Financial Analysis

"NOTE 10: LEGAL PROCEEDINGS, C OMMITMENTS AND CONTINGENCIES Legal Proceedings We are party to various legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceeding that management believes could have a material adverse effect on our Consolidated Statement of Operations , Consolidated Balance Sheet or Consolidated Statement of Cash Flows . Environmental Matters Site Remediation Under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) commonly known as the Superfund and similar state laws, we: are a party to various proceedings related to the cleanup of hazardous waste sites and have been notified that we may be a potentially responsible party related to the cleanup of other hazardous waste sites for which proceedings have not yet been initiated. As of June 30, 2026, our total accrual for future estimated remediation costs on active Superfund sites and other sites for which we are potentially responsible was approximately $ 93 million . These amounts are recorded in ""Accrued liabilities"" and ""Other liabilities"" on our Consolidated Balance Sheet ." …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"NOTE 8: LONG-TERM DEBT, LINE OF CREDIT AND COMMERCIAL PAPER PROGRAM Long-term Debt In July 2026, we repaid the remaining $ 62 million and $ 60 million in principal outstanding on our 7.35 percent and 7.85 percent debentures, respectively, at maturity. During second quarter 2026, we repaid the remaining $ 250 million in principal outstanding on our 4.75 percent notes at maturity. We also amended our $ 300 million senior unsecured term loan to extend the maturity date from April 2030 to April 2031 and amended our $ 250 million senior unsecured term loan to extend the maturity date from December 2028 to April 2031 . Refinancing costs associated with each of these extensions were immaterial. During first quarter 2026, we repaid our $ 150 million 7.70 percent debentures at maturity. During first quarter 2025, we repaid our $ 139 million 8.50 percent debentures and our $ 71 million 7.95 percent debentures at maturity. We also entered into a $ 300 million senior unsecured term loan that will mature in April 2031 as a result of the aforementioned amendment. Net proceeds after fees were $ 299 million. Borrowings will bear interest at a floating rate based on either the adjusted term Secured Overnight Financing Rate ( SOFR) plus a spread or a mutually agreed-upon base rate plus a spread. Commercial Paper Program During fourth quarter 2025, we established a commercial paper program under which we may issue short-term, unsecured commercial paper notes pursuant to the exemption from regi …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

A reconciliation of revenue recognized by our major products: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2026 JUNE 2025 JUNE 2026 JUNE 2025 Net sales to unaffiliated customers: Timberlands segment Delivered logs: West Domestic sales $ 100 $ 102 $ 183 $ 200 Export grade sales 71 67 132 138 Subtotal West 171 169 315 338 South 145 154 293 306 North 9 8 23 22 Subtotal delivered logs sales 325 331 631 666 Stumpage and pay-as-cut timber 11 13 21 23 Recreational and other lease revenue 20 19 40 38 Other (1) 11 10 31 28 Net sales attributable to Timberlands segment 367 373 723 755 Strategic Land Solutions segment Real estate 91 72 160 134 Natural resources 34 26 61 45 Climate solutions 15 56 126 69 Net sales attributable to Strategic Land Solutions segment 140 154 347 248 Wood Products segment Structural lumber 591 581 1,069 1,108 Oriented strand board 180 205 347 433 Engineered solid section 181 169 336 330 Engineered I-joists 89 95 161 183 Softwood plywood 47 41 85 81 Medium density fiberboard 31 36 62 68 Complementary building products 179 155 322 280 Other (2) 62 75 142 161 Net sales attributable to Wood Products segment 1,360 1,357 2,524 2,644 Total net sales $ 1,867 $ 1,884 $ 3,594 $ 3,647 (1) Other Timberlands sales include sales of seeds and seedlings from our nursery operations as well as wood chips. (2) Other Wood Products sales include wood chips, other byproducts and third-party residual log sales from our Canadian Forestlands operations.

DisaggregationOfRevenueTableTextBlock

NOTE 12: SHARE-B ASED COMPENSATION Share-based compensation activity during year-to-date 2026 included the following: SHARES IN THOUSANDS GRANTED VESTED Restricted stock units (RSUs) 1,184 766 Performance share units (PSUs) 622 214 A total of 712 thousand shares of common stock were issued as a result of RSU and PSU vestings, net of tax. Restricted Stock Units The weighted average fair value of the RSUs granted in 2026, calculated as an average of the high and low prices on grant date, was $ 26.84 . The vesting provisions for RSUs granted in 2026 were consistent with prior year grants. Performance Share Units The weighted average grant date fair value of PSUs granted in 2026 was $ 26.29 . The final number of shares granted in 2026 will vest between a range of 0 percent to 150 percent of each grant's target, depending upon actual company total shareholder return (TSR) compared against the TSR of an industry peer group, as well as company progress in achieving EBITDA growth targets. TSR assumes full reinvestment of dividends. In the event of negative absolute TSR, the TSR component used in the blended payout calculation is capped at 125 percent. Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2026 PERFORMANCE SHARE UNITS Performance period 2/13/2026 12/31/2028 Valuation date closing stock price $ 26.75 Risk-free rate 3.37 % 3.43 % Expected volatility 27.90 % …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair value and carrying value of our long-term debt consisted of the following: JUNE 30, 2026 DECEMBER 31, 2025 DOLLAR AMOUNTS IN MILLIONS CARRYING VALUE FAIR VALUE (LEVEL 2) CARRYING VALUE FAIR VALUE (LEVEL 2) Long-term debt (including current maturities), line of credit and commercial paper: Fixed rate $ 3,828 $ 3,776 $ 4,225 $ 4,242 Variable rate 1,347 1,350 1,347 1,350 Commercial paper program 250 250 Total debt $ 5,425 $ 5,376 $ 5,572 $ 5,592 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 value with only insignificant differences. The inputs to the valuations of our long-term debt are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date. Derivative Instruments Designated as Cash Flow Hedges Interest Rate Swap Hedging Relationship During third quarter 2025, we entered into interest rate swaps with the risk management objective of managing exposure to interest rate volatility by converting variable rate debt oblig …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

NOTE 14: INCOME TAXES As a real estate investment trust (REIT), we generally are not subject to federal corporate income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our Taxable REIT Subsidiaries (TRSs), which include our Wood Products segment and a portion of our Timberlands and Strategic Land Solutions segments. 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 2026 estimated annual effective tax rate, excluding discrete items, differs from the U.S. federal statutory tax rate of 21 percent primarily due to state and foreign income taxes and tax benefits associated with our nontaxable REIT earnings. Tax Legislation On July 4, 2025, H.R. 1, commonly known as the One Big, Beautiful Bill Act (the OBBBA), was enacted. The OBBBA contained significant changes to corporate taxation, including accelerated deductions for capital spending, expensing of research and development costs and increased deductibility of interest expense. Additionally, effective for taxable years beginning after December 31, 2025, the value of TRS securities that a REIT may hold increased from 20 percent to 25 percent of the value of the REITs total assets. We do not expect a material impact to our 2026 financial statements due to the enactment of the OBBBA. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 6: PENSION AND OTHER PO ST-EMPLOYMENT BENEFIT PLANS The components of net periodic benefit cost are: PENSION QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2026 JUNE 2025 JUNE 2026 JUNE 2025 Service cost $ 5 $ 5 $ 9 $ 9 Interest cost 24 30 47 60 Expected return on plan assets ( 23 ) ( 26 ) ( 45 ) ( 52 ) Amortization of actuarial loss 12 14 24 28 Amortization of prior service cost 1 1 1 1 Total net periodic benefit cost pension $ 19 $ 24 $ 36 $ 46 OTHER POST-EMPLOYMENT BENEFITS QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2026 JUNE 2025 JUNE 2026 JUNE 2025 Interest cost $ 1 $ 1 $ 2 $ 2 Amortization of prior service credit ( 1 ) ( 1 ) ( 1 ) ( 1 ) Total net periodic benefit cost other post-employment benefits $ $ $ 1 $ 1 For the periods presented, service cost is included in Costs of sales, Selling expenses, and General and administrative expenses with the remaining components included in Non-operating pension and other post-employment benefit costs in our Consolidated Statement of Operations . Fair Value of Pension Plan Assets and Obligations In our year-end reporting process, we estimate the fair value of pension plan assets based upon the information available at that time. For certain assets, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We evaluate the year-end estimated fair value of pensio …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 3: REVENU E RECOGNITION A reconciliation of revenue recognized by our major products: QUARTER ENDED YEAR-TO-DATE ENDED DOLLAR AMOUNTS IN MILLIONS JUNE 2026 JUNE 2025 JUNE 2026 JUNE 2025 Net sales to unaffiliated customers: Timberlands segment Delivered logs: West Domestic sales $ 100 $ 102 $ 183 $ 200 Export grade sales 71 67 132 138 Subtotal West 171 169 315 338 South 145 154 293 306 North 9 8 23 22 Subtotal delivered logs sales 325 331 631 666 Stumpage and pay-as-cut timber 11 13 21 23 Recreational and other lease revenue 20 19 40 38 Other (1) 11 10 31 28 Net sales attributable to Timberlands segment 367 373 723 755 Strategic Land Solutions segment Real estate 91 72 160 134 Natural resources 34 26 61 45 Climate solutions 15 56 126 69 Net sales attributable to Strategic Land Solutions segment 140 154 347 248 Wood Products segment Structural lumber 591 581 1,069 1,108 Oriented strand board 180 205 347 433 Engineered solid section 181 169 336 330 Engineered I-joists 89 95 161 183 Softwood plywood 47 41 85 81 Medium density fiberboard 31 36 62 68 Complementary building products 179 155 322 280 Other (2) 62 75 142 161 Net sales attributable to Wood Products segment 1,360 1,357 2,524 2,644 Total net sales $ 1,867 $ 1,884 $ 3,594 $ 3,647 (1) Other Timberlands sales include sales of seeds and seedlings from our nursery operations as well as wood chips. (2) Other Wood Products sales include wood chips, other byproducts and third-party residual log sales from our Canadian Forest …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

NOTE 2: BUSIN ESS 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; Strategic Land Solutions Real Estate (sales of timberlands), Natural Resources (rights to explore for and extract hard minerals, construction materials and natural gas production) and Climate Solutions (conservation, mitigation banking, renewable energy, forest carbon and carbon capture and sequestration). 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 our Consolidated Statement of Operations is as follows: DOLLAR AMOUNTS IN MILLIONS TIMBERLANDS STRATEGIC LAND SOLUTIONS WOOD PRODUCTS UNALLOCATED ITEMS AND INTERSEGMENT ELIMINATIONS CONSOLIDATED QUARTER ENDED JUNE 2026 Net sales to unaffiliated customers $ 367 $ 140 $ 1,360 $ $ 1,867 Intersegment sales 151 ( 151 ) Total 518 140 1,360 ( 151 ) 1,867 Costs of sales 434 38 1,223 ( 139 ) 1,556 Gross margin 84 102 137 ( 12 ) 311 Selling expenses 1 23 24 General and administrative expenses 24 8 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing