Weyerhaeuser (WY) risk factors, FY2024 10-K

Other

1. 01INFORMATION ABOUT COMMON SHARE REPURCHASES
2. 02WHAT YOU WILL FIND IN THIS MD&A
3. 03performance and liquidity measures
4. 04ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS
5. 05WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 44
6. 06The condition of the labor market affects all of our businesses as it relates to our ability to attract and retain employees and contractors. The unemployment rate remained flat at 4.1 percent from third quarter 2024 to fourth quarter 2024
7. 07Net Sales — Unaffiliated Customers
8. 08Net Contribution to Earnings
9. 09Operating income and Net contribution to earnings
10. 10an $8 million decrease in softwood plywood sales attributable to a 5 percent decrease in sales realizations
11. 11Common - capital gain distribution
12. 12WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 51
13. 13LIQUIDITY AND CAPITAL RESOURCES
14. 14INVESTING IN OUR BUSINESS
15. 15purchases and maturities of short-term investments
16. 16payments for cash dividends and repurchasing stock
17. 17a defined debt-to-total-capital ratio of 65 percent or less
18. 18plus total adjusted shareholders' equity
19. 19a defined debt-to-total-capital ratio of 33.4 percent
20. 20OUR CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
21. 21Significant Contractual Obligations as of December 31, 2024
22. 22Amounts presented for interest payments assume that all long-term debt obligations outstanding as of December 31, 2024 will remain outstanding until maturity
23. 23OFF-BALANCE SHEET ARRANGEMENTS
24. 24CRITICAL ACCOUNTING ESTIMATES
25. 25DISCOUNT RATES FOR PENSION AND POST-EMPLOYMENT BENEFIT PLANS
26. 264.5 percent for our Canadian post-employment benefit plans — compared with 4.6 percent at December 31, 2023
27. 27WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 55
28. 28PERFORMANCE AND LIQUIDITY MEASURES
29. 29We reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income (loss) for the business segments, as those are the most directly comparable U.S. GAAP measures for each
30. 30WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 56
31. 31Net Earnings and Net Earnings per Diluted Share Before Special Items (Income Tax Affected)
32. 32WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 57
33. 33LONG-TERM DEBT OBLIGATIONS
34. 34estimated fair values of outstanding obligations
35. 35Opinion on the Consolidated Financial Statements
36. 36Projected benefit obligations for pensions
37. 37DOLLAR AMOUNTS IN MILLIONS
38. 38Commitments and contingencies (Note 13)
39. 39Net cash from investing activities
40. 40DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
41. 41PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS
42. 42LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES
43. 43OTHER OPERATING COSTS, NET
44. 44NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
45. 45REAL ESTATE INVESTMENT TRUST (REIT)
46. 46HOW WE REPORT OUR RESULTS
47. 47Consolidated Financial Statements
48. 48We also transfer raw materials, semi-finished materials and end products among our business segments. Because of this intracompany activity, accounting for our business segments involves pricing products transferred between our business segments at current market values
49. 49asset retirement obligations initially measured at fair value
50. 50Foreign Currency Translation
51. 51CHANGES IN HOW WE REPORT OUR RESULTS
52. 52HOW WE ACCOUNT FOR CERTAIN KEY ITEMS
53. 53We carry timber and timberlands at cost less depletion. Depletion refers to the carrying value of timber that is harvested or sold
54. 54forest management in Canada
55. 55Accounting practices for these costs do not change when timber becomes merchantable and harvesting starts
56. 56In addition, the duration of the harvest cycle varies by geographic region and species of timber
57. 57We include the cost of timber harvested in the carrying values of raw materials and product inventories. As these inventories are sold to third parties, we include them in costs of sales
58. 58renewable provided we meet reforestation, operating and management guidelines
59. 59Impairment of Long-Lived Assets
60. 60WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 70
61. 61net operating loss and tax credit carryforwards
62. 62We recognize the overfunded or underfunded status of our defined benefit pension and other post-employment benefit plans on our Consolidated Balance Sheet and recognize changes in the funded status through comprehensive income (loss) in the year in which the changes occur
63. 63Union employee benefits are set through collective-bargaining agreements
64. 64Canadian pension plans — according to the applicable provincial pension act and the Income Tax Act
65. 65WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 71
66. 66expected future performance of similar asset classes
67. 67We are subject to lawsuits, investigations and other claims related to environmental remediation, product and other matters, and are required to assess the likelihood of any adverse judgments or outcomes to these matters, as well as the amount or range of potential loss
68. 68the amount of loss can be reasonably estimated
69. 69In addition to contingent liabilities recorded for probable losses, we disclose contingent liabilities when there is a reasonable possibility that a loss may have been incurred
70. 70Disaggregation of Income Statement Expenses
71. 71NOTE 2: BUSINESS SEGMENTS
72. 72WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 73
73. 73WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 74
74. 74Substantially all of our 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
75. 75SOUTHERN TIMBERLANDS ACQUISITION AND DIVESTITURE
76. 76NOTE 5: NET EARNINGS PER SHARE
77. 77Basic earnings per share is net earnings available to common shareholders 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
78. 78the effect of our outstanding dilutive potential common shares
79. 79SHARES EXCLUDED FROM DILUTIVE EFFECT
80. 80In general, additions are classified into components, each with its own estimated useful life as determined at the time of purchase
81. 81NOTE 8: PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS
82. 82Actions to Reduce Pension Plan Obligations
83. 83Actuarial (gain) loss is primarily due to year-over-year changes in discount rates
84. 84WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 80
85. 85U.S. qualified salaried and nonqualified plans only
86. 86Our Investment Policies and Strategies
87. 87U.S. and Canadian Pension Trusts
88. 88Public equity investments are valued at exit prices quoted in active markets
89. 89WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 81
90. 90Retirement Compensation Arrangements
91. 91Valuation of Our Plan Assets
92. 92WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 82
93. 93Public equity investments
94. 94Estimating Our Pension and
95. 95During 2024, we made contributions and/or benefit payments of $10 million for our U.S. nonqualified pension plans, $2 million for our Canadian nonregistered pension plans and less than $1 million for our Canadian registered plans
96. 96We contribute to multiemployer defined benefit plans under the terms of collective-bargaining agreements. These plans cover a small number of our employees and on an annual basis our contributions are immaterial
97. 97NOTE 9: ACCRUED LIABILITIES
98. 98LETTERS OF CREDIT AND SURETY BONDS
99. 99NOTE 11: LONG-TERM DEBT, NET
100. 100Over the course of 2023, we refinanced approximately $1 billion of debt
101. 101In May 2023, we completed an offering of debt securities by issuing $750 million of 4.750 percent notes due in May 2026. The net proceeds after deducting the discount, underwriting fees and issuance costs were $743 million
102. 102FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS
103. 103NOTE 13: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES
104. 104WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 88
105. 105Accrual balance as of December 31, 2024
106. 106costs incurred to remediate sites
107. 107uses assumptions that are less favorable to us among the range of reasonably possible outcomes
108. 108Asset Retirement Obligations
109. 109In July 2017, we announced we were implementing a solution to address concerns regarding our TJI® Joists coated with our former Flak Jacket® Protection product. This issue was isolated to Flak Jacket product manufactured after December 1, 2016 and did not affect any of our other products
110. 110NOTE 14: SHAREHOLDERS’ INTEREST
111. 111PREFERRED AND PREFERENCE SHARES
112. 112SHARE REPURCHASE PROGRAMS
113. 113During 2022, we repurchased 15,983,097 common shares for approximately $550 million (including transaction fees) under the 2021 Repurchase Program
114. 114ACCUMULATED OTHER COMPREHENSIVE LOSS
115. 115Amounts of actuarial loss and prior service (cost) credit are components of net periodic benefit cost. See Note 8: Pension and Other Post-Employment Benefit Plans
116. 116NOTE 15: SHARE-BASED COMPENSATION
117. 117deferred compensation stock equivalent units
118. 118OUR LONG-TERM INCENTIVE COMPENSATION PLAN
119. 119performance share units (PSUs)
120. 120For stock-settled awards, we issue new stock into the marketplace and generally do not repurchase shares in connection with issuance of new awards
121. 121HOW WE ACCOUNT FOR SHARE-BASED AWARDS
122. 122Awards that continue to vest following job elimination or the sale of a business — the required service period ends on the date the employment from the company is terminated
123. 123TAX BENEFITS OF SHARE-BASED AWARDS
124. 124WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 92
125. 125As of December 31, 2024, there were approximately 178 thousand RSUs that had met the requisite service period and will be released as identified in the grant terms
126. 126The final number of shares granted in 2024, 2023 and 2022 will vest between a range of 0 percent to 150 percent of each grant’s target, depending upon actual company total shareholder return (TSR) compared against the TSR of an industry peer group. TSR assumes full reinvestment of dividends
127. 127As of December 31, 2024, there were approximately 65 thousand PSUs that had met the requisite service period and will be released as identified in the grant terms
128. 128UNRECOGNIZED SHARE-BASED COMPENSATION
129. 129WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 94
130. 130Financing cash flows for financing leases(1)
131. 131NOTE 17: OTHER OPERATING COSTS, NET
132. 132During third quarter 2024, we recorded a $10 million noncash impairment charge related to the indefinite curtailment of our New Bern lumber mill. The loss was attributable to our Wood Products segment and was recorded within "Other operating costs, net" in our Consolidated Statement of Operations
133. 133ENVIRONMENTAL REMEDIATION
134. 134DEFERRED TAX ASSETS AND LIABILITIES
135. 135Net Operating Loss and Credit Carryforwards
136. 136Foreign — none currently recorded
137. 137UNRECOGNIZED TAX BENEFITS
138. 138WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 99
139. 139EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
140. 140CHANGES IN INTERNAL CONTROL
141. 141MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
142. 142Opinion on Internal Control Over Financial Reporting
143. 143Definition and Limitations of Internal Control Over Financial Reporting
144. 144During fourth quarter 2024, one of the company's "officers" (as that term is defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) adopted a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act
145. 145DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
146. 146EXECUTIVE AND DIRECTOR COMPENSATION
147. 147CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
148. 148Our independent registered public accounting firm is KPMG LLP, Seattle, WA, Auditor Firm ID: 185
149. 149All financial statement schedules have been omitted because they are not applicable or the required information is included in the consolidated financial statements, or the notes thereto, in Financial Statements and Supplementary Data above
150. 150Articles of Incorporation
151. 151Instruments Defining the Rights of Security Holders, Including Indentures
152. 152WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 105
153. 153WEYERHAEUSER COMPANY > 2024 ANNUAL REPORT AND FORM 10-K 106
154. 154The cover page from Weyerhaeuser Company’s Annual Report on Form 10-K for the year ended December 31, 2024 has been formatted in Inline XBRL
155. 155President and Chief Executive Officer