WEYERHAEUSER CO 10-Q

Item 1. FINANCIAL STATEMENTS WEYERHAEUSER COMPANY CONSOLIDATED STATEM ENT OF OPERATIONS (UNAUDITED) QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES MARCH 2025 MARCH 2024 Net sales (Note 3) $ 1,763 $ 1,796 Costs of sales 1,428 1,441 Gross margin 335 355 Selling expenses 23 22 General and administrative expenses 119 120 Other operating costs, net (Note 13) 14 17 Operating income 179 196 Non-operating pension and other post-employment benefit costs (Note 6) ( 19 ) ( 11 ) Interest income and other 5 16 Interest expense, net of capitalized interest ( 66 ) ( 67 ) Earnings before income taxes 99 134 Income taxes (Note 14) ( 16 ) ( 20 ) Net earnings $ 83 $ 114 Earnings per share, basic and diluted (Note 4) $ 0.11 $ 0.16 Weighted average shares outstanding (in thousands) (Note 4): Basic 726,143 730,043 Diluted 726,566 730,558 See accompanying Notes to Consolidated Financial Statements . 1 WEYERHAEUSER COMPANY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2025 MARCH 2024 Net earnings $ 83 $ 114 Other comprehensive income (loss): Foreign currency translation adjustments 2 ( 9 ) Changes in unamortized actuarial loss, net of tax expense of $ 3 and $ 4 10 8 Changes in unamortized net prior service cost, net of tax benefit of $ 0 and $ 0 ( 1 ) — Unrealized gain on cash flow hedges (Note 9) 2 — Total other comprehensive income (loss) 13 ( 1 ) Total comprehensive income $ 96 $ 113 See accompanying Notes to Consolidated Financial Statements . 2 WEYERHAEUSER COMPANY CONSOLIDATED BALANCE SHEET (UNAUD ITED) DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE MARCH 31, 2025 DECEMBER 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 560 $ 684 Receivables, net 382 306 Receivables for taxes 13 9 Inventories (Note 5) 675 607 Prepaid expenses and other current assets 141 142 Total current assets 1,771 1,748 Property and equipment, less accumulated depreciation of $ 4,044 and $ 3,980 2,333 2,329 Construction in progress 291 287 Timber and timberlands at cost, less depletion 11,506 11,551 Minerals and mineral rights, less depletion 187 189 Deferred tax assets 23 24 Other assets 409 408 Total assets $ 16,520 $ 16,536 LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term debt (Note 8) $ 150 $ 210 Accounts payable 288 255 Accrued liabilities (Note 7) 430 512 Total current liabilities 868 977 Long-term debt, net (Note 8) 5,017 4,866 Deferred tax liabilities 32 26 Deferred pension and other post-employment benefits (Note 6) 602 596 Other liabilities 356 350 Total liabilities 6,875 6,815 Commitments and contingencies (Note 10) Equity: Common shares: $ 1.25 par value; authorized 1,360 million shares; issued and outstanding: 725,671 thousand shares at March 31, 2025 and 725,845 thousand shares at December 31, 2024 908 908 Other capital 7,483 7,500 Retained earnings 1,643 1,715 Accumulated other comprehensive loss (Note 11) ( 389 ) ( 402 ) Total equity 9,645 9,721 Total liabilities and equity $ 16,520 $ 16,536 See accompanying Notes to Consolidated Financial Statements . 3 WEYERHAEUSER COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2025 MARCH 2024 Cash flows from operations: Net earnings $ 83 $ 114 Noncash charges (credits) to earnings: Depreciation, depletion and amortization 125 125 Basis of real estate sold 24 31 Deferred income taxes, net 4 — Pension and other post-employment benefits (Note 6) 23 16 Share-based compensation expense (Note 12) 11 10 Other — 1 Change in: Receivables, net ( 76 ) ( 53 ) Receivables and payables for taxes ( 22 ) ( 3 ) Inventories ( 68 ) ( 68 ) Prepaid expenses and other current assets 5 17 Accounts payable and accrued liabilities ( 25 ) ( 51 ) Pension and post-employment benefit contributions and payments ( 3 ) ( 4 ) Other ( 11 ) ( 11 ) Net cash from operations 70 124 Cash flows from investing activities: Capital expenditures for property and equipment ( 71 ) ( 57 ) Capital expenditures for timberlands reforestation ( 22 ) ( 22 ) Acquisitions of timberlands ( 4 ) — Other — 2 Net cash from investing activities ( 97 ) ( 77 ) Cash flows from financing activities: Cash dividends on common shares ( 152 ) ( 248 ) Net proceeds from issuance of long-term debt (Note 8) 299 — Payments on long-term debt (Note 8) ( 210 ) — Repurchases of common shares (Note 4) ( 25 ) ( 50 ) Other ( 9 ) ( 10 ) Net cash from financing activities ( 97 ) ( 308 ) Net change in cash, cash equivalents and restricted cash ( 124 ) ( 261 ) Cash, cash equivalents and restricted cash at beginning of period 684 1,164 Cash, cash equivalents and restricted cash at end of period $ 560 $ 903 Cash paid during the period for: Interest, net of amount capitalized of $ 3 and $ 2 $ 58 $ 57 Income taxes, net of refunds $ 34 $ 23 See accompanying Notes to Consolidated Financial Statements . 4 WEYERHAEUSER COMPANY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES MARCH 2025 MARCH 2024 Common shares: Balance at beginning of period $ 908 $ 912 Issued for exercise of stock options and vested units 1 2 Repurchases of common shares (Note 4) ( 1 ) ( 2 ) Balance at end of period 908 912 Other capital: Balance at beginning of period 7,500 7,608 Issued for exercise of stock options 1 2 Repurchases of common shares (Note 4) ( 24 ) ( 47 ) Share-based compensation 11 10 Other transactions, net ( 5 ) ( 7 ) Balance at end of period 7,483 7,566 Retained earnings: Balance at beginning of period 1,715 2,009 Net earnings 83 114 Dividends on common shares ( 155 ) ( 253 ) Balance at end of period 1,643 1,870 Accumulated other comprehensive loss: Balance at beginning of period ( 402 ) ( 293 ) Other comprehensive income (loss) 13 ( 1 ) Balance at end of period (Note 11) ( 389 ) ( 294 ) Total equity: Balance at end of period $ 9,645 $ 10,054 Dividends paid per common share $ 0.21 $ 0.34 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 9 NOTE 4: NET EARNINGS PER SHARE AND SHARE REPURCHASES 10 NOTE 5: INVENTORIES 11 NOTE 6: PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS 11 NOTE 7: ACCRUED LIABILITIES 12 NOTE 8: LONG-TERM DEBT AND LINE OF CREDIT 12 NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS 12 NOTE 10: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES 13 NOTE 11: ACCUMULATED OTHER COMPREHENSIVE LOSS 13 NOTE 12: SHARE-BASED COMPENSATION 14 NOTE 13: OTHER OPERATING COSTS, NET 14 NOTE 14: INCOME TAXES 14 NOTE 15: RESTRICTED CASH 14 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE QUARTERS ENDED MARCH 31, 2025 AND 2024 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, 2024 . Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year. Summary of Significant Accounting Policies The following updates the policies disclosed in Note 1: Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2024. Derivative Instruments At times, we may manage exposure to certain risks by entering into derivative instruments. We do not enter into derivative instruments for speculative purposes. We record all derivative instruments on our Consolidated Balance Sheet at fair value. We are allowed to net settle transactions with respective counterparties for certain derivative instruments; however, we have not offset derivative asset and liability balances on our Consolidated Balance Sheet . For derivative instruments that are designated as hedging instruments in a qualifying cash flow hedge, the hedging instrument’s income or loss is reported as a component of other comprehensive income (loss) and recorded in accumulated other comprehensive loss on our Consolidated Balance Sheet . The income or loss is subsequently reclassified into net earnings when the hedged transaction affects net earnings in the same line item as the underlying hedged transaction in our Consolidated Statement of Operations . The initial value of hedged components excluded from the assessment of effectiveness are amortized over the life of the hedging instrument, using a systematic and rational method, and recognized in the same line item as the hedged transaction. Cash flows from derivative instruments designated as hedging instruments are classified in the same category as the cash flows from the respective hedged transaction. See Note 9: Fair Value of Financial Instruments . 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. 7 A reconciliation of our business segment information to the respective information in the Consolidated Statement of Operations is as follows: DOLLAR AMOUNTS IN MILLIONS TIMBERLANDS REAL ESTATE & ENR WOOD PRODUCTS UNALLOCATED ITEMS AND INTERSEGMENT ELIMINATIONS CONSOLIDATED QUARTER ENDED MARCH 2025 Net sales to unaffiliated customers $ 382 $ 94 $ 1,287 $ — $ 1,763 Intersegment sales 152 — — ( 152 ) — Total 534 94 1,287 ( 152 ) 1,763 Costs of sales 409 32 1,114 ( 127 ) 1,428 Gross margin 125 62 173 ( 25 ) 335 Selling expenses — — 22 1 23 General and administrative expenses 24 7 39 49 119 Other segment items (1) ( 1 ) ( 1 ) 6 24 28 Net contribution (charge) to earnings $ 102 $ 56 $ 106 $ ( 99 ) $ 165 QUARTER ENDED MARCH 2024 Net sales to unaffiliated customers $ 387 $ 107 $ 1,302 $ — $ 1,796 Intersegment sales 134 — — ( 134 ) — Total 521 107 1,302 ( 134 ) 1,796 Costs of sales 415 41 1,107 ( 122 ) 1,441 Gross margin 106 66 195 ( 12 ) 355 Selling expenses — — 21 1 22 General and administrative expenses 25 6 40 49 120 Other segment items (1) 1 — 6 5 12 Net contribution (charge) to earnings $ 80 $ 60 $ 128 $ ( 67 ) $ 201 (1) Other segment items for each reportable segment includes recurring and non-recurring income and expense items. For Unallocated Items, this includes non-operating pension and other post-employment benefit costs and interest income and other. Reconciliation of Net Contribution to Earnings to Net Earnings QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2025 MARCH 2024 Net contribution to earnings $ 165 $ 201 Interest expense, net of capitalized interest ( 66 ) ( 67 ) Earnings before income taxes 99 134 Income taxes ( 16 ) ( 20 ) Net earnings $ 83 $ 114 Additional Financial Information DOLLAR AMOUNTS IN MILLIONS TIMBERLANDS REAL ESTATE & ENR WOOD PRODUCTS UNALLOCATED ITEMS AND INTERSEGMENT ELIMINATIONS CONSOLIDATED QUARTER ENDED MARCH 2025 Depreciation, depletion and amortization $ 65 $ 2 $ 55 $ 3 $ 125 Capital expenditures $ 26 $ — $ 67 $ — $ 93 QUARTER ENDED MARCH 2024 Depreciation, depletion and amortization $ 64 $ 3 $ 56 $ 2 $ 125 Capital expenditures $ 31 $ — $ 42 $ 6 $ 79 8 Total Assets DOLLAR AMOUNTS IN MILLIONS MARCH 31, 2025 DECEMBER 31, 2024 Timberlands and Real Estate & ENR (1) $ 12,507 $ 12,545 Wood Products 3,288 3,116 Unallocated items 725 875 Consolidated $ 16,520 $ 16,536 (1) Assets attributable to the Real Estate & ENR segment are combined with total assets for the Timberlands segment as we do not produce separate balance sheets internally. NOTE 3: REVENU E RECOGNITION A reconciliation of revenue recognized by our major products: QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2025 MARCH 2024 Net sales to unaffiliated customers: Timberlands segment Delivered logs: West Domestic sales $ 98 $ 94 Export grade sales 71 82 Subtotal West 169 176 South 152 151 North 14 13 Subtotal delivered logs sales 335 340 Stumpage and pay-as-cut timber 10 11 Recreational and other lease revenue 19 19 Other (1) 18 17 Net sales attributable to Timberlands segment 382 387 Real Estate & ENR segment Real estate 69 83 Energy and natural resources 25 24 Net sales attributable to Real Estate & ENR segment 94 107 Wood Products segment Structural lumber 527 464 Oriented strand board 228 255 Engineered solid section 161 177 Engineered I-joists 88 99 Softwood plywood 40 41 Medium density fiberboard 32 39 Complementary building products 125 141 Other (2) 86 86 Net sales attributable to Wood Products segment 1,287 1,302 Total net sales $ 1,763 $ 1,796 (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. 9 NOTE 4: NET EARNINGS PER SHARE AND SHARE REPURCHASES Our basic and diluted earnings per share were: ● $ 0.11 during first quarter 2025 and ● $ 0.16 during first quarter 2024. 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 SHARES IN THOUSANDS MARCH 2025 MARCH 2024 Weighted average common shares outstanding – basic 726,143 730,043 Dilutive potential common shares: Stock options 74 144 Restricted stock units 43 122 Performance share units 306 249 Total effect of outstanding dilutive potential common shares 423 515 Weighted average common shares outstanding – dilutive 726,566 730,558 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 SHARES IN THOUSANDS MARCH 2025 MARCH 2024 Stock options — 609 Performance share units 905 814 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 845,049 common shares for approximately $ 25 million (including transaction fees) under the 2021 Repurchase Program during first quarter 2025 . During first quarter 2024, we repurchased 1,472,369 common shares for approximately $ 49 million (including transaction fees) under the 2021 Repurchase Program. As of March 31, 2025, we had remaining authorization of $ 74 million for future share repurchases. 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 no unsettled shares as of March 31, 2025 and 12,436 unsettled shares (less than $ 1 million) as of December 31, 2024 . 10 NOTE 5: IN VENTORIES Inventories include raw materials, work-in-process and finished goods, as well as materials and supplies. DOLLAR AMOUNTS IN MILLIONS MARCH 31, 2025 DECEMBER 31, 2024 LIFO inventories: Logs $ 21 $ 23 Lumber, plywood, oriented strand board and fiberboard 95 82 Other products 14 14 Moving average cost or FIFO inventories: Logs 71 55 Lumber, plywood, oriented strand board, fiberboard and engineered wood products 146 130 Other products 164 147 Materials and supplies 164 156 Total $ 675 $ 607 LIFO – the last-in, first-out method – applies to major inventory products held at our U.S. locations. The moving average cost method or FIFO – the first-in, first-out method – applies to the balance of our U.S. raw material and product inventories, all material and supply inventories and all foreign inventories. NOTE 6: PENSION AND OTHER PO ST-EMPLOYMENT BENEFIT PLANS The components of net periodic benefit cost are: PENSION QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2025 MARCH 2024 Service cost $ 4 $ 5 Interest cost 30 29 Expected return on plan assets ( 26 ) ( 31 ) Amortization of actuarial loss 14 11 Total net periodic benefit cost – pension $ 22 $ 14 OTHER POST-EMPLOYMENT BENEFITS QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2025 MARCH 2024 Interest cost $ 1 $ 1 Amortization of actuarial loss — 1 Total net periodic benefit cost – other post-employment benefits $ 1 $ 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 the second quarter of each year to incorporate final net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K. 11 NOTE 7: ACCRU ED LIABILITIES Accrued liabilities were comprised of the following: DOLLAR AMOUNTS IN MILLIONS MARCH 31, 2025 DECEMBER 31, 2024 Compensation and employee benefit costs $ 159 $ 171 Current portion of lease liabilities 22 29 Customer rebates, volume discounts and deferred income 83 129 Interest 63 62 Taxes payable 30 47 Other 73 74 Total $ 430 $ 512 NOTE 8: LONG-TERM DEBT AND LINE OF CREDIT Long-term Debt During first quarter 2025, we repaid our $ 139 million 8.50 percent debentures and our $ 71 million 7.95 percent debentures at maturity. We also entered into a $ 300 million senior unsecured term loan that will mature in March 2030 . Net proceeds after fees were $ 299 million. 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. Line of Credit 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 SOFR plus a spread or a mutually agreed upon base rate plus a spread. We had no outstanding borrowings on our credit facility as of March 31, 2025 and December 31, 2024 . NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair value and carrying value of our long-term debt consisted of the following: MARCH 31, 2025 DECEMBER 31, 2024 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 $ 4,619 $ 4,581 $ 4,827 $ 4,757 Variable rate 548 550 249 250 Total debt $ 5,167 $ 5,131 $ 5,076 $ 5,007 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 Derivative Instruments Designated as Cash Flow Hedges During first quarter 2025, we entered into forward contracts with the risk management objective of reducing foreign exchange risk associated with the variability in cash flows from the settlement of forecasted foreign currency-denominated purchases of equipment. Our forward contracts provide the right to buy specified quantities of euros during predetermined future periods at predetermined future rates. As of March 31, 2025, all forward contracts with an aggregate notional amount of $ 50 million were designated as cash flow hedging instruments of hedged forecasted foreign-currency denominated purchases of equipment. No comparable activity was present as of and for the year ended December 31, 2024. For the quarter ended March 31, 2025, an unrealized gain on forward contracts designated as cash flow hedging instruments of $ 2 million was recognized in “Other comprehensive income (loss)” in our Consolidated Statement of Comprehensive Income and is recorded in “Accumulated other comprehensive loss” on our Consolidated Balance Sheet as of March 31, 2025. As of March 31, 2025, the current and noncurrent fair value of forward contracts designated as cash flow hedging instruments in an asset position of $ 1 million and less than $ 1 million are recorded in " Prepaid expenses and other current assets " and " Other assets " on our Consolidated Balance Sheet , respectively. The Derivative Instruments section of Note 1: Basis of Presentation provides information about how we account for derivative instruments as cash flow hedges. 12 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 March 31, 2025, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately $ 82 million. These amounts are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet . NOTE 11: ACCUMULATED OT HER COMPREHENSIVE LOSS Changes in amounts included in our accumulated other comprehensive loss by component are: QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2025 MARCH 2024 Pension (1) Balance at beginning of period $ ( 583 ) $ ( 515 ) Other comprehensive income before reclassifications — 1 Amounts reclassified from accumulated other comprehensive loss to earnings (2) 10 8 Total other comprehensive income 10 9 Balance at end of period $ ( 573 ) $ ( 506 ) Other post-employment benefits (1) Balance at beginning of period $ 23 $ 24 Other comprehensive loss before reclassifications ( 1 ) ( 2 ) Amounts reclassified from accumulated other comprehensive loss to earnings (2) — 1 Total other comprehensive loss ( 1 ) ( 1 ) Balance at end of period $ 22 $ 23 Translation adjustments and other Balance at beginning of period $ 158 $ 198 Translation adjustments 2 ( 9 ) Unrealized gain on cash flow hedges (1) 2 — Total other comprehensive income (loss) 4 ( 9 ) Balance at end of period 162 189 Accumulated other comprehensive loss, end of period $ ( 389 ) $ ( 294 ) (1) Amounts presented are net of tax. (2) Amounts of actuarial loss and prior service cost are components of net periodic benefit cost. See Note 6: Pension and Other Post-Employment Benefit Plans . 13 NOTE 12: SHARE-B ASED COMPENSATION Share-based compensation activity during first quarter 2025 included the following: SHARES IN THOUSANDS GRANTED VESTED Restricted stock units (RSUs) 981 666 Performance share units (PSUs) 479 139 A total of 588 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 2025, calculated as an average of the high and low prices on grant date, was $ 29.92 . The vesting provisions for RSUs granted in 2025 were consistent with prior year grants. Performance Share Units The weighted average grant date fair value of PSUs granted in 2025 was $ 32.50 . The final number of shares granted in 2025 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 2025 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 2025 PERFORMANCE SHARE UNITS Performance period 2/14/2025 – 12/31/2027 Valuation date closing stock price $ 29.61 Risk-free rate 4.17 % – 4.26 % Expected volatility 22.20 % – 25.70 % NOTE 13: OTHER OPERAT ING COSTS, NET Other operating costs, net were comprised of the following: QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2025 MARCH 2024 Environmental remediation charges $ 4 $ 2 Litigation expense, net 2 6 Research and development expenses 1 1 Other, net 7 8 Total other operating costs, net $ 14 $ 17 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 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 occurr ed during the year. Our 2025 estimated annual effective tax rate, excluding discrete items, differs from the U.S. federal statutory tax rate of 21 percent p rimarily due to state and foreign income taxes and tax benefits associated with our nontaxable REIT earnings. NOTE 15: RESTRICTED CASH The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on our Consolidated Balance Sheet that sum to the total of the amounts shown in the Consolidated Statement of Cash Flows : DOLLAR AMOUNTS IN MILLIONS MARCH 31, 2025 MARCH 31, 2024 Cash and cash equivalents $ 560 $ 871 Restricted cash included in other assets (1) — 32 Total cash, cash equivalents and restricted cash $ 560 $ 903 (1) Amounts included in restricted cash as of March 31, 2024 are comprised of proceeds held by a qualified intermediary that were subsequently reinvested in timber and timberlands through a like-kind exchange transaction. 14