NOTE 2: BUSINESS SEGMENTS

Our business segments and how we account for those segments are discussed in Note 1: Summary of Significant Accounting Policies. This note provides key financial data by business segment and information about our chief operating decision maker.

KEY FINANCIAL DATA BY BUSINESS SEGMENT

Sales, Significant Segment Expenses and Net Contribution (Charge) to Earnings

 

DOLLAR AMOUNTS IN MILLIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNALLOCATED

 

 

 

 

 

 

 

 

 

REAL

 

 

 

 

 

ITEMS AND

 

 

 

 

 

 

 

 

 

ESTATE

 

 

WOOD

 

 

INTERSEGMENT

 

 

 

 

 

 

TIMBERLANDS

 

 

& ENR

 

 

PRODUCTS

 

 

ELIMINATIONS

 

 

CONSOLIDATED

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales to unaffiliated customers

 

$

1,494

 

 

$

454

 

 

$

4,957

 

 

$

 

 

$

6,905

 

Intersegment sales

 

 

592

 

 

 

 

 

 

 

 

 

(592

)

 

 

 

Total

 

 

2,086

 

 

 

454

 

 

 

4,957

 

 

 

(592

)

 

 

6,905

 

Costs of sales

 

 

1,664

 

 

 

117

 

 

 

4,674

 

 

 

(575

)

 

 

5,880

 

Gross margin

 

 

422

 

 

 

337

 

 

 

283

 

 

 

(17

)

 

 

1,025

 

Selling expenses

 

 

1

 

 

 

 

 

 

88

 

 

 

3

 

 

 

92

 

General and administrative expenses

 

 

97

 

 

 

27

 

 

 

156

 

 

 

173

 

 

 

453

 

Other segment items(1)

 

 

(262

)

 

 

(5

)

 

 

(16

)

 

 

230

 

 

 

(53

)

Net contribution (charge) to earnings

 

$

586

 

 

$

315

 

 

$

55

 

 

$

(423

)

 

$

533

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales to unaffiliated customers

 

$

1,512

 

 

$

391

 

 

$

5,221

 

 

$

 

 

$

7,124

 

Intersegment sales

 

 

554

 

 

 

 

 

 

 

 

 

(554

)

 

 

 

Total

 

 

2,066

 

 

 

391

 

 

 

5,221

 

 

 

(554

)

 

 

7,124

 

Costs of sales

 

 

1,686

 

 

 

152

 

 

 

4,516

 

 

 

(543

)

 

 

5,811

 

Gross margin

 

 

380

 

 

 

239

 

 

 

705

 

 

 

(11

)

 

 

1,313

 

Selling expenses

 

 

1

 

 

 

 

 

 

85

 

 

 

2

 

 

 

88

 

General and administrative expenses

 

 

100

 

 

 

26

 

 

 

155

 

 

 

199

 

 

 

480

 

Other segment items(1)

 

 

(1

)

 

 

(3

)

 

 

8

 

 

 

45

 

 

 

49

 

Net contribution (charge) to earnings

 

$

280

 

 

$

216

 

 

$

457

 

 

$

(257

)

 

$

696

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales to unaffiliated customers

 

$

1,654

 

 

$

363

 

 

$

5,657

 

 

$

 

 

$

7,674

 

Intersegment sales

 

 

572

 

 

 

 

 

 

 

 

 

(572

)

 

 

 

Total

 

 

2,226

 

 

 

363

 

 

 

5,657

 

 

 

(572

)

 

 

7,674

 

Costs of sales

 

 

1,746

 

 

 

126

 

 

 

4,699

 

 

 

(579

)

 

 

5,992

 

Gross margin

 

 

480

 

 

 

237

 

 

 

958

 

 

 

7

 

 

 

1,682

 

Selling expenses

 

 

1

 

 

 

 

 

 

84

 

 

 

2

 

 

 

87

 

General and administrative expenses

 

 

100

 

 

 

26

 

 

 

149

 

 

 

156

 

 

 

431

 

Other segment items(1)

 

 

(109

)

 

 

 

 

 

16

 

 

 

40

 

 

 

(53

)

Net contribution (charge) to earnings

 

$

488

 

 

$

211

 

 

$

709

 

 

$

(191

)

 

$

1,217

 

(1)
Other segment items for each reportable segment includes recurring and non-recurring income and expense items. For our Timberlands segment, this includes a legal benefit in 2023 and gains on the sale of timberlands in 2023 and 2025. For our Wood Products segment, this includes insurance recoveries in 2023, product remediation recoveries and an impairment charge related to the indefinite curtailment of our New Bern lumber mill in 2024, and a gain on the sale of our Princeton lumber mill in 2025. For Unallocated Items, this includes a legal expense in 2023, noncash environmental remediation charges in 2023 and 2025, as well as non-operating pension and other post-employment benefit costs, interest income and other and insurance recoveries for all periods presented. Refer to Note 17: Other Operating Costs, Net for additional information.

The chief operating decision maker, our president and chief executive officer, evaluates segment performance and allocates capital based on the net contribution (charge) to earnings of the respective segments. This measure is used to monitor budget versus actual results and to benchmark performance against competitors, as well as to evaluate segment performance for capital allocation decisions. An analysis and reconciliation of our business segment information to the consolidated financial statements are included below:

Reconciliation of Net Contribution to Earnings to Net Earnings

 

DOLLAR AMOUNTS IN MILLIONS

 

 

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2023

 

Net contribution to earnings

 

$

533

 

 

$

696

 

 

$

1,217

 

Interest expense, net of capitalized interest

 

 

(273

)

 

 

(269

)

 

 

(280

)

Income before income taxes

 

 

260

 

 

 

427

 

 

 

937

 

Income taxes

 

 

64

 

 

 

(31

)

 

 

(98

)

Net earnings

 

$

324

 

 

$

396

 

 

$

839

 

Additional Financial Information

 

DOLLAR AMOUNTS IN MILLIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REAL ESTATE

 

 

WOOD

 

 

UNALLOCATED

 

 

 

 

 

 

TIMBERLANDS

 

 

& ENR

 

 

PRODUCTS

 

 

ITEMS

 

 

CONSOLIDATED

 

Depreciation, depletion and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

$

261

 

 

$

12

 

 

$

224

 

 

$

12

 

 

$

509

 

2024

 

$

260

 

 

$

13

 

 

$

219

 

 

$

10

 

 

$

502

 

2023

 

$

267

 

 

$

16

 

 

$

210

 

 

$

7

 

 

$

500

 

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

$

120

 

 

$

 

 

$

353

 

 

$

1

 

 

$

474

 

2024

 

$

105

 

 

$

 

 

$

294

 

 

$

17

 

 

$

416

 

2023

 

$

111

 

 

$

 

 

$

323

 

 

$

13

 

 

$

447

 

Total Assets

 

DOLLAR AMOUNTS IN MILLIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TIMBERLANDS AND

 

 

WOOD

 

 

UNALLOCATED

 

 

 

 

 

 

REAL ESTATE & ENR

 

 

PRODUCTS

 

 

ITEMS

 

 

CONSOLIDATED

 

Total assets(1)

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

$

12,687

 

 

$

3,194

 

 

$

732

 

 

$

16,613

 

2024

 

$

12,545

 

 

$

3,116

 

 

$

875

 

 

$

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.

Historical Timeline

Fiscal YearFiled
2025Feb 13, 2026Showing above
2024Feb 14, 2025
2023Feb 16, 2024
2022Feb 17, 2023
2021Feb 18, 2022
2020Feb 19, 2021
2019Feb 14, 2020
2018Feb 15, 2019
2017Feb 16, 2018
2016Feb 24, 2017
2015Feb 17, 2016

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.