WEYERHAEUSER CO

Previous wording

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; our cash dividend framework, including our target percentage return to shareholders of Adjusted Funds Available for Distribution, including expected supplemental cash dividends and/or future share repurchases; 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; estimated returns on pension plan assets; expected market and general economic conditions, including related influencing factors such as the trajectory of U.S. housing construction activity, repair and remodel activity, inflation trends and interest rates; our expectations about our future opportunities in emerging carbon credit and carbon capture and storage markets; assumptions used in valuing incentive compensation and related expense and the expected effects of U.S. international trade policy.

Current wording

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; our cash dividend framework, including our target percentage return to shareholders of Adjusted Funds Available for Distribution, including expected supplemental cash dividends and/or future share repurchases; future 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; estimated returns on pension plan assets; expected market and general economic conditions, including related influencing factors such as the trajectory of U.S. housing construction activity, repair and remodel activity, inflation trends and interest rates and the potential impacts of U.S. trade policy; our expectations about our future opportunities in emerging carbon credit and carbon capture and storage markets; assumptions used in valuing incentive compensation and related expense; the expected effects of U.S. international trade policy and the occurrence and timing of the closing of an announced timberland acquisition transaction and the occurrence and timing of the closing of an announced wood products manufacturing facility sale transaction.

Previous wording

Home sales and building activity have continued at a moderated pace in response to elevated mortgage interest rates, reduced affordability and lower consumer confidence. New single-family home construction remained generally resilient in the first quarter, as existing homeowners continued to be constrained by the lock-in effect of lower mortgage rates compared to current rates, keeping inventories of existing homes relatively low. Multi-family construction remains more muted given the elevated supply of recently completed projects in conjunction with higher interest rates and other factors constraining the underwriting of proposed projects. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for first quarter 2025 averaged 1.4 million units, a 0.1 percent increase from fourth quarter 2024. Single-family starts averaged 1.0 million units in first quarter 2025, a 0.5 percent decrease from fourth quarter 2024. Multi-family starts averaged 381 thousand units in first quarter 2025, a 1.8 percent increase from fourth quarter 2024. Single-family construction is the primary driver for our business as compared to multi-family due to the amount of wood products used. Sales of newly built, single-family homes averaged a seasonally adjusted annual rate of 684 thousand units for first quarter 2025, an increase of 1.6 percent from fourth quarter 2024, supported by a moderate decrease in mortgage rates in March. Notwithstanding current macroeconomic uncertainty and potential impacts to housing demand, we expect a favorable U.S. housing construction market over the medium to long-term, supported by strong demographics in the key home buying age cohorts, a decade of under building and historically low housing inventory.

Current wording

Home sales and building activity has eased in response to elevated mortgage interest rates, reduced affordability and lower consumer confidence. Despite areas in the U.S. South and Southwest seeing an uptick in new offerings, overall housing inventory remains historically low across many markets. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for second quarter 2025 averaged 1.3 million units, a 5.3 percent decrease from first quarter 2025. Single-family starts averaged 919 thousand units in second quarter 2025, a 9.5 percent decrease from first quarter 2025. Multi-family starts averaged 408 thousand units in second quarter 2025, a 5.9 percent increase from first quarter 2025. Single-family construction is the primary driver for our business as compared to multi-family due to the amount of wood products used. Sales of newly built, single-family homes averaged a seasonally adjusted annual rate of 652 thousand units for second quarter 2025, a 0.5 percent decrease from first quarter 2025. Notwithstanding current macroeconomic uncertainty and potential impacts to housing demand, we expect a favorable U.S. housing construction market over the medium to long-term, supported by strong demographics in the key home buying age cohorts and a decade of under building.

Previous wording

Repair and remodeling expenditures decreased by 1.6 percent from fourth quarter 2024 to first quarter 2025 according to the Census Bureau Advance Retail Spending report. While there continues to be steady demand due to growing home equity and the previously mentioned lock-in effect, many homeowners have been more cautious in discretionary spending on large projects. This softness has been reflected in both the do-it-yourself (DIY) and professionally built segments. Over the longer term, we expect this sector to return to historical growth trends driven by recent deferrals in repair and remodel spending, elevated home equity and an aging U.S. housing stock, with a median age of 45 years.

Current wording

Repair and remodeling expenditures increased by 0.3 percent from first quarter 2025 to second quarter 2025 according to the Census Bureau Advance Retail Spending report. While there continues to be steady demand due to growing home equity and the lock-in effect of lower mortgage rates compared to current rates, many homeowners have been more cautious in discretionary spending on large projects. Slower sales of existing homes has also contributed to more subdued activity. This softness has been reflected in both the do-it-yourself (DIY) and professionally built segments, largely driven by lower consumer confidence, higher interest rates and general uncertainty around the trajectory of the economy. Over the longer term, we expect this sector to return to historical growth trends driven by recent deferrals in repair and remodel spending, higher levels of home equity and an aging U.S. housing stock, with a median age of 45 years.

Previous wording

In U.S. wood product markets, pricing for lumber increased during first quarter 2025, driven by more constrained market supply from previously announced mill curtailments and closures and speculation around tariffs on imported supply. In contrast, OSB prices decreased in response to cautious buyer sentiment given tariff-related uncertainty and a softer than expected start to the spring building season. In first quarter 2025, the Random Lengths Framing Lumber Composite price averaged $455/MBF and the OSB Composite averaged $376/MSF. Over the course of first quarter 2025, composite prices for lumber increased from $433/MBF to $488/MBF and composite prices for OSB decreased from $418/MSF to $358/MSF.

Current wording

In U.S. wood product markets, after a steady increase in the first quarter, the Random Lengths Framing Lumber Composite peaked in early April and trended lower through late June. This was driven by cautious buyer sentiment in response to elevated macroeconomic uncertainty and a softer than expected spring building season. OSB prices decreased significantly in the second quarter in response to softening demand from home construction activity and ample supply. In second quarter 2025, the Random Lengths Framing Lumber Composite price averaged $453/MBF and the OSB Composite averaged $304/MSF. Over the course of second quarter 2025, composite prices for lumber decreased from $488/MBF to $422/MBF and composite prices for OSB decreased from $358/MSF to $262/MSF.

Previous wording

In Western log markets, Douglas-fir sawlog prices increased 13.3 percent in first quarter 2025 compared with fourth quarter 2024, as reported by Fastmarkets RISI Log Lines based on Weyerhaeuser’s sales mix. This was primarily driven by strengthening lumber prices and seasonal reductions in log supply. In the South, delivered sawlog prices decreased 0.1 percent in first quarter 2025 compared to fourth quarter 2024 and declined 3.1 percent from first quarter 2024, as reported by TimberMart-South. In general, Southern log supply remains ample and mills continue to align capacity with end-market demand.

Current wording

In Western log markets, Douglas-fir sawlog prices decreased 0.9 percent in second quarter 2025 compared with first quarter 2025, as reported by Fastmarkets RISI Log Lines based on Weyerhaeuser’s sales mix. Prices in the first quarter had been elevated given seasonally lower log supply and steady takeaway of lumber, but decreased in the second quarter in response to a softening lumber market and elevated log inventories. In the South, delivered sawlog prices decreased 0.4 percent in second quarter 2025 compared to first quarter 2025 and declined 2.5 percent from second quarter 2024, as reported by TimberMart-South. In general, Southern log supply remains ample and mills continue to align production with end-market demand.

Previous wording

Currency exchange rates, available supply from other countries and trade policy affect our export businesses. During first quarter 2025, end use demand in export markets moderated. In Japan, total housing starts decreased 1.1 percent year to date through February compared to the same period in 2024, while the key Post and Beam segment saw a 2.1 percent decrease. The slowing demand was partially offset by a decrease in lumber imports to Japan from Europe and reduced inventories of European lumber in the Japanese market. In China, log demand moderated in the quarter in response to reduced consumption during the Lunar New Year holiday. In early March, Chinese regulators announced an immediate suspension of log imports from the U.S.

Current wording

Currency exchange rates, available supply from other countries and trade policy affect our export businesses. During second quarter 2025, end-use demand in export markets moderated. In Japan, total housing starts decreased 6.0 percent year-to-date through May compared to the same period in 2024, while the key Post and Beam segment saw a 2.2 percent decrease, in part due to more stringent building permit requirements, effective April 1,

Previous wording

Interest rates affect our business primarily through their impact on mortgage rates and housing affordability, their general impact on the economy and their influence on our capital management activities. Actions by the U.S. Federal Reserve, the overall condition of the economy and fluctuations in financial markets are all factors that influence long-term interest rates. 30-year mortgage rates, which are correlated with long-term interest rates, decreased from 6.9 percent in fourth quarter 2024 to 6.7 percent in first quarter 2025, according to economic data from Freddie Mac. Many builders have been able to offset higher mortgage rates through discounts, mortgage rate buydowns and modifying product offerings such as home sizes and finishes. Higher rates have also locked-in many existing homeowners from selling, thereby reducing inventories of existing homes for sale which has led to demand for available new homes.

Current wording

Interest rates affect our business primarily through their impact on mortgage rates and housing affordability, their general impact on the economy and their influence on our capital management activities. Actions by the U.S. Federal Reserve, the overall condition of the economy and fluctuations in financial markets are all factors that influence long-term interest rates. 30-year mortgage rates, which are generally correlated with long-term interest rates, increased from 6.7 percent in first quarter 2025 to 6.8 percent in second quarter 2025, according to economic data from Freddie Mac. Many builders have been able to offset higher mortgage rates through discounts, mortgage rate buydowns and modifying product offerings such as home sizes and finishes. Higher rates have also locked-in many existing homeowners from selling, thereby reducing inventories of existing homes for sale which has led to incremental demand for available new homes.

Previous wording

Increased inflation affects the cost of our operations across each of our business segments, including costs for raw materials, transportation, energy and labor. The Consumer Price Index increased at an annual rate of 2.4 percent as of March 2025 compared to 2.9 percent in December 2024. This rate is markedly down from its peak of over 9.0 percent in June 2022. While we can offset some of the impacts of inflation through our sales activities, operational excellence initiatives and procurement practices, not all costs associated with inflation can be fully mitigated or passed on to the customer.

Current wording

Increased inflation affects the cost of our operations across each of our business segments, including costs for raw materials, transportation, energy and labor. The Consumer Price Index increased at an annual rate of 2.7 percent as of June 2025 compared to 2.4 percent in March 2025. This rate is markedly down from prior periods of elevated inflation, with limited tariff-related pressures largely offset by easing costs in other goods and services. While we can offset some of our costs that are affected by inflation through our sales activities, operational excellence initiatives and procurement practices, not all costs associated with inflation can be fully mitigated or passed on to the customer.

Previous wording

The condition of the labor market affects all of our businesses as it relates to our ability to attract and retain employees and contractors. The unemployment rate increased slightly from 4.1 percent in fourth quarter 2024 to 4.2 percent in first quarter 2025.

Current wording

The condition of the labor market affects all of our businesses as it relates to our ability to attract and retain employees and contractors. The unemployment rate decreased slightly from 4.2 percent in first quarter 2025 to 4.1 percent in second quarter 2025.

Previous wording

Net sales decreased $33 million – 2 percent – primarily due to a $15 million decrease in Wood Products net sales attributable to decreased sales realizations across most product lines, partially offset by increased structural lumber sales, as well as a $13 million decrease in Real Estate & ENR net sales attributable to a decrease in acres sold.

Current wording

Net sales decreased $88 million – 2 percent – primarily due to a $79 million decrease in Wood Products net sales attributable to decreased sales realizations across most product lines, partially offset by increased structural lumber sales, as well as a $41 million decrease in Timberlands net sales to unaffiliated customers attributable to decreased log sales realizations, partially attributable to a lower mix of export sales, and sales volumes in the Western region. These changes were partially offset by a $32 million increase in Real Estate & ENR net sales attributable to an increase in average price per acre sold, partially offset by a decrease in acres sold.

Previous wording

Costs of sales decreased $13 million – 1 percent – primarily due to a decrease in acres sold in our Real Estate & ENR segment, as well as decreased Western sales volumes and export log freight costs in our Timberlands segment, partially offset by increased structural lumber sales volumes in our Wood Products segment.

Current wording

Costs of sales increased $11 million – less than 1 percent – primarily due to increased sales volumes for structural lumber and oriented strand board in our Wood Products segment, partially offset by decreased Western sales volumes in our Timberlands segment.

Previous wording

Net earnings decreased $31 million – 27 percent – primarily due to the $17 million decrease in operating income discussed above, as well as an $11 million decrease in interest income and other and an $8 million increase in non-operating pension and other post-employment benefit costs. These changes were partially offset by a $4 million decrease in income tax expense.

Current wording

Net earnings decreased $117 million – 41 percent – primarily due to the $109 million decrease in operating income discussed above, as well as an $18 million decrease in interest income and other and a $17 million increase in non-operating pension and other post-employment benefit costs. These changes were partially offset by a $25 million decrease in income tax expense.

Previous wording

Net sales to unaffiliated customers decreased $5 million – 1 percent – primarily due to a $7 million decrease in Western log sales attributable to a 2 percent decrease in sales volumes and sales realizations. This decrease was partially offset by a $1 million increase in Northern log sales attributable to a 10 percent increase in sales volumes, partially offset by a 3 percent decrease in sales realizations.

Current wording

Net sales to unaffiliated customers decreased $36 million – 9 percent – primarily due to a $36 million decrease in Western log sales attributable to a 14 percent decrease in sales volumes and a 4 percent decrease in sales realizations, partially attributable to a lower mix of export sales.

Previous wording

Operating income decreased $17 million – 9 percent – primarily due to a $20 million decrease in consolidated gross income (see discussion of components above).

Current wording

Net contribution to earnings increased $7 million – 9 percent – primarily due to the change in the components of gross margin, as discussed above.

Previous wording

Intersegment sales increased $18 million – 13 percent – primarily due to a 13 percent increase in sales volumes.

Current wording

Costs of sales decreased $11 million – 13 percent – primarily due to a decrease in acres sold.

Previous wording

a $16 million decrease in engineered solid section sales attributable to a 6 percent decrease in sales realizations, as well as a 2 percent decrease in sales volumes;

Current wording

a $22 million decrease in engineered solid section sales attributable to a 10 percent decrease in sales realizations, as well as a 3 percent decrease in sales volumes;

Previous wording

a $16 million decrease in complementary building products sales attributable to decreased sales volumes across most products;

Current wording

a $21 million decrease in complementary building products sales attributable to decreased sales volumes across most products;

Previous wording

an $11 million decrease in engineered I-joist sales attributable to a 5 percent decrease in sales volumes and sales realizations and

Current wording

a $12 million decrease in engineered I-joist sales attributable to a 9 percent decrease in sales realizations, as well as a 2 percent decrease in sales volumes and

Previous wording

a $7 million decrease in medium density fiberboard sales attributable to an 18 percent decrease in sales volumes, as well as a 2 percent decrease in sales realizations.

Current wording

a $6 million decrease in medium density fiberboard sales attributable to a 14 percent decrease in sales volumes, partially offset by a 1 percent increase in sales realizations.

Previous wording

a $27 million decrease in oriented strand board sales attributable to a 12 percent decrease in sales realizations, partially offset by a 1 percent increase in sales volumes;

Current wording

a $110 million decrease in oriented strand board sales attributable to a 22 percent decrease in sales realizations, partially offset by a 2 percent increase in sales volumes;

Previous wording

These decreases were partially offset by a $63 million increase in structural lumber sales attributable to an 8 percent increase in sales realizations and a 5 percent increase in sales volumes.

Current wording

These decreases were partially offset by a $145 million increase in structural lumber sales attributable to an 8 percent increase in sales realizations and a 6 percent increase in sales volumes.

Previous wording

a $12 million increase in the charge for elimination of intersegment profit in inventory and LIFO;

Current wording

Net charge to earnings increased $12 million – 19 percent – primarily due to a $10 million increase in the charge for elimination of intersegment profit in inventory and LIFO.

Previous wording

an $11 million decrease in interest income and other, primarily attributable to a decrease in cash and cash equivalents and

Current wording

Net charge to earnings increased $44 million – 34 percent – primarily due to a $22 million increase in the charge for elimination of intersegment profit in inventory and LIFO and a $17 million decrease in interest income and other, primarily attributable to a decrease in cash and cash equivalents.

Previous wording

Interest expense decreased by $1 million compared to first quarter 2024 primarily due to debt retirements and a debt issuance in first quarter 2025 that slightly decreased our average outstanding debt and weighted average interest rate.

Current wording

Interest expense decreased by $1 million compared to second quarter 2024 and decreased $2 million compared to year-to-date 2024 primarily due to debt retirements and a debt issuance in first quarter 2025 that decreased our weighted average interest rate.

Previous wording

Our provision for income taxes is primarily driven by earnings generated by our TRSs. Income tax expense decreased by $4 million compared to first quarter 2024 primarily due to a decrease in our overall earnings in first quarter 2025.

Current wording

Our provision for income taxes is primarily driven by earnings generated by our TRSs. Income tax expense decreased by $25 million compared to year-to-date 2024 primarily due to a decrease in our pretax earnings in 2025.

Previous wording

We are committed to maintaining an appropriate capital structure that provides financial flexibility and enables us to protect the interests of our shareholders and meet our obligations to our lenders, while also maintaining access to all major financial markets. As of March 31, 2025, we had $560 million in cash and cash equivalents and $1.5 billion of availability on our line of credit, which expires in March 2028. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

Current wording

We are committed to maintaining an appropriate capital structure that provides financial flexibility and enables us to protect the interests of our shareholders and meet our obligations to our lenders, while also maintaining access to all major financial markets. As of June 30, 2025, we had $592 million in cash and cash equivalents and $1.75 billion of availability on our line of credit, which expires in June 2030. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

Previous wording

Net cash from operations decreased $54 million primarily due to decreased cash inflows from our business operations, as well as an $11 million increase in cash paid for income taxes.

Current wording

Net cash from operations decreased $90 million primarily due to decreased cash inflows from our operations.

Previous wording

Net cash from investing activities decreased $20 million primarily due to a $14 million increase in cash paid for capital expenditures.

Current wording

Net cash from investing activities increased $12 million primarily due to a $48 million decrease in cash paid for acquisitions of timberlands, partially offset by a $30 million increase in cash paid for capital expenditures.

Previous wording

We anticipate our capital expenditures for 2025 to be approximately $440 million, excluding the investment in our Monticello engineered wood products facility. The amount we spend on capital expenditures could change.

Current wording

We anticipate our capital expenditures for 2025 to be approximately $400 million, excluding approximately $130 million of investment in our Monticello engineered wood products facility. The amount we spend on capital expenditures could change.

Previous wording

a $299 million increase in net proceeds from issuance of long-term debt,

Current wording

Net cash from financing activities increased $153 million primarily due to a $299 million increase in net proceeds from issuance of long-term debt, as well as a $90 million decrease in cash paid for dividends. These changes were partially offset by a $210 million increase in payments on long-term debt and a $26 million increase in cash used for repurchases of common stock.

Previous wording

We had no outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility as of March 31, 2025 or December 31, 2024. This credit facility expires in March 2028.

Current wording

In June 2025, we amended and restated our senior unsecured revolving credit facility to extend the expiration date to June 2030, while increasing borrowing capacity from $1.5 billion to $1.75 billion. Borrowings will bear interest at a floating rate based on either the adjusted term SOFR plus a spread or a mutually agreed upon base rate plus a spread. We had no outstanding borrowings on our revolving credit facility as of June 30, 2025 or December 31, 2024.

Previous wording

We repurchased 845,049 common shares for approximately $25 million (including transaction fees) during first quarter 2025 under the 2021 Repurchase Program. During first quarter 2024, we repurchased 1,472,369 common shares for approximately $49 million (including transaction fees) under the 2021 Repurchase Program. There were no unsettled shares as of March 31, 2025 and 12,436 unsettled shares (less than $1 million) as of December 31, 2024. Refer to Note 4: Net Earnings Per Share and Share Repurchases for further information.

Current wording

We repurchased 3,888,932 common shares for approximately $100 million (including transaction fees) during second quarter 2025 and 4,733,981 common shares for approximately $125 million (including transaction fees) during year-to-date 2025 under the share repurchase programs. During second quarter 2024, we repurchased 1,669,145 common shares for approximately $50 million (including transaction fees) and 3,141,514 common shares for approximately $99 million (including transaction fees) during year-to-date 2024 under the share repurchase programs. There were no unsettled shares as of June 30, 2025 and 12,436 unsettled shares (less than $1 million) as of December 31, 2024. Refer to Note 4: Net Earnings Per Share and Share Repurchases for further information.

Previous wording

There have been no material changes during first quarter 2025 to the critical accounting estimates presented in our 2024 Annual Report on Form 10-K.

Current wording

There have been no material changes during year-to-date 2025 to the critical accounting estimates presented in our 2024 Annual Report on Form 10-K.