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 ~~SEPTEMBER~~JUNE 30, ~~2022~~2023


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

FOR THE TRANSITION PERIOD FROM TO 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 ~~October~~July 24, ~~2022, 735,917~~2023, 730,748 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	26
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	~~OTHER INFORMATION – NOT APPLICABLE~~27
ITEM 6.	EXHIBITS	2829
	SIGNATURES	2930

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	SEPTEMBER 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021				JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022
Net sales (Note 3)	$	2,276		$	2,345		$	8,361		$	7,995
Net sales (Note 3)														$	1,997		$	2,973		$	3,878		$	6,085
Costs of sales		1,694			1,589			5,130			4,602				1,528			1,789			3,040			3,436
Gross margin		582			756			3,231			3,393				469			1,184			838			2,649
Selling expenses		24			24			70			68				22			23			44			46
General and administrative expenses		100			98			294			283				108			102			209			194
Other operating costs (income), net (Note 13)		1			(15	)		19			8
Other operating costs, net (Note 13)															20			12			30			18
Operating income		457			649			2,848			3,034				319			1,047			555			2,391
Non-operating pension and other post-employment benefit costs (Note 6)		(12	)		(5	)		(38	)		(14	)
Non-operating pension and other post-employment benefit costs (Note 6)															(12	)		(11	)		(21	)		(26	)
Interest income and other		9			1			9			4				18			1			30			—
Interest expense, net of capitalized interest		(67	)		(79	)		(204	)		(236	)			(70	)		(65	)		(136	)		(137	)
Loss on debt extinguishment (Note 8)		—			—			(276	)		—
Loss on debt extinguishment (Note 8)															—			—			—			(276	)
Earnings before income taxes		387			566			2,339			2,788				255			972			428			1,952
Income taxes (Note 14)		(77	)		(84	)		(470	)		(597	)
Income taxes (Note 14)													��		(25	)		(184	)		(47	)		(393	)
Net earnings	$	310		$	482		$	1,869		$	2,191			$	230		$	788		$	381		$	1,559

Earnings per share, basic and diluted (Note 4)	$	0.42		$	0.64		$	2.51		$	2.92
Weighted average shares outstanding (in thousands) (Note 4):
Earnings per share, basic and diluted (Note 4)														$	0.31		$	1.06		$	0.52		$	2.09
Weighted average shares outstanding (in thousands) (Note 4):
Basic		740,058			750,105			743,990			749,657				732,021			744,542			732,599			746,017
Diluted		740,975			751,443			745,081			750,999				732,362			745,582			732,961			747,194

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	SEPTEMBER 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021			JUNE 2023		JUNE 2022			JUNE 2023		JUNE 2022
Net earnings	$	310		$	482		$	1,869		$	2,191		$	230	$	788		$	381	$	1,559
Other comprehensive income (loss):
Other comprehensive income:
Foreign currency translation adjustments		(53	)		(25	)		(62	)		(1	)		7		(25	)		7		(9	)
Changes in unamortized actuarial loss, net of tax expense of $11, $10, $40 and $55		32			29			122			170
Changes in unamortized net prior service credit, net of tax expense of $0, $0, $1 and $0		1			1			1			2
Total other comprehensive income (loss)		(20	)		5			61			171
Changes in unamortized actuarial loss, net of tax expense of $2, $24, $4 and $29														7		77			14		90
Changes in unamortized net prior service credit, net of tax (expense) benefit of $1, $0, $1 and ($1)														1		—			1		—
Total other comprehensive income														15		52			22		81
Total comprehensive income	$	290		$	487		$	1,930		$	2,362		$	245	$	840		$	403	$	1,640

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)


DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE	SEPTEMBER 30, 2022			DECEMBER 31, 2021			JUNE 30, 2023			DECEMBER 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	1,920		$	1,879		$	1,095		$	1,581
Short-term investments (Note 9)								665			—
Receivables, net		425			507			462			357
Receivables for taxes		15			24			18			42
Inventories (Note 5)		542			520
Inventories (Note 5)								539			550
Prepaid expenses and other current assets		146			205			188			216
Total current assets		3,048			3,135			2,967			2,746
Property and equipment, less accumulated depreciation of $3,680 and $3,592		1,997			2,057
Property and equipment, less accumulated depreciation of $3,820 and $3,710								2,133			2,171
Construction in progress		245			175			260			222
Timber and timberlands at cost, less depletion		11,681			11,510			11,512			11,604
Minerals and mineral rights, less depletion		245			255			207			214
Deferred tax assets		10			17			8			8
Other assets		364			503			383			375
Total assets	$	17,590		$	17,652		$	17,470		$	17,340
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt (Note 8)	$	118		$	—
Current maturities of long-term debt (Note 8)							$	980		$	982
Accounts payable		272			281			254			247
Accrued liabilities (Note 7)		664			673
Accrued liabilities (Note 7)								473			511
Total current liabilities		1,054			954			1,707			1,740
Long-term debt, net (Note 8)		4,935			5,099
Long-term debt, net (Note 8)								4,817			4,071
Deferred tax liabilities		89			46			105			96
Deferred pension and other post-employment benefits (Note 6)		335			440
Deferred pension and other post-employment benefits (Note 6)								348			344
Other liabilities		339			346			352			340
Total liabilities		6,752			6,885			7,329			6,591
Commitments and contingencies (Note 10)
Commitments and contingencies (Note 10)
Equity:
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 737,547 thousand shares at September 30, 2022 and 747,301 thousand shares at December 31, 2021		922			934
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 730,850 thousand shares at June 30, 2023 and 732,794 thousand shares at December 31, 2022								914			916
Other capital		7,824			8,181			7,624			7,691
Retained earnings		2,510			2,131			1,828			2,389
Accumulated other comprehensive loss (Note 11)		(418	)		(479	)
Accumulated other comprehensive loss (Note 11)								(225	)		(247	)
Total equity		10,838			10,767			10,141			10,749
Total liabilities and equity	$	17,590		$	17,652		$	17,470		$	17,340

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	SEPTEMBER 2022			SEPTEMBER 2021			JUNE 2023			JUNE 2022
Cash flows from operations:
Net earnings	$	1,869		$	2,191		$	381		$	1,559
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization		360			356			252			241
Basis of real estate sold		77			62			46			70
Deferred income taxes, net		17			16
Pension and other post-employment benefits (Note 6)		65			46
Share-based compensation expense (Note 12)		25			23
Gain on sale of timberlands (Note 16)		—			(32	)
Loss on debt extinguishment (Note 8)		276			—
Pension and other post-employment benefits (Note 6)								32			44
Share-based compensation expense (Note 12)								17			17
Loss on debt extinguishment (Note 8)								—			276
Other								2			14
Change in:
Receivables, net		81			(47	)		(105	)		(40	)
Receivables and payables for taxes		15			93			27			27
Inventories		(30	)		(55	)		14			(58	)
Prepaid expenses and other current assets		(7	)		(21	)		8			(3	)
Accounts payable and accrued liabilities		(23	)		116			(30	)		(15	)
Pension and post-employment benefit contributions and payments		(19	)		(56	)		(11	)		(14	)
Other		(41	)		(27	)		(11	)		(15	)
Net cash from operations		2,665			2,665			622			2,103
Cash flows from investing activities:
Capital expenditures for property and equipment		(207	)		(184	)		(119	)		(121	)
Capital expenditures for timberlands reforestation		(38	)		(39	)		(33	)		(30	)
Acquisition of timberlands (Note 16)		(286	)		(149	)
Proceeds from sale of timberlands (Note 16)		—			261
Acquisition of timberlands (Note 15)								(2	)		(283	)
Purchase of short-term investments								(664	)		—
Other		1			3			—			1
Net cash from investing activities		(530	)		(108	)		(818	)		(433	)
Cash flows from financing activities:
Cash dividends on common shares		(1,485	)		(382	)		(938	)		(1,352	)
Net proceeds from issuance of long-term debt (Note 8)		881			—
Payments on long-term debt (Note 8)		(1,203	)		(225	)
Proceeds from exercise of stock options		15			46
Repurchases of common shares (Note 4)		(402	)		(26	)
Net proceeds from issuance of long-term debt (Note 8)								743			881
Payments on long-term debt (Note 8)								—			(1,203	)
Repurchases of common shares (Note 4)								(85	)		(259	)
Other		(20	)		(19	)		(10	)		(5	)
Net cash from financing activities		(2,214	)		(606	)		(290	)		(1,938	)
Net change in cash, cash equivalents and restricted cash		(79	)		1,951			(486	)		(268	)
Cash, cash equivalents and restricted cash at beginning of period		1,999			495			1,581			1,999
Cash, cash equivalents and restricted cash at end of period	$	1,920		$	2,446		$	1,095		$	1,731
Cash paid (received) during the period for:
Interest, net of amount capitalized of $5 and $3	$	211		$	237
Cash paid during the period for:
Interest, net of amount capitalized of $3 and $3							$	127		$	149
Income taxes, net of refunds	$	446		$	494		$	18		$	354

See accompanyingNotes 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	SEPTEMBER 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021			JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022
Common shares:
Balance at beginning of period	$	927		$	937		$	934		$	934		$	916		$	932		$	916		$	934
Issued for exercise of stock options and vested units		—			—			2			3			1			—			2			2
Repurchases of common shares (Note 4)		(5	)		(1	)		(14	)		(1	)
Repurchases of common shares (Note 4)														(3	)		(5	)		(4	)		(9	)
Balance at end of period		922			936			922			936			914			927			914			927
Other capital:
Balance at beginning of period		7,954			8,258			8,181			8,208			7,662			8,076			7,691			8,181
Issued for exercise of stock options		1			1			14			44			—			2			2			13
Repurchases of common shares (Note 4)		(140	)		(25	)		(390	)		(25	)
Repurchases of common shares (Note 4)														(47	)		(133	)		(81	)		(250	)
Share-based compensation		8			8			25			23			9			9			17			17
Other transactions, net		1			—			(6	)		(8	)		—			—			(5	)		(7	)
Balance at end of period		7,824			8,242			7,824			8,242			7,624			7,954			7,624			7,954
Retained earnings:
Balance at beginning of period		2,333			1,861			2,131			411			1,738			1,679			2,389			2,131
Net earnings		310			482			1,869			2,191			230			788			381			1,559
Dividends on common shares		(133	)		(501	)		(1,490	)		(760	)		(140	)		(134	)		(942	)		(1,357	)
Balance at end of period		2,510			1,842			2,510			1,842			1,828			2,333			1,828			2,333
Accumulated other comprehensive loss:
Balance at beginning of period		(398	)		(656	)		(479	)		(822	)		(240	)		(450	)		(247	)		(479	)
Other comprehensive income (loss)		(20	)		5			61			171
Balance at end of period (Note 11)		(418	)		(651	)		(418	)		(651	)
Other comprehensive income														15			52			22			81
Balance at end of period (Note 11)														(225	)		(398	)		(225	)		(398	)
Total equity:
Balance at end of period	$	10,838		$	10,369		$	10,838		$	10,369		$	10,141		$	10,816		$	10,141		$	10,816

Dividends paid per common share	$	0.18		$	0.17		$	1.99		$	0.51		$	0.19		$	0.18		$	1.28		$	1.81

See accompanying Notes to Consolidated Financial Statements.

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1:	BASIS OF PRESENTATION	7

NOTE 2:	BUSINESS SEGMENTS	7

NOTE 3:	REVENUE RECOGNITION	8

NOTE 4:	NET EARNINGS PER SHARE AND SHARE REPURCHASES	8

NOTE 5:	INVENTORIES	9

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

NOTE 7:	ACCRUED LIABILITIES	10

NOTE 8:	LONG-TERM DEBT AND LINE OF CREDIT	1110

NOTE 9:	FAIR VALUE OF FINANCIAL INSTRUMENTS	11

NOTE 10:	LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES	11

NOTE 11:	ACCUMULATED OTHER COMPREHENSIVE LOSS	12

NOTE 12:	SHARE-BASED COMPENSATION	12

NOTE 13:	OTHER OPERATING COSTS, ~~(INCOME),~~ NET	13

NOTE 14:	INCOME TAXES	13
~~NOTE 15:~~	~~RESTRICTED CASH~~	13
NOTE ~~16:~~15:	TIMBERLAND ACQUISITIONS ~~AND DIVESTITURES~~	13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTERS AND YEAR-TO-DATE PERIODS ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023 AND ~~2021~~2022

NOTE 1: BASIS OF PRESENTATION

Our consolidated financial statements provide an overall view of our results of operations, financial condition and cash flows. They include our accounts and the accounts of entities we control, including majority-owned domestic and foreign subsidiaries. They do not include our intercompany transactions and accounts, which are eliminated. Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” “we,” “the company” 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, ~~2021.~~2022. 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~~our acreage through the sale of higher and better use (HBU) properties; and monetizing the value of surface and subsurface assets through leases and royalties. Our business segments are ~~categorized~~organized based primarily on products and services which include:

●

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

●

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

●

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

●

~~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
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022
Sales to unaffiliated customers:
Timberlands	$	417		$	515		$	879		$	980
Real Estate & ENR		80			117			181			245
Wood Products		1,500			2,341			2,818			4,860
		1,997			2,973			3,878			6,085
Intersegment sales:
Timberlands		150			156			292			317

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

(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.

QUARTER ENDED

YEAR-TO-DATE ENDED

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 2022

SEPTEMBER 2021

SEPTEMBER 2022

SEPTEMBER 2021

Sales to unaffiliated customers:

Timberlands

$
441

$
423

$
1,421

$
1,207

Real Estate & ENR

68

69

313

285

Wood Products

1,767

1,853

6,627

6,503

2,276

2,345

8,361

7,995

Intersegment sales:

Timberlands

133

129

450

399

Total sales

2,409

2,474

8,811

8,394

Intersegment eliminations

(133
)

(129
)

(450
)

(399
)
Total

$
2,276

$
2,345

$
8,361

$
7,995

Net contribution (charge) to earnings:

Timberlands

$
107

$
133

$
442

$
354

Real Estate & ENR

48

45

194

174

Wood Products

344

517

2,389

2,695

499

695

3,025

3,223

Unallocated items⁽¹⁾

(45
)

(50
)

(206
)

(199
)
Net contribution to earnings

454

645

2,819

3,024

Interest expense, net of capitalized interest

(67
)

(79
)

(204
)

(236
)
Loss on debt extinguishment

—

—

(276
)

—

Earnings before income taxes

387

566

2,339

2,788

Income taxes

(77
)

(84
)

(470
)

(597
)
Net earnings

$
310

$
482

$
1,869

$
2,191

~~(1)~~

NOTE 3: REVENUE RECOGNITION

A reconciliation of revenue recognized by our major products:


	QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023		JUNE 2022		JUNE 2023		JUNE 2022
Net sales to unaffiliated customers:
Timberlands segment
Delivered logs:
West
Domestic sales	$	101	$	103	$	194	$	216
Export grade sales		105		205		241		351
Subtotal West		206		308		435		567
South		162		160		330		314
North		7		10		24		25
Subtotal delivered logs sales		375		478		789		906
Stumpage and pay-as-cut timber		15		11		31		20
Recreational and other lease revenue		17		16		35		33
Other(1)		10		10		24		21
Net sales attributable to Timberlands segment		417		515		879		980
Real Estate & ENR segment
Real estate		47		90		119		187
Energy and natural resources		33		27		62		58
Net sales attributable to Real Estate & ENR segment		80		117		181		245
Wood Products segment
Structural lumber		573		998		1,088		2,204
Oriented strand board		215		497		423		1,061
Engineered solid section		215		247		384		443
Engineered I-joists		126		168		213		305
Softwood plywood		44		53		85		111
Medium density fiberboard		42		53		80		101
Complementary building products		204		239		367		454
Other(2)		81		86		178		181
Net sales attributable to Wood Products segment		1,500		2,341		2,818		4,860
Total net sales	$	1,997	$	2,973	$	3,878	$	6,085

QUARTER ENDED

YEAR-TO-DATE ENDED

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 2022

SEPTEMBER 2021

SEPTEMBER 2022

SEPTEMBER 2021

Net sales to unaffiliated customers:

Timberlands segment

Delivered logs:

West

Domestic sales

$
97

$
76

$
313

$
235

Export grade sales

127

150

478

414

Subtotal West

224

226

791

649

South

166

153

480

429

North

15

13

40

38

Subtotal delivered logs sales

405

392

1,311

1,116

Stumpage and pay-as-cut timber

10

9

30

22

Recreational and other lease revenue

18

16

51

48

Other⁽¹⁾

8

6

29

21

Net sales attributable to Timberlands segment

441

423

1,421

1,207

Real Estate & ENR segment

Real estate

30

45

217

212

Energy and natural resources

38

24

96

73

Net sales attributable to Real Estate & ENR segment

68

69

313

285

Wood Products segment

Structural lumber

676

681

2,880

3,020

Oriented strand board

287

470

1,348

1,513

Engineered solid section

233

183

676

491

Engineered I-joists

166

128

471

315

Softwood plywood

47

45

158

170

Medium density fiberboard

50

52

151

143

Complementary building products

222

211

676

595

Other⁽²⁾

86

83

267

256

Net sales attributable to Wood Products segment

1,767

1,853

6,627

6,503

Total net sales

$
2,276

$
2,345

$
8,361

$
7,995

(1)

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

~~(1)~~

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

~~(2)~~

(2)

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

NOTE 4: NET EARNINGS PER SHARE AND SHARE REPURCHASES

Our basic and diluted earnings per share were:

●

$0.31 during second quarter 2023 and $0.52 during year-to-date 2023;

●

$1.06 during second quarter 2022 and $2.09 during year-to-date 2022.

●

~~$0.42 during third quarter 2022 and $2.51 during year-to-date 2022;~~

●	~~$0.64 during third quarter 2021 and $2.92 during 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

SHARES IN THOUSANDS

SEPTEMBER 2022

SEPTEMBER 2021

SEPTEMBER 2022

SEPTEMBER 2021

Weighted average common shares outstanding – basic

740,058

750,105

743,990

749,657

Dilutive potential common shares:

Stock options

192

293

294

318

Restricted stock units

420

730

417

709

Performance share units

305

315

380

315

Total effect of outstanding dilutive potential common shares

917

1,338

1,091

1,342

Weighted average common shares outstanding – dilutive

740,975

751,443

745,081

750,999


	QUARTER ENDED				YEAR-TO-DATE ENDED
SHARES IN THOUSANDS	JUNE 2023		JUNE 2022		JUNE 2023		JUNE 2022
Weighted average common shares outstanding – basic		732,021		744,542		732,599		746,017
Dilutive potential common shares:
Stock options		111		308		124		346
Restricted stock units		20		410		23		415
Performance share units		210		322		215		416
Total effect of outstanding dilutive potential common shares		341		1,040		362		1,177
Weighted average common shares outstanding – dilutive		732,362		745,582		732,961		747,194

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	SEPTEMBER 2022		SEPTEMBER 2021		SEPTEMBER 2022		SEPTEMBER 2021		JUNE 2023		JUNE 2022		JUNE 2023		JUNE 2022
Stock options		620		789		620		789		787		—		787		—
Performance share units		623		1,067		623		1,067		682		573		682		573

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$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 ~~4,234,838~~1,689,874 common shares for approximately ~~$145~~$50 million (including transaction fees) under the 2021 Repurchase Program during ~~third~~second quarter ~~2022~~2023 and ~~11,217,300~~2,805,434 common shares for approximately ~~$404~~$85 million under the 2021 Repurchase Program during year-to-date 2023. As of June 30, 2023, we had remaining authorization of $292 million for future share repurchases. During year-to-date 2022, we repurchased 6,982,462 common shares for approximately $259 million (including transaction fees) under the 2021 Repurchase Program during year-to-date 2022. As of September 30, 2022, we had remaining authorization of $523 million for future share repurchases. During year-to-date 2021, we repurchased 780,228 common shares for approximately $26 million (including transaction fees) under the 2019 Repurchase Program.

All common stock repurchases under the ~~2019 Repurchase Program and~~ 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 ~~64,135 unsettled shares (approximately $2 million) as of September 30, 2022 and~~ no unsettled shares as of June 30, 2023, and 223,548 unsettled shares (approximately $7 million) as of December 31, ~~2021.~~2022.

NOTE 5: INVENTORIES

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

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 30,
2022

DECEMBER 31,
2021

LIFO inventories:

Logs

$
24

$
26

Lumber, plywood, panels and fiberboard

60

61

Other products

14

17

Moving average cost or FIFO inventories:

Logs

52

65

Lumber, plywood, panels, fiberboard and engineered wood products

116

106

Other products

147

131

Materials and supplies

129

114

Total

$
542

$
520


DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2023		DECEMBER 31, 2022
LIFO inventories:
Logs	$	25	$	32
Lumber, plywood, panels and fiberboard		69		61
Other products		19		9
Moving average cost or FIFO inventories:
Logs		40		56
Lumber, plywood, panels, fiberboard and engineered wood products		110		122
Other products		132		140
Materials and supplies		144		130
Total	$	539	$	550

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

NOTE 6: PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The components of net periodic benefit cost are:


	PENSION												PENSION
	QUARTER ENDED						YEAR-TO-DATE ENDED						QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021			JUNE 2023			JUNE 2022			JUNE 2023			JUNE 2022
Service cost	$	9		$	11		$	27		$	32		$	5		$	8		$	11		$	18
Interest cost		27			24			80			73			29			26			59			53
Expected return on plan assets		(40	)		(51	)		(120	)		(153	)		(30	)		(41	)		(60	)		(80	)
Amortization of actuarial loss		23			29			70			86			11			23			19			47
Amortization of prior service cost		1			1			2			2			1			—			1			1
Total net periodic benefit cost – pension	$	20		$	14		$	59		$	40		$	16		$	16		$	30		$	39


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

OTHER POST-EMPLOYMENT BENEFITS

QUARTER ENDED

YEAR-TO-DATE ENDED

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 2022

SEPTEMBER 2021

SEPTEMBER 2022

SEPTEMBER 2021

Interest cost

$
—

$
—

$
2

$
2

Amortization of actuarial loss

1

2

4

4

Amortization of prior service credit

—

—

—

—

Total net periodic benefit cost – other post-employment benefits

$
1

$
2

$
6

$
6

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 2022, we recorded an increase~~No adjustments to the ~~beginning of the year~~ fair value of ~~the pension~~ assets ~~of $54 million,~~ or ~~2 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 decrease of $13 million, or less than 1 percent. The net effect of these updates was a $67 million improvement in funded status. This change in funded status was reflected on our ~~Consolidated Balance Sheet~~ ~~as of June 30, 2022.~~obligations were necessary during second quarter 2023.

NOTE 7: ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:


DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2023		DECEMBER 31, 2022
Compensation and employee benefit costs	$	157	$	201
Current portion of lease liabilities		20		22
Customer rebates, volume discounts and deferred income		137		132
Interest		72		69
Taxes payable		33		23
Other		54		64
Total	$	473	$	511

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 30,
2022

DECEMBER 31,
2021

Compensation and employee benefit costs

$
213

$
225

Current portion of lease liabilities

22

24

Customer rebates, volume discounts and deferred income

165

164

Interest

72

83

Taxes payable

125

106

Other

67

71

Total

$
664

$
673

NOTE 8: LONG-TERM DEBT AND LINE OF CREDIT

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

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

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

In ~~May 2021,~~March 2023, we ~~repaid our $225 million variable-rate term loan that was scheduled to mature in July 2026.~~

~~In January 2020, we refinanced and extended our $1.5~~entered into a new $1.5 billion five-year senior unsecured revolving credit facility, which expires in March 2028 and replaced the existing facility which was set to expire in January 2025. Borrowings ~~are~~will bear interest at ~~LIBOR~~a floating rate based on either the adjusted term Secured Overnight Financing Rate (SOFR) plus a spread or ~~at other interest rates~~a mutually agreed upon ~~between the borrower and the lending banks.~~base rate plus a spread. We had no outstanding borrowings on our credit facility as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS

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


DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2023		DECEMBER 31, 2022
Long-term fixed rate debt (including current maturities):
Carrying value	$	5,797	$	5,053
Fair value (level 2)	$	5,687	$	4,918

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 30,
2022

DECEMBER 31, 2021

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

Carrying value

$
5,053

$
5,099

Fair value (level 2)

$
4,846

$
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 line of credit has a net carrying value that approximates its fair value within an insignificant difference. The inputs to the valuations of our long-term debt are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date.

Fair Value of Other Financial Instruments

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

As of June 30, 2023, we had $665 million in short-term investments classified as held-to-maturity debt securities, which consist of a mixture of term deposits and Treasury bills. We did not have any short-term investments classified as held-to-maturity debt securities as of December 31, 2022. These short-term investments mature within one year and are recorded in "Short-term investments" on our Consolidated Balance Sheet. We record held-to-maturity debt securities at amortized cost, which approximates fair value.

NOTE 10: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES

Legal Proceedings

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

Environmental Matters

Site Remediation

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

●

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

●

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

●

~~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 ~~September~~June 30, ~~2022,~~2023, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately ~~$63~~$75 million. These amounts are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet.

NOTE 11: ACCUMULATED OTHER COMPREHENSIVE LOSS

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


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

(1)

Amounts presented are net of tax.

(2)

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

QUARTER ENDED

YEAR-TO-DATE ENDED

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 2022

SEPTEMBER 2021

SEPTEMBER 2022

SEPTEMBER 2021

Pension⁽¹⁾

Balance at beginning of period

$
(632
)

$
(924
)

$
(720
)

$
(1,064
)
Other comprehensive income before reclassifications

14

6

65

102

Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾

19

23

56

67

Total other comprehensive income

33

29

121

169

Balance at end of period

$
(599
)

$
(895
)

$
(599
)

$
(895
)
Other post-employment benefits⁽¹⁾

Balance at beginning of period

$
—

$
(10
)

$
(2
)

$
(12
)
Other comprehensive loss before reclassifications

(1
)

(1
)

(1
)

(1
)
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾

1

2

3

4

Total other comprehensive income

—

1

2

3

Balance at end of period

$
—

$
(9
)

$
—

$
(9
)
Translation adjustments and other

Balance at beginning of period

$
234

$
278

$
243

$
254

Translation adjustments

(53
)

(25
)

(62
)

(1
)
Total other comprehensive loss

(53
)

(25
)

(62
)

(1
)
Balance at end of period

181

253

181

253

Accumulated other comprehensive loss, end of period

$
(418
)

$
(651
)

$
(418
)

$
(651
)

~~(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 6: Pension and Other Post-Employment Benefit Plans~~.

NOTE 12: SHARE-BASED COMPENSATION

Share-based compensation activity during year-to-date ~~2022~~2023 included the following:


SHARES IN THOUSANDS	GRANTED		VESTED		GRANTED		VESTED
Restricted stock units (RSUs)		626		857		840		768
Performance share units (PSUs)		306		419		392		228

A total of ~~1.5 million~~861 thousand 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 ~~2022~~2023 was ~~$41.94.~~$33.77. The vesting provisions for RSUs granted in ~~2022~~2023 were consistent with prior year grants.

Performance Share Units

The weighted average grant date fair value of PSUs granted in ~~2022~~2023 was ~~$49.77.~~$37.58. The final number of shares granted in ~~2022~~2023 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 ~~2022~~2023 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 ~~2022~~2023


	PERFORMANCE SHARE UNITS
Performance period	~~2/10/2022 – 12/31/2024~~	2/09/2023 – 12/31/2025
Valuation date average stock price⁽¹⁾	~~$42.16~~
~~Expected dividends~~	~~1.72%~~
~~Risk-free rate~~	~~0.34% – 1.84%~~
~~Expected volatility~~	~~26.27% – 41.01%~~

(1)	~~Calculated as an average of the high and low prices on grant date.~~	$33.96
Expected dividends		2.25%
Risk-free rate		4.21% – 4.66%
Expected volatility		29.26% – 40.19%

(1)

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

NOTE 13: OTHER OPERATING COSTS, ~~(INCOME),~~ NET

Other operating costs, ~~(income),~~ net were comprised of the following:


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

QUARTER ENDED

YEAR-TO-DATE ENDED

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 2022

SEPTEMBER 2021

SEPTEMBER 2022

SEPTEMBER 2021

Foreign exchange gains, net

$
(8
)

$
(5
)

$
(12
)

$
(2
)
Gain on sale of timberlands

—

(32
)

—

(32
)
Litigation expense, net

2

5

10

11

Research and development expenses

1

1

4

3

Other, net

6

16

17

28

Total other operating costs (income), net

$
1

$
(15
)

$
19

$
8

NOTE 14: INCOME TAXES

As a real estate investment trust (REIT), we generally are not subject to federal corporate income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our wholly-owned Taxable REIT Subsidiaries (TRSs), which includes 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 ~~2022~~2023 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~~:TIMBERLAND ACQUISITIONS

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 30,
2022

SEPTEMBER 30,
2021

DECEMBER 31,
2021

Cash and cash equivalents

$
1,920

$
2,326

$
1,879

Restricted cash included in other assets⁽¹⁾

—

120

120

Total cash, cash equivalents and restricted cash

$
1,920

$
2,446

$
1,999

~~(1)~~

Amounts included in restricted cash as of September 30, 2021 and 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.

On July 19, 2023, we completed the purchase of 22 thousand acres of Mississippi timberlands for approximately $60 million.

~~NOTE 16: TIMBERLAND ACQUISITIONS AND DIVESTITURES~~

~~Carolinas Acquisition~~

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

~~Washington Divestiture~~

On April 30, 2021, we announced an agreement to sell 145 thousand 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 $32 million was recorded in the Timberlands segment in our third quarter 2021 ~~Consolidated Statement of Operations~~.

This 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.

~~Alabama Acquisition~~

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~~. ~~As discussed above, 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; compliance with covenants in our debt agreements; our expectations concerning our contingent liabilities and the sufficiency of related reserves and accruals including, but not limited to, cost estimates of future litigation and environmental remediation; expected capital expenditures; market and general economic conditions, including related influencing factors such as the trajectory of U.S. housing activity, repair and remodel activity, ~~impacts from any future restrictions related to COVID or other viral or similar outbreak,~~ inflation trends and interest rates; our expectations about our future opportunities in emerging carbon offset and carbon capture and storage markets; and assumptions used in valuing incentive compensation and related expense.

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

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

●

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

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

●

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;

●

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;~~

●

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;~~

●

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

●	~~the availability and cost of shipping and transportation;~~

●

the availability and cost of shipping and transportation;

●	~~economic activity in Asia, especially Japan and China;~~

●

economic activity in Asia, especially Japan and China;

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

●

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

●	~~potential disruptions in our manufacturing operations;~~

●

potential disruptions in our manufacturing operations;

●	~~the level of competition from domestic and foreign producers;~~

●

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;~~

●

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

●	~~our ability to hire and retain capable employees;~~

●

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;~~

●

raw material availability and prices;

●	~~the effect of weather;~~

●

the effect of weather;

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

●

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

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

●

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

●	~~energy prices;~~

●

energy prices;

●	~~transportation and labor availability and costs;~~

●

transportation and labor availability and costs;

●	~~federal tax policies;~~

●

federal tax policies;

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

●

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

●	~~legal proceedings;~~

●

legal proceedings;

●	~~performance of pension fund investments and related derivatives;~~

●

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 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;~~

●

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~~

●

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 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.

●

other risks and uncertainties described in this report under Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and in our 2022 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.

●

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

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

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

~~While underlying longer-term fundamentals remain favorable for construction of new housing in~~

Over the ~~U.S.,~~past year, home sales and building activity ~~have~~ slowed due in part to higher mortgage interest rates, reduced affordability and general macroeconomic conditions. During second quarter 2023, market conditions improved in response to a stabilization in mortgage rates and increased homebuilder sentiment. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for ~~third~~second quarter ~~2022~~2023 averaged ~~1.46~~1.45 million units, a 4.5 percent increase from first quarter 2023. Single-family starts averaged 929 thousand units, an 1111.4 percent increase from first quarter 2023. Multi-family starts averaged 518 thousand units in second quarter 2023, which was a 6.1 percent decrease from ~~second~~first quarter 2022. Single family starts averaged 0.9 million units, a 16 percent decrease from second quarter 2022. Multi-family starts averaged 551 thousand units in third quarter 2022, which was a 2 percent decrease from second quarter 2022.2023. Sales of newly built, ~~single family~~single-family homes averaged a seasonally adjusted annual rate of ~~608~~694 thousand units for ~~third~~second quarter ~~2022, a decrease~~2023, an increase of ~~0.2~~8.8 percent from the prior quarter. Over the medium to long-term, we expect ~~continued strength in the~~a favorable U.S. housing construction market supported by strong demographics in the key homebuying age cohorts, a decade of underbuilding and ~~an aging~~a historically low housing ~~stock.~~inventory.

Repair and remodeling expenditures ~~increased~~decreased by ~~1.8~~1.9 percent from first quarter 2023 to second quarter ~~2022 to third quarter 2022~~2023 according to the Census Bureau Advance Retail Spending report. Do-it-yourself activity has been returning to more normalized levels while professionally contracted activities have ~~benefitted~~benefited from larger projects and increases in home equity levels. Over the longer term, we expect this sector to return to pre-pandemic growth trends with healthy household balance sheets, elevated home equity and aan aging U.S. housing stock, with a median age of 43 ~~years old.~~years.

In U.S. wood product markets, demand ~~was measured most~~in early second quarter 2023 continued to be affected by softening in the housing market and ongoing macroeconomic uncertainty. As the quarter progressed, improvements in the housing market, combined with supply concerns resulting from a series of ~~third quarter 2022 as buyers adjusted~~temporary and permanent mill curtailments and wildfires in Canada, led to ~~a more uncertain economic environment.~~moderately tighter markets. The Random Lengths Framing Lumber Composite price averaged ~~$591/~~$409/MBF and the OSB Composite averaged ~~$449/~~$360/MSF in ~~third~~second quarter ~~2022.~~2023. Over the course of the ~~third~~second quarter, prices ~~declined~~increased from ~~$604/~~$417/MBF to ~~$512/~~$438/MBF for lumber and from ~~$425/~~$297/MSF to ~~$402/~~$432/MSF for ~~OSB, reflecting a softening housing construction market. Pricing for both lumber and OSB remain well above 10-year averages.~~OSB.

In Western log markets, Douglas fir sawlog prices ~~fell~~rose by ~~2.9~~0.4 percent in ~~third~~second quarter ~~2022~~2023 compared with ~~second~~first quarter ~~2022~~2023, as reported by RISI Log Lines based on Weyerhaeuser’s ~~portfolio~~sales mix. Overall, domestic prices in the West ~~were supported~~stayed consistent, with lower lumber prices offset by ~~steady demand and constrained~~continued constraints in log ~~supplies associated with log and haul capacity in the region.~~supply. In the South, delivered sawlog prices ~~increased by 0.2~~remained flat in second quarter 2023 compared to first quarter 2023 and declined 1.5 percent from second quarter 2022 ~~and 5.5 percent from third quarter 2021~~ as reported by TimberMart-South, as ~~mills are carrying higher inventories to mitigate~~ log and haul capacity ~~constraints.~~constraints eased somewhat.

Currency exchange rates, available supply from other countries and trade policy affect our export businesses. During ~~third~~second quarter ~~2022,~~2023, end use demand softened ~~which was partly~~in export markets, partially offset by continued disruptions ~~of other~~in global ~~sources of~~ log and lumber supply. In Japan, total housing starts ~~increased 1.4~~decreased 1.6 percent year to date through ~~August~~May compared to the same period in ~~2021,~~2022, while the key Post and Beam segment saw a ~~2.8~~5.9 percent decrease. An increase in lumber imports to Japan from Europe ~~to Japan~~ placed downward pressure on market conditions. China demand ~~was held back by their~~has improved from low levels late in 2022 but remains subdued due to general economic conditions ~~but constraints~~and increased supply of ~~supply sources~~logs from ~~other countries supported demand from U.S. producers.~~New Zealand.

Interest rates affect our business primarily through their impact on mortgage rates and housing affordability, their general impact on the economy, and their influence on our capital management activities. Actions by the U.S. Federal Reserve, the overall condition of the economy and fluctuations in financial markets are all factors that influence long-term interest rates. 30-year mortgage rates, which are correlated with long-term interest rates, increased from ~~5.7~~6.3 percent at the end of first quarter 2023 to 6.7 percent at the end of second quarter ~~2022~~2023. While mortgage rates remain elevated, home buyers have responded favorably to ~~6.7 percent at the end~~even small reductions. Builders have also been able to offset higher mortgage rates through discounts, loan subsidies and modifying product offerings such as home sizes and finishes. Higher rates have also locked-in many existing homeowners from selling, reducing inventories of ~~the third quarter. This represents an increase of 3.6 percentage points from the end of 2021,~~existing homes for sale which has ~~had a negative impact on home affordability and has reduced~~led to increased demand for ~~homebuying.~~available new homes.

~~Monetary policy set by the U.S. Federal Reserve affects changes in the rate of inflation 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, including costs for raw materials, transportation, energy and labor. The Consumer Price Index increased ~~8.2~~3.0 percent year over year in ~~September~~June 2023, which is markedly down from its peak of over 9.0 percent in June 2022. While we can offset some of the impacts of inflation through our sales activities, our operational excellence initiatives and our procurement practices, not all of the costs associated with inflation can be fully mitigated or passed on to the consumer.

The ~~relative strength~~condition of the labor market affects all of our businesses as it relates to our ability to attract and retain employees and contractors. The unemployment rate ~~was 3.5~~of 3.6 percent in ~~September 2022, compared to 3.6~~June 2023 remained near historically low levels and increased 0.1 percent atfrom the end of ~~the second quarter.~~first quarter 2023. Labor force participation hasincreased to ~~62.3~~62.6 percent in ~~September 2022,~~June 2023, from ~~61.7~~62.2 percent in ~~September 2021, but this remains below pre-pandemic~~June 2022, approaching pre-Pandemic levels of ~~over~~ 63 percent.

Governments and businesses across the globe are taking action on climate change and are making significant commitments towards decarbonizing operations and reducing greenhouse gas emissions to net zero. Achieving these commitments will require governments and companies to take major steps to modify operations, invest in low-carbon activities and purchase offsets 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 and renewable energy activities.

In mid-September 2022, Weyerhaeuser employee members of the International Association of Machinists and Aerospace Workers union commenced a work stoppage affecting the company’s operations in Washington and Oregon. The stoppage involves approximately 1,200 employees and affects four lumber mills in our Wood Products segment and a portion of our Western Timberlands operations. This event has had a negative impact on our results of operations for the third quarter, including reductions in fee harvest volumes and sale volumes for Western Timberlands, as well as reductions in production volumes and sales volumes for our lumber business. The stoppage has had a similar impact on our fourth quarter results to date. On October 28, 2022, the company announced the successful resolution of the work stoppage and will resume normal operations as soon as possible.CONSOLIDATED RESULTS

~~CONSOLIDATED RESULTS~~

How We Did ~~Third~~Second Quarter ~~2022~~2023 and Year-to-Date ~~2022~~2023


	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	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022
Net sales	$	2,276	$	2,345	$	(69	)	$	8,361	$	7,995	$	366		$	1,997	$	2,973	$	(976	)	$	3,878	$	6,085	$	(2,207	)
Costs of sales	$	1,694	$	1,589	$	105		$	5,130	$	4,602	$	528		$	1,528	$	1,789	$	(261	)	$	3,040	$	3,436	$	(396	)
Operating income	$	457	$	649	$	(192	)	$	2,848	$	3,034	$	(186	)	$	319	$	1,047	$	(728	)	$	555	$	2,391	$	(1,836	)
Net earnings	$	310	$	482	$	(172	)	$	1,869	$	2,191	$	(322	)	$	230	$	788	$	(558	)	$	381	$	1,559	$	(1,178	)
Earnings per share, basic and diluted	$	0.42	$	0.64	$	(0.22	)	$	2.51	$	2.92	$	(0.41	)	$	0.31	$	1.06	$	(0.75	)	$	0.52	$	2.09	$	(1.57	)

Comparing ~~Third~~Second Quarter 2023 with Second Quarter 2022 ~~with Third Quarter 2021~~

Net sales

Net sales decreased ~~$69~~$976 million – 333 percent – primarily due to an ~~$86~~$841 million decrease in Wood Products sales to unaffiliated customers attributable to decreased sales volumes and sales realizations across most product lines, as well as a $98 million decrease in Timberlands net sales to unaffiliated customers primarily attributable to decreased sales realizations and sales volumes in the Western region.

Costs of sales

Costs of sales decreased $261 million – 15 percent – primarily due to decreased sales volumes and raw material costs across most product lines and decreased freight costs within our Wood Products segment, as well as decreased export log freight costs and third-party log purchases within our Timberlands segment.

Operating income

Operating income decreased $728 million – 70 percent – primarily due to a $715 million decrease in consolidated gross margin, as discussed above.

Net earnings

Net earnings decreased $558 million – 71 percent – primarily due to the $728 million decrease in operating income, as discussed above.

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

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

Net sales

Net sales decreased $2,207 million – 36 percent – primarily due to a $2,042 million decrease in Wood Products sales to unaffiliated customers attributable to decreased sales realizations ~~for oriented strand board,~~and sales volumes across most product lines, as well as ~~decreased sales volumes for structural lumber.~~

~~This~~a $101 million decrease ~~was partially offset by an $18 million increase~~ in Timberlands ~~net~~ sales to unaffiliated customers attributable to decreased sales realizations in the Western region, partially offset by increased sales volumes in the Southern region and increased stumpage sales.

Costs of sales

Costs of sales decreased $396 million – 12 percent – primarily due to ~~increased~~decreased sales ~~realizations for Southern logs.~~

~~Costs of sales~~

~~Costs of sales increased $105 million – 7 percent –~~ ~~primarily~~ ~~due to increased freight~~volumes and raw material costs across most product lines within our Wood Products segment, as well as ~~increased logging and hauling costs within our Timberlands segment.~~decreased freight costs.

Operating income

Operating income decreased ~~$192~~$1,836 million – 3077 percent – primarily due to a ~~$174~~$1,811 million decrease in consolidated gross margin, ~~(see discussion of components above).~~as discussed above.

Net earnings

Net earnings decreased ~~$172~~$1,178 million – 3676 percent – primarily due to the ~~$192~~$1,836 million decrease in operating income, as discussed above.

This decrease was partially offset by a ~~$12 million decrease in interest expense, as well as a $7~~$346 million decrease in income tax expense (refer to ~~Interest Expenseand~~ Income Taxes), .

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

~~Net sales~~

Net sales increased $366 million – 5 percent – primarily due to a $214 million increase in Timberlands sales to unaffiliated customers attributable to increased sales realizations and sales volumes in the Western and Southern regions, as well as ~~a $124 million increase in Wood Products sales to unaffiliated customers attributable to increased sales realizations across most product lines.~~

~~Costs of sales~~

~~Costs of sales increased $528 million – 11 percent –~~ ~~primarily~~ ~~due to increased freight and raw material costs within our Wood Products segment, as well as increased third-party log purchases and logging and hauling costs within our Timberlands segment.~~

~~Operating income~~

~~Operating income decreased $186 million – 6 percent – primarily due to a $162 million decrease in consolidated gross margin (see discussion of components above).~~

~~Net earnings~~

~~Net earnings decreased $322 million – 15 percent – primarily due to~~ a $276 million pretax charge ($207 million after-tax) related to the early extinguishment of debt in first quarter 2022 (refer to Note 8: Long-Term Debt and Line of Credit),.

TIMBERLANDS

How We Did Second Quarter 2023 and Year-to-Date 2023


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

(1)

Other Timberlands sales include sales of seeds and seedlings from our nursery operations as well as ~~the $186 million decrease in operating income discussed above.~~wood chips.

~~These decreases were partially offset by a $127 million decrease in income tax expense, as well as a $32 million decrease in interest expense (refer to~~ ~~Income Taxes~~ ~~and~~ ~~Interest Expense~~).

~~TIMBERLANDS~~

~~How We Did Third~~Comparing Second Quarter 2023 with Second Quarter 2022 ~~and Year-to-Date 2022~~

QUARTER ENDED

AMOUNT OF
CHANGE

YEAR-TO-DATE ENDED

AMOUNT OF
CHANGE

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 2022

SEPTEMBER 2021

2022 VS.
2021

SEPTEMBER 2022

SEPTEMBER 2021

2022 VS.
2021

Net sales to unaffiliated customers:

Delivered logs:

West

$
224

$
226

$
(2
)

$
791

$
649

$
142

South

166

153

13

480

429

51

North

15

13

2

40

38

2

Subtotal delivered logs sales

405

392

13

1,311

1,116

195

Stumpage and pay-as-cut timber

10

9

1

30

22

8

Recreational and other lease revenue

18

16

2

51

48

3

Other⁽¹⁾

8

6

2

29

21

8

Subtotal net sales to unaffiliated customers

441

423

18

1,421

1,207

214

Intersegment sales

133

129

4

450

399

51

Total sales

$
574

$
552

$
22

$
1,871

$
1,606

$
265

Costs of sales

$
442

$
428

$
14

$
1,360

$
1,218

$
142

Operating income and Net contribution to earnings

$
107

$
133

$
(26
)

$
442

$
354

$
88

~~(1)~~

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

~~Comparing Third Quarter 2022 with Third Quarter 2021~~

Net sales to unaffiliated customers

Net sales to unaffiliated customers ~~increased $18~~decreased $98 million – 19 percent – primarily due to a $102 million decrease in Western log sales attributable to a 29 percent decrease in sales realizations and a 7 percent decrease in sales volumes, partially offset by a $4 million increase in stumpage and pay-as-cut timber sales.

Intersegment sales

Intersegment sales decreased $6 million – 4 percent – primarily due to a ~~$13 million increase in Southern log sales attributable to a 9 percent increase in sales realizations. Western log sales decreased $2 million due to a~~ 9 percent decrease ~~in sales volumes, primarily attributable to the work stoppage in Washington and Oregon, partially offset by a 9 percent increase in sales realizations.~~

~~Intersegment sales~~

~~Intersegment sales increased $4 million – 3 percent – primarily due to a 9 percent increase~~ in sales realizations, partially offset by a 56 percent ~~decrease~~increase in sales ~~volumes, primarily attributable to the work stoppage in Washington and Oregon.~~volumes.

Costs of sales

Costs of sales ~~increased $14~~decreased $56 million – 311 percent – primarily due to ~~increased logging~~decreased Western third-party log purchases and ~~hauling costs, partially offset by a 3 percent decrease in sales volumes, primarily attributable to the work stoppage in Washington and Oregon.~~export log freight costs.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased ~~$26~~$49 million – ~~20 percent – primarily due to a $32 million gain on sale of timberlands recorded in third quarter 2021, partially offset by the change in the components of gross margin, as discussed above.~~

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

~~Net sales to unaffiliated customers~~

Net sales to unaffiliated customers increased $214 million – 18 percent – primarily due to a $142 million increase in Western log sales attributable to a 19 percent increase in sales realizations and a 2 percent increase in sales volumes, as well as a $51 million increase in Southern log sales attributable to a 9 percent increase in sales realizations and a 3 percent increase in sales volumes.

~~Intersegment sales~~

~~Intersegment sales increased $51 million – 13 percent – primarily due to a 16 percent increase in sales realizations, partially offset by a 3 percent decrease in sales volumes.~~

~~Costs of sales~~

~~Costs of sales increased $142 million – 12 percent – primarily due to increased third-party log purchases and logging and hauling costs.~~

~~Operating income and Net contribution to earnings~~

~~Operating income and net contribution to earnings increased $88 million – 25~~32 percent – primarily due to the change in the components of gross margin, as discussed ~~above,~~above.

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

Net sales to unaffiliated customers

Net sales to unaffiliated customers decreased $101 million – 10 percent – primarily due to a $132 million decrease in Western log sales attributable to a 22 percent decrease in sales realizations, partially offset by a ~~$32~~$16 million ~~gain on sale~~increase in Southern log sales, attributable to a 5 percent increase in sales volumes, and an $11 million increase in stumpage and pay-as-cut timber sales.

Intersegment sales

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

Costs of ~~timberlands recorded~~sales

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

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased $111 million – 33 percent – primarily due to the change in ~~third quarter 2021.~~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
VOLUMES IN THOUSANDS	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022
Third-party log sales – tons:
West(1)		1,661		1,778		(117	)		3,335		3,382		(47	)
South		4,341		4,167		174			8,727		8,302		425
North		98		118		(20	)		302		328		(26	)
Total		6,100		6,063		37			12,364		12,012		352
Fee harvest volumes – tons:
West(1)		2,292		2,085		207			4,537		4,325		212
South		6,430		6,159		271			12,862		12,001		861
North		175		180		(5	)		460		458		2
Total		8,897		8,424		473			17,859		16,784		1,075

QUARTER ENDED

AMOUNT OF
CHANGE

YEAR-TO-DATE ENDED

AMOUNT OF
CHANGE

VOLUMES IN THOUSANDS

SEPTEMBER 2022

SEPTEMBER 2021

2022 VS.
2021

SEPTEMBER 2022

SEPTEMBER 2021

2022 VS.
2021

Third-party log sales – tons:

West⁽¹⁾

1,411

1,555

(144
)

4,793

4,702

91

South

4,310

4,304

6

12,612

12,236

376

North

177

195

(18
)

505

571

(66
)
Total

5,898

6,054

(156
)

17,910

17,509

401

Fee harvest volumes – tons:

West⁽¹⁾

1,760

1,930

(170
)

6,085

6,130

(45
)
South

6,112

5,912

200

18,113

17,144

969

North

245

264

(19
)

703

800

(97
)
Total

8,117

8,106

11

24,901

24,074

827

(1)

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

~~(1)~~

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

REAL ESTATE, ENERGY AND NATURAL RESOURCES

How We Did ~~Third~~Second Quarter ~~2022~~2023 and Year-to-Date ~~2022~~2023


	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	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021		JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022
Net sales:
Real estate	$	30	$	45	$	(15	)	$	217	$	212	$	5	$	47	$	90	$	(43	)	$	119	$	187	$	(68	)
Energy and natural resources		38		24		14			96		73		23		33		27		6			62		58		4
Total	$	68	$	69	$	(1	)	$	313	$	285	$	28	$	80	$	117	$	(37	)	$	181	$	245	$	(64	)
Costs of sales	$	14	$	18	$	(4	)	$	100	$	93	$	7	$	21	$	45	$	(24	)	$	62	$	86	$	(24	)
Operating income and Net contribution to earnings	$	48	$	45	$	3		$	194	$	174	$	20	$	52	$	65	$	(13	)	$	105	$	146	$	(41	)

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

Comparing ~~Third~~Second Quarter 2023 with Second Quarter 2022 ~~with Third Quarter 2021~~

Net sales

Net sales decreased $1$37 million – 132 percent – primarily due to a decrease in acres sold, partially offset by an increase in ~~royalty income from our Energy and Natural Resources business.~~the average price per acre sold.

Costs of sales

Costs of sales decreased $4$24 million – 2253 percent – primarily due to a decrease in acres sold, as well as a decrease in basis per acre sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings ~~increased $3~~decreased $13 million – 720 percent – primarily due to the change in the components of gross margin, as discussed above.

Comparing Year-to-Date ~~2022~~2023 with Year-to-Date ~~2021~~2022

Net sales

Net sales ~~increased $28~~decreased $64 million – 1026 percent – primarily due to ~~increases in acres sold and royalty income from our Energy and Natural Resources business, partially offset by~~ a decrease ~~in mitigation bank credit sales.~~

~~Costs of sales~~

~~Costs of sales increased $7 million – 8 percent – primarily due to an increase~~ in acres sold, partially offset by an increase in the average price per acre sold.

Costs of sales

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

Operating income and Net contribution to earnings

Operating income and net contribution to earnings ~~increased $20~~decreased $41 million – 1128 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
	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022
Acres sold		5,014		11,037		(6,023	)		56,046		48,907		7,139			9,281		26,906		(17,625	)		30,034		51,032		(20,998	)
Average price per acre	$	5,046	$	4,005	$	1,041		$	3,624	$	3,632	$	(8	)	$	4,790	$	3,215	$	1,575		$	3,720	$	3,484	$	236

WOOD PRODUCTS

How We Did ~~Third~~Second Quarter ~~2022~~2023 and Year-to-Date ~~2022~~2023


	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022
Net sales:
Structural lumber	$	573	$	998	$	(425	)	$	1,088	$	2,204	$	(1,116	)
Oriented strand board		215		497		(282	)		423		1,061		(638	)
Engineered solid section		215		247		(32	)		384		443		(59	)
Engineered I-joists		126		168		(42	)		213		305		(92	)
Softwood plywood		44		53		(9	)		85		111		(26	)
Medium density fiberboard		42		53		(11	)		80		101		(21	)
Complementary building products		204		239		(35	)		367		454		(87	)
Other products produced(1)		81		86		(5	)		178		181		(3	)
Total	$	1,500	$	2,341	$	(841	)	$	2,818	$	4,860	$	(2,042	)
Costs of sales	$	1,218	$	1,414	$	(196	)	$	2,377	$	2,690	$	(313	)
Operating income and Net contribution to earnings	$	218	$	863	$	(645	)	$	313	$	2,045	$	(1,732	)

QUARTER ENDED

AMOUNT OF
CHANGE

YEAR-TO-DATE ENDED

AMOUNT OF
CHANGE

DOLLAR AMOUNTS IN MILLIONS

SEPTEMBER 2022

SEPTEMBER 2021

2022 VS.
2021

SEPTEMBER 2022

SEPTEMBER 2021

2022 VS.
2021

Net sales:

Structural lumber

$
676

$
681

$
(5
)

$
2,880

$
3,020

$
(140
)
Oriented strand board

287

470

(183
)

1,348

1,513

(165
)
Engineered solid section

233

183

50

676

491

185

Engineered I-joists

166

128

38

471

315

156

Softwood plywood

47

45

2

158

170

(12
)
Medium density fiberboard

50

52

(2
)

151

143

8

Complementary building products

222

211

11

676

595

81

Other products produced⁽¹⁾

86

83

3

267

256

11

Total

$
1,767

$
1,853

$
(86
)

$
6,627

$
6,503

$
124

Costs of sales

$
1,360

$
1,270

$
90

$
4,050

$
3,623

$
427

Operating income and Net contribution to earnings

$
344

$
517

$
(173
)

$
2,389

$
2,695

$
(306
)
(1)

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

~~(1)~~

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

Comparing ~~Third~~Second Quarter 2023 with Second Quarter 2022 ~~with Third Quarter 2021~~

Net sales

Net sales decreased ~~$86~~$841 million – 536 percent – due to:

●

a $425 million decrease in structural lumber sales attributable to a ~~$183~~38 percent decrease in sales realizations, as well as a 7 percent decrease in sales volumes;

●

a $282 million decrease in oriented strand board sales attributable to a 4256 percent decrease in sales realizations, as well as a 2 percent decrease in sales volumes;

●

a $42 million decrease in engineered I-joists sales attributable to a 15 percent decrease in sales realizations, as well as a 10 percent decrease in sales volumes;

●

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

●

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

●

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

●

a $9 million decrease in softwood plywood sales attributable to a 36 percent decrease in sales realizations, partially offset by a 534 percent increase in sales volumes ~~as well as~~ and

●

a $5 million decrease in ~~structural lumber sales~~other products produced attributable to ~~an 8 percent decrease in~~decreased sales ~~volumes, partially offset by an 8 percent increase in sales realizations.~~volumes.

~~These decreases were partially offset by:~~19

●	~~a $50 million increase in engineered solid section sales due to a 28 percent increase in sales realizations;~~

●	~~a $38 million increase in engineered I-joists sales due to a 36 percent increase in sales realizations and~~

●	~~an $11 million increase in complementary building products sales due to increased sales volumes and sales realizations for siding and trim.~~

Costs of sales

Costs of sales ~~increased $90~~decreased $196 million – 714 percent – primarily due to ~~increased freight~~decreased sales volumes and raw material costs across most product lines, as well as decreased freight costs.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased ~~$173~~$645 million – 3375 percent – primarily due to the change in the components of gross margin, as discussed above.

Comparing Year-to-Date ~~2022~~2023 with Year-to-Date ~~2021~~2022

Net sales

Net sales ~~increased $124~~decreased $2,042 million – 242 percent – due to:

●	~~a $185 million increase in engineered solid section sales attributable to a 43 percent increase in sales realizations, partially offset by a 4 percent decrease in sales volumes;~~

●

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

●	~~a $156 million increase in engineered I-joists sales attributable to a 56 percent increase in sales realizations, partially offset by a 5 percent decrease in sales volumes;~~

●	~~an $81 million increase in complementary building products sales attributable to increased sales realizations;~~

●	~~an $11 million increase in other products produced sales attributable to increased sales volumes for wood chips and~~

●	~~an $8 million increase in medium density fiberboard sales attributable to a 33 percent increase in sales realizations, partially offset by a 20 percent decrease in sales volumes.~~

~~These increases were partially offset by~~ a ~~$165~~$638 million decrease in oriented strand board sales ~~due~~attributable to a 1561 percent decrease in sales realizations, partially offset by a 53 percent increase in sales volumes;

●

a $92 million decrease in engineered I-joist sales attributable to a 25 percent decrease in sales volumes, as well as a ~~$140~~6 percent decrease in sales realizations;

●

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

●

a $59 million decrease in engineered solid section sales attributable to a 312 percent decrease in sales volumes, as well as a 2 percent decrease in sales realizations;

●

a $26 million decrease in softwood plywood sales attributable to a 37 percent decrease in sales realizations, ~~and~~partially offset by a 122 percent increase in sales volumes and

●

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

Costs of sales

Costs of sales ~~increased $427~~decreased $313 million – 12 percent – primarily due to ~~increased freight~~decreased sales volumes and raw material costs across most product lines, as well as decreased freight costs.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased ~~$306~~$1,732 million – 1185 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
VOLUMES IN MILLIONS(1)	JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022
Structural lumber – board feet		1,196		1,289		(93	)		2,340		2,446		(106	)
Oriented strand board – square feet (3/8”)		720		735		(15	)		1,493		1,452		41
Engineered solid section – cubic feet		6.0		6.4		(0.4	)		10.7		12.1		(1.4	)
Engineered I-joists – lineal feet		44		49		(5	)		71		95		(24	)
Softwood plywood – square feet (3/8”)		94		70		24			177		145		32
Medium density fiberboard – square feet (3/4”)		31		45		(14	)		60		89		(29	)

QUARTER ENDED

AMOUNT OF
CHANGE

YEAR-TO-DATE ENDED

AMOUNT OF
CHANGE

VOLUMES IN MILLIONS⁽¹⁾

SEPTEMBER 2022

SEPTEMBER 2021

2022 VS.
2021

SEPTEMBER 2022

SEPTEMBER 2021

2022 VS.
2021

Structural lumber – board feet

1,216

1,320

(104
)

3,662

3,717

(55
)
Oriented strand board – square feet (3/8”)

715

681

34

2,167

2,058

109

Engineered solid section – cubic feet

5.9

5.9

—

18.0

18.7

(0.7
)
Engineered I-joists – lineal feet

47

49

(2
)

142

149

(7
)
Softwood plywood – square feet (3/8”)

74

69

5

219

240

(21
)
Medium density fiberboard – square feet (3/4”)

40

55

(15
)

129

162

(33
)
(1)

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

~~(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	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			JUNE 2023		JUNE 2022		2023 VS. 2022			JUNE 2023		JUNE 2022		2023 VS. 2022
Structural lumber – board feet:
Production		1,140		1,222		(82	)		3,575		3,667		(92	)		1,164		1,232		(68	)		2,307		2,435		(128	)
Outside purchase		35		56		(21	)		120		160		(40	)		36		43		(7	)		75		85		(10	)
Total		1,175		1,278		(103	)		3,695		3,827		(132	)		1,200		1,275		(75	)		2,382		2,520		(138	)
Oriented strand board – square feet (3/8”):
Production		735		715		20			2,232		2,140		92			727		758		(31	)		1,488		1,497		(9	)
Outside purchase		18		62		(44	)		154		201		(47	)		19		66		(47	)		36		136		(100	)
Total		753		777		(24	)		2,386		2,341		45			746		824		(78	)		1,524		1,633		(109	)
Engineered solid section – cubic feet:
Production		6.0		5.8		0.2			18.1		18.0		0.1			5.9		6.4		(0.5	)		10.5		12.1		(1.6	)
Outside purchase		3.6		0.2		3.4			4.1		0.7		3.4			4.0		0.3		3.7			6.0		0.5		5.5
Total		9.6		6.0		3.6			22.2		18.7		3.5			9.9		6.7		3.2			16.5		12.6		3.9
Engineered I-joists – lineal feet:
Production		47		49		(2	)		141		144		(3	)		38		50		(12	)		63		94		(31	)
Outside purchase		1		2		(1	)		6		6		—			—		3		(3	)		1		5		(4	)
Total		48		51		(3	)		147		150		(3	)		38		53		(15	)		64		99		(35	)
Softwood plywood – square feet (3/8”):
Production		64		61		3			197		203		(6	)		84		67		17			158		133		25
Outside purchase		9		12		(3	)		27		38		(11	)		11		8		3			23		18		5
Total		73		73		—			224		241		(17	)		95		75		20			181		151		30
Medium density fiberboard – square feet (3/4"):
Production		38		55		(17	)		130		163		(33	)		33		48		(15	)		67		92		(25	)
Total		38		55		(17	)		130		163		(33	)		33		48		(15	)		67		92		(25	)

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	SEPTEMBER 2022			SEPTEMBER 2021			2022 VS. 2021			SEPTEMBER 2022			SEPTEMBER 2021			2022 VS. 2021			JUNE 2023			JUNE 2022			2023 VS. 2022			JUNE 2023			JUNE 2022			2023 VS. 2022
Unallocated corporate function and variable compensation expense	$	(36	)	$	(33	)	$	(3	)	$	(103	)	$	(94	)	$	(9	)	$	(32	)	$	(36	)	$	4		$	(59	)	$	(67	)	$	8
Liability classified share-based compensation		2			(1	)		3			5			(2	)		7			(2	)		2			(4	)		(2	)		3			(5	)
Foreign exchange gain		9			5			4			12			2			10
Foreign exchange gain (loss)																				2			3			(1	)		1			3			(2	)
Elimination of intersegment profit in inventory and LIFO		2			12			(10	)		(39	)		(33	)		(6	)		3			18			(15	)		12			(41	)		53
Other		(19	)		(29	)		10			(52	)		(62	)		10			(26	)		(21	)		(5	)		(39	)		(33	)		(6	)
Operating loss		(42	)		(46	)		4			(177	)		(189	)		12			(55	)		(34	)		(21	)		(87	)		(135	)		48
Non-operating pension and other post-employment benefit costs		(12	)		(5	)		(7	)		(38	)		(14	)		(24	)		(12	)		(11	)		(1	)		(21	)		(26	)		5
Interest income and other		9			1			8			9			4			5			18			1			17			30			—			30
Net charge to earnings	$	(45	)	$	(50	)	$	5		$	(206	)	$	(199	)	$	(7	)	$	(49	)	$	(44	)	$	(5	)	$	(78	)	$	(161	)	$	83

Comparing ~~Third~~Second Quarter 2023 with Second Quarter 2022 ~~with Third Quarter 2021~~

Net charge to earnings ~~decreased~~increased $5 million – 1011 percent – primarily due to:

●	~~an $8 million increase in interest income and other due to an increase in the interest rate on our cash and investment accounts;~~

●	~~a $4 million increase in foreign exchange gain due to strengthening of the U.S. dollar and~~

●	~~a $3 million decrease in liability classified share-based compensation driven by the change in our stock price.~~

~~These changes were partially offset by~~ a ~~$10~~$15 million increase in elimination of intersegment profit in inventory and ~~LIFO.~~LIFO and

●

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

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

Comparing Year-to-Date ~~2022~~2023 with Year-to-Date ~~2021~~2022

Net charge to earnings ~~increased $7~~decreased $83 million – 452 percent – primarily due to a ~~$24~~$53 million ~~increase~~decrease in ~~non-operating pension~~elimination of intersegment profit in inventory and ~~other post-employment benefit costs.~~

~~This increase was partially offset by a $10 million increase in foreign exchange gain due to strengthening of the U.S. dollar,~~LIFO, as well as a $7$30 million ~~decrease~~increase in ~~liability classified share-based compensation driven by~~interest income and other due to an increase in the ~~change in~~interest rate on our ~~stock price.~~cash and short-term investment accounts.

INTEREST EXPENSE

Our interest expense, net of capitalized interest, was:

●

$70 million for second quarter 2023 and $136 million year-to-date 2023;

●

$65 million for second quarter 2022 and $137 million year-to-date 2022.

●

~~$67 million for third quarter 2022 and $204 million year-to-date 2022;~~

●	~~$79 million for third quarter 2021 and $236 million year-to-date 2021.~~

Interest expense ~~decreased~~increased by ~~$12~~$5 million compared to ~~third~~second quarter ~~2021 and decreased by $32 million compared to year-to-date 2021~~2022 primarily due to ~~decreases~~an increase in ~~the~~weighted average outstanding debt ~~and~~in second quarter 2023. Year-to-date 2023 interest expense was comparable to year-to-date 2022 primarily due to the May 2023 issuance of debt securities that increased our weighted average outstanding debt, offset by a series of transactions performed in March 2022 that lowered our weighted average interest ~~rate.~~rate and extended our weighted average maturity.

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

INCOME TAXES

Our provision for income taxes was:

●

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

●

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

●

~~a $77 million expense for third quarter 2022 and a $470 million expense year-to-date 2022;~~

●	~~an $84 million expense for third quarter 2021 and a $597 million expense year-to-date 2021.~~

Our provision for income taxes is primarily driven by earnings generated by our TRSs. Income tax expense decreased by ~~$127~~$346 million compared to year-to-date ~~2021~~2022 primarily due to a ~~tax benefit of approximately $69 million resulting from the $276 million pretax loss on debt extinguishment recorded~~decrease in ~~first quarter 2022,~~our TRS earnings in 2023, as well as a decrease in our estimated annual effective tax rate.

Refer to Note 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 ~~September~~June 30, ~~2022,~~2023, we had ~~over $1.9~~approximately $1.1 billion in cash and cash equivalents, $665 million in short-term investments and $1.5 billion of availability on our line of credit, which expires in ~~January 2025.~~March 2028. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

●

$622 million for year-to-date 2023 and

●

$2,103 million for year-to-date 2022.

●

~~$2,665 million for year-to-date 2022 and~~

●	~~$2,665 million for year-to-date 2021.~~

Net cash from operations ~~remained consistent as~~decreased $1,481 million primarily due to decreased cash inflows from our business ~~operations were~~operations. This change was partially offset by a ~~$48~~$336 million decrease in cash paid for income ~~taxes,~~taxes.

CASH FROM INVESTING ACTIVITIES

Consolidated net cash from investing activities was:

●

$(818) million for year-to-date 2023 and

●

$(433) million for year-to-date 2022.

Net cash from investing activities decreased $385 million primarily due to a ~~$37~~$664 million ~~decrease~~increase in ~~pension and post-employment benefit contributions and payments, and~~cash paid for short-term investments. This change was partially offset by a ~~$26~~$281 million decrease in cash paid for ~~interest.~~acquisition of timberlands.

~~CASH FROM INVESTING ACTIVITIES~~

~~Consolidated net cash from investing activities was:~~

●	~~$(530) million for year-to-date 2022 and~~

●	~~$(108) million for year-to-date 2021.~~

~~Net cash from investing activities decreased $422 million, primarily due to:~~

●	~~a $261 million decrease in proceeds from the sale of timberlands;~~

●	~~a $137 million increase in cash paid for the acquisition of timberlands and~~

●	~~a $22 million increase in cash paid for capital expenditures.~~

Summary of Capital Spending by Business Segment


	YEAR-TO-DATE ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022		SEPTEMBER 2021		JUNE 2023		JUNE 2022
Timberlands	$	75	$	76	$	48	$	53
Wood Products		163		146		99		95
Unallocated Items		7		1		5		3
Total	$	245	$	223	$	152	$	151

We anticipate our capital expenditures for ~~2022~~2023 to be approximately ~~$460~~$440 million. The amount we spend on capital expenditures could change.

CASH FROM FINANCING ACTIVITIES

Consolidated net cash from financing activities was:

●

$(290) million for year-to-date 2023 and

●

$(1,938) million for year-to-date 2022.

●

~~$(2,214) million for year-to-date 2022 and~~

●	~~$(606) million for year-to-date 2021.~~

Net cash from financing activities ~~decreased $1,608~~increased $1,648 million, primarily due to:

●

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

●

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

●

a $174 million decrease in cash used for repurchases of common stock.

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

●

~~a $1,103 million increase in cash paid for dividends;~~

●	~~a $376 million increase in cash used for repurchases of common stock and~~

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

Line of Credit

In March 2023, we entered into a new $1.5 billion five-year senior unsecured revolving credit facility, which expires in March 2028 and replaced the existing facility which was set to expire in January 2025. Borrowings will bear interest at a floating rate based on either the adjusted term SOFR plus a spread or a mutually agreed upon base rate plus a spread. We had no outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility as of ~~September~~June 30, ~~2022~~2023 or December 31, ~~2021. This credit facility expires in January 2025.~~2022.

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. We plan to transition our revolving credit facility to an alternate reference rate prior to the cessation of 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 July 2023, we repaid $118 million of our 7.125% notes at maturity. We have $860 million of long-term debt scheduled to mature during fourth quarter 2023.

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

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

~~In May 2021, we repaid our $225 million variable-rate term loan that was scheduled to mature in July 2026.~~

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

Debt Covenants

As of ~~September~~June 30, ~~2022,~~2023, Weyerhaeuser Company was in compliance with its debt covenants. There have been no significant changes to the debt covenants presented in our ~~2021~~2022 Annual Report on Form 10-K for our long-term debt instruments, and we expect to remain in compliance with our debt covenants for the foreseeable future.

~~Option Exercises~~

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

●	~~$15 million for year-to-date 2022 and~~

●	~~$46 million for year-to-date 2021.~~

~~Our average stock price was $37.24 and $35.41 for year-to-date 2022 and 2021, respectively.~~

Dividend Payments

We paid cash dividends on common shares of:

●	~~$1,485 million for year-to-date 2022 and~~

●

$938 million for year-to-date 2023 and

●	~~$382 million for year-to-date 2021.~~

●

$1,352 million for year-to-date 2022.

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

Share Repurchases

We repurchased ~~4,234,838~~1,689,874 common shares for approximately ~~$145~~$50 million (including transaction fees) during ~~third~~second quarter ~~2022~~2023 and ~~11,217,300~~2,805,434 common shares for approximately ~~$404~~$85 million (including transaction fees) during year-to-date 2023 under the 2021 Repurchase Program. During second quarter 2022, we repurchased 3,784,787 common shares for approximately $138 million (including transaction fees) and we repurchased 6,982,462 common shares for approximately $259 million (including transaction fees) during year-to-date 2022 under the 2021 Repurchase Program. ~~During third quarter and year-to-date 2021, we repurchased 780,228 common shares for approximately $26 million (including transaction fees) under the 2019 Repurchase Program.~~ There were ~~64,135 unsettled shares (approximately $2 million) as of September 30, 2022 and~~ no unsettled shares as of June 30, 2023 and 223,548 unsettled shares (approximately $7 million) as of December 31, ~~2021.~~2022. Refer to Note 4: Net Earnings Per Share and Share Repurchases for further information.

PERFORMANCE MEASURES

Adjusted EBITDA by Segment

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


	QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE			QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022			SEPTEMBER 2021			2022 VS. 2021			SEPTEMBER 2022			SEPTEMBER 2021			2022 VS. 2021			JUNE 2023			JUNE 2022			2023 VS. 2022			JUNE 2023			JUNE 2022			2023 VS. 2022
Adjusted EBITDA by Segment:
Timberlands	$	168		$	165		$	3		$	634		$	517		$	117		$	172		$	219		$	(47	)	$	360		$	466		$	(106	)
Real Estate & ENR		60			60			—			283			247			36			70			107			(37	)		159			223			(64	)
Wood Products		395			565			(170	)		2,540			2,840			(300	)		270			912			(642	)		418			2,145			(1,727	)
		623			790			(167	)		3,457			3,604			(147	)		512			1,238			(726	)		937			2,834			(1,897	)
Unallocated Items		(40	)		(44	)		4			(172	)		(184	)		12			(43	)		(33	)		(10	)		(73	)		(132	)		59
Adjusted EBITDA	$	583		$	746		$	(163	)	$	3,285		$	3,420		$	(135	)	$	469		$	1,205		$	(736	)	$	864		$	2,702		$	(1,838	)

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 ~~September~~June 30, ~~2022:~~2023:


DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	230
Interest expense, net of capitalized interest											70
Income taxes											25
Net contribution (charge) to earnings	$	104	$	52	$	218	$	(49	)	$	325
Non-operating pension and other post-employment benefit costs		—		—		—		12			12
Interest income and other		—		—		—		(18	)		(18	)
Operating income (loss)		104		52		218		(55	)		319
Depreciation, depletion and amortization		68		5		52		1			126
Basis of real estate sold		—		13		—		—			13
Special items included in operating income (loss)(1)		—		—		—		11			11
Adjusted EBITDA	$	172	$	70	$	270	$	(43	)	$	469

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate &
ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
310

Interest expense, net of capitalized interest

67

Income taxes

77

Net contribution (charge) to earnings

$
107

$
48

$
344

$
(45
)

$
454

Non-operating pension and other post-employment benefit costs

—

—

—

12

12

Interest income and other

—

—

—

(9
)

(9
)
Operating income (loss)

107

48

344

(42
)

457

Depreciation, depletion and amortization

61

5

51

2

119

Basis of real estate sold

—

7

—

—

7

Adjusted EBITDA

$
168

$
60

$
395

$
(40
)

$
583

(1)

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

The table below reconciles Adjusted EBITDA for the quarter ended ~~September~~June 30, ~~2021:~~2022:

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate &
ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
482

Interest expense, net of capitalized interest

79

Income taxes

84

Net contribution (charge) to earnings

$
133

$
45

$
517

$
(50
)

$
645

Non-operating pension and other post-employment benefit costs

—

—

—

5

5

Interest income and other

—

—

—

(1
)

(1
)
Operating income (loss)

133

45

517

(46
)

649

Depreciation, depletion and amortization

64

4

48

2

118

Basis of real estate sold

—

11

—

—

11

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

(32
)

—

—

—

(32
)
Adjusted EBITDA

$
165

$
60

$
565

$
(44
)

$
746


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

~~(1)~~

~~Operating income (loss) includes a pretax special item consisting of a $32 million gain on the sale of timberlands.~~

The table below reconciles Adjusted EBITDA for the year-to-date period ended ~~September~~June 30, ~~2022:~~2023:


DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	381
Interest expense, net of capitalized interest											136
Income taxes											47
Net contribution (charge) to earnings	$	224	$	105	$	313	$	(78	)	$	564
Non-operating pension and other post-employment benefit costs		—		—		—		21			21
Interest income and other		—		—		—		(30	)		(30	)
Operating income (loss)		224		105		313		(87	)		555
Depreciation, depletion and amortization		136		8		105		3			252
Basis of real estate sold		—		46		—		—			46
Special items included in operating income (loss)(1)		—		—		—		11			11
Adjusted EBITDA	$	360	$	159	$	418	$	(73	)	$	864

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate &
ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
1,869

Interest expense, net of capitalized interest

204

Loss on debt extinguishment⁽¹⁾

276

Income taxes

470

Net contribution (charge) to earnings

$
442

$
194

$
2,389

$
(206
)

$
2,819

Non-operating pension and other post-employment benefit costs

—

—

—

38

38

Interest income and other

—

—

—

(9
)

(9
)
Operating income (loss)

442

194

2,389

(177
)

2,848

Depreciation, depletion and amortization

192

12

151

5

360

Basis of real estate sold

—

77

—

—

77

Adjusted EBITDA

$
634

$
283

$
2,540

$
(172
)

$
3,285

(1)

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

~~(1)~~

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

The table below reconciles Adjusted EBITDA for the year-to-date period ended ~~September~~June 30, ~~2021:~~2022:


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

DOLLAR AMOUNTS IN MILLIONS

Timberlands

Real Estate
& ENR

Wood
Products

Unallocated
Items

Total

Adjusted EBITDA by Segment:

Net earnings

$
2,191

Interest expense, net of capitalized interest

236

Income taxes

597

Net contribution (charge) to earnings

$
354

$
174

$
2,695

$
(199
)

$
3,024

Non-operating pension and other post-employment benefit costs

—

—

—

14

14

Interest income and other

—

—

—

(4
)

(4
)
Operating income (loss)

354

174

2,695

(189
)

3,034

Depreciation, depletion and amortization

195

11

145

5

356

Basis of real estate sold

—

62

—

—

62

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

(32
)

—

—

—

(32
)
Adjusted EBITDA

$
517

$
247

$
2,840

$
(184
)

$
3,420

(1)

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

~~(1)~~

~~Operating income (loss) includes a pretax special item consisting of a $32 million gain on the sale of timberlands.~~

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	SEPTEMBER 2022		SEPTEMBER 2021			SEPTEMBER 2022		SEPTEMBER 2021			JUNE 2023		JUNE 2022		JUNE 2023		JUNE 2022
Net earnings	$	310	$	482		$	1,869	$	2,191		$	230	$	788	$	381	$	1,559
Environmental remediation charge												8		—		8		—
Loss on debt extinguishment		—		—			207		—			—		—		—		207
Gain on sale of timberlands		—		(32	)		—		(32	)
Net earnings before special items	$	310	$	450		$	2,076	$	2,159		$	238	$	788	$	389	$	1,766

Net Earnings per Diluted Share Before Special Items


	QUARTER ENDED					YEAR-TO-DATE ENDED					QUARTER ENDED				YEAR-TO-DATE ENDED
	SEPTEMBER 2022		SEPTEMBER 2021			SEPTEMBER 2022		SEPTEMBER 2021			JUNE 2023		JUNE 2022		JUNE 2023		JUNE 2022
Net earnings per diluted share	$	0.42	$	0.64		$	2.51	$	2.92		$	0.31	$	1.06	$	0.52	$	2.09
Environmental remediation charge												0.01		—		0.01		—
Loss on debt extinguishment		—		—			0.28		—			—		—		—		0.28
Gain on sale of timberlands		—		(0.04	)		—		(0.04	)
Net earnings per diluted share before special items	$	0.42	$	0.60		$	2.79	$	2.88		$	0.32	$	1.06	$	0.53	$	2.37

CRITICAL ACCOUNTING POLICIES

There have been no significant changes during year-to-date ~~2022~~2023 to the critical accounting policies presented in our ~~2021~~2022 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.

●

~~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 ~~September~~June 30, ~~2022~~2023


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

DOLLAR AMOUNTS IN MILLIONS

2022

2023

2024

2025

2026

THEREAFTER

TOTAL⁽¹⁾

FAIR VALUE

Fixed-rate debt

$
—

$
978

$
—

$
210

$
272

$
3,633

$
5,093

$
4,846

Average interest rate

—
%

5.44
%

—
%

8.31
%

7.65
%

5.00
%

5.36
%

N/A

(1)

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

~~(1)~~

~~Excludes $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 ~~September~~June 30, ~~2022,~~2023, 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 ~~2022~~ 2023 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

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

Item 1A. RISK FACTORS

There have been no material changes with respect to the risk factors disclosed in our ~~2021~~2022 Annual Report on Form 10-K.

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

Issuer Purchases of Equity Securities

The following table provides information with respect to purchases of common stock made by the company during ~~third~~second quarter ~~2022:~~2023:

COMMON SHARE REPURCHASES DURING THIRD 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

July 1 – July 31

1,675,436

$
34.83

1,675,436

$
610,116,001

August 1 – August 31

1,346,245

35.54

1,346,245

562,268,165

September 1 – September 30

1,213,157

32.15

1,213,157

523,268,401

Total

4,234,838

$
34.29

4,234,838

$
523,268,401


COMMON SHARE REPURCHASES DURING SECOND QUARTER 2023	TOTAL NUMBER OF SHARES PURCHASED		AVERAGE PRICE PAID PER SHARE		TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PROGRAMS		APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PROGRAMS
April 1 – April 30		283,244	$	30.36		283,244	$	333,205,159
May 1 – May 31		1,406,630		29.44		1,406,630		291,801,000
June 1 – June 30		—		—		—		291,801,000
Total		1,689,874	$	29.59		1,689,874	$	291,801,000

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 ~~third~~second quarter ~~2022,~~2023, we repurchased ~~4,234,838 common~~1,689,874 shares for approximately ~~$145~~$50 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 ~~September~~June 30, ~~2022,~~2023, we had remaining authorization of ~~$523~~$292 million for future stock repurchases.

Item 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangements

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

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

Frequency of Say on Pay

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

Item 6. EXHIBITS



~~10.1~~4.1	Officer’s Certificate dated as of May 17, 2023 executed by Weyerhaeuser Company ~~2023 Deferred Compensation Plan~~as Issuer of 4.750% Senior Notes due 2026 (incorporated by reference to Exhibit ~~10.1~~4.2 to the Current Report on Form 8-K filed on ~~August~~May 17, ~~2022~~2023 – Commission File Number 1-4825)
~~10.2~~	~~Form of Executive Severance Agreement, as in effect August 12, 2022 (incorporated by reference to~~ ~~Exhibit 10.2~~ ~~to the Current Report on Form 8-K filed on August 17, 2022 – Commission File Number 1-4825)~~
~~10.3~~	~~Form of Executive Change of Control Agreement, as in effect August 12, 2022 (incorporated by reference to~~ ~~Exhibit 10.3~~ ~~to the Current Report on Form 8-K filed on August 17, 2022 – Commission File Number 1-4825)~~
~~10.4~~	~~Executive Severance Agreement with the CEO, as in effect August 12, 2022 (incorporated by reference to~~ ~~Exhibit 10.4~~ ~~to the Current Report on Form 8-K filed on August 17, 2022 – Commission File Number 1-4825)~~
~~10.5~~	~~Executive Change of Control Agreement with the CEO, as in effect August 12, 2022 (incorporated by reference to~~ ~~Exhibit 10.5~~ ~~to the Current Report on Form 8-K filed on August 17, 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 ~~September~~June 30, ~~2022,~~2023, has been formatted in Inline XBRL.

~~SIGNATURES~~29

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: ~~October~~July 28, ~~2022~~2023	By:	/s/ David M. Wold
		David M. Wold
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer and Duly Authorized Officer)

2930


DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Long-term fixed rate debt (including current maturities):
Carrying value	$	5,053	$	5,099
Fair value (level 2)	$	4,846	$	6,221

DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 30, 2022		SEPTEMBER 30, 2021		DECEMBER 31, 2021
Cash and cash equivalents	$	1,920	$	2,326	$	1,879
Restricted cash included in other assets⁽¹⁾		—		120		120
Total cash, cash equivalents and restricted cash	$	1,920	$	2,446	$	1,999

DOLLAR AMOUNTS IN MILLIONS	2022			2023			2024			2025			2026			THEREAFTER			TOTAL⁽¹⁾			FAIR VALUE
Fixed-rate debt	$	—		$	978		$	—		$	210		$	272		$	3,633		$	5,093		$	4,846
Average interest rate		—	%		5.44	%		—	%		8.31	%		7.65	%		5.00	%		5.36	%	N/A