SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS
TRADING SYMBOL(S)
NAME OF EACH EXCHANGE
ON WHICH REGISTERED
Common Shares ($1.25 par value)
WY
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒Yes☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒Yes☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒ Accelerated filer ☐ Non-accelerated filer ☐
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No
The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant based on the closing sale price as of the last business day of the most recently completed second fiscal quarter ended on June 30, 2020, as reported on the New York Stock Exchange Composite Price Transactions, was approximately $16.8 billion.
As of February 8, 2021, 747,768 thousand shares of the registrant’s common stock ($1.25 par value) were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Notice of the 2021 Annual Meeting of Shareholders and Proxy Statement for the company’s Annual Meeting of Shareholders to be held May 14, 2021, are incorporated by reference into Part III.
WEYERHAEUSER COMPANY > 2020 ANNUAL REPORT AND FORM 10-K
We are one of the world's largest private owners of timberlands. We own or control 10.7 million acres of timberlands in the U.S. and manage an additional 14.1 million acres of timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. Our objective is to maximize the long-term value of timberlands we own. We analyze each timberland acre comprehensively to understand its highest-value use. We realize this value in many ways, most notably through growing and harvesting the trees, but also by selling properties when we can create incremental value. In addition, we focus on opportunities to realize value through lease and royalty agreements for the surface and subsurface rights that exist in our ownership.
We are also one of the largest manufacturers of wood products in North America. We manufacture and distribute high-quality wood products, including structural lumber, oriented strand board, engineered wood products and other specialty products. These products are primarily supplied to the residential, multi-family, industrial, light commercial as well as repair and remodel markets. We operate 35 manufacturing facilities in the United States and Canada.
Sustainability and citizenship are part of our core values. In addition to practicing sustainable forestry, we focus on increasing energy and resource efficiency, reducing greenhouse gas emissions, conserving natural resources and offering sustainable products that meet our customers' needs. We operate with world-class safety results, actively support the communities in which we operate and strive to communicate transparently with our investors and other stakeholders. We are one of only two North American forest products companies included on the Dow Jones Sustainability North America Index, and we are also recognized for our leading performance in the areas of ethics, citizenship and gender equality.
This portion of our Annual Report on Form 10-K provides detailed information about who we are and what we do. Unless otherwise specified, current information reported in this Form 10-K is as of or for the fiscal year ended December 31, 2020. Throughout this Form 10-K, unless specified otherwise, references to “we,” “our,” “us” and “the company” refer to the consolidated company. We break out financial information such as revenues, earnings and assets by the business segments that comprise our company. We also discuss the geographic areas where we do business.
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AVAILABLE INFORMATION
We meet the information reporting requirements of the Securities Exchange Act of 1934 by filing periodic reports (annual reports on Form 10-K, quarterly reports on Form 10-Q), current reports on Form 8-K, proxy statements and other information with the Securities and Exchange Commission (SEC). These reports and statements, which contain information about our company’s business, financial results, corporate governance and other matters, as well as amendments to these reports and statements, are available at:
•
the SEC website — www.sec.gov and
•
our website (free of charge) — www.weyerhaeuser.com.
When we file or furnish information electronically with the SEC, it is also posted to our website.
WHO WE ARE
We were incorporated as Weyerhaeuser Timber Company in the state of Washington in January 1900, when Frederick Weyerhaeuser and 15 partners bought 900,000 acres of timberland. Today, we are working to be the world's premier timber, land and forest products company for our shareholders, customers and employees.
REAL ESTATE INVESTMENT TRUST (REIT)
Our company is a REIT and REIT income can be distributed to shareholders without first paying corporate level tax, substantially eliminating the double taxation on income. We expect to derive most of our REIT income from our timberlands, including gains from the sales of our standing timber and rent from recreational leases. We continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiaries (TRSs), which include our Wood Products segment and a portion of our Timberlands and Real Estate, Energy and Natural Resources segments.
WEYERHAEUSER COMPANY > 2020 ANNUAL REPORT AND FORM 10-K1
The health of the U.S. housing market strongly affects the performance of all our business segments. Wood Products primarily sells into the new residential building and repair and remodel markets. Demand for sawlogs within our Timberlands segment is directly affected by domestic production of wood-based building products as well as export markets. Seasonal weather patterns impact the level of construction activity in the U.S., generally characterized by a reduction in activity during the winter months, which in turn affects the demand for our logs and wood products. Real Estate is affected by the health of the U.S. economy and the local real estate market conditions, such as the level of supply or demand for properties sharing the same or similar characteristics as our timberlands. Energy and Natural Resources is affected by underlying demand for commodities, including oil, natural gas and minerals.
COMPETITION IN OUR MARKETS
We operate in highly competitive domestic and foreign markets, with numerous companies selling similar products. Many of our products also face competition from substitutes for wood products. We compete in our markets primarily through product quality, service levels and price. We are relentlessly focused on operational excellence, producing quality products customers want and are willing to pay for, at the lowest possible cost.
Our business segments’ competitive strategies are as follows:
•
Timberlands — Deliver maximum timber value from every acre we own or manage.
•
Real Estate & ENR — Deliver premiums to timberland value by identifying and monetizing higher and better use lands and capturing the full value of surface and subsurface assets.
•
Wood Products — Manufacture high-quality structural lumber, oriented strand board and engineered wood products, as well as deliver complementary building products for residential, multi-family, industrial and light commercial applications at competitive costs.
HUMAN CAPITAL AND TALENT MANAGEMENT
Our human capital and talent management practices strive to attract and retain diverse and talented people. Since we depend so much on our people, we focus on ensuring that we create and maintain a safe and inclusive work environment in which our employees have opportunities to develop and reach their potential.
OUR PEOPLE BY THE NUMBERS
As of December 31, 2020, we employed 9,372 employees, including 7,971 in the United States, 1,389 in Canada, and 12 in Japan. Of these employees, 2,421 are members of unions covered by multi-year collective-bargaining agreements.
Our employees by business segment were as follows:
SEGMENT
NUMBER OF EMPLOYEESS
Timberlands
1,289
Real Estate & ENR
67
Wood Products
7,220
Corporate
796
Total
9,372
SAFETY
Our highest priority is the safety of our employees, contractors and all others who come into contact with our daily operations. Our industry-leading safety results are driven by:
•
caring leadership with a safety-focused “tone at the top”;
•
robust safety policies and practices;
•
engaged employees with regular safety training and education and
WEYERHAEUSER COMPANY > 2020 ANNUAL REPORT AND FORM 10-K2
a strong company-wide focus on identifying and reducing hazards and risks.
We regularly review safety incidents, risk-identification reports and “near-miss” incidents and apply key learnings across our organization. Our efforts have resulted in a significant and sustained reduction in the number and severity of recordable injuries. This includes a drop in our Recordable Incident Rate, which is the number of Occupational Safety and Health Administration-defined recordable injuries/illnesses that occur in 100 workers working in one year, from 10 in 1990 to 1.56 in 2020. We remain relentlessly focused on achieving our goal of creating an injury-free workplace.
In 2020, our continued focus on workplace safety enabled us to quickly implement additional protocols to safeguard the health of our employees and preserve business continuity during the COVID-19 pandemic.
PEOPLE DEVELOPMENT
We focus a great deal of energy and resources on the training and development of our people. We also connect key human capital management priorities, such as succession planning, leadership development and critical role placement, with our executive compensation programs by including these and related priorities in our senior executives’ annual cash bonus plan goals. To support our people development objectives we:
•
partner with our employees on individual development plans and provide a wide range of individual development tools;
•
annually enroll hundreds of our front-line, mid-level and future executive leaders in development programs;
•
engage in rigorous internal talent assessment and succession planning and
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monitor and regularly review our strategies and action plans to address any workforce gaps in our organization, including gender, race and other underrepresented groups.
We also believe in the 70-20-10 approach to professional growth. This model acknowledges that at least 70 percent of development occurs on the job through direct experience and skill-building. Another 20 percent comes from focused relationship-building and exposure to projects, processes and perspective outside one’s normal expertise. The final 10 percent is focused on targeted training courses and development programs that help our employees achieve their own specific career goals. In 2020, our employees logged 31,415 hours of training in our online learning management system, which tracks both virtual and classroom courses delivered. In addition, we offer three classroom-based leadership development programs that focus on helping current and future leaders build these skills. We typically enroll hundreds of leaders in these in-person programs each year. However, in 2020 due to COVID-related health and safety restrictions, we converted our programs into virtual formats where viable. In addition, we developed “Leading Through Uncertainty” training to help leaders effectively manage their teams through the many challenges of 2020, and we offered several virtual seminars on managing stress and work/life balance.
DIVERSITY, EQUITY AND INCLUSION
We are taking action to increase diversity at all levels of our company, create a truly inclusive environment and secure, preserve and promote equity for our employees.
To help us accelerate progress in creating a truly inclusive work culture at Weyerhaeuser, we identified inclusion as one of our five core values in 2019 and formed an Inclusion Council of 20 diverse employees from across our company to help provide insights and recommendations to our senior management team. We have six focus areas: leadership and accountability; equitable practices and policies; recruiting and hiring; training and development; communication and culture; and affinity and connection. We have set targets for improvement in each category which are reviewed and reset annually. Our practices for achieving and maintaining a strong, diverse and inclusive workplace culture also include:
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“no tolerance” policies regarding discrimination and harassment of employees, suppliers, customers and visitors;
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third-party reviews of pay equity;
•
removal of names from resumes and creation of diverse hiring teams;
•
mandatory training on unconscious bias and harassment prevention;
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ongoing company-wide communication on the importance of inclusion and
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regular company-wide surveys and other means of anonymously collecting candid feedback to assist us in evaluating our progress and addressing any identified gaps.
Excluding temporary hires and part-time employees, in 2020, 40 percent of the company’s new U.S. hires met the company’s criteria for diversity, which includes race, ethnicity, gender and disability status. In response to our annual feedback survey conducted for 2020, 82 percent of our employees agreed their work environment is inclusive.
WEYERHAEUSER COMPANY > 2020 ANNUAL REPORT AND FORM 10-K3
We consider our strong company culture to be a competitive advantage. We are intentional in our efforts to preserve the key positives of our workplace environment, as well as continuously improving and evolving our culture. At the heart of our culture is an unwavering commitment to our core values — safety, integrity, citizenship, sustainability and inclusion. Most of these values have been ingrained in our culture for many decades; they are cited often by our employees and are visible throughout our organization. We also embrace five key behaviors that shape our culture and guide how we work together — urgency, accountability, courage, simplicity and innovation. To assess the health of our culture, we conduct regular company-wide surveys to collect candid feedback from employees and assess overall engagement. In 2020, our overall engagement score was 85 percent and our average score on questions about the strength of our values was 83 percent. Another indicator we monitor to assess the strength of our company culture is voluntary turnover, which was only 6.5 percent in 2020.
COMPETITIVE PAY & BENEFITS
We offer competitive compensation and benefits packages based on experience, knowledge and skill level that are designed to attract and retain talented employees and reward superior performance. Some of our benefits include paid parental leave, company match for retirement plans, comprehensive medical and dental coverage and paid time off.
WHAT WE DO
This section provides information about how we:
•
grow and harvest trees,
•
maximize the value of every acre we own and
•
manufacture and sell wood products.
For each of our business segments, we provide details about what we do, where we do it, how much we sell and where we are headed.
TIMBERLANDS
Our Timberlands segment manages 10.7 million acres of private commercial timberlands in the U.S. We own 9.9 million of those acres and control the remaining acres through long-term contracts. In addition, we have renewable, long-term licenses on 14.1 million acres of Canadian timberlands.
WHAT WE DO
Forestry Management
Our Timberlands segment:
•
plants seedlings to reforest harvested areas using the most effective regeneration method for the site and species (natural regeneration is employed and managed in parts of Canada and the northern U.S.);
•
manages our timberlands as the trees grow to maturity;
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harvests trees to be converted into wood products, such as lumber, pellets, pulp and paper;
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manages the health of our forests to sustainably maximize harvest volumes, minimize risks, and protect unique environmental, cultural, historical and recreational value and
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offers recreational access.
We seek to maximize the returns from our timberlands by selling delivered logs and through stumpage sales to both internal and external customers. We leverage our expertise in forestry using research and planning systems to optimize log production and innovative planting and harvesting techniques across varying terrain. We use intensive, customized silviculture to increase forest productivity and returns while managing our forests on a sustainable basis. We use our scale, infrastructure and supply chain expertise to deliver reliable and consistent supply to our customers.
Competitive factors within each of our market areas generally include price, species, grade, quality, proximity to wood-consuming facilities and the ability to consistently meet customer requirements. We compete in the marketplace through our ability to provide customers with a consistent and reliable supply of high-quality logs at scale volumes and competitive prices. Our customers also value our status as a Sustainable Forestry Initiative® (SFI) certified supplier.
Sustainable Forestry Practices
We manage our forests intensively to maximize the value of every acre and produce a sustainable supply of wood fiber for our customers. At the same time, we are careful to protect biological diversity, water quality and other ecosystem values. Our working forests also provide unique environmental, cultural, historical and recreational value. We work hard to protect these and other qualities, while still managing our forests to produce financially mature timber. We follow regulatory requirements, voluntary standards and certify 100 percent of our North American timberlands under the SFI Forest Management Standard.
WEYERHAEUSER COMPANY > 2020 ANNUAL REPORT AND FORM 10-K4
In Canada, we manage timberlands under long-term licenses that serve as the primary source of raw material for our manufacturing facilities in various provinces. When we harvest trees, we pay the provinces at stumpage rates set by the government. We transfer logs to our manufacturing facilities at cost and do not generate any significant profit from the harvest of timber from our licensed acres in Canada.
Timberlands Products
PRODUCTS
HOW THEY’RE USED
Delivered logs:
• Grade logs
• Fiber logs
Grade logs are made into lumber, plywood, veneer and other products used in residential homes, commercial structures, furniture, industrial and decorative applications. Fiber logs are sold to pulp, paper and oriented strand board mills to make products used for printing, writing, packaging, homebuilding and consumer products, as well as into renewable energy and pellets.
Timber
Standing timber is sold to third parties through stumpage sales.
Recreational leases
Timberlands are leased or permitted for recreational purposes.
Other products
Seed and seedlings grown in the U.S. and wood chips.
HOW WE MEASURE OUR PRODUCT
We use multiple units of measure when transacting business including:
•
Thousand board feet (MBF) — used in the West to measure the expected lumber recovery from a tree or log and
•
Green tons (GT) — used in the South to measure weight; factors used for conversion to product volume can vary by species, size, location and season.
We report Timberlands volumes in ton equivalents.
WHERE WE DO IT
As of December 31, 2020, we sustainably managed timberlands in 18 states. This included owned or contracted acres in the following locations:
•
2.7 million acres in the western U.S. (Oregon and Washington);
•
6.8 million acres in the southern U.S. (Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Texas and Virginia) and
•
1.2 million acres in the northern U.S. (Maine, New Hampshire, Vermont, West Virginia and Wisconsin).
In Canada, we manage timberlands under long-term licenses that provide raw material for our manufacturing facilities. These licenses are in Alberta, British Columbia, Ontario and Saskatchewan.
Our total timber inventory — including timber on owned and contracted land — is approximately 593 million tons. This timber inventory does not translate into a specific amount of lumber or panel products because the quantity of end products varies according to the age, species, size and quality of the timber and will change over time as these variables adjust.
We maintain our timber inventory in an integrated resource inventory system and geographic information system (GIS). The resource inventory component of the system is proprietary and is largely based on internally developed methods, including growth and yield models developed by our research and development organization. The GIS component is based on GIS software that is viewed as the standard in our industry.
Timber inventory data collection and verification techniques include the use of industry standard field sampling procedures as well as proprietary remote sensing technologies in some geographies. The data is collected and maintained at the timber stand level.
We also own and operate nurseries and seed orchards in Alabama, Arkansas, Georgia, Louisiana, Mississippi, Oregon, South Carolina and Washington.
WEYERHAEUSER COMPANY > 2020 ANNUAL REPORT AND FORM 10-K5
Acres include all conservation and non-harvestable areas.
We provide a year-round flow of logs to internal and external customers. We sell grade and fiber logs to manufacturers that produce a diverse range of products. We also sell standing timber to third parties and lease land for recreational purposes. Most of our timberlands are strategically located to take advantage of road, logging and transportation systems for efficient delivery of logs to customers.
Western United States
Our Western timberlands are well situated to serve the wood products and pulp markets in Oregon and Washington. For the year ended December 31, 2020, we sold 30 percent of our total Western log sales volume internally. Additionally, our location on the West Coast provides access to higher-value export markets for Douglas fir and whitewood logs to Japan, China and Korea. Our largest export market is Japan, where Douglas fir is the preferred species for higher-valued post and beam homebuilding. The size and quality of our Western timberlands, coupled with their proximity to several deep-water port facilities, competitively positions us to meet the needs of Pacific Rim log markets.
Our holdings are composed primarily of Douglas fir, a species highly valued for its structural strength, stiffness and appearance. Most of our lands are located on the west side of the Cascade Mountain Range with soil and rainfall conditions considered favorable for growing this species. Our standing timber inventory is comprised of 79 percent Douglas fir, 15 percent whitewood and 6 percent hardwood.
Our management systems and supply chain expertise provide us a competitive operating advantage in a number of areas including forestry and research, harvesting, marketing and logistics. Additionally, our scale, diversity of timberlands ownership and infrastructure on the West Coast allow us to consistently and reliably supply logs to our internal and external customers year-round.
We sell recreational use permits covering approximately 2 million acres of our owned Western timberlands.
WEYERHAEUSER COMPANY > 2020 ANNUAL REPORT AND FORM 10-K7
The average age of timber harvested from our Western timberlands in 2020 was 49 years. In accordance with our sustainable forestry practices, we harvest and replant approximately 2 percent of our Western acreage each year.
Southern United States
Our Southern timberland ownership, covering 11 states, is well situated to serve domestic wood products and pulp markets, including third-party customers and our own mills. For the year ended December 31, 2020, we sold 22 percent of our total Southern log sales volume internally. Additionally, our Atlantic and Gulf coastal locations position us to serve an emerging Asian log export market. Our standing timber inventory is comprised of 76 percent Southern yellow pine and 24 percent hardwoods.
Operationally, we focus on efficiently harvesting and hauling logs from our ownership and capitalizing on our scale and supply chain expertise to consistently and reliably serve a broad range of customers through seasonal and weather-related events year-round.
We lease approximately 93 percent of our owned Southern acreage for recreational purposes.
2020 Southern U.S. Inventory by Species
WEYERHAEUSER COMPANY > 2020 ANNUAL REPORT AND FORM 10-K8
The average age of timber harvested from our Southern timberlands in 2020 was 29 years. In accordance with our sustainable forestry practices, we harvest and replant approximately 3 percent of our acreage each year in the South.
Northern United States
Our Northern timberlands acres contain a diverse mix of temperate broadleaf hardwoods and mixed conifer species across timberlands located in five states. We grow over 50 species and market over 500 product grades to a diverse mix of customers.
Our large-diameter cherry, red oak and hard maple sawlogs and veneer logs serve domestic and export furniture markets. Our maple and other appearance woods are used in furniture and high-value decorative applications. In addition to high-value hardwood sawlogs, our mix includes hardwood fiber logs for pulp and oriented strand board applications. Hardwood pulpwood is a significant market in the Northern region and we have long-term supply agreements, primarily at market rates, for nearly 95 percent of our hardwood pulp production.
We also grow softwood logs that supply our lumber and plywood mills and other customers. Our competitive advantages include a merchandising program to capture the value of the premium hardwood logs.
Regeneration is predominantly natural, augmented by planting where appropriate.
2020 Northern U.S. Inventory by Species
2020 Northern U.S. Inventory by Age / Species
The average age of timber harvested from our Northern timberlands in 2020 was 53 years. Timber harvested in the North is sold predominantly as delivered logs to domestic mills, including our manufacturing facilities. For the year ended December 31, 2020, we sold 7 percent of our total
WEYERHAEUSER COMPANY > 2020 ANNUAL REPORT AND FORM 10-K9
Northern log sales volume internally. In accordance with our sustainable forestry practices, we harvest approximately 1 percent of our acreage each year in the North.
Canada — Licensed Forestlands
We manage forestlands in Canada under long-term licenses from the provincial governments to secure volume for our manufacturing facilities in various provinces. The provincial governments regulate the volume of timber that may be harvested each year through Annual Allowable Cuts (AAC), which are updated every 10 years. As of December 31, 2020, our AAC by province was:
•
Alberta — 2,221 thousand tons,
•
British Columbia — 547 thousand tons,
•
Ontario — 154 thousand tons and
•
Saskatchewan — 633 thousand tons.
When the volume is harvested, we pay the province for that volume at stumpage rates set by the government. The harvested logs are transferred to our manufacturing facilities at cost (stumpage plus harvest, haul and overhead costs less any margin on selling logs to third parties). Any profit from harvesting the log through converting to finished products is recognized at the respective mill in our Wood Products segment.
Summary of License Arrangements
GEOGRAPHIC AREA
THOUSANDS OF
ACRES AT
DECEMBER 31, 2020
TOTAL ACRES
Province:
Alberta
5,399
British Columbia
1,166
Ontario(1)
2,574
Saskatchewan(1)
4,987
Total Canada
14,126
(1)
License is managed by partnership.
HOW MUCH WE HARVEST
Our fee harvest volumes are managed sustainably across all regions to ensure the preservation of long-term economic value of the timber and to capture maximum value from the markets. This is accomplished by ensuring annual harvest schedules target financially mature timber and reforestation activities align with the growing of timber through its life cycle to financial maturity.
Five-Year Summary of Timberlands Fee Harvest Volumes
FEE HARVEST VOLUMES IN THOUSANDS OF TONS
2020
2019
2018
2017
2016
West(1)
8,542
9,237
9,571
10,083
11,083
South
23,149
26,278
26,708
27,149
26,343
North(2)
1,226
2,042
2,129
2,205
2,044
Uruguay(3)
—
—
—
822
1,119
Other(4)
—
—
—
1,384
701
Total
32,917
37,557
38,408
41,643
41,290
(1)
Western logs are primarily transacted in thousand board feet (MBF) but are converted to ton equivalents for external reporting purposes.
(2)
In November 2019, we sold our Michigan timberlands and in March 2020, we sold our Montana timberlands. Refer to Note 4: Timberland Acquisitions and Divestitures for further information on these divestitures.
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