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 MARCH 31, ~~2021~~2022

☐	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 April ~~26, 2021, 749,215~~25, 2022, 744,498 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	2524
ITEM 4.	CONTROLS AND PROCEDURES	2524

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	2524
ITEM 1A.	RISK FACTORS	2524
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2524
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES – NOT APPLICABLE
ITEM 4.	MINE SAFETY DISCLOSURES – NOT APPLICABLE
ITEM 5.	OTHER INFORMATION – NOT APPLICABLE
ITEM 6.	EXHIBITS	26
	SIGNATURES	27

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	MARCH 2021			MARCH 2020			MARCH 2022			MARCH 2021
Net sales (Note 3)	$	2,506		$	1,728		$	3,112		$	2,506
Costs of sales		1,430			1,382			1,647			1,430
Gross margin		1,076			346			1,465			1,076
Selling expenses		20			22			23			20
General and administrative expenses		90			74			92			90
Other operating costs, net (Note 15)		10			10
Other operating costs, net (Note 13)								6			10
Operating income		956			240			1,344			956
Non-operating pension and other post-employment benefit costs (Note 7)		(8	)		(9	)
Non-operating pension and other post-employment benefit costs (Note 6)								(15	)		(8	)
Interest income and other		1			1			(1	)		1
Interest expense, net of capitalized interest		(79	)		(85	)		(72	)		(79	)
Loss on debt extinguishment (Note 8)								(276	)		0
Earnings before income taxes		870			147			980			870
Income taxes (Note 16)		(189	)		3
Income taxes (Note 14)								(209	)		(189	)
Net earnings	$	681		$	150		$	771		$	681

Earnings per share, basic and diluted (Note 4)	$	0.91		$	0.20		$	1.03		$	0.91
Weighted average shares outstanding (in thousands) (Note 4):
Basic		748,718			746,534			747,507			748,718
Diluted		750,024			747,155			748,823			750,024

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

	QUARTER ENDED					QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021		MARCH 2020			MARCH 2022		MARCH 2021
Net earnings	$	681	$	150		$	771	$	681
Other comprehensive income (loss):
Foreign currency translation adjustments		9		(42	)		16		9
Changes in unamortized actuarial loss, net of tax expense of $7 and $16		20		44
Changes in unamortized net prior service credit, net of tax benefit of $1 and $0		1		1
Changes in unamortized actuarial loss, net of tax expense of $5 and $7							13		20
Changes in unamortized net prior service credit, net of tax (expense) benefit of ($1) and $1							0		1
Total other comprehensive income		30		3			29		30
Total comprehensive income	$	711	$	153		$	800	$	711

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE	MARCH 31, 2021			DECEMBER 31, 2020			MARCH 31, 2022			DECEMBER 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,016		$	495		$	1,205		$	1,879
Receivables, net		589			450			745			507
Receivables for taxes		7			82			8			24
Inventories (Note 5)		505			443			611			520
Prepaid expenses and other current assets		141			139			206			205
Total current assets		2,258			1,609			2,775			3,135
Property and equipment, less accumulated depreciation of $3,487 and $3,432		1,971			2,013
Property and equipment, less accumulated depreciation of $3,654 and $3,592								2,026			2,057
Construction in progress		91			73			203			175
Timber and timberlands at cost, less depletion		11,776			11,827			11,469			11,510
Minerals and mineral rights, less depletion		265			268			252			255
Deferred tax assets		106			120			15			17
Other assets		407			401			376			503
Total assets	$	16,874		$	16,311		$	17,116		$	17,652
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt (Note 9)	$	150		$	150
Accounts payable		236			204		$	310		$	281
Accrued liabilities (Note 8)		549			596
Accrued liabilities (Note 7)								674			673
Total current liabilities		935			950			984			954
Long-term debt, net (Note 9)		5,325			5,325
Long-term debt, net (Note 8)								5,053			5,099
Deferred tax liabilities		26			24			66			46
Deferred pension and other post-employment benefits (Note 7)		893			911
Deferred pension and other post-employment benefits (Note 6)								432			440
Other liabilities		367			370			344			346
Total liabilities		7,546			7,580			6,879			6,885
Commitments and contingencies (Note 11)
Commitments and contingencies (Note 10)
Equity:
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 748,751 thousand shares at March 31, 2021 and 747,385 thousand shares at December 31, 2020		936			934
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 745,442 thousand shares at March 31, 2022 and 747,301 thousand shares at December 31, 2021								932			934
Other capital		8,222			8,208			8,076			8,181
Retained earnings		962			411			1,679			2,131
Accumulated other comprehensive loss (Note 12)		(792	)		(822	)
Accumulated other comprehensive loss (Note 11)								(450	)		(479	)
Total equity		9,328			8,731			10,237			10,767
Total liabilities and equity	$	16,874		$	16,311		$	17,116		$	17,652

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021			MARCH 2020			MARCH 2022			MARCH 2021
Cash flows from operations:
Net earnings	$	681		$	150		$	771		$	681
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization		118			123			122			118
Basis of real estate sold		27			62			31			27
Deferred income taxes, net		8			(82	)		14			8
Pension and other post-employment benefits (Note 7)		19			19
Share-based compensation expense (Note 13)		7			7
Pension and other post-employment benefits (Note 6)								25			19
Share-based compensation expense (Note 12)								8			7
Loss on debt extinguishment								276			0
Change in:
Receivables, net		(139	)		(82	)		(238	)		(139	)
Receivables and payables for taxes		120			79			110			120
Inventories		(60	)		(72	)		(87	)		(60	)
Prepaid expenses and other current assets		(2	)		(2	)		(1	)		(2	)
Accounts payable and accrued liabilities		(60	)		(91	)		(62	)		(60	)
Pension and post-employment benefit contributions and payments		(8	)		(10	)		(4	)		(8	)
Other		(13	)		(15	)		(8	)		(13	)
Net cash from operations		698			86			957			698
Cash flows from investing activities:
Capital expenditures for property and equipment		(31	)		(47	)		(50	)		(31	)
Capital expenditures for timberlands reforestation		(22	)		(21	)		(20	)		(22	)
Proceeds from note receivable held by variable interest entities (Note 6)		0			362
Proceeds from sale of Montana timberlands (Note 14)		0			145
Acquisition of timberlands								(18	)		0
Other		0			2			1			0
Net cash from investing activities		(53	)		441			(87	)		(53	)
Cash flows from financing activities:
Cash dividends on common shares		(127	)		(254	)		(1,218	)		(127	)
Net proceeds from issuance of long-term debt (Note 9)		0			732
Proceeds from borrowings on line of credit (Note 9)		0			550
Payments on line of credit (Note 9)		0			(230	)
Net proceeds from issuance of long-term debt (Note 8)								881			0
Payments on long-term debt (Note 8)								(1,203	)		0
Proceeds from exercise of stock options		17			6			12			17
Repurchases of common shares (Note 4)								(118	)		0
Other		(14	)		(12	)		(18	)		(14	)
Net cash from financing activities		(124	)		792			(1,664	)		(124	)
Net change in cash and cash equivalents		521			1,319
Cash and cash equivalents at beginning of period		495			139
Cash and cash equivalents at end of period	$	1,016		$	1,458
Net change in cash, cash equivalents and restricted cash								(794	)		521
Cash, cash equivalents and restricted cash at beginning of period								1,999			495
Cash, cash equivalents and restricted cash at end of period							$	1,205		$	1,016
Cash paid (received) during the period for:
Interest, net of amount capitalized of $1 and $1	$	75		$	108		$	78		$	75
Income taxes, net of refunds	$	66		$	0		$	85		$	66

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(UNAUDITED)

	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	MARCH 2021			MARCH 2020			MARCH 2022			MARCH 2021
Common shares:
Balance at beginning of period	$	934		$	932		$	934		$	934
Issued for exercise of stock options and vested restricted stock units		2			1
Issued for exercise of stock options and vested units								2			2
Repurchases of common shares (Note 4)								(4	)		0
Balance at end of period		936			933			932			936
Other capital:
Balance at beginning of period		8,208			8,152			8,181			8,208
Issued for exercise of stock options		16			6			11			16
Shared-based compensation		7			7
Repurchases of common shares (Note 4)								(117	)		0
Share-based compensation								8			7
Other transactions, net		(9	)		(6	)		(7	)		(9	)
Balance at end of period		8,222			8,159			8,076			8,222
Retained earnings (accumulated deficit):
Retained earnings:
Balance at beginning of period		411			(3	)		2,131			411
Net earnings		681			150			771			681
Dividends on common shares		(130	)		(256	)		(1,223	)		(130	)
Balance at end of period		962			(109	)		1,679			962
Accumulated other comprehensive loss:
Balance at beginning of period		(822	)		(904	)		(479	)		(822	)
Other comprehensive income		30			3			29			30
Balance at end of period (Note 12)		(792	)		(901	)
Balance at end of period (Note 11)								(450	)		(792	)
Total equity:
Balance at end of period	$	9,328		$	8,082		$	10,237		$	9,328

Dividends paid per common share	$	0.17		$	0.34		$	1.63		$	0.17

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:	~~VARIABLE INTEREST ENTITIES~~	9

~~NOTE 7:~~	PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS	10

NOTE 8:7:	ACCRUED LIABILITIES	10

NOTE 9:8:	LONG-TERM DEBT AND LINE OF CREDIT	10

NOTE ~~10:~~9:	FAIR VALUE OF FINANCIAL INSTRUMENTS	11

NOTE ~~11:~~10:	LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES	11

NOTE ~~12:~~11:	ACCUMULATED OTHER COMPREHENSIVE LOSS	12

NOTE ~~13:~~12:	SHARE-BASED COMPENSATION	12

NOTE ~~14:~~	~~TIMBERLAND ACQUISITIONS AND DIVESTITURES~~	13

~~NOTE 15:~~13:	OTHER OPERATING COSTS, NET	13

NOTE ~~16:~~14:	INCOME TAXES	13
NOTE 15:	RESTRICTED CASH	13
NOTE 16:	TIMBERLAND ACQUISITION	13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTERS ENDED MARCH 31, ~~2021~~2022 AND ~~2020~~2021

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” 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, ~~2020.~~2021. 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 every acre we own through the sale of higher and better use (HBU) properties; and monetizing the value of surface and subsurface assets through leases and royalties. Our business segments are categorized 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, and wind and solar resources) 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						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021			MARCH 2020			MARCH 2022			MARCH 2021
Sales to unaffiliated customers:
Timberlands	$	379		$	381		$	465		$	379
Real Estate & ENR		106			112			128			106
Wood Products		2,021			1,235			2,519			2,021
		2,506			1,728			3,112			2,506
Intersegment sales:
Timberlands		134			122			161			134

Total sales		2,640			1,850			3,273			2,640
Intersegment eliminations		(134	)		(122	)		(161	)		(134	)
Total	$	2,506		$	1,728		$	3,112		$	2,506
Net contribution (charge) to earnings:
Timberlands	$	108		$	105		$	182		$	108
Real Estate & ENR		66			36			81			66
Wood Products		840			134			1,182			840
		1,014			275			1,445			1,014
Unallocated items⁽¹⁾		(65	)		(43	)
Unallocated items⁽¹⁾								(117	)		(65	)
Net contribution to earnings		949			232			1,328			949
Interest expense, net of capitalized interest		(79	)		(85	)		(72	)		(79	)
Loss on debt extinguishment								(276	)		0
Earnings before income taxes		870			147			980			870
Income taxes		(189	)		3			(209	)		(189	)
Net earnings	$	681		$	150		$	771		$	681

(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.

NOTE 3: REVENUE RECOGNITION

A reconciliation of revenue recognized by our major products:

	QUARTER ENDED				QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021		MARCH 2020		MARCH 2022		MARCH 2021
Net sales to unaffiliated customers:
Timberlands segment
Delivered logs:
West
Domestic sales	$	79	$	87	$	113	$	79
Export grade sales		122		90		146		122
Subtotal West		201		177		259		201
South		131		150		154		131
North		16		17		15		16
Subtotal delivered logs sales		348		344		428		348
Stumpage and pay-as-cut timber		6		5		9		6
Recreational and other lease revenue		16		15		17		16
Other⁽¹⁾		9		17
Other⁽¹⁾						11		9
Net sales attributable to Timberlands segment		379		381		465		379
Real Estate & ENR segment
Real estate		84		95		97		84
Energy and natural resources		22		17		31		22
Net sales attributable to Real Estate & ENR segment		106		112		128		106
Wood Products segment
Structural lumber		990		508		1,206		990
Oriented strand board		438		190		564		438
Engineered solid section		142		127		196		142
Engineered I-joists		83		78		137		83
Softwood plywood		56		39		58		56
Medium density fiberboard		48		44		48		48
Complementary building products		171		153		215		171
Other⁽²⁾		93		96
Other⁽²⁾						95		93
Net sales attributable to Wood Products segment		2,021		1,235		2,519		2,021
Total net sales	$	2,506	$	1,728	$	3,112	$	2,506

(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:

●	$~~0.91~~1.03 during first quarter ~~2021~~2022 and

●	$~~0.20~~0.91 during first quarter ~~2020.~~2021.

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				QUARTER ENDED
SHARES IN THOUSANDS	MARCH 2021		MARCH 2020		MARCH 2022		MARCH 2021
Weighted average common shares outstanding – basic		748,718		746,534		747,507		748,718
Dilutive potential common shares:
Stock options		217		338		384		217
Restricted stock units		738		283		420		738
Performance share units		351		0		512		351
Total effect of outstanding dilutive potential common shares		1,306		621		1,316		1,306
Weighted average common shares outstanding – dilutive		750,024		747,155		748,823		750,024

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				QUARTER ENDED
SHARES IN THOUSANDS	MARCH 2021		MARCH 2020		MARCH 2022		MARCH 2021
Stock options		147		2,292		0		147
Performance share units		1,115		1,390		693		1,115

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).

During first quarter 2022, we repurchased 3,197,675 common shares for approximately $121 million under the 2021 Repurchase Program. As of March 31, 2022, we had remaining authorization of $806 million for future share repurchases. We did 0t repurchase shares during first quarter 2021.

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 78,380 unsettled shares (approximately $3 million) as of March 31, 2022 and 0 unsettled shares as of December 31, 2021.

NOTE 5: INVENTORIES

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

DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2021		DECEMBER 31, 2020		MARCH 31, 2022		DECEMBER 31, 2021
LIFO inventories:
Logs	$	20	$	24	$	30	$	26
Lumber, plywood, panels and fiberboard		80		59		80		61
Other products		8		9		22		17
Moving average cost or FIFO inventories:
Logs		92		64		104		65
Lumber, plywood, panels, fiberboard and engineered wood products		90		84		116		106
Other products		106		100		140		131
Materials and supplies		109		103		119		114
Total	$	505	$	443	$	611	$	520

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: VARIABLE INTEREST ENTITIES~~

From 2002 through 2004, we sold certain nonstrategic timberlands. As a result of these sales, buyer-sponsored and monetization variable interest entities, or special purpose entities (SPEs), were formed. We were the primary beneficiary and consolidated the assets and liabilities of the SPEs involved in these transactions.

The assets of the buyer-sponsored SPEs were financial investments which consisted of bank guarantees. These bank guarantees were in turn backed by bank notes, which were the liabilities of the monetization SPEs. Interest earned from the financial investments within the buyer-sponsored SPEs was used to pay interest accrued on the corresponding monetization SPE’s note.

During first quarter 2020, we received $362 million in proceeds from our final buyer-sponsored SPE at maturity. The corresponding $302 million in liabilities of this SPE was paid in third quarter 2019.

NOTE 7:6: PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The components of net periodic benefit cost are:

	PENSION						PENSION
	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021			MARCH 2020			MARCH 2022			MARCH 2021
Service cost	$	11		$	10		$	10		$	11
Interest cost		24			35			27			24
Expected return on plan assets		(49	)		(59	)		(39	)		(49	)
Amortization of actuarial loss		30			30			24			30
Amortization of prior service cost		1			1			1			1
Total net periodic benefit cost - pension	$	17		$	17
Total net periodic benefit cost – pension							$	23		$	17

	OTHER POST-EMPLOYMENT BENEFITS					OTHER POST-EMPLOYMENT BENEFITS
	QUARTER ENDED					QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021			MARCH 2020		MARCH 2022		MARCH 2021
Interest cost	$	1		$	1	$	1	$	1
Amortization of actuarial loss		2			1		1		2
Amortization of prior service credit		(1	)		0		0		(1	)
Total net periodic benefit cost - other post-employment benefits	$	2		$	2
Total net periodic benefit cost – other post-employment benefits						$	2	$	2

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 the year-end estimated fair value of pension plan assets in the 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.

NOTE 8:7: ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2021		DECEMBER 31, 2020		MARCH 31, 2022		DECEMBER 31, 2021
Compensation and employee benefit costs	$	150	$	204	$	166	$	225
Current portion of lease liabilities		23		26		23		24
Customer rebates, volume discounts and deferred income		84		111		119		164
Interest		84		87		72		83
Taxes payable		115		75		202		106
Other		93		93		92		71
Total	$	549	$	596	$	674	$	673

NOTE 9:8: LONG-TERM DEBT AND LINE OF CREDIT

In March ~~2020,~~2022, we ~~issued $750~~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 ~~4.00~~principal in higher interest rate notes. We issued $450 million of 3.375 percent notes due in ~~April 2030.~~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 ~~$732 million.~~$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 January 2020, we refinanced and extended our $1.5 billion five-year senior unsecured revolving credit facility, which expires in January 2025. Borrowings are at LIBOR plus a spread or at other interest rates mutually agreed upon between the borrower and the lending banks. We had 0 outstanding borrowings on our credit facility as of March 31, ~~2021~~2022 and December 31, ~~2020.~~

2021.

NOTE ~~10:~~9: FAIR VALUE OF FINANCIAL INSTRUMENTS

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

MARCH 31,
2021

DECEMBER 31,
2020

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

$
5,250

$
6,413

$
5,250

$
6,718

Variable rate

225

225

225

225

Total debt

$
5,475

$
6,638

$
5,475

$
6,943


DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2022		DECEMBER 31, 2021
Long-term fixed rate debt (including current maturities):
Carrying value	$	5,053	$	5,099
Fair value (level 2)	$	5,538	$	6,221

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 ~~instruments have~~has a net carrying ~~values~~value that ~~approximate their~~approximates its fair ~~values with only~~value within an insignificant ~~differences.~~difference. The inputs to ~~these~~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, ~~mutual fund investments held in grantor trusts, and~~ 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.

NOTE ~~11:~~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 March 31, ~~2021,~~2022, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately ~~$58~~$62 million. These amounts are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet.

NOTE ~~12:~~11: ACCUMULATED OTHER COMPREHENSIVE LOSS

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

	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021			MARCH 2020			MARCH 2022			MARCH 2021
Pension⁽¹⁾
Pension⁽¹⁾
Balance at beginning of period	$	(1,064	)	$	(1,128	)	$	(720	)	$	(1,064	)
Other comprehensive income (loss) before reclassifications		(4	)		20			(8	)		(4	)
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾		24			24
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾								19			24
Total other comprehensive income		20			44			11			20
Balance at end of period		(1,044	)		(1,084	)	$	(709	)	$	(1,044	)
Other Post-Employment Benefits⁽¹⁾
Other post-employment benefits⁽¹⁾
Balance at beginning of period	$	(12	)	$	(12	)	$	(2	)	$	(12	)
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾		1			1
Other comprehensive income (loss) before reclassifications								1			0
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾								1			1
Total other comprehensive income		1			1			2			1
Balance at end of period		(11	)		(11	)	$	0		$	(11	)
Translation Adjustments and Other
Translation adjustments and other
Balance at beginning of period	$	254		$	236		$	243		$	254
Translation adjustments		9			(42	)		16			9
Total other comprehensive income (loss)		9			(42	)
Total other comprehensive income								16			9
Balance at end of period		263			194			259			263
Accumulated other comprehensive loss, end of period	$	(792	)	$	(901	)	$	(450	)	$	(792	)

(1)	Amounts presented are net of tax.

(2)	Amounts of actuarial loss and prior service (cost) credit are components of net periodic benefit cost (credit). See Note 7:6: Pension and Other Post-Employment Benefit Plans.

NOTE ~~13:~~12: SHARE-BASED COMPENSATION

Share-based compensation activity during first quarter ~~2021~~2022 included the following:

SHARES IN THOUSANDS	GRANTED		VESTED		GRANTED		VESTED
Restricted stock units (RSUs)		736		723		615		830
Performance share units (PSUs)		354		229		295		419

A total of ~~1.4~~1.3 million shares of common stock were issued as a result of RSU vestings, PSU vestings and stock option exercises.

Restricted Stock Units

The weighted average fair value of the RSUs granted in ~~2021~~2022 was ~~$34.19.~~$42.13. The vesting provisions for RSUs granted in ~~2021~~2022 were consistent with prior year grants.

Performance Share Units

The weighted average grant date fair value of PSUs granted in ~~2021~~2022 was ~~$38.50.~~$49.77. The final number of shares granted in ~~2021~~2022 will vest between a range of 0 percent to 150 percent of each grant's target, depending upon actual company performance compared against an industry peer group. PSUs granted in ~~2021~~2022 will vest at a maximum of 100 percent of target value in the event of negative absolute company total shareholder return.

Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in ~~2021~~2022

		PERFORMANCE SHARE UNITS
Performance period		2/~~11/2021~~10/2022 – 12/31/~~2023~~2024
Valuation date average stock price⁽¹⁾⁽¹⁾		$~~34.14~~42.16
Expected dividends		~~1.99%~~1.72%
Risk-free rate		~~0.02%~~0.34% – ~~0.20%~~1.84%
Expected volatility		~~32.87%~~26.27% – ~~52.82%~~41.01%

(1)	Calculated as an average of the high and low prices on grant date.

~~NOTE 14: TIMBERLAND ACQUISITIONS AND DIVESTITURES~~

~~Washington Divestiture~~

On April 30, 2021, we announced an agreement to sell 145,000 acres of timberlands in the North Cascades region of Washington for $266 million in cash. This agreement is subject to customary closing conditions and is expected to close in third quarter 2021.

~~Alabama Acquisition~~

~~On February 25, 2021, we announced an agreement to purchase 69,200 acres of southwest Alabama timberlands for approximately $149 million. We completed the purchase on April 27, 2021.~~

~~Montana Divestiture~~

On December 17, 2019, we announced an agreement to sell 630,000 acres of Montana timberlands, which was part of our Timberlands business segment. On March 26, 2020, we completed the sale for $145 million in cash proceeds, which is net of purchase price adjustments and closing costs. Due to the impairment recorded during fourth quarter 2019, no material gain or loss was recorded as a result of this sale.

The divestiture was not considered a strategic shift that had or will have a major effect on our operations or financial results and therefore did not meet the requirements for presentation as discontinued operations.

NOTE ~~15:~~13: OTHER OPERATING COSTS, NET

Other operating costs, net were comprised of the following:

	QUARTER ENDED					QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021		MARCH 2020			MARCH 2022			MARCH 2021
Foreign exchange losses, net	$	2	$	8
Litigation expense (income), net		3		(4	)
Foreign exchange losses (gains), net						$	(1	)	$	2
Litigation expense, net							4			3
Research and development expenses		1		1			1			1
Other, net		4		5			2			4
Total other operating costs, net	$	10	$	10		$	6		$	10

NOTE ~~16:~~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 our Wood Products segment earnings and portions of our Timberlands and Real Estate & ENR segments' earnings.

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 ~~2021~~2022 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: RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents and 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, 2022		December 31, 2021
Cash and cash equivalents	$	1,205	$	1,879
Restricted cash included in other assets⁽¹⁾		0		120
Total cash, cash equivalents and restricted cash	$	1,205	$	1,999

(1) Amounts included in restricted cash as of December 31, 2021 were comprised of proceeds held by a qualified intermediary that were intended to be reinvested in timber and timberlands through a like-kind exchange transaction. In first quarter 2022, the proceeds were released as a like-kind property was not identified.

NOTE 16: TIMBERLAND ACQUISITION

On April 14, 2022, we announced an agreement to purchase 81 thousand acres of North and South Carolina timberlands for approximately $265 million. The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2022.

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; estimated taxes and tax provision; our capital structure and the sufficiency of our liquidity position to meet future cash requirements; ~~future debt maturities,~~ compliance with our debt ~~agreements and the effect on our financial position of the expected discontinuation of LIBOR; expected results of litigation and other legal proceedings and~~agreements; contingent liabilities, and the sufficiency of litigation and other contingent liability reserves and related ~~accruals; expected uses~~accruals including, but not limited to, estimates of ~~cash, including~~ future ~~dividends and~~environmental remediation costs; expected capital expenditures; expected ~~effects~~timing of ~~certain divestitures on our operations~~closing of a timberlands acquisition; market and ~~financial results; expected~~general economic conditions, including ~~markets, pricing~~related influencing factors such as the trajectory of U.S. housing activity, repair and ~~demand for our products; laws~~remodel activity, impacts from COVID-related restrictions, inflation trends, and ~~regulations relevant to our businesses;~~interest rates; assumptions used in valuing incentive compensation and related expense; and our expectations relating to returns on invested pension plan assets and expected benefit payments.

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,~~“anticipate,” “believe,” “committed,” "continue,~~" "estimate," "expect," "foreseeable," "future," "intend," "maintain," "may," "plan," "potential," "project," "should," "targeted," "will,"~~” “estimate,” “expect,” “foreseeable,” “future,” “maintain,” “may,” “plan,” “potential,” “will,” and ~~"would,"~~“would,” 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. ~~These risks and uncertainties include, but~~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 ~~limited to:~~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, inflation, housing starts, general availability 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;

●	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; 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 ~~2020~~2021 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

~~Overview~~

In March 2020, COVID-19 was officially declared a global pandemic by the World Health Organization, and a national emergency was declared by the United States. States and municipalities subsequently began to issue shelter-in-place orders and similar mandates requiring those not engaged in essential activities to remain home. The U.S. Department of Homeland Security designated the forest products industry as an "essential critical infrastructure workforce," which recognizes the importance of timber and wood products operations in supporting critical infrastructure and construction projects and the manufacture of important personal hygiene items. In response to the pandemic, we took proactive steps to safeguard the health of our employees. These actions included detailed cleaning and disinfecting procedures, strict processes around social distancing and personal hygiene, clear communication with our employees, contractors, vendors and visitors about our safety protocols, comprehensive guidance for response to any COVID-19 diagnoses or exposures in our operations, suspension of all air travel and non-essential meetings, and a directive that employees work from home if feasible.

The immediate economic effects of the pandemic were severe, as U.S. gross domestic product (GDP) declined 31 percent in the second quarter of 2020 and the national unemployment rate soared to a record-high of nearly 15 percent in April driven by the restrictions imposed in response to the pandemic. However, the unemployment rate has steadily fallen from that point forward, and U.S. GDP rebounded significantly over the second half of 2020 as states reopened their economies and loosened restrictions. Market conditions across our businesses deteriorated rapidly in late first quarter and early second quarter 2020 but quickly rebounded as demand for housing and wood products proved resilient. Growth in repair and remodel demand and new residential construction activity resulted in demand for wood products that significantly outpaced available supply, and benchmark pricing for our commodity wood products reached record levels. After declining briefly in the final months of 2020, benchmark prices for our commodity wood products have risen sharply during the first quarter of 2021 beyond the record levels established in the prior year. Looking ahead, ~~to the remainder of 2021,~~ our market conditions and the strength of the broader U.S. economy will continue to be influenced by the trajectory of U.S. housing activity, ~~COVID-19 infections~~repair and ~~pace of vaccinations~~remodel activity, impacts from COVID-related restrictions, inflation trends and ~~the nature and extent of future government stimulus including the proposed infrastructure bill.~~

~~Business Outlook~~

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, especially 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. ~~In first quarter 2021, winter weather activity in the U.S. South caused a temporary disruption in production and sales volumes for wood products and logs.~~ 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 pellets made from pulpwood. The Timberlands segment is also influenced by the availability of harvestable timber. In general, Western log markets are highly tensioned while Southern log markets have more available supply. However, additional mill capacity ~~is contributing to some tightening~~being added in the ~~South.~~U.S. South has led to tightening of markets in certain geographies.

On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for first quarter ~~2021~~2022 averaged ~~1.61~~1.75 million units, ~~which was 2~~a 5 percent ~~above~~increase from fourth quarter ~~2020.~~2021. Single family starts averaged ~~1.16~~1.2 million units, a 62.5 percent ~~decline~~increase from fourth quarter ~~2020 and a 19 percent improvement over first quarter 2020.~~ 2021. Multi-family starts averaged ~~458~~557 thousand units in first quarter ~~2021,~~2022, which was 28a 10.7 percent ~~higher than~~increase from fourth quarter ~~2020 and 11 percent lower than first quarter 2020.~~2021. Sales of newly built, single family homes ~~have been robust averaging~~averaged a seasonally adjusted annual rate of ~~959~~814 thousand units for ~~the~~ first quarter 2022. This is an increase of ~~2021, a 4~~6.6 percent ~~increase~~ from the ~~prior~~previous quarter.

Repair and remodeling expenditures increased by 5.2 percent from fourth quarter ~~average of 924 thousand units and a 37 percent increase from the~~2021 to first quarter ~~2020 average of 701 thousand units.~~

In repair and remodel markets, stay at home behavior has continued to bolster do-it-yourself activity, contributing to increased sales at building supply stores and overall repair and remodeling demand. This activity is now transitioning to larger projects, supported by increased home buying activity and overall household savings. According2022 according to the Census Bureau Advance Retail Spending ~~report, building material and garden supply store sales increased 8 percent in first quarter 2021 compared~~report. Do-it-yourself activity remains at or above pre-pandemic historical levels while professionally contracted activities continue to ~~fourth quarter 2020, evidencing the continued strength of the repair and remodeling market.~~expand.

In U.S. wood product markets, demand ~~for commodity products increased sharply~~was strong during ~~the~~most of first quarter ~~and benchmark pricing~~2022 as dealer inventories remained lean, which contributed to increased prices for lumber and ~~oriented strand board reached record highs as demand continued to outpace production capacity.~~panels. The Random Lengths Framing Lumber Composite price averaged ~~$978/~~$1,248/MBF ~~for~~and the OSB Composite averaged $1,215/MSF in first quarter 2021, a 41 percent increase from the fourth quarter 2020 average. The Oriented Strand Board Composite indicator price also increased significantly, averaging $904/MSF for the first quarter 2021, a 30 percent increase from the fourth quarter 2020 average.2022.

In Western log markets, Douglas fir sawlog prices increased 4by 18 percent in first quarter ~~2021~~2022 compared with fourth quarter ~~2020~~2021 as reported by RISI Log Lines. The strength in Western log prices was supported by multiple factors including strong demand as mills capitalized on high lumber pricing. In the South, sawlog prices increased by 36 percent from fourth quarter ~~2020~~2021 and 13 percent from first quarter 2021 as reported by ~~TimberMart-South.~~TimberMart-South mainly attributable to the increase in lumber prices.

Exchange rates, available supply from other countries and trade policy affect our export businesses. During first quarter ~~2021,~~2022, continued strength in end use demand and disruptions ~~in shipping, diversion~~ of ~~European~~other global sources of supply supported sustained demand for export logs. China export activity and pricing were supported by constrained log and lumber ~~supply to~~imports from other ~~markets, and curtailments on Australian log imports to China provided a favorable environment for log export demand.~~geographies. In Japan, total housing starts ~~declined 3~~increased 4.3 percent year to date through February compared to the same period in ~~2020,~~2021, while the key

Post and Beam segment saw a 21.5 percent increase. Decreased lumber imports from Europe to Japan ~~were~~have continued to be favorable to our Japanese log export business.

Governments and businesses across the globe are taking action on climate change and are making significant commitments towards 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 to reduce environmental impacts. We believe we are uniquely positioned to help entities achieve these commitments through natural climate solutions, including forest carbon sequestration and carbon capture and storage activities.

CONSOLIDATED RESULTS

How We Did First Quarter ~~2021~~2022

	QUARTER ENDED				AMOUNT OF CHANGE		QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	MARCH 2021		MARCH 2020		2021 VS. 2020		MARCH 2022		MARCH 2021		2022 VS. 2021
Net sales	$	2,506	$	1,728	$	778	$	3,112	$	2,506	$	606
Costs of sales		1,430		1,382		48	$	1,647	$	1,430	$	217
Operating income		956		240		716	$	1,344	$	956	$	388
Net earnings		681		150		531	$	771	$	681	$	90
Earnings per share, basic and diluted		0.91		0.20		0.71	$	1.03	$	0.91	$	0.12

Comparing First Quarter ~~2021~~2022 with First Quarter ~~2020~~2021

Net sales

Net sales increased ~~$778~~$606 million – 4524 percent – primarily due to a ~~$786~~$498 million increase in Wood Products sales to unaffiliated customers attributable to increased sales realizations across ~~most~~all product ~~lines.~~

~~This~~lines, as well as an $86 million increase ~~was partially offset by a $6 million decrease~~ in ~~Real Estate & ENR net~~Timberlands sales to unaffiliated customers ~~primarily due~~attributable to ~~decreased real estate acres sold.~~increased sales realizations and sales volumes in the Western and Southern regions.

Costs of sales

Costs of sales increased ~~$48~~$217 million – 315 percent – primarily due to increased complementary building product sales, ~~and~~ increased cost of commodity products, and higher log and fiber costs within our Wood Products ~~segment. This increase was partially offset by decreased real estate acres sold~~segment and increased freight costs and third-party log purchases within our ~~Real Estate & ENR~~Timberlands segment.

Operating income

Operating income increased ~~$716~~$388 million – ~~298~~41 percent – primarily due to a ~~$730~~ $389 million increase in consolidated gross margin (see discussion of components above).

~~This increase was partially offset by a $16 million increase in general and administrative expenses primarily due to an increase in liability classified share-based compensation (refer to~~ ~~Unallocated Items~~).

Net earnings

Net earnings increased ~~$531~~$90 million – ~~354~~13 percent – primarily due to the ~~$730~~$388 million increase in operating income, as discussed above.

This increase was partially offset by a ~~$192~~$276 million pretax charge ($207 million after-tax) related to the early extinguishment of debt (refer to Note 8: Long-Term Debt and Line of Credit), as well as a $20 million increase in income tax expense (refer to Income Taxes).

TIMBERLANDS

How We Did First Quarter ~~2021~~2022

	QUARTER ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021		MARCH 2020		2021 VS. 2020			MARCH 2022		MARCH 2021		2022 VS. 2021
Net sales to unaffiliated customers:
Delivered logs:
West	$	201	$	177	$	24		$	259	$	201	$	58
South		131		150		(19	)		154		131		23
North⁽¹⁾		16		17		(1	)		15		16		(1	)
Subtotal delivered logs sales		348		344		4			428		348		80
Stumpage and pay-as-cut timber		6		5		1			9		6		3
Recreational and other lease revenue		16		15		1			17		16		1
Other⁽²⁾		9		17		(8	)
Other⁽¹⁾									11		9		2
Subtotal net sales to unaffiliated customers		379		381		(2	)		465		379		86
Intersegment sales		134		122		12			161		134		27
Total sales	$	513	$	503	$	10		$	626	$	513	$	113
Costs of sales	$	383	$	375	$	8		$	423	$	383	$	40
Operating income and Net contribution to earnings	$	108	$	105	$	3		$	182	$	108	$	74

(1)	~~In March 2020, we sold our Montana timberlands.~~

~~(2)~~

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

Comparing First Quarter ~~2021~~2022 with First Quarter ~~2020~~2021

Net sales to unaffiliated customers

Net sales to unaffiliated customers ~~decreased $2~~increased $86 million – 123 percent – primarily due ~~to:~~

●	~~a $19 million decrease in Southern log sales, attributable~~ to ~~a 13 percent decrease in sales volumes and~~

●	~~an $8 million decrease in other product sales including chips and seedlings.~~

~~These decreases were partially offset by~~ a ~~$24~~$58 million increase in Western log sales attributable to a 2523 percent increase in sales realizations ~~partially offset by~~and a 4 percent increase in sales volumes, as well as a $23 million increase in Southern log sales attributable to a 9 percent ~~decrease~~increase in sales ~~volumes.~~volumes and an 8 percent increase in sales realizations.

Intersegment sales

Intersegment sales increased ~~$12~~$27 million – 20 percent – primarily due to a 20 percent increase in sales realizations.

Costs of sales

Costs of sales increased $40 million – 10 percent – primarily due to ~~a 15 percent increase in intersegment log sales realizations, partially offset by a 4 percent decrease in intersegment log sales volumes.~~

~~Costs of sales~~

~~Costs of sales~~ increased ~~$8 million – 2 percent – primarily due to increased transportation~~freight costs and third-party log purchases, ~~partially offset by a decrease in~~as well as increased sales volumes, as discussed above.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased $3$74 million – 369 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			QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN THOUSANDS	MARCH 2021		MARCH 2020		2021 VS. 2020			MARCH 2022		MARCH 2021		2022 VS. 2021
Third-party log sales – tons:
West⁽¹⁾		1,539		1,684		(145	)
West⁽¹⁾									1,604		1,539		65
South		3,782		4,365		(583	)		4,135		3,782		353
North⁽²⁾		261		284		(23	)		210		261		(51	)
Total		5,582		6,333		(751	)		5,949		5,582		367
Fee harvest volumes – tons:
West⁽¹⁾		2,101		2,310		(209	)
West⁽¹⁾									2,240		2,101		139
South		5,376		6,130		(754	)		5,842		5,376		466
North⁽²⁾		337		386		(49	)		278		337		(59	)
Total		7,814		8,826		(1,012	)		8,360		7,814		546

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

~~(2)~~

~~In March 2020, we sold our Montana timberlands.~~

REAL ESTATE, ENERGY AND NATURAL RESOURCES

How We Did First Quarter ~~2021~~2022

	QUARTER ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021		MARCH 2020		2021 VS. 2020			MARCH 2022		MARCH 2021		2022 VS. 2021
Net sales:
Real estate	$	84	$	95	$	(11	)	$	97	$	84	$	13
Energy and natural resources		22		17		5			31		22		9
Total	$	106	$	112	$	(6	)	$	128	$	106	$	22
Costs of sales	$	34	$	70	$	(36	)	$	41	$	34	$	7
Operating income and Net contribution to earnings	$	66	$	36	$	30		$	81	$	66	$	15

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 (particularly in the northern states), 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 First Quarter ~~2021~~2022 with First Quarter ~~2020~~2021

Net sales

Net sales ~~decreased $6~~increased $22 million – 521 percent – primarily due to ~~decreased real estate~~increases in the amount of acres sold ~~partially offset by an increase in the average price per acre sold.~~and energy and natural resources sales.

Costs of sales

Costs of sales ~~decreased $36~~increased $7 million – 5121 percent – primarily due to ~~decreased real estate~~an increase in the amount of acres sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased ~~$30~~$15 million – 8323 percent – primarily due to the change in the components of gross margin, as discussed above.

REAL ESTATE SALES STATISTICS

	QUARTER ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
	MARCH 2021		MARCH 2020		2021 VS. 2020			MARCH 2022		MARCH 2021		2022 VS. 2021
Acres sold		19,455		44,974		(25,519	)		24,126		19,455		4,671
Average price per acre	$	3,803	$	1,992	$	1,811		$	3,785	$	3,803	$	(18	)

WOOD PRODUCTS

How We Did First Quarter ~~2021~~2022

	QUARTER ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021		MARCH 2020		2021 VS. 2020			MARCH 2022		MARCH 2021		2022 VS. 2021
Net sales:
Structural lumber	$	990	$	508	$	482		$	1,206	$	990	$	216
Oriented strand board		438		190		248			564		438		126
Engineered solid section		142		127		15			196		142		54
Engineered I-joists		83		78		5			137		83		54
Softwood plywood		56		39		17			58		56		2
Medium density fiberboard		48		44		4			48		48		—
Complementary building products		171		153		18			215		171		44
Other products produced⁽¹⁾		93		96		(3	)
Other products produced⁽¹⁾									95		93		2
Total	$	2,021	$	1,235	$	786		$	2,519	$	2,021	$	498
Costs of sales	$	1,124	$	1,040	$	84		$	1,276	$	1,124	$	152
Operating income and Net contribution to earnings	$	840	$	134	$	706		$	1,182	$	840	$	342

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

Comparing First Quarter ~~2021~~2022 with First Quarter ~~2020~~2021

Net sales

Net sales increased ~~$786~~$498 million – 6425 percent – ~~primarily~~ due to:

●	a ~~$482~~$216 million increase in structural lumber sales attributable to a ~~108~~21 percent increase in sales realizations, as well as a 1 percent increase in sales volumes;

●	a $126 million increase in oriented strand board sales attributable to a 28 percent increase in sales realizations;

●	a $54 million increase in engineered solid section sales attributable to a 50 percent increase in sales realizations, partially offset by ~~a 6~~an 8 percent decrease in sales volumes;

●	a ~~$248~~$54 million increase in ~~oriented strand board~~engineered I-joists sales attributable to a ~~150~~67 percent increase in sales realizations, partially offset by a 72 percent decrease ~~in sales volumes;~~

●	~~an $18 million increase in complementary building products sales attributable to increased sales volumes and sales realizations;~~

●	~~a $17 million increase in softwood plywood sales attributable to a 71 percent increase in sales realizations, partially offset by a 17 percent decrease in sales volumes;~~

●	~~a $15 million increase in engineered solid section sales attributable to a 6 percent increase in sales realizations, as well as a 5 percent increase~~ in sales volumes, and

●	a $5$44 million increase in ~~engineered I-joists~~complementary building products sales attributable to ~~a 6 percent increase in~~increased sales realizations.

Costs of sales

Costs of sales increased ~~$84~~$152 million – 814 percent – primarily due to increased complementary building product sales, ~~and~~ increased cost of commodity ~~products.~~products, and higher log and fiber costs.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased ~~$706~~$342 million – ~~527~~41 percent – primarily due to the change in the components of gross margin, as discussed above.

Third-Party Sales Volumes

	QUARTER ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS⁽¹⁾	MARCH 2021		MARCH 2020		2021 VS. 2020
VOLUMES IN MILLIONS⁽¹⁾								MARCH 2022		MARCH 2021		2022 VS. 2021
Structural lumber – board feet		1,145		1,222		(77	)		1,157		1,145		12
Oriented strand board – square feet (3/8”)		714		770		(56	)		717		714		3
Engineered solid section – cubic feet		6.2		5.9		0.3			5.7		6.2		(0.5	)
Engineered I-joists – lineal feet		47		47		—			46		47		(1	)
Softwood plywood – square feet (3/8”)		94		113		(19	)		75		94		(19	)
Medium density fiberboard – square feet (3/4”)		57		52		5			44		57		(13	)

(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			QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS	MARCH 2021		MARCH 2020		2021 VS. 2020			MARCH 2022		MARCH 2021		2022 VS. 2021
Structural lumber – board feet:
Production		1,211		1,209		2			1,203		1,211		(8	)
Outside purchase		55		59		(4	)		42		55		(13	)
Total		1,266		1,268		(2	)		1,245		1,266		(21	)
Oriented strand board – square feet (3/8”):
Production		742		777		(35	)		739		742		(3	)
Outside purchase		68		87		(19	)		70		68		2
Total		810		864		(54	)		809		810		(1	)
Engineered solid section – cubic feet:
Production		6.0		6.1		(0.1	)		5.7		6.0		(0.3	)
Outside purchase		0.3		0.1		0.2			0.2		0.3		(0.1	)
Total		6.3		6.2		0.1			5.9		6.3		(0.4	)
Engineered I-joists – lineal feet:
Production		44		47		(3	)		44		44		—
Outside purchase		3		2		1			2		3		(1	)
Total		47		49		(2	)		46		47		(1	)
Softwood plywood – square feet (3/8”):
Production		80		97		(17	)		66		80		(14	)
Outside purchase		14		16		(2	)		10		14		(4	)
Total		94		113		(19	)		76		94		(18	)
Medium density fiberboard – square feet (3/4"):
Production		56		56		—			44		56		(12	)
Total		56		56		—			44		56		(12	)

UNALLOCATED ITEMS

Net Charge to Earnings – Unallocated Items

	QUARTER ENDED						AMOUNT OF CHANGE			QUARTER ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021			MARCH 2020			2021 VS. 2020			MARCH 2022			MARCH 2021			2022 VS. 2021
Unallocated corporate function and variable compensation expense	$	(25	)	$	(19	)	$	(6	)	$	(31	)	$	(25	)	$	(6	)
Liability classified share-based compensation		(1	)		10			(11	)		1			(1	)		2
Foreign exchange loss		(2	)		(8	)		6			—			(2	)		2
Elimination of intersegment profit in inventory and LIFO		(17	)		(13	)		(4	)		(59	)		(17	)		(42	)
Other		(13	)		(5	)		(8	)		(12	)		(13	)		1
Operating loss		(58	)		(35	)		(23	)		(101	)		(58	)		(43	)
Non-operating pension and other post-employment benefit costs		(8	)		(9	)		1			(15	)		(8	)		(7	)
Interest income and other		1			1			—			(1	)		1			(2	)
Net charge to earnings	$	(65	)	$	(43	)	$	(22	)	$	(117	)	$	(65	)	$	(52	)

Comparing First Quarter ~~2021~~2022 with First Quarter ~~2020~~2021

Net charge to earnings increased ~~$22~~$52 million – 5180 percent – primarily due ~~to:~~to a $42 million increase in elimination of intersegment profit in inventory and LIFO.

●	~~a $12 million legal benefit recognized in first quarter 2020 and~~

●	an $11 million increase in expense related to liability classified share-based compensation due to an increase in our stock price for the quarter ended March 31, 2021 compared to a decrease for the same period in 2020.

INTEREST EXPENSE

Our interest expense, net of capitalized interest, was:

●	$7972 million for first quarter ~~2021~~2022 and

●	$8579 million for first quarter ~~2020.~~2021.

Interest expense decreased by $6$7 million compared to first quarter 2021 primarily due to a decrease in the average outstanding debt and weighted average interest rate in first quarter ~~2021 compared to first quarter 2020.~~2022.

Refer to Note 9:8: Long-Term Debt and Line of Credit for further information.

INCOME TAXES

Our provision for income taxes was:

●	a ~~$189~~$209 million expense for first quarter ~~2021~~2022 and

●	a $3$189 million ~~benefit~~expense for first quarter ~~2020.~~2021.

Our provision for income taxes is primarily driven by earnings generated by our ~~Taxable REIT Subsidiaries (TRSs).~~TRSs. Income tax expense increased by ~~$192~~$20 million compared to first quarter ~~2020~~2021 primarily due to an increase in our TRS earnings in first quarter ~~2021.~~2022, partially offset by a tax benefit of approximately $69 million resulting from the $276 million pretax loss on debt extinguishment recorded in first quarter 2022.

Refer to Note ~~16:~~14: Income Taxes and Note 8: Long-Term Debt and Line of Creditfor further information.

LIQUIDITY AND CAPITAL RESOURCES

We are committed to maintaining an appropriate capital structure that provides 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 March 31, ~~2021,~~2022, we had over ~~$1.0~~$1.2 billion in cash and cash equivalents and $1.5 billion of availability on our line of credit, which expires in January 2025. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

●	$~~698~~957 million for first quarter ~~2021~~2022 and

●	$86698 million for first quarter ~~2020.~~2021.

Net cash from operations increased ~~$612~~$259 million, primarily due ~~to:~~

●	~~increased cash inflows from our business segments and~~

●	~~decreased cash used for interest payments.~~

~~These changes were~~to increased cash inflows from our business operations. This change was partially offset by a ~~$66~~$19 million increase in cash paid for income taxes.

CASH FROM INVESTING ACTIVITIES

Consolidated net cash from investing activities was:

●	$~~(53)~~(87) million for first quarter ~~2021~~2022 and

●	$~~441~~(53) million for first quarter ~~2020.~~2021.

Net cash from investing activities decreased ~~$494~~$34 million, primarily due to:

●	a ~~$362~~$17 million ~~decrease~~increase in ~~proceeds received from variable interest entities~~cash paid for capital expenditures and

●	~~a $145~~an $18 million ~~decrease~~increase in ~~proceeds from the sale~~cash paid for acquisition of timberlands.

~~These decreases were partially offset by a $15 million decrease in cash used for capital expenditures.~~

Summary of Capital Spending by Business Segment

	QUARTER ENDED				QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021		MARCH 2020		MARCH 2022		MARCH 2021
Timberlands	$	28	$	30	$	30	$	28
Wood Products		25		38		39		25
Unallocated Items						1		—
Total	$	53	$	68	$	70	$	53

We ~~expect~~anticipate our capital expenditures for ~~2021 will~~2022 to be approximately ~~$420~~$440 million. The amount we spend on capital expenditures could change.

CASH FROM FINANCING ACTIVITIES

Consolidated net cash from financing activities was:

●	$~~(124)~~(1,664) million for first quarter ~~2021~~2022 and

●	$~~792~~(124) million for first quarter ~~2020.~~2021.

Net cash from financing activities decreased ~~$916~~$1,540 million, primarily due to:

●	a ~~$732~~$1,091 million ~~decrease~~increase in ~~net proceeds from issuance~~cash used for payments of ~~long-term debt and~~dividends;

●	a ~~$320~~$322 million ~~decrease~~increase in net cash ~~received related to borrowings~~used for payments on ~~our line of credit.~~long-term debt and

~~These decreases were partially offset by a $127 million decrease in cash paid for dividends.~~

●	a $118 million increase in cash used for repurchases of common stock.

Line of Credit

We had no outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility as of March 31, ~~2021~~2022 or December 31, ~~2020.~~2021. This credit facility expires in January 2025.

~~Refer to~~ ~~Note 9: Long-Term Debt and Line of Credit~~ ~~for further information.~~

~~Long-Term Debt~~

~~In March 2020, we issued $750 million of 4.00 percent notes due in April 2030. The net proceeds after deducting the discount, underwriting fees and issuance costs were $732 million.~~

~~Refer to~~ ~~Note 9: Long-Term Debt and Line of Credit~~ ~~for further information.~~

Our revolving credit agreement ~~and our term loan agreement utilize~~utilizes the London Inter-bank Offered Rate (LIBOR) as a basis for one of the interest rate options available to the company to apply to outstanding borrowings. ~~Publication~~Due to the cessation of USD LIBOR ~~is expected~~we plan to ~~cease between January 1, 2022 and July 1, 2023, and we are closely monitoring ongoing market developments~~transition our revolving credit facility to an alternate reference rate in ~~the identification or creation of a widely accepted replacement rate.~~2022. We have included provisions in our revolving credit ~~agreement and term loan~~ agreement that specifically contemplate the transition from LIBOR to a replacement benchmark rate.

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

AsLong-Term Debt

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 ~~31, 2021,~~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 ~~$5.5~~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.

Refer to Note 8: Long-Term Debt and Line of long-term debt, only $225 million in term loan borrowings are governed by a debt agreement that utilizes LIBOR as one of the alternative applicable rates. We therefore do not believe that the discontinuation of LIBOR as a reference rate in our debt agreements will have a material adverse effect on our financial position or materially affect our interest expense.Credit for further information.

Debt Covenants

As of March 31, ~~2021,~~2022, Weyerhaeuser Company was in compliance with its debt covenants. There have been no significant changes to the debt covenants presented in our ~~2020~~2021 Annual Report on Form 10-K for our ~~existing~~ long-term debt instruments, and we expect to remain in compliance with our debt covenants for the foreseeable future.

Option Exercises

We received cash proceeds from the exercise of stock options of:

●	$1712 million for first quarter ~~2021~~2022 and

●	$617 million for first quarter ~~2020.~~2021.

Our average stock price was ~~$34.05~~$39.65 and ~~$26.30~~$34.05 for first quarter ~~2021~~2022 and ~~2020,~~2021, respectively.

Dividend Payments

We paid cash dividends on common shares of:

●	$~~127~~1,218 million for first quarter ~~2021~~2022 and

●	$~~254~~127 million for first quarter ~~2020.~~2021.

~~This decrease~~

The increase in dividends paid is primarily due to a ~~decrease~~supplemental dividend of $1.45 per share based on 2021 financial results for a total of $1,084 million paid in ~~dividends paid per common share from $0.34 to $0.17 as part~~the first quarter of ~~the new dividend framework discussed in our 2020 Annual Report on Form 10-K~~.2022.

Share Repurchases

We repurchased 3,197,675 shares for approximately $121 million (including transaction fees) during first quarter 2022 under the 2021 Repurchase Program. We did not repurchase shares ~~during~~in first quarter ~~2021 or first quarter 2020.~~2021. There were no78,380 unsettled ~~repurchases~~shares (approximately $3 million) as of March 31, ~~2021 or~~2022 and no unsettled shares as of December 31, ~~2020.~~2021. Refer to Note 4: Net Earnings Per Share and Share Repurchases for further information.

PERFORMANCE 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			QUARTER ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2021			MARCH 2020			2021 VS. 2020			MARCH 2022			MARCH 2021			2022 VS. 2021
Adjusted EBITDA by Segment:
Timberlands	$	172		$	173		$	(1	)	$	247		$	172		$	75
Real Estate & ENR		96			101			(5	)		116			96			20
Wood Products		889			184			705			1,233			889			344
		1,157			458			699			1,596			1,157			439
Unallocated Items		(56	)		(45	)		(11	)		(99	)		(56	)		(43	)
Adjusted EBITDA	$	1,101		$	413		$	688		$	1,497		$	1,101		$	396

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.

The table below reconciles Adjusted EBITDA for the quarter ended March 31, ~~2021:~~2022:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total			Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	681											$	771
Interest expense, net of capitalized interest											79												72
Loss on debt extinguishment⁽¹⁾																							276
Income taxes											189												209
Net contribution (charge) to earnings	$	108	$	66	$	840	$	(65	)	$	949		$	182	$	81	$	1,182	$	(117	)	$	1,328
Non-operating pension and other post-employment benefit costs		—		—		—		8			8			—		—		—		15			15
Interest income and other		—		—		—		(1	)		(1	)		—		—		—		1			1
Operating income (loss)		108		66		840		(58	)		956			182		81		1,182		(101	)		1,344
Depreciation, depletion and amortization		64		3		49		2			118			65		4		51		2			122
Basis of real estate sold		—		27		—		—			27			—		31		—		—			31
Adjusted EBITDA	$	172	$	96	$	889	$	(56	)	$	1,101		$	247	$	116	$	1,233	$	(99	)	$	1,497

(1)	Loss on debt extinguishment is a special item consisting of a pretax charge of $276 million related to early debt retirement.

The table below reconciles Adjusted EBITDA for the quarter ended March 31, ~~2020:~~2021:

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate &
ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
150

Interest expense, net of capitalized interest

85

Income taxes

(3
)
Net contribution (charge) to earnings

$
105

$
36

$
134

$
(43
)

$
232

Non-operating pension and other post-employment benefit costs

—

—

—

9

9

Interest income and other

—

—

—

(1
)

(1
)
Operating income (loss)

105

36

134

(35
)

240

Depreciation, depletion and amortization

68

3

50

2

123

Basis of real estate sold

—

62

—

—

62

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

—

—

—

(12
)

(12
)
Adjusted EBITDA

$
173

$
101

$
184

$
(45
)

$
413

~~(1)~~

~~Operating income (loss) includes a pretax special item consisting of a $12 million noncash legal benefit within Unallocated Items.~~

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	681
Interest expense, net of capitalized interest											79
Income taxes											189
Net contribution (charge) to earnings	$	108	$	66	$	840	$	(65	)	$	949
Non-operating pension and other post-employment benefit costs		—		—		—		8			8
Interest income and other		—		—		—		(1	)		(1	)
Operating income (loss)		108		66		840		(58	)		956
Depreciation, depletion and amortization		64		3		49		2			118
Basis of real estate sold		—		27		—		—			27
Adjusted EBITDA	$	172	$	96	$	889	$	(56	)	$	1,101

Net Earnings and Net Earnings per Diluted Share Before Special Items

We use net earnings before special items and net earnings per diluted share before special items as key performance measures to evaluate the performance of the consolidated company. These measures should not be considered in isolation from, and are not intended to represent an alternative to, our results reported in accordance with U.S. GAAP. However, we believe the measures provide meaningful supplemental information for investors about our operating performance, better facilitate period to period comparisons and are widely used by analysts, lenders, rating agencies and other interested parties.

Net Earnings Before Special Items

QUARTER ENDED

DOLLAR AMOUNTS IN MILLIONS

MARCH 2021

MARCH 2020

Net earnings

$
681

$
150

Legal benefit

—

(12
)
Net earnings before special items

$
681

$
138

	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2022		MARCH 2021
Net earnings	$	771	$	681
Loss on debt extinguishment		207		—
Net earnings before special items	$	978	$	681

Net Earnings per Diluted Share Before Special Items

	QUARTER ENDED					QUARTER ENDED
	MARCH 2021		MARCH 2020			MARCH 2022		MARCH 2021
Net earnings per diluted share	$	0.91	$	0.20		$	1.03	$	0.91
Legal benefit		—		(0.02	)
Loss on debt extinguishment							0.28		—
Net earnings per diluted share before special items	$	0.91	$	0.18		$	1.31	$	0.91

CRITICAL ACCOUNTING POLICIES

There have been no significant changes during first quarter ~~2021~~2022 to the critical accounting policies presented in our ~~2020~~2021 Annual Report on Form 10-K.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

LONG-TERM INDEBTEDNESS OBLIGATIONS

The following summary of our long-term indebtedness 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 debt instruments using quoted market prices we received 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 Obligations as of March 31, ~~2021~~2022

DOLLAR AMOUNTS IN MILLIONS	2021			2022			2023			2024			2025			THEREAFTER			TOTAL⁽¹⁾			FAIR VALUE		2022			2023			2024			2025			2026			THEREAFTER			TOTAL⁽¹⁾			FAIR VALUE
Fixed-rate debt	$	150		$	—		$	1,051		$	—		$	436		$	3,638		$	5,275		$	6,413	$	—		$	978		$	—		$	210		$	272		$	3,633		$	5,093		$	5,538
Average interest rate		9.00	%		—	%		5.56	%		—	%		8.33	%		5.94	%		6.15	%	N/A			—	%		5.44	%		—	%		8.31	%		7.65	%		5.00	%		5.36	%	N/A
Variable-rate debt	$	—		$	—		$	—		$	—		$	—		$	225		$	225		$	225
Average interest rate		—	%		—	%		—	%		—	%		—	%		1.71	%		1.71	%	N/A

(1)	Excludes ~~$25~~$40 million of unamortized discounts, capitalized debt expense and business combination fair value adjustments.

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 March 31, ~~2021,~~2022, 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 first quarter ~~2021~~2022 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 ~~11:~~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 ~~2020~~2021 Annual Report on Form 10-K.

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

Issuer Purchases of Equity Securities

~~There were no share repurchases~~The following table provides information with respect to purchases of common stock made by the company during first quarter ~~2021.~~2022:

COMMON SHARE REPURCHASES DURING FIRST QUARTER 2022	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		1,320,787	$	37.87		1,320,787	$	876,697,873
February 1 – February 28		221,913	$	37.31		221,913	$	868,422,515
March 1 – March 31		1,654,975	$	37.97		1,654,975	$	805,603,171
Total		3,197,675	$	37.87		3,197,675	$	805,603,171

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 first quarter 2022, we repurchased 3,197,675 common shares for approximately $121 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 March 31, 2022, we had remaining authorization of $806 million for future stock repurchases.

Item 6. EXHIBITS



10.1	Form of Weyerhaeuser Company 2013 ~~Long Term~~Long-Term Incentive Plan Performance Share Unit Award Terms and Conditions for Plan Year ~~2021~~2022 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on January ~~26, 2021~~24, 2022 – Commission File Number 1-4825)*

10.2	Form of Weyerhaeuser Company 2013 Long-Term Incentive Plan Restricted Stock Unit Award Terms and Conditions for Plan ~~Year 2021~~Years 2022 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on January ~~26, 2021~~24, 2022 – 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 March 31, ~~2021,~~2022, has been formatted in Inline XBRL.

* Denotes a management contract or compensatory plan or arrangement.

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: April ~~30, 2021~~29, 2022	By:	/s/ David M. Wold
		David M. Wold
		Vice President and Chief Accounting Officer
		(Principal Accounting Officer and Duly Authorized Officer)