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NOTE 7: EQUITY AFFILIATES We have investments in unconsolidated equity affiliates over which we have significant influence that we account for using the equity method with taxes provided on undistributed earnings. We record earnings and accrue taxes in the period that the earnings are recognized by the affiliates. This note provides information about: • our Weyerhaeuser equity affiliates; and • our Real Estate unconsolidated entities. WEYERHAEUSER EQUITY AFFILIATES Our Weyerhaeuser equity affiliates are all in businesses or have investments related to the forest products industry. Following is a listing of Weyerhaeuser equity affiliates as of December 30, 2007: Details About Our Equity Affiliates  Following is a listing of additional Weyerhaeuser equity affiliate relationships that were in place during 2007: Details About Our Equity Affiliates  During 2007, we began the process to restructure our ownership interests in Uruguay. In June 2007, our joint venture, RII Weyerhaeuser World Timberfund L.P., transferred all of its stock in Colonvade (Uruguay) to the joint owners, Weyerhaeuser International Holdings Ltd (a wholly owned subsidiary) and Global Forest Partners. In addition, Southern Cone Timber Investors Ltd (Southern Cone Timber) transferred all its investments, including Los Piques (Uruguay) and Vandora (Uruguay) joint ventures, to the joint owners, Weyerhaeuser International Holdings Ltd (a wholly owned subsidiary) and Global Forest Partners. This joint venture was dissolved. Through consolidation of our wholly owned subsidiaries, we have 50 percent ownership in each of these three Uruguay joint ventures. The assets of these joint ventures are expected to be partitioned to the joint-venture owners during the first quarter of 2008. In October 2007, we sold our interest in Nelson Forests Joint Venture (Nelson Forests JV) and the related management company that was our wholly-owned subsidiary. We received net cash proceeds of approximately $161 million. We recognized a pretax gain on the sale of Nelson Forests JV and its management company of approximately $10 million in the fourth quarter of 2007, which is included in other operating costs, net, in the consolidated statement of earnings. In July 2005, we sold our interest in MAS Capital Management Partners L.P. (MAS) for net cash proceeds of approximately $115 million. We recognized a pretax gain on the sale of MAS of approximately $115 million in the third quarter of 2005 which is included in interest income and other in the consolidated statement of earnings. Unconsolidated Financial Information of Weyerhaeuser Equity Affiliates We use the equity method to account for unconsolidated financial information of our equity affiliates. Assets and Liabilities of Weyerhaeuser Equity Affiliates  Operating Results of Weyerhaeuser Equity Affiliates  Operating results includes information for Nelson Forests JV, Southern Cone Timber and MAS for the periods that we held an interest in these joint ventures. Doing Business with Weyerhaeuser Affiliates Doing business with our affiliates varies by the individual affiliate. We: • provide a varying mix of goods and services to some of our affiliates; and • buy finished products from some of our affiliates. The goods and services we provide include: • raw materials; • management and marketing services; • support services; and • shipping services. In addition, we manage cash for NORPAC under a services agreement. Weyerhaeuser holds the cash and records a payable balance to NORPAC which is included in accounts payable in the accompanying Consolidated Balance Sheet. We had the following payable balances to NORPAC: • $68 million at December 30, 2007; and • $70 million at December 31, 2006. REAL ESTATE UNCONSOLIDATED ENTITIES We use the equity method to account for unconsolidated financial information for our real-estate unconsolidated entities. Assets and Liabilities of Real Estate Unconsolidated Entities  Results of Operations from Real Estate Unconsolidated Entities  Real Estate’s equity in income of unconsolidated entities for 2007 includes $22 million of pretax charges for the impairment of assets owned by equity-method investees. |