Weyerhaeuser (WY) 10-K risk factor changes: FY2016 vs FY2015

You should consider the following risk factors, in addition to the information presented elsewhere in this report, particularly in [added: "[Our Business - Who We Are](#s7E444E52C1015BA19C45A11A0AD64B0F)", "[Our Business - What We Do](#sBF79670ACE8C5F14BAF5BDB0DCBB0532)", "[Our Business - Natural Resources and Environmental Matters](#s02B2E1C1D4C25D3F91F10399430FFE1F)",] “[Forward-Looking [removed: Statements](#sDB92E8D2B47B5E029BD875E0ED5C0007)”] [added: Statements](#s92171823452D5464A8060042E0C61A82)”] and "[Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sA0B4406F31D451639BD7643BF4EFEBB3)"] [added: Operations](#s9469DC2A40B55279BD8C3DDE2391ECB6)"] as well as in the filings we make from time to time with the SEC, in evaluating us, our business and an investment in our securities.

The construction and homebuilding industries continue to [removed: slowly] recover from the severe downturn caused by the overall collapse of credit markets and recession of 2009.

Those conditions have improved since the recession, but if macroeconomic conditions do not continue to improve we could experience lower sales [removed: volumes] [added: volume] and smaller margins.

INDUSTRY SUPPLY OF [removed: LOGS,] [added: LOGS AND] WOOD PRODUCTS [removed: AND PULP]

Excess supply of [added: logs and wood] products may adversely affect prices and margins.

Demand for new homes also has been adversely affected by factors such as [removed: unemployment and lower job participation,] limited wage growth and weak consumer confidence.

Homebuyers’ ability to qualify for and obtain affordable mortgages could be affected by changes in [added: interest rates,] government sponsored entities and private mortgage insurance companies supporting the mortgage market.

[removed: The federal government has historically had a] [added: Another] significant role [added: of the federal government] in supporting mortgage lending [added: has been] through its sponsorship of Fannie Mae and Freddie Mac.

The liquidity provided to the mortgage industry by Fannie Mae and Freddie Mac, both of which purchase home mortgages and mortgage-backed securities originated by mortgage lenders, [removed: is] [added: has been] critical to the housing market.

[removed: There] [added: However, there] have been [removed: significant] [added: questions and] concerns about the future purpose of Fannie Mae and Freddie [removed: Mac] [added: Mac,] and a number of proposals to curtail their activities over time are under review.

Limitations or restrictions on the availability of financing by these entities could [added: also] adversely affect interest rates and the availability of mortgage [removed: financing, which could reduce demand for housing and adversely affect demand for our products.][added: financing.]

Changes in [added: regulations relating to tax deductions for] mortgage interest expense and real estate [removed: tax regulations] [added: taxes] could harm our future sales and earnings.

[removed: Upset] [added: Challenging] financial or credit market conditions can impair the company’s ability to borrow money or otherwise access credit markets on terms acceptable to us, which may, among other impacts, reduce our ability to take advantage of growth and expansion opportunities.

Credit rating agencies rate our debt securities on factors that include our operating [removed: results,] [added: results and balance sheet,] actions that we take, their view of the general outlook for our industry and their view of the general outlook for the economy.

Actions taken by the rating agencies can include maintaining, upgrading or downgrading the current rating or placing the company on a watch list for possible future [removed: downgrading.][added: ratings actions.]

Our products may compete with [removed: nonfiber-based] [added: non-fiber based] alternatives or with alternative products in certain market segments.

If we are not successful in implementing previously announced or future price increases, or in our plans to increase sales of higher-priced, higher-value products, or if there are delays in acceptance of price increases or failure of customers to accept higher-priced [removed: products] [added: products,] our results of operations and financial condition could be materially and adversely affected.

Price discounting, if required to maintain our competitive position, could result in lower than anticipated price [removed: realizations.][added: realizations and margins.]

We compete with North American [added: producers] and, for [removed: many] [added: some] of our product lines, global producers, some of which may have greater financial resources and lower production costs than we do.

[removed: If and to the extent that preference for a standard other than SFI® becomes a] customer requirement, there may be reduced demand and lower prices for our products relative to competitors who can supply products sourced from forests certified to competing certification standards.

| • | unscheduled maintenance [removed: outages,] [added: outages;] |

| • | prolonged power [removed: failures,] [added: failures;] |

| • | equipment [removed: failure,] [added: failure;] |

| • | a chemical spill or [removed: release,] [added: release;] |

| • | explosion of a [removed: boiler,] [added: boiler;] |

| • | fires, floods, windstorms, earthquakes, hurricanes or other severe weather conditions or catastrophes, affecting the production of goods or the supply of raw materials (including [removed: fiber),] [added: fiber);] |

| • | the effect of drought or reduced rainfall on water [removed: supply,] [added: supply;] |

| • | labor [removed: difficulties,] [added: difficulties;] |

| • | disruptions in transportation infrastructure, including roads, bridges, rail, tunnels, shipping and port [removed: facilities,] [added: facilities;] |

| • | terrorism or threats of [removed: terrorism,] [added: terrorism;] |

| • | governmental [removed: regulations,] [added: regulations;] and |

Our business and financial results may be adversely [removed: impacted] [added: affected] if we are unable to successfully execute on important strategic initiatives.

These strategic initiatives are designed to improve our results of operations and drive long-term shareholder value, and include, among others: [removed: maximizing] [added: optimizing] cash flow through operational excellence; reducing costs to achieve industry-leading cost structure; and innovating in higher-margin products.

[added: We also could incur substantial costs, such as civil or criminal fines,] sanctions and enforcement actions (including orders limiting our operations or requiring corrective measures, installation of pollution control equipment or other remedial actions), cleanup and closure costs, and third-party claims for property damage and personal injury as a result of violations of, or liabilities under, environmental laws and regulations.

Any material liability we incur [added: as a result of activities conducted on our properties by us or by others with whom we have a business relationship] could adversely affect our financial condition or preclude us from making capital expenditures that otherwise would benefit our business.

Within the U.S. and Canada, some of these proposals would (and have in some Canadian provinces) regulate and/or tax the production of carbon dioxide and other [removed: “greenhouse gases”] [added: greenhouse gases] to facilitate the reduction of carbon compound emissions into the atmosphere and provide tax and other incentives to produce and use [removed: “cleaner”] [added: cleaner] energy.

We have manufacturing operations in [removed: Canada, Poland] [added: Canada] and Uruguay.

We are also [removed: a large] [added: an] exporter and compete with global producers of products very similar to ours.

Changes in exchange rates could materially and adversely affect our sales [removed: volumes,] [added: volume,] margins and results of operations.

We rely heavily on certain raw materials (principally wood fiber and chemicals) and energy sources (principally natural gas, [removed: electricity, coal] [added: electricity] and fuel oil) in our manufacturing processes.

Our industry may increase harvest levels, which could lead to an oversupply of logs.

Wood products producers may likewise expand manufacturing capacity, which could lead to an oversupply of manufactured wood products.

Any occurrence, continuation or increase of industry oversupply to our markets could adversely affect our prices and margins.

Access to affordable mortgage financing is critical to the health of the U.S. housing market.

Recently, the U.S. Federal Reserve increased its benchmark interest rate, and further increases are expected in 2017.

Generally, increases in interest rates make mortgage financing more difficult for home buyers to obtain, which could negatively affect demand for housing and, in turn, for our products.

Whether resulting from direct increases in borrowing rates or reduced federal support of the mortgage lending industry, a challenging mortgage financing environment could reduce demand for housing and, therefore, adversely affect demand for our products.

If and to the extent that preference for a standard other than SFI® becomes a

Strategic Review of our Uruguay Operations.

On October 12, 2016, we announced that our board of directors authorized the exploration of strategic alternatives for our Uruguay timberlands and manufacturing businesses, including options to continue to hold and operate, or sell, the business.

If a sale is pursued, there can be no assurance that an agreement with a third-party purchaser for the business will be reached, and if any such an agreement is reached, there can be no assurance that it will be on terms favorable to us or that the transactions contemplated by such an agreement will be consummated.

We also lease some of our properties to third-party operators for the purpose of exploring, extracting, developing and producing oil, gas, rock and other minerals in exchange for fees and royalty payments.

These activities are also subject to federal, state and local laws and regulations.

These operations may create risk of environmental liabilities for any unlawful discharge of oil, gas or other chemicals into the air, soil or water.

Generally, these third-party operators indemnify us against any such liability, and we require that that they maintain liability insurance during the term of our lease with them.

However, if for any reason our third-party operators are not able to honor their indemnity obligation, or if the required liability insurance were not in effect, then it is possible that we could be responsible for costs associated with environmental liability caused by such third-party operators.

For the

provided to our shareholders based on consideration of a number of factors.

We export logs and finished wood products to foreign markets, and our ability to do so profitably is affected by U.S. and foreign trade policy.

Additionally, the new U.S. administration might adopt international trade policy that could result in one or more of our foreign export market jurisdictions adopting responsive trade policy making it more difficult or costly for us to export our products in those countries.

We could therefore experience reduced revenues and margins in any of our businesses that is adversely affected by international trade tariffs, duties, taxes, customs or dispute settlement terms.

We cannot predict future trade policy or the terms of any settlements of international trade disputes and their impact on our business.

increase in timber harvesting from government-owned land could significantly reduce timber prices.

Such a downturn could also adversely affect our customers and reduce the demand for our products, as well as our ability to realize upon our strategy of selling non-strategic timberlands and timberland properties that have higher and better uses at attractive prices.

Oversupply of products may result from producers introducing new capacity for manufactured products or increasing harvest levels in response to favorable short-term pricing trends.

Industry supplies of pulp are also influenced by global production capacity, which has grown in recent years and is expected to continue to grow.

Continuation of these factors could adversely affect our sales volumes and margins.

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We also could incur substantial costs, such as civil or criminal fines,

Therefore, we pay income taxes on the income generated by our TRSs.

A new agreement has not been reached.

We could experience reduced revenues and margins in any business that is subject to such tariffs or to the terms of the settlements of such international disputes.

To the extent such tariffs increase prices, they could also reduce the demand for our products.

We cannot predict whether or when there will be a further extension of the SLA or a new agreement or, if any extension or new agreement is completed, its impact on our business.

The merger may not be completed on the terms currently contemplated, or at all.

If the merger is not completed, our businesses may be adversely affected and we may be subject to various risks without realizing any of the benefits of having the merger completed, including the following:

| • | We may be required, under certain circumstances, to pay a termination fee of $250 million. |

| • | We may be required to reimburse Plum Creek for all reasonable documented out-of-pocket fees and expenses incurred in connection with the Merger Agreement and the merger up to a maximum of $40 million. |

| • | We may experience negative reactions from the financial markets or from our customers, suppliers or employees. |

| • | We may be subject to litigation related to failure to complete the merger or to enforcement proceedings to perform our obligations under the Merger Agreement. |

A delay in completing the merger, which is subject to a number of conditions, some of which are outside our control, may reduce or eliminate the expected benefits from the merger.

The merger is subject to a number of conditions, some of which are beyond our control, that could prevent, delay or otherwise materially adversely affect its completion.

We cannot predict whether and when the conditions will be satisfied.

In addition, several putative class action lawsuits relating to the merger have been filed and additional lawsuits may be filed, which could delay completion of the merger.

We intend to vigorously defend the litigation but we cannot predict the outcome.

The requirement to obtain certain regulatory approvals could delay the completion of the merger for a significant period of time or prevent it from occurring.

A delay in completing the merger could cause the combined company not to realize some or all of the synergies and other benefits that it expects to achieve if the merger is successfully completed within its expected time frame.

The Merger Agreement contains certain restrictions on the conduct of our business.

If the merger is delayed, these restrictions could adversely affect our ability to execute business strategies or pursue attractive business opportunities.

In addition, a delay could cause management to focus on completion of the merger instead of on other opportunities that could be beneficial to the company.

We have incurred and expect to continue to incur substantial costs and expenses relating directly to the merger, including fees and expenses payable to financial and other professional advisors, SEC filing fees, printing and mailing costs and other transaction-related costs, fees and expenses.

There are a large number of systems that must be integrated, including management information, purchasing, accounting and finance, sales, billing, payroll and benefits, fixed asset and lease administration systems and regulatory compliance.

Expenses related to this integration are by their nature difficult to estimate accurately.

These integration expenses likely will result in significant charges against earnings following the completion of the merger, but the amount and timing of such charges are uncertain.

The merger involves the combination of two independently operated public companies.

Uncertainties associated with the merger may adversely affect our business and operations.

Uncertainties associated with the merger could cause customers, suppliers or other entities with whom we have a business relationship to delay or defer decisions, which could negatively impact our revenues, earnings and cash flows.

The strength of the U.S. housing market strongly affects our Wood [removed: Products and] [added: Products,] Timberlands [added: and Real Estate] segments.

As published by the U.S. Census Bureau, total U.S. housing starts for [removed: 2015] [added: 2016] were [removed: 1,111,000] [added: 1,166,000] units, with single-family units accounting for [removed: 715,000] [added: 781,000] of the total.

This represents [removed: a] [added: an almost] 10 percent increase in single-family starts from [removed: 2014,] [added: 2015,] which were [removed: 648,000] [added: 715,000] units.

Multi-family construction [removed: also increased] [added: was slightly weaker] in [removed: 2015] [added: 2016 falling] to [removed: 396,000] [added: 385,000] units compared with [removed: 358,000] [added: 396,000] in [removed: 2014.][added: 2015.]

Expectations are for a [removed: similar] [added: 6 percent to 12 percent] increase in [removed: 2016.][added: total starts in 2017.]

Consensus forecasts place expected total housing starts between [removed: 1.2] [added: 1.24] and [removed: 1.3] [added: 1.31] million units for [removed: 2016.][added: 2017.]

While housing has improved significantly since the recession of 2009, current demand for new housing continues to run below historic [removed: pre bubble averages.][added: levels.]

Demand for wood products continued to improve in [removed: 2015] [added: 2016,] following the growth in home [removed: construction, however, growth in production also expanded] [added: construction] and [removed: prices were lower in 2015 than 2014.][added: remodeling.]

The Random Lengths framing lumber composite was [removed: 14] [added: 4] percent [removed: lower] [added: higher] in [removed: 2015] [added: 2016] versus [removed: 2014] [added: 2015] while oriented strand board (OSB) was [removed: 4] [added: 29] percent [removed: lower] [added: higher] in [added: 2016 versus] 2015 as measured by Random Lengths North Central Price.

Expectations are for similar to slightly higher wood product prices in [removed: 2016] [added: 2017] as demand continues to increase with growth in housing starts and remodeling.

In the South, Southern pine sawlog [removed: prices] [added: prices, as reported by TimberMart-South,] were [removed: flat to slightly higher] [added: 2 percent lower] in [added: 2016 compared with] 2015 as available supplies continue to match or exceed growth in demand.

Expectations are for slightly improved log prices as off-shore demand improves over [removed: 2015] [added: 2016] and domestic wood products manufacturing output increases with rising housing starts creating increased log demand.

[removed: ][added: ]

[removed: ][added: ]

HOW WE DID IN [removed: 2015][added: 2016]

| | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | | | [removed: 2013] [added: 2014] | | | [removed: 2015] [added: 2016] vs. [removed: 2014] [added: 2015] | | | [removed: 2014] [added: 2015] vs. [removed: 2013] [added: 2014] | | |

| Earnings from discontinued operations, net of [removed: tax] [added: taxes] | [removed: $] | [removed: —] | | [removed: $] | [removed: 998] | | [removed: $] | [removed: 72] | | [removed: $] | [removed: (998] | [removed: )] | [removed: $] [added: (95] | [removed: 926] | [added: )] |

| Net earnings attributable to Weyerhaeuser common shareholders | $ | [removed: 462] [added: 1,005] | | $ | [removed: 1,782] [added: 462] | | $ | [removed: 540] [added: 1,782] | | $ | [removed: (1,320] [added: 543] | [removed: )] | $ | [removed: 1,242] [added: (1,320] | [added: )] |

| Basic earnings per share attributable to Weyerhaeuser common shareholders | $ | [removed: 0.89] [added: 1.40] | | $ | [removed: 3.20] [added: 0.89] | | $ | [removed: 0.95] [added: 3.20] | | $ | [removed: (2.31] [added: 0.51] | [removed: )] | $ | [removed: 2.25] [added: (2.31] | [added: )] |

| Diluted earnings per share attributable to Weyerhaeuser common shareholders | $ | [removed: 0.89] [added: 1.39] | | $ | [removed: 3.18] [added: 0.89] | | $ | [removed: 0.95] [added: 3.18] | | $ | [removed: (2.29] [added: 0.50] | [removed: )] | $ | [removed: 2.23] [added: (2.29] | [added: )] |

[added: |] Net [removed: Sales][added: sales to unaffiliated buyers: | | | | | | | | | | | | | | | |]

Net sales [removed: decreased $321] [added: increased $462] million — [removed: 4] [added: 12] percent — primarily due to:

| • | [removed: lower] Timberlands segment sales [removed: — $147] [added: decreased $142] million — [added: 10 percent —] primarily due to lower average log sales realizations and export sales [removed: volumes] [added: volume] in the West, and lower log sales [removed: volumes] [added: volume] in the South; |

| • | [removed: lower] Wood Products segment sales [removed: —] [added: decreased] $98 million — [added: 2 percent —] primarily due to decreased structural lumber and OSB average realizations, partially offset by higher structural lumber, OSB, and engineered solid section sales [removed: volumes] [added: volume] and higher sales of complementary building [removed: products; and] [added: products.] |

| • | lower [removed: Cellulose Fibers segment] [added: average] sales [removed: — $76 million — primarily due to lower] [added: realizations for] pulp and liquid packaging [removed: board average sales realizations.] [added: board;] |

Our net earnings attributable to Weyerhaeuser common shareholders decreased $1,320 million [added: — 74 percent —] primarily due to:

| • | [removed: lower] [added: Lower] gross margin — [removed: $252] [added: $181] million — primarily due to lower average sales realizations in lumber and OSB in our Wood Products [removed: segment,] [added: segment and] lower average log sales realizations and sales [removed: volumes] [added: volume] in our Timberlands [removed: segment, and lower average sales realizations for pulp and liquid packaging board, and higher operating costs due to scheduled maintenance outages and the West Coast port slowdown in our Cellulose Fibers segment;] [added: segment.] |

| • | [removed: losses from an equity affiliate] [added: a decrease] in [removed: 2015] [added: the equity loss from our printing papers joint venture] — [removed: $105] [added: $101] million — primarily [removed: due] [added: attributable] to an $84 million noncash asset impairment recorded [removed: by an equity affiliate] in [removed: the] fourth quarter [removed: 2015.] [added: 2015; and] |

These decreases were partially offset [removed: by:][added: by lower general and administrative expenses — $47 million.]

| • | lower [added: selling,] general and administrative expenses — [removed: $49 million.] [added: $11 million and] |

Net sales [added: to unaffiliated customers] increased [removed: $149] [added: $532] million — [removed: 2] [added: 42] percent — primarily due to:

Our net earnings attributable to Weyerhaeuser common shareholders increased [removed: $1,242] [added: $543] million [removed: primarily due to:][added: — 118 percent — compared to 2015.]

| [removed: •] [added: ◦] | a [removed: $926 million increase in earnings from discontinued operations, primarily due to a] $972 million net gain on the [removed: Real Estate] [added: WRECO] Divestiture recognized in [removed: 2014;] [added: 2014 and] |

| [removed: •] [added: ◦] | a [removed: $166 million increase in other operating income, primarily due to a] $151 million pretax gain recognized in 2014 related to a previously announced postretirement plan amendment; [removed: and] |

HOW WE DID IN [removed: 2015][added: 2016]

We report sales volume and annual production data for our Timberlands segment in [Our Business/What We [removed: Do/Timberlands](#s1881E9E1176C58FDB51653F34FA2AFE0).][added: Do/Timberlands](#sD21D9FD8CB5D5AA39FEC28AE8894DED8).]

Here is a comparison of net sales to unaffiliated customers, intersegment sales, [added: cost of products sold] and net contribution to earnings for the last three years:

| | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | | | [removed: 2013] [added: 2014] | | | [removed: 2015] [added: 2016] vs. [removed: 2014] [added: 2015] | | | [removed: 2014] [added: 2015] vs. [removed: 2013] [added: 2014] | | |

| [removed: Logs:] [added: Delivered logs(1):] | | | | | | | | | | | | | | | |

| West | $ | [removed: 830] [added: 865] | | $ | [removed: 972] [added: 830] | | $ | [removed: 828] [added: 972] | | $ | [removed: (142] [added: 35] | [removed: )] | $ | [removed: 144] [added: (142] | [added: )] |

Sources include NAHB, Fannie Mae, Mortgage Bankers Association, APA, and FEA.

Demand for homes remains strong relative to inventories.

US Census reported new homes sales of 563 thousand units, a 12.2 percent rise in sales over 2015 and consistently low inventories as measured by months of supply which averaged 5.3 months through 2016.

Existing homes performed similarly, with total sales for 2016 of 5.45 million units, a gain of 4 percent over 2015 and the highest sales level since 2006 according to the National Association of Realtors.

Existing home inventories were also tight with supplies, averaging 4.3 months for the year.

The Joint Center for Housing Studies at Harvard projects trend demand at 1.7 million total units which is well above current levels.

Remodeling activity also affects our Wood Products and Timberlands segments.

According to the Joint Center for Housing Studies at Harvard, the Leading Indicator of Remodeling Activity (LIRA) increased 6 percent in 2016 and is expected to rise 7.8 percent in 2017.

Real estate sales are affected by local economic conditions, the ability of borrowers to obtain financing, the number of competing properties listed for sale and the availability of government and not for profit funding, especially for conservation sales.

Western domestic log prices, as reported by Loglines, were flat in 2016 while Export logs to Japan were 1 percent higher, however, exports of Hemlock logs, whose primary destinations are China and Korea, sold at prices 8 percent below 2015 levels.

Energy markets hit their low point in early 2016 and rebounded through the remainder of the year.

For the year, oil prices averaged $43/BBL for West Texas Intermediate crude, an 11 percent decline from 2015.

Prices bottomed in February at $30/BBL, recovering to almost $52/BBL in December.

Natural gas prices were also lower in 2016 but the decline from 2015 was more modest at 4 percent for the Henry Hub price.

Expectations are for energy prices to slowly increase in 2017.

Our merger with Plum Creek during first quarter 2016 significantly affected the comparability of our consolidated operating results between 2016 and prior periods.

As a result of progress made to integrate financial processes and systems since the merger date, the results beginning on February 19, 2016, from acquired Plum Creek operations and the respective impacts of these results on our current period results are impracticable to disclose in the year-to-date period ended December 31, 2016.

Our prior period results do not include pre-merger results of Plum Creek operations.

When compared to historical Plum Creek results, the post-merger results of the acquired operations are significantly affected by the following items:

| • | increased depletion charges and increased basis of real estate sold as a result of applying acquisition accounting to timberland and real estate and energy and natural resources assets acquired as described in [Note 4: Merger with Plum Creek](#s975E19957C7F5DCAA1ABBA07BAEF8C2F) in [Notes to Consolidated Financial Statements](#sF4532038972E54D6978A09105688E153); and |

| • | certain merger-related costs as described in [Note 17: Charges for Integration and Restructuring, Closures and Asset Impairments](#sAF0870104A435400B7C328D33BA98444) in [Notes to Consolidated Financial Statements](#sF4532038972E54D6978A09105688E153). |

| Net sales | $ | 6,365 | | $ | 5,246 | | $ | 5,489 | | $ | 1,119 | | $ | (243 | ) |

| Costs of products sold | $ | 4,926 | | $ | 4,121 | | $ | 4,183 | | $ | 805 | | $ | (62 | ) |

| Operating income | $ | 870 | | $ | 658 | | $ | 987 | | $ | 212 | | $ | (329 | ) |

COMPARING 2016 WITH 2015

| • | Timberlands segment sales increased $532 million — 42 percent — primarily due to sales from acquired Plum Creek operations. This increase was partially offset by lower average sales realizations. The decrease in average sales realizations is primarily attributable to the increase in sales volume for the South, which has lower average sales realizations compared to the West. The South comprised 31 percent of Timberlands' sales to unaffiliated customers in 2016 compared to 19 percent in 2015. |

| • | Real Estate & ENR segment sales increased $125 million — 124 percent — attributable to increased volume of timberland acres sold and increased ENR sales volume attributable to the operations acquired in our merger with Plum Creek. These increases were partially offset by a decrease in average price realized per acre due to geographic mix of properties sold. |

| • | Wood Products segment sales increased $462 million — 12 percent — due to increased medium density fiberboard and plywood sales generated from our operations acquired from our merger with Plum Creek; and increased oriented strand board and lumber average sales realizations. |

Costs of Products Sold

Costs of products sold increased $805 million — 20 percent — primarily attributable to the following developments:

| • | Timberlands costs of products sold increased $488 million — 31 percent — due to increased sales volume as explained above and to higher depletion rates in the South and West for acquired Plum Creek timberlands, which were measured at fair value as of the merger date; |

| • | Real Estate & ENR costs of products sold increased $114 million — 570 percent — attributable to increased real estate and ENR sales volume as explained above and to higher basis in real estate sold resulting from measuring acquired Plum Creek properties at fair value as of the February 19, 2016, merger date. |

| • | Wood Products costs of products sold increased $201 million — 6 percent — primarily attributable to increased sales volume as explained above. This increase was partially offset by lower log costs and lower manufacturing costs per unit. |

| • | an increase to company-wide gross margin of $314 million — 28 percent — as described above; |

| • | a favorable shift in gain on foreign currency remeasurement — $52 million; and |

| • | a gain on the sale of our Federal Way headquarters campus — $36 million. |

| • | a $131 million increase in charges for integration and restructuring, closures and asset impairments, primarily attributable to incurring $146 million of costs related to our merger with Plum Creek in 2016 compared to $14 million incurred in 2015; and |

| • | a $63 million increase in selling, general and administrative expenses primarily attributable to merging legacy Weyerhaeuser and Plum Creek operations. |

Earnings from continuing operations before income taxes increased $151 million — 43 percent — due to the variances in net sales, costs of products sold and operating income explained above.

The increase was offset by a $147 million increase to income taxes from continuing operations resulting from increased taxable earnings generated by our TRSs.

Sources include IHS Global Insight, John Burns Real Estate and RISI.

The 25-year period of 1976-2000 averaged 1.5 million total starts and 1.1 million single family starts, levels which have not yet been achieved in the post recession period.

Western log prices were lower in 2015 due primarily to the pullback in demand from China which had been actively competing with domestic lumber producers for sawlogs.

Cellulose Fibers is primarily affected by global supply and demand factors and the relative strength of the U.S. dollar.

The slowdown in global growth and reduced expectations for emerging economies slowed demand growth for pulp in 2015.

The U.S. dollar continued to strengthen versus the Euro in 2015, rising 12 percent due to stronger US economic growth and increasingly accommodative monetary policies in Eurozone economies.

Consequently prices for benchmark NBSK pulp were 8% lower in 2015 versus 2014.

Expectations are for similar to slightly lower prices in 2016 as global economic growth is expected to be weak, which will limit growth in demand for products made with cellulose fibers.

Furthermore, the US dollar is expected to remain strong relative to other currencies including the euro and a weak euro has historically been associated with lower US dollar prices for cellulose fibers.

| Net sales | $ | 7,082 | | $ | 7,403 | | $ | 7,254 | | $ | (321 | ) | $ | 149 | |

| Operating income | $ | 919 | | $ | 1,320 | | $ | 634 | | $ | (401 | ) | $ | 686 | |

| • | earnings from discontinued operation recognized in 2014 — $998 million. There were no earnings from discontinued operations in 2015; |

| • | lower other operating income — $219 million — primarily due to a $151 million pretax gain recognized in 2014 related to a previously announced postretirement plan amendment, a $22 million pretax gain recognized in 2014 on the sale of a landfill in Washington State, $14 million of Plum Creek merger-related costs in 2015, and a $13 million noncash impairment charge related to a nonstrategic asset sale in 2015; and |

| • | lower income taxes — $188 million — primarily due to lower earnings in our Taxable REIT Subsidiary (TRS) in 2015, an income tax benefit recognized in the fourth quarter 2015 related to a noncash asset impairment recorded by an equity affiliate and the expiration of the company's built-in-gains tax period as a result of a change in U.S. tax legislation; and |

COMPARING 2014 WITH 2013

| • | Timberlands segment sales increased $154 million, primarily due to higher log prices and increased sales volumes in the West, including our acquired Longview Timber holdings. |

| • | Cellulose Fibers segment sales increased $34 million primarily due to higher sales realizations for pulp. |

These increases were partially offset by a $39 million decrease in our Wood Products segment sales, primarily due to lower sales realizations for OSB.

This decrease in sales was partially offset by higher sales realizations and volumes for engineered wood products and lumber and increased sales from complementary building products.

| • | a $333 million decrease in charges for restructuring, closure and asset impairments primarily related to a noncash impairment charge relating to a large master-planned community north of Las Vegas, Nevada which was retained by Weyerhaeuser in the divestiture of Weyerhaeuser Real Estate Company (WRECO); |

| • | a $206 million increase in gross margin in our Timberlands and Cellulose Fibers segments, primarily due to higher sales realizations and owning Longview Timber for a full year; |

| • | a $79 million decrease in our selling, general and administrative expenses. |

| • | a $356 million change in income taxes from a benefit in 2013 to an expense in 2014 primarily related to a previously unrecognized tax benefit recorded in 2013 and higher earnings in our Taxable REIT Subsidiary (TRS) in 2014; and |

| • | a $140 million decrease in gross margin in our Wood Products segment, primarily due to lower sales realizations in OSB. |

| Canada | 24 | | | 22 | | | 19 | | | 2 | | | 3 | | |

| Chip sales | 15 | | | 12 | | | 9 | | | 3 | | | 3 | | |

| Timberlands exchanges(1) | 62 | | | 52 | | | 65 | | | 10 | | | (13 | | ) |

| Higher and better-use land sales(1) | 14 | | | 19 | | | 19 | | | (5 | | ) | — | | |

| Minerals, oil and gas | 26 | | | 32 | | | 32 | | | (6 | | ) | — | | |

| Products from international operations(2) | 87 | | | 96 | | | 90 | | | (9 | | ) | 6 | | |

| Subtotal sales to unaffiliated customers | 1,350 | | | 1,497 | | | 1,343 | | | (147 | | ) | 154 | | |

| Total | $ | 2,180 | | $ | 2,364 | | $ | 2,142 | | $ | (184 | ) | $ | 222 | |

| (1) Significant dispositions of higher and better use timberland and some nonstrategic timberlands are made through subsidiaries. (2) Products include logs, plywood and hardwood lumber harvested or produced by our international operations. This includes sales from our operations in Uruguay and Brazil (sold in 2014). | | | | | | | | | | | | | | | |

On July 23, 2013, we purchased 100 percent of the equity interests in Longview Timber LLC (Longview Timber) for cash and assumed debt.

Longview Timber was and continues to be a supplier to our Wood Products segment and those sales are shown in intersegment sales.

These decreases were partially offset by:

| • | higher average sales realizations in the South — $13 million; and |

| • | lower selling, general and administrative expenses — $11 million. |

COMPARING 2014 WITH 2013

Net sales to unaffiliated customers increased $154 million — 11 percent — primarily due to a $144 million increase in Western log sales due to higher log prices from our legacy Western timberlands and a 17 percent increase in sales volumes including the increase related to the acquired Longview Timber holdings.

SUMMARY OF LONG-TERM DEBT OBLIGATIONS AS OF DECEMBER 31, [removed: 2015][added: 2016]

| | [removed: 2016 | | |] 2017 | | | 2018 | | | 2019 | | | 2020 | | | [added: 2021 | | |] THEREAFTER | | | TOTAL | | | FAIR VALUE | | |

| Fixed-rate debt | $ | [removed: — | | $ |] 281 | | $ | 62 | | $ | 500 | | $ | — | | $ | [removed: 3,503] [added: 756] | | $ | [removed: 4,346] [added: 4,479] | | $ | [removed: 5,070] [added: 6,078] | | [added: $ | 6,925 | |]

| Average interest rate | [removed: — | | % |] 6.95 | | % | 7.00 | | % | 7.38 | | % | — | | % | [removed: 7.09] [added: 5.55] | | % | [removed: 7.12] [added: 6.38] | | % | [added: 6.39 | | % |] N/A | | |

| Variable-rate debt | $ | — | | $ | — | | $ | — | | $ | [removed: —] [added: 550] | | $ | [removed: 550] [added: —] | | $ | — | | $ | 550 | | $ | 550 | |

| Average interest rate | — | | % | — | | % | — | | % | [removed: —] [added: 2.36] | | % | [removed: 2.07] [added: —] | | % | — | | % | [removed: 2.07] [added: 2.36] | | % | N/A | | |

We own or control [removed: nearly 7] [added: 13.1] million acres of timberlands, primarily in the U.S., and manage additional timberlands under long-term licenses in Canada.

We are also one of the largest manufacturers of wood [removed: and specialty cellulose fibers products.][added: products in North America.]

[removed: We] [added: In our operations, we] focus on increasing energy and resource efficiency, reducing greenhouse gas emissions, reducing water consumption, conserving natural resources, and offering products that meet [removed: human] [added: our customers'] needs with superior sustainability attributes.

In [removed: 2015,] [added: 2016,] we generated [removed: $7.1] [added: $6.4] billion in net sales [added: from continuing operations] and employed approximately [removed: 12,600] [added: 10,400] people who serve customers worldwide.

This portion of our Annual Report [removed: and] [added: on] Form 10-K provides detailed information about who we are, what we do and where we are headed.

Unless otherwise specified, current information reported in this Form 10-K is as of [added: or for] the fiscal year ended December 31, [removed: 2015.][added: 2016.]

Today, we are working to [removed: grow a truly great] [added: be the world's premier timber, land, and forest products] company for our shareholders, customers and employees.

[removed: We] [added: | • |] grow and harvest [removed: trees and manufacture and sell products made from trees.][added: trees; |]

We continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which includes our [removed: manufacturing businesses] [added: Wood Products segment] and [removed: the] [added: a] portion of our Timberlands [removed: segment income included in the TRS.][added: and Real Estate, Energy and Natural Resources (Real Estate & ENR) segments.]

[removed: PENDING] MERGER WITH PLUM CREEK

On [removed: November 6, 2015 Weyerhaeuser Company and Plum Creek Timber Company, Inc. (“Plum Creek”) entered into an] [added: February 19, 2016, pursuant to the] Agreement and Plan of Merger [removed: (“Merger Agreement”) pursuant to which] [added: dated November 6, 2015,] Plum Creek [removed: will merge] [added: Timber Company, Inc. (Plum Creek) merged] with and into [removed: Weyerhaeuser Company with Weyerhaeuser continuing as the surviving corporation.][added: Weyerhaeuser.]

Under the terms of the [removed: Merger Agreement, Plum Creek shareholders will receive 1.60 shares] [added: Agreement and Plan] of [removed: Weyerhaeuser common shares for] [added: Merger,] each [added: issued and outstanding] share of Plum Creek common stock [removed: at the closing date.][added: was exchanged for 1.60 Weyerhaeuser common shares.]

Plum Creek [removed: is] [added: was] a REIT that [removed: owns] [added: primarily owned] and [removed: manages more than 6 million acres of timberland] [added: managed timberlands] in the United States.

[removed: In addition] Plum Creek [removed: produces] [added: also produced] wood products, [removed: develops] [added: developed] opportunities for mineral and other natural resource extraction, and [removed: develops and sells] [added: sold] real estate properties.

See [Note 4: [removed: Acquisitions](#sCA83216C0CF456CB85D8855829BB2F87)] [added: Merger with Plum Creek](#s975E19957C7F5DCAA1ABBA07BAEF8C2F)] in the [Notes to Consolidated Financial [removed: Statements](#s9BA5C07793D859489A3701F92874EAC5)] [added: Statements](#sF4532038972E54D6978A09105688E153)] for further information about the [removed: pending] merger.

In the [Consolidated [removed: Results](#sED58068E05785B7E9721D4E0AB683DEC)] [added: Results](#s33D367FD631159D6964708BED77DB8D0)] section of [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sA0B4406F31D451639BD7643BF4EFEBB3),] [added: Operations](#s9469DC2A40B55279BD8C3DDE2391ECB6),] you will find our overall performance results for our business [removed: segments:][added: segments.]

| • | [removed: Timberlands,] [added: Timberlands;] |

| • | [removed: Wood Products] [added: wood products facilities] and |

Detailed financial information about our business segments and our geographic locations is [added: provided] in [Note 2: Business [removed: Segments](#sB3DB13B5FDEA5CABB492CA03089F6D7B)] [added: Segments](#sA4C04CD8DD4450DD90B67F8EE4B944B7)] and [Note [removed: 21:] [added: 20:] Geographic [removed: Areas](#s6DD083FA0D55507B8ED9443CBDDD63EC)] [added: Areas](#s40D568D719C1544AA564EF6633E03CBA)] in the [Notes to Consolidated Financial [removed: Statements](#s9BA5C07793D859489A3701F92874EAC5),] [added: Statements](#sF4532038972E54D6978A09105688E153),] as well as in this section and in [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sA0B4406F31D451639BD7643BF4EFEBB3).][added: Operations](#s9469DC2A40B55279BD8C3DDE2391ECB6).]

Many of our products also face competition from substitutes for wood [removed: and wood-fiber] products.

We compete in our markets primarily through [removed: price,] product [removed: quality and] [added: quality,] service [removed: levels.][added: levels and price.]

We are relentlessly focused on improving operational excellence to ensure a competitive cost structure and producing quality products customers want and are [removed: wiling] [added: willing] to pay for.

| • | Timberlands — Extract maximum [added: timber] value from each acre we own or manage. |

In [removed: 2015, $2.3 billion] [added: 2016, $915 million] — [removed: 32] [added: 14] percent — of our total consolidated sales from continuing operations were to customers outside the U.S. Our sales outside the U.S. are generally denominated in U.S. dollars.

| | [removed: 2015] [added: 2016] | | [added: 2015] | [removed: 2014] | [added: 2014] | | 2013 | | [added: 2012] | [added: |]

| Exports from the U.S. | $ | [removed: 1,719] [added: 515] | | $ | [removed: 1,892] [added: 497] | | $ | [removed: 1,891] [added: 640] | |

| Canadian export and domestic sales | [removed: 400] [added: 342] | | | [removed: 472] [added: 317] | | | [removed: 488] [added: 392] | | |

| Other foreign sales | [removed: 144] [added: 58] | | | [removed: 150] [added: 69] | | | [removed: 114] [added: 80] | | |

| Percent of total sales | [removed: 32] [added: 14] | | % | [removed: 34] [added: 17] | | % | [removed: 29] [added: 20] | | % |

We have approximately [removed: 12,600] [added: 10,400] employees.

| • | [removed: 11,700] [added: 9,700] employed in North America and |

| • | [removed: 900] [added: 700] employed by our operations outside of North America. |

Of these employees, approximately [removed: 3,500] [added: 2,900] are members of unions covered by multi-year collective-bargaining agreements.

More information about these agreements is [added: provided] in [Note 9: Pension and Other Postretirement Benefit [removed: Plans](#s0DC7E54BD3F15BFE8F7B9583551CF07C)] [added: Plans](#sE0DBE88811F85CC38767EEE647724481)] in the [Notes to Consolidated Financial [removed: Statements](#s9BA5C07793D859489A3701F92874EAC5).][added: Statements](#sF4532038972E54D6978A09105688E153).]

Our Timberlands segment manages [removed: 6.9] [added: 13.1] million acres of private commercial timberlands worldwide.

We own [removed: 6.3] [added: 12.0] million of those acres and have long-term leases on the other [removed: 0.6] [added: 1.1] million acres.

In addition, we have renewable, long-term licenses on [added: 13.9 million acres of] Canadian timberlands.

The tables presented in this section include data from this segment's business units as of the end of [removed: 2015.][added: 2016.]

| • | [removed: grows and] harvests trees to be converted into lumber, [removed: other] wood [removed: and building products and] [added: products,] pulp and paper; |

| • | plants seedlings to reforest harvested areas using the most effective regeneration method for the site and species [removed: (in] [added: (natural regeneration is employed and managed in] parts of Canada [removed: natural regeneration is employed);] [added: and the northern U.S.);] |

Our objective is to maximize the long-term value of timberlands we own.

We analyze each timberland acre comprehensively to understand its highest-value use.

We realize this value in many different ways, including harvesting the trees and selling the timberland.

In addition, we focus on opportunities to realize value for oil and natural gas production, construction aggregates and mineral extraction, wind power and communication and transportation rights of way that exist in our ownership.

The merger combined two industry leaders.

The breadth and diversity of our combined timberlands, real estate, energy and natural resources assets, and wood products operations position Weyerhaeuser to capitalize on the improving housing market and to continue to capture value across the combined portfolio.

During fiscal year 2016, the company's chief operating decision maker changed the information regularly reviewed for making decisions to allocate resources and assess performance.

As a result, the company will report its financial performance based on three business segments:

| • | Real Estate, Energy and Natural Resources (Real Estate & ENR); and |

| • | Wood Products. |

Prior to revising our segment structure, activities related to the Real Estate & ENR business segment were reported as part of the Timberlands business segment.

Amounts for all periods presented have been reclassified throughout the consolidated financial statements and disclosures to conform to the new segment structure.

We have made certain reclassifications in our consolidated financial statements to reflect discontinued operations related to our former Cellulose Fibers businesses disposed of during 2016, and Weyerhaeuser Real Estate Company (WRECO) disposed of during 2014.

Cellulose Fibers was previously disclosed as a separate reportable business segment and WRECO and its subsidiaries were previously reported as the Real Estate segment.

Refer to [Note 3: Discontinued Operations](#s23B1B7E4042756F485D07BE80B284BDF) in the [Notes to Consolidated Financial Statements](#sF4532038972E54D6978A09105688E153) for further information.

Real Estate is affected by local real estate market conditions, such as the level of supply of, or demand for, properties sharing the same or similar characteristics as our timberlands.

Energy and Natural Resources are affected by the changes in commodity prices, including oil and gas.

| • | Real Estate & ENR — Deliver premiums to timber value by identifying and monetizing higher and better use lands and capturing the full value of surface and subsurface assets. |

| DOLLAR AMOUNTS IN MILLIONS | | | | | | | | | |

| | 2016 | | | 2015 | | | 2014 | | |

| Total | $ | 915 | | $ | 883 | | $ | 1,112 | |

| Excludes sales from Discontinued Operations. Refer to [Note 3: Discontinued Operations](#s23B1B7E4042756F485D07BE80B284BDF) in the [Notes to Consolidated Financial Statements](#sF4532038972E54D6978A09105688E153) for further information. | | | | | | | | | |

| • | maximize the value of every acre we own; and |

| • | offers recreational access to the public. |

| Grade logs | Grade logs are made into a diverse range of products including lumber, plywood, and veneer. |

| Recreational leases | Timberlands are leased to the public for recreational purposes. |

We previously reported Timberlands volumes information in cubic meters.

Prior period volumes have been converted from cubic meters to tons using conversion factors as follows:

| • | West: 1.056 m3 = 1 ton |

| • | South: 0.818 m3 = 1 ton |

| • | Uruguay: 0.907 m3 = 1 ton |

| • | Canada: 1.244 m3 = 1 ton |

| • | 2.5 million acres in the northern U.S. (Maine, Michigan, Montana, New Hampshire, Vermont, West Virginia and Wisconsin). |

Included in the acreage above is the approximately 6.3 million acres of timberlands added through our merger with Plum Creek, which produced over 18 million tons of harvest volume in 2015.

The merger resulted in the addition of the following acres:

| • | 0.4 million acres in the western U.S., |

| • | 3.4 million acres in the southern U.S. and |

| • | 2.5 million acres in the northern U.S. |

| Cedar | 3 | |

| Total West | 210 | |

A significant portion of our timberland segment earnings receives this favorable tax treatment.

| • | Cellulose Fibers. |

On November 8, 2015 Weyerhaeuser announced that the board authorized the exploration of strategic alternatives for its Cellulose Fibers business.

At this time there can be no assurance that the board's evaluation process will result in any transaction or that any transaction, if pursued, will be consummated.

Cellulose Fibers is primarily affected by global demand and the relative strength of the U.S. dollar.

| • | Cellulose Fibers — Concentrate on value-added pulp products and low cost manufacturing assets. |

| SALES OUTSIDE THE U.S. IN MILLIONS OF DOLLARS | | | | | | | | | |

| Total | $ | 2,263 | | $ | 2,514 | | $ | 2,493 | |

| • | grow and harvest trees and |

| • | exports logs to other countries where they are made into products; |

Other Values From Our Timberlands

In the United States, we actively manage mineral, oil and gas leases on our land and use geologic databases to identify and market opportunities for commercial mineral and geothermal development.

| • | geothermal lease and option revenues; and |

| PRODUCTS | HOW THEY’RE USED |

| Logs | Logs are made into lumber, other wood and building products, and pulp and paper products. |

We report Timberlands data in cubic meters.

Cubic meters measure the total volume of wood fiber in a tree or log that we can sell.

Cubic meter volume is determined from the large and small-end diameters and length and provides a comparative measure of timber and log volume among operating regions, species, size and seasons of the year.

| • | varies according to the species, size and quality of the timber; and |

| • | will change through time as the mix of these variables adjust. |

| | | |

| --- | --- | --- |

| | | |

| | 196 | |

| | 142 | |

| (1) Inventory includes all conservation and set aside areas. | | |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | | | |

| South | 3,403 | | 630 | | 4,033 | |

| Total U.S. | 5,997 | | 630 | | 6,627 | |

On July 23, 2013, we purchased 100 percent of the equity interests in Longview Timber LLC (Longview Timber) for $1.58 billion cash and assumed debt of $1.07 billion, for an aggregate purchase price of $2.65 billion.

Longview Timber was a privately-held Delaware limited liability company engaged in the ownership and management of approximately 645,000 acres of timberlands in Oregon and Washington.

More information on this transaction can be found in [Note 4: Acquisitions](#sCA83216C0CF456CB85D8855829BB2F87) in the [Notes to Consolidated Financial Statements](#s9BA5C07793D859489A3701F92874EAC5).

We also actively manage our land to capture revenues from our oil, gas and hard minerals resources.

International

Summary of 2015 International Standing Timber Inventory

| GEOGRAPHIC AREA | MILLIONS OF CUBIC METERS AT DECEMBER 31, 2015 | |

| | TOTAL INVENTORY | |

| Total International | 12 | |

See [Note [removed: 15:] [added: 14:] Legal Proceedings, Commitments and [removed: Contingencies](#s87E5C4739D7A520C9017CD335BD3CAF3)] [added: Contingencies](#s066C8D24A8A05335A9BBFDE3E00BE9AC) and [Note 19: Income Taxes](#s51B5FBE0DEAA5792BC73707577655338)] in the [Notes to Consolidated Financial [removed: Statements](#s9BA5C07793D859489A3701F92874EAC5)] [added: Statements](#sF4532038972E54D6978A09105688E153)] for a summary of legal proceedings.

FOR THE FISCAL YEAR ENDED DECEMBER 31, [removed: 2015][added: 2016]

As of June 30, [removed: 2015,] [added: 2016,] the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was [removed: $16.0] [added: $21.6] billion based on the closing sale price as reported on the New York Stock Exchange Composite Price Transactions.

As of January [removed: 29, 2016, 510,492,965] [added: 27, 2017, 748,998,273] shares of the registrant’s common stock ($1.25 par value) were outstanding.

Portions of the Notice of [removed: 2016] [added: 2017] Annual Meeting of Shareholders and Proxy Statement for the company’s Annual Meeting of Shareholders to be held May [removed: 20, 2016,] [added: 19, 2017,] are incorporated by reference into Part II and III.

| PART I | | [added: PAGE] |

| ITEM 1. | [OUR [removed: BUSINESS](#s3C2DC7D3FB395C1D9F158C7544BD161D)] [added: BUSINESS](#s73E5031952F05FC4B4CAD46F483C551E)] | [removed: [1](#s3C2DC7D3FB395C1D9F158C7544BD161D)] [added: [1](#s73E5031952F05FC4B4CAD46F483C551E)] |

| | [WE CAN TELL YOU [removed: MORE](#s2A365764BC5B55EBAC2F43D549205F0F)] [added: MORE](#s42FCD8BAECFB5CE599DC55A5F235BEB7)] | [removed: [1](#s2A365764BC5B55EBAC2F43D549205F0F)] [added: [1](#s42FCD8BAECFB5CE599DC55A5F235BEB7)] |

| | [WHO WE [removed: ARE](#sB29D83EAF92A52949C387AC8D0492695)] [added: ARE](#s7E444E52C1015BA19C45A11A0AD64B0F)] | [removed: [1](#sB29D83EAF92A52949C387AC8D0492695)] [added: [1](#s7E444E52C1015BA19C45A11A0AD64B0F)] |

| | • [REAL ESTATE INVESTMENT TRUST (REIT) [removed: ELECTION](#sEDC793AFC81657A998A3739689448BAB)] [added: ELECTION](#s2FD21915EB0457108F18A9F82922D04B)] | [removed: [1](#sEDC793AFC81657A998A3739689448BAB)] [added: [1](#s2FD21915EB0457108F18A9F82922D04B)] |

| | [removed: • [PENDING] [added: [•] MERGER WITH PLUM [removed: CREEK](#s306db1e2e65141edaea54cb93df284a4)] [added: CREEK](#s102907132EB3564692DEC0C61C4BF53E)] | [removed: [1](#s306db1e2e65141edaea54cb93df284a4)] [added: [1](#s102907132EB3564692DEC0C61C4BF53E)] |

| | • [OUR BUSINESS [removed: SEGMENTS](#sA539BC02CD115ABCA5C68033E6B64A92)] [added: SEGMENTS](#s614BCCFA75915969B3716A47152312CA)] | [removed: [1](#sA539BC02CD115ABCA5C68033E6B64A92)] [added: [1](#s614BCCFA75915969B3716A47152312CA)] |

| | • [EFFECT OF MARKET [removed: CONDITIONS](#s374178EE4F745A25B57E4CAFAC19251E)] [added: CONDITIONS](#sCEDFE292E77753B5A8D3EEA00C5916CE)] | [removed: [2](#s374178EE4F745A25B57E4CAFAC19251E)] [added: [2](#sCEDFE292E77753B5A8D3EEA00C5916CE)] |

| | • [COMPETITION IN OUR [removed: MARKETS](#sCA9BEE2EB878503AB9631E63DBB09C55)] [added: MARKETS](#s4CBD337F67D357FFB20E42BE48781D06)] | [removed: [2](#sCA9BEE2EB878503AB9631E63DBB09C55)] [added: [2](#s4CBD337F67D357FFB20E42BE48781D06)] |

| | • [SALES OUTSIDE THE [removed: U.S.](#s566AAB61E5BF549693787FA0BEC28BD4)] [added: U.S.](#s80ABE6D7ABE85284BA4C6C76575BD704)] | [removed: [2](#s566AAB61E5BF549693787FA0BEC28BD4)] [added: [2](#s80ABE6D7ABE85284BA4C6C76575BD704)] |

| | • [OUR [removed: EMPLOYEES](#sE70E9E7E43755C75AD1FD11BD69029B8)] [added: EMPLOYEES](#sF359BD6EF71D59E1BDE0083965CA7738)] | [removed: [2](#sE70E9E7E43755C75AD1FD11BD69029B8)] [added: [2](#sF359BD6EF71D59E1BDE0083965CA7738)] |

| | [removed: • [WOOD PRODUCTS](#sB94DC83C67305B9CA0854AC1278A8AEA)] [added: [• WOOD PRODUCTS](#s09835627A2D95A43B0D7FD88F44FBFE2)] | [removed: [11](#sB94DC83C67305B9CA0854AC1278A8AEA)] [added: [14](#s09835627A2D95A43B0D7FD88F44FBFE2)] |

| | [EXECUTIVE OFFICERS OF THE [removed: REGISTRANT](#s565784D7CBF150549B8BBBF348D3CF5D)] [added: REGISTRANT](#s4E30E0CEA75B53A9B82A24AF02C43ABE)] | [removed: [17](#sFAC1F072E2A35A8FB89812D14EDF36C7)] [added: [18](#s4E30E0CEA75B53A9B82A24AF02C43ABE)] |

| | [NATURAL RESOURCE AND ENVIRONMENTAL [removed: MATTERS](#sA6A0D9AC5A86512CA882F35061CF2C41)] [added: MATTERS](#s02B2E1C1D4C25D3F91F10399430FFE1F)] | [removed: [18](#sA6A0D9AC5A86512CA882F35061CF2C41)] [added: [19](#s02B2E1C1D4C25D3F91F10399430FFE1F)] |

| | • [REGULATIONS AFFECTING FORESTRY [removed: PRACTICES](#s76083E87C8615CEFA954257572642C55)] [added: PRACTICES](#s7246CF088E985C4987D616C51B658889)] | [removed: [18](#s76083E87C8615CEFA954257572642C55)] [added: [19](#s7246CF088E985C4987D616C51B658889)] |

| | • [ENDANGERED SPECIES [removed: PROTECTIONS](#sF79770FD27EE52AD8C9678FE65A1516C)] [added: PROTECTIONS](#sE683B54483095C398DD2C275F9D29A64)] | [removed: [18](#sF79770FD27EE52AD8C9678FE65A1516C)] [added: [19](#sE683B54483095C398DD2C275F9D29A64)] |

| | • [FOREST CERTIFICATION [removed: STANDARDS](#s2FF9BCF715375A6E8B0612ED1F725679)] [added: STANDARDS](#s85488D36A8945A57939AB2830F361BE9)] | [removed: [19](#s2FF9BCF715375A6E8B0612ED1F725679)] [added: [20](#s85488D36A8945A57939AB2830F361BE9)] |

| | • [WHAT THESE REGULATIONS AND CERTIFICATION PROGRAMS MEAN TO [removed: US](#s694281657B925E6A82AED725EA5903B9)] [added: US](#sE08AD9FA3A5E5BABAA93523FF150C437)] | [removed: [19](#s694281657B925E6A82AED725EA5903B9)] [added: [20](#sE08AD9FA3A5E5BABAA93523FF150C437)] |

| | • [CANADIAN ABORIGINAL [removed: RIGHTS](#sB776E47A9CE15BB08501B61E4E0546FB)] [added: RIGHTS](#sDD83E445512C56FB9C6FDBBDBB5ACB8A)] | [removed: [19](#sB776E47A9CE15BB08501B61E4E0546FB)] [added: [20](#sDD83E445512C56FB9C6FDBBDBB5ACB8A)] |

| | • [POLLUTION-CONTROL [removed: REGULATIONS](#sEC8792980CB057B4A6C2C879F43988D3)] [added: REGULATIONS](#s493A22F000B952379773BCBD8EBFEA79)] | [removed: [19](#sEC8792980CB057B4A6C2C879F43988D3)] [added: [20](#s493A22F000B952379773BCBD8EBFEA79)] |

| | • [ENVIRONMENTAL [removed: CLEANUP](#s118F79A4DE835682A04E03CFE3BEA819)] [added: CLEANUP](#s516BB07B70CB535E990D583C22584C67)] | [removed: [20](#s118F79A4DE835682A04E03CFE3BEA819)] [added: [21](#s516BB07B70CB535E990D583C22584C67)] |

| | • [REGULATION OF AIR EMISSIONS IN THE [removed: U.S.](#sD9AB75E983CE517DA5D1DA3E20C62C23)] [added: U.S.](#s2C27DB9E949C5DBE93E02E39675E44BF)] | [removed: [20](#sD9AB75E983CE517DA5D1DA3E20C62C23)] [added: [21](#s2C27DB9E949C5DBE93E02E39675E44BF)] |

| | • [REGULATION OF AIR EMISSIONS IN [removed: CANADA](#sEEB60E3E6ECD5596A67AF717F488D726)] [added: CANADA](#sD86638E5F1F45DDEB17B0942CF8A24E1)] | [removed: [21](#sEEB60E3E6ECD5596A67AF717F488D726)] [added: [22](#sD86638E5F1F45DDEB17B0942CF8A24E1)] |

| | [removed: • [REGULATION] [added: [• REGULATION] OF AIR EMISSIONS IN [removed: POLAND AND URUGUAY](#sE98E3DAB612F5B0D9D47BFE41C01AD6C)] [added: URUGUAY](#sF7974482043D5687BF44154DD96393E8)] | [removed: [21](#sE98E3DAB612F5B0D9D47BFE41C01AD6C)] [added: [22](#sF7974482043D5687BF44154DD96393E8)] |

| | • [REGULATION OF [removed: WATER](#s1F7DAEF43F0759208CB4B4B81AFFE295)] [added: WATER](#s125CBA11302D5790B75563B4584B664C)] | [removed: [21](#s1F7DAEF43F0759208CB4B4B81AFFE295)] [added: [22](#s125CBA11302D5790B75563B4584B664C)] |

| | • [POTENTIAL CHANGES IN POLLUTION [removed: REGULATION](#sC3AE4821BDE652E8917612089CD88E76)] [added: REGULATION](#s4BEF91DFD73651D1B615783ADC3C7C59)] | [removed: [22](#sC3AE4821BDE652E8917612089CD88E76)] [added: [23](#s4BEF91DFD73651D1B615783ADC3C7C59)] |

| | [FORWARD-LOOKING [removed: STATEMENTS](#sDB92E8D2B47B5E029BD875E0ED5C0007)] [added: STATEMENTS](#s92171823452D5464A8060042E0C61A82)] | [removed: [23](#sDB92E8D2B47B5E029BD875E0ED5C0007)] [added: [24](#s92171823452D5464A8060042E0C61A82)] |

| ITEM 1A. | [RISK [removed: FACTORS](#s4FE7A5996AC755E9BD224CA1DB661A67)] [added: FACTORS](#s36F8388139F151EE8CCC630D1D983B7C)] | [removed: [24](#s4FE7A5996AC755E9BD224CA1DB661A67)] [added: [25](#s36F8388139F151EE8CCC630D1D983B7C)] |

| | [RISKS RELATED TO OUR INDUSTRIES AND [removed: BUSINESS](#s0AFF47F39CD45B6B9B907040B6267C71)] [added: BUSINESS](#s30E334BD154F5CD8A03D18D7822ED9C5)] | [removed: [24](#s0AFF47F39CD45B6B9B907040B6267C71)] [added: [25](#s30E334BD154F5CD8A03D18D7822ED9C5)] |

| | • [MACROECONOMIC [removed: CONDITIONS](#s4F9F522E380650979180B68303572B5E)] [added: CONDITIONS](#sF789B6FC6F2D5350BBC06897805D6655)] | [removed: [24](#s4F9F522E380650979180B68303572B5E)] [added: [25](#sF789B6FC6F2D5350BBC06897805D6655)] |

| | • [COMMODITY [removed: PRODUCTS](#s46D987C8D30555E1AE18090FFD310493)] [added: PRODUCTS](#s45E3AD20B25A5A998A9DA4DBC0F7D1B9)] | [removed: [24](#s46D987C8D30555E1AE18090FFD310493)] [added: [25](#s45E3AD20B25A5A998A9DA4DBC0F7D1B9)] |

| | [removed: • [INDUSTRY] [added: [• INDUSTRY] SUPPLY OF [removed: LOGS, WOOD PRODUCTS] [added: LOGS] AND [removed: PULP](#s853F6CB9B81A5FC4B69DE8C57C704E74)] [added: WOOD PRODUCTS](#sA28DAC4081685067BFB5CDA5A92D3D2D)] | [removed: [24](#s853F6CB9B81A5FC4B69DE8C57C704E74)] [added: [25](#sA28DAC4081685067BFB5CDA5A92D3D2D)] |

| | • [HOMEBUILDING MARKET AND ECONOMIC [removed: RISKS](#s639E6D475F5050209AA32741137FED0C)] [added: RISKS](#s3A55B24098FA5A6789F53D07B39E51E9)] | [removed: [24](#s639E6D475F5050209AA32741137FED0C)] [added: [25](#s3A55B24098FA5A6789F53D07B39E51E9)] |

| | • [CAPITAL [removed: MARKETS](#s0F2FE266A5065820A3650F1C128287BF)] [added: MARKETS](#s13DB4C5CAE7B523B9BF817A4FB62FB3B)] | [removed: [25](#s0F2FE266A5065820A3650F1C128287BF)] [added: [26](#s13DB4C5CAE7B523B9BF817A4FB62FB3B)] |

| | • [CHANGES IN CREDIT [removed: RATINGS](#sE31997971DFE5FD4990E0786CDA62B13)] [added: RATINGS](#s505DE8E16CBA57EEA92C7B41172CEEF1)] | [removed: [25](#sE31997971DFE5FD4990E0786CDA62B13)] [added: [26](#s505DE8E16CBA57EEA92C7B41172CEEF1)] |

| | • [CHANGES IN PRODUCT MIX OR [removed: PRICING](#s14DEA9E3BDED59BEADFD0F5227A0BAEB)] [added: PRICING](#s352E851846A152F1893F84C2D42E9911)] | [removed: [25](#s14DEA9E3BDED59BEADFD0F5227A0BAEB)] [added: [26](#s352E851846A152F1893F84C2D42E9911)] |

10-K 1 wy-123116x10k.htm 10-K

220 OCCIDENTAL AVENUE SOUTH, SEATTLE, WASHINGTON 98104-7800 TELEPHONE (206) 539-3000

| Securities registered pursuant to Section 12(g) of the Act: None | | |

\[X\]

| | [WHAT WE DO](#sBF79670ACE8C5F14BAF5BDB0DCBB0532) | [3](#sBF79670ACE8C5F14BAF5BDB0DCBB0532) |

| | • [TIMBERLANDS](#sD21D9FD8CB5D5AA39FEC28AE8894DED8) | [3](#sD21D9FD8CB5D5AA39FEC28AE8894DED8) |

| | [• REAL ESTATE, ENERGY AND NATURAL RESOURCES](#sfb88692723c74389b72d031a64c5a74c) | [12](#sfb88692723c74389b72d031a64c5a74c) |

| | • [SUBSTITUTION](#sF83A3833CFC5521087EA8965284F3AB5) | [26](#sF83A3833CFC5521087EA8965284F3AB5) |

| | • [PEOPLE](#s465FAFE806BE5B5B8AA5FC8BBA70C691) | [29](#s465FAFE806BE5B5B8AA5FC8BBA70C691) |

| | • [TRANSPORTATION](#s867ED74D2F5F582AA48997BDE4808395) | [29](#s867ED74D2F5F582AA48997BDE4808395) |

| | • [TIMBERLANDS](#s98209C278B945CC38608B0204BDC0D94) | [41](#s98209C278B945CC38608B0204BDC0D94) |

| | [• REAL ESTATE, ENERGY AND NATURAL RESOURCES](#sAC29C656C66A5908A3FD34002CAD3C0A) | [43](#sAC29C656C66A5908A3FD34002CAD3C0A) |

| | • [FINANCING](#sFEEC8A2A29D95909B3AAF421D3806474) | [49](#sFEEC8A2A29D95909B3AAF421D3806474) |

| | [EXHIBITS](#s9E3AFC03DD5F55B994BD0499E182FA2F) | [116](#s9E3AFC03DD5F55B994BD0499E182FA2F) |

| | [SIGNATURES](#s0FF72AFCDB725554A568982F5B820512) | [119](#s0FF72AFCDB725554A568982F5B820512) |

| | | |

10-K 1 wy-123115x10k.htm 10-K

33663 WEYERHAEUSER WAY SOUTH, FEDERAL WAY, WASHINGTON 98063-9777 TELEPHONE (253) 924-2345

| 6.375% Mandatory Convertible Preference Shares, Series A ($1.00 par value) | | New York Stock Exchange |

\[ \]

| | [WHAT WE DO](#s1B01DA6CEE4A5E89B2EB0DC5E18971AA) | [2](#s1B01DA6CEE4A5E89B2EB0DC5E18971AA) |

| | • [TIMBERLANDS](#s1881E9E1176C58FDB51653F34FA2AFE0) | [2](#s1881E9E1176C58FDB51653F34FA2AFE0) |

| | • [CELLULOSE FIBERS](#s39A8827053EC5B0DABDFED495001AE7E) | [14](#s39A8827053EC5B0DABDFED495001AE7E) |

| | • [SUBSTITUTION](#sB72B7307A9CA58C882FCE3DBEB24C84F) | [25](#sB72B7307A9CA58C882FCE3DBEB24C84F) |

| | • [PEOPLE](#s3C066AEEE0B35BF3A31201098DFA314D) | [27](#s3C066AEEE0B35BF3A31201098DFA314D) |

| | • [TRANSPORTATION](#s87B774AA7DAA51F7B2DAB2A377157170) | [27](#s87B774AA7DAA51F7B2DAB2A377157170) |

| | • [PREFERENCE SHARES](#sB75DD6C39EF658B7BAAF38170BCDC502) | [32](#sB75DD6C39EF658B7BAAF38170BCDC502) |

| | • [TIMBERLANDS](#sEDA12CCEAC6C50D5BED79DEDFFBC14CF) | [40](#sEDA12CCEAC6C50D5BED79DEDFFBC14CF) |

| | • [CELLULOSE FIBERS](#s9599C1D686935C73B8A17306C8E3B9D8) | [43](#s9599C1D686935C73B8A17306C8E3B9D8) |

| | • [FINANCING](#s668E8C6294D554B083B211264E92D1DA) | [47](#s668E8C6294D554B083B211264E92D1DA) |

| | [EXHIBITS](#sD57C81DAFDDE5B21824BEBA9067AA877) | [110](#sD57C81DAFDDE5B21824BEBA9067AA877) |

| | [SIGNATURES](#s971E9DF874835BF39C73162E3EB1C87C) | [112](#s971E9DF874835BF39C73162E3EB1C87C) |

| | [CERTIFICATIONS](#s971E9DF874835BF39C73162E3EB1C87C) | 113 |

Details about our facilities, production capacities and locations are found in the [Our Business — What We [removed: Do](#s1B01DA6CEE4A5E89B2EB0DC5E18971AA)] [added: Do](#sBF79670ACE8C5F14BAF5BDB0DCBB0532)] section of this report.

| • | For details about our Timberlands properties, go to [Our Business/What We Do/Timberlands/Where We Do [removed: It](#s1881E9E1176C58FDB51653F34FA2AFE0).] [added: It](#sD21D9FD8CB5D5AA39FEC28AE8894DED8).] |

| • | For details about our Wood Products properties, go to [Our Business/What We Do/Wood Products/Where We Do [removed: It](#sB94DC83C67305B9CA0854AC1278A8AEA).] [added: It](#s09835627A2D95A43B0D7FD88F44FBFE2).] |

| • | For details about our [removed: Cellulose Fibers] [added: Real Estate, Energy and Natural Resources] properties, go to [Our Business/What We [removed: Do/Cellulose Fibers/Where] [added: Do/Real Estate, Energy and Natural Resources/Where] We Do [removed: It](#s39A8827053EC5B0DABDFED495001AE7E).] [added: It](#sfb88692723c74389b72d031a64c5a74c).] |

As of December 31, [removed: 2015,] [added: 2016,] there were [removed: 7,700] [added: 15,504] holders of record of our common shares.

Dividend-per-share data and the range of closing market prices for our common stock for each of the four quarters in [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] are included in [Note [removed: 22:] [added: 21:] Selected Quarterly Financial Information [removed: (unaudited)](#s8ED6E0375C9759EEA633C31FE26A2E2C)] [added: (unaudited)](#sDF60E23F158F52ACB8AED74AEA51A9DB)] in the [Notes to Consolidated Financial [removed: Statements](#s9BA5C07793D859489A3701F92874EAC5).][added: Statements](#sF4532038972E54D6978A09105688E153).]

| (1) Includes [removed: 1,104,621] [added: 1,582,831] restricted stock units and [removed: 685,535] [added: 760,650] performance share units. Because there is no exercise price associated with restricted stock units and performance share units, excluding these stock units the weighted average exercise price calculation would be [removed: $25.83.] [added: $24.93.] | | | | | | | |

INFORMATION ABOUT COMMON STOCK REPURCHASES DURING [removed: 2015][added: 2016]

| | TOTAL NUMBER OF SHARES (OR UNITS) PURCHASED | | AVERAGE PRICE PAID PER SHARE (OR UNIT) | | | TOTAL NUMBER OF SHARES (OR UNITS) PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OF PROGRAMS | | MAXIMUM NUMBER (OR APPROXIMATE DOLLAR VALUE) OF SHARES (OR UNITS) THAT MAY YET BE PURCHASED UNDER THE PLANS OR [removed: PROGRAMS(1)(2)] [added: PROGRAMS(1)] | | |

| [removed: December] [added: January] | — | | $ | — | | — | | $ | 478,442,984 | |

[removed: ][added: ]

| • | Assumes $100 invested on December 31, [removed: 2010] [added: 2011] in Weyerhaeuser common stock, the S&P 500 Index and the S&P Global Timber & Forestry Index. |

| Equity compensation plans approved by security holders(1) | 17,440,704 | | $ | 21.58 | | 21,646,924 | |

| Total | 17,440,704 | | $ | 21.58 | | 21,646,924 | |

| February | 11,151,586 | | $ | 24.90 | | 11,151,586 | | $ | 2,222,380,446 | |

| March | 20,215,955 | | $ | 28.93 | | 20,215,955 | | $ | 1,637,554,693 | |

| Total repurchases during first quarter | 31,367,541 | | $ | 27.49 | | 31,367,541 | | $ | 1,637,554,693 | |

| April | 12,288,096 | | $ | 31.48 | | 12,288,096 | | $ | 1,250,716,457 | |

| May | 12,124,893 | | $ | 31.16 | | 12,124,893 | | $ | 872,903,002 | |

| June | 2,260,407 | | $ | 29.47 | | 2,260,407 | | $ | 806,283,924 | |

| Total repurchases during second quarter | 26,673,396 | | $ | 31.16 | | 26,673,396 | | $ | 806,283,924 | |

| July | 8,579,989 | | $ | 31.16 | | 8,579,989 | | $ | 538,928,998 | |

| August | 1,195,884 | | $ | 32.55 | | 1,195,884 | | $ | 500,000,011 | |

| September | — | | $ | — | | — | | $ | 500,000,011 | |

| Total repurchases during third quarter | 9,775,873 | | $ | 31.33 | | 9,775,873 | | $ | 500,000,011 | |

| October | — | | $ | — | | — | | $ | 500,000,011 | |

| November | — | | $ | — | | — | | $ | 500,000,011 | |

| December | — | | $ | — | | — | | $ | 500,000,011 | |

| Total repurchases during fourth quarter | — | | $ | — | | — | | $ | 500,000,011 | |

| Total common stock repurchases during 2016 | 67,816,810 | | $ | 29.49 | | 67,816,810 | | $ | 500,000,011 | |

| (1) The 2016 Share Repurchase Authorization was approved in November 2015 by our Board of Directors and authorized management to repurchase up to $2.5 billion of outstanding shares subsequent to the closing of our merger with Plum Creek. Transaction fees incurred for repurchases are not counted as use of funds authorized for repurchase under the 2016 Share Repurchase Authorization. All common stock purchases under the stock repurchase program were made in open-market transactions. | | | | | | | | | | |

| Equity compensation plans approved by security holders(1) | 14,935,316 | | $ | 22.74 | | 17,317,903 | |

| Total | 14,935,316 | | $ | 22.74 | | 17,317,903 | |

| January | 228,429 | | $ | 35.85 | | 228,429 | | $ | 488,348,381 | |

| February | 3,038,219 | | $ | 35.21 | | 3,038,219 | | $ | 381,369,837 | |

| March | 4,074,918 | | $ | 33.69 | | 4,074,918 | | $ | 244,089,600 | |

| Total repurchases during first quarter | 7,341,566 | | $ | 34.39 | | 7,341,566 | | $ | 244,089,600 | |

| April | 1,949,315 | | $ | 31.84 | | 1,949,315 | | $ | 182,017,591 | |

| May | 1,570,276 | | $ | 31.81 | | 1,570,276 | | $ | 132,064,000 | |

| June | 1,322,926 | | $ | 31.76 | | 1,322,926 | | $ | 90,047,982 | |

| Total repurchases during second quarter | 4,842,517 | | $ | 31.81 | | 4,842,517 | | $ | 90,047,982 | |

| July | — | | — | | | — | | $ | 90,047,982 | |

| August | 145,720 | | $ | 28.00 | | 145,720 | | $ | 585,967,414 | |

| September | 3,112,428 | | $ | 27.56 | | 3,112,428 | | $ | 500,190,226 | |

| Total repurchases during third quarter | 3,258,148 | | $ | 27.58 | | 3,258,148 | | $ | 500,190,226 | |

| October | 616,265 | | $ | 28.76 | | 616,265 | | $ | 482,469,449 | |

| November | 130,930 | | $ | 30.75 | | 130,930 | | $ | 478,442,984 | |

| Total repurchases during fourth quarter | 747,195 | | $ | 29.11 | | 747,195 | | $ | 478,442,984 | |

| Total common stock repurchases during 2015 | 16,189,426 | | $ | 32.00 | | 16,189,426 | | $ | 478,442,984 | |

| (1) On August 13, 2014, our board of directors approved a stock repurchase program under which we were authorized to repurchase up to $700 million of outstanding shares (the 2014 Repurchase Program). The 2014 stock repurchase program replaced the prior 2011 stock repurchase program. During 2014, we repurchased $203 million of outstanding shares under the 2014 Repurchase Program. During 2015, we completed the 2014 Repurchase Program by purchasing $497 million of outstanding shares. All common stock purchases under the stock repurchase program were made in open-market transactions. (2) On August 27, 2015, our board of directors approved a new share repurchase program of up to $500 million of outstanding shares (the 2015 Repurchase Program), commencing upon completion of the 2014 Repurchase Program. During 2015, we repurchased $22 million of outstanding shares under the 2015 Repurchase Program. All common stock purchases under the stock repurchase program were made in open-market transactions. | | | | | | | | | | |

| | [removed: 2015] [added: 2016] | | | [added: 2015 | |] 2014 | | 2013 | | 2012 | | [removed: 2011 | |]

| Diluted earnings from continuing operations attributable to Weyerhaeuser common shareholders | $ | [removed: 0.89] [added: 0.55] | | [removed: 1.40] [added: 0.71] | | [removed: 0.82] [added: 1.02] | | [removed: 0.58] [added: 0.54] | | [removed: 0.50] [added: 0.29] | |

| Diluted earnings from discontinued operations attributable to Weyerhaeuser common [removed: shareholders(1)] [added: shareholders] | [removed: —] [added: 0.84] | | | [removed: 1.78] [added: 0.18] | | [removed: 0.13] [added: 2.16] | | [removed: 0.13] [added: 0.41] | | [removed: 0.11] [added: 0.42] | |

| Diluted net earnings attributable to Weyerhaeuser common shareholders | $ | [added: 1.39 | |] 0.89 | | 3.18 | | 0.95 | | 0.71 | | [removed: 0.61 | |]

| Dividends paid [removed: per common share] | $ | [added: 1.24 | |] 1.20 | | 1.02 | | 0.81 | | 0.62 | | [removed: 0.60 | |]

| Weyerhaeuser shareholders’ interest (end of year) | $ | [added: 12.26 | |] 9.54 | | 10.11 | | 11.64 | | 7.50 | | [removed: 7.95 | |]

| FINANCIAL POSITION [added: (1)] | | | | | | | | | | | |

| | [removed: 2015] [added: 2016] | | | [added: 2015 | |] 2014 | | 2013 | | 2012 | | [removed: 2011 | |]

| Weyerhaeuser shareholders’ interest | $ | [added: 9,180 | |] 4,869 | | 5,304 | | 6,795 | | 4,070 | | [removed: 4,263 | |]

| Percent earned on average [added: year-end] Weyerhaeuser shareholders’ interest | [removed: 9.1] [added: 14.3] | | % | [removed: 29.5] [added: 9.1] | % | [removed: 9.9] [added: 29.5] | % | [removed: 9.2] [added: 9.9] | % | [removed: 7.5] [added: 9.2] | % |

| | [removed: 2015] [added: 2016] | | | [added: 2015 | |] 2014 | | 2013 | | 2012 | | [removed: 2011 | |]

| Discontinued operations, net of income [removed: taxes(1)] [added: taxes] | [removed: —] [added: 612] | | | [removed: 998] [added: 95] | | [removed: 72] [added: 1,210] | | [removed: 72] [added: 233] | | [removed: 61] [added: 228] | |

| Net earnings | [removed: 506] [added: 1,027] | | | [added: 506 | |] 1,826 | | 563 | | 384 | | [removed: 331 | |]

| Net loss (earnings) attributable to noncontrolling interest | — | | | — | | — | | [removed: 1] [added: —] | | [removed: —] [added: 1] | |

| Net earnings attributable to Weyerhaeuser | [removed: 506] [added: 1,027] | | | [added: 506 | |] 1,826 | | 563 | | 385 | | [removed: 331 | |]

| Dividends on preference shares | [removed: (44] [added: (22] | | ) | (44 | ) | [removed: (23] [added: (44] | ) | [removed: —] [added: (23] | [added: )] | — | |

| Net earnings attributable to Weyerhaeuser common shareholders | $ | [added: 1,005 | |] 462 | | 1,782 | | 540 | | 385 | | [removed: 331 | |]

| CASH FLOWS [added: (1)] | | | | | | | | | | | |

| | [removed: 2015] [added: 2016] | | | [added: 2015 | |] 2014 | | 2013 | | 2012 | | [removed: 2011 | |]

| [removed: Cash] [added: Net cash] from investing activities | [removed: (487] [added: 2,559] | | [added: | (487 |] ) | 361 | | [removed: (1,829] [added: (1,848] | ) | [removed: (192] [added: (197] | ) | [removed: 122 | |]

| [removed: Cash] [added: Net cash] from financing activities | [removed: (1,145] [added: (3,630] | | ) | [removed: (704] [added: (1,156] | ) | [removed: 762] [added: (725] | [added: )] | [removed: (444] [added: 762] | [removed: )] | [removed: (927] [added: (444] | ) |

| Net change in cash and cash equivalents | $ | [added: (336 | ) |] (568 | ) | 745 | | (63 | ) | (55 | ) | [removed: (514 | ) |]

| | [removed: 2015] [added: 2016] | | | [added: 2015 | |] 2014 | | 2013 | | 2012 | | [removed: 2011 | |]

| Number of employees | [removed: 12,600] [added: 10,400] | | | [added: 12,600 | |] 12,800 | | 13,700 | | 13,200 | | [removed: 12,800 | |]

| Number of common shareholder accounts at year-end | [removed: 7,700] [added: 15,504] | | | [added: 7,700 | |] 8,248 | | 8,859 | | 9,227 | | [removed: 9,724 | |]

| Number of common shares outstanding at year-end (thousands) | [removed: 510,483] [added: 748,528] | | | [added: 510,483 | |] 524,474 | | 583,548 | | 542,393 | | [removed: 536,425 | |]

| Weighted average common shares outstanding – diluted (thousands) | [removed: 519,618] [added: 722,401] | | | [added: 519,618 | |] 560,899 | | 571,239 | | 542,310 | | [removed: 539,879 | |]

| (1) [removed: |] [added: Amounts are not updated for the Cellulose Fibers divestitures.] See [Note 3: Discontinued [removed: Operations](#s6342BDD8C6395C7287416D2C59142A7E)] [added: Operations](#s23B1B7E4042756F485D07BE80B284BDF)] in the [Notes to Consolidated Financial [removed: Statements](#s9BA5C07793D859489A3701F92874EAC5).] [added: Statements](#sF4532038972E54D6978A09105688E153).] | [added: | | | | | | | | | | |]

| Total assets | $ | 19,243 | | 12,470 | | 13,247 | | 14,352 | | 12,594 | |

| Total long-term debt, including current portion | $ | 6,610 | | 4,875 | | 4,873 | | 4,871 | | 4,276 | |

| Net sales | $ | 6,365 | | 5,246 | | 5,489 | | 5,373 | | 4,154 | |

| Earnings from continuing operations | $ | 415 | | 411 | | 616 | | 330 | | 156 | |

| Net cash from operations | $ | 735 | | 1,075 | | 1,109 | | 1,023 | | 586 | |

| Total assets | $ | 12,486 | | 13,265 | | 14,372 | | 12,609 | | 12,523 | |

| Total long-term debt | $ | 4,891 | | 4,891 | | 4,891 | | 4,291 | | 4,478 | |

| Net sales | $ | 7,082 | | 7,403 | | 7,254 | | 5,989 | | 5,378 | |

| Earnings from continuing operations | $ | 506 | | 828 | | 491 | | 312 | | 270 | |

| Net cash from operations | $ | 1,064 | | 1,088 | | 1,004 | | 581 | | 291 | |

| | |

| --- | --- |

We have audited the accompanying consolidated balance sheets of Weyerhaeuser Company and subsidiaries as of December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] and the related consolidated statements of operations, comprehensive income, cash [removed: flows,] [added: flows] and changes in equity for each of the years in the three-year period ended December 31, [removed: 2015.][added: 2016.]

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Weyerhaeuser Company and subsidiaries as of December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, [removed: 2015,] [added: 2016,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Weyerhaeuser Company’s internal control over financial reporting as of December 31, [removed: 2015,] [added: 2016,] based on criteria established in Internal Control [removed: —] [added: -] Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February [removed: 17, 2016] [added: 24, 2017] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

[removed: February 17,] [added: |] 2016 [added: | $ | 8 | | $ | — | | $ | 22 | | $ | (43 | ) | $ | (13 | ) |]

FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, [removed: 2015][added: 2016]

| | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | | | [removed: 2013] [added: 2014] | | |

| Selling expenses | [removed: 113] [added: 89] | | | [removed: 112] [added: 99] | | | [removed: 125] [added: 97] | | |

| General and administrative expenses | [removed: 289] [added: 29] | | | [removed: 338] [added: 30] | | | [removed: 404] [added: 57] | | |

| Research and development expenses | [removed: 24] [added: 19] | | | [removed: 27] [added: 18] | | | [removed: 33] [added: 20] | | |

[removed: | Charges for restructuring, closures and impairments (Note 18) | 25 | | | 44 | | | 377 | | |][added: NOTE 17: CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS]

[removed: | Other operating costs (income), net (Note 19) | 18 | | | (201 | | ) | (35 | | ) |][added: NOTE 18: OTHER OPERATING COSTS (INCOME), NET]

| [removed: Earnings (loss)] [added: Equity (earnings) loss] from [removed: equity affiliates (Note 8)] [added: joint ventures] | [removed: (105] [added: (18] | | ) | [removed: (1] [added: 105] | | [removed: )] | 1 | | |

| Interest income and other | [removed: 36] [added: 43] | | | [removed: 38] [added: 36] | | | [removed: 54] [added: 38] | | |

| Interest expense, net of capitalized interest | [removed: (347] [added: (5] | | ) | [removed: (344] [added: (6] | | ) | [removed: (369] [added: (9] | | ) |

| Earnings from continuing operations before income taxes | [removed: 503] [added: $] | [added: 77] | | [removed: 1,013] [added: $] | [added: 124] | | [removed: 320] [added: $] | [added: 88] | | [added: $ | 64 | | $ | 353 | |]

| Income taxes (Note [removed: 20)] [added: 19)] | [removed: 3] [added: (89] | | [added: )] | [removed: (185] [added: 58] | | [removed: )] | [removed: 171] [added: (71] | | [added: )] |

| Earnings from continuing operations | [removed: 506] [added: 415] | | | [removed: 828] [added: 411] | | | [removed: 491] [added: 616] | | |

| Earnings from discontinued operations, net of income taxes (Note 3) | [removed: —] [added: 612] | | | [removed: 998] [added: 95] | | | [removed: 72] [added: 1,210] | | |

| Net earnings | [removed: 506] [added: 1,027] | | | [removed: 1,826] [added: 506] | | | [removed: 563] [added: 1,826] | | |

| Dividends on preference shares | [removed: (44] [added: (22] | | ) | (44 | | ) | [removed: (23] [added: (44] | | ) |

| Net earnings attributable to Weyerhaeuser common shareholders | $ | [removed: 462] [added: 1,005] | | $ | [removed: 1,782] [added: 462] | | $ | [removed: 540] [added: 1,782] | |

| Net earnings per share | $ | [removed: 0.89] [added: 1.40] | | $ | [removed: 3.20] [added: 0.89] | | $ | [removed: 0.95] [added: 3.20] | |

| Net earnings per share | $ | [removed: 0.89] [added: 1.39] | | $ | [removed: 3.18] [added: 0.89] | | $ | [removed: 0.95] [added: 3.18] | |

| Dividends paid per common share | $ | [removed: 1.20] [added: 1.24] | | $ | [removed: 1.02] [added: 1.20] | | $ | [removed: 0.81] [added: 1.02] | |

| Basic | [removed: 516,371] [added: 718,560] | | | [removed: 556,705] [added: 516,371] | | | [removed: 566,329] [added: 556,705] | | |

| Diluted | [removed: 519,618] [added: 722,401] | | | [removed: 560,899] [added: 519,618] | | | [removed: 571,239] [added: 560,899] | | |

See accompanying [Notes to Consolidated Financial [removed: Statements](#s9BA5C07793D859489A3701F92874EAC5).][added: Statements](#sF4532038972E54D6978A09105688E153).]

FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, [removed: 2015][added: 2016]

| | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | | | [removed: 2013] [added: 2014] | | |

| Net earnings | $ | [removed: 506] [added: 1,027] | | $ | [removed: 1,826] [added: 506] | | $ | [removed: 563] [added: 1,826] | |

| Foreign currency translation adjustments | [removed: (97] [added: 25] | | [removed: )] | [removed: (50] [added: (97] | | ) | [removed: (59] [added: (50] | | ) |

| Changes in unamortized net pension and other postretirement benefit gain (loss), net of tax expense (benefit) of [added: ($151) in 2016,] $131 in 2015, [removed: ($323) in 2014,] and [removed: $480] [added: ($323)] in [removed: 2013] [added: 2014] | [removed: 282] [added: (269] | | [added: )] | [removed: (554] [added: 282] | | [removed: )] | [removed: 902] [added: (554] | | [added: )] |

| Changes in unamortized prior service [removed: credit (cost),] [added: cost,] net of tax [removed: expense (benefit)] [added: benefit] of [removed: ($1)] [added: $0] in [removed: 2015, ($64)] [added: 2016, $1] in [removed: 2014] [added: 2015] and [removed: $23] [added: $64] in [removed: 2013] [added: 2014] | (4 | | ) | [removed: (103] [added: (4] | | ) | [removed: 27] [added: (103] | | [added: )] |

| Unrealized gains on available-for-sale securities | [removed: —] [added: 1] | | | — | | | [removed: 2] [added: —] | | |

| Total comprehensive income [removed: attributable to Weyerhaeuser shareholders] | $ | [removed: 687] [added: 780] | | $ | [removed: 1,119] [added: 687] | | $ | [removed: 1,435] [added: 1,119] | |

See accompanying [Notes to Consolidated Financial [removed: Statements](#s9BA5C07793D859489A3701F92874EAC5).][added: Statements](#sF4532038972E54D6978A09105688E153).]

| DOLLAR AMOUNTS IN MILLIONS | | | | | | | [added: | | | | | |]

| | DECEMBER 31, [removed: 2015] [added: 2016] | | | DECEMBER 31, [removed: 2014] [added: 2015] | | |

| Cash and cash equivalents [added: at beginning of year] | $ | 1,012 | | $ | 1,580 | | [added: $ | 835 | |]

| Receivables, less discounts and allowances [removed: of $3 and $3] | [removed: 487 | | | 525] [added: 211] | | |

Our report dated February 24, 2017, on the effectiveness of internal control over financial reporting as of December 31, 2016, contains an explanatory paragraph that states Weyerhaeuser Company acquired Plum Creek Timber Company, Inc. during 2016, and management excluded from its assessment of the effectiveness of Weyerhaeuser’s internal control over financial reporting as of December 31, 2016, certain components of Plum Creek Timber Company, Inc.’s internal control over financial reporting associated with less than 10% of total assets and less than 10% of net sales included in the consolidated financial statements of Weyerhaeuser Company and subsidiaries as of and for the year ended December 31, 2016.

Our audit of internal control over financial reporting of Weyerhaeuser Company also excluded an evaluation of the internal control over financial reporting of certain components of Plum Creek Timber Company, Inc.

| Net sales | $ | 6,365 | | $ | 5,246 | | $ | 5,489 | |

| Costs of products sold | 4,926 | | | 4,121 | | | 4,183 | | |

| Gross margin | 1,439 | | | 1,125 | | | 1,306 | | |

| General and administrative expenses | 332 | | | 259 | | | 306 | | |

| Operating income | 870 | | | 658 | | | 987 | | |