANY
Economic vitality is important to communities where we operate too. As a good
neighbor and corporate citizen, Weyer-
8
haeuser invests in these communities.
An estimated 86 percent, or $7.2 million
of the total $8.4 million contributed by
the Weyerhaeuser Company Foundation in
2006, can be categorized as supporting
infrastructure. This includes community
services; education; and civic, health and
human services.
In Canada, the company provided an estimated 49 percent, or $1.4 million US, of
the total $2.9 million US, in 2006 contributions that can also be categorized as
infrastructure. These projects lasted anywhere from a few days up to two years for
major capital building projects. Major grants
contributed to improving health, recreation,
education, safety, and community facilities
and programs, while smaller grants built
capacity and assisted local organizations
to provide better services to residents.
While we do not carry out formal community needs assessments, the foundation
relies on advisory teams in Weyerhaeuser
communities to make recommendations.
In the United States, Weyerhaeuser employees who serve as advisers recommend
grants to support community needs.
Foundation advisers include mill managers,
public affairs managers and other local
company employees. Local company management maintains relationships with key
community leaders.
You can read more about community giving
on Pages 57–59 of this report.
2006 net sales
and revenue in billions
$21.9
2006 net earnings
in millions
$453
2006 capital expenditures
in millions (Weyerhaeuser only,
excluding acquisitions)
$849
Percentage of total
foundation contributions
that supported community
infrastructure in 2006
86%
9
IMPROVE
SECTION 2
SUSTAINABLE
SYSTEMS
Lucy Walker, nursery manager, shows
results of new root-pruning techniques
in Washington, N.C.
WE MANAGE OUR ENVIRONMENTAL AND SOCIAL PERFORMANCE
THROUGH A SYSTEMATIC APPROACH. WE USE THESE SYSTEMS
TO CONTINUALLY IMPROVE OUR SUSTAINABILITY PERFORMANCE.
ENVIRONMENTAL MANAGEMENT SYSTEMS
We use environmental management
systems to implement our environmental
policy and evaluate performance results.
SUSTAINABILITY SYSTEMS ANALYSIS
In August 2006, we conducted a sustainability gap analysis for our company. We
analyzed sustainability performance and
strategy information from 50 companies among our peer group, key customers
and influential organizations. We also
examined emerging sustainability trends,
best practices and surveys received from
social responsibility indices.
We targeted five areas for improvement
in 2007:
• Integrating our financial and sustainability reporting. Our Company Overview,
mailed to shareholders earlier this year,
is a first step toward describing how
sustainability is integral to achieving
business results.
• Developing a human rights policy
statement that reflects both our record
and our commitment to ensure there
is no forced or compulsory labor, or child
labor, in any of our operations.
• Evaluating sustainable residential building practices. Weyerhaeuser Real Estate
Company intends to retain its position
as an industry leader for innovative and
environmentally sensitive practices
among large-volume builders.
• Reducing water consumption. In support
of our membership in the U.S. Business
Roundtable S.E.E. Change initiative,
we are developing a water consumption
reduction goal.
• Labeling our products. Nearly all of our
North American-made forest products
are certified to sustainable forestry standards. In 2007, we will increase our
use of labels to make that status clear
to customers and consumers. By the
end of 2008, our goal is to have labels
on all qualifying products.
We will describe our progress on these
initiatives in subsequent reports.
SUSTAINABILITY INTEGRATED INTO
VISION AND POLICIES
Sustainability has long been a part of
Weyerhaeuser’s values. In early 2007, this
linkage became more direct as we introduced a revised Roadmap for Success,
which documents our vision, values, behaviors and goals. For the first time, sustainability is explicitly stated as a key behavior:
We will lead and manage our company in
a sustainable and responsible way. We
involved internal and external stakeholders
to understand the company’s relevance
to today’s society (see Page 19 for more
detail).
ACHIEVES
HEALTH AND SAFETY RECORD KEEPING
We ensure accurate record keeping, which
provides a solid foundation for reporting,
tracking and preventing incidents.
EXCEEDS
Our revised Roadmap for Success
articulates our vision to lead and
manage our company in a
sustainable and responsible way.
SYSTEMS TO HELP MANAGE SOCIAL
AND ENVIRONMENTAL RISKS
We have a disciplined process for setting
companywide strategic direction on social
11
SECTION 2 SUSTAINABLE SYSTEMS
PROGRESS TOWARD SUSTAINABILITY GOALS
Goal
2006 Progress
Rating
Total Shareholder
Return
Outperform the Standard & Poor’s 500 index
in at least one of two time frames
10.17% TSR (one year)
Achieves
Forest Certification
Maintain 100% certification of
North American forestlands
100% certified since
March 2005
Achieves
Environmental
Management Systems
100% operations are ISO 14001
certification-ready
100% certification-ready
Achieves
Recordable Incident Rate
Less than 1 recordable incident rate
1.67 RIR
Below
Lost-Time Injuries
65-85% of manufacturing facilities operate
with zero lost-time injuries
68.5% facilities with
zero lost-time injuries
Achieves
Health and Safety
Record Keeping
More than 90% accuracy rate
(exceed OSHA average)
95% accuracy rate
Exceeds
Diversity
Maintain or improve overall work force
representation of women and minorities in
management, professional and sales positions;
make progress in placement-against-opportunities targets in the same categories
6.3% work force
representation improvement
Exceeds
Global Climate Change and
Greenhouse Gas Emissions
40% reduction in GHG emissions
from 2000 levels by 2020
10% less than 2000
Achieves
Product Certification
Continue certifying North American-made forest
products to sustainable forestry standards
88% certified
Achieves
Responsiveness to
Social Issues
Support operating communities through
philanthropy and volunteerism
Ron Brown Award for
Corporate Leadership
Exceeds
Independence of
Board of Directors
Comply with New York Stock Exchange
requirements for independent board membership
91.7% independent
Exceeds
Employee Ethics Training
All employees complete annual ethics training
98.3% completed
Achieves
12
8.65% TSR (five years)
101.8% placement
against opportunities rate
ENVIRONMENTAL CORE POLICY
It is Weyerhaeuser’s core policy to be responsible stewards of the environment wherever we do business. We will practice
sustainable forestry, set and meet goals to reduce pollution, conserve natural resources and energy, and continually improve our
environmental performance.
All employees and leaders worldwide are accountable for
managing and operating our businesses to:
• Comply with all applicable environmental laws.
• Promote environmental laws, policies and regulations that
are based on sound science and that incorporate incentivebased approaches to improve environmental performance.
• Follow company environmental standards.
• Adopt company standards to protect the environment.
• Meet other external requirements to which the company
commits.
• Manage forestlands for the sustainable production of wood
while protecting water quality; fish and wildlife habitat;
soil productivity; and cultural, historical and aesthetic values.
Business activities will be conducted to:
• Audit compliance with environmental laws, policies, regulations
and company requirements.
• Employ environmental management systems to achieve
company expectations.
• Manage the environmental impacts of our business activities and
products, including innovative and advanced technology solutions.
and environmental matters. This directionsetting process guides company behavior
on market-driven issues such as climate
change and endangered forests.
Supporting the direction-setting process
are systems that give our senior management team information to make good
decisions and effectively implement them.
Our systems: Our primary systems for
evaluating potential risks and implementing
leadership direction are:
• Internal audits of our environmental
compliance with government regulations,
voluntary standards and company policies.
• Environmental management systems,
which provides a disciplined approach
to implementing our environmental policy
and evaluating performance results.
• The Weyerhaeuser Safety Strategy —
Safe From the Start — which lays out
the basic framework of our safety
strategy and the five elements of worldclass safety.
• The Safety and Health Information Management System, which enables us to
report incidents. With the resulting investigation information, we track the
progress of corrective actions, analyze
• Resolve noncompliance conditions promptly, including curtailing operations when necessary to protect human health and
the environment.
• Track and publicly report on our environmental performance.
company trends, and identify potential
future risks in health and safety performance.
• The Health and Safety Exchange, which
assesses a facility’s ability to identify,
manage and control health and safety
risks.
Our management structures: All managers
share responsibility for implementing
policy on environmental and social matters.
They are supported by our management
structures:
• The Environment, Health and Safety
Council, a cross-business panel of leaders that is accountable to our senior
management team, oversees the environmental, health and safety directionsetting process. The council prioritizes
issues, analyzes relevant information,
recommends company policies, and
reviews the effectiveness of company
decisions.
• Staff professionals in health, safety
and environment, as well as public and
regulatory affairs, that provide technical
expertise to evaluate our performance;
identify opportunities, risks and external
trends that could affect the company;
and provide recommendations to optimize our performance.
13
Percentage of our
North American forestlands certified
to SFI or CSA standards
100%
• Cross-functional issue-management
teams that recommend strategy and
manage our response to environmental,
health and safety, social and public
policy issues.
REVISED ENVIRONMENT, HEALTH
AND SAFETY POLICIES
Percentage of our
manufacturing facilities
with environmental
management systems
100%
In early 2007, as part of periodic reviews
of policies to ensure they are up to date
and relevant, changes to our environmental
policy and health and safety risk management policy were approved. Our health and
safety policy reflects that our commitment
is based on caring for our employees. The
revised policy brings more attention to
health, increases focus on accountability,
and is aligned with our safety strategy (see
Page 18). The updated environmental policy
clarifies that it applies to all of our businesses. Other changes include adding an
energy conservation goal and placing more
focus on employee education.
To support these policies, managers and
employees need to understand what
both the law and the company require of
them, and have the knowledge and tools
to succeed. In 2006, we adopted a new
competency standard for employees with
environment, health and safety responsibilities, and introduced training for all managers about their environment, health and
safety obligations.
ENVIRONMENTAL SYSTEMS
We are committed to responsible environmental stewardship wherever we operate. Our employees, whether they work in
a forest, factory or suburban office, are
responsible stewards of the air, land and
water.
A comprehensive set of systems and policies supports our environmental stewardship. Overseeing our policies are company
leaders, starting with the board of directors. The board evaluates environmental
issues and social trends in its company
direction-setting process. The senior management team carries out that direction
by setting strategic environmental direction
and expectations. This environmental strategy is supported by:
14
• A companywide environmental policy
• Implementation standards and
management systems
• Independent certification of our compliance with sustainable forestry standards
• Annual measurement and reporting
• A staff organization skilled in environmental issues management, regulation
and compliance
ENVIRONMENTAL MANAGEMENT SYSTEMS
SUPPORT CONTINUOUS IMPROVEMENT
To track performance and ensure we meet
our goals, Weyerhaeuser uses ISO 14001
environmental management systems. This
standard, set by the International Organization for Standardization, outlines the key
elements of an effective environmental
management system that will achieve its
environmental and economic goals. An environmental management system defines
how to effectively manage a facility’s environmental aspects — by setting clear objectives, documenting best practices, and
establishing processes that promote continuous improvement and provide a record
of performance against goals. We have
implemented environmental management
systems in all our manufacturing facilities
and managed forests.
Each operation sets targets appropriate to
its circumstances. As each unit improves,
so does the company’s performance as a
whole, continually reducing our environmental footprint. In 2006, we developed comprehensive “environmental essentials”
training for employees who manage such
issues at their sites.
In our forests, each EMS has been audited
by a third party and registered to the ISO
14001 standard. In our manufacturing facilities, we’ve instituted environmental management systems that meet ISO 14001
standards, but the decision to take the additional step of registering those systems
with the ISO depends on the value to the
business.
In 2006, we reached our goal of implementing environmental management systems
in 100 percent of our manufacturing units.
WEYERHAEUSER’S SUSTAINABLE FORESTRY STANDARD
We manage our forests for the sustainable production of wood and wood products that meet our customers’ needs. We are
committed to independent certification of our forest management and to meeting the principles and objectives of applicable
forest certification systems. The elements of Weyerhaeuser’s standard apply to company-owned and -managed lands worldwide.
• We harvest at sustainable rates over the long term.
• We encourage the use of nontimber products and services
from the forest.
• We reforest promptly after harvesting by planting within the
first available planting season, not to exceed 24 months,
or by planned natural-regeneration methods within five years
or as provided in an applicable license.
• We employ reliable processes in using forest chemicals to
meet our silvicultural and environmental objectives in compliance with applicable laws, best management practices and
label directions and in conformance with applicable certification
standards.
• We protect soil stability and ensure long-term soil productivity
by using equipment and practices appropriate to the soil,
topography and weather to minimize erosion and harmful soil
disturbance.
• We use forestry practices and technology to retain organic
matter and soil nutrients.
• We maintain healthy forests and minimize losses caused by
fire, insects and disease.
WE SELF-AUDIT TO MEET
PERFORMANCE STANDARDS
Weyerhaeuser maintains environmental
audit programs to track compliance with
environmental laws and our own policies.
Our program includes compliance audits of
our manufacturing facilities, forests and
management systems. In addition to identifying potential risks and areas for improvement, these audits also identify best
practices, which are then shared across
the company. The frequency of audits at
an operation depends on the level of risk
associated with the operation and past
performance.
In 2006, internal environmental compliance
audits covered approximately 21 percent
of our manufacturing operations. Our
environmental compliance audits identify
instances where operations may not comply with either regulatory requirements
or company environmental policies or standards. When issues are identified, a corrective action plan is developed and
• We meet or exceed applicable water-quality laws and BMPs
to protect water quality, water bodies and riparian areas.
• We protect water quality by practicing sound road construction
and maintenance.
• We provide a diversity of habitats for wildlife and contribute to
conservation of biological diversity through practices or programs that address habitat diversity and conservation of plants
and animals at multiple scales in accordance with applicable
certification programs or other locally accepted standards.
• We protect threatened and endangered species and cooperate
with government agencies to determine how our forestlands
can contribute to their conservation.
• We consider aesthetic values by identifying sensitive areas
and adapting our practices accordingly and in conformance
with applicable certification standards.
• We identify special ecologic, geologic, cultural and historical
sites and manage them in a manner appropriate for their
unique features.
• We minimize waste in our harvesting.
implementation is tracked to ensure timely
resolution. In 2006, we made significant
improvements to the environmental compliance audit program based on a review undertaken in 2005. Revisions increased the
rigor of audit findings and the process for
closing identified issues. We also audit our
conformance with ISO 14001 EMS. In 2006,
internal audits evaluating our conformance
with ISO 14001 environmental management systems covered approximately 48
percent of our manufacturing operations.
All of our managed forests and
manufacturing facilities have
implemented environmental management systems.
Find a list of forests and facilities
with environmental management systems
registered to ISO 14001 at www.wy.com/
ourbusinesses/forestry/timberlands/
forestcertification/currentstatus.asp.
15
RESPONSIBLE SOURCING
ENVIRONMENTAL NONCOMPLIANCE
INCIDENTS IN THE UNITED STATES AND
CANADA1
40
39
30
32
26
10
0
’02
’03
’04
’05
CERTIFICATION STANDARDS USED
BY WEYERHAEUSER
Weyerhaeuser relies on two types of
certification standards for our forests:
23
23
20
We support third-party certification as a
means of demonstrating our commitment
to the responsible sourcing that our customers and the public expect.
’06
1. Incidents include items disclosed,
notices of violations and/or penalties.
Incidents not fully resolved by year-end
carry over and add to the number
of incidents counted the following year.
ENVIRONMENTAL NONCOMPLIANCE
INCIDENTS 2006
27
• The first governs the management systems and processes needed to achieve
environmental goals and manage environmental impact.
• The second governs the specific practices associated with growing and harvesting trees on land we manage, and
purchasing logs and chips from trees
grown on others’ land. The principal
systems we use in North America are
the:
− Sustainable Forestry Initiative®
standard
− Canadian Standards Association
(CAN/CSA Z809) Sustainable Forest
Management standard
Two other widely known sustainable
forestry standards are:
• The Forest Stewardship Council, an
international standard with regional
variations. The FSC standard was
originally developed for tropical areas
where effective governmental regulations of forestry practices did not exist. FSC standards in North America
(although not in some other regions)
generally discourage some silvicultural practices that are important to
intensive, commercial forest management.
• The Programme for the Endorsement
of Forest Certification, an international umbrella organization for the
assessment and mutual recognition
of national forest certification standards. It now endorses 22 sustainable forest management standards
(including SFI and CSA), which account for nearly 450 million acres of
certified forestland.
Weyerhaeuser chose the SFI and CSA
standards for our U.S. and Canadian
operations, respectively, because they:
248
WEYERHAEUSER’S WOOD-PROCUREMENT POLICY
Manufacturing sites with noncompliance
incidents
Manufacturing sites without incidents
Weyerhaeuser works to ensure that our sources comply with applicable laws and
do not cause or encourage destruction of forest areas at risk of loss from unsustainable practices. These regions are identified in guidelines issued under this
standard and include remaining natural forests in biodiversity hot spots and major
tropical wilderness areas as defined by Conservation International as of July 1,
2002.
Within the regions in which we and our sources operate, Weyerhaeuser works
with governments, environmental nongovernmental organizations, indigenous peoples and communities to identify and help protect forest areas that are priorities
for conservation.
In the United States and some other areas, Weyerhaeuser also operates in conformance
with the Sustainable Forestry Initiative® standard. When operations using the SFI standard are procuring externally sourced logs and chips for use in Weyerhaeuser manufacturing and chipping facilities or by Weyerhaeuser log customers, Weyerhaeuser will
operate in compliance with the SFI procurement principles and objectives.
Weyerhaeuser will not knowingly purchase wood, wood fiber or products for distribution
that originate from illegal logging. Weyerhaeuser will also not harvest or purchase wood,
wood fiber or products for distribution from forest areas at risk of loss as described in
guidelines issued under this standard unless the sources have been independently certified or verified as well managed.
16
U.S. AND CANADIAN ENVIRONMENTAL NONCOMPLIANCE PENALTIES
(in thousands of U.S. dollars)
2002
Manufacturing fines and penalties
Manufacturing supplemental
environmental projects2
Timberlands fines and penalties
2003
2004
2005
2006
$75
$152
1
$86
$288
$15
$8
$15
$10
$6
–
$19
$1
$108
$1
$942
1. $900,000 is the result of a settlement relating to violations concerning the Johnsonburg, Pa.,
pulp and paper mill that occurred under its previous owners.
2. As part of environmental enforcement settlements, regulatory agencies may allow companies to
fund community programs aimed at improving environmental awareness or resources.
• Are well accepted in the marketplace
and satisfy our own and our customers’
procurement policies.
• Address each nation’s unique cultural
and land-ownership conditions: SFI for the
diverse, privately owned and often small
tracts in the United States and New
Brunswick, Canada, and CSA for the large,
publicly owned tracts in other parts of
Canada.
• Reflect the legal institutions and requirements in both countries.
• Offer the best fit with our management
strategies to derive economic, environmental and social benefits from the forests we manage.
Independent organizations have verified
that CSA, FSC, PEFC and SFI standards are
all credible systems. For example:
• The Central Point of Expertise on Timber
— the United Kingdom government
agency that assesses forest certification
systems — determined that SFI, CSA,
PEFC and FSC fully meet the agency’s
criteria for evidence of legal and sustainable sources of forest products.
• Finnish consulting firm Savcor Indufor
Oy studied the effectiveness of PEFC and
FSC in Nordic countries. It concluded
that both standards enhance sustainable
forest management and do not result
in significantly different outcomes in the
practical implementation of the environmental, social or economic requirements.
• Metafore, a nonprofit organization that
seeks nonregulatory solutions to environmental challenges, concluded that SFI,
CSA and FSC are all transparent, include
opportunities for input from different
stakeholders, and share similar characteristics on key operational and structural criteria.
ENVIRONMENTAL COMPLIANCE
Our environmental policy requires all employees to comply with environmental laws,
company environmental standards, and
other external company commitments.
Despite our commitment to operate in compliance, we sometimes experience incidents
of noncompliance. In 2006, our penalties
and incidents increased relative to 2005.
The majority of the penalties paid were the
result of the resolution of incidents reported in previous years, including our Flint
River cellulose fibers mill in Oglethorpe,
Ga., the Hawesville, Ky., pulp and paper
mill, and the Wright City, Okla., wood products facility. Sometimes a government
agency prefers to use a project with environmental benefits in lieu of paying fines
or penalties. In Wright City, Okla., a building
valued at $90,000 was donated to the
local community as a supplemental environmental project.
Additionally, in 2006, our Pine Hill, Ala.,
containerboard mill paid a penalty of
$50,000 relating to air stack test compliance issues.
17
NUMBER OF HEALTH AND SAFETY
COMPLIANCE CITATIONS IN THE UNITED
STATES AND CANADA
25
20
HEALTH AND SAFETY RISK MANAGEMENT CORE POLICY
It is Weyerhaeuser’s core policy and highest priority to protect the health and
well-being of all employees through the prevention of injury and illness at work.
This commitment is based on caring for our employees.
21
Expectations
17
15
15
14
• Focus on preventing incidents to achieve a workplace that is free from workrelated injury and illness and to enable employees to complete each workday
and their work life in good health.
10
9
5
0
’02
’03
’04
Business activities will be conducted to:
’05
’06
• Achieve full compliance with all applicable legal requirements and company
standards.
• Identify and respond to any public health impacts of our operations and the use
of our products and services.
• Treat injured employees with dignity and respect and provide the best medical
treatment for workplace injury and illness.
2006 HEALTH AND SAFETY
COMPLIANCE CITATIONS
• Effectively manage illness and injury and reduce associated costs.
• Maintain a workplace free of the effects of alcohol and other drugs of abuse.
14
WE SPENT $21 MILLION IN 2006 ON
ENVIRONMENTAL REQUIREMENTS
Our capital expenditure for environmental
regulatory requirements in 2006 was
an estimated $21 million (approximately
2 percent of total capital expenditures).
In 2007, we expect capital expenditures
for environmental compliance to be about
$10 million (approximately 1 percent
of expected total capital expenditures).
These capital expenditures exclude acquisitions and Real Estate and Related Assets.
261
Manufacturing sites with citations
Manufacturing sites without citations
HEALTH AND SAFETY COMPLIANCE
IN THE UNITED STATES AND CANADA
WE PERFORM ENVIRONMENTAL REMEDIATION
(In thousands of U.S. dollars)
We maintain an environmental remediation program to fulfill our responsibilities
under regulatory agreements, reduce the
risk of environmental harm, and reduce the
potential financial liability because of past
practices at sites owned, acquired or divested by Weyerhaeuser; certain third-party
sites; and Superfund sites where we have
been named as a potentially responsible
party.
300
250
200
150
100
50
• 203 remediation projects have been
completed since this program’s inception.
0
’02
’03
’04
’05
Manufacturing fines and penalties
Timberlands fines and penalties
18
’06
• At the end of 2006, we had 67 active
projects and spent approximately $12
million on environmental remediation.
HEALTH AND SAFETY SYSTEMS
The health and safety of our employees
is a core value and our highest operating
priority. We care for employees and want
them to return home safely each and every
day of their working lives.
Our goal is an injury-free workplace. Our
current target is to reduce our recordable
incident rate to less than 1 — that is, less
than one injury or illness requiring more
than first-aid treatment per 100 employees
per year.
The effectiveness of our safety management systems, as with our environmental
and financial compliance systems, is a
function of leadership and accountability.
OUR HEALTH AND SAFETY STRATEGY DRIVES
OUR SAFETY PERFORMANCE
The companywide strategy, “Safe From
the Start: Our Approach to Safety,” defines
five basic elements of the company’s
approach to managing safety:
• Have committed leadership
• Be employee-driven
• Do the basics well
• Focus on the greatest potential
improvements
• Recognize and manage risk
Key companywide tools that support this
approach include:
• Annual companywide performance
objectives
• A standard process to report and
investigate incidents
• A database to manage incident data
• An audit process to assess regulatory
compliance and continuous improvement
• Online training available to all
employees
• Robust communications
For information about our five safety
management elements, visit www.wy.com/
sustainability/06report/web. See Sustainable Systems > Safety Management.
We do experience cases where, despite
our commitment and efforts, our results do
not meet expectations. In March 2007,
Weyerhaeuser Company Limited received a
preliminary determination from WorkSafeBC (British Columbia’s workers’ compensation system) setting a $297,000 Cdn
fine for safety violations contributing to
the death of an employee at a lumber mill
in New Westminster in 2004. This mill has
since been sold and subsequently was
closed. Weyerhaeuser has provided corrections and comments with respect to the
facts and assumptions set out in the WorkSafeBC preliminary determination.
HEALTH AND SAFETY RECORD KEEPING
Accurate reporting and record keeping are
important to our safety management
system. It provides a solid foundation for
reporting and tracking incidents. It also
enables us to analyze trends so we can
implement effective safety processes and
prevent injuries. We have reinforced our
expectation for accurate record keeping, and
we are working diligently to improve our
accuracy through record keeping audits and
training. Our 2006 goal was to achieve a
higher accuracy rate than the industry average. In fact, our accuracy rate for 2006
record keeping (95 percent) exceeded the
average level found by OSHA inspections
at companies across the United States
(90 percent).
STAKEHOLDER ENGAGEMENT
The way we engage with our stakeholders
varies according to the nature of our relationship with them. However, there’s at
least one quality common to each of these
relationships: We listen and are open to
change so that we can strengthen our performance.
During 2006, we conducted surveys and
interviews to understand how we are perceived by a variety of internal and external
stakeholders. Stakeholders had varying
points of view on the company but agreed
that, in the future, Weyerhaeuser should
more boldly claim these traits: being focused, responsible, accountable and innovative. This information is being used to
help us set priorities for action and improve
our transparency, including in this report.
Stakeholder inquiries focus on
environmental practices.
We track all requests for information and
issues customers and other stakeholders
care about. In 2006, customer and stakeholder interest in the company’s practices
focused primarily on:
• Forestry practices
• Environmental management system
certification
• Sustainable forestry management
certification
• Chemical content and use
• Regulatory compliance
• Product-specific information, such as
origin of fiber
We welcome these opportunities to answer
customer and stakeholder questions
about our practices and to share information about the company.
19
ENVIRONMENTAL NONGOVERNMENTAL
ORGANIZATIONS WITH WHICH
WEYERHAEUSER IS ENGAGED
TYPES OF STAKEHOLDER ENGAGEMENT WE CONDUCT
Customers
• Canadian Boreal Initiative
• Forums at which customers learn about and discuss
Weyerhaeuser forestry, fiber sourcing and environmental practices
• Climate, Community and
Biodiversity Alliance
• Field trips to company forestlands and operations to provide
firsthand inspection of those practices
• The Conservation Fund
• At customer request, advice on the development of procurement
policies and supplier-qualification processes that encourage
sustainable forestry
• Conservation International,
Business and Biodiversity Council
• Ducks Unlimited Inc. and Ducks
Unlimited Canada
• Responses to customer surveys and other inquiries regarding
our environmental performance
• Environmental Law Institute
• Day-to-day contact through sales and marketing personnel
• Mountains to Sound
Greenway Trust
• National Wild Turkey Federation
Investors
• Visits with our executives
• The Nature Conservancy
• Regular two-way discussions with institutional shareholders
• Nature Trust of British Columbia
• Annual investor meeting and periodic investment presentations
available via webcast
• Pew Center for Global Climate
Change, Business Environmental
Leadership Council
• Earnings conferences that are webcast and available on our website
• An investor website, annual investor guide and readable 10-K
• Resources for the Future
• In-depth education about the company and industry
• World Business Council for
Sustainable Development
• World Resources Institute
Employees
• Yale Forest Forum —
The Forests Dialogue
• Regular forums involving employees and company leaders, including the CEO, with conference-call connections to distant facilities
• E-mails to the CEO via “Ask Steve”; questions and responses
of broad interest are reprinted in company media
• Regular internal newsletters distributed to all employees
• A comprehensive employee-climate survey measuring key indicators of employee satisfaction
Communities
• Cooperation with local elected and appointed government
officials and community leaders on company issues that affect
the community
• Public consultation processes in Canada and community
advisory panels in the United States
• Dialogue with individuals who voice concerns about how our
operations affect them
• Philanthropic contributions and employee volunteerism
(Pages 57–59)
• Tours in some locations and learning centers in others
providing opportunities to learn about sustainable forestry and
manufacturing
Suppliers
• Outreach efforts to promote sustainable forestry practices
among owners of small forests that supply our mills
(see Page 38 for more on suppliers)
Nongovernmental
organizations
• One-on-one dialogue
• Partnerships to conduct wildlife, biodiversity and other
environmental research
• Community consultation
• Support for organizations that promote sustainable business
practices
• Participation in multistakeholder forums
20
MARKET CAMPAIGNS CONTINUE
GRASSY NARROWS
Weyerhaeuser supports a governmental
resolution of the Grassy Narrows dispute.
We produce Timberstrand® engineered
wood beams at our mill in Kenora, Ontario.
Some of the wood supply is provided by
Abitibi Consolidated, a Canadian firm operating under a license from the province of
Ontario to sustainably manage the Whiskey
Jack Forest. The Whiskey Jack Forest is an
important supply area for our Kenora mill.
The province’s right to award this license
is being contested by the Grassy Narrows
First Nation, one of 28 First Nation bands
in northwestern Ontario with a common
treaty with the Crown, signed in 1873.
Some Grassy Narrows members brought a
constitutional claim against the government
in 2000. The court declined to decide the
issues without a full trial, which is expected to take place in 2008. Weyerhaeuser is
not involved in the lawsuit. In the meantime, the Grassy Narrows First Nation has
mounted a protest against Weyerhaeuser
and its subsidiaries for being a customer
of the harvested logs.
We support the timely and meaningful resolution of aboriginal claims. We believe that
treaty claims must be addressed by the
provincial and federal governments directly
with First Nations’ leaders. If necessary,
these issues must be resolved by the
courts. We have respectfully presented this
position to the Grassy Narrows First Nation
Band Council and to Ontario’s Ministry of
Natural Resources. Last year, the president
of Weyerhaeuser’s Canadian operations
personally urged the province of Ontario to
increase its efforts to resolve issues related
to Grassy Narrows.
We respect the rights of aboriginal peoples
and are committed to building mutually
beneficial relationships with aboriginal communities. Weyerhaeuser draws employees,
suppliers and contractors from aboriginal
communities in the areas where we operate.
Weyerhaeuser involved First Nations extensively during construction of the Kenora
mill, where approximately 25 percent of our
work force is aboriginal.
For more information, go to
www.wy.com/environment/currentissues/
grassynarrows.asp.
vey of industry executives and financial
analysts who rate companies in eight
different categories.
SOCIALLY RESPONSIBLE INVESTMENT INDICES
RAINFOREST ACTION NETWORK
In 2004, Weyerhaeuser became the target
of a market campaign led by the Rainforest Action Network primarily focused on
forestry practices in Canada. This campaign continued during 2006. In regular
discussions with RAN, we’ve identified common goals. These include protecting wildlife habitat, fighting illegal logging, and
using independent certification to ensure
wood products are produced in an environmentally responsible way. We’ve retained
a professional facilitator, agreed to by both
sides, and meet regularly with RAN to discuss their concerns, provide current information about Weyerhaeuser’s forestry and
environmental practices, and find common
ground that will bring about a resolution.
SUSTAINABILITY AWARDS
AND RECOGNITION
• Weyerhaeuser was selected for inclusion
in the Dow Jones Sustainability Indexes
for North America and the United States.
Weyerhaeuser is the only North American
forest products company in the industry
category of basic materials to be named
to these indices.
• Storebrand named Weyerhaeuser “Best
in Class” for its leading environmental
and social performance. The designation
qualifies Weyerhaeuser for Storebrand
Principle Funds and the Morgan Stanley
Capital International World Index.
We are proud to have received external
recognition of our sustainability systems
and performance in 2006.
• Ron Brown Award for Corporate
Leadership: Our company and foundation invested more than $2.8 million in
Hurricane Katrina relief efforts that, in
addition to a loaned employee program,
included a full-time disaster relief coordinator, an adopt-a-family program, and
a guide to helping employees in a natural disaster that has been shared with
relief organizations and other companies. (See Page 58 for more information.)
• International financial consulting firm
E. Capital Partners added Weyerhaeuser
to its list of ethical companies. The
Milan, Italy-based firm maintains the
Ethical Index GLOBAL®, cataloging
ethical companies traded on European
stock exchanges.
• National Safety Council Awards:
Trendmaker Homes in Houston, Texas,
received accolades from the National
Safety Council, including its Certificate of
Merit, Occupational Excellence Achievement and Perfect Record awards.
• Fortune Second Most Admired:
Fortune magazine ranked Weyerhaeuser
the second most admired forest and
paper products company in America, a
position Weyerhaeuser has held since
1988. The rankings are based on a sur-
21
GROW
SECTION 3
EMPLOYEE
WELL-BEING
Zackary Lawson, saw filer III at our
New Bern, N.C., lumber mill, wears
proper protective gear while examining a saw blade.
TO SUCCEED, WE MUST INSPIRE INGENUITY, NURTURE TALENT
AND CREATE AN INCLUSIVE WORKPLACE WHERE PEOPLE
THRIVE AND GROW. AND WE MUST BALANCE THIS WORK WITH
OUR OTHER BUSINESS NEEDS.
The forest products industry is highly
competitive. Work force demographics in
North America are rapidly changing. In this
dynamic environment, Weyerhaeuser must
attract, engage and retain diverse talent
that helps us safely deliver on our commitments to customers and shareholders.
Our goal is to have current and prospective
employees consistently recognize Weyerhaeuser as a preferred place to work — an
“employer of choice.”
We accomplish this by:
1. Defining and communicating the unique
employment experience that we offer:
• A highly competitive compensation
and benefits package (total value in
the top quartile of peer companies)
• A comprehensive education and
training program
• Challenging work that requires innovative thinking and offers growth
and advancement opportunities
• A diverse, performance-driven culture
that rewards results
• The opportunity to be part of a highly
respected company
2. Identifying and closing any gaps
between what we say and what we do.
• Our businesses annually update
work force plans to proactively address
challenges.
RECORDABLE INCIDENT RATE
We set a stretch target to reduce our RIR,
which measures the number of recordable safety incidents per 100 employees
per year. See Pages 23–24 for more
information
• We routinely implement best practices
across the company to improve performance in areas such as leadership
development, cross-business teaming,
and diversity improvement planning.
Underpinning our employer-of-choice strategy is a strong company culture that emphasizes safety (below), ethical conduct
(Page 65) and environmental responsibility
(Page 14).
COMMITTED TO SAFETY
BELOW
LOST-TIME INJURIES
We track the percentage of our manufacturing facilities that operate without
lost-time injuries. See Page 24 for more
information
Our commitment to employees’ health
and safety is absolute. It is our company’s
top priority. To that end, we intend to
create an environment with zero incidents.
One measure we use to monitor our health
and safety performance is the recordable incident rate. Our target is to reduce
our recordable incident rate to less than 1
— that is, fewer than one recordable injury
or illness per 100 employees per year.
In 2006, our RIR was 1.67, the lowest in our
history and among the best in our industry.
We also set a target to reduce our lostworkday rate to less than 15. This rate
measures the severity of injuries. In 2006,
our lost-workday rate was 21.37.
While we have not met our targets, through
active, visible leadership and engaged
employees, we have made improvements in
our recordable incidents, lost-time injuries
and days lost, year over year. We reduced
the number of recordable incidents in 2006
by 29 percent compared with 2005. The
ACHIEVES
DIVERSITY PROGRESS
We measure our progress toward improving the representation of women and
minorities in management, professional
and sales positions. See Page 29 for
more information
EXCEEDS
23
number of our manufacturing facilities
without a lost-time injury in 2006 increased
to 68.5 percent. Lost-time injuries fell by
35 percent and lost workdays declined by
45 percent year over year. And we have not
suffered any employee fatalities since February 2005.
SAFETY PERFORMANCE:
EMPLOYEE RIR
2.1
1.7
1.5
2.0
2.2
2.4
2.5
2.0
1.0
0.5
0.0
’02
’03
’04
’05
SECTION 3 EMPLOYEE WELL-BEING
’06
The heart of our safety program is to ensure that managers and employees understand what both the law and the company
require of them, and have the knowledge
and tools to succeed. In 2006, we developed eight online training programs for
safety topics such as fall protection, ergonomics and hearing conservation. Employees completed more than 4,800 online
safety-related training courses. We will continue to expand our online safety training
in 2007.
Employees’ health and safety and reducing our RIR are integral components of our
Roadmap for Success. For information
about our health and safety policy, see the
Sustainable Systems section on Page 18
of this report.
Weyerhaeuser’s 2006 safety record
was in the top quartile of companies surveyed by the American
Forest & Paper Association.
FATALITIES
It is not acceptable to Weyerhaeuser that
any person lose his or her life working
for us. Regrettably, we experienced three
on-the-job fatalities in 2006. All three were
contractors — a tractor operator in Uruguay, a Maracay Homes subcontractor in
Phoenix, Ariz., and a crane operator in Pine
Hill, Ala.
Each fatality is reviewed by the senior management team after a thorough investigation. Lessons learned from the investigations are communicated to the entire company and recommendations implemented.
INJURY ANALYSIS
The most common types of recordable
injuries sustained in 2006 were:
• Fractures, cuts and bruises to hands,
fingers and lower arms (28 percent)
• Strains and sprains to backs and
shoulders (26 percent)
Employee behaviors that most frequently
contributed to incidents were failure to
follow safe work procedures, pay attention
to one’s surroundings, and maintain the
correct position for the task.
The most frequent root causes of recordable incidents were:
• Work standards or procedures
• Management systems
• Engineering or design
Areas of focus for reducing injuries in
2007 include:
SAFETY PERFORMANCE
Safety incidents and fatalities1
United States and Canada
Employee RIR
Unsupervised contractor RIR
Days-away case rate3
Days-away rate3
Fatalities worldwide
Employees
Contractors
2002
2003
2004
2005
2006
2.4
–
0.7
30.7
2.2
–
0.6
21.7
2.0
–
0.5
16.9
2.1
1.82
0.6
21.7
1.7
1.8
0.4
19.0
0
7
3
9
3
6
1
4
0
3
1. The data include facilities transferred to Domtar in March 2007.
2. These data were first collected in 2005.
3. Numbers cited do not match those published in our 2004 report because in 2004 we segregated
U.S. and Canadian data.
24
• Preventing injuries to fingers, hands and
arms. This type of injury decreased
by 27 percent in 2006 over 2005 levels,
due to prevention efforts.
• Recognizing and promoting the efforts
that improve employee safety.
• Learning from sites that use a focused
approach to manage the key sources of
their injuries; and from businesses that
use a disciplined approach to return-towork programs.
SENIOR MANAGEMENT TEAM
VISITS DRIVE IMPROVEMENT
Committed leadership is an essential
part of our safety progress. Following this
principle, every member of our senior
management team in 2006 personally visited one or more of 25 “Safety Focus”
operations — those identified as being in
greatest need of improved performance.
The visits were in addition to routine visits
to operations under their direction.
Each daylong visit included:
• A walk-through inspection
• Interviews with employees
• A review of the unit’s safety
improvement plan
The results are promising. The visited
operations reduced their recordable incident rate by an average of 52 percent compared with 2005. The severity of injuries
declined by 69 percent as measured by
the days-away case rate. The program continues, with visits to 19 sites planned for
2007.
• Aberdeen, Wash., in the woodland
operations sector
• Phoenix, Ariz., in the recycling collection centers sector
In addition, we participate in the U.S.
Occupational Safety and Health Administration’s Voluntary Protection Program. This
program promotes and recognizes effective
safety and health management programs.
VPP recognizes two levels of accomplishment: star and merit. In 2006, our Bowling
Green, Ky., containerboard facility achieved
“star” status and was recognized by Kentucky’s governor. Star sites serve as models for health and safety in the industry and
as mentors to other companies.
Other sites that earned state, provincial,
trade association or Weyerhaeuser safety
awards in 2006:
Percentage reduction in
injuries to fingers, arms and
hands in 2006
27%
Percentage of senior
vice presidents who personally
visited at least one
“safety focus unit” in 2006
100%
Percentage of employees
with access to health and wellness
programs
• Albany, Ore., composite products plant
• Belleville, Ill., packaging plant
• Bennettsville, S.C., composite products
plant
• Dodson and Taylor, La., lumber
operations
• Green Bay, Wis., iLevel™ service center
• Eugene, Ore., composite products plant
• Malvern, Ark., composite panels facility
• Marlboro, S.C., fine paper facility
62%
Number of
U.S. employees who had on-site
health screenings in 2006
2,000
• Midwest iLevel sales group
• Rothschild, Wis., fine paper facility
• South Central iLevel sales group
• Trendmaker Homes in Houston, Texas
AWARDS AND RECOGNITION EARNED
The American Forest & Paper Association
recognized Weyerhaeuser sites for exemplary safety performance. The awards were
given to member companies in 2006 for
the lowest total case incident rate for the
year 2005, based on work-hour categories.
Sites awarded by AF&PA were:
• Dodson and Simsboro, La., in the
wood products operations sector
• Lynchburg, Va., in the converting
operations sector
For more safety awards won in
2006, visit www.wy.com/sustainability/
06report/web. See Employee Well-Being >
Safety Awards.
EMPLOYEE HEALTH
More than 62 percent of our North
American employees have access to health
and wellness programs.
The health and safety of Weyerhaeuser employees is a core company value. We meet
the OSHA requirement for formal health
25
PERCENTAGE OF NORTH AMERICAN
EMPLOYEES IN EACH SEGMENT
4%
and safety committees at all U.S. sites.
Across our North American operations, 330
locations have registered site health and
wellness programs. Employees with access
to those programs total 27,777, which is
more than 62 percent of our North American employees.
35% 30%
COMPETITIVE BENEFITS PACKAGE
ENCOURAGES GOOD HEALTH
17%*
4%
10%
Real Estate
Containerboard Packaging and Recycling
Our highly competitive compensation and
benefits package ranks in the top quartile
of our peer companies. This comprehensive package includes:
Cellulose Fibers and White Papers
• Competitive base pay and pay for
performance
Corporate Functions
Timberlands
ployees and their families to stay healthy,
make healthy lifestyle choices, and be better consumers of health care. The overall
objective is to identify and diminish root
causes that contribute to poor health and
serious diseases, such as depression and
unmanaged stress, excess weight, high
blood pressure, tobacco use and inactivity.
Many efforts engage Weyerhaeuser
people in improving their health, on both
the companywide and site levels. Work site
health and wellness coordinators support
on-site activities at more than 70 percent
of our locations. Specific programs offered
by Health Connection include:
• Employee Assistance
Wood Products
*Note: In March 2007, Weyerhaeuser’s fine
paper business and related assets were
combined with Domtar to create a new
fine paper company, Domtar Corporation.
Due to this transaction, the percentage
of North American employees working in
the Cellulose Fibers segment changed
to 7 percent as of March 2007. The percentages in the other segments increased
(except for Real Estate) following the
transaction.
• Medical and dental plans
• Subsidized Weight Watchers program
• Flexible spending accounts
• Personal Health Resources website
• Life, short-term disability and long-term
disability insurance
• Personal health coaching by phone
• 401(k) plan
• On-site health screenings
• A well-funded defined pension plan
• FreshStart tobacco cessation
• Physical activity campaigns
HEALTH CONNECTION
A new program, “Health Connection,”
was launched in early 2006 to help North
American employees and retirees make
healthy choices and to control health care
costs. Health Connection programs offer
resources, information and support for em-
EMPLOYEES BY TYPE
As of Dec. 31, 2006
• Personal health assessments
• Monthly webinars
In 2006, nearly 2,000 U.S. employees
took advantage of on-site health screenings,
and about 8 percent of U.S. employees
used the Employee Assistance Program. In
211
40,000
38,579
30,000
TURNOVER BY AGE GROUP AND GENDER IN NORTH AMERICA
20,000
10,000
42
5,629
0
United States
Full time
Part time
Percentage
turnover
of females
(involuntary)1
Percentage
turnover
of males
(involuntary) 1
Percentage
turnover
of females
(voluntary)
Percentage
turnover
of males
(voluntary)
< 30 years old
7
10
14
23
30–49 years old
6
6
5
5
50 and over
7
7
5
5
829
4,005
787
3,253
Age group
Canada
Total number
of individuals
who left
the company
1. The involuntary terminations in 2006 included employees affected by asset changes, closing or
selling facilities, and business unit reorganizations.
26
the future, the company plans to introduce
more Health Connection offerings, such
as subsidized flu shots, across U.S. sites.
Overall, the goal is to encourage more
employee use of preventive care services,
such as getting mammograms, participating in personal health coaching, and
taking part in on-site health screenings.
More than 10,000 employees
and spouses participated in
personal health assessments.
Learn more about Weyerhaeuser
benefits at www.wy.com/careers/opportunity/employment/rewards/benefits.asp.
For numbers of employees by region and
country, visit www.wy.com/sustainability/
Numbers By Region.
PENSION INVESTMENTS PERFORM
IN TOP QUARTILE
The company continues to sponsor
defined pension plans covering most of its
employees to provide them with ongoing
income after retirement. Both the U.S. and
Canadian plans covering salaried employees provide pension benefits based on
each employee’s highest monthly earnings
for five consecutive years during the final
10 years before retirement. Plans covering
hourly employees generally provide benefits of stated amounts for each year of service. The benefit levels for these plans
are typically set through collective bargaining agreements with the unions representing the employees participating in the
plans. Retiree medical and life plans are
also offered in both countries. These plans
are typically not prefunded.
Weyerhaeuser’s pension plan
assets perform in the top quartile
when compared with other companies with pension plans greater
than $1 billion.
(Based on fourth quarter 2006 data from Russell Mellon Analytic Services. All rights reserved.)
Due to the strength of the pension plans,
Weyerhaeuser employees can look forward
to receiving benefits from plans that are
well funded, adding to their own financial
security in retirement. The 2006 year-end
estimated fair value of our combined
pension plans’ assets was $6.2 billion
compared with a $5.4 billion combined
benefit obligation, as of the end of 2006,
measured on the basis of the Financial
Accounting Standards Board No. 158.
Total number
of global employees
(Dec. 31, 2006)
46,737
Total number
of employees post-Domtar
(March 2007)
Over the period of 22 years during which
we’ve pursued our current investment
strategy, the U.S. fund has achieved a net
compound annual return of 17.8 percent.
We’ve achieved first-quartile performance in
the U.S. pension trust by investing in
a diversified mix of nontraditional strategies, including hedge funds, private equity,
opportunistic real estate and other externally managed alternative investment
funds. The Canadian pension trust has a
similar investment strategy.
42,000
Company contributions to U.S. pension
plans are based on funding standards
established by the Employee Retirement
Income Security Act of 1974. Contributions
to Canadian pension plans are based on
funding standards established by the applicable Provincial Pension Benefits Act and
by the Income Tax Act.
Voluntary terminations
in North America in 2006
(includes retirements)
We fund our qualified and registered
pension plans and a portion of our nonregistered plans. The company accrues for
nonqualified pension benefits and health
and life postretirement benefits. We do not
expect to have an obligation to fund our
U.S. qualified pension plans in 2007, but
we do expect to contribute approximately
$8 million to our Canadian pension plans
(registered and nonregistered) in 2007.
Overall North American
employee turnover in 2006
Involuntary terminations
in North America in 2006
10%
9%
19%
Weyerhaeuser adopted the provisions of
Financial Accounting Standards Board
Statement No. 158 in 2006, which requires
that the funded status of pension and
other postretirement benefit plans be presented on the balance sheet.
For more information, see Page 72
of our 2006 Annual Report and Form 10-K
available at investor.weyerhaeuser.com.
27
Average number of years
with the company
(North American employees
as of March 2007)
12
North American employees
younger than 30 years
(as of March 2007)
12%
Average age of
North American employees
(as of March 2007)
42
Percentage of
employees in the United States
and Canada
95%
Countries where
we have employees
18
TRAINING SUPPORTS EMPLOYEE
DEVELOPMENT
Developing a culture of personal growth
is one of the ways we will succeed. Nearly
every company employee receives some
training each year. Opportunities vary by
site and type of employee. We estimate
that most managers participate in three to
five days of education and training each
year. Hourly employees typically participate
in one to two days per year, usually focused
on safety, technical and operational training.
In 2006, our companywide training
resource provided:
• More than 336 classes, representing
more than 17,200 student days of education
• Courses completed by nearly 12,000
employees, including online training
An example of training tied to business
goals is demonstrated by the more than
100 online modules developed to tackle an
important companywide supply chain imperative. About 5,700 modules were completed by employees participating in this
supply chain program.
Training modules on more than 40 topics
regarding environment, health and safety
are also offered. (See Pages 14 and 24
for more information on our environment,
health and safety training.)
Other training-related resources include
tuition assistance, which is offered to employees who want to further their education in areas that meet company needs.
The company also encourages mentoring.
PERFORMANCE-DRIVEN CULTURE
REWARDS RESULTS
Employees
represented by unions
38%
Critical to building a culture of personal
growth and engaging talented people is a
disciplined performance management
system. We are committed to cultivating a
performance-driven culture that rewards
results. That’s why we have a rigorous performance management process.
Employees develop and review their goals
annually with their managers, defining
expectations that meet and exceed the objectives. Then during performance reviews,
the results of how well goals were met
(or not) are discussed and evaluated, which
28
feeds into salary actions. This criteriadriven system is all about improving performance and developing people. As part of
the process, employees create individual
development plans. Salaried employees
use the performance management system,
while hourly employees use a goal-setting
process. Although the systems differ in
some ways, the end objective is the same
— to align individuals’ work to company
and unit business goals.
In 2006, more than 95 percent of North
American exempt employees engaged
in performance and career development
reviews with their managers. About 50
percent of North American nonexempt
production and maintenance employees
developed team-based goals that are
reflected in their sites’ gain-sharing plans.
Employee compensation tied
to performance
In January 2006, Weyerhaeuser implemented a new compensation program for
salaried employees, including its executive
officers. The new program was the result
of a year-long review and redesign undertaken in 2005 by the board of directors’
compensation committee working with its
compensation consultant, Mercer Human
Resource Consulting. The focus of the review was to assess the effectiveness of the
existing incentive programs in implementing the company’s compensation philosophy and to establish key compensation
principles for designing and administering
compensation.
Weyerhaeuser’s compensation philosophy
is to tie each employee’s interests to
the interests of shareholders and stakeholders. Weyerhaeuser’s compensation
programs are designed to:
• Focus decision making and behavior on
goals — including goals relating to environmental, safety, diversity and other
social performance measures — consistent with overall business strategy.
• Reinforce a pay-for-performance culture
through a balance of fixed and incentive
pay opportunities.
• Allow the company to attract and
retain employees with the skills critical
to its long-term success.
Employee compensation consists of base
salary, annual cash incentives and longterm equity incentives, plus retirement,
medical and other benefits.
101.8 percent, and our work force representation improvement was 6.3 percent.
2006 U.S. DIVERSITY PROFILE
50
Weyerhaeuser was selected
Employees complete an annual performance
by Universum, a recruitment and
management plan as described above, inresearch firm, as one of the top 10
cluding specific goals relating to economic,
socially responsible companies
social and environmental performance as
as evaluated by nearly 5,000 MBA
students.
appropriate. Similar goals are established
for each business unit and for the company
as a whole. Employee compensation is
Across the company, we’ve achieved
tied to the performance of the company, the
results and forged many partnerships to
business unit and the individual employee
further our diversity goals. Here are
against these goals.
some highlights from 2006:
DIVERSITY
As part of our goal to be an “employer
of choice,” we strive to create an inclusive,
performance-driven culture where employees thrive and grow. A critical component
of such an environment is diversity. We
continue to make progress in leadership
role modeling, fostering an inclusive work
climate, and implementing mentoring
and outreach strategies. We also conduct
leader diversity assessments, develop
educational programs, and encourage diversity business networks to ensure employees have access to the best possible
support and development tools.
In addition, each business and function
establishes annual diversity goals in
two critical areas. The first is placement
against opportunities. This requires us to
determine the percentage of women and
minorities available to fill management,
professional and sales positions at Weyerhaeuser. We use that information to set
placement targets in the areas where we
have gaps in those same categories.
Then we monitor whether we’re filling open
positions at the target rates we’ve set
or higher. The second area is work force
representation. This tracks the progress
made toward increasing representation of
women and minorities in the same three
categories.
In 2006, our goal was to make placements
against opportunity at or higher than the
targets we set, and to maintain or improve
our overall work force representation.
Our placement-against-opportunity rate was
• We continue to sponsor and participate
in the BOLD CEO Roundtable and
Workplace Flexibility Study. CEOs from 20
influential companies in the Pacific Northwest, such as Boeing, Nordstrom, Costco
and Washington Mutual, meet three
to four times per year to discover ways to
increase diversity in their organizations.
• We successfully completed a BOLD Work
Flexibility pilot in our Employee Service
Center, and subsequently implemented
best practices.
30
11%
• We received the Frederick D. Patterson
Award, named for the founder of the
United Negro College Fund, in recognition
of our support for UNCF activities.
Weyerhaeuser Scholars, a partnership
program with the UNCF, focuses on
minority and female college sophomores
and juniors. In 2006, we awarded 25
such paid internships and scholarships.
10%
33%
34%
Professionals
Sales
20
18%
10
0
Officials
& Managers
Women
Minorities
2006 U.S. PLACEMENT RATE
The placement rate is the percentage
of new hires and promotions that
are filled by women and minorities.
80
70
60
50
18%
40
30
• We published a diversity best practices handbook, with ideas and insights
from businesses across the state of
Washington.
14%
40
20
16%
45%
13%
36%
24%
10
0
Officials
& Managers
Women
Professionals
Sales
Minorities
• Steve Rogel was among eight CEOs
recognized for diversity leadership by the
Diversity Best Practices organization
and was featured in the book CEOs Who
Get It. Rogel and the company’s chief
diversity officer were featured in Fortune
magazine for their efforts.
• We received recognition for outreach efforts from National Society of Black
Engineers; Society of Hispanic Engineers;
Women in Construction; Society of
Women Engineers; UNCF; National Soci-
29
Women on 15-member
senior management team
3
Racial minorities on
senior management team
1
Women on 12-member
board of directors
(as of April 2007)
4
Racial minorities
on board of directors
(as of April 2007)
1
Rate at which we met
“placement against opportunity”
targets in 2006
101.8%
Overall
improvement in work force
representation in 2006
6.3%
ety of Hispanic MBAs; Minorities in Agriculture, Natural Resources and Related
Sciences; and Diversity Best Practices.
For more about our anti-discrimination
programs, visit www.wy.com/sustainability/
Anti-Discrimination.
WE ACTIVELY BUILD RELATIONSHIPS
WITH INDIGENOUS PEOPLES
Weyerhaeuser is committed to developing
and maintaining positive relationships with
aboriginal communities wherever we operate. For example, in Canada, where Weyerhaeuser is a steward of public land, we
work to support and sustain the role of
aboriginal peoples in Canadian forests. Our
relationships with aboriginal communities
include:
• Contractual relationships for timber
harvesting, forest silviculture, infrastructure development, and other goods
and services
• Involvement with and donations to
aboriginal community initiatives
• Support for education to help develop
employment skills
• Employment opportunities
Read about our relationships with
aboriginal communities in Canada at
www.wy.com/aboutus/whereweoperate/
wyincanada.asp.
Weyerhaeuser also works with key contractors and suppliers to develop awareness about respectful workplace behavior
and encourages them to ensure their
work forces reflect the populations where
they operate.
PURCHASES FROM MINORITY- AND WOMENOWNED SUPPLIERS ARE UP 17 PERCENT
Weyerhaeuser has had a supplier-diversity
program to increase the number of minority- and women-owned businesses supplying the company since 2003. In 2006,
purchases from minority- or women-owned
suppliers were up 17 percent from the
year before, for a total of $244 million.
30
MANAGING SUPPLIERS
Weyerhaeuser seeks to build relationships
with our suppliers based on mutual benefit,
trust, performance and a joint commitment to continuous improvement. We expect
— and our contracts require — suppliers
to operate ethically and to comply with
all laws and regulations. Our contract suppliers must also become familiar with,
comply with and maintain policies consistent with Weyerhaeuser’s environmental,
health and safety policies and standards.
Our suppliers core policy details our
expectations of suppliers and what they
can expect of us. We monitor suppliers’
conformance with those requirements. If
suppliers become deficient, improvement
plans are developed. Where improvement
in critical areas is not sustained, suppliers are replaced. These principles are
consistent with the Institute for Supply
Management’s Principles of Social Responsibility, which we adopted in 2005.
While we do not collect data about our
practices with regard to local suppliers, we
operate a supplier diversity program and
conduct business according to our supplier
core policy, as described above.
To see the companies with which we
have national supply contracts, visit
www.wy.com/sustainability/06report/web.
See Employee Well-Being > Suppliers.
SOURCING TALENT TO
ACHIEVE RESULTS
Our goal is to develop leaders from within
the company. For example, for the top 50
positions of Weyerhaeuser leadership, our
target is to fill at least 80 percent of those
jobs through the development and promotion of current employees. In practice,
significantly more than 80 percent of these
critical roles are filled by employees from
within.
In North America, where 95 percent of our
employees work, we follow a hiring policy
that bases employment decisions on consistent, job-related criteria. Many facilities
are in rural areas and rely heavily on the
local work force for talent. Hiring locally is
preferable, but we use many sourcing channels to fill open positions depending on
the requirements of the role. We start with
defining job duties and qualifications. Then
we monitor staffing decisions to ensure
selection processes are free from bias. Our
process aligns with an employee relations
policy that reflects values such as diversity,
teamwork, effective leadership and personal accountability.
At our global locations, our practice is to
hire local management and employees. In
fact, the proportion of expatriates placed
outside of North America to the total global Weyerhaeuser employee population is
less than 1 percent. We place expatriates
in international assignments when broader
experience is required, when specialized
expertise is not available in the host country, or for startup operations.
In some cases, the best skills for the job
may come from another source. In each
case, Weyerhaeuser’s staff works to recruit
the most talented candidates with the
potential to grow to their fullest capacity.
EMPLOYEE REPRESENTATION
AND INVOLVEMENT
hours of work. In addition, the U.S. WARN
Act requires 60 days’ notice of major
curtailments. If the company needs to curtail operations sooner, we pay employees
for the notice period.
For more about our labor relations principles, employee participation and dispute
resolution mechanisms, visit www.wy.com/
sustainability/06report/web. See Employee
Well-Being > Labor Principles.
HUMAN RIGHTS
We recognize that companies operating in
today’s global marketplace need a human
rights policy. In 2007, we will craft a statement that reflects our commitment, and
our practice, to ensure there is no forced
or compulsory labor or child labor in any of
our operations.
At Weyerhaeuser, we do not currently have
a formal supplier screening process for
human rights issues. However, we apply our
ethical conduct standards when we select
suppliers and business partners. We
also apply standard terms of purchase in
all of our U.S.-based contracts that require
suppliers to meet company standards.
LABOR RELATIONS ARE GUIDED
BY SHARED PRINCIPLES
Labor unions represent 38 percent of
Weyerhaeuser employees. Our labor relations continue to be guided by principles
jointly developed in 1994 with the three
unions then representing the largest
numbers of employees in our U.S.-based
businesses. The principles are designed
to foster cooperative relationships and
employee empowerment.
Our company’s labor principles allow
employees the right to freely choose to
organize and bargain collectively. To
our knowledge, these rights are not at
risk at any Weyerhaeuser operation.
In terms of the notice period provided for
significant operational changes, our labor
contracts require five to 10 days’ advance
notice to change employees’ scheduled
See the standard contract language
at www.wy.com/usterms.asp.
Another area of interest involves the
rights of indigenous people. These rights
can take two forms.
•Supervisor, manager or team leader
•Human resources manager or director
•Plant or unit manager
•Ethics and business conduct or
Canadian business conduct contact at
EthicsLine at (800) 716-3488 or
www.weyerhaeuserEthicsOnline.com
•Work force representation and diversity
center of expertise
The company will take immediate and
appropriate corrective action when it determines that these behaviors have occurred.
Second, there are rights arising in the context of land use. As discussed on Page 30,
Weyerhaeuser is committed to developing
and maintaining positive relationships with
aboriginal communities wherever we operate. In 2006, Weyerhaeuser was asked to
cease purchasing wood from a supplier
managing a forest subject to a treaty rights
dispute brought by the Grassy Narrows
First Nation in Ontario, Canada. The Grassy
Narrows claim must be resolved by the provincial government.
Our position is available in our
2007 Proxy Statement (Page 46) posted at
investor.weyerhaeuser.com and at
www.wy.com/environment/currentissues/
grassynarrows.asp.
For more information about our relationships with indigenous people, see Page 30.
First is the personal right to be free of discrimination. At Weyerhaeuser, we do not
tolerate any discrimination or harassment.
Our anti-harassment policy states that all
employees, suppliers, customers and visitors will be treated with dignity and respect.
Harassment based on an individual’s gender, race, color, religion, national origin, age,
disability, sexual orientation or other statutorily protected characteristic will not be
tolerated. Employees who believe they are
being harassed or subject to inappropriate
workplace conduct can report the issue
through any one of a number of channels:
31
MEASURE
SECTION 4
ENVIRONMENTAL
FOOTPRINT
Viet Vuong, project coordinator, tests
water quality outside our Port
Wentworth, Ga., cellulose fibers mill.
ACROSS OUR SUPPLY CHAIN, FROM OUR FORESTRY PRACTICES TO MANUFACTURING OPERATIONS, WE SEEK TO MANAGE
OUR ENVIRONMENTAL IMPACT. AS WE IMPROVE EFFICIENCY,
DECREASE EMISSIONS AND MAKE BETTER USE OF NATURAL
RESOURCES, WE REDUCE OUR FOOTPRINT.
MANAGING FORESTS SUSTAINABLY
Weyerhaeuser manages forests for wood
production as well as the ecosystem services they provide. These include clean water, habitat for fish and wildlife, and sites
of cultural, historic and scenic importance.
This commitment is described in our sustainable forestry standard on Page 15. We
implement landscape-level forest management as part of our compliance with the
Sustainable Forestry Initiative® standard.
INTENSIVELY MANAGED FORESTS
PRODUCE MORE WOOD
On forestland that we manage in the United
States and Southern Hemisphere, we use
scientific principles and environmentally
responsible techniques to enhance the forest’s ability to grow wood quickly. By planting selectively bred seedlings, controlling
invasive species and other competing
vegetation, fertilizing the soil, and thinning
the forest before final harvest, we can grow
wood on this land at two to three times
the rate it grows in comparable unmanaged
forests. Intensive management on our
lands allows other lands to be less intensively managed and still provide the wood
fiber society needs.
In Uruguay, where we’ve planted trees on
former grazing land, the first harvest began
in 2005. All of our forestland in the United
States and Southern Hemisphere has been
harvested and regenerated at least once.
GREENHOUSE GAS REDUCTION
We have committed to reduce our
greenhouse gas emissions, and we measure our progress annually. See Pages
40–44 for more information
IN CANADA, WE USE LESS
INTENSIVE METHODS
In Canada, we manage public forestland
under long-term licenses. Government
requirements prescribe much of our forest
practices, including harvest rates and types
of trees harvested. We apply less intensive
methods on this public land, fertilizing
less often and relying more on seed trees
and natural root sprouting to reforest.
These methods are better suited to local
conditions and climate. Because trees
in Canada grow more slowly, we maintain
sustainable harvest rates by harvesting
less frequently — an average of once every
80 to 100 years compared with once
every 20 to 50 years in the United States.
HARVESTED AREAS ARE REFORESTED
ACHIEVES
FOREST CERTIFICATION
We’ve maintained independent certification of all our North American forestlands to either SFI or CSA sustainable
forestry standards. See Page 38 for
more information
ACHIEVES
In 2006, the size of Weyerhaeuser’s average clearcut in the United States and
Canada was 90 acres. We reforest these
areas by planting seedlings or through
natural regeneration. We generally plant at
the first opportunity following harvest.
In the United States in 2006, we replanted
100 percent of harvested areas within two
years of harvest. Nearly 71 percent was
replanted within one year.
In Canada, we rely more on natural regeneration. In harvest areas where replanting
is done, more than 85 percent of the acres
are replanted within two years of harvest.
33
2006 KEY WEYERHAEUSER
FORESTRY NUMBERS
SECTION 4 ENVIRONMENTAL FOOTPRINT
2006 MAP OF TIMBERLAND OWNERSHIP, MANAGEMENT AND LOCATIONS
Area owned or managed*
33.8 million
acres
Seedlings planted
133.8 million
Percentage of land
certified to ISO 14001
100%
Percentage of North American
forests certified to sustainable
forestry standards
100%
Percentage of land harvested
United States
2.8%
Canada
0.5%
Australia and New Zealand
2.7%
Uruguay
0.2%
Area harvested
311,028 acres
CANADA
ISO and CSA
ISO and SFI
UNITED STATES
Percentage replanted within
two years (United States)
100%
ISO and SFI
Percentage of harvested land
100%
replanted or naturally regenerated
*Includes 657,000 acres managed cooperatively by Weyerhaeuser and our joint
venture partners.
AUSTRALIA AND NEW ZEALAND
ISO
URUGUAY
ISO
34
In areas where we rely on natural regeneration, this is typically achieved within five
years of harvest.
minimize and mitigate negative effects
on threatened and endangered species from
forestry or other land-use activities. These
species are:
Learn more from the Harvest
and Regeneration Methods fact sheet
at www.wy.com/aboutus/facts.
• Northern spotted owl in Oregon
PROTECTING OLD-GROWTH FORESTS
Weyerhaeuser does not harvest or buy
wood from old-growth forests on public or
private land in the United States. We make
exceptions only in limited circumstances
with a net environmental benefit or to
respect the economic and cultural interests of indigenous peoples. In Canada,
we work with the provinces, First Nations,
environmental groups and others to conserve old-growth forests while maintaining
a viable forest products-based economy.
• American burying beetle in Oklahoma
and Arkansas
• Red Hills salamander in Alabama
We also take action to protect certain
sensitive species in addition to measures
contained in formal habitat conservation
plans. Examples include:
• Salmon in Washington and Oregon
• Red-cockaded woodpecker in the
U.S. Southeast
• Neotropical migrants and other
songbirds in the U.S. Southeast
• Mountain caribou in Alberta
In the United States, we do not
harvest or buy standing timber or
logs from public or private oldgrowth forests.
To read more about wildlife protection,
visit www.wy.com/sustainability/06report/
web. See Environmental Footprint >
Threatened Species Protection.
THREATENED, ENDANGERED
AND SENSITIVE SPECIES ARE PROTECTED
SEATTLE AUDUBON FILES SUIT
Across the United States and Canada,
hundreds of species of plants and animals
are protected under the U.S. Endangered
Species Act or the Canadian Species at
Risk Act. Forests that Weyerhaeuser owns
or manages provide habitat for a number
of these species. Some of the threatened
or endangered species that inhabit areas
near or within our U.S. timberlands include
the northern spotted owl, the marbled murrelet, a number of salmon species, bull
trout and steelhead trout in the Pacific Northwest and the red-cockaded woodpecker,
gopher tortoise and American burying beetle in the Southeast.
In November 2006, Seattle Audubon and
another Audubon chapter filed a suit
against the state of Washington and Weyerhaeuser, alleging that state regulations are
inadequate to protect the northern spotted
owl. They also allege that Weyerhaeuser’s
operations around four specific owl sites
in southwest Washington are likely to
harm owls in violation of the U.S. Endangered Species Act. The lawsuit contends
that the state of Washington should be
held liable under the ESA for “take” of a
species for permits the state issues to private parties under state law. “Take” can
include significant habitat modification that
actually kills or injures wildlife. The ESA
requires private landowners such as Weyerhaeuser to avoid the take of threatened
and endangered species. Seattle Audubon
also challenges Weyerhaeuser’s SFI certifications. They argue that our practices
violate the ESA; therefore, they do not conform to the SFI requirement of complying
with the law and protecting threatened and
endangered species.
Where these species are present, we design our forest-management practices to
avoid harming them. This includes following
all applicable state, provincial and federal
laws. We also engage in cooperative research to expand our understanding of the
needs of these species.
We have formal habitat conservation plans
for three threatened or endangered species
in the United States. These long-term plans
35
2006 FORESTRY RESEARCH
SPENDING
3%
7%
6%
5%
79%
Forest health and productivity
Water quality
Fish and wildlife
Ecosystems and biodiversity
Other
Weyerhaeuser strongly disagrees with
Seattle Audubon’s complaint. Hundreds of
northern spotted owls live on or near our
forests in Washington and Oregon. Our land
consists of managed forests, not the oldgrowth forest on which the owl is believed
to depend. Beginning even before the owl
was listed in the ESA, we have supported
scientific research to understand spotted
owl biology and conducted comprehensive
surveys to understand the location and
status of owls. We develop protection plans
for each known occupied site on or near
our lands and plan activities to avoid take
of owls. We also survey nearby areas
planned for harvest to make sure they are
not occupied by owls, and we avoid operations that could disturb owls during the
nesting season. In the 16 years since
the listing of the northern spotted owl, we
are not aware of any incidents of take
associated with our operations in relation
to the northern spotted owl.
On our land in the United States, we locate
and protect imperiled species and natural
communities. We preserve selected sites,
often partnering with government agencies
and conservation groups through conservation agreements and other means. In
Washington state alone, as of 2006, we
have contributed more than 100,000 acres
to conservation initiatives through land
exchanges, sales, donations and conservation easements.
Across Canada, our planning and harvesting guidelines protect areas of high ecological, historic or cultural value. Features
such as mineral licks, grave sites, old cabins, and hawk and eagle nests are identified and protected. This process to identify
and protect sites includes consultation
with aboriginal communities and the general public, review of plans by resourcemanagement professionals in government,
and identification in the field by our staff
and contractors.
OUR RESEARCH ADVANCES
FORESTRY PRACTICES
Sustainable forestry requires continuous
improvement, built on a foundation of
sound scientific research and technological
innovation. We believe Weyerhaeuser has
the best forestry research organization
in the world, with a wealth of environmental
research that we use and share.
In 2006, we spent $19.1 million on forestry
research by both our own scientists and
those at universities and other research
organizations. Topics included forest health
and productivity, water quality, fish and
wildlife, landscape management and biodiversity.
To learn more about efforts to
protect special sites, visit www.wy.com/
sustainability/06report/web. See
Environmental Footprint > Special Sites
Protection.
FIBER FROM THE SOUTHERN HEMISPHERE
IS PLANTATION-GROWN
Our forestry operations in Australia,
New Zealand and Uruguay are in plantations. Our mills in the Southern Hemisphere (Australia, New Zealand, Uruguay
and Brazil) use wood fiber from only our
own plantations or other plantations
nearby. For example, we buy the raw material for our Lyptus® premium hardwood,
which is produced by our joint-venture sawSPECIAL SITES RECEIVE SPECIAL ATTENTION
mill in Brazil, from plantations located on
Most of the forests we manage include
places with unique environmental, cultural, the eastern coast, far from the Amazon
historical or recreational value. We manage rainforest. These plantations, owned by
others, are interspersed among indigenous
these areas to protect their unique qualforests so that one-third of the area is
ities. Protecting forests with exceptional
conservation value is part of implementing kept in native vegetation, helping maintain
the Sustainable Forestry Initiative® standard, elements of the natural ecosystem.
and protecting places with special biologiOur procurement standard (see Page 16)
cal significance is required by the Sustainprecludes the purchase of wood products
able Forest Management Standard of the
from forests at risk, which are defined
Canadian Standards Association (Page 16).
in our procurement guidelines.
36
To see our wood procurement guidelines, visit www.wy.com/sustainability/
06report/web. See Environmental Footprint
> Procurement Guidelines.
OPPOSING ILLEGAL LOGGING
We are committed to combat illegal logging
by exercising due diligence in our procurement of third-party wood and using our influence as an industry leader to strengthen
efforts to eliminate illegal logging.
We distribute products from native tropical
forests only if the suppliers are, or are on
a schedule to be, independently verified as
selling or harvesting products legally and in
compliance with our procurement standards.
BOREAL FOREST MANAGEMENT
The boreal (or “northern”) forest is a vast
area stretching through Canada, Alaska,
Norway, Sweden, Finland and Russia. It is
home to the world’s largest populations
of caribou, wolves, grizzly bears and lynx.
It is also the breeding ground for an estimated one-third of North America’s land
birds and 40 percent of its waterfowl.
About 70 percent of the boreal forest remains undeveloped, leading to concerns
about encroaching human use.
Three-quarters of Canada’s forest is in the
boreal. The Canadian boreal includes a
rich variety of grasslands, tundra, rocky outcrops and extensive wetlands. It is dominated by hardy coniferous trees well suited
to the short growing season.
is to find practices under which the forest
thrives and satisfies community needs.
After producing wood products for more
than a century, 92 percent of Canadian
land that was originally forested is
still forested. This is more than any other
forested nation. Canada also has the largest area of protected forest in the world.
Fire is a dominant force in the boreal forest.
The boreal forest is swept by frequent and
large natural disturbances. These include
insects and disease, but the primary force
is fire, which regularly burns large areas.
Acres contributed
to conservation initiatives
in Washington in 2006
100,000
Dollars spent on
forestry research in 2006
in millions
$19.1
Because fire is such a common feature,
few stands reach 200 years in age. Trees
in the boreal are nowhere near the size
of their coastal counterparts. Taiga — the
word sometimes used by scientists to
describe the boreal ecosystem — is a Russian word meaning “land of little sticks.”
In some areas, mature trees are often less
than 6 inches (15 centimeters) in diameter.
The larger trees, usually in southern areas
around water, may reach up to 24 inches
(60 centimeters) in diameter.
We harvest less than 1 percent.
We strive to harvest in a way that emulates
natural disturbances such as fire. For example, we leave variable edges and clumps
of trees in harvested areas. We also leave
buffer strips of trees along scenic routes
and streams, lakes and other water bodies.
Our 2006 harvest in the boreal forest was
one-half of 1 percent of the forest area we
manage.
Managing Canada’s boreal forest
is a public affair.
Most of Canada’s forests are publicly
owned. Weyerhaeuser licenses land from
provincial governments for periods of 20
to 25 years. We hold licenses to roughly
25.6 million acres (10.4 million hectares)
of forestland in the Canadian boreal forest.
After harvest, we take three approaches
to reforestation: planting seedlings, spreading seed, and leaving trees to drop seed
or sprout from roots. For example, black
spruce and jack pine will come back quickly
from seed, whereas white spruce requires
planting. Birch regenerates naturally with
sprouts from the stump.
Although management of the boreal forest
ultimately rests with provincial governments,
industry and government partner to conduct research and develop forest-management plans. These plans are prepared in
consultation with stakeholders such as
aboriginal communities, tourist outfitters,
trappers, anglers and hunters. The goal
Wildlife are considered in forestry planning.
Most bird and animal populations in the
boreal thrive despite wildfires and timber
harvests. Different creatures prefer different habitat. Some species move out of
an area after fire or harvest, while others
— preferring open areas — move in.
37
WEYERHAEUSER EXCEEDS
THE NORTH AMERICAN AND GLOBAL
AVERAGES FOR CERTIFIED FORESTS
Certified forests as a percentage
of total forest, by region1
100
100
66
48
93
80
60
52
40
34
20
Wolves, red foxes and elk are examples
of animals that prefer forest clearings and
shrub-covered areas.
Some species require special attention.
Woodland caribou, a threatened species in
Canada, feed on lichen in the older-aged
boreal and require large areas of forest. We
have voluntarily delayed harvesting for up
to five years within 202,000 acres (82,000
hectares) used by caribou in Alberta. This
will allow time for Weyerhaeuser, the province and others to conduct research and
implement a recovery plan.
7
0
WY North
America
Certified
North
America
Europe
Rest
of World
Canada has more certified forests
than all other countries in the world
combined.
56 PERCENT OF OUR NORTH AMERICAN
LOG AND CHIP SUPPLY
COMES FROM CERTIFIED FORESTS
Certified forests as fiber sources
for Weyerhaeuser manufacturing
facilities in North America
44% 41%
15%
Certified from Weyerhaeuser forests
Joining forces with Ducks Unlimited
Canada to conserve boreal wetlands.
In April 2006, Weyerhaeuser and Ducks
Unlimited Canada agreed to jointly fund and
conduct research focused on migratory
bird habitat on 12 million acres (4.9 million hectares) of Weyerhaeuser-managed
land in Alberta (see Page 59).
All the forests we own or manage
in North America have been
independently certified to globally
recognized standards for
sustainable forest management.
PROMOTING SUSTAINABLE FORESTRY
In 2006 in the United States, Weyerhaeuser:
Certified from other forests
Not certified
• Purchased wood directly from 4,659
private forest owners and provided them
with information on reforestation and
best management practices.
• Provided information on reforestation
and best management practices to
10,196 indirect suppliers, such as loggers who supply logs to third-party
sawmills that sell their residual chips
to Weyerhaeuser.
• Communicated our procurement policies
to loggers, chip suppliers, wood dealers
and other raw-material suppliers.
38
Learn more about our forestry
practices at www.wy.com/ourbusinesses/
forestry/timberlands.
FOREST CERTIFICATION
AT WEYERHAEUSER
Uncertified
1. UNECE/FAO Forest Products Annual
Market Review, 2005–2006
• Provided information about sustainable
forestry to more than 4,500 family forest
owners in the United States. About 580
of these owners — who manage a total of
more than 103,000 acres — participated in our Land Owner Assistance Program. In 2006, we helped these owners
develop forest-management plans,
provided 3.5 million seedlings at no cost,
and helped regenerate 5,455 acres
through planting and 8,372 acres through
natural regeneration.
Forests. All of the forests we own or manage worldwide have environmental management systems registered to the ISO 14001
standard. In addition, 100 percent of the
forests we own or manage in North America
have been independently certified as
meeting either the SFI or CSA standard. In
Australia, New Zealand and Uruguay, we
will certify to appropriate national standards
based on availability and customer need.
See Page 16 for more information on our
forestry management and certification systems.
Our certified status exceeds the averages
for North America (34 percent) and Western
Europe (52 percent), the two regions with
the highest percentage of certified forests.
Manufacturing facilities. All of our mills
in the United States that use logs or wood
chips as their raw material are independently certified as meeting the procurement
provisions of the SFI standard. This includes all primary facilities — that is, those
using logs or chips to produce pulp, paper,
lumber, plywood and oriented strand board.
In addition, 85 secondary manufacturing
plants meet the fiber sourcing provisions of
the SFI standard. These include three of
our I-joist plants, all of our corrugated container plants, and all of our white paper
converting plants.* In Canada, 11 of our
18 primary mills (excluding joint ventures)
are independently certified as meeting
either the chain-of-custody requirements of
the CSA standard or the procurement
provisions of the SFI standard.
* Note: In March 2007, Weyerhaeuser’s fine
paper business and related assets were
combined with Domtar Inc. to create a
new fine paper company, Domtar Corporation. For more information, see Page 6.
- We promote sustainable forestry practices among those owners who have not
yet pursued certification. In the United
States, nearly half of our fiber comes
from family forest owners for whom formal certification is a major hurdle.
What certification of our procurement
systems says about our products:
• We know the areas our wood comes from
and the type of supplier, whether they
are certified forests owned by major timberland owners, small family forests,
sawmills that supply residual chips, wood
dealers or provincial governments in
Canada. We can identify the percentage
and source of certified content in our
products.
• We use independent auditors. Auditors
of the SFI and CSA standards must
be accredited by the American National
Standards Institute or the Standards
Council of Canada. The SFI standard itself is governed by an independent board
with equal representation from environmental organizations, the forest products
industry, and the broader forestry community. The CSA standard’s governance
represents four interests: professional,
environmental, government and business. Both standards provide for public
consultation.
• The SFI standard, unique among certification systems, requires manufacturers
to reach out to family forest owners and
educate them about sustainable forestry.
- We monitor the use of best management practices by our log suppliers.
These practices, developed state by
state, specify proper techniques for protecting watersheds and riparian areas.
In 2006, 94 percent of the primary raw
material used by Weyerhaeuser’s U.S.
mills was harvested by professionally
trained loggers.
Number of suppliers who
received information on reforestation
and best management
practices in 2006
10,196
I-JOIST PLANTS ARE FIRST TO ADOPT
SFI CHAIN-OF-CUSTODY STANDARD
For a list of our certified timberlands
and manufacturing facilities, see www.wy.
com/ourbusinesses/forestry/timberlands/
forestcertification/currentstatus.asp.
In 2005, three of our secondary manufacturing plants were the first ever to meet
the SFI new chain-of-custody standard.
In 2006, two Weyerhaeuser primary mills
added the SFI chain of custody to their
already-SFI-certified procurement systems.
Our manufacturing facilities that have
adopted the SFI chain of custody standard
include:
North American
forests independently certified
100%
• Valdosta, Ga., iLevel™ Trus Joist®
brand I-joists
• Evergreen, Ala., iLevel Trus Joist
brand I-joists
• Natchitoches, La., iLevel Trus Joist
brand I-joists
• Deerwood, Minn., TimberStrand® mill
• Colbert, Ga., Parallam® mill
Under the standard, wood from certified
forests used to make these products is
tracked through each stage of production.
Modeled after a similar provision used
by the European-based PEFC, the chain-ofcustody provision allows more precise claims
about certified content and has opened
the door for SFI-certified products to earn
preferred status in European markets.
Weyerhaeuser has several engineered wood
products customers in Great Britain.
RAW MATERIAL SOURCES
Half of the logs and wood chips we use
in our U.S. and Canadian operations come
from certified forests (see chart on previous page). The uncertified portion of our
supply in the United States comes mainly
from small, family-owned forests and in
Canada mainly from publicly owned forests
not managed by Weyerhaeuser. In 2006,
our U.S. and Canadian manufacturing facilities that use logs and chips as their raw
material consumed 25.1 million cunits
39
RESIDUALS MANAGEMENT
Estimated pounds of residuals per ton of
2006 production at Weyerhaeuser’s U.S.
and Canadian pulp and paper mills* and
wood products facilities
of wood fiber. (One cunit equals 100 cubic
feet of solid wood.)
For material use data, visit www.wy.com/
sustainability/06report/web. See Environmental Footprint > Raw Material Use.
PULP AND PAPER
MILLS
See Page 51 for information about fiber
recovery and recycled content.
111 66
SOLID WASTE MANAGEMENT
2,126
Burned for energy1
Deposited in landfills, incinerated,
or disposed of as hazardous waste2
Land-applied for soil amendment;
beneficially reused other than for
land application
Weyerhaeuser policy requires mills and
manufacturing facilities to develop strategies and implement programs to manage, reduce or eliminate residual or solid
waste, such as wood and bark residuals,
ash and sludge. A key strategy is to reuse
residual waste. We use it to manufacture
our own products, convert it to energy,
or sell it to other industries.
As a result of this waste management policy, in 2006, 86 percent of our manufacturing facilities in the United States were in
the EPA’s lowest-risk category for hazardous
waste generation.
WOOD PRODUCTS
FACILITIES
80
23
299
495
Burned for energy1
Shipped off site for use in other
products
Deposited in landfills, incinerated,
or disposed of as hazardous waste2
Land-applied for soil amendment;
beneficially reused other than for
land application
1. Burned for energy both on site and
off site.
2. Includes recurring and nonrecurring
hazardous waste.
* Note: In March 2007, Weyerhaeuser’s
fine paper business and related assets
were combined with Domtar Inc. to
create a new fine paper company, Domtar Corporation. For more information,
see Page 6.
For the EPA status of our facilities as
generators of hazardous waste, visit www.
wy.com/sustainability/06report/web.
See Environmental Footprint > Hazardous
Waste & Residuals Management.
We make the most of each log.
Weyerhaeuser uses almost every portion
of every log in our manufacturing processes. Wood chips left over from making
lumber are used to make pulp and paper.
Logs too small for dimensional lumber are
processed into engineered wood products
such as oriented strand board. And we generate a substantial amount of energy from
biomass fuels, including wood residuals.
We use 97 percent of each log in
our North American operations.
Many of our mills actively seek partners
and customers who are able to use wood
residuals in their products or processes,
further reducing waste. Obtaining maximum
use of raw materials is a key consideration
40
in process improvement, capital modifications, product changes and manufacturing
operations.
ENERGY USE AND CLIMATE CHANGE
We meet more than half of our operations’
energy needs through the use of renewable
and greenhouse-gas-neutral biomass fuels
such as wood residuals and other organic
byproducts. Much of the fuel we use in our
pulp and paper mills is consumed in boilers
to generate high-pressure steam, which
is used to generate electric power and heat.
The latter is used to soften and separate
wood fibers from each other and to dry
pulp and paper.
Boilers can run on fossil fuels, but they
can also use biomass — bark and lignin
— which are byproducts of making pulp.
In 2006, biomass fuel generated:
• 72 percent of our power in our pulp
and paper mills
• 60 percent of our energy supply at
our wood products facilities
During 2006, Weyerhaeuser entered into
several transactions involving the sale of
“Green Tags.” A “Green Tag” is a renewable
energy certificate representing the environmental attributes associated with generating energy from renewable sources,
including biomass fuel. The energy associated with the sale of these renewable energy credits is estimated to be less than
1 percent of the total biomass energy used
by the company.
We are also pursuing other alternatives
to fossil fuels. Our Grande Prairie, Alberta,
cellulose fibers mill has installed a hydrogen pipeline. The mill will use less natural
gas for its lime kiln, resulting in a reduction
in carbon dioxide emissions.
Increasing the use of biomass-based
fuels and reducing our reliance on fossil
fuels will reduce carbon dioxide in the
atmosphere.
Chevron and Weyerhaeuser create
biofuels alliance.
In April 2007, we announced a letter of
intent with Chevron Corporation to jointly
assess the feasibility of commercializing
the production of biofuels from cellulosebased sources. The alliance will focus
on researching and developing technology
that can transform wood fiber and other
nonfood sources of cellulose into economical, clean-burning biofuels for cars and
trucks. Feedstock options include a wide
range of materials from our existing forest
and mill system and cellulosic crops
planted on our managed forest plantations.
The partnership reflects the view that
cellulosic biofuels will fill an important role
in diversifying the nation’s energy sources
and addressing global climate change by
providing a source of low-carbon transportation fuel. Many states nationwide are seeking opportunities to diversify fuel sources
with secure, renewable, low-carbon and
environmentally sustainable alternatives.
Ethanol produced from biomass such as
forest and agricultural waste does not present a conflict with food supply sources
such as corn and is considered greenhousegas-neutral when derived from sustainable
management practices, providing climate
change benefits.
Mills enhance energy efficiency.
Weyerhaeuser mills are steadily improving
their energy efficiency. In 2006, we used
23 percent less energy to produce a ton of
product compared with 1999.
We continue to collaborate with federal
and regional agencies and organizations to
expand our knowledge of energy efficiency
opportunities. In 2006, Weyerhaeuser
co-sponsored with Industrial Efficiency Alliance, Department of Energy and Bonneville
Power Administration a pumping efficiency
program using the systems approach.
More than 30 Weyerhaeuser engineers and
process owners participated. The purpose
of this program is to allow those facilities
to upgrade their efficiency skills so the new
techniques can be applied as part of a facility’s normal optimization efforts.
Weyerhaeuser is systematically evaluating
energy use within our operating facilities
to identify opportunities for efficiencies and
savings. In 2006, each of our businesses
designated efficiency champions to work
closely with the corporate energy management group in prioritizing facilities to focus
energy efficiency efforts. This approach has
led to an increased awareness within our
company of energy efficiency opportunities,
including both behavioral and technology
improvements.
We have already identified and are implementing projects that have the potential to
reduce purchased electricity by 4 percent,
and we believe that savings of 10–15
percent are achievable. Examples of our
progress to date include:
• One plant implemented compressed
air measures and balanced the building
air flow to improve the working environment, resulting in a savings of $50,000
per year.
MOST OF OUR ENERGY CAME
FROM GREENHOUSE-GAS-NEUTRAL
BIOMASS FUEL
Percentage of energy
consumed that was generated
from biomass fuel, 2006
PULP AND PAPER
MILLS
28%
72%
WOOD PRODUCTS
FACILITIES
40%
60%
Biomass fuel
Other fuel sources
• Another mill installed a load management tool that allows the mill to optimize its variable rate power contract, with
a savings of about $300,000 per year.
• A lighting opportunity has reduced one
site’s annual lighting load by more than
6,500,000 kWh, or enough to supply
power to 650 average homes for a year.
ENERGY USE
Millions of BTUs per ton of production at Weyerhaeuser’s U.S. and Canadian
facilities
Pulp and paper
Wood products
Packaging1
2002
2003
2004
2005
2006
24.4
2.4
NA
24.8
2.5
NA
24.1
2.6
1.1
24.4
2.6
1.0
23.9
2.5
1.3
41
GREENHOUSE GAS EMISSIONS DECLINE
(In million metric tons CO2e*)
8
For details on our energy use, visit
www.wy.com/sustainability/06report/web.
See Environmental Footprint >
2002–2006 Energy Use.
7
GREENHOUSE GAS REDUCTION
6
5
4
3
2
1
0
’02
’03
’04
’05
’06
* Note: Our commitment to reduce greenhouse gas emissions uses a year 2000
baseline value of 7.1 million metric tons
CO2e.
Weyerhaeuser commits to reduce
greenhouse gas emissions by 40 percent.
In 2006, we committed to reduce GHG
emissions by 40 percent by 2020 using
a 2000 baseline — the most aggressive
target in our industry. We will be using
more biomass to meet our energy needs
in our pulp and paper operations. As a
result, by 2020 we expect to:
• Make our pulp mills essentially energy
self-sufficient
• Decrease our purchased-energy costs
by 50 percent
• Reduce our annual carbon dioxide
emissions by 2.8 million metric tons
The result is a win-win for shareholders and
sustainability. Shareholders benefit from
lower energy costs, and the environment
benefits from lower emissions of greenhouse gas. Biomass fuel from sustainably
managed forests is considered to have a
neutral effect on greenhouse gases in the
atmosphere because the regenerating
forest absorbs the carbon dioxide released
by burning the fuel. Therefore, by deriving
the majority of our energy from biomass
rather than fossil fuel, we avoid releasing
additional carbon dioxide.
The GHG reduction goal follows several
initiatives we took in 2006 to manage
greenhouse gas emissions. They include:
• Evaluating the greenhouse gas emissions from proposed energy-related
investments.
• Improving energy efficiency and productivity by reducing dependence on fossil fuels — for example, by using cogeneration
systems and greenhouse-gas-neutral
biomass fuels to meet mill energy needs.
• Improving our energy efficiency in our
manufacturing processes.
42
Reduction efforts are adding up.
Our efforts are reducing Weyerhaeuser’s
greenhouse gas emissions footprint. Direct
emissions in 2006 were 6.4 million metric
tons, which was 700,000 metric tons
less than in 2000, our base year. This is a
decrease of 10 percent. In addition, our
indirect emissions in 2006 were 2.8 percent
lower than in 2000.
Last year, we also sequestered approximately 16.2 million metric tons of GHGs —
carbon dioxide equivalent, or CO2e — in our
forests and products. This amount was
reduced by 0.8 million metric tons of CO2e
adjustments, reflecting the sale of more
than 400,000 “Green Tags” (see Page 40).
Hence, we sequestered about 2.4 times
more carbon dioxide than we emitted, effectively removing approximately 9 million
metric tons of CO2e from the atmosphere.
Measured in terms of intensity (emissions
per metric ton of production), our direct
greenhouse gas emissions were approximately 9 percent below the 2000 baseline.
Between 2000 and 2006, we
achieved a 10 percent reduction in
greenhouse gas emissions.
Our greenhouse gas inventory process adheres to the guidelines published by the
Greenhouse Gas Protocol Initiative’s Greenhouse Gas Protocol, Revised Edition,
and its associated forest products industry
greenhouse-gas-quantification methods.
The initiative is a multistakeholder partnership convened by the World Business Council for Sustainable Development and the
World Resources Institute.
We previously reported a 13 percent reduction based on our 2005 data. As part of
adhering to the above protocol, in 2006, we
adjusted our inventory for divestitures completed in 2005. This adjustment restated
prior year data and resulted in a 2006
reduction of 10 percent compared with our
2000 baseline.
For our greenhouse gas emissions
data, visit www.wy.com/sustainability/
> GHG Emissions.
Forest management practices contribute
positively to carbon inventory.
Because forests both sequester and release carbon in unequal amounts over time,
forest carbon reporting has special accounting issues. The rate of forest carbon
sequestration is subject to seasonal variation, annual variation due to climate and
disturbance impacts, age-related variation
due to the natural cycle of tree growth,
and effects from forest management practices such as fertilization and harvesting.
Although these processes are complex,
there are certain trends that can be estimated across a large landscape. We have
taken a conservative approach to estimating carbon sequestration on our lands by:
• Reporting carbon sequestration only on
lands owned by Weyerhaeuser.
• Assuming that when trees are harvested, the carbon they store is released for
the purposes of calculating carbon sequestration in sustainable forest management. On a landscape level, this
carbon is offset by annual forest growth
on the remaining lands. We, therefore,
consider our sustainably managed forests to be carbon-neutral. This assumption is reaffirmed in the US DOE 1605(b)
guidelines for voluntary greenhouse gas
emissions reporting.
• Including only afforestation, conservation
zones and riparian areas in our GHG
inventory as areas that sequester carbon.
During 2006, these lands accounted for
2.8 million metric tons of sequestered
CO2e.
Forest products sequester carbon.
Some of the carbon stored in trees harvested from sustainably managed forests is
captured in our products, not lost to the
atmosphere. Wood products store carbon
during their useful life, limiting the amount
of carbon dioxide in the atmosphere. We
use a third-party 100-year-decay method for
quantifying long-term forest-product carbon
sequestration, which for 2006 indicates
that we totaled 13.4 million metric tons of
product-sequestered CO2e.
FINANCIAL IMPLICATIONS, RISKS
AND OPPORTUNITIES OF CLIMATE CHANGE
We recognize that climate change poses
both potential risks and commercial opportunities, and we have strategies in place
to address these challenges and capture
future opportunities. Given our commitment
to reduce greenhouse gas emissions by
40 percent by 2020 relative to our emissions in 2000, we anticipate that we
will be well positioned to respond to future
governmental requirements to reduce
greenhouse gas emissions.
At present, our operations are largely based
in countries that have yet to implement
mandatory programs for reducing greenhouse gases. Some countries, such as Canada and Uruguay, are signatory to the Kyoto
Protocol, and others, such as the United
States and Australia, are not. But in all
cases, public policy is moving toward adopting a mandatory approach to address the
challenges of climate change through programs that will likely require the reduction of greenhouse gas emissions. We have
designed our climate change strategy to
meet likely future regulatory obligations.
There are, however, other risks that may be
related to climate change.
Reduction in
GHG emissions in 2006 from
year 2000 levels
10%
Millions of metric tons
of product-sequestered Co2e
13.4
Weather-related risks capable of affecting
the company’s assets — standing timber
and manufacturing facilities — have long
been at the core of our business risk management practices. We manage our timberlands for a variety of risks, including
losses from storm blow-down, pest infestation, fire, drought and precipitation. We
locate our forestlands in climatically advantaged geographies with histories of a manageable incidence of storms and drought.
We use regionally adapted sustainable
forest management practices to reduce the
effects of drought on regeneration, and we
use thinning to reduce the potential effects
of drought and insect attack. We also use
regionally adapted varieties of tree species
to increase the ability of our timber stands
to withstand the weather extremes that
can occur over the multidecade growth period for forests.
We regularly update our forest timber inventories, growth projections, harvest schedules and planting activities to account
for potential and actual annual losses from
43
WATER QUALITY DISCHARGES
SINCE 2002
PULP AND PAPER MILLS —
WATER-QUALITY MEASURES
Estimated discharge of selected pollutants1 in pounds per ton of production
at Weyerhaeuser’s U.S. and Canadian pulp
and paper mills
5
extreme weather. Logging and replanting
schedules are also adjusted to account for
weather-induced conditions that could
delay either activity. In making these adjustments, we are able to draw on more than
100 years of experience, state-of-the-art
silviculture, and the most up-to-date statistical methods to quantify these risks by
region.
Climate change initiatives
Weyerhaeuser supports and is actively involved in national and international climate
change policy initiatives, including:
4
3
2
• The American Forest & Paper Association’s commitment to the U.S. Department of Energy’s Climate VISION
program
1
0
’02
’03
’04
’05
’06
Biochemical oxygen demand
Total suspended solids
1. Treated wastewater.
2. In March 2007, Weyerhaeuser’s fine
paper business and related assets
were combined with Domtar Inc. to create a new fine paper company, Domtar
Corporation. For more information, see
Page 6 or our 2006 Annual Report
and Form 10-K posted at investor.weyerhaeuser.com.
• The Forest Products Association
of Canada’s discussions with Canadian
officials to develop equitable, balanced
approaches to meet Canada’s commitments under the Kyoto Protocol
• The Business Environmental Leadership
Council for the Pew Center on Global
Climate Change
• The World Business Council for Sustainable Development Energy & Climate
focus area core team
• The U.S. Business Roundtable’s Climate
Resolve and S.E.E. Change programs
• The Washington State Climate Action
Task Force
AIR QUALITY
Our air emissions have been steadily
declining. Air emissions from Weyerhaeuser
facilities come primarily from two sources:
• Industrial boilers that burn fuel to produce electricity and steam and recover
chemicals used in the pulping process
• Airborne chemicals released in the production of wood, pulp and paper products
Boiler replacements and upgrades at pulp
and paper mills have a positive effect on
air quality. Since 1999, our pulp and paper
facilities have reduced their SO2 emissions
by 24 percent and their particulate matter
emissions by 74 percent. In our wood prod-
44
ucts mills, Weyerhaeuser has reduced air
emissions of volatile organic compounds
by 44 percent since 1999. This trend is the
result of process modifications and the
use of lower-emitting additives as well as
pollution-control equipment that has captured or destroyed a significant amount of
emissions.
Since 1999, our wood products
and pulp and paper facilities have
reduced air emissions of particulate matter per ton of production
by 71 percent and nitrogen oxides
by 23 percent.
To learn about our limited use of methyl
bromide, visit www.wy.com/sustainability/
> Methyl Bromide.
WATER QUALITY
We continually work to improve water quality, in particular by reducing biodegradable
organic materials in wastewater. When left
untreated, biodegradable organic materials
can contribute to low dissolved oxygen
levels in receiving waters, which may harm
some aquatic organisms. High levels of
untreated solids, measured as total suspended solids, can reduce river clarity,
inhibit photosynthesis, and damage fish
and aquatic insect sediment habitat.
We also work to protect water quality in
areas where we grow and manage timber.
We grade and maintain roads so runoff
is channeled to the forest floor, keeping
silt away from streams. We build culverts
and bridges to allow fish passage, and
we seed exposed road banks with grasses
to prevent erosion.
To see more about our efforts to
improve water quality, visit www.wy.com/
sustainability/06report/web. See Environmental Footprint > Water & Dioxins.
WATER USE AND CONSERVATION
Weyerhaeuser recognizes water consumption and water quality as global social and
environmental issues.
Making pulp and paper requires large volumes of water, and we are working on ways
to reduce water consumption in our operations. Since 1990, Weyerhaeuser has
reduced the amount of water required to
produce a ton of pulp and paper by 48 percent — from 19,430 gallons to 10,064
gallons. The water we use in the manufacturing process is treated and returned
to the environment.
As part of our membership in the U.S.
Business Roundtable S.E.E. Change initiative, we are working to develop a water
consumption reduction goal.
We also monitor our impact on water tables
in our forestry operations. For instance,
in Uruguay, where we’ve planted trees on
former grazing land, we initiated a study in
1999 to determine the effect of the land
use change on the region’s water table. Since
then, we’ve collaborated with a Uruguayan
organization and North Carolina State University to determine the effects of change
in land use, including annual water yield,
peak runoff rates, and water quality.
Since 1990, Weyerhaeuser has
reduced the amount of water
required to produce a ton of pulp
and paper by 48 percent.
PULP AND PAPER MILLS — AIR-QUALITY MEASURES
Estimated pounds emitted per ton of production at Weyerhaeuser’s U.S.
and Canadian pulp and paper mills1
Nitrogen oxides
Particulate matter
Sulfur dioxide/sulfur
Total reduced sulfur
2002
2003
2004
2005
2006
4.5
2.0
3.3
0.3
4.5
1.9
3.2
0.3
4.4
2.0
2.6
0.3
4.5
1.6
2.7
0.5
4.4
1.5
2.5
0.1
1. In March 2007, Weyerhaeuser’s fine paper business and related assets were combined with Domtar
Inc. to create a new fine paper company, Domtar Corporation. For more information, see Page 6 or our
2006 Annual Report and Form 10-K posted at investor.weyerhaeuser.com.
WOOD PRODUCTS FACILITIES — AIR-QUALITY MEASURES
Estimated pounds emitted per ton of production at Weyerhaeuser’s U.S.
and Canadian wood products facilities
Carbon monoxide
Volatile organic compounds
Particulate matter
Nitrogen oxides
2002
2003
2004
2005
2006
3.7
1.4
1.0
0.5
3.1
1.4
0.9
0.5
2.9
1.1
0.8
0.5
2.4
1.3
0.7
0.5
3.1
1.3
0.8
0.6
CORRUGATED PACKAGING AND BAG PLANTS — AIR-QUALITY MEASURES
Estimated pounds emitted per ton of production at Weyerhaeuser’s U.S. corrugated
packaging and bag plants
MANAGING OUR
TRANSPORTATION IMPACT
Weyerhaeuser uses a variety of modes of
transportation for our raw materials and
finished products. We rely primarily on third
parties to meet our transportation needs,
but also operate our own systems. For
example, we operate Westwood Shipping
Lines, a subsidiary that provides custom
transportation of containers, forest products and other cargo to Pacific Rim countries.
Carbon monoxide
Particulate matter
Nitrogen oxides
Volatile organic compounds
20041
2005
2006
0.07
0.11
0.10
0.19
0.06
0.13
0.09
0.20
0.06
0.14
0.08
0.16
We have a 5,500-railcar private fleet and
five short-line railroads that carry more than
90,000 carloads a year. Our private truck
fleet includes more than 500 trucks that
cover more than 26 million miles per year.
During 2006, we combined two previously
separate organizational units — Procurement and Logistics. Centralization of our
various modes of transport will enable us
45
Millions of vehicle miles
reduced from total commute to
headquarters
1.2
Equivalent C02 emission
reduction in kilograms
415,000
WE’VE REDUCED WATER USE SINCE 2002
Total water use: Estimated gallons of water used per ton of production at
Weyerhaeuser’s U.S. and Canadian facilities
Pulp and paper mills
total wastewater discharged1
2002
2003
2004
2005
2006
11,080
10,960
10,600
10,750
10,064
113
120
119
99
87
–
852
73
73
Wood products facilities
water use
Corrugated packaging, bag plants
and stand-alone converting operations
water use
–
1. Wastewater discharged is used as a surrogate measurement for water usage.
to increase efficiencies and capture significant cost savings.
Our modern shipping fleet protects
ocean waters.
Weyerhaeuser owns four shipping vessels
that are five years old or less and are
operated in compliance with Det Norske
Veritas’ Clean Class notation. Air and oceanwater quality have been improved due
to the features of these ships, including:
• Reduced engine emissions
• Use of low sulphur fuels
• Ballast water, fuel oil and garbage
management plans
• Systems to exchange ballast at sea,
keeping foreign species out of local
ecosystems
• Double-hulled construction with inboardlocated fuel tanks
• Less toxic paint on the ship bottom
Westwood is also testing a new system
on one vessel that will allow for a more
complete combustion of fuel, avoiding formation of soot and visible smoke.
Headquarters employees reduce
dependence on cars.
More than half of our corporate headquarters region staff are enrolled in the Weyerhaeuser Freeways program. The program
encourages people to commute using vanpools, carpools and shuttle services to
46
public-transit hubs, or by walking or biking.
In 2006, this program reduced the total
vehicle miles driven to and from work
by 1.2 million, which reduced emissions of
carbon dioxide equivalents by more than
415,000 kilograms.
REDUCING RISKS ASSOCIATED
WITH CHEMICALS
Reducing chemical risk continues to be a
focus at Weyerhaeuser. We have updated our chemical management standard,
setting clear expectations for “no new
purchases” of products containing polychlorinated biphenyls, asbestos or leadbased paints and “restricted use only” of
products containing chlorinated solvents,
mercury compounds or aerosol propellants.
In 2006, we continued our focus on reducing the overall number of chemical products
used through improved inventory management and on improving the accuracy of our
chemical product inventory by eliminating
outdated records. These efforts reduce
the risk of chemical exposures and improve
employee access to chemical product
information through Material Safety Data
Sheets.
In our wood products organization, businesswide goals for chemical management
have driven a dramatic chemical reduction
improvement. That business has reduced
the total number of chemicals in our MSDS
database by more than 65 percent between
2004 and 2006. Our goal is to reduce the
total number of chemicals purchased by
using the same set of approved products
across multiple sites. In our wood products
business, we have improved the number
of products used at a single location from
43 percent to less than 20 percent between
2004 and 2006.
Companywide, we continue to focus on
reducing chemical risk, including:
• Reducing and eliminating the use of
certain high-risk chemicals identified in
our chemical management standard
• Continuing our chemical reduction efforts
through improved inventory management of all chemical products and better
MSDS management
• Seeking less hazardous substitutes for
chemicals and using these across the
company
U.S. TOXIC RELEASE AND
CANADIAN NATIONAL POLLUTANT
RELEASE INVENTORIES
Every year, we report the release of certain
chemicals into the air, water and land
under the U.S. Toxic Release Inventory and
the Canadian National Pollutant Release
Inventory. With rare exceptions, these are
lawfully permitted releases that are made
in a controlled fashion after steps have
been taken to reduce the emissions and
mitigate their effects.
Both inventories mandate that we report
total emissions without regard to changes
in production levels.
To view a five-year chemical-bychemical breakdown of our TRI and NPRI
emissions, visit www.wy.com/sustainability/
06report/web. See Environmental
Footprint > TRI/NPRI.
47
U.S. TOXIC RELEASE INVENTORY
CANADIAN NATIONAL POLLUTANT RELEASE INVENTORY
Estimated tons released from Weyerhaeuser’s U.S.
manufacturing facilities
Estimated metric tons released from Weyerhaeuser’s
Canadian manufacturing facilities1
Compound
Methanol
Ammonia
Manganese compounds
Hydrochloric acid
Acetaldehyde
Formaldehyde
Nitrate compounds
Sulfuric acid
Barium compounds
Phenol
Zinc compounds
Lead and lead compounds
Chloroform
Cresol (mixed isomers)
Chlorine
Chlorine dioxide
Mercury and mercury compounds
Dioxin and dioxin-like compounds — in grams2
Other compounds
TOTAL U.S. Weyerhaeuser operations
20051
6,630
1,055
633
593
494
392
164
145
117
97
88
49
41
36
19
22
0.07
3313
126
10,702
1. 2005 is the most recent reporting period.
2. Dioxin is presented in grams, while other chemicals are presented in tons.
All required dioxin isomers and compounds are reported regardless of
their relative toxicity.
3. Amount shown includes disposal of materials as part of approved remediation activities as well as from normal operational discharges. The dioxin
in materials disposed as part of remediation activities was created by
discontinued processes.
Compound
20052
Methanol
Ammonia
Phosphorous (total)
Formaldehyde
Manganese
Hydrogen sulfide
Acetaldehyde
Chlorine dioxide
Zinc
Hydrochloric acid
Acrolein
Phenol
Sulfuric acid
Cresol (isomers)
Ethylene glycol
Isopropyl alcohol
Chloroform
Chlorine
Methylenebis (phenylisocyanate) — MDI
Lead compounds
Hexavalent chromium compounds
Polycyclic aromatic hydrocarbons
Arsenic compounds
Nitrate ion
Cadmium compounds
Dioxin and dioxin-like compounds — grams3
Nonylphenols and nonylphenol ethoxylates
Mercury compounds
1,159
564
438
331
285
245
142
64
27
61
32
29
23
–
7
–
–
–
4
2
1.2
0.9
0.7
0.6
0.4
0.03
–
–
TOTAL Canadian Weyerhaeuser operations
3,4494
1. Dashes indicate a chemical was not required to be reported for these
years or there was no quantity to report.
2. 2005 is the most recent reporting period.
3. Dioxin is presented in grams of toxic equivalence.
4. The sum of the individual pollutants may not be equal to the total due
to rounding.
48
2006 EMISSIONS DATA FOR OUR PULP, PAPER3 AND CONTAINERBOARD MILLS
Per ton of production
Total suspended solids
(pounds)
Biochemical oxygen
demand (pounds)
Adsorbable organic
halides (AOX) (pounds)
Beneficially applied to
land (pounds)
Other beneficial use
(pounds)
Burned for energy
(pounds)
Disposed as hazardous
waste (pounds)
1.2
1.0
0.9
0.05
5.0
2.9
2.2
–
8
43
81
1,231
0.009
Cedar River
(Cedar Rapids), Iowa1
–
–
–
–
0.7
1.4
18.0
–
92
27.0
10
–
–
Columbus, Miss.
4.3
1.7
0.5
0.04
9.5
1.3
1.3
0.34
268
19
–
3,508
0.001
Columbus Modified Fiber,
Miss.1
0.2
1.1
0.001 –
0.01
0.02
1.0
–
–
–
10
–
–
Cosmopolis, Wash.
2.6
2.6
5.0
0.02
51.7
42.7
48.0
1.76
182
94
–
3,526
0.055
Dryden, Ontario
3.8
0.9
0.6
0.33
23.1
6.6
4.7
0.54
99
–
–
2,628
0.384
Flint River (Oglethorpe), Ga.
4.8
1.9
1.3
0.08
7.3
3.3
3.1
0.13
90
–
–
4,895
–
Grande Prairie, Alberta
5.1
0.9
8.8
0.06
11.3
3.5
2.3
0.47
178
–
82
3,797
0.025
Landfilled (pounds)
Wastewater discharged
(thousands of gallons)
Albany, Ore.
Total reduced sulfur
(pounds)
Facility
Sulfur oxide
compounds (pounds)
Waste management
Particulate matter
(pounds)
Water quality
Nitrogen oxide compounds
(pounds)
Air emissions
Hawesville, Ky.
2.4
0.7
0.2
0.06
10.8
5.5
4.4
0.19
22
213
–
2,526
0.001
Henderson, Ky.1
0.3
–
–
–
1.5
9.7
14.8
–
185
–
–
–
–
Johnsonburg, Pa.
5.4
0.4
1.0
0.04
13.2
2.1
2.6
0.36
19
293
43
2,465
0.008
Kamloops,
British Columbia
6.3
7.3
0.3
0.03
21.0
4.7
4.7
0.78
178
–
14
3,918
0.003
Kingsport, Tenn.
3.7
0.7
0.4
–
7.4
6.1
2.5
0.18
192
–
–
2,133
0.003
Longview, Wash.2
3.3
0.3
1.3
0.03
15.1
2.7
1.4
0.53
129
–
44
1,569
0.020
Marlboro (Bennettsville),
S.C.
4.1
0.6
0.1
0.03
11.9
2.8
3.3
0.30
17
91
15
3,174
0.009
New Bern, N.C.
4.5
3.1
10.7
0.33
16.6
1.3
2.4
0.20
11
10
401
3,481
0.048
Pine Hill, Ala.
5.0
1.8
4.3
0.38
7.7
3.6
2.7
–
–
315
–
2,038
0.004
Plymouth, N.C.
11.1
4.4
10.3
0.37
20.4
3.0
3.5
0.30
229
–
42
3,192
0.003
Port Hueneme (Oxnard),
Calif.1
0.4
–
–
–
0.7
0.4
0.2
–
166
–
64
–
0.120
Port Wentworth, Ga.
6.8
1.0
5.0
0.16
14.3
4.3
1.4
0.46
12
42
171
6,089
0.008
Prince Albert,
Saskatchewan
5.1
0.8
0.2
0.15
19.4
4.0
5.1
0.02
445
–
–
3,332
1.174
Red River (Campti), La.
2.6
0.5
0.3
0.02
5.4
5.1
4.3
–
104
–
–
1,287
0.001
Rothschild, Wis.
5.3
0.9
0.3
–
17.4
7.2
2.8
0.05
25
124
4
298
0.002
Springfield, Ore.
3.0
0.8
0.6
0.15
5.9
2.8
1.1
–
91
53
91
1,517
0.060
Valliant, Okla.
5.7
1.0
3.1
0.32
5.0
3.0
3.4
–
171
–
–
1,201
–
1. Wastewater sent to publicly owned treatment works.
2. Includes production and emissions of NORPAC, a joint–venture newsprint mill.
3. In March 2007, Weyerhaeuser’s fine paper business and related assets were combined with Domtar Inc. to create a new fine paper company. Domtar Corporation.
For more information, see Page 6 or our 2006 Annual Report and Form 10-K posted at investor.weyerhaeuser.com.
49
DELIVER
SECTION 5
PRODUCT
RESPONSIBILITY
Marian Herz, cellulose fibers market
director, displays a new nonwoven
biodegradable material — meltblown
lyocell — made with our kraft pulp.
WE RELEASE THE POTENTIAL IN TREES TO SOLVE IMPORTANT
PROBLEMS FOR PEOPLE AND THE PLANET. WE ARE UNIQUELY
QUALIFIED TO DELIVER INNOVATIVE AND SUSTAINABLE SOLUTIONS TO MEET THE NEEDS OF OUR CUSTOMERS.
PAPER RECOVERY AND RECYCLING
The growth of our recycling business parallels the development of paper recycling
in the United States. In 2006, the amount
of paper recovered and reused in the
United States climbed to an all-time high of
53.4 percent, and demand for recovered
paper continues to grow.
WE COLLECTED 6.5 MILLION TONS
OF PAPER IN 2006
Since entering the paper recycling business in 1974, we’ve steadily increased
how much paper we recover. Today, we
are one of the world’s largest recyclers of
paper.
In 2006, we collected 6.5 million tons of
paper, about 12 percent of the paper recovered in the United States — or enough
to fill a train with 130,000 freight cars. Our
paper and packaging mills rely on recycled
paper for a significant portion of their raw
material. We sell the remaining recovered
paper to other mills around the world to
make paper products with recycled content.
Also in 2006, we:
• Used 57 percent of the paper we
collected to make new paper and paperboard products
• Made our products with 33 percent postconsumer recycled content (measured
as an average across all grades of paper
and packaging). In one product line, containerboard, it averaged 50 percent. Our
other product lines with recycled-contentpaper products are office and printing
papers, bags and newsprint.
PRODUCT CERTIFICATION
We’ve certified nearly all of our North
American-made forest products to sustainable forestry standards. Our goal is to
make that status clear by using labels
on all qualifying products by the end
of 2008. See Page 52 for more infor-
mation
Weyerhaeuser is one of the
world’s largest recyclers of paper.
ACHIEVES
Our success in paper recycling reflects a
commitment to conserve natural resources
and recognition that recovered paper is
an important raw material in producing new
paper and packaging products. Our use of
recovered paper keeps it out of landfills
and ensures we get the maximum value out
of wood fiber.
Can all paper eventually be made from
recovered paper? The answer is no.
Wood fiber gradually wears out, and a single fiber in a sheet of paper can be recycled
only between four and 10 times. Beyond
that limit, the fiber loses its strength and
is no longer useful in making new paper.
Papermakers must introduce a continuous
stream of new fiber to replace fiber weakened through repeated recycling.
OUR PROMOTION EFFORTS HELP
BOOST RECOVERY RATES
An ongoing challenge is to ensure that the
supply of recovered paper — particularly
high-quality office paper — is sufficient to
meet future demand. Education and outreach are important parts of our effort
to promote recycling and increase recovery
51
rates. Weyerhaeuser works with partners
ranging from local communities to large
industries to encourage high rates of paper
recovery.
COLLECTION AND REUSE OF
RECOVERED PAPER
(In millions of tons)
8
SUSTAINABLE FORESTRY
PRODUCT LABELING
6.7
6.7
6.5
4
3.7
3
4
6.2
4
4.1
5
6.3
6
4.3
7
2
1
0
’02
’03
’04
’05
’06
Total paper collected by Weyerhaeuser
Total paper reused by Weyerhaeuser1
(remainder is used by others)
We support labeling our products to help
educate customers that the products they
are purchasing come from sustainably
managed sources. Nearly all of our North
American-made forest products are certified to sustainable forestry standards. By
the end of 2008, our goal is to use labels
on all qualifying products to make that
status clear.
Percentage of North American-made
products certified
In early 2007, Weyerhaeuser became one
of the first corrugated packaging companies allowed to use the SFI “Certified
Sourcing” label on all of its U.S.-produced
packaging. Our packaging exceeds the
requirement that two-thirds of the raw material must be from mills with certified
wood fiber procurement systems or from
recycled sources.
100
LIFE-CYCLE ASSESSMENTS
1. Includes NORPAC, a joint venture of
which Weyerhaeuser owns 50 percent.
PRODUCT CERTIFICATION
88
80
60
65
52
40
20
0
20
28
34
0
’00
’01
’02
’03
’04
’05
’06
Weyerhaeuser uses or participates in lifecycle assessments of our products based
on business needs. LCA is a useful tool
with complex methodology and is not always
feasible.
We participated as a technical partner in
LCA research conducted for the Japan
Association for Milkcarton Recycling and
the Committee on Milkcarton Environmental Issues. These organizations have conducted significant life-cycle analyses on
different types of packaging along the complete life cycle of a milk carton, from forest to dairy to retail. In our wood products
business, we supported a consortium of
15 universities and research institutions in
their LCA comparing wood, steel and concrete housing (see “green building” below).
GREEN BUILDING
Green building is the practice of increasing
the efficiency with which buildings and
their sites use energy, water and materials,
as well as reducing impact on human
health and the environment through better
52
SECTION 5 PRODUCT RESPONSIBILITY
siting, design, construction, operation,
maintenance and removal. It encompasses
the complete building cycle.
Weyerhaeuser supports the concept
of green building. We support using a lifecycle assessment approach to determine
the total environmental impact of specific
building materials, from resource extraction
to demolition and disposal.
The Consortium for Research on Renewable Industrial Materials found that for a
typical house, wood framing:
• Used 17 percent less energy than steel
construction
• Used 16 percent less energy than
concrete construction
• Generated 26 percent less greenhouse
gas emissions than steel and 31 percent
less than concrete. It also generated
fewer air pollutants.
Wood framing generates 26 percent
less greenhouse gas emissions
than steel and 31 percent less than
concrete.
Additionally, carbon stored in trees harvested from sustainably managed forests
is captured in our products. Wood products
store carbon during their useful life, limiting the amount of carbon dioxide in the
atmosphere.
Learn more about wood versus steel
and concrete construction at www.corrim.
org/factsheets/fs_02/index.asp.
WEYERHAEUSER GREEN BUILDING ACTIVITIES
Many of our business segments are
recognized as leaders in their fields and for
their commitment to green building.
Our building subsidiaries are constructing
energy-efficient homes.
Weyerhaeuser Real Estate Company’s five
homebuilders are at the forefront of building energy-efficient homes. During 2007,
we will seek broad input from our customer
base to understand how we can further
our industry-leading position as an environmentally sensitive production homebuilder.
SUSTAINABLE FORESTRY PRODUCT LABELING
Label Type
Facilities Authorized to Use
Sustainable Forestry Initiative®
Certified Participant product
label
• All primary U.S. manufacturing facilities that make
hardwood lumber, softwood lumber, plywood, oriented
strand board, TimberStrand®, Parallam®, pulp and paper
• Two primary manufacturing facilities in Canada
Canadian Standards
Association label
• Five of our primary softwood lumber mills
• Three primary pulp and paper* mills
Sustainable Forestry Initiative
Fiber Sourcing label
• Three I-joist facilities
• All corrugated container facilities
• All fine paper* secondary manufacturing facilities
*Note: In March 2007, Weyerhaeuser’s fine paper business and related assets were combined with Domtar
Inc. to create a new fine paper company, Domtar Corporation. For more information, see Page 6.
Pardee Homes builds houses in Las Vegas,
Nev.; Los Angeles and San Diego, Calif.
Pardee was the first U.S. multiregion builder
to commit to building Energy Star homes,
which are at least 30 percent more efficient
than homes built to standard federal
building codes. In addition to conventional
energy-saving features, Pardee offers photovoltaic systems in many neighborhoods,
and its Living Smart™ program helps
buyers understand the benefits of living in
sustainably built homes.
Efforts such as these earned Pardee
several awards in 2006, including:
• Special recognition from the U.S. EPA
for “sustained excellence” in the Energy
Star program. Pardee has been named
“Energy Partner of the Year” for four
straight years.
• An award for Production Home Builder
of the Year in the 2006 National Green
Building Awards program sponsored by
the National Association of Home Builders.
Additional accomplishments of Weyerhaeuser’s homebuilders include:
• Quadrant Homes was the first major
Washington state homebuilder certified
as an Energy Star builder. And it was
the first Seattle-area builder certified as
Built Green, with a three-star rating given
by the Master Builders Association of
King and Snohomish counties.
• Trendmaker Homes was one of the first
Energy Star builders in its Houston,
Texas, market.
• Winchester Homes is taking the lead as
an Energy Star builder in Virginia and
Maryland, where fewer than 5 percent of
builders have adopted the program. Every
one of Winchester’s new luxury-class
Camberley Homes will be built to Energy
Star standards.
Innovations bring green building
concepts to customers.
• Our iLevel™ business’s NextPhase™ Site
Solutions dramatically reduces job site
waste and increases construction site
efficiency. The package of software, products, equipment and services delivers
customized home plans and premanufactured panel sections directly to builders.
• In early 2007, we partnered with Cherokee Investment Partners and donated
structural framing materials to build the
National Homebuilding Mainstream
GreenHome™ in Raleigh, N.C. This home
will provide the average homebuilder with
a model for residential green building
that reduces energy usage and uses products from renewable, sustainably managed resources.
53
Learn more about our iLevel solutions
at www.ilevel.com.
Learn more about the National
Homebuilding Mainstream GreenHome
at www.mainstreamgreenhome.com.
GREEN BUILDING STANDARDS
Standards for rating a building’s “greenness” have been established by several
organizations, using point systems to rate
energy, water use, materials, design and
more.
Some green building programs are sponsored by state or local governments, and
others are administered by homebuilding
industry associations or by other voluntary
groups.
We support green building standards that
are voluntary, are consensus-based, incorporate life-cycle assessment, and specify
wood products that come from certified
sources. Weyerhaeuser actively supports
the development of green building standards, including Green Globes and the
National Association of Home Builders’
Model Green Home Building Guidelines.
A variety of green building codes exist,
including:
• Green Globes: Green Globes is a webbased green building performance tool
used in Canadian and U.S. nonresidential building markets. It can be customized for specific needs and provides
design guidance that can be used for
self-assessments or verified by third-party
certifiers for use of the Green Globes
logo and brand. The 2006 version fully
incorporates Life-Cycle Assessments into
its assessment building assemblies and
materials. Green Globes also recognizes
the American Tree Farm System, Sustainable Forestry Initiative, Canadian
Standards Association and Forest Stewardship Council certification systems as
certified sustainable sources for wood
building materials.
• LEED: Leadership in Energy and Environmental Design, developed by the U.S.
Green Building Council, is a rating and
third-party certification system for
54
new and existing commercial buildings,
high-rise residential buildings and neighborhood development. The current version of LEED does not give credit to most
U.S.-produced wood products because it
excludes SFI and CSA, the most widely
used certification systems in the United
States. LEED is also in the process of
developing a green building standard for
residential buildings and is integrating
life-cycle assessments into its rating
system.
• NAHB Model Green Building Guidelines:
The National Association of Home Builders’ Model Green Building Guidelines are
voluntary standards designed for mainstream homebuilders. These guidelines
recognize SFI, ATFS, CSA, the Program for
the Endorsement of Forest Certification
Schemes and Forest Stewardship Council
certification programs. Innovative design
credits can be obtained by using an
LCA tool to compare building materials
and use the analysis to determine the
most environmentally preferable product
for that building component.
HEALTH AND SAFETY OF
OUR PRODUCTS
We are committed to ensuring the public
health aspects of our products in the marketplace. Our health and safety risk
management policy states our commitment
to “identify, understand and respond to
public-health impacts of our operations and
the use of our products and services.”
As part of this commitment, we provide our
customers with Material and Safety Data
Sheets for 73 of our most commonly used
products. Health, safety, legal, regulatory
and environmental issues are taken into
account in our development of new products by identifying potential issues and mitigating or resolving any issues before
commercializing a product. Additionally, all
our facilities maintain policies that require
all visitors, including customers, to have a
safety orientation and proper safety gear
before entering the operating portion of the
facility.
View our MSDS at
www.wy.com/environment/msds.
COMPLIANCE OF PRODUCTS
Our food contact packaging materials
comply with the federal Food, Drug and
Cosmetic Act regulations.
REACH, or Registration, Evaluation, Authorization and Restriction of Chemicals, is a
new chemical regulation adopted by the
European Union in December 2006. Weyerhaeuser is affected by this regulation as it
applies to the products that we export
directly into the European Union or where
we sell products to non-EU customers who
then use our products in their sales to
the EU. We are working internally and with
our customers to understand how REACH
applies to our products so that we can register them and comply with REACH requirements.
We are not aware of any significant fines
for noncompliance with laws or regulations
concerning the provision and use of our
products and services.
NANOTECHNOLOGY
Nanotechnology is the art and science
of manipulating matter at the nanoscale
(down to 1/100,000 of the width of a
human hair) to create significant new and
unique materials. Nanotechnology has
many potential applications in the forest
products industry.
Weyerhaeuser is working to address policy
issues, business opportunities and possible health and environmental risks relating to the use of nanotechnology. We are
seeking to enable research and use of nanotechnologies based on an approach that
balances economic, product and process
opportunities with an understanding and
consideration of environmental, health and
safety issues.
GENETIC ENGINEERING
Weyerhaeuser operates seed orchards
where we use the traditional techniques of
selection and cross-pollination to produce
seeds that grow superior trees. We grow
seedlings in our own nurseries as well as
purchase seedlings from others.
Weyerhaeuser does not grow genetically
engineered trees. Genetically engineered
plants are regulated by law, and no genetically engineered tree has been approved
for use in the countries where we operate.
We support continued scientific research
to understand the benefits and risks, and
to ensure safeguards are in place if and
when genetic engineering is used in commercial forestry.
RESPONSIBLE MARKETING AND
COMMUNICATIONS
Our policy in advertising and marketing is
to comply with all applicable laws in the
country where we are communicating. We
apply worldwide the practices adopted
in guidelines issued by the U.S. Federal
Trade Commission. The FTC regulates advertising in the United States, with its main
purpose to prevent consumer deception.
In cooperation with the states and the U.S.
Environmental Protection Agency, the FTC
has published “Guidelines for the Use
of Environmental Marketing Claims.” These
are commonly known as the FTC’s “Green
Guides.” The Green Guides explain FTC
interpretations of federal advertising law.
They also influence court decisions, state
regulation of advertising, Better Business
Bureau responses to complaints about
advertising, and challenges to “green marketing” claims.
resolution forum, we became a member
of the U.S. Council of Better Business
Bureaus’ National Advertising Division in
2006. NAD employs advertising review
specialists who are experienced attorneys
with expertise in claims substantiation,
advertising and trade regulation, litigation
and arbitration. NAD mediates agreements
to resolve advertising disputes but can issue informal rulings and refer unresolved
cases to the FTC.
Learn more about the FTC’s
“Green Guides” at www.ftc.gov/bcp/grnrule/
guides980427.htm.
We have specialized staff in both our
corporate affairs organization and our law
department with expertise on consumer
protection and advertising law. We train our
business marketing managers to comply
with applicable laws and policies, including
the Green Guides, and regularly conduct
centralized reviews of selected advertising
and marketing materials, especially if they
involve environmental marketing claims.
In 2006, to our knowledge, Weyerhaeuser
did not sell products banned in any markets. Company products were the subject
of stakeholder or public debate in the case
of underlying public policy issues related
to forestland management, which are discussed on Page 21.
To increase our level of expertise and
provide access to an alternative dispute
55
CONNECT
SECTION 6
CITIZENSHIP
Ivy Pittman, planer operator, moved into
a new home in McComb, Miss., built
by Weyerhaeuser volunteers after Hurricane Katrina.
BUSINESS CANNOT SUCCEED IN SOCIETIES THAT FAIL, AND
SOCIETIES CANNOT SUCCEED WHEN BUSINESSES DO NOT
THRIVE. AT WEYERHAEUSER, WE KNOW THAT THE COMPANY’S
SUCCESS IS TIED TO THE HEALTH OF BOTH LOCAL AND GLOBAL
COMMUNITIES.
Since the company’s founding in 1900, being a good neighbor and corporate citizen
has been a core value. The jobs we provide
and livelihoods we support are critical to
creating sustainable communities. Communities also benefit through our corporate
philanthropy.
RESPONSIVENESS TO SOCIAL ISSUES
We measure our responsiveness to social
issues as an indicator of corporate citizenship. See Pages 58–59 for more information about the Ron Brown Award for
Corporate Leadership that we received for
our disaster relief efforts following the
2005 Gulf Coast hurricanes.
dation is sharpening its philanthropic focus
to align with company direction and to
address today’s challenges in sustainability.
The need for imaginative, sustainable solutions to the world’s challenges has never
been greater. In partnership with employees and other organizations, the Weyerhaeuser Company Foundation will help
Supporting communities benefits Weyerhaeuser, too. Strong school systems prepare solve important problems for people and
the planet.
a strong work force. Vibrant communities
attract and retain creative people. Employees who volunteer in the community
WEYERHAEUSER VOLUNTEERS
develop skills important to their jobs.
Weyerhaeuser strongly encourages employees to volunteer in our communities and
Weyerhaeuser made the company’s first
supports their volunteer efforts. Through
charitable contribution in 1903. Since the
the Making WAVES (Weyerhaeuser Active
creation of the Weyerhaeuser Company
Volunteer Employees) program, volunteers
Foundation in 1948, company employees
are making a difference across the United
who serve as advisers of the foundation
States and Canada. Making WAVES volhave carefully directed more than $192
unteers, composed of employees, retirees,
million in donations.
friends and family members, are making
In 2007, the Weyerhaeuser Company Foun- our communities better places to work and
EXCEEDS
2006 DISTRIBUTION OF FOUNDATION
GRANTS IN THE UNITED STATES
6% 3%
10%
35%
27%
19%
Education
Civic and community
Health and human services
Environment
Culture and arts
Other
CONTRIBUTIONS PAID IN 2006
(In millions of dollars)
Weyerhaeuser
Company Foundation
Weyerhaeuser
Company
Total
United States
Canada
International
8.2
0.1
0.1
4.2
2.9
0.1
12.4
3.0
0.2
Total
8.4
7.2
15.6
57
live. The Weyerhaeuser Company Foundation honors their commitment by providing
grants to the organizations for which they
volunteer. From adopt-a-parks to mentoring
programs, from rebuilding efforts to days of
caring, together Weyerhaeuser volunteers
contribute their time and talents to respond
to community needs.
ANNUAL WEYERHAEUSER
CHARITABLE GIVING
Includes foundation grants
and direct company contributions
(Millions of dollars paid)
15.6
15.1
14.9
12.7
10
15.9
20
15
5
0
’02
’03
’04
’05
SECTION 6 CITIZENSHIP
In 2006, almost 14,000 Weyerhaeuser volunteers from the United
States and Canada completed
more than 450 projects and contributed nearly 190,000 volunteer
hours.
’06
In addition to Making WAVES, Weyerhaeuser
provides:
CONTRIBUTIONS AS A
PERCENTAGE OF THREE-YEAR
AVERAGE PRETAX EARNINGS
• “Loaned executives” to United Way
• Support to employees who serve on
industry and community boards
3.5
• Volunteer foresters who share their
expertise with family forest owners
3.4
3.0
2.5
Our approach — combining foundation
funding with encouraging employee
involvement — is powerful and effective.
1.3
1.5
1.0
1.6
1.5
1.7
2.0
0.5
’02
’03
’04
’05
’06
In the United States, the Weyerhaeuser
Company Foundation directs most of the
company’s charitable giving. Foundation
grants help fill the gap between local needs
and available resources in communities
where Weyerhaeuser operates. The foundation’s local giving is directed by employee
volunteers most familiar with community
needs. Approximately 1,000 employees
serve on advisory committees to determine
priority needs and recommend projects to
fund. The majority of grants are awarded
in rural areas where resources are scarce.
Disaster relief — rebuilding the Gulf Coast
This one-of-a-kind program involved Weyerhaeuser volunteers in everything from
hanging sheetrock to installing plumbing to
removing debris. Employees partnered with
North Carolina Baptist Men, a faith-based
volunteer group with a mission to rebuild
more than 600 Gulfport, Miss.-area homes.
58
• Volunteers repaired, rebuilt or built new
homes for more than 50 employees,
retirees and other community members,
volunteering more than 45,000 hours.
• 128 employee and retiree families
were assisted through our disaster relief
programs.
• Weyerhaeuser’s and the Weyerhaeuser
Company Foundation’s disaster relief
efforts for victims of Hurricanes Katrina
and Rita totaled more than $2.8 million.
Included are the Adopt-A-Family, Employee-2-Employee fund and Loaned Employee programs as well as more than
$1 million donated to relief agencies and
$275,000 in building materials donated
to the Baptist Builders and others.
The company dedicated a disaster relief
coordinator to the effort and developed
and shared publicly an employer’s guide to
helping employees in a disaster.
OUR GIVING SUPPORTS LOCAL AND
GLOBAL COMMUNITIES
0.0
• The program brought nearly 300 Weyerhaeuser volunteers from throughout
North America to the Gulf Coast through
the loaned-employee program, which covered salaries plus travel costs for
employees who participated in rebuilding
projects.
In the wake of Hurricane Katrina,
Weyerhaeuser volunteers repaired,
rebuilt or built new homes for more
than 50 employees, retirees and
other community members, volunteering more than 45,000 hours.
Weyerhaeuser received the Ron Brown
Award for Corporate Leadership at a White
House ceremony for our contributions to
the hurricane recovery effort. More importantly, all 128 of our affected families in
Mississippi and Louisiana have now been
resettled in their own homes.
Learn more about our employer’s
guide to helping employees in a disaster
at www.wy.com/katrina.
Global partnership with CARE
In 2000, the Weyerhaeuser Company Foundation launched a strategic partnership
SECTION 6 CITIZENSHIP
with CARE International as a structure for
global philanthropy. CARE is one of the
leading humanitarian organizations fighting
poverty. CARE works in 72 countries helping poor families solve their most threatening problems.
Using a people-centered approach, the
foundation and CARE are promoting sustainable forest management and environmental stewardship to improve the lives of
people in developing countries for current
and future generations. In the latest phase
of this long-term partnership, the foundation and CARE are investing in rural communities in Brazil to increase family incomes,
reforest and preserve protected areas, and
develop environmental education.
Effect on local communities
More than one-third of the Weyerhaeuser
Company Foundation’s philanthropy is focused on education. Beneficiaries include
elementary schools and adult education
centers. Since 1987, the Southern Schools
Partnership has helped improve academic
achievement in 15 school districts in rural
communities in six states. In Canada, Weyerhaeuser Company Limited’s innovative
Jobs for Youth Program provides on-the-job
experience for young people and enables
community nonprofit organizations to hire
temporary staff. In 2006, this program benefited 102 nonprofit organizations in five
provinces and provided summer employment
for 120 young people who were able to
develop skills and explore career interests.
Support for local operating communities is
provided through foundation grants recommended by local advisory committees,
scholarships for children of employees,
grants to 15 school districts in six Southern states, and grants provided through
the Making WAVES volunteer program.
Many operations are in rural communities
where foundation support makes a significant difference.
When Weyerhaeuser enters a new community, a foundation advisory committee is
established, and the community is immediately eligible to receive foundation grants.
A prorated foundation budget is established
for the year to support community needs.
When the company exits a community, the
annual foundation budget allocation for
an operating community is maintained in
full during the year of a closure.
WE SUPPORT FORESTRY EDUCATION
AND RESEARCH
In 2006, Weyerhaeuser Company and the
foundation contributed to research and education projects on sustainable forestry.
Where we are able, we partner with universities and nongovernmental organizations
to broaden our perspective and ensure
a balanced approach.
New research commitments in 2006
include the company’s partnerships with
The Nature Conservancy and Ducks
Unlimited Canada.
ties and provide unparalleled economic,
environmental and social benefits to all
Canadians.
In addition to supporting Ducks’ inventory work, which began in July 2006, we
will collaborate on research to inform
best management practices (e.g., stream
and lake buffers, effect of roads on subsurface hydrology). Traditional land use
inventories and relationships with local
aboriginal groups and woodlot owners are
areas that both organizations intend to
address through ongoing efforts.
The first collaborative research topic selected will focus on assessing watershed
vulnerability and, in turn, determining the
resiliency of varying amounts of wetland
to harvesting activities.
The Nature Conservancy
Weyerhaeuser and the Weyerhaeuser
RECOGNITION IN 2006
Company Foundation pledged $1 million to
The Nature Conservancy. Together, the
• Weyerhaeuser’s disaster response
conservancy and Weyerhaeuser will conefforts earned the Ron Brown Award for
duct research to enable better conservation
Corporate Leadership, the only presidenplanning and sustainable management
tial award to honor companies for the
of biological diversity in managed forests
exemplary quality of their relationships
in both the Northwest and the Southeast.
with employees and communities. We
received the award for our disaster relief
Over the next five years, Weyerhaeuser
efforts following the 2005 Gulf Coast
and the conservancy will select projects
hurricanes.
to recognize and quantify the biodiversity
that exists in managed forests and produce • The Weyerhaeuser Company Foundation/
information to inform the conservancy’s
CARE partnership was one of five
conservation priorities and increase confinalists for the Partnership Award at the
servation efforts if needed. The 2006 projU.S. Chamber of Commerce Business
ects selected were the “Blackland Prairie
Civic Leadership Center 2006 Corporate
& Woodland Biodiversity and ConservaCitizenship Awards in the fall of 2006.
tion Forestry Project in Arkansas” and the
• Pardee Homes was honored with the
“Characterization of Biological Diversity
Hearthstone Builder Humanitarian Award
Within Old-Growth Forest Refugia and Adjafor outstanding philanthropy.
cent Managed Forests in the Willapa Hills”
in Washington.
• The Weyerhaeuser Company Foundation’s
Making WAVES program was a finalist
Ducks Unlimited Canada
for the Excellence in Workplace Volunteer
Weyerhaeuser and Ducks Unlimited CanPrograms award managed by the Points
ada announced a new five-year, $2.5 million
of Light Foundation.
($1.25 million Cdn per partner) conserva• The American Cancer Society recognized
tion project that will provide science-based
Weyerhaeuser as a Relay for Life national
information to help manage migratory
corporate team member. We earned this
bird habitats in all three of Weyerhaeuser’s
distinction with 61 Making WAVES teams
Alberta forest management areas.
taking part to celebrate survivors, reThe partnership will focus on conserving
member loved ones, and raise money for
boreal wetland systems, including riparian
the fight against cancer.
areas. These watersheds of the western
boreal forest are vital to northern communi59
LEAD
SECTION 7
CORPORATE
GOVERNANCE
Caleb Doty, sales and marketing
manager for Building Components of
Idaho in Boise, reviews plans at his
customer’s construction site.
WEYERHAEUSER HAS A TRADITION OF RESPONSIBLE CORPORATE GOVERNANCE, UPHELD BY AN INDEPENDENT BOARD
OF DIRECTORS. THE BOARD OVERSEES THE MANAGEMENT
OF OUR GLOBAL BUSINESS, INCLUDING ITS COMMITMENT TO
SUSTAINABILITY.
BOARD COMPOSITION,
STRUCTURE AND INDEPENDENCE
The company follows New York Stock
Exchange corporate governance rules and
requirements. Twelve directors serve on
the board, of which all except for the chairman are independent directors under the
standards of the New York Stock Exchange
and the Securities and Exchange Commission. These directors are, or have recently
been, leaders of major companies and
institutions and possess a wide range of
experience and skills.
We have more independent outside directors than is required, with 11 out of 12
independents. The average number is 81
percent, according to a study by Spencer
Stuart, a recruiting and leadership consulting firm. We have 91.7 percent.
In the Corporate Governance Handbook
2005, Developments in Best Practices, Compliance and Legal Standards, The Conference Board noted that board structures
vary greatly among U.S. corporations and
that no single model of board leadership
structure guarantees corporate success.
The structure Weyerhaeuser uses was considered an appropriate approach by the
Conference Board. The board periodically
re-evaluates its structure and performance, and believes its current structure
is effective to ensure proper oversight of
the company.
Our board relies on proven management
systems. In its 2006 assessment of corporate governance and business practices,
GovernanceMetrics International® rated
Weyerhaeuser on 14 categories, including:
INDEPENDENT DIRECTORS
We comply with New York Stock Exchange
requirements for independent board
membership. See this page for more
information
EXCEEDS
• Board accountability
• Financial disclosure and internal controls
EMPLOYEE ETHICS TRAINING
• Shareholder rights
We require all employees to take annual
online or leader-led ethics training.
• Executive remuneration
• Takeover defenses and ownership base
• Corporate behavior (management of
environmental risks, labor relations, foreign sourcing practices and significant
litigation and regulatory actions)
ACHIEVES
All companies rated by GMI are scored on
a scale of 1.0 (lowest) to 10.0 (highest).
Weyerhaeuser received a 2006 rating
of 9.0. A GMI rating of 9.0 or higher is well
above average.
KEY 2006–07 BOARD ACCOMPLISHMENTS
• Two new directors, both female, were
added to the board. Women now
comprise 33 percent of Weyerhaeuser’s
board.
• The board adopted a related party transactions policy in 2007.
61
DIVERSITY IN WEYERHAEUSER’S
BOARD OF DIRECTORS
PERCENTAGE FEMALE
100
33
80
60
40
20
8
16
16
’03
’04
’05
• The board strategically directed the company through major business changes in
composites, fine paper, residential wood
products and containerboard packaging.
on areas such as ethics and business
conduct, management succession, human
resources practices, and environmental
and safety issues.
• The compensation committee of the
board completed its year-long review and
redesign of company compensation
and implemented a new compensation
program for salaried employees.
The audit committee helps the board fulfill
its responsibility for oversight of the quality
and integrity of the accounting, auditing
and financial reporting practices of the
company, including the company’s compliance with legal and regulatory requirements.
GOVERNANCE AND
SUSTAINABILITY MATTERS
25
16
BOARD RESPONSIBILITY FOR
0
’02
SUSTAINABILITY PERFORMANCE
’06
PERCENTAGE FROM
MINORITY GROUPS
100
8
80
60
40
20
8
8
8
8
8
’02
’03
’04
’05
’06
0
SECTION 7 CORPORATE GOVERNANCE
Our stakeholders expect the company to
operate in a healthy, safe, legal and environmentally responsible manner. To meet
this expectation, we have developed effective systems for identifying and evaluating risks, setting standards, implementing
programs, monitoring performance, and
complying with the law. The board addresses aspects of sustainability at every
meeting (e.g., safety, diversity), and board
committees address aspects of sustainability on a regular basis (e.g., legal compliance). On an annual basis, the corporate
governance committee receives a “state
of the company” environmental report.
The board, through its company directionsetting process, establishes companywide
strategic direction for capital spending,
business and financial matters, as well as
social and environmental issues. Weyerhaeuser employs this process in threeto five-year cycles to set overall strategic
direction of the company. As part of the
process, the company analyzes global
trends that have the potential to affect its
businesses over the long term, analyzes
the capabilities and challenges of company
businesses, and integrates this information into its planning and decision making
regarding company direction.
The compensation committee reviews and
approves the strategy and design of compensation systems against established
goals and objectives, some of which relate
to sustainability performance (e.g., safety,
diversity).
The finance committee monitors and oversees our financial resources and strategies,
with emphasis on those issues that are
long term in nature, and provides guidance
to the board regarding major financial policies and financial matters.
The international committee advises the
company on relevant, critical policy issues,
as well as investment and other commercial opportunities outside the United
States, and provides oversight and direction on the economic, political and social
trends in countries where Weyerhaeuser
has international operations.
The board annually, with the assistance
of the corporate governance committee,
reviews its overall performance and reviews
the performance of board committees.
Learn more about our board committees
and charters at investor.weyerhaeuser.com
in the governance section.
BOARD QUALIFICATIONS AND EXPERTISE
Weyerhaeuser’s Corporate Governance
Guidelines (see Page 64) provide that the
Board committees are responsible for susboard should encompass a range of talent,
tainability issues in their areas of oversight,
skill and expertise sufficient to provide
ensuring that all aspects of sustainability
sound and prudent guidance with respect
are addressed on an ongoing basis.
to the company’s operations and interests.
The corporate governance committee takes Additionally, at all times, a majority of the
a leadership role in shaping the governboard must be “independent directors” as
ance of the company and provides oversight defined by the listing requirements of the
New York Stock Exchange and any specific
requirements established by the board.
62
Each director is expected to exhibit high
standards of integrity, commitment and
independence of thought and judgment; to
use his or her skills and experience to
provide independent oversight to the business of the company; and to represent
the long-term interests of all shareholders.
Directors must be willing to devote sufficient time to carrying out their duties and
responsibilities effectively.
As part of its periodic self-assessment
process, the board determined that, as a
whole, it must have the right diversity and
mix of characteristics and skills for optimal oversight of the company. It should be
composed of persons with skills in areas
such as:
• Finance
• Sales and markets
• Strategic planning
• Human resources and diversity
• Safety
• Industry business
• Leadership of large, complex
organizations
• Legal
• Banking
• Government and governmental
relationships
• International business and
international cultures
• Information technology
In addition to the targeted skill areas, the
corporate governance committee identified
key knowledge areas critical for directors
to add value to a board, including strategy,
leadership, organizational issues, relationships and ethics.
For more information about the
board of directors selection process, see
the Notice of 2007 Annual Meeting
of Shareholders and Proxy Statement at
investor.weyerhaeuser.com.
PROVIDING RECOMMENDATIONS
TO THE BOARD
Any shareholder can communicate directly
with the board, the independent directors,
and any individual director or the chair of
any committee via the company’s corporate
secretary. The processes for communicating with the board, recommending nominees for the board, or submitting shareholder proposals are outlined in the Notice
of 2007 Annual Meeting of Shareholders
and Proxy Statement.
The board also requests regular reports
about interests and concerns of shareholders and communication with shareholders.
Individuals recommended for consideration
as nominees for the board are evaluated
against the targeted skill and knowledge
areas described earlier. The corporate governance committee regularly assesses
the mix of these skills represented on the
board as well as the skills represented by
retiring directors and additional skill areas
identified during the board self-assessment process. Based on this analysis, the
committee determines the best qualified
candidates and recommends those candidates to the board for election at the next
shareholders’ meeting.
DIVERSITY IN WEYERHAEUSER’S
BOARD OF DIRECTORS
PERCENTAGE
AGE 30–50
100
80
42
60
40
20
33
27
17
18
’03
’04
33
0
’02
’05
’06
PERCENTAGE
AGE 60 OR OVER
100
80
60
83
82
73
67
67
58
40
20
0
’02
’03
’04
’05
’06
The governance committee carefully reviews
shareholder proposals submitted for consideration at the next annual meeting,
develops a suggested response, then presents these recommendations to the full
board. The board may engage outside advisers to provide support of its consideration of some proposals. The full board
approves the suggested responses to any
shareholder proposals that will be included
in the proxy statement for the annual shareholders’ meeting.
Examples of recent topics considered in
shareholder proposals include:
• Operational practices (chemical use,
pollution controls)
• Governance (majority vote, director
election by majority, executive
compensation, appointment of auditors,
independent chairman)
• Forestry practices (certification,
wood supply)
63
• Social issues (aboriginal peoples
relations)
COMPENSATION
Weyerhaeuser has a robust compensation
structure that ties performance to goals,
including social and environmental goals.
Directors’ Compensation
The board believes that the interests and
focus of directors must be closely tied
to the long-term interests of shareholders.
As a result, 2006 compensation for nonemployee directors consisted of an annual
retainer fee, half of which was automatically deferred into the common stock equivalent account in the deferred compensation
plan for directors. These amounts will be
paid to the director in cash only after
the director retires from the board, based
on the value of the company stock at that
time. The directors may also defer the remaining fees paid to them, and many of the
directors have chosen to defer these fees
into the common stock equivalent account
as well. Chairs of board committees receive an additional fee, which also may be
deferred or paid in cash.
In addition, directors are reimbursed for
expenses incurred in board travel and may
receive additional compensation if asked
to travel for extended periods on behalf of
the board. Nonemployee director compensation is based on board and committee
responsibilities and is competitive with
comparable companies.
In 2006, nonemployee directors received
retainer fees consisting of:
• A base annual retainer fee of $140,000,
$70,000 of which was deferred into
common stock equivalent unit awards
• An additional cash annual retainer fee
of $10,000 for each committee chair
For more information about the company’s
compensation programs, including departure arrangements, see the Notice of
2007 Annual Meeting of Shareholders and
Proxy Statement.
AVOIDING CONFLICTS OF INTEREST
Weyerhaeuser’s board is bound by the company’s business ethics core policy and
code of ethics, as are the company’s offi-
64
cers and employees. The code explicitly
addresses conflicts of interest and the consequences of noncompliance. The board
also has adopted a policy regarding related
party transactions, which defines specific
areas that could result in conflicts of interest and procedures for reviewing these
transactions.
In addition, the board of directors has
documented its governance practices in
the Corporate Governance Guidelines.
The guidelines cover board functions and
operation, company operations, board organization and composition, and board conduct — including ethics and conflicts of
interest.
View governance policies and
guidelines at investor.weyerhaeuser.com
in the governance section.
The corporate governance committee takes
a leadership role in shaping the governance
of the corporation and provides oversight
and direction regarding the operation of the
board of directors. The committee regularly
reviews recommended corporate governance
practices and recommends that the board
adopt practices the committee considers to
be best practices. As a result of this process, the board recently amended the company’s bylaws to clarify that a director must
stand for election at the next annual shareholders’ meeting if the director was appointed to fill a vacancy on the board. It
also recently amended the board charter to
require a director to submit a letter of
resignation for consideration by the governance committee if the director changes his
or her principal occupation. For more information, see the Notice of 2007 Annual
Meeting of Shareholders and Proxy Statement.
PREVENTING CORRUPTION AND BRIBERY
Weyerhaeuser is committed to obeying the
law in all countries where we do business.
We have adopted policies and standards
for ethical conduct to ensure that we comply with the U.S. Foreign Corrupt Practices
Act and similar anti-corruption laws in each
country where we do business.
In addition to our employees, anyone who
does business on Weyerhaeuser’s behalf
is expected to understand and comply with
these policies and standards for ethical
business conduct in the code of ethics.
Employees who fail to comply with these
policies and standards are subject to disciplinary action, up to termination of employment. Our contracts and purchasing policies
require agents, contractors, suppliers, service providers and joint-venture partners to
comply with these policies and standards as
well as all statutes and regulations, including those regarding corruption and bribery.
For information about the company’s issue
resolution process, see “ethics” below.
To help ensure that shareholders receive
accurate financial information, the Sarbanes-Oxley Act of 2002 requires public
companies to assess their internal control
structures and procedures for financial reporting and to disclose any material weakness in these controls. The company’s
assessment is audited by the company’s
independent public accounting firm. The
first report was due for the 2004 fiscal
year. The company spent 20 months and
22,000 direct employee hours to establish
a process and conduct the initial review,
which concluded our internal controls were
effective and identified no material weaknesses. Our reports for fiscal 2005 and
2006 also concluded that our internal controls were effective and identified no material weaknesses.
ETHICS AND BUSINESS CONDUCT
Weyerhaeuser was founded on values driven
by integrity. More than 100 years after its
founding, the company retains its reputation for conducting business honestly and
with integrity. Compliance with all laws and
policies is expected of every employee,
but we are committed to going farther — to
set the standard for integrity in business.
The company’s code of ethics, “Our Reputation, A Shared Responsibility,” is issued
to all employees and available to customers, contractors, suppliers and the public.
Weyerhaeuser’s code of ethics applies to
all employees, officers of the company,
and the board of directors. Failure to comply with this core policy could result in dis-
ciplinary action, up to termination of
employment. The code of ethics explains
the standards of conduct that employees
are expected to follow. Topics include:
• Resolving business ethics concerns
• Confidentiality
• Employment expectations
• Employment issue resolution process
• Safety and health
• Conflict of interest
• Intellectual property
• Inside information and insider training
• Antitrust and competition laws
• International business conduct
• Environmental responsibility
• Government affairs
Learn more about our ethics program
and core policy at www.wy.com/citizenship/
businessconduct.
Regular improvements are made to the
program, including seven revisions of the
company’s code of ethics to address new
issues or clarify the company’s policies.
In addition to receiving the code, all
employees participate in ethics training
on a regular basis and are expected to
role model and promote ethical behavior.
The company’s top senior managers complete a certificate of compliance with the
company’s code of ethics every year, and
salaried employees do so every two years.
New employees are introduced to the
company’s code of ethics as part of orientation. All employees participate in regular training to understand and reinforce our
ethics expectations.
Individuals with ethics concerns or questions
can use Weyerhaeuser EthicsOnline, our
web reporting tool, at www.WeyerhaeuserEthicsOnline.com or call the EthicsLine at
(800) 716-3488 to submit a concern or ask
a question. The individual has the option to
remain anonymous. These tools, which are
in compliance with international governmen-
65
tal requirements, are available anywhere in
the world, in any language, 24 hours a day,
seven days a week.
Key ethics and business conduct accomplishments in 2006 include:
• Employees were issued the seventh
edition of the code of ethics.
• More than 98 percent of employees completed ethics training as of June 1, 2007.
• Specific training was developed for
Foreign Corrupt Practices Act compliance
(to be delivered in 2007).
• Our international ethics program was
strengthened with dedicated staff to
facilitate training and receipt of the code
of ethics, and to work with local managers.
ANTI-COMPETITIVE BEHAVIOR
A $79 million antitrust award against Weyerhaeuser from 2003 was overturned by
the U.S. Supreme Court in February 2007.
The court agreed with the company that the
district court instructed the jury to use the
wrong standard for judging whether bidding
for raw materials — alder sawlogs in this
case — violated the antitrust statutes.
Weyerhaeuser was joined by the U.S. Department of Justice and a number of other
companies and industry groups, including
Dow Chemical, Coca-Cola, Microsoft, Business Roundtable, and the National Association of Manufacturers. The case, in which
Ross Simmons Lumber Co. claimed that
Weyerhaeuser forced it out of business by
bidding more than necessary to monopolize
the supply of alder logs, has been sent
back to the federal district court. The district court has asked the parties to submit
briefs regarding the plaintiffs’ request to
fill a fifth amended complaint and the
scope and procedures of a second trial, if
one is ordered. The opinion will also affect
a similar case brought against Weyerhaeuser by Washington Alder, which had
been postponed in the 9th Circuit pending
the Supreme Court decision.
66
For a description of current antitrust litigation involving the company, see the legal
proceedings section in Note 16 of Weyerhaeuser’s 2006 Form 10-K, filed with the
Securities and Exchange Commission. Updated information may be found in quarterly
reports filed with the SEC, at investor.
weyerhaeuser.com in Reports > SEC Filings.
PARTICIPATING IN THE
POLITICAL PROCESS
Participating in the democratic process and
good government is part of Weyerhaeuser’s
values and a corporate responsibility.
We understand our success can be affected
— both positively and negatively — by
legislation, public policy and regulation. We
build long-term relationships with government officials based on a foundation of
mutual respect, trust and candor. We contribute lawfully to political campaigns, and
we make representations to public officials
using only legal and ethical practices.
Employees and retirees participate
Weyerhaeuser encourages employees to
register and exercise their right to vote. Our
intranet site includes online voter registration information for U.S. employees as well
as tools to identify elected representatives,
contact them, and review their voting records. We also engage our managers and
retirees to voluntarily advocate for the company in communications with public officials
on “calls to action” relating to issues of
high impact and importance.
CAMPAIGN CONTRIBUTIONS — UNITED STATES
Political contributions reflect one dimension
of participation in the political process.
All of Weyerhaeuser’s political contributions
comply with applicable law, and require the
prior approval of the law department and
authorization of either the vice president of
federal and international affairs or the public affairs vice president.
Weyerhaeuser sponsors an employeefunded Weyerhaeuser Political Action Committee that solicits voluntary contributions
from eligible shareholders and employees.
Decisions regarding contributions are
controlled by an employee-based board of
ISSUES IMPORTANT TO WEYERHAEUSER
Weyerhaeuser policy teams monitor public policy issues that affect the business
climate and coordinate company actions to understand and engage in public
discourse. In 2006, issues of particular importance to Weyerhaeuser included:
• Taxation of timberlands in the United States
• Energy policy, including renewable energy and rates levied by the Bonneville Power
Administration
• Conservation of and access to the boreal forest in Canada
• Global climate change
• Softwood lumber trade between the United States and Canada
• Green building programs and standards and recognition for the sustainable attributes
of wood products
directors. These contributions are bipartisan and based on a variety of considerations. These pooled funds are used mainly
to support candidates for the U.S. House
of Representatives and the U.S. Senate.
In some jurisdictions where Weyerhaeuser
operates — North Carolina, Oklahoma and
Kentucky — legally sanctioned WPAC
funds are also used to support candidates
for state elective offices.
In 2006, the Weyerhaeuser Political Action
Committee contributed $294,000 to
federal candidates, committees and some
state candidates. WPAC contribution reports are filed with the Federal Elections
Commission and posted on its website at
www.fec.gov.
Other states allow companies to contribute
directly to campaigns for state and local
offices and for ballot measures, a democratic process in which Weyerhaeuser
participates. Reports of state and local
contributions are filed as required at state
and local levels.
CAMPAIGN CONTRIBUTIONS — CANADA
Weyerhaeuser Company Limited participates in the democratic process of
parliamentary government in Canada.
Lawful corporate donations to political parties are a recognized, legitimate and
transparent part of the Canadian process.
Donations are made at only the federal
and provincial levels of government and are
publicly disclosed in accordance with
reporting requirements in each jurisdiction
where the company operates.
In 2006, Weyerhaeuser Company Limited,
the company’s primary Canadian subsidiary,
contributed $92,000 Cdn to political parties or candidates in Canada.
WE PARTICIPATE IN PUBLIC POLICY DISCOURSE
We belong to a variety of industry associations and public policy organizations
that participate in the public debate about
issues that are of interest to us.
To advocate our positions, we rely primarily
on Weyerhaeuser managers and subjectmatter experts who are assisted by internal
public affairs and federal affairs professionals. They follow both the letter and the
spirit of the laws governing lobbying, with
managers receiving regular training on current law and practices. In all lobbying efforts, we strive to work fairly and honestly
with public officials at all levels.
For a list of national associations
in which we participate, visit www.wy.com/
sustainability/06report/web. See Corporate
Governance > Association Participation.
Learn more about issues important to
Weyerhaeuser at www.wy.com/environment/
currentissues/.
67
ENDORSEMENT OF EXTERNAL PRINCIPLES
Weyerhaeuser has voluntarily endorsed the following external initiatives:
68
Initiative
Adopted
Applicability
Multistakeholder
Involvement
Business Roundtable Social,
Environmental, Economic
(S.E.E.) Change
2005 —
founding
member
United States
No
Institute for Supply Management™ Principles of Social
Responsibility
2005
Global
Yes
World Business Council for
Sustainable Development Sustainable Forestry Principles
2005
Global
Yes
International Conference of
Forest Products Association’s
Principles on Sustainability
2006
Global
No
American Forest & Paper
Association Environment
Health & Safety Principles
1996
United States
No
Sustainable Forestry Initiative
Principles
2001
United States
Yes
ISO 14001 Environmental
Management System Standard
1998
Global
Yes
ABOUT THIS REPORT
DATA
REPORT CONTENT
Except where noted, this report covers all operations of Weyerhaeuser during calendar year 2006, including the company’s fine
paper business and related assets that were transferred to
Domtar Inc. in March 2007. Financial results are for fiscal 2006.
Publishing our sustainability report facilitates transparency in
the company’s disclosure of relevant sustainability information.
Our process for determining report content includes:
The 2006 environmental data in this report cover:
• Weyerhaeuser operations owned in 2006. Joint ventures are
not included except for NORPAC, a newsprint mill.
• Forestry operations worldwide.
• All wood products, pulp, paper, bag and corrugated packaging
manufacturing facilities in the United States and Canada (26
pulp and paper facilities; 82 ink, bag, corrugated packaging and
converting locations; and 78 wood products reporting locations).
Environmental data for our recycling plants and distribution centers are not included because these sites have a minimal environmental impact relative to our other manufacturing operations.
We continue to improve our processes for collecting environmental, health and safety data from our manufacturing operations
outside of the United States and Canada. Where that information
is available, it is included and noted in this report.
USE OF GRI GUIDELINES
Weyerhaeuser has published an annual environmental performance report since 1993 and a citizenship report since 2001.
In 2002, we combined these reports into this sustainability report
and began following guidelines recommended by the Global
Reporting Initiative. In 2004, we issued our first report “in accordance” with the guidelines. In 2005, we had our “in accordance”
report checked by the GRI. This is our first report produced using
the G3 guidelines to an application level of “A.” Our sustainability reports since 2002 can be found on www.weyerhaeuser.com.
The codes (e.g., EN 10, HR 5) shown in the index on Page 70
refer to specific GRI indicators. For more information about GRI
and its indicators, please visit www.globalreporting.org.
• Identifying key audiences for the report, including customers,
investors, current and potential employees, and other stakeholders.
• Determining the information needs of our audiences based on
our internal tracking of stakeholder inquiries, broader sustainability trends, and discussions with key users of the report.
• Comparing these content needs with the Global Reporting Initiative indicators and prioritizing topics within the report.
• Measuring our sustainability performance. In this year’s report,
you’ll see dashboard icons at the beginning of each section.
This is our first year to rate our performance in key areas in this
manner. We will refine and improve the dashboard measures
in the coming years.
HOW DATA IN THIS REPORT WERE VERIFIED
The Weyerhaeuser data contained in this report are drawn from:
• Established internal databases that are used regularly by
our operations.
• Annual internal surveys.
Environmental data are obtained in a number of ways at Weyerhaeuser facilities, including physical measurement, representative
and other sampling, application of standard government factors,
and recognized industry factors. Calculations were performed using measured data as well as commonly recognized engineering
standards. All equations and estimations that were used in calculating environmental data reported in this document have been
accepted industrywide and by all pertinent regulatory authorities.
In addition, each section of the report is reviewed by an internal
subject-matter expert to ensure accuracy. The final draft of the
report is reviewed by members of Weyerhaeuser’s Disclosure Committee and key senior leaders to ensure material information is
accurately communicated.
69
ABOUT THIS REPORT
(CONTINUED)
Weyerhaeuser has evaluated options for external verification of
data and does not currently externally verify all of the data included in this report. We continue to monitor stakeholder interest
and trends in external verification.
GRI ELEMENTS AND INDICATORS INDEX
This table at right tells where to find Weyerhaeuser information
that addresses elements of the Global Reporting Initiative.
References are to page numbers in this report, the online version of this report (www.wy.com/sustainability/06report/web) by
section and heading titles (indicated such as “Environmental
Footprint > Raw Material Use”), or to our annual report to shareholders (indicated as AR, page number). Information that is not
available or publicly released is marked NR for “not reported.”
For information about the GRI indicators themselves, please visit
www.globalreporting.org.
CATEGORY
Strategy and Analysis
1.1
1.2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
Report Parameters
EC 4, LA 1: Data for these indicators are not available; data systems to generate
the required information do not currently exist.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
3.11: This information is not reported because there have not been any significant changes since the previous report.
1, 12
12
Organizational Profile
Notes about items not reported (NR):
HR 4, LA 14: Data for these indicators are considered proprietary.
PAGE
Cover
Inside cover, AR 5, 10, 11
Inside cover
Inside cover
AR 12, 22, 23, 24
investor.weyerhaeuser.com
Inside cover
8
6
21, 25, 59
69
69
69
Inside back cover
69
69
69
69
69
42
NR
70
70
Governance, Commitments and Engagement
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
70
61
61
61
63
64
64
63
13, 15, 16, 18, 64, 65
62
62
55
68
67, Corporate Governance > Association Participation
CATEGORY
PAGE
Governance, Commitments and Engagement
4.14
4.15
4.16
4.17
20
20
20
19
5
8
43
27
NR
30
31
8, 9
Environment
DMA
EN 1
EN 2
EN 3
EN 4
EN 5
EN 6
EN 8
EN 11
EN 12
EN 13
EN 14
EN 16
EN 17
EN 18
EN 19
EN 20
EN 21
EN 22
EN 23
EN 24
EN
EN
EN
EN
EN
26
27
28
29
30
PAGE
Labor
Economic
DMA
EC 1
EC 2
EC 3
EC 4
EC 6
EC 7
EC 8
CATEGORY
13
39, Environmental Footprint > Raw Material Use
51
41
Environmental Footprint > 2002–2006 Energy Use
41
52
46
34, 35
35, 37
37, Environmental Footprint > Special Sites Protection
36
42, Environmental Footprint > GHG Emissions
42, Environmental Footprint > GHG Emissions
42
Environmental Footprint > Methyl Bromide
45
46, Environmental Footprint > Water & Dioxins
40, Environmental Footprint > Hazardous Waste &
Residuals Management
48, Environmental Footprint > TRI/NPRI
42, Environmental Footprint > Hazardous Waste &
Residuals Management
51, 52
51
17
46
18
DMA
LA 1
LA 2
LA 4
LA 5
LA 6
LA 7
LA 8
LA 10
LA 12
LA 13
LA 14
12, 18, 23, 28, 29, Employee Well-Being > Labor Principles
26, Employee Well-Being > Numbers By Region
26
31
31
25
24
26
28
28
29
NR
Human Rights
DMA
HR 1
HR 2
HR 4
HR 5
HR 6
HR 7
HR 9
31
31
31
NR
31
31
31
31
Society
DMA
SO 1
SO 2
SO 3
SO 4
SO 5
SO 6
SO 7
SO 8
65, 66
59
64, 65
66
64
67
66, 67
66
66
Product Responsibility
DMA
PR 1
PR 3
PR 6
PR 9
52, 54
54
52
55
55
71
GLOSSARY
AFFORESTATION: The conversion of land
that has not been forested for at least 50
years to forested land through planting
and seeding.
BIOCHEMICAL OXYGEN DEMAND (BOD):
A measure of the amount of oxygen consumed by microbiological organisms and
certain chemicals that oxidize and remove
organic pollutants during wastewater treatment. If left untreated, organic material
would exert an oxygen demand in receiving
waters, resulting in low dissolved oxygen levels and adverse effects on some
aquatic organisms.
BIOMASS FUELS: Organic-based, nonfossil
fuel, including wood, wood residuals,
bark, black liquor, and liquefied and gasified
wood.
EXEMPT EMPLOYEE: An exempt employee
is an employee who, because of his or her
positional responsibilities and level of
decision-making authority, is exempt from
the overtime provisions of the Fair Labor
Standards Act. Primarily a term used in
the United States, an exempt employee is
compensated by a salary, as opposed to
a nonexempt employee, who is paid on an
hourly basis and is eligible for overtime.
ISO 14001 ENVIRONMENTAL MANAGEMENT
SYSTEM (EMS): The International Organi-
zation for Standardization (ISO) is a worldwide federation founded to promote the
development of international standards.
The ISO 14000 series is composed of
six elements, including an environmental
management system, auditing, environmental performance evaluation, labeling
and life-cycle analysis.
CARBON DIOXIDE EQUIVALENTS (CO2e):
A common unit of measurement against
which the impact of releasing, decreasing
or avoiding the release of different greenhouse gases can be evaluated, expressed
in terms of the global warming potential
of one unit of carbon dioxide.
CARBON MONOXIDE (CO): A colorless,
odorless and, at high levels, poisonous
gas, formed when carbon in fuel is not
burned completely.
COGENERATION: The generation of electricity
as a byproduct of heat or steam that is
created for use elsewhere in the manufacturing process, e.g., to remove the water
from pulp or paper.
CUNIT: A measurement of volume equal
to 100 cubic feet.
DAYS-AWAY CASE: Work-related incident
NITROGEN OXIDES (NOX): The term used to
describe the sum of NO, NO2 and other
oxides of nitrogen that play a major role
in the formation of ozone.
OXYGEN DELIGNIFICATION: A pulp-making
technology that uses oxygen in the chipcooking process to help break down
lignin, a natural glue that holds wood fibers
together and gives wood its brown color.
PARTICULATE MATTER (PM): Fine liquid or
solid particles such as dust, smoke, mist,
fumes or smog found in air or emissions.
Inhalable PM includes both fine and coarse
particles. These particles can accumulate
in the respiratory system and are associated with numerous health effects.
PRIMARY MILLS: Manufacturing facilities
that use logs or wood chips as their raw
material.
that involves days away from work.
RECORDABLE INCIDENT: An incident is
EMISSIONS INTENSITY: A unit of measure-
ment intended to capture changes in
greenhouse gas emissions that occur from
investments or changes that enhance
manufacturing efficiency. Usually expressed
as greenhouse gas emissions per ton of
production or other uniform units of
business and/or manufacturing activity.
72
recordable if it results in a work-related
injury or illness that results in death,
days away, restricted activity, job transfer,
medical treatment beyond first aid, loss
of consciousness, or significant diagnosis.
RECORDABLE INCIDENT RATE (RIR): The rate
is the count of occurrences per 100
employees per year. An occurrence may be
a recordable incident, lost-workday case
or lost workdays.
RIPARIAN: On or next to the bank of a river,
pond or lake.
SEQUESTRATION: The uptake and storage
of carbon dioxide in a different form, such
as wood or trees. Trees absorb carbon
dioxide from the atmosphere and bind the
carbon in wood fiber both while the tree
lives and after it is converted into lumber
and paper.
SULFUR DIOXIDE (SO2): A gaseous molecule
made of sulfur and oxygen. High concentrations of SO2 can result in temporary
breathing impairment for asthmatic children
and adults who are active outdoors.
TOTAL TREATED EFFLUENT: Wastewater
treated in primary and/or secondary wastewater treatment systems before being
returned to a river or other body of water.
TOTAL REDUCED SULFUR (TRS): A measure
of the amount of reduced sulfur compounds in air emissions. TRS compounds
cause nuisance odors, including a “rotten
egg” smell, around kraft mills.
TOTAL SUSPENDED SOLIDS (TSS): A measure
of the suspended solids in wastewater,
effluent or water bodies. Increased
suspended solids reduce how deep below
the water surface light can penetrate and
thereby reduce the depth at which plants
can grow. This can shift habitat for fish and
the quality of food for herbivores.
VOLATILE ORGANIC COMPOUNDS (VOCs):
Any compound of carbon, excluding carbon monoxide, carbon dioxide and carbonic
acid, that participates in atmospheric
photochemical reactions.
VOLUNTARY PROTECTION PROGRAM (VPP):
An OSHA program designed to recognize
and promote effective safety and health
management. In the VPP, management,
labor and OSHA establish a cooperative
relationship at a workplace that has
implemented a strong safety and health
program.
WEYERHAEUSER
AT A GLANCE
ONLINE VERSION OF THIS REPORT
TOTAL SALES AND REVENUES
In 2006, our total net sales and revenues were $21.9 billion. Here’s how
that breaks down by business segment.
2% 5%
15%
22%
35%
Weyerhaeuser grows and harvests trees, builds homes, and makes forest products essential
to everyday lives. Our company, headquartered in Federal Way, Wash., was founded in 1900
and now has offices or operations in 18 countries, with customers worldwide. At the end
of 2006, we employed approximately 46,700 people. In 2006, we ranked 90th on Fortune
magazine’s list of America’s largest corporations.
This report is also available on our website.
The online version at www.weyerhaeuser.com/
sustainability/06report features more information about topics, as referenced throughout
the report. Also see our Company Overview
online with stories about how we are creating
sustainable solutions to the world’s challenges
at http://investor.weyerhaeuser.com.
CONTACT INFORMATION
Business
Description
Key Customers
2006 Operating Stats
Timberlands
Manages forests on a
sustainable basis by
growing and harvesting
trees on a renewable
cycle.
Weyerhaeuser facilities.
Other log processors
in the United States
and around the world.
• Harvest rate: 1%
21%
• Trees planted:
133.8 million
• Acres managed:
- 6.4 million
(United States)
Timberlands
We welcome your comments about this
report. E-mail us at environment_contact@
weyerhaeuser.com, or write directly to:
Sara Kendall
Vice President, Environment,
Health and Safety
Weyerhaeuser Company
P.O. Box 9777
Federal Way, WA 98063-9777
- 26.8 million (Canada)
Wood Products
Cellulose Fibers
& White Papers
Wood
Products
Manufactures and distributes a variety of
building products, such
as lumber and engineered wood, for homes
and other structures.
Structural frame
construction.
Repair and remodel.
Furniture and
cabinetry.
Industrial
construction.
• Softwood lumber
FORWARD-LOOKING STATEMENTS
facilities: 32
• Engineered lumber
facilities: 18
• Veneer facilities: 8
• Oriented strand
board facilities: 9
• Hardwood lumber
facilities: 8
• Plywood facilities: 3
• Distribution locations:
851
Containerboard
Packaging
and Recycling2
Produces boxes and
bags that move food
and products to consumers, and collects and
recycles wastepaper to
make new products.
Manufacturers,
producers and retailers
that ship and/or sell
durable and nondurable
goods in North America.
• Containerboard
This report contains statements concerning
the company’s future results and performance
that are forward-looking statements within
the meaning of the Private Securities Litigation
Reform Act of 1995. Some of these forwardlooking statements can be identified by the
use of forward-looking terminology such as
“expects,” “may,” “will,” “believes,” “should,”
“approximately,” “anticipates,” “estimates”
and “plans” and the negative or other variations of those terms or comparable terminology
or by discussions of goals, strategy, plans or
intentions. In particular, some of these forward-looking statements deal with expectations
regarding the way we will conduct business;
reduction in greenhouse gas emissions by
2020; the impact of forest management programs and sustainable forest management
systems; reductions in recordable incident
rates; reduction in energy use (including use
of purchased electricity); reduction in air and
water pollution; use of biomass; reduction in
water use; reduction in chemical use; increase
in diversity; return on net assets; building of
three new state-of-the-art softwood lumber
mills; the potential for the Cellulose Fibers
business and new products; outlook for WRECO
during the current real estate cycle; cost savings from restructuring of transportation and
warehousing organizations and implementation
of a common integrated technology platform;
contributions to pension funds in 2007; alignment of climate change management strategy
to meet likely future regulatory obligations;
requests for customer input; and similar matters. The accuracy of such statements is subject to a number of risks, uncertainties and
assumptions that may cause actual results to
differ materially from those projected, including,
but not limited to, the effect of general eco-
Containerboard
Packaging & Recycling
Real Estate
Other
MARKETS OUTSIDE THE UNITED STATES
In 2006, 17 percent of our total net
sales and revenue were from customers
outside the United States. Here’s how
that $3.6 billion breaks down by country
and region.
32%
15%
21%
Europe
Canada
Other
plants: 75
• Bag or specialty
plants: 14
• Recycling facilities: 19
32%
Japan
plants: 9
• Packaging/box
Cellulose
Fibers
and White
Papers3
Makes innovative products to serve the growing
absorbent pulp market.
Produces liquid
packaging and newsprint
products.
Absorbent product
manufacturers worldwide.
Carton and food product
packaging converters.
Newspapers
and publishers.
• Pulp mills: 103
Real Estate
Provides shelter by
developing land
and building homes.
Single-family home
buyers in select U.S.
geographies.
• Homes built
• Paper facilities: 213
• Liquid packaging
facility: 1
• Newsprint joint
venture: 1
and delivered:
5,836
1. In 2006, we announced the intent to sell 26 distribution locations.
2. In May 2007, we announced that we are considering a broad range of strategic alternatives for our Containerboard Packaging and Recycling business.
3. In early 2007, we completed the Domtar transaction, which combined our fine paper and related assets
with Domtar Inc. to form a new company. Those facilities no longer with Weyerhaeuser are included in the data
and descriptions in the table above, as well as in the metrics shown throughout this report. The facilities were
part of our operations through 2006 year-end. They are also included in the net sales and revenues pie charts,
which are based on data in our 2006 Form 10-K.
nomic conditions, including the level of interest
rates and housing starts; market demand for
the company’s products, which may be tied to
the relative strength of various U.S. business
segments; energy prices; raw material prices;
chemical prices; performance of the company’s
manufacturing operations; the successful execution of internal performance plans and initiatives; the level of competition from domestic
and foreign producers; the effect of forestry,
land use, environmental and other governmental policies and regulations, and changes in
accounting regulations; the effect of weather;
the risk of loss from fires, floods, windstorms,
hurricanes, pest infestation and other natural
disasters; transportation costs; legal proceedings; the effect of timing of retirements and
changes in the market price of company stock
on charges for stock-based compensation;
and performance of pension fund investments
and related derivatives.
The company is also a large exporter and
is affected by changes in economic activity in
Europe and Asia, particularly Japan, and by
changes in currency exchange rates, particularly the relative value of the U.S. dollar to the
Euro and the Canadian dollar, and restrictions
on international trade or tariffs imposed on
imports. These and other factors could cause
or contribute to actual results differing materially from such forward-looking statements and,
accordingly, no assurances can be given that
any of the events anticipated by the forwardlooking statements will occur or, if any of
them occurs, what effect they will have on the
company’s results of operations or financial
condition. The company expressly declines any
obligation to publicly revise any forward-looking
statements that have been made to reflect
the occurrence of events after the date of this
news release.
Designed by: Lesley Feldman
Photography by: Dave Putnam
Printing by: Cenveo
Printed on SFI-certified Domtar 100 lb. Recycled Cougar Cover and 70 lb. Recycled Cougar
Opaque Text. Soy-based inks, which are more
easily separated from the paper fiber in the
repulping process, were used in printing this
report. The entire report can be recycled in
most high-grade office paper recycling programs.
Thank you for recycling.
LOOK FOR PROOF
WEYERHAEUSER COMPANY 2006 SUSTAINABILITY PERFORMANCE REPORT
For more information, please visit www.weyerhaeuser.com.
LOOK
FOR
PROOF
2006 SUSTAINABILITY PERFORMANCE REPORT

Weyerhaeuser Report

Transcription

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