UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, ~~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 July ~~26, 2021, 749,784~~25, 2022, 740,315 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	2726
ITEM 4.	CONTROLS AND PROCEDURES	27

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	27
ITEM 1A.	RISK FACTORS	27
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	27
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES – NOT APPLICABLE
ITEM 4.	MINE SAFETY DISCLOSURES – NOT APPLICABLE
ITEM 5.	OTHER INFORMATION – NOT APPLICABLE
ITEM 6.	EXHIBITS	28
	SIGNATURES	29

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

	QUARTER ENDED						YEAR-TO-DATE ENDED						QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	JUNE 2021			JUNE 2020			JUNE 2021			JUNE 2020			JUNE 2022			JUNE 2021			JUNE 2022			JUNE 2021
Net sales (Note 3)	$	3,144		$	1,631		$	5,650		$	3,359		$	2,973		$	3,144		$	6,085		$	5,650
Costs of sales		1,583			1,283			3,013			2,665			1,789			1,583			3,436			3,013
Gross margin		1,561			348			2,637			694			1,184			1,561			2,649			2,637
Selling expenses		24			18			44			40			23			24			46			44
General and administrative expenses		95			84			185			158			102			95			194			185
Other operating costs, net (Note 15)		13			3			23			13
Other operating costs, net (Note 13)														12			13			18			23
Operating income		1,429			243			2,385			483			1,047			1,429			2,391			2,385
Non-operating pension and other post-employment benefit costs (Note 7)		(1	)		(10	)		(9	)		(19	)
Non-operating pension and other post-employment benefit costs (Note 6)														(11	)		(1	)		(26	)		(9	)
Interest income and other		2			2			3			3			1			2			0			3
Interest expense, net of capitalized interest		(78	)		(103	)		(157	)		(188	)		(65	)		(78	)		(137	)		(157	)
Loss on debt extinguishment (Note 8)														0			0			(276	)		0
Earnings before income taxes		1,352			132			2,222			279			972			1,352			1,952			2,222
Income taxes (Note 16)		(324	)		(60	)		(513	)		(57	)
Income taxes (Note 14)														(184	)		(324	)		(393	)		(513	)
Net earnings	$	1,028		$	72		$	1,709		$	222		$	788		$	1,028		$	1,559		$	1,709

Earnings per share, basic and diluted (Note 4)	$	1.37		$	0.10		$	2.28		$	0.30		$	1.06		$	1.37		$	2.09		$	2.28
Weighted average shares outstanding (in thousands) (Note 4):
Basic		750,127			746,896			749,429			746,715			744,542			750,127			746,017			749,429
Diluted		751,508			746,984			750,773			747,070			745,582			751,508			747,194			750,773

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

	QUARTER ENDED				YEAR-TO-DATE ENDED					QUARTER ENDED					YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021		JUNE 2020		JUNE 2021		JUNE 2020			JUNE 2022			JUNE 2021		JUNE 2022			JUNE 2021
Net earnings	$	1,028	$	72	$	1,709	$	222		$	788		$	1,028	$	1,559		$	1,709
Other comprehensive income (loss):
Foreign currency translation adjustments		15		17		24		(25	)		(25	)		15		(9	)		24
Changes in unamortized actuarial loss, net of tax expense of $38, $8, $45 and $24		121		23		141		67
Changes in unamortized net prior service credit, net of tax expense of $1, $0, $0 and $0		0		1		1		2
Changes in unamortized actuarial loss, net of tax expense of $24, $38, $29 and $45											77			121		90			141
Changes in unamortized net prior service credit, net of tax expense of $0, $1, $1 and $0											0			0		0			1
Total other comprehensive income		136		41		166		44			52			136		81			166
Total comprehensive income	$	1,164	$	113	$	1,875	$	266		$	840		$	1,164	$	1,640		$	1,875

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE	JUNE 30, 2021			DECEMBER 31, 2020			JUNE 30, 2022			DECEMBER 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,777		$	495		$	1,723		$	1,879
Receivables, net		702			450			547			507
Receivables for taxes		7			82			6			24
Inventories (Note 5)		499			443			571			520
Assets held for sale (Note 14)		229			0
Prepaid expenses and other current assets		141			139			165			205
Total current assets		3,355			1,609			3,012			3,135
Property and equipment, less accumulated depreciation of $3,550 and $3,432		1,965			2,013
Property and equipment, less accumulated depreciation of $3,673 and $3,592								2,000			2,057
Construction in progress		102			73			233			175
Timber and timberlands at cost, less depletion		11,643			11,827			11,706			11,510
Minerals and mineral rights, less depletion		262			268			248			255
Deferred tax assets		71			120			11			17
Other assets		432			401			370			503
Total assets	$	17,830		$	16,311		$	17,580		$	17,652
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt (Note 9)	$	150		$	150
Accounts payable		253			204		$	283		$	281
Accrued liabilities (Note 8)		775			596
Accrued liabilities (Note 7)								658			673
Total current liabilities		1,178			950			941			954
Long-term debt, net (Note 9)		5,100			5,325
Long-term debt, net (Note 8)								5,053			5,099
Deferred tax liabilities		42			24			83			46
Deferred pension and other post-employment benefits (Note 7)		747			911
Deferred pension and other post-employment benefits (Note 6)								347			440
Other liabilities		363			370			340			346
Total liabilities		7,430			7,580			6,764			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: 749,782 thousand shares at June 30, 2021 and 747,385 thousand shares at December 31, 2020		937			934
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 741,738 thousand shares at June 30, 2022 and 747,301 thousand shares at December 31, 2021								927			934
Other capital		8,258			8,208			7,954			8,181
Retained earnings		1,861			411			2,333			2,131
Accumulated other comprehensive loss (Note 12)		(656	)		(822	)
Accumulated other comprehensive loss (Note 11)								(398	)		(479	)
Total equity		10,400			8,731			10,816			10,767
Total liabilities and equity	$	17,830		$	16,311		$	17,580		$	17,652

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	YEAR-TO-DATE ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021			JUNE 2020			JUNE 2022			JUNE 2021
Cash flows from operations:
Net earnings	$	1,709		$	222		$	1,559		$	1,709
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization		238			240			241			238
Basis of real estate sold		51			96			70			51
Deferred income taxes, net		19			(2	)		14			19
Pension and other post-employment benefits (Note 7)		30			37
Share-based compensation expense (Note 13)		15			15
Pension and other post-employment benefits (Note 6)								44			30
Share-based compensation expense (Note 12)								17			15
Loss on debt extinguishment (Note 8)								276			0
Change in:
Receivables, net		(252	)		(112	)		(40	)		(252	)
Receivables and payables for taxes		236			61			27			236
Inventories		(51	)		2			(58	)		(51	)
Prepaid expenses and other current assets		(1	)		5			(3	)		(1	)
Accounts payable and accrued liabilities		65			(61	)		(15	)		65
Pension and post-employment benefit contributions and payments		(33	)		(16	)		(14	)		(33	)
Other		(20	)		(10	)		(15	)		(20	)
Net cash from operations		2,006			477			2,103			2,006
Cash flows from investing activities:
Capital expenditures for property and equipment		(93	)		(102	)		(121	)		(93	)
Capital expenditures for timberlands reforestation		(32	)		(32	)		(30	)		(32	)
Acquisition of Alabama timberlands (Note 14)		(149	)		0
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 (Note 16)								(283	)		(149	)
Other		1			3			1			1
Net cash from investing activities		(273	)		376			(433	)		(273	)
Cash flows from financing activities:
Cash dividends on common shares		(255	)		(254	)		(1,352	)		(255	)
Net proceeds from issuance of long-term debt (Note 9)		0			732
Payments on long-term debt (Note 9)		(225	)		(588	)
Proceeds from borrowings on line of credit (Note 9)		0			550
Payments on line of credit (Note 9)		0			(780	)
Net proceeds from issuance of long-term debt (Note 8)								881			0
Payments on long-term debt (Note 8)								(1,203	)		(225	)
Proceeds from exercise of stock options		45			6			14			45
Repurchases of common shares (Note 4)								(259	)		0
Other		(16	)		(15	)		(19	)		(16	)
Net cash from financing activities		(451	)		(349	)		(1,938	)		(451	)
Net change in cash and cash equivalents		1,282			504
Cash and cash equivalents at beginning of period		495			139
Cash and cash equivalents at end of period	$	1,777		$	643
Net change in cash, cash equivalents and restricted cash								(268	)		1,282
Cash, cash equivalents and restricted cash at beginning of period								1,999			495
Cash, cash equivalents and restricted cash at end of period							$	1,731		$	1,777
Cash paid (received) during the period for:
Interest, net of amount capitalized of $2 and $3	$	154		$	178
Interest, net of amount capitalized of $3 and $2							$	149		$	154
Income taxes, net of refunds	$	263		$	1		$	354		$	263

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(UNAUDITED)

	QUARTER ENDED						YEAR-TO-DATE ENDED						QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	JUNE 2021			JUNE 2020			JUNE 2021			JUNE 2020			JUNE 2022			JUNE 2021			JUNE 2022			JUNE 2021
Common shares:
Balance at beginning of period	$	936		$	933		$	934		$	932		$	932		$	936		$	934		$	934
Issued for exercise of stock options and vested units		1			0			3			1			0			1			2			3
Repurchases of common shares (Note 4)														(5	)		0			(9	)		0
Balance at end of period		937			933			937			933			927			937			927			937
Other capital:
Balance at beginning of period		8,222			8,159			8,208			8,152			8,076			8,222			8,181			8,208
Issued for exercise of stock options		27			0			43			6			2			27			13			43
Repurchases of common shares (Note 4)														(133	)		0			(250	)		0
Share-based compensation		8			8			15			15			9			8			17			15
Other transactions, net		1			(1	)		(8	)		(7	)		0			1			(7	)		(8	)
Balance at end of period		8,258			8,166			8,258			8,166			7,954			8,258			7,954			8,258
Retained earnings (accumulated deficit):
Retained earnings:
Balance at beginning of period		962			(109	)		411			(3	)		1,679			962			2,131			411
Net earnings		1,028			72			1,709			222			788			1,028			1,559			1,709
Dividends on common shares		(129	)		0			(259	)		(256	)		(134	)		(129	)		(1,357	)		(259	)
Balance at end of period		1,861			(37	)		1,861			(37	)		2,333			1,861			2,333			1,861
Accumulated other comprehensive loss:
Balance at beginning of period		(792	)		(901	)		(822	)		(904	)		(450	)		(792	)		(479	)		(822	)
Other comprehensive income		136			41			166			44			52			136			81			166
Balance at end of period (Note 12)		(656	)		(860	)		(656	)		(860	)
Balance at end of period (Note 11)														(398	)		(656	)		(398	)		(656	)
Total equity:
Balance at end of period	$	10,400		$	8,202		$	10,400		$	8,202		$	10,816		$	10,400		$	10,816		$	10,400

Dividends paid per common share	$	0.17		$	0		$	0.34		$	0.34		$	0.18		$	0.17		$	1.81		$	0.34

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	1110

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 ACQUISITIONS	13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTERS AND YEAR-TO-DATE PERIODS ENDED JUNE 30, ~~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						YEAR-TO-DATE ENDED						QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021			JUNE 2020			JUNE 2021			JUNE 2020			JUNE 2022			JUNE 2021			JUNE 2022			JUNE 2021
Sales to unaffiliated customers:
Timberlands	$	405		$	359		$	784		$	740		$	515		$	405		$	980		$	784
Real Estate & ENR		110			65			216			177			117			110			245			216
Wood Products		2,629			1,207			4,650			2,442			2,341			2,629			4,860			4,650
		3,144			1,631			5,650			3,359			2,973			3,144			6,085			5,650
Intersegment sales:
Timberlands		136			121			270			243			156			136			317			270

Total sales		3,280			1,752			5,920			3,602			3,129			3,280			6,402			5,920
Intersegment eliminations		(136	)		(121	)		(270	)		(243	)		(156	)		(136	)		(317	)		(270	)
Total	$	3,144		$	1,631		$	5,650		$	3,359		$	2,973		$	3,144		$	6,085		$	5,650
Net contribution (charge) to earnings:
Timberlands	$	113		$	75		$	221		$	180		$	153		$	113		$	335		$	221
Real Estate & ENR		63			19			129			55			65			63			146			129
Wood Products		1,338			159			2,178			293			863			1,338			2,045			2,178
		1,514			253			2,528			528			1,081			1,514			2,526			2,528
Unallocated items⁽¹⁾		(84	)		(18	)		(149	)		(61	)
Unallocated items⁽¹⁾														(44	)		(84	)		(161	)		(149	)
Net contribution to earnings		1,430			235			2,379			467			1,037			1,430			2,365			2,379
Interest expense, net of capitalized interest		(78	)		(103	)		(157	)		(188	)		(65	)		(78	)		(137	)		(157	)
Loss on debt extinguishment														0			0			(276	)		0
Earnings before income taxes		1,352			132			2,222			279			972			1,352			1,952			2,222
Income taxes		(324	)		(60	)		(513	)		(57	)		(184	)		(324	)		(393	)		(513	)
Net earnings	$	1,028		$	72		$	1,709		$	222		$	788		$	1,028		$	1,559		$	1,709

(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				YEAR-TO-DATE ENDED				QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021		JUNE 2020		JUNE 2021		JUNE 2020		JUNE 2022		JUNE 2021		JUNE 2022		JUNE 2021
Net sales to unaffiliated customers:
Timberlands segment
Delivered logs:
West
Domestic sales	$	80	$	71	$	159	$	158	$	103	$	80	$	216	$	159
Export grade sales		142		108		264		198		205		142		351		264
Subtotal West		222		179		423		356		308		222		567		423
South		145		145		276		295		160		145		314		276
North		9		7		25		24		10		9		25		25
Subtotal delivered logs sales		376		331		724		675		478		376		906		724
Stumpage and pay-as-cut timber		7		5		13		10		11		7		20		13
Recreational and other lease revenue		16		16		32		31		16		16		33		32
Other⁽¹⁾		6		7		15		24
Other⁽¹⁾										10		6		21		15
Net sales attributable to Timberlands segment		405		359		784		740		515		405		980		784
Real Estate & ENR segment
Real estate		83		48		167		143		90		83		187		167
Energy and natural resources		27		17		49		34		27		27		58		49
Net sales attributable to Real Estate & ENR segment		110		65		216		177		117		110		245		216
Wood Products segment
Structural lumber		1,349		538		2,339		1,046		998		1,349		2,204		2,339
Oriented strand board		605		179		1,043		369		497		605		1,061		1,043
Engineered solid section		166		111		308		238		247		166		443		308
Engineered I-joists		104		70		187		148		168		104		305		187
Softwood plywood		69		34		125		73		53		69		111		125
Medium density fiberboard		43		33		91		77		53		43		101		91
Complementary building products		213		169		384		322		239		213		454		384
Other⁽²⁾		80		73		173		169
Other⁽²⁾										86		80		181		173
Net sales attributable to Wood Products segment		2,629		1,207		4,650		2,442		2,341		2,629		4,860		4,650
Total net sales	$	3,144	$	1,631	$	5,650	$	3,359	$	2,973	$	3,144	$	6,085	$	5,650

(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:

●	$~~1.37~~1.06 during second quarter ~~2021~~2022 and ~~$2.28~~$2.09 during year-to-date ~~2021;~~2022;

●	$~~0.10~~1.37 during second quarter ~~2020~~2021 and ~~$0.30~~$2.28 during ~~year-to-date 2020.~~year-to date 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				YEAR-TO-DATE ENDED				QUARTER ENDED				YEAR-TO-DATE ENDED
SHARES IN THOUSANDS	JUNE 2021		JUNE 2020		JUNE 2021		JUNE 2020		JUNE 2022		JUNE 2021		JUNE 2022		JUNE 2021
Weighted average common shares outstanding – basic		750,127		746,896		749,429		746,715		744,542		750,127		746,017		749,429
Dilutive potential common shares:
Stock options		443		0		330		169		308		443		346		330
Restricted stock units		659		38		699		161		410		659		415		699
Performance share units		279		50		315		25		322		279		416		315
Total effect of outstanding dilutive potential common shares		1,381		88		1,344		355		1,040		1,381		1,177		1,344
Weighted average common shares outstanding – dilutive		751,508		746,984		750,773		747,070		745,582		751,508		747,194		750,773

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

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

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

	QUARTER ENDED				YEAR-TO-DATE ENDED				QUARTER ENDED				YEAR-TO-DATE ENDED
SHARES IN THOUSANDS	JUNE 2021		JUNE 2020		JUNE 2021		JUNE 2020		JUNE 2022		JUNE 2021		JUNE 2022		JUNE 2021
Stock options		0		4,676		0		4,676
Performance share units		1,142		1,139		1,142		1,139		573		1,142		573		1,142

Share Repurchase Program

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

We repurchased 3,784,787 common shares for approximately $138 million under the 2021 Repurchase Program during second quarter 2022 and 6,982,462 common shares for approximately $259 million under the 2021 Repurchase Program during year-to-date 2022. As of June 30, 2022, we had remaining authorization of $668 million for future share repurchases. We did 0t repurchase shares during year-to-date 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 0 unsettled repurchases as of June 30, 2022, or December 31, 2021.

NOTE 5: INVENTORIES

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

DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2021		DECEMBER 31, 2020		JUNE 30, 2022		DECEMBER 31, 2021
LIFO inventories:
Logs	$	17	$	24	$	17	$	26
Lumber, plywood, panels and fiberboard		80		59		75		61
Other products		10		9		25		17
Moving average cost or FIFO inventories:
Logs		67		64		53		65
Lumber, plywood, panels, fiberboard and engineered wood products		104		84		127		106
Other products		109		100		151		131
Materials and supplies		112		103		123		114
Total	$	499	$	443	$	571	$	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						YEAR-TO-DATE ENDED						QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021			JUNE 2020			JUNE 2021			JUNE 2020			JUNE 2022			JUNE 2021			JUNE 2022			JUNE 2021
Service cost	$	10		$	8		$	21		$	18		$	8		$	10		$	18		$	21
Interest cost		25			34			49			69			26			25			53			49
Expected return on plan assets		(53	)		(57	)		(102	)		(116	)		(41	)		(53	)		(80	)		(102	)
Amortization of actuarial loss		27			31			57			61			23			27			47			57
Amortization of prior service cost		0			1			1			2			0			0			1			1
Total net periodic benefit cost – pension	$	9		$	17		$	26		$	34		$	16		$	9		$	39		$	26

	OTHER POST-EMPLOYMENT BENEFITS								OTHER POST-EMPLOYMENT BENEFITS
	QUARTER ENDED				YEAR-TO-DATE ENDED				QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021		JUNE 2020		JUNE 2021		JUNE 2020		JUNE 2022		JUNE 2021		JUNE 2022		JUNE 2021
Interest cost	$	1	$	1	$	2	$	2	$	1	$	1	$	2	$	2
Amortization of actuarial loss		0		0		2		1		2		0		3		2
Amortization of prior service credit		1		0		0		0		0		1		0		0
Total net periodic benefit cost – other post-employment benefits	$	2	$	1	$	4	$	3	$	3	$	2	$	5	$	4

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.

During second quarter ~~2021,~~2022, we recorded an increase to the beginning of the year fair value of the pension assets of ~~$155~~$54 million, or 52 percent. We also updated our census data that is used to estimate our beginning of the year projected benefit obligation for our pension plans, which resulted in a projected benefit obligation ~~increase~~decrease of ~~$17~~$13 million, or less than 1 percent. The net effect of these updates was a ~~$138~~$67 million improvement in funded status. This change in funded status was reflected on our Consolidated Balance Sheet as of June 30, ~~2021.~~2022.

NOTE 8:7: ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2021		DECEMBER 31, 2020		JUNE 30, 2022		DECEMBER 31, 2021
Compensation and employee benefit costs	$	185	$	204	$	197	$	225
Current portion of lease liabilities		23		26		22		24
Customer rebates, volume discounts and deferred income		160		111		190		164
Interest		86		87		68		83
Taxes payable		235		75		119		106
Other		86		93		62		71
Total	$	775	$	596	$	658	$	673

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

In ~~May 2021,~~March 2022, we ~~repaid~~completed a series of transactions that lowered our ~~$225~~weighted average interest rate and extended our weighted average maturity by issuing $900 million ~~variable-rate term loan that was scheduled~~in notes and using the net proceeds plus cash on hand to ~~mature in July 2026.~~

~~In March 2020, we issued $750~~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. In May 2020, a portion of the~~$444 million and $437 million, respectively.The net proceeds ~~was~~were used to ~~redeem~~retire $592 million of our ~~$569 million 4.70~~7.375 percent notes due in March ~~2021.~~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 ~~$11~~$276 million ($207

million after-tax) was included in ~~“Interest expense, net of capitalized interest” in~~ the Consolidated Statement of Operations in ~~second~~first quarter ~~2020~~2022 for ~~the make-whole premium~~premiums to retire $931 million of principal plus unamortized debt issuance costs and unamortized debt discounts in connection with the early ~~extinguishment of the $569 million notes, partially offset by the write-off of an unamortized fair value step-up adjustment.~~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 June 30, ~~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:

JUNE 30,
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

$
6,529

$
5,250

$
6,718

Variable rate

0

0

225

225

Total debt

$
5,250

$
6,529

$
5,475

$
6,943


DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2022		DECEMBER 31, 2021
Long-term fixed rate debt (including current maturities):
Carrying value	$	5,053	$	5,099
Fair value (level 2)	$	5,118	$	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, ~~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 June 30, ~~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						YEAR-TO-DATE ENDED						QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021			JUNE 2020			JUNE 2021			JUNE 2020			JUNE 2022			JUNE 2021			JUNE 2022			JUNE 2021
Pension⁽¹⁾
Pension⁽¹⁾
Balance at beginning of period	$	(1,044	)	$	(1,084	)	$	(1,064	)	$	(1,128	)	$	(709	)	$	(1,044	)	$	(720	)	$	(1,064	)
Other comprehensive income before reclassifications		100			0			96			20			59			100			51			96
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾		20			24			44			48
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾														18			20			37			44
Total other comprehensive income		120			24			140			68			77			120			88			140
Balance at end of period		(924	)		(1,060	)		(924	)		(1,060	)	$	(632	)	$	(924	)	$	(632	)	$	(924	)
Other Post-Employment Benefits⁽¹⁾
Other post-employment benefits⁽¹⁾
Balance at beginning of period	$	(11	)	$	(11	)	$	(12	)	$	(12	)	$	0		$	(11	)	$	(2	)	$	(12	)
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾		1			0			2			1
Other comprehensive loss before reclassifications														(1	)		0			0			0
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾														1			1			2			2
Total other comprehensive income		1			0			2			1			0			1			2			2
Balance at end of period		(10	)		(11	)		(10	)		(11	)	$	0		$	(10	)	$	0		$	(10	)
Translation Adjustments and Other
Translation adjustments and other
Balance at beginning of period	$	263		$	194		$	254		$	236		$	259		$	263		$	243		$	254
Translation adjustments		15			17			24			(25	)		(25	)		15			(9	)		24
Total other comprehensive income (loss)		15			17			24			(25	)		(25	)		15			(9	)		24
Balance at end of period		278			211			278			211			234			278			234			278
Accumulated other comprehensive loss, end of period	$	(656	)	$	(860	)	$	(656	)	$	(860	)	$	(398	)	$	(656	)	$	(398	)	$	(656	)

(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 year-to-date ~~2021~~2022 included the following:

SHARES IN THOUSANDS	GRANTED		VESTED		GRANTED		VESTED
Restricted stock units (RSUs)		769		781		626		853
Performance share units (PSUs)		354		229	306		419

A total of ~~2.4~~1.4 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 ~~$34.38.~~$41.94. 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. On July 7, 2021, we completed the sale for $261 million in cash proceeds, which is net of purchase price adjustments and closing costs. This transaction was structured as a like-kind exchange along with the Alabama acquisition discussed below. As a result of the sale, a gain of approximately $30 million will be recorded in the Timberlands segment in our third quarter 2021 ~~Consolidated Statement of Operations~~.

This divestiture is not considered a strategic shift that has, or will have, a major effect on our operations or financial results and therefore does not meet the requirements for presentation as discontinued operations. However, the related assets have met the relevant criteria to be classified as held for sale in the current period ~~Consolidated Balance Sheet~~. The designation as held for sale requires us to record the related net assets at the lower of their current cost basis or fair value, less an amount of estimated selling costs. This classification does not affect the presentation in the ~~Consolidated Statement of Operations. The held for sale classification did change the presentation of the related assets from long-term to current on our~~ ~~Consolidated Balance Sheet~~.

~~As of June 30, 2021, “Assets held for sale” had a balance of $229 million, which consisted primarily of timberlands and other related assets.~~

~~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~~ ~~and recorded $148 million of timberland assets in “Timber and timberlands at cost, less depletion” and $1 million of related assets in “Property and equipment, net” on ourConsolidated Balance Sheet~~. ~~As discussed above, this transaction was structured as a like-kind exchange, and therefore, the southwest Alabama timberlands were held on our behalf by an intermediary as of June 30, 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					YEAR-TO-DATE ENDED					QUARTER ENDED					YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021		JUNE 2020			JUNE 2021		JUNE 2020			JUNE 2022			JUNE 2021		JUNE 2022			JUNE 2021
Foreign exchange losses (gains), net	$	1	$	(3	)	$	3	$	5		$	(3	)	$	1	$	(4	)	$	3
Litigation expense, net		3		6			6		2			4			3		8			6
Product remediation recovery		0		(8	)		0		(8	)
Research and development expenses		1		2			2		3			2			1		3			2
Other, net		8		6			12		11			9			8		11			12
Total other operating costs, net	$	13	$	3		$	23	$	13		$	12		$	13	$	18		$	23

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	JUNE 30, 2022		DECEMBER 31, 2021
Cash and cash equivalents	$	1,723	$	1,879
Restricted cash included in other assets⁽¹⁾		0		120
Restricted cash included in prepaid expenses and other current assets		8		0
Total cash, cash equivalents and restricted cash	$	1,731	$	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 ACQUISITIONS

On April 14, 2022, we announced an agreement to purchase 81 thousand acres of North and South Carolina timberlands for approximately $265 million. We completed the purchase on May 18, 2022 and recorded $263 million of timberland assets in “Timber and timberlands at cost, less depletion” and $2 million of related assets in “Property and equipment, net” on our Consolidated Balance Sheet.

On February 25, 2021, we announced an agreement to purchase 69 thousand acres of southwest Alabama timberlands for approximately $149 million. We completed the purchase on April 27, 2021 and recorded $148 million of timberland assets in “Timber and timberlands at cost, less depletion” and $1 million of related assets in “Property and equipment, net” on our Consolidated Balance Sheet. This transaction was structured as a like-kind exchange.

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 expectations relating to returns on invested pension plan assets and expected benefit payments; our capital structure and the sufficiency of our liquidity position to meet future cash requirements; ~~future debt maturities,~~ compliance with covenants in our debt ~~agreements and the effect on~~agreements; our ~~financial position of the expected discontinuation of LIBOR; expected results of litigation and other legal proceedings and~~expectations concerning our contingent liabilities and the sufficiency of related reserves and accruals including, but not limited to, cost estimates of future litigation and ~~other contingent liability reserves and related accruals; expected uses of cash, including future dividends and~~environmental remediation; expected capital expenditures; ~~expected effects of certain acquisitions~~market and ~~divestitures on our operations 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~~remodel activity, impacts from COVID-related restrictions, inflation trends and interest rates; our ~~products; laws~~expectations about our future opportunities in emerging carbon offset and ~~regulations relevant to our businesses;~~carbon capture and storage markets; and assumptions used in valuing incentive compensation and related ~~expense; and our expectations relating to returns on invested pension plan assets and expected benefit payments.~~expense.

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often involve use of words such as ~~"anticipate," "believe," "committed,~~“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. 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 2020 driven by the restrictions imposed in response to the pandemic. Since that time the unemployment rate has fallen steadily, and U.S. GDP has rebounded significantly as states have continued to reopen their economies and loosen restrictions. Although market conditions across our businesses deteriorated rapidly in late first quarter and early second quarter 2020, they 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 rose sharply through May 2021 beyond the record levels established in the prior year. At the end of the second quarter, lumber prices had begun a substantial correction as demand and supply came into balance. Looking ahead to the remainder of 2021, ourOur market conditions and the strength of the broader U.S. economy are, and will continue to be, influenced by the trajectory of U.S. housing activity, ~~the ongoing pace of reopening economic activities due to~~repair and remodel activity, impacts from COVID-related restrictions, inflation trends and interest ~~rates, and the nature and extent of future government stimulus including the proposed infrastructure bill.~~

We have taken proactive steps to safeguard the health of our employees and preserve business continuity from the beginning of the pandemic. These actions included detailed cleaning and disinfecting procedures, strict processes around masking, 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. In light of the recent adjustments to federal, state and local health and safety restrictions, we have begun a phased-in approach to return those employees who have been working from home back to their work locations. We remain vigilant about employee safety and will continue to monitor developments, including but not limited to the spread of disease variants and their impact on local health systems.

~~Business Outlook~~

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~~particularly new residential construction, strongly affects demand in our Wood Products segment, as does repair and remodeling activity. Seasonal weather patterns impact the level of construction activity in the U.S., which in turn affects demand for our logs and wood products. ~~In second quarter 2021, wet weather constrained harvest operations for producers in the U.S. South.~~ 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 second quarter ~~2021~~2022 averaged ~~1.57~~1.65 million units, ~~which was 2~~a 4 percent ~~below~~decrease from first quarter ~~2021.~~2022. Single family starts averaged 1.1 million units, a 49.5 percent ~~decline~~decrease from first quarter ~~2021 but a 43 percent improvement over second quarter 2020.~~2022. Multi-family starts averaged ~~464~~577 thousand units in second quarter ~~2021,~~2022, which was 5an 8.4 percent ~~higher than~~increase from first quarter ~~2021 and 49 percent higher than second quarter 2020.~~2022. Sales of newly built, single family homes averaged a seasonally adjusted annual rate of ~~728~~612 thousand units for second quarter ~~2021,~~2022, a 19decrease of 21.1 percent ~~decrease~~ from the prior ~~quarter average of 896 thousand units and a 4 percent increase from the second quarter 2020 average of 703 thousand units~~.quarter.

Repair and remodeling expenditures ~~declined~~fell by 101 percent from ~~March~~first quarter 2022 to ~~June 2021~~second quarter 2022 according to the Census Bureau Advance Retail Spending report. ~~A decrease in do-it-yourself~~Do-it-yourself activity ~~contributed~~has been returning to ~~lower sales at home improvement centers offset in part by a transition~~more normalized levels while professionally contracted activities continue to ~~larger projects undertaken by professional contractors.~~increase.

In U.S. wood product markets, demand ~~for commodity products~~ was ~~strong during the first half~~steady most of ~~the~~ second quarter ~~and benchmark pricing for lumber and OSB reached record highs~~2022 as ~~demand continued~~dealer inventories adjusted to ~~outpace production capacity. As repair and remodeling demand fell, lumber prices declined. OSB, which is much~~a more ~~focused on new residential construction activity than repair and remodeling, had not seen similar price declines as lumber at the end of the quarter.~~uncertain economic environment. The Random Lengths Framing Lumber Composite price averaged ~~$1,260/~~$850/MBF and the OSB Composite averaged ~~$1,373/~~$798/MSF in second quarter ~~2021. At~~2022. Over the ~~end~~course of the second quarter, prices ~~were $770/~~declined from $1,134/MBF to $604/MBF for ~~the Lumber Composite~~lumber and ~~$1,501/~~from $1,372/MSF to $425/MSF for ~~the~~ OSB, ~~composite. Through the end of July, lumber prices continued to fall, and OSB prices began to decline in the second half of July.~~ reflecting a more volatile pricing environment.

In Western log markets, Douglas fir sawlog prices ~~decreased~~fell by 3 percent in second quarter ~~2021~~2022 compared with first quarter 2022 as reported by RISI Log Lines. Continued strength in Western log prices was supported by tight log supplies. In the South, delivered sawlog prices increased by 0.7 percent from first quarter 2022 and 7 percent from second quarter 2021 as reported by ~~RISI Log Lines,~~TimberMart-South, as new mill capacity has increased demand in ~~part a response to the recent decline in lumber prices. In the South, sawlog prices increased by 3 percent from first quarter 2021 as reported by TimberMart-South.~~certain markets.

Exchange rates, available supply from other countries and trade policy affect our export businesses. During second quarter ~~2021,~~2022, continued strength in end use demand and disruptions ~~in shipping, diversion~~ of ~~European~~other global sources of supply supported 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 generally had a positive impact on China’s demand for logs imported from the U.S.~~geographies. In Japan, total housing starts increased 2.5 percent year to date through May compared to the same period in ~~2020,~~2021, while the key Post and Beam segment saw a 62.1 percent ~~increase.~~decrease. Decreased lumber imports from Europe to Japan ~~were~~have been favorable to our Japanese log export ~~business.~~business through the first half of 2022.

Interest rates affect our business primarily through their impact on mortgage rates, their general impact on the economy, and their influence on our capital management activities. Actions by the U.S. Federal Reserve, the overall condition of the economy, and fluctuations in financial markets are all factors that influence longer-term interest rates. Mortgage rates, which are correlated to longer-term interest rates, impact home affordability and therefore significant increases can reduce demand for homebuying.

Changes in inflation also reflect monetary policy set by the U.S. Federal Reserve, as well as changes in demand and supply for goods and services and fluctuations in labor markets. Increased inflation affects the cost of our operations across each of our business segments. The Consumer Price Index increased 9.1 percent year over year in June 2022. While we can offset some of the impacts of inflation through our sales activities, not all of the costs associated with inflation can be fully mitigated.

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 Second Quarter ~~2021~~2022 and Year-to-Date ~~2021~~2022

	QUARTER ENDED				AMOUNT OF CHANGE		YEAR-TO-DATE ENDED				AMOUNT OF CHANGE		QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	JUNE 2021		JUNE 2020		2021 VS. 2020		JUNE 2021		JUNE 2020		2021 VS. 2020		JUNE 2022		JUNE 2021		2022 VS. 2021			JUNE 2022		JUNE 2021		2022 VS. 2021
Net sales	$	3,144	$	1,631	$	1,513	$	5,650	$	3,359	$	2,291	$	2,973	$	3,144	$	(171	)	$	6,085	$	5,650	$	435
Costs of sales		1,583		1,283		300		3,013		2,665		348	$	1,789	$	1,583	$	206		$	3,436	$	3,013	$	423
Operating income		1,429		243		1,186		2,385		483		1,902	$	1,047	$	1,429	$	(382	)	$	2,391	$	2,385	$	6
Net earnings		1,028		72		956		1,709		222		1,487	$	788	$	1,028	$	(240	)	$	1,559	$	1,709	$	(150	)
Earnings per share, basic and diluted		1.37		0.10		1.27		2.28		0.30		1.98	$	1.06	$	1.37	$	(0.31	)	$	2.09	$	2.28	$	(0.19	)

Comparing Second Quarter ~~2021~~2022 with Second Quarter ~~2020~~2021

Net sales

Net sales decreased $171 million – 5 percent – primarily due to a $288 million decrease in Wood Products sales to unaffiliated customers attributable to decreased sales realizations for structural lumber, oriented strand board and softwood plywood.

This decrease was partially offset by a $110 million increase in Timberlands net sales to unaffiliated customers primarily due to increased sales realizations.

Costs of sales

Costs of sales increased $206 million – 13 percent – primarily due to increased freight and raw material costs within our Wood Products segment as well as increased freight costs, third-party log purchases and sales volumes within our Timberlands segment.

Operating income

Operating income decreased $382 million – 27 percent – primarily due to a $377 million decrease in consolidated gross margin (see discussion of components above).

Net earnings

Net earnings decreased $240 million – 23 percent – primarily due to the $382 million decrease in operating income discussed above.

This decrease was partially offset by a $140 million decrease in income tax expense (refer to Income Taxes).

Comparing Year-to-Date 2022 with Year-to-Date 2021

Net sales

Net sales increased ~~$1,513~~$435 million – 938 percent – primarily due to a ~~$1,422~~$210 million i~~ncrease~~increase in Wood Products sales to unaffiliated customers attributable to increased sales realizations across ~~all~~most product ~~lines.~~lines, as well as a $196 million increase in Timberlands sales to unaffiliated customers attributable to increased sales realizations and sales volumes in the Western and Southern regions.

Costs of sales

Costs of sales increased ~~$300~~$423 million ~~– 23~~–14 percent – primarily due to increased ~~sales volumes~~freight and raw material costs within our Wood Products segment ~~and~~as well as increased freight costs, ~~and~~ third-party log purchases and sales volumes within our Timberlands segment.

Operating income

Operating income increased ~~$1,186~~$6 million – ~~488~~less than 1 percent – primarily due to a ~~$1,213~~$12 million increase in consolidated gross margin (see discussion of components above).

Net earnings

Net earnings ~~increased $956~~decreased $150 million – ~~1,328~~9 percent – primarily due to a $276 million pretax charge ($207 million after-tax) related to the ~~$1,186~~ early extinguishment of debt (refer to ~~million increase in operating income discussed above.~~Note 8: Long-Term Debt and Line of Credit).

This ~~increase~~decrease was partially offset by a ~~$264~~$120 million ~~increase~~decrease in income tax expense (refer to Income Taxes).

~~Comparing Year-to-Date 2021 with Year-to-Date 2020~~

~~Net sales~~

~~Net sales increased $2,291 million – 68 percent – primarily due to a $2,208 million increase in Wood Products sales to unaffiliated customers attributable to increased sales realizations across all product lines.~~

~~Costs of sales~~

~~Costs of sales increased $348 million – 13 percent – primarily due to~~ ~~increased sales volumes within our Wood Products segment and increased freight costs and third-party log purchases within our Timberlands segment.~~

~~These increases were partially offset by decreased real estate acres sold within our Real Estate & ENR segment.~~

~~Operating income~~

~~Operating income increased $1,902 million – 394 percent – primarily due to a $1,943 million~~ ~~increase in consolidated gross margin (see discussion of components above).~~

~~Net earnings~~

~~Net earnings increased $1,487 million – 670 percent –~~ ~~primarily due to the $1,902 million increase in operating income discussed above.~~

~~This increase was partially offset by a $456 million increase in income tax expense (refer to~~ ~~Income Taxes~~).

TIMBERLANDS

How We Did Second Quarter ~~2021~~2022 and Year-to-Date ~~2021~~2022

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE		YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2022		JUNE 2021		2022 VS. 2021		JUNE 2022		JUNE 2021		2022 VS. 2021
Net sales to unaffiliated customers:
Delivered logs:
West	$	222	$	179	$	43		$	423	$	356	$	67		$	308	$	222	$	86	$	567	$	423	$	144
South		145		145		—			276		295		(19	)		160		145		15		314		276		38
North⁽¹⁾		9		7		2			25		24		1			10		9		1		25		25		—
Subtotal delivered logs sales		376		331		45			724		675		49			478		376		102		906		724		182
Stumpage and pay-as-cut timber		7		5		2			13		10		3			11		7		4		20		13		7
Recreational and other lease revenue		16		16		—			32		31		1			16		16		—		33		32		1
Other⁽²⁾		6		7		(1	)		15		24		(9	)
Other⁽¹⁾																10		6		4		21		15		6
Subtotal net sales to unaffiliated customers		405		359		46			784		740		44			515		405		110		980		784		196
Intersegment sales		136		121		15			270		243		27			156		136		20		317		270		47
Total sales	$	541	$	480	$	61		$	1,054	$	983	$	71		$	671	$	541	$	130	$	1,297	$	1,054	$	243
Costs of sales	$	407	$	383	$	24		$	790	$	758	$	32		$	495	$	407	$	88	$	918	$	790	$	128
Operating income and Net contribution to earnings	$	113	$	75	$	38		$	221	$	180	$	41		$	153	$	113	$	40	$	335	$	221	$	114

(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 Second Quarter ~~2021~~2022 with Second Quarter ~~2020~~2021

Net sales to unaffiliated customers

Net sales to unaffiliated customers increased ~~$46~~$110 million – 1327 percent – primarily due to ~~a $43~~an $86 million increase in Western log sales attributable to a 3126 percent increase in sales realizations ~~partially offset by a 6~~and an 11 percent ~~decrease~~increase in sales ~~volumes.~~volumes, as well as a $15 million increase in Southern log sales attributable to a 10 percent increase in sales realizations.

Intersegment sales

Intersegment sales increased ~~$15~~$20 million – 1215 percent – primarily due to a 1519 percent increase in sales ~~realizations, partially offset by a 2 percent decrease in sales volumes.~~realizations.

Costs of sales

Costs of sales increased ~~$24~~$88 million – 622 percent – primarily due to increased freight costs and third-party log purchases, ~~partially offset by decreased fee harvest volumes.~~as well as increased sales volumes, as discussed above.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased ~~$38~~$40 million – 5135 percent – primarily due to the change in the components of gross margin, as discussed above.

Comparing Year-to-Date ~~2021~~2022 with Year-to-Date ~~2020~~2021

Net sales to unaffiliated customers

Net sales to unaffiliated customers increased ~~$44~~$196 million – 625 percent – primarily due to a ~~$67~~$144 million increase in Western log sales attributable to a 2825 percent increase in sales realizations ~~partially offset by~~and a 7 percent ~~decrease~~increase in sales ~~volumes. The~~volumes, as well as a $38 million increase ~~was partially offset by a $19 million decrease~~ in Southern log sales attributable to a 9 percent ~~decrease~~increase in sales realizations and a 5 percent increase in sales volumes.

Intersegment sales

Intersegment sales increased ~~$27~~$47 million – 1117 percent – primarily due to a 1519 percent increase in sales ~~realizations, partially offset by a 3 percent decrease in sales volumes.~~realizations.

Costs of sales

Costs of sales increased ~~$32~~$128 million – 416 percent – primarily due to ~~increases in~~increased freight costs and third-party log purchases, ~~partially offset by decreased fee harvest volumes.~~as well as increased sales volumes, as discussed above.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased ~~$41~~$114 million – 2352 percent – primarily due to the change in the components of gross margin, as discussed above.

Third-Party Log Sales Volumes and Fee Harvest Volumes

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
VOLUMES IN THOUSANDS	JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2022		JUNE 2021		2022 VS. 2021			JUNE 2022		JUNE 2021		2022 VS. 2021
Third-party log sales – tons:
West⁽¹⁾		1,608		1,714		(106	)		3,147		3,398		(251	)
West⁽¹⁾																1,778		1,608		170			3,382		3,147		235
South		4,150		4,307		(157	)		7,932		8,672		(740	)		4,167		4,150		17			8,302		7,932		370
North⁽²⁾		115		113		2			376		397		(21	)		118		115		3			328		376		(48	)
Total		5,873		6,134		(261	)		11,455		12,467		(1,012	)		6,063		5,873		190			12,012		11,455		557
Fee harvest volumes – tons:
West⁽¹⁾		2,099		2,236		(137	)		4,200		4,546		(346	)
West⁽¹⁾																2,085		2,099		(14	)		4,325		4,200		125
South		5,856		5,914		(58	)		11,232		12,044		(812	)		6,159		5,856		303			12,001		11,232		769
North⁽²⁾		199		194		5			536		580		(44	)		180		199		(19	)		458		536		(78	)
Total		8,154		8,344		(190	)		15,968		17,170		(1,202	)		8,424		8,154		270			16,784		15,968		816

(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 Second Quarter ~~2021~~2022 and Year-to-Date ~~2021~~2022

	QUARTER ENDED				AMOUNT OF CHANGE		YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE		YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021		JUNE 2020		2021 VS. 2020		JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2022		JUNE 2021		2022 VS. 2021		JUNE 2022		JUNE 2021		2022 VS. 2021
Net sales:
Real estate	$	83	$	48	$	35	$	167	$	143	$	24		$	90	$	83	$	7	$	187	$	167	$	20
Energy and natural resources		27		17		10		49		34		15			27		27		—		58		49		9
Total	$	110	$	65	$	45	$	216	$	177	$	39		$	117	$	110	$	7	$	245	$	216	$	29
Costs of sales	$	41	$	40	$	1	$	75	$	110	$	(35	)	$	45	$	41	$	4	$	86	$	75	$	11
Operating income and Net contribution to earnings	$	63	$	19	$	44	$	129	$	55	$	74		$	65	$	63	$	2	$	146	$	129	$	17

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 Second Quarter ~~2021~~2022 with Second Quarter ~~2020~~2021

Net sales

Net sales increased ~~$45~~$7 million – 696 percent – primarily due to an increase in the ~~average price per real estate acre sold.~~amount of acres sold, partially offset by decreased mitigation bank credit sales.

Costs of sales

Costs of sales increased $1$4 million – 310 percent – primarily due to ~~increased~~increases in the amount of acres sold and basis per ~~real estate~~ acre ~~sold, partially offset by decreased real estate acres~~ sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased ~~$44~~$2 million – ~~232~~3 percent – primarily due to the change in the components of gross margin, as discussed above.

Comparing Year-to-Date ~~2021~~2022 with Year-to-Date ~~2020~~2021

Net sales

Net sales increased ~~$39~~$29 million – 2213 percent – primarily due to an increase in the ~~average price per real estate acre sold.~~amount of acres sold, partially offset by decreased mitigation bank credit sales.

Costs of sales

Costs of sales ~~decreased $35~~increased $11 million – 3215 percent – primarily due to ~~decreased real estate~~increases in the amount of acres sold and basis per acre sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased ~~$74~~$17 million – ~~135~~13 percent – primarily due to the change in the components of gross margin, as discussed above.

REAL ESTATE SALES STATISTICS

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
	JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2022		JUNE 2021		2022 VS. 2021			JUNE 2022		JUNE 2021		2022 VS. 2021
Acres sold		18,415		31,337		(12,922	)		37,870		76,310		(38,440	)		26,906		18,415		8,491			51,032		37,870		13,162
Average price per acre	$	3,227	$	1,501	$	1,726		$	3,523	$	1,790	$	1,733		$	3,215	$	3,227	$	(12	)	$	3,484	$	3,523	$	(39	)

WOOD PRODUCTS

How We Did Second Quarter ~~2021~~2022 and Year-to-Date ~~2021~~2022

	QUARTER ENDED				AMOUNT OF CHANGE		YEAR-TO-DATE ENDED				AMOUNT OF CHANGE		QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021		JUNE 2020		2021 VS. 2020		JUNE 2021		JUNE 2020		2021 VS. 2020		JUNE 2022		JUNE 2021		2022 VS. 2021			JUNE 2022		JUNE 2021		2022 VS. 2021
Net sales:
Structural lumber	$	1,349	$	538	$	811	$	2,339	$	1,046	$	1,293	$	998	$	1,349	$	(351	)	$	2,204	$	2,339	$	(135	)
Oriented strand board		605		179		426		1,043		369		674		497		605		(108	)		1,061		1,043		18
Engineered solid section		166		111		55		308		238		70		247		166		81			443		308		135
Engineered I-joists		104		70		34		187		148		39		168		104		64			305		187		118
Softwood plywood		69		34		35		125		73		52		53		69		(16	)		111		125		(14	)
Medium density fiberboard		43		33		10		91		77		14		53		43		10			101		91		10
Complementary building products		213		169		44		384		322		62		239		213		26			454		384		70
Other products produced⁽¹⁾		80		73		7		173		169		4
Other products produced⁽¹⁾														86		80		6			181		173		8
Total	$	2,629	$	1,207	$	1,422	$	4,650	$	2,442	$	2,208	$	2,341	$	2,629	$	(288	)	$	4,860	$	4,650	$	210
Costs of sales	$	1,229	$	997	$	232	$	2,353	$	2,037	$	316	$	1,414	$	1,229	$	185		$	2,690	$	2,353	$	337
Operating income and Net contribution to earnings	$	1,338	$	159	$	1,179	$	2,178	$	293	$	1,885	$	863	$	1,338	$	(475	)	$	2,045	$	2,178	$	(133	)

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

Comparing Second Quarter ~~2021~~2022 with Second Quarter ~~2020~~2021

Net sales

Net sales ~~increased $1,422~~decreased $288 million – ~~118~~11 percent – due to:

●	~~an $811~~a $351 million ~~increase~~decrease in structural lumber sales attributable to a ~~146~~28 percent ~~increase~~decrease in sales realizations, ~~as well as~~partially offset by a 23 percent increase in sales volumes;

●	a ~~$426~~$108 million ~~increase~~decrease in oriented strand board sales attributable to a ~~280~~26 percent ~~increase~~decrease in sales realizations, partially offset by an 11 ~~percent decrease in sales volumes primarily due to planned maintenance outages;~~

●	~~a $55 million increase in engineered solid section sales attributable to a 27 percent increase in sales volumes, as well as an 18 percent increase in sales realizations;~~

●	~~a $44 million increase in complementary building product sales attributable to increased sales volumes and sales realizations;~~

●	a $35 million increase in softwood plywood sales attributable to a 153 percent increase in sales realizations, partially offset by a 19 percent decrease in sales volumes primarily due to the ongoing effects of weather-related disruptions that occurred in first quarter 2021;

●	~~a $34 million increase in engineered I-joists sales attributable to a 26 percent increase in sales volumes, as well as a 20 percent increase in sales realizations;~~

●	~~a $10 million increase in medium density fiberboard sales attributable to a 25 percent increase in sales volumes, as well as a 5 percent increase in sales realizations and~~

●	~~a $7 million increase in other products produced sales attributable to increased sales volumes and sales realizations.~~

~~Costs of sales~~

~~Costs of sales increased $232 million – 23 percent – primarily due to~~ ~~an increase in sales volumes across most product lines.~~

~~Operating income and Net contribution to earnings~~

~~Operating income and net contribution to earnings increased $1,179 million – 742 percent – primarily due to~~ ~~the change in the components of gross margin, as discussed above.~~

~~Comparing Year-to-Date 2021 with Year-to-Date 2020~~

~~Net sales~~

~~Net sales increased $2,208 million – 90 percent – primarily due to:~~

●	~~a $1,293 million increase in structural lumber sales attributable to a 128 percent increase in sales realizations, partially offset by a 2 percent decrease in sales volumes;~~

●	a $674 million increase in oriented strand board sales attributable to a 211 percent increase in sales realizations, partially offset by a 9 percent decrease in sales volumes primarily due to planned maintenance outages;

●	~~a $70 million increase in engineered solid section sales attributable to a 15 percent increase in sales volumes, as well as a 12 percent increase in sales realizations;~~

●	~~a $62 million increase in complementary building product sales attributable to increased sales volumes and sales realizations;~~

●	a $52 million increase in softwood plywood sales attributable to a 108 percent increase in sales realizations, partially offset by an 18 percent decrease in sales volumes primarily due to the effects of weather-related disruptions that occurred in first quarter 2021;

●	~~a $39 million increase in engineered I-joists sales attributable to a 14 percent increase in sales realizations, as well as a 12~~ percent increase in sales volumes and

●	a ~~$14~~$16 million decrease in softwood plywood sales attributable to a 17 percent decrease in sales realizations, as well as a 9 percent decrease in sales volumes.

These decreases were partially offset by:

●	an $81 million increase in engineered solid section sales due to a 53 percent increase in sales realizations, partially offset by a 3 percent decrease in sales volumes;

●	a $64 million increase in engineered I-joists sales due to a 73 percent increase in sales realizations, partially offset by an 8 percent decrease in sales volumes;

●	a $26 million increase in complementary building products sales attributable to increased sales realizations;

●	a $10 million increase in medium density fiberboard sales attributable to a 1635 percent increase in sales realizations, partially offset by a 10 percent decrease in sales volumes ~~as well as~~ and

●	a ~~2 percent~~$6 million increase in other products produced sales ~~realizations.~~attributable to increased sales volumes.

Costs of sales

Costs of sales increased ~~$316~~$185 million – 1615 percent – primarily due to ~~an increase in sales volumes for engineered wood products~~increased freight and ~~complementary building products, as discussed above.~~

raw material costs.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings ~~increased $1,885~~decreased $475 million – ~~643~~36 percent – primarily due to the change in the components of gross margin, as discussed above.

Comparing Year-to-Date 2022 with Year-to-Date 2021

Net sales

Net sales increased $210 million – 5 percent – due to:

●	a $135 million increase in engineered solid section sales attributable to a 52 percent increase in sales realizations, partially offset by a 5 percent decrease in sales volumes;

●	a $118 million increase in engineered I-joists sales attributable to a 70 percent increase in sales realizations, partially offset by a 5 percent decrease in sales volumes;

●	a $70 million increase in complementary building products sales attributable to increased sales realizations;

●	an $18 million increase in oriented strand board sales attributable to 5 percent increase in sales volumes, partially offset by a 3 percent decrease in sales realizations;

●	a $10 million increase in medium density fiberboard sales attributable to a 32 percent increase in sales realizations, partially offset by a 17 percent decrease in sales volumes and

●	an $8 million increase in other products produced sales attributable to increased sales volumes.

These increases were partially offset by a $135 million decrease in structural lumber sales attributable to an 8 percent decrease in sales realizations, partially offset by a 2 percent increase in sales volumes, as well as a $14 million decrease in softwood plywood sales attributable to a 15 percent decrease in sales volumes, partially offset by a 4 percent increase in sales realizations.

Costs of sales

Costs of sales increased $337 million – 14 percent – primarily due to increased freight and raw material costs.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased $133 million – 6 percent – primarily due to the change in the components of gross margin, as discussed above.

Third-Party Sales Volumes

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED					AMOUNT OF CHANGE
VOLUMES IN MILLIONS⁽¹⁾	JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2021		JUNE 2020		2021 VS. 2020
VOLUMES IN MILLIONS⁽¹⁾															JUNE 2022		JUNE 2021		2022 VS. 2021			JUNE 2022			JUNE 2021		2022 VS. 2021
Structural lumber – board feet		1,252		1,225		27			2,397		2,447		(50	)		1,289		1,252		37			2,446			2,397		49
Oriented strand board – square feet (3/8”)		663		747		(84	)		1,377		1,517		(140	)		735		663		72			1,452			1,377		75
Engineered solid section – cubic feet		6.6		5.2		1.4			12.8		11.1		1.7			6.4		6.6		(0.2	)		12.1			12.8		(0.7	)
Engineered I-joists – lineal feet		53		42		11			100		89		11			49		53		(4	)		95			100		(5	)
Softwood plywood – square feet (3/8”)		77		95		(18	)		171		208		(37	)		70		77		(7	)		145			171		(26	)
Medium density fiberboard – square feet (3/4”)		50		40		10			107		92		15			45		50		(5	)		89	��		107		(18	)

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

PRODUCTION AND OUTSIDE PURCHASE VOLUMES

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

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS	JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2021		JUNE 2020		2021 VS. 2020			JUNE 2022		JUNE 2021		2022 VS. 2021			JUNE 2022		JUNE 2021		2022 VS. 2021
Structural lumber – board feet:
Production		1,234		1,108		126			2,445		2,317		128			1,232		1,234		(2	)		2,435		2,445		(10	)
Outside purchase		49		51		(2	)		104		110		(6	)		43		49		(6	)		85		104		(19	)
Total		1,283		1,159		124			2,549		2,427		122			1,275		1,283		(8	)		2,520		2,549		(29	)
Oriented strand board – square feet (3/8”):
Production		683		742		(59	)		1,425		1,519		(94	)		758		683		75			1,497		1,425		72
Outside purchase		71		64		7			139		151		(12	)		66		71		(5	)		136		139		(3	)
Total		754		806		(52	)		1,564		1,670		(106	)		824		754		70			1,633		1,564		69
Engineered solid section – cubic feet:
Production		6.2		5.3		0.9			12.2		11.4		0.8			6.4		6.2		0.2			12.1		12.2		(0.1	)
Outside purchase		0.2		0.1		0.1			0.5		0.3		0.2			0.3		0.2		0.1			0.5		0.5		—
Total		6.4		5.4		1.0			12.7		11.7		1.0			6.7		6.4		0.3			12.6		12.7		(0.1	)
Engineered I-joists – lineal feet:
Production		51		38		13			95		85		10			50		51		(1	)		94		95		(1	)
Outside purchase		2		3		(1	)		5		5		—			3		2		1			5		5		—
Total		53		41		12			100		90		10			53		53		—			99		100		(1	)
Softwood plywood – square feet (3/8”):
Production		62		76		(14	)		142		173		(31	)		67		62		5			133		142		(9	)
Outside purchase		12		14		(2	)		26		30		(4	)		8		12		(4	)		18		26		(8	)
Total		74		90		(16	)		168		203		(35	)		75		74		1			151		168		(17	)
Medium density fiberboard – square feet (3/4"):
Production		52		35		17			108		91		17			48		52		(4	)		92		108		(16	)
Total		52		35		17			108		91		17			48		52		(4	)		92		108		(16	)

UNALLOCATED ITEMS

Net Charge to Earnings – Unallocated Items

	QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE			QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021			JUNE 2020			2021 VS. 2020			JUNE 2021			JUNE 2020			2021 VS. 2020			JUNE 2022			JUNE 2021			2022 VS. 2021			JUNE 2022			JUNE 2021			2022 VS. 2021
Unallocated corporate function and variable compensation expense	$	(36	)	$	(23	)	$	(13	)	$	(61	)	$	(42	)	$	(19	)	$	(36	)	$	(36	)	$	—		$	(67	)	$	(61	)	$	(6	)
Liability classified share-based compensation		—			(4	)		4			(1	)		6			(7	)		2			—			2			3			(1	)		4
Foreign exchange gain (loss)		(1	)		3			(4	)		(3	)		(5	)		2			3			(1	)		4			3			(3	)		6
Elimination of intersegment profit in inventory and LIFO		(28	)		18			(46	)		(45	)		5			(50	)		18			(28	)		46			(41	)		(45	)		4
Other		(20	)		(4	)		(16	)		(33	)		(9	)		(24	)		(21	)		(20	)		(1	)		(33	)		(33	)		—
Operating loss		(85	)		(10	)		(75	)		(143	)		(45	)		(98	)		(34	)		(85	)		51			(135	)		(143	)		8
Non-operating pension and other post-employment benefit costs		(1	)		(10	)		9			(9	)		(19	)		10			(11	)		(1	)		(10	)		(26	)		(9	)		(17	)
Interest income and other		2			2			—			3			3			—			1			2			(1	)		—			3			(3	)
Net charge to earnings	$	(84	)	$	(18	)	$	(66	)	$	(149	)	$	(61	)	$	(88	)	$	(44	)	$	(84	)	$	40		$	(161	)	$	(149	)	$	(12	)

Comparing Second Quarter ~~2021~~2022 with Second Quarter ~~2020~~2021

Net charge to earnings decreased $40 million – 48 percent – primarily due to a $46 million decrease in elimination of intersegment profit in inventory and LIFO.

Comparing Year-to-Date 2022 with Year-to-Date 2021

Net charge to earnings increased ~~$66~~$12 million – ~~367~~8 percent – primarily due ~~to:~~

●	~~a $46 million increase in elimination of intersegment profit in inventory and LIFO and~~

●	~~a $13 million increase in unallocated corporate function and variable compensation expense.~~

~~Comparing Year-to-Date 2021 with Year-to-Date 2020~~

~~Net charge~~ to ~~earnings increased $88~~a $17 million ~~– 144 percent – primarily due to:~~

●	~~a $50 million increase in elimination of intersegment profit in inventory and LIFO;~~

●	~~a $19 million increase in unallocated corporate function and variable compensation expense;~~

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

●	a $7 million increase in liability classified share-based compensation due to an increase in our stock price for the year-to-date period ended June 30, 2021 compared to a decrease for the same period in 2020.

increase in non-operating pension and other post-employment benefit costs.

INTEREST EXPENSE

Our interest expense, net of capitalized interest, was:

●	$7865 million for second quarter ~~2021~~2022 and ~~$157~~$137 million year-to-date ~~2021;~~2022;

●	$~~103~~78 million for second quarter ~~2020~~2021 and ~~$188~~$157 million year-to-date ~~2020.~~2021.

Interest expense decreased by ~~$25~~$13 million compared to second quarter ~~2020~~2021 and decreased by ~~$31~~$20 million compared to year-to-date ~~2020. The decreases were~~2021 primarily due to ~~an $11 million charge related to the early extinguishment of debt recorded in second quarter 2020, with no similar activity in second quarter and year-to-date 2021, as well as a decrease~~decreases in the average outstanding debt ~~in second quarter~~ and ~~year-to-date 2021.~~weighted average interest rate.

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

INCOME TAXES

Our provision for income taxes was:

●	a $184 million expense for second quarter 2022 and a $393 million expense year-to-date 2022;

●	a $324 million expense for second quarter 2021 and a $513 million expense year-to-date ~~2021;~~

●	~~a $60 million expense for second quarter 2020 and a $57 million expense year-to-date 2020.~~2021.

Our provision for income taxes is primarily driven by earnings generated by our TRSs. Income tax expense ~~increased~~decreased by ~~$456~~$120 million compared to year-to-date ~~2020~~2021 primarily due to ~~an increase~~a tax benefit of approximately $69 million resulting from the $276 million pretax loss on debt extinguishment recorded in first quarter 2022, as well as a decrease in our ~~TRS earnings in 2021.~~estimated annual effective tax rate.

Refer to Note ~~16:~~14: Income Taxes and Note 8: Long-Term Debt and Line of Credit for 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 June 30, ~~2021,~~2022, we had over $1.7 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:

●	$~~2,006~~2,103 million for year-to-date ~~2021~~2022 and

●	$~~477~~2,006 million for year-to-date ~~2020.~~2021.

Net cash from operations increased ~~$1,529~~$97 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 ~~$262~~$91 million increase in cash paid for income taxes.

CASH FROM INVESTING ACTIVITIES

Consolidated net cash from investing activities was:

●	$~~(273)~~(433) million for year-to-date ~~2021~~2022 and

●	$~~376~~(273) million for year-to-date ~~2020.~~2021.

Net cash from investing activities decreased ~~$649~~$160 million, primarily due to:

●	a ~~$362 million decrease in proceeds received from variable interest entities;~~

●	~~a $149~~$134 million increase in cash paid for acquisition of timberlands ~~acquisitions~~ and

●	a ~~$145~~$26 million ~~decrease~~increase in ~~proceeds from the sale of timberlands.~~cash paid for capital expenditures.

Summary of Capital Spending by Business Segment

	YEAR-TO-DATE ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021		JUNE 2020		JUNE 2022		JUNE 2021
Timberlands	$	49	$	51	$	53	$	49
Wood Products		76		83		95		76
Unallocated Items						3		—
Total	$	125	$	134	$	151	$	125

We ~~expect~~anticipate our capital expenditures for ~~2021 will~~2022 to be approximately $460 million. The amount we spend on capital expenditures could change.

CASH FROM FINANCING ACTIVITIES

Consolidated net cash from financing activities was:

●	$~~(451)~~(1,938) million for year-to-date ~~2021~~2022 and

●	$~~(349)~~(451) million for year-to-date ~~2020.~~2021.

Net cash from financing activities decreased ~~$102~~$1,487 million, primarily due ~~to a $369 million increase in net cash used for payments on long-term debt.~~

~~This change was partially offset by:~~to:

●	a ~~$230~~$1,097 million ~~decrease~~increase in~~net~~ cash paid ~~related to borrowings on our line of credit~~for dividends; ~~and~~

●	a ~~$39~~$259 million increase in cash ~~received from exercise~~used for repurchases of common stock ~~options.~~and

●	a $97 million increase in net cash used for payments on long term debt.

Line of Credit

We had no outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility as of June 30, ~~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 May 2021, we repaid our $225 million variable-rate term loan that was scheduled to mature in July 2026.~~

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. In May 2020, a portion of the net proceeds was used to redeem our $569 million 4.70 percent notes due in March 2021.

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

Our revolving credit agreement 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~~We plan to transition our revolving credit facility to an alternate reference rate prior to the cessation of USD LIBOR is expected to cease between January 1, 2022 and July 1, 2023, and we are closely monitoring ongoing market developments in the identification or creation of a widely accepted replacement rate.LIBOR. We have included provisions in our revolving credit 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.

Long-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 2033 and $450 million of 4.000 percent notes due in March 2052. The net proceeds after deducting the discount, underwriting fees and issuance costs were $444 million and $437 million, respectively. The net proceeds were used to retire $592 million of our 7.375 percent notes due in March 2032, $161 million of our 8.500 percent notes due in January 2025, $73 million of our 7.125 percent notes due in July 2023, $65 million of our 7.950 percent notes due in March 2025, and $40 million of our 7.850 percent notes due in July 2026. We paid holders an aggregate $1.2 billion in cash reflecting principal, premium to par and tender premium.

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

Debt Covenants

As of June 30, ~~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:

●	$4514 million for year-to-date ~~2021~~2022 and

●	$645 million for year-to-date ~~2020.~~2021.

Our average stock price was ~~$35.60~~$38.89 and ~~$23.24~~$35.60 for year-to-date ~~2021~~2022 and ~~2020,~~2021, respectively.

Dividend Payments

We paid cash dividends on common shares of:

●	$1,352 million for year-to-date 2022 and

●	$255 million for year-to-date 2021.

The increase in dividends paid is primarily due to a supplemental dividend of ~~$255~~$1.45 per share ($1,084 million ~~and $254 million for year-to-date~~in total) paid in the first quarter of 2022 based on 2021 ~~and 2020, respectively.~~financial results.

Share Repurchases

We repurchased 3,197,675 shares for approximately $121 million (including transaction fees) during first quarter 2022 and 3,784,787 shares for approximately $138 million (including transaction fees) during second quarter 2022 under the 2021 Repurchase Program. We did not repurchase shares during year-to-date ~~2021 or 2020.~~2021. There were no unsettled repurchases as of June 30, ~~2021~~2022 or December 31, ~~2020.~~2021. Refer to Note 4: Net Earnings Per Share and Share Repurchases for further information.

PERFORMANCE MEASURES

Adjusted EBITDA by Segment

	QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2022			JUNE 2021			2022 VS. 2021			JUNE 2022			JUNE 2021			2022 VS. 2021
Adjusted EBITDA by Segment:
Timberlands	$	219		$	180		$	39		$	466		$	352		$	114
Real Estate & ENR		107			91			16			223			187			36
Wood Products		912			1,386			(474	)		2,145			2,275			(130	)
		1,238			1,657			(419	)		2,834			2,814			20
Unallocated Items		(33	)		(84	)		51			(132	)		(140	)		8
Adjusted EBITDA	$	1,205		$	1,573		$	(368	)	$	2,702		$	2,674		$	28

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

QUARTER ENDED

AMOUNT OF
CHANGE

YEAR-TO-DATE ENDED

AMOUNT OF
CHANGE

DOLLAR AMOUNTS IN MILLIONS

JUNE 2021

JUNE 2020

2021 VS.
2020

JUNE 2021

JUNE 2020

2021 VS.
2020

Adjusted EBITDA by Segment:

Timberlands

$
180

$
140

$
40

$
352

$
313

$
39

Real Estate & ENR

91

57

34

187

158

29

Wood Products

1,386

198

1,188

2,275

382

1,893

1,657

395

1,262

2,814

853

1,961

Unallocated Items

(84
)

(9
)

(75
)

(140
)

(54
)

(86
)
Adjusted EBITDA

$
1,573

$
386

$
1,187

$
2,674

$
799

$
1,875

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 June 30, 2022:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	788
Interest expense, net of capitalized interest											65
Income taxes											184
Net contribution (charge) to earnings	$	153	$	65	$	863	$	(44	)	$	1,037
Non-operating pension and other post-employment benefit costs		—		—		—		11			11
Interest income and other		—		—		—		(1	)		(1	)
Operating income (loss)		153		65		863		(34	)		1,047
Depreciation, depletion and amortization		66		3		49		1			119
Basis of real estate sold		—		39		—		—			39
Adjusted EBITDA	$	219	$	107	$	912	$	(33	)	$	1,205

The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2021:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	1,028
Interest expense, net of capitalized interest											78
Income taxes											324
Net contribution (charge) to earnings	$	113	$	63	$	1,338	$	(84	)	$	1,430
Non-operating pension and other post-employment benefit costs		—		—		—		1			1
Interest income and other		—		—		—		(2	)		(2	)
Operating income (loss)		113		63		1,338		(85	)		1,429
Depreciation, depletion and amortization		67		4		48		1			120
Basis of real estate sold		—		24		—		—			24
Adjusted EBITDA	$	180	$	91	$	1,386	$	(84	)	$	1,573

The table below reconciles Adjusted EBITDA for the ~~quarter~~year-to-date period ended June 30, ~~2020:~~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											$	72											$	1,559
Interest expense, net of capitalized interest⁽¹⁾												103												137
Loss on debt extinguishment⁽¹⁾																								276
Income taxes												60												393
Net contribution (charge) to earnings	$	75	$	19	$	159		$	(18	)	$	235		$	335	$	146	$	2,045	$	(161	)	$	2,365
Non-operating pension and other post-employment benefit costs		—		—		—			10			10			—		—		—		26			26
Interest income and other		—		—		—			(2	)		(2	)		—		—		—		—			—
Operating income (loss)		75		19		159			(10	)		243			335		146		2,045		(135	)		2,391
Depreciation, depletion and amortization		65		4		47			1			117			131		7		100		3			241
Basis of real estate sold		—		34		—			—			34			—		70		—		—			70
Special items included in operating income (loss)⁽²⁾		—		—		(8	)		—			(8	)
Adjusted EBITDA	$	140	$	57	$	198		$	(9	)	$	386		$	466	$	223	$	2,145	$	(132	)	$	2,702

(1)	~~Interest expense, net of capitalized interest includes~~Loss on debt extinguishment is a ~~pretax special item of $11 million related to a net charge for the early extinguishment of debt.~~

~~(2)~~

~~Operating income (loss) includes a pretax~~ special item consisting of ~~an $8~~a pretax charge of $276 million ~~product remediation insurance recovery.~~related to early debt retirement.

The table below reconciles Adjusted EBITDA for the year-to-date period ended June 30, 2021:

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										$	1,709											$	1,709
Interest expense, net of capitalized interest											157												157
Income taxes											513												513
Net contribution (charge) to earnings	$	221	$	129	$	2,178	$	(149	)	$	2,379		$	221	$	129	$	2,178	$	(149	)	$	2,379
Non-operating pension and other post-employment benefit costs		—		—		—		9			9			—		—		—		9			9
Interest income and other		—		—		—		(3	)		(3	)		—		—		—		(3	)		(3	)
Operating income (loss)		221		129		2,178		(143	)		2,385			221		129		2,178		(143	)		2,385
Depreciation, depletion and amortization		131		7		97		3			238			131		7		97		3			238
Basis of real estate sold		—		51		—		—			51			—		51		—		—			51
Adjusted EBITDA	$	352	$	187	$	2,275	$	(140	)	$	2,674		$	352	$	187	$	2,275	$	(140	)	$	2,674

~~The table below reconciles Adjusted EBITDA for the year-to-date period ended June 30, 2020:~~

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate
& ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
222

Interest expense, net of capitalized interest⁽¹⁾

188

Income taxes

57

Net contribution (charge) to earnings

$
180

$
55

$
293

$
(61
)

$
467

Non-operating pension and other post-employment benefit costs

—

—

—

19

19

Interest income and other

—

—

—

(3
)

(3
)
Operating income (loss)

180

55

293

(45
)

483

Depreciation, depletion and amortization

133

7

97

3

240

Basis of real estate sold

—

96

—

—

96

Special items included in operating income (loss)⁽²⁾

—

—

(8
)

(12
)

(20
)
Adjusted EBITDA

$
313

$
158

$
382

$
(54
)

$
799

~~(1)~~

~~Interest expense, net of capitalized interest includes a pretax special item of $11 million related to a net charge for the early extinguishment of debt.~~

~~(2)~~

Operating income (loss) includes pretax special items consisting of a $12 million noncash legal benefit within Unallocated Items and an $8 million product remediation insurance recovery within Wood Products.

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					YEAR-TO-DATE ENDED					QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2021		JUNE 2020			JUNE 2021		JUNE 2020			JUNE 2022		JUNE 2021		JUNE 2022		JUNE 2021
Net earnings	$	1,028	$	72		$	1,709	$	222		$	788	$	1,028	$	1,559	$	1,709
Early extinguishment of debt charge		—		11			—		11
Legal benefit		—		—			—		(12	)
Product remediation recovery		—		(6	)		—		(6	)
Loss on debt extinguishment												—		—		207		—
Net earnings before special items	$	1,028	$	77		$	1,709	$	215		$	788	$	1,028	$	1,766	$	1,709

Net Earnings per Diluted Share Before Special Items

QUARTER ENDED

YEAR-TO-DATE ENDED

JUNE 2021

JUNE 2020

JUNE 2021

JUNE 2020

Net earnings per diluted share

$
1.37

$
0.10

$
2.28

$
0.30

Early extinguishment of debt charge

—

0.02

—

0.02

Legal benefit

—

—

—

(0.02
)
Product remediation recovery

—

(0.01
)

—

(0.01
)
Net earnings per diluted share before special items

$
1.37

$
0.11

$
2.28

$
0.29

	QUARTER ENDED				YEAR-TO-DATE ENDED
	JUNE 2022		JUNE 2021		JUNE 2022		JUNE 2021
Net earnings per diluted share	$	1.06	$	1.37	$	2.09	$	2.28
Loss on debt extinguishment		—		—		0.28		—
Net earnings per diluted share before special items	$	1.06	$	1.37	$	2.37	$	2.28

CRITICAL ACCOUNTING POLICIES

There have been no significant changes during year-to-date ~~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 June 30, ~~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		$	6,529	$	—		$	978		$	—		$	210		$	272		$	3,633		$	5,093		$	5,118
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

(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 June 30, ~~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 year-to-date ~~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 second quarter ~~2021.~~2022:

COMMON SHARE REPURCHASES DURING SECOND 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
April 1 – April 30		981,596	$	37.88		981,596	$	768,422,544
May 1 – May 31		—		—		—		768,422,544
June 1 – June 30		2,803,191		35.66		2,803,191		668,467,616
Total		3,784,787	$	36.23		3,784,787	$	668,467,616

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) and during second quarter 2022, we repurchased 3,784,787 common shares for approximately $138 million (including transaction fees) under the 2021 Repurchase Program in open-market transactions. Transaction fees incurred for repurchases are not counted as use of funds authorized for repurchases under the 2021 Repurchase Program. As of June 30, 2022, we had remaining authorization of $668 million for future stock repurchases.

Item 6. EXHIBITS


~~4.1~~	~~Second Amendment to Installment Loan Agreement (including as Annex A the Amended Installment Note) dated as of June 30, 2021 between~~
10.1	Weyerhaeuser Company ~~as borrower, and MeadWestvaco Timber Note Holding Company II, LLC as Holder~~2022 Long-Term Incentive Plan (incorporated by reference to Exhibit ~~4.1~~10.1 to the Current Report on Form 8-K filed on ~~July 7, 2021~~May 13, 2022 – Commission File Number 1-4825).
10.2	Form of 2022 Long-Term Incentive Plan Performance Share Unit Award Terms and Conditions (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed May 13, 2022 – Commission File Number 1-4825)
10.3	Form of 2022 Long-Term Incentive Plan Restricted Stock Unit Award Terms and Conditions (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed May 13, 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 June 30, ~~2021,~~2022, has been formatted in Inline XBRL.

SIGNATURES

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

	WEYERHAEUSER COMPANY
	(Registrant)

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