WEYERHAEUSER CO 10-Q

Item 1. FINANCIAL STATEMENTS WEYERHAEUSER COMPANY CONSOLIDATED STATEM ENT OF OPERATIONS (UNAUDITED) QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Net sales (Note 3) $ 1,939 $ 1,997 $ 3,735 $ 3,878 Costs of sales 1,535 1,528 2,976 3,040 Gross margin 404 469 759 838 Selling expenses 22 22 44 44 General and administrative expenses 116 108 236 209 Other operating (income) costs, net (Note 13) ( 4 ) 20 13 30 Operating income 270 319 466 555 Non-operating pension and other post-employment benefit costs (Note 6) ( 10 ) ( 12 ) ( 21 ) ( 21 ) Interest income and other 13 18 29 30 Interest expense, net of capitalized interest ( 67 ) ( 70 ) ( 134 ) ( 136 ) Earnings before income taxes 206 255 340 428 Income taxes (Note 14) ( 33 ) ( 25 ) ( 53 ) ( 47 ) Net earnings $ 173 $ 230 $ 287 $ 381 Earnings per share, basic and diluted (Note 4) $ 0.24 $ 0.31 $ 0.39 $ 0.52 Weighted average shares outstanding (in thousands) (Note 4): Basic 729,026 732,021 729,534 732,599 Diluted 729,341 732,362 729,950 732,961 See accompanying Notes to Consolidated Financial Statements . 1 WEYERHAEUSER COMPANY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Net earnings $ 173 $ 230 $ 287 $ 381 Other comprehensive income: Foreign currency translation adjustments ( 5 ) 7 ( 14 ) 7 Changes in unamortized actuarial loss, net of tax expense of $ 2 , $ 2 , $ 6 and $ 4 7 7 15 14 Changes in unamortized net prior service credit, net of tax benefit of $ 0 , $ 1 , $ 0 and $ 1 — 1 — 1 Total other comprehensive income 2 15 1 22 Total comprehensive income $ 175 $ 245 $ 288 $ 403 See accompanying Notes to Consolidated Financial Statements . 2 WEYERHAEUSER COMPANY CONSOLIDATED BALANCE SHEET (UNAUD ITED) DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE JUNE 30, 2024 DECEMBER 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 997 $ 1,164 Receivables, net 410 354 Receivables for taxes 10 10 Inventories (Note 5) 614 566 Prepaid expenses and other current assets 152 219 Total current assets 2,183 2,313 Property and equipment, less accumulated depreciation of $ 3,970 and $ 3,901 2,240 2,269 Construction in progress 303 270 Timber and timberlands at cost, less depletion 11,475 11,528 Minerals and mineral rights, less depletion 194 200 Deferred tax assets 13 15 Other assets 392 388 Total assets $ 16,800 $ 16,983 LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term debt (Note 8) $ 210 $ — Accounts payable 281 287 Accrued liabilities (Note 7) 504 501 Total current liabilities 995 788 Long-term debt, net (Note 8) 4,862 5,069 Deferred tax liabilities 87 81 Deferred pension and other post-employment benefits (Note 6) 460 461 Other liabilities 351 348 Total liabilities 6,755 6,747 Commitments and contingencies (Note 10) Equity: Common shares: $ 1.25 par value; authorized 1,360 million shares; issued and outstanding: 727,519 thousand shares at June 30, 2024 and 729,753 thousand shares at December 31, 2023 910 912 Other capital 7,530 7,608 Retained earnings 1,897 2,009 Accumulated other comprehensive loss (Note 11) ( 292 ) ( 293 ) Total equity 10,045 10,236 Total liabilities and equity $ 16,800 $ 16,983 See accompanying Notes to Consolidated Financial Statements . 3 WEYERHAEUSER COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2024 JUNE 2023 Cash flows from operations: Net earnings $ 287 $ 381 Noncash charges to earnings: Depreciation, depletion and amortization 251 252 Basis of real estate sold 70 46 Pension and other post-employment benefits (Note 6) 31 32 Share-based compensation expense (Note 12) 22 17 Other 4 2 Change in: Receivables, net ( 57 ) ( 105 ) Receivables and payables for taxes 13 27 Inventories ( 53 ) 14 Prepaid expenses and other current assets 33 8 Accounts payable and accrued liabilities ( 14 ) ( 30 ) Pension and post-employment benefit contributions and payments ( 9 ) ( 11 ) Other ( 22 ) ( 11 ) Net cash from operations 556 622 Cash flows from investing activities: Capital expenditures for property and equipment ( 139 ) ( 119 ) Capital expenditures for timberlands reforestation ( 31 ) ( 33 ) Acquisitions of timberlands (Note 15) ( 53 ) ( 2 ) Purchase of short-term investments — ( 664 ) Other 3 — Net cash from investing activities ( 220 ) ( 818 ) Cash flows from financing activities: Cash dividends on common shares ( 394 ) ( 938 ) Net proceeds from issuance of long-term debt (Note 8) — 743 Repurchases of common shares (Note 4) ( 99 ) ( 85 ) Other ( 10 ) ( 10 ) Net cash from financing activities ( 503 ) ( 290 ) Net change in cash, cash equivalents and restricted cash ( 167 ) ( 486 ) Cash, cash equivalents and restricted cash at beginning of period 1,164 1,581 Cash, cash equivalents and restricted cash at end of period $ 997 $ 1,095 Cash paid during the period for: Interest, net of amount capitalized of $ 5 and $ 3 $ 126 $ 127 Income taxes, net of refunds $ 38 $ 18 See accompanying Notes to Consolidated Financial Statements . 4 WEYERHAEUSER COMPANY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Common shares: Balance at beginning of period $ 912 $ 916 $ 912 $ 916 Issued for exercise of stock options and vested units — 1 2 2 Repurchases of common shares (Note 4) ( 2 ) ( 3 ) ( 4 ) ( 4 ) Balance at end of period 910 914 910 914 Other capital: Balance at beginning of period 7,566 7,662 7,608 7,691 Issued for exercise of stock options 1 — 3 2 Repurchases of common shares (Note 4) ( 48 ) ( 47 ) ( 95 ) ( 81 ) Share-based compensation 12 9 22 17 Other transactions, net ( 1 ) — ( 8 ) ( 5 ) Balance at end of period 7,530 7,624 7,530 7,624 Retained earnings: Balance at beginning of period 1,870 1,738 2,009 2,389 Net earnings 173 230 287 381 Dividends on common shares ( 146 ) ( 140 ) ( 399 ) ( 942 ) Balance at end of period 1,897 1,828 1,897 1,828 Accumulated other comprehensive loss: Balance at beginning of period ( 294 ) ( 240 ) ( 293 ) ( 247 ) Other comprehensive income 2 15 1 22 Balance at end of period (Note 11) ( 292 ) ( 225 ) ( 292 ) ( 225 ) Total equity: Balance at end of period $ 10,045 $ 10,141 $ 10,045 $ 10,141 Dividends paid per common share $ 0.20 $ 0.19 $ 0.54 $ 1.28 See accompanying Notes to Consolidated Financial Statements . 5 INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: BASIS OF PRESENTATION 7 NOTE 2: BUSINESS SEGMENTS 7 NOTE 3: REVENUE RECOGNITION 8 NOTE 4: NET EARNINGS PER SHARE AND SHARE REPURCHASES 8 NOTE 5: INVENTORIES 9 NOTE 6: PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS 10 NOTE 7: ACCRUED LIABILITIES 10 NOTE 8: LONG-TERM DEBT AND LINE OF CREDIT 10 NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS 11 NOTE 10: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES 11 NOTE 11: ACCUMULATED OTHER COMPREHENSIVE LOSS 12 NOTE 12: SHARE-BASED COMPENSATION 12 NOTE 13: OTHER OPERATING (INCOME) COSTS, NET 13 NOTE 14: INCOME TAXES 13 NOTE 15: TIMBERLAND ACQUISITONS 13 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE QUARTERS AND YEAR-TO-DATE PERIODS ENDED JUNE 30, 2024 AND 2023 NOTE 1: BASIS O F PRESENTATION Our consolidated financial statements provide an overall view of our results of operations, financial condition and cash flows. They include our accounts and the accounts of entities we control, including majority-owned domestic and foreign subsidiaries. They do not include our intercompany transactions and accounts, which are eliminated. Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” “the company,” “we” and “our” refer to the consolidated company. The accompanying unaudited Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Except as otherwise disclosed in these Notes to Consolidated Financial Statements, such adjustments are of a normal, recurring nature. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements. Certain information and footnote disclosures normally included in our annual Consolidated Financial Statements have been condensed or omitted. These quarterly Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023 . Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year. NOTE 2: BUSIN ESS SEGMENTS We are principally engaged in growing and harvesting timber; maximizing the value of our acreage through the sale of higher and better use (HBU) properties; monetizing the value of surface and subsurface assets through leases and royalties; and manufacturing, distributing and selling products made from trees. Our business segments are organized based primarily on products and services which include: ● Timberlands – Logs, timber, recreational leases and other products; ● Real Estate, Energy and Natural Resources (Real Estate & ENR) – Real Estate (sales of timberlands) and ENR (rights to explore for and extract hard minerals, construction materials, natural gas production and wind and solar) and ● Wood Products – Structural lumber, oriented strand board, engineered wood products and building materials distribution. A reconciliation of our business segment information to the respective information in the Consolidated Statement of Operations is as follows: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Sales to unaffiliated customers: Timberlands $ 409 $ 417 $ 796 $ 879 Real Estate & ENR 109 80 216 181 Wood Products 1,421 1,500 2,723 2,818 1,939 1,997 3,735 3,878 Intersegment sales: Timberlands 146 150 280 292 Total sales 2,085 2,147 4,015 4,170 Intersegment eliminations ( 146 ) ( 150 ) ( 280 ) ( 292 ) Total $ 1,939 $ 1,997 $ 3,735 $ 3,878 Net contribution (charge) to earnings: Timberlands $ 81 $ 104 $ 161 $ 224 Real Estate & ENR 59 52 119 105 Wood Products 196 218 324 313 336 374 604 642 Unallocated items (1) ( 63 ) ( 49 ) ( 130 ) ( 78 ) Net contribution to earnings 273 325 474 564 Interest expense, net of capitalized interest ( 67 ) ( 70 ) ( 134 ) ( 136 ) Earnings before income taxes 206 255 340 428 Income taxes ( 33 ) ( 25 ) ( 53 ) ( 47 ) Net earnings $ 173 $ 230 $ 287 $ 381 (1) Unallocated items are gains or charges not related to, or allocated to, an individual operating segment. They include all or a portion of items such as share-based compensation, pension and post-employment costs, elimination of intersegment profit in inventory and LIFO, foreign exchange transaction gains and losses, interest income and other. 7 NOTE 3: REVENU E RECOGNITION A reconciliation of revenue recognized by our major products: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Net sales to unaffiliated customers: Timberlands segment Delivered logs: West Domestic sales $ 97 $ 101 $ 191 $ 194 Export grade sales 108 105 190 241 Subtotal West 205 206 381 435 South 153 162 304 330 North 9 7 22 24 Subtotal delivered logs sales 367 375 707 789 Stumpage and pay-as-cut timber 13 15 24 31 Recreational and other lease revenue 19 17 38 35 Other (1) 10 10 27 24 Net sales attributable to Timberlands segment 409 417 796 879 Real Estate & ENR segment Real estate 78 47 161 119 Energy and natural resources 31 33 55 62 Net sales attributable to Real Estate & ENR segment 109 80 216 181 Wood Products segment Structural lumber 499 573 963 1,088 Oriented strand board 288 215 543 423 Engineered solid section 191 215 368 384 Engineered I-joists 107 126 206 213 Softwood plywood 42 44 83 85 Medium density fiberboard 42 42 81 80 Complementary building products 176 204 317 367 Other (2) 76 81 162 178 Net sales attributable to Wood Products segment 1,421 1,500 2,723 2,818 Total net sales $ 1,939 $ 1,997 $ 3,735 $ 3,878 (1) Other Timberlands sales include sales of seeds and seedlings from our nursery operations as well as wood chips. (2) Other Wood Products sales include wood chips, other byproducts and third-party residual log sales from our Canadian Forestlands operations. NOTE 4: NET EARNINGS PER SHARE AND SHARE REPURCHASES Our basic and diluted earnings per share were: ● $ 0.24 during second quarter 2024 and $ 0.39 during year-to-date 2024; ● $ 0.31 during second quarter 2023 and $ 0.52 during year-to-date 2023. 8 Basic earnings per share is net earnings divided by the weighted average number of our outstanding common shares, including stock equivalent units where there is no circumstance under which those shares would not be issued. Diluted earnings per share is net earnings divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares. QUARTER ENDED YEAR-TO-DATE ENDED SHARES IN THOUSANDS JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Weighted average common shares outstanding – basic 729,026 732,021 729,534 732,599 Dilutive potential common shares: Stock options 106 111 125 124 Restricted stock units 158 20 140 23 Performance share units 51 210 151 215 Total effect of outstanding dilutive potential common shares 315 341 416 362 Weighted average common shares outstanding – dilutive 729,341 732,362 729,950 732,961 We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units. Potential Shares Not Included in the Computation of Diluted Earnings per Share The following shares were not included in the computation of diluted earnings per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods. QUARTER ENDED YEAR-TO-DATE ENDED SHARES IN THOUSANDS JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Stock options 607 787 607 787 Performance share units 946 682 946 682 Share Repurchase Program On September 22, 2021, we announced that our board of directors approved a new share repurchase program (the 2021 Repurchase Program) under which we are authorized to repurchase up to $ 1 billion of outstanding shares. Concurrently, the board terminated the remaining repurchase authorization under the share repurchase program approved by the board in February 2019 (the 2019 Repurchase Program). We repurchased 1,669,145 common shares for approximately $ 50 million (including transaction fees) under the 2021 Repurchase Program during second quarter 2024 and 3,141,514 common shares for approximately $ 99 million (including transaction fees) under the 2021 Share Repurchase Program during year-to-date 2024. As of June 30, 2024, we had remaining authorization of $ 152 million for future share repurchases. During year-to-date 2023 , we repurchased 2,805,434 common shares for approximately $ 85 million (including transaction fees) under the 2021 Repurchase Program. All common stock repurchases under the 2021 Repurchase Program were made in open-market transactions. We record share repurchases upon trade date as opposed to the settlement date when cash is disbursed. We record a liability for repurchases that have not yet been settled as of period end. There were 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 . NOTE 5: IN VENTORIES Inventories include raw materials, work-in-process and finished goods, as well as materials and supplies. DOLLAR AMOUNTS IN MILLIONS JUNE 30, 2024 DECEMBER 31, 2023 LIFO inventories: Logs $ 16 $ 29 Lumber, plywood, oriented strand board and fiberboard 90 77 Other products 13 12 Moving average cost or FIFO inventories: Logs 49 49 Lumber, plywood, oriented strand board, fiberboard and engineered wood products 143 115 Other products 144 134 Materials and supplies 159 150 Total $ 614 $ 566 LIFO – the last-in, first-out method – applies to major inventory products held at our U.S. locations. The moving average cost method or FIFO – the first-in, first-out method – applies to the balance of our U.S. raw material and product inventories, all material and supply inventories and all foreign inventories. 9 NOTE 6: PENSION AND OTHER PO ST-EMPLOYMENT BENEFIT PLANS The components of net periodic benefit cost are: PENSION QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Service cost $ 5 $ 5 $ 10 $ 11 Interest cost 29 29 58 59 Expected return on plan assets ( 30 ) ( 30 ) ( 61 ) ( 60 ) Amortization of actuarial loss 9 11 20 19 Amortization of prior service cost 1 1 1 1 Total net periodic benefit cost – pension $ 14 $ 16 $ 28 $ 30 OTHER POST-EMPLOYMENT BENEFITS QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Interest cost $ 1 $ 1 $ 2 $ 2 Amortization of actuarial loss — 1 1 1 Amortization of prior service credit — ( 1 ) — ( 1 ) Total net periodic benefit cost – other post-employment benefits $ 1 $ 1 $ 3 $ 2 For the periods presented, service cost is included in “Costs of sales,” “Selling expenses,” and “General and administrative expenses” with the remaining components included in “Non-operating pension and other post-employment benefit costs” in the Consolidated Statement of Operations . Fair Value of Pension Plan Assets and Obligations In our year-end reporting process, we estimate the fair value of pension plan assets based upon the information available at that time. For certain assets, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We evaluate the year-end estimated fair value of pension plan assets in second quarter of each year to incorporate final net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K. No adjustments to the fair value of assets or projected benefit obligations were necessary during second quarter 2024 . NOTE 7: ACCRU ED LIABILITIES Accrued liabilities were comprised of the following: DOLLAR AMOUNTS IN MILLIONS JUNE 30, 2024 DECEMBER 31, 2023 Compensation and employee benefit costs $ 158 $ 173 Current portion of lease liabilities 21 19 Customer rebates, volume discounts and deferred income 140 124 Interest 62 63 Taxes payable 53 31 Other 70 91 Total $ 504 $ 501 NOTE 8: LONG-TERM DEBT AND LINE OF CREDIT 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. In March 2023, we refinanced and extended our $ 1.5 billion five-year senior unsecured revolving credit facility, which expires in March 2028 . 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 sprea d. We had no outstanding borrowings on our credit facility as of June 30, 2024 and December 31, 2023 . 10 NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair value and carrying value of our long-term debt consisted of the following: JUNE 30, 2024 DECEMBER 31, 2023 DOLLAR AMOUNTS IN MILLIONS CARRYING VALUE FAIR VALUE (LEVEL 2) CARRYING VALUE FAIR VALUE (LEVEL 2) Long-term debt (including current maturities) and line of credit: Fixed rate $ 4,823 $ 4,718 $ 4,820 $ 4,853 Variable rate 249 250 249 250 Total debt $ 5,072 $ 4,968 $ 5,069 $ 5,103 To estimate the fair value of fixed rate long-term debt, we used the market approach, which is based on quoted market prices we received for the same types and issues of our debt. We believe that our variable-rate long term debt and line of credit instruments have net carrying values that approximate their fair value with only insignificant differences. The inputs to the valuations of our long-term debt are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date. Fair Value of Other Financial Instruments We believe that our other financial instruments, including cash and cash equivalents, short-term investments, receivables and payables, have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to the short-term nature of these instruments and the allowance for doubtful accounts. NOTE 10: LEGAL PROCEEDINGS, C OMMITMENTS AND CONTINGENCIES Legal Proceedings We are party to various legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceeding that management believes could have a material adverse effect on our Consolidated Statement of Operations , Consolidated Balance Sheet or Consolidated Statement of Cash Flows . Environmental Matters Site Remediation Under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) – commonly known as the “Superfund” – and similar state laws, we: ● are a party to various proceedings related to the cleanup of hazardous waste sites and ● have been notified that we may be a potentially responsible party related to the cleanup of other hazardous waste sites for which proceedings have not yet been initiated. As of June 30, 2024, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately $ 79 million. These amounts are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet . 11 NOTE 11: ACCUMULATED OT HER COMPREHENSIVE LOSS Changes in amounts included in our accumulated other comprehensive loss by component are: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Pension (1) Balance at beginning of period $ ( 506 ) $ ( 451 ) $ ( 515 ) $ ( 458 ) Other comprehensive (loss) income before reclassifications — ( 2 ) 1 ( 1 ) Amounts reclassified from accumulated other comprehensive loss to earnings (2) 8 9 16 15 Total other comprehensive income 8 7 17 14 Balance at end of period $ ( 498 ) $ ( 444 ) $ ( 498 ) $ ( 444 ) Other post-employment benefits (1) Balance at beginning of period $ 23 $ 20 $ 24 $ 20 Other comprehensive (loss) income before reclassifications ( 1 ) 1 ( 3 ) 1 Amounts reclassified from accumulated other comprehensive loss to earnings (2) — — 1 — Total other comprehensive (loss) income ( 1 ) 1 ( 2 ) 1 Balance at end of period $ 22 $ 21 $ 22 $ 21 Translation adjustments and other Balance at beginning of period $ 189 $ 191 $ 198 $ 191 Translation adjustments ( 5 ) 7 ( 14 ) 7 Total other comprehensive (loss) income ( 5 ) 7 ( 14 ) 7 Balance at end of period 184 198 184 198 Accumulated other comprehensive loss, end of period $ ( 292 ) $ ( 225 ) $ ( 292 ) $ ( 225 ) (1) Amounts presented are net of tax. (2) Amounts of actuarial loss and prior service (cost) credit are components of net periodic benefit cost. See Note 6: Pension and Other Post-Employment Benefit Plans . NOTE 12: SHARE-B ASED COMPENSATION Share-based compensation activity during year-to-date 2024 included the following: SHARES IN THOUSANDS GRANTED VESTED Restricted stock units (RSUs) 915 684 Performance share units (PSUs) 412 317 A total of 746 thousand shares of common stock were issued as a result of RSU and PSU vestings. Restricted Stock Units The weighted average fair value of the RSUs granted in 2024, calculated as an average of the high and low prices on grant date, was $ 32.92 . The vesting provisions for RSUs granted in 2024 were consistent with prior year grants. Performance Share Units The weighted average grant date fair value of PSUs granted in 2024 was $ 37.90 . The final number of shares granted in 2024 will vest between a range of 0 percent to 150 percent of each grant's target, depending upon actual company total shareholder return (TSR) compared against the TSR of an industry peer group. TSR assumes full reinvestment of dividends. PSUs granted in 2024 will vest at a maximum of 100 percent of target value in the event of negative absolute company TSR. Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2024 PERFORMANCE SHARE UNITS Performance period 2/09/2024 – 12/31/2026 Valuation date closing stock price $ 33.28 Risk-free rate 4.19 % – 4.27 % Expected volatility 21.50 % – 27.60 % 12 NOTE 13: OTHER OPERAT ING (INCOME) COSTS, NET Other operating (income) costs, net were comprised of the following: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2024 JUNE 2023 JUNE 2024 JUNE 2023 Environmental remediation charges $ 4 $ 12 $ 6 $ 13 Foreign exchange losses (gains), net 1 ( 3 ) 1 ( 2 ) Litigation expense, net 12 1 18 2 Product remediation recovery ( 25 ) — ( 25 ) — Research and development expenses 3 1 4 3 Other, net 1 9 9 14 Total other operating (income) costs, net $ ( 4 ) $ 20 $ 13 $ 30 NOTE 14: INCOME TAXES As a real estate investment trust (REIT), we generally are not subject to federal corporate income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our wholly-owned Taxable REIT Subsidiaries (TRSs), which include our Wood Products segment and a portion of our Timberlands and Real Estate & ENR segments. The quarterly provision for income taxes is based on our current estimate of the annual effective tax rate and is adjusted for discrete taxable events that have occurred during the year. Our 2024 estimated annual effective tax rate, excluding discrete items, differs from the U.S. federal statutory tax rate of 21 percent primarily due to state and foreign income taxes and tax benefits associated with our nontaxable REIT earnings. N OTE 15: TIMBERLAND ACQUISITIONS On July 25, 2024, we announced acquisitions totaling 84 thousand acres of Alabama timberlands for approximately $ 244 million. The first transaction was completed o n May 30, 2024 and was comprised of 13 thousand acres for approximately $ 48 million. We recorded $ 47 million of timberland assets in "Timber and timberlands at cost, less depletion" and $ 1 million of related assets in "Property and equipment, net" on our Consolidated Balance Sheet . The remaining transactions are subject to customary closing conditions and are expected to close in second half 2024. 13