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, 2022

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 24, 2022, 735,917 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 – NOT APPLICABLE
ITEM 6.	EXHIBITS	28
	SIGNATURES	29

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	SEPTEMBER 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021
Net sales (Note 3)	$	2,276		$	2,345		$	8,361		$	7,995
Costs of sales		1,694			1,589			5,130			4,602
Gross margin		582			756			3,231			3,393
Selling expenses		24			24			70			68
General and administrative expenses		100			98			294			283
Other operating costs (income), net (Note 13)		1			(15	)		19			8
Operating income		457			649			2,848			3,034
Non-operating pension and other post-employment benefit costs (Note 6)		(12	)		(5	)		(38	)		(14	)
Interest income and other		9			1			9			4
Interest expense, net of capitalized interest		(67	)		(79	)		(204	)		(236	)
Loss on debt extinguishment (Note 8)		—			—			(276	)		—
Earnings before income taxes		387			566			2,339			2,788
Income taxes (Note 14)		(77	)		(84	)		(470	)		(597	)
Net earnings	$	310		$	482		$	1,869		$	2,191
Earnings per share, basic and diluted (Note 4)	$	0.42		$	0.64		$	2.51		$	2.92
Weighted average shares outstanding (in thousands) (Note 4):
Basic		740,058			750,105			743,990			749,657
Diluted		740,975			751,443			745,081			750,999

See accompanying Notes to Consolidated Financial Statements.

1

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021
Net earnings	$	310		$	482		$	1,869		$	2,191
Other comprehensive income (loss):
Foreign currency translation adjustments		(53	)		(25	)		(62	)		(1	)
Changes in unamortized actuarial loss, net of tax expense of $11, $10, $40 and $55		32			29			122			170
Changes in unamortized net prior service credit, net of tax expense of $0, $0, $1 and $0		1			1			1			2
Total other comprehensive income (loss)		(20	)		5			61			171
Total comprehensive income	$	290		$	487		$	1,930		$	2,362

See accompanying Notes to Consolidated Financial Statements.

2

WEYERHAEUSER COMPANY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE	SEPTEMBER 30, 2022			DECEMBER 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,920		$	1,879
Receivables, net		425			507
Receivables for taxes		15			24
Inventories (Note 5)		542			520
Prepaid expenses and other current assets		146			205
Total current assets		3,048			3,135
Property and equipment, less accumulated depreciation of $3,680 and $3,592		1,997			2,057
Construction in progress		245			175
Timber and timberlands at cost, less depletion		11,681			11,510
Minerals and mineral rights, less depletion		245			255
Deferred tax assets		10			17
Other assets		364			503
Total assets	$	17,590		$	17,652
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt (Note 8)	$	118		$	—
Accounts payable		272			281
Accrued liabilities (Note 7)		664			673
Total current liabilities		1,054			954
Long-term debt, net (Note 8)		4,935			5,099
Deferred tax liabilities		89			46
Deferred pension and other post-employment benefits (Note 6)		335			440
Other liabilities		339			346
Total liabilities		6,752			6,885
Commitments and contingencies (Note 10)
Equity:
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 737,547 thousand shares at September 30, 2022 and 747,301 thousand shares at December 31, 2021		922			934
Other capital		7,824			8,181
Retained earnings		2,510			2,131
Accumulated other comprehensive loss (Note 11)		(418	)		(479	)
Total equity		10,838			10,767
Total liabilities and equity	$	17,590		$	17,652

See accompanying Notes to Consolidated Financial Statements.

3

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022			SEPTEMBER 2021
Cash flows from operations:
Net earnings	$	1,869		$	2,191
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization		360			356
Basis of real estate sold		77			62
Deferred income taxes, net		17			16
Pension and other post-employment benefits (Note 6)		65			46
Share-based compensation expense (Note 12)		25			23
Gain on sale of timberlands (Note 16)		—			(32	)
Loss on debt extinguishment (Note 8)		276			—
Change in:
Receivables, net		81			(47	)
Receivables and payables for taxes		15			93
Inventories		(30	)		(55	)
Prepaid expenses and other current assets		(7	)		(21	)
Accounts payable and accrued liabilities		(23	)		116
Pension and post-employment benefit contributions and payments		(19	)		(56	)
Other		(41	)		(27	)
Net cash from operations		2,665			2,665
Cash flows from investing activities:
Capital expenditures for property and equipment		(207	)		(184	)
Capital expenditures for timberlands reforestation		(38	)		(39	)
Acquisition of timberlands (Note 16)		(286	)		(149	)
Proceeds from sale of timberlands (Note 16)		—			261
Other		1			3
Net cash from investing activities		(530	)		(108	)
Cash flows from financing activities:
Cash dividends on common shares		(1,485	)		(382	)
Net proceeds from issuance of long-term debt (Note 8)		881			—
Payments on long-term debt (Note 8)		(1,203	)		(225	)
Proceeds from exercise of stock options		15			46
Repurchases of common shares (Note 4)		(402	)		(26	)
Other		(20	)		(19	)
Net cash from financing activities		(2,214	)		(606	)
Net change in cash, cash equivalents and restricted cash		(79	)		1,951
Cash, cash equivalents and restricted cash at beginning of period		1,999			495
Cash, cash equivalents and restricted cash at end of period	$	1,920		$	2,446
Cash paid (received) during the period for:
Interest, net of amount capitalized of $5 and $3	$	211		$	237
Income taxes, net of refunds	$	446		$	494

See accompanying Notes to Consolidated Financial Statements.

4

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(UNAUDITED)

	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	SEPTEMBER 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021
Common shares:
Balance at beginning of period	$	927		$	937		$	934		$	934
Issued for exercise of stock options and vested units		—			—			2			3
Repurchases of common shares (Note 4)		(5	)		(1	)		(14	)		(1	)
Balance at end of period		922			936			922			936
Other capital:
Balance at beginning of period		7,954			8,258			8,181			8,208
Issued for exercise of stock options		1			1			14			44
Repurchases of common shares (Note 4)		(140	)		(25	)		(390	)		(25	)
Share-based compensation		8			8			25			23
Other transactions, net		1			—			(6	)		(8	)
Balance at end of period		7,824			8,242			7,824			8,242
Retained earnings:
Balance at beginning of period		2,333			1,861			2,131			411
Net earnings		310			482			1,869			2,191
Dividends on common shares		(133	)		(501	)		(1,490	)		(760	)
Balance at end of period		2,510			1,842			2,510			1,842
Accumulated other comprehensive loss:
Balance at beginning of period		(398	)		(656	)		(479	)		(822	)
Other comprehensive income (loss)		(20	)		5			61			171
Balance at end of period (Note 11)		(418	)		(651	)		(418	)		(651	)
Total equity:
Balance at end of period	$	10,838		$	10,369		$	10,838		$	10,369
Dividends paid per common share	$	0.18		$	0.17		$	1.99		$	0.51

See accompanying Notes to Consolidated Financial Statements.

5

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:	BASIS OF PRESENTATION	7
NOTE 2:	BUSINESS SEGMENTS	7
NOTE 3:	REVENUE RECOGNITION	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	11
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 (INCOME), NET	13
NOTE 14:	INCOME TAXES	13
NOTE 15:	RESTRICTED CASH	13
NOTE 16:	TIMBERLAND ACQUISITIONS AND DIVESTITURES	13

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTERS AND YEAR-TO-DATE PERIODS ENDED SEPTEMBER 30, 2022 AND 2021

NOTE 1: BASIS OF 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, 2021. 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: BUSINESS SEGMENTS

We are principally engaged in growing and harvesting timber; manufacturing, distributing and selling products made from trees; maximizing the value of every acre we own 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 categorized 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, and wind and solar resources) 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 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021
Sales to unaffiliated customers:
Timberlands	$	441		$	423		$	1,421		$	1,207
Real Estate & ENR		68			69			313			285
Wood Products		1,767			1,853			6,627			6,503
		2,276			2,345			8,361			7,995
Intersegment sales:
Timberlands		133			129			450			399
Total sales		2,409			2,474			8,811			8,394
Intersegment eliminations		(133	)		(129	)		(450	)		(399	)
Total	$	2,276		$	2,345		$	8,361		$	7,995
Net contribution (charge) to earnings:
Timberlands	$	107		$	133		$	442		$	354
Real Estate & ENR		48			45			194			174
Wood Products		344			517			2,389			2,695
		499			695			3,025			3,223
Unallocated items(1)		(45	)		(50	)		(206	)		(199	)
Net contribution to earnings		454			645			2,819			3,024
Interest expense, net of capitalized interest		(67	)		(79	)		(204	)		(236	)
Loss on debt extinguishment		—			—			(276	)		—
Earnings before income taxes		387			566			2,339			2,788
Income taxes		(77	)		(84	)		(470	)		(597	)
Net earnings	$	310		$	482		$	1,869		$	2,191

(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 as well as legacy obligations.

7

NOTE 3: REVENUE RECOGNITION

A reconciliation of revenue recognized by our major products:

	QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022		SEPTEMBER 2021		SEPTEMBER 2022		SEPTEMBER 2021
Net sales to unaffiliated customers:
Timberlands segment
Delivered logs:
West
Domestic sales	$	97	$	76	$	313	$	235
Export grade sales		127		150		478		414
Subtotal West		224		226		791		649
South		166		153		480		429
North		15		13		40		38
Subtotal delivered logs sales		405		392		1,311		1,116
Stumpage and pay-as-cut timber		10		9		30		22
Recreational and other lease revenue		18		16		51		48
Other(1)		8		6		29		21
Net sales attributable to Timberlands segment		441		423		1,421		1,207
Real Estate & ENR segment
Real estate		30		45		217		212
Energy and natural resources		38		24		96		73
Net sales attributable to Real Estate & ENR segment		68		69		313		285
Wood Products segment
Structural lumber		676		681		2,880		3,020
Oriented strand board		287		470		1,348		1,513
Engineered solid section		233		183		676		491
Engineered I-joists		166		128		471		315
Softwood plywood		47		45		158		170
Medium density fiberboard		50		52		151		143
Complementary building products		222		211		676		595
Other(2)		86		83		267		256
Net sales attributable to Wood Products segment		1,767		1,853		6,627		6,503
Total net sales	$	2,276	$	2,345	$	8,361	$	7,995

(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:

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

● $0.64 during third quarter 2021 and $2.92 during year-to-date 2021.

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.

8

	QUARTER ENDED				YEAR-TO-DATE ENDED
SHARES IN THOUSANDS	SEPTEMBER 2022		SEPTEMBER 2021		SEPTEMBER 2022		SEPTEMBER 2021
Weighted average common shares outstanding – basic		740,058		750,105		743,990		749,657
Dilutive potential common shares:
Stock options		192		293		294		318
Restricted stock units		420		730		417		709
Performance share units		305		315		380		315
Total effect of outstanding dilutive potential common shares		917		1,338		1,091		1,342
Weighted average common shares outstanding – dilutive		740,975		751,443		745,081		750,999

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 2022		SEPTEMBER 2021		SEPTEMBER 2022		SEPTEMBER 2021
Stock options		620		789		620		789
Performance share units		623		1,067		623		1,067

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 4,234,838 common shares for approximately $145 million (including transaction fees) under the 2021 Repurchase Program during third quarter 2022 and 11,217,300 common shares for approximately $404 million (including transaction fees) under the 2021 Repurchase Program during year-to-date 2022. As of September 30, 2022, we had remaining authorization of $523 million for future share repurchases. During year-to-date 2021, we repurchased 780,228 common shares for approximately $26 million (including transaction fees) under the 2019 Repurchase Program.

All common stock repurchases under the 2019 Repurchase Program and 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 64,135 unsettled shares (approximately $2 million) as of September 30, 2022 and no unsettled shares as of December 31, 2021.

NOTE 5: INVENTORIES

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

DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 30, 2022		DECEMBER 31, 2021
LIFO inventories:
Logs	$	24	$	26
Lumber, plywood, panels and fiberboard		60		61
Other products		14		17
Moving average cost or FIFO inventories:
Logs		52		65
Lumber, plywood, panels, fiberboard and engineered wood products		116		106
Other products		147		131
Materials and supplies		129		114
Total	$	542	$	520

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.

9

NOTE 6: PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The components of net periodic benefit cost are:

	PENSION
	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021
Service cost	$	9		$	11		$	27		$	32
Interest cost		27			24			80			73
Expected return on plan assets		(40	)		(51	)		(120	)		(153	)
Amortization of actuarial loss		23			29			70			86
Amortization of prior service cost		1			1			2			2
Total net periodic benefit cost – pension	$	20		$	14		$	59		$	40

	OTHER POST-EMPLOYMENT BENEFITS
	QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022		SEPTEMBER 2021		SEPTEMBER 2022		SEPTEMBER 2021
Interest cost	$	—	$	—	$	2	$	2
Amortization of actuarial loss		1		2		4		4
Amortization of prior service credit		—		—		—		—
Total net periodic benefit cost – other post-employment benefits	$	1	$	2	$	6	$	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 the second quarter of each year to incorporate final net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K.

During second quarter 2022, we recorded an increase to the beginning of the year fair value of the pension assets of $54 million, or 2 percent. We also updated our census data that is used to estimate our beginning of the year projected benefit obligation for our pension plans, which resulted in a projected benefit obligation decrease of $13 million, or less than 1 percent. The net effect of these updates was a $67 million improvement in funded status. This change in funded status was reflected on our Consolidated Balance Sheet as of June 30, 2022.

NOTE 7: ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Compensation and employee benefit costs	$	213	$	225
Current portion of lease liabilities		22		24
Customer rebates, volume discounts and deferred income		165		164
Interest		72		83
Taxes payable		125		106
Other		67		71
Total	$	664	$	673

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NOTE 8: LONG-TERM DEBT AND LINE OF CREDIT

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 May 2021, we repaid our $225 million variable-rate term loan that was scheduled to mature in July 2026.

In January 2020, we refinanced and extended our $1.5 billion five-year senior unsecured revolving credit facility, which expires in January 2025. Borrowings are at LIBOR plus a spread or at other interest rates mutually agreed upon between the borrower and the lending banks. We had no outstanding borrowings on our credit facility as of September 30, 2022 and December 31, 2021.

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, 2022		DECEMBER 31, 2021
Long-term fixed rate debt (including current maturities):
Carrying value	$	5,053	$	5,099
Fair value (level 2)	$	4,846	$	6,221

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.

NOTE 10: LEGAL PROCEEDINGS, COMMITMENTS 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, 2022, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately $63 million. These amounts are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet.

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NOTE 11: ACCUMULATED OTHER 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 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021
Pension(1)
Balance at beginning of period	$	(632	)	$	(924	)	$	(720	)	$	(1,064	)
Other comprehensive income before reclassifications		14			6			65			102
Amounts reclassified from accumulated other comprehensive loss to earnings(2)		19			23			56			67
Total other comprehensive income		33			29			121			169
Balance at end of period	$	(599	)	$	(895	)	$	(599	)	$	(895	)
Other post-employment benefits(1)
Balance at beginning of period	$	—		$	(10	)	$	(2	)	$	(12	)
Other comprehensive loss before reclassifications		(1	)		(1	)		(1	)		(1	)
Amounts reclassified from accumulated other comprehensive loss to earnings(2)		1			2			3			4
Total other comprehensive income		—			1			2			3
Balance at end of period	$	—		$	(9	)	$	—		$	(9	)
Translation adjustments and other
Balance at beginning of period	$	234		$	278		$	243		$	254
Translation adjustments		(53	)		(25	)		(62	)		(1	)
Total other comprehensive loss		(53	)		(25	)		(62	)		(1	)
Balance at end of period		181			253			181			253
Accumulated other comprehensive loss, end of period	$	(418	)	$	(651	)	$	(418	)	$	(651	)

(1) Amounts presented are net of tax.

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

NOTE 12: SHARE-BASED COMPENSATION

Share-based compensation activity during year-to-date 2022 included the following:

SHARES IN THOUSANDS	GRANTED		VESTED
Restricted stock units (RSUs)		626		857
Performance share units (PSUs)		306		419

A total of 1.5 million 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 2022 was $41.94. The vesting provisions for RSUs granted in 2022 were consistent with prior year grants.

Performance Share Units

The weighted average grant date fair value of PSUs granted in 2022 was $49.77. The final number of shares granted in 2022 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 2022 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 2022

	PERFORMANCE SHARE UNITS
Performance period	2/10/2022 – 12/31/2024
Valuation date average stock price(1)	$42.16
Expected dividends	1.72%
Risk-free rate	0.34% – 1.84%
Expected volatility	26.27% – 41.01%

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

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NOTE 13: OTHER OPERATING COSTS (INCOME), NET

Other operating costs (income), net were comprised of the following:

	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022			SEPTEMBER 2021			SEPTEMBER 2022			SEPTEMBER 2021
Foreign exchange gains, net	$	(8	)	$	(5	)	$	(12	)	$	(2	)
Gain on sale of timberlands		—			(32	)		—			(32	)
Litigation expense, net		2			5			10			11
Research and development expenses		1			1			4			3
Other, net		6			16			17			28
Total other operating costs (income), net	$	1		$	(15	)	$	19		$	8

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 2022 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: RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on our Consolidated Balance Sheet that sum to the total of the amounts shown in the Consolidated Statement of Cash Flows:

DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 30, 2022		SEPTEMBER 30, 2021		DECEMBER 31, 2021
Cash and cash equivalents	$	1,920	$	2,326	$	1,879
Restricted cash included in other assets(1)		—		120		120
Total cash, cash equivalents and restricted cash	$	1,920	$	2,446	$	1,999

(1) Amounts included in restricted cash as of September 30, 2021 and December 31, 2021 were comprised of proceeds held by a qualified intermediary that were intended to be reinvested in timber and timberlands through a like-kind exchange transaction. In first quarter 2022, the proceeds were released as a like-kind property was not identified.

NOTE 16: TIMBERLAND ACQUISITIONS AND DIVESTITURES

Carolinas Acquisition

On April 14, 2022, we announced an agreement to purchase 81 thousand acres of North and South Carolina timberlands for approximately $265 million. We completed the purchase on May 18, 2022 and 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.

Washington Divestiture

On April 30, 2021, we announced an agreement to sell 145 thousand acres of timberlands in the North Cascades region of Washington. On July 7, 2021, we completed the sale for $261 million in cash proceeds, which is net of purchase price adjustments and closing costs. This transaction was structured as a like-kind exchange along with the Alabama acquisition discussed below. As a result of the sale, a gain of $32 million was recorded in the Timberlands segment in our third quarter 2021 Consolidated Statement of Operations.

This divestiture was not considered a strategic shift that had, or will have, a major effect on our operations or financial results and therefore did not meet the requirements for presentation as discontinued operations.

Alabama Acquisition

On February 25, 2021, we announced an agreement to purchase 69 thousand acres of southwest Alabama timberlands for approximately $149 million. We completed the purchase on April 27, 2021 and recorded $148 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. As discussed above, this transaction was structured as a like-kind exchange.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

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; estimated taxes and tax provision; our expectations relating to returns on invested pension plan assets and expected benefit payments; 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; expected capital expenditures; market and general economic conditions, including related influencing factors such as the trajectory of U.S. housing activity, repair and remodel activity, impacts from any future restrictions related to COVID or other viral or similar outbreak, 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,” “future,” “maintain,” “may,” “plan,” “potential,” “will,” and “would,” 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 2021 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.

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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, impacts from any future restrictions related to COVID or other viral or similar outbreak, 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 repair and remodeling activity. Seasonal weather patterns impact the level of construction activity in the U.S., which in turn affects demand for our logs and wood products. Our Timberlands segment, specifically the Western region, is also affected by export demand and trade policy. Japanese housing starts are a key driver of export log demand in Japan. The demand for pulpwood from our Timberlands segment is directly affected by the production of pulp, paper and oriented strand board (OSB) as well as the demand for biofuels, such as wood-burning pellets made from pulpwood. The Timberlands segment is also influenced by the availability of harvestable timber. In general, Western log markets are highly tensioned by available supply, while Southern log markets have more available supply. However, additional mill capacity being added in the U.S. South has led to tightening of markets in certain geographies. Our Real Estate, Energy and Natural Resources segment is affected by a variety of factors, including the general state of the economy, local real estate market conditions, the level of construction activity in the U.S., and evolution of emerging renewable energy and carbon-related markets.

While underlying longer-term fundamentals remain favorable for construction of new housing in the U.S., home sales and building activity have slowed due in part to higher mortgage interest rates, reduced affordability, and general macroeconomic conditions. On a seasonally adjusted annual basis, as reported by the U.S. Census Bureau, housing starts for third quarter 2022 averaged 1.46 million units, an 11 percent decrease from second quarter 2022. Single family starts averaged 0.9 million units, a 16 percent decrease from second quarter 2022. Multi-family starts averaged 551 thousand units in third quarter 2022, which was a 2 percent decrease from second quarter 2022. Sales of newly built, single family homes averaged a seasonally adjusted annual rate of 608 thousand units for third quarter 2022, a decrease of 0.2 percent from the prior quarter. Over the medium to long-term, we expect continued strength in the U.S. housing construction market, supported by strong demographics in the key homebuying age cohorts, a decade of underbuilding and an aging housing stock.

Repair and remodeling expenditures increased by 1.8 percent from second quarter 2022 to third quarter 2022 according to the Census Bureau Advance Retail Spending report. Do-it-yourself activity has been returning to more normalized levels while professionally contracted activities have benefitted from larger projects and increases in home equity levels. Over the longer term, we expect this sector to return to pre-pandemic growth trends with healthy household balance sheets, elevated home equity, and a housing stock median age of 43 years old.

In U.S. wood product markets, demand was measured most of third quarter 2022 as buyers adjusted to a more uncertain economic environment. The Random Lengths Framing Lumber Composite price averaged $591/MBF and the OSB Composite averaged $449/MSF in third quarter 2022. Over the course of the third quarter, prices declined from $604/MBF to $512/MBF for lumber and from $425/MSF to $402/MSF for OSB, reflecting a softening housing construction market. Pricing for both lumber and OSB remain well above 10-year averages.

In Western log markets, Douglas fir sawlog prices fell by 2.9 percent in third quarter 2022 compared with second quarter 2022 as reported by RISI Log Lines based on Weyerhaeuser’s portfolio mix. Overall, domestic prices in the West were supported by steady demand and constrained log supplies associated with log and haul capacity in the region. In the South, delivered sawlog prices increased by 0.2 percent from second quarter 2022 and 5.5 percent from third quarter 2021 as reported by TimberMart-South, as mills are carrying higher inventories to mitigate log and haul capacity constraints.

Currency exchange rates, available supply from other countries and trade policy affect our export businesses. During third quarter 2022, end use demand softened which was partly offset by disruptions of other global sources of log supply. In Japan, total housing starts increased 1.4 percent year to date through August compared to the same period in 2021, while the key Post and Beam segment saw a 2.8 percent decrease. An increase in lumber imports from Europe to Japan placed downward pressure on market conditions. China demand was held back by their general economic conditions, but constraints of supply sources from other countries supported demand from U.S. producers.

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, increased from 5.7 percent at the end of second quarter 2022 to 6.7 percent at the end of the third quarter. This represents an increase of 3.6 percentage points from the end of 2021, which has had a negative impact on home affordability and has reduced demand for homebuying.

Monetary policy set by the U.S. Federal Reserve affects changes in the rate of inflation as well as changes in demand and supply for goods and services and fluctuations in labor markets. 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 8.2 percent year over year in September 2022. While we can offset some of the impacts of inflation through our sales activities, our operational excellence initiatives, and our procurement practices, not all of the costs associated with inflation can be fully mitigated or passed on to the consumer.

The relative strength 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 was 3.5 percent in September 2022, compared to 3.6 percent at the end of the second quarter. Labor force participation has increased to 62.3 percent in September 2022, from 61.7 percent in September 2021, but this remains below pre-pandemic levels of over 63 percent.

Governments and businesses across the globe are taking action on climate change and are making significant commitments towards reducing greenhouse gas emissions to net zero. Achieving these commitments will require governments and companies to take major steps to modify operations, invest in low-carbon activities and purchase offsets to reduce environmental impacts. We believe we are uniquely positioned to help entities achieve these commitments through natural climate solutions, including forest carbon sequestration and carbon capture and storage activities.

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In mid-September 2022, Weyerhaeuser employee members of the International Association of Machinists and Aerospace Workers union commenced a work stoppage affecting the company’s operations in Washington and Oregon. The stoppage involves approximately 1,200 employees and affects four lumber mills in our Wood Products segment and a portion of our Western Timberlands operations. This event has had a negative impact on our results of operations for the third quarter, including reductions in fee harvest volumes and sale volumes for Western Timberlands, as well as reductions in production volumes and sales volumes for our lumber business. The stoppage has had a similar impact on our fourth quarter results to date. On October 28, 2022, the company announced the successful resolution of the work stoppage and will resume normal operations as soon as possible.

CONSOLIDATED RESULTS

How We Did Third Quarter 2022 and Year-to-Date 2022

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021
Net sales	$	2,276	$	2,345	$	(69	)	$	8,361	$	7,995	$	366
Costs of sales	$	1,694	$	1,589	$	105		$	5,130	$	4,602	$	528
Operating income	$	457	$	649	$	(192	)	$	2,848	$	3,034	$	(186	)
Net earnings	$	310	$	482	$	(172	)	$	1,869	$	2,191	$	(322	)
Earnings per share, basic and diluted	$	0.42	$	0.64	$	(0.22	)	$	2.51	$	2.92	$	(0.41	)

Comparing Third Quarter 2022 with Third Quarter 2021

Net sales

Net sales decreased $69 million – 3 percent – primarily due to an $86 million decrease in Wood Products sales to unaffiliated customers attributable to decreased sales realizations for oriented strand board, as well as decreased sales volumes for structural lumber.

This decrease was partially offset by an $18 million increase in Timberlands net sales to unaffiliated customers primarily due to increased sales realizations for Southern logs.

Costs of sales

Costs of sales increased $105 million – 7 percent – primarily due to increased freight and raw material costs within our Wood Products segment, as well as increased logging and hauling costs within our Timberlands segment.

Operating income

Operating income decreased $192 million – 30 percent – primarily due to a $174 million decrease in consolidated gross margin (see discussion of components above).

Net earnings

Net earnings decreased $172 million – 36 percent – primarily due to the $192 million decrease in operating income discussed above.

This decrease was partially offset by a $12 million decrease in interest expense, as well as a $7 million decrease in income tax expense (refer to Interest Expense and Income Taxes).

Comparing Year-to-Date 2022 with Year-to-Date 2021

Net sales

Net sales increased $366 million – 5 percent – primarily due to a $214 million increase in Timberlands sales to unaffiliated customers attributable to increased sales realizations and sales volumes in the Western and Southern regions, as well as a $124 million increase in Wood Products sales to unaffiliated customers attributable to increased sales realizations across most product lines.

Costs of sales

Costs of sales increased $528 million – 11 percent – primarily due to increased freight and raw material costs within our Wood Products segment, as well as increased third-party log purchases and logging and hauling costs within our Timberlands segment.

Operating income

Operating income decreased $186 million – 6 percent – primarily due to a $162 million decrease in consolidated gross margin (see discussion of components above).

Net earnings

Net earnings decreased $322 million – 15 percent – primarily due to a $276 million pretax charge ($207 million after-tax) related to the early extinguishment of debt (refer to Note 8: Long-Term Debt and Line of Credit), as well as the $186 million decrease in operating income discussed above.

These decreases were partially offset by a $127 million decrease in income tax expense, as well as a $32 million decrease in interest expense (refer to Income Taxes and Interest Expense).

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TIMBERLANDS

How We Did Third Quarter 2022 and Year-to-Date 2022

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021
Net sales to unaffiliated customers:
Delivered logs:
West	$	224	$	226	$	(2	)	$	791	$	649	$	142
South		166		153		13			480		429		51
North		15		13		2			40		38		2
Subtotal delivered logs sales		405		392		13			1,311		1,116		195
Stumpage and pay-as-cut timber		10		9		1			30		22		8
Recreational and other lease revenue		18		16		2			51		48		3
Other(1)		8		6		2			29		21		8
Subtotal net sales to unaffiliated customers		441		423		18			1,421		1,207		214
Intersegment sales		133		129		4			450		399		51
Total sales	$	574	$	552	$	22		$	1,871	$	1,606	$	265
Costs of sales	$	442	$	428	$	14		$	1,360	$	1,218	$	142
Operating income and Net contribution to earnings	$	107	$	133	$	(26	)	$	442	$	354	$	88

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

Comparing Third Quarter 2022 with Third Quarter 2021

Net sales to unaffiliated customers

Net sales to unaffiliated customers increased $18 million – 4 percent – primarily due to a $13 million increase in Southern log sales attributable to a 9 percent increase in sales realizations. Western log sales decreased $2 million due to a 9 percent decrease in sales volumes, primarily attributable to the work stoppage in Washington and Oregon, partially offset by a 9 percent increase in sales realizations.

Intersegment sales

Intersegment sales increased $4 million – 3 percent – primarily due to a 9 percent increase in sales realizations, partially offset by a 5 percent decrease in sales volumes, primarily attributable to the work stoppage in Washington and Oregon.

Costs of sales

Costs of sales increased $14 million – 3 percent – primarily due to increased logging and hauling costs, partially offset by a 3 percent decrease in sales volumes, primarily attributable to the work stoppage in Washington and Oregon.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased $26 million – 20 percent – primarily due to a $32 million gain on sale of timberlands recorded in third quarter 2021, partially offset by the change in the components of gross margin, as discussed above.

Comparing Year-to-Date 2022 with Year-to-Date 2021

Net sales to unaffiliated customers

Net sales to unaffiliated customers increased $214 million – 18 percent – primarily due to a $142 million increase in Western log sales attributable to a 19 percent increase in sales realizations and a 2 percent increase in sales volumes, as well as a $51 million increase in Southern log sales attributable to a 9 percent increase in sales realizations and a 3 percent increase in sales volumes.

Intersegment sales

Intersegment sales increased $51 million – 13 percent – primarily due to a 16 percent increase in sales realizations, partially offset by a 3 percent decrease in sales volumes.

Costs of sales

Costs of sales increased $142 million – 12 percent – primarily due to increased third-party log purchases and logging and hauling costs.

17

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased $88 million – 25 percent – primarily due to the change in the components of gross margin, as discussed above, partially offset by a $32 million gain on sale of timberlands recorded in third quarter 2021.

Third-Party Log Sales Volumes and Fee Harvest Volumes

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
VOLUMES IN THOUSANDS	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021
Third-party log sales – tons:
West(1)		1,411		1,555		(144	)		4,793		4,702		91
South		4,310		4,304		6			12,612		12,236		376
North		177		195		(18	)		505		571		(66	)
Total		5,898		6,054		(156	)		17,910		17,509		401
Fee harvest volumes – tons:
West(1)		1,760		1,930		(170	)		6,085		6,130		(45	)
South		6,112		5,912		200			18,113		17,144		969
North		245		264		(19	)		703		800		(97	)
Total		8,117		8,106		11			24,901		24,074		827

(1) Western logs are primarily transacted in thousand board feet (MBF) but are converted to ton equivalents for external reporting purposes.

REAL ESTATE, ENERGY AND NATURAL RESOURCES

How We Did Third Quarter 2022 and Year-to-Date 2022

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021
Net sales:
Real estate	$	30	$	45	$	(15	)	$	217	$	212	$	5
Energy and natural resources		38		24		14			96		73		23
Total	$	68	$	69	$	(1	)	$	313	$	285	$	28
Costs of sales	$	14	$	18	$	(4	)	$	100	$	93	$	7
Operating income and Net contribution to earnings	$	48	$	45	$	3		$	194	$	174	$	20

The volume of real estate sales is a function of many factors, including the general state of the economy, demand in local real estate markets, the ability of buyers to obtain financing, the number of competing properties listed for sale, the seasonal nature of sales, the plans of adjacent landowners, our expectation of future price appreciation, the timing of harvesting activities, and the availability of government and not-for-profit funding. In any period, the average sales price per acre will vary based on the location and physical characteristics of parcels sold.

Comparing Third Quarter 2022 with Third Quarter 2021

Net sales

Net sales decreased $1 million – 1 percent – primarily due to a decrease in acres sold, partially offset by an increase in royalty income from our Energy and Natural Resources business.

Costs of sales

Costs of sales decreased $4 million – 22 percent – primarily due to a decrease in acres sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased $3 million – 7 percent – primarily due to the change in the components of gross margin, as discussed above.

18

Comparing Year-to-Date 2022 with Year-to-Date 2021

Net sales

Net sales increased $28 million – 10 percent – primarily due to increases in acres sold and royalty income from our Energy and Natural Resources business, partially offset by a decrease in mitigation bank credit sales.

Costs of sales

Costs of sales increased $7 million – 8 percent – primarily due to an increase in acres sold, partially offset by a decrease in mitigation bank credit sales.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased $20 million – 11 percent – primarily due to the change in the components of gross margin, as discussed above.

REAL ESTATE SALES STATISTICS

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021
Acres sold		5,014		11,037		(6,023	)		56,046		48,907		7,139
Average price per acre	$	5,046	$	4,005	$	1,041		$	3,624	$	3,632	$	(8	)

WOOD PRODUCTS

How We Did Third Quarter 2022 and Year-to-Date 2022

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021
Net sales:
Structural lumber	$	676	$	681	$	(5	)	$	2,880	$	3,020	$	(140	)
Oriented strand board		287		470		(183	)		1,348		1,513		(165	)
Engineered solid section		233		183		50			676		491		185
Engineered I-joists		166		128		38			471		315		156
Softwood plywood		47		45		2			158		170		(12	)
Medium density fiberboard		50		52		(2	)		151		143		8
Complementary building products		222		211		11			676		595		81
Other products produced(1)		86		83		3			267		256		11
Total	$	1,767	$	1,853	$	(86	)	$	6,627	$	6,503	$	124
Costs of sales	$	1,360	$	1,270	$	90		$	4,050	$	3,623	$	427
Operating income and Net contribution to earnings	$	344	$	517	$	(173	)	$	2,389	$	2,695	$	(306	)

(1) Other products produced sales include wood chips, other byproducts and third-party residual log sales from our Canadian Forestlands operations.

Comparing Third Quarter 2022 with Third Quarter 2021

Net sales

Net sales decreased $86 million – 5 percent – due to a $183 million decrease in oriented strand board sales attributable to a 42 percent decrease in sales realizations, partially offset by a 5 percent increase in sales volumes, as well as a $5 million decrease in structural lumber sales attributable to an 8 percent decrease in sales volumes, partially offset by an 8 percent increase in sales realizations.

These decreases were partially offset by:

● a $50 million increase in engineered solid section sales due to a 28 percent increase in sales realizations;

● a $38 million increase in engineered I-joists sales due to a 36 percent increase in sales realizations and

● an $11 million increase in complementary building products sales due to increased sales volumes and sales realizations for siding and trim.

19

Costs of sales

Costs of sales increased $90 million – 7 percent – primarily due to increased freight and raw material costs.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased $173 million – 33 percent – primarily due to the change in the components of gross margin, as discussed above.

Comparing Year-to-Date 2022 with Year-to-Date 2021

Net sales

Net sales increased $124 million – 2 percent – due to:

● a $185 million increase in engineered solid section sales attributable to a 43 percent increase in sales realizations, partially offset by a 4 percent decrease in sales volumes;

● a $156 million increase in engineered I-joists sales attributable to a 56 percent increase in sales realizations, partially offset by a 5 percent decrease in sales volumes;

● an $81 million increase in complementary building products sales attributable to increased sales realizations;

● an $11 million increase in other products produced sales attributable to increased sales volumes for wood chips and

● an $8 million increase in medium density fiberboard sales attributable to a 33 percent increase in sales realizations, partially offset by a 20 percent decrease in sales volumes.

These increases were partially offset by a $165 million decrease in oriented strand board sales due to a 15 percent decrease in sales realizations, partially offset by a 5 percent increase in sales volumes, as well as a $140 million decrease in structural lumber sales due to a 3 percent decrease in sales realizations and a 1 percent decrease in sales volumes.

Costs of sales

Costs of sales increased $427 million – 12 percent – primarily due to increased freight and raw material costs.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased $306 million – 11 percent – primarily due to the change in the components of gross margin, as discussed above.

Third-Party Sales Volumes

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS(1)	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021
Structural lumber – board feet		1,216		1,320		(104	)		3,662		3,717		(55	)
Oriented strand board – square feet (3/8”)		715		681		34			2,167		2,058		109
Engineered solid section – cubic feet		5.9		5.9		—			18.0		18.7		(0.7	)
Engineered I-joists – lineal feet		47		49		(2	)		142		149		(7	)
Softwood plywood – square feet (3/8”)		74		69		5			219		240		(21	)
Medium density fiberboard – square feet (3/4”)		40		55		(15	)		129		162		(33	)

(1) Sales volumes include sales of internally produced products and products purchased for resale primarily through our distribution business.

20

PRODUCTION AND OUTSIDE PURCHASE VOLUMES

Outside purchase volumes are primarily purchased for resale through our distribution business. Production volumes are produced for sale through our own sales organizations and through our distribution business. Production of oriented strand board and engineered solid section are also used to manufacture engineered I-joists.

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS	SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021			SEPTEMBER 2022		SEPTEMBER 2021		2022 VS. 2021
Structural lumber – board feet:
Production		1,140		1,222		(82	)		3,575		3,667		(92	)
Outside purchase		35		56		(21	)		120		160		(40	)
Total		1,175		1,278		(103	)		3,695		3,827		(132	)
Oriented strand board – square feet (3/8”):
Production		735		715		20			2,232		2,140		92
Outside purchase		18		62		(44	)		154		201		(47	)
Total		753		777		(24	)		2,386		2,341		45
Engineered solid section – cubic feet:
Production		6.0		5.8		0.2			18.1		18.0		0.1
Outside purchase		3.6		0.2		3.4			4.1		0.7		3.4
Total		9.6		6.0		3.6			22.2		18.7		3.5
Engineered I-joists – lineal feet:
Production		47		49		(2	)		141		144		(3	)
Outside purchase		1		2		(1	)		6		6		—
Total		48		51		(3	)		147		150		(3	)
Softwood plywood – square feet (3/8”):
Production		64		61		3			197		203		(6	)
Outside purchase		9		12		(3	)		27		38		(11	)
Total		73		73		—			224		241		(17	)
Medium density fiberboard – square feet (3/4"):
Production		38		55		(17	)		130		163		(33	)
Total		38		55		(17	)		130		163		(33	)

21

UNALLOCATED ITEMS

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 as well as legacy obligations.

Net Charge to Earnings – Unallocated Items

	QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022			SEPTEMBER 2021			2022 VS. 2021			SEPTEMBER 2022			SEPTEMBER 2021			2022 VS. 2021
Unallocated corporate function and variable compensation expense	$	(36	)	$	(33	)	$	(3	)	$	(103	)	$	(94	)	$	(9	)
Liability classified share-based compensation		2			(1	)		3			5			(2	)		7
Foreign exchange gain		9			5			4			12			2			10
Elimination of intersegment profit in inventory and LIFO		2			12			(10	)		(39	)		(33	)		(6	)
Other		(19	)		(29	)		10			(52	)		(62	)		10
Operating loss		(42	)		(46	)		4			(177	)		(189	)		12
Non-operating pension and other post-employment benefit costs		(12	)		(5	)		(7	)		(38	)		(14	)		(24	)
Interest income and other		9			1			8			9			4			5
Net charge to earnings	$	(45	)	$	(50	)	$	5		$	(206	)	$	(199	)	$	(7	)

Comparing Third Quarter 2022 with Third Quarter 2021

Net charge to earnings decreased $5 million – 10 percent – primarily due to:

● an $8 million increase in interest income and other due to an increase in the interest rate on our cash and investment accounts;

● a $4 million increase in foreign exchange gain due to strengthening of the U.S. dollar and

● a $3 million decrease in liability classified share-based compensation driven by the change in our stock price.

These changes were partially offset by a $10 million increase in elimination of intersegment profit in inventory and LIFO.

Comparing Year-to-Date 2022 with Year-to-Date 2021

Net charge to earnings increased $7 million – 4 percent – primarily due to a $24 million increase in non-operating pension and other post-employment benefit costs.

This increase was partially offset by a $10 million increase in foreign exchange gain due to strengthening of the U.S. dollar, as well as a $7 million decrease in liability classified share-based compensation driven by the change in our stock price.

INTEREST EXPENSE

Our interest expense, net of capitalized interest, was:

● $67 million for third quarter 2022 and $204 million year-to-date 2022;

● $79 million for third quarter 2021 and $236 million year-to-date 2021.

Interest expense decreased by $12 million compared to third quarter 2021 and decreased by $32 million compared to year-to-date 2021 primarily due to decreases in the average outstanding debt and weighted average interest rate.

Refer to Note 8: Long-Term Debt and Line of Credit for further information.

INCOME TAXES

Our provision for income taxes was:

● a $77 million expense for third quarter 2022 and a $470 million expense year-to-date 2022;

● an $84 million expense for third quarter 2021 and a $597 million expense year-to-date 2021.

Our provision for income taxes is primarily driven by earnings generated by our TRSs. Income tax expense decreased by $127 million compared to year-to-date 2021 primarily due to a tax benefit of approximately $69 million resulting from the $276 million pretax loss on debt extinguishment recorded in first quarter 2022, as well as a decrease in our estimated annual effective tax rate.

Refer to Note 14: Income Taxes and Note 8: Long-Term Debt and Line of Credit for further information.

22

LIQUIDITY AND CAPITAL RESOURCES

We are committed to maintaining an appropriate capital structure that provides 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 September 30, 2022, we had over $1.9 billion in cash and cash equivalents and $1.5 billion of availability on our line of credit, which expires in January 2025. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

● $2,665 million for year-to-date 2022 and

● $2,665 million for year-to-date 2021.

Net cash from operations remained consistent as decreased cash inflows from our business operations were offset by a $48 million decrease in cash paid for income taxes, a $37 million decrease in pension and post-employment benefit contributions and payments, and a $26 million decrease in cash paid for interest.

CASH FROM INVESTING ACTIVITIES

Consolidated net cash from investing activities was:

● $(530) million for year-to-date 2022 and

● $(108) million for year-to-date 2021.

Net cash from investing activities decreased $422 million, primarily due to:

● a $261 million decrease in proceeds from the sale of timberlands;

● a $137 million increase in cash paid for the acquisition of timberlands and

● a $22 million increase in cash paid for capital expenditures.

Summary of Capital Spending by Business Segment

	YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022		SEPTEMBER 2021
Timberlands	$	75	$	76
Wood Products		163		146
Unallocated Items		7		1
Total	$	245	$	223

We anticipate our capital expenditures for 2022 to be approximately $460 million. The amount we spend on capital expenditures could change.

CASH FROM FINANCING ACTIVITIES

Consolidated net cash from financing activities was:

● $(2,214) million for year-to-date 2022 and

● $(606) million for year-to-date 2021.

Net cash from financing activities decreased $1,608 million, primarily due to:

● a $1,103 million increase in cash paid for dividends;

● a $376 million increase in cash used for repurchases of common stock and

● a $97 million increase in net cash used for payments on long term debt.

Line of Credit

We had no outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility as of September 30, 2022 or December 31, 2021. This credit facility expires in January 2025.

Our revolving credit agreement utilizes the London Inter-bank Offered Rate (LIBOR) as a basis for one of the interest rate options available to the company to apply to outstanding borrowings. We plan to transition our revolving credit facility to an alternate reference rate prior to the cessation of LIBOR. We have included provisions in our revolving credit agreement that specifically contemplate the transition from LIBOR to a replacement benchmark rate.

Refer to Note 8: Long-Term Debt and Line of Credit for further information.

23

Long-Term Debt

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.

In May 2021, we repaid our $225 million variable-rate term loan that was scheduled to mature in July 2026.

Refer to Note 8: Long-Term Debt and Line of Credit for further information.

Debt Covenants

As of September 30, 2022, Weyerhaeuser Company was in compliance with its debt covenants. There have been no significant changes to the debt covenants presented in our 2021 Annual Report on Form 10-K for our long-term debt instruments, and we expect to remain in compliance with our debt covenants for the foreseeable future.

Option Exercises

We received cash proceeds from the exercise of stock options of:

● $15 million for year-to-date 2022 and

● $46 million for year-to-date 2021.

Our average stock price was $37.24 and $35.41 for year-to-date 2022 and 2021, respectively.

Dividend Payments

We paid cash dividends on common shares of:

● $1,485 million for year-to-date 2022 and

● $382 million for year-to-date 2021.

The increase in dividends paid is primarily due to a supplemental dividend of $1.45 per share ($1,084 million in total) paid in the first quarter of 2022 based on 2021 financial results.

Share Repurchases

We repurchased 4,234,838 common shares for approximately $145 million (including transaction fees) during third quarter 2022 and 11,217,300 common shares for approximately $404 million (including transaction fees) during year-to-date 2022 under the 2021 Repurchase Program. During third quarter and year-to-date 2021, we repurchased 780,228 common shares for approximately $26 million (including transaction fees) under the 2019 Repurchase Program. There were 64,135 unsettled shares (approximately $2 million) as of September 30, 2022 and no unsettled shares as of December 31, 2021. Refer to Note 4: Net Earnings Per Share and Share Repurchases for further information.

PERFORMANCE MEASURES

Adjusted EBITDA by Segment

We use Adjusted EBITDA as a key performance measure to evaluate the performance of the consolidated company and our business segments. This measure should not be considered in isolation from, and is not intended to represent an alternative to, our results reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP). However, we believe Adjusted EBITDA provides meaningful supplemental information for investors about our operating performance, better facilitates period to period comparisons and is widely used by analysts, lenders, rating agencies and other interested parties. Our definition of Adjusted EBITDA may be different from similarly titled measures reported by other companies. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold and special items.

	QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022			SEPTEMBER 2021			2022 VS. 2021			SEPTEMBER 2022			SEPTEMBER 2021			2022 VS. 2021
Adjusted EBITDA by Segment:
Timberlands	$	168		$	165		$	3		$	634		$	517		$	117
Real Estate & ENR		60			60			—			283			247			36
Wood Products		395			565			(170	)		2,540			2,840			(300	)
		623			790			(167	)		3,457			3,604			(147	)
Unallocated Items		(40	)		(44	)		4			(172	)		(184	)		12
Adjusted EBITDA	$	583		$	746		$	(163	)	$	3,285		$	3,420		$	(135	)

We reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income (loss) for the business segments, as those are the most directly comparable U.S. GAAP measures for each.

24

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2022:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	310
Interest expense, net of capitalized interest											67
Income taxes											77
Net contribution (charge) to earnings	$	107	$	48	$	344	$	(45	)	$	454
Non-operating pension and other post-employment benefit costs		—		—		—		12			12
Interest income and other		—		—		—		(9	)		(9	)
Operating income (loss)		107		48		344		(42	)		457
Depreciation, depletion and amortization		61		5		51		2			119
Basis of real estate sold		—		7		—		—			7
Adjusted EBITDA	$	168	$	60	$	395	$	(40	)	$	583

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2021:

DOLLAR AMOUNTS IN MILLIONS	Timberlands			Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings											$	482
Interest expense, net of capitalized interest												79
Income taxes												84
Net contribution (charge) to earnings	$	133		$	45	$	517	$	(50	)	$	645
Non-operating pension and other post-employment benefit costs		—			—		—		5			5
Interest income and other		—			—		—		(1	)		(1	)
Operating income (loss)		133			45		517		(46	)		649
Depreciation, depletion and amortization		64			4		48		2			118
Basis of real estate sold		—			11		—		—			11
Special items included in operating income (loss)(1)		(32	)		—		—		—			(32	)
Adjusted EBITDA	$	165		$	60	$	565	$	(44	)	$	746

(1) Operating income (loss) includes a pretax special item consisting of a $32 million gain on the sale of timberlands.

The table below reconciles Adjusted EBITDA for the year-to-date period ended September 30, 2022:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	1,869
Interest expense, net of capitalized interest											204
Loss on debt extinguishment(1)											276
Income taxes											470
Net contribution (charge) to earnings	$	442	$	194	$	2,389	$	(206	)	$	2,819
Non-operating pension and other post-employment benefit costs		—		—		—		38			38
Interest income and other		—		—		—		(9	)		(9	)
Operating income (loss)		442		194		2,389		(177	)		2,848
Depreciation, depletion and amortization		192		12		151		5			360
Basis of real estate sold		—		77		—		—			77
Adjusted EBITDA	$	634	$	283	$	2,540	$	(172	)	$	3,285

(1) Loss on debt extinguishment is a special item consisting of a pretax charge of $276 million related to early debt retirement.

25

The table below reconciles Adjusted EBITDA for the year-to-date period ended September 30, 2021:

DOLLAR AMOUNTS IN MILLIONS	Timberlands			Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings											$	2,191
Interest expense, net of capitalized interest												236
Income taxes												597
Net contribution (charge) to earnings	$	354		$	174	$	2,695	$	(199	)	$	3,024
Non-operating pension and other post-employment benefit costs		—			—		—		14			14
Interest income and other		—			—		—		(4	)		(4	)
Operating income (loss)		354			174		2,695		(189	)		3,034
Depreciation, depletion and amortization		195			11		145		5			356
Basis of real estate sold		—			62		—		—			62
Special items included in operating income (loss)(1)		(32	)		—		—		—			(32	)
Adjusted EBITDA	$	517		$	247	$	2,840	$	(184	)	$	3,420

(1) Operating income (loss) includes a pretax special item consisting of a $32 million gain on the sale of timberlands.

Net Earnings and Net Earnings per Diluted Share Before Special Items

We use net earnings before special items and net earnings per diluted share before special items as key performance measures to evaluate the performance of the consolidated company. These measures should not be considered in isolation from, and are not intended to represent an alternative to, our results reported in accordance with U.S. GAAP. However, we believe the measures provide meaningful supplemental information for investors about our operating performance, better facilitate period to period comparisons and are widely used by analysts, lenders, rating agencies and other interested parties.

Net Earnings Before Special Items

	QUARTER ENDED					YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2022		SEPTEMBER 2021			SEPTEMBER 2022		SEPTEMBER 2021
Net earnings	$	310	$	482		$	1,869	$	2,191
Loss on debt extinguishment		—		—			207		—
Gain on sale of timberlands		—		(32	)		—		(32	)
Net earnings before special items	$	310	$	450		$	2,076	$	2,159

Net Earnings per Diluted Share Before Special Items

	QUARTER ENDED					YEAR-TO-DATE ENDED
	SEPTEMBER 2022		SEPTEMBER 2021			SEPTEMBER 2022		SEPTEMBER 2021
Net earnings per diluted share	$	0.42	$	0.64		$	2.51	$	2.92
Loss on debt extinguishment		—		—			0.28		—
Gain on sale of timberlands		—		(0.04	)		—		(0.04	)
Net earnings per diluted share before special items	$	0.42	$	0.60		$	2.79	$	2.88

CRITICAL ACCOUNTING POLICIES

There have been no significant changes during year-to-date 2022 to the critical accounting policies presented in our 2021 Annual Report on Form 10-K.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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.

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We estimate the fair value of our debt instruments using quoted market prices we received for the same types and issues of our debt or on the discounted value of the future cash flows using market yields for the same type and comparable issues of 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, 2022

DOLLAR AMOUNTS IN MILLIONS	2022			2023			2024			2025			2026			THEREAFTER			TOTAL(1)			FAIR VALUE
Fixed-rate debt	$	—		$	978		$	—		$	210		$	272		$	3,633		$	5,093		$	4,846
Average interest rate		—	%		5.44	%		—	%		8.31	%		7.65	%		5.00	%		5.36	%	N/A

(1) Excludes $40 million of unamortized discounts, capitalized debt expense and business combination fair value adjustments.

Item 4. CONTROLS AND PROCEDURES

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, 2022, 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 2022 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 PROCEEDINGS

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.

Item 1A. RISK FACTORS

There have been no material changes with respect to the risk factors disclosed in our 2021 Annual Report on Form 10-K.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES 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 2022:

COMMON SHARE REPURCHASES DURING THIRD QUARTER 2022	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		1,675,436	$	34.83		1,675,436	$	610,116,001
August 1 – August 31		1,346,245		35.54		1,346,245		562,268,165
September 1 – September 30		1,213,157		32.15		1,213,157		523,268,401
Total		4,234,838	$	34.29		4,234,838	$	523,268,401

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 2022, we repurchased 4,234,838 common shares for approximately $145 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, 2022, we had remaining authorization of $523 million for future stock repurchases.

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Item 6. EXHIBITS

10.1	Weyerhaeuser Company 2023 Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 17, 2022 – Commission File Number 1-4825)
10.2	Form of Executive Severance Agreement, as in effect August 12, 2022 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on August 17, 2022 – Commission File Number 1-4825)
10.3	Form of Executive Change of Control Agreement, as in effect August 12, 2022 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on August 17, 2022 – Commission File Number 1-4825)
10.4	Executive Severance Agreement with the CEO, as in effect August 12, 2022 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on August 17, 2022 – Commission File Number 1-4825)
10.5	Executive Change of Control Agreement with the CEO, as in effect August 12, 2022 (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on August 17, 2022 – Commission File Number 1-4825)
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, 2022, has been formatted in Inline XBRL.

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SIGNATURES

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 28, 2022	By:	/s/ David M. Wold
		David M. Wold
		Senior Vice President and Chief Financial Officer
		(Principal Accounting Officer and Duly Authorized Officer)

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