UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~JUNE 30,~~MARCH 31, ~~2023~~2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO ______

COMMISSION FILE NUMBER: 1-4825

WEYERHAEUSER COMPANY

(Exact name of registrant as specified in its charter)


Washington		91-0470860
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

220 Occidental Avenue South Seattle, Washington		98104-7800
(Address of principal executive offices)		(Zip Code)

(206) 539-3000

(Registrant’s telephone number, including area code)

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 Stock, par value $1.25 per share

New York Stock Exchange

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, a 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of ~~July 24, 2023,~~April 22, 2024, ~~730,748~~729,017 thousand shares of the registrant’s common stock ($1.25 par value) were outstanding.

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS:
	CONSOLIDATED STATEMENT OF OPERATIONS	1
	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	2
	CONSOLIDATED BALANCE SHEET	3
	CONSOLIDATED STATEMENT OF CASH FLOWS	4
	CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	5
	INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	6
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)	14
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2624
ITEM 4.	CONTROLS AND PROCEDURES	2725

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	2725
ITEM 1A.	RISK FACTORS	2725
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2725
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES – NOT APPLICABLE
ITEM 4.	MINE SAFETY DISCLOSURES – NOT APPLICABLE
ITEM 5.	OTHER INFORMATION	2726
ITEM 6.	EXHIBITS	2927
	SIGNATURES	3028

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)


		QUARTER ENDED						YEAR-TO-DATE ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES		JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022			MARCH 2024			MARCH 2023
Net sales (Note 3)		$	1,997		$	2,973		$	3,878		$	6,085		$	1,796		$	1,881
Costs of sales			1,528			1,789			3,040			3,436			1,441			1,512
Gross margin			469			1,184			838			2,649			355			369
Selling expenses			22			23			44			46			22			22
General and administrative expenses			108			102			209			194			120			101
Other operating costs, net (Note 13)			20			12			30			18			17			10
Operating income			319			1,047			555			2,391			196			236
Non-operating pension and other post-employment benefit costs (Note 6)			(12	)		(11	)		(21	)		(26	)		(11	)		(9	)
Interest income and other			18			1			30			—			16			12
Interest expense, net of capitalized interest			(70	)		(65	)		(136	)		(137	)		(67	)		(66	)
Loss on debt extinguishment (Note 8)			—			—			—			(276	)
Earnings before income taxes			255			972			428			1,952			134			173
Income taxes (Note 14)	��		(25	)		(184	)		(47	)		(393	)		(20	)		(22	)
Net earnings		$	230		$	788		$	381		$	1,559		$	114		$	151

Earnings per share, basic and diluted (Note 4)		$	0.31		$	1.06		$	0.52		$	2.09		$	0.16		$	0.21
Weighted average shares outstanding (in thousands) (Note 4):
Basic			732,021			744,542			732,599			746,017			730,043			733,163
Diluted			732,362			745,582			732,961			747,194			730,558			733,546

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)


	QUARTER ENDED					YEAR-TO-DATE ENDED					QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023		JUNE 2022			JUNE 2023		JUNE 2022			MARCH 2024			MARCH 2023
Net earnings	$	230	$	788		$	381	$	1,559		$	114		$	151
Other comprehensive income:
Other comprehensive (loss) income:
Foreign currency translation adjustments		7		(25	)		7		(9	)		(9	)		—
Changes in unamortized actuarial loss, net of tax expense of $2, $24, $4 and $29		7		77			14		90
Changes in unamortized net prior service credit, net of tax (expense) benefit of $1, $0, $1 and ($1)		1		—			1		—
Total other comprehensive income		15		52			22		81
Changes in unamortized actuarial loss, net of tax expense of $4 and $2												8			7
Total other comprehensive (loss) income												(1	)		7
Total comprehensive income	$	245	$	840		$	403	$	1,640		$	113		$	158

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)


DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE	JUNE 30, 2023			DECEMBER 31, 2022			MARCH 31, 2024			DECEMBER 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,095		$	1,581		$	871		$	1,164
Short-term investments (Note 9)		665			—
Receivables, net		462			357			405			354
Receivables for taxes		18			42			13			10
Inventories (Note 5)		539			550			630			566
Prepaid expenses and other current assets		188			216			192			219
Total current assets		2,967			2,746			2,111			2,313
Property and equipment, less accumulated depreciation of $3,820 and $3,710		2,133			2,171
Property and equipment, less accumulated depreciation of $3,935 and $3,901								2,283			2,269
Construction in progress		260			222			243			270
Timber and timberlands at cost, less depletion		11,512			11,604			11,481			11,528
Minerals and mineral rights, less depletion		207			214			198			200
Deferred tax assets		8			8			14			15
Other assets		383			375			426			388
Total assets	$	17,470		$	17,340		$	16,756		$	16,983
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt (Note 8)	$	980		$	982
Current maturities of long-term debt							$	210		$	—
Accounts payable		254			247			310			287
Accrued liabilities (Note 7)		473			511			424			501
Total current liabilities		1,707			1,740			944			788
Long-term debt, net (Note 8)		4,817			4,071
Long-term debt, net								4,861			5,069
Deferred tax liabilities		105			96			84			81
Deferred pension and other post-employment benefits (Note 6)		348			344			460			461
Other liabilities		352			340			353			348
Total liabilities		7,329			6,591			6,702			6,747
Commitments and contingencies (Note 10)
Equity:
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 730,850 thousand shares at June 30, 2023 and 732,794 thousand shares at December 31, 2022		914			916
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 729,141 thousand shares at March 31, 2024 and 729,753 thousand shares at December 31, 2023								912			912
Other capital		7,624			7,691			7,566			7,608
Retained earnings		1,828			2,389			1,870			2,009
Accumulated other comprehensive loss (Note 11)		(225	)		(247	)		(294	)		(293	)
Total equity		10,141			10,749			10,054			10,236
Total liabilities and equity	$	17,470		$	17,340		$	16,756		$	16,983

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)


	YEAR-TO-DATE ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023			JUNE 2022			MARCH 2024			MARCH 2023
Cash flows from operations:
Net earnings	$	381		$	1,559		$	114		$	151
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization		252			241			125			126
Basis of real estate sold		46			70			31			33
Pension and other post-employment benefits (Note 6)		32			44			16			15
Share-based compensation expense (Note 12)		17			17			10			8
Loss on debt extinguishment (Note 8)		—			276
Other		2			14			1			3
Change in:
Receivables, net		(105	)		(40	)		(53	)		(83	)
Receivables and payables for taxes		27			27			(3	)		14
Inventories		14			(58	)		(68	)		(36	)
Prepaid expenses and other current assets		8			(3	)		17			(9	)
Accounts payable and accrued liabilities		(30	)		(15	)		(51	)		(87	)
Pension and post-employment benefit contributions and payments		(11	)		(14	)		(4	)		(6	)
Other		(11	)		(15	)		(11	)		(3	)
Net cash from operations		622			2,103			124			126
Cash flows from investing activities:
Capital expenditures for property and equipment		(119	)		(121	)		(57	)		(50	)
Capital expenditures for timberlands reforestation		(33	)		(30	)		(22	)		(21	)
Acquisition of timberlands (Note 15)		(2	)		(283	)
Purchase of short-term investments		(664	)		—
Other		—			1			2			2
Net cash from investing activities		(818	)		(433	)		(77	)		(69	)
Cash flows from financing activities:
Cash dividends on common shares		(938	)		(1,352	)		(248	)		(799	)
Net proceeds from issuance of long-term debt (Note 8)		743			881
Payments on long-term debt (Note 8)		—			(1,203	)
Repurchases of common shares (Note 4)		(85	)		(259	)		(50	)		(34	)
Other		(10	)		(5	)		(10	)		(8	)
Net cash from financing activities		(290	)		(1,938	)		(308	)		(841	)
Net change in cash, cash equivalents and restricted cash		(486	)		(268	)		(261	)		(784	)
Cash, cash equivalents and restricted cash at beginning of period		1,581			1,999			1,164			1,581
Cash, cash equivalents and restricted cash at end of period	$	1,095		$	1,731		$	903		$	797
Cash paid during the period for:
Interest, net of amount capitalized of $3 and $3	$	127		$	149
Interest, net of amount capitalized of $2 and $1							$	57		$	57
Income taxes, net of refunds	$	18		$	354		$	23		$	6

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(UNAUDITED)


	QUARTER ENDED						YEAR-TO-DATE ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022			MARCH 2024			MARCH 2023
Common shares:
Balance at beginning of period	$	916		$	932		$	916		$	934		$	912		$	916
Issued for exercise of stock options and vested units		1			—			2			2			2			1
Repurchases of common shares (Note 4)		(3	)		(5	)		(4	)		(9	)		(2	)		(1	)
Balance at end of period		914			927			914			927			912			916
Other capital:
Balance at beginning of period		7,662			8,076			7,691			8,181			7,608			7,691
Issued for exercise of stock options		—			2			2			13			2			2
Repurchases of common shares (Note 4)		(47	)		(133	)		(81	)		(250	)		(47	)		(34	)
Share-based compensation		9			9			17			17			10			8
Other transactions, net		—			—			(5	)		(7	)		(7	)		(5	)
Balance at end of period		7,624			7,954			7,624			7,954			7,566			7,662
Retained earnings:
Balance at beginning of period		1,738			1,679			2,389			2,131			2,009			2,389
Net earnings		230			788			381			1,559			114			151
Dividends on common shares		(140	)		(134	)		(942	)		(1,357	)		(253	)		(802	)
Balance at end of period		1,828			2,333			1,828			2,333			1,870			1,738
Accumulated other comprehensive loss:
Balance at beginning of period		(240	)		(450	)		(247	)		(479	)		(293	)		(247	)
Other comprehensive income		15			52			22			81
Other comprehensive (loss) income														(1	)		7
Balance at end of period (Note 11)		(225	)		(398	)		(225	)		(398	)		(294	)		(240	)
Total equity:
Balance at end of period	$	10,141		$	10,816		$	10,141		$	10,816		$	10,054		$	10,076

Dividends paid per common share	$	0.19		$	0.18		$	1.28		$	1.81		$	0.34		$	1.09

See accompanying Notes to Consolidated Financial Statements.

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1:	BASIS OF PRESENTATION	7

NOTE 2:	BUSINESS SEGMENTS	7

NOTE 3:	REVENUE RECOGNITION	8

NOTE 4:	NET EARNINGS PER SHARE AND SHARE REPURCHASES	8

NOTE 5:	INVENTORIES	9

NOTE 6:	PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS	10

NOTE 7:	ACCRUED LIABILITIES	10

NOTE 8:	~~LONG-TERM DEBT AND~~ LINE OF CREDIT	10

NOTE 9:	FAIR VALUE OF FINANCIAL INSTRUMENTS	11

NOTE 10:	LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES	11

NOTE 11:	ACCUMULATED OTHER COMPREHENSIVE LOSS	12

NOTE 12:	SHARE-BASED COMPENSATION	12

NOTE 13:	OTHER OPERATING COSTS, NET	13

NOTE 14:	INCOME TAXES	13

NOTE 15:	~~TIMBERLAND ACQUISITIONS~~RESTRICTED CASH	13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTERS ENDED MARCH 31, 2024 AND ~~YEAR-TO-DATE PERIODS ENDED JUNE 30,~~ 2023 ~~AND 2022~~

NOTE 1: BASIS OF PRESENTATION

Our consolidated financial statements provide an overall view of our results of operations, financial condition and cash flows. They include our accounts and the accounts of entities we control, including majority-owned domestic and foreign subsidiaries. They do not include our intercompany transactions and accounts, which are eliminated. Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” ~~“we,~~“the company,” ~~“the company”~~“we” and “our” refer to the consolidated company.

The accompanying unaudited Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Except as otherwise disclosed in these Notes to Consolidated Financial Statements, such adjustments are of a normal, recurring nature. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements. Certain information and footnote disclosures normally included in our annual Consolidated Financial Statements have been condensed or omitted. These quarterly Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023. Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year.

NOTE 2: BUSINESS SEGMENTS

We are principally engaged in growing and harvesting timber; ~~manufacturing, distributing and selling products made from trees;~~ maximizing the value of our acreage through the sale of higher and better use (HBU) properties; ~~and~~ monetizing the value of surface and subsurface assets through leases and ~~royalties.~~royalties; and manufacturing, distributing and selling products made from trees. Our business segments are organized based primarily on products and services which include:

●

Timberlands – Logs, timber, recreational leases and other products;

●

Real Estate, Energy and Natural Resources (Real Estate & ENR) – Real Estate (sales of timberlands) and ENR (rights to explore for and extract hard minerals, construction materials, natural gas production and wind and solar); and

●

Wood Products – Structural lumber, oriented strand board, engineered wood products and building materials distribution.

A reconciliation of our business segment information to the respective information in the Consolidated Statement of Operations is as follows:


	QUARTER ENDED						YEAR-TO-DATE ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022			MARCH 2024			MARCH 2023
Sales to unaffiliated customers:
Timberlands	$	417		$	515		$	879		$	980		$	387		$	462
Real Estate & ENR		80			117			181			245			107			101
Wood Products		1,500			2,341			2,818			4,860			1,302			1,318
		1,997			2,973			3,878			6,085			1,796			1,881
Intersegment sales:
Timberlands		150			156			292			317			134			142

Total sales		2,147			3,129			4,170			6,402			1,930			2,023
Intersegment eliminations		(150	)		(156	)		(292	)		(317	)		(134	)		(142	)
Total	$	1,997		$	2,973		$	3,878		$	6,085		$	1,796		$	1,881
Net contribution (charge) to earnings:
Timberlands	$	104		$	153		$	224		$	335		$	80		$	120
Real Estate & ENR		52			65			105			146			60			53
Wood Products		218			863			313			2,045			128			95
		374			1,081			642			2,526			268			268
Unallocated items(1)		(49	)		(44	)		(78	)		(161	)		(67	)		(29	)
Net contribution to earnings		325			1,037			564			2,365			201			239
Interest expense, net of capitalized interest		(70	)		(65	)		(136	)		(137	)		(67	)		(66	)
Loss on debt extinguishment		—			—			—			(276	)
Earnings before income taxes		255			972			428			1,952			134			173
Income taxes		(25	)		(184	)		(47	)		(393	)		(20	)		(22	)
Net earnings	$	230		$	788		$	381		$	1,559		$	114		$	151

(1)

Unallocated items are gains or charges not related to, or allocated to, an individual operating segment. They include all or a portion of items such as share-based compensation, pension and post-employment costs, elimination of intersegment profit in inventory and LIFO, foreign exchange transaction gains and losses, interest income and ~~other as well as legacy obligations.~~other.

NOTE 3: REVENUE RECOGNITION

A reconciliation of revenue recognized by our major products:

QUARTER ENDED

YEAR-TO-DATE ENDED

DOLLAR AMOUNTS IN MILLIONS

JUNE 2023

JUNE 2022

JUNE 2023

JUNE 2022

Net sales to unaffiliated customers:

Timberlands segment

Delivered logs:

West

Domestic sales

$
101

$
103

$
194

$
216

Export grade sales

105

205

241

351

Subtotal West

206

308

435

567

South

162

160

330

314

North

7

10

24

25

Subtotal delivered logs sales

375

478

789

906

Stumpage and pay-as-cut timber

15

11

31

20

Recreational and other lease revenue

17

16

35

33

Other(1)

10

10

24

21

Net sales attributable to Timberlands segment

417

515

879

980

Real Estate & ENR segment

Real estate

47

90

119

187

Energy and natural resources

33

27

62

58

Net sales attributable to Real Estate & ENR segment

80

117

181

245

Wood Products segment

Structural lumber

573

998

1,088

2,204

Oriented strand board

215

497

423

1,061

Engineered solid section

215

247

384

443

Engineered I-joists

126

168

213

305

Softwood plywood

44

53

85

111

Medium density fiberboard

42

53

80

101

Complementary building products

204

239

367

454

Other(2)

81

86

178

181

Net sales attributable to Wood Products segment

1,500

2,341

2,818

4,860

Total net sales

$
1,997

$
2,973

$
3,878

$
6,085


	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2024		MARCH 2023
Net sales to unaffiliated customers:
Timberlands segment
Delivered logs:
West
Domestic sales	$	94	$	93
Export grade sales		82		136
Subtotal West		176		229
South		151		168
North		13		17
Subtotal delivered logs sales		340		414
Stumpage and pay-as-cut timber		11		16
Recreational and other lease revenue		19		18
Other(1)		17		14
Net sales attributable to Timberlands segment		387		462
Real Estate & ENR segment
Real estate		83		72
Energy and natural resources		24		29
Net sales attributable to Real Estate & ENR segment		107		101
Wood Products segment
Structural lumber		464		515
Oriented strand board		255		208
Engineered solid section		177		169
Engineered I-joists		99		87
Softwood plywood		41		41
Medium density fiberboard		39		38
Complementary building products		141		163
Other(2)		86		97
Net sales attributable to Wood Products segment		1,302		1,318
Total net sales	$	1,796	$	1,881

(1)

Other Timberlands sales include sales of seeds and seedlings from our nursery operations as well as wood chips.

(2)

Other Wood Products sales include wood chips, other byproducts and third-party residual log sales from our Canadian Forestlands operations.

NOTE 4: NET EARNINGS PER SHARE AND SHARE REPURCHASES

Our basic and diluted earnings per share were:

●

$~~0.31~~0.16 during ~~second~~first quarter ~~2023~~2024 and $~~0.52~~ ~~during year-to-date 2023;~~

●

$~~1.06~~0.21 during ~~second~~first quarter ~~2022 and $2.09~~ ~~during year-to-date 2022.~~2023.

Basic earnings per share is net earnings divided by the weighted average number of our outstanding common shares, including stock equivalent units where there is no circumstance under which those shares would not be issued. Diluted earnings per share is net earnings divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares.


	QUARTER ENDED				YEAR-TO-DATE ENDED				QUARTER ENDED
SHARES IN THOUSANDS	JUNE 2023		JUNE 2022		JUNE 2023		JUNE 2022		MARCH 2024		MARCH 2023
Weighted average common shares outstanding – basic		732,021		744,542		732,599		746,017		730,043		733,163
Dilutive potential common shares:
Stock options		111		308		124		346		144		137
Restricted stock units		20		410		23		415		122		27
Performance share units		210		322		215		416		249		219
Total effect of outstanding dilutive potential common shares		341		1,040		362		1,177		515		383
Weighted average common shares outstanding – dilutive		732,362		745,582		732,961		747,194		730,558		733,546

We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units.

Potential Shares Not Included in the Computation of Diluted Earnings per Share

The following shares were not included in the computation of diluted earnings per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods.


	QUARTER ENDED				YEAR-TO-DATE ENDED				QUARTER ENDED
SHARES IN THOUSANDS	JUNE 2023		JUNE 2022		JUNE 2023		JUNE 2022		MARCH 2024		MARCH 2023
Stock options		787		—		787		—		609		610
Performance share units		682		573		682		573		814		860

Share Repurchase Program

On September 22, 2021, we announced that our board of directors approved a new share repurchase program (the 2021 Repurchase Program) under which we are authorized to repurchase up to $1 billion of outstanding shares. Concurrently, the board terminated the remaining repurchase authorization under the share repurchase program approved by the board in February 2019 (the 2019 Repurchase Program).

We repurchased ~~1,689,874~~1,472,369 common shares for approximately $5049 million (including transaction fees) under the 2021 Repurchase Program during ~~second~~first quarter ~~2023 and~~ ~~2,805,434~~ ~~common shares for approximately $~~85 ~~million under the 2021 Repurchase Program during year-to-date 2023.~~2024. As of ~~June 30, 2023,~~March 31, 2024, we had remaining authorization of $~~292~~202 million for future share repurchases. During ~~year-to-date 2022,~~first quarter 2023, we repurchased ~~6,982,462~~1,115,560 common shares for approximately $~~259~~35 million (including transaction fees) under the 2021 Repurchase Program.

All common stock repurchases under the 2021 Repurchase Program were made in open-market transactions. We record share repurchases upon trade date as opposed to the settlement date when cash is disbursed. We record a liability for repurchases that have not yet been settled as of period end. There were no unsettled shares as of ~~June 30, 2023,~~March 31, 2024 and ~~223,548~~13,866 unsettled shares (approximately $71 million) as of December 31, ~~2022.~~2023.

NOTE 5: INVENTORIES

Inventories include raw materials, work-in-process and finished goods, as well as materials and supplies.

DOLLAR AMOUNTS IN MILLIONS

JUNE 30,
2023

DECEMBER 31,
2022

LIFO inventories:

Logs

$
25

$
32

Lumber, plywood, panels and fiberboard

69

61

Other products

19

9

Moving average cost or FIFO inventories:

Logs

40

56

Lumber, plywood, panels, fiberboard and engineered wood products

110

122

Other products

132

140

Materials and supplies

144

130

Total

$
539

$
550


DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2024		DECEMBER 31, 2023
LIFO inventories:
Logs	$	25	$	29
Lumber, plywood, oriented strand board and fiberboard		89		77
Other products		12		12
Moving average cost or FIFO inventories:
Logs		72		49
Lumber, plywood, oriented strand board, fiberboard and engineered wood products		134		115
Other products		144		134
Materials and supplies		154		150
Total	$	630	$	566

LIFO – the last-in, first-out method – applies to major inventory products held at our U.S. locations. The moving average cost method or FIFO – the first-in, first-out method – applies to the balance of our U.S. raw material and product inventories, all material and supply inventories and all foreign inventories.

NOTE 6: PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The components of net periodic benefit cost are:


	PENSION												PENSION
	QUARTER ENDED						YEAR-TO-DATE ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022			MARCH 2024			MARCH 2023
Service cost	$	5		$	8		$	11		$	18		$	5		$	6
Interest cost		29			26			59			53			29			30
Expected return on plan assets		(30	)		(41	)		(60	)		(80	)		(31	)		(30	)
Amortization of actuarial loss		11			23			19			47			11			8
Amortization of prior service cost		1			—			1			1
Total net periodic benefit cost – pension	$	16		$	16		$	30		$	39		$	14		$	14


	OTHER POST-EMPLOYMENT BENEFITS										OTHER POST-EMPLOYMENT BENEFITS
	QUARTER ENDED					YEAR-TO-DATE ENDED					QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023			JUNE 2022		JUNE 2023			JUNE 2022		MARCH 2024		MARCH 2023
Interest cost	$	1		$	1	$	2		$	2	$	1	$	1
Amortization of actuarial loss		1			2		1			3		1		—
Amortization of prior service credit		(1	)		—		(1	)		—
Total net periodic benefit cost – other post-employment benefits	$	1		$	3	$	2		$	5	$	2	$	1

For the periods presented, service cost is included in “Costs of sales,” “Selling expenses,” and “General and administrative expenses” with the remaining components included in “Non-operating pension and other post-employment benefit costs” in the Consolidated Statement of Operations.

Fair Value of Pension Plan Assets and Obligations

In our year-end reporting process, we estimate the fair value of pension plan assets based upon the information available at that time. For certain assets, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We ~~update~~evaluate the year-end estimated fair value of pension plan assets in second quarter of each year to incorporate final net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K.No ~~adjustments to the fair value of assets or projected benefit obligations were necessary during second quarter 2023.~~

NOTE 7: ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:


DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2023		DECEMBER 31, 2022		MARCH 31, 2024		DECEMBER 31, 2023
Compensation and employee benefit costs	$	157	$	201	$	155	$	173
Current portion of lease liabilities		20		22		21		19
Customer rebates, volume discounts and deferred income		137		132		83		124
Interest		72		69		66		63
Taxes payable		33		23		35		31
Other		54		64		64		91
Total	$	473	$	511	$	424	$	501

NOTE 8:~~LONG-TERM DEBT AND~~ LINE OF CREDIT

~~In July 2023, we repaid $118~~ ~~million of our~~ ~~7.125% notes at maturity.~~

~~In May 2023, we completed an offering of debt securities by issuing $750~~ ~~million of~~ ~~4.750~~ ~~percent notes due in~~ ~~May 2026. The net proceeds after deducting the discount, underwriting fees and issuance costs were $743~~ ~~million. Of these total net proceeds, $664~~ ~~million was invested in short-term investments classified as held-to-maturity securities.~~

~~In March 2022, we completed a series of transactions that lowered our weighted average interest rate and extended our weighted average maturity by issuing $900~~ ~~million in notes and using the net proceeds plus cash on hand to close cash tender offers for $931~~ ~~million of principal in higher interest rate notes. We issued $450~~ ~~million of~~ ~~3.375~~ ~~percent notes due in~~ ~~March 2033~~ ~~and $450~~ ~~million of~~ ~~4.000~~ ~~percent notes due in~~ ~~March 2052. The net proceeds after deducting the discount, underwriting fees and issuance costs were $444~~ ~~million and $437~~ ~~million, respectively. The net proceeds were used to retire $592~~ ~~million of our~~ ~~7.375~~ ~~percent notes due in~~ ~~March 2032, $161~~ ~~million of our~~ ~~8.500~~ ~~percent notes due in~~ ~~January 2025, $~~73 ~~million of our~~ ~~7.125~~ ~~percent notes due in~~ ~~July 2023, $~~65 ~~million of our~~ ~~7.950~~ ~~percent notes due in~~ ~~March 2025, and $~~40 ~~million of our~~ ~~7.850~~ ~~percent notes due in~~ ~~July 2026. We paid holders an aggregate $1.2~~ ~~billion in cash reflecting principal, premium to par and tender premium. A net pretax charge of $276~~ ~~million ($207~~ ~~million after-tax) was included in the~~ ~~Consolidated Statement of Operations~~ ~~in first quarter 2022 for premiums to retire $931~~ ~~million of principal plus unamortized debt issuance costs and unamortized debt discounts in connection with the early debt retirement.~~

In March 2023, we entered into a new $1.5 billion five-year senior unsecured revolving credit facility, which expires in March 2028 and replaced the existing facility which was set to expire in January ~~2025.~~2025. Borrowings will bear interest at a floating rate based on either the adjusted term Secured Overnight Financing Rate (SOFR) plus a spread or a mutually agreed upon base rate plus a spread. We had no outstanding borrowings on our credit facility as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.

NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value and carrying value of our long-term debt consisted of the following:

DOLLAR AMOUNTS IN MILLIONS

JUNE 30,
2023

DECEMBER 31,
2022

Long-term fixed rate debt (including current maturities):

Carrying value

$
5,797

$
5,053

Fair value (level 2)

$
5,687

$
4,918


	MARCH 31, 2024				DECEMBER 31, 2023
DOLLAR AMOUNTS IN MILLIONS	CARRYING VALUE		FAIR VALUE (LEVEL 2)		CARRYING VALUE		FAIR VALUE (LEVEL 2)
Long-term debt (including current maturities) and line of credit:
Fixed rate	$	4,822	$	4,775	$	4,820	$	4,853
Variable rate		249		250		249		250
Total debt	$	5,071	$	5,025	$	5,069	$	5,103

To estimate the fair value of fixed rate long-term debt, we used the market approach, which is based on quoted market prices we received for the same types and issues of our debt. We believe that our variable-rate long term debt and line of credit ~~has a~~instruments have net carrying ~~value~~values that ~~approximates its~~approximate their fair value ~~within an~~with only insignificant ~~difference.~~differences. The inputs to the valuations of our long-term debt are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date.

Fair Value of Other Financial Instruments

We believe that our other financial instruments, including cash and cash equivalents, short-term investments, receivables and payables, have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to the short-term nature of these instruments and the allowance for doubtful accounts.

~~As of June 30, 2023, we had $665~~ ~~million in short-term investments classified as held-to-maturity debt securities, which consist of a mixture of term deposits and Treasury bills. We did~~ no~~t have any short-term investments classified as held-to-maturity debt securities as of December 31, 2022. These short-term investments mature within~~ ~~one year~~ ~~and are recorded in "Short-term investments" on our~~ ~~Consolidated Balance Sheet. We record held-to-maturity debt securities at amortized cost, which approximates fair value.~~

NOTE 10: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES

Legal Proceedings

We are party to various legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceeding that management believes could have a material adverse effect on our Consolidated Statement of Operations, Consolidated Balance Sheet or Consolidated Statement of Cash Flows.

Environmental Matters

Site Remediation

Under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) – commonly known as the “Superfund” – and similar state laws, we:

●

are a party to various proceedings related to the cleanup of hazardous waste sites and

●

have been notified that we may be a potentially responsible party related to the cleanup of other hazardous waste sites for which proceedings have not yet been initiated.

As of ~~June 30, 2023,~~March 31, 2024, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately $7576 million. These amounts are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet.

NOTE 11: ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in amounts included in our accumulated other comprehensive loss by component are:


	QUARTER ENDED						YEAR-TO-DATE ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022			MARCH 2024			MARCH 2023
Pension(1)
Balance at beginning of period	$	(451	)	$	(709	)	$	(458	)	$	(720	)	$	(515	)	$	(458	)
Other comprehensive (loss) income before reclassifications		(2	)		59			(1	)		51
Other comprehensive income before reclassifications														1			1
Amounts reclassified from accumulated other comprehensive loss to earnings(2)		9			18			15			37			8			6
Total other comprehensive income		7			77			14			88			9			7
Balance at end of period	$	(444	)	$	(632	)	$	(444	)	$	(632	)	$	(506	)	$	(451	)
Other post-employment benefits(1)
Balance at beginning of period	$	20		$	—		$	20		$	(2	)	$	24		$	20
Other comprehensive income (loss) before reclassifications		1			(1	)		1			—
Other comprehensive loss before reclassifications														(2	)		—
Amounts reclassified from accumulated other comprehensive loss to earnings(2)		—			1			—			2			1			—
Total other comprehensive income		1			—			1			2
Total other comprehensive loss														(1	)		—
Balance at end of period	$	21		$	—		$	21		$	—		$	23		$	20
Translation adjustments and other
Balance at beginning of period	$	191		$	259		$	191		$	243		$	198		$	191
Translation adjustments		7			(25	)		7			(9	)		(9	)		—
Total other comprehensive income (loss)		7			(25	)		7			(9	)
Total other comprehensive loss														(9	)		—
Balance at end of period		198			234			198			234			189			191
Accumulated other comprehensive loss, end of period	$	(225	)	$	(398	)	$	(225	)	$	(398	)	$	(294	)	$	(240	)

(1)

Amounts presented are net of tax.

(2)

Amounts of actuarial loss and prior service ~~(cost) credit~~cost are components of net periodic benefit cost. See Note 6: Pension and Other Post-Employment Benefit Plans.

NOTE 12: SHARE-BASED COMPENSATION

Share-based compensation activity during ~~year-to-date 2023~~first quarter 2024 included the following:


SHARES IN THOUSANDS	GRANTED		VESTED		GRANTED		VESTED
Restricted stock units (RSUs)		840		768		847		649
Performance share units (PSUs)		392		228		412		317

A total of ~~861~~714 thousand shares of common stock were issued as a result of RSU ~~vestings,~~and PSU ~~vestings and stock option exercises.~~vestings.

Restricted Stock Units

The weighted average fair value of the RSUs granted in ~~2023~~2024, calculated as an average of the high and low prices on grant date, was $~~33.77~~33.12. The vesting provisions for RSUs granted in ~~2023~~2024 were consistent with prior year grants.

Performance Share Units

The weighted average grant date fair value of PSUs granted in ~~2023~~2024 was $~~37.58~~37.90. The final number of shares granted in ~~2023~~2024 will vest between a range of 0 percent to 150 percent of each grant's target, depending upon actual company ~~performance~~total shareholder return (TSR) compared against the TSR of an industry peer group. TSR assumes full reinvestment of dividends. PSUs granted in ~~2023~~2024 will vest at a maximum of 100 percent of target value in the event of negative absolute company ~~total shareholder return.~~TSR.

Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in ~~2023~~2024


		PERFORMANCE SHARE UNITS
Performance period		2/09/~~2023~~2024 – 12/31/~~2025~~2026
Valuation date ~~average~~closing stock price~~(1)~~		$~~33.96~~
~~Expected dividends~~		~~2.25~~%33.28
Risk-free rate		~~4.21~~4.19% – ~~4.66~~4.27%
Expected volatility		~~29.26~~21.50% – ~~40.19~~27.60%

~~(1)~~

~~Calculated as an average of the high and low prices on grant date.~~

NOTE 13: OTHER OPERATING COSTS, NET

Other operating costs, net were comprised of the following:


	QUARTER ENDED						YEAR-TO-DATE ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022			MARCH 2024		MARCH 2023
Environmental remediation charges	$	12		$	1		$	13		$	1		$	2	$	1
Foreign exchange gains, net		(3	)		(3	)		(2	)		(4	)
Litigation expense, net		1			4			2			8			6		1
Research and development expenses		1			2			3			3			1		2
Other, net		9			8			14			10			8		6
Total other operating costs, net	$	20		$	12		$	30		$	18		$	17	$	10

NOTE 14: INCOME TAXES

As a real estate investment trust (REIT), we generally are not subject to federal corporate income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our wholly-owned Taxable REIT Subsidiaries (TRSs), which ~~includes~~include our Wood Products segment ~~earnings~~ and ~~portions~~a portion of our Timberlands and Real Estate & ENR ~~segments' earnings.~~

segments.

The quarterly provision for income taxes is based on our current estimate of the annual effective tax rate and is adjusted for discrete taxable events that have occurred during the year. Our ~~2023~~2024 estimated annual effective tax rate, excluding discrete items, differs from the U.S. federal statutory tax rate of 21 percent primarily due to state and foreign income taxes and tax benefits associated with our nontaxable REIT earnings.

NOTE 15: ~~TIMBERLAND ACQUISITIONS~~RESTRICTED CASH

~~On July 19, 2023, we completed the purchase~~The following table provides a reconciliation of 22 ~~thousand acres of Mississippi timberlands for approximately $~~60 ~~million.~~

~~On May 18, 2022, we completed the purchase of~~ 81 ~~thousand acres of North~~cash, cash equivalents and ~~South Carolina timberlands for approximately $265~~ ~~million. We recorded $263~~ ~~million of timberland assets in “Timber and timberlands at cost, less depletion” and $~~2 ~~million of related assets in “Property and equipment, net”~~restricted cash reported on our Consolidated Balance Sheet. that sum to the total of the amounts shown in the Consolidated Statement of Cash Flows:


DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2024		MARCH 31, 2023
Cash and cash equivalents	$	871	$	797
Restricted cash included in other assets(1)		32		—
Total cash, cash equivalents and restricted cash	$	903	$	797

(1)

Amounts included in restricted cash as of March 31, 2024 are comprised of proceeds held by a qualified intermediary that are intended to be reinvested in timber and timberlands through a like-kind exchange transaction.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This report contains statements concerning our future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, without limitation, statements relating to: our expected future financial and operating performance; our plans, strategies, intentions and expectations; our capital structure and the sufficiency of our liquidity position to meet future cash requirements; compliance with covenants in our debt agreements; our expectations concerning our contingent liabilities and the sufficiency of related reserves and accruals including, but not limited to, cost estimates of future litigation and environmental remediation; our provision for income taxes; expected capital expenditures; expected returns on pension plan assets; market and general economic conditions, including related influencing factors such as the trajectory of U.S. housing activity, repair and remodel activity, inflation trends and interest rates; our expectations about our future opportunities in emerging carbon ~~offset~~credit and carbon capture and storage markets; and assumptions used in valuing incentive compensation and related expense.

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often involve use of words such as “anticipate,” “believe,” “committed,” "continue,” “estimate,” “expect,” “foreseeable,” ~~“future,”~~ “maintain,” “may,” ~~“plan,”~~ “potential,~~” “will,~~” and ~~“would,~~“will,” or similar words or terminology. They may use the positive, negative or another variation of those and similar words. These forward-looking statements are based on our current expectations and assumptions and are not guarantees of future events or performance. The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. There is no guarantee that any of the events anticipated by our forward-looking statements will occur. If any of the events occur, there is no guarantee what effect it will have on our operations, cash flows, or financial condition. We undertake no obligation to update our forward-looking statements after the date of this report. The factors listed below, as well as other factors not described herein because they are not currently known to us or we currently judge them to be immaterial, may cause our actual results to differ significantly from our forward-looking statements:

●

the effect of general economic conditions, including employment rates, interest ~~rate levels,~~rates, inflation rates, housing starts, general availability and cost of financing for home mortgages and the relative strength of the U.S. dollar;

●

the effect of COVID-19 and other viral or disease outbreaks, including but not limited to any related regulatory restrictions or requirements, and their potential effects on our business, results of operations, cash flows, financial condition and future prospects;

●

market demand for the company's products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;

●

changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Japanese yen, the Chinese yuan and the Canadian dollar, and the relative value of the euro to the yen;

●

restrictions on international trade and tariffs imposed on imports or exports;

●

the availability and cost of shipping and transportation;

●

economic activity in Asia, especially Japan and China;

●

performance of our manufacturing operations, including maintenance and capital requirements;

●

potential disruptions in our manufacturing operations;

●

the level of competition from domestic and foreign producers;

●

the successful execution of our internal plans and strategic initiatives, including restructuring and cost reduction initiatives;

●

our ability to hire and retain capable employees;

●

the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing and required regulatory approvals or the occurrence of any event, change or other circumstances that could give rise to a termination of any acquisition or divestiture transaction under the terms of the governing transaction agreements;

●

raw material availability and prices;

●

the effect of weather;

●

changes in global or regional climate conditions and governmental response to such changes;

●

the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;

●

the effects of significant geopolitical conditions or developments such as significant international trade disputes or domestic or foreign terrorist attacks, armed conflict and political unrest;

●

the occurrence of regional or global health epidemics and their potential effects on our business, results of operations, cash flows, financial condition and future prospects;

●

energy prices;

●

transportation and labor availability and costs;

●

federal tax policies;

●

the effect of forestry, land use, environmental and other governmental regulations;

●

legal proceedings;

●

performance of pension fund investments and related derivatives;

●

the effect of timing of employee retirements as it relates to the cost of pension benefits and changes in the market price of our common stock on charges for share-based compensation;

●

the accuracy of our estimates of costs and expenses related to contingent liabilities and the accuracy of our estimates of charges related to casualty losses;

●

changes in accounting ~~principles;~~principles and

●

other risks and uncertainties described in this report under Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and in our ~~2022~~2023 Annual Report on Form 10-K, as well as those set forth from time to time in our other public statements, reports, registration statements, prospectuses, information statements and other filings with the SEC.

It is not possible to predict or identify all risks and uncertainties that might affect the accuracy of our forward-looking statements and, consequently, our descriptions of such risks and uncertainties should not be considered exhaustive. There is no guarantee that any of the events anticipated by these forward-looking statements will occur, and if any of the events do occur, there is no guarantee what effect they will have on the company's business, results of operations, cash flows, financial condition and future prospects.

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

RESULTS OF OPERATIONS

In reviewing our results of operations, it is important to understand these terms:

●

Sales realizations for Timberlands and Wood Products refer to net selling prices. This includes selling price plus freight, minus normal sales deductions. Real Estate transactions are presented at the contract sales price before commissions and closing costs, net of any credits.

●

Net contribution (charge) to earnings does not include interest expense ~~loss on debt extinguishment~~ or income taxes.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

Our market conditions and the strength of the broader U.S. economy are, and will continue to be, influenced by the trajectory of activity in the U.S. housing and repair and remodel segments, inflation trends and interest rates. The demand for sawlogs within our Timberlands segment is directly affected by domestic production of wood-based building products. The strength of the U.S. housing market, particularly new residential construction, strongly affects demand in our Wood Products segment, as does repair and remodeling activity. Seasonal weather patterns impact the level of construction activity in the U.S., which in turn affects demand for our logs and wood products. Our Timberlands segment, specifically the Western region, is also affected by export demand and trade policy. Japanese housing starts are a key driver of export log demand in Japan. The demand for pulpwood from our Timberlands segment is directly affected by the production of pulp, paper and oriented strand board (OSB), as well as the demand for biofuels, such as wood-burning pellets made from pulpwood. Our Timberlands segment is also influenced by the availability of harvestable timber. In general, Western log markets are highly tensioned by available supply, while Southern log markets have more available supply. However, additional mill capacity being added in the U.S. South has led to tightening of markets in certain geographies. Our Real Estate, Energy and Natural Resources segment is affected by a variety of factors, including the general state of the economy, local real estate market conditions, the level of construction activity in the U.S. and evolution of emerging renewable energy and carbon-related markets.

Over the past year, particularly in the first half of 2023, home sales and building activity slowed due in part to higher mortgage interest rates, reduced affordability and general macroeconomic conditions. ~~During~~In the second half of 2023 and into first quarter ~~2023, market conditions improved in response to a stabilization in mortgage rates~~2024, new home sales and ~~increased homebuilder sentiment.~~single-family construction activity strengthened, supported by near record-low levels of existing inventory and resilient levels of demand. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for ~~second~~first quarter ~~2023~~2024 averaged ~~1.45~~1.4 million units, a ~~4.5~~4.7 percent ~~increase~~decrease from ~~first~~fourth quarter 2023. Single-family starts averaged ~~929 thousand~~1.1 million units ~~an 11.4~~in first quarter 2024, a 1.4 percent increase from ~~first~~fourth quarter 2023. Multi-family starts averaged ~~518~~346 thousand units in ~~second~~first quarter ~~2023,~~2024, which was a ~~6.1~~19.5 percent decrease from ~~first~~fourth quarter 2023. Single-family construction is the primary driver for our business as compared to multi-family due to the amount of wood products used. Sales of newly built, single-family homes averaged a seasonally adjusted annual rate of ~~694~~667 thousand units for ~~second~~first quarter ~~2023,~~2024, an increase of ~~8.8~~3.5 percent from ~~the prior quarter.~~fourth quarter 2023. Over the medium to long-term, we expect a favorable U.S. housing construction market supported by strong demographics in the key ~~homebuying~~home buying age cohorts, a decade of ~~underbuilding~~under building and a historically low housing inventory.

Repair and remodeling expenditures decreased by ~~1.9~~2.8 percent from ~~first~~fourth quarter 2023 to ~~second~~first quarter ~~2023~~2024 according to the Census Bureau Advance Retail Spending report. ~~Do-it-yourself~~Near-term, activity has been ~~returning~~supported by existing homeowners staying in place and investing in their current homes due to ~~more normalized levels while professionally contracted activities have benefited from larger projects and increases in home equity levels.~~the lock-in effect of having lower rate mortgages compared to current rates. Over the longer term, we expect this sector to ~~return to~~resume pre-pandemic growth trends with healthy household balance sheets, elevated home equity and an aging U.S. housing stock, with a median age of 43 years.

In U.S. wood product markets, demand ~~in early second~~for lumber and OSB was influenced by cautious buyer sentiment at the outset of first quarter ~~2023 continued to be affected by softening in the housing market and ongoing macroeconomic uncertainty.~~2024. As the quarter progressed, ~~improvements~~demand was steady in ~~the~~response to strong single-family housing ~~market, combined with supply concerns resulting from a series of temporary and permanent mill curtailments and wildfires in Canada, led to moderately tighter markets.~~starts. The Random Lengths Framing Lumber Composite price averaged ~~$409/~~$403/MBF and the OSB Composite averaged ~~$360/~~$460/MSF in ~~second~~first quarter ~~2023.~~2024. Over the course of the ~~second~~first quarter, composite prices for lumber increased from ~~$417/~~$395/MBF to ~~$438/~~$422/MBF and composite prices for ~~lumber and~~OSB increased from ~~$297/~~$430/MSF to ~~$432/MSF~~$603/MSF. Constrained capacity for ~~OSB.~~

OSB led to the sharp price increases, while lumber supply moderately outpaced demand.

In Western log markets, Douglas fir sawlog prices~~rose by 0.4~~ decreased 2.9 percent in ~~second~~first quarter ~~2023~~2024 compared with ~~first~~fourth quarter 2023, as reported by Fastmarkets RISI Log Lines based on Weyerhaeuser’s sales mix. Overall, domestic log demand and prices infaced downward pressure through the ~~West stayed consistent, with lower~~quarter, as mills continued to adjust to a soft lumber ~~prices offset by continued constraints in~~market and worked through elevated log ~~supply.~~inventories. In the South, delivered sawlog prices ~~remained flat~~were stable in ~~second~~first quarter ~~2023~~2024 compared to ~~first~~fourth quarter 2023 and declined ~~1.5~~0.6 percent from ~~second~~first quarter ~~2022~~2023 as reported by ~~TimberMart-South, as~~TimberMart-South. While there continued to be demand for logs across the region and markets generally had ample log supply, a number of mills faced elevated inventories and ~~haul capacity constraints eased somewhat.~~

were adjusting operations due to lower lumber prices.

Currency exchange rates, available supply from other countries and trade policy affect our export businesses. During ~~second~~first quarter ~~2023,~~2024, end use demand ~~softened~~ in export markets ~~partially offset by continued disruptions in global log and lumber supply.~~moderated. In Japan, total housing starts decreased ~~1.6~~7.8 percent year to date through ~~May~~February compared to the same period in ~~2022,~~2023, while the key Post and Beam segment saw a 5.9 percent decrease. ~~An increase in lumber~~Lumber imports to Japan from Europe ~~placed downward pressure on market conditions. China demand has improved from low levels late in 2022 but remains subdued~~were reduced due to ~~general economic conditions~~supply chain costs, which provided some support for log sales. China’s weaker end use demand for logs and ~~increased~~lumber was offset by lower competitive supply, ofleading to an increase in pricing for logs from ~~New Zealand.~~the West.

Interest rates affect our business primarily through their impact on mortgage rates and housing affordability, their general impact on the economy and their influence on our capital management activities. Actions by the U.S. Federal Reserve, the overall condition of the economy and fluctuations in financial markets are all factors that influence long-term interest rates. 30-year mortgage rates, which are correlated with long-term interest rates, increased from ~~6.3~~6.6 percent at the end of fourth quarter 2023 to 6.8 percent at the end of first quarter ~~2023~~2024, according to ~~6.7 percent at the end of second quarter 2023. While mortgage rates remain elevated, home buyers~~economic data from Freddie Mac. Many builders have ~~responded favorably to even small reductions. Builders have also~~ been able to offset higher mortgage rates through discounts, ~~loan subsidies~~mortgage rate buydowns and modifying product offerings such as

home sizes and finishes. Higher rates have also locked-in many existing homeowners from selling, reducing inventories of existing homes for sale which has led to increased demand for available new homes.

Increased inflation affects the cost of our operations across each of our business segments, including costs for raw materials, transportation, energy and labor. The Consumer Price Index increased ~~3.0~~at an annual rate of 3.5 percent ~~year over year in June 2023,~~as of March 2024, which is markedly down from its peak of over 9.0 percent in June 2022. While we can offset some of the impacts of inflation through our sales activities, ~~our~~ operational excellence initiatives and ~~our~~ procurement practices, not all of the costs associated with inflation can be fully mitigated or passed on to the consumer.

The condition of the labor market affects all of our businesses as it relates to our ability to attract and retain employees and contractors. The unemployment rate of ~~3.6~~3.8 percent in ~~June 2023~~March 2024 remained near historically low levels and increased 0.1 percent from the end of ~~first~~fourth quarter 2023. ~~Labor force participation hasincreased to 62.6 percent in June 2023, from 62.2 percent in June 2022, approaching pre-Pandemic levels of 63 percent.~~

Governments and businesses across the globe are taking action on climate change and are making significant commitments towards decarbonizing operations and reducing greenhouse gas emissions to net zero. Achieving these commitments will require governments and companies to take major steps to modify operations, invest in low-carbon activities and purchase ~~offsets~~credits to reduce environmental impacts. We believe we are uniquely positioned to help entities achieve these commitments through natural climate solutions, including forest carbon sequestration, carbon capture and storage and renewable energy activities.

~~CONSOLIDATED RESULTS~~

CONSOLIDATED RESULTS

How We Did ~~Second~~First Quarter ~~2023 and Year-to-Date 2023~~2024


	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022			MARCH 2024		MARCH 2023		2024 VS. 2023
Net sales	$	1,997	$	2,973	$	(976	)	$	3,878	$	6,085	$	(2,207	)	$	1,796	$	1,881	$	(85	)
Costs of sales	$	1,528	$	1,789	$	(261	)	$	3,040	$	3,436	$	(396	)	$	1,441	$	1,512	$	(71	)
Operating income	$	319	$	1,047	$	(728	)	$	555	$	2,391	$	(1,836	)	$	196	$	236	$	(40	)
Net earnings	$	230	$	788	$	(558	)	$	381	$	1,559	$	(1,178	)	$	114	$	151	$	(37	)
Earnings per share, basic and diluted	$	0.31	$	1.06	$	(0.75	)	$	0.52	$	2.09	$	(1.57	)	$	0.16	$	0.21	$	(0.05	)

Comparing ~~Second~~First Quarter ~~2023~~2024 with ~~Second~~First Quarter ~~2022~~2023

Net sales

Net sales decreased ~~$976~~$85 million – 335 percent – primarily due to ~~an $841~~a $75 million decrease in ~~Wood Products~~Timberlands sales to unaffiliated customers, attributable to decreased log sales volumes and sales realizations across most product lines, as well as a $98 million decrease in Timberlands net sales to unaffiliated customers primarily attributable to decreased sales realizations and sales volumes in the Western region.realizations.

Costs of sales

Costs of sales decreased ~~$261~~$71 million – 155 percent – primarily due to decreased sales volumes ~~and raw material costs across most product lines and decreased freight costs within~~in our Wood Products segment, as well as decreased ~~export log freight costs and~~ third-party log purchases ~~within~~and sales volumes in our Timberlands segment.

Operating income

Operating income decreased ~~$728~~$40 million – 7017 percent – primarily due to a ~~$715~~$14 million decrease in consolidated gross margin (see discussion of components above), as ~~discussed above.~~well as increased elimination of intersegment profit in inventory and LIFO and unallocated corporate function and variable compensation expense.

Net earnings

Net earnings decreased ~~$558~~$37 million – 7125 percent – primarily due to the ~~$728~~$40 million decrease in operating income, as discussed ~~above.~~

~~This decrease in operating income was~~above, partially offset by a ~~$159~~$2 million decrease in income tax expense (refer to Income Taxes).

~~Comparing Year-to-Date 2023 with Year-to-Date 2022~~

~~Net sales~~

Net sales decreased $2,207 million – 36 percent – primarily due to a $2,042 million decrease in Wood Products sales to unaffiliated customers attributable to decreased sales realizations and sales volumes across most product lines, as well as a $101 million decrease in Timberlands sales to unaffiliated customers attributable to decreased sales realizations in the Western region, partially offset by increased sales volumes in the Southern region and increased stumpage sales.

~~Costs of sales~~

Costs of sales decreased $396 million – 12 percent – primarily due to decreased sales volumes and raw material costs across most product lines within our Wood Products segment, as well as decreased freight costs.

~~Operating income~~

~~Operating income decreased $1,836 million – 77 percent – primarily due to a $1,811 million decrease in consolidated gross margin, as discussed above.~~

~~Net earnings~~

~~Net earnings decreased $1,178 million – 76 percent – primarily due to the $1,836 million decrease in operating income, as discussed above.~~

~~This decrease was partially offset by a $346 million decrease in income tax expense (refer to~~ ~~Income Taxes~~), ~~as well as a $276 million pretax charge ($207 million after-tax) related to the early extinguishment of debt in first quarter 2022 (refer to~~ ~~Note 8: Long-Term Debt and Line of Credit~~).

TIMBERLANDS

How We Did ~~Second~~First Quarter ~~2023 and Year-to-Date 2023~~2024


	QUARTER ENDED					AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023		JUNE 2022			2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022			MARCH 2024		MARCH 2023		2024 VS. 2023
Net sales to unaffiliated customers:
Delivered logs:
West	$	206	$	308		$	(102	)	$	435	$	567	$	(132	)	$	176	$	229	$	(53	)
South		162		160			2			330		314		16			151		168		(17	)
North		7		10			(3	)		24		25		(1	)		13		17		(4	)
Subtotal delivered logs sales		375		478	��		(103	)		789		906		(117	)		340		414		(74	)
Stumpage and pay-as-cut timber		15		11			4			31		20		11			11		16		(5	)
Recreational and other lease revenue		17		16			1			35		33		2			19		18		1
Other(1)		10		10			—			24		21		3			17		14		3
Subtotal net sales to unaffiliated customers		417		515			(98	)		879		980		(101	)		387		462		(75	)
Intersegment sales		150		156			(6	)		292		317		(25	)		134		142		(8	)
Total sales	$	567	$	671		$	(104	)	$	1,171	$	1,297	$	(126	)	$	521	$	604	$	(83	)
Costs of sales	$	439	$	495		$	(56	)	$	900	$	918	$	(18	)	$	415	$	461	$	(46	)
Operating income and Net contribution to earnings	$	104	$	153		$	(49	)	$	224	$	335	$	(111	)	$	80	$	120	$	(40	)

(1)

Other Timberlands sales include sales of seeds and seedlings from our nursery operations as well as wood chips.

Comparing ~~Second~~First Quarter ~~2023~~2024 with ~~Second~~First Quarter ~~2022~~2023

Net sales to unaffiliated customers

Net sales to unaffiliated customers decreased ~~$98~~$75 million – 1916 percent – primarily due to a ~~$102~~$53 million decrease in Western log sales attributable to a 2913 percent decrease in sales volumes and a 12 percent decrease in sales realizations, ~~and~~as well as a $17 million decrease in Southern log sales attributable to a 7 percent decrease in sales volumes ~~partially offset by~~and a ~~$4 million increase~~3 percent decrease in ~~stumpage and pay-as-cut timber sales.~~sales realizations.

Intersegment sales

Intersegment sales decreased $6$8 million – 46 percent – primarily due to a 93 percent decrease in sales realizations, ~~partially offset by~~as well as a 63 percent ~~increase~~decrease in sales volumes.

Costs of sales

Costs of sales decreased ~~$56~~$46 million – 1110 percent – primarily due to decreased Western third-party log purchases and ~~export log~~ freight ~~costs.~~costs, as well as decreased sales volumes across all regions.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased ~~$49~~$40 million – 3233 percent – primarily due to the change in the components of gross margin, as discussed above.

~~Comparing Year-to-Date 2023 with Year-to-Date 2022~~

~~Net sales to unaffiliated customers~~

Net sales to unaffiliated customers decreased $101 million – 10 percent – primarily due to a $132 million decrease in Western log sales attributable to a 22 percent decrease in sales realizations, partially offset by a $16 million increase in Southern log sales, attributable to a 5 percent increase in sales volumes, and an $11 million increase in stumpage and pay-as-cut timber sales.

~~Intersegment sales~~

~~Intersegment sales decreased $25 million – 8 percent – primarily due to a 9 percent decrease in sales realizations, partially offset by a 2 percent increase in sales volumes.~~

~~Costs of sales~~

Costs of sales decreased $18 million – 2 percent – primarily due to decreased Western third-party log purchases, partially offset by increased logging and hauling costs as well as increased Southern log sales volumes.

~~Operating income and Net contribution to earnings~~

~~Operating income and net contribution to earnings decreased $111 million – 33 percent – primarily due to the change in the components of gross margin, as discussed above.~~

Third-Party Log Sales Volumes and Fee Harvest Volumes


	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN THOUSANDS	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022			MARCH 2024		MARCH 2023		2024 VS. 2023
Third-party log sales – tons:
West(1)		1,661		1,778		(117	)		3,335		3,382		(47	)		1,452		1,674		(222	)
South		4,341		4,167		174			8,727		8,302		425			4,089		4,386		(297	)
North		98		118		(20	)		302		328		(26	)		175		204		(29	)
Total		6,100		6,063		37			12,364		12,012		352			5,716		6,264		(548	)
Fee harvest volumes – tons:
West(1)		2,292		2,085		207			4,537		4,325		212			2,214		2,245		(31	)
South		6,430		6,159		271			12,862		12,001		861			5,990		6,432		(442	)
North		175		180		(5	)		460		458		2			239		285		(46	)
Total		8,897		8,424		473			17,859		16,784		1,075			8,443		8,962		(519	)

(1)

Western logs are primarily transacted in thousand board feet (MBF) but are converted to ton equivalents for external reporting purposes.

REAL ESTATE, ENERGY AND NATURAL RESOURCES

How We Did ~~Second~~First Quarter ~~2023 and Year-to-Date 2023~~2024


	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022			MARCH 2024		MARCH 2023		2024 VS. 2023
Net sales:
Real estate	$	47	$	90	$	(43	)	$	119	$	187	$	(68	)	$	83	$	72	$	11
Energy and natural resources		33		27		6			62		58		4			24		29		(5	)
Total	$	80	$	117	$	(37	)	$	181	$	245	$	(64	)	$	107	$	101	$	6
Costs of sales	$	21	$	45	$	(24	)	$	62	$	86	$	(24	)	$	41	$	41	$	—
Operating income and Net contribution to earnings	$	52	$	65	$	(13	)	$	105	$	146	$	(41	)	$	60	$	53	$	7

The volume of real estate sales is a function of many factors, including the general state of the economy, demand in local real estate markets, the ability of buyers to obtain financing, the number of competing properties listed for sale, the seasonal nature of sales, the plans of adjacent landowners, our expectation of future price appreciation, the timing of harvesting activities and the availability of government and not-for-profit funding. In any period, the average ~~sales~~ price per acre will vary based on the location and physical characteristics of parcels sold.

Comparing ~~Second~~First Quarter ~~2023~~2024 with ~~Second~~First Quarter ~~2022~~2023

Net sales

Net sales ~~decreased $37~~increased $6 million – 326 percent – primarily due to ~~a decrease~~increases in ~~acres sold, partially offset by an increase in the~~ average price per acre ~~sold.~~sold and mitigation credit sales, partially offset by a decrease in royalty income from our Energy and Natural Resources business.

Costs of sales

Costs of sales ~~decreased $24 million – 53 percent – primarily due to~~remained consistent with an increase in mitigation credit sales offset by a decrease in acres ~~sold, as well as a decrease in basis per acre~~ sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings ~~decreased $13~~increased $7 million – ~~20 percent – primarily due to the change in the components of gross margin, as discussed above.~~

~~Comparing Year-to-Date 2023 with Year-to-Date 2022~~

~~Net sales~~

~~Net sales decreased $64 million – 26 percent – primarily due to a decrease in acres sold, partially offset by an increase in the average price per acre sold.~~

~~Costs of sales~~

~~Cost of sales decreased $24 million – 28 percent – primarily due to a decrease in acres sold, partially offset by an increase in basis per acre sold.~~

~~Operating income and Net contribution to earnings~~

~~Operating income and net contribution to earnings decreased $41 million – 28~~13 percent – primarily due to the change in the components of gross margin, as discussed above.

REAL ESTATE SALES STATISTICS


	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022			MARCH 2024		MARCH 2023		2024 VS. 2023
Acres sold		9,281		26,906		(17,625	)		30,034		51,032		(20,998	)		19,774		20,753		(979	)
Average price per acre	$	4,790	$	3,215	$	1,575		$	3,720	$	3,484	$	236		$	3,629	$	3,241	$	388

WOOD PRODUCTS

How We Did ~~Second~~First Quarter ~~2023 and Year-to-Date 2023~~2024


	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022			MARCH 2024		MARCH 2023		2024 VS. 2023
Net sales:
Structural lumber	$	573	$	998	$	(425	)	$	1,088	$	2,204	$	(1,116	)	$	464	$	515	$	(51	)
Oriented strand board		215		497		(282	)		423		1,061		(638	)		255		208		47
Engineered solid section		215		247		(32	)		384		443		(59	)		177		169		8
Engineered I-joists		126		168		(42	)		213		305		(92	)		99		87		12
Softwood plywood		44		53		(9	)		85		111		(26	)		41		41		—
Medium density fiberboard		42		53		(11	)		80		101		(21	)		39		38		1
Complementary building products		204		239		(35	)		367		454		(87	)		141		163		(22	)
Other products produced(1)		81		86		(5	)		178		181		(3	)		86		97		(11	)
Total	$	1,500	$	2,341	$	(841	)	$	2,818	$	4,860	$	(2,042	)	$	1,302	$	1,318	$	(16	)
Costs of sales	$	1,218	$	1,414	$	(196	)	$	2,377	$	2,690	$	(313	)	$	1,107	$	1,159	$	(52	)
Operating income and Net contribution to earnings	$	218	$	863	$	(645	)	$	313	$	2,045	$	(1,732	)	$	128	$	95	$	33

(1)

Other products produced sales include wood chips, other byproducts and third-party residual log sales from our Canadian Forestlands operations.

Comparing ~~Second~~First Quarter 2024 with First Quarter 2023 ~~with Second Quarter 2022~~

Net sales

Net sales decreased ~~$841~~$16 million – 361 percent – due to:

●

a ~~$425~~$51 million decrease in structural lumber sales attributable to a 386 percent decrease in sales ~~realizations,~~volumes, as well as a 75 percent decrease in sales realizations;

●

a $22 million decrease in complementary building products sales primarily attributable to decreased sales volumes and realizations across most products and

●

an $11 million decrease in other products produced primarily attributable to decreased sales realizations for wood chips.

These decreases were partially offset by:

●

a $47 million increase in oriented strand board sales attributable to a 33 percent increase in sales realizations, partially offset by an 8 percent decrease in sales volumes;

●

a ~~$282~~$12 million ~~decrease in oriented strand board sales attributable to a 56 percent decrease in sales realizations, as well as a 2 percent decrease in sales volumes;~~

●

~~a $42 million decrease~~increase in engineered I-joists sales attributable to a 1537 percent ~~decrease in sales realizations, as well as a 10 percent decrease in sales volumes;~~

●

a $35 million decrease in complementary building products sales attributable to decreased sales realizations and volumes for steel, concrete and cedar, as well as decreased sales volumes for siding and trim;

●

~~a $32 million decrease in engineered solid section sales attributable to an 8 percent decrease in sales realizations, as well as a 6 percent decrease in sales volumes;~~

●

~~an $11 million decrease in medium density fiberboard sales attributable to a 31 percent decrease~~increase in sales volumes, partially offset by a ~~14 percent increase in sales realizations;~~

●

~~a $9 million decrease in softwood plywood sales attributable to a 36~~16 percent decrease in sales realizations ~~partially offset by a 34 percent increase in sales volumes~~ and

●

~~a $5 million decrease in other products produced attributable to decreased sales volumes.~~

~~Costs of sales~~

~~Costs of sales decreased $196 million – 14 percent – primarily due to decreased sales volumes and raw material costs across most product lines, as well as decreased freight costs.~~

~~Operating income and Net contribution to earnings~~

~~Operating income and net contribution to earnings decreased $645 million – 75 percent – primarily due to the change in the components of gross margin, as discussed above.~~

~~Comparing Year-to-Date 2023 with Year-to-Date 2022~~

~~Net sales~~

~~Net sales decreased $2,042 million – 42 percent – due to:~~

●

~~a $1,116 million decrease in structural lumber sales attributable to a 48 percent decrease in sales realizations, as well as a 4 percent decrease in sales volumes;~~

●

~~a $638 million decrease in oriented strand board sales attributable to a 61 percent decrease in sales realizations, partially offset by a 3 percent increase in sales volumes;~~

●

~~a $92 million decrease in engineered I-joist sales attributable to a 25 percent decrease in sales volumes, as well as a 6 percent decrease in sales realizations;~~

●

an ~~$87~~$8 million ~~decrease in complementary building products sales attributable to decreased sales realizations and volumes for steel, concrete and cedar, as well as decreased sales volumes for siding and trim;~~

●

~~a $59 million decrease~~increase in engineered solid section sales attributable to a 1215 percent ~~decrease in sales volumes, as well as a 2 percent decrease in sales realizations;~~

●

~~a $26 million decrease in softwood plywood sales attributable to a 37 percent decrease in sales realizations, partially offset by a 22 percent~~ increase ~~in sales volumes and~~

●

~~a $21 million decrease in medium density fiberboard sales attributable to a 33 percent decrease~~ in sales volumes, partially offset by ~~an 18~~a 12 percent ~~increase~~decrease in sales realizations.

Costs of sales

Costs of sales decreased ~~$313~~$52 million – 124 percent – primarily due to decreased sales volumes for oriented strand board and structural lumber, as discussed above, as well as decreased raw material costs across most product ~~lines, as well as decreased freight costs.~~lines.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings ~~decreased $1,732~~increased $33 million – 8535 percent – primarily due to the change in the components of gross margin, as discussed above.

Third-Party Sales Volumes


	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS(1)	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022			MARCH 2024		MARCH 2023		2024 VS. 2023
Structural lumber – board feet		1,196		1,289		(93	)		2,340		2,446		(106	)		1,080		1,144		(64	)
Oriented strand board – square feet (3/8”)		720		735		(15	)		1,493		1,452		41			710		773		(63	)
Engineered solid section – cubic feet		6.0		6.4		(0.4	)		10.7		12.1		(1.4	)		5.4		4.7		0.7
Engineered I-joists – lineal feet		44		49		(5	)		71		95		(24	)		37		27		10
Softwood plywood – square feet (3/8”)		94		70		24			177		145		32			81		83		(2	)
Medium density fiberboard – square feet (3/4”)		31		45		(14	)		60		89		(29	)		33		29		4

(1)

Sales volumes include sales of internally produced products and products purchased for resale primarily through our distribution business.

PRODUCTION AND OUTSIDE PURCHASE VOLUMES

Outside purchase volumes are primarily purchased for resale through our distribution business. Production volumes are produced for sale through our own sales organizations and through our distribution business. Production of oriented strand board and engineered solid section are also used to manufacture engineered I-joists.


	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022			MARCH 2024		MARCH 2023		2024 VS. 2023
Structural lumber – board feet:
Production		1,164		1,232		(68	)		2,307		2,435		(128	)		1,085		1,143		(58	)
Outside purchase		36		43		(7	)		75		85		(10	)		33		39		(6	)
Total		1,200		1,275		(75	)		2,382		2,520		(138	)		1,118		1,182		(64	)
Oriented strand board – square feet (3/8”):
Production		727		758		(31	)		1,488		1,497		(9	)		735		761		(26	)
Outside purchase		19		66		(47	)		36		136		(100	)		20		17		3
Total		746		824		(78	)		1,524		1,633		(109	)		755		778		(23	)
Engineered solid section – cubic feet:
Production		5.9		6.4		(0.5	)		10.5		12.1		(1.6	)		5.7		4.6		1.1
Outside purchase		4.0		0.3		3.7			6.0		0.5		5.5			2.8		2.0		0.8
Total		9.9		6.7		3.2			16.5		12.6		3.9			8.5		6.6		1.9
Engineered I-joists – lineal feet:
Production		38		50		(12	)		63		94		(31	)		43		25		18
Outside purchase		—		3		(3	)		1		5		(4	)		1		—		1
Total		38		53		(15	)		64		99		(35	)		44		25		19
Softwood plywood – square feet (3/8”):
Production		84		67		17			158		133		25			72		74		(2	)
Outside purchase		11		8		3			23		18		5			9		12		(3	)
Total		95		75		20			181		151		30			81		86		(5	)
Medium density fiberboard – square feet (3/4"):
Production		33		48		(15	)		67		92		(25	)		34		34		—
Total		33		48		(15	)		67		92		(25	)		34		34		—

UNALLOCATED ITEMS

Net Charge to Earnings – Unallocated Items

QUARTER ENDED

AMOUNT OF
CHANGE

YEAR-TO-DATE ENDED

AMOUNT OF
CHANGE

DOLLAR AMOUNTS IN MILLIONS

JUNE 2023

JUNE 2022

2023 VS.
2022

JUNE 2023

JUNE 2022

2023 VS.
2022

Unallocated corporate function and variable compensation expense

$
(32
)

$
(36
)

$
4

$
(59
)

$
(67
)

$
8

Liability classified share-based compensation

(2
)

2

(4
)

(2
)

3

(5
)
Foreign exchange gain (loss)

2

3

(1
)

1

3

(2
)
Elimination of intersegment profit in inventory and LIFO

3

18

(15
)

12

(41
)

53

Other

(26
)

(21
)

(5
)

(39
)

(33
)

(6
)
Operating loss

(55
)

(34
)

(21
)

(87
)

(135
)

48

Non-operating pension and other post-employment benefit costs

(12
)

(11
)

(1
)

(21
)

(26
)

5

Interest income and other

18

1

17

30

—

30

Net charge to earnings

$
(49
)

$
(44
)

$
(5
)

$
(78
)

$
(161
)

$
83


	QUARTER ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2024			MARCH 2023			2024 VS. 2023
Unallocated corporate function and variable compensation expense	$	(38	)	$	(27	)	$	(11	)
Liability classified share-based compensation		(1	)		—			(1	)
Foreign exchange loss		(1	)		(1	)		—
Elimination of intersegment profit in inventory and LIFO		(6	)		9			(15	)
Other		(26	)		(13	)		(13	)
Operating loss		(72	)		(32	)		(40	)
Non-operating pension and other post-employment benefit costs		(11	)		(9	)		(2	)
Interest income and other		16			12			4
Net charge to earnings	$	(67	)	$	(29	)	$	(38	)

Comparing ~~Second~~First Quarter ~~2023~~2024 with ~~Second~~First Quarter ~~2022~~2023

Net charge to earnings increased $5$38 million – 11131 percent – primarily due ~~to:~~

●

to a $15 million increase in elimination of intersegment profit in inventory and LIFO and

●

~~a $5~~ an $11 million increase in ~~other, primarily due to increased charges for environmental remediation.~~

~~These changes were partially offset by a $17 million increase in interest income~~unallocated corporate function and ~~other due to an increase in the interest rate on our cash and short-term investment accounts.~~

~~Comparing Year-to-Date 2023 with Year-to-Date 2022~~

Net charge to earnings decreased $83 million – 52 percent – primarily due to a $53 million decrease in elimination of intersegment profit in inventory and LIFO, as well as a $30 million increase in interest income and other due to an increase in the interest rate on our cash and short-term investment accounts.variable compensation expense.

INTEREST EXPENSE

Our interest expense, net of capitalized interest, was:

●

$7067 million for ~~second~~first quarter ~~2023~~2024 and ~~$136 million year-to-date 2023;~~

●

$6566 million for ~~second~~first quarter ~~2022 and $137 million year-to-date 2022.~~2023.

Interest expense increased by $5$1 million compared to ~~second~~first quarter ~~2022~~2023 primarily due to an increase in weighted average outstanding debt in second quarter 2023. Year-to-date 2023 interest expense was comparable to year-to-date 2022 primarily due to the May 2023 issuance of debt securities that increased our weighted average outstanding debt, offset by a series of ~~transactions performed in March 2022~~debt issuances and retirements during 2023 that ~~lowered~~slightly increased our ~~weighted~~ average ~~interest rate and extended our weighted average maturity.~~

~~Refer to~~ ~~Note 8: Long-Term Debt and Line of Credit~~ ~~for further information.~~outstanding debt.

INCOME TAXES

Our provision for income taxes was:

●

a ~~$25~~$20 million expense for ~~second~~first quarter ~~2023~~2024 and ~~$47 million year-to-date 2023;~~

●

a ~~$184~~$22 million expense for ~~second~~first quarter ~~2022 and $393 million year-to-date 2022.~~2023.

Our provision for income taxes is primarily driven by earnings generated by our TRSs. Income tax expense decreased by ~~$346~~$2 million compared to ~~year-to-date 2022~~first quarter 2023 primarily due to a slight decrease in our ~~TRS~~overall earnings in ~~2023, as well as a decrease in our estimated annual effective tax rate.~~first quarter 2024.

Refer to Note 14: Income Taxes for further information.

LIQUIDITY AND CAPITAL RESOURCES

We are committed to maintaining an appropriate capital structure that provides financial flexibility and enables us to protect the interests of our shareholders and meet our obligations to our lenders, while also maintaining access to all major financial markets. As of ~~June 30, 2023,~~March 31, 2024, we had ~~approximately $1.1 billion~~$871 million in cash and cash equivalents ~~$665 million in short-term investments~~ and $1.5 billion of availability on our line of credit, which expires in March 2028. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

●

$~~622~~124 million for ~~year-to-date 2023~~first quarter 2024 and

●

$~~2,103~~126 million for ~~year-to-date 2022.~~first quarter 2023.

Net cash from operations decreased ~~$1,481~~$2 million primarily due to ~~decreased~~a $17 million increase in cash paid for income taxes, partially offset by increased cash inflows from our business operations. ~~This change was partially offset by a $336 million decrease in cash paid for income taxes.~~

CASH FROM INVESTING ACTIVITIES

Consolidated net cash from investing activities was:

●

$~~(818)~~(77) million for ~~year-to-date 2023~~first quarter 2024 and

●

$~~(433)~~(69) million for ~~year-to-date 2022.~~first quarter 2023.

Net cash from investing activities decreased ~~$385~~$8 million primarily due to ~~a $664~~an $8 million increase in cash paid for ~~short-term investments. This change was partially offset by a $281 million decrease in cash paid for acquisition of timberlands.~~capital expenditures.

Summary of Capital Spending by Business Segment


	YEAR-TO-DATE ENDED				QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023		JUNE 2022		MARCH 2024		MARCH 2023
Timberlands	$	48	$	53	$	31	$	26
Wood Products		99		95		42		43
Unallocated Items		5		3		6		2
Total	$	152	$	151	$	79	$	71

We anticipate our capital expenditures for ~~2023~~2024 to be approximately $440 million. The amount we spend on capital expenditures could change.

CASH FROM FINANCING ACTIVITIES

Consolidated net cash from financing activities was:

●

$~~(290)~~(308) million for ~~year-to-date 2023~~first quarter 2024 and

●

$~~(1,938)~~(841) million for ~~year-to-date 2022.~~first quarter 2023.

Net cash from financing activities increased ~~$1,648~~$533 million primarily due ~~to:~~

●

to a ~~$1,203 million decrease in cash used for payments on long-term debt;~~

●

~~a $414~~$551 million decrease in cash used for payments of dividends, ~~and~~

●

partially offset by a ~~$174~~$16 million ~~decrease~~increase in cash used for repurchases of common stock.

~~These changes were partially offset by a $138 million decrease in net proceeds from issuance of long-term debt.~~

Line of Credit

In March 2023, we entered into a new $1.5 billion five-year senior unsecured revolving credit facility, which expires in March 2028 and replaced the existing facility which was set to expire in January 2025. Borrowings will bear interest at a floating rate based on either the adjusted term SOFR plus a spread or a mutually agreed upon base rate plus a spread. We had no outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility as of ~~June 30, 2023~~March 31, 2024 or December 31, ~~2022.~~2023.

Refer to Note 8: ~~Long-Term Debt and~~ Line of Credit for further information.

Long-Term Debt

~~In July 2023, we repaid $118 million of our 7.125% notes at maturity.~~ We have ~~$860~~$210 million of long-term debt scheduled to mature during ~~fourth~~first quarter ~~2023.~~

In May 2023, we completed an offering of debt securities by issuing $750 million of 4.750 percent notes due in May 2026. The net proceeds after deducting the discount, underwriting fees and issuance costs were $743 million. Of these total net proceeds, $664 million was invested in short-term debt securities which are classified as held-to-maturity.

In March 2022, we completed a series of transactions that lowered our weighted average interest rate and extended our weighted average maturity by issuing $900 million in notes and using the net proceeds plus cash on hand to close cash tender offers for $931 million of principal in higher interest rate notes. We issued $450 million of 3.375 percent notes due in March 2033 and $450 million of 4.000 percent notes due in March 2052. The net proceeds after deducting the discount, underwriting fees and issuance costs were $444 million and $437 million, respectively. The net proceeds were used to retire $592 million of our 7.375 percent notes due in March 2032, $161 million of our 8.500 percent notes due in January 2025, $73 million of our 7.125 percent notes due in July 2023, $65 million of our 7.950 percent notes due in March 2025, and $40 million of our 7.850 percent notes due in July 2026. We paid holders an aggregate $1.2 billion in cash reflecting principal, premium to par and tender premium.2025.

Refer to Note ~~8: Long-Term Debt and Line~~9: Fair Value of ~~Credit~~Financial Instruments for further information.

Debt Covenants

As of ~~June 30, 2023,~~March 31, 2024, Weyerhaeuser Company was in compliance with its debt covenants. There have been no significant changes to the debt covenants presented in our ~~2022~~2023 Annual Report on Form 10-K for our long-term debt instruments, and we expect to remain in compliance with our debt covenants for the foreseeable future.

Dividend Payments

We paid cash dividends on common shares of:

●

$~~938~~248 million for ~~year-to-date 2023~~first quarter 2024 and

●

$~~1,352~~799 million for ~~year-to-date 2022.~~first quarter 2023.

The decrease in dividends paid is primarily due to a supplemental dividend of $0.14 per share based on 2023 financial results for a total of $102 million paid in first quarter 2024 in comparison to a supplemental dividend of $0.90 per share based on 2022 financial results for a total of $660 million paid in first quarter ~~2023 in comparison to a supplemental dividend of $1.45 per share based on 2021 financial results for a total of $1,084 million paid in first quarter 2022.~~2023.

We plan to supplement our base dividend each year with an additional return of cash, in the form of a supplemental cash dividend and/or share repurchase, to achieve our targeted annual payout of total cash to shareholders of 75 to 80 percent of Adjusted Funds Available for Distribution (Adjusted FAD). For further information on Adjusted FAD see Performance and Liquidity Measures.

Share Repurchases

We repurchased ~~1,689,874~~1,472,369 common shares for approximately ~~$50~~$49 million (including transaction fees) during ~~second~~first quarter ~~2023~~2024 and ~~2,805,434~~we repurchased 1,115,560 common shares for approximately ~~$85~~$35 million (including transaction fees) during ~~year-to-date~~first quarter 2023 under the 2021 Repurchase Program. During second quarter 2022, we repurchased 3,784,787 common shares for approximately $138 million (including transaction fees) and we repurchased 6,982,462 common shares for approximately $259 million (including transaction fees) during year-to-date 2022 under the 2021 Repurchase Program. There were no unsettled shares as of ~~June 30, 2023~~March 31, 2024 and ~~223,548~~13,866 unsettled shares (approximately $7$1 million) as of December 31, ~~2022.~~2023. Refer to Note 4: Net Earnings Per Share and Share Repurchases for further information.

PERFORMANCE AND LIQUIDITY MEASURES

Adjusted EBITDA by Segment

We use Adjusted EBITDA as a key performance measure to evaluate the performance of the consolidated company and our business segments. This measure should not be considered in isolation from, and is not intended to represent an alternative to, our results reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP). However, we believe Adjusted EBITDA provides meaningful supplemental information for investors about our operating performance, better facilitates period to period comparisons and is widely used by analysts, lenders, rating agencies and other interested parties. Our definition of Adjusted EBITDA may be different from similarly titled measures reported by other companies. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold and special items.


	QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE			QUARTER ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023			JUNE 2022			2023 VS. 2022			JUNE 2023			JUNE 2022			2023 VS. 2022			MARCH 2024			MARCH 2023			2024 VS. 2023
Adjusted EBITDA by Segment:
Timberlands	$	172		$	219		$	(47	)	$	360		$	466		$	(106	)	$	144		$	188		$	(44	)
Real Estate & ENR		70			107			(37	)		159			223			(64	)		94			89			5
Wood Products		270			912			(642	)		418			2,145			(1,727	)		184			148			36
		512			1,238			(726	)		937			2,834			(1,897	)		422			425			(3	)
Unallocated Items		(43	)		(33	)		(10	)		(73	)		(132	)		59			(70	)		(30	)		(40	)
Adjusted EBITDA	$	469		$	1,205		$	(736	)	$	864		$	2,702		$	(1,838	)	$	352		$	395		$	(43	)

We reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income (loss) for the business segments, as those are the most directly comparable U.S. GAAP measures for each.

24The table below reconciles Adjusted EBITDA for the quarter ended March 31, 2024:


DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	114
Interest expense, net of capitalized interest											67
Income taxes											20
Net contribution (charge) to earnings	$	80	$	60	$	128	$	(67	)	$	201
Non-operating pension and other post-employment benefit costs		—		—		—		11			11
Interest income and other		—		—		—		(16	)		(16	)
Operating income (loss)		80		60		128		(72	)		196
Depreciation, depletion and amortization		64		3		56		2			125
Basis of real estate sold		—		31		—		—			31
Adjusted EBITDA	$	144	$	94	$	184	$	(70	)	$	352

The table below reconciles Adjusted EBITDA for the quarter ended ~~June 30,~~March 31, 2023:

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate &
ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
230

Interest expense, net of capitalized interest

70

Income taxes

25

Net contribution (charge) to earnings

$
104

$
52

$
218

$
(49
)

$
325

Non-operating pension and other post-employment benefit costs

—

—

—

12

12

Interest income and other

—

—

—

(18
)

(18
)
Operating income (loss)

104

52

218

(55
)

319

Depreciation, depletion and amortization

68

5

52

1

126

Basis of real estate sold

—

13

—

—

13

Special items included in operating income (loss)(1)

—

—

—

11

11

Adjusted EBITDA

$
172

$
70

$
270

$
(43
)

$
469

~~(1)~~

~~Operating income (loss) for Unallocated Items includes a pretax special item consisting of an $11 million noncash environmental remediation charge.~~


DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	151
Interest expense, net of capitalized interest											66
Income taxes											22
Net contribution (charge) to earnings	$	120	$	53	$	95	$	(29	)	$	239
Non-operating pension and other post-employment benefit costs		—		—		—		9			9
Interest income and other		—		—		—		(12	)		(12	)
Operating income (loss)		120		53		95		(32	)		236
Depreciation, depletion and amortization		68		3		53		2			126
Basis of real estate sold		—		33		—		—			33
Adjusted EBITDA	$	188	$	89	$	148	$	(30	)	$	395

~~The table below reconciles~~ Adjusted ~~EBITDA for the quarter ended June 30, 2022:~~

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate &
ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
788

Interest expense, net of capitalized interest

65

Income taxes

184

Net contribution (charge) to earnings

$
153

$
65

$
863

$
(44
)

$
1,037

Non-operating pension and other post-employment benefit costs

—

—

—

11

11

Interest income and other

—

—

—

(1
)

(1
)
Operating income (loss)

153

65

863

(34
)

1,047

Depreciation, depletion and amortization

66

3

49

1

119

Basis of real estate sold

—

39

—

—

39

Adjusted EBITDA

$
219

$
107

$
912

$
(33
)

$
1,205

~~The table below reconciles Adjusted EBITDA for the year-to-date period ended June 30, 2023:~~

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate &
ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
381

Interest expense, net of capitalized interest

136

Income taxes

47

Net contribution (charge) to earnings

$
224

$
105

$
313

$
(78
)

$
564

Non-operating pension and other post-employment benefit costs

—

—

—

21

21

Interest income and other

—

—

—

(30
)

(30
)
Operating income (loss)

224

105

313

(87
)

555

Depreciation, depletion and amortization

136

8

105

3

252

Basis of real estate sold

—

46

—

—

46

Special items included in operating income (loss)(1)

—

—

—

11

11

Adjusted EBITDA

$
360

$
159

$
418

$
(73
)

$
864

~~(1)~~

~~Operating income (loss) for Unallocated Items includes a pretax special item consisting of an $11 million noncash environmental remediation charge.~~

~~The table below reconciles Adjusted EBITDA for the year-to-date period ended June 30, 2022:~~

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate
& ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
1,559

Interest expense, net of capitalized interest

137

Loss on debt extinguishment(1)

276

Income taxes

393

Net contribution (charge) to earnings

$
335

$
146

$
2,045

$
(161
)

$
2,365

Non-operating pension and other post-employment benefit costs

—

—

—

26

26

Interest income and other

—

—

—

—

—

Operating income (loss)

335

146

2,045

(135
)

2,391

Depreciation, depletion and amortization

131

7

100

3

241

Basis of real estate sold

—

70

—

—

70

Adjusted EBITDA

$
466

$
223

$
2,145

$
(132
)

$
2,702

~~(1)~~

~~Loss on debt extinguishment is a special item consisting of a pretax charge of $276 million ($207 million after-tax) related to early debt retirement.~~

~~Net Earnings and Net Earnings per Diluted Share Before Special Items~~

FAD

We use ~~net earnings before special items and net earnings per diluted share before special items as key performance measures~~Adjusted Funds Available for Distribution (Adjusted FAD) to evaluate the ~~performance~~company’s liquidity and measure cash generated during the period (net of ~~the consolidated company. These measures~~capital expenditures and significant non-recurring items) that is available for dividends, repurchases of common shares, debt reduction, acquisitions and other discretionary and nondiscretionary capital allocation activities. Adjusted FAD should not be considered in isolation from, and ~~are~~is not intended to represent an alternative to, our results reported in accordance with U.S. GAAP. However, we believe the ~~measures provide~~measure provides meaningful supplemental information for our investors about our ~~operating performance, better facilitate period~~liquidity. Adjusted FAD, as we define it, is net cash from operations adjusted for capital expenditures and significant non-recurring items. Our definition of Adjusted FAD may be different from similarly titled measures reported by other companies, including those in our industry. We reconcile Adjusted FAD to ~~period comparisons and are widely used by analysts, lenders, rating agencies and other interested parties.~~net cash from operations, as that is the most directly comparable U.S. GAAP measure.

~~Net Earnings Before Special Items~~The table below reconciles Adjusted FAD to net cash from operations:

QUARTER ENDED

YEAR-TO-DATE ENDED

DOLLAR AMOUNTS IN MILLIONS

JUNE 2023

JUNE 2022

JUNE 2023

JUNE 2022

Net earnings

$
230

$
788

$
381

$
1,559

Environmental remediation charge

8

—

8

—

Loss on debt extinguishment

—

—

—

207

Net earnings before special items

$
238

$
788

$
389

$
1,766

~~Net Earnings per Diluted Share Before Special Items~~

QUARTER ENDED

YEAR-TO-DATE ENDED

JUNE 2023

JUNE 2022

JUNE 2023

JUNE 2022

Net earnings per diluted share

$
0.31

$
1.06

$
0.52

$
2.09

Environmental remediation charge

0.01

—

0.01

—

Loss on debt extinguishment

—

—

—

0.28

Net earnings per diluted share before special items

$
0.32

$
1.06

$
0.53

$
2.37


	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2024			MARCH 2023
Net cash from operations	$	124		$	126
Capital expenditures		(79	)		(71	)
Adjusted FAD	$	45		$	55
Net cash from investing activities	$	(77	)	$	(69	)
Net cash from financing activities	$	(308	)	$	(841	)

CRITICAL ACCOUNTING POLICIES

There have been no significant changes during ~~year-to-date 2023~~first quarter 2024 to the critical accounting policies presented in our ~~2022~~2023 Annual Report on Form 10-K.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

LONG-TERM ~~INDEBTEDNESS~~DEBT OBLIGATIONS

The following summary of our long-term ~~indebtedness~~debt obligations includes:

●

scheduled principal repayments for the next five years and after;

●

weighted average interest rates for debt maturing in each of the next five years and after and

●

estimated fair values of outstanding obligations.

We estimate the fair value of ~~our~~long-term debt ~~instruments using~~based on quoted market prices we ~~received~~receive for the same types and issues of our debt or on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt. Changes in market rates of interest affect the fair value of our fixed-rate debt.

Summary of Long-Term ~~Indebtedness Principal~~Debt Obligations as of ~~June 30, 2023~~March 31, 2024


DOLLAR AMOUNTS IN MILLIONS	2023			2024			2025			2026			2027			THEREAFTER			TOTAL(1)			FAIR VALUE		2024			2025			2026			2027			2028			THEREAFTER			TOTAL(1)			FAIR VALUE
Fixed-rate debt	$	978		$	—		$	210		$	1,022		$	300		$	3,333		$	5,843		$	5,687	$	—		$	210		$	1,022		$	300		$	—		$	3,333		$	4,865		$	4,775
Average interest rate		5.44	%		—	%		8.31	%		5.52	%		6.95	%		4.82	%		5.28	%	N/A			—	%		8.31	%		5.52	%		6.95	%		—	%		4.82	%		5.25	%	N/A
Variable-rate debt(2)																								$	—		$	—		$	—		$	—		$	250		$	—		$	250		$	250

(1)

Excludes ~~$47~~$44 million of unamortized discounts and capitalized debt ~~expense and business combination fair value adjustments.~~expense.

(2)

As of March 31, 2024, the interest rate for our variable-rate debt was 7.28 percent, excluding estimated patronage refunds.

Item 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls are controls and other procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure. The company’s principal executive officer and principal financial officer have concluded that the company’s disclosure controls and procedures were effective as of ~~June 30, 2023,~~March 31, 2024, based on an evaluation of the company’s disclosure controls and procedures as of that date.

CHANGES IN INTERNAL CONTROLS

No changes occurred in the company’s internal control over financial reporting during ~~year-to-date 2023~~first quarter 2024 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Refer to Note 10: Legal Proceedings, Commitments and Contingencies. SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. In accordance with these regulations, the company uses a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required pursuant to this item.

Item 1A. RISK FACTORS

There have been no material changes with respect to the risk factors disclosed in our ~~2022~~2023 Annual Report on Form 10-K.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information with respect to purchases of common stock made by the company during ~~second~~first quarter ~~2023:~~2024:

COMMON SHARE REPURCHASES DURING SECOND QUARTER 2023

TOTAL NUMBER
OF SHARES
PURCHASED

AVERAGE PRICE
PAID PER SHARE

TOTAL NUMBER
OF SHARES
PURCHASED AS
PART OF PUBLICLY
ANNOUNCED
PROGRAMS

APPROXIMATE
DOLLAR VALUE
OF SHARES THAT
MAY YET BE
PURCHASED
UNDER THE
PROGRAMS

April 1 – April 30

283,244

$
30.36

283,244

$
333,205,159

May 1 – May 31

1,406,630

29.44

1,406,630

291,801,000

June 1 – June 30

—

—

—

291,801,000

Total

1,689,874

$
29.59

1,689,874

$
291,801,000


COMMON SHARE REPURCHASES DURING FIRST QUARTER 2024	TOTAL NUMBER OF SHARES PURCHASED		AVERAGE PRICE PAID PER SHARE		TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PROGRAMS		APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PROGRAMS
January 1 – January 31		136,247	$	33.03		136,247	$	247,298,679
February 1 – February 29		823,395	$	33.04		823,395	$	220,090,994
March 1 – March 31		512,727	$	34.41		512,727	$	202,445,908
Total		1,472,369	$	33.52		1,472,369

On September 22, 2021, we announced that our board had approved a new share repurchase program (the 2021 Repurchase Program) under which we are authorized to repurchase up to $1 billion of outstanding shares. Concurrently, the board terminated the remaining repurchase authorization under the 2019 Repurchase Program.

During ~~second~~first quarter ~~2023,~~2024, we repurchased ~~1,689,874~~1,472,369 shares for approximately ~~$50~~$49 million (including transaction fees) under the 2021 Repurchase Program in open-market transactions. Transaction fees incurred for repurchases are not counted as use of funds authorized for repurchases under the 2021 Repurchase Program. As of ~~June 30, 2023,~~March 31, 2024, we had remaining authorization of ~~$292~~$202 million for future stock repurchases.

Item 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangements

During ~~second~~first quarter ~~2023, two~~2024, one of the ~~company’s executive officers~~company's "officers" (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) adopted a trading ~~plans~~plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. ~~Rule 10b5–1(c).~~ ~~David M. Wold~~Russell S. Hagen, senior vice president and chief ~~financial~~development officer,adopted~~, adopted~~ a plan on ~~June 5, 2023~~ ~~to initiate the cashless exercise of~~ ~~8,095~~ ~~stock options in the aggregate,~~ ~~3,693~~ ~~of which expire on February 12,~~March 8, 2024 ~~and~~ ~~4,402~~ ~~of which expire on February 12, 2025, and thereby sell on the open market~~ ~~8,095~~ shares of common stock underlying the stock options at a designated strike price. Mr. Wold’s plan begins on September 5, 2023 and expires when all of the options are exercised and all of the underlying shares are sold or on February 12, 2024, whichever occurs first. ~~Denise M. Merle~~,

~~senior vice president and chief administration officer, adopted a plan on~~ ~~June 14, 2023~~ to sell an aggregate of ~~22,500~~40,065 shares of common stock. ~~Ms. Merle’s~~Mr. Hagen's plan ~~begins on September 13, 2023 and~~ expires when all of the shares are sold or on ~~September 11, 2024,~~June 10, 2025, whichever occurs first.

~~Frequency of Say on Pay~~26

As previously reported in our Form 8-K filed on May 15, 2023, the 2023 Annual Meeting of Shareholders was held on May 12, 2023 (the “2023 Annual Meeting”). The shareholders voted on the matters set forth in such Form 8-K, including Proposal 3 related to the say-on-frequency advisory vote. Based on the voting results for Proposal 3 as set forth in the Form 8-K, and as was recommended with respect to this proposal by the board of directors in the proxy statement for the 2023 Annual Meeting, the board has determined that future advisory votes regarding named executive officer compensation will be conducted on an annual basis. This disclosure is intended to satisfy the requirements of Item 5.07(d) of Form 8-K.

Item 6. EXHIBITS



10.1	Form of Weyerhaeuser Company 2022 Long-Term Incentive Plan Performance Share Unit Award Terms and Conditions for Plan Year 2024 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on January 24, 2024 – Commission File Number 1-4825)

~~4.1~~10.2	~~Officer’s Certificate dated as~~Form of ~~May 17, 2023 executed by~~ Weyerhaeuser Company ~~as Issuer of 4.750% Senior Notes due 2026~~2022 Long-Term Incentive Plan Restricted Stock Unit Award Terms and Conditions for Plan Year 2024 (incorporated by reference to Exhibit ~~4.2~~10.2 to the Current Report on Form 8-K filed on ~~May 17, 2023~~January 24, 2024 – Commission File Number 1-4825)

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

32	Certification pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).

101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2023,~~March 31, 2024, has been formatted in Inline XBRL.

2927

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	WEYERHAEUSER COMPANY
	(Registrant)

Date: ~~July 28, 2023~~April 26, 2024	By:	/s/ David M. Wold
		David M. Wold
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer and Duly Authorized Officer)

3028


DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	1,559
Interest expense, net of capitalized interest											137
Loss on debt extinguishment(1)											276
Income taxes											393
Net contribution (charge) to earnings	$	335	$	146	$	2,045	$	(161	)	$	2,365
Non-operating pension and other post-employment benefit costs		—		—		—		26			26
Interest income and other		—		—		—		—			—
Operating income (loss)		335		146		2,045		(135	)		2,391
Depreciation, depletion and amortization		131		7		100		3			241
Basis of real estate sold		—		70		—		—			70
Adjusted EBITDA	$	466	$	223	$	2,145	$	(132	)	$	2,702