UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________________________________

FORM 10-Q

__________________________________________________



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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, ~~2018~~2019



o	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

__________________________________________________



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)

__________________________________________________

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. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). x Yes o 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 x Accelerated filer o Non-accelerated filer o

Smaller reporting company o Emerging growth company o

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. o

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

As of April ~~23, 2018, 757,013,955~~22, 2019, 744,786,160 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	56
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	67
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ~~(“MD&A”)~~(MD&A)	17
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	28
ITEM 4.	CONTROLS AND PROCEDURES	28

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	28
ITEM 1A.	RISK FACTORS	28
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2829
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2829
~~ITEM��~~ITEM 4.	MINE SAFETY DISCLOSURES	2829
ITEM 5.	OTHER INFORMATION	2829
ITEM 6.	EXHIBITS	30
	SIGNATURE	31

FINANCIAL INFORMATION

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)


	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	MARCH 2018			MARCH 2017			MARCH 2019			MARCH 2018
Net sales (Note 3)	$	1,865		$	1,693		$	1,643		$	1,865
Costs of products sold	1,348			1,272
Costs of sales							1,322			1,348
Gross margin	517			421			321			517
Selling expenses	23			22			21			23
General and administrative expenses	78			87			89			78
Research and development expenses	2			4			1			2
Charges for integration and restructuring, closures and asset impairments (Note 15)	2			13
Charges (recoveries) for product remediation (Note 16)	(20		)	—
Other operating costs, net (Note 17)	28			2
Other operating costs, net (Note 15)							36			10
Operating income	404			293			174			404
Non-operating pension and other postretirement benefit costs	(24		)	(22		)	(470		)	(24		)
Interest income and other	12			9			10			12
Interest expense, net of capitalized interest	(93		)	(99		)	(107		)	(93		)
Earnings before income taxes	299			181
Income taxes (Note 18)	(30		)	(24		)
Net earnings	$	269		$	157
Earnings per share, basic and diluted (Note 5)	$	0.35		$	0.21
Dividends paid per share	$	0.32		$	0.31
Weighted average shares outstanding (in thousands) (Note 5):
Earnings (loss) before income taxes							(393		)	299
Income taxes (Note 16)							104			(30		)
Net earnings (loss)							$	(289	)	$	269

Earnings (loss) per share, basic and diluted (Note 4)							$	(0.39	)	$	0.35
Weighted average shares outstanding (in thousands) (Note 4):
Basic	756,815			750,665			746,603			756,815
Diluted	759,462			754,747			746,603			759,462

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)


	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018			MARCH 2017			MARCH 2019			MARCH 2018
Net earnings	$	269		$	157
Net earnings (loss)							$	(289	)	$	269
Other comprehensive income (loss):
Foreign currency translation adjustments	(15		)	2			14			(15		)
Amortization of net pension and other postretirement benefits actuarial loss, net of tax expense of $19 and $26	54			29
Amortization of net prior service credit, net of tax benefit of $0 and $0	(1		)	(1		)
Unrealized gains on available-for-sale securities	—			1
Changes in unamortized actuarial loss, net of tax expense of $111 and $19							344			54
Changes in unamortized net prior service credit, net of tax benefit of $0 and $0							—			(1		)
Total other comprehensive income	38			31			358			38
Total comprehensive income	$	307		$	188		$	69		$	307

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)


DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2018			DECEMBER 31, 2017
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA							MARCH 31, 2019			DECEMBER 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	598		$	824		$	259		$	334
Receivables, less discounts and allowances of $1 and $1	481			396			398			337
Receivables for taxes	24			14			163			137
Inventories (Note 6)	445			383
Inventories (Note 5)							451			389
Prepaid expenses and other current assets	118			98			141			152
Current restricted financial investments held by variable interest entities (Note 7)	253			—
Current restricted financial investments held by variable interest entities (Note 6)							362			253
Total current assets	1,919			1,715			1,774			1,602
Property and equipment, less accumulated depreciation of $3,354 and $3,338	1,573			1,618
Property and equipment, less accumulated depreciation of $3,424 and $3,376							1,917			1,857
Construction in progress	275			225			102			136
Timber and timberlands at cost, less depletion	12,888			12,954			12,586			12,671
Minerals and mineral rights, less depletion	306			308			291			294
Goodwill	40			40
Deferred tax assets	244			268			18			15
Other assets	278			316			444			312
Restricted financial investments held by variable interest entities (Note 7)	362			615
Restricted financial investments held by variable interest entities (Note 6)							—			362
Total assets	$	17,885		$	18,059		$	17,132		$	17,249

LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt (Note 10)	$	—		$	62
Current debt (nonrecourse to the company) held by variable interest entities (Note 7)	209			209
Current maturities of long-term debt (Note 9)							$	—		$	500
Current debt (nonrecourse to the company) held by variable interest entities (Note 6)							302			302
Borrowings on line of credit (Note 9)							245			425
Accounts payable	245			249			243			222
Accrued liabilities (Note 9)	457			645
Accrued liabilities (Note 8)							411			490
Total current liabilities	911			1,165			1,201			1,939
Long-term debt (Note 10)	5,928			5,930
Long-term debt (nonrecourse to the company) held by variable interest entities (Note 7)	302			302
Deferred pension and other postretirement benefits (Note 8)	1,454			1,487
Long-term debt (Note 9)							6,156			5,419
Deferred tax liabilities							34			43
Deferred pension and other postretirement benefits (Note 7)							542			527
Other liabilities	299			276			398			275
Total liabilities	8,894			9,160			8,331			8,203
Commitments and contingencies (Note 12)

Commitments and contingencies (Note 11)
Equity:
Common shares: $1.25 par value; authorized 1,360,000,000 shares; issued and outstanding: 756,699,978 and 755,222,727 shares	946			944
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 744,767 thousand shares at March 31, 2019 and 746,391 thousand shares at December 31, 2018							931			933
Other capital	8,466			8,439			8,121			8,172
Retained earnings	1,365			1,078			543			1,093
Accumulated other comprehensive loss (Note 13)	(1,786		)	(1,562		)
Accumulated other comprehensive loss (Note 12)							(794		)	(1,152		)
Total equity	8,991			8,899			8,801			9,046
Total liabilities and equity	$	17,885		$	18,059		$	17,132		$	17,249

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


	YEAR-TO-DATE ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018			MARCH 2017			MARCH 2019			MARCH 2018
Cash flows from operations:
Net earnings	$	269		$	157
Noncash charges to earnings:
Net earnings (loss)							$	(289	)	$	269
Noncash charges to earnings (loss):
Depreciation, depletion and amortization	120			133			123			120
Basis of real estate sold	12			14			48			12
Deferred income taxes, net	10			3			(123		)	10
Pension and other postretirement benefits (Note 8)	34			32
Pension and other postretirement benefits (Note 7)							478			34
Share-based compensation expense	9			10			9			9
Foreign exchange transaction losses (Note 17)	2			3
Change in:
Receivables, less allowances	(83		)	(70		)	(77		)	(83		)
Receivables and payables for taxes	5			(36		)	(31		)	5
Inventories	(66		)	(28		)	(60		)	(66		)
Prepaid expenses	(5		)	(9		)	(5		)	(5		)
Accounts payable and accrued liabilities	(173		)	(137		)	(82		)	(173		)
Pension and postretirement benefit contributions and payments	(16		)	(22		)	(14		)	(16		)
Other	18			(15		)	9			20
Net cash from operations	136			35
Net cash from (used in) operations							(14		)	136
Cash flows from investing activities:
Capital expenditures for property and equipment	(61		)	(52		)	(41		)	(61		)
Capital expenditures for timberlands reforestation	(20		)	(23		)	(18		)	(20		)
Proceeds from sale of nonstrategic assets	2			8
Proceeds from note receivable held by variable interest entities (Note 6)							253			—
Other	3			(1		)	18			5
Net cash used in investing activities	(76		)	(68		)
Net cash from (used in) investing activities							212			(76		)
Cash flows from financing activities:
Cash dividends on common shares	(242		)	(233		)	(254		)	(242		)
Payments of long-term debt (Note 10)	(62		)	—
Net proceeds from issuance of long-term debt (Note 9)							739			—
Payments on long-term debt (Note 9)							(512		)	(62		)
Proceeds from borrowings on line of credit (Note 9)							245			—
Payments on line of credit (Note 9)							(425		)	—
Proceeds from exercise of stock options	25			55			2			25
Repurchases of common shares (Note 4)							(60		)	—
Other	(7		)	(10		)	(8		)	(7		)
Net cash used in financing activities	(286		)	(188		)	(273		)	(286		)

Net change in cash and cash equivalents	(226		)	(221		)	(75		)	(226		)
Cash and cash equivalents at beginning of period	824			676			334			824
Cash and cash equivalents at end of period	$	598		$	455		$	259		$	598

Cash paid during the period for:
Interest, net of amount capitalized of $3 and $3	$	105		$	120
Interest, net of amount capitalized of $1 and $3							$	127		$	105
Income taxes	$	17		$	59		$	50		$	17

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(UNAUDITED)



	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA	MARCH 2019			MARCH 2018
Common shares:
Balance at beginning of period	$	933		$	944
Issued for exercised stock options and vested restricted stock units	1			2
Repurchases of common shares (Note 4)	(3		)	—
Balance at end of period	931			946
Other Capital:
Balance at beginning of period	8,172			8,439
Issued for exercise of stock options	2			24
Repurchases of common shares (Note 4)	(57		)	—
Shared-based compensation	9			9
Other transactions, net	(5		)	(6		)
Balance at end of period	8,121			8,466
Retained Earnings:
Balance at beginning of period	1,093			1,078
Net earnings (loss)	(289		)	269
Dividends on common shares	(254		)	(242		)
Adjustments related to accounting pronouncements and other	(7		)	260
Balance at end of period	543			1,365
Accumulated other comprehensive loss:
Balance at beginning of period	(1,152		)	(1,562		)
Other comprehensive income (loss)	358			(224		)
Balance at end of period (Note 12)	(794		)	(1,786		)
Total equity:
Balance at end of period	$	8,801		$	8,991

Dividends paid per common share	$	0.34		$	0.32

See accompanying Notes to Consolidated Financial Statements.

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1:	BASIS OF PRESENTATION	67

NOTE 2:	BUSINESS SEGMENTS	67

NOTE 3:	REVENUE RECOGNITION	79

NOTE 4:	~~OPERATIONS DIVESTED~~NET EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES	9

NOTE 5:	~~NET EARNINGS PER SHARE~~INVENTORIES	10

NOTE 6:	~~INVENTORIES~~	10

~~NOTE 7:~~	~~SPECIAL-PURPOSE~~VARIABLE INTEREST ENTITIES	11

NOTE 8:7:	PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS	11

NOTE 9:8:	ACCRUED LIABILITIES	12

NOTE ~~10:~~9:	LONG-TERM DEBT AND LINES OF CREDIT	12

NOTE ~~11:~~10:	FAIR VALUE OF FINANCIAL INSTRUMENTS	12

NOTE ~~12:~~11:	LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES	13

NOTE ~~13:~~12:	ACCUMULATED OTHER COMPREHENSIVE LOSS	14

NOTE ~~14:~~13:	SHARE-BASED COMPENSATION	14

NOTE ~~15:~~14:	~~CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS~~LEASES	15

NOTE ~~16:~~	~~CHARGES (RECOVERIES) FOR PRODUCT REMEDIATION~~	15

~~NOTE 17:~~15:	OTHER OPERATING COSTS, NET	16

NOTE ~~18:~~16:	INCOME TAXES	16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE ~~QUARTER~~QUARTERS ENDED MARCH 31, ~~2018~~2019 AND ~~2017~~2018

NOTE 1: BASIS OF PRESENTATION

We are a corporation that has elected to be taxed as a real estate investment trust (REIT). We expect to derive most of our REIT income from investments in timberlands, including the sale of standing timber. As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our taxable REIT subsidiaries (TRSs), which includes our Wood Products segment and portions of our Timberlands and Real Estate, Energy and Natural Resources (Real Estate & ENR) segments.

Our consolidated financial statements provide an overall view of our results of operations and financial condition. They include our accounts and the accounts of entities we control, including:

majority-owned domestic and foreign subsidiaries and

variable interest entities in which we are the primary beneficiary.

They do not include our intercompany transactions and accounts, which are eliminated.

We account for investments in and advances to unconsolidated equity affiliates using the equity method, with taxes provided on undistributed earnings. This means that we record earnings and accrue taxes in the period earnings are recognized by our unconsolidated equity affiliates.

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, ~~2017.~~2018. Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year.

~~NEW ACCOUNTING PRONOUNCEMENTS~~

~~Leases~~

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, which requires lessees to recognize assets and liabilities for the rights and obligations created by those leases and requires leases to be recognized on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. We expect to adopt on January 1, 2019. We are still evaluating certain aspects of the revised guidance and subsequent revisions either made or being contemplated by the FASB, including application of the available practical expedients. We expect the adoption to result in the recognition of the present value of the future commitments on operating leases on our ~~Consolidated Balance Sheet~~.

~~Reclassification of Certain Amounts from Accumulated Other Comprehensive Loss~~

In February 2018, the FASB issued ASU 2018-02, which allows for the reclassification of certain income tax effects related to the Tax Cuts and Jobs Act (the "Tax Act") between “Accumulated other comprehensive loss” and “Retained earnings.” This ASU provides that adjustments to deferred tax liabilities and assets related to a change in tax laws be included in “Income from continuing operations”, even in situations where the related items were originally recognized in “Other comprehensive income.” The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this ASU is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax laws was recognized. We adopted this ASU during first quarter 2018 using the period of adoption method, which resulted in a reclassification of $253 million from "Accumulated other comprehensive loss" to "Retained earnings" on our ~~Consolidated Balance Sheet~~due to changes in federal statutory and effective state rates. In general, tax effects unrelated to the Tax Cuts and Jobs Act are released from accumulated other comprehensive loss using the portfolio approach.

In January 2016, the FASB issued ASU No. 2016-01, which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. We adopted ASU 2016-01 in first quarter 2018, which resulted in a reclassification of accumulated unrealized gains on available-for-sale securities of $9 million from "Accumulated other comprehensive loss" to "Retained earnings" on our ~~Consolidated Balance Sheet~~.

NOTE 2: BUSINESS SEGMENTS

Reportable business segments are determined based on the company’s "management approach," as defined by FASB ASC 280, “Segment Reporting.” The management approach is based on the way the chief operating decision maker organizes the segments within a company for making decisions about resources to be allocated and assessing their performance.

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 reserves of minerals, oil, gas, coal, and other natural resources on our timberlands. ~~The following is a brief description of each of our reportable~~Our business segments are categorized based primarily on products and ~~activities:~~

services which includes:

Timberlands – ~~which includes~~ logs, timber and leased recreational access;

Real Estate & ENR – ~~which includes~~ sales of ~~timberlands;~~HBU properties, rights to explore for and extract hard minerals, construction materials, oil and gas production, wind, solar and coal; ~~and equity interests in our Real Estate Development Ventures;~~ and

Wood Products – ~~which includes~~ softwood lumber, engineered wood products, structural panels, medium density fiberboard 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						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018			MARCH 2017			MARCH 2019			MARCH 2018
Sales to unaffiliated customers (Note 3):
Sales to unaffiliated customers:
Timberlands(1)	$	505		$	486		$	431		$	490
Real Estate & ENR	51			53			118			51
Wood Products(1)	1,309			1,154			1,094			1,324
	1,865			1,693			1,643			1,865
Intersegment sales:
Timberlands	228			202
Timberlands⁽¹⁾							125			142

Total sales	2,093			1,895			1,768			2,007
Intersegment eliminations(1)	(228		)	(202		)	(125		)	(142		)
Total	$	1,865		$	1,693		$	1,643		$	1,865
Net contribution to earnings:
Timberlands	$	189		$	148		$	120		$	189
Real Estate & ENR⁽¹⁾	25			26			55			25
Wood Products	270			172			69			270
	484			346			244			484
Unallocated items⁽²⁾	(92		)	(66		)	(530		)	(92		)
Net contribution to earnings	392			280
Net contribution to earnings (loss)							(286		)	392
Interest expense, net of capitalized interest	(93		)	(99		)	(107		)	(93		)
Earnings before income taxes	299			181
Earnings (loss) before income taxes							(393		)	299
Income taxes	(30		)	(24		)	104			(30		)
Net earnings	$	269		$	157
Net earnings (loss)							$	(289	)	$	269

(1)

~~The Real Estate & ENR segment includes~~In January 2019, we changed the ~~equity earnings from investments in and advances to~~way we report our ~~Real Estate Development Ventures,~~Canadian Forestlands operations, which are ~~accounted for under~~primarily operated to supply Weyerhaeuser’s Canadian Wood Products manufacturing facilities. As a result, we no longer report related intersegment sales in the ~~equity method.~~Timberlands segment and we will now record the minimal associated third-party log sales in the Wood Products segment. These collective transactions did not contribute any earnings to the Timberlands segment. We have conformed prior period presentation with the current period.

(2)

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:~~as share-based compensation, ~~expenses,~~ pension and postretirement costs, ~~foreign exchange transaction gains and losses and the~~ elimination of intersegment profit in inventory and ~~LIFO.~~LIFO, foreign exchange transaction gains and losses, interest income and other as well as legacy obligations.

NOTE 3: REVENUE

~~A majority of our revenue is derived from sales of delivered logs and manufactured wood products. We account for revenue in accordance with ASC Topic 606,~~ ~~Revenue from Contracts with Customers, which we adopted on January 1, 2018, using the cumulative effect method. The adoption of the new revenue recognition guidance did not materially impact our~~ ~~Consolidated Statement of Operations~~, ~~Consolidated Balance Sheet, or~~ ~~Consolidated Statement of Cash Flows~~.

~~PERFORMANCE OBLIGATIONS~~

A performance obligation, as defined in ASC Topic 606, is a promise in a contract to transfer a distinct good or service to a customer. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue at the point in time, or over the period, in which the performance obligation is satisfied.

Performance obligations associated with delivered log sales are typically satisfied when the logs are delivered to our customers’ mills or delivered to an ocean vessel in the case of export sales. Performance obligations associated with the sale of wood products are typically satisfied when the products are shipped. Customers are generally invoiced shortly after logs are delivered or after wood products are shipped, with payment generally due within a month or less of the invoice date. ASC Topic 606 requires entities to consider significant financing components of contracts with customers, though allows for the use of a practical expedient when the period between satisfaction of a

~~performance obligation and payment receipt is one year or less. Given the nature of our revenue transactions, we have elected to utilize this practical expedient.~~

~~Performance obligations associated with real estate sales are generally met when placed into escrow and all conditions of closing have been satisfied.~~

~~CONTRACT ESTIMATES~~

Substantially all of the company’s performance obligations are satisfied as of a point in time. Therefore, there is little judgment in determining when control transfers for our business segments as described above.

The transaction price for log sales generally equals the amount billed to our customer for logs delivered during the accounting period. For the limited number of log sales subject to a long-term supply agreement, the transaction price is variable but is known at the time of billing. For wood products sales, the transaction price is generally the amount billed to the customer for the products shipped but may be reduced slightly for estimated cash discounts and rebates.

~~There are no significant contract estimates related to the real estate business.~~

~~CONTRACT BALANCES~~

In general, customers are billed and a receivable is recorded as we ship and/or deliver wood products and logs. We generally receive payment shortly after products have been received by our customers. Contract asset and liability balances are immaterial.

~~For real estate sales, the company receives the entire consideration in cash at closing.~~

~~MAJOR PRODUCTS~~ RECOGNITION

A reconciliation of revenue recognized by our major products:


	QUARTER ENDED				QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018		MARCH 2017		MARCH 2019		MARCH 2018
Net sales:
Net sales to unaffiliated customers:
Timberlands Segment
Delivered logs⁽¹⁾:
West
Domestic sales	$	137	$	119	$	101	$	137
Export sales	129		106
Export grade sales					104		129
Subtotal West	266		225		205		266
South	157		148		159		157
North	25		27		29		25
Other	14		20
Subtotal delivered logs sales	462		420		393		448
Stumpage and pay-as-cut timber	15		12		9		15
Recreational and other lease revenue	14		14		15		14
Other⁽²⁾	14		40		14		13
Net sales attributable to Timberlands segment	505		486		431		490
Real Estate & ENR Segment
Real estate	34		37		96		34
Energy and natural resources	17		16		22		17
Net sales attributable to Real Estate & ENR segment	51		53		118		51
Wood Products Segment
Structural lumber	569		478		444		569
Oriented strand board					160		232
Engineered solid section	129		117		116		129
Engineered I-joists	78		73		70		78
Oriented strand board	232		203
Softwood plywood	50		44		44		50
Medium density fiberboard	43		47		38		43
Complementary building products	137		122		137		137
Other	71		70
Other⁽³⁾					85		86
Net sales attributable to Wood Products segment	1,309		1,154		1,094		1,324
Total net sales	$	1,865	$	1,693	$	1,643	$	1,865

(1)

In January 2019, we changed the way we report our Canadian Forestlands operations. We no longer report intersegment sales related to these operations in the Timberlands segment and ~~managed Twin Creeks Venture. Our management agreement~~now record the minimal associated third-party log sales within the Wood Products segment. Refer to Note 2: Business Segments for ~~the Twin Creeks Venture began in April 2016 and terminated in December 2017.~~additional details.


(2)	Other Timberlands sales include ~~sales of~~ seeds and seedlings from our nursery operations and chips.


(3)	Other Wood Products sales include chips, ~~as well as~~other byproducts and third-party residual log sales from our ~~former Uruguayan operations (sold during third quarter 2017). Our former Uruguayan operations included logs, plywood and hardwood lumber harvested or produced. Refer to~~ ~~Note 4: Operations Divested~~ ~~for further information.~~Canadian Forestlands operations.

NOTE 4: ~~OPERATIONS DIVESTED~~

On October 12, 2016, we announced the exploration of strategic alternatives for our Uruguay timberlands and manufacturing operations, which was part of our Timberlands business segment. On June 2, 2017, the Weyerhaeuser Board of Directors approved an equity purchase agreement with a consortium led by BTG Pactual's Timberland Investment Group (TIG), including other long-term investors, pursuant to which the Company agreed to sell, in exchange for $403 million in cash, all of its equity interest in the subsidiaries that collectively owned and operated its Uruguayan timberlands and manufacturing operations.

On September 1, 2017, we completed the sale of our Uruguay timberlands and manufacturing operations for approximately $403 million of cash proceeds. Due to the $147 million impairment of our Uruguayan operations recorded during second quarter 2017, no material gain or loss was recorded as a result of this sale.

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

~~NOTE 5:~~ NET EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES

Our basic and diluted earnings (loss) per share were:

$(0.39) during first quarter 2019 and

$0.35 during first quarter ~~2018 and~~2018.

~~$0.21 during first quarter 2017.~~

Basic earnings (loss) per share is net earnings (loss) 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 (loss) per share is net earnings (loss) divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common ~~shares:~~shares.


	QUARTER ENDED		QUARTER ENDED
SHARES IN THOUSANDS	MARCH 2018	MARCH 2017	MARCH 2019	MARCH 2018
Weighted average common shares outstanding – basic	756,815	750,665	746,603	756,815
Dilutive potential common shares:
Stock options	1,682	2,981	—	1,682
Restricted stock units	569	547	—	569
Performance share units	396	554	—	396
Total effect of outstanding dilutive potential common shares	2,647	4,082	—	2,647
Weighted average common shares outstanding – dilutive	759,462	754,747	746,603	759,462

We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units. Share-based payment awards that are contingently issuable upon the achievement of specified performance or market conditions are included in our diluted earnings per share calculation in the period in which the conditions are satisfied.

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		QUARTER ENDED
SHARES IN THOUSANDS	MARCH 2018	MARCH 2017	MARCH 2019	MARCH 2018
Stock options	1,301	1,432	2,862	1,301
Restricted stock units			383	—
Performance share units	744	568	1,356	744

Share Repurchase Program

On February 7, 2019, our board of directors approved and announced a new share repurchase program (the 2019 Repurchase Program) under which we are authorized to repurchase up to $500 million of outstanding shares. On the same day, the board terminated the remaining repurchase authorization under the share repurchase program approved by the board in November 2015.

During first quarter 2019, we repurchased over 2.3 million common shares for approximately $60 million under the 2019 Repurchase Program. As of March 31, 2019, we had remaining authorization of $440 million for future share repurchases. We did not repurchase shares during first quarter 2018.

All common share purchases under the share repurchase program are expected to be made in open-market transactions. We record share repurchases upon trade date as opposed to the settlement date when cash is disbursed. We record a liability for repurchases that have not yet been settled as of period end. There were no unsettled repurchases as of March 31, 2019 or December 31, 2018.

NOTE 6:5: INVENTORIES

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


DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2018		DECEMBER 31, 2017		MARCH 31, 2019		DECEMBER 31, 2018
LIFO inventories:
Logs	$	19	$	17	$	15	$	11
Lumber, plywood, panels and fiberboard	76		66		83		75
Other products	16		10		12		10
FIFO or moving average cost inventories:
Logs	64		38		58		35
Lumber, plywood, panels, fiberboard and engineered wood products	109		91		105		86
Other products	77		77		86		83
Materials and supplies	84		84		92		89
Total	$	445	$	383	$	451	$	389

LIFO – the last-in, first-out method – applies to major inventory products held at our U.S. locations. The FIFO – the first-in, first-out method – or moving average cost methods apply to the balance of our U.S. raw material and product inventories, all material and supply inventories and all

foreign inventories. If we used FIFO for all LIFO inventories, our stated inventories would have been higher by ~~$70~~$79 million as of March 31, ~~2018,~~2019, and ~~$70 millionas of~~ December 31, ~~2017.~~2018.

NOTE ~~7: SPECIAL-PURPOSE~~6: VARIABLE INTEREST ENTITIES

From 2002 through 2004, we sold certain nonstrategic ~~timberlands in five separate transactions.~~timberlands. As a result of these sales, buyer-sponsored and monetization variable interest entities, or special purpose entities (SPEs), were formed. We are the primary beneficiary and consolidate the assets and liabilities of ~~certain monetization and buyer-sponsored Special-purpose entities (SPEs)~~the SPEs involved in these transactions. ~~We have an equity interest~~

The assets of the buyer-sponsored SPEs are financial investments which consist of bank guarantees. These bank guarantees are in turn backed by bank notes, which are the liabilities of the monetization ~~SPEs, but no ownership interest in the buyer-sponsored~~ SPEs. ~~The long-term notes of our monetization SPEs and~~Interest earned from the financial investments ofwithin the buyer-sponsored SPEs is used to pay interest accrued on the corresponding monetization SPE’s note.

During first quarter 2019, we received $253 million in proceeds related to our buyer-sponsored SPEs ~~include $209 million and $253 million scheduled to mature in~~at maturity.

During fourth quarter 2018, ~~and first quarter 2019, respectively. We have classified the long-term notes scheduled~~we paid $209 million related to ~~mature in fourth quarter 2018 as current~~ liabilities ~~and the~~from our monetized SPEs at maturity.

The financial ~~investments~~investment related to our remaining buyer-sponsored SPE is $362 million, which is scheduled to mature in first quarter ~~2019 as~~2020. We have classified this in current ~~receivables~~assets on our Consolidated Balance Sheet. The note related to our remaining monetization SPE is $302 million and is scheduled to mature in third quarter of 2019. We have classified this in current liabilities on our Consolidated Balance Sheet.

NOTE 8:7: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The components of net periodic benefit ~~costs~~cost are:


	PENSION						PENSION
	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018			MARCH 2017			MARCH 2019			MARCH 2018
Service cost	$	10		$	10		$	8		$	10
Interest cost	60			66			43			60
Expected return on plan assets	(100		)	(102		)	(62		)	(100		)
Amortization of actuarial loss	61			55			30			61
Amortization of prior service cost	1			1			1			1
Settlement charge							455			—
Total net periodic benefit cost - pension	$	32		$	30		$	475		$	32


	OTHER POSTRETIREMENT BENEFITS						OTHER POSTRETIREMENT BENEFITS
	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018			MARCH 2017			MARCH 2019			MARCH 2018
Interest cost	$	2		$	2		$	2		$	2
Amortization of actuarial loss	2			2			2			2
Amortization of prior service credit	(2		)	(2		)	(1		)	(2		)
Total net periodic benefit cost - other postretirement benefits	$	2		$	2		$	3		$	2

For the periods presented, ~~Service~~service cost is included in ~~"Cost~~"Costs of ~~products sold,~~sales," "Selling expenses," and "General and administrative expenses" ~~and the~~. The remaining ~~other items~~components are included in "Non-operating pension and other postretirement benefit costs." Refer to the Consolidated Statement of Operations.

~~FAIR VALUE OF PENSION PLAN ASSETS AND OBLIGATIONS~~Fair Value of Pension Plan Assets and Obligations

WeIn our year-end reporting process, we estimate the fair value of pension plan assets based upon the information available ~~during the year-end reporting process. In some cases,~~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 ~~year-end~~final net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K. ~~We expect~~At that time, we typically also incorporate adjusted census data and record an adjustment to ~~complete~~year-to-date non-operating pension and other postretirement benefit costs to reflect the ~~valuation~~updated information. Historically, these adjustments have not been material.

Actions to Reduce Pension Plan Obligations

As part of our continued efforts to reduce pension plan obligations, as announced in 2018, we transferred approximately $1.5 billion of U.S. qualified pension plan assets and liabilities to an insurance company through the purchase of a group annuity contract in January 2019. In connection with this transaction, we recorded a noncash pretax preliminary settlement charge of $455 million during first quarter 2019, accelerating the recognition of previously unrecognized losses in “Accumulated other comprehensive loss”, that would have otherwise been recorded in subsequent periods. This settlement charge will be adjusted in the second quarter once we finalize the prior year-end fair values of pension plan assets and obligations. Refer to “Fair Value of Pension Plan Assets and Obligations” above.

The settlement triggered a remeasurement of plan assets and liabilities, and accordingly, we have updated the discount rate used to measure our projected benefit obligation for the U.S. qualified pension plan as of January 31, 2019 and to calculate the related net periodic benefit cost for the remainder of 2019 to 4.30 percent from 4.40 percent as of December 31, 2018. All other assumptions remain unchanged.

~~EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS~~

~~In 2018 we expect to:~~

~~be required to contribute approximately $23 million for our Canadian registered plan;~~

~~be required to contribute or make benefit payments for our Canadian nonregistered plans of $4 million;~~

~~make benefit payments of $19 million for our U.S. nonqualified pension plans;~~Expected Funding and

~~make benefit payments of $19 million for our U.S. and Canadian other postretirement plans.~~ Benefit Payments

We do not anticipate being required to make a contribution to our U.S. qualified pension plan for 2019. For all other U.S. and Canadian pension and postretirement plans we expect to contribute or make benefit payments of approximately $40 million in ~~2018.~~2019.

NOTE 9:8: ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

DOLLAR AMOUNTS IN MILLIONS MARCH 31,
2018 DECEMBER 31,
2017
Accrued income taxes $ —
$ 19
Customer rebates and volume discounts 32
48
Deferred income 31
48
Interest 84
111
Pension and other postretirement benefits 40
40
Product remediation accrual(Note 16)
43
98
Taxes – Social Security and real and personal property 27
24
Vacation pay 35
33
Wages, salaries and severance pay 86
150
Other 79
74
Total $ 457
$ 645



DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2019		DECEMBER 31, 2018
Compensation and employee benefit costs	$	143	$	192
Current portion of lease liabilities (Note 14)	28		—
Customer rebates, volume discounts and deferred income	65		99
Interest	66		109
Taxes payable	28		30
Other	81		60
Total	$	411	$	490

NOTE ~~10:~~9: LONG-TERM DEBT AND LINES OF CREDIT

~~During~~In February 2019, we issued $750 million of 4.00 percent notes due in November 2029. The net proceeds after deducting the discount, underwriting fees and issuance costs were $739 million. In March 2019, a portion of the net proceeds were used to redeem our outstanding $500 million 7.38 percent note due in October 2019. A pretax charge of $12 million was included in "Interest expense, net of capitalized interest" in the Consolidated Statement of Operations in first quarter ~~2018, we paid our $62~~2019, for make-whole premiums, unamortized debt issuance costs and unamortized debt discounts in connection with the early extinguishment of the $500 million ~~7.00 percent debenture at maturity.~~note.

~~During~~As of March ~~2017,~~31, 2019 and December 31, 2018, we ~~entered into a new~~had $245 million and $425 million, respectively, of outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility. This credit facility ~~that~~ expires in March 2022. This replaced a $1.0 billion senior unsecured revolving credit facility that was set to expire September 2018. The entire amount is available to Weyerhaeuser Company. Interest on borrowings are at LIBOR plus a spread or at other interest rates mutually agreed upon between the borrower and the lending banks. As of March 31, 2018, there were no borrowings outstanding.

NOTE ~~11:~~10: FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values and carrying values of our long-term debt and line of credit consisted of the following:


	MARCH 31, 2018				DECEMBER 31, 2017				MARCH 31, 2019				DECEMBER 31, 2018
DOLLAR AMOUNTS IN MILLIONS	CARRYING VALUE		FAIR VALUE (LEVEL 2)		CARRYING VALUE		FAIR VALUE (LEVEL 2)		CARRYING VALUE		FAIR VALUE (LEVEL 2)		CARRYING VALUE		FAIR VALUE (LEVEL 2)
Long-term debt (including current maturities)⁽¹⁾:
Long-term debt (including current maturities) and line of credit⁽¹⁾:
Fixed rate	$	5,704	$	6,568	$	5,768	$	6,823	$	5,931	$	6,775	$	5,694	$	6,345
Variable rate	224		225		224		225		470		470		650		650
Total debt	$	5,928	$	6,793	$	5,992	$	7,048	$	6,401	$	7,245	$	6,344	$	6,995

~~(1) Excludes nonrecourse debt held by our Variable Interest Entities (VIEs).~~


(1)	Excludes nonrecourse debt held by our Variable Interest Entities (VIEs).

To estimate the fair value of fixed rate long-term debt we used the ~~following valuation approaches:~~

market approach, –which is based on quoted market prices we received for the same types and issues of our ~~debt; or~~

~~income approach – based on the discounted value of the future cash flows using market yields for the same type and comparable issues of~~ debt.

We believe that our variable rate long-term debt and line of credit instruments have net carrying values that approximate their fair values with only insignificant differences.

The inputs to these valuations 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, mutual fund investments held in grantor trusts, 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 ~~12:~~11: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES

~~LEGAL PROCEEDINGS~~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 Balance Sheet, Consolidated Statement of Operations, or Consolidated Statement of Cash Flows. ~~See~~ ~~Note 18: Income Taxes~~ ~~for a discussion of a tax proceeding involving Plum Creek's 2008 U.S. federal income tax return.~~

~~ENVIRONMENTAL MATTERS~~Environmental Matters

Site Remediation

Under the 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.

We have received notification from the Environmental Protection Agency (the EPA) and have acknowledged that we are a potentially responsible party in a portion of the Kalamazoo River Superfund site in southwest Michigan. Our involvement in the remediation site is based on our former ownership of the Plainwell, Michigan mill located within the remediation site. Several other companies also have been deemed potentially responsible parties as past or present owners or operators of facilities within the site, or as arrangers under CERCLA.

We are currently cooperating with other parties to jointly implement an administrative order issued by the EPA on April 14, 2016, with respect to a portion of the site comprising a stretch of the river approximately 1.7 miles long referred to as the Otsego Township Dam Area. We do not expect to incur material losses related to the implementation of this administrative order.

In 2010, the company, along with others, was named as a defendant by Georgia-Pacific Consumer Products LP, Fort James Corporation and Georgia-Pacific LLC in an action seeking contribution under CERCLA for remediation costs relating to a certain area within the site. On March 29, 2018, the U.S. District Court issued an opinion and order assigning the company responsibility for five percent of approximately $50 million in past costs incurred by the plaintiffs. The remaining ninety-five percent of this pool of past costs incurred was allocated to the plaintiffs and other defendants.

The opinion and order does not establish allocation for future remediation costs, and accordingly, we may incur additional costs in connection with future remediation tasks for other areas of the site. In connection with the opinion and order, we have updated our assessment of the company’s reasonably possible estimated liability associated with the site and have recorded a pretax charge of $28 million in the first quarter as "Other operating costs, net" on the ~~Consolidated Statement of Operations~~.

As of March 31, ~~2018,~~2019, our total accrual for future estimated remediation costs on the active Superfund sites and other sites for which we are potentially responsible was approximately ~~$72~~$62 million. These amounts are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet.

Asset Retirement Obligations

We have obligations associated with the future retirement of tangible long-lived assets consisting primarily of reforestation obligations related to forest management licenses in Canada and obligations to close and cap landfills. As of March 31, ~~2018,~~2019, our accrued balance for these obligations was ~~$34~~$32 million. These obligations are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet. ~~The accruals have not changed materially since the end of 2017.~~

Some of our sites have materials containing asbestos. We have met our current legal obligation to identify and manage these materials. In situations where we cannot reasonably determine when materials containing asbestos might be removed from the sites, we have not recorded an accrual because the fair value of the obligation cannot be reasonably estimated.

~~PRODUCT REMEDIATION~~

In July 2017, the company announced it was implementing a solution to address concerns regarding our TJI® Joists with Flak Jacket® Protection product. The company has determined that an odor in certain newly constructed homes is related to a recent formula change to the Flak Jacket coating that included a formaldehyde-based resin. This issue is isolated to Flak Jacket product manufactured after December 1, 2016, and does not affect any of the company’s other products. We recorded pretax charges of $290 million to accrue for remediation costs in the year-to-date period ended December 31, 2017. We received insurance recoveries of $20 million during the quarter ended March 31, 2018. Refer to ~~Note 16: Charges (Recoveries) for Product Remediation~~ ~~for further information.~~

NOTE ~~13:~~12: ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in amounts included in our accumulated other comprehensive loss by component are:

PENSION OTHER POSTRETIREMENT BENEFITS
DOLLAR AMOUNTS IN MILLIONS Foreign currency translation adjustments Actuarial loss Prior service cost Actuarial loss Prior service credit Unrealized gains on available-for-sale securities Total
Beginning balance as of December 31, 2017 $ 264
$ (1,802 ) $ (8 ) $ (48 ) $ 23
$ 9
$ (1,562 )
Other comprehensive income (loss) before reclassifications (15 ) 10
—
—
—
—
(5 )
Income taxes —
(2 ) —
—
—
—
(2 )
Net other comprehensive income (loss) before reclassifications (15 ) 8
—
—
—
—
(7 )
Amounts reclassified from accumulated other comprehensive loss⁽¹⁾
—
61
1
2
(2 ) —
62
Income taxes —
(16 ) —
(1 ) —
—
(17 )
Net amounts reclassified from accumulated other comprehensive loss to earnings —
45
1
1
(2 ) —
45
Total other comprehensive income (loss) (15 ) 53
1
1
(2 ) —
38
Reclassification of certain tax affects due to tax law changes⁽²⁾
—
(245 ) (1 ) (12 ) 5
—
(253 )
Reclassification of accumulated unrealized gains on available-for-sale securities⁽³⁾
—
—
—
—
—
(9 ) (9 )
Net amounts reclassified from accumulated other comprehensive loss to retained earnings —
(245 ) (1 ) (12 ) 5
(9 ) (262 )
Ending balance as of March 31, 2018 $ 249
$ (1,994 ) $ (8 ) $ (59 ) $ 26
$ —
$ (1,786 )



	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2019			MARCH 2018
PENSION⁽¹⁾
Balance at beginning of period	$	(1,343	)	$	(1,810	)
Other comprehensive income (loss) before reclassifications	(24		)	8
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾	367			46
Total other comprehensive income	343			54
Reclassification of certain effects due to tax law changes⁽³⁾	$	—		$	(246	)
Balance at end of period	$	(1,000	)	$	(2,002	)
OTHER POSTRETIREMENT BENEFITS⁽¹⁾
Balance at beginning of period	$	(19	)	$	(25	)
Amounts reclassified from other comprehensive income (loss) to earnings⁽²⁾	1			(1		)
Total other comprehensive income (loss)	1			(1		)
Reclassification of certain effects due to tax law changes⁽³⁾	$	—		$	(7	)
Balance at end of period	$	(18	)	$	(33	)
TRANSLATION ADJUSTMENTS AND OTHER
Balance at beginning of period	$	210		$	273
Translation adjustments	14			(15		)
Total other comprehensive income (loss)	14			(15		)
Reclassification of accumulated unrealized gains on available-for-sale securities⁽⁴⁾	—			(9		)
Balance at end of period	$	224		$	249
Accumulated other comprehensive loss, end of period	$	(794	)	$	(1,786	)


(1)	Amounts presented are net of tax.


(2)	~~Amortization~~Amounts of actuarial loss and prior service (cost) credit are components of net periodic benefit cost (credit). See Note 8:7: Pension and Other Postretirement Benefit Plans.


~~(2)~~(3)	We reclassified certain tax ~~affects~~effects from tax law changes of $253 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet in accordance with ASU ~~2018-02. SeeNote 1: Basis of Presentation~~.2018-02 which we adopted in 2018.


~~(3)~~(4)	We reclassified accumulated unrealized gains from available-for-sale securities of $9 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet in accordance with ASU ~~2016-01. SeeNote 1: Basis of Presentation~~.2016-01 which we adopted in 2018.

NOTE ~~14:~~13: SHARE-BASED COMPENSATION

Share-based compensation activity ~~in first quarter 2018~~during quarter-to-date 2019 included the following:


SHARES IN THOUSANDS	Granted	Vested	GRANTED	VESTED
Restricted Stock Units (RSUs)	673	576	894	599
Performance Share Units (PSUs)	344	110	421	153

A total of ~~1.5 million~~725 thousand shares of common stock were issued as a result of RSU vestings, PSU vestings and stock option exercises.

~~RESTRICTED STOCK UNITS~~Restricted Stock Units

The weighted average fair value of the RSUs granted in ~~2018~~2019 was ~~$34.14.~~$25.83. The vesting provisions for RSUs granted in ~~2018~~2019 were ~~as follows:~~

~~vest ratably over four years;~~

~~immediately vest in the event of death while employed or disability;~~

~~continue to vest upon retirement at an age of at least 62, but a portion of the grant is forfeited if retirement occurs before the one-year anniversary of the grant;~~

~~continue vesting for one~~consistent with prior year ~~in the event of involuntary termination when the retirement criteria has not been met; and~~

~~will be entirely forfeited upon termination of employment in all other situations including early retirement prior to age 62.~~grants.

~~PERFORMANCE SHARE UNITS~~

Performance Share Units

The weighted average grant date fair value of PSUs granted in ~~2018~~2019 was ~~$35.49.~~

$29.66. The final number of shares granted in ~~2018~~2019 will range from 0 percent to 150 percent of each grant's target, depending upon actual company ~~performance.~~

~~The ultimate number of PSUs earned is based on two measures:~~

~~our relative total shareholder return (TSR) ranking measured~~performance compared against the S&P 500 ~~over a three year period and~~

~~our relative TSR ranking measured against~~as well as an industry peer ~~group of companies over a three~~group. These measures are consistent with those utilized in prior year ~~period.~~

grants. The vesting provisions for PSUs granted in ~~2018~~2019 were ~~as follows:~~consistent with prior year grants.

~~vest 100 percent on the third anniversary of the grant date if the individual remains employed by the company;~~

~~fully vest in the event the participant dies or becomes disabled while employed;~~

~~continue to vest upon retirement at an age of at least 62, but a portion of the grant is forfeited if retirement occurs before the one year anniversary of the grant;~~

~~continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met and the employee has met the second anniversary of the grant date; and~~

~~will be entirely forfeited upon termination of employment in all other situations including early retirement prior to age 62.~~

Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in ~~2018~~2019


	Performance Share Units				PERFORMANCE SHARE UNITS
Performance period	1/1/2018		–	12/31/2020	1/1/2019		–	12/31/2021
Valuation date average stock price⁽¹⁾				$34.14	$25.83
Expected dividends				3.81%	5.25%
Risk-free rate	1.75	%	–	2.34%	2.43	%	–	2.55%
Expected volatility	17.30	%	–	21.52%	22.50	%	–	27.40%


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

~~(1) Calculated as an average~~

NOTE 14:LEASES

We account for leases in accordance with ASC Topic 842, Leases, which we adopted on January 1, 2019, using the modified retrospective transition approach at the beginning of the ~~high~~adoption period through a cumulative-effect adjustment to retained earnings. This adoption resulted in the recognition of right-of-use assets ("ROU assets") of $165 million and ~~low prices~~lease liabilities of $172 million, with the difference of $7 million recorded to "Retained earnings", on ~~grant date.~~our Consolidated Balance Sheet on January 1, 2019.

~~VALUE MANAGEMENT AWARDS~~The majority of our operating leases are related to our office and warehouse space, and the majority of our financing leases are related to vehicles and forklifts. Our leases have remaining lease terms of approximately 1 year to 25 years. Options to renew, extend or terminate a lease are reflected in our lease terms when we believe it is reasonably certain we will exercise that option. When our leases do not provide an implicit or an explicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments.

~~Value Management Awards (VMAs) are relative performance equity incentive awards granted~~Expense related to ~~certain former employees of Plum Creek~~leases for first quarter 2019 was $5 million and assumed by the company in connection with the Plum Creek merger. In accordance with the terms of the merger, all VMAs outstanding on December 31, 2017, vested at “target” level performance of $100 per unit$4 million for operating leases and financing leases, respectively. Cash flows related to operating and financing leases were ~~paid out in full~~immaterial in first quarter 2019.

Supplemental balance sheet information related to leases was as follows:



DOLLAR AMOUNTS IN MILLIONS		MARCH 31, 2019
LEASES	BALANCE SHEET CLASSIFICATION
Assets
Operating lease right-of-use assets	Other assets	$	125
Financing lease right-of-use assets	Property and equipment, less accumulated depreciation	34
Total leased assets		$	159
Liabilities
Current:
Operating lease liabilities	Accrued liabilities	$	14
Financing lease liabilities	Accrued liabilities	14
Noncurrent:
Operating lease liabilities	Other liabilities	113
Financing lease liabilities	Other liabilities	24
Total lease liabilities		$	165

Weighted average remaining lease term as of ~~2018.~~March 31, 2019:



Operating leases	10 years
Financing leases	3 years

Weighted average discount rate as of March 31, 2019:



Operating leases	4.3	%
Financing leases	2.9	%

Maturities of lease liabilities as of March 31, 2019:



DOLLAR AMOUNTS IN MILLIONS	OPERATING LEASES			FINANCING LEASES
2019	$	15		$	12
2020	20			12
2021	16			8
2022	17			5
2023	15			3
Thereafter	76			—
Total lease payments	159			40
Less: interest	(32		)	(2		)
Total present value of lease liabilities	$	127		$	38

~~NOTE 15:CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS~~

QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017
Integration and restructuring charges related to our merger with Plum Creek $ —
$ 12
Charges related to closures and other restructuring activities 1
1
Impairments of long-lived assets 1
—
Total charges for integration and restructuring, closures and asset impairments $ 2
$ 13

~~NOTE 16:CHARGES (RECOVERIES) FOR PRODUCT REMEDIATION~~

In July 2017, we announced we were implementing a solution to address concerns regarding our TJI® Joists with Flak Jacket® Protection product. This issue was isolated to Flak Jacket product manufactured after December 1, 2016, and does not affect any of our other products. We estimate that approximately 2,400 homes were affected.

We recorded pretax charges of $290 million in the year-to-date period ended December 31, 2017, to accrue for expected costs associated with the remediation. During first quarter 2018, we received and recorded insurance recoveries of $20 million. The charges and recoveries are attributable to our Wood Products segment and were recorded in "Charges (recoveries) for product remediation," on the ~~Consolidated Statement of Operations.~~

~~As of March 31, 2018, $247 million has been paid out in relation to our remediation efforts. The remaining accrual of $43 million is recorded in "Accrued liabilities" on the~~ ~~Consolidated Balance Sheet. The company ultimately expects a significant portion of the total expense will be covered by insurance. As of March 31, 2018, $20 million has been received and recorded for insurance recoveries.~~

NOTE ~~17:~~15: OTHER OPERATING COSTS, NET

Other operating costs, net:

includes both recurring and occasional income and expense items and

can fluctuate from year to year.

~~ITEMS INCLUDED IN OTHER OPERATING COSTS, NET~~Items Included in Other Operating Costs, Net


	QUARTER ENDED						QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018			MARCH 2017			MARCH 2019		MARCH 2018
Gain on disposition of nonstrategic assets	$	(2	)	$	(7	)
Foreign exchange losses, net	2			3
Recoveries for product remediation							$	—	$	(20	)
Foreign exchange loss, net							3		2
Litigation expense, net	5			3			25		5
Other, net⁽¹⁾	23			3			8		23
Total other operating costs, net	$	28		$	2		$	36	$	10

~~(1) "Other, net" includes environmental remediation charges. See~~ ~~Note 12: Legal Proceedings, Commitments, and Contingencies~~ ~~for more information.~~

NOTE ~~18:~~16: INCOME TAXES

As a REIT, we generally are not subject to federal corporate ~~level~~ 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 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 ~~the~~our current estimate of the annual effective tax ~~rate.~~rate and is adjusted for discrete taxable events that may occur during the quarter. Our ~~2018~~2019 estimated annual effective tax rate for our TRSs, excluding discrete items, is ~~approximately 24~~20.5 percent, which is ~~higher~~slightly lower than the U.S. ~~domestic~~federal statutory ~~federal~~ tax rate primarily due to state income tax benefits related to unitary state filings, partially offset by a higher ~~foreign~~ tax ~~rates~~rate applicable to ~~foreign~~Canadian earnings and ~~state income taxes.~~

~~TAX LEGISLATION~~

~~On December 22, 2017, H.R. 1, commonly known as~~ the Tax Cuts and Jobs Act (the "Tax Act"), was enacted. The Tax Act contains significant changes to corporate taxation, including the reduction of the corporate tax rate from 35 percent to 21 percent. As a result of the reduction in the corporate tax rate, we revalued our deferred tax assets and liabilities and recorded a tax expense of $74 million during 2017, which reduced our net deferred tax asset. The deemed repatriation on deferred foreign income provisions does not impact our operations due to the fact that we have no foreign undistributed earnings.

~~The~~ impact of ~~the Tax Act provisions effective in 2018 is a reduction to our overall estimated annual effective tax rate primarily due to the reduced corporate tax rate.~~most Canadian earnings no longer being permanently reinvested.

~~During~~In first quarter ~~2018,~~2019, we ~~adopted ASU 2018-02 which allows for the reclassification~~recorded as a discrete item a benefit of ~~certain income tax effects~~$110 million related to the ~~Tax Act between accumulated other comprehensive income and retained earnings.~~tax effects of the noncash pretax settlement charge recorded in connection with our U.S. pension plan. Refer to Note ~~1: Basis of Presentation~~7: Pension and Other Postretirement Benefit Plans for ~~further details on this ASU and the related impact on our financial statements.~~additional details.

~~ONGOING IRS MATTER~~

In connection with the merger with Plum Creek, we acquired equity interests in Southern Diversified Timber, LLC, a timberland joint venture (Timberland Venture) with an affiliate of Campbell Global LLC (TCG Member). On August 31, 2016, the Timberland Venture redeemed TCG Member's interest and became a fully consolidated, wholly-owned subsidiary of Weyerhaeuser.

We received a Notice of Final Partnership Administrative Adjustment (FPAA), dated July 20, 2016, from the Internal Revenue Service (IRS) in regard to Plum Creek's 2008 U.S. federal income tax treatment of the transaction forming the Timberland Venture. The IRS is asserting that the transfer of the timberlands to the Timberland Venture was a taxable transaction to Plum Creek at the time of the transfer rather than a nontaxable capital contribution. We have filed a petition in the U.S. Tax Court and will vigorously contest this adjustment.

In the event that we are unsuccessful in this tax litigation, we could be required to recognize and distribute gain to shareholders of approximately $600 million and pay built-in gains tax of approximately $100 million. We would also be required to pay interest on both of those amounts, which would be substantial. As much as 80 percent of any such gain distribution could be made with our common stock, and shareholders would be subject to tax on the distribution at the applicable capital gains tax rate. Alternatively, we could elect to retain the gain and pay corporate-level tax to minimize interest costs to the company.

Although the outcome of this process cannot be predicted with certainty, we are confident in our position based on U.S. tax law and believe we will be successful in defending it. Accordingly, no reserve has been recorded related to this matter.

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, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report. These forward-looking statements generally are identified by words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” and expressions such as “will be,” “will continue,” “will likely result,” and similar words and expressions. Forward-looking statements are based on our current expectations and assumptions and are not guarantees of future 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 the content of these forward-looking statements. These risks and uncertainties include, but are not limited to:

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

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 ~~and~~ 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~~operational excellence initiatives;

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;

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 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;

changes in accounting principles; and

other risks and uncertainties identified in our ~~2017~~2018 Annual Report on Form 10-K, which are incorporated herein by reference, as well as those set forth from time to time in our other public statements and other reports and filings with the SEC.

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

RESULTS OF OPERATIONS

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

Sales realizations for Timberlands and Wood Products refer to net selling ~~prices – this~~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 to earnings does not include interest expense and income taxes.

In the following discussion, unless otherwise noted, references to increases or decreases in income and expense items, sales realizations, shipment volumes, and net contributions to earnings are based on the quarter ended March 31, 2018, compared to quarter ended March 31, 2017.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

The demand for grade logs within our Timberlands segment is directly affected by production levels of domestic wood-based building products. The strength of the U.S. housing market strongly affects demand in our Wood Products segment, as does repair and remodeling activity. Our Timberlands segment, specifically the Western region, is also affected by export ~~demand.~~demand and trade policy. Japanese housing starts are a key driver of export log demand infor Japan. The demand for pulpwood from our Timberlands segment is directly affected by the production of pulp, paper and OSB as well as the demand for biofuels, such as pellets made from pulpwood.

In first quarter ~~2018,~~2019, housing starts averaged ~~1.32~~approximately 1.2 million total units on a seasonally adjusted annual basis according to the ~~U.S.~~U.S Census Bureau. Single family units accounted for 6771 percent of total housing starts in the first quarter. ~~Multifamily starts rebounded from the decline posted in 2017.~~ Single family starts are 62 percent higher onthan fourth quarter 2018 but 5 percent lower than first quarter 2018. Multifamily units declined 19 percent from the same period in 2018. Severe weather in the first quarter was a ~~year ago basis for~~contributing factor to the ~~quarter.~~decline in starts compared with first quarter 2018. We continue to expect improving U.S. housing starts and anticipate a level ~~of approximately 1.30~~slightly below 1.3 million units in ~~2018,~~2019 which would be an 8approximately 4 percent ~~increase compared to 2017.~~gain over 2018. We attribute this continued improvement primarily to ongoing employment growth, ~~improving~~strong consumer confidence and ~~favorable~~ mortgage rates, which have declined since peaking in late 2018 and remain ~~near~~affordable on a historic ~~lows.~~basis.

According to the Joint Center for Housing of Harvard University, the Leading Indicator of Remodeling Activity ~~increased by 6.4~~(LIRA) projects that the year-over-year increase in residential remodeling expenditures reached 7 percent in ~~2017~~2018 and is expected to average ~~7.5~~6.5 percent ~~year over year for 2018.~~in 2019.

In U.S. wood product markets, ~~advanced in the~~ first quarter 2019 prices made a soft rebound from fourth quarter 2018. The price of ~~2018, consistent with growth~~the framing lumber composite averaged $355/MBF in ~~homebuilding and remodeling segments, as described above.~~first quarter, while the fourth quarter average was $347/MBF. According to Forest Economic Advisors, LLC, ~~North American~~U.S. lumber consumption is expected to grow at a 43.5 percent rate in 2019, however, due to declines forecast in off-shore export volumes and increases in off-shore imports, the increase in overall demand on North American mills is expected to rise by 2.5 percent over 2018. ~~Consistent with this expectation, demand for logs increased~~Log markets in the west were consistent with wood products ~~production within our Western region. This coupled with higher~~manufacturing, and weaker market prices infor western logs continued into the first quarter ~~drove higher realizations.~~2019 from the second half of 2018. In the ~~South, log supplies kept pace with~~south, wet weather adversely affected logging operations and sawlog prices increased ~~demand, leaving prices flat to slightly increased from~~by 2 percent over fourth quarter ~~2017.~~2018.

Log inventories in Chinese ports ~~increased~~decreased 2.6 percent in ~~the latter part of first quarter~~March 2019 compared to February 2019 as reported by International Wood Markets China Bulletin. ~~The increased inventory level is attributed~~While the decline in overall volume was slight, there was a greater decline in North American Hemlock and Douglas fir volumes. These species were 7.8 percent lower in March 2019 compared to ~~a slow start~~February 2019 which has positive implications for demand as suppliers will need to re-build depleted inventories. Exchange rates also affect our export business to China. A weaker yuan relative to the ~~construction season due~~U.S. dollar reduces the competitiveness of U.S. logs relative to those imported from other countries whose currencies have not appreciated in a similar manner. First quarter of 2019 the yuan continued to slightly decrease relative to the ~~later occurrence~~U.S. dollar, which reduces the competitiveness of ~~the Spring Festival and is expected~~our export logs to ~~normalize over upcoming quarters.~~ China.

In Japan, ~~wooden~~ housing starts for January and February 2019 are ~~down 1.7~~up 2.7 percent from the same period ~~last year.~~in 2018 and the key Post and Beam segment was 2.8 percent higher compared to 2018.

We expect demand from China and Japan in ~~2018~~2019 to be similar to ~~demand experienced in 2017.~~2018 levels.

Our Real Estate ~~Energy and Natural Resources~~& ENR segment is affected by the health of the U.S. economy and especially the U.S. housing sector of the economy. According to the Realtors Land Institute (RLI) of the National Association of Realtors, the dollar volume of rural properties sold, including timber, ~~sold~~grew 2 percent in ~~2017 grew 4 percent over 2016 sales while~~2018, and per acre prices were also up 32 percent on average. Additionally, RLI ~~is optimistic that~~expects these trends ~~will~~to continue with prices and volumes of land transactions forecast to rise 3 percent in ~~2018.~~2019.

CONSOLIDATED RESULTS

How We Did First Quarter ~~2018~~2019


	QUARTER ENDED				AMOUNT OF CHANGE		QUARTER ENDED					AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	MARCH 2018		MARCH 2017		2018 VS. 2017		MARCH 2019			MARCH 2018		2019 VS. 2018
Net sales	$	1,865	$	1,693	$	172	$	1,643		$	1,865	$	(222	)
Costs of products sold	1,348		1,272		76
Costs of sales							1,322			1,348		(26		)
Operating income	404		293		111		174			404		(230		)
Net earnings	269		157		112
Earnings per share, basic and diluted	$	0.35	$	0.21	$	0.14
Net earnings (loss)							(289		)	269		(558		)
Earnings (loss) per share, basic and diluted							$	(0.39	)	$	0.35	$	(0.74	)

Comparing First Quarter ~~2018~~2019 with First Quarter ~~2017~~2018

Net sales

Net sales ~~increased $172~~decreased $222 million – 1012 percent – primarily ~~attributable to the following factors:~~

due to:

Wood Products sales to unaffiliated customers ~~increased $155~~decreased $230 million, ~~– 13 percent –~~ primarily ~~due~~attributable to ~~increased~~decreased sales realizations as well as decreased sales volumes across the majority of our product ~~lines.~~lines and

Timberlands sales to unaffiliated customers ~~increased $19~~decreased $59 million, ~~– 4 percent –~~primarily attributable to decreased Western log sales realizations as well as sales volumes.

These decreases were offset by a $67 million increase in our Real Estate & ENR segment, which was primarily attributable to increased ~~Western log sales realizations, partially offset by decreased international operations revenue from the sale of our Uruguayan operations in third quarter 2017.~~

~~Costs of products~~acres sold as well as increased average price per acre.

Costs of ~~products sold increased $76~~sales

Costs of sales decreased $26 million – ~~6 percent – primarily attributable to the following:~~

~~Wood Products segment costs of products sold increased $79 million – 9~~2 percent – primarily due to ~~increased~~decreased sales volumes within our Wood Products and Timberlands segments, as well as decreased log sourcing costs within our Timberlands segment, partially offset by an increase in acres sold within our Real Estate & ENR segment. Refer to additional analysis of fluctuations within our Timberlands, Real Estate, Energy and ~~fiber~~Natural ResourcesandWood Productsdiscussions below.

Operating income

Operating income decreased $230 million – 57 percent – primarily due to:

a $196 million decrease in consolidated gross margin, as described above, and

a $26 million increase in other operating costs, ~~across all product lines~~primarily attributable to a $20 million legal charge recorded in ~~the West and Canada;~~first quarter 2019.

Net earnings

Net earnings decreased $558 million – 207 percent. This was primarily due to:


•	a $446 million increase in non-operating pension and other postretirement benefit costs (refer to Note 7: Pension and Other Postretirement Benefit Plans in the Notes to Consolidated Financial Statements),

a $230 million decrease in operating income, as described above, and

•

~~Unallocated costs of product sold increased $18 million – 14 percent – primarily due to~~ a ~~$15~~$14 million increase in ~~costs for elimination~~interest expense, net of ~~intersegment profit in inventory and LIFO. Refer~~capitalized interest, primarily attributable to a $12 million charge related to the early extinguishment of debt (refer to ~~Unallocated Items~~Interest Expense ~~for further details.~~).

~~Increased costs of products sold was~~These changes were partially offset by a ~~$26~~$134 million ~~increase – 13 percent –~~change in ~~Timberland intersegment sales which are eliminated upon consolidation. Refer to~~ ~~Timberlands~~ ~~for further details.~~

~~Operating income~~

~~Operating~~ income ~~increased $111~~tax, resulting from a $104 million ~~– 38 percent – primarily attributable to:~~

~~increased consolidated gross margin of $96 million as described above;~~

~~increased product remediation insurance recoveries of $20 million received~~income tax benefit in first quarter ~~of 2018; and~~

~~decreased general and administrative expenses and integration costs related~~2019 compared to ~~the merger of Plum Creek for $20 million.~~

~~Increased operating~~a $30 million income ~~was partially offset by $28 million increased environmental charges~~tax charge in first quarter ~~2018. Refer~~2018 (refer to ~~Note 17: Other Operating Costs, Net~~Income Taxes~~, "Other, net" for further details.~~).

~~Net earnings~~

~~Our Net earnings increased $112 million – 71 percent. This is attributable to increased operating income, as described above.~~

TIMBERLANDS

How We Did First Quarter ~~2018~~2019


	QUARTER ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018		MARCH 2017		2018 VS. 2017			MARCH 2019		MARCH 2018		2019 VS. 2018
Net sales to unaffiliated customers:
Delivered logs⁽¹⁾:
Delivered logs:
West	$	266	$	225	$	41		$	205	$	266	$	(61	)
South	157		148		9			159		157		2
North	25		27		(2		)	29		25		4
Other	14		20		(6		)
Subtotal delivered logs sales	462		420		42			393		448		(55		)
Stumpage and pay-as-cut timber	15		12		3			9		15		(6		)
Uruguay operations⁽²⁾	—		19		(19		)
Recreational and other lease revenue	14		14		—			15		14		1
Other	14		21		(7		)
Other⁽¹⁾								14		13		1
Subtotal net sales to unaffiliated customers	505		486		19			431		490		(59		)
Intersegment sales:
United States	142		130		12
Other	86		72		14
Subtotal intersegment sales	228		202		26
Intersegment sales								125		142		(17		)
Total sales	$	733	$	688	$	45		$	556	$	632	$	(76	)
Costs of products sold	$	526	$	519	$	7
Costs of sales								$	413	$	422	$	(9	)
Operating income and Net contribution to earnings	$	189	$	148	$	41		$	120	$	189	$	(69	)

(1)

~~The West region~~Other Timberlands sales includes ~~Washington~~seeds and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includesseedlings from our ~~Canadian~~nursery operations and ~~managed Twin Creeks Venture. Our management agreement for the Twin Creeks Venture began in April 2016 and was terminated in December 2017.~~chips.

~~(2)~~

~~Includes logs, plywood and hardwood lumber harvested or produced by our former international operations in Uruguay. Our Uruguayan operations were divested on September 1, 2017. Refer to~~ ~~Note 4: Operations Divested~~ ~~for further information.~~

In January 2019, we changed the way we report our Canadian Forestlands operations, which are primarily operated to supply Weyerhaeuser’s Canadian Wood Products manufacturing facilities. As a result, we no longer report related intersegment sales in the Timberlands segment and we will now record the minimal associated third-party log sales in the Wood Products segment. These collective transactions did not contribute any earnings to the Timberlands segment. We have conformed prior period presentation with the current period.

Comparing First Quarter ~~2018~~2019 with First Quarter ~~2017~~2018

Net sales to unaffiliated customers

Net sales to unaffiliated customers ~~increased $19~~decreased $59 million – 412 percent – primarily due to a ~~$41~~$61 million ~~increase~~decrease in Western log sales, attributable to a ~~26% increase in Western log prices, partially offset by a 6%~~19 percent decrease in ~~Western delivered logs~~log sales ~~volumes.~~

~~This increase was partially offset by~~realizations, as well as a ~~$19 million~~5 percent decrease in sales ~~from our Uruguay operations, which were divested in third quarter 2017.~~volumes.

Intersegment sales

Intersegment sales ~~increased $26~~decreased $17 million – 1312 percent – primarily due to ~~increases~~a decrease in Western log ~~prices, consistent with third party~~ sales realizations, as discussed above.

Costs of ~~products sold~~sales

Costs of ~~products sold increased $7~~sales decreased $9 million – 12 percent – primarily due to ~~increased external~~decreased log sourcing costs, to meet increased demand for export sales. The increase was partially offset by a decrease in our international cost of products sold due to the divestiture of our Uruguayan operations in third quarter 2017.as well as lower Western sales volumes, as discussed above.

Operating income and Net contribution to earnings

Operating income and ~~Net~~net contribution to earnings ~~increased $41~~decreased $69 million – 2837 percent – primarily ~~attributable~~due to ~~increased~~the change in gross margin, as discussed above.

~~THIRD-PARTY LOG SALES VOLUMES AND FEE HARVEST VOLUMES~~Third-Party Log Sales Volumes and Fee Harvest Volumes


	QUARTER ENDED		AMOUNT OF CHANGE		QUARTER ENDED		AMOUNT OF CHANGE
VOLUMES IN THOUSANDS⁽²⁾	MARCH 2018	MARCH 2017	2018 VS. 2017		MARCH 2019	MARCH 2018	2019 VS. 2018
Third party log sales – tons:
West	2,019	2,157	(138	)
West⁽¹⁾					1,920	2,019	(99	)
South	4,510	4,293	217		4,499	4,510	(11	)
North	404	454	(50	)	494	404	90
Other	317	510	(193	)
Total⁽³⁾	7,250	7,414	(164	)
Total					6,913	6,933	(20	)
Fee harvest volumes – tons:
West	2,443	2,657	(214	)
West⁽¹⁾					2,385	2,443	(58	)
South	6,751	6,373	378		6,492	6,751	(259	)
North	549	622	(73	)	627	549	78
Other	—	371	(371	)
Total ⁽³⁾	9,743	10,023	(280	)
Total					9,504	9,743	(239	)

(1)

The West region includes Washington and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks Venture. Our management agreement for the Twin Creeks Venture began in April 2016 and terminated in December 2017.


~~(2)~~	Western logs are primarily transacted in thousand board feet (MBF) but are converted to ton equivalents for external reporting purposes.


~~(3)~~	~~Total volumes exclude third party log sales and fee harvest volumes from our former Uruguayan operations, which we sold during third quarter 2017. Refer to~~ ~~Note 4: Operations Divestedfor further information regarding this sale.~~

REAL ESTATE, ENERGY AND NATURAL RESOURCES

How We Did First Quarter ~~2018~~2019


	QUARTER ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018		MARCH 2017		2018 VS. 2017			MARCH 2019		MARCH 2018		2019 VS. 2018
Net sales:
Real estate	$	34	$	37	$	(3	)	$	96	$	34	$	62
Energy and natural resources	17		16		1			22		17		5
Total	$	51	$	53	$	(2	)	$	118	$	51	$	67
Costs of products sold	$	19	$	20	$	(1	)
Operating income and net contribution to earnings	$	25	$	26	$	(1	)
Costs of sales								$	56	$	19	$	37
Net contribution to earnings								$	55	$	25	$	30

The timing 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 to obtain entitlements, the ability of buyers to obtain financing, the number of competing properties listed for sale, the seasonal nature of sales (particularly in the northern states), 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 First Quarter ~~2018~~2019 with First Quarter ~~2017~~2018

Net sales

Net sales ~~decreased $2~~increased $67 million – 4131 percent – primarily ~~attributable~~due to ~~a decrease in~~increased acres sold as well as increased average price ~~realized~~ per ~~acre due to mix of properties sold offset by an increase in acres sold.~~acre.

Costs of ~~products sold~~sales

Costs of ~~products sold decreased $1~~sales increased $37 million – 5195 percent – primarily ~~attributable~~due to ~~mix of properties~~increased acres sold, ~~in first quarter 2018 as compared to first quarter 2017,~~ as discussed above.

Net contribution to earnings

Net contribution to earnings ~~for the quarter decreased $1~~increased $30 million – 4120 percent – primarily ~~attributable~~due to ~~decreased~~the increase in gross margin, as discussed above.

REAL ESTATE SALES STATISTICS


	QUARTER ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
	MARCH 2018		MARCH 2017		2018 VS. 2017			MARCH 2019		MARCH 2018		2019 VS. 2018
Acres sold	21,771		13,257		8,514			38,834		21,771		17,063
Average price per acre	$	1,539	$	2,403	$	(864	)	$	2,424	$	1,539	$	885

WOOD PRODUCTS

How We Did First Quarter ~~2018~~2019


	QUARTER ENDED				AMOUNT OF CHANGE			QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018		MARCH 2017		2018 VS. 2017			MARCH 2019		MARCH 2018		2019 VS. 2018
Net sales:
Structural lumber	$	569	$	478	$	91		$	444	$	569	$	(125	)
Oriented strand board								160		232		(72		)
Engineered solid section	129		117		12			116		129		(13		)
Engineered I-joists	78		73		5			70		78		(8		)
Oriented strand board	232		203		29
Softwood plywood	50		44		6			44		50		(6		)
Medium density fiberboard	43		47		(4		)	38		43		(5		)
Other products produced(1)	71		70		1			85		86		(1		)
Complementary building products	137		122		15			137		137		—
Total	$	1,309	$	1,154	$	155		$	1,094	$	1,324	$	(230	)
Costs of products sold	$	1,005	$	926	$	79
Costs of sales								$	967	$	1,020	$	(53	)
Operating income and Net contribution to earnings	$	270	$	172	$	98		$	69	$	270	$	(201	)

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

Comparing First Quarter ~~2018~~2019 with First Quarter ~~2017~~2018

Net sales

Net sales ~~increased $155~~decreased $230 million – 1317 percent – primarily due to:

a ~~$91~~$125 million ~~increase~~decrease in structural lumber sales attributable to a ~~21%~~21 percent ~~increase~~decrease in ~~average sales~~ realizations ~~partially offset by~~as well as a 2%1 percent decrease in sales volumes;

a ~~$29~~$72 million ~~increase~~decrease in oriented strand board sales attributable to a ~~19% increase~~29 percent decrease in ~~average sales~~ realizations ~~partially offset by~~as well as a 4%3 percent decrease in sales volumes;

a ~~$15~~$13 million increase in complementary building product sales. These are other products sold by our distribution business and correlated to the general market demand, which was higher in first quarter 2018 as compared to first quarter 2017;

~~a $12 million increase~~decrease in engineered solid ~~section~~selection sales ~~primarily~~ attributable to ~~an 11%~~a 16 percent decrease in sales volumes, partially offset by a 6 percent increase in ~~average~~realizations;

an $8 million decrease in engineered I-joist sales ~~realizations;~~due to a 16 percent decrease in sales volumes, partially offset by an 8 percent increase in realizations and

a $6 million ~~increase~~decrease in softwood plywood sales ~~attributable~~primarily due to a ~~16% increase in average sales realizations, partially offset by a 3%~~13 percent decrease in ~~sales volumes.~~realizations.

Costs of ~~products sold~~sales

Costs of ~~products sold increased $79~~sales decreased $53 million – 95 percent – primarily due to ~~increased log and fiber costs~~lower sales volumes across all product lines, ~~in the West and Canada.~~as discussed above.

Operating income and Net contribution to earnings

Operating income and ~~Net~~net contribution to earnings ~~increased $98~~decreased $201 million – 5774 percent – primarily ~~attributable to:~~

~~increased~~due to the change in gross margin, as discussed ~~above; and~~above.


•	~~increased product remediation recoveries of $20 million in first quarter 2018 compared to first quarter 2017 (please see~~ Third-Party Sales Volumes~~Note 16: Charges (recoveries) for product remediation~~ ~~for further details).~~

~~THIRD-PARTY SALES VOLUMES~~


	QUARTER ENDED		AMOUNT OF CHANGE		QUARTER ENDED		AMOUNT OF CHANGE
VOLUMES IN MILLIONS⁽¹⁾	MARCH 2018	MARCH 2017	2018 VS. 2017		MARCH 2019	MARCH 2018	2019 VS. 2018
Structural lumber – board feet	1,140	1,158	(18	)	1,133	1,140	(7	)
Oriented strand board – square feet (3/8”)					717	739	(22	)
Engineered solid section – cubic feet	6.2	6.2	—		5.2	6.2	(1.0	)
Engineered I-joists – lineal feet	49	49	—		41	49	(8	)
Oriented strand board – square feet (3/8”)	739	769	(30	)
Softwood plywood – square feet (3/8”)	115	118	(3	)	115	115	—
Medium density fiberboard – square feet (3/4”)	51	59	(8	)	44	51	(7	)


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

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		QUARTER ENDED		AMOUNT OF CHANGE
VOLUMES IN MILLIONS	MARCH 2018	MARCH 2017	2018 VS. 2017		MARCH 2019	MARCH 2018	2019 VS. 2018
Structural lumber – board feet:
Production					1,145	1,160	(15	)
Outside purchase					55	47	8
Total					1,200	1,207	(7	)
Oriented strand board – square feet (3/8”):
Production	1,160	1,152	8		729	734	(5	)
Outside purchase	47	49	(2	)	81	100	(19	)
Total	1,207	1,201	6		810	834	(24	)
Engineered solid section – cubic feet:
Production	6.3	6.3	—		5.9	6.3	(0.4	)
Outside purchase	1.0	—	1.0		0.1	1.0	(0.9	)
Total	7.3	6.3	1.0		6.0	7.3	(1.3	)
Engineered I-joists – lineal feet:
Production	56	50	6		44	56	(12	)
Outside purchase	3	2	1		2	3	(1	)
Total	59	52	7		46	59	(13	)
Oriented strand board – square feet (3/8”):
Production	734	758	(24	)
Outside purchase	100	98	2
Total	834	856	(22	)
Softwood plywood – square feet (3/8”):
Production	97	97	—		98	97	1
Outside purchase	20	19	1		16	20	(4	)
Total	117	116	1		114	117	(3	)
Medium density fiberboard – square feet (3/4"):	Medium density fiberboard – square feet (3/4"):				Medium density fiberboard – square feet (3/4"):
Production	50	56	(6	)	45	50	(5	)
Outside purchase	—	—	—		—	—	—
Total	50	56	(6	)	45	50	(5	)

UNALLOCATED ITEMS

Unallocated ~~Items~~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 postretirement costs, ~~foreign exchange transaction gains and losses, and the~~ elimination of intersegment profit in inventory and ~~LIFO.~~LIFO, foreign exchange transaction gains and losses, interest income and other as well as legacy obligations.

~~NET CONTRIBUTION TO EARNINGS~~Net Contribution to Earnings – ~~UNALLOCATED ITEMS~~Unallocated Items


	QUARTER ENDED						AMOUNT OF CHANGE			QUARTER ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018			MARCH 2017			2018 VS. 2017			MARCH 2019			MARCH 2018			2019 VS. 2018
Unallocated corporate function and variable compensation expense	$	(18	)	$	(19	)	$	1		$	(19	)	$	(18	)	$	(1	)
Liability classified share-based compensation	—			(6		)	6			(4		)	—			(4		)
Foreign exchange losses	(2		)	(3		)	1
Foreign exchange loss										(3		)	(2		)	(1		)
Elimination of intersegment profit in inventory and LIFO	(21		)	(6		)	(15		)	(5		)	(21		)	16
Charges for integration and restructuring, closures and asset impairments	—			(12		)	12
Other	(39		)	(7		)	(32		)	(39		)	(39		)	—
Operating income (loss)	(80		)	(53		)	(27		)	(70		)	(80		)	10
Non-operating pension and other postretirement benefit costs	(24		)	(22		)	(2		)	(470		)	(24		)	(446		)
Interest income and other	12			9			3			10			12			(2		)
Net contribution to earnings	$	(92	)	$	(66	)	$	(26	)
Net contribution to earnings (loss)										$	(530	)	$	(92	)	$	(438	)

Comparing First Quarter ~~2018~~2019 with First Quarter ~~2017~~2018

~~Changes in~~ Unallocated Items ~~were~~net contribution to earnings decreased $438 million – 476 percent – primarily ~~related to:~~


•	~~a $28 million increase in charges for "Other," due to environmental remediation charges recorded in first quarter 2018 (refer to~~ ~~Note 12: Legal Proceedings, Commitments and Contingencies~~);

~~a $15 million increase in charges for "Elimination of intersegment profit in inventory and LIFO"~~ due to an increase in ~~intercompany lumber~~non-operating pension and ~~log inventories from~~other postretirement benefit costs, which is primarily attributable to the $455 million noncash pretax pension settlement charge recorded during first quarter ~~2017~~2019. The settlement charge is related to ~~first quarter 2018;~~the transfer of pension assets and

•

~~a $12 million decrease in charges related to our merger with Plum Creek compared to first quarter 2017 (refer to~~ ~~Note 15: Charges for Integration and Restructuring, Closures, and Asset Impairments~~ liabilities through the purchase of a group annuity contract (refer to Note 7: Pension and Other Postretirement Benefit Plans in the Notes to Consolidated Financial Statements for further details).

INTEREST EXPENSE

Our interest expense, net of capitalized interest incurred, was:

$107 million for first quarter 2019 and

$93 million for ~~the~~first quarter 2018.

Interest expense increased by $14 million compared to first quarter 2018 ~~and~~

~~$99 million for the first quarter 2017.~~

~~Interest expense decreased by $6 million~~ primarily due to a $12 million charge related to the ~~decreased average outstanding~~early extinguishment of debt in first quarter ~~2018 compared~~2019 (refer to ~~first quarter 2017.~~Note 9: Long-Term Debt and Lines of Credit in the Notes to Consolidated Financial Statements for further details).

INCOME TAXES

Our provision for income taxes was:

~~$30~~a $104 million benefit for ~~the~~ first quarter ~~2018~~2019 and

~~$24~~a $30 million expense for ~~the~~ first quarter ~~2017.~~

2018.

Our provision for income taxes is primarily driven by earnings (losses) generated by our TRSs. During first quarter 2019, a noncash pretax settlement charge of $455 million was recorded related to the transfer of pension assets and liabilities through the purchase of a group annuity contract. As a result of this charge, we recognized a tax provision benefit of approximately $110 million in first quarter 2019. Overall performance results for our business segments can be found in Consolidated Results.

The Tax Act, enacted in December 2017, reduced the U.S. corporate tax rate from 35 percent to 21 percent. In first quarter 2018, our provision for income taxes was higher compared to first quarter 2017 due to increased earnings in our TRS. The tax impact of the increased earnings more than offset the benefit of the reduced U.S. corporate tax rate.

Refer to Note ~~18:~~16: Income Taxes and Note 7: Pension and Other Postretirement Benefit Plans in the Notes to Consolidated Financial Statements for additional information.

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 lenders and maintain access to all major financial markets.

CASH FROM OPERATIONS

Consolidated net cash ~~from~~used in or provided by our operations was:

$14 million net cash used in operations during first quarter 2019 and

$136 million ~~for~~net cash provided by operations during first quarter ~~2018; and~~

~~$35 million for first quarter 2017.~~2018.

~~Comparing first quarter 2018 with first quarter 2017~~

Net cash from operations ~~increased $101~~decreased $150 million, primarily due to:

~~increased~~a $33 million increase in cash paid for income taxes, primarily related to a $21 million cash payment for the resolution of an IRS matter, as accrued for during fourth quarter 2018;


•	a $22 million increase in cash paid for interest, net of capitalized amounts, primarily related to the early payment of accrued interest on our $500 million 7.38 percent note (refer to Note 9: Long-Term Debt and Lines of Credit in the Notes to Consolidated Financial Statements for further details);

cash used in working capital changes and

decreased cash flows generated from our business ~~segments, excluding working capital changes, of $103 million;~~

~~decreased cash paid for income taxes of $42 million;~~

~~product remediation insurance recoveries received of $20 million in first quarter 2018;~~

~~decreased working capital used for accrued wages, salaries, and severance pay of $17 million; and~~

~~decreased cash paid for interest of $15 million; and~~

~~These increases were partially offset by a net increase in working capital from our business segments of $126 million.~~segments.

CASH FROM (USED IN) INVESTING ACTIVITIES

Consolidated net cash used in or provided by investing activities was:

$76212 million ~~for~~cash provided by investing activities during first quarter ~~2018;~~2019 and

$6876 million ~~for first quarter 2017.~~

~~Comparing first quarter 2018 with first quarter 2017~~

~~Net~~ cash used in investing activities during first quarter 2018.

Net cash from investing activities increased $8$288 million, primarily due to:

$253 million cash proceeds received related to our buyer-sponsored SPEs during first quarter 2019 and

a $6$20 million decrease in ~~proceeds from sale of non-strategic assets;~~cash outflow for property and

~~a $6 million increase in cash used for~~ equipment capital expenditures.

Summary of Capital Spending by Business Segment


	QUARTER ENDED				QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018		MARCH 2017		MARCH 2019		MARCH 2018
Timberlands	$	28	$	30	$	26	$	28
Real Estate & ENR	—		—		—		—
Wood Products	52		44		30		52
Unallocated Items	1		1		3		1
Total	$	81	$	75	$	59	$	81

We expect our net capital expenditures for ~~2018 to~~2019 will be ~~$420 million, which is comparable to 2017 capital spending.~~approximately $400 million. The amount we spend on capital expenditures could change.

CASH ~~FROM~~USED IN FINANCING ACTIVITIES

Consolidated net cash used in financing activities was:

$273 million in first quarter 2019 and

$286 million ~~for~~in first quarter ~~2018 and~~

~~$188 million for first quarter 2017.~~

~~Comparing first quarter 2018 with first quarter 2017~~2018.

Net cash used in financing activities ~~increased $98~~decreased $13 million primarily due to $739 million cash proceeds received from the ~~following:~~issuance of long-term debt during first quarter 2019, with no similar activity in first quarter 2018.

anThis increased cash inflow was partially offset by:

a $450 million increase ~~of $62 million~~ in cash used for payments of long-term ~~debt;~~debt (including the $12 million first quarter 2019 early extinguishment charge);

a $180 million net cash outflow related to borrowings on our line of credit, with no similar activity in first quarter 2018;

a $60 million cash outflow for the repurchase of common shares, with no similar activity in first quarter 2018;

a $23 million decrease in cash received from exercise of stock options and

a ~~decrease~~$12 million increase in cash used for payment of ~~$30 million in proceeds from exercises of stock options.~~dividends on common shares.

~~Lines~~Line of Credit

~~During~~As of March ~~2017,~~31, 2019 and December 31, 2018, we ~~entered into a new~~had $245 million and $425 million, respectively, of outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility. This credit facility ~~that~~ expires in March 2022. ~~This replaces a $1 billion senior unsecured revolving credit facility that was set to expire September 2018. As of March 31, 2018, there were no borrowings outstanding.~~

Refer to Note ~~10:~~9: Long-Term Debt and Lines of Credit in the Notes to Consolidated Financial Statements for further information.

~~Long-term~~Long-Term Debt

In February 2019, we issued $750 million of 4.00 percent notes due in November 2029. The net proceeds after deducting the discount, underwriting fees, and issuance costs were $739 million. In March 2019, a portion of the net proceeds were used to redeem our outstanding $500 million 7.38 percent note due in October 2019. A pretax charge of $12 million was included in "Interest expense, net of capitalized interest" in the Consolidated Statement of Operations in first quarter 2019, for make-whole premiums, unamortized debt issuance costs and unamortized debt discounts in connection with the early extinguishment of debt.

During first quarter 2018, we paid our $62 million 7.00 percent debenture at maturity.

Refer to Note ~~10:~~9: Long-Term Debt and Lines of Credit in the Notes to Consolidated Financial Statements for further information.

Debt Covenants

As of March 31, ~~2018,~~2019, Weyerhaeuser Company was in compliance with its debt covenants. There have been no significant changes during first quarter ~~2018~~2019 to the debt covenants presented in our ~~2017~~2018 Annual Report on Form 10-K for our existing long-term debt instruments.

Option Exercises

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

$2 million in first quarter 2019 and

$25 million in first quarter ~~2018 and~~

~~$55 million in first quarter 2017.~~2018.

Our average stock price was ~~$35.29~~$25.19 and ~~$32.53~~$35.29 for first quarter ~~2018~~2019 and first quarter ~~2017,~~2018, respectively.

~~Paying Dividends and Repurchasing Shares~~Dividend Payments

We paid cash dividends on common shares of:

$254 million in first quarter 2019 and

$242 million in first quarter ~~2018 and~~

~~$233 million in first quarter 2017.~~2018.

The increase in dividends paid is primarily due to an increase in our quarterly dividend from ~~31 cents per share to~~ 32 cents per share in ~~November 2017.~~

~~The 2016 Share Repurchase Authorization was approved in November 2015 by our Board of Directors and authorized management to repurchase up to $2.5 billion of outstanding shares. During~~ first quarter 2018 weto 34 cents per share in first quarter 2019.

Share Repurchases

We repurchased over 2.3 million shares for approximately $60 million (including transaction fees) during first quarter 2019, under the 2019 Repurchase Program. We did not repurchase ~~any shares. As of March 31, 2018, we had remaining authorization of $500 million for future share repurchases.~~

If a repurchase were to occur, we would record share repurchases upon the trade date as opposed to the settlement date when cash is disbursed. We would record a liability for repurchases that had not yet been settled.shares during first quarter 2018. There were no unsettled repurchases as of March 31, 2019 or December 31, 2018. Refer to Note 4: Net Earnings (Loss) Per Share and Share Repurchases in the Notes to Consolidated Financial Statements for further information.

PERFORMANCE MEASURES

We use Adjusted Earnings before Interest, Taxes, Depreciation, Depletion and Amortization (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, ~~unallocated pension service costs~~ and special items. ~~Adjusted EBITDA excludes results from joint ventures.~~

~~ADJUSTED~~Adjusted EBITDA ~~BY SEGMENT~~by Segment


	QUARTER ENDED						AMOUNT OF CHANGE			QUARTER ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 2018			MARCH 2017			2018 VS. 2017			MARCH 2019			MARCH 2018			2019 VS. 2018
Adjusted EBITDA by Segment:
Timberlands	$	268		$	242		$	26		$	193		$	268		$	(75	)
Real Estate & ENR	41			43			(2		)	106			41			65
Wood Products	286			207			79			115			286			(171		)
	595			492			103			414			595			(181		)
Unallocated Items	(51		)	(38		)	(13		)	(49		)	(51		)	2
Adjusted EBITDA	$	544		$	454		$	90		$	365		$	544		$	(179	)

We reconcile Adjusted EBITDA by segment to "Net earnings" for the consolidated company and to "Operating income" for the business segments, as those are the most directly comparable U.S. GAAP measures for each. The table below reconciles Adjusted EBITDA for the quarter ended March 31, ~~2018:~~2019:


DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products			Unallocated Items			Total			Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings											$	269
Net earnings (loss)																							$	(289	)
Interest expense, net of capitalized interest(1)											93												107
Income taxes											30												(104		)
Net contribution to earnings	$	189	$	25	$	270		$	(92	)	$	392
Non-operating pension and other postretirement benefit cost	—		—		—			24			24
Net contribution to earnings (loss)														$	120	$	55	$	69	$	(530	)	$	(286	)
Non-operating pension and other postretirement benefit costs⁽²⁾														—		—		—		470			470
Interest income and other	—		—		—			(12		)	(12		)	—		—		—		(10		)	(10		)
Operating income (loss)	189		25		270			(80		)	404			120		55		69		(70		)	174
Depreciation, depletion and amortization	79		4		36			1			120			73		3		46		1			123
Basis of real estate sold	—		12		—			—			12			—		48		—		—			48
Unallocated pension service costs	—		—		—			—			—
Special items^{(1) (2)}	—		—		(20		)	28			8
Special items included in operating income (loss)⁽³⁾														—		—		—		20			20
Adjusted EBITDA	$	268	$	41	$	286		$	(51	)	$	544		$	193	$	106	$	115	$	(49	)	$	365


~~(1)~~	~~Special items in Wood Products include $20 million of product remediation insurance recoveries.~~

(1) Interest expense, net of capitalized interest includes a pretax special item of $12 million related to a charge for the early extinguishment of debt.


~~(2)~~	~~Special items attributable to Unallocated Items include $28 million of environmental remediation charges.~~

(2) Non-operating pension and other postretirement benefit costs includes a pretax special item consisting of a $455 million noncash settlement charge related to the transfer of approximately $1.5 billion of U.S. qualified pension plan assets and liabilities to an insurance company through the purchase of a group annuity contract.

(3) Operating income (loss) includes a pretax special item consisting of a $20 million legal charge within Unallocated Items.

The table below reconciles Adjusted EBITDA for the quarter ended March 31, ~~2017:~~2018:


DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total			Timberlands		Real Estate & ENR		Wood Products			Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	157												$	269
Interest expense, net of capitalized interest										99													93
Income taxes										24													30
Net contribution to earnings	$	148	$	26	$	172	$	(66	)	$	280		$	189	$	25	$	270		$	(92	)	$	392
Non-operating pension and other postretirement benefit cost	—		—		—		22			22
Non-operating pension and other postretirement benefit costs													—		—		—			24			24
Interest income and other	—		—		—		(9		)	(9		)	—		—		—			(12		)	(12		)
Operating income (loss)	148		26		172		(53		)	293			189		25		270			(80		)	404
Depreciation, depletion and amortization	94		3		35		1			133			79		4		36			1			120
Basis of real estate sold	—		14		—		—			14			—		12		—			—			12
Unallocated pension service costs	—		—		—		2			2
Special items⁽¹⁾	—		—		—		12			12
Special items included in operating income (loss)⁽¹⁾													—		—		(20		)	28			8
Adjusted EBITDA	$	242	$	43	$	207	$	(38	)	$	454		$	268	$	41	$	286		$	(51	)	$	544


(1)	~~Special~~Operating income (loss) includes pretax special items ~~include: $12~~consisting of a $20 million ~~of Plum Creek merger-related costs.~~benefit from product remediation insurance proceeds and $28 million for environmental remediation charges.

CRITICAL ACCOUNTING POLICIES

There have been no significant changes during first quarter ~~2018~~2019 to ~~our~~the critical accounting policies presented in our ~~2017~~2018 Annual Report on Form 10-K.

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.

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 MARCH~~Summary of Long-Term Indebtedness Principal Obligations as of March 31, ~~2018~~2019


DOLLAR AMOUNTS IN MILLIONS	DOLLAR AMOUNTS IN MILLIONS																							DOLLAR AMOUNTS IN MILLIONS
	2018			2019			2020			2021			2022			THEREAFTER			TOTAL			FAIR VALUE		2019			2020			2021			2022			2023			THEREAFTER			TOTAL⁽¹⁾⁽²⁾			FAIR VALUE
Fixed-rate debt ⁽²⁾	$	—		$	500		$	—		$	719		$	—		$	4,450		$	5,669		$	6,568	$	—		$	—		$	719		$	—		$	1,876		$	3,324		$	5,919		$	6,775
Average interest rate	—		%	7.38		%	—		%	5.57		%	—		%	6.38		%	6.36		%	N/A		—		%	—		%	5.58		%	—		%	4.91		%	6.69		%	5.99		%	N/A
Variable-rate debt ⁽²⁾⁽³⁾	$	—		$	—		$	—		$	—		$	—		$	224		$	224		$	225	$	—		$	—		$	—		$	—		$	—		$	225		$	225		$	225
Average interest rate	—		%	—		%	—		%	—		%	—		%	3.48		%	3.48		%	N/A		—		%	—		%	—		%	—		%	—		%	4.10		%	4.10		%	N/A


(1)	Excludes ~~$35~~$12 million of unamortized discounts, capitalized debt expense and business combination fair value ~~step-up (related to Plum Creek merger).~~adjustments.


(2)	Does not include nonrecourse debt held by our Variable Interest Entities (VIEs). See Note ~~7: Special-Purpose~~6: Variable Interest Entities in the Notes to Consolidated Financial Statements for further information on our VIEs and the related nonrecourse debt.


(3)	Excludes borrowings under our line of credit of $245 million as of March 31, 2019. Our line of credit expires in 2022, at which time all outstanding amounts must be repaid. The timing of the repayment of the current outstanding balance is uncertain. See Note 9: Long-Term Debt and Line of Credit in the Notes to Consolidated Financial Statements for further information on our line of credit.

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 March 31, ~~2018,~~2019, 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 first quarter ~~2018~~2019 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

LEGAL PROCEEDINGS

Refer to “Note 11: Legal Proceedings, Commitments and Contingenciesin the Notes to Consolidated Financial Statements ~~– Note 12: Legal Proceedings, Commitments and Contingencies.”~~.

RISK FACTORS

There have been no material changes with respect to the risk factors disclosed in our ~~2017~~2018 Annual Report on Form 10-K.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~There have been no share repurchases~~Issuer Purchases of Equity Securities

The following table provides information with respect to purchases of common stock made by the company during first quarter ~~2018.~~2019:



COMMON SHARE REPURCHASES DURING FIRST QUARTER	TOTAL NUMBER OF SHARES PURCHASED	AVERAGE PRICE PAID PER SHARE		TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PROGRAM	APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PROGRAM
January 1 - January 31	—	$	—	—	$	134,633,963
February 1 - February 28	1,944,241	25.71		1,944,241	450,016,213
March 1 - March 31	404,394	24.73		404,394	440,016,723
Total repurchases during first quarter	2,348,635	$	25.54	2,348,635	$	440,016,723

During first quarter 2019, we repurchased over 2.3 million shares of common stock for approximately $60 million (including transaction fees) under the 2019 Repurchase Program in open-market transactions. Transaction fees incurred for repurchases are not counted as use of funds authorized for repurchases under the 2019 Repurchase Program.

DEFAULTS UPON SENIOR SECURITIES

None.

MINE SAFETY DISCLOSURES

Not applicable.

OTHER INFORMATION

None.

EXHIBITS



4.1	Officer’s Certificate dated February 25, 2019 (including Form of Global Note) setting forth the terms of the 4.00% senior notes due 2029 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed February 25, 2019 - Commission File Number 1-4825).

10.1	Commitment Agreement dated as of January 23, 2019, by and among Weyerhaeuser Company, Athene Annuity and Life Company and State Street Global Advisors Trust Company (incorporated by reference to Exhibit 10(hh) to the Annual Report on Form 10-K for the annual period ended December 31, 2018 - Commission File Number 1-4825). Confidential treatment was granted for portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been omitted and filed separately with the Securities and Exchange Commission.

~~31.1~~31	Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as ~~amended~~amended.

~~32.1~~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).

~~100.INS~~101.INS	XBRL Instance Document

~~100.SCH~~101.SCH	XBRL Taxonomy Extension Schema Document

~~100.CAL~~101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

~~100.DEF~~101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

~~100.LAB~~101.LAB	XBRL Taxonomy Extension Label Linkbase Document

~~100.PRE~~101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Signature

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
	Date:	April ~~27, 2018~~26, 2019

	By:	/s/ Jeanne M. Hillman
		Jeanne M. Hillman
		Vice President and Chief Accounting Officer
		(Principal Accounting Officer)