BUSINESS SEGMENTS

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

BUSINESS SEGMENTS

NOTE 2: BUSINESS SEGMENTS

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

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

●Real Estate, Energy and Natural Resources (Real Estate & ENR) – Real Estate (sales of timberlands) and ENR (rights to explore for and extract hard minerals, construction materials, natural gas production and 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:

DOLLAR AMOUNTS IN MILLIONS	TIMBERLANDS			REAL ESTATE & ENR			WOOD PRODUCTS		UNALLOCATED ITEMS AND INTERSEGMENT ELIMINATIONS			CONSOLIDATED
QUARTER ENDED MARCH 2025
Net sales to unaffiliated customers	$	382		$	94		$	1,287	$	—		$	1,763
Intersegment sales		152			—			—		(152	)		—
Total		534			94			1,287		(152	)		1,763
Costs of sales		409			32			1,114		(127	)		1,428
Gross margin		125			62			173		(25	)		335
Selling expenses		—			—			22		1			23
General and administrative expenses		24			7			39		49			119
Other segment items(1)		(1	)		(1	)		6		24			28
Net contribution (charge) to earnings	$	102		$	56		$	106	$	(99	)	$	165
QUARTER ENDED MARCH 2024
Net sales to unaffiliated customers	$	387		$	107		$	1,302	$	—		$	1,796
Intersegment sales		134			—			—		(134	)		—
Total		521			107			1,302		(134	)		1,796
Costs of sales		415			41			1,107		(122	)		1,441
Gross margin		106			66			195		(12	)		355
Selling expenses		—			—			21		1			22
General and administrative expenses		25			6			40		49			120
Other segment items(1)		1			—			6		5			12
Net contribution (charge) to earnings	$	80		$	60		$	128	$	(67	)	$	201

(1)Other segment items for each reportable segment includes recurring and non-recurring income and expense items. For Unallocated Items, this includes non-operating pension and other post-employment benefit costs and interest income and other.

Reconciliation of Net Contribution to Earnings to Net Earnings

	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2025			MARCH 2024
Net contribution to earnings	$	165		$	201
Interest expense, net of capitalized interest		(66	)		(67	)
Earnings before income taxes		99			134
Income taxes		(16	)		(20	)
Net earnings	$	83		$	114

Additional Financial Information

DOLLAR AMOUNTS IN MILLIONS	TIMBERLANDS		REAL ESTATE & ENR		WOOD PRODUCTS		UNALLOCATED ITEMS AND INTERSEGMENT ELIMINATIONS		CONSOLIDATED
QUARTER ENDED MARCH 2025
Depreciation, depletion and amortization	$	65	$	2	$	55	$	3	$	125
Capital expenditures	$	26	$	—	$	67	$	—	$	93
QUARTER ENDED MARCH 2024
Depreciation, depletion and amortization	$	64	$	3	$	56	$	2	$	125
Capital expenditures	$	31	$	—	$	42	$	6	$	79

Total Assets

DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2025		DECEMBER 31, 2024
Timberlands and Real Estate & ENR(1)	$	12,507	$	12,545
Wood Products		3,288		3,116
Unallocated items		725		875
Consolidated	$	16,520	$	16,536

(1)Assets attributable to the Real Estate & ENR segment are combined with total assets for the Timberlands segment as we do not produce separate balance sheets internally.