Weyerhaeuser 10-Q 2023-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO ______

COMMISSION FILE NUMBER: 1-4825

WEYERHAEUSER COMPANY

(Exact name of registrant as specified in its charter)

Washington		91-0470860
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
220 Occidental Avenue South Seattle**,** Washington		98104-7800
(Address of principal executive offices)		(Zip Code)

(206) 539-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $1.25 per share		WY		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of October 23, 2023, 730,001 thousand shares of the registrant’s common stock ($1.25 par value) were outstanding.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS:
	CONSOLIDATED STATEMENT OF OPERATIONS	1
	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	2
	CONSOLIDATED BALANCE SHEET	3
	CONSOLIDATED STATEMENT OF CASH FLOWS	4
	CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	5
	INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	6
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)	14
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	26
ITEM 4.	CONTROLS AND PROCEDURES	27
PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	27
ITEM 1A.	RISK FACTORS	27
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	27
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES – NOT APPLICABLE
ITEM 4.	MINE SAFETY DISCLOSURES – NOT APPLICABLE
ITEM 5.	OTHER INFORMATION	28
ITEM 6.	EXHIBITS	29
	SIGNATURES	30

PART I – FINANCIAL INFORMATION

WEYERHAEUSER COMPANY

CONSOLIDATED STATEM****ENT OF OPERATIONS

(UNAUDITED)

		QUARTER ENDED								YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Net sales (Note 3)		$	2,022			$	2,276			$	5,900			$	8,361
Costs of sales			1,520				1,694				4,560				5,130
Gross margin			502				582				1,340				3,231
Selling expenses			22				24				66				70
General and administrative expenses			107				100				316				294
Other operating costs, net (Note 13)			20				1				50				19
Operating income			353				457				908				2,848
Non-operating pension and other post-employment benefit costs (Note 6)			(12	)			(12	)			(33	)			(38	)
Interest income and other			24				9				54				9
Interest expense, net of capitalized interest			(72	)			(67	)			(208	)			(204	)
Loss on debt extinguishment (Note 8)			—				—				—				(276	)
Earnings before income taxes			293				387				721				2,339
Income taxes (Note 14)			(54	)			(77	)			(101	)			(470	)
Net earnings		$	239			$	310			$	620			$	1,869
Earnings per share, basic and diluted (Note 4)		$	0.33			$	0.42			$	0.85			$	2.51
Weighted average shares outstanding (in thousands) (Note 4):
Basic			731,046				740,058				732,069				743,990
Diluted			731,742				740,975				732,542				745,081

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

		QUARTER ENDED								YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Net earnings		$	239			$	310			$	620			$	1,869
Other comprehensive income (loss):
Foreign currency translation adjustments			(7	)			(53	)			—				(62	)
Changes in unamortized actuarial loss, net of tax expense of $3, $11, $7 and $40			9				32				23				122
Changes in unamortized net prior service credit, net of tax benefit (expense) of $0, $0, $1 and ($1)			—				1				1				1
Total other comprehensive income (loss)			2				**(**20	)			24				61
Total comprehensive income		$	241			$	290			$	644			$	1,930

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED BALANCE SHEET

(UNAUD****ITED)

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE		SEPTEMBER 30, 2023				DECEMBER 31, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	1,173			$	1,581
Short-term investments (Note 9)			668				—
Receivables, net			443				357
Receivables for taxes			18				42
Inventories (Note 5)			528				550
Prepaid expenses and other current assets			186				216
Total current assets			3,016				2,746
Property and equipment, less accumulated depreciation of $3,854 and $3,710			2,106				2,171
Construction in progress			311				222
Timber and timberlands at cost, less depletion			11,521				11,604
Minerals and mineral rights, less depletion			203				214
Deferred tax assets			8				8
Other assets			385				375
Total assets		$	17,550			$	17,340
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt (Note 8)		$	861			$	982
Accounts payable			288				247
Accrued liabilities (Note 7)			537				511
Total current liabilities			1,686				1,740
Long-term debt, net (Note 8)			4,818				4,071
Deferred tax liabilities			113				96
Deferred pension and other post-employment benefits (Note 6)			349				344
Other liabilities			356				340
Total liabilities			7,322				6,591
Commitments and contingencies (Note 10)
Equity:
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 730,128 thousand shares at September 30, 2023 and 732,794 thousand shares at December 31, 2022			913				916
Other capital			7,609				7,691
Retained earnings			1,929				2,389
Accumulated other comprehensive loss (Note 11)			(223	)			(247	)
Total equity			10,228				10,749
Total liabilities and equity		$	17,550			$	17,340

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

		YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS		SEPTEMBER 2023				SEPTEMBER 2022
Cash flows from operations:
Net earnings		$	620			$	1,869
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization			374				360
Basis of real estate sold			80				77
Pension and other post-employment benefits (Note 6)			50				65
Share-based compensation expense (Note 12)			26				25
Loss on debt extinguishment (Note 8)			—				276
Other			(4	)			17
Change in:
Receivables, net			(77	)			81
Receivables and payables for taxes			51				15
Inventories			23				(30	)
Prepaid expenses and other current assets			(5	)			(7	)
Accounts payable and accrued liabilities			43				(23	)
Pension and post-employment benefit contributions and payments			(16	)			(19	)
Other			(20	)			(41	)
Net cash from operations			1,145				2,665
Cash flows from investing activities:
Capital expenditures for property and equipment			(209	)			(207	)
Capital expenditures for timberlands reforestation			(42	)			(38	)
Acquisition of timberlands (Note 15)			(70	)			(286	)
Purchase of short-term investments			(664	)			—
Other			3				1
Net cash from investing activities			**(**982	)			**(**530	)
Cash flows from financing activities:
Cash dividends on common shares			(1,076	)			(1,485	)
Net proceeds from issuance of long-term debt (Note 8)			743				881
Payments on long-term debt (Note 8)			(118	)			(1,203	)
Repurchases of common shares (Note 4)			(109	)			(402	)
Other			(11	)			(5	)
Net cash from financing activities			**(**571	)			**(**2,214	)
Net change in cash, cash equivalents and restricted cash			**(**408	)			**(**79	)
Cash, cash equivalents and restricted cash at beginning of period			1,581				1,999
Cash, cash equivalents and restricted cash at end of period		$	1,173			$	1,920
Cash paid during the period for:
Interest, net of amount capitalized of $5 and $5		$	190			$	211
Income taxes, net of refunds		$	40			$	446

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(UNAUDITED)

		QUARTER ENDED								YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Common shares:
Balance at beginning of period		$	914			$	927			$	916			$	934
Issued for exercise of stock options and vested units			—				—				2				2
Repurchases of common shares (Note 4)			(1	)			(5	)			(5	)			(14	)
Balance at end of period			913				922				913				922
Other capital:
Balance at beginning of period			7,624				7,954				7,691				8,181
Issued for exercise of stock options			1				1				3				14
Repurchases of common shares (Note 4)			(24	)			(140	)			(105	)			(390	)
Share-based compensation			9				8				26				25
Other transactions, net			(1	)			1				(6	)			(6	)
Balance at end of period			7,609				7,824				7,609				7,824
Retained earnings:
Balance at beginning of period			1,828				2,333				2,389				2,131
Net earnings			239				310				620				1,869
Dividends on common shares			(138	)			(133	)			(1,080	)			(1,490	)
Balance at end of period			1,929				2,510				1,929				2,510
Accumulated other comprehensive loss:
Balance at beginning of period			(225	)			(398	)			(247	)			(479	)
Other comprehensive income (loss)			2				(20	)			24				61
Balance at end of period (Note 11)			**(**223	)			**(**418	)			**(**223	)			**(**418	)
Total equity:
Balance at end of period		$	10,228			$	10,838			$	10,228			$	10,838
Dividends paid per common share		$	0.19			$	0.18			$	1.47			$	1.99

See accompanying Notes to Consolidated Financial Statements*.*

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:	BASIS OF PRESENTATION	7
NOTE 2:	BUSINESS SEGMENTS	7
NOTE 3:	REVENUE RECOGNITION	8
NOTE 4:	NET EARNINGS PER SHARE AND SHARE REPURCHASES	8
NOTE 5:	INVENTORIES	9
NOTE 6:	PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS	10
NOTE 7:	ACCRUED LIABILITIES	10
NOTE 8:	LONG-TERM DEBT AND LINE OF CREDIT	10
NOTE 9:	FAIR VALUE OF FINANCIAL INSTRUMENTS	11
NOTE 10:	LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES	11
NOTE 11:	ACCUMULATED OTHER COMPREHENSIVE LOSS	12
NOTE 12:	SHARE-BASED COMPENSATION	12
NOTE 13:	OTHER OPERATING COSTS, NET	13
NOTE 14:	INCOME TAXES	13
NOTE 15:	TIMBERLAND ACQUISITIONS	13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTERS AND YEAR-TO-DATE PERIODS ENDED SEPTEMBER 30, 2023 AND 2022

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,” “we,” “the company” 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, 2022. Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year.

NOTE 2: BUSIN****ESS SEGMENTS

We are principally engaged in growing and harvesting timber; manufacturing, distributing and selling products made from trees; maximizing the value of our acreage through the sale of higher and better use (HBU) properties; and monetizing the value of surface and subsurface assets through leases and royalties. Our business segments are organized based primarily on products and services which include:

●

Timberlands – Logs, timber, recreational leases and other products;

●

Real Estate, Energy and Natural Resources (Real Estate & ENR) – Real Estate (sales of timberlands) and ENR (rights to explore for and extract hard minerals, construction materials, natural gas production, and wind and solar); and

●

Wood Products – Structural lumber, oriented strand board, engineered wood products and building materials distribution.

A reconciliation of our business segment information to the respective information in the Consolidated Statement of Operations is as follows:

		QUARTER ENDED								YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Sales to unaffiliated customers:
Timberlands		$	380			$	441			$	1,259			$	1,421
Real Estate & ENR			105				68				286				313
Wood Products			1,537				1,767				4,355				6,627
			2,022				2,276				5,900				8,361
Intersegment sales:
Timberlands			141				133				433				450
Total sales			2,163				2,409				6,333				8,811
Intersegment eliminations			(141	)			(133	)			(433	)			(450	)
Total		$	2,022			$	2,276			$	5,900			$	8,361
Net contribution (charge) to earnings:
Timberlands		$	78			$	107			$	302			$	442
Real Estate & ENR			56				48				161				194
Wood Products			277				344				590				2,389
			411				499				1,053				3,025
Unallocated items(1)			(46	)			(45	)			(124	)			(206	)
Net contribution to earnings			365				454				929				2,819
Interest expense, net of capitalized interest			(72	)			(67	)			(208	)			(204	)
Loss on debt extinguishment			—				—				—				(276	)
Earnings before income taxes			293				387				721				2,339
Income taxes			(54	)			(77	)			(101	)			(470	)
Net earnings		$	239			$	310			$	620			$	1,869

(1)

Unallocated items are gains or charges not related to, or allocated to, an individual operating segment. They include all or a portion of items such as share-based compensation, pension and post-employment costs, elimination of intersegment profit in inventory and LIFO, foreign exchange transaction gains and losses, interest income and other.

NOTE 3: REVENU****E RECOGNITION

A reconciliation of revenue recognized by our major products:

		QUARTER ENDED								YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Net sales to unaffiliated customers:
Timberlands segment
Delivered logs:
West
Domestic sales		$	96			$	97			$	290			$	313
Export grade sales			80				127				321				478
Subtotal West			176				224				611				791
South			155				166				485				480
North			11				15				35				40
Subtotal delivered logs sales			342				405				1,131				1,311
Stumpage and pay-as-cut timber			12				10				43				30
Recreational and other lease revenue			19				18				54				51
Other(1)			7				8				31				29
Net sales attributable to Timberlands segment			380				441				1,259				1,421
Real Estate & ENR segment
Real estate			79				30				198				217
Energy and natural resources			26				38				88				96
Net sales attributable to Real Estate & ENR segment			105				68				286				313
Wood Products segment
Structural lumber			570				676				1,658				2,880
Oriented strand board			284				287				707				1,348
Engineered solid section			216				233				600				676
Engineered I-joists			122				166				335				471
Softwood plywood			42				47				127				158
Medium density fiberboard			40				50				120				151
Complementary building products			184				222				551				676
Other(2)			79				86				257				267
Net sales attributable to Wood Products segment			1,537				1,767				4,355				6,627
Total net sales		$	2,022			$	2,276			$	5,900			$	8,361

(1)

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

(2)

Other Wood Products sales include wood chips, other byproducts and third-party residual log sales from our Canadian Forestlands operations.

NOTE 4: NET EARNINGS PER SHARE AND SHARE REPURCHASES

Our basic and diluted earnings per share were:

●

$0.33 during third quarter 2023 and $0.85 during year-to-date 2023;

●

$0.42 during third quarter 2022 and $2.51 during year-to-date 2022.

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		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Weighted average common shares outstanding – basic			731,046				740,058				732,069				743,990
Dilutive potential common shares:
Stock options			154				192				134				294
Restricted stock units			304				420				117				417
Performance share units			238				305				222				380
Total effect of outstanding dilutive potential common shares			696				917				473				1,091
Weighted average common shares outstanding – dilutive			731,742				740,975				732,542				745,081

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		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Stock options			609				620				609				620
Performance share units			612				623				612				623

Share Repurchase Program

On September 22, 2021, we announced that our board of directors approved a new share repurchase program (the 2021 Repurchase Program) under which we are authorized to repurchase up to $1 billion of outstanding shares. Concurrently, the board terminated the remaining repurchase authorization under the share repurchase program approved by the board in February 2019 (the 2019 Repurchase Program).

We repurchased 757,510 common shares for approximately $25 million (including transaction fees) under the 2021 Repurchase Program during third quarter 2023 and 3,562,944 common shares for approximately $110 million under the 2021 Repurchase Program during year-to-date 2023. As of September 30, 2023, we had remaining authorization of $267 million for future share repurchases. During year-to-date 2022, we repurchased 11,217,300 common shares for approximately $404 million (including transaction fees) under the 2021 Repurchase Program.

All common stock repurchases under the 2021 Repurchase Program were made in open-market transactions. We record share repurchases upon trade date as opposed to the settlement date when cash is disbursed. We record a liability for repurchases that have not yet been settled as of period end. There were 32,757 unsettled shares (approximately $1 million) as of September 30, 2023, and 223,548 unsettled shares (approximately $7 million) as of December 31, 2022.

NOTE 5: IN****VENTORIES

Inventories include raw materials, work-in-process and finished goods, as well as materials and supplies.

DOLLAR AMOUNTS IN MILLIONS		SEPTEMBER 30, 2023				DECEMBER 31, 2022
LIFO inventories:
Logs		$	28			$	32
Lumber, plywood, panels and fiberboard			80				61
Other products			16				9
Moving average cost or FIFO inventories:
Logs			31				56
Lumber, plywood, panels, fiberboard and engineered wood products			98				122
Other products			129				140
Materials and supplies			146				130
Total		$	528			$	550

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		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Service cost		$	6			$	9			$	17			$	27
Interest cost			30				27				89				80
Expected return on plan assets			(30	)			(40	)			(90	)			(120	)
Amortization of actuarial loss			10				23				29				70
Amortization of prior service cost			—				1				1				2
Total net periodic benefit cost – pension		$	16			$	20			$	46			$	59

		OTHER POST-EMPLOYMENT BENEFITS
		QUARTER ENDED								YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Interest cost		$	2			$	—			$	4			$	2
Amortization of actuarial loss			—				1				1				4
Amortization of prior service credit			—				—				(1	)			—
Total net periodic benefit cost – other post-employment benefits		$	2			$	1			$	4			$	6

For the periods presented, service cost is included in “Costs of sales,” “Selling expenses,” and “General and administrative expenses” with the remaining components included in “Non-operating pension and other post-employment benefit costs” in the Consolidated Statement of Operations.

Fair Value of Pension Plan Assets and Obligations

In our year-end reporting process, we estimate the fair value of pension plan assets based upon the information available at that time. For certain assets, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We update the year-end estimated fair value of pension plan assets in second quarter of each year to incorporate final net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K. No adjustments to the fair value of assets or projected benefit obligations were necessary during second quarter 2023.

NOTE 7: ACCRU****ED LIABILITIES

Accrued liabilities were comprised of the following:

DOLLAR AMOUNTS IN MILLIONS		SEPTEMBER 30, 2023				DECEMBER 31, 2022
Compensation and employee benefit costs		$	173			$	201
Current portion of lease liabilities			21				22
Customer rebates, volume discounts and deferred income			135				132
Interest			84				69
Taxes payable			66				23
Other			58				64
Total		$	537			$	511

NOTE 8: LONG-TERM DEBT AND LINE OF CREDIT

In July 2023, we repaid $118 million of our 7.125 percent notes at maturity.

In May 2023, we completed an offering of debt securities by issuing $750 million of 4.750 percent notes due in May 2026. The net proceeds after deducting the discount, underwriting fees and issuance costs were $743 million. Of these total net proceeds, $664 million was invested in short-term investments classified as held-to-maturity securities.

In March 2022, we completed a series of transactions that lowered our weighted average interest rate and extended our weighted average maturity by issuing $900 million in notes and using the net proceeds plus cash on hand to close cash tender offers for $931 million of principal in higher interest rate notes. We issued $450 million of 3.375 percent notes due in March 2033 and $450 million of 4.000 percent notes due in March 2052. The net proceeds after deducting the discount, underwriting fees and issuance costs were $444 million and $437 million, respectively. The net proceeds were used to retire $592 million of our 7.375 percent notes due in March 2032, $161 million of our 8.500 percent notes due in January 2025, $73 million of our 7.125 percent notes due in July 2023, $65 million of our 7.950 percent notes due in March 2025, and $40 million of our 7.850 percent notes due in July 2026. We paid holders an aggregate $1.2 billion in cash reflecting principal, premium to par and tender premium. A net pretax charge of $276 million ($207 million after-tax) was included in the Consolidated Statement of Operations in first quarter 2022 for premiums to retire $931 million of principal plus unamortized debt issuance costs and unamortized debt discounts in connection with the early debt retirement.

In March 2023, we entered into a new $1.5 billion five-year senior unsecured revolving credit facility, which expires in March 2028 and replaced the existing facility which was set to expire in January 2025. Borrowings will bear interest at a floating rate based on either the adjusted term Secured Overnight Financing Rate (SOFR) plus a spread or a mutually agreed upon base rate plus a spread. We had no outstanding borrowings on our credit facility as of September 30, 2023 and December 31, 2022.

NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value and carrying value of our long-term debt consisted of the following:

DOLLAR AMOUNTS IN MILLIONS		SEPTEMBER 30, 2023				DECEMBER 31, 2022
Long-term fixed rate debt (including current maturities):
Carrying value		$	5,679			$	5,053
Fair value (level 2)		$	5,434			$	4,918

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 line of credit has a net carrying value that approximates its fair value within an insignificant difference. The inputs to the valuations of our long-term debt are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date.

Fair Value of Other Financial Instruments

We believe that our other financial instruments, including cash and cash equivalents, short-term investments, receivables and payables, have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to the short-term nature of these instruments and the allowance for doubtful accounts.

As of September 30, 2023, we had $668 million in short-term investments classified as held-to-maturity debt securities, which consist of a mixture of term deposits and Treasury bills. We did not have any short-term investments classified as held-to-maturity debt securities as of December 31, 2022. These short-term investments mature within one year and are recorded in "Short-term investments" on our Consolidated Balance Sheet. We record held-to-maturity debt securities at amortized cost, which approximates fair value.

NOTE 10: LEGAL PROCEEDINGS, C****OMMITMENTS AND CONTINGENCIES

Legal Proceedings

We are party to various legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceeding that management believes could have a material adverse effect on our Consolidated Statement of Operations, Consolidated Balance Sheet or Consolidated Statement of Cash Flows.

Environmental Matters

Site Remediation

Under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) – commonly known as the “Superfund” – and similar state laws, we:

●

are a party to various proceedings related to the cleanup of hazardous waste sites and

●

have been notified that we may be a potentially responsible party related to the cleanup of other hazardous waste sites for which proceedings have not yet been initiated.

As of September 30, 2023, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately $75 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		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Pension**(1)**
Balance at beginning of period		$	(444	)		$	(632	)		$	(458	)		$	(720	)
Other comprehensive income (loss) before reclassifications			—				14				(1	)			65
Amounts reclassified from accumulated other comprehensive loss to earnings(2)			9				19				24				56
Total other comprehensive income			9				33				23				121
Balance at end of period		$	**(**435	)		$	**(**599	)		$	**(**435	)		$	**(**599	)
Other post-employment benefits**(1)**
Balance at beginning of period		$	21			$	—			$	20			$	(2	)
Other comprehensive loss before reclassifications			(1	)			(1	)			—				(1	)
Amounts reclassified from accumulated other comprehensive loss to earnings(2)			1				1				1				3
Total other comprehensive income			—				—				1				2
Balance at end of period		$	21			$	—			$	21			$	—
Translation adjustments and other
Balance at beginning of period		$	198			$	234			$	191			$	243
Translation adjustments			(7	)			(53	)			—				(62	)
Total other comprehensive loss			(7	)			(53	)			—				(62	)
Balance at end of period			191				181				191				181
Accumulated other comprehensive loss, end of period		$	**(**223	)		$	**(**418	)		$	**(**223	)		$	**(**418	)

(1)

Amounts presented are net of tax.

(2)

Amounts of actuarial loss and prior service (cost) credit are components of net periodic benefit cost. See Note 6: Pension and Other Post-Employment Benefit Plans.

NOTE 12: SHARE-B****ASED COMPENSATION

Share-based compensation activity during year-to-date 2023 included the following:

SHARES IN THOUSANDS		GRANTED				VESTED
Restricted stock units (RSUs)			844				771
Performance share units (PSUs)			392				228

A total of 897 thousand shares of common stock were issued as a result of RSU vestings, PSU vestings and stock option exercises.

Restricted Stock Units

The weighted average fair value of the RSUs granted in 2023 was $33.76. The vesting provisions for RSUs granted in 2023 were consistent with prior year grants.

Performance Share Units

The weighted average grant date fair value of PSUs granted in 2023 was $37.58. The final number of shares granted in 2023 will vest between a range of 0 percent to 150 percent of each grant's target, depending upon actual company performance compared against an industry peer group. PSUs granted in 2023 will vest at a maximum of 100 percent of target value in the event of negative absolute company total shareholder return.

Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2023

		PERFORMANCE SHARE UNITS
Performance period		2/09/2023 – 12/31/2025
Valuation date average stock price(1)		$33.96
Expected dividends		2.25%
Risk-free rate		4.21% – 4.66%
Expected volatility		29.26% – 40.19%

(1)

Calculated as an average of the high and low prices on grant date.

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		SEPTEMBER 2023				SEPTEMBER 2022				SEPTEMBER 2023				SEPTEMBER 2022
Environmental remediation charges		$	1			$	—			$	14			$	1
Foreign exchange losses (gains), net			1				(8	)			(1	)			(12	)
Litigation expense, net			9				2				11				10
Research and development expenses			2				1				5				4
Other, net			7				6				21				16
Total other operating costs, net		$	20			$	1			$	50			$	19

NOTE 14: INCOME TAXES

As a real estate investment trust (REIT), we generally are not subject to federal corporate income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our wholly-owned Taxable REIT Subsidiaries (TRSs), which includes our Wood Products segment earnings and portions of our Timberlands and Real Estate & ENR segments' earnings.

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 2023 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.

NOTE 15: TIMBERLAND ACQUISITIONS

On July 19, 2023, we completed the purchase of 22 thousand acres of Mississippi timberlands for approximately $60 million. We recorded $59 million of timberland assets in "Timber and timberlands at cost, less depletion" and $1 million of related assets in "Property and equipment, net" on our Consolidated Balance Sheet.

On May 18, 2022, we completed the purchase of 81 thousand acres of North and South Carolina timberlands for approximately $265 million. We recorded $263 million of timberland assets in “Timber and timberlands at cost, less depletion” and $2 million of related assets in “Property and equipment, net” on our Consolidated Balance Sheet.

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This report contains statements concerning our future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, without limitation, statements relating to: our expected future financial and operating performance; our plans, strategies, intentions and expectations; our capital structure and the sufficiency of our liquidity position to meet future cash requirements; compliance with covenants in our debt agreements; our expectations concerning our contingent liabilities and the sufficiency of related reserves and accruals including, but not limited to, cost estimates of future litigation and environmental remediation; our provision for income taxes; expected capital expenditures; expected returns on pension plan assets; market and general economic conditions, including related influencing factors such as the trajectory of U.S. housing activity, repair and remodel activity, inflation trends and interest rates; our expectations about our future opportunities in emerging carbon offset and carbon capture and storage markets; and assumptions used in valuing incentive compensation and related expense.

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often involve use of words such as “anticipate,” “believe,” “committed,” "continue,” “estimate,” “expect,” “foreseeable,” “maintain,” “may,” “potential,” and “will,” or similar words or terminology. They may use the positive, negative or another variation of those and similar words. These forward-looking statements are based on our current expectations and assumptions and are not guarantees of future events or performance. The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. There is no guarantee that any of the events anticipated by our forward-looking statements will occur. If any of the events occur, there is no guarantee what effect it will have on our operations, cash flows, or financial condition. We undertake no obligation to update our forward-looking statements after the date of this report. The factors listed below, as well as other factors not described herein because they are not currently known to us or we currently judge them to be immaterial, may cause our actual results to differ significantly from our forward-looking statements:

●

the effect of general economic conditions, including employment rates, interest rate levels, inflation, housing starts, general availability and cost of financing for home mortgages and the relative strength of the U.S. dollar;

●

the effect of COVID-19 and other viral or disease outbreaks, including but not limited to any related regulatory restrictions or requirements, and their potential effects on our business, results of operations, cash flows, financial condition and future prospects;

●

market demand for the company's products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;

●

changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Japanese yen, the Chinese yuan, and the Canadian dollar, and the relative value of the euro to the yen;

●

restrictions on international trade and tariffs imposed on imports or exports;

●

the availability and cost of shipping and transportation;

●

economic activity in Asia, especially Japan and China;

●

performance of our manufacturing operations, including maintenance and capital requirements;

●

potential disruptions in our manufacturing operations;

●

the level of competition from domestic and foreign producers;

●

the successful execution of our internal plans and strategic initiatives, including restructuring and cost reduction initiatives;

●

our ability to hire and retain capable employees;

●

the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing and required regulatory approvals or the occurrence of any event, change or other circumstances that could give rise to a termination of any acquisition or divestiture transaction under the terms of the governing transaction agreements;

●

raw material availability and prices;

●

the effect of weather;

●

changes in global or regional climate conditions and governmental response to such changes;

●

the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;

●

energy prices;

●

transportation and labor availability and costs;

●

federal tax policies;

●

the effect of forestry, land use, environmental and other governmental regulations;

●

legal proceedings;

●

performance of pension fund investments and related derivatives;

●

the effect of timing of employee retirements as it relates to the cost of pension benefits and changes in the market price of our common stock on charges for share-based compensation;

●

the accuracy of our estimates of costs and expenses related to contingent liabilities and the accuracy of our estimates of charges related to casualty losses;

●

changes in accounting principles; and

●

other risks and uncertainties described in this report under Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and in our 2022 Annual Report on Form 10-K, as well as those set forth from time to time in our other public statements, reports, registration statements, prospectuses, information statements and other filings with the SEC.

It is not possible to predict or identify all risks and uncertainties that might affect the accuracy of our forward-looking statements and, consequently, our descriptions of such risks and uncertainties should not be considered exhaustive. There is no guarantee that any of the events anticipated by these forward-looking statements will occur, and if any of the events do occur, there is no guarantee what effect they will have on the company's business, results of operations, cash flows, financial condition and future prospects.

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

RESULTS OF OPERATIONS

In reviewing our results of operations, it is important to understand these terms:

●

Sales realizations for Timberlands and Wood Products refer to net selling prices. This includes selling price plus freight, minus normal sales deductions. Real Estate transactions are presented at the contract sales price before commissions and closing costs, net of any credits.

●

Net contribution (charge) to earnings does not include interest expense, loss on debt extinguishment or income taxes.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

Our market conditions and the strength of the broader U.S. economy are, and will continue to be, influenced by the trajectory of activity in the U.S. housing and repair and remodel segments, inflation trends and interest rates. The demand for sawlogs within our Timberlands segment is directly affected by domestic production of wood-based building products. The strength of the U.S. housing market, particularly new residential construction, strongly affects demand in our Wood Products segment, as does

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LONG-TERM INDEBTEDNESS OBLIGATIONS

The following summary of our long-term indebtedness obligations includes:

●

scheduled principal repayments for the next five years and after;

●

weighted average interest rates for debt maturing in each of the next five years and after and

●

estimated fair values of outstanding obligations.

We estimate the fair value of fixed-rate long-term debt using the market approach, which is based on quoted market prices we received for the same types and issues of our debt. Changes in market rates of interest affect the fair value of our fixed-rate debt.

Summary of Long-Term Indebtedness Principal Obligations as of September 30, 2023

DOLLAR AMOUNTS IN MILLIONS		2023				2024				2025				2026				2027				THEREAFTER				TOTAL**(1)**				FAIR VALUE
Fixed-rate debt		$	860			$	—			$	210			$	1,022			$	300			$	3,333			$	5,725			$	5,434
Average interest rate			5.21	%			—	%			8.31	%			5.52	%			6.95	%			4.82	%			5.24	%		N/A

(1)

Excludes $46 million of unamortized discounts, capitalized debt expense and business combination fair value adjustments.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls are controls and other procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure. The company’s principal executive officer and principal financial officer have concluded that the company’s disclosure controls and procedures were effective as of September 30, 2023, based on an evaluation of the company’s disclosure controls and procedures as of that date.

CHANGES IN INTERNAL CONTROLS

No changes occurred in the company’s internal control over financial reporting during year-to-date 2023 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PRO****CEEDINGS

Refer to Note 10: Legal Proceedings, Commitments and Contingencies. SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. In accordance with these regulations, the company uses a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required pursuant to this item.

There have been no material changes with respect to the risk factors disclosed in our 2022 Annual Report on Form 10-K.

Item 2. UNREGISTERED SALES OF EQUITY S****ECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information with respect to purchases of common stock made by the company during third quarter 2023:

COMMON SHARE REPURCHASES DURING THIRD QUARTER 2023		TOTAL NUMBER OF SHARES PURCHASED				AVERAGE PRICE PAID PER SHARE				TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PROGRAMS				APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PROGRAMS
July 1 – July 31			171,731			$	33.63				171,731			$	286,026,373
August 1 – August 31			353,664			$	32.88				353,664			$	274,398,582
September 1 – September 30			232,115			$	31.63				232,115			$	267,055,708
Total			757,510			$	32.67				757,510

On September 22, 2021, we announced that our board had approved a new share repurchase program (the 2021 Repurchase Program) under which we are authorized to repurchase up to $1 billion of outstanding shares. Concurrently, the board terminated the remaining repurchase authorization under the 2019 Repurchase Program.

During third quarter 2023, we repurchased 757,510 shares for approximately $25 million (including transaction fees) under the 2021 Repurchase Program in open-market transactions. Transaction fees incurred for repurchases are not counted as use of funds authorized for repurchases under the 2021 Repurchase Program. As of September 30, 2023, we had remaining authorization of $267 million for future stock repurchases.

I****tem 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangements

During third quarter 2023, two of the company’s “officers” (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) adopted trading plans intended to satisfy the affirmative defense conditions of Rule 10b5–1(c) of the Exchange Act.

(1)

Devin W. Stockfish, president and chief executive officer, adopted a plan on August 3, 2023 with respect to the exercise of up to 161,500 stock options in the aggregate,14,412 of which expire February 12, 2024, 17,468 of which expire April 9, 2024, 39,458 of which expire February 12, 2025 and 90,162 of which expire February 9, 2026. Specifically, the plan provides for: (i) the exercise of 90,162 stock options at a designated strike price and the sale of all of the underlying shares of common stock in a “cashless” exercise transaction and (ii) the exercise of the remaining stock options at designated strike prices and the sale of an indeterminate number of the underlying shares to cover applicable exercise prices and withholding taxes for such exercises in “cashless” exercise transactions, with the remaining shares to be held by Mr. Stockfish. Mr. Stockfish’s plan expires when all of the shares are sold or on November 12, 2024, whichever occurs first.

(2)

Keith J. O’Rear, senior vice president, Wood Products, adopted a plan on August 3, 2023 to sell an aggregate of 40,876 shares of common stock. Mr. O’Rear’s plan expires when all of the shares are sold or on October 30, 2024, whichever occurs first.

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
32	Certification pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, has been formatted in Inline XBRL.

S****IGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WEYERHAEUSER COMPANY
	(Registrant)
Date: October 27, 2023	By:	/s/ David M. Wold
		David M. Wold
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer and Duly Authorized Officer)