What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-07-26 compared with 2024-04-26 · 205 added, 91 removed, 300 unchanged (50% of the section changed)

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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 future share repurchases;

compliance with covenants in our debt agreements;

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housing activity, repair and remodel activity, inflation trends and interest rates;

expected adjustments to our lumber production in third quarter 2024;

our expectations about our future opportunities in emerging carbon credit and carbon capture and storage markets;

and assumptions used in valuing incentive compensation and related expense.

assumptions used in valuing incentive compensation and related expense and pending timberland acquisition transactions.

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,” “potential,” and “will,” or similar words or terminology.

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.

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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 second half of 2023 and into first quarter 2024, new home sales and single-family construction activity strengthened, supported by near record-low levels of existing inventory and resilient levels of demand.

Over the first half of the year, home sales and building activity moderated in part due to continued elevated mortgage interest rates, reduced affordability and general macroeconomic conditions.

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.

On a seasonally adjusted annual basis, as reported by the U.S.

Census Bureau, housing starts for first quarter 2024 averaged 1.4 million units, a 4.7 percent decrease from fourth quarter 2023.

Single-family starts averaged 1.1 million units in first quarter 2024, a 1.4 percent increase from fourth quarter 2023.

Multi-family starts averaged 346 thousand units in first quarter 2024, which was a 19.5 percent decrease from fourth quarter 2023.

Census Bureau, housing starts for second quarter 2024 averaged 1.35 million units, a 4.2 percent decrease from first quarter 2024.

Single-family starts averaged 1.0 million units in second quarter 2024, a 5.2 percent decrease from first quarter 2024.

Multi-family starts averaged 342 thousand units in second quarter 2024, which was a 1.0 percent decrease from first 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 667 thousand units for first quarter 2024, an increase of 3.5 percent from fourth quarter 2023.

Sales of newly built, single-family homes averaged a seasonally adjusted annual rate of 656 thousand units for second quarter 2024, a decrease of 1.1 percent from first quarter 2024, with slower activity primarily due to high mortgage rates.

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 2.8 percent from fourth quarter 2023 to first quarter 2024 according to the Census Bureau Advance Retail Spending report.

Near-term, activity has been supported by existing homeowners staying in place and investing in their current homes due to the lock-in effect of having lower rate mortgages compared to current rates.

Repair and remodeling expenditures increased by 1.1 percent from first quarter 2024 to second 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 of having lower mortgage rates compared to current rates, many homeowners have become more cautious in discretionary spending on large projects.

Additionally, some repair and remodeling activity was accelerated during the pandemic which has had an 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 43 years.

wood product markets, demand for lumber and OSB was influenced by cautious buyer sentiment at the outset of first quarter 2024.

As the quarter progressed, demand was steady in response to strong single-family housing starts.

The Random Lengths Framing Lumber Composite price averaged $403/MBF and the OSB Composite averaged $460/MSF in first quarter 2024.

Over the course of the first quarter, composite prices for lumber increased from $395/MBF to $422/MBF and composite prices for OSB increased from $430/MSF to $603/MSF.

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

In Western log markets, Douglas fir sawlog prices decreased 2.9 percent in first quarter 2024 compared with fourth quarter 2023, as reported by Fastmarkets RISI Log Lines based on Weyerhaeuser’s sales mix.

wood product markets, demand for lumber and OSB was influenced by cautious buyer sentiment during the second quarter of 2024.

As the quarter progressed, demand was mixed as continued strength in single-family housing starts was offset by weaker multi-family construction and repair and remodel activity.

The Random Lengths Framing Lumber Composite price averaged $384/MBF and the OSB Composite averaged $487/MSF in second quarter 2024.

Over the course of the second quarter, composite prices for lumber decreased from $422/MBF to $366/MBF and composite prices for OSB decreased from $603/MSF to $352/MSF.

Lumber markets have been particularly challenged due to an imbalance of supply and demand, which has resulted in a sustained, weak pricing environment.

In light of these conditions, Weyerhaeuser expects to reduce its lumber production by 5 to 10 percent in third quarter 2024.

This reduction is inclusive of the company's decision to indefinitely curtail its lumber mill in New Bern, North Carolina.

The company will continue to assess its operating rates in light of current market conditions on a go-forward basis.

In Western log markets, Douglas fir sawlog prices decreased 4.9 percent in second quarter 2024 compared with first quarter 2024, as reported by Fastmarkets RISI Log Lines based on Weyerhaeuser’s sales mix.

Overall, domestic log demand and prices faced downward pressure through the quarter, as mills continued to adjust to a soft lumber market and worked through elevated log inventories.

In the South, delivered sawlog prices were stable in first quarter 2024 compared to fourth quarter 2023 and declined 0.6 percent from first quarter 2023 as reported by TimberMart-South.

In the South, delivered sawlog prices decreased 1.0 percent in second quarter 2024 compared to first quarter 2024 and declined 1.7 percent from second quarter 2023 as reported by TimberMart-South.

While there continued to be demand for logs across the region and markets generally had ample log supply, a number of mills faced elevated inventories and were adjusting operations due to lower lumber prices.

Currency exchange rates, available supply from other countries and trade policy affect our export businesses.

During first quarter 2024, end use demand in export markets moderated.

In Japan, total housing starts decreased 7.8 percent year to date through February compared to the same period in 2023, while the key Post and Beam segment saw a 5.9 percent decrease.

During second quarter 2024, end use demand in export markets moderated.

In Japan, total housing starts decreased 4.0 percent year to date through May compared to the same period in 2023, while the key Post and Beam segment saw a 4.4 percent decrease.

Lumber imports to Japan from Europe were reduced due to supply chain costs, which provided some support for log sales.

China’s weaker end use demand for logs and lumber was offset by lower competitive supply, leading to an increase in pricing for logs from the West.

China’s weaker end use demand for logs and lumber led to a decrease in 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.

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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 6.6 percent at the end of fourth quarter 2023 to 6.8 percent at the end of first 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.

30-year mortgage rates, which are correlated with long-term interest rates, increased from 6.8 percent at the end of first quarter 2024 to 6.9 percent at the end of second 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, 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 3.5 percent as of March 2024, which is markedly down from its peak of over 9.0 percent in June 2022.

The Consumer Price Index increased at an annual rate of 3.0 percent as of June 2024, which is markedly down from its peak of over 9.0 percent in June 2022.

While we can offset some of the impacts of inflation through our sales activities, operational excellence initiatives and 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 3.8 percent in March 2024 remained near historically low levels and increased 0.1 percent from the end of fourth quarter 2023.

The unemployment rate of 4.1 percent in June 2024 has increased moderately above historically low levels and increased 0.3 percent from the end of first quarter 2024.

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.

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CONSOLIDATED RESULTS

How We Did First Quarter 2024

How We Did Second Quarter 2024 and Year-to-Date 2024

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Earnings per share, basic and diluted

Comparing First Quarter 2024 with First Quarter 2023

Net sales decreased $85 million – 5 percent – primarily due to a $75 million decrease in Timberlands sales to unaffiliated customers, attributable to decreased log sales volumes and sales realizations.

Comparing Second Quarter 2024 with Second Quarter 2023

Net sales decreased $58 million – 3 percent – primarily due to a $79 million decrease in Wood Products net sales to unaffiliated customers attributable to decreased sales realizations and sales volumes across most product lines, partially offset by a $29 million increase in Real Estate, Energy and Natural Resources net sales attributable to an increase in acres sold.

Costs of sales

Costs of sales decreased $71 million – 5 percent – primarily due to decreased sales volumes in our Wood Products segment, as well as decreased third-party log purchases and sales volumes in our Timberlands segment.

Costs of sales increased $7 million – less than 1 percent – primarily due to an increase in acres sold in our Real Estate, Energy and Natural Resources segment, partially offset by decreased sales volumes across most product lines in our Wood Products segment.

Operating income

Operating income decreased $40 million – 17 percent – primarily due to a $14 million decrease in consolidated gross margin (see discussion of components above), as well as increased elimination of intersegment profit in inventory and LIFO and unallocated corporate function and variable compensation expense.

Net earnings decreased $37 million – 25 percent – primarily due to the $40 million decrease in operating income, as discussed above, partially offset by a $2 million decrease in income tax expense (refer to Income Taxes ).

How We Did First Quarter 2024

Operating income decreased $49 million – 15 percent – primarily due to a $65 million decrease in consolidated gross margin (see discussion of components above), partially offset by a $25 million product remediation recovery recorded in second quarter 2024 (refer to Note 13:

Other Operating (Income) Costs, Net ).

Net earnings decreased $57 million – 25 percent – primarily due to the $49 million decrease in operating income, as discussed above, as well as an $8 million increase in income tax expense (refer to Income Taxes ).

Comparing Year-to-Date 2024 with Year-to-Date 2023

Net sales decreased $143 million – 4 percent – primarily due to a $95 million decrease in Wood Products net sales to unaffiliated customers attributable to decreased sales realizations across most product lines, as well as an $83 million decrease in Timberlands net sales to unaffiliated customers attributable to decreased sales volumes and sales realizations.

Costs of sales

Costs of sales decreased $64 million – 2 percent – primarily due to decreased sales volumes for oriented strand board and structural lumber in our Wood Products segment.

Operating income

Operating income decreased $89 million – 16 percent – primarily due to a $79 million decrease in gross margin (see discussion of components above).

Net earnings decreased $94 million – 25 percent – primarily due to the $89 million decrease in operating income, as discussed above.

How We Did Second Quarter 2024 and Year-to-Date 2024

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DOLLAR AMOUNTS IN MILLIONS

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Costs of sales

Operating income and Net contribution to earnings

Operating income

Interest income and other

Net contribution to earnings

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

Comparing First Quarter 2024 with First Quarter 2023

Comparing Second Quarter 2024 with Second Quarter 2023

Net sales to unaffiliated customers

Net sales to unaffiliated customers decreased $75 million – 16 percent – primarily due to a $53 million decrease in Western log sales attributable to a 13 percent decrease in sales volumes and a 12 percent decrease in sales realizations, as well as a $17 million decrease in Southern log sales attributable to a 7 percent decrease in sales volumes and a 3 percent decrease in sales realizations.

Net sales to unaffiliated customers decreased $8 million – 2 percent – primarily due to a $9 million decrease in Southern log sales attributable to a 4 percent decrease in sales volumes and a 2 percent decrease in sales realizations.

Intersegment sales

Intersegment sales decreased $8 million – 6 percent – primarily due to a 3 percent decrease in sales realizations, as well as a 3 percent decrease in sales volumes.

Intersegment sales decreased $4 million – 3 percent – primarily due to a 5 percent decrease in sales realizations, partially offset by a 2 percent increase in sales volumes.

Costs of sales

Costs of sales decreased $46 million – 10 percent – primarily due to decreased Western third-party log purchases and freight costs, as well as decreased sales volumes across all regions.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased $40 million – 33 percent – primarily due to the change in the components of gross margin, as discussed above.

Costs of sales increased $11 million – 3 percent – primarily due to increased Western logging, hauling and freight costs.

Net contribution to earnings

Net contribution to earnings decreased $23 million – 22 percent – primarily due to the change in the components of gross margin, as discussed above.

Comparing Year-to-Date 2024 with Year-to-Date 2023

Net sales to unaffiliated customers

Net sales to unaffiliated customers decreased $83 million – 9 percent – primarily due to a $54 million decrease in Western log sales attributable to a 6 percent decrease in sales volumes and sales realizations, as well as a $26 million decrease in Southern log sales attributable to a 6 percent decrease in sales volumes and a 3 percent decrease in sales realizations.

Intersegment sales

Intersegment sales decreased $12 million – 4 percent – primarily due to a 4 percent decrease in sales realizations.

Costs of sales

Costs of sales decreased $35 million – 4 percent – primarily due to decreased Western third-party log purchases and decreased Southern sales volumes, partially offset by increased Western logging and hauling costs.

Net contribution to earnings

Net contribution to earnings decreased $63 million – 28 percent – primarily due to the change in the components of gross margin, as discussed above.

Third-Party Log Sales Volumes and Fee Harvest Volumes

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VOLUMES IN THOUSANDS

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REAL ESTATE, ENERGY A ND NATURAL RESOURCES

How We Did First Quarter 2024

How We Did Second Quarter 2024 and Year-to-Date 2024

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

Comparing First Quarter 2024 with First Quarter 2023

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

Comparing Second Quarter 2024 with Second Quarter 2023

Net sales increased $29 million – 36 percent – primarily due to an increase in acres sold, partially offset by a decrease in average price per acre sold.

Costs of sales

Costs of sales remained consistent with an increase in mitigation credit sales offset by a decrease in acres sold.

Costs of sales increased $25 million – 119 percent – primarily due to an increase in acres sold.

Operating income and Net contribution to earnings

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

Comparing Year-to-Date 2024 with Year-to-Date 2023

Net sales increased $35 million – 19 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 $25 million – 40 percent – primarily due to an increase in acres sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased $14 million – 13 percent – primarily due to the change in the components of gross margin, as discussed above.

REAL ESTATE SALES STATISTICS

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Average price per acre

WOOD PRODUCTS

How We Did First Quarter 2024

How We Did Second Quarter 2024 and Year-to-Date 2024

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

Comparing First Quarter 2024 with First Quarter 2023

Net sales decreased $16 million – 1 percent – due to:

● a $51 million decrease in structural lumber sales attributable to a 6 percent decrease in sales volumes, as well as a 5 percent decrease in sales realizations;

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

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

These decreases were partially offset by:

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

● a $12 million increase in engineered I-joists sales attributable to a 37 percent increase in sales volumes, partially offset by a 16 percent decrease in sales realizations and

● an $8 million increase in engineered solid section sales attributable to a 15 percent increase in sales volumes, partially offset by a 12 percent decrease in sales realizations.

Comparing Second Quarter 2024 with Second Quarter 2023

Net sales decreased $79 million – 5 percent – primarily due to:

● a $74 million decrease in structural lumber sales attributable to a 13 percent decrease in sales realizations;

● a $28 million decrease in complementary building products sales attributable to decreased sales realizations and sales volumes across most products;

● a $24 million decrease in engineered solid section sales attributable to a 9 percent decrease in sales realizations and

● a $19 million decrease in engineered I-joist sales attributable to a 9 percent decrease in sales realizations, as well as a 7 percent decrease in sales volumes.

These decreases were partially offset by a $73 million increase in oriented strand board sales attributable to a 36 percent increase in sales realizations.

Costs of sales

Costs of sales decreased $33 million – 3 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 $22 million – 10 percent – primarily due to the change in the components of gross margin, as discussed above, partially offset by a $25 million product remediation recovery recorded in second quarter 2024 (refer to Note 13:

Other Operating (Income) Costs, Net ).

Comparing Year-to-Date 2024 with Year-to-Date 2023

Net sales decreased $95 million – 3 percent – primarily due to:

● a $125 million decrease in structural lumber sales attributable to a 9 percent decrease in sales realizations, as well as a 3 percent decrease in sales volumes;

● a $50 million decrease in complementary building products sales attributable to decreased sales realizations and sales volumes across most products;

● a $16 million decrease in engineered solid section sales attributable to a 10 percent decrease in sales realizations, partially offset by a 7 percent increase in sales volumes and

● a $16 million decrease in other products produced primarily attributable to decreased sales realizations for wood chips.

These decreases were partially offset by a $120 million increase in oriented strand board sales attributable to a 35 percent increase in sales realizations, partially offset by a 5 percent decrease in sales volumes.

Costs of sales

Costs of sales decreased $85 million – 4 percent – primarily due to decreased sales volumes for oriented strand board and structural lumber, as discussed above, as well as decreased raw material costs across most product lines.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased $33 million – 35 percent – primarily due to the change in the components of gross margin, as discussed above.

Operating income and net contribution to earnings increased $11 million – 4 percent – primarily due to a $25 million product remediation recovery recorded in second quarter 2024 (refer to Note 13:

Other Operating (Income) Costs, Net ), partially offset by the change in the components of gross margin, as discussed above.

Third-Party Sales Volumes

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VOLUMES IN MILLIONS (1)

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Liability classified share-based compensation

Foreign exchange loss

Foreign exchange gain (loss)

Elimination of intersegment profit in inventory and LIFO

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Net charge to earnings

Comparing First Quarter 2024 with First Quarter 2023

Net charge to earnings increased $38 million – 131 percent – primarily due to a $15 million increase in elimination of intersegment profit in inventory and LIFO and an $11 million increase in unallocated corporate function and variable compensation expense.

Comparing Second Quarter 2024 with Second Quarter 2023

Net charge to earnings increased $14 million – 29 percent – primarily due to:

● a $6 million decrease in interest income and other, primarily attributable to a decrease in our cash and short-term investment accounts;

● a $5 million increase in unallocated corporate function and variable compensation expense and

● a $2 million decrease in foreign exchange gain.

Comparing Year-to-Date 2024 with Year-to-Date 2023

Net charge to earnings increased $52 million – 67 percent – primarily due to a $16 million increase in unallocated corporate function and variable compensation expense and a $12 million increase in elimination of intersegment profit in inventory and LIFO.

INTEREST EXPENSE

Our interest expense, net of capitalized interest, was:

● $67 million for first quarter 2024 and

● $66 million for first quarter 2023.

Interest expense increased by $1 million compared to first quarter 2023 primarily due to a series of debt issuances and retirements during 2023 that slightly increased our average outstanding debt.

● $67 million for second quarter 2024 and $134 million year-to-date 2024;

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

Interest expense decreased by $3 million compared to second quarter 2023 and decreased by $2 million compared to year-to-date 2023 primarily due to a series of debt issuances and retirements during 2023 that decreased our average outstanding debt.

Refer to Note 8:

Long-Term Debt and Line of Credit for further information.

Our provision for income taxes was:

● a $20 million expense for first quarter 2024 and

● a $22 million expense for first quarter 2023.

● a $33 million expense for second quarter 2024 and $53 million year-to-date 2024;

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

Our provision for income taxes is primarily driven by earnings generated by our TRSs.

Income tax expense decreased by $2 million compared to first quarter 2023 primarily due to a slight decrease in our overall earnings in first quarter 2024.

Income tax expense increased by $6 million compared to year-to-date 2023 primarily due to a $25 million product remediation recovery received during second quarter 2024.

Refer to Note 13:

Other Operating (Income) Costs, Net and Note 14:

Income Taxes for further information.

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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 March 31, 2024, we had $871 million in cash and cash equivalents and $1.5 billion of availability on our line of credit, which expires in March 2028.

As of June 30, 2024, we had $997 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.

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Consolidated net cash from operations was:

● $124 million for first quarter 2024 and

● $126 million for first quarter 2023.

Net cash from operations decreased $2 million primarily due to a $17 million increase in cash paid for income taxes, partially offset by increased cash inflows from our business operations.

● $556 million for year-to-date 2024 and

● $622 million for year-to-date 2023.

Net cash from operations decreased $66 million primarily due to decreased cash flows from our business operations, as well as a $20 million increase in cash paid for income taxes.

CASH FROM INVESTING ACTIVITIES

Consolidated net cash from investing activities was:

● $(77) million for first quarter 2024 and

● $(69) million for first quarter 2023.

Net cash from investing activities decreased $8 million primarily due to an $8 million increase in cash paid for capital expenditures.

● $(220) million for year-to-date 2024 and

● $(818) million for year-to-date 2023.

Net cash from investing activities increased $598 million primarily due to a $664 million decrease in cash paid for short-term investments, partially offset by a $51 million increase in cash paid for acquisitions of timberlands.

Summary of Capital Spending by Business Segment

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Consolidated net cash from financing activities was:

● $(308) million for first quarter 2024 and

● $(841) million for first quarter 2023.

Net cash from financing activities increased $533 million primarily due to a $551 million decrease in cash used for payments of dividends, partially offset by a $16 million increase in cash used for repurchases of common stock.

● $(503) million for year-to-date 2024 and

● $(290) million for year-to-date 2023.

Net cash from financing activities decreased $213 million primarily due to a $743 million decrease in net proceeds from issuance of long-term debt, partially offset by a $544 million decrease in cash used for payments of dividends.

Line of Credit

In March 2023, we entered into a new $1.5 billion five-year senior unsecured revolving credit facility, which expires in March 2028 and replaced the existing facility which was set to expire in January 2025.

Borrowings will bear interest at a floating rate based on either the adjusted term SOFR plus a spread or a mutually agreed upon base rate plus a spread.

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

We had no outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility as of June 30, 2024 or December 31, 2023.

This credit facility expires in March 2028.

Refer to Note 8:

Line of Credit for further information.

Long-Term Debt and Line of Credit for further information.

Long-Term Debt

We have $210 million of long-term debt scheduled to mature during first quarter 2025.

We have $210 million of long-term debt, with a weighted average interest rate of 8.314 percent, scheduled to mature during first quarter 2025.

In May 2023, we completed an offering of debt securities by issuing $750 million of 4.750 percent notes due in May 2026.

The net proceeds after deducting the discount, underwriting fees and issuance costs were $743 million.

Refer to Note 8:

Fair Value of Financial Instruments for further information.

Long-Term Debt and Line of Credit for further information.

Debt Covenants

As of March 31, 2024, Weyerhaeuser Company was in compliance with its debt covenants.

As of June 30, 2024, Weyerhaeuser Company was in compliance with its debt covenants.

There have been no significant changes to the debt covenants presented in our 2023 Annual Report on Form 10-K for our long-term debt instruments, and we expect to remain in compliance with our debt covenants for the foreseeable future.

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We paid cash dividends on common shares of:

● $248 million for first quarter 2024 and

● $799 million for first quarter 2023.

● $394 million for year-to-date 2024 and

● $938 million for year-to-date 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.

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Share Repurchases

We repurchased 1,472,369 common shares for approximately $49 million (including transaction fees) during first quarter 2024 and we repurchased 1,115,560 common shares for approximately $35 million (including transaction fees) during first quarter 2023 under the 2021 Repurchase Program.

There were no unsettled shares as of March 31, 2024 and 13,866 unsettled shares (approximately $1 million) as of December 31, 2023.

We repurchased 1,669,145 common shares for approximately $50 million (including transaction fees) during second quarter 2024 and 3,141,514 common shares for approximately $99 million (including transaction fees) during year-to-date 2024 under the 2021 Repurchase Program.

During second quarter 2023, we repurchased 1,689,874 common shares for approximately $50 million (including transaction fees) and 2,805,434 common shares for approximately $85 million (including transaction fees) during year-to-date 2023 under the 2021 Repurchase Program.

There were 15,765 unsettled shares (approximately $1 million) as of June 30, 2024 and 13,866 unsettled shares (approximately $1 million) as of December 31, 2023.

Refer to Note 4:

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DOLLAR AMOUNTS IN MILLIONS

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GAAP measures for each.

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

The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2024:

DOLLAR AMOUNTS IN MILLIONS

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Basis of real estate sold

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

Adjusted EBITDA

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

(1) Operating income (loss) for Wood Products includes a pretax special item consisting of a $25 million product remediation recovery.

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

DOLLAR AMOUNTS IN MILLIONS

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Basis of real estate sold

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

Adjusted EBITDA

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

The table below reconciles Adjusted EBITDA for the year-to-date period ended June 30, 2024:

DOLLAR AMOUNTS IN MILLIONS

Real Estate &

Adjusted EBITDA by Segment:

Interest expense, net of capitalized interest

Net contribution (charge) to earnings

Non-operating pension and other post-employment benefit costs

Interest income and other

Operating income (loss)

Depreciation, depletion and amortization

Basis of real estate sold

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

Adjusted EBITDA

(1) Operating income (loss) for Wood Products includes a pretax special item consisting of a $25 million product remediation recovery.

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

DOLLAR AMOUNTS IN MILLIONS

Adjusted EBITDA by Segment:

Interest expense, net of capitalized interest

Net contribution (charge) to earnings

Non-operating pension and other post-employment benefit costs

Interest income and other

Operating income (loss)

Depreciation, depletion and amortization

Basis of real estate sold

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

Adjusted EBITDA

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

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 non-recurring items) that is available for dividends, repurchases of common shares, debt reduction, acquisitions and other discretionary and nondiscretionary capital allocation activities.

7 unchanged sentences

QUARTER ENDED

YEAR-TO-DATE ENDED

DOLLAR AMOUNTS IN MILLIONS

1 unchanged sentence

Capital expenditures

Cash from product remediation recovery

Net cash from investing activities

Net cash from financing activities

CRITICAL ACCOUNTING POLICIES

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

Net Earnings and Net Earnings per Diluted Share Before Special Items

We use net earnings before special items and net earnings per diluted share before special items as key performance measures to evaluate the performance of the consolidated company.

These measures should not be considered in isolation from, and are not intended to represent an alternative to, our results reported in accordance with U.S.

However, we believe the measures provide meaningful supplemental information for investors about our operating performance, better facilitate period to period comparisons and are widely used by analysts, lenders, rating agencies and other interested parties.

Net Earnings Before Special Items

QUARTER ENDED

YEAR-TO-DATE ENDED

DOLLAR AMOUNTS IN MILLIONS

Environmental remediation charge

Product remediation recovery

Net earnings before special items

Net Earnings per Diluted Share Before Special Items

QUARTER ENDED

YEAR-TO-DATE ENDED

Net earnings per diluted share

Environmental remediation charge

Product remediation recovery

Net earnings per diluted share before special items

CRITICAL ACCOUNTING E STIMATES

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

QUANTIT ATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

6 unchanged sentences

Changes in market rates of interest affect the fair value of our fixed-rate debt.

Summary of Long-Term Debt Obligations as of March 31, 2024

Summary of Long-Term Debt Obligations as of June 30, 2024

DOLLAR AMOUNTS IN MILLIONS

3 unchanged sentences

(1) Excludes $43 million of unamortized discounts and capitalized debt expense.

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

(2) As of June 30, 2024, the interest rate for our variable-rate debt was 7.29 percent, excluding estimated patronage refunds.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis