Item 1. Financial Statements
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 2026
JUNE 2025
JUNE 2026
JUNE 2025
Net sales (Note 3)
$
1,867
$
1,884
$
3,594
$
3,647
Costs of sales
1,556
1,559
2,965
2,987
Gross margin
311
325
629
660
Selling expenses
24
23
47
46
General and administrative expenses
115
114
234
233
Gain on sale of timberlands (Note 15)
( 71
)
—
( 129
)
—
Other operating costs, net (Note 13)
20
10
7
24
Operating income
223
178
470
357
Non-operating pension and other post-employment benefit costs (Note 6)
( 14
)
( 19
)
( 28
)
( 38
)
Interest income and other
4
6
8
11
Interest expense, net of capitalized interest
( 66
)
( 66
)
( 132
)
( 132
)
Earnings before income taxes
147
99
318
198
Income taxes (Note 14)
15
( 12
)
—
( 28
)
Net earnings
$
162
$
87
$
318
$
170
Earnings per share, basic and diluted (Note 4)
$
0.23
$
0.12
$
0.44
$
0.23
Weighted average shares outstanding (in thousands) (Note 4):
Basic
721,421
723,682
721,356
724,906
Diluted
721,901
723,927
721,787
725,239
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 2026
JUNE 2025
JUNE 2026
JUNE 2025
Net earnings
$
162
$
87
$
318
$
170
Other comprehensive income (loss):
Foreign currency translation adjustments
( 10
)
19
( 17
)
21
Changes in unamortized actuarial loss, net of tax expense of $ 3 , $ 2 , $ 6 and $ 5
10
9
21
19
Changes in unamortized net prior service credit, net of tax expense of $ 0 , $ 0 , $ 0 and $ 0
—
1
1
—
Unrealized net gain on cash flow hedges, net of tax expense of $ 1 , $ 0 , $ 2 and $ 0 (Note 9)
5
4
9
6
Total other comprehensive income
5
33
14
46
Total comprehensive income
$
167
$
120
$
332
$
216
See accompanying Notes to Consolidated Financial Statements .
2
WEYERHAEUSER COMPANY
CONSOLIDATED BALANCE SHEET
(UNAUD ITED)
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE
JUNE 30,
2026
DECEMBER 31,
2025
ASSETS
Current assets:
Cash and cash equivalents
$
527
$
464
Receivables, net
373
303
Receivables for taxes
5
10
Inventories (Note 5)
604
593
Assets held for sale
—
128
Prepaid expenses and other current assets
127
154
Total current assets
1,636
1,652
Property and equipment, less accumulated depreciation of $ 4,248 and $ 4,158
2,405
2,420
Construction in progress
423
337
Timber and timberlands at cost, less depletion
11,384
11,533
Minerals and mineral rights, less depletion
173
177
Deferred tax assets
113
97
Other assets
379
397
Total assets
$
16,513
$
16,613
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt (Note 8)
$
122
$
522
Accounts payable
311
278
Accrued liabilities (Note 7)
468
478
Total current liabilities
901
1,278
Long-term debt, net (Note 8)
5,303
5,050
Deferred tax liabilities
15
18
Deferred pension and other post-employment benefits (Note 6)
486
485
Other liabilities
352
356
Total liabilities
7,057
7,187
Commitments and contingencies (Note 10)
Equity:
Common shares: $ 1.25 par value; authorized 1,360 million shares; issued and outstanding: 720,692 thousand shares at June 30, 2026 and 720,531 thousand shares at December 31, 2025
901
901
Other capital
7,392
7,390
Retained earnings
1,442
1,428
Accumulated other comprehensive loss (Note 11)
( 279
)
( 293
)
Total equity
9,456
9,426
Total liabilities and equity
$
16,513
$
16,613
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 2026
JUNE 2025
Cash flows from operations:
Net earnings
$
318
$
170
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization
251
250
Basis of acres sold
54
57
Deferred income taxes, net
( 25
)
4
Pension and other post-employment benefits (Note 6)
37
47
Share-based compensation expense (Note 12)
23
23
Gain on sale of timberlands (Note 15)
( 129
)
—
Other
1
—
Change in:
Receivables, net
( 83
)
( 66
)
Receivables and payables for taxes
14
( 16
)
Inventories
( 14
)
( 13
)
Prepaid expenses and other current assets
4
17
Accounts payable and accrued liabilities
17
39
Pension and post-employment benefit contributions and payments
( 9
)
( 6
)
Other
( 8
)
( 40
)
Net cash from operations
451
466
Cash flows from investing activities:
Capital expenditures for property and equipment
( 220
)
( 170
)
Capital expenditures for timberlands reforestation
( 31
)
( 30
)
Proceeds from sale of timberlands (Note 15)
306
—
Proceeds from lumber mill sale (Note 16)
22
—
Other
( 3
)
( 8
)
Net cash from investing activities
74
( 208
)
Cash flows from financing activities:
Cash dividends on common shares
( 303
)
( 304
)
Net proceeds from issuance of long-term debt (Note 8)
—
299
Net proceeds from issuance of commercial paper (Note 8)
331
—
Payments on long-term debt (Note 8)
( 400
)
( 210
)
Payments on commercial paper (Note 8)
( 81
)
—
Repurchases of common shares (Note 4)
( 20
)
( 125
)
Other
( 6
)
( 10
)
Net cash from financing activities
( 479
)
( 350
)
Net change in cash, cash equivalents and restricted cash
46
( 92
)
Cash, cash equivalents and restricted cash at beginning of period
481
684
Cash, cash equivalents and restricted cash at end of period
$
527
$
592
Cash paid during the period for:
Interest, net of amount capitalized of $ 7 and $ 6
$
133
$
132
Income taxes, net of refunds
$
13
$
40
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 2026
JUNE 2025
JUNE 2026
JUNE 2025
Common shares:
Balance at beginning of period
$
901
$
908
$
901
$
908
Issued for exercise of stock options and vested units
—
—
1
1
Repurchases of common shares (Note 4)
—
( 5
)
( 1
)
( 6
)
Balance at end of period
901
903
901
903
Other capital:
Balance at beginning of period
7,391
7,483
7,390
7,500
Issued for exercise of stock options
—
—
5
1
Repurchases of common shares (Note 4)
( 10
)
( 95
)
( 19
)
( 119
)
Share-based compensation
10
12
23
23
Other transactions, net
1
1
( 7
)
( 4
)
Balance at end of period
7,392
7,401
7,392
7,401
Retained earnings:
Balance at beginning of period
1,431
1,643
1,428
1,715
Net earnings
162
87
318
170
Dividends on common shares
( 151
)
( 154
)
( 304
)
( 309
)
Balance at end of period
1,442
1,576
1,442
1,576
Accumulated other comprehensive loss:
Balance at beginning of period
( 284
)
( 389
)
( 293
)
( 402
)
Other comprehensive income
5
33
14
46
Balance at end of period (Note 11)
( 279
)
( 356
)
( 279
)
( 356
)
Total equity:
Balance at end of period
$
9,456
$
9,524
$
9,456
$
9,524
Dividends paid per common share
$
0.21
$
0.21
$
0.42
$
0.42
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
10
NOTE 4:
NET EARNINGS PER SHARE AND SHARE REPURCHASES
11
NOTE 5:
INVENTORIES
12
NOTE 6:
PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS
12
NOTE 7:
ACCRUED LIABILITIES
13
NOTE 8:
LONG-TERM DEBT, LINE OF CREDIT AND COMMERCIAL PAPER PROGRAM
13
NOTE 9:
FAIR VALUE OF FINANCIAL INSTRUMENTS
13
NOTE 10:
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES
14
NOTE 11:
ACCUMULATED OTHER COMPREHENSIVE LOSS
15
NOTE 12:
SHARE-BASED COMPENSATION
15
NOTE 13:
OTHER OPERATING COSTS, NET
16
NOTE 14:
INCOME TAXES
16
NOTE 15:
TIMBERLAND DIVESTITURES
16
NOTE 16:
PRINCETON LUMBER MILL DIVESTITURE
16
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE QUARTERS AND YEAR-TO-DATE PERIODS ENDED JUNE 30, 2026 AND 2025
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, 2025 . Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year.
Reclassifications
We have reclassified certain balances and results from prior years to be consistent with our 2026 reporting. This makes balances comparable from year to year. These changes include updates to the segment previously called Real Estate, Energy & Natural Resources, which has been renamed Strategic Land Solutions, effective first quarter 2026. Reportable business lines included within the segment have been updated from Real Estate and Energy & Natural Resources to Real Estate, Natural Resources and Climate Solutions. Refer to Note 2: Business Segments for discussion of the activities which comprise each business line. Our reclassifications had no effect on consolidated net earnings or equity.
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;
● Strategic Land Solutions – Real Estate (sales of timberlands), Natural Resources (rights to explore for and extract hard minerals, construction materials and natural gas production) and Climate Solutions (conservation, mitigation banking, renewable energy, forest carbon and carbon capture and sequestration).
● 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 our Consolidated Statement of Operations is as follows:
DOLLAR AMOUNTS IN MILLIONS
TIMBERLANDS
STRATEGIC LAND SOLUTIONS
WOOD PRODUCTS
UNALLOCATED ITEMS AND INTERSEGMENT ELIMINATIONS
CONSOLIDATED
QUARTER ENDED JUNE 2026
Net sales to unaffiliated customers
$
367
$
140
$
1,360
$
—
$
1,867
Intersegment sales
151
—
—
( 151
)
—
Total
518
140
1,360
( 151
)
1,867
Costs of sales
434
38
1,223
( 139
)
1,556
Gross margin
84
102
137
( 12
)
311
Selling expenses
1
—
23
—
24
General and administrative expenses
24
8
37
46
115
Other segment items (1)
( 71
)
—
6
24
( 41
)
Net contribution (charge) to earnings
$
130
$
94
$
71
$
( 82
)
$
213
QUARTER ENDED JUNE 2025
Net sales to unaffiliated customers
$
373
$
154
$
1,357
$
—
$
1,884
Intersegment sales
156
—
—
( 156
)
—
Total
529
154
1,357
( 156
)
1,884
Costs of sales
416
44
1,243
( 144
)
1,559
Gross margin
113
110
114
( 12
)
325
Selling expenses
1
—
22
—
23
General and administrative expenses
24
6
40
44
114
Other segment items (1)
—
( 2
)
6
19
23
Net contribution (charge) to earnings
$
88
$
106
$
46
$
( 75
)
$
165
YEAR-TO-DATE ENDED JUNE 2026
Net sales to unaffiliated customers
$
723
$
347
$
2,524
$
—
$
3,594
Intersegment sales
287
—
—
( 287
)
—
Total
1,010
347
2,524
( 287
)
3,594
Costs of sales
843
70
2,310
( 258
)
2,965
Gross margin
167
277
214
( 29
)
629
Selling expenses
1
—
45
1
47
General and administrative expenses
49
14
76
95
234
Other segment items (1)
( 128
)
—
( 20
)
46
( 102
)
Net contribution (charge) to earnings
$
245
$
263
$
113
$
( 171
)
$
450
YEAR-TO-DATE ENDED JUNE 2025
Net sales to unaffiliated customers
$
755
$
248
$
2,644
$
—
$
3,647
Intersegment sales
308
—
—
( 308
)
—
Total
1,063
248
2,644
( 308
)
3,647
Costs of sales
825
76
2,357
( 271
)
2,987
Gross margin
238
172
287
( 37
)
660
Selling expenses
1
—
44
1
46
General and administrative expenses
48
13
79
93
233
Other segment items (1)
( 1
)
( 3
)
12
43
51
Net contribution (charge) to earnings
$
190
$
162
$
152
$
( 174
)
$
330
(1) Other segment items for each reportable segment includes recurring and non-recurring income and expense items. For our Timberlands segment, this includes gains on the sale of timberlands for the quarter and year-to-date period ended June 30, 2026. For our Wood Products segment, this includes product remediation insurance recoveries for the year-to-date period ended June 30, 2026. For Unallocated Items, this includes non-operating pension and other post-employment benefit costs and interest income and other for all periods presented. Refer to Note 13: Other Operating Costs, Net for additional information.
8
Reconciliation of Net Contribution to Earnings to Net Earnings
QUARTER ENDED
YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS
JUNE 2026
JUNE 2025
JUNE 2026
JUNE 2025
Net contribution to earnings
$
213
$
165
$
450
$
330
Interest expense, net of capitalized interest
( 66
)
( 66
)
( 132
)
( 132
)
Earnings before income taxes
147
99
318
198
Income taxes
15
( 12
)
—
( 28
)
Net earnings
$
162
$
87
$
318
$
170
Additional Financial Information
DOLLAR AMOUNTS IN MILLIONS
TIMBERLANDS
STRATEGIC LAND SOLUTIONS
WOOD PRODUCTS
UNALLOCATED ITEMS AND INTERSEGMENT ELIMINATIONS
CONSOLIDATED
QUARTER ENDED JUNE 2026
Depreciation, depletion and amortization
$
64
$
4
$
58
$
1
$
127
Capital expenditures
$
24
$
—
$
115
$
—
$
139
QUARTER ENDED JUNE 2025
Depreciation, depletion and amortization
$
64
$
4
$
55
$
2
$
125
Capital expenditures
$
19
$
—
$
88
$
—
$
107
YEAR-TO-DATE ENDED JUNE 2026
Depreciation, depletion and amortization
$
127
$
5
$
115
$
4
$
251
Capital expenditures
$
67
$
—
$
184
$
—
$
251
YEAR-TO-DATE ENDED JUNE 2025
Depreciation, depletion and amortization
$
129
$
6
$
110
$
5
$
250
Capital expenditures
$
45
$
—
$
155
$
—
$
200
Total Assets
DOLLAR AMOUNTS IN MILLIONS
JUNE 30,
2026
DECEMBER 31,
2025
Timberlands and Strategic Land Solutions (1)
$
12,398
$
12,687
Wood Products
3,368
3,194
Unallocated items
747
732
Consolidated
$
16,513
$
16,613
(1) Assets attributable to the Strategic Land Solutions segment are combined with total assets for the Timberlands segment as we do not produce separate balance sheets internally.
9
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 2026
JUNE 2025
JUNE 2026
JUNE 2025
Net sales to unaffiliated customers:
Timberlands segment
Delivered logs:
West
Domestic sales
$
100
$
102
$
183
$
200
Export grade sales
71
67
132
138
Subtotal West
171
169
315
338
South
145
154
293
306
North
9
8
23
22
Subtotal delivered logs sales
325
331
631
666
Stumpage and pay-as-cut timber
11
13
21
23
Recreational and other lease revenue
20
19
40
38
Other (1)
11
10
31
28
Net sales attributable to Timberlands segment
367
373
723
755
Strategic Land Solutions segment
Real estate
91
72
160
134
Natural resources
34
26
61
45
Climate solutions
15
56
126
69
Net sales attributable to Strategic Land Solutions segment
140
154
347
248
Wood Products segment
Structural lumber
591
581
1,069
1,108
Oriented strand board
180
205
347
433
Engineered solid section
181
169
336
330
Engineered I-joists
89
95
161
183
Softwood plywood
47
41
85
81
Medium density fiberboard
31
36
62
68
Complementary building products
179
155
322
280
Other (2)
62
75
142
161
Net sales attributable to Wood Products segment
1,360
1,357
2,524
2,644
Total net sales
$
1,867
$
1,884
$
3,594
$
3,647
(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.
10
NOTE 4: NET EARNINGS PER SHARE AND SHARE REPURCHASES
Our basic and diluted earnings per share were:
● $ 0.23 during second quarter 2026 and $ 0.44 d uring year-to-date 2026.
● $ 0.12 during second quarter 2025 and $ 0.23 during year-to-date 2025.
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 2026
JUNE 2025
JUNE 2026
JUNE 2025
Weighted average common shares outstanding – basic
721,421
723,682
721,356
724,906
Dilutive potential common shares:
Stock options
—
35
2
54
Restricted stock units
125
43
89
43
Performance share units
355
167
340
236
Total effect of outstanding dilutive potential common shares
480
245
431
333
Weighted average common shares outstanding – dilutive
721,901
723,927
721,787
725,239
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 2026
JUNE 2025
JUNE 2026
JUNE 2025
Performance share units
824
815
824
815
Share Repurchase Program
During second quarter 2025, we completed the $ 1 billion purchase authorization under the share repurchase program approved by the board in September 2021 (the 2021 Repurchase Program). On May 8, 2025, we announced the board approved a new share repurchase program (the 2025 Repurchase Program) under which we are authorized to repurchase up to $ 1 billion of outstanding shares. Concurrently, the board of directors terminated the completed purchase authorization under the 2021 Repurchase Program.
We repurchased 409,734 common shares for approximately $ 10 million (including transaction fees) under the 2025 Repurchase Program during second quarter 2026 and 818,777 common shares for approximately $ 20 million (including transaction fees) under the 2025 Repurchase Program during year-to-date 2026. As of June 30, 2026, we had remaining authorization of $ 918 million for future share repurchases under the 2025 Repurchase Program. During second quarter 2025 , we repurchased 3,888,932 common shares for approximately $ 100 million (including transaction fees) and 4,733,981 common shares for approximately $ 125 million (including transaction fees) during year-to-date 2025 under the share repurchase programs.
All common stock repurchases under the share repurchase programs 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 June 30, 2026 and December 31, 2025 .
11
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,
2026
DECEMBER 31,
2025
LIFO inventories:
Logs
$
14
$
28
Lumber, plywood, oriented strand board and fiberboard
91
74
Other products
10
9
Moving average cost or FIFO inventories:
Logs
36
39
Lumber, plywood, oriented strand board, fiberboard and engineered wood products
112
107
Other products
167
173
Materials and supplies
174
163
Total
$
604
$
593
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
YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS
JUNE 2026
JUNE 2025
JUNE 2026
JUNE 2025
Service cost
$
5
$
5
$
9
$
9
Interest cost
24
30
47
60
Expected return on plan assets
( 23
)
( 26
)
( 45
)
( 52
)
Amortization of actuarial loss
12
14
24
28
Amortization of prior service cost
1
1
1
1
Total net periodic benefit cost – pension
$
19
$
24
$
36
$
46
OTHER POST-EMPLOYMENT BENEFITS
QUARTER ENDED
YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS
JUNE 2026
JUNE 2025
JUNE 2026
JUNE 2025
Interest cost
$
1
$
1
$
2
$
2
Amortization of prior service credit
( 1
)
( 1
)
( 1
)
( 1
)
Total net periodic benefit cost – other post-employment benefits
$
—
$
—
$
1
$
1
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 our 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 . No adjustments to the fair value of assets or projected benefit obligations were necessary during second quarter 2026.
12
NOTE 7: ACCRU ED LIABILITIES
Accrued liabilities were comprised of the following:
DOLLAR AMOUNTS IN MILLIONS
JUNE 30,
2026
DECEMBER 31,
2025
Compensation and employee benefit costs
$
149
$
190
Current portion of lease liabilities
24
25
Customer rebates, volume discounts and deferred income
143
127
Interest
47
53
Taxes payable
46
28
Other
59
55
Total
$
468
$
478
NOTE 8: LONG-TERM DEBT, LINE OF CREDIT AND COMMERCIAL PAPER PROGRAM
Long-term Debt
In July 2026, we repaid the remaining $ 62 million and $ 60 million in principal outstanding on our 7.35 percent and 7.85 percent debentures, respectively, at maturity.
During second quarter 2026, we repaid the remaining $ 250 million in principal outstanding on our 4.75 percent notes at maturity. We also amended our $ 300 million senior unsecured term loan to extend the maturity date from April 2030 to April 2031 and amended our $ 250 million senior unsecured term loan to extend the maturity date from December 2028 to April 2031 . Refinancing costs associated with each of these extensions were immaterial.
During first quarter 2026, we repaid our $ 150 million 7.70 percent debentures at maturity.
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 April 2031 as a result of the aforementioned amendment. 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.
Commercial Paper Program
During fourth quarter 2025, we established a commercial paper program under which we may issue short-term, unsecured commercial paper notes pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Under this program, we may issue notes from time to time in an aggregate amount not to exceed $ 1.75 billion outstanding at any time. The notes will have maturities of up to 397 days from the date of issue and will not be subject to voluntary prepayment or redemption prior to maturity. We use our revolving credit facility as a liquidity backstop for the repayment of short-term unsecured notes issued under the commercial paper program. As of June 30, 2026, we had $ 250 million of commercial paper issued and outstanding under this program, with a weighted average interest rate of 4.10 percent. There was no commercial paper issued and outstanding under this program as of December 31, 2025.
As of June 30, 2026 , we have classified all issued and outstanding commercial paper maturing in the next 12 months as long-term because we have the intent and ability to refinance these borrowings on a long-term basis, as supported by the available capacity under our $ 1.75 billion revolving credit facility. The amount outstanding is recorded in "Long-term debt, net" on our Consolidated Balance Sheet .
Line of Credit
During second quarter 2025, we amended and restated our senior unsecured revolving credit facility to extend the expiration date to June 2030 , while increasing borrowing capacity from $ 1.5 billion to $ 1.75 billion. Borrowings will bear interest at a floating rate based on either the adjusted term SOFR plus a spread or a mutually agreed-upon base rate plus a spread. We had no outstanding borrowings on our revolving credit facility as of June 30, 2026 or December 31, 2025 .
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,
2026
DECEMBER 31,
2025
DOLLAR AMOUNTS IN MILLIONS
CARRYING
VALUE
FAIR VALUE
(LEVEL 2)
CARRYING
VALUE
FAIR VALUE
(LEVEL 2)
Long-term debt (including current maturities), line of credit and commercial paper:
Fixed rate
$
3,828
$
3,776
$
4,225
$
4,242
Variable rate
1,347
1,350
1,347
1,350
Commercial paper program
250
250
—
—
Total debt
$
5,425
$
5,376
$
5,572
$
5,592
13
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.
Derivative Instruments Designated as Cash Flow Hedges
Interest Rate Swap Hedging Relationship
During third quarter 2025, we entered into interest rate swaps with the risk management objective of managing exposure to interest rate volatility by converting variable rate debt obligations associated with our $ 800 million term loan due in 2028 into fixed rate payments. The interest rate swaps provide the right to make fixed rate payments to the counterparty in exchange for variable, SOFR-based payments on a monthly settlement schedule. As of June 30, 2026 and December 31, 2025, our interest rate swap agreements with an aggregate notional amount o f $ 800 million were designated as cash flow hedging instruments of variable, SOFR-based interest payments on our $ 800 million term loan.
Foreign Currency Hedging Relationship
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 June 30, 2026 and December 31, 2025, all forward contracts with an aggregate notional amount of $ 14 million and $ 32 million, respectively, were designated as cash flow hedging instruments of hedged forecasted foreign-currency denominated purchases of equipment.
The current and noncurrent fair value of our outstanding derivatives designated as cash flow hedging instruments as recorded on our Consolidated Balance Sheet are summarized below:
DERIVATIVE ASSETS
DERIVATIVE LIABILITIES
DOLLAR AMOUNTS IN MILLIONS
PREPAID EXPENSES AND OTHER CURRENT ASSETS
OTHER ASSETS
ACCRUED LIABILITIES
OTHER LIABILITIES
AS OF JUNE 30, 2026
Interest rate swaps
$
4
$
5
$
—
$
—
Foreign currency forward contracts
1
—
—
—
Total fair value
$
5
$
5
$
—
$
—
AS OF DECEMBER 31, 2025
Interest rate swaps
$
—
$
—
$
1
$
2
Foreign currency forward contracts
2
1
—
—
Total fair value
$
2
$
1
$
1
$
2
The pre-tax unrealized gain on our outstanding derivative instruments recognized in "Other comprehensive income" in our Consolidated Statement of Comprehensive Income and recorded in "Accumulated other comprehensive loss" on our Consolidated Balance Sheet are summarized below:
QUARTER ENDED
YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS
JUNE 2026
JUNE 2025
JUNE 2026
JUNE 2025
Interest rate swaps
$
6
$
—
$
11
$
—
Foreign currency forward contracts
—
4
—
6
Total unrealized gain on cash flow hedges
$
6
$
4
$
11
$
6
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 .
14
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, 2026, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately $ 93 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
YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS
JUNE 2026
JUNE 2025
JUNE 2026
JUNE 2025
Pension (1)
Balance at beginning of period
$
( 489
)
$
( 573
)
$
( 502
)
$
( 583
)
Other comprehensive income (loss) before reclassifications
2
( 3
)
3
( 3
)
Amounts reclassified from accumulated other comprehensive loss to earnings (2)
9
12
21
22
Total other comprehensive income
11
9
24
19
Balance at end of period
$
( 478
)
$
( 564
)
$
( 478
)
$
( 564
)
Other post-employment benefits (1)
Balance at beginning of period
$
27
$
22
$
28
$
23
Other comprehensive income (loss) before reclassifications
—
2
( 1
)
1
Amounts reclassified from accumulated other comprehensive loss to earnings (2)
( 1
)
( 1
)
( 1
)
( 1
)
Total other comprehensive (loss) income
( 1
)
1
( 2
)
—
Balance at end of period
$
26
$
23
$
26
$
23
Translation adjustments and other
Balance at beginning of period
$
178
$
162
$
181
$
158
Translation adjustments
( 10
)
19
( 17
)
21
Unrealized gain on cash flow hedges (1)
5
4
9
6
Total other comprehensive (loss) income
( 5
)
23
( 8
)
27
Balance at end of period
173
185
173
185
Accumulated other comprehensive loss, end of period
$
( 279
)
$
( 356
)
$
( 279
)
$
( 356
)
(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 .
NOTE 12: SHARE-B ASED COMPENSATION
Share-based compensation activity during year-to-date 2026 included the following:
SHARES IN THOUSANDS
GRANTED
VESTED
Restricted stock units (RSUs)
1,184
766
Performance share units (PSUs)
622
214
A total of 712 thousand shares of common stock were issued as a result of RSU and PSU vestings, net of tax.
Restricted Stock Units
The weighted average fair value of the RSUs granted in 2026, calculated as an average of the high and low prices on grant date, was $ 26.84 . The vesting provisions for RSUs granted in 2026 were consistent with prior year grants.
15
Performance Share Units
The weighted average grant date fair value of PSUs granted in 2026 was $ 26.29 . The final number of shares granted in 2026 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, as well as company progress in achieving EBITDA growth targets. TSR assumes full reinvestment of dividends. In the event of negative absolute TSR, the TSR component used in the blended payout calculation is capped at 125 percent.
Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2026
PERFORMANCE SHARE UNITS
Performance period
2/13/2026 – 12/31/2028
Valuation date closing stock price
$ 26.75
Risk-free rate
3.37 % – 3.43 %
Expected volatility
27.90 %
NOTE 13: OTHER OPERAT ING COSTS, NET
Other operating costs, net were comprised of the following:
QUARTER ENDED
YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS
JUNE 2026
JUNE 2025
JUNE 2026
JUNE 2025
Environmental remediation charges
$
5
$
3
$
6
$
7
Litigation expense, net
12
3
20
5
Product remediation insurance recovery
—
—
( 28
)
—
Research and development expenses
1
1
2
2
Other, net
2
3
7
10
Total other operating costs, net
$
20
$
10
$
7
$
24
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 Strategic Land Solutions 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 2026 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.
Tax Legislation
On July 4, 2025, H.R. 1, commonly known as the One Big, Beautiful Bill Act (the OBBBA), was enacted. The OBBBA contained significant changes to corporate taxation, including accelerated deductions for capital spending, expensing of research and development costs and increased deductibility of interest expense. Additionally, effective for taxable years beginning after December 31, 2025, the value of TRS securities that a REIT may hold increased from 20 percent to 25 percent of the value of the REIT’s total assets. We do not expect a material impact to our 2026 financial statements due to the enactment of the OBBBA.
NOTE 15: TIMBERLAND DIVE STITURES
Divestitures
In June 2026, we completed the sale of 29 thousand acres of Oregon timberlands for $ 114 million, which is net of purchase price adjustments and closing costs. As a result of the sale, we recorded a $ 71 million gain in the Timberlands segment in our Consolidated Statement of Operations . This sale was not considered a strategic shift that had, or will have, a major effect on our operations or financial results and therefore did not meet the requirements for presentation as discontinued operations.
In February 2026, we completed the sale of 108 thousand acres of Virginia timberlands for $ 192 million, which is net of purchase price adjustments and closing costs. As a result of the sale, we recorded a $ 58 million gain in the Timberlands segment in our Consolidated Statement of Operations . This sale was not considered a strategic shift that had, or will have, a major effect on our operations or financial results and therefore did not meet the requirements for presentation as discontinued operations.
NOTE 16: PRINCETON LUMBER MILL DIV ESTITURE
In third quarter 2025, we completed the sale of our Princeton lumber mill for a total purchase price of approximately $ 85 million. The total purchase price was inclusive of mill assets, the associated timber licenses in British Columbia and the value of working capital as of the closing date. Pursuant to the transaction closing, a gain on the sale of $ 29 million was recognized. The transfer of all associated timber licenses in British Columbia was subject to regulatory approval and a portion of the total purchase price was held in escrow to be released in conjunction with the approval and transfer of these licenses. In April 2026, we obtained all necessary approvals and completed the transfer of the associated licenses. As a result, we received final proceeds of $ 22 million.
16
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.