| 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:
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DOLLAR AMOUNTS IN MILLIONS |
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TIMBERLANDS |
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REAL ESTATE
& ENR |
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|
WOOD PRODUCTS |
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UNALLOCATED ITEMS AND INTERSEGMENT ELIMINATIONS |
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CONSOLIDATED |
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QUARTER ENDED JUNE 2025 |
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Net sales to unaffiliated customers |
|
$ |
373 |
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|
$ |
154 |
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|
$ |
1,357 |
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|
$ |
— |
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|
$ |
1,884 |
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Intersegment sales |
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|
156 |
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|
— |
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|
— |
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(156 |
) |
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|
— |
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Total |
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|
529 |
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|
154 |
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|
1,357 |
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(156 |
) |
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|
1,884 |
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Costs of sales |
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|
416 |
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|
44 |
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|
1,243 |
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(144 |
) |
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|
1,559 |
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Gross margin |
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|
113 |
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|
110 |
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|
114 |
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(12 |
) |
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|
325 |
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Selling expenses |
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|
1 |
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|
— |
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|
22 |
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|
— |
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|
23 |
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General and administrative expenses |
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|
24 |
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|
6 |
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|
40 |
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|
44 |
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|
114 |
|
Other segment items(1) |
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|
— |
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(2 |
) |
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|
6 |
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|
19 |
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|
23 |
|
Net contribution (charge) to earnings |
|
$ |
88 |
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$ |
106 |
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$ |
46 |
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|
$ |
(75 |
) |
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$ |
165 |
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QUARTER ENDED JUNE 2024 |
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Net sales to unaffiliated customers |
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$ |
409 |
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|
$ |
109 |
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|
$ |
1,421 |
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|
$ |
— |
|
|
$ |
1,939 |
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Intersegment sales |
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|
146 |
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|
— |
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|
— |
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(146 |
) |
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|
— |
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Total |
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|
555 |
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|
109 |
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1,421 |
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(146 |
) |
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|
1,939 |
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Costs of sales |
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|
450 |
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|
46 |
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|
1,185 |
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(146 |
) |
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|
1,535 |
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Gross margin |
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|
105 |
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|
63 |
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|
236 |
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|
— |
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|
404 |
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Selling expenses |
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|
— |
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|
|
— |
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|
22 |
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|
|
— |
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|
22 |
|
General and administrative expenses |
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|
25 |
|
|
|
8 |
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|
37 |
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|
46 |
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|
116 |
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Other segment items(1) |
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(1 |
) |
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(4 |
) |
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|
(19 |
) |
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|
17 |
|
|
|
(7 |
) |
Net contribution (charge) to earnings |
|
$ |
81 |
|
|
$ |
59 |
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$ |
196 |
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|
$ |
(63 |
) |
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$ |
273 |
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YEAR-TO-DATE ENDED JUNE 2025 |
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Net sales to unaffiliated customers |
|
$ |
755 |
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|
$ |
248 |
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|
$ |
2,644 |
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|
$ |
— |
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$ |
3,647 |
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Intersegment sales |
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|
308 |
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|
— |
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|
— |
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(308 |
) |
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|
— |
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Total |
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1,063 |
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|
248 |
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|
2,644 |
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(308 |
) |
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|
3,647 |
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Costs of sales |
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|
825 |
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|
76 |
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|
2,357 |
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(271 |
) |
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|
2,987 |
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Gross margin |
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|
238 |
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|
172 |
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|
287 |
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(37 |
) |
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|
660 |
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Selling expenses |
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|
1 |
|
|
|
— |
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|
|
44 |
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|
1 |
|
|
|
46 |
|
General and administrative expenses |
|
|
48 |
|
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|
13 |
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|
79 |
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|
93 |
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|
233 |
|
Other segment items(1) |
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(1 |
) |
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(3 |
) |
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|
12 |
|
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|
43 |
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|
51 |
|
Net contribution (charge) to earnings |
|
$ |
190 |
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$ |
162 |
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$ |
152 |
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$ |
(174 |
) |
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$ |
330 |
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YEAR-TO-DATE ENDED JUNE 2024 |
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Net sales to unaffiliated customers |
|
$ |
796 |
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|
$ |
216 |
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|
$ |
2,723 |
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|
$ |
— |
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|
$ |
3,735 |
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Intersegment sales |
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|
280 |
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|
— |
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|
— |
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(280 |
) |
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— |
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Total |
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1,076 |
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|
216 |
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2,723 |
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(280 |
) |
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|
3,735 |
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Costs of sales |
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|
865 |
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|
87 |
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|
2,292 |
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(268 |
) |
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|
2,976 |
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Gross margin |
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|
211 |
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|
129 |
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|
431 |
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(12 |
) |
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|
759 |
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Selling expenses |
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|
— |
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— |
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|
43 |
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|
1 |
|
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|
44 |
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General and administrative expenses |
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|
50 |
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|
14 |
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|
77 |
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|
95 |
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|
236 |
|
Other segment items(1) |
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|
— |
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(4 |
) |
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(13 |
) |
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|
22 |
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|
5 |
|
Net contribution (charge) to earnings |
|
$ |
161 |
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|
$ |
119 |
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|
$ |
324 |
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|
$ |
(130 |
) |
|
$ |
474 |
|
(1)Other segment items for each reportable segment includes recurring and non-recurring income and expense items. For our Wood Products segment, this includes product remediation recoveries. 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
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QUARTER ENDED |
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YEAR-TO-DATE ENDED |
|
DOLLAR AMOUNTS IN MILLIONS |
|
JUNE 2025 |
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|
JUNE 2024 |
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JUNE 2025 |
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JUNE 2024 |
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Net contribution to earnings |
|
$ |
165 |
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$ |
273 |
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$ |
330 |
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$ |
474 |
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Interest expense, net of capitalized interest |
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(66 |
) |
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(67 |
) |
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(132 |
) |
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|
(134 |
) |
Earnings before income taxes |
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|
99 |
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|
206 |
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|
198 |
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|
340 |
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Income taxes |
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(12 |
) |
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(33 |
) |
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(28 |
) |
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|
(53 |
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Net earnings |
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$ |
87 |
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|
$ |
173 |
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$ |
170 |
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|
$ |
287 |
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Additional Financial Information
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|
DOLLAR AMOUNTS IN MILLIONS |
|
TIMBERLANDS |
|
|
REAL ESTATE
& ENR |
|
|
WOOD PRODUCTS |
|
|
UNALLOCATED ITEMS AND INTERSEGMENT ELIMINATIONS |
|
|
CONSOLIDATED |
|
QUARTER ENDED JUNE 2025 |
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Depreciation, depletion and amortization |
|
$ |
64 |
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$ |
4 |
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$ |
55 |
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$ |
2 |
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|
$ |
125 |
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Capital expenditures |
|
$ |
19 |
|
|
$ |
— |
|
|
$ |
88 |
|
|
$ |
— |
|
|
$ |
107 |
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|
QUARTER ENDED JUNE 2024 |
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|
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|
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Depreciation, depletion and amortization |
|
$ |
67 |
|
|
$ |
4 |
|
|
$ |
54 |
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|
$ |
1 |
|
|
$ |
126 |
|
Capital expenditures |
|
$ |
21 |
|
|
$ |
— |
|
|
$ |
63 |
|
|
$ |
7 |
|
|
$ |
91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
YEAR-TO-DATE ENDED JUNE 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
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Depreciation, depletion and amortization |
|
$ |
129 |
|
|
$ |
6 |
|
|
$ |
110 |
|
|
$ |
5 |
|
|
$ |
250 |
|
Capital expenditures |
|
$ |
45 |
|
|
$ |
— |
|
|
$ |
155 |
|
|
$ |
— |
|
|
$ |
200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
YEAR-TO-DATE ENDED JUNE 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
$ |
131 |
|
|
$ |
7 |
|
|
$ |
110 |
|
|
$ |
3 |
|
|
$ |
251 |
|
Capital expenditures |
|
$ |
52 |
|
|
$ |
— |
|
|
$ |
105 |
|
|
$ |
13 |
|
|
$ |
170 |
|
Total Assets
|
|
|
|
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|
DOLLAR AMOUNTS IN MILLIONS |
|
JUNE 30,
2025 |
|
|
DECEMBER 31,
2024 |
|
Timberlands and Real Estate & ENR(1) |
|
$ |
12,455 |
|
|
$ |
12,545 |
|
Wood Products |
|
|
3,278 |
|
|
|
3,116 |
|
Unallocated items |
|
|
745 |
|
|
|
875 |
|
Consolidated |
|
$ |
16,478 |
|
|
$ |
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. |