WEYERHAEUSER CO (Form: 10-Q, Received: 10/30/2020 16:07:46)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020

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

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 1-4825

WEYERHAEUSER COMPANY

(Exact name of registrant as specified in its charter)

Washington		91-0470860
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

220 Occidental Avenue South Seattle, Washington		98104-7800
(Address of principal executive offices)		(Zip Code)

(206) 539-3000

(Registrant’s telephone number, including area code)

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

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $1.25 per share

New York Stock Exchange

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

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

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

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

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

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

As of October 26, 2020, 746,423 thousand shares of the registrant’s common stock ($1.25 par value) were outstanding.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS:
	CONSOLIDATED STATEMENT OF OPERATIONS	1
	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	2
	CONSOLIDATED BALANCE SHEET	3
	CONSOLIDATED STATEMENT OF CASH FLOWS	4
	CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	5
	INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	6
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)	15
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	29
ITEM 4.	CONTROLS AND PROCEDURES	29

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	29
ITEM 1A.	RISK FACTORS	29
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	30
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	30
ITEM 4.	MINE SAFETY DISCLOSURES	30
ITEM 5.	OTHER INFORMATION	30
ITEM 6.	EXHIBITS	31
	SIGNATURES	32

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	SEPTEMBER 2020			SEPTEMBER 2019			SEPTEMBER 2020			SEPTEMBER 2019
Net sales (Note 3)	$	2,110		$	1,671		$	5,469		$	5,006
Costs of sales		1,390			1,399			4,055			4,111
Gross margin		720			272			1,414			895
Selling expenses		22			20			62			62
General and administrative expenses		96			85			254			254
Product remediation recoveries (Note 14)		—			(68	)		(8	)		(68	)
Other operating costs, net (Note 16)		92			33			113			85
Operating income		510			202			993			562
Non-operating pension and other postretirement benefit costs (Note 7)		(9	)		(15	)		(28	)		(495	)
Interest income and other		2			6			5			22
Interest expense, net of capitalized interest		(111	)		(91	)		(299	)		(289	)
Earnings (loss) before income taxes		392			102			671			(200	)
Income taxes (Note 17)		(109	)		(3	)		(166	)		138
Net earnings (loss)	$	283		$	99		$	505		$	(62	)

Earnings (loss) per share, basic and diluted (Note 4)	$	0.38		$	0.13		$	0.68		$	(0.08	)
Weighted average shares outstanding (in thousands) (Note 4):
Basic		746,996			745,626			746,809			745,901
Diluted		748,450			746,514			747,530			745,901

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

	QUARTER ENDED					YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020		SEPTEMBER 2019			SEPTEMBER 2020			SEPTEMBER 2019
Net earnings (loss)	$	283	$	99		$	505		$	(62	)
Other comprehensive income (loss):
Foreign currency translation adjustments		11		(6	)		(14	)		19
Changes in unamortized actuarial loss, net of tax expense of $6, $8, $30 and $128		19		25			86			398
Changes in unamortized net prior service credit, net of tax expense of $0, $0, $0 and $0		—		—			2			(1	)
Total other comprehensive income		30		19			74			416
Total comprehensive income	$	313	$	118		$	579		$	354

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

DOLLAR AMOUNTS IN MILLIONS, EXCEPT PAR VALUE	SEPTEMBER 30, 2020			DECEMBER 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	787		$	139
Receivables, net		500			309
Receivables for taxes		48			98
Inventories (Note 5)		411			416
Assets held for sale (Note 15)		199			140
Prepaid expenses and other current assets		101			147
Current restricted financial investments held by variable interest entities (Note 6)		—			362
Total current assets		2,046			1,611
Property and equipment, less accumulated depreciation of $3,423 and $3,477		1,945			1,969
Construction in progress		119			130
Timber and timberlands at cost, less depletion		11,465			11,929
Minerals and mineral rights, less depletion		271			281
Deferred tax assets		44			72
Other assets		466			414
Total assets	$	16,356		$	16,406
LIABILITIES AND EQUITY
Current liabilities:
Borrowings on line of credit (Note 9)	$	—		$	230
Accounts payable		215			246
Accrued liabilities (Note 8)		617			530
Total current liabilities		832			1,006
Long-term debt, net (Note 9)		5,974			6,147
Deferred tax liabilities		27			6
Deferred pension and other postretirement benefits (Note 7)		638			693
Other liabilities		358			377
Total liabilities		7,829			8,229
Commitments and contingencies (Note 11)
Equity:
Common shares: $1.25 par value; authorized 1,360 million shares; issued and outstanding: 746,398 thousand shares at September 30, 2020 and 745,300 thousand shares at December 31, 2019		933			932
Other capital		8,178			8,152
Retained earnings (accumulated deficit)		246			(3	)
Accumulated other comprehensive loss (Note 12)		(830	)		(904	)
Total equity		8,527			8,177
Total liabilities and equity	$	16,356		$	16,406

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020			SEPTEMBER 2019
Cash flows from operations:
Net earnings (loss)	$	505		$	(62	)
Noncash charges (credits) to earnings (loss):
Depreciation, depletion and amortization		355			382
Basis of real estate sold		136			105
Deferred income taxes, net		20			(164	)
Pension and other postretirement benefits (Note 7)		55			519
Share-based compensation expense (Note 13)		22			23
Timber casualty loss (Note 16)		80			—
Change in:
Receivables, net		(192	)		(47	)
Receivables and payables for taxes		103			(18	)
Inventories		2			(2	)
Prepaid expenses and other current assets		5			5
Accounts payable and accrued liabilities		3			(13	)
Pension and postretirement benefit contributions and payments		(21	)		(36	)
Other		12			(18	)
Net cash from operations		1,085			674
Cash flows from investing activities:
Capital expenditures for property and equipment		(158	)		(199	)
Capital expenditures for timberlands reforestation		(41	)		(42	)
Proceeds from note receivable held by variable interest entities (Note 6)		362			253
Proceeds from sale of Montana timberlands (Note 15)		145			—
Other		3			20
Net cash from investing activities		311			32
Cash flows from financing activities:
Cash dividends on common shares		(254	)		(760	)
Net proceeds from issuance of long-term debt (Note 9)		732			739
Payments on long-term debt (Note 9)		(936	)		(512	)
Proceeds from borrowings on line of credit (Note 9)		550			875
Payments on line of credit (Note 9)		(780	)		(860	)
Payments on debt held by variable interest entities (Note 6)		—			(302	)
Proceeds from exercise of stock options		9			8
Repurchases of common shares (Note 4)		—			(60	)
Other		(16	)		(15	)
Net cash from financing activities		(695	)		(887	)
Net change in cash, cash equivalents and restricted cash		701			(181	)
Cash, cash equivalents and restricted cash at beginning of period		139			334
Cash, cash equivalents and restricted cash at end of period	$	840		$	153
Cash paid (received) during the period for:
Interest, net of amount capitalized of $3 and $4	$	278		$	310
Income taxes, net of refunds	$	46		$	46

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(UNAUDITED)

	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	SEPTEMBER 2020			SEPTEMBER 2019			SEPTEMBER 2020			SEPTEMBER 2019
Common shares:
Balance at beginning of period	$	933		$	931		$	932		$	933
Issued for exercise of stock options and vested restricted stock units		—			—			1			1
Repurchases of common shares (Note 4)		—			—			—			(3	)
Balance at end of period		933			931			933			931
Other capital:
Balance at beginning of period		8,166			8,130			8,152			8,172
Issued for exercise of stock options		3			3			9			7
Repurchases of common shares (Note 4)		—			—			—			(57	)
Shared-based compensation		7			7			22			23
Other transactions, net		2			—			(5	)		(5	)
Balance at end of period		8,178			8,140			8,178			8,140
Retained earnings (accumulated deficit):
Balance at beginning of period		(37	)		418			(3	)		1,093
Net earnings (loss)		283			99			505			(62	)
Dividends on common shares		—			(253	)		(256	)		(760	)
Adjustments related to accounting pronouncements and other		—			—			—			(7	)
Balance at end of period		246			264			246			264
Accumulated other comprehensive loss:
Balance at beginning of period		(860	)		(755	)		(904	)		(1,152	)
Other comprehensive income		30			19			74			416
Balance at end of period (Note 12)		(830	)		(736	)		(830	)		(736	)
Total equity:
Balance at end of period	$	8,527		$	8,599		$	8,527		$	8,599

Dividends paid per common share	$	—		$	0.34		$	0.34		$	1.02

See accompanying Notes to Consolidated Financial Statements.

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:	BASIS OF PRESENTATION	7

NOTE 2:	BUSINESS SEGMENTS	7

NOTE 3:	REVENUE RECOGNITION	8

NOTE 4:	NET EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES	8

NOTE 5:	INVENTORIES	9

NOTE 6:	VARIABLE INTEREST ENTITIES	9

NOTE 7:	PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS	10

NOTE 8:	ACCRUED LIABILITIES	11

NOTE 9:	LONG-TERM DEBT AND LINE OF CREDIT	11

NOTE 10:	FAIR VALUE OF FINANCIAL INSTRUMENTS	11

NOTE 11:	LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES	12

NOTE 12:	ACCUMULATED OTHER COMPREHENSIVE LOSS	12

NOTE 13:	SHARE-BASED COMPENSATION	13

NOTE 14:	PRODUCT REMEDIATION RECOVERIES	13

NOTE 15:	TIMBERLAND ACQUISITIONS AND DIVESTITURES	13

NOTE 16:	OTHER OPERATING COSTS, NET	14

NOTE 17:	INCOME TAXES	14

NOTE 18:	RESTRICTED CASH	14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTERS AND YEAR-TO-DATE PERIODS ENDED SEPTEMBER 30, 2020 AND 2019

NOTE 1: BASIS OF PRESENTATION

Our consolidated financial statements provide an overall view of our results of operations, financial condition and cash flows. They include our accounts and the accounts of entities we control, including majority-owned domestic and foreign subsidiaries. They do not include our intercompany transactions and accounts, which are eliminated. Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” “we,” “the company” and “our” refer to the consolidated company.

The accompanying unaudited Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Except as otherwise disclosed in these Notes to Consolidated Financial Statements, such adjustments are of a normal, recurring nature. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements. Certain information and footnote disclosures normally included in our annual Consolidated Financial Statements have been condensed or omitted. These quarterly Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2019. Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year.

NOTE 2: BUSINESS SEGMENTS

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

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

●	Real Estate & ENR – Real Estate (sales of timberlands) and ENR (rights to explore for and extract hard minerals, construction materials, oil and gas production, wind and solar) and

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

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

	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020			SEPTEMBER 2019			SEPTEMBER 2020			SEPTEMBER 2019
Sales to unaffiliated customers:
Timberlands	$	345		$	398		$	1,085		$	1,230
Real Estate & ENR		69			69			246			268
Wood Products		1,696			1,204			4,138			3,508
		2,110			1,671			5,469			5,006
Intersegment sales:
Timberlands		107			125			350			381

Total sales		2,217			1,796			5,819			5,387
Intersegment eliminations		(107	)		(125	)		(350	)		(381	)
Total	$	2,110		$	1,671		$	5,469		$	5,006
Net contribution (charge) to earnings:
Timberlands	$	(11	)	$	72		$	169		$	294
Real Estate & ENR		17			32			72			122
Wood Products		566			143			859			293
		572			247			1,100			709
Unallocated items⁽¹⁾		(69	)		(54	)		(130	)		(620	)
Net contribution to earnings		503			193			970			89
Interest expense, net of capitalized interest		(111	)		(91	)		(299	)		(289	)
Earnings (loss) before income taxes		392			102			671			(200	)
Income taxes		(109	)		(3	)		(166	)		138
Net earnings (loss)	$	283		$	99		$	505		$	(62	)

(1)

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

NOTE 3: REVENUE RECOGNITION

A reconciliation of revenue recognized by our major products:

	QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020		SEPTEMBER 2019		SEPTEMBER 2020		SEPTEMBER 2019
Net sales to unaffiliated customers:
Timberlands segment
Delivered logs:
West
Domestic sales	$	80	$	86	$	238	$	291
Export grade sales		83		86		281		280
Subtotal West		163		172		519		571
South		141		168		436		483
North⁽¹⁾		13		24		37		70
Subtotal delivered logs sales		317		364		992		1,124
Stumpage and pay-as-cut timber		5		10		15		29
Recreational and other lease revenue		16		15		47		45
Other⁽²⁾		7		9		31		32
Net sales attributable to Timberlands segment		345		398		1,085		1,230
Real Estate & ENR segment
Real estate		49		45		192		200
Energy and natural resources		20		24		54		68
Net sales attributable to Real Estate & ENR segment		69		69		246		268
Wood Products segment
Structural lumber		819		487		1,865		1,426
Oriented strand board		290		159		659		475
Engineered solid section		135		138		373		388
Engineered I-joists		83		90		231		246
Softwood plywood		55		42		128		130
Medium density fiberboard		47		44		124		127
Complementary building products		183		162		505		466
Other⁽³⁾		84		82		253		250
Net sales attributable to Wood Products segment		1,696		1,204		4,138		3,508
Total net sales	$	2,110	$	1,671	$	5,469	$	5,006

(1)	In November 2019, we sold our Michigan timberlands and in March 2020, we sold our Montana timberlands.

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

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

NOTE 4: NET EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES

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

●	$0.38 during third quarter 2020 and $0.68 during year-to-date 2020;

●	$0.13 during third quarter 2019 and $(0.08) during year-to-date 2019.

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.

	QUARTER ENDED				YEAR-TO-DATE ENDED
SHARES IN THOUSANDS	SEPTEMBER 2020		SEPTEMBER 2019		SEPTEMBER 2020		SEPTEMBER 2019
Weighted average common shares outstanding – basic		746,996		745,626		746,809		745,901
Dilutive potential common shares:
Stock options		401		396		246		—
Restricted stock units		570		357		297		—
Performance share units		483		135		178		—
Total effect of outstanding dilutive potential common shares		1,454		888		721		—
Weighted average common shares outstanding – dilutive		748,450		746,514		747,530		745,901

We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units.

Potential Shares Not Included in the Computation of Diluted Earnings (Loss) per Share

The following shares were not included in the computation of diluted earnings (loss) per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods.

	QUARTER ENDED				YEAR-TO-DATE ENDED
SHARES IN THOUSANDS	SEPTEMBER 2020		SEPTEMBER 2019		SEPTEMBER 2020		SEPTEMBER 2019
Stock options		2,260		2,384		2,260		2,755
Restricted stock units		—		—		—		358
Performance share units		729		959		729		1,054

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. Concurrently, the board terminated the remaining repurchase authorization under the share repurchase program approved by the board in November 2015.

During year-to-date 2020, we did not repurchase shares. During year-to-date 2019, we repurchased over 2.3 million common shares for approximately $60 million under the 2019 Repurchase Program. As of September 30, 2020, we had remaining authorization of approximately $440 million for future share repurchases. All common stock repurchases under the 2019 Repurchase Program were made in open-market transactions.

NOTE 5: INVENTORIES

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

DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 30, 2020		DECEMBER 31, 2019
LIFO inventories:
Logs	$	14	$	19
Lumber, plywood, panels and fiberboard		64		82
Other products		8		10
Moving average cost or FIFO inventories:
Logs		49		28
Lumber, plywood, panels, fiberboard and engineered wood products		74		84
Other products		98		98
Materials and supplies		104		95
Total	$	411	$	416

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

NOTE 6: VARIABLE INTEREST ENTITIES

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

The assets of the buyer-sponsored SPEs were financial investments which consisted of bank guarantees. These bank guarantees were in turn backed by bank notes, which were the liabilities of the monetization SPEs. Interest earned from the financial investments within the buyer-sponsored SPEs was used to pay interest accrued on the corresponding monetization SPE’s note.

During first quarter 2020, we received $362 million in proceeds from our final buyer-sponsored SPE at maturity. The corresponding $302 million in liabilities of this SPE was paid in third quarter 2019. During first quarter 2019, we received $253 million in proceeds from a buyer-sponsored SPE at maturity. The corresponding $209 million in liabilities of this SPE was paid in fourth quarter 2018.

NOTE 7: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The components of net periodic benefit cost are:

	PENSION
	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020			SEPTEMBER 2019			SEPTEMBER 2020			SEPTEMBER 2019
Service cost	$	9		$	8		$	27		$	24
Interest cost		35			39			104			122
Expected return on plan assets		(59	)		(54	)		(175	)		(170	)
Amortization of actuarial loss		31			27			92			85
Amortization of prior service cost		1			1			3			3
Settlement charge		—			—			—			449
Total net periodic benefit cost - pension	$	17		$	21		$	51		$	513

	OTHER POSTRETIREMENT BENEFITS
	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020			SEPTEMBER 2019			SEPTEMBER 2020			SEPTEMBER 2019
Interest cost	$	1		$	2		$	3		$	5
Amortization of actuarial loss		1			1			2			5
Amortization of prior service credit		(1	)		(1	)		(1	)		(4	)
Total net periodic benefit cost - other postretirement benefits	$	1		$	2		$	4		$	6

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

Actions to Reduce Pension Plan Obligations

As a part of our continued efforts to reduce pension plan obligations, 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 preliminary noncash pretax settlement charge of $455 million during first quarter 2019, accelerating the recognition of previously unrecognized losses in “Accumulated other comprehensive loss”, that would have been recognized in subsequent periods. In second quarter 2019, we finalized the prior year-end fair value of pension plan assets and obligations, which reduced the settlement charge by $6 million for a final settlement charge of $449 million.

Fair Value of Pension Plan Assets and Obligations

In our year-end reporting process, we estimate the fair value of pension plan assets based upon the information available at that time. For certain assets, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We update the year-end estimated fair value of pension plan assets in the second quarter of each year to incorporate final net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K.

During second quarter 2020, we recorded an increase to the beginning of the year fair value of the pension assets of $25 million, or less than 1 percent. We also updated our census data that is used to estimate our beginning of the year projected benefit obligation for our pension plans, which resulted in a projected benefit obligation increase of $11 million, or less than 1 percent. The net effect of these updates was a $14 million improvement in funded status as of December 31, 2019. This change in funded status was reflected on our second quarter 2020 Consolidated Balance Sheet.

NOTE 8: ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 30, 2020		DECEMBER 31, 2019
Compensation and employee benefit costs	$	187	$	188
Current portion of lease liabilities		30		33
Customer rebates, volume discounts and deferred income		122		105
Interest		86		98
Taxes payable		89		24
Other		103		82
Total	$	617	$	530

NOTE 9: LONG-TERM DEBT AND LINE OF CREDIT

In October 2020, we notified holders of our outstanding 4.625 percent notes due in September 2023 that we will redeem the entire aggregate principal amount outstanding in December 2020. The amount of principal outstanding and the book value of the debt were approximately $500 million and $498 million, respectively, as of September 30, 2020. The total redemption price of the notes is expected to be approximately $560 million which reflects the make-whole premium due on early redemption.

In September 2020, we redeemed our $325 million 3.25 percent notes due in March 2023. A pretax charge of $23 million was included in “Interest expense, net of capitalized interest” in the Consolidated Statement of Operations in third quarter 2020 for the make-whole premium in connection with the early extinguishment of the $325 million notes.

In March 2020, we issued $750 million of 4.00 percent notes due in April 2030. The net proceeds after deducting the discount, underwriting fees and issuance costs were $732 million. In May 2020, a portion of the net proceeds was used to redeem our $569 million 4.70 percent notes due in March 2021. A net pretax charge of $11 million was included in “Interest expense, net of capitalized interest” in the Consolidated Statement of Operations in second quarter 2020 for the make-whole premium in connection with the early extinguishment of the $569 million notes, partially offset by the write-off of an unamortized fair value step-up adjustment.

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 was used to redeem our $500 million 7.38 percent notes 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 the make-whole premium, unamortized debt issuance costs and unamortized debt discounts in connection with the early extinguishment of the $500 million notes.

In January 2020, we refinanced and extended our $1.5 billion five-year senior unsecured revolving credit facility, which now expires in January 2025. Borrowings are at LIBOR plus a spread or at other interest rates mutually agreed upon between the borrower and the lending banks. We had no outstanding borrowings on our credit facility as of September 30, 2020. As of December 31, 2019, we had $230 million of outstanding borrowings on our credit facility.

NOTE 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:

	SEPTEMBER 30, 2020				DECEMBER 31, 2019
DOLLAR AMOUNTS IN MILLIONS	CARRYING VALUE		FAIR VALUE (LEVEL 2)		CARRYING VALUE		FAIR VALUE (LEVEL 2)
Long-term debt (including current maturities) and line of credit:
Fixed rate	$	5,749	$	7,194	$	5,922	$	6,986
Variable rate		225		225		455		455
Total debt	$	5,974	$	7,419	$	6,377	$	7,441

To estimate the fair value of fixed rate long-term debt we used the market approach, which is based on quoted market prices we received for the same types and issues of our debt.

We believe that our 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, and 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 11: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES

Legal Proceedings

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

Environmental Matters

Site Remediation

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

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

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

As of September 30, 2020, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately $58 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 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. Some of our sites have asbestos containing materials. We have met our current legal obligation to identify and manage these materials. In situations where we cannot reasonably determine when asbestos containing materials might be removed from the sites, we have not recorded an accrual because the fair value of the obligation cannot be reasonably estimated. As of September 30, 2020, we had an asset retirement obligation reserve of $30 million. These obligations are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet.

NOTE 12: ACCUMULATED OTHER COMPREHENSIVE LOSS

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

	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020			SEPTEMBER 2019			SEPTEMBER 2020			SEPTEMBER 2019
Pension⁽¹⁾
Balance at beginning of period	$	(1,060	)	$	(972	)	$	(1,128	)	$	(1,343	)
Other comprehensive income (loss) before reclassifications		(6	)		4			14			(10	)
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾		24			21			72			406
Total other comprehensive income		18			25			86			396
Balance at end of period	$	(1,042	)	$	(947	)	$	(1,042	)	$	(947	)
Other Postretirement Benefits⁽¹⁾
Balance at beginning of period	$	(11	)	$	(18	)	$	(12	)	$	(19	)
Other comprehensive income before reclassifications		1			—			1			—
Amounts reclassified from accumulated other comprehensive loss to earnings⁽²⁾		—			—			1			1
Total other comprehensive income		1			—			2			1
Balance at end of period	$	(10	)	$	(18	)	$	(10	)	$	(18	)
Translation Adjustments and Other
Balance at beginning of period	$	211		$	235		$	236		$	210
Translation adjustments		11			(6	)		(14	)		19
Total other comprehensive income (loss)		11			(6	)		(14	)		19
Balance at end of period		222			229			222			229
Accumulated other comprehensive loss, end of period	$	(830	)	$	(736	)	$	(830	)	$	(736	)

(1)	Amounts presented are net of tax.

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

NOTE 13: SHARE-BASED COMPENSATION

Share-based compensation activity during year-to-date 2020 included the following:

SHARES IN THOUSANDS	GRANTED		VESTED
Restricted stock units (RSUs)		880		737
Performance share units (PSUs)		377		91

A total of 1.1 million shares of common stock were issued as a result of RSU vestings, PSU vestings and stock option exercises.

Restricted Stock Units

The weighted average fair value of the RSUs granted in 2020 was $28.92. The vesting provisions for RSUs granted in 2020 were consistent with prior year grants.

Performance Share Units

The weighted average grant date fair value of PSUs granted in 2020 was $33.16. The final number of shares granted in 2020 will range from 0 percent to 150 percent of each grant's target, depending upon actual company performance compared against an industry peer group. For prior year grants, company performance is measured against an industry peer group and the S&P 500. Beginning with PSUs granted in 2020, PSUs will vest at a maximum of 100 percent of target value in the event of negative absolute company total shareholder return.

Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2020

		PERFORMANCE SHARE UNITS
Performance period		2/13/2020 – 12/31/2022
Valuation date average stock price⁽¹⁾		$30.03
Expected dividends		4.50%
Risk-free rate		1.45% – 1.62%
Expected volatility		20.02% – 22.40%

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

NOTE 14: PRODUCT REMEDIATION RECOVERIES

In 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.

In third quarter 2019 and second quarter 2020, we received and recorded insurance recoveries of $68 million and $8 million, respectively, related to prior remediation efforts. These recoveries are attributable to our Wood Products segment and were recorded in "Product remediation recoveries" in the Consolidated Statement of Operations.

NOTE 15: TIMBERLAND ACQUISITIONS AND DIVESTITURES

Oregon Acquisition and Divestiture

On September 1, 2020, we announced an agreement to sell 149,000 acres of southern Oregon timberlands for $385 million and a separate agreement to purchase 85,000 acres of mid-coastal Oregon timberlands for $426 million. These transactions within our Timberlands business segment will be structured as a like-kind exchange for tax purposes. The two agreements are subject to customary closing conditions and are both expected to close in fourth quarter 2020.

The sale of southern Oregon timberlands is not considered a strategic shift that has, or will have, a major effect on our operations or financial results and therefore does not meet the requirements for presentation as discontinued operations. However, the related assets have met the relevant criteria to be classified as held for sale in the current period Consolidated Balance Sheet. This classification does not affect the presentation in the Consolidated Statement of Operations. The held for sale classification did change the presentation of the related assets from long-term to current on our Consolidated Balance Sheet. As of September 30, 2020, “Assets held for sale” had a balance of $199 million, which consisted primarily of timberlands and other related assets.

Montana Divestiture

On December 17, 2019, we announced an agreement to sell 630,000 acres of Montana timberlands, which was part of our Timberlands business segment. On March 26, 2020, we completed the sale for $145 million in cash proceeds, which is net of purchase price adjustments and closing costs. Due to the impairment recorded during fourth quarter 2019, no material gain or loss was recorded as a result of this sale.

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

NOTE 16: OTHER OPERATING COSTS, NET

Other operating costs, net were comprised of the following:

	QUARTER ENDED					YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020			SEPTEMBER 2019		SEPTEMBER 2020		SEPTEMBER 2019
Foreign exchange losses (gains), net	$	(2	)	$	1	$	3	$	2
Litigation expense, net		7			25		9		59
Research and development expenses		1			1		4		4
Timber casualty loss		80			—		80		—
Other, net		6			6		17		20
Total other operating costs, net	$	92		$	33	$	113	$	85

Timber Casualty Loss

In September 2020, forest fires in the state of Oregon, commonly referred to as the Holiday Farm, Beachie Creek, Riverside, and Archie Creek fires, spread from adjacent lands onto portions of our Oregon timberland properties. Based on interpretation of satellite imagery and aerial photography, we estimate that the fires have had some impact on approximately 125,000 acres of our Oregon timberlands. Our initial assessments indicate that the extent of damage varies from tract to tract based on topographical conditions, rate of fire spread, age of the timber and other circumstances. Based on these initial assessments, we expect that the majority of merchantable timber, even if affected by the fires, is likely salvageable if we are able to harvest it within a reasonable period of time. We anticipate that the majority of pre-merchantable timber affected by the fires will not be able to be salvaged.

For the quarter ended September 30, 2020, we have recorded a timber casualty loss of $80 million which represents the estimated book value of timber and related assets that cannot be salvaged based on the information available at this time. The loss is attributable to our Timberlands segment and is recorded within “Other operating costs, net” in the Consolidated Statement of Operations. As salvage efforts continue and as we are able to complete on-site assessments of timber within the fire perimeter, it is reasonably possible that this estimate could increase by as much as $30 million to $40 million.

NOTE 17: INCOME TAXES

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

The quarterly provision for income taxes is based on our current estimate of the annual effective tax rate and is adjusted for discrete taxable events that have occurred during the year. Our 2020 estimated annual effective tax rate, excluding discrete items, differs from the U.S. federal statutory tax rate of 21 percent primarily due to tax benefits associated with our nontaxable REIT earnings and the projected mix of earnings between our REIT and our TRSs.

In July 2020, the Internal Revenue Service released final regulations which resolved uncertainties related to the deductible portion of our interest expense under the Tax Cuts and Jobs Act of 2017. Previously unrecognized tax benefits associated with this position were recognized in third quarter 2020, which favorably impacted our receivables for taxes and did not impact our effective tax rate.

NOTE 18: RESTRICTED CASH

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

DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 30, 2020		SEPTEMBER 30, 2019
Cash and cash equivalents	$	787	$	153
Restricted cash included in other assets⁽¹⁾		53		—
Total cash, cash equivalents and restricted cash	$	840	$	153

(1)	Amounts included in restricted cash are primarily comprised of proceeds held by a qualified intermediary that are intended to be reinvested in timber and timberlands through a like-kind exchange transaction, as well as additional funds held in escrow related to this transaction.

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

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This report contains 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, including but not limited to, our expectations concerning our future performance and the effects of the COVID-19 pandemic on the company’s business, results of operations, liquidity, cash flows and financial condition, the consummation of previously announced timberland transactions, as well as our plans and decisions relating to various capital expenditures, capital allocation priorities and other discretionary items, including but not limited to with respect to future dividend payments to our shareholders. Forward-looking statements generally are identified by words such as "anticipate," "believe," "continue," "estimate," "expect," "foreseeable," "future," "intend," "maintain," "may," "plan," "potential," "project," "should," "targeted," "will," and "would," and similar words and expressions. Forward-looking statements are based on our current expectations and assumptions. The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. 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;

●	the effect of COVID-19 and other viral or disease outbreaks and their potential effects on our business, results of operations, cash flows, financial condition and future prospects;

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

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

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

●	the availability and cost of shipping and transportation;

●	economic activity in Asia, especially Japan and China;

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

●	potential disruptions in our manufacturing operations;

●	the level of competition from domestic and foreign producers;

●	our 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, required regulatory approvals or the occurrence of any event, change or other circumstances that could give rise to a termination of any acquisition or divestiture transaction under the terms of the governing transaction agreements;

●	raw material availability and prices;

●	the effect of weather;

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

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

●	energy prices;

●	transportation and labor availability and costs;

●	federal tax policies;

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

●	legal proceedings;

●	performance of pension fund investments and related derivatives;

●	the effect of timing of employee retirements and changes in the market price of our common stock on charges for share-based compensation;

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

●	changes in accounting principles; and

●	other risks and uncertainties identified in our 2019 Annual Report on Form 10-K, as well as those set forth from time to time in our other public statements, reports, registration statements, prospectuses, information statements and other filings with the SEC.

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

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

RESULTS OF OPERATIONS

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

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

●	Net contribution to earnings does not include interest expense or income taxes.

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

Overview

In mid-March, COVID-19 was officially declared a global pandemic by the World Health Organization and a national emergency was declared by the United States. States and municipalities subsequently began to issue shelter-in-place orders and similar mandates requiring those not engaged in essential activities to remain home. The U.S. Department of Homeland Security designated the forest products industry as an "essential critical infrastructure workforce," which recognizes the importance of timber and wood products operations in supporting critical infrastructure and construction projects and the manufacture of important personal hygiene items. In response to the pandemic, we began taking proactive steps in early March to safeguard the health of our employees. These actions include detailed cleaning and disinfecting procedures, strict processes around social distancing and personal hygiene, clear communication with our employees, contractors, vendors and visitors about our safety protocols, comprehensive guidance for response to any COVID-19 diagnoses or exposures in our operations, suspension of all air travel and non-essential meetings, and a directive that employees work from home if feasible.

Based on the timing of the outbreak, the economic effects of the pandemic were less pronounced in the first quarter with a drop in U.S. gross domestic product (GDP) of 5 percent. The effects in the second quarter were more acute, with U.S. GDP declining 31 percent. In April, the national unemployment rate soared to a record-high of nearly 15 percent driven by the restrictions imposed in response to the pandemic. Unemployment gradually decreased over the following two months to 13 percent in May and 11 percent in June as several states began to reopen their economies and loosen restrictions on certain sectors. U.S. GDP increased 33 percent in the third quarter based on the advance estimate released by the U.S. Bureau of Economic Analysis, a notable rebound from the prior quarter. The national unemployment rate has shown similar signs of recovery during the quarter, dropping from 10 percent in July to below 8 percent in September. However, a growing share of the job losses are permanent in nature, as opposed to temporary layoffs, raising further concerns about the prospects of sustained economic recovery.

Our second and third quarter 2020 market conditions exceeded expectations, with a record run-up in pricing for our commodity wood products. This pricing was driven by strong repair and remodel demand and a stronger-than-expected U.S. housing market, resulting in demand that significantly outpaced available supply. However, there is still uncertainty as to our market conditions for the remainder of the year, which will be influenced by the trajectory of COVID-19 infections and the related impact on economic activity, including changes in the unemployment rate and the nature and extent of future government stimulus.

Business Outlook

The demand for sawlogs within our Timberlands segment is directly affected by domestic production of wood-based building products. The strength of the U.S. housing market, especially new residential construction, 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 and trade policy. Japanese housing starts are a key driver of export log demand in Japan. The demand for pulpwood from our Timberlands segment is directly affected by the production of pulp, paper and oriented strand board as well as the demand for biofuels, such as pellets made from pulpwood.

Third quarter new residential construction activity increased significantly compared with the prior quarter. On a seasonally adjusted annual basis, housing starts as reported by the U.S. Census Bureau for the third quarter 2020 averaged 1.43 million, which was 33 percent above second quarter 2020. Single family starts averaged 1.04 million units, a 36 percent improvement over second quarter 2020 and 16 percent higher than third quarter 2019. Multi-family starts averaged 390 thousand units in third quarter 2020, which was 24 percent higher than second quarter 2020 and 1 percent higher than third quarter 2019. Sales of newly built, single family homes averaged a seasonally adjusted annual rate of 973 thousand units for the third quarter of 2020, an increase of 38 percent from the prior quarter average of 703 thousand units. Additionally, the National Association of Home Builders Housing Market Index, which measures builder confidence in the market for newly built single family homes in the U.S., reported a historic high of 83 points in September.

In repair and remodel markets, stay at home behavior has bolstered do-it-yourself activity, contributing to increased sales at building supply stores and overall repair and remodeling demand. According to the Census Bureau Advance Retail Spending report, building material and garden supply store sales increased 17 percent in third quarter 2020 compared with the same quarter a year ago, suggesting continued strength in the remodeling market through the third quarter.

In U.S. wood product markets, demand and pricing for commodity products increased sharply throughout the quarter, and benchmark pricing for lumber and oriented strand board reached record highs in September 2020. The Random Lengths Framing Lumber Composite price averaged $746/MBF in third quarter 2020, an 84 percent increase from second quarter 2020. The Oriented Strand Board Composite indicator price also increased significantly, averaging $585/MSF in third quarter 2020, a 99 percent increase from second quarter 2020. To date, fourth quarter benchmark pricing for lumber has declined from its record high levels in September. Fourth quarter to date benchmark pricing for oriented strand board has held firm.

In Western log markets, Douglas fir sawlog prices increased 10 percent in third quarter 2020 compared with second quarter 2020 as reported by RISI Log Lines. We experienced significant wildfire activity in the West during the third quarter which impacted our Oregon timberlands and restricted harvest activity. The resulting impacts to the supply chain and log prices from these wildfires and subsequent salvage operations remains to be seen. In the South, delivered sawlog prices decreased slightly compared with second quarter 2020 with a two percent change in price as reported by TimberMart-South. We continue to expect our full year Southern timber harvest volumes will be approximately 10 percent below 2019 harvest levels, as we reduced 2020 harvest volumes in light of the economic effects of the COVID-19 pandemic.

Exchange rates, available supply from other countries and trade policy affect our export businesses. In Japan, total housing starts year to date through August 2020 declined 11 percent compared to the same period in 2019. A comparable decline was observed for the key Post and Beam segment. The decline in year over year housing starts is likely due to an increase in the consumption tax which came into effect in October 2019, as well as the impacts of the COVID-19 pandemic.

Export log prices to China decreased by 6 percent on average in third quarter 2020 over second quarter 2020, as reported by RISI Log Lines. Chinese economic activity and log demand improved in the third quarter as the impacts of COVID-19 remained limited. Log supply to China’s main ocean ports was higher as shipment volumes from New Zealand and Europe increased following second quarter disruptions related to COVID-19. Softwood log inventories at China’s main ocean ports remained flat through the third quarter.

Our Real Estate & ENR segment is affected by the health of the U.S. economy. According to the Realtors Land Institute (RLI) of the National Association of Realtors, the dollar volume of rural properties sold increased by 2.2 percent in 2019 over 2018, and per acre prices grew 2.1 percent on average. Based on RLI’s 2019 Land Market Survey published in January 2020, these trends are expected to continue with prices and volumes of land transactions forecasted to rise 2.2 percent and timberland sales expected to rise 1.5 percent in 2020. Demand for rural properties has remained solid in 2020, although COVID-19-related restrictions are delaying the financing and closing of some land transactions.

CONSOLIDATED RESULTS

How We Did Third Quarter 2020 and Year-to-Date 2020

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED					AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019			SEPTEMBER 2020		SEPTEMBER 2019			2020 VS. 2019
Net sales	$	2,110	$	1,671	$	439		$	5,469	$	5,006		$	463
Costs of sales		1,390		1,399		(9	)		4,055		4,111			(56	)
Operating income		510		202		308			993		562			431
Net earnings (loss)		283		99		184			505		(62	)		567
Earnings (loss) per share, basic and diluted		0.38		0.13		0.25			0.68		(0.08	)		0.76

Comparing Third Quarter 2020 with Third Quarter 2019

Net sales

Net sales increased $439 million – 26 percent – primarily due to a $492 million increase in Wood Products sales to unaffiliated customers attributable to increased sales realizations across most product lines.

This increase was partially offset by a $53 million decrease in Timberlands sales to unaffiliated customers, primarily due to decreased sales volumes across all regions.

Costs of sales

Costs of sales decreased $9 million – 1 percent – primarily due to decreased log sales volumes within our Timberlands segment partially offset by increased real estate acres sold within our Real Estate & ENR segment. Refer to additional analysis of fluctuations within our Timberlands, Real Estate, Energy and Natural Resources and Wood Products discussions below.

Operating income

Operating income increased $308 million – 152 percent – primarily due to a $448 million increase in consolidated gross margin (see discussion of components above).

This increase was partially offset by an $80 million timber casualty loss recorded related to the Oregon wildfires (refer to Note 16: Other Operating Costs, Net) and a $68 million product remediation insurance recovery recorded in third quarter 2019, with no similar activity in third quarter 2020 (refer to Note 14: Product Remediation Recoveries).

Net earnings (loss)

Net earnings increased $184 million – 186 percent – primarily due to the $308 million increase in operating income, as discussed above.

This increase was partially offset by a $106 million increase in income tax expense and a $20 million increase in interest expense (refer to Income Taxes and Interest Expense).

Comparing Year-to-Date 2020 with Year-to-Date 2019

Net sales

Net sales increased $463 million – 9 percent – primarily due to a $630 million increase in Wood Products sales to unaffiliated customers attributable to increased sales realizations for our structural lumber and oriented strand board products.

This increase was partially offset by a $145 million decrease in Timberlands sales to unaffiliated customers, primarily attributable to decreased sales volumes across all regions, as well as a $22 million decrease in Real Estate & ENR net sales to unaffiliated customers, primarily due to decreased oil and gas prices.

Costs of sales

Costs of sales decreased $56 million – 1 percent – primarily due to decreased log sales volumes within our Timberlands segment. This decrease was partially offset by increased real estate acres sold, as well as increased basis per acre sold within our Real Estate & ENR segment. Refer to additional analysis of fluctuations within our Timberlands, Real Estate, Energy and Natural Resources and Wood Products discussions below.

Operating income

Operating income increased $431 million – 77 percent – primarily due to a $519 million increase in consolidated gross margin (see discussion of components above).

This increase was partially offset by a $60 million decrease in product remediation insurance recoveries (refer to Note 14: Product Remediation Recoveries) and a $28 million increase in other operating costs, net attributable to an $80 million timber casualty loss recorded in third quarter 2020 related to the Oregon wildfires, partially offset by a reduction in legal charges (refer to Note 16: Other Operating Costs, Net).

Net earnings (loss)

Net earnings increased $567 million – 915 percent – primarily due to:

●	a $467 million decrease in non-operating pension and other postretirement benefit costs (refer to Note 7: Pension and Other Postretirement Benefit Plans) and

●	a $431 million increase in operating income, as discussed above.

These changes were partially offset by a $304 million change in income taxes, from a $138 million benefit year-to-date 2019, to a $166 million income tax charge for year-to-date 2020 (refer to Income Taxes), as well as a $17 million decrease in interest income and other.

TIMBERLANDS

How We Did Third Quarter 2020 and Year-to-Date 2020

	QUARTER ENDED					AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020			SEPTEMBER 2019		2020 VS. 2019			SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019
Net sales to unaffiliated customers:
Delivered logs:
West	$	163		$	172	$	(9	)	$	519	$	571	$	(52	)
South		141			168		(27	)		436		483		(47	)
North⁽¹⁾		13			24		(11	)		37		70		(33	)
Subtotal delivered logs sales		317			364		(47	)		992		1,124		(132	)
Stumpage and pay-as-cut timber		5			10		(5	)		15		29		(14	)
Recreational and other lease revenue		16			15		1			47		45		2
Other⁽²⁾		7			9		(2	)		31		32		(1	)
Subtotal net sales to unaffiliated customers		345			398		(53	)		1,085		1,230		(145	)
Intersegment sales		107			125		(18	)		350		381		(31	)
Total sales	$	452		$	523	$	(71	)	$	1,435	$	1,611	$	(176	)
Costs of sales	$	358		$	429	$	(71	)	$	1,116	$	1,247	$	(131	)
Operating income (loss) and Net contribution (charge) to earnings	$	(11	)	$	72	$	(83	)	$	169	$	294	$	(125	)

(1)	In November 2019, we sold our Michigan timberlands and in March 2020, we sold our Montana timberlands.

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

Comparing Third Quarter 2020 with Third Quarter 2019

Net sales to unaffiliated customers

Net sales to unaffiliated customers decreased $53 million – 13 percent – primarily due to:

●	a $27 million decrease in Southern log sales attributable to a 13 percent decrease in sales volumes, as well as a 4 percent decrease in sales realizations;

●	an $11 million decrease in Northern log sales attributable to a 46 percent decrease in sales volumes due to the divestitures of our Michigan and Montana timberlands and

●	a $9 million decrease in Western log sales attributable to a 14 percent decrease in sales volumes, partially offset by a 10 percent increase in sales realizations.

Intersegment sales

Intersegment sales decreased $18 million – 14 percent – primarily due to a 22 percent decrease in intersegment log sales volumes, partially offset by a 10 percent increase in intersegment log sales realizations.

Costs of sales

Costs of sales decreased $71 million – 17 percent – primarily due to decreases in log sales volumes across all regions, as discussed above.

Operating income (loss) and Net contribution (charge) to earnings

Operating income (loss) and net contribution (charge) to earnings decreased $83 million – 115 percent – primarily due to an $80 million timber casualty loss related to the Oregon wildfires recorded in third quarter 2020 with no similar activity in the same period in 2019.

Comparing Year-to-Date 2020 with Year-to-Date 2019

Net sales to unaffiliated customers

Net sales to unaffiliated customers decreased $145 million – 12 percent – primarily due to:

●	a $52 million decrease in Western log sales attributable to an 11 percent decrease in sales volumes, partially offset by a 3 percent increase in sales realizations;

●	a $47 million decrease in Southern log sales attributable to a 6 percent decrease in sales volumes, as well as a 4 percent decrease in sales realizations and

●	a $33 million decrease in Northern log sales attributable to a 47 percent decrease in sales volumes due to the divestitures of our Michigan and Montana timberlands.

Intersegment sales

Intersegment sales decreased $31 million – 8 percent – primarily due to a 10 percent decrease in intersegment log sales volumes, partially offset by a 3 percent increase in intersegment log sales realizations.

Costs of sales

Costs of sales decreased $131 million – 11 percent – primarily due to decreases in log sales volumes across all regions, as discussed above.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased $125 million – 43 percent – primarily due to an $80 million timber casualty loss related to the Oregon wildfires recorded in year-to-date 2020 with no similar activity for the same period in 2019, as well as the change in the components of gross margin, as discussed above.

Third-Party Log Sales Volumes and Fee Harvest Volumes

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
VOLUMES IN THOUSANDS	SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019			SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019
Third-party log sales – tons:
West⁽¹⁾		1,489		1,729		(240	)		4,887		5,513		(626	)
South		4,185		4,795		(610	)		12,857		13,694		(837	)
North⁽²⁾		234		429		(195	)		631		1,186		(555	)
Total		5,908		6,953		(1,045	)		18,375		20,393		(2,018	)
Fee harvest volumes – tons:
West⁽¹⁾		1,911		2,183		(272	)		6,457		7,023		(566	)
South		5,596		6,802		(1,206	)		17,640		19,661		(2,021	)
North⁽²⁾		321		560		(239	)		901		1,565		(664	)
Total		7,828		9,545		(1,717	)		24,998		28,249		(3,251	)

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

(2)	In November 2019, we sold our Michigan timberlands and in March 2020, we sold our Montana timberlands.

REAL ESTATE, ENERGY AND NATURAL RESOURCES

How We Did Third Quarter 2020 and Year-to-Date 2020

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019			SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019
Net sales:
Real estate	$	49	$	45	$	4		$	192	$	200	$	(8	)
Energy and natural resources		20		24		(4	)		54		68		(14	)
Total	$	69	$	69	$	—		$	246	$	268	$	(22	)
Costs of sales	$	46	$	32	$	14		$	156	$	127	$	29
Operating income and Net contribution to earnings	$	17	$	32	$	(15	)	$	72	$	122	$	(50	)

The volume of real estate sales is a function of many factors, including the general state of the economy, demand in local real estate markets, the ability of buyers to obtain financing, the number of competing properties listed for sale, the seasonal nature of sales (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 Third Quarter 2020 with Third Quarter 2019

Net sales

Net sales remained consistent due to a minimal increase in real estate sales, offset by an equal decrease in energy and natural resources sales.

Costs of sales

Costs of sales increased $14 million – 44 percent – primarily due to increased real estate acres sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased $15 million – 47 percent – primarily due to the change in the components of gross margin, as discussed above.

Comparing Year-to-Date 2020 with Year-to-Date 2019

Net sales

Net sales decreased $22 million – 8 percent – primarily due to lower oil and gas prices, as well as decreased energy and natural resources sales volumes.

Costs of sales

Costs of sales increased $29 million – 23 percent – primarily due to increased real estate acres sold, as well as increased basis per acre sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings decreased $50 million – 41 percent – primarily due to the change in the components of gross margin, as discussed above.

REAL ESTATE SALES STATISTICS

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
	SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019			SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019
Acres sold		34,917		18,057		16,860			111,228		103,922		7,306
Average price per acre	$	1,381	$	2,415	$	(1,034	)	$	1,662	$	1,806	$	(144	)

WOOD PRODUCTS

How We Did Third Quarter 2020 and Year-to-Date 2020

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019			SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019
Net sales:
Structural lumber	$	819	$	487	$	332		$	1,865	$	1,426	$	439
Oriented strand board		290		159		131			659		475		184
Engineered solid section		135		138		(3	)		373		388		(15	)
Engineered I-joists		83		90		(7	)		231		246		(15	)
Softwood plywood		55		42		13			128		130		(2	)
Medium density fiberboard		47		44		3			124		127		(3	)
Complementary building products		183		162		21			505		466		39
Other products produced⁽¹⁾		84		82		2			253		250		3
Total	$	1,696	$	1,204	$	492		$	4,138	$	3,508	$	630
Costs of sales	$	1,075	$	1,067	$	8		$	3,112	$	3,104	$	8
Operating income and Net contribution to earnings	$	566	$	143	$	423		$	859	$	293	$	566

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

Comparing Third Quarter 2020 with Third Quarter 2019

Net sales

Net sales increased $492 million – 41 percent – primarily due to:

●	a $332 million increase in structural lumber sales attributable to a 73 percent increase in sales realizations, partially offset by a 3 percent decrease in sales volumes;

●	a $131 million increase in oriented strand board sales attributable to an 85 percent increase in sales realizations, partially offset by a 1 percent decrease in sales volumes;

●	a $21 million increase in complementary building products sales attributable to increased sales volumes and

●	a $13 million increase in softwood plywood sales attributable to a 47 percent increase in sales realizations, partially offset by a 12 percent decrease in sales volumes.

These increases were partially offset by a $7 million decrease in sales for engineered I-joists and a $3 million decrease in sales for engineered solid section.

Costs of sales

Costs of sales increased $8 million – 1 percent – primarily due to increased Canadian timberlands and Distribution costs, partially offset by decreased sales volumes.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased $423 million – 296 percent – primarily due to the change in the components of gross margin, as discussed above, partially offset by a $68 million decrease in product remediation insurance recoveries.

Comparing Year-to-Date 2020 with Year-to-Date 2019

Net sales

Net sales increased $630 million – 18 percent – primarily due to:

●	a $439 million increase in structural lumber sales attributable to a 31 percent increase in sales realizations;

●	a $184 million increase in oriented strand board sales attributable to a 35 percent increase in sales realizations, as well as a 3 percent increase in sales volumes and

●	a $39 million increase in complementary building products sales attributable to increased sales volumes.

These increases were partially offset by a $15 million decrease in sales for engineered solid section and a $15 million decrease in sales for engineered I-joists.

Costs of sales

Cost of sales increased $8 million – less than 1 percent – primarily due to a minimal 1 percent increase in total sales volumes.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings increased $566 million – 193 percent – primarily due to the change in the components of gross margin, as discussed above, partially offset by a $60 million decrease in product remediation insurance recoveries.

Third-Party Sales Volumes

	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS⁽¹⁾	SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019			SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019
Structural lumber – board feet		1,216		1,253		(37	)		3,663		3,660		3
Oriented strand board – square feet (3/8”)		736		740		(4	)		2,253		2,190		63
Engineered solid section – cubic feet		6.3		6.3		—			17.4		17.6		(0.2	)
Engineered I-joists – lineal feet		51		54		(3	)		140		147		(7	)
Softwood plywood – square feet (3/8”)		107		121		(14	)		315		351		(36	)
Medium density fiberboard – square feet (3/4”)		55		53		2			147		152		(5	)

(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			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS	SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019			SEPTEMBER 2020		SEPTEMBER 2019		2020 VS. 2019
Structural lumber – board feet:
Production		1,170		1,189		(19	)		3,487		3,527		(40	)
Outside purchase		55		69		(14	)		164		182		(18	)
Total		1,225		1,258		(33	)		3,651		3,709		(58	)
Oriented strand board – square feet (3/8”):
Production		759		747		12			2,278		2,212		66
Outside purchase		77		93		(16	)		228		262		(34	)
Total		836		840		(4	)		2,506		2,474		32
Engineered solid section – cubic feet:
Production		5.4		5.3		0.1			16.8		17.2		(0.4	)
Outside purchase		0.2		0.2		—			0.4		0.4		—
Total		5.6		5.5		0.1			17.2		17.6		(0.4	)
Engineered I-joists – lineal feet:
Production		43		47		(4	)		128		139		(11	)
Outside purchase		3		4		(1	)		8		8		—
Total		46		51		(5	)		136		147		(11	)
Softwood plywood – square feet (3/8”):
Production		94		100		(6	)		267		302		(35	)
Outside purchase		17		21		(4	)		47		56		(9	)
Total		111		121		(10	)		314		358		(44	)
Medium density fiberboard – square feet (3/4"):
Production		57		47		10			148		153		(5	)
Total		57		47		10			148		153		(5	)

UNALLOCATED ITEMS

Net Charge to Earnings – Unallocated Items

	QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020			SEPTEMBER 2019			2020 VS. 2019			SEPTEMBER 2020			SEPTEMBER 2019			2020 VS. 2019
Unallocated corporate function and variable compensation expense	$	(36	)	$	(19	)	$	(17	)	$	(78	)	$	(50	)	$	(28	)
Liability classified share-based compensation		(5	)		(1	)		(4	)		1			(5	)		6
Foreign exchange gain (loss)		2			(1	)		3			(3	)		(2	)		(1	)
Elimination of intersegment profit in inventory and LIFO		(9	)		6			(15	)		(4	)		(4	)		—
Other		(14	)		(30	)		16			(23	)		(86	)		63
Operating loss		(62	)		(45	)		(17	)		(107	)		(147	)		40
Non-operating pension and other postretirement benefit costs		(9	)		(15	)		6			(28	)		(495	)		467
Interest income and other		2			6			(4	)		5			22			(17	)
Net charge to earnings	$	(69	)	$	(54	)	$	(15	)	$	(130	)	$	(620	)	$	490

Comparing Third Quarter 2020 with Third Quarter 2019

Net charge to earnings increased $15 million – 28 percent – primarily due to:

●	a $17 million increase in unallocated corporate function and variable compensation expense and

●	a $15 million increase in elimination of intersegment profit in inventory and LIFO.

These increases were partially offset by a $16 million decrease in Other, primarily due to a reduction in legal charges.

Comparing Year-to-Date 2020 with Year-to-Date 2019

Net charge to earnings decreased $490 million – 79 percent – primarily due to:

●	a $449 million noncash pension settlement charge recorded during year-to-date 2019, with no similar activity in 2020 (refer to Note 7: Pension and Other Postretirement Benefit Plans for further information);

●	a $12 million legal benefit recognized during year-to-date 2020 and

●	a $6 million decrease in expense related to liability classified share-based compensation attributable to a decrease in our stock price for the year-to-date period ended September 30, 2020 compared to an increase for the same period in 2019.

INTEREST EXPENSE

Our interest expense, net of capitalized interest, was:

●	$111 million for third quarter 2020 and $299 million year-to-date 2020;

●	$91 million for third quarter 2019 and $289 million year-to-date 2019.

Interest expense increased by $20 million compared to third quarter 2019 primarily due to a $23 million charge related to the early extinguishment of debt recorded in third quarter 2020.

Interest expense increased by $10 million compared to year-to-date 2019 primarily due to a $22 million increase in charges related to the early extinguishment of debt. This increase was partially offset by $12 million of expense on SPE notes recorded during year-to-date 2019, with no similar activity in 2020.

Refer to Note 9: Long-Term Debt and Line of Credit for further information.

INCOME TAXES

Our provision for income taxes was:

●	a $109 million expense for third quarter 2020 and a $166 million expense year-to-date 2020;

●	a $3 million expense for third quarter 2019 and a $138 million benefit year-to-date 2019.

Our provision for income taxes is primarily driven by earnings (losses) generated by our TRSs. Income tax expense increased by $304 million compared to year-to-date 2019 primarily due to the $109 million tax benefit recognized in 2019 related to our noncash pension settlement charge and stronger current year-to-date earnings. Overall performance results for our business segments can be found in Consolidated Results.

Refer to Note 17: Income Taxes and Note 7: Pension and Other Postretirement Benefit Plans for further 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 meet our obligations to our lenders, while also maintaining access to all major financial markets. As of September 30, 2020, we have $787 million in cash and cash equivalents and $1.5 billion of availability on our line of credit, which expires in January 2025. We believe we have sufficient liquidity to meet our cash requirements for the foreseeable future.

In light of the significant uncertainty regarding the duration and magnitude of the effects of the COVID-19 pandemic on our business and our customers, in May 2020, as part of several steps taken to enhance and preserve liquidity and financial flexibility, the board of directors temporarily suspended the quarterly cash dividend.

The board has continued to evaluate the company’s cash flow, liquidity, leverage, customer demand, market conditions, the broader macroeconomic environment, and other factors in assessing opportunities to reinitiate the quarterly cash dividend. Based upon its most recent evaluation of these factors, the board has approved the reinitiation of the company’s quarterly cash dividend within a new implementation framework. Under this new framework, the company intends to pay a quarterly base cash dividend beginning in the fourth quarter 2020 that will be supported by cash flows from the Timberlands and Real Estate, Energy and Natural Resources segments. This base dividend may be supplemented by a variable cash dividend and potential opportunistic share repurchases, as needed, to achieve the company’s targeted annual total return of cash to shareholders. For the fourth quarter 2020, the base cash dividend declared by the board was $0.17 per share. The board will continue to evaluate the cash dividend on a quarterly basis based on this framework and the other factors outlined above.

CASH FROM OPERATIONS

Consolidated net cash from operations was:

●	$1,085 million for year-to-date 2020 and

●	$674 million for year-to-date 2019.

Net cash from operations increased $411 million, primarily due to:

●	increased cash inflows from our business segments and

●	decreased cash used for interest payments.

CASH FROM INVESTING ACTIVITIES

Consolidated net cash from investing activities was:

●	$311 million for year-to-date 2020 and

●	$32 million for year-to-date 2019.

Net cash from investing activities increased $279 million, primarily due to:

●	$145 million of proceeds from the sale of our Montana timberlands during first quarter 2020;

●	a $109 million increase in proceeds received from variable interest entities and

●	a $41 million decrease in cash paid for capital expenditures for property and equipment.

Summary of Capital Spending by Business Segment

	YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020		SEPTEMBER 2019
Timberlands	$	75	$	79
Wood Products		124		148
Unallocated Items		—		14
Total	$	199	$	241

We expect our net capital expenditures for 2020 will be approximately $280 million. The amount we spend on capital expenditures could change.

CASH FROM FINANCING ACTIVITIES

Consolidated net cash from financing activities was:

●	$(695) million for year-to-date 2020 and

●	$(887) million for year-to-date 2019.

Net cash from financing activities increased $192 million, primarily due to:

●	a $506 million decrease in cash paid for dividends;

●	a $302 million decrease in cash paid related to our monetized SPEs and

●	a $60 million decrease in cash used for share repurchases.

These changes were partially offset by a $424 million increase in cash used for payments on long-term debt and a $245 million increase in net cash payments related to borrowings on our line of credit.

Line of Credit

We had no outstanding borrowings on our credit facility as of September 30, 2020. As of December 31, 2019, we had $230 million of outstanding borrowings on our $1.5 billion five-year senior unsecured revolving credit facility. This credit facility expires in January 2025.

Refer to Note 9: Long-Term Debt and Line of Credit for further information.

Long-Term Debt

In September 2020, we redeemed our $325 million 3.25 percent notes due in March 2023.

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 was used to redeem our outstanding $500 million 7.38 percent notes due in October 2019.

Refer to Note 9: Long-Term Debt and Line of Credit for further information.

Our revolving credit agreement and our term loan agreement utilize the London Inter-bank Offered Rate (LIBOR) as a basis for one of the interest rate options available to the company to apply to outstanding borrowings. LIBOR is expected to be discontinued at some point during 2021, and we are closely monitoring ongoing market developments in the identification or creation of a widely accepted replacement rate. We have included provisions in our new revolving credit agreement that specifically contemplate the transition from LIBOR to a replacement benchmark rate. In July 2020, we amended our term loan agreement primarily to include provisions that address the future discontinuance of LIBOR and set forth the process for transition to an alternate benchmark rate.

As of September 30, 2020, of our $6.0 billion of long-term debt, only $225 million in term loan borrowings are governed by a debt agreement that utilizes LIBOR as one of the alternative applicable rates. We therefore do not believe that the discontinuation of LIBOR as a reference rate in our debt agreements will have a material adverse effect on our financial position or materially affect our interest expense.

Debt Covenants

As of September 30, 2020, Weyerhaeuser Company was in compliance with its debt covenants. There have been no significant changes to the debt covenants presented in our 2019 Annual Report on Form 10-K for our existing long-term debt instruments, and we expect to remain in compliance with our debt covenants for the foreseeable future.

Option Exercises

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

●	$9 million for year-to-date 2020 and

●	$8 million for year-to-date 2019.

Our average stock price was $24.67 and $25.57 for year-to-date 2020 and 2019, respectively.

Dividend Payments

We paid cash dividends on common shares of:

●	$254 million for year-to-date 2020 and

●	$760 million for year-to-date 2019.

This decrease in dividends paid is due to the temporary suspension of the quarterly dividend that was announced in second quarter 2020.

Share Repurchases

During year-to-date 2020, we did not repurchase shares. During year-to-date 2019, we repurchased over 2.3 million common shares for approximately $60 million under the 2019 Repurchase Program. There were no unsettled repurchases as of September 30, 2020 or December 31, 2019. Refer to Note 4: Net Earnings (Loss) Per Share and Share Repurchases for further information.

PERFORMANCE MEASURES

Adjusted EBITDA by Segment

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 and special items.

	QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020			SEPTEMBER 2019			2020 VS. 2019			SEPTEMBER 2020			SEPTEMBER 2019			2020 VS. 2019
Adjusted EBITDA by Segment:
Timberlands	$	130		$	154		$	(24	)	$	443		$	522		$	(79	)
Real Estate & ENR		60			60			—			218			237			(19	)
Wood Products		615			123			492			997			366			631
		805			337			468			1,658			1,125			533
Unallocated Items		(60	)		(29	)		(31	)		(114	)		(109	)		(5	)
Adjusted EBITDA	$	745		$	308		$	437		$	1,544		$	1,016		$	528

We reconcile Adjusted EBITDA to net earnings (loss) 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.

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2020:

DOLLAR AMOUNTS IN MILLIONS	Timberlands			Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings											$	283
Interest expense, net of capitalized interest⁽¹⁾												111
Income taxes												109
Net contribution (charge) to earnings	$	(11	)	$	17	$	566	$	(69	)	$	503
Non-operating pension and other postretirement benefit costs		—			—		—		9			9
Interest income and other		—			—		—		(2	)		(2	)
Operating income (loss)		(11	)		17		566		(62	)		510
Depreciation, depletion and amortization		61			3		49		2			115
Basis of real estate sold		—			40		—		—			40
Special items included in operating income (loss)⁽²⁾		80			—		—		—			80
Adjusted EBITDA	$	130		$	60	$	615	$	(60	)	$	745

(1)	Interest expense, net of capitalized interest includes a pretax special item of $23 million related to a charge for the early extinguishment of debt.

(2)	Operating income (loss) includes a pretax special item consisting of an $80 million timber casualty loss.

The table below reconciles Adjusted EBITDA for the quarter ended September 30, 2019:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products			Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings											$	99
Interest expense, net of capitalized interest												91
Income taxes												3
Net contribution (charge) to earnings	$	72	$	32	$	143		$	(54	)	$	193
Non-operating pension and other postretirement benefit costs		—		—		—			15			15
Interest income and other		—		—		—			(6	)		(6	)
Operating income (loss)		72		32		143			(45	)		202
Depreciation, depletion and amortization		82		4		48			1			135
Basis of real estate sold		—		24		—			—			24
Special items included in operating income (loss)⁽¹⁾		—		—		(68	)		15			(53	)
Adjusted EBITDA	$	154	$	60	$	123		$	(29	)	$	308

(1)	Operating income (loss) includes pretax special items consisting of a $68 million product remediation insurance recovery within Wood Products and a $15 million legal charge within Unallocated Items.

The table below reconciles Adjusted EBITDA for the year-to-date period ended September 30, 2020:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products			Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings											$	505
Interest expense, net of capitalized interest⁽¹⁾												299
Income taxes												166
Net contribution (charge) to earnings	$	169	$	72	$	859		$	(130	)	$	970
Non-operating pension and other postretirement benefit costs		—		—		—			28			28
Interest income and other		—		—		—			(5	)		(5	)
Operating income (loss)		169		72		859			(107	)		993
Depreciation, depletion and amortization		194		10		146			5			355
Basis of real estate sold		—		136		—			—			136
Special items included in operating income (loss)⁽²⁾		80		—		(8	)		(12	)		60
Adjusted EBITDA	$	443	$	218	$	997		$	(114	)	$	1,544

(1)	Interest expense, net of capitalized interest includes pretax special items of $34 million related to charges for the early extinguishment of debt.

(2)	Operating income (loss) includes pretax special items consisting of a $12 million noncash legal benefit within Unallocated Items, an $8 million product remediation insurance recovery within Wood Products and an $80 million timber casualty loss within Timberlands.

The table below reconciles Adjusted EBITDA for the year-to-date period ended September 30, 2019:

DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products			Unallocated Items			Total
Adjusted EBITDA by Segment:
Net loss											$	(62	)
Interest expense, net of capitalized interest⁽¹⁾												289
Income taxes												(138	)
Net contribution (charge) to earnings	$	294	$	122	$	293		$	(620	)	$	89
Non-operating pension and other postretirement benefit costs⁽²⁾		—		—		—			495			495
Interest income and other		—		—		—			(22	)		(22	)
Operating income (loss)		294		122		293			(147	)		562
Depreciation, depletion and amortization		228		10		141			3			382
Basis of real estate sold		—		105		—			—			105
Special items included in operating income (loss)⁽³⁾		—		—		(68	)		35			(33	)
Adjusted EBITDA	$	522	$	237	$	366		$	(109	)	$	1,016

(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)

Non-operating pension and other postretirement benefit costs includes a pretax special item consisting of a $449 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 pretax special items consisting of a $68 million product remediation insurance recovery within Wood Products and $35 million of legal charges within Unallocated Items.

Net Earnings and Net Earnings per Diluted Share Before Special Items

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

Net Earnings Before Special Items

	QUARTER ENDED					YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2020		SEPTEMBER 2019			SEPTEMBER 2020			SEPTEMBER 2019
Net earnings (loss)	$	283	$	99		$	505		$	(62	)
Early extinguishment of debt charges		23		—			34			9
Legal charges (benefits)		—		11			(12	)		26
Pension settlement charges		—		—			—			340
Product remediation recoveries		—		(51	)		(6	)		(51	)
Timber casualty loss		80		—			80			—
Net earnings before special items	$	386	$	59		$	601		$	262

Net Earnings per Diluted Share Before Special Items

	QUARTER ENDED					YEAR-TO-DATE ENDED
	SEPTEMBER 2020		SEPTEMBER 2019			SEPTEMBER 2020			SEPTEMBER 2019
Net earnings (loss) per diluted share	$	0.38	$	0.13		$	0.68		$	(0.08	)
Early extinguishment of debt charges		0.03		—			0.05			0.01
Legal charges (benefits)		—		0.02			(0.02	)		0.04
Pension settlement charges		—		—			—			0.46
Product remediation recoveries		—		(0.07	)		(0.01	)		(0.07	)
Timber casualty loss		0.11		—			0.11			—
Net earnings per diluted share before special items	$	0.52	$	0.08		$	0.81		$	0.36

CRITICAL ACCOUNTING POLICIES

There have been no significant changes during year-to-date 2020 to the critical accounting policies presented in our 2019 Annual Report on Form 10-K.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

LONG-TERM INDEBTEDNESS OBLIGATIONS

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

●	scheduled principal repayments for the next five years and after;

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

●	estimated fair values of outstanding obligations.

We estimate the fair value of our debt instruments using quoted market prices we received for the same types and issues of our debt or on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt. Changes in market rates of interest affect the fair value of our fixed-rate debt.

Summary of Long-Term Indebtedness Principal Obligations as of September 30, 2020

DOLLAR AMOUNTS IN MILLIONS	2020			2021			2022			2023			2024			THEREAFTER			TOTAL⁽¹⁾			FAIR VALUE
Fixed-rate debt	$	—		$	150		$	—		$	1,551		$	—		$	4,074		$	5,775		$	7,194
Average interest rate		—	%		9.00	%		—	%		5.26	%		—	%		6.19	%		6.01	%	N/A
Variable-rate debt	$	—		$	—		$	—		$	—		$	—		$	225		$	225		$	225
Average interest rate		—	%		—	%		—	%		—	%		—	%		1.75	%		1.75	%	N/A

(1)	Excludes $26 million of unamortized discounts, capitalized debt expense and business combination fair value adjustments.

Item 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls are controls and other procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure. The company’s principal executive officer and principal financial officer have concluded that the company’s disclosure controls and procedures were effective as of September 30, 2020, based on an evaluation of the company’s disclosure controls and procedures as of that date.

CHANGES IN INTERNAL CONTROLS

No changes occurred in the company’s internal control over financial reporting during year-to-date 2020 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Refer to Note 11: Legal Proceedings, Commitments and Contingencies.

Item 1A. RISK FACTORS

The following supplements and updates the risk factors in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and in Part II, Item 1A, “Risk Factors,” of our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020. If any of the risks discussed below or in our Annual Report on Form 10-K occur, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected.

Homebuilding Market and Economic Risks

We face risks related to COVID-19 and other health epidemics and outbreaks, which may adversely affect our business, results of operations and financial condition.

We face risks related to health epidemics and other outbreaks, including the global outbreak of a novel strain of coronavirus (“COVID-19”). In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic. The outbreak spread widely throughout the United States and other regions of the world. In response, federal, state and local governments in the United States, as well as governments throughout the world, declared states of emergency and ordered preventative measures to contain and mitigate the spread of the virus. These measures, which have included shelter-in-place and similar mandates for individuals and closure or curtailment of many businesses, have caused significant economic disruption as well as disruption and volatility in global capital markets, which could worsen. As a result, there have been periodic adverse effects on the demand for our timber and wood products and disruptions to our supply chain and the manufacturing, distribution and export of our timber and wood products, all of which could worsen in the future. Any one or more of these consequences of COVID-19, as well as other unpredictable events, could materially adversely affect our business, results of operations, cash flows and financial condition. The COVID-19 outbreak continues to rapidly evolve, with periods of improvement followed by periods of higher infection rates in various geographical locations throughout the world. The extent to which COVID-19 may further impact our business, results of operations, cash flows and financial condition, as well as our plans and decisions relating to various capital expenditures, other discretionary items and capital allocation priorities, including the timing and amount of our dividends to shareholders, are therefore highly uncertain and will depend on future developments, which cannot be predicted with confidence. Such developments include, but are not limited to, the future rate of occurrence or mutation of COVID-19 or the outbreak of another virulent disease, continuation of or changes in governmental responses to disease outbreak, the duration of disease outbreak, the timing and effectiveness of treatment and testing options, including availability of a vaccine, and consequential restrictions, business disruptions and the effectiveness of responsive actions taken in the United States and other countries to contain

and manage the disease. The impacts of the outbreak and related restrictions have led to a significant increase in national unemployment since the outset of the pandemic. An extended continuation or worsening of domestic unemployment may adversely affect demand for our products and thus negatively impact our business, results of operations, cash flows and financial condition. In addition, the impact of COVID-19 or other virulent disease may also trigger the occurrence, or exacerbate, other risks discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, any of which could have a material adverse effect on our business, results of operation, cash flows and financial condition. For a more detailed discussion on the current effects of COVID-19 on our business and operations, see our discussion under Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) – Economic and Market Conditions Affecting our Operations.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

There were no share repurchases during third quarter 2020.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

None.

Item 6. EXHIBITS


10.1	2011 Fee Deferral Plan for Directors of Weyerhaeuser Company (Amended and Restated Effective August 14, 2020).*

10.2	Weyerhaeuser Company 2013 Long-Term Incentive Plan (Amended and Restated Effective August 14, 2020).*

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

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

32	Certification pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).

101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, has been formatted in Inline XBRL.

* Denotes a management contract or compensatory plan or arrangement.

SIGNATURES

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

	WEYERHAEUSER COMPANY
	(Registrant)

Date: October 30, 2020	By:	/s/ David M. Wold
		David M. Wold
		Vice President and Chief Accounting Officer
		(Principal Accounting Officer and Duly Authorized Officer)

EXHIBIT 10.1

2011 Fee Deferral Plan for Directors
of
Weyerhaeuser Company
(Amended and Restated Effective August 14, 2020)

1.Name and Purpose. The name of this plan is the “2011 Fee Deferral Plan for Directors of Weyerhaeuser Company” (the “Plan”). Its purpose is to provide non‑employee Directors of the Company with increased flexibility in timing the receipt of Fees earned as a Director and to assist the Company in attracting and retaining qualified individuals to serve as Directors.

2.Definitions. Whenever used in the Plan, the following terms shall have the meanings set forth below:

(a)“Beneficiary” means the beneficiary or beneficiaries appointed by a Director to receive payment of the Director’s Deferred Fees after the Director’s death. The appointment shall be made on a form to be supplied by the Company and may be revoked or superseded at any time. In the absence of such appointment, or if the appointed beneficiary or beneficiaries fail to survive the Director, the Director’s beneficiary shall be the Director’s estate.

(b)“Board” means the Board of Directors of the Company, provided that no member of the Board shall participate in or cast a vote with respect to any matter which specifically relates to that individual, as opposed to relating to the Directors as a group.

(c)“Canadian Director” means a Director who is a resident of Canada for the purposes of the Income Tax Act (Canada).

(d)“Committee” means the Compensation Committee of the Board. The Committee makes recommendations to the Board, when appropriate, with respect to matters arising under the Plan.

(e)“Commencement Date” means (i) a Director’s Separation from Service or (ii) a date that is one to five years following a Director’s Separation from Service, as elected by the Director.

(f)“Common Shares” means the shares of common stock, $1.25 par value, of the Company.

(g)“Company” means Weyerhaeuser Company.

(h)“Deferral Period” means that period of time from the end of the date on which Fees would have been paid but for deferral under the Plan (or, in the case of Fees paid in the form of RSUs, from the end of the date of grant of such RSUs) until the time when such Fees are paid.

(i)“Deferred Fees” means any Voluntarily Deferred Fees and Designated Stock Equivalents that have been deferred pursuant to the Plan, together with any earnings or other appreciation thereon. All Deferred Fees are subject to the restrictions on transfer set forth in Subparagraph 7(d).

(j)“Designated Stock Equivalents” has the meaning set forth Subparagraph 4(c).

(k)“Director” for purposes of the Plan means a person serving on the Board who is not an Employee.

(l)“Effective Date” has the meaning set forth in Paragraph 10.

(m)“Election Agreement” has the meaning set forth in Paragraph 4(b).

(n)“Employee” means a person who is classified by the Company or any of its subsidiaries as actively employed by the Company or the subsidiary, as applicable, and who is compensated on a salaried basis as reflected on the Company’s or the subsidiary’s payroll records.

(o)“Fees” mean the fees payable to a Director by the Company, in cash or RSUs, upon the Director’s election or reelection to the Board and chairing the Board or a Committee of the Board, but not fees payable for extended travel at the request of the Board or a Committee of the Board or reimbursement for expenses.

(p)“Interest Rate Deferral” has the meaning set forth in Subparagraph 4(a)(i).

(q)“Plan Year” means the calendar year.

(r)“RSU” means a restricted stock unit granted to a Director, each of which is equivalent in value to one Common Share.

(s)“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and regulations and other guidance promulgated thereunder.

(t)“Separation from Service” means the failure to be reelected to, or the resignation or retirement from, the Board as a Director for any reason, provided, that if the Director continues to provide services for the Company or a subsidiary or affiliate in any capacity, the Director shall have a Separation from Service only if the Director has a “separation from service” within the meaning of Section 409A.

(u)“Specified Employee” means a Director who, as of the date of the Director’s Separation from Service for any reason, is a key employee of the Company. The Director is a key employee if the Director meets the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code Section 416(i)(5)) at any time during the twelve‑month period ending on a Specified Employee identification date as determined under Code section 409A. If the Director is a key employee as of December 31, the Director shall be treated as a Specified Employee for the entire twelve‑month period beginning on the following April 1^st.

(v)“Stock Equivalent” means a deferred unit of account, whether through Stock Equivalent Deferral or Designated Stock Equivalents, which is equal in value to one Common Share of the Company.

(w)“Stock Equivalent Deferral” means Fees deferred as Stock Equivalents pursuant to Subparagraph 4(a)(ii) or 4(c).

(x)“Trading Day” means a day that the New York Stock Exchange is open for business.

(y)“Voluntarily Deferred Fees” has the meaning set forth in Subparagraph 4(a).

3.Participation in the Plan. Any individual who is a Director may participate in the Plan.

4.Deferral of Fees.

(a)Voluntarily Deferred Fees. Except as provided in Subparagraph (c) below for Fees paid in the form of RSUs, a Director may elect to defer receipt of all or a percentage of his or her cash Fees earned in any Plan Year in accordance with this Subparagraph (a). The procedure for this election is set forth in Subparagraph (b) below. Two forms of “Voluntarily Deferred Fees” are provided for.

(i)“Interest Rate Deferral” ‑ This form of deferral provides for the payment of the amount to be deferred with interest, commencing with the Commencement Date elected by the Director, in the form of a lump sum or annual installments over up to 10 years, as elected by the Director. Details as to the amount and timing of payments are set forth in Paragraph 5.

(ii)“Stock Equivalent Deferral” ‑ This form of deferral provides for the payment of the amount to be deferred, increased or decreased by reference to the market price and dividend history of Common Shares, commencing with the Commencement Date elected by the Director, in the form of a lump sum or annual installments over up to 10 years, as elected by the Director. Details as to the amount and timing of payments are set forth in Paragraph 6.

(b)Election Procedure. A Director shall notify the Company, in writing and substantially in the form of Appendix A attached hereto (the “Election Agreement”), on or prior to the December 31 preceding each Plan Year of his or her election to defer the receipt of all or a percentage of any Fees described in Subparagraph 4(a) that are to be earned starting in the Plan Year about to commence; provided, however, that a Director who is newly elected or appointed to the Board after the commencement of a Plan Year may notify the Company of such deferral election at any time prior to the effective date of his or her election or appointment provided that the requirements of Treas. Reg. § 1.409A‑2(a)(7) (or any successor provision) are satisfied. Each notice to defer shall:

(i)state the percentage of the Fees to be deferred;

(ii)designate the percentage of the total amount to be deferred as an Interest Rate Deferral and the percentage of the total amount to be deferred as a Stock Equivalent Deferral; and

(iii)state the Commencement Date for payment of the Voluntarily Deferred Fees and the number of years (from one to 10) elected for payment.

An election to defer Fees is irrevocable. If a Director fails to make a payment election in the Election Agreement for any Plan Year, any Voluntarily Deferred Fees for such Plan Year pursuant to this Subparagraph (b) shall be payable in a single lump sum payment following the Director’s Separation from Service as if the Director had elected Separation from Service as the Commencement Date.

(c)Designated Stock Equivalents. In the event that the Board designates that any Fee to be paid to a Director shall be paid in the form of RSUs, a Director may elect to defer the settlement of a percentage of his or her RSUs in accordance with the procedures set forth below.

(i)Any such deferrals shall be credited to the Director’s account under the Plan as of the date of grant of such RSUs in the form of an equal number of Stock Equivalents or fractions thereof (calculated to the third decimal place with conventional rounding or as otherwise determined by the Committee) (referred to herein as “Designated Stock Equivalents”), which Designated Stock Equivalents, along with any increments thereto pursuant to Subparagraph 6(b) or 6(d) below, shall thereafter be subject to the investment, forfeiture and payment provisions of Paragraphs 6 and 7 of the Plan as well as this Subparagraph (c). Any RSUs or part thereof which the Director does not elect to defer shall be settled as provided in the instrument evidencing the award.

(ii)A Director shall notify the Company, in the Election Agreement, on or prior to the December 31 preceding each Plan Year of his or her election to defer the settlement of a percentage of the RSUs to be granted and starting to be earned in the Plan Year about to commence; provided, however, that a Director who is newly elected or appointed to the Board after the commencement of a Plan Year may notify the Company of such deferral election at any time prior to the effective date of his or her election or appointment provided that the requirements of Treas. Reg. § 1.409A‑2(a)(7) (or any successor provision) are satisfied. Each notice to defer shall:

(I)state the percentage of the RSUs to be deferred as Designated Stock Equivalents; and

(II)state the Commencement Date for the payment of the Designated Stock Equivalents and the number of years (from one to 10) elected for payment.

(iii)An election to defer RSUs in the form of Designated Stock Equivalents shall be irrevocable. Should a Director make a deferral election but fail to make a

payment election in the Election Agreement for any Designated Stock Equivalents, such Designated Stock Equivalents shall be payable in a single lump sum payment following the Director’s Separation from Service as if the Director had elected Separation from Service as the Commencement Date.

(iv)A Director shall be entitled to receive payments with respect to Designated Stock Equivalents as provided in Subparagraph 6(c).

(v)The provisions of the Plan, including those relating to Voluntarily Deferred Fees, shall apply to Designated Stock Equivalents to the extent they are not inconsistent with this Subparagraph (c).

5.Interest Rate Deferral.

(a)Accounts. Any Voluntarily Deferred Fees designated as Interest Rate Deferrals shall be credited to a Director’s account as of the day it would otherwise have been paid in cash and shall thereafter accrue interest at a rate to be designated from time to time by the Board, with such interest to be compounded monthly.

(b)Payments. A Director shall be entitled to receive cash payments with respect to Voluntarily Deferred Fees designated as Interest Rate Deferrals, together with interest accrued to the date of payment in each year of the applicable period as elected under Subparagraph 4(b). Payment shall be made in accordance with Subparagraph 7(a); provided, however, that in the event payments commence based on the Director’s Separation from Service, no payment shall be made earlier than six months after the date of such Separation from Service if the Director is then a Specified Employee, in which case any suspended payment shall occur on the earliest date permitted by this Subparagraph (b) and Section 409A. The amount of cash to be paid each year with respect to the amount of such Interest Rate Deferrals from any Plan Year shall be computed by multiplying a fraction, the numerator of which is one and the denominator of which is the number of years remaining in the applicable payment period for such Interest Rate Deferrals, by the remaining portion of such Interest Rate Deferrals plus accrued interest thereon (e.g., 1/10th is paid in the first year of a ten‑year payment period; 1/9th of the remaining balance in the second year, 1/8th of the remaining balance in the third year, etc., over the ten years).

6.Stock Equivalents.

(a)Accounts. Any Voluntarily Deferred Fees designated as Stock Equivalent Deferrals shall be divided by the price per share (or other pricing methodology approved by the Committee) of the Common Shares on the date such Fees would otherwise have been paid (or, if such date is not a Trading Day, then on the first Trading Day immediately preceding such date) in cash to determine the number of Stock Equivalents or fractions thereof (calculated to the third decimal place with conventional rounding or as otherwise determined by the Committee) credited to a Director’s account. Any Designated Stock Equivalents shall be equal in number to the number of RSUs a Director elects to defer, but shall, along with any increments thereto pursuant to Subparagraph (b) or (d) below, continue to be subject to the forfeiture provisions (but not the payment provisions) of the instrument evidencing the

award of the RSUs in the same manner as if no deferral election had been made. All such Stock Equivalents shall be promptly credited to a Director’s account.

(b)Dividend Equivalents. All Stock Equivalents credited to a Director’s account shall be further credited with an amount equivalent to each dividend declared on Common Shares. The amount of such dividend equivalents shall be divided by the price per share of the Common Shares on the ex-dividend date for such dividend (or other pricing date determined by the Committee for such dividend; and, if any such date is not a Trading Day, then on the first Trading Day immediately preceding such date) to determine the number of additional Stock Equivalents or fractions thereof (calculated to the third decimal place with conventional rounding or as otherwise approved by the Committee) to be credited to a Director’s account.

(c)Payments.

(i)Payment with respect to any Stock Equivalents credited to a Director’s account shall be made as follows:

(I)in the form of Common Shares, equal in number to the number of Stock Equivalents with respect to which payment is being made, plus cash for any fractional shares (determined based on the price per share of the Common Shares on the date of payment or, if such date is not a Trading Day, then on the first Trading Day immediately preceding such date), or

(II)if the Director is a Canadian Director and elects to receive payment in the form of cash, by written notice delivered to the Company on or before the 10^th business day after the Commencement Date or, if applicable, the relevant anniversary thereof (each a “Calculation Date”), in respect of one or more Designated Stock Equivalents of the Director, then a cash payment equal to the product obtained by multiplying the number of Common Shares that would otherwise be delivered to the Director in accordance with Section 6(c)(i)(I) in payment of those Designated Stock Equivalents, in respect of the Calculation Date by the price per share of the Common Shares on the Calculation Date shall be made;

provided, however, no payment shall be made earlier than six months after the date of the Director’s Separation from Service if the Director is then a Specified Employee, in which case any suspended payment shall occur on the earliest date permitted by this Subparagraph (c) and Section 409A.

(ii)In the event a Director has elected payment of Stock Equivalents over a number of years rather than as a lump sum, the number of Common Shares to be paid each year (or, if applicable, the amount of the cash payment to be made pursuant to section 6(c)(i)(II)) shall be computed by multiplying a fraction, the numerator of which is one and the denominator of which is the number of years remaining in the elected payment period, by the remaining number of Stock Equivalents credited to the Director’s account (calculated to the third decimal place

with conventional rounding or as otherwise determined by the Committee), to determine the number of Stock Equivalents for which payment is to be made.

(d)Change in Common Shares. In the event, at any time or from time to time, of a stock dividend, stock split, reverse stock split, combination or exchange of shares, recapitalization, merger, consolidation, change in control or other change in the Company’s structure, the Committee shall make proportional adjustments in the number of Stock Equivalents credited to a Director’s account. Any such adjustments made by the Committee shall be conclusive and binding for all purposes of the Plan.

(e)Price per Share. The term “price per share” shall refer to the closing price of the Common Shares on the New York Stock Exchange on the Trading Day in question.

7.General Provisions Related to Deferred Fees.

(a)Date of Payments. Payments with respect to Interest Rate Deferrals and Stock Equivalents credited to a Director’s account shall be made annually prior to March 15 based on the election made by a Director in the applicable Election Agreement. Payments with respect to Interest Rate Deferrals generally shall be made in January following the Commencement Date. Payments with respect to Stock Equivalents generally shall be made in February following the Commencement Date.

(b)Segregation of Funds. The Company shall be under no obligation to segregate any Deferred Fees during the Deferral Period. Such unsegregated funds are subject to the claims of the Company’s general creditors during the Deferral Period.

(c)Payment on Death. In the event of a Director’s death, all of the Director’s Interest Rate Deferrals and Stock Equivalents credited to the Director’s account, including any unpaid installments, shall be paid to the Director’s Beneficiary in a lump sum in the calendar year immediately following the year of the Director’s death.

(d)Restrictions on Deferred Fees. No Director’s interest in any Deferred Fees is assignable, either by voluntary or involuntary assignment or by operation of law. No part of any Deferred Fees, regardless of the form thereof, may be paid over, loaned, sold, assigned, transferred, discounted, pledged as collateral for a loan or in any other way encumbered until the end of the Deferral Period with respect to such Deferred Fees.

8.Administration and Amendment of the Plan.

(a)Powers of the Committee. Full power and authority to construe and interpret the Plan shall be vested in the Committee as, from time to time, constituted by the Board. The Committee shall have the authority to modify any of the terms, conditions, limitations and restrictions relating to any Deferred Fees under the Plan in any manner not inconsistent with the Plan. Decisions hereunder by the Committee shall be final, conclusive and binding on all parties, including each Director and the Company.

(b)Expenses of the Plan. The expenses of administering the Plan shall be borne by the Company.

(c)Amendment and Termination. The Board in its sole discretion may (i) amend, suspend or terminate the Plan, (ii) supplement or replace the Plan with other Deferred Fees plans, and (iii) modify any provisions of the Plan and the terms, conditions, limitations and restrictions relating to any Deferred Fees under the Plan in any manner not inconsistent with the Plan.

(d)Directors’ Rights. No amendment, suspension or termination of the Plan shall affect any deferral already made, and in the event of any such change, any Deferred Fees credited to a Director’s account shall be paid as provided herein. No Director shall have any right or interest in the Plan or its continuance or in his or her continued participation in the Plan, other than in the Deferred Fees credited to his or her account. The existence of the Plan does not extend to any Director a right to continued Director status with the Company, and each Director is deemed to have agreed to the terms herein.

9.Notice to the Plan Recordkeeper. Any notice required to be furnished by a Director to the Plan recordkeeper shall be deemed to be provided if sent via fax or other electronic delivery method or via first class mail, in accordance with information and instructions communicated by the Plan recordkeeper to the Directors from time to time.

10.Effective Date. The Plan is originally effective as of November 1, 2010. The Plan applies to Deferred Fees earned in 2011 and subsequent years that are subject to deferral elections made on or after November 1, 2010 or designated by the Board as Stock Equivalents. The Plan is most recently amended and restated effective August 14, 2020 (the “Restated Plan”). Notwithstanding the foregoing, the Restated Plan applies to Deferred Fees that are subject to deferral elections made on or after August 14, 2020 and subsequent years that are subject to deferral elections with respect to Plan Years beginning on or after January 1, 2021 (or the Plan Year beginning January 1, 2020 as to a Director who is newly elected or appointed to the Board during the period from the Restated Plan effective date through December 31, 2020 and who makes a deferral election with respect to such Plan Year in accordance with Section 4(b)).

11.No Acceleration. The acceleration of the time or schedule of any payment due under the Plan is generally prohibited. The Board may, however, accelerate certain distributions under the Plan to the extent permitted under Section 409A.

12.Miscellaneous.

(a)Rights Unsecured. The rights of a Director or his or her Beneficiary to receive a payment hereunder shall be an unsecured claim against the general assets of the Company, and neither the Director nor his or her Beneficiary shall have any rights in or against any amount credited to his or her account or any other specific assets of the Company. The Plan at all times shall be considered entirely unfunded for tax purposes. Any funds set aside by the Company for the purpose of meeting its obligations under the Plan, including any amounts held by a trustee, shall continue for all purposes to be part of the general assets of the Company and shall be available to the Company’s general creditors in the event of the Company’s bankruptcy or insolvency. The Company’s obligation under the Plan shall be that of an unfunded and unsecured promise to pay benefits in the future. The Plan shall not be subject to any mistake of fact claim.

(b)Taxes. The Company or any other payer may, in such manner as the Company reasonably determines, withhold from a benefit payment under the Plan, or from or with respect to any other compensation payable by the Company or other payer under the Plan, to the Director any or all federal, state, local, or foreign taxes required by law to be withheld with respect to a deferral, payment or accrual under the Plan and shall report such payments and other Plan related information to the appropriate governmental agencies as required under applicable law.

(c)No Guarantee of Tax Consequences. None of the Company, the Board, the Committee or any other person guarantees that any particular federal or state income, payroll, personal property or other tax consequence shall occur because of participation in the Plan. A Director should consult with professional tax advisors regarding all questions relative to the tax consequences arising from participation in the Plan.

(d)Successors and Assigns. The terms and conditions of the Plan, as amended and in effect from time to time, shall be binding on the Company’s successors and assigns, including, without limitation, any entity into which the Company may be merged or with which the Company may be consolidated.

(e)Applicable Law and Venue. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving effect to the choice or conflicts of law provisions thereof. The Company intends that the Plan constitutes, and shall be construed and administered as, an unfunded plan of deferred compensation. In addition, the Plan is intended to comply with the requirements of Section 409A, including any official guidance issued thereunder. Notwithstanding any other provision, the Plan shall be interpreted, operated and administered in a manner consistent with this intention to the extent the Board deems necessary to comply with such requirements of Section 409A and to avoid the imposition of any additional tax thereunder. In addition, notwithstanding anything in Subparagraph 8(d) to the contrary, the Plan shall be deemed to be amended, and any deferrals and distributions hereunder shall be deemed to be modified, to the extent necessary to comply with such requirements of Section 409A. If the Company or any Director or Beneficiary initiates litigation related to the Plan, the venue for such action shall be King County, Washington.

Appendix A

Election Agreement for Fees Earned During 20__ Under the

2011 Fee Deferral Plan for

Directors of Weyerhaeuser Company

Name:

You must complete this form to direct the payment of fees earned during 20___. The 2011 Fee Deferral Plan for Directors of Weyerhaeuser Company (“Plan”) is intended to meet the requirements for nonqualified deferred compensation plans under applicable U.S. tax law, including Section 409A of the Internal Revenue Code. Deferral elections and payment options are subject to all of the terms and conditions of the Plan and applicable U.S. tax law.

IMPORTANT NOTICE FOR CANADIAN TAXPAYERS:

Directors who are resident in Canada for the purposes of the Income Tax Act (Canada) (“Canadian Directors”) may be subject to adverse Canadian income tax consequences in respect of an election to defer the receipt of cash fees or RSUs. Canadian Directors should obtain their own Canadian income tax advice with respect to the Canadian income tax consequences of making such an election before deciding whether to elect. Neither Weyerhaeuser nor the Board will be responsible for the Canadian income tax consequent to any Canadian Director of making such an election.

Please return this form no later than December 31, 20___

1.Election for Deferral of Restricted Stock Units Granted in 20___. The Board has determined that a portion of fees earned for services as a Director during 20___ will be granted in the form of restricted stock units.

Instead of receiving payment with respect to your restricted stock units at the end of the applicable vesting period, you may choose to defer income on some or all of your units into a stock equivalent account under the Plan. If you choose this option, the amount deferred will continue to track the value of Weyerhaeuser common stock and will be paid to you in shares of Weyerhaeuser common stock once you leave the Board in accordance with your payment election below.

Deferral Election for RSUs:

I hereby choose to:Percent (%)

☐

Receive vested 20___ RSUs after one year

☐

Defer payment of 20___ RSUs into stock equivalent account

Sum of Percentages must equal 100%

Payment Election for Deferred RSUs:

(Complete this section only if you have elected to defer some or all of your 20___ RSUs into a stock equivalent account.)

For deferred 20___ RSUs, I hereby choose the following payment options from the stock equivalent account:

•

Commencement Date:

Payment to begin:

☐

following my separation from Board service; or

☐

years following my separation from Board service (Choose a number from 1 to 5).

Actual payment generally will begin in February of the year following the Commencement Date. Special rules may apply if you continue to provide services to Weyerhaeuser Company after you leave the Board. Notwithstanding your payment elections, your share equivalent account may be paid early in a lump sum in the event of your death.

•

Number of Installments:

Pay in annual installments.

(The number of payments cannot exceed 10. Choose 1 payment for a lump sum payment during the chosen year).

2.Election for Cash Fees Earned During 20___. You may elect to defer all or a portion of the cash fees you earn for services as a Director during 20___.

Deferral Election for Cash Fees:

I hereby choose to:Percent (%)

☐

Receive 20___ fees earned immediately in cash

☐

Defer payment of 20___ fees earned

Sum of Percentages must equal 100%

Investment Election for Deferred Cash Fees:

(Complete this section only if you have elected to defer all or a portion of your remaining fees.)

For any cash fees that I have chosen to defer above, I designate the following deferral account (Sum of Percentages must equal 100%):

☐

Defer % of the designated fee amount into an interest-bearing account.

The account will be credited with interest and paid to you in cash after you leave the Board in accordance with your payment election below.

☐

Defer % of the designated amount into a stock equivalent account.

The account will track the value of Weyerhaeuser common stock and will be paid to you in shares of Weyerhaeuser common stock once you leave the Board in accordance with your payment election below.

Payment Election for Deferred Cash Fees:

(Complete this section only if you have elected to defer all or a portion of your cash fees.)

For any cash fees that I have chosen to defer above, I hereby choose the following payment options:

•

Commencement Date:

Payment to begin:

☐

following my separation from Board service; or

☐

years following my separation from Board service (Choose a number from 1 to 5).

Actual payment for fees deferred into an interest-bearing account generally will begin in January of the year following the Commencement Date and payment for fees deferred into a stock equivalent account will begin in February of the year following the Commencement Date. Special rules may apply if you continue to provide services to Weyerhaeuser Company after you leave the Board. Notwithstanding your payment elections, your account may be paid early in a lump sum in the event of your death.

•

Number of Installments:

Pay inannual installments.

(The number of payments cannot exceed 10. Choose 1 payment for a lump sum payment during the chosen year. If you do not make an election, payment will be made in a lump sum.)

I have received and reviewed the terms of the Plan. I understand that my election to defer and my choice of payment options for deferred fees are irrevocable for fees earned during 20___.

DateSignature

EXHIBIT 10.2

WEYERHAEUSER COMPANY
2013 LONG-TERM INCENTIVE PLAN

(Amended and Restated Effective August 14, 2020)

WEYERHAEUSER COMPANY
2013 LONG-TERM INCENTIVE PLAN

(Amended and Restated Effective August 14, 2020)

section 1. purpose and establishment3

1.1Purpose3

1.2Replacement Plan3

section 2. definitions3

section 3. administration8

3.1Administration of the Plan8

3.2Administration and Interpretation by Committee8

section 4. shares subject to the plan9

4.1Authorized Number of Shares9

4.2Share Usage10

Section 5. eligibility11

section 6. awards11

6.1Form and Grant of Awards11

6.2Evidence of Awards11

6.3Deferrals11

6.4Dividends and Distributions11

section 7. options12

7.1Grant of Options12

7.2Option Exercise Price12

7.3Terms of Options12

7.4Exercise of Options12

7.5Payment of Exercise Price12

7.6Post-Termination Exercise13

7.7Incentive Stock Option Limitations14

section 8. stock appreciation rights14

8.1Grant of Stock Appreciation Rights14

8.2Payment of SAR Amount14

section 9. STOCK AWARDS, restricted stock and stock units15

9.1Grant of Stock Awards, Restricted Stock and Stock Units15

9.2Vesting of Restricted Stock and Stock Units15

section 10. performance shares and performance units15

10.1Grant of Performance Shares15

10.2Grant of Performance Units15

section 11. other stock or cash based awards16

section 12. withholding16

12.1Withholding for Taxes or Other Obligations16

12.2Payment of Withholding Obligations16

section 13. assignability16

section 14. ADJUSTMENTS17

14.1Adjustment of Shares17

14.2Dissolution or Liquidation17

14.3Change of Control17

14.4Further Adjustment of Awards19

14.5No Limitations19

14.6No Fractional Shares19

14.7Section 409A19

SECTION 15. sECTION 162(m) PROVISIONS19

15.1Terms of Section 162(m) Awards Generally19

15.2Performance Criteria20

15.3Adjustment of Awards20

15.4Limitations21

SECTION 16. amendment and termination21

16.1Amendment, Suspension or Termination of the Plan21

16.2Term of the Plan21

16.3Consent of Participant21

section 17. general22

17.1No Individual Rights22

17.2Issuance of Shares22

17.3Indemnification23

17.4No Rights as a Shareholder23

17.5Compliance with Laws and Regulations23

17.6Participants in Other Countries24

17.7No Trust or Fund24

17.8Successors25

17.9Severability25

17.10Choice of Law25

17.11Legal Requirements25

section 18. effective date25

WEYERHAEUSER COMPANY
2013 LONG-TERM INCENTIVE PLAN

(Amended and Restated Effective August 14, 2020)

section 1. purpose and establishment

1.1Purpose

The purposes of this 2013 Long-Term Incentive Plan (as amended from time to time, the “Plan”) is to promote the interests of Weyerhaeuser Company (the “Company”) and its shareholders by attracting, retaining and motivating employees, officers and directors key to the growth and success of the Company by providing them the opportunity to acquire a proprietary interest in the Company and to link their interests and efforts to the long-term interests of the Company’s shareholders.

1.2Replacement Plan

This Plan replaces the Company’s 2004 Long-Term Incentive Plan and 1998 Long-Term Incentive Compensation Plan (collectively, the “Prior Plans”). No further awards may be made under the Prior Plans after the Effective Date (as defined in Section 18).

section 2. definitions

As used in the Plan, the following definitions apply to the terms indicated below:

“Acquired Entity” means any entity acquired by the Company or a Related Company or with which the Company or a Related Company merges or combines.

“Award” means any Option, Stock Appreciation Right, Stock Award, Restricted Stock, Stock Unit, Performance Share, Performance Unit, dividend equivalent, cash-based award or other incentive payable in cash or in shares of Common Stock as may be designated by the Committee from time to time.

“Board” means the Board of Directors of the Company.

“Business Combination” has the meaning set forth in the definition of “Change of Control.”

“Cause,” unless otherwise defined in the instrument evidencing an Award or, if not provided in such instrument, in a written employment, services or other agreement between the Participant and the Company or a Related Company, means dishonesty, fraud, serious or willful misconduct, unauthorized use or disclosure of confidential information or trade secrets, violation of a state or federal criminal law involving the commission of a crime against the Company or a felony, current use of illegal substances, or any act or omission that substantially impairs the Company’s business, good will or reputation, in each case as determined by the Company’s chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Compensation Committee, whose determination shall be conclusive and binding.

“Change in Control” or “CIC” unless otherwise defined in the instrument evidencing an Award or, if not provided in such instrument, in a written employment, services or other agreement between the Participant and the Company or a Related Company, means the occurrence of any of the following events:

(a)

an acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the number of then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change of Control: (1) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege where the security being so converted was not acquired directly from the Company by the party exercising the conversion privilege, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Company, or (4) an acquisition by any Person pursuant to a transaction that meets the conditions of clauses (i), (ii) and (iii) set forth in subsection (d) of this definition of Change in Control;

(b)

a change in the composition of the Board during any 24-consecutive month period such that the individuals who, as of the beginning of such period, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that for purposes of this definition, any individual who becomes a member of the Board during the period, whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; and provided further, however, that any such individual whose initial assumption of office occurs as a result of or in connection with an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an Entity other than the Board shall not be considered a member of the Incumbent Board; or

(c)consummation of a complete liquidation or dissolution of the Company; or

(d)

consummation in one transaction or a series of transactions undertaken with a common purpose of a reorganization, merger or consolidation, sale of at least 60% of the Company’s outstanding securities, or sale or other disposition of all or substantially all of the assets of the Company ( a “Business Combination”); excluding however, such a Business Combination pursuant to which:

(i)all or substantially all of the Persons who are the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination will beneficially own, directly or indirectly, at least 60% of the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Successor Company

(including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets or stock either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities;

(ii)no Person (other than the Company, any employee benefit plan (or related trust) of the Company, a Related Company or such Successor Company) will beneficially own, directly or indirectly, 30% or more of, respectively, the outstanding shares of common stock of the Successor Company or the combined voting power of the outstanding voting securities of the Successor Company entitled to vote generally in the election of directors unless such ownership resulted solely from ownership of securities of the Company prior to the Business Combination; and

(iii)individuals who were members of the Incumbent Board will immediately after the consummation of the Business Combination constitute at least a majority of the members of the board of directors of the Successor Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” has the meaning set forth in Section 3.1.

“Common Stock” means the common stock, par value $1.25 per share, of the Company.

“Company” means Weyerhaeuser Company, a Washington corporation.

“Compensation Committee” means the Compensation Committee of the Board.

“Covered Employee” means a “covered employee” as that term is defined in Section 162(m)(3) of the Code or any successor provision.

“Disability” means “Disability” as defined in the instrument evidencing an Award or, if not provided in such instrument, by the Committee or the Company’s senior vice president of human resources for purposes of the Plan or an Award, or in a written employment or services agreement. Notwithstanding the foregoing, with respect to Incentive Stock Options,

“Disability” shall have the meaning attributed to that term for purposes of Section 422 of the Code.

“Effective Date” has the meaning set forth in Section 18.

“Eligible Person” means any person eligible to receive an Award as set forth in Section 5.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Fair Market Value” means the closing price for the Common Stock on any given date during regular trading, or if not trading on that date, such price on the last preceding date on which the Common Stock was traded, unless determined otherwise by the Committee using such methods or procedures as it may establish.

“Grant Date” means the latter of (a) date on which the Committee completes the corporate action authorizing the grant of an Award or such later date specified by the Committee and (b) the date on which all conditions precedent to an Award have been satisfied, provided that conditions to the exercisability or vesting of Awards shall not defer the Grant Date.

“Incentive Stock Option” means an Option granted with the intention that it qualify as an “incentive stock option” as that term is defined in Section 422 of the Code or any successor provision.

“Incumbent Board” has the meaning set forth in the definition of “Change of Control.”

“Layoff” means “Layoff” as defined in the instrument evidencing an Award or, if not provided in such instrument, by the Committee or the Company’s senior vice president of human resources for purposes of the Plan or an Award, or in a written employment or services agreement.

“Non-qualified Stock Option” means an Option other than an Incentive Stock Option.

“Option” means a right to purchase Common Stock granted under Section 7.

“Option Expiration Date” means the last day of the maximum term of an Option.

“Outstanding Company Common Stock” has the meaning set forth in the definition of “Change of Control.”

“Outstanding Company Voting Securities” has the meaning set forth in the definition of “Change of Control.”

“Parent Company” means a company or other entity that, as a result of a Company Transaction, owns the Company or all or substantially all of the Company’s assets, either directly or through one or more subsidiaries.

“Participant” means any Eligible Person to whom an Award is granted.

“Performance Award” means an Award of Performance Shares or Performance Units granted under Section 10.

“Performance Criteria” has the meaning set forth in Section 15.2.

“Performance Share” means an Award of units denominated in shares of Common Stock granted under Section 10.1.

“Performance Unit” means an Award of units denominated in cash or property other than shares of Common Stock granted under Section 10.2.

“Person” means any individual, entity or group (within the meaning of Section 13(d)(3) and 14(d)(2) of the Exchange Act.

“Plan” means the Weyerhaeuser Company 2013 Long-Term Incentive Plan.

“Prior Plans” has the meaning set forth in Section 1.2.

“Related Company” means any entity that is directly or indirectly controlled by or under common control with the Company.

“Restricted Stock” means an Award of shares of Common Stock granted under Section 9, the rights of ownership of which may be subject to restrictions prescribed by the Committee.

“Retirement,” shall mean Retirement as defined in the instrument evidencing the Award or, if not provided in such instrument, by the Committee or the Company’s senior vice president of human resources or other person performing that function or in a written employment, services or other agreement between the Participant and the Company or a Related Company.

“Securities Act” means the Securities Act of 1933, as amended from time to time.

“Section 409A” means Section 409A of the Code.

“Stock Appreciation Right” or “SAR” means the right granted under Section 8.1 to receive the excess of the Fair Market Value of a specified number of shares of Common Stock over the grant price.

“Stock Award” means an Award of shares of Common Stock granted under Section 9, the rights of ownership of which are not subject to restrictions prescribed by the Committee.

“Stock Unit” means an Award granted under Section 9 denominated in units of Common Stock.

“Substitute Awards” means Awards granted or shares of Common Stock issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, by an Acquired Entity or with which the Company combines.

“Successor Company” means the surviving company, the successor company or Parent Company, as applicable, in connection with a Business Combination.

“Termination of Service,” means a termination of employment or service relationship with the Company or a Related Company for any reason, whether voluntary or involuntary, including by reason of death, Disability, Retirement, or Layoff. Any question as to whether and when there has been a Termination of Service for the purposes of an Award and the cause of such Termination of Service shall be determined by the Company’s senior vice president of human

resources or other person performing that function or, with respect to directors and executive officers, by the Committee, whose determination shall be final and binding. Transfer of a Participant’s employment or service relationship between the Company and any Related Company shall not be considered a Termination of Service for purposes of an Award. Unless the Committee determines otherwise, a Termination of Service shall be deemed to occur if the Participant’s employment or service relationship is with an entity that has ceased to be a Related Company. A Participant’s change in status from an employee of the Company or a Related Company to a nonemployee director, consultant, advisor or independent contractor of the Company or a Related Company or a change in status from a nonemployee director, consultant, advisor or independent contractor of the Company or a Related Company to an employee of the Company or a Related Company, shall not be considered a Termination of Service.

“Vesting Commencement Date” means the Grant Date or such other date selected by the Committee as the date from which an Award begins to vest.

section 3. administration

3.1Administration of the Plan

The Plan shall be administered by the Compensation Committee, which shall be composed of two or more directors, each of whom shall qualify as a “non-employee director” within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act (or any successor definition adopted by the Securities and Exchange Commission), an “outside director” within the meaning of Section 162(m), and an “independent director” as defined under the New York Stock Exchange listing standards. Notwithstanding the foregoing, the Board or the Compensation Committee may delegate responsibility for administering the Plan with respect to designated classes of Eligible Persons to different committees consisting of two or more members of the Board, subject to such limitations as the Board or the Compensation Committee deems appropriate, except with respect to benefits to non-employee directors and to officers subject to Section 16 of the Exchange Act or awards subject to Section 15 of the Plan. Members of any committee shall serve for such term as the Board may determine, subject to removal by the Board at any time. To the extent consistent with applicable law, the Board or the Compensation Committee may authorize one or more officers of the Company to grant Awards to designated classes of Eligible Persons, within limits specifically prescribed by the Board or the committee; provided, however, that no such officer shall have or obtain authority to grant Awards to himself or herself or to any person subject to Section 16 of the Exchange Act. All references in the Plan to the “Committee” shall be, as applicable, to the Compensation Committee, or any other committee or any officer to whom the Board or the Compensation Committee has delegated authority to administer the Plan.

3.2Administration and Interpretation by Committee

(a)Except for the terms and conditions explicitly set forth in the Plan, and to the extent permitted by applicable law, the Committee shall have full power and exclusive authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board or a Committee composed of members of the Board, to (i) select the Eligible Persons to whom Awards may from time to time be granted under the Plan; (ii) determine the type or types of Award to be granted to each Participant under the Plan; (iii) determine the number of shares of Common Stock to be covered by each Award granted

under the Plan; (iv) determine the terms and conditions of any Award granted under the Plan; (v) approve the forms of notice or agreement for use under the Plan; (vi) determine whether, to what extent, and under what circumstances Awards may be settled in cash, shares of Common Stock or other property or canceled or suspended; (vii) determine whether, to what extent, and under what circumstances cash, shares of Common Stock, other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant, subject to Section 409A and in accordance with Section 6.3 of the Plan; (viii) interpret and administer the Plan and any instrument evidencing an Award, notice or agreement executed or entered into under the Plan; (ix) establish such rules and regulations as it shall deem appropriate for the proper administration of the Plan; (x) delegate ministerial duties to such of the Company’s employees as it so determines; (xi) waive any terms, conditions or restrictions on any Award under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate; and (xii) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

(b)In no event, however, shall the Board or the Committee have the right, without shareholder approval, to (i) lower the exercise or grant price of an Option or SAR after it is granted, except in connection with adjustments provided in Section 14, (ii) cancel an Option or SAR at a time when its exercise or grant price exceeds the Fair Market Value of the underlying stock, in exchange for cash, another option or stock appreciation right, restricted stock or other equity award, unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction or (iii) take any other action that is treated as a repricing under generally accepted accounting principles.

(c)Decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, any Participant, any shareholder and any Eligible Person. A majority of the members of the Committee may determine its actions.

section 4. shares subject to the plan

4.1Authorized Number of Shares

Subject to adjustment from time to time as provided in Section 14.1, the maximum number of shares of Common Stock available for issuance under the Plan shall be:

(a)	10,000,000 shares reduced by the aggregate number of shares of Common Stock that become subject to Awards and less one share for every one share that was subject to an award granted after February 28, 2013 under the Prior Plans; plus

(b)(i) any authorized shares not issued or subject to outstanding awards under the Company’s Prior Plan as of the Effective Date and (ii) any shares subject to outstanding awards under the Prior Plan as of the Effective Date that subsequently cease to be subject to such Awards (other than by reason of exercise or settlement of the Awards to the extent they are exercised for or settled in vested and non-forfeitable shares), which shares of Common Stock shall cease, as of such date, to be available for grant and issuance under the Prior Plan, but shall be available for issuance under the Plan.

Shares issued under the Plan shall be drawn from authorized and unissued shares or shares now held or subsequently acquired by the Company as treasury shares.

4.2Share Usage

(a)

If (i) any Award based on shares lapses, expires, terminates or is canceled prior to the issuance of shares thereunder, or if shares of Common Stock are issued under the Plan to a Participant and thereafter are forfeited to the Company, or if an Award is settled for cash (in whole or in part) or otherwise does not result in the issuance of all or a portion of the shares of Common Stock subject to such Award, or (ii) after February 28, 2013 any award under the Prior Plans based on shares lapses, expires, terminates, or is canceled prior to the issuance of shares thereunder, or if shares of Common Stock issued under the Prior Plans to a Participant are thereafter forfeited to the Company, or if an award under the Prior Plans is settled for cash (in whole or in part), or otherwise does not result in the issuance of all or a portion of the shares of Common Stock subject to such award under the Prior Plans, then the shares subject to such Awards or awards under the Prior Plan shall again be available for issuance under the Plan.

(b)

In the event that (i) any Option or, after February 28, 2013, an option under the Prior Plans, is exercised through the tendering of shares of Common Stock (either actually or by attestation) or by the withholding of shares of Common Stock by the Company or (ii) withholding tax liabilities arising from an Award or, after February 28, 2013, an award under the Prior Plans, are satisfied by the tendering of shares of Common Stock (either actually or by attestation) or by the withholding of shares of Common Stock by the Company, then in each such case the Shares so tendered or withheld shall again be available for issuance under the Plan on a one-for-one basis, provided, however, that only the number of shares withheld to satisfy withholding tax liabilities at the employee’s minimum required tax withholding rate will again be available for issuance under the Plan.

(c)	The number of shares of Common Stock available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional shares of Common Stock or credited as additional shares of Common Stock subject or paid with respect to an Award.

(d)	The Committee shall also, without limitation, have the authority to grant Awards as an alternative to or as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company.

(e)

Notwithstanding any other provision of the Plan to the contrary, the Committee may grant Substitute Awards under the Plan. Substitute Awards shall not reduce the number of shares authorized for issuance under the Plan. In the event that an Acquired Entity has shares available for awards or grants under one or more preexisting plans not adopted in contemplation of such acquisition or combination, then, to the extent determined by the Board or the Compensation Committee, the shares available for grant pursuant to the terms of such preexisting plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to holders of common stock of the entities that are parties to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the number of shares of Common Stock authorized for issuance under the Plan; provided, however,

that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of such preexisting plans, absent the acquisition or combination, and shall be made only to persons who were not employees or directors of the Company or a Related Company prior to such acquisition or combination. In the event that a written agreement between the Company and an Acquired Entity pursuant to which a merger or consolidation is completed is approved by the Board and that agreement sets forth the terms and conditions of the substitution for or assumption of outstanding awards of the Acquired Entity, those terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with Rule 16b-3 under the Exchange Act, and the persons holding such awards shall be deemed to be Participants.

(f)	Notwithstanding the foregoing, the maximum number of shares that may be issued upon the exercise of Incentive Stock Options shall equal the share number stated in Section 4.1(a), subject to adjustment as provided in Section 14.1.

Section 5. eligibility

An Award may be granted to any employee, officer or director of the Company or a Related Company whom the Committee from time to time selects. The above are “Eligible Persons.”

section 6. awards

6.1Form and Grant of Awards

The Committee shall have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan. Such Awards may be granted either alone, in addition to or in tandem with any other type of Award. Any Award settlement may be subject to such conditions, restrictions and contingencies as the Committee shall determine.

6.2Evidence of Awards

Awards granted under the Plan shall be evidenced by a written or electronic instrument that shall contain such terms, conditions, limitations and restrictions as the Committee shall deem advisable and that are not inconsistent with the Plan.

6.3Deferrals

The Committee may permit or require a Participant to defer receipt of the payment of any Award if and to the extent set forth in the instrument evidencing the Award at the time of grant. If any such deferral election is permitted or required, the Committee, in its sole discretion, shall establish rules and procedures for such payment deferrals, which may include the grant of additional Awards or provisions for the payment or crediting of interest or dividend equivalents, including converting such credits to deferred stock unit equivalents; provided, however, that the terms of any deferrals under this Section 6.3 shall comply with all applicable law, rules and regulations, including, without limitation, Section 409A of the Code.

6.4Dividends and Distributions

Participants may, if the Committee so determines, be credited with dividends paid with respect to shares of Common Stock underlying an Award in a manner determined by the Committee in its sole discretion. The Committee may apply any restrictions to the dividends or dividend

equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of Common Stock, Restricted Stock or Stock Units. Notwithstanding the foregoing, if any Award for which dividends or dividend equivalents have been granted has its vesting, payment or grant dependent upon the achievement of one or more performance goals, then the dividends or dividend equivalents shall accrue and be paid only to the extent the Award becomes vested or payable. Also notwithstanding the foregoing, the crediting of dividends or dividend equivalents must comply with or qualify for an exemption under Section 409A.

section 7. options

7.1Grant of Options

The Committee may grant Options designated as Incentive Stock Options or Non-qualified Stock Options.

7.2Option Exercise Price

The exercise price for shares purchased under an Option shall be the average of the high and low price of the Common Stock for the Grant Date (and not less than the minimum exercise price required by Section 422 of the Code with respect to Incentive Stock Options), except in the case of Substitute Awards.

7.3Terms of Options

Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Option shall be 10 years from the Grant Date. For Incentive Stock Options, the maximum term shall comply with Section 422 of the Code

7.4Exercise of Options

(a)	The Committee shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable.

(b)

To the extent an Option has vested and become exercisable, the Option may be exercised in whole or from time to time in part by delivery as directed by the Company to the Company or a brokerage firm designated or approved by the Company of a stock option exercise agreement or notice, in a form and in accordance with procedures established by the Committee, setting forth the number of shares with respect to which the Option is being exercised, the restrictions imposed on the shares purchased under such exercise agreement or notice, if any, and such representations and agreements as may be required by the Committee, accompanied by payment in full as described in Section 7.5. An Option may be exercised only for whole shares and may not be exercised for less than a reasonable number of shares at any one time, as determined by the Committee.

7.5Payment of Exercise Price

The exercise price for shares purchased under an Option shall be paid in full as directed by the Company to the Company or a brokerage firm designated or approved by the Company by delivery of consideration equal to the product of the Option exercise price and the number of shares purchased. Such consideration must be paid before the Company will issue the shares

being purchased and must be in a form or a combination of forms acceptable to the Committee for that purchase, which forms may include:

(a) cash;

(b) check or wire transfer;

(c) having the Company withhold shares of Common Stock that otherwise would be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;

(d) tendering (either actually or, so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by attestation) shares of Common Stock already owned by the Participant that on the day prior to the exercise date have a Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;

(e) so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, and to the extent permitted by applicable law, delivery of a properly executed exercise agreement or notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of sale or loan proceeds to pay the Option exercise price and any tax withholding obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board; or

(f) such other consideration as the Committee may permit.

7.6Post-Termination Exercise

(a)The Committee shall establish and set forth in each instrument that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service.

(b)Also notwithstanding the foregoing, in case a Participant’s Termination of Service occurs for Cause, all Options granted to the Participant shall automatically expire upon first notification to the Participant of such termination, unless the Committee determines otherwise. If a Participant’s employment or service relationship with the Company is suspended pending an investigation of whether the Participant shall be terminated for Cause, all the Participant’s rights under any Option shall likewise be suspended during the period of investigation; provided, however, that any such suspension shall not extend the expiration date of any Option. If any facts that would constitute termination for Cause are discovered after a Participant’s Termination of Service, any Option then held by the Participant may be immediately terminated by the Committee, in its sole discretion.

(c)If the exercise of the Option following a Participant’s Termination of Service, but while the Option is otherwise exercisable, would be prohibited solely because the issuance of Common Stock would violate either the registration requirements under the Securities Act or the Company’s insider trading policy, then the Option shall remain exercisable until the earlier of (i) the Option Expiration Date and (ii) the expiration of a period of three months (or such longer period of time as determined by the Committee in its sole discretion) after the Participant’s

Termination of Service during which the exercise of the Option would not be in violation of such Securities Act or insider trading policy requirements.

7.7Incentive Stock Option Limitations

Notwithstanding any other provisions of the Plan, the terms of any Incentive Stock Options shall in addition comply in all respects with Section 422 of the Code, or any successor provision, and any applicable regulations thereunder. Persons who are not employees of the Company or one of its parent or subsidiary corporations (as such terms are defined for purposes of Section 422 of the Code) may not be granted Incentive Stock Options. To the extent that the aggregate Fair Market Value of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year exceeds $100,000 (or, if different, the maximum limitation in effect at the time of grant under the Code), such portion in excess of $100,000 shall be treated as Nonqualified Stock Options. If any Participant shall make any disposition of shares of Common Stock issued pursuant to the exercise of an Incentive Stock Option under any circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions), such Participant shall notify the Company of such disposition.

section 8. stock appreciation rights

8.1Grant of Stock Appreciation Rights

The Committee may grant stock appreciation rights (“Stock Appreciation Rights” or “SARs”) to Participants at any time and on such terms and conditions as the Committee shall determine in its sole discretion. A SAR may be granted in tandem with an Option (“tandem SAR”) or alone (“freestanding SAR”). The grant price of a tandem SAR shall be equal to the exercise price of the related Option. The grant price of a freestanding SAR shall be established in accordance with procedures for Options set out in Section 7.2. A SAR may be exercised upon such terms and conditions and for the term as the Committee determines in its sole discretion; provided, however, that, subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the SAR, the maximum term of a freestanding SAR shall be 10 years, and in the case of a tandem SAR, (a) the term shall not exceed the term of the related Option and (b) the tandem SAR may be exercised for all or part of the shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option, except that the tandem SAR may be exercised only with respect to the shares for which its related Option is then exercisable.

8.2Payment of SAR Amount

Upon the exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying: (a) the difference between the Fair Market Value of the Common Stock on the date of exercise over the grant price of the SAR by (b) the number of shares with respect to which the SAR is exercised. At the discretion of the Committee as set out in the instrument evidencing the Award, the payment upon exercise of a SAR may be in cash, in shares of equivalent value, in some combination thereof or in any other manner approved by the Committee in its sole discretion.

section 9. STOCK AWARDS, restricted stock and stock units

9.1Grant of Stock Awards, Restricted Stock and Stock Units

The Committee may grant Stock Awards, Restricted Stock and Stock Units on such terms and conditions and subject to such repurchase or forfeiture restrictions, if any, which may be based on continuous service with the Company or a Related Company or the achievement of any performance goals, as the Committee shall determine in its sole discretion, which terms, conditions and restrictions shall be set forth in the instrument evidencing the Award.

9.2Vesting of Restricted Stock and Stock Units

Upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Stock Units, or upon a Participant’s release from any terms, conditions and restrictions of Restricted Stock or Stock Units, as determined by the Committee, and subject to the provisions of Section 12, (a) the shares of Restricted Stock covered by each Award of Restricted Stock shall become freely transferable by the Participant, and (b) Stock Units shall be paid in shares of Common Stock or, if set out in the instrument evidencing the Awards, in cash or a combination of cash and shares of Common Stock. Any fractional shares subject to such Awards shall be paid to the Participant in cash.

section 10. performance shares and performance units

10.1Grant of Performance Shares

The Committee may grant Awards of performance shares (“Performance Shares”), designate the Participants to whom Performance Shares are to be awarded, and determine the number of Performance Shares and the terms and conditions of each such Award. Performance Shares shall consist of a unit valued by reference to a designated number of shares of Common Stock, the value of which may be paid to the Participant by delivery of shares of Common Stock or, if set out in the instrument evidencing the Award, of such property as the Committee shall determine, including without limitation, cash, shares of Common Stock, or other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. The amount to be paid under an Award of Performance Shares may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.

10.2Grant of Performance Units

The Committee may grant Awards of performance units (“Performance Units”), designate the Participants to whom Performance Units are to be awarded, and determine the number of Performance Units and the terms and conditions of each such Award. Performance Units shall consist of a unit valued by reference to a designated amount of cash or property other than shares of Common Stock, which value may be paid to the Participant by delivery of the cash or such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. The Amount to be paid under an Award of Performance Units may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.

section 11. other stock or cash based awards

Subject to the terms of the Plan and such other terms and conditions as the Committee deems appropriate, the Committee may grant other incentives payable in cash or in shares of Common Stock under the Plan.

section 12. withholding

12.1Withholding for Taxes or Other Obligations

The Company may require the Participant to pay to the Company the amount of (a) any taxes that the Company is required by applicable federal, state, local or foreign law to withhold with respect to the grant, vesting or exercise of an Award (“tax withholding obligations”) and (b) any amounts due from the Participant to the Company or to any Related Company (“other obligations”). Notwithstanding any other provision of the Plan to the contrary, the Company shall not be required to issue any shares of Common Stock or otherwise settle an Award under the Plan until such tax withholding obligations and other obligations are satisfied and shall not be required to issue any shares of Common Stock or otherwise settle an Award under the Plan; provided, however, such payment or satisfaction of tax withholding or other obligations may not be delayed in such a way as to cause such issuance or settlement to not be in compliance with Section 409A of the Code.

12.2Payment of Withholding Obligations

The Committee may permit or require a Participant to satisfy all or part of his or her tax withholding obligations and other obligations by (a) paying cash to the Company, (b) having the Company withhold an amount from any cash amounts otherwise due or to become due from the Company to the Participant, (c) having the Company withhold a number of shares of Common Stock that would otherwise be issued to the Participant (or become vested in the case of Restricted Stock) having a Fair Market Value equal to the tax withholding obligations and other obligations, or (d) surrendering a number of shares of Common Stock the Participant already owns having a value equal to the tax withholding obligations and other obligations. The value of the shares so withheld or tendered may not exceed the employee's minimum required tax withholding rate or such other rate as may be approved by the Committee so long as such withholding does not result in adverse treatment for financial accounting purposes.

section 13. assignability

No Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the performance of an obligation or for any other purpose) or transferred by the Participant or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and distribution, except that to the extent the Participant designates one or more beneficiaries on a Company-approved form who may exercise the Award or receive payment under an Award after the Participant’s death. During a Participant’s lifetime, an Award may be exercised only by the Participant. Notwithstanding the foregoing and to the extent permitted by Section 422 of the Code with respect to Stock Options, the Committee, in its sole discretion, may permit a Participant to assign or transfer an Award without consideration, subject to such terms and conditions as the Committee shall specify.

section 14. ADJUSTMENTS

14.1Adjustment of Shares

(a)

In the event, at any time or from time to time, a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, extraordinary cash dividend, distribution to shareholders other than a normal cash dividend, or other change in the Company’s corporate or capital structure results in (i) the outstanding shares of Common Stock, or any securities exchanged therefore or received in their place, being exchanged for a different number or kind of securities of the Company or (ii) new, different or additional securities of the Company or of any other company being received by the holders of shares of Common Stock, then the Committee shall make proportional adjustments, taking into consideration the accounting and tax consequences, in (A) the maximum number and kind of securities available for issuance under the Plan; (B) the maximum number and kind of securities issuable as Incentive Stock Options as set forth in Section 4.2; (C) the maximum number and kind of securities set forth in Section 15.4; (D) the number and kind of securities that are subject to any outstanding Awards and the per share exercise or grant price of such securities, without any change in the aggregate price to be paid therefor. The determination by the Committee as to the terms of any of the foregoing adjustments shall be conclusive and binding.

(b)

Notwithstanding the foregoing, the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services rendered, either upon direct sale or upon the exercise of rights or warrants to subscribe therefore, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding Awards. Also notwithstanding the foregoing, a dissolution or liquidation of the Company or a Business Combination shall not be governed by this Section 14.1, but shall be governed by Sections 14.2 and 14.3, respectively.

14.2Dissolution or Liquidation

To the extent not previously exercised or settled, and unless otherwise determined by the Committee in its sole discretion, Awards shall terminate immediately prior to the dissolution or liquidation of the Company. To the extent a vesting condition, forfeiture provision or repurchase right applicable to an Award has not been waived by the Committee, the Award shall be forfeited immediately prior to the consummation of the dissolution or liquidation.

14.3Change of Control

Notwithstanding any other provision of the Plan to the contrary, unless the Committee shall determine otherwise in the instrument evidencing the Award or, if not provided for in such instrument, in a written employment, services or other agreement between the Participant and the Company or a Related Company, in the event of a Change of Control:

(a)If the Change of Control is a Business Combination in which Awards, other than Performance Shares and Performance Units, could be converted, assumed, substituted for or replaced by the Successor Company, then, if and to the extent that the Successor Company converts, assumes, substitutes or replaces an Award, the vesting restrictions or forfeiture provisions applicable to such Award shall not be accelerated or lapse, and all such vesting restrictions or forfeiture provisions shall continue with respect to any shares of the Successor

Company or other consideration that may be received with respect to such Award. If and to the extent that such Awards are not converted, assumed, substituted for or replaced by the Successor Company, such Awards shall become fully vested and exercisable or payable, and all applicable restrictions or forfeiture provisions shall lapse, immediately prior to the Change of Control and such Awards shall terminate at the effective time of the Change of Control.

If the Change of Control is not a Business Combination in which Awards, other than Performance Shares and Performance Units, could be converted, assumed, substituted for or replaced by the Successor Company, all outstanding Awards, other than Performance Shares and Performance Units, shall become fully vested and exercisable or payable, and all applicable restrictions or forfeiture provisions shall lapse, immediately prior to the Change of Control and shall terminate at the effective time of the Change of Control.

For the purposes of this Section 14.3(a), an Award shall be considered converted, assumed, substituted for or replaced by the Successor Company if following the Business Combination the option or right confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Business Combination, the consideration (whether stock, cash or other securities or property) received in the Business Combination by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the Business Combination is not solely common stock of the Successor Company, the Committee may, with the consent of the Successor Company, provide for the consideration to be received pursuant to the Award, for each share of Common Stock subject thereto, to be solely common stock of the Successor Company substantially equal in Fair Market Value to the per share consideration received by holders of Common Stock in the Business Combination. The determination of such substantial equality of value of consideration shall be made by the Committee, and its determination shall be conclusive and binding.

(b)All Performance Shares or Performance Units earned and outstanding as of the date the Change of Control is determined to have occurred and for which the payout level has been determined shall be payable in full in accordance with the payout schedule pursuant to the instrument evidencing the Award. Any remaining outstanding Performance Shares or Performance Units (including any applicable performance period) for which the payout level has not been determined shall be payable in accordance with the terms and payout schedule pursuant to the instrument evidencing the Award. Any existing deferrals or other restrictions not waived by the Committee in its sole discretion shall remain in effect.

(c)Notwithstanding the foregoing, the Committee, in its sole discretion, may instead provide in the event of a Change of Control that is a Business Combination that a Participant’s outstanding Awards shall terminate upon or immediately prior to such Business Combination and that such Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (x) the value of the per share consideration received by holders of Common Stock in the Business Combination, or, in the event the Business Combination is one of the transactions listed under subsection (c) in the definition of Business Combination or otherwise does not result in direct receipt of consideration by holders of Common Stock, the value of the deemed per share consideration received, in each case as determined by the Committee in its sole

discretion, multiplied by the number of shares of Common Stock subject to such outstanding Awards (to the extent then vested and exercisable or whether or not then vested and exercisable, as determined by the Committee in its sole discretion) exceeds (y) if applicable, the respective aggregate exercise price or grant price for such Awards.

(d)For the avoidance of doubt, nothing in this Section 14.3 requires all outstanding Awards to be treated similarly.

14.4Further Adjustment of Awards

Subject to Sections 14.2 and 14.3, the Committee shall have the discretion, exercisable at any time before a sale, merger, consolidation, reorganization, liquidation, dissolution or change of control of the Company, as defined by the Committee, to take such further action as it determines to be necessary or advisable with respect to Awards. Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions, or duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise, lifting restrictions and other modifications, and the Committee may take such actions with respect to all Participants, to certain categories of Participants or only to individual Participants. The Committee may take such action before or after granting Awards to which the action relates and before or after any public announcement with respect to such sale, merger, consolidation, reorganization, liquidation, dissolution or change of control that is the reason for such action.

14.5No Limitations

The grant of Awards shall in no way affect the Company’s right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

14.6No Fractional Shares

In the event of any adjustment in the number of shares covered by any Award, each such Award shall cover only the number of full shares resulting from such adjustment, and any fractional shares resulting from such adjustment shall be disregarded.

14.7Section 409A

Notwithstanding any other provision of the Plan to the contrary, (a) any adjustments made pursuant to this Section 14 to Awards that are considered “deferred compensation” within the meaning of Section 409A shall be made in compliance with the requirements of Section 409A and (b) any adjustments made pursuant to this Section 15 to Awards that are not considered “deferred compensation” subject to Section 409A shall be made in such a manner as to ensure that after such adjustment the Awards either (i) continue not to be subject to Section 409A or (ii) comply with the requirements of Section 409A.

SECTION 15. sECTION 162(m) PROVISIONS

15.1Terms of Section 162(m) Awards Generally

Notwithstanding any other provision of the Plan to the contrary, if the Committee determines, at the time Awards are granted to a Participant who is, or is likely to be as of the end of the tax year

in which the Company would claim a tax deduction in connection with such Award, a Covered Employee, then the Committee may provide that this Section 15 is applicable to such Award.

15.2Performance Criteria

This Section 15 is not intended to apply to any Options or SARs granted under the Plan. However, if an Award is subject to this Section 15, then the lapsing of restrictions thereon and the distribution of cash, shares of Common Stock or other property pursuant thereto, as applicable, shall be subject to the achievement of one or more objective performance goals established by the Committee, which shall be based on the attainment of specified levels of one of or any combination of the following “performance criteria” for the Company as a whole or any affiliate or business unit of the Company, as reported or calculated by the Company: cash flows (including, but not limited to, operating cash flow, free cash flow or cash flow return on capital); working capital; earnings per share; book value per share; operating income (including or excluding depreciation, amortization, extraordinary items, restructuring charges or other expenses); funds from operations and funds from operations per share; revenues; operating margins; return on assets; return on equity; return on net assets; debt; debt plus equity; market or economic value added; stock price appreciation; total shareholder return; cost control; strategic initiatives; market share; net income; return on invested capital; improvements in capital structure; or customer satisfaction, employee satisfaction, services performance, subscriber, cash management or asset management metrics (together, the “Performance Criteria”).

Such performance goals also may be based on the achievement of specified levels of Company performance (or performance of an applicable affiliate or business unit of the Company) under one or more of the Performance Criteria described above relative to the performance of other corporations or a market index. Such performance goals shall be set by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m) of the Code, or any successor provision thereto, and the regulations thereunder.

The Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a performance period: (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (iv) any reorganization and restructuring programs, (v) extraordinary nonrecurring items as described in Accounting Standards Codification 225-20 or in Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in the Company’s annual report to shareholders for the applicable year, (vi) acquisitions or divestitures, (vii) foreign exchange gains and losses, (viii) gains and losses on asset sales, and (ix) impairments. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that satisfies the requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto.

The Committee shall certify in writing that any Performance Criteria have been met prior to settling any Award subject to Performance Criteria.

15.3Adjustment of Awards

Notwithstanding any provision of the Plan other than Section 15, with respect to any Award that is subject to this Section 15, the Committee may adjust downwards, but not upwards, the amount

payable pursuant to such Award, and the Committee may not waive the achievement of the applicable performance goals except in the case of the death or Disability of the Covered Employee or a Change in Control.

15.4Limitations

Subject to adjustment from time to time as provided in Section 14.1, no Participant may be granted during any calendar year (i) Options or SARs with respect to more than 2,000,000 shares, and (ii) Awards other than Options and SARs that are intended to comply with the performance-based exception under Code Section 162(m) and are denominated in shares under which more than 1,000,000 shares of Common Stock may be earned in each 12 months in the performance period. During any calendar year, no Participant may be granted Awards other than Options and SARs that are intended to comply with the performance-based exception under Code Section 162(m) and are denominated in cash under which more than $10,000,000 may be earned in each 12 months in the performance period. Each of the limitations in this section shall be multiplied by two with respect to Awards granted to a Participant during the first calendar year in which the Participant commences employment with the Company. If an Award is cancelled, the cancelled Award shall continue to be counted toward the applicable limitation in this section.

The Committee shall have the power to impose such other restrictions on Awards subject to this Section 15 as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto.

SECTION 16. amendment and termination

16.1Amendment, Suspension or Termination of the Plan

The Board or the Compensation Committee of the Board may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that, to the extent required by applicable law, regulation or stock exchange rule other than Section 162(m) of the Code, shareholder approval shall be required for any amendment to the Plan; and provided, further, that any amendment that requires shareholder approval may be made only by the Board. Subject to Section 16.3, the Committee may amend the terms of any outstanding Award, prospectively or retroactively.

16.2Term of the Plan

Unless sooner terminated as provided herein, the Plan shall terminate 10 years from the Effective Date. After the Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan’s terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than 10 years after the earlier of approval by the Board or the shareholders of the Plan (or any amendment to the Plan that constitutes the adoption of a new plan for purposes of Section 422 of the Code).

16.3Consent of Participant

The amendment, suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant’s consent, materially adversely affect any

rights under any outstanding Award under the Plan. Except as otherwise determined by the Committee, any change or adjustment to an outstanding Incentive Stock Option shall not, without the consent of the Participant, be made in a manner so as to constitute a “modification” that would cause such Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to Section 14 shall not be subject to these restrictions.

section 17. general

17.1No Individual Rights

(a)	person or Participant shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Participants under the Plan.

(b)

Nothing in the Plan or any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate a Participant’s employment or other relationship at any time, with or without cause.

17.2Issuance of Shares

(a)

Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue or deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless, in the opinion of the Company’s counsel, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity.

(b)

The Company shall be under no obligation to any Participant to register for offering or resale or to qualify for exemption under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made.

(c)

As a condition to the exercise of an Option or any other receipt of Common Stock pursuant to an Award under the Plan, the Company may require (i) the Participant to represent and warrant at the time of any such exercise or receipt that such shares are being purchased or received only for the Participant’s own account and without any present intention to sell or distribute such shares and (ii) such other action or agreement by the Participant as may from time to time be necessary to comply with the federal, state and foreign securities laws. At the option of the Company, a stop-transfer order against any such shares may be placed on the official stock books and records of the Company, and a legend indicating that such shares may not be pledged, sold or otherwise transferred, unless an opinion of counsel is provided (concurred in by counsel for the Company) stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates to ensure exemption from registration. The Committee may also require the Participant to execute and deliver to the Company a purchase agreement or

such other agreement as may be in use by the Company at such time that describes certain terms and conditions applicable to the shares.

(d)

To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of shares of Common Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

17.3Indemnification

Each person who is or shall have been a member of the Board or a committee appointed by the Board or an officer of the Company to whom authority was delegated in accordance with Section 3, shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company’s approval, or paid by such person in satisfaction of any judgment in any such claim, action, suit or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person’s own behalf, unless such loss, cost, liability or expense is a result of such person’s own willful misconduct or except as expressly provided by statute.

The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person may be entitled under the Company’s certificate of incorporation or bylaws, as a matter of law, or otherwise, or of any power that the Company may have to indemnify or hold harmless.

17.4No Rights as a Shareholder

Unless otherwise provided by the instrument evidencing the Award or, if not provided in such instrument, in a written employment or services agreement, no Award other than a Stock Award, shall entitle the Participant to any cash dividend, voting or other right of a shareholder unless and until the date of issuance under the Plan of the shares that are the subject of such Award.

17.5Compliance with Laws and Regulations

(a)	In interpreting and applying the provisions of the Plan, any Option granted as an Incentive Stock Option pursuant to the Plan shall, to the extent permitted by law, be construed as an “incentive stock option” within the meaning of Section 422 of the Code.

(b)

The Plan and Awards granted under the Plan are intended to be exempt from the requirements of Section 409A of the Code to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the exclusion applicable to stock options, stock appreciation rights and certain other equity-based compensation under Treasury Regulation Section 1.409A-1(b)(5), or otherwise. To the extent Code Section 409A is applicable to the Plan or any Award granted under the Plan, it is intended that the Plan and any Awards granted under the Plan comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A. Notwithstanding any other

provision of the Plan or any Award granted under the Plan to the contrary, the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with such intentions.

Without limiting the generality of the foregoing, and notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, with respect to any payments and benefits under the Plan or any Award granted under the Plan to which Code Section 409A applies, all references in the Plan or any Award granted under the Plan to the termination of the Participant's employment or service are intended to mean the Participant's “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i). In addition, if the Participant is a “specified employee” within the meaning of Code Section 409, then to the extent necessary to avoid subjecting the Participant to the imposition of any additional tax under Code Section 409A, amounts that would otherwise be payable under the Plan or any Award granted under the Plan during the six-month period immediately following the Participant's “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i), shall not be paid to the Participant during such period, but shall instead be accumulated and paid to the Participant (or, in the event of the Participant's death, the Participant's estate) in a lump sum on the first business day after the earlier of the date that is six months following the Participant's separation from service or the Participant's death.

Notwithstanding any other provision in the Plan to the contrary, the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan and any Award granted under the Plan so that the Award qualifies for exemption from or complies with Code Section 409A; provided, however, that the Committee makes no representations that Awards granted under the Plan shall be exempt from or comply with Code Section 409A and makes no undertaking to preclude Code Section 409A from applying to Awards granted under the Plan.

17.6Participants in Other Countries

Without amending the Plan, the Committee may grant Awards to Eligible Persons who are foreign nationals on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan and shall have the authority to adopt such modifications, procedures and subplans and the like as may be necessary or desirable to comply with provisions of the laws of other countries in which the Company or any Related Company may operate or have employees to ensure the viability of the benefits from Awards granted to Participants employed in such countries or jurisdictions, meet the requirements that permit the Plan to operate in a qualified or tax-efficient manner, comply with applicable foreign laws and to meet the objectives of the Plan.

17.7No Trust or Fund

The Plan is intended to constitute an “unfunded” plan. Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.

17.8Successors

All obligations of the Company under the Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all the business or assets of the Company.

17.9Severability

If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee’s determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

17.10Choice of Law

The Plan, all Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving effect to principles of conflicts of law. Participants irrevocably consent to the nonexclusive jurisdiction and venue of the state and federal courts located in the State of Washington.

17.11Legal Requirements

The granting of Awards and the issuance of shares of Common Stock under the Plan are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

section 18. effective date

The effective date (the “Effective Date”) is the date on which the Plan is approved by the shareholders of the Company. If the shareholders of the Company do not approve the Plan within 12 months after the Board’s adoption of the Plan, any Incentive Stock Options granted under the Plan will be treated as Nonqualified Stock Options.

EXHIBIT 31.1

Certification Pursuant to Rule 13a-14(a)

Under the Securities Exchange Act of 1934

I, Devin W. Stockfish, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Weyerhaeuser Company.

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	Date:	October 30, 2020

	/s/ DEVIN W. STOCKFISH
	Devin W. Stockfish President and Chief Executive Officer

EXHIBIT 31.2

Certification Pursuant to Rule 13a-14(a)

Under the Securities Exchange Act of 1934

I, Russell S. Hagen, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Weyerhaeuser Company.

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	Date:	October 30, 2020

	/s/ RUSSELL S. HAGEN
	Russell S. Hagen Senior Vice President and Chief Financial Officer

EXHIBIT 32

Certification Pursuant to Rule 13a-14(b)

Under the Securities Exchange Act of 1934 and

Section 1350, Chapter 63 of Title 18, United States Code

Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and section 1350, chapter 63 of title 18, United States Code, each of the undersigned officers of Weyerhaeuser Company, a Washington corporation (the “Company”), hereby certifies that:

The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 and dated October 30, 2020 (the “Form 10-Q”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ DEVIN W. STOCKFISH
Devin W. Stockfish President and Chief Executive Officer

Dated:	October 30, 2020

/s/ RUSSELL S. HAGEN
Russell S. Hagen Senior Vice President and Chief Financial Officer

Dated:	October 30, 2020