grepcent / static financial knowledge base

WEYERHAEUSER CO (WY)

CIK: 0000106535. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-02-13.

SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=106535. Latest filing source: 0001193125-26-051422.

Informational only - descriptive public-record data, not investment advice.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue6,905,000,000USD20252026-02-13
Net income324,000,000USD20252026-02-13
Assets16,613,000,000USD20252026-02-13

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000106535.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric201420152016201720182019202020212022202320242025
Revenue6,365,000,0007,196,000,0007,476,000,0006,554,000,0007,532,000,00010,201,000,00010,184,000,0007,674,000,0007,124,000,0006,905,000,000
Net income1,027,000,000582,000,000748,000,000-76,000,000797,000,0002,607,000,0001,880,000,000839,000,000396,000,000324,000,000
Operating income822,000,0001,131,000,0001,394,000,000651,000,0001,710,000,0003,643,000,0003,080,000,0001,186,000,000685,000,000731,000,000
Gross profit1,385,000,0001,898,000,0001,884,000,0001,142,000,0002,085,000,0004,098,000,0003,620,000,0001,682,000,0001,313,000,0001,025,000,000
Diluted EPS1.390.770.99-0.101.073.472.531.150.540.45
Operating cash flow735,000,0001,201,000,0001,112,000,000966,000,0001,529,000,0003,159,000,0002,832,000,0001,433,000,0001,008,000,000562,000,000
Dividends paid932,000,000941,000,000995,000,0001,013,000,000381,000,000884,000,0001,617,000,0001,216,000,000684,000,000606,000,000
Share buybacks2,003,000,0000.00366,000,00060,000,0000.00100,000,000543,000,000131,000,000154,000,000160,000,000
Assets19,243,000,00018,059,000,00017,249,000,00016,406,000,00016,311,000,00017,652,000,00017,340,000,00016,983,000,00016,536,000,00016,613,000,000
Liabilities10,063,000,0009,160,000,0008,203,000,0008,229,000,0007,580,000,0006,885,000,0006,591,000,0006,747,000,0006,815,000,0007,187,000,000
Stockholders' equity5,304,000,0004,869,000,0009,046,000,0008,177,000,0008,731,000,00010,767,000,00010,749,000,00010,236,000,0009,721,000,0009,426,000,000
Cash and cash equivalents676,000,000824,000,000334,000,000139,000,000495,000,0001,879,000,0001,581,000,0001,164,000,000684,000,000464,000,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric201420152016201720182019202020212022202320242025
Net margin16.14%8.09%10.01%-1.16%10.58%25.56%18.46%10.93%5.56%4.69%
Operating margin12.91%15.72%18.65%9.93%22.70%35.71%30.24%15.45%9.62%10.59%
Return on equity8.27%-0.93%9.13%24.21%17.49%8.20%4.07%3.44%
Return on assets5.34%3.22%4.34%-0.46%4.89%14.77%10.84%4.94%2.39%1.95%
Liabilities / equity0.911.010.870.640.610.660.700.76
Current ratio1.341.470.831.601.693.291.582.941.791.29

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-01. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000106535.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

QuarterEnd DateRevenueNet IncomeDiluted EPSMethod
2022-Q22022-06-301.06reported discrete quarter
2022-Q32022-09-300.42reported discrete quarter
2023-Q12023-03-310.21reported discrete quarter
2023-Q22023-06-301,997,000,000230,000,0000.31reported discrete quarter
2023-Q32023-09-302,022,000,000239,000,0000.33reported discrete quarter
2023-Q42023-12-311,774,000,000219,000,000derived Q4 = FY annual - nine-month YTD
2024-Q12024-03-311,796,000,000114,000,0000.16reported discrete quarter
2024-Q22024-06-301,939,000,000173,000,0000.24reported discrete quarter
2024-Q32024-09-301,681,000,00028,000,0000.04reported discrete quarter
2024-Q42024-12-311,708,000,00081,000,000derived Q4 = FY annual - nine-month YTD
2025-Q12025-03-311,763,000,00083,000,0000.11reported discrete quarter
2025-Q22025-06-301,884,000,00087,000,0000.12reported discrete quarter
2025-Q32025-09-301,717,000,00080,000,0000.11reported discrete quarter
2025-Q42025-12-311,541,000,00074,000,000derived Q4 = FY annual - nine-month YTD
2026-Q12026-03-311,727,000,000156,000,0000.22reported discrete quarter

Quarterly Charts

Macro Cross-References

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-201473.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-01. Report date: 2026-03-31.

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

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This report contains statements concerning our future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, without limitation, statements relating to: our expected future financial and operating performance; our plans, strategies, intentions and expectations; our capital structure and the sufficiency of our liquidity position to meet future cash requirements; our cash dividend framework, including our target percentage return to shareholders of Adjusted Funds Available for Distribution, including expected supplemental cash dividends and/or future share repurchases; future compliance with covenants in our debt agreements; our expectations concerning our contingent liabilities and the sufficiency of related reserves and accruals including, but not limited to, cost estimates of future litigation and environmental remediation; our provision for income taxes; expected capital expenditures; the expected cost, productivity and timing of the completion of a new wood products manufacturing facility; estimated returns on pension plan assets; expected market and general economic conditions, including related influencing factors such as the trajectory of U.S. housing construction activity, repair and remodel activity, inflation trends and interest rates and the potential impacts of U.S. trade policy; our expectations about our future opportunities in emerging carbon credit and carbon capture and storage markets and our 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,” “maintain,” “may,” "plan," “potential,” and “will,” or similar words or terminology. They may use the positive, negative or another variation of those and similar words. These forward-looking statements are based on our current expectations and assumptions and are not guarantees of future events or performance. The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. There is no guarantee that any of the events anticipated by our forward-looking statements will occur. If any of the events occur, there is no guarantee what effect it will have on our operations, cash flows, or financial condition. We undertake no obligation to update our forward-looking statements after the date of this report. The factors listed below, as well as other factors not described herein because they are not currently known to us or we currently judge them to be immaterial, may cause our actual results to differ significantly from our forward-looking statements:

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

●
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;

●
U.S. trade policy and resulting restrictions on international trade and tariffs imposed on imports or exports;

●
the availability and cost of shipping and transportation;

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

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

●
potential disruptions in our manufacturing operations;

●
the level of competition from domestic and foreign producers;

●
the successful execution of our internal plans and strategic initiatives, including restructuring and cost reduction initiatives, as well as our previously announced growth initiatives;

●
our ability to hire and retain capable employees;

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

●
raw material availability and prices;

●
the effect of weather;

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

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

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

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

●
energy and fuel prices;

●
transportation and labor availability and costs;

●
federal tax policies;

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

●
legal proceedings;

●
performance of pension fund investments and related derivatives;

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

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

16

●
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 2025 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 update our forward-looking statements after the date of this report.

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 or income taxes.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

Our market conditions and the strength of the broader U.S. economy are, and will continue to be, influenced by the trajectory of activity in the U.S. housing and repair and remodel segments, inflation trends, employment growth 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, particularly the Western region, is also affected by export demand and trade policy. Japanese housing starts are a key driver of export log demand in Japan. The demand for pulpwood from our Timberlands segment is directly affected by the production of pulp, paper and oriented strand board (OSB), as well as the demand for biofuels, such as wood-burning pellets made from pulpwood. Our Timberlands segment is also influenced by the availability of harvestable timber. In general, Western log markets are highly tensioned by available supply, while Southern log markets have more available supply. However, additional mill capacity being added in the U.S. South has led to tightening of markets in certain geographies. Our Strategic Land Solutions 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 development of opportunities in our Climate Solutions business.

Geopolitical events and ongoing U.S. trade policy changes have resulted in macroeconomic uncertainty and increased cautiousness by consumers. The conflict in the Middle East has had a near-term impact on energy and fuel prices, which has negatively affected businesses and households. Trade and tariff policies, along with potential countermeasures by other countries, affect supply and demand trends, import and export dynamics, and pricing for our products.

The discussion below includes a number of publicly available data points, many of which are obtained from U.S. federal government institutions. Due to the federal government shutdown in February, availability of certain data points is limited to January or February 2026. All other data points are updated through first quarter 2026.

Housing market conditions have been mixed, with lower home sales but relatively steady building activity. Elevated mortgage interest rates, reduced affordability and weaker consumer confidence remain key factors influencing housing demand. While overall housing inventory remains historically low across many markets, inventories of unsold new and existing single-family units have stabilized after increasing through 2025. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for first quarter 2026 averaged 1.4 million units, a 7.2 percent increase from fourth quarter 2025. Single-family starts averaged 957 thousand units in first quarter 2026, a 3.5 percent increase from fourth quarter 2025. Multi-family starts averaged 462 thousand units in first quarter 2026, a 16.0 percent increase from fourth quarter 2025. Single-family construction is a primary driver of our business as compared to multi-family construction due to the amount of wood products used per unit. Sales of newly built single-family homes averaged a seasonally adjusted annual rate of 587 thousand units for January 2026, a 17.2 percent decrease from fourth quarter 2025, as affordability constraints and elevated financing costs continued to weigh on buyer demand despite ongoing builder incentives. Notwithstanding current macroeconomic uncertainty and potential impacts to housing demand, we expect a favorable U.S. housing co

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Confidence: high. Filing date: 2026-02-13. Report date: 2025-12-31.

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

WHAT YOU WILL FIND IN THIS MD&A

Our MD&A includes the following major sections:

economic and market conditions affecting our operations;
financial performance summary;
results of operations;
liquidity and capital resources;
environmental matters, legal proceedings and other contingencies;
accounting matters and
performance and liquidity measures.

For Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) related to the year ended December 31, 2023, refer to this same section in our 2024 annual report on Form 10-K as filed with the Securities and Exchange Commission on February 14, 2025.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

Our market conditions and the strength of the broader U.S. economy are, and will continue to be, influenced by the trajectory of activity in the U.S. housing and repair and remodel segments, inflation trends and interest rates. The demand for sawlogs within our Timberlands segment is directly affected by domestic production of wood-based building products. The strength of the U.S. housing market, particularly new residential construction, strongly affects demand in our Wood Products segment, as does repair and remodeling activity. Seasonal weather patterns impact the level of construction activity in the U.S., which in turn affects demand for our logs and wood products. Our Timberlands segment, particularly the Western region, is also affected by export demand and trade policy. Japanese housing starts are a key driver of export log demand in Japan. The demand for pulpwood from our Timberlands segment is directly affected by the production of pulp, paper and oriented strand board (OSB), as well as the demand for biofuels, such as wood-burning pellets made from pulpwood. Our Timberlands segment is also influenced by the availability of harvestable timber. In general, Western log markets are highly tensioned by available supply, while Southern log markets have

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 44

Table of Contents

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.

Ongoing U.S. trade policy changes have resulted in macroeconomic uncertainty and increased cautiousness by consumers. These policies, along with potential countermeasures by other countries, have the potential to affect supply and demand trends, import and export dynamics, and pricing for our products. Trade and tariff policies are generally separate from the annual establishment and collection of anti-dumping and countervailing duties (AD/CVD) placed on certain products and countries, such as for Canadian softwood lumber.

The discussion below includes a number of publicly available data points, many of which are obtained from U.S. federal government institutions. Due to the federal government shutdown that ended in November, availability of these data points is limited to October or November 2025. All other data points are updated through fourth quarter 2025.

Home sales and building activity continue to moderate in response to elevated mortgage interest rates, reduced affordability and lower consumer confidence. While overall housing inventory remains historically low across many markets, there has been some increase in unsold new and existing single-family units. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for October 2025 averaged 1.2 million units, a 7.0 percent decrease from third quarter 2025. Single-family starts averaged 874 thousand units in October 2025, a 1.0 percent decrease from third quarter 2025. Multi-family starts averaged 372 thousand units in October 2025, an 18.4 percent decrease from third quarter 2025. Single-family construction is the primary driver for our business as compared to multi-family due to the amount of wood products used. Sales of newly built single-family homes averaged a seasonally adjusted annual rate of 737 thousand units for October 2025, a 5.9 percent increase from third quarter 2025, driven by builder incentives and moderate relief in mortgage rates. Notwithstanding current macroeconomic uncertainty and potential impacts to housing demand, we expect a favorable U.S. housing construction market over the medium to long-term, supported by strong demographics in the key home buying age cohorts and a decade of under building.

Repair and remodeling expenditures decreased 0.6 percent from third quarter 2025 to the end of November 2025, according to the Census Bureau Advance Retail Spending report. While there continues to be steady demand due to growing home equity and the lock-in effect of lower mortgage rates compared to current rates, many homeowners have been more cautious in discretionary spending on large projects. Recent softness has been reflected in both the do-it-yourself (DIY) and professionally built segments, largely driven by subdued consumer confidence, elevated interest rates and concerns around the trajectory of the economy. Slower sales of existing homes have also contributed to muted activity as there is often an increase in upgrades and repairs before and after the sale of a home. Over the longer term, we expect this sector to return to historical growth trends driven by recent deferrals in repair and remodel spending, higher levels of home equity and an aging U.S. housing stock, with a median age of 46 years.

In U.S. wood product markets, soft end use demand and steady supply have led to continued price weakness in commodity products. In fourth quarter 2025, the Random Lengths Framing Lumber Composite price averaged $378/MBF and the OSB Composite averaged $234/MSF, both near multi-decade lows on an inflation-adjusted basis. Over the course of fourth quarter 2025, composite prices for lumber increased from $367/MBF to $385/MBF and composite prices for OSB decreased from $237/MSF to $230/MSF. The Framing Lumber Composite began the fourth quarter on a slight upward trajectory supported by improving Western SPF pricing and broader concerns around the Section 232 tariff, which took effect in October. As the quarter progressed, ample product supply and seasonally softer demand led to lower composite pricing through early December. By quarter end, product supply decreased and demand improved as buyers replenished lean inventories. This drove price gains across North American lumber markets, with a notable increase in Southern Yellow Pine. For OSB, soft product pricing in fourth quarter 2025 was largely driven by lower demand in response to the seasonal reduction in new home construction activity. In September 2025, Weyerhaeuser elected to moderate production across its lumber mill set in response to the softer demand environment, and maintained a lower operating posture through year end 2025. When combined with the volume impact associated with the sale of the company’s sawmill in Princeton, British Columbia – which was sold in late third quarter 2025 – Weyerhaeuser’s lumber production volumes decreased by 14 percent in fourth quarter 2025 compared to the prior quarter. The company expects to return to a more normalized operating posture in first quarter 2026.

In Western log markets, Douglas-fir sawlog prices decreased 5.6 percent in fourth quarter 2025 compared with third quarter 2025, as reported by Fastmarkets RISI Log Lines based on Weyerhaeuser’s sales mix. Log prices in the domestic market faced downward pressure as supply remained ample, and mills continued to carry elevated log inventories and navigate a challenging lumber market. In the South, delivered sawlog prices decreased 2.3 percent in fourth quarter 2025 compared to third quarter 2025 and declined 2.3 percent from fourth quarter 2024, as reported by TimberMart-South. Delivered pine pulpwood prices decreased 2.1 percent in fourth quarter 2025 compared to third quarter 2025 and declined 4.7 percent from fourth quarter 2024 as reported by TimberMart-South. In general, Southern log supply remains ample and wood product and fiber mills continue to align production with end-market demand. Pulpwood prices have been more challenged in several localized regions following recent mill closures.

Currency exchange rates, available supply from other countries and trade policy affect our export businesses. In Japan, total housing starts decreased 7.4 percent year-to-date through December compared to the same period in 2024, while the key Post and Beam segment saw a 4.0 percent decrease, in part due to more stringent building permit requirements which went into effect on April 1, 2025. The slowing demand has been partially offset by a decrease in lumber imports to Japan from Europe and reduced inventories of European lumber in the Japanese market. In China, during fourth quarter 2025 regulators lifted the March 4, 2025 suspension of log imports from the U.S. As a result, Weyerhaeuser is in the early stages of re-establishing its log export program to strategic customers in China.

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 generally correlated with long-term interest rates, decreased from 6.3 percent in third quarter 2025 to 6.2 percent in fourth quarter 2025, according to economic data from Freddie Mac. Many builders have been able to offset higher mortgage rates through discounts, mortgage rate buydowns and modifying product offerings such as home sizes and finishes. Higher rates have also locked in many existing homeowners from selling, thereby reducing inventories of existing homes for sale which has led to incremental demand for available new homes.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 45

Table of Contents

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 at an annual rate of 2.7 percent as of December 2025 compared to 3.0 percent as of September 2025. This rate is markedly down from prior periods of elevated inflation. While we can offset some of our costs that are affected by inflation through our sales activities, operational excellence initiatives and procurement practices, not all costs associated with inflation can be fully mitigated or passed on to the customer.

The condition of the labor market affects all of our businesses as it relates to our ability to attract and retain employees and contractors. The unemployment rate remained level at 4.4 percent in third quarter 2025 and fourth quarter 2025.

Governments and businesses across the globe have publicly expressed that climate change is a compelling issue requiring considerable responsive action; many have made significant commitments toward decarbonizing activities and operations and reducing greenhouse gas emissions. Achieving these commitments will require significant efforts, including modifying operations, investing in low-carbon technologies or purchasing credits to reduce environmental impacts. Although political and broader sentiment for climate change mitigation activities and related investments can fluctuate, we expect that over the long-term, climate change will continue to be a significant social concern and priority. With that in mind, we believe we are uniquely positioned to help others achieve climate change mitigation goals through our Climate Solutions business.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 46

Table of Contents

FINANCIAL PERFORMANCE SUMMARY

Net Sales by Segment

Contribution to Earnings by Segment

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 47

Table of Contents

RESULTS OF OPERATIONS

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

Sales realizations refer to net selling prices — this includes selling price plus freight minus normal sales deductions.
Net contribution (charge) to earnings refers to earnings (loss) before interest expense and income taxes.

CONSOLIDATED RESULTS

HOW WE DID

Summary of Financial Results

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
AMOUNT OF CHANGE
2025
vs.
202520242024
Net sales$6,905$7,124$(219)
Costs of sales$5,880$5,811$69
Operating income$731$685$46
Net earnings$324$396$(72)
Basic and diluted earnings per share$0.45$0.54$(0.09)

COMPARING 2025 WITH 2024

Net Sales

Net sales decreased $219 million — 3 percent — primarily due to a $264 million decrease in Wood Products net sales attributable to decreased sales realizations across most product lines, as well as an $18 million decrease in Timberlands net sales to unaffiliated customers attributable to decreased log sales realizations and volumes in the Western region. These decreases were partially offset by a $63 million increase in Real Estate, Energy and Natural Resources net sales attributable to an increase in average price per acre sold.

Costs of Sales

Costs of sales increased $69 million — 1 percent — primarily due to increased sales volumes for structural lumber, oriented strand board and softwood plywood within our Wood Products segment, partially offset by a decrease in acres sold in our Real Estate, Energy and Natural Resources segment and decreased Western sales volumes in our Timberlands segment.

Operating Income

Operating income increased $46 million — 7 percent — primarily due to:

a $266 million increase in gain on sale of timberlands (refer to: Note 4: Timberland Acquisitions and Divestitures);
a $43 million increase in insurance recoveries;
a $29 million gain on the sale of our Princeton lumber mill in third quarter 2025;
a $27 million decrease in general and administrative expenses and
a $10 million decrease in noncash impairment charges.

These changes were partially offset by:

a $288 million decrease in consolidated gross margin (see discussion of components above);
a $25 million decrease in product remediation recoveries received and
an $18 million noncash environmental remediation charge recorded in fourth quarter 2025.

Refer to the breakout of these items in Note 17: Other Operating Costs, Net.

Net Earnings

Net earnings decreased $72 million — 18 percent — primarily due to a $178 million increase in non-operating and other post-employment benefit costs, primarily attributable to a $145 million noncash pension settlement charge (refer to: Note 8: Pension and Other Post-Employment Benefit Plans), as well as a $31 million decrease in interest income and other. These changes were partially offset by a $95 million decrease in tax expense (refer to Income Taxes) and the $46 million increase in operating income discussed above.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 48

Table of Contents

TIMBERLANDS

HOW WE DID

We report sales volumes and fee harvest volumes for our Timberlands segment in Our Business/What We Do/Timberlands.

Net Sales and Net Contribution to Earnings for Timberlands

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2025
vs.
202520242024
Net sales to unaffiliated customers:
Delivered logs:
West$645$693$(48)
South61360310
North50464
Total1,3081,342(34)
Stumpage and pay-as-cut timber60519
Recreational and other lease revenue79772
Other products(1)47425
Subtotal net sales to unaffiliated customers1,4941,512(18)
Intersegment net sales59255438
Total segment net sales$2,086$2,066$20
Costs of sales$1,664$1,686$(22)
Operating income$586$279$307
Interest income and other—1(1)
Net contribution to earnings$586$280$306

(1)
Other products include sales of seeds and seedlings from our nursery operations and wood chips.

COMPARING 2025 WITH 2024

Net Sales — Unaffiliated Customers

Net sales to unaffiliated customers decreased $18 million — 1 percent — primarily due to a $48 million decrease in Western log sales attributable to a 4 percent decrease in sales volumes and a 3 percent decrease in sales realizations. This decrease was partially offset by a $10 million increase in Southern log sales attributable to a 1 percent increase in sales volumes, as well as a $9 million increase in stumpage and pay-as-cut timber sales attributable to increased sales realizations and sales volumes.

Intersegment Sales

Intersegment sales increased $38 million — 7 percent — primarily due to a 3 percent increase in sales realizations, as well as a 3 percent increase in sales volumes.

Costs of Sales

Costs of sales decreased $22 million — 1 percent — primarily due to decreased Western sales volumes, partially offset by increased Southern sales volumes.

Net Contribution to Earnings

Net contribution to earnings increased $306 million — 109 percent — primarily due to a $266 million increase in gain on sale of timberlands (refer to Note 4: Timberland Acquisitions and Divestitures), as well as the change in the components of gross margin, as discussed above.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 49

Table of Contents

REAL ESTATE, ENERGY AND NATURAL RESOURCES

HOW WE DID

We report acres sold and average price per acre for our Real Estate, Energy and Natural Resources (Real Estate & ENR) segment in Our Business/What We Do/Real Estate, Energy and Natural Resources.

Net Sales and Net Contribution to Earnings for Real Estate, Energy and Natural Resources

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2025
vs.
202520242024
Net sales to unaffiliated buyers:
Real estate$330$280$50
Energy and natural resources12411113
Total segment net sales$454$391$63
Costs of sales$117$152$(35)
Operating income and Net contribution to earnings$315$216$99

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 expectations of future price appreciation, the timing of harvesting activities and the availability of government and not-for-profit funding. In any period, the average price per acre will vary based on the location and physical characteristics of parcels sold.

COMPARING 2025 WITH 2024

Net Sales

Net sales increased $63 million — 16 percent — primarily due to an increase in average price per acre sold and an increase in right-of-way easements and royalty income from our Energy and Natural Resources business, partially offset by a decrease in acres sold.

Costs of Sales

Costs of sales decreased $35 million — 23 percent — primarily due to a decrease in acres sold.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings increased $99 million — 46 percent — primarily due to the change in the components of gross margin, as discussed above.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 50

Table of Contents

WOOD PRODUCTS

HOW WE DID

We report sales volumes and annual production data for our Wood Products segment in Our Business/What We Do/Wood Products.

Net Sales and Net Contribution to Earnings for Wood Products

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2025
vs.
202520242024
Net sales:
Structural lumber$2,037$1,906$131
Oriented strand board762979(217)
Engineered solid section649708(59)
Engineered I-joists343390(47)
Softwood plywood155158(3)
Medium density fiberboard135159(24)
Complementary building products565615(50)
Other products produced (1)3113065
Total segment net sales$4,957$5,221$(264)
Costs of sales$4,674$4,516$158
Operating income and Net contribution to earnings$55$457$(402)

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

COMPARING 2025 WITH 2024

Net Sales

Net sales decreased $264 million — 5 percent — primarily due to:

a $217 million decrease in oriented strand board sales attributable to a 25 percent decrease in sales realizations, partially offset by a 4 percent increase in sales volumes;
a $59 million decrease in engineered solid section sales attributable to a 7 percent decrease in sales realizations and a 1 percent decrease in sales volumes;
a $50 million decrease in complementary building products sales attributable to a decrease in sales volumes across most products;
a $47 million decrease in engineered I-joist sales attributable to a 7 percent decrease in sales realizations and a 5 percent decrease in sales volumes;
a $24 million decrease in medium density fiberboard sales attributable to a 14 percent decrease in sales volumes and a 1 percent decrease in sales realizations and
a $3 million decrease in softwood plywood sales attributable to a 7 percent decrease in sales realizations, partially offset by a 5 percent increase in sales volumes.

These decreases were partially offset by a $131 million increase in structural lumber sales attributable to a 5 percent increase in sales volumes and a 1 percent increase in sales realizations, as well as a $5 million increase in other products produced sales attributable to an increase in wood chip sales volumes.

Costs of Sales

Costs of sales increased $158 million — 3 percent — primarily due to increased sales volumes for structural lumber, oriented strand board and softwood plywood.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings decreased $402 million — 88 percent — primarily due to the change in the components of gross margin, as discussed above, as well as a $25 million product remediation recovery recorded in second quarter 2024. These changes were partially offset by a $10 million noncash impairment charge related to the indefinite curtailment of our New Bern lumber mill recorded in third quarter 2024 and a $29 million gain related to the sale of our Princeton lumber mill recorded in third quarter 2025 (refer to the breakout of these items in Note 17: Other Operating Costs, Net).

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 51

Table of Contents

UNALLOCATED ITEMS

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 — the last-in, first-out method,
foreign exchange transaction gains and losses resulting from changes in exchange rates primarily related to our U.S. dollar denominated cash and debt balances that are held by our Canadian subsidiary, as well as
interest income and other.

Net Charge to Earnings for Unallocated Items

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2025
vs.
202520242024
Unallocated corporate function and variable compensation expense$(166)$(154)$(12)
Liability classified share-based compensation12(1)
Foreign exchange gain11—
Elimination of intersegment profit in inventory and LIFO1147
Other, net(72)(120)48
Operating loss(225)(267)42
Non-operating pension and other post-employment benefit costs(220)(42)(178)
Interest income and other2252(30)
Net charge to earnings$(423)$(257)$(166)

Net charge to earnings increased by $166 million — 65 percent — primarily due to:

a $178 million increase in non-operating pension and other post-employment benefit costs, primarily attributable to a $145 million pension settlement charge (refer to Note 8: Pension and Other Post-Employment Benefit Plans);
a $30 million decrease in interest income and other, primarily attributable to a decrease in cash and cash equivalents and
a $12 million increase in unallocated corporate function and variable compensation expense.

These changes were partially offset by a $48 million decrease in other, net, primarily attributable to a $30 million increase in insurance recoveries, as well as a $7 million increase in the benefit from elimination of intersegment profit in inventory and LIFO.

INTEREST EXPENSE

Our net interest expense incurred for the last two years was:

$273 million in 2025 and
$269 million in 2024.

Interest expense increased by $4 million compared to 2024 primarily due to $3 million of debt extinguishment costs incurred in conjunction with the partial redemption of our $750 million 4.75 percent senior unsecured notes due in May 2026, as well as a series of debt issuances and retirements in 2025 that increased our outstanding debt, partially offset by a decrease in our weighted average interest rate.

Refer to Note 11: Long-Term Debt, Net for further information.

INCOME TAXES

As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. Historical distributions to shareholders, including amounts and tax characteristics, are summarized in the table below.

AMOUNTS PER SHARE
20252024
Common - capital gain distribution$0.84$0.94

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 52

Table of Contents

We are required to pay corporate income taxes on earnings of our TRSs, which include our Wood Products segment and portions of our Timberlands and Real Estate & ENR segments' earnings. Our provision for income taxes is primarily driven by earnings generated by our TRSs.

Our provision for income taxes the last two years was:

$64 million benefit in 2025 and
$31 million expense in 2024.

Income tax expense decreased by $95 million compared to 2024, resulting in a net benefit position, primarily due to a significant decrease in our TRS earnings in 2025 and the effect of a $34 million tax benefit related to the noncash pretax settlement charge recorded in connection with our U.S. pension plan, as well as a decrease in our effective tax rate.

Refer to Note 8: Pension and Other Post-Employment Benefit Plans and Note 18: Income Taxes for further information.

LIQUIDITY AND CAPITAL RESOURCES

We are committed to maintaining an appropriate capital structure that provides financial flexibility and enables us to protect the interests of our shareholders and meet our obligations to our lenders, while also maintaining access to all major financial markets. As of December 31, 2025, we had $464 million in cash and cash equivalents, $1.75 billion of availability on our line of credit, which expires in June 2030, and $1.75 billion of availability on our commercial paper program. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

$562 million in 2025 and
$1,008 million in 2024.

COMPARING 2025 WITH 2024

Net cash from operations decreased by $446 million, primarily due to decreased cash inflows from our business operations, as well as a $201 million increase in pension and post-employment benefit contributions and payments, as discussed below. Refer to Note 8: Pension and Other Post-Employment Benefit Plans for further information.

Pension Contributions and Benefit Payments Made and Expected

During 2025, we contributed a total of $219 million to our pension and post-employment benefit plans, including a $200 million voluntary contribution to our U.S. qualified pension plan, compared to a total of $18 million during 2024.

For 2026, we expect to contribute approximately $20 million to our pension and post-employment benefit plans. Refer to Note 8: Pension and Other Post-Employment Benefit Plans for further information.

INVESTING IN OUR BUSINESS

Cash from investing activities includes items such as:

capital expenditures for property, equipment and reforestation,
acquisitions and divestitures of timberlands,
proceeds from sales of assets and operations and
purchases and maturities of short-term investments.

Consolidated net cash from investing activities was:

$(475) million in 2025 and
$(636) million in 2024.

COMPARING 2025 WITH 2024

Net cash from investing activities increased by $161 million, primarily due to a $405 million increase in proceeds from the sale of timberlands and a $61 million increase in proceeds from the sale of our Princeton lumber mill, partially offset by a $218 million increase in cash spent on the acquisition of timberlands and a $59 million increase in capital expenditures for property and equipment.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 53

Table of Contents

Summary of Capital Spending by Business Segment

DOLLAR AMOUNTS IN MILLIONS
20252024
Timberlands$120$105
Wood Products353294
Unallocated Items117
Total$474$416

During fourth quarter 2024, we announced our plan to invest approximately $500 million to build a new TimberStrand® facility in Monticello, Arkansas. This capital outlay may be sourced from cash on hand or through future financing, as deemed appropriate. Construction began in 2025, with the goal of starting operations in 2027. Once completed, the new facility will increase our engineered wood products capacity by approximately 10 million cubic feet. In 2025, we had $109 million in capital expenditures related to the construction of this facility.

We expect our capital expenditures for 2026 to be approximately $400-$450 million, excluding approximately $300 million of investment in our Monticello engineered wood products facility. We exclude this investment for purposes of calculating our annual Adjusted Funds Available for Distribution (Adjusted FAD), as used in our flexible cash return framework. The amount we spend on capital expenditures could change due to:

future economic conditions,
environmental regulations,
changes in the composition of our business,
weather,
timing of equipment purchases and
capital needs related to other business opportunities.

FINANCING

Cash from financing activities includes items such as:

issuances and payments of debt and
payments for cash dividends and repurchasing stock.

Consolidated net cash from financing activities was:

$(290) million in 2025 and
$(852) million in 2024.

COMPARING 2025 WITH 2024

Net cash from financing activities increased by $562 million, primarily due to a $1,199 million increase in net proceeds from issuance of long-term debt and a $78 million decrease in cash paid for dividends, partially offset by a $712 million increase in payments on long-term debt.

LONG-TERM DEBT

Our consolidated long-term debt (including current portion) was:

$5,572 million as of December 31, 2025 and
$5,076 million as of December 31, 2024.

The $496 million increase in our long-term debt during 2025 is primarily attributable to:

the August 2025 issuance of an $800 million senior unsecured term loan;
the March 2025 issuance of a $300 million senior unsecured term loan and
the November 2025 loan of $102 million related to resource recovery revenue bonds.

These issuances were partially offset by:

the August 2025 partial repayment of approximately $500 million of our $750 million 4.75 percent senior unsecured notes;
the January 2025 repayment of our $139 million 8.50 percent debentures and
the March 2025 repayment of our $71 million 7.95 percent debentures.

The weighted average interest rate and the weighted average maturity on our long-term debt as of December 31, 2025 were 5.11 percent and 6.5 years, respectively.

See Note 11: Long-Term Debt, Net for more information.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 54

Table of Contents

LINE OF CREDIT

In June 2025, we amended and restated our senior unsecured revolving credit facility to extend the expiration date to June 2030, while increasing borrowing capacity from $1.5 billion to $1.75 billion. Borrowings will bear interest at a floating rate based on either the adjusted term Secured Overnight Financing Rate (SOFR) plus a spread or a mutually agreed-upon base rate plus a spread. As of December 31, 2025 and 2024, we had no outstanding borrowings on the revolving credit facility.

Refer to Note 10: Line of Credit and Commercial Paper Program for further information.

COMMERCIAL PAPER PROGRAM

In November 2025, we established a commercial paper program under which we may issue short-term, unsecured commercial paper notes pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Under this program, we may issue notes from time to time in an aggregate amount not to exceed $1.75 billion outstanding at any time. The notes will have maturities of up to 397 days from the date of issue and will not be subject to voluntary prepayment or redemption prior to maturity. We use our revolving credit facility as a liquidity backstop for the repayment of short-term unsecured notes issued under the commercial paper program. There were no notes outstanding under this program as of December 31, 2025.

Refer to Note 10: Line of Credit and Commercial Paper Program for further information.

OUR COVENANTS

Our key covenants include the requirement to maintain:

a minimum total adjusted shareholders' equity of $3.0 billion and
a defined debt-to-total-capital ratio of 65 percent or less.

Our total adjusted shareholders' equity is comprised of:

total shareholders’ equity,
excluding accumulated other comprehensive loss,
minus our investment in our unrestricted subsidiaries.

Our capitalization is comprised of:

total debt,
plus total adjusted shareholders' equity.

As of December 31, 2025, we had:

total adjusted shareholders' equity of $9.7 billion and
a defined debt-to-total-capital ratio of 36.4 percent.

When calculating compliance in accordance with financial debt covenants as of December 31, 2025 and December 31, 2024, we excluded the full amount of accumulated other comprehensive loss of $293 million and $402 million, respectively. See Note 14: Shareholders’ Interest for further information on accumulated other comprehensive loss.

There are no other significant financial debt covenants related to our third-party debt.

INTEREST RATE SWAP HEDGING RELATIONSHIP

During third quarter 2025, we entered into interest rate swaps with the risk management objective of managing exposure to interest rate volatility by converting variable rate debt obligations associated with our new $800 million term loan into fixed rate payments. The interest rate swaps provide the right to make fixed rate payments to the counterparty in exchange for variable, SOFR-based payments on a monthly settlement schedule. As of December 31, 2025, our interest rate swap agreements with an aggregate notional amount of $800 million were designated as cash flow hedging instruments of variable, SOFR-based interest payments on our $800 million term loan. No comparable activity was present for the year ended December 31, 2024.

Refer to Note 12: Fair Value of Financial Instruments for further information.

CREDIT RATINGS

As of December 31, 2025, our long-term issuer credit rating was BBB and Baa2 from S&P and Moody’s, respectively.

DIVIDENDS

We paid cash dividends on common shares of:

$606 million in 2025 and
$684 million in 2024.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 55

Table of Contents

The decrease in dividends paid is primarily due to a supplemental dividend of $0.14 per share based on 2023 financial results for a total of $102 million paid in first quarter 2024.

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

SHARE REPURCHASES

During second quarter 2025, we completed the $1 billion purchase authorization under the share repurchase program approved by the board in

September 2021 (the 2021 Repurchase Program). On May 8, 2025, we announced the board approved a new share repurchase program (the 2025 Repurchase Program) under which we are authorized to repurchase up to $1 billion of outstanding shares. Concurrently, the board terminated the completed purchase authorization under the 2021 Repurchase Program.

We repurchased 6.1 million common shares for approximately $160 million (including transaction fees) during the year ended December 31, 2025. We repurchased 4.9 million common shares for approximately $153 million (including transaction fees) in 2024. As of December 31, 2025, we had remaining authorization of $938 million for future share repurchases. For further information on share repurchases see Note 14: Shareholders’ Interest.

OUR CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

More details about our contractual obligations and commercial commitments are in Note 8: Pension and Other Post-Employment Benefit Plans, Note 10: Line of Credit and Commercial Paper Program, Note 11: Long-Term Debt, Net, Note 12: Fair Value of Financial Instruments, Note 13: Legal Proceedings, Commitments and Contingencies, Note 16: Leases and Note 18: Income Taxes.

Significant Contractual Obligations as of December 31, 2025

Significant contractual obligations as of December 31, 2025 include our long-term debt obligations and lease obligations. Refer to Note 11: Long-Term Debt, Net, Note 12: Fair Value of Financial Instruments and Note 16: Leases for further information. Additional significant contractual obligations are included below.

DOLLAR AMOUNTS IN MILLIONS
PAYMENTS DUE BY PERIOD
LESS THAN1–33–5MORE THAN
TOTAL1 YEARYEARSYEARS5 YEARS
Interest(1)$1,751$274$474$309$694
Purchase obligations(2)$346$166$132$15$33
Employee-related obligations(3)$263$125$19$17$34

(1)
Amounts presented for interest payments assume that all long-term debt obligations outstanding as of December 31, 2025 will remain outstanding until maturity. Interest payments related to our $800 million term loan due in 2028 are treated as fixed due to the impact of the related interest rate swap.

(2)
Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions and the approximate timing of the transaction. Purchase obligations exclude arrangements that the company can cancel without penalty.

(3)
The timing of certain payments within this category will be triggered by retirements or other events. These payments can include workers compensation, deferred compensation and banked vacation, among other obligations. When the timing of payment is uncertain, the amounts are included in the total column only. Minimum pension funding is required by established funding standards and estimates are not made for 2027 onward. Estimated payments of contractually obligated post-employment benefits are not included due to the uncertainty of payment timing.

OFF-BALANCE SHEET ARRANGEMENTS

Off-balance sheet arrangements have not had — and are not reasonably likely to have — a material effect on our current or future financial condition, results of operations or cash flows. Note 10: Line of Credit and Commercial Paper Program contains our disclosures of surety bonds and letters of credit.

ENVIRONMENTAL MATTERS, LEGAL PROCEEDINGS AND OTHER CONTINGENCIES

See Note 13: Legal Proceedings, Commitments and Contingencies.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 56

Table of Contents

ACCOUNTING MATTERS

CRITICAL ACCOUNTING ESTIMATES

In the preparation of our financial statements we follow established accounting policies and make estimates that affect both the amounts and timing of the recording of assets, liabilities, revenues and expenses. We base our judgments and estimates on historical experience and assumptions we believe are appropriate and reasonable under current circumstances. Actual results, however, could differ materially from the estimated amounts we have recorded. Some of these estimates require judgments about matters that are inherently uncertain. Accounting policies whose application involve a significant level of estimation uncertainty and may have a material effect on our results of operations or financial condition are considered critical accounting estimates.

DISCOUNT RATES FOR PENSION AND POST-EMPLOYMENT BENEFIT PLANS

Discount rates are used to estimate the net present value of our pension and other post-employment plan obligations. These rates are determined at the measurement date by matching current spot rates of high-quality corporate bonds with maturities similar to the timing of expected cash outflows for benefits. The selection of discount rates requires judgment as well as the involvement of actuarial specialists. These specialists assist with selecting yield curves based on published indices for high-quality corporate bonds and projecting the timing and amount of cash flows associated with our obligations to ultimately support our determination of an appropriate discount rate for each plan.

Our discount rates as of December 31, 2025 are:

5.3 percent for our U.S. pension plans — compared with 5.7 percent at December 31, 2024;
5.0 percent for our U.S. post-employment benefit plans — compared with 5.5 percent at December 31, 2024;
4.9 percent for our Canadian pension plans — compared with 4.7 percent at December 31, 2024 and
4.6 percent for our Canadian post-employment benefit plans — compared with 4.5 percent at December 31, 2024.

Pension expenses for 2026 will be based on the 5.3 percent and 4.9 percent assumed discount rates for the U.S. pension plans and the Canadian pension plans, respectively, and the 5.0 percent and 4.6 percent assumed discount rates for the U.S. and Canadian post-employment benefit plans, respectively.

Our discount rates are important in determining the cost of our plans. A 50 basis point decrease in our discount rate would increase expense or reduce a credit by approximately:

$8 million for our U.S. qualified pension plans and
$2 million for our Canadian registered pension plans.

Details about our other significant accounting policies are in Note 1: Summary of Significant Accounting Policies.

PROSPECTIVE ACCOUNTING PRONOUNCEMENTS

A summary of prospective accounting pronouncements is in Note 1: Summary of Significant Accounting Policies.

PERFORMANCE AND LIQUIDITY MEASURES

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 our 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.

Adjusted EBITDA by Segment

DOLLAR AMOUNTS IN MILLIONS
20252024
Timberlands$581$539
Real Estate & ENR411349
Wood Products250661
Unallocated Items(221)(257)
Total$1,021$1,292

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 57

Table of Contents

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 by segment to net earnings for the year ended December 31, 2025:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$324
Interest expense, net of capitalized interest273
Income taxes(64)
Net contribution (charge) to earnings$586$315$55$(423)$533
Non-operating pension and other post-employment benefit costs(1)———220220
Interest income and other———(22)(22)
Operating income (loss)58631555(225)731
Depreciation, depletion and amortization2611222412509
Basis of real estate sold—84——84
Special items included in operating income (loss)(2)(3)(4)(266)—(29)(8)(303)
Adjusted EBITDA$581$411$250$(221)$1,021

(1)
Non-operating pension and other post-employment benefit costs includes a pretax special item consisting of a $145 million noncash settlement charge related to the transfer of pension plan assets and liabilities to an insurance company through the purchase of a

group annuity contract.

(2)
Operating income (loss) for Timberlands includes pretax special items consisting of a $117 million gain on the sale of Georgia and Alabama timberlands and a $149 million gain on the sale of Oregon timberlands.

(3)
Operating income (loss) for Wood Products includes a pretax special item consisting of a $29 million gain on the sale of our Princeton lumber mill.

(4)
Operating income (loss) for Unallocated Items includes pretax special items consisting of an $18 million noncash environmental remediation charge and a $26 million insurance recovery.

The table below reconciles Adjusted EBITDA by segment to net earnings for the year ended December 31, 2024:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$396
Interest expense, net of capitalized interest269
Income taxes31
Net contribution (charge) to earnings$280$216$457$(257)$696
Non-operating pension and other post-employment benefit costs———4242
Interest income and other(1)——(52)(53)
Operating income (loss)279216457(267)685
Depreciation, depletion and amortization2601321910502
Basis of real estate sold—120——120
Special items included in operating income (loss)(1)——(15)—(15)
Adjusted EBITDA$539$349$661$(257)$1,292

(1)
Operating income (loss) for Wood Products includes pretax special items consisting of a $25 million product remediation recovery and a $10 million noncash impairment charge related to the indefinite curtailment of our New Bern lumber mill.

Net Earnings and Net Earnings per Diluted Share Before Special Items (Income Tax Affected)

We reconcile net earnings before special items to net earnings and net earnings per diluted share before special items to net earnings per diluted share, as those are the most directly comparable U.S. GAAP measures. 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.

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 58

Table of Contents

The table below reconciles net earnings before special items to net earnings:

DOLLAR AMOUNTS IN MILLIONS
20252024
Net earnings$324$396
Environmental remediation charge14—
Gain on sale of lumber mill(21)—
Gain on sale of timberlands(266)—
Insurance recovery(19)—
Pension settlement charge111—
Product remediation recovery—(19)
Restructuring, impairments and other charges—7
Net earnings before special items$143$384

The table below reconciles net earnings per diluted share before special items to net earnings per diluted share:

AMOUNTS PER SHARE
20252024
Net earnings per diluted share$0.45$0.54
Environmental remediation charge0.02—
Gain on sale of lumber mill(0.03)—
Gain on sale of timberlands(0.36)—
Insurance recovery(0.03)—
Pension settlement charge0.15—
Product remediation recovery—(0.02)
Restructuring, impairments and other charges—0.01
Net earnings per diluted share before special items$0.20$0.53

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 59

Table of Contents

Adjusted FAD

We use Adjusted Funds Available for Distribution (Adjusted FAD) to evaluate the company’s liquidity and measure cash generated during the period (net of capital expenditures and significant nonrecurring items) that is available for dividends, repurchases of common shares, debt reduction, acquisitions, and other discretionary and nondiscretionary capital allocation activities. Adjusted FAD should not be considered in isolation from, and is not intended to represent an alternative to, results reported in accordance with U.S. GAAP. However, we believe the measure provides meaningful supplemental information for our investors about our liquidity. Adjusted FAD, as we define it, is net cash from operations adjusted for capital expenditures and significant non-recurring items. Our definition of Adjusted FAD may be different from similarly titled measures reported by other companies, including those in our industry. We reconcile Adjusted FAD to net cash from operations, as that is the most directly comparable U.S. GAAP measure.

The table below reconciles Adjusted FAD to net cash from operations:

DOLLAR AMOUNTS IN MILLIONS
20252024
Net cash from operations$562$1,008
Capital expenditures(474)(416)
FAD$88$592
Cash from product remediation recovery—(25)
Cash contribution to our U.S. qualified pension plan200—
Monticello engineered wood products facility capital expenditures109—
Adjusted FAD$397$567
Net cash from investing activities$(475)$(636)
Net cash from financing activities$(290)$(852)

WEYERHAEUSER COMPANY 2025 ANNUAL REPORT AND FORM 10-K 60

Table of Contents

MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. The latest 10-K appears above; prior years are below.

FY 2024 10-K MD&A

SEC filing source: 0000950170-25-021254.

Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Confidence: high. Filing date: 2025-02-14. Report date: 2024-12-31.

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

WHAT YOU WILL FIND IN THIS MD&A

Our MD&A includes the following major sections:

economic and market conditions affecting our operations;
financial performance summary;
results of operations;
liquidity and capital resources;
environmental matters, legal proceedings and other contingencies;
accounting matters and
performance and liquidity measures.

For Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) related to the year ended December 31, 2022, refer to this same section in our 2023 annual report on Form 10-K as filed with the Securities and Exchange Commission on February 16, 2024.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

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

Over the past year, home sales and building activity moderated in part due to consistently elevated mortgage interest rates and reduced affordability. Specifically, multi-family construction has been hampered by a large supply of recently completed projects as well as higher interest rates and other factors constraining the underwriting of proposed projects. In contrast, new single-family home construction has remained resilient, as existing homeowners continued to be constrained by the lock-in effect of lower mortgage rates, compared to current rates. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for fourth quarter 2024 averaged 1.4 million units, a 3.5 percent increase from third quarter 2024. Single-family starts averaged 1.0 million units in fourth quarter 2024, a 3.3 percent increase from third quarter 2024. Multi-family starts averaged 376 thousand units in fourth quarter 2024, which was a 4.1 percent increase from third quarter 2024. Single-family construction is the primary driver for our business as compared to multi-family due to the amount of wood products used. Sales of newly built, single-family homes averaged a seasonally adjusted annual rate of 662 thousand units for fourth quarter 2024, a decrease of 6.5 percent from third quarter 2024, primarily driven by a seasonal reduction in buying activity. Over the medium to long-term, we expect a favorable U.S. housing construction market supported by strong demographics in the key home buying age cohorts, a decade of under building and historically low housing inventory.

Repair and remodeling expenditures decreased by 0.7 percent from third quarter 2024 to fourth quarter 2024 according to the Census Bureau Advance Retail Spending report. While there continues to be steady demand due to growing home equity and the lock-in effect, many homeowners have been more cautious in discretionary spending on large projects. Additionally, some repair and remodeling activity was accelerated during the pandemic which has had some impact on the level of spending. This softness has been reflected in both the do-it-yourself (DIY) and professionally built segments. Over the longer term, we expect this sector to resume pre-pandemic growth trends with healthy household balance sheets, elevated home equity and an aging U.S. housing stock, with a median age of 45 years.

In U.S. wood product markets, pricing for lumber and OSB increased during the fourth quarter, primarily driven by more constrained market supply. Demand for both products reflected measured buyer sentiment and a typical seasonal reduction in building activity through the winter months. In fourth quarter 2024, the Random Lengths Framing Lumber Composite price averaged $429/MBF and the OSB Composite averaged

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 44

Table of Contents

$401/MSF. Over the course of fourth quarter 2024, composite prices for lumber increased from $396/MBF to $433/MBF and composite prices for OSB increased from $344/MSF to $418/MSF. Recent mill curtailments contributed to the strengthening lumber prices. OSB prices were supported by steady demand and limited open-market supply.

In Western log markets, Douglas fir sawlog prices increased 5.6 percent in fourth quarter 2024 compared with third quarter 2024, as reported by Fastmarkets RISI Log Lines based on Weyerhaeuser’s sales mix. Strengthening lumber prices and seasonal reductions in log supply contributed to log price increases in fourth quarter 2024. In the South, delivered sawlog prices decreased 3.0 percent in fourth quarter 2024 compared to third quarter 2024 and declined 2.9 percent from fourth quarter 2023, as reported by TimberMart-South. This was largely driven by ample log supply and ongoing actions taken by mills to align capacity with lower demand for finished products, partially driven by the seasonal reduction in building activity in the winter months.

Currency exchange rates, available supply from other countries and trade policy affect our export businesses. During fourth quarter 2024, end use demand in export markets moderated. In Japan, total housing starts decreased 3.4 percent year to date through November compared to the same period in 2023, while the key Post and Beam segment saw a 2.6 percent decrease. The slowing demand was partially offset by a decrease in lumber imports to Japan from Europe, and reduced inventories of European lumber in the Japanese market. China’s log markets were generally stable despite ongoing softness in end-market demand.

Interest rates affect our business primarily through their impact on mortgage rates and housing affordability, their general impact on the economy and their influence on our capital management activities. Actions by the U.S. Federal Reserve, the overall condition of the economy and fluctuations in financial markets are all factors that influence long-term interest rates. 30-year mortgage rates, which are correlated with long-term interest rates, increased from 6.1 percent in third quarter 2024 to 6.9 percent in fourth quarter 2024, according to economic data from Freddie Mac. Many builders have been able to offset higher mortgage rates through discounts, mortgage rate buydowns and modifying product offerings such as home sizes and finishes. Higher rates have also locked-in many existing homeowners from selling, thereby reducing inventories of existing homes for sale which has led to increased demand for available new homes.

Increased inflation affects the cost of our operations across each of our business segments, including costs for raw materials, transportation, energy and labor. The Consumer Price Index increased at an annual rate of 2.9 percent as of December 2024 compared to 2.4 percent in September 2024. This rate 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, operational excellence initiatives and procurement practices, not all costs associated with inflation can be fully mitigated or passed on to the customer.

The condition of the labor market affects all of our businesses as it relates to our ability to attract and retain employees and contractors. The unemployment rate remained flat at 4.1 percent from third quarter 2024 to fourth quarter 2024.

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

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 45

Table of Contents

FINANCIAL PERFORMANCE SUMMARY

Net Sales by Segment

Contribution to Earnings by Segment

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 46

Table of Contents

RESULTS OF OPERATIONS

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

Sales realizations refer to net selling prices — this includes selling price plus freight minus normal sales deductions.
Net contribution (charge) to earnings refers to earnings (loss) before interest expense, loss on debt extinguishment and income taxes.

CONSOLIDATED RESULTS

HOW WE DID

Summary of Financial Results

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
AMOUNT OF CHANGE
2024
vs.
202420232023
Net sales$7,124$7,674$(550)
Costs of sales$5,811$5,992$(181)
Operating income$685$1,186$(501)
Net earnings$396$839$(443)
Basic and diluted earnings per share$0.54$1.15$(0.61)

COMPARING 2024 WITH 2023

Net Sales

Net sales decreased $550 million — 7 percent — primarily due to a $436 million decrease in Wood Products net sales attributable to decreased sales realizations and sales volumes across most product lines, as well as a $142 million decrease in Timberlands net sales to unaffiliated customers attributable to decreased log sales realizations and sales volumes in the Western and Southern regions.

Costs of Sales

Costs of sales decreased $181 million — 3 percent — primarily due to decreased sales volumes across most product lines in Wood Products, as well as decreased sales volumes in our Timberlands segment, partially offset by an increase in acres sold in our Real Estate, Energy and Natural Resources segment.

Operating Income

Operating income decreased $501 million — 42 percent — primarily due to a $369 million decrease in consolidated gross margin (see discussion of components above), as well as an $84 million decrease in gain on sale of timberlands (refer to Note 4: Timberland Acquisitions and Divestitures).

Net Earnings

Net earnings decreased $443 million — 53 percent — primarily due to the $501 million decrease in operating income discussed above. This decrease was partially offset by a $67 million decrease in income tax expense (refer to Income Taxes).

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 47

Table of Contents

TIMBERLANDS

HOW WE DID

We report sales volumes and fee harvest volumes for our Timberlands segment in Our Business/What We Do/Timberlands.

Net Sales and Net Contribution to Earnings for Timberlands

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2024
vs.
202420232023
Net sales to unaffiliated customers:
Delivered logs:
West$693$794$(101)
South603643(40)
North4648(2)
Total1,3421,485(143)
Stumpage and pay-as-cut timber5156(5)
Recreational and other lease revenue77743
Other products(1)42393
Subtotal net sales to unaffiliated customers1,5121,654(142)
Intersegment net sales554572(18)
Total segment net sales$2,066$2,226$(160)
Costs of sales$1,686$1,746$(60)
Operating income$279$488$(209)
Interest income and other1—1
Net contribution to earnings$280$488$(208)

(1)
Other products include sales of seeds and seedlings from our nursery operations and wood chips.

COMPARING 2024 WITH 2023

Net Sales — Unaffiliated Customers

Net sales to unaffiliated customers decreased $142 million — 9 percent — primarily due to a $101 million decrease in Western log sales attributable to a 7 percent decrease in sales realizations and a 6 percent decrease in sales volumes, as well as a $40 million decrease in Southern log sales primarily attributable to a 5 percent decrease in sales volumes.

Intersegment Sales

Intersegment sales decreased $18 million — 3 percent — primarily due to a 6 percent decrease in sales realizations, partially offset by a 3 percent increase in sales volumes.

Costs of Sales

Costs of sales decreased $60 million — 3 percent — primarily due to decreased Western and Southern sales volumes.

Net Contribution to Earnings

Net contribution to earnings decreased $208 million — 43 percent — primarily due to the change in the components of gross margin, as discussed above, as well as an $84 million decrease in gain on sale of timberlands (refer to Note 4: Timberland Acquisitions and Divestitures).

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 48

Table of Contents

REAL ESTATE, ENERGY AND NATURAL RESOURCES

HOW WE DID

We report acres sold and average price per acre for our Real Estate, Energy and Natural Resources (Real Estate & ENR) segment in Our Business/What We Do/Real Estate, Energy and Natural Resources.

Net Sales and Net Contribution to Earnings for Real Estate, Energy and Natural Resources

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2024
vs.
202420232023
Net sales to unaffiliated buyers:
Real estate$280$237$43
Energy and natural resources111126(15)
Total segment net sales$391$363$28
Costs of sales$152$126$26
Operating income and Net contribution to earnings$216$211$5

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 expectations of future price appreciation, the timing of harvesting activities and the availability of government and not-for-profit funding. In any period, the average price per acre will vary based on the location and physical characteristics of parcels sold.

COMPARING 2024 WITH 2023

Net Sales

Net sales increased $28 million — 8 percent — primarily due to an increase in acres sold, partially offset by a decrease in average price per acre sold and a decrease in royalty income from our Energy and Natural Resources business.

Costs of Sales

Costs of sales increased $26 million — 21 percent — primarily due to an increase in acres sold.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings increased $5 million — 2 percent — primarily due to the change in the components of gross margin, as discussed above.

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 49

Table of Contents

WOOD PRODUCTS

HOW WE DID

We report sales volumes and annual production data for our Wood Products segment in Our Business/What We Do/Wood Products.

Net Sales and Net Contribution to Earnings for Wood Products

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2024
vs.
202420232023
Net sales:
Structural lumber$1,906$2,123$(217)
Oriented strand board97994435
Engineered solid section708783(75)
Engineered I-joists390447(57)
Softwood plywood158166(8)
Medium density fiberboard1591554
Complementary building products615704(89)
Other products produced (1)306335(29)
Total segment net sales$5,221$5,657$(436)
Costs of sales$4,516$4,699$(183)
Operating income and Net contribution to earnings$457$709$(252)

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

COMPARING 2024 WITH 2023

Net Sales

Net sales decreased $436 million — 8 percent — primarily due to:

a $217 million decrease in structural lumber sales attributable to a 7 percent decrease in sales realizations, as well as a 3 percent decrease in sales volumes;
an $89 million decrease in complementary building products sales attributable to decreased sales volumes across most products;
a $75 million decrease in engineered solid section sales attributable to a 10 percent decrease in sales realizations;
a $57 million decrease in engineered I-joists sales attributable to a 10 percent decrease in sales realizations, as well as a 3 percent decrease in sales volumes;
a $29 million decrease in other products produced primarily attributable to decreased sales realizations for wood chips and
an $8 million decrease in softwood plywood sales attributable to a 5 percent decrease in sales realizations.

These decreases were partially offset by a $35 million increase in oriented strand board sales attributable to a 6 percent increase in sales realizations, partially offset by a 2 percent decrease in sales volumes.

Costs of Sales

Costs of sales decreased $183 million — 4 percent — primarily due to decreased sales volumes across most product lines.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings decreased $252 million — 36 percent — primarily due to the change in the components of gross margin, as discussed above.

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 50

Table of Contents

UNALLOCATED ITEMS

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 - the last-in, first-out method,
foreign exchange transaction gains and losses resulting from changes in exchange rates primarily related to our U.S. dollar denominated cash and debt balances that are held by our Canadian subsidiary, as well as
interest income and other.

Net Charge to Earnings for Unallocated Items

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2024
vs.
202420232023
Unallocated corporate function and variable compensation expense$(154)$(127)$(27)
Liability classified share-based compensation2(2)4
Foreign exchange gain11—
Elimination of intersegment profit in inventory and LIFO411(7)
Other(120)(105)(15)
Operating loss(267)(222)(45)
Non-operating pension and other post-employment benefit costs(42)(45)3
Interest income and other5276(24)
Net charge to earnings$(257)$(191)$(66)

Net charge to earnings increased by $66 million — 35 percent — primarily due to:

a $27 million increase in unallocated corporate function and variable compensation expense;
a $24 million decrease in interest income and other, primarily attributable to a decrease in our cash and short-term investment accounts and
a $7 million decrease in elimination of intersegment profit in inventory and LIFO.

INTEREST EXPENSE

Our net interest expense incurred for the last two years was:

$269 million in 2024 and
$280 million in 2023.

Interest expense decreased by $11 million compared to 2023 primarily due to a series of debt issuances and retirements during 2023 that decreased our average outstanding debt.

Refer to Note 11: Long-Term Debt, Net for further information.

INCOME TAXES

As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. Historical distributions to shareholders, including amounts and tax characteristics, are summarized in the table below.

AMOUNTS PER SHARE
20242023
Common - capital gain distribution$0.94$1.66

We are required to pay corporate income taxes on earnings of our TRSs, which include our Wood Products segment and portions of our Timberlands and Real Estate & ENR segments' earnings. Our provision for income taxes is primarily driven by earnings generated by our TRSs.

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 51

Table of Contents

Our provision for income taxes the last two years was:

$31 million in 2024 and
$98 million in 2023.

Income tax expense decreased by $67 million compared to 2023 primarily due to decreases in our pretax earnings and effective income tax rate.

Refer to Note 18: Income Taxes for further information.

LIQUIDITY AND CAPITAL RESOURCES

We are committed to maintaining an appropriate capital structure that provides financial flexibility and enables us to protect the interests of our shareholders and meet our obligations to our lenders, while also maintaining access to all major financial markets. As of December 31, 2024, we had $684 million in cash and cash equivalents and $1.5 billion of availability on our line of credit, which expires in March 2028. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

$1,008 million in 2024 and
$1,433 million in 2023.

COMPARING 2024 WITH 2023

Net cash from operations decreased by $425 million, primarily due to decreased cash inflows from our business operations.

Pension Contributions and Benefit Payments Made and Expected

During 2024, we contributed a total of $18 million to our pension and post-employment benefit plans, compared to a total of $20 million during 2023.

For 2025, we expect to contribute approximately $20 million to our pension and post-employment benefit plans. Refer to Note 8: Pension and Other Post-Employment Benefit Plans for further information.

INVESTING IN OUR BUSINESS

Cash from investing activities includes items such as:

capital expenditures for property, equipment and reforestation,
acquisitions of timberlands,
proceeds from sales of assets and operations and
purchases and maturities of short-term investments.

Consolidated net cash from investing activities was:

$(636) million in 2024 and
$(508) million in 2023.

COMPARING 2024 WITH 2023

Net cash from investing activities decreased by $128 million, primarily due to:

a $166 million decrease in proceeds from the sale of timberlands and
an $18 million increase in cash spent on the acquisition of timberlands.

These changes were partially offset by a $26 million decrease in capital expenditures for property and equipment.

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 52

Table of Contents

Summary of Capital Spending by Business Segment

DOLLAR AMOUNTS IN MILLIONS
20242023
Timberlands$105$111
Wood Products294323
Unallocated Items1713
Total$416$447

During fourth quarter 2024, we announced our plan to invest approximately $500 million to build a new TimberStrand® facility in Monticello, Arkansas. This capital outlay may be sourced from cash on hand or through future financing, as deemed appropriate. Construction is expected to start in 2025, with the goal of starting operations in 2027. Once completed, the new facility will increase our engineered wood products capacity by approximately 10 million cubic feet.

We expect our capital expenditures for 2025 to be approximately $440 million, excluding the investment in our Monticello engineered wood products facility. We plan to exclude the investment for purposes of calculating our annual Adjusted Funds Available for Distribution (Adjusted FAD), as used in our flexible cash return framework. The amount we spend on capital expenditures could change due to:

future economic conditions,
environmental regulations,
changes in the composition of our business,
weather,
timing of equipment purchases and
capital needs related to other business opportunities.

FINANCING

Cash from financing activities includes items such as:

issuances and payments of debt and
payments for cash dividends and repurchasing stock.

Consolidated net cash from financing activities was:

$(852) million in 2024 and
$(1,342) million in 2023.

COMPARING 2024 WITH 2023

Net cash from financing activities increased by $490 million, primarily due to:

a $978 million decrease in payments on long-term debt and
a $532 million decrease in cash paid for dividends.

These changes were partially offset by a $992 million decrease in net proceeds from issuance of long-term debt and a $23 million increase in cash used for repurchases of common stock.

LONG-TERM DEBT

Our consolidated long-term debt (including current portion) was:

$5,076 million as of December 31, 2024 and
$5,069 million as of December 31, 2023.

The $7 million increase in our long-term debt during 2024 is attributable to amortization of debt discounts and capitalized debt expenses.

The weighted average interest rate and the weighted average maturity on our long-term debt as of December 31, 2024 were 5.30 percent and 6.6 years, respectively.

In January 2025, we repaid our $139 million 8.50 percent debentures at maturity. We have $71 million of 7.95 percent debentures scheduled to mature in first quarter 2025.

See Note 11: Long-Term Debt, Net for more information.

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 53

Table of Contents

LINE OF CREDIT

We had no outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility as of December 31, 2024 or December 31, 2023. This credit facility expires in March 2028.

Refer to Note 10: Line of Credit for further information.

Our Covenants

Our key covenants include the requirement to maintain:

a minimum total adjusted shareholders' equity of $3.0 billion and
a defined debt-to-total-capital ratio of 65 percent or less.

Our total adjusted shareholders' equity is comprised of:

total shareholders’ equity,
excluding accumulated other comprehensive loss,
minus our investment in our unrestricted subsidiaries.

Our capitalization is comprised of:

total debt,
plus total adjusted shareholders' equity.

As of December 31, 2024, we had:

total adjusted shareholders' equity of $10.1 billion and
a defined debt-to-total-capital ratio of 33.4 percent.

When calculating compliance in accordance with financial debt covenants as of December 31, 2024 and December 31, 2023, we excluded the full amount of accumulated other comprehensive loss of $402 million and $293 million, respectively. See Note 14: Shareholders’ Interest for further information on accumulated other comprehensive loss.

There are no other significant financial debt covenants related to our third-party debt.

CREDIT RATINGS

As of December 31, 2024, our long-term issuer credit rating was BBB and Baa2 from S&P and Moody’s, respectively.

DIVIDENDS

We paid cash dividends on common shares of:

$684 million in 2024 and
$1,216 million in 2023.

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

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

SHARE REPURCHASES

We repurchased 4.9 million common shares for approximately $153 million (including transaction fees) during the year ended December 31, 2024. We repurchased 4.1 million common shares for approximately $125 million (including transaction fees) in 2023. As of December 31, 2024, we had remaining authorization of $99 million for future share repurchases. For further information on share repurchases see Note 14: Shareholders’ Interest.

OUR CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

More details about our contractual obligations and commercial commitments are in Note 8: Pension and Other Post-Employment Benefit Plans, Note 10: Line of Credit, Note 11: Long-Term Debt, Net, Note 13: Legal Proceedings, Commitments and Contingencies, Note 16: Leases and Note 18: Income Taxes.

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 54

Table of Contents

Significant Contractual Obligations as of December 31, 2024

Significant contractual obligations as of December 31, 2024 include our long-term debt obligations and lease obligations. Refer to Note 11: Long-Term Debt, Net and Note 16: Leases, respectively, for further information. Additional significant contractual obligations are included below.

DOLLAR AMOUNTS IN MILLIONS
PAYMENTS DUE BY PERIOD
LESS THAN1–33–5MORE THAN
TOTAL1 YEARYEARSYEARS5 YEARS
Interest(1)$1,703$264$431$337$671
Purchase obligations(2)$624$219$272$70$63
Employee-related obligations(3)$263$114$20$17$40

(1)
Amounts presented for interest payments assume that all long-term debt obligations outstanding as of December 31, 2024 will remain outstanding until maturity.

(2)
Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions and the approximate timing of the transaction. Purchase obligations exclude arrangements that the company can cancel without penalty.

(3)
The timing of certain payments within this category will be triggered by retirements or other events. These payments can include workers compensation, deferred compensation and banked vacation, among other obligations. When the timing of payment is uncertain, the amounts are included in the total column only. Minimum pension funding is required by established funding standards and estimates are not made for 2026 onward. Estimated payments of contractually obligated post-employment benefits are not included due to the uncertainty of payment timing.

OFF-BALANCE SHEET ARRANGEMENTS

Off-balance sheet arrangements have not had — and are not reasonably likely to have — a material effect on our current or future financial condition, results of operations or cash flows. Note 10: Line of Credit contains our disclosures of surety bonds and letters of credit.

ENVIRONMENTAL MATTERS, LEGAL PROCEEDINGS AND OTHER CONTINGENCIES

See Note 13: Legal Proceedings, Commitments and Contingencies.

ACCOUNTING MATTERS

CRITICAL ACCOUNTING ESTIMATES

In the preparation of our financial statements we follow established accounting policies and make estimates that affect both the amounts and timing of the recording of assets, liabilities, revenues and expenses. We base our judgments and estimates on historical experience and assumptions we believe are appropriate and reasonable under current circumstances. Actual results, however, could differ materially from the estimated amounts we have recorded. Some of these estimates require judgments about matters that are inherently uncertain. Accounting policies whose application involve a significant level of estimation uncertainty and may have a material effect on our results of operations or financial condition are considered critical accounting estimates.

DISCOUNT RATES FOR PENSION AND POST-EMPLOYMENT BENEFIT PLANS

Discount rates are used to estimate the net present value of our pension and other post-employment plan obligations. These rates are determined at the measurement date by matching current spot rates of high-quality corporate bonds with maturities similar to the timing of expected cash outflows for benefits. The selection of discount rates requires judgment as well as the involvement of actuarial specialists. These specialists assist with selecting yield curves based on published indices for high-quality corporate bonds and projecting the timing and amount of cash flows associated with our obligations to ultimately support our determination of an appropriate discount rate for each plan.

Our discount rates as of December 31, 2024 are:

5.7 percent for our U.S. pension plans — compared with 5.2 percent at December 31, 2023;
5.5 percent for our U.S. post-employment benefit plans — compared with 5.1 percent at December 31, 2023;
4.7 percent for our Canadian pension plans — compared with 4.7 percent at December 31, 2023 and
4.5 percent for our Canadian post-employment benefit plans — compared with 4.6 percent at December 31, 2023.

Pension expenses for 2025 will be based on the 5.7 percent and 4.7 percent assumed discount rates for the U.S. pension plans and the Canadian pension plans, respectively, and the 5.5 percent and 4.5 percent assumed discount rates for the U.S. and Canadian post-employment benefit plans, respectively.

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 55

Table of Contents

Our discount rates are important in determining the cost of our plans. A 50 basis point decrease in our discount rate would increase expense or reduce a credit by approximately:

$10 million for our U.S. qualified pension plans and
$2 million for our Canadian registered pension plans.

Details about our other significant accounting policies are in Note 1: Summary of Significant Accounting Policies.

PROSPECTIVE ACCOUNTING PRONOUNCEMENTS

A summary of prospective accounting pronouncements is in Note 1: Summary of Significant Accounting Policies.

PERFORMANCE AND LIQUIDITY MEASURES

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 our 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.

Adjusted EBITDA by Segment

DOLLAR AMOUNTS IN MILLIONS
20242023
Timberlands$539$646
Real Estate & ENR349320
Wood Products661905
Unallocated Items(257)(177)
Total$1,292$1,694

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 by segment to net earnings for the year ended December 31, 2024:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$396
Interest expense, net of capitalized interest269
Income taxes31
Net contribution (charge) to earnings$280$216$457$(257)$696
Non-operating pension and other post-employment benefit costs———4242
Interest income and other(1)——(52)(53)
Operating income (loss)279216457(267)685
Depreciation, depletion and amortization2601321910502
Basis of real estate sold—120——120
Special items included in operating income (loss)(1)——(15)—(15)
Adjusted EBITDA$539$349$661$(257)$1,292

(1)
Operating income (loss) for Wood Products includes pretax special items consisting of a $25 million product remediation recovery and a $10 million noncash impairment charge related to the indefinite curtailment of our New Bern lumber mill.

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 56

Table of Contents

The table below reconciles Adjusted EBITDA by segment to net earnings for the year ended December 31, 2023:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$839
Interest expense, net of capitalized interest280
Income taxes98
Net contribution (charge) to earnings$488$211$709$(191)$1,217
Non-operating pension and other post-employment benefit costs———4545
Interest income and other———(76)(76)
Operating income (loss)488211709(222)1,186
Depreciation, depletion and amortization267162107500
Basis of real estate sold—93——93
Special items included in operating income (loss)(1)(2)(3)(109)—(14)38(85)
Adjusted EBITDA$646$320$905$(177)$1,694

(1)
Operating income (loss) for Timberlands includes pretax special items consisting of an $84 million gain on the sale of timberlands and a $25 million legal benefit.

(2)
Operating income (loss) for Wood Products includes a pretax special item consisting of a $14 million insurance recovery.

(3)
Operating income (loss) for Unallocated Items includes pretax special items consisting of an $11 million noncash environmental remediation charge and $27 million of legal expense.

Net Earnings and Net Earnings per Diluted Share Before Special Items (Income Tax Affected)

We reconcile net earnings before special items to net earnings and net earnings per diluted share before special items to net earnings per diluted share, as those are the most directly comparable U.S. GAAP measures. 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.

The table below reconciles net earnings before special items to net earnings:

DOLLAR AMOUNTS IN MILLIONS
20242023
Net earnings$396$839
Environmental remediation charge—8
Gain on sale of timberlands—(83)
Insurance recovery—(10)
Legal benefit—(25)
Legal expense—20
Product remediation recovery(19)—
Restructuring, impairments and other charges7—
Net earnings before special items$384$749

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 57

Table of Contents

The table below reconciles net earnings per diluted share before special items to net earnings per diluted share:

AMOUNTS PER SHARE
20242023
Net earnings per diluted share$0.54$1.15
Environmental remediation charge—0.01
Gain on sale of timberlands—(0.12)
Insurance recovery—(0.01)
Legal benefit—(0.03)
Legal expense—0.02
Product remediation recovery(0.02)—
Restructuring, impairments and other charges0.01—
Net earnings per diluted share before special items$0.53$1.02

Adjusted FAD

We use Adjusted Funds Available for Distribution (Adjusted FAD) to evaluate the company’s liquidity and measure cash generated during the period (net of capital expenditures and significant nonrecurring items) that is available for dividends, repurchases of common shares, debt reduction, acquisitions, and other discretionary and nondiscretionary capital allocation activities. Adjusted FAD should not be considered in isolation from, and is not intended to represent an alternative to, results reported in accordance with U.S. GAAP. However, we believe the measure provides meaningful supplemental information for our investors about our liquidity. Adjusted FAD, as we define it, is net cash from operations adjusted for capital expenditures and significant non-recurring items. Our definition of Adjusted FAD may be different from similarly titled measures reported by other companies, including those in our industry. We reconcile Adjusted FAD to net cash from operations, as that is the most directly comparable U.S. GAAP measure.

The table below reconciles Adjusted FAD to net cash from operations:

DOLLAR AMOUNTS IN MILLIONS
20242023
Net cash from operations$1,008$1,433
Capital expenditures(416)(447)
FAD$592$986
Cash from product remediation recovery(25)—
Adjusted FAD$567$986
Net cash from investing activities$(636)$(508)
Net cash from financing activities$(852)$(1,342)

WEYERHAEUSER COMPANY 2024 ANNUAL REPORT AND FORM 10-K 58

Table of Contents

FY 2023 10-K MD&A

SEC filing source: 0000950170-24-016434.

Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Confidence: high. Filing date: 2024-02-16. Report date: 2023-12-31.

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

WHAT YOU WILL FIND IN THIS MD&A

Our MD&A includes the following major sections:

economic and market conditions affecting our operations;
financial performance summary;
results of our operations;
liquidity and capital resources;
environmental matters, legal proceedings and other contingencies;
accounting matters and
performance and liquidity measures.

For Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) related to the year ended December 31, 2021, refer to this same section in our 2022 annual report on Form 10-K as filed with the Securities and Exchange Commission on February 17, 2023.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

Our market conditions and the strength of the broader U.S. economy are, and will continue to be, influenced by the trajectory of activity in the U.S. housing and repair and remodel segments, inflation trends and interest rates. The demand for sawlogs within our Timberlands segment is directly affected by domestic production of wood-based building products. The strength of the U.S. housing market, particularly new residential construction, strongly affects demand in our Wood Products segment, as does repair and remodeling activity. Seasonal weather patterns impact the level of construction activity in the U.S., which in turn affects demand for our logs and wood products. Our Timberlands segment, specifically the Western region, is also affected by export demand and trade policy. Japanese housing starts are a key driver of export log demand in Japan. The demand for pulpwood from our Timberlands segment is directly affected by the production of pulp, paper and oriented strand board (OSB)

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 43

Table of Contents

as well as the demand for biofuels, such as wood-burning pellets made from pulpwood. Our Timberlands segment is also influenced by the availability of harvestable timber. In general, Western log markets are highly tensioned by available supply, while Southern log markets have more available supply. However, additional mill capacity being added in the U.S. South has led to tightening of markets in certain geographies. Our Real Estate, Energy and Natural Resources segment is affected by a variety of factors, including the general state of the economy, local real estate market conditions, the level of construction activity in the U.S. and evolution of emerging renewable energy and carbon-related markets.

Over the past year, particularly in the first half of 2023, home sales and building activity slowed due in part to higher mortgage interest rates, reduced affordability and general macroeconomic conditions. In the latter part of 2023, new home sales and construction activity strengthened, supported by near record-low levels of existing inventory. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for fourth quarter 2023 averaged 1.5 million units, a 6.1 percent increase from third quarter 2023. Single-family starts averaged 1.0 million units in fourth quarter 2023, a 7.7 percent increase from third quarter 2023. Multi-family starts averaged 412 thousand units in fourth quarter 2023, which was a 2.2 percent increase from third quarter 2023. Single-family construction is the primary driver for our business as compared to multi-family due to the amount of wood products used. Sales of newly built, single-family homes averaged a seasonally adjusted annual rate of 652 thousand units for fourth quarter 2023, a decrease of 6.0 percent from third quarter 2023. Over the medium to long-term, we expect a favorable U.S. housing construction market supported by strong demographics in the key homebuying age cohorts, a decade of underbuilding and a historically low housing inventory.

Repair and remodeling expenditures were steady from third quarter 2023 to fourth quarter 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 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 an aging U.S. housing stock, with a median age of 43 years.

In U.S. wood product markets, demand for lumber and OSB was influenced by cautious buyer sentiment at the outset of fourth quarter 2023. As the quarter progressed, demand increased in response to strong single-family housing starts and improving macroeconomic conditions. The Random Lengths Framing Lumber Composite price averaged $384/MBF and the OSB Composite averaged $406/MSF in fourth quarter 2023. Over the course of the fourth quarter, composite prices for lumber decreased from $422/MBF to $395/MBF and composite prices for OSB decreased from $454/MSF to $430/MSF.

In Western log markets, Douglas fir sawlog prices decreased 2.8 percent in fourth quarter 2023 compared with third quarter 2023, as reported by Fastmarkets RISI Log Lines based on Weyerhaeuser’s sales mix. Overall, domestic log demand and prices faced downward pressure at the outset of the quarter, as mills adjusted to a softening lumber market and worked through elevated log inventories. As the quarter progressed, lumber markets improved, and log supply decreased seasonally. In the South, delivered sawlog prices decreased 0.5 percent in fourth quarter 2023 compared to third quarter 2023 and declined 3.6 percent from fourth quarter 2022 as reported by TimberMart-South. This was primarily driven by ample log supply, elevated mill inventories and reduced demand for finished goods during the quarter.

Currency exchange rates, available supply from other countries and trade policy affect our export businesses. During fourth quarter 2023, end use demand in export markets was mixed. In Japan, total housing starts decreased 4.7 percent year to date through November compared to the same period in 2022, while the key Post and Beam segment saw a 6.2 percent decrease. Lumber imports to Japan from Europe were more balanced than in previous quarters, providing support for logs. China’s weaker end use demand for logs and lumber was offset by lower competitive supply, leading to stable pricing for logs from the West.

Interest rates affect our business primarily through their impact on mortgage rates and housing affordability, their general impact on the economy and their influence on our capital management activities. Actions by the U.S. Federal Reserve, the overall condition of the economy and fluctuations in financial markets are all factors that influence long-term interest rates. 30-year mortgage rates, which are correlated with long-term interest rates, decreased from 7.3 percent at the end of third quarter 2023 to 6.6 percent at the end of fourth quarter 2023, according to economic data from Freddie Mac. Many builders have been able to offset higher mortgage rates through discounts, mortgage rate buydowns and modifying product offerings such as home sizes and finishes. Higher rates have also locked-in many existing homeowners from selling, reducing inventories of existing homes for sale which has led to increased demand for available new homes.

Increased inflation affects the cost of our operations across each of our business segments, including costs for raw materials, transportation, energy and labor. The Consumer Price Index increased at an annual rate of 3.4 percent as of December 2023, which is markedly down from its peak of over 9.0 percent annual increase in June 2022. While we can offset some of the impacts of inflation through our sales activities, our operational excellence initiatives and our procurement practices, not all of the costs associated with inflation can be fully mitigated or passed on to the consumer.

The condition of the labor market affects all of our businesses as it relates to our ability to attract and retain employees and contractors. The unemployment rate of 3.7 percent in December 2023 remained near historically low levels and decreased 0.1 percent from the end of third quarter 2023.

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 credits to reduce environmental impacts. We believe we are uniquely positioned to help entities achieve these commitments through natural climate solutions, including forest carbon sequestration, carbon capture and storage and renewable energy activities.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 44

Table of Contents

FINANCIAL PERFORMANCE SUMMARY

Net Sales by Segment

Contribution to Earnings by Segment

RESULTS OF OPERATIONS

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

Sales realizations refer to net selling prices — this includes selling price plus freight minus normal sales deductions.
Net contribution (charge) to earnings refers to earnings (loss) before interest expense, loss on debt extinguishment and income taxes.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 45

Table of Contents

CONSOLIDATED RESULTS

HOW WE DID

Summary of Financial Results

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
AMOUNT OF CHANGE
2023
vs.
202320222022
Net sales$7,674$10,184$(2,510)
Costs of sales$5,992$6,564$(572)
Operating income$1,186$3,080$(1,894)
Net earnings$839$1,880$(1,041)
Basic and diluted earnings per share$1.15$2.53$(1.38)

COMPARING 2023 WITH 2022

Net Sales

Net sales decreased $2,510 million — 25 percent — primarily due to a $2,301 million decrease in Wood Products net sales to unaffiliated customers attributable to decreased sales realizations and sales volumes across most product lines, as well as a $204 million decrease in Timberlands net sales to unaffiliated customers attributable to decreased log sales realizations in the Western region.

Costs of Sales

Costs of sales decreased $572 million — 9 percent — primarily due to decreased sales volumes across most product lines and decreased raw material prices within our Wood Products segment, as well as decreased third-party log purchases within our Timberlands segment.

Operating Income

Operating income decreased $1,894 million — 61 percent — primarily due to a $1,938 million decrease in consolidated gross margin (see discussion of components above), partially offset by an $84 million gain on sale of timberlands (refer to Note 4: Timberland Acquisitions and Divestitures).

Net Earnings

Net earnings decreased $1,041 million — 55 percent — primarily due to the $1,894 million decrease in operating income discussed above.

This decrease was partially offset by:

a $327 million decrease in income tax expense (refer to Income Taxes);
a $276 million decrease in debt extinguishment charges (refer to Note 11: Long-Term Debt, Net);
a $209 million decrease in non-operating pension and other post-employment benefit costs (refer to Note 8: Pension and Other Post-Employment Benefit Plans) and
a $51 million increase in interest income and other attributable to interest earned on short-term investments held for a portion of the year in 2023 and an increase in the interest rate on our cash and investment accounts.

TIMBERLANDS

HOW WE DID

We report sales volumes and annual production data for our Timberlands segment in Our Business/What We Do/Timberlands.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 46

Table of Contents

Net Sales and Net Contribution to Earnings for Timberlands

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2023
vs.
202320222022
Net sales to unaffiliated customers:
Delivered logs:
West$794$1,004$(210)
South643645(2)
North4856(8)
Total1,4851,705(220)
Stumpage and pay-as-cut timber564610
Recreational and other lease revenue74686
Other products(1)3939—
Subtotal net sales to unaffiliated customers1,6541,858(204)
Intersegment net sales57256111
Total segment net sales$2,226$2,419$(193)
Costs of sales$1,746$1,796$(50)
Operating income and Net contribution to earnings$488$528$(40)

(1)
Other products include sales of seeds and seedlings from our nursery operations and wood chips.

COMPARING 2023 WITH 2022

Net Sales — Unaffiliated Customers

Net sales to unaffiliated customers decreased $204 million — 11 percent — primarily due to a $210 million decrease in Western log sales primarily attributable to a 20 percent decrease in sales realizations, partially offset by a $10 million increase in stumpage and pay-as-cut timber sales.

Intersegment Sales

Intersegment sales increased $11 million — 2 percent — primarily due to a 9 percent increase in sales volumes, partially offset by a 6 percent decrease in sales realizations.

Costs of Sales

Costs of sales decreased $50 million — 3 percent — primarily due to decreased Western third-party log purchases, partially offset by increased logging and hauling costs and increased sales volumes.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings decreased $40 million — 8 percent — primarily due to the change in the components of gross margin, as discussed above, partially offset by an $84 million gain on sale of timberlands recorded in fourth quarter 2023.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 47

Table of Contents

REAL ESTATE, ENERGY AND NATURAL RESOURCES

HOW WE DID

We report acres sold and average price per acre for our Real Estate, Energy and Natural Resources segment in Our Business/What We Do/Real Estate, Energy and Natural Resources.

Net Sales and Net Contribution to Earnings for Real Estate, Energy and Natural Resources

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2023
vs.
202320222022
Net sales to unaffiliated buyers:
Real estate$237$235$2
Energy and natural resources126133(7)
Total segment net sales$363$368$(5)
Costs of sales$126$113$13
Operating income and Net contribution to earnings$211$218$(7)

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

COMPARING 2023 WITH 2022

Net Sales

Net sales decreased $5 million — 1 percent — primarily attributable to lower prices in our Energy and Natural Resources business, partially offset by an increase in acres sold.

Costs of Sales

Costs of sales increased $13 million — 12 percent — primarily attributable to an increase in acres sold.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings decreased $7 million — 3 percent — primarily attributable to the change in the components of gross margin, as discussed above, partially offset by a $10 million noncash impairment charge related to the planned divestiture of legacy coal assets in 2022 with no similar activity in 2023.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 48

Table of Contents

WOOD PRODUCTS

HOW WE DID

We report sales volumes and annual production data for our Wood Products segment in Our Business/What We Do/Wood Products.

Net Sales and Net Contribution to Earnings for Wood Products

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2023
vs.
202320222022
Net sales:
Structural lumber$2,123$3,374$(1,251)
Oriented strand board9441,578(634)
Engineered solid section783862(79)
Engineered I-joists447573(126)
Softwood plywood166193(27)
Medium density fiberboard155192(37)
Complementary building products704840(136)
Other products produced (1)335346(11)
Total segment net sales$5,657$7,958$(2,301)
Costs of sales$4,699$5,166$(467)
Operating income and Net contribution to earnings$709$2,536$(1,827)

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

COMPARING 2023 WITH 2022

Net Sales

Net sales decreased $2,301 million — 29 percent — primarily due to:

a $1,251 million decrease in structural lumber sales attributable to a 37 percent decrease in sales realizations;
a $634 million decrease in oriented strand board sales attributable to a 40 percent decrease in sales realizations;
a $136 million decrease in complementary building products attributable to decreased sales volumes across most products;
a $126 million decrease in engineered I-joists sales attributable to a 13 percent decrease in sales realizations, as well as a 10 percent decrease in sales volumes;
a $79 million decrease in engineered solid section sales attributable to a 6 percent decrease in sales realizations, as well as a 3 percent decrease in sales volumes;
a $37 million decrease in medium density fiberboard sales attributable to a 24 percent decrease in sales volumes, partially offset by a 6 percent increase in sales realizations;
a $27 million decrease in softwood plywood sales attributable to a 28 percent decrease in sales realizations, partially offset by a 20 percent increase in sales volumes and
an $11 million decrease in other products produced attributable to decreased sales volumes for veneer and plywood byproducts.

Costs of Sales

Costs of sales decreased $467 million — 9 percent — primarily due to decreased sales volumes across most product lines, as well as decreased raw material prices.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings decreased $1,827 million — 72 percent — primarily due to the change in the components of gross margin, as discussed above.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 49

Table of Contents

UNALLOCATED ITEMS

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 - the last-in, first-out method,
foreign exchange transaction gains and losses resulting from changes in exchange rates primarily related to our U.S. dollar denominated cash and debt balances that are held by our Canadian subsidiary, as well as
interest income and other.

Net Charge to Earnings for Unallocated Items

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2023
vs.
202320222022
Unallocated corporate function and variable compensation expense$(127)$(139)$12
Liability classified share-based compensation(2)4(6)
Foreign exchange gain110(9)
Elimination of intersegment profit in inventory and LIFO11(21)32
Other(105)(56)(49)
Operating loss(222)(202)(20)
Non-operating pension and other post-employment benefit costs(45)(254)209
Interest income and other762551
Net charge to earnings$(191)$(431)$240

Net charge to earnings decreased by $240 million — 56 percent — primarily due to a $209 million decrease in non-operating pension and other post-employment benefit costs attributable to a $205 million pension settlement charge recorded in fourth quarter 2022 (refer to Note 8: Pension and Other Post-Employment Benefit Plans), as well as a $51 million increase in interest income and other attributable to interest earned on short-term investments held for a portion of the year in 2023 and an increase in the interest rate on our cash and investment accounts.

INTEREST EXPENSE

Our net interest expense incurred for the last two years was:

$280 million in 2023 and
$270 million in 2022.

Interest expense increased by $10 million compared to 2022 primarily due to the May 2023 issuance of debt securities that increased our weighted average outstanding debt.

Refer to Note 11: Long-Term Debt, Net for further information.

INCOME TAXES

As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. Historical distributions to shareholders, including amounts and tax characteristics, are summarized in the table below.

AMOUNTS PER SHARE
20232022
Common - capital gain distribution$1.66$1.59
Common - ordinary dividend (qualified)$—$0.07
Common - return of capital$—$0.51

We are required to pay corporate income taxes on earnings of our TRSs, which include our Wood Products segment and portions of our Timberlands and Real Estate & ENR segments' earnings. Our provision for income taxes is primarily driven by earnings generated by our TRSs.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 50

Table of Contents

Our provision for income taxes the last two years was:

$98 million in 2023 and
$425 million in 2022.

Income tax expense decreased by $327 million compared to 2022 primarily due to decreases in our pretax earnings and effective income tax rate. During 2022, we recorded a $69 million tax benefit in connection with our early debt retirement and a $53 million tax benefit related to our noncash pension settlement charge.

Refer to Note 19: Income Taxes, Note 11: Long-Term Debt, Net and Note 8: Pension and Other Post-Employment Benefit Plans for further information.

LIQUIDITY AND CAPITAL RESOURCES

We are committed to maintaining an appropriate capital structure that provides financial flexibility and enables us to protect the interests of our shareholders and meet our obligations to our lenders, while also maintaining access to all major financial markets. As of December 31, 2023, we had $1.2 billion in cash and cash equivalents and $1.5 billion of availability on our line of credit, which expires in March 2028. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

$1,433 million in 2023 and
$2,832 million in 2022.

COMPARING 2023 WITH 2022

Net cash from operations decreased by $1,399 million, primarily due to decreased cash inflows from our business operations. This change was partially offset by a $503 million decrease in our cash paid for income taxes.

Pension Contributions and Benefit Payments Made and Expected

During 2023, we contributed a total of $20 million to our pension and post-employment benefit plans, compared to a total of $24 million during 2022.

For 2024, we expect to contribute approximately $20 million to our pension and post-employment benefit plans. Refer to Note 8: Pension and Other Post-Employment Benefit Plans for further information.

INVESTING IN OUR BUSINESS

Cash from investing activities includes items such as:

capital expenditures for property, equipment and reforestation,
acquisitions of timberlands,
proceeds from sales of assets and operations and
purchases and maturities of short-term investments.

Consolidated net cash from investing activities was:

$(508) million in 2023 and
$(759) million in 2022.

COMPARING 2023 WITH 2022

Net cash from investing activities increased by $251 million, primarily due to:

a $166 million increase in proceeds from the sale of timberlands;
a $62 million decrease in cash spent on the acquisition of timberlands and
a $25 million decrease in capital expenditures for property and equipment.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 51

Table of Contents

Summary of Capital Spending by Business Segment

DOLLAR AMOUNTS IN MILLIONS
20232022
Timberlands$111$113
Wood Products323347
Unallocated Items138
Total$447$468

We expect our capital expenditures for 2024 to be approximately $440 million. The amount we spend on capital expenditures could change due to:

future economic conditions,
environmental regulations,
changes in the composition of our business,
weather,
timing of equipment purchases and
capital needs related to other business opportunities.

FINANCING

Cash from financing activities includes items such as:

issuances and payments of debt,
borrowings and payments on our revolving line of credit and
payments for cash dividends and repurchasing stock.

Consolidated net cash from financing activities was:

$(1,342) million in 2023 and
$(2,491) million in 2022.

COMPARING 2023 WITH 2022

Net cash from financing activities increased by $1,149 million in 2023, primarily due to:

a $412 million decrease in cash used for repurchases of common stock;
a $401 million decrease in cash paid for dividends and
a $336 million decrease in net cash used for payments on long-term debt.

LONG-TERM DEBT

Our consolidated long-term debt (including current portion) was:

$5,069 million as of December 31, 2023 and
$5,053 million as of December 31, 2022.

The increase in our long-term debt during 2023 is primarily attributable to the May 2023 issuance of $750 million of 4.750 percent notes and the December 2023 issuance of a $250 million senior unsecured term loan, offset by the December 2023 repayment of our $860 million 5.207 percent note and the July 2023 repayment of our $118 million 7.125 percent notes.

The weighted average interest rate and the weighted average maturity on our long-term debt as of December 31, 2023 were 5.35 percent and 7.6 years, respectively.

See Note 11: Long-Term Debt, Net for more information.

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 Secured Overnight Financing Rate (SOFR) plus a spread or a mutually agreed upon base rate plus a spread. As of December 31, 2023 and December 31, 2022, we had no outstanding borrowings on the revolving credit facility and we were in compliance with the revolving credit facility covenants.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 52

Table of Contents

Our Covenants

Our key covenants include the requirement to maintain:

a minimum total adjusted shareholders' equity of $3.0 billion and
a defined debt-to-total-capital ratio of 65 percent or less.

Our total adjusted shareholders' equity is comprised of:

total shareholders’ equity,
excluding accumulated other comprehensive income (loss),
minus our investment in our unrestricted subsidiaries.

Our capitalization is comprised of:

total debt,
plus total adjusted shareholders' equity.

As of December 31, 2023, we had:

total adjusted shareholders' equity of $10.5 billion and
a defined debt-to-total-capital ratio of 32.5 percent.

When calculating compliance in accordance with financial debt covenants as of December 31, 2023 and December 31, 2022, we excluded the full amount of accumulated other comprehensive loss of $293 million and $247 million, respectively. See Note 14: Shareholders’ Interest for further information on accumulated other comprehensive loss.

There are no other significant financial debt covenants related to our third-party debt.

CREDIT RATINGS

As of December 31, 2023, our long-term issuer credit rating was BBB and Baa2 from S&P and Moody’s, respectively.

DIVIDENDS

We paid cash dividends on common shares of:

$1,216 million in 2023 and
$1,617 million in 2022.

The 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 based on 2021 financial results for a total of $1,084 million paid in first quarter 2022.

On January 25, 2024, our board of directors declared a supplemental dividend of $0.14 per share based on 2023 financial results. The dividend is payable on February 27, 2024 to shareholders of record as of the close of business on February 16, 2024.

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

SHARE REPURCHASES

We repurchased 4.1 million common shares for approximately $125 million (including transaction fees) during the year ended December 31, 2023. We repurchased 16.0 million common shares for approximately $550 million (including transaction fees) in 2022. As of December 31, 2023, we had remaining authorization of $252 million for future share repurchases. For further information on share repurchases see Note 14: Shareholders’ Interest.

OUR CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

More details about our contractual obligations and commercial commitments are in Note 8: Pension and Other Post-Employment Benefit Plans, Note 10: Line of Credit, Note 11: Long-Term Debt, Net, Note 13: Legal Proceedings, Commitments and Contingencies, Note 16: Leases and Note 19: Income Taxes.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 53

Table of Contents

Significant Contractual Obligations as of December 31, 2023

Significant contractual obligations as of December 31, 2023 include our long-term debt obligations and lease obligations. Refer to Note 11: Long-Term Debt, Net and Note 16: Leases, respectively, for further information. Additional significant contractual obligations are included below.

DOLLAR AMOUNTS IN MILLIONS
PAYMENTS DUE BY PERIOD
LESS THAN1–33–5MORE THAN
TOTAL1 YEARYEARSYEARS5 YEARS
Interest(1)$1,982$276$498$379$829
Purchase obligations(2)$550$186$238$91$35
Employee-related obligations(3)$277$117$23$18$37

(1)
Amounts presented for interest payments assume that all long-term debt obligations outstanding as of December 31, 2023 will remain outstanding until maturity.

(2)
Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions and the approximate timing of the transaction. Purchase obligations exclude arrangements that the company can cancel without penalty.

(3)
The timing of certain payments within this category will be triggered by retirements or other events. These payments can include workers compensation, deferred compensation and banked vacation, among other obligations. When the timing of payment is uncertain, the amounts are included in the total column only. Minimum pension funding is required by established funding standards and estimates are not made for 2025 onward. Estimated payments of contractually obligated post-employment benefits are not included due to the uncertainty of payment timing.

OFF-BALANCE SHEET ARRANGEMENTS

Off-balance sheet arrangements have not had — and are not reasonably likely to have — a material effect on our current or future financial condition, results of operations or cash flows. Note 10: Line of Credit contains our disclosures of surety bonds and letters of credit.

ENVIRONMENTAL MATTERS, LEGAL PROCEEDINGS AND OTHER CONTINGENCIES

See Note 13: Legal Proceedings, Commitments and Contingencies.

ACCOUNTING MATTERS

CRITICAL ACCOUNTING ESTIMATES

In the preparation of our financial statements we follow established accounting policies and make estimates that affect both the amounts and timing of the recording of assets, liabilities, revenues and expenses. We base our judgments and estimates on historical experience and assumptions we believe are appropriate and reasonable under current circumstances. Actual results, however, could differ materially from the estimated amounts we have recorded. Some of these estimates require judgments about matters that are inherently uncertain. Accounting policies whose application involve a significant level of estimation uncertainty and may have a material effect on our results of operations or financial condition are considered critical accounting estimates.

DISCOUNT RATES FOR PENSION AND POST-EMPLOYMENT BENEFIT PLANS

Discount rates are used to estimate the net present value of our pension and other post-employment plan obligations. These rates are determined at the measurement date by matching current spot rates of high-quality corporate bonds with maturities similar to the timing of expected cash outflows for benefits. The selection of discount rates requires judgment as well as the involvement of actuarial specialists. These specialists assist with selecting yield curves based on published indices for high-quality corporate bonds and projecting the timing and amount of cash flows associated with our obligations to ultimately support our determination of an appropriate discount rate for each plan.

Our discount rates as of December 31, 2023 are:

5.2 percent for our U.S. pension plans — compared with 5.4 percent at December 31, 2022;
5.1 percent for our U.S. post-employment benefit plans — compared with 5.4 percent at December 31, 2022;
4.7 percent for our Canadian pension plans — compared with 5.3 percent at December 31, 2022 and
4.6 percent for our Canadian post-employment benefit plans — compared with 5.3 percent at December 31, 2022.

Pension expenses for 2024 will be based on the 5.2 percent and 4.7 percent assumed discount rates for the U.S. pension plans and the Canadian pension plans, respectively, and the 5.1 percent and 4.6 percent assumed discount rates for the U.S. and Canadian post-employment benefit plans, respectively.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 54

Table of Contents

Our discount rates are important in determining the cost of our plans. A 50 basis point decrease in our discount rate would increase expense or reduce a credit by approximately:

$11 million for our U.S. qualified pension plans and
$2 million for our Canadian registered pension plans.

Details about our other significant accounting policies are in Note 1: Summary of Significant Accounting Policies.

PROSPECTIVE ACCOUNTING PRONOUNCEMENTS

A summary of prospective accounting pronouncements is in Note 1: Summary of Significant Accounting Policies.

PERFORMANCE AND LIQUIDITY MEASURES

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 our 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.

Adjusted EBITDA by Segment

DOLLAR AMOUNTS IN MILLIONS
20232022
Timberlands$646$784
Real Estate & ENR320329
Wood Products9052,737
Unallocated Items(177)(196)
Total$1,694$3,654

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 by segment to net earnings for the year ended December 31, 2023:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$839
Interest expense, net of capitalized interest280
Income taxes98
Net contribution (charge) to earnings$488$211$709$(191)$1,217
Non-operating pension and other post-employment benefit costs———4545
Interest income and other———(76)(76)
Operating income (loss)488211709(222)1,186
Depreciation, depletion and amortization267162107500
Basis of real estate sold—93——93
Special items included in operating income (loss)(1)(2)(3)(109)—(14)38(85)
Adjusted EBITDA$646$320$905$(177)$1,694

(1)
Operating income (loss) for Timberlands includes pretax special items consisting of an $84 million gain on the sale of timberlands and a $25 million legal benefit.

(2)
Operating income (loss) for Wood Products includes a pretax special item consisting of a $14 million insurance recovery.

(3)
Operating income (loss) for Unallocated Items includes pretax special items consisting of an $11 million noncash environmental remediation charge and $27 million of legal expense.

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 55

Table of Contents

The table below reconciles Adjusted EBITDA by segment to net earnings for the year ended December 31, 2022:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$1,880
Interest expense, net of capitalized interest270
Loss on debt extinguishment(1)276
Income taxes425
Net contribution (charge) to earnings$528$218$2,536$(431)$2,851
Non-operating pension and other post-employment benefit costs———254254
Interest income and other———(25)(25)
Operating income (loss)5282182,536(202)3,080
Depreciation, depletion and amortization256172016480
Basis of real estate sold—84——84
Special items included in operating income (loss)(2)—10——10
Adjusted EBITDA$784$329$2,737$(196)$3,654

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

(2)
Operating income (loss) for Real Estate & ENR includes a pretax special item consisting of a $10 million noncash impairment charge related to the planned divestiture of legacy coal assets.

We reconcile net earnings before special items to net earnings and net earnings per diluted share before special items to net earnings per diluted share, as those are the most directly comparable U.S. GAAP measures. 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.

The table below reconciles net earnings before special items to net earnings:

DOLLAR AMOUNTS IN MILLIONS
20232022
Net earnings$839$1,880
Environmental remediation charge8—
Gain on sale of timberlands(83)—
Insurance recovery(10)—
Legal benefit(25)—
Legal expense20—
Loss on debt extinguishment—207
Pension settlement charge—152
Restructuring, impairments and other charges—8
Net earnings before special items$749$2,247

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 56

Table of Contents

The table below reconciles net earnings per diluted share before special items to net earnings per diluted share:

AMOUNTS PER SHARE
20232022
Net earnings per diluted share$1.15$2.53
Environmental remediation charge0.01—
Gain on sale of timberlands(0.12)—
Insurance recovery(0.01)—
Legal benefit(0.03)—
Legal expense0.02—
Loss on debt extinguishment—0.28
Pension settlement charge—0.20
Restructuring, impairments and other charges—0.01
Net earnings per diluted share before special items$1.02$3.02

We use Adjusted Funds Available for Distribution (Adjusted FAD) to evaluate the company’s liquidity and measure cash generated during the period (net of capital expenditures and significant nonrecurring items) that is available for dividends, repurchases of common shares, debt reduction, acquisitions, and other discretionary and nondiscretionary capital allocation activities. Adjusted FAD should not be considered in isolation from, and is not intended to represent an alternative to, results reported in accordance with U.S. GAAP. However, we believe the measure provides meaningful supplemental information for our investors about our liquidity. Adjusted FAD, as we define it, is net cash from operations adjusted for capital expenditures and significant non-recurring items. Our definition of Adjusted FAD may be different from similarly titled measures reported by other companies, including those in our industry. We reconcile Adjusted FAD to net cash from operations, as that is the most directly comparable U.S. GAAP measure.

The table below reconciles Adjusted FAD to net cash from operations:

DOLLAR AMOUNTS IN MILLIONS
20232022
Net cash from operations$1,433$2,832
Capital expenditures(447)(468)
FAD$986$2,364
Cash from product remediation insurance recoveries—(37)
Adjusted FAD$986$2,327
Net cash from investing activities$(508)$(759)
Net cash from financing activities$(1,342)$(2,491)

WEYERHAEUSER COMPANY 2023 ANNUAL REPORT AND FORM 10-K 57

Table of Contents

FY 2022 10-K MD&A

SEC filing source: 0000950170-23-003217.

Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Confidence: high. Filing date: 2023-02-17. Report date: 2022-12-31.

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

WHAT YOU WILL FIND IN THIS MD&A

Our MD&A includes the following major sections:

economic and market conditions affecting our operations;
financial performance summary;
results of our operations;
liquidity and capital resources;
environmental matters, legal proceedings and other contingencies;
accounting matters and
performance measures.

For Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) related to the year ended December 31, 2020, refer to this same section in our 2021 annual report on Form 10-K as filed with the Securities and Exchange Commission on February 18, 2022.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 43

Table of Contents

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-19 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 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 the U.S., home sales and building activity have slowed due in part to higher mortgage interest rates, reduced affordability and general macroeconomic conditions. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for fourth quarter 2022 averaged 1.4 million units, a 3.2 percent decrease from third quarter 2022. Single family starts averaged 0.9 million units, a 4.8 percent decrease from third quarter 2022. Multi-family starts averaged 541 thousand units in fourth quarter 2022, which was a 0.6 percent decrease from third quarter 2022. Sales of newly built, single family homes averaged a seasonally adjusted annual rate of 605 thousand units for fourth quarter 2022, an increase of 4.4 percent from the prior quarter. Over the medium to long-term, we expect continued strength in the U.S. housing construction market, supported by strong demographics in the key homebuying age cohorts, a decade of underbuilding and an aging housing stock.

Repair and remodeling expenditures decreased by 0.8 percent from third quarter 2022 to fourth quarter 2022 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 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 a U.S. housing stock median age of 43 years.

In U.S. wood product markets, demand felt the effects of a slowing housing market and more uncertain economic environment over most of fourth quarter 2022. The Random Lengths Framing Lumber Composite price averaged $452/MBF and the OSB Composite averaged $360/MSF in fourth quarter 2022. Over the course of the fourth quarter, prices declined from $512/MBF to $380/MBF for lumber and from $402/MSF to $288/MSF for OSB.

In Western log markets, Douglas fir sawlog prices fell by 7.4 percent in fourth quarter 2022 compared with third quarter 2022 as reported by RISI Log Lines based on Weyerhaeuser’s portfolio mix. Overall, domestic prices in the West fell moderately, as mills felt the effects of lower lumber prices, partially offset by continued constraints in log supply. In the South, delivered sawlog prices increased by 1.2 percent in fourth quarter 2022 compared to third quarter 2022 and 4.6 percent from fourth quarter 2021 as reported by Timber Mart-South, as mills are carrying higher inventories to mitigate log and haul capacity constraints.

Currency exchange rates, available supply from other countries and trade policy affect our export businesses. During fourth quarter 2022, end use demand softened in export markets, partially offset by continued disruptions in global log and lumber supply. In Japan, total housing starts increased 0.8 percent year to date through November compared to the same period in 2021, while the key Post and Beam segment saw a 4.0 percent decrease. An increase in lumber imports from Europe to Japan placed downward pressure on market conditions. China demand was held back by zero COVID-19 policies and general economic conditions, but constraints of supply sources from other countries, particularly Russia, supported demand from U.S. producers.

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, decreased from 6.7 percent at the end of third quarter 2022 to 6.4 percent at the end of the fourth quarter. While mortgage rates fell over the quarter and from a high of over 7 percent in November, the rapid increase in mortgage rates since the end of 2021 has had a negative impact on home affordability and reduced demand for homebuying.

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 6.5 percent year over year in December 2022, primarily due to demand and supply for goods and services, fluctuations in labor markets, and monetary policy set by the U.S. Federal Reserve. While we can offset some of the impacts of inflation through our sales activities, our operational excellence initiatives and our procurement practices, not all of the costs associated with inflation can be fully mitigated or passed on to the consumer.

The condition of the labor market affects all of our businesses as it relates to our ability to attract and retain employees and contractors. The unemployment rate of 3.5 percent in December 2022 remained near historically low levels and was unchanged from the end of the third quarter.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 44

Table of Contents

Labor force participation has increased to 62.3 percent in December 2022, from 61.9 percent in December 2021, but this remains below 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 reducing greenhouse gas emissions to net zero. Achieving these commitments will require governments and companies to take major steps to modify operations, invest in low-carbon activities and purchase offsets to reduce environmental impacts. We believe we are uniquely positioned to help entities achieve these commitments through natural climate solutions, including forest carbon sequestration and carbon capture and storage activities.

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 involved approximately 1,200 employees and affected four lumber mills in our Wood Products segment and a portion of our Western Timberlands operations. This event had a negative impact on our operations for the third and fourth 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. On October 28, 2022, the company announced the successful resolution of the work stoppage and resumed operations.

FINANCIAL PERFORMANCE SUMMARY

Net Sales by Segment

Contribution to Earnings by Segment

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 45

Table of Contents

RESULTS OF OPERATIONS

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

Sales realizations refer to net selling prices — this includes selling price plus freight minus normal sales deductions.
Net contribution (charge) to earnings refers to earnings (loss) before interest expense, loss on debt extinguishment and income taxes.

CONSOLIDATED RESULTS

HOW WE DID

Summary of Financial Results

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
AMOUNT OF CHANGE
2022
vs.
202220212021
Net sales$10,184$10,201$(17)
Costs of sales$6,564$6,103$461
Operating income$3,080$3,643$(563)
Net earnings$1,880$2,607$(727)
Basic earnings per share$2.53$3.48$(0.95)
Diluted earnings per share$2.53$3.47$(0.94)

COMPARING 2022 WITH 2021

Net Sales

Net sales decreased $17 million — less than 1 percent — primarily due to a $263 million decrease in Wood Products net sales to unaffiliated customers, primarily attributable to decreased sales volumes across most product lines and decreased realizations for structural lumber and oriented strand board.

This decrease was partially offset by a $222 million increase in Timberlands net sales to unaffiliated customers, primarily due to increased sales realizations in the Western and Southern regions.

Costs of Sales

Costs of sales increased $461 million — 8 percent — primarily due to increased freight and raw material costs within our Wood Products segment, as well as increased logging and hauling costs and increased third party log purchase costs within our Timberlands segment.

Operating Income

Operating income decreased $563 million — 15 percent — primarily due to a $478 million decrease in consolidated gross margin (see discussion of components above).

Net Earnings

Net earnings decreased $727 million — 28 percent — primarily due to:

the $563 million decrease in operating income discussed above;
a $276 million pretax charge ($207 million after-tax) related to the early extinguishment of debt (refer to Note 12: Long-Term Debt, Net) and
a $235 million increase in non-operating pension and other post-employment benefit costs (refer to Note 9: Pension and Other Post-Employment Benefit Plans).

These decreases were partially offset by a $284 million decrease in income tax expense, as well as a $43 million decrease in interest expense (refer to Income Taxes and Interest Expense).

TIMBERLANDS

HOW WE DID

We report sales volumes and annual production data for our Timberlands segment in Our Business/What We Do/Timberlands.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 46

Table of Contents

Net Sales and Net Contribution to Earnings for Timberlands

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2022
vs.
202220212021
Net sales to unaffiliated customers:
Delivered logs:
West$1,004$869$135
South64558956
North56524
Total1,7051,510195
Stumpage and pay-as-cut timber463115
Recreational and other lease revenue68653
Other products(1)39309
Subtotal net sales to unaffiliated customers1,8581,636222
Intersegment net sales56153526
Total segment net sales$2,419$2,171$248
Costs of sales$1,796$1,650$146
Operating income and Net contribution to earnings$528$464$64

(1)
Other products include sales of seeds and seedlings from our nursery operations and wood chips.

COMPARING 2022 WITH 2021

Net Sales — Unaffiliated Customers

Net sales to unaffiliated customers increased $222 million — 14 percent — primarily due to a $135 million increase in Western log sales attributable to a 14 percent increase in sales realizations and a 1 percent increase in sales volumes, as well as a $56 million increase in Southern log sales attributable to an 8 percent increase in sales realizations and a 2 percent increase in sales volumes.

Intersegment Sales

Intersegment sales increased $26 million — 5 percent — primarily due to a 13 percent increase in sales realizations, partially offset by a 7 percent decrease in sales volumes.

Costs of Sales

Costs of sales increased $146 million — 9 percent — primarily due to increased logging and hauling costs, as well as increased third party log purchase costs.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings increased $64 million — 14 percent — primarily due to the change in the components of gross margin, as discussed above, partially offset by a $32 million gain on sale of timberlands recorded in third quarter 2021.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 47

Table of Contents

REAL ESTATE, ENERGY AND NATURAL RESOURCES

HOW WE DID

We report acres sold and average price per acre for our Real Estate, Energy and Natural Resources segment in Our Business/What We Do/Real Estate, Energy and Natural Resources.

Net Sales and Net Contribution to Earnings for Real Estate, Energy and Natural Resources

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2022
vs.
202220212021
Net sales to unaffiliated buyers:
Real estate$235$246$(11)
Energy and natural resources1339835
Total segment net sales$368$344$24
Costs of sales$113$109$4
Operating income and Net contribution to earnings$218$210$8

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 expectations 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 2022 WITH 2021

Net Sales

Net sales increased $24 million — 7 percent — primarily attributable to an increase in royalty income from our Energy and Natural Resources business.

Costs of Sales

Costs of sales increased $4 million — 4 percent — primarily attributable to an increase in acres sold.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings increased $8 million — 4 percent — attributable to the change in the components of gross margin, as discussed above, partially offset by a $10 million noncash impairment charge related to the planned divestiture of legacy coal assets.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 48

Table of Contents

WOOD PRODUCTS

HOW WE DID

We report sales volumes and annual production data for our Wood Products segment in Our Business/What We Do/Wood Products.

Net Sales and Net Contribution to Earnings for Wood Products

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2022
vs.
202220212021
Net sales:
Structural lumber$3,374$3,721$(347)
Oriented strand board1,5781,840(262)
Engineered solid section862679183
Engineered I-joists573447126
Softwood plywood193210(17)
Medium density fiberboard1921866
Complementary building products84079050
Other products produced (1)346348(2)
Total segment net sales$7,958$8,221$(263)
Costs of sales$5,166$4,808$358
Operating income and Net contribution to earnings$2,536$3,211$(675)

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

COMPARING 2022 WITH 2021

Net Sales

Net sales decreased $263 million — 3 percent — primarily due to:

a $347 million decrease in structural lumber sales attributable to a 5 percent decrease in sales volumes, partially due to the work stoppage, as well as a 5 percent decrease in sales realizations;
a $262 million decrease in oriented strand board sales attributable to an 18 percent decrease in sales realizations, partially offset by a 5 percent increase in sales volumes and
a $17 million decrease in softwood plywood sales attributable to a 7 percent decrease in sales volumes.

These decreases were partially offset by:

a $183 million increase in engineered solid section sales attributable to a 34 percent increase in sales realizations, partially offset by a 6 percent decrease in sales volumes;
a $126 million increase in engineered I-joists sales attributable to a 46 percent increase in sales realizations, partially offset by a 12 percent decrease in sales volumes and
a $50 million increase in complementary building products sales attributable to increased sales realizations for siding and trim, decking, and glulam.

Costs of Sales

Costs of sales increased $358 million — 7 percent — primarily due to increased freight and raw material costs, partially offset by lower sales volumes.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings decreased $675 million — 21 percent — primarily due to the change in the components of gross margin, as discussed above.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 49

Table of Contents

UNALLOCATED ITEMS

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 - the last-in, first-out method,
foreign exchange transaction gains and losses resulting from changes in exchange rates primarily related to our U.S. dollar denominated cash and debt balances that are held by our Canadian subsidiary,
interest income and other, as well as
legacy obligations, such as environmental remediation and workers compensation.

Net Charge to Earnings for Unallocated Items

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
2022
vs.
202220212021
Unallocated corporate function and variable compensation expense$(139)$(129)$(10)
Liability classified share-based compensation4(6)10
Foreign exchange gain1055
Elimination of intersegment profit in inventory and LIFO(21)(23)2
Other(56)(89)33
Operating loss(202)(242)40
Non-operating pension and other post-employment benefit costs(254)(19)(235)
Interest income and other25520
Net charge to earnings$(431)$(256)$(175)

Net charge to earnings increased by $175 million — 68 percent — primarily due to a $235 million increase in non-operating pension and other post-employment benefit costs primarily attributable to a $205 million pension settlement charge (refer to Note 9: Pension and Other Post-Employment Benefit Plans).

This increase was partially offset by:

a $33 million decrease in other, primarily due to lower charges for group insurance and environmental remediation;
a $20 million increase in interest income and other due to an increase in the interest rate on our cash and investment accounts and
a $10 million decrease in liability classified share-based compensation driven by the change in our stock price.

INTEREST EXPENSE

Our net interest expense incurred for the last two years was:

$270 million in 2022 and
$313 million in 2021.

Interest expense decreased by $43 million compared to 2021 primarily due to decreases in the average outstanding debt and weighted average interest rate.

Refer to Note 12: Long-Term Debt, Net for further information.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 50

Table of Contents

INCOME TAXES

As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. Historical distributions to shareholders, including amounts and tax characteristics, are summarized in the table below.

AMOUNTS PER SHARE
20222021
Common - capital gain distribution$1.59$1.18
Common - ordinary dividend (qualified)$0.07$—
Common - return of capital$0.51$—

We are required to pay corporate income taxes on earnings of our TRSs, which include our Wood Products segment and portions of our Timberlands and Real Estate & ENR segments' earnings. Our provision for income taxes is primarily driven by earnings generated by our TRSs.

Our provision for income taxes the last two years was:

$425 million in 2022 and
$709 million in 2021.

Income tax expense decreased by $284 million compared to 2021 due to decreases in our pretax earnings and effective income tax rate. We recorded a $69 million tax benefit related to the premiums paid in connection with our early debt retirement and a $53 million tax benefit related to our noncash pension settlement charge during 2022.

Refer to Note 20: Income Taxes, Note 12: Long-Term Debt, Net and Note 9: Pension and Other Post-Employment Benefit Plans 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 December 31, 2022, we had $1.6 billion in cash and cash equivalents and $1.5 billion of availability on our line of credit, which expires in January 2025. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

$2,832 million in 2022 and
$3,159 million in 2021.

COMPARING 2022 WITH 2021

Net cash from operations decreased by $327 million, primarily due to decreased cash inflows from our Wood Products segment.

This change was partially offset by a $43 million decrease in cash paid for income taxes, as well as a $32 million decrease in cash used for interest payments.

Pension Contributions and Benefit Payments Made and Expected

During 2022, we contributed a total of $24 million to our pension and post-employment plans, compared to a total of $59 million during 2021.

For 2023, we expect to contribute approximately $25 million to our pension and post-employment benefit plans. Refer to Note 9: Pension and Other Post-Employment Benefit Plans for further information.

INVESTING IN OUR BUSINESS

Cash from investing activities includes items such as:

acquisitions of property, equipment, timberlands and reforestation and
proceeds from sales of assets and operations.

Consolidated net cash from investing activities was:

$(759) million in 2022 and
$(325) million in 2021.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 51

Table of Contents

COMPARING 2022 WITH 2021

Net cash from investing activities decreased by $434 million, primarily due to:

a $261 million decrease in proceeds from the sale of timberlands;
a $146 million increase in cash paid for timberlands acquisitions and
a $29 million increase in capital expenditures for property and equipment.

Summary of Capital Spending by Business Segment

DOLLAR AMOUNTS IN MILLIONS
20222021
Timberlands$113$114
Wood Products347320
Unallocated Items87
Total$468$441

We expect our capital expenditures for 2023 to be approximately $440 million. The amount we spend on capital expenditures could change due to:

future economic conditions,
environmental regulations,
changes in the composition of our business,
weather,
timing of equipment purchases and
capital needs related to other business opportunities.

FINANCING

Cash from financing activities includes items such as:

issuances and payments of debt,
borrowings and payments on our revolving line of credit,
proceeds from option exercises and
payments for cash dividends and repurchasing stock.

Consolidated net cash from financing activities was:

$(2,491) million in 2022 and
$(1,330) million in 2021.

COMPARING 2022 WITH 2021

Net cash from financing activities decreased $1,161 million in 2022, primarily due to:

a $733 million increase in cash paid for dividends and
a $443 million increase in cash used for repurchases of common shares.

LONG-TERM DEBT

Our consolidated long-term debt (including current portion) was:

$5,053 million as of December 31, 2022 and
$5,099 million as of December 31, 2021.

The decrease in our long-term debt during 2022 is primarily attributable to the retirement of $592 million of our 7.375 percent notes, $161 million of our 8.500 percent notes, $73 million of our 7.125 percent notes, $65 million of our 7.950 percent notes and $40 million of our 7.850 percent notes, offset by the March 2022 issuance of $450 million of 3.375 percent notes and $450 million of 4.000 percent notes.

The weighted average interest rate and the weighted average maturity on our long-term debt as of December 31, 2022 were 5.36 percent and 8.1 years, respectively.

We have $118 million and $860 million of long-term debt scheduled to mature during third and fourth quarter 2023, respectively.

See Note 12: Long-Term Debt, Net for more information.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 52

Table of Contents

LINE OF CREDIT

In January 2020, we refinanced and extended our $1.5 billion five-year senior unsecured revolving credit facility, which expires in January 2025. As of December 31, 2022 and December 31, 2021, we had no outstanding borrowings on the revolving credit facility and we were in compliance with the revolving credit facility covenants.

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.

Our Covenants

Our key covenants include the requirement to maintain:

a minimum total adjusted shareholders' equity of $3.0 billion and
a defined debt-to-total-capital ratio of 65 percent or less.

Our total adjusted shareholders' equity is comprised of:

total shareholders’ equity,
excluding accumulated other comprehensive income (loss),
minus our investment in our unrestricted subsidiaries.

Our capitalization is comprised of:

total debt,
plus total adjusted shareholders' equity.

As of December 31, 2022, we had:

total adjusted shareholders' equity of $11.0 billion and
a defined debt-to-total-capital ratio of 31.5 percent.

When calculating compliance in accordance with financial debt covenants as of December 31, 2022 and December 31, 2021, we excluded the full amount of accumulated other comprehensive loss of $247 million and $479 million, respectively. See Note 15: Shareholders’ Interest for further information on accumulated other comprehensive loss.

There are no other significant financial debt covenants related to our third-party debt.

CREDIT RATINGS

As of December 31, 2022, our long-term issuer credit rating was BBB and Baa2 from S&P and Moody’s, respectively.

OPTION EXERCISES

Our cash proceeds from the exercise of stock options were:

$16 million in 2022 and
$51 million in 2021.

Our average stock price was $35.67 and $36.06 in 2022 and 2021, respectively.

DIVIDENDS

We paid cash dividends on common shares of:

$1,617 million in 2022 and
$884 million in 2021.

The increase in dividends paid is primarily due to the supplemental dividend of $1.1 billion paid in the first quarter of 2022 based on 2021 financial results, partially offset by the interim supplemental dividend of $375 million paid in the fourth quarter of 2021. On January 26, 2023, our board of directors declared a supplemental dividend of $0.90 per share based on 2022 financial results. The dividend is payable on February 27, 2023 to shareholders of record as of the close of business on February 15, 2023.

SHARE REPURCHASES

We repurchased 16.0 million common shares for approximately $550 million (including transaction fees) during the year ended December 31, 2022. We repurchased over 2.7 million common shares for approximately $100 million (including transaction fees) in 2021. As of December 31, 2022, we had remaining authorization of $377 million for future share repurchases. For further information on share repurchases see Note 15: Shareholders’ Interest.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 53

Table of Contents

OUR CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

More details about our contractual obligations and commercial commitments are in Note 9: Pension and Other Post-Employment Benefit Plans, Note 11: Line of Credit, Note 12: Long-Term Debt, Net, Note 14: Legal Proceedings, Commitments and Contingencies and Note 20: Income Taxes.

Significant Contractual Obligations as of December 31, 2022

Significant contractual obligations as of December 31, 2022 include our long-term debt obligations and lease obligations. Refer to Note 12: Long Term Debt, Net and Note 17: Leases, respectively, for further information. Additional significant contractual obligations are included below.

DOLLAR AMOUNTS IN MILLIONS
PAYMENTS DUE BY PERIOD
LESS THAN1–33–5MORE THAN
TOTAL1 YEARYEARSYEARS5 YEARS
Interest(1)$2,082$279$433$377$993
Purchase obligations(2)$509$135$177$141$56
Employee-related obligations(3)$323$148$28$20$41

(1)
Amounts presented for interest payments assume that all long-term debt obligations outstanding as of December 31, 2022 will remain outstanding until maturity.

(2)
Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions and the approximate timing of the transaction. Purchase obligations exclude arrangements that the company can cancel without penalty.

(3)
The timing of certain payments within this category will be triggered by retirements or other events. These payments can include workers compensation, deferred compensation and banked vacation, among other obligations. When the timing of payment is uncertain, the amounts are included in the total column only. Minimum pension funding is required by established funding standards and estimates are not made for 2024 onward. Estimated payments of contractually obligated post-employment benefits are not included due to the uncertainty of payment timing.

OFF-BALANCE SHEET ARRANGEMENTS

Off-balance sheet arrangements have not had — and are not reasonably likely to have — a material effect on our current or future financial condition, results of operations or cash flows. Note 8: Related Parties and Note 11: Line of Credit contain our disclosures of:

surety bonds,
letters of credit and
information regarding variable interest entities.

ENVIRONMENTAL MATTERS, LEGAL PROCEEDINGS AND OTHER CONTINGENCIES

See Note 14: Legal Proceedings, Commitments and Contingencies.

ACCOUNTING MATTERS

CRITICAL ACCOUNTING POLICIES

In the preparation of our financial statements we follow established accounting policies and make estimates that affect both the amounts and timing of the recording of assets, liabilities, revenues and expenses. Some of these estimates require judgments about matters that are inherently uncertain. Accounting policies whose application may have a significant effect on the reported results of operations and financial position are considered critical accounting policies.

In accounting, we base our judgments and estimates on:

historical experience and
assumptions we believe are appropriate and reasonable under current circumstances.

Actual results, however, may differ from the estimated amounts we have recorded.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 54

Table of Contents

Our most critical accounting policies relate to our:

discount rates for pension and post-employment benefit plans;
potential impairments of long-lived assets and
contingent liabilities.

Details about our other significant accounting policies — what we use and how we estimate — are in Note 1: Summary of Significant Accounting Policies.

DISCOUNT RATES FOR PENSION AND POST-EMPLOYMENT BENEFIT PLANS

Discount rates are used to estimate the net present value of our pension and other post-employment plan obligations. These rates are determined at the measurement date by matching current spot rates of high-quality corporate bonds with maturities similar to the timing of expected cash outflows for benefits. The selection of discount rates requires judgment as well as the involvement of actuarial specialists. These specialists assist with selecting yield curves based on published indices for high-quality corporate bonds and projecting the timing and amount of cash flows associated with our obligations to ultimately support our determination of an appropriate discount rate for each plan.

Our discount rates as of December 31, 2022 are:

5.4 percent for our U.S. pension plans — compared with 2.9 percent at December 31, 2021;
5.4 percent for our U.S. post-employment plans — compared with 2.6 percent at December 31, 2021;
5.3 percent for our Canadian pension plans — compared with 3.1 percent at December 31, 2021 and
5.3 percent for our Canadian post-employment plans — compared with 3.0 percent at December 31, 2021.

Pension expenses for 2023 will be based on the 5.4 percent and 5.3 percent assumed discount rates for the U.S. pension plans and the Canadian pension plans, respectively, and the 5.4 percent and 5.3 percent assumed discount rates for the U.S. and Canadian post-employment benefit plans, respectively.

Our discount rates are important in determining the cost of our plans. A 50 basis point decrease in our discount rate would increase expense or reduce a credit by approximately:

$10 million for our U.S. qualified pension plans and
$1 million for our Canadian registered pension plans.

IMPAIRMENT OF LONG-LIVED ASSETS

We review the carrying value of long-lived assets whenever an event or a change in circumstance indicates that the carrying value of the asset or asset group may not be recoverable through future operations. The carrying value is the original cost, less accumulated depreciation and any past impairments recorded.

If we evaluate recoverability, we are required to estimate future cash flows and residual values of the asset or asset group. Key assumptions used in developing these estimates would include probability of alternative outcomes, product pricing, raw material cost and product sales.

An impairment occurs when the carrying value of a long-lived asset is greater than the amount that could be recovered from the estimated future cash flows of the asset and greater than fair market value (the amount we could receive if we were to sell the asset). Key assumptions used in developing estimates of fair value would include the estimated future cash flows used to assess recoverability, discount rates and probability of alternative outcomes.

CONTINGENT LIABILITIES

We are subject to lawsuits, investigations and other claims related to environmental, product and other matters, and are required to assess the likelihood of any adverse judgments or outcomes to these matters, as well as the amount or range of potential loss.

We record contingent liabilities when:

it becomes probable that a loss has been incurred and
the amount of loss can be reasonably estimated.

Assessing probability of loss and estimating the amount of loss can require analysis of multiple factors, such as:

historical experience,
evaluations of relevant legal and environmental authorities and regulations,
judgments about the potential actions of third-party claimants and courts and
consideration of potential environmental remediation methods.

In addition to contingent liabilities recorded for probable losses, we disclose contingent liabilities when there is a reasonable possibility that a loss may have been incurred.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 55

Table of Contents

Recorded contingent liabilities are based on the best information available and actual losses in any future period are inherently uncertain. If estimated probable future losses or actual losses exceed our recorded liability for such claims, we record additional charges. These exposures and proceedings can be significant and the ultimate negative outcomes could be material to our operating results or cash flows in any given quarter or year. See Note 14: Legal Proceedings, Commitments and Contingencies for more information.

PROSPECTIVE ACCOUNTING PRONOUNCEMENTS

A summary of prospective accounting pronouncements is in Note 1: Summary of Significant Accounting Policies.

PERFORMANCE MEASURES

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 our 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.

Adjusted EBITDA by Segment

DOLLAR AMOUNTS IN MILLIONS
20222021
Timberlands$784$693
Real Estate & ENR329296
Wood Products2,7373,357
Unallocated Items(196)(252)
Total$3,654$4,094

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 by segment to net earnings for the year ended December 31, 2022:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$1,880
Interest expense, net of capitalized interest270
Loss on debt extinguishment(1)276
Income taxes425
Net contribution (charge) to earnings$528$218$2,536$(431)$2,851
Non-operating pension and other post-employment benefit costs———254254
Interest income and other———(25)(25)
Operating income (loss)5282182,536(202)3,080
Depreciation, depletion and amortization256172016480
Basis of real estate sold—84——84
Special items included in operating income (loss)(2)—10——10
Adjusted EBITDA$784$329$2,737$(196)$3,654

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

(2)
Operating income (loss) for Real Estate & ENR includes a pretax special item consisting of a $10 million noncash impairment charge related to the planned divestiture of legacy coal assets.

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 56

Table of Contents

The table below reconciles Adjusted EBITDA by segment to net earnings for the year ended December 31, 2021:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$2,607
Interest expense, net of capitalized interest313
Income taxes709
Net contribution (charge) to earnings$464$210$3,211$(256)$3,629
Non-operating pension and other post-employment benefit costs———1919
Interest income and other———(5)(5)
Operating income (loss)4642103,211(242)3,643
Depreciation, depletion and amortization261151965477
Basis of real estate sold—71——71
Special items included in operating income (loss)(1)(2)(3)(32)—(50)(15)(97)
Adjusted EBITDA$693$296$3,357$(252)$4,094

(1)
Operating Income (loss) for Timberlands includes a pretax special item consisting of a $32 million gain on sale of timberlands.

(2)
Operating income (loss) for Wood Products includes pretax special items consisting of a $37 million product remediation insurance recovery and a $13 million insurance recovery.

(3)
Operating income (loss) for Unallocated Items includes a pretax special item consisting of a $15 million noncash legal benefit.

We also reconcile net earnings before special items to net earnings and net earnings per diluted share before special items to net earnings per diluted share, as those are the most directly comparable U.S. GAAP measures. 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.

The table below reconciles net earnings before special items to net earnings:

DOLLAR AMOUNTS IN MILLIONS
20222021
Net earnings$1,880$2,607
Loss on debt extinguishment207—
Gain on sale of timberlands—(32)
Insurance recovery—(9)
Legal benefit—(12)
Pension settlement charge152—
Product remediation recovery—(28)
Restructuring, impairments and other charges8—
Net earnings before special items$2,247$2,526

WEYERHAEUSER COMPANY 2022 ANNUAL REPORT AND FORM 10-K 57

Table of Contents

The table below reconciles net earnings per diluted share before special items to net earnings per diluted share:

AMOUNTS PER SHARE
20222021
Net earnings per diluted share$2.53$3.47
Loss on debt extinguishment0.28—
Gain on sale of timberlands—(0.04)
Insurance recovery—(0.01)
Legal benefit—(0.01)
Pension settlement charge0.20—
Product remediation recovery—(0.04)
Restructuring, impairments and other charges0.01—
Net earnings per diluted share before special items$3.02$3.37

FY 2021 10-K MD&A

SEC filing source: 0001564590-22-005707.

Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Confidence: high. Filing date: 2022-02-18. Report date: 2021-12-31.

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

WHAT YOU WILL FIND IN THIS MD&A

Our MD&A includes the following major sections:

•economic and market conditions affecting our operations;
•financial performance summary;
•results of our operations;
•liquidity and capital resources;
•environmental matters, legal proceedings and other contingencies;
•accounting matters and
•performance measures.

For Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) related to the year ended December 31, 2019, refer to this same section in our 2020 annual report on Form 10-K as filed with the Securities and Exchange Commission on February 19, 2021.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

Overview

In March 2020, COVID-19 was officially declared a global pandemic by the World Health Organization, and a national emergency was declared by the United States. The immediate economic effects of the pandemic were severe, as U.S. gross domestic product (GDP) declined 31 percent in the second quarter of 2020 and the national unemployment rate soared to a record-high of nearly 15 percent in April 2020 driven by the restrictions imposed in response to the pandemic. Since that time the unemployment rate has fallen steadily, and U.S. GDP has rebounded significantly as states have continued to reopen their economies and loosen restrictions. Although market conditions across our businesses deteriorated rapidly in late first quarter and early second quarter 2020, they quickly rebounded as demand for housing and wood products proved resilient. Growth in repair and remodel demand and new residential construction activity resulted in increased demand for wood products. As a result, benchmark prices rose to record levels through May 2021 for most lumber products and into early July for oriented strand board (OSB). During the second quarter, lumber prices, followed by OSB, began a substantial correction as demand from the repair and remodel segment lessened during the summer months. Later in the third quarter, prices bottomed and began to rebound, and increased well above historical norms again by the end of 2021. Looking ahead to 2022, our market conditions and the strength of the broader U.S. economy will continue to be influenced by the trajectory of U.S. housing activity, repair and remodel activity, impacts from COVID-related restrictions, inflation trends, interest rates, and the nature and extent of future government stimulus including the recently-passed Infrastructure Investment and Jobs Act.

We have taken proactive steps to safeguard the health of our employees and preserve business continuity from the beginning of the pandemic. These actions have included detailed cleaning and disinfecting procedures, strict processes around masking, social distancing and personal hygiene, clear communication with our employees, contractors, vendors and visitors about our safety protocols, comprehensive guidance for response to any COVID-19 diagnoses or exposures in our operations, and a directive that employees work from home if feasible. In light of adjustments to federal, state and local health and safety restrictions, we began a phased-in approach to return some of our employees who have been working from home back to their work locations. We remain vigilant about employee safety and will continue to monitor developments, including but not limited to the spread of disease variants and their impact on local health systems.

Business Outlook

The demand for sawlogs within our Timberlands segment is directly affected by domestic production of wood-based building products. The strength of the U.S. housing market, especially new residential construction, strongly affects demand in our Wood Products segment, as does repair and remodeling activity. Seasonal weather patterns impact the level of construction activity in the U.S., which in turn affects demand for our logs and wood products. In the fourth quarter of 2021, weather conditions were favorable for harvest operations in the U.S. South. Our Timberlands segment, specifically the Western region, is also affected by export demand and trade policy. Japanese housing starts are a key driver of export log demand in Japan. The demand for pulpwood from our Timberlands segment is directly affected by the production of pulp, paper and OSB as well as the demand for biofuels, such as pellets made from pulpwood. The Timberlands segment is also influenced by the availability of harvestable timber. In general, Western log markets are highly tensioned while Southern log markets have more available supply. However, additional mill capacity being added in the U.S. South has led to tightening of markets in certain geographies.

On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for fourth quarter 2021 averaged 1.644 million units, a 5.3 percent increase from third quarter 2021. Single family starts averaged 1.148 million units and multi-family starts averaged 496

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 43

Table of Contents

thousand units in fourth quarter 2021, which represented increases of 4.7 percent and 6.5 percent from the third quarter, respectively. Total housing starts of 1.595 million in 2021 were up 15.6 percent from 2020. Sales of newly built, single family homes averaged a seasonally adjusted annual rate of 728 thousand units for fourth quarter 2021, which is an increase of 4.2 percent from the third quarter. The continued strength of the housing market has been driven by low inventory, underlying demographic fundamentals, and low mortgage rates. Builders have struggled to keep pace due to material shortages and other constraints, which has contributed to a growing backlog of construction activity.

Repair and remodeling expenditures increased by 5.8 percent from third quarter to fourth quarter 2021 and increased by 13.5 percent for the full year compared to 2020 according to the Census Bureau Advance Retail Spending report. A rebound in do-it-yourself activity and continued strength in projects undertaken by professional contractors contributed to higher sales in the sector.

In U.S. wood product markets, demand was steady during most of fourth quarter 2021 as dealer inventories remained tight. In the second half of the fourth quarter, lumber and OSB prices rebounded sharply from lows in the third quarter. In addition to steady demand, floods in British Columbia contributed to the increase in prices. The Random Lengths Framing Lumber Composite price averaged $691/MBF and the OSB Composite averaged $624/MSF in fourth quarter 2021.

Western log markets have shown continued strength in response to the increase in lumber prices and limited log supply. Douglas fir sawlog prices increased by 4 percent in fourth quarter 2021 compared with third quarter 2021 as reported by RISI Log Lines. The strength in Western log prices was supported by multiple factors including continued demand in export markets. In the South, sawlog prices increased by 1 percent from third quarter 2021 and 10 percent from fourth quarter 2020 as reported by TimberMart-South. While weather events contributed to some of this increase, transportation constraints and additional mill demand also contributed to more tensioned log markets.

Exchange rates, available supply from other countries and trade policy affect our export businesses. During fourth quarter 2021, continued disruptions in global shipping, diversion of European log and lumber supply to other markets, and bans on Australian log imports to China generally had a positive impact on China’s demand for logs imported from the U.S. In Japan, total housing starts increased 5.1 percent year to date through November compared to the same period in 2020, while the key Post and Beam segment saw an 8.9 percent increase. Decreased redwood lumber imports from Europe to Japan have continued to be favorable to our Japanese log export business.

Inflation affects our business, especially in increased costs for materials and labor, although there are also offsetting impacts including wood product prices and timberland’s effectiveness as an inflation hedge. Over the last twelve months, the Consumer Price Index (CPI) increased by 7.0 percent, while the Producer Price Index (final demand) increased by 9.7 percent.

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

FINANCIAL PERFORMANCE SUMMARY

Net Sales by Segment

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 44

Table of Contents

Contribution to Earnings by Segment

RESULTS OF OPERATIONS

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

•Sales realizations refer to net selling prices — this includes selling price plus freight minus normal sales deductions.
•Net contribution (charge) to earnings refers to earnings (loss) before interest expense and income taxes.

CONSOLIDATED RESULTS

HOW WE DID

Summary of Financial Results

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
AMOUNT OF CHANGE
202120202021 vs. 2020
Net sales$10,201$7,532$2,669
Costs of sales$6,103$5,447$656
Operating income$3,643$1,710$1,933
Net earnings$2,607$797$1,810
Basic earnings per share$3.48$1.07$2.41
Diluted earnings per share$3.47$1.07$2.40

COMPARING 2021 WITH 2020

Net Sales

Net sales increased $2,669 million — 35 percent — primarily due to:

•a $2,431 million increase in Wood Products net sales to unaffiliated customers, primarily attributable to increased sales realizations across all product lines;
•a $170 million increase in Timberlands net sales to unaffiliated customers, primarily due to increased sales realizations in the Western and Southern regions and
•a $68 million increase in Real Estate & ENR net sales to unaffiliated customers, primarily attributable to increases in mitigation bank sales and the average price per real estate acre sold.

Costs of Sales

Costs of sales increased $656 million — 12 percent — primarily due to increased freight costs and increased sales volumes across most product lines within our Wood Products segment, as well as increased freight costs and third-party log purchases within our Timberlands segment.

These increases were partially offset by a decrease in real estate acres sold within our Real Estate & ENR segment. Refer to additional analysis of fluctuations within our Wood Products, Timberlands and Real Estate, Energy and Natural Resources discussions below.

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 45

Table of Contents

Operating Income

Operating income increased $1,933 million — 113 percent — primarily due to a $2,013 million increase in consolidated gross margin (see discussion of components above), as well as an $80 million timber casualty loss recorded in third quarter 2020 related to the Oregon wildfires.

These changes were partially offset by a $150 million decrease in gain on sale of timberlands (refer to Note 4: Timberland Acquisitions and Divestitures).

Net Earnings

Net earnings increased $1,810 million — 227 percent — primarily due to:

•a $1,933 million increase in operating income, as discussed above;
•a $271 million decrease in non-operating pension and other post-employment benefit costs (refer to Note 9: Pension and Other Post-Employment Benefit Plans) and
•a $130 million decrease in interest expense (refer to Interest Expense below).

These changes were partially offset by a $524 million increase in income tax expense (refer to Income Taxes below).

TIMBERLANDS

HOW WE DID

We report sales volumes and annual production data for our Timberlands segment in Our Business/What We Do/Timberlands.

Net Sales and Net Contribution to Earnings for Timberlands

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
202120202021 vs. 2020
Net sales to unaffiliated customers:
Delivered logs:
West$869$720$149
South58957316
North5252—
0
Total1,5101,345165
Stumpage and pay-as-cut timber311912
Recreational and other lease revenue65632
Other products(1)3039(9)
0
Subtotal net sales to unaffiliated customers1,6361,466170
Intersegment net sales53547164
0
Total segment net sales$2,171$1,937$234
0
Costs of sales$1,650$1,491$159
Operating income and Net contribution to earnings$464$455$9
Column 1Column 2
(1)Other products include sales of seeds and seedlings from our nursery operations and wood chips.

COMPARING 2021 WITH 2020

Net Sales — Unaffiliated Customers

Net sales to unaffiliated customers increased $170 million — 12 percent — primarily due to a $149 million increase in Western log sales attributable to a 27 percent increase in sales realizations, partially offset by a 5 percent decrease in sales volumes, as well as a $16 million increase in Southern log sales attributable to a 5 percent increase in sales realizations, partially offset by a 2 percent decrease in sales volumes.

Intersegment Sales

Intersegment sales increased $64 million — 14 percent — primarily due to an 11 percent increase in sales realizations, as well as a 3 percent increase in sales volumes.

Costs of Sales

Costs of sales increased $159 million — 11 percent — primarily due to increased freight costs and third-party log purchases, partially offset by the decrease in third-party sales volumes, as discussed above.

Operating Income and Net Contribution to Earnings

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 46

Table of Contents

Operating income and net contribution to earnings increased $9 million — 2 percent — primarily due to an $80 million timber casualty loss recorded in third quarter 2020 related to the Oregon wildfires, the change in the components of gross margin as discussed above, and a $32 million gain on the sale of timberlands in the North Cascades region of Washington recorded in third quarter 2021, partially offset by a $182 million gain on the sale of certain southern Oregon timberlands recorded in fourth quarter 2020.

REAL ESTATE, ENERGY AND NATURAL RESOURCES

HOW WE DID

We report acres sold and average price per acre for our Real Estate, Energy and Natural Resources segment in Our Business/What We Do/Real Estate, Energy and Natural Resources.

Net Sales and Net Contribution to Earnings for Real Estate, Energy and Natural Resources

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
202120202021 vs. 2020
Net sales to unaffiliated buyers:
Real estate$246$202$44
Energy and natural resources987424
Total segment net sales$344$276$68
Costs of sales$109$165$(56)
Net contribution to earnings$210$86$124

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 to obtain entitlements,
•the ability of buyers to obtain financing,
•the number of competing properties listed for sale,
•the seasonal nature of sales (particularly in the northern states),
•the plans of adjacent landowners,
•our expectations of future price appreciation,
•the timing of harvesting activities and
•the availability of government and not-for-profit funding (especially for conservation sales).

In any period, the average sales price per acre will vary based on the location and physical characteristics of parcels sold.

COMPARING 2021 WITH 2020

Net Sales

Net sales increased $68 million — 25 percent — primarily attributable to increases in mitigation bank sales, the average price per acre sold and energy and natural resources sales.

Costs of Sales

Costs of sales decreased $56 million — 34 percent — primarily attributable to a decrease in the amount of acres sold.

Net Contribution to Earnings

Net contribution to earnings increased $124 million — 144 percent — attributable to the change in the components of gross margin, as discussed above.

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 47

Table of Contents

WOOD PRODUCTS

HOW WE DID

We report sales volumes and annual production data for our Wood Products segment in Our Business/What We Do/Wood Products.

Net Sales and Net Contribution to Earnings for Wood Products

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
202120202021 vs. 2020
Net sales:
Structural lumber$3,721$2,602$1,119
Oriented strand board1,8401,013827
Engineered solid section679505174
Engineered I-joists447316131
Softwood plywood21017139
Medium density fiberboard18617115
Complementary building products790676114
Other products produced (1)34833612
Total segment net sales$8,221$5,790$2,431
Costs of sales$4,808$4,221$587
Operating income and Net contribution to earnings$3,211$1,340$1,871
Column 1Column 2
(1)Other products produced sales include wood chips, other byproducts and third-party residual log sales from our Canadian Forestlands operations.

COMPARING 2021 WITH 2020

Net Sales

Net sales increased $2,431 million — 42 percent — primarily due to:

•a $1,119 million increase in structural lumber sales attributable to a 42 percent increase in sales realizations;
•an $827 million increase in oriented strand board sales attributable to a 97 percent increase in sales realizations, partially offset by an 8 percent decrease in sales volumes;
•a $174 million increase in engineered solid section sales attributable to a 29 percent increase in sales realizations, as well as a 4 percent increase in sales volumes;
•a $131 million increase in engineered I-joists sales attributable to a 38 percent increase in sales realizations;
•a $114 million increase in complementary building products sales attributable to increased sales realizations;
•a $39 million increase in softwood plywood sales attributable to a 66 percent increase in sales realizations, partially offset by a 26 percent decrease in sales volumes;
•a $15 million increase in medium density fiberboard sales attributable to a 7 percent increase in sales realizations and
•a $12 million increase in other products produced sales attributable to increased sales volumes for veneer, as well as increased sales realizations for veneer and logs.

Costs of Sales

Costs of sales increased $587 million — 14 percent — primarily attributable to increased freight costs, sales volumes and raw material costs for most products.

Operating Income and Net Contribution to Earnings

Operating income and net contribution to earnings increased $1,871 million — 140 percent — primarily due to the change in the components of gross margin, as discussed above.

UNALLOCATED ITEMS

Unallocated Items are gains or charges related to company-level initiatives or previous businesses that are not allocated to our current business segments. They include all or a portion of items such as:

•share-based compensation,
•pension and post-employment costs,

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 48

Table of Contents

•elimination of intersegment profit in inventory and LIFO,
•foreign exchange transaction gains and losses resulting from changes in exchange rates primarily related to our U.S. dollar denominated cash and debt balances that are held by our Canadian subsidiary,
•interest income and other, as well as
•legacy obligations, such as environmental remediation and workers compensation.

Net Charge to Earnings for Unallocated Items

DOLLAR AMOUNTS IN MILLIONS
AMOUNT OF CHANGE
202120202021 vs. 2020
Unallocated corporate function and variable compensation expense$(129)$(109)$(20)
Liability classified share-based compensation(6)(2)(4)
Foreign exchange gain (loss)5(7)12
Elimination of intersegment profit in inventory and LIFO(23)(17)(6)
Other(89)(36)(53)
Operating loss(242)(171)(71)
Non-operating pension and other post-employment benefit costs(19)(290)271
Interest income and other55—
Net charge to earnings$(256)$(456)$200

Net charge to earnings decreased by $200 million — 44 percent — primarily due to a $271 million decrease in non-operating pension and other post-employment benefit costs primarily attributable to a $253 million decrease in pension settlement charges (refer to Note 9: Pension and Other Post-Employment Benefit Plans).

This decrease was partially offset by a $53 million increase in other, primarily due to increased costs for group insurance, as well as a $20 million increase in unallocated corporate function and variable compensation expense.

INTEREST EXPENSE

Our net interest expense incurred for the last two years was:

•$313 million in 2021 and
•$443 million in 2020.

Interest expense decreased by $130 million compared to 2020 primarily due to $92 million of charges related to the early extinguishment of debt (refer to Note 12: Long-Term Debt, Net) recorded in 2020, with no similar activity in 2021. The remaining change was due to a decrease in average outstanding debt in 2021 compared to 2020.

INCOME TAXES

As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. Historical distributions to shareholders, including amounts and tax characteristics, are summarized in the table below.

AMOUNTS PER SHARE
20212020
Common - capital gain distribution$1.18$0.51

We are required to pay corporate income taxes on earnings of our TRSs, which include our Wood Products segment and portions of our Timberlands and Real Estate & ENR segments' earnings. Our provision for income taxes is primarily driven by earnings generated by our TRSs.

Our provision for income taxes the last two years was:

•$709 million in 2021 and
•$185 million in 2020.

During 2020, we recorded a $60 million tax benefit related to the noncash pretax settlement charge recorded in connection with our U.S. pension plan. Refer to Note 20: Income Taxes and Note 9: Pension and Other Post-Employment Benefit Plans for further information.

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 49

Table of Contents

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 December 31, 2021, we had $1.9 billion in cash and cash equivalents and $1.5 billion of availability on our line of credit, which expires in January 2025. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

•$3,159 million in 2021 and
•$1,529 million in 2020.

COMPARING 2021 WITH 2020

Net cash from operations increased by $1,630 million, primarily due to:

•increased cash inflows from our business operations, primarily from our Wood Products segment, and
•decreased cash used for interest payments.

These changes were partially offset by a $433 million increase in cash paid for income taxes.

Pension Contributions and Benefit Payments Made and Expected

During 2021, we contributed a total of $59 million to our pension and post-employment plans, compared to a total of $30 million during 2020.

For 2022, we expect to contribute approximately $30 million to our pension and post-employment benefit plans. Refer to Note 9: Pension and Other Post-Employment Benefit Plans for further information.

INVESTING IN OUR BUSINESS

Cash from investing activities includes items such as:

•acquisitions of property, equipment, timberlands and reforestation and
•proceeds from sales of assets and operations.

Consolidated net cash from investing activities was:

•$(325) million in 2021 and
•$185 million in 2020.

COMPARING 2021 WITH 2020

Net cash from investing activities decreased by $510 million, primarily due to:

•a $362 million decrease in proceeds received from variable interest entities;
•a $265 million decrease in proceeds from the sale of timberlands and
•a $161 million increase in capital expenditures for property and equipment.

These changes were partially offset by a $276 million decrease in cash paid for timberlands acquisitions.

Summary of Capital Spending by Business Segment

DOLLAR AMOUNTS IN MILLIONS
20212020
Timberlands$114$104
Wood Products320176
Unallocated Items71
Total$441$281

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 50

Table of Contents

We expect our capital expenditures for 2022 to be approximately $440 million. The amount we spend on capital expenditures could change due to:

•future economic conditions,
•environmental regulations,
•changes in the composition of our business,
•weather,
•timing of equipment purchases and
•capital needs related to other business opportunities.

FINANCING

Cash from financing activities includes items such as:

•issuances and payments of debt,
•borrowings and payments on our revolving line of credit,
•proceeds from option exercises and
•payments for cash dividends and repurchasing stock.

Consolidated net cash from financing activities was:

•$(1,330) million in 2021 and
•$(1,358) million in 2020.

COMPARING 2021 WITH 2020

Net cash from financing activities increased $28 million in 2021, primarily due to:

•a $385 million decrease in net cash used for payments on long-term debt and
•a $230 million decrease in net cash paid related to borrowings on our line of credit.

These changes were largely offset by the following:

•a $503 million increase in cash paid for dividends and
•a $100 million increase in cash used for repurchases of common shares.

LONG-TERM DEBT

Our consolidated long-term debt (including current portion) was:

•$5.1 billion as of December 31, 2021 and
•$5.5 billion as of December 31, 2020.

The decrease in our long-term debt during 2021 is attributable to the repayment of our $225 million variable-rate term loan and our $150 million 9.00 percent notes.

The weighted average interest rate and the weighted average maturity on our long-term debt as of December 31, 2021 were 6.06 percent and 6.7 years, respectively.

See Note 12: Long-Term Debt, Net for more information.

LINE OF CREDIT

In January 2020, we refinanced and extended our $1.5 billion five-year senior unsecured revolving credit facility, which expires in January 2025. As of December 31, 2021 and December 31, 2020, we had no outstanding borrowings on the revolving credit facility and we were in compliance with the revolving credit facility covenants.

Our revolving credit agreement utilizes the London Inter-bank Offered Rate (LIBOR) as a basis for one of the interest rate options available to the company to apply to outstanding borrowings. Publication of USD LIBOR is expected to cease between January 1, 2022 and July 1, 2023. We plan to transition our revolving credit facility to an alternate reference rate in 2022. We have included provisions in our revolving credit agreement that specifically contemplate the transition from LIBOR to a replacement benchmark rate.

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 51

Table of Contents

Our Covenants

Our key covenants include the requirement to maintain:

•a minimum total adjusted shareholders' equity of $3.0 billion and
•a defined debt-to-total-capital ratio of 65 percent or less.

Our total adjusted shareholders' equity is comprised of:

•total shareholders’ equity,
•excluding accumulated other comprehensive income (loss),
•minus our investment in our unrestricted subsidiaries.

Our capitalization is comprised of:

•total debt,
•plus total adjusted shareholders' equity.

As of December 31, 2021, we had:

•total adjusted shareholders' equity of $11.2 billion and
•a defined debt-to-total-capital ratio of 31.2 percent.

When calculating compliance in accordance with financial debt covenants as of December 31, 2021 and December 31, 2020, we excluded the full amount of accumulated other comprehensive loss of $479 million and $822 million, respectively. See Note 15: Shareholders’ Interest for further information on accumulated other comprehensive loss.

There are no other significant financial debt covenants related to our third-party debt.

CREDIT RATINGS

As of December 31, 2021, our long-term issuer credit rating was BBB and Baa2 from S&P and Moody’s, respectively.

OPTION EXERCISES

Our cash proceeds from the exercise of stock options were:

•$51 million in 2021 and
•$33 million in 2020.

Our average stock price was $36.06 and $26.04 in 2021 and 2020, respectively.

DIVIDENDS

We paid cash dividends on common shares of:

•$884 million in 2021 and
•$381 million in 2020.

The increase in dividends paid is primarily due to the interim supplemental dividend of $375 million paid in the fourth quarter of 2021, as well as the temporary suspension of our quarterly dividend payments in the second and third quarter of 2020. On January 28, 2022, our board of directors declared a supplemental dividend of $1.45 per share based on 2021 financial results. The dividend is payable on February 28, 2022 to shareholders of record as of the close of business on February 18, 2022.

SHARE REPURCHASES

We repurchased over 2.7 million shares for approximately $100 million (including transaction fees) during the year ended December 31, 2021. As of December 31, 2021, we had remaining authorization of $927 million for future share repurchases. We did not repurchase shares in 2020. For further information on share repurchases see Note 15: Shareholders’ Interest.

OUR CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

More details about our contractual obligations and commercial commitments are in Note 9: Pension and Other Post-Employment Benefit Plans, Note 11: Line of Credit, Note 12: Long-Term Debt, Net, Note 14: Legal Proceedings, Commitments and Contingencies and Note 20: Income Taxes.

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 52

Table of Contents

Significant Contractual Obligations as of December 31, 2021

Significant contractual obligations as of December 31, 2021 include our long-term debt obligations and lease obligations. Refer to Note 12: Long Term Debt, Net and Note 17: Leases, respectively, for further information. Additional significant contractual obligations are included below.

DOLLAR AMOUNTS IN MILLIONS
PAYMENTS DUE BY PERIOD
LESS THAN1–33–5MORE THAN
TOTAL1 YEARYEARSYEARS5 YEARS
Interest(1)$2,183$313$571$444$855
Purchase obligations(2)$586$124$181$162$119
Employee-related obligations(3)$373$154$34$23$63
Column 1Column 2
(1)Amounts presented for interest payments assume that all long-term debt obligations outstanding as of December 31, 2021 will remain outstanding until maturity.
Column 1Column 2
(2)Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions and the approximate timing of the transaction. Purchase obligations exclude arrangements that the company can cancel without penalty.
Column 1Column 2
(3)The timing of certain payments within this category will be triggered by retirements or other events. These payments can include workers' compensation, deferred compensation and banked vacation, among other obligations. When the timing of payment is uncertain, the amounts are included in the total column only. Minimum pension funding is required by established funding standards and estimates are not made for 2023 onward. Estimated payments of contractually obligated post-employment benefits are not included due to the uncertainty of payment timing.

OFF-BALANCE SHEET ARRANGEMENTS

Off-balance sheet arrangements have not had — and are not reasonably likely to have — a material effect on our current or future financial condition, results of operations or cash flows. Note 8: Related Parties and Note 11: Line of Credit contain our disclosures of:

•surety bonds,
•letters of credit and
•information regarding variable interest entities.

ENVIRONMENTAL MATTERS, LEGAL PROCEEDINGS AND OTHER CONTINGENCIES

See Note 14: Legal Proceedings, Commitments and Contingencies.

ACCOUNTING MATTERS

CRITICAL ACCOUNTING POLICIES

In the preparation of our financial statements we follow established accounting policies and make estimates that affect both the amounts and timing of the recording of assets, liabilities, revenues and expenses. Some of these estimates require judgments about matters that are inherently uncertain. Accounting policies whose application may have a significant effect on the reported results of operations and financial position are considered critical accounting policies.

In accounting, we base our judgments and estimates on:

•historical experience and
•assumptions we believe are appropriate and reasonable under current circumstances.

Actual results, however, may differ from the estimated amounts we have recorded.

Our most critical accounting policies relate to our:

•discount rates for pension and post-employment benefit plans;
•potential impairments of long-lived assets and
•contingent liabilities.

Details about our other significant accounting policies — what we use and how we estimate — are in Note 1: Summary of Significant Accounting Policies.

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 53

Table of Contents

DISCOUNT RATES FOR PENSION AND POST-EMPLOYMENT BENEFIT PLANS

Discount rates are used to estimate the net present value of our pension and other post-employment plan obligations. These rates are determined at the measurement date by matching current spot rates of high-quality corporate bonds with maturities similar to the timing of expected cash outflows for benefits. The selection of discount rates requires judgment as well as the involvement of actuarial specialists. These specialists assist with selecting yield curves based on published indices for high-quality corporate bonds and projecting the timing and amount of cash flows associated with our obligations to ultimately support our determination of an appropriate discount rate for each plan.

Our discount rates as of December 31, 2021 are:

•2.9 percent for our U.S. pension plans — compared with 2.5 percent at December 31, 2020;
•2.6 percent for our U.S. post-employment plans — compared with 2.1 percent at December 31, 2020;
•3.1 percent for our Canadian pension plans — compared with 2.5 percent at December 31, 2020 and
•3.0 percent for our Canadian post-employment plans — compared with 2.4 percent at December 31, 2020.

Pension expenses for 2022 will be based on the 2.9 percent and 3.1 percent assumed discount rates for the U.S. pension plan and the Canadian pension plan, respectively, and the 2.6 percent and 3.0 percent assumed discount rates for the U.S. and Canadian post-employment benefit plans, respectively.

Our discount rates are important in determining the cost of our plans. A 50 basis point decrease in our discount rate would increase expense or reduce a credit by approximately:

•$18 million for our U.S. qualified pension plans and
•$6 million for our Canadian registered pension plans.

IMPAIRMENT OF LONG-LIVED ASSETS

We review the carrying value of long-lived assets whenever an event or a change in circumstance indicates that the carrying value of the asset or asset group may not be recoverable through future operations. The carrying value is the original cost, less accumulated depreciation and any past impairments recorded. Refer to Note 4: Timberland Acquisitions and Divestitures for information on an impairment recognized in 2019.

If we evaluate recoverability, we are required to estimate future cash flows and residual values of the asset or asset group. Key assumptions used in developing these estimates would include probability of alternative outcomes, product pricing, raw material cost and product sales.

An impairment occurs when the carrying value of a long-lived asset is greater than the amount that could be recovered from the estimated future cash flows of the asset and greater than fair market value (the amount we could receive if we were to sell the asset). Key assumptions used in developing estimates of fair value would include the estimated future cash flows used to assess recoverability, discount rates and probability of alternative outcomes.

CONTINGENT LIABILITIES

We are subject to lawsuits, investigations and other claims related to environmental, product and other matters, and are required to assess the likelihood of any adverse judgments or outcomes to these matters, as well as the amount or range of potential loss.

We record contingent liabilities when:

•it becomes probable that a loss has been incurred and
•the amount of loss can be reasonably estimated.

Assessing probability of loss and estimating the amount of loss can require analysis of multiple factors, such as:

•historical experience,
•evaluations of relevant legal and environmental authorities and regulations,
•judgments about the potential actions of third-party claimants and courts and
•consideration of potential environmental remediation methods.

In addition to contingent liabilities recorded for probable losses, we disclose contingent liabilities when there is a reasonable possibility that a loss may have been incurred.

Recorded contingent liabilities are based on the best information available and actual losses in any future period are inherently uncertain. If estimated probable future losses or actual losses exceed our recorded liability for such claims, we record additional charges. These exposures and proceedings can be significant and the ultimate negative outcomes could be material to our operating results or cash flows in any given quarter or year. See Note 14: Legal Proceedings, Commitments and Contingencies for more information.

PROSPECTIVE ACCOUNTING PRONOUNCEMENTS

A summary of prospective accounting pronouncements is in Note 1: Summary of Significant Accounting Policies.

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 54

Table of Contents

PERFORMANCE MEASURES

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 our 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.

Adjusted EBITDA by Segment

DOLLAR AMOUNTS IN MILLIONS
20212020
Timberlands$693$610
Real Estate & ENR296241
Wood Products3,3571,527
Unallocated Items(252)(177)
Total$4,094$2,201

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

The table below reconciles Adjusted EBITDA by segment to net earnings for the year ended December 31, 2021:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$2,607
Interest expense, net of capitalized interest313
Income taxes709
Net contribution (charge) to earnings$464$210$3,211$(256)$3,629
Non-operating pension and other post-employment benefit costs———1919
Interest income and other———(5)(5)
Operating income (loss)4642103,211(242)3,643
Depreciation, depletion and amortization261151965477
Basis of real estate sold—71——71
Special items included in operating income (loss)(1)(2)(3)(32)—(50)(15)(97)
Adjusted EBITDA$693$296$3,357$(252)$4,094
Column 1Column 2
(1)Operating income (loss) for Timberlands includes a pretax special item consisting of a $32 million gain on sale of timberlands.
Column 1Column 2
(2)Operating income (loss) for Wood Products includes pretax special items consisting of a $37 million product remediation insurance recovery and a $13 million insurance recovery.
Column 1Column 2
(3)Operating income (loss) for Unallocated Items includes a pretax special item consisting of a $15 million noncash legal benefit.

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 55

Table of Contents

The table below reconciles Adjusted EBITDA by segment to net earnings for the year ended December 31, 2020:

DOLLAR AMOUNTS IN MILLIONS
REAL ESTATEWOODUNALLOCATED
TIMBERLANDS& ENRPRODUCTSITEMSTOTAL
Net earnings$797
Interest expense, net of capitalized interest(1)443
Income taxes185
Net contribution (charge) to earnings$455$86$1,340$(456)$1,425
Non-operating pension and other post-employment benefit costs(2)———290290
Interest income and other———(5)(5)
Operating income (loss)455861,340(171)1,710
Depreciation, depletion and amortization257141956472
Basis of real estate sold—141——141
Special items included in operating income (loss)(3)(4)(5)(102)—(8)(12)(122)
Adjusted EBITDA$610$241$1,527$(177)$2,201
Column 1Column 2
(1)Interest expense, net of capitalized interest includes pretax special items of $92 million related to charges for the early extinguishment of debt.
Column 1Column 2
(2)Non-operating pension and other post-employment benefit costs includes a pretax special item consisting of a $253 million noncash settlement charge related to the transfer of pension plan assets and liabilities through the purchase of a group annuity contract.
Column 1Column 2
(3)Operating income (loss) for Timberlands includes pretax special items consisting of a $182 million gain on sale of certain southern Oregon timberlands and an $80 million timber casualty loss.
Column 1Column 2
(4)Operating income (loss) for Wood Products includes a pretax special item consisting of an $8 million product remediation insurance recovery.
Column 1Column 2
(5)Operating income (loss) for Unallocated Items includes a pretax special item consisting of a $12 million noncash legal benefit.

We also reconcile net earnings before special items to net earnings and net earnings per diluted share before special items to net earnings per diluted share, as those are the most directly comparable U.S. GAAP measures. 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.

The table below reconciles net earnings before special items to net earnings:

DOLLAR AMOUNTS IN MILLIONS
20212020
Net earnings$2,607$797
Early extinguishment of debt charges—92
Gain on sale of timberlands(32)(182)
Insurance recovery(9)—
Legal benefits(12)(12)
Pension settlement charge—193
Product remediation recoveries(28)(6)
Timber casualty loss—80
Net earnings before special items$2,526$962

WEYERHAEUSER COMPANY 2021 ANNUAL REPORT AND FORM 10-K 56

Table of Contents

The table below reconciles net earnings per diluted share before special items to net earnings per diluted share:

AMOUNTS PER SHARE
20212020
Net earnings per diluted share$3.47$1.07
Early extinguishment of debt charges—0.12
Gain on sale of timberlands(0.04)(0.24)
Insurance recovery(0.01)—
Legal benefits(0.01)(0.02)
Pension settlement charge—0.26
Product remediation recoveries(0.04)(0.01)
Timber casualty loss—0.11
Net earnings per diluted share before special items$3.37$1.29