DISCONTINUED OPERATIONS
There are no operations classified as discontinued in December 31, 2013 or December 31, 2012. Discontinued operations in December 31, 2011 include our hardwoods and Westwood Shipping Lines operations, both of which were sold in third quarter 2011.
OPERATIONS INCLUDED IN DISCONTINUED OPERATIONS
Discontinued Operations
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| | | |
Operations | Disposition | Segment where activities were included | Pretax gain or loss on sale |
Hardwoods | Sold 2011 — third quarter | Wood Products | $22 million loss in Wood Products |
Westwood Shipping Lines | Sold 2011 — third quarter | Corporate and Other | $49 million gain in Unallocated Items |
Sale of Hardwoods
On August 1, 2011, we completed the sale of our hardwoods operations to American Industrial Partners for consideration of $109 million, of which $25 million was a note receivable. During second quarter 2011, we reduced our hardwoods assets to their fair value less selling costs which resulted in the recognition of a $9 million charge. An additional $10 million pension curtailment charge was recognized in third quarter 2011 when the transaction closed. Total pre-tax charges on the sale of $22 million were recorded in our Wood Products segment. We recognized a tax benefit on the sale of $8 million, resulting in a year-to-date net loss of $14 million.
The following operating assets were included as part of the transaction:
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• | seven primary hardwood mills with a total capacity of 300 million board feet, |
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• | four concentration yards, |
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• | three remanufacturing plants, |
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• | one log merchandising yard and |
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• | sales offices in the U.S., Canada, Japan, China and Hong Kong. |
Sale of Westwood Shipping Lines
On September 30, 2011, we completed the sale of Westwood Shipping Lines to J-WesCo of Japan for $58 million in cash. We recognized a pre-tax gain of $49 million in Unallocated Items and recorded tax expense of $18 million, resulting in a net gain of $31 million. This transaction also reduced our operating lease obligations by approximately $130 million.
NET EARNINGS FROM DISCONTINUED OPERATIONS
Sales and Net Earnings from Discontinued Operations
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| | | |
DOLLAR AMOUNTS IN MILLIONS |
| 2011 |
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Net sales: | |
Hardwoods | $ | 222 |
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Westwood Shipping Lines | 180 |
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Total net sales from discontinued operations | $ | 402 |
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Loss from operations: | |
Hardwoods | $ | (3 | ) |
Westwood Shipping Lines | — |
|
Other discontinued operations | (13 | ) |
Total loss from discontinued operations | (16 | ) |
Income taxes | 5 |
|
Net loss from operations | (11 | ) |
Net gain (loss) on sale (after-tax): | |
Hardwoods | (14 | ) |
Westwood Shipping Lines | 31 |
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Sale of property | 6 |
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Net earnings from discontinued operations | $ | 12 |
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Results of discontinued operations exclude certain general corporate overhead costs that have been allocated to and are included in contribution to earnings for the operating segments.
Other discontinued operations relate to gains or losses for businesses we have divested in prior years and are included in Unallocated Items. During 2011 we increased our reserve for estimated future environmental remediation costs and recognized an $11 million charge associated with discontinued operations.
