Weyerhaeuser (WY) 28 Oct 222022 Q3 Earnings call transcript

Greetings, and welcome to the Weyerhaeuser Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Andy Taylor, Vice President of Investor Relations. Thank you, Mr. Taylor.

begin. may You

Good today Rob. This Thank for you is Thank discuss morning, Weyerhaeuser's us www.weyerhaeuser.com. to webcast earnings. third joining being you, at everyone. quarter call XXXX

also made earnings forward-looking forward-looking be review Our statements warning our presentation as on in during statements call. release statements presentation risks slides and materials concerning the found our the this website. release conference on Please and the be press will can associated with

reconciliation discuss of our can non-GAAP in financial earnings will a the and We found GAAP measures, be materials website. on

Chief call Officer; Officer. the this the Stockfish. On morning now are will Davie Financial call Devin Stockfish, Chief to Devin Executive Wold, over turn and I

GAAP morning, second you largely lumber the or quarter. near-term than This Yesterday, Thanks, million is joining $XXX approximately on Andy. $X.XX per on weighed thank macroeconomic and pricing diluted everyone, totaled softening housing sales Adjusted in Good lower EBITDA of XX% billion. earnings of share further million the and was $X.X outlook. $XXX third quarter the and for cautious sentiment quarter net us. by in Weyerhaeuser and as OSB third reported driven

that sustainable is work everyone pleased who work is quarter report months employees, that Northwest as and the and the agreement operations. portion a many we'll importantly, over come to degree, and lesser to Western and families of we've this well operations. and in our to we that to believe our by as acknowledge business our our worked been cycle. appreciate XX X how lumber I'm all situation stoppage commenced our were involved. work communities the want and resuming Oregon and mills impacted The in for company begin of employees, these our important to for last stoppage, Timberlands resolved an as night, third competitive a impacted also difficult I fair the wood jobs Additionally, products our week. timberlands stoppage Washington has We for how results operations throughout and to on are and their next September diligently

quarter stoppage $XXX And as $XXX the in With on increase operating the back, quarter by ago quickly currently less to returning in volume million the focused Northwest well and late as earnings. we're average the employees to quarter. -- as I'll million, up over resulting million third lower West, a stoppage contributed the posture welcoming to Timberlands third that, quarter being to our days of customers This expect driven slides. realizations XX by sales I'll our $XX year the from lower full to quarter in West, million totaled compared largely capacity possible. due decreased Pages supporting X to through earnings the With now as on to business third ramp work X to returning full Adjusted operating discussion with second quarter. in EBITDA work. resolved, to We export our to quarter. after shipped compared the begin Timberlands results. X was turn the our volumes in EBITDA $X partly

quarter by Despite fairly lumber certain markets capacity. harvest the steady pricing, the in areas log stable demand lower in market. Western to was log and supply third was constrained haul Turning domestic remained log and as somewhat

markets challenges, kept the these for experience quarter. log of tensioned impacts not did the Weyerhaeuser Although most

Western worth combination log by that favorable activities of our domestic employees the our result, realizations weather a quarter. quarter comparable were the second decreased and Notwithstanding outside harvest that our sales second stoppage sales in It's As noting result commenced and a Weyerhaeuser are contractors. a as work haul of and the mid-September. volumes fee domestic conditions, compared quarter third to to operated

a As a haul our portion stoppage. work through harvest contract of continued result, operations the and

and were second haul costs per log higher and quarter, were and costs lower. unit Our to road the compared seasonally forestry

due Turning in to Japanese due number imports our quarter somewhat an a third of sales the factors, of log second compared export markets. including lumber increase In decreased Japan, to our European logs lockdowns. of the elevated demand for the pandemic-related log third we as well the at a to and significantly domestic log into continue for the to the Australian in in declined Japan. to These to lower volumes as China, quarter quarter combined softened for the reported Sales the in compared earlier ongoing our impacts inventories from the wood the moderately with in timing log real log disruptions capture to from logs persisted. In the stoppage. better volume were Chinese export log Chinese resulting softened shipments, quarter. demand imports, the decreased China reduction market shift slightly reduction activity headwinds ports in margin into flow in European the modestly work realizations the estate as on supply on to lower levels Average exports intentionally market sales ban significantly Despite opportunities. quarter, softer Russia's China. include logs demand, from realizations export as restrictions steadily and sales were our to volumes second due year,

log impacted export work were sales volumes a further resulting reduction stoppage. to activity from the quarter third in Our by China

South. the to Moving

challenges. and Southern supply ago the fiber the for second was the and markets maintain remained Despite sawlog as softening third pricing, year comparable product supply Timberlands’ Southern quarter majority of mitigate from mills adjusted to to stable adequate steady and demand EBITDA quarter ongoing finished chain quarter. log risks

were were certain activity third conditions a affected and geographies harvest as our comparable were than better second also Fee for our As the realizations weather sales of portion harvest volumes comparable quarter. the expected in a result, to quarter.

and higher were comparable costs haul road per log the costs and Forestry quarter. were to unit seasonally second and

our China of out to On U.S. export side, the log the exports

imported pine phytosanitary logs. rules on South to concerns to ongoing remain address paused due by regulators Chinese imposed potential

the market to result, mills to we third logs domestic a As continue the redirect quarter. in during India

a markets. adjusted North, this to maintain quarter and seasonal higher third outlook EBITDA as and in typical to compared business increased from positive view volumes temporary the slightly our the second headwind for is export longer-term that the Southern quarter. in increase In due a other to significantly sales harvest continue the to China activity We resulting Asian

Our sales were realizations comparable.

Turning third XX. to to real EBITDA. $XX $XX and estate, energy million to resources earnings and natural Estate Pages ENR million and adjusted Real X on and contributed quarter

but recent XXXX EBITDA real reduction heavily royalty adjusted $XX in in estate offset year toward to our and Energy partially ago second quarter lower the acres to income estate Third Natural has primarily Similar million by the a comparable been due sold quarter, quarter, increase activity our from an to half weighted the than was of Resources first business. the years, year. real

in is of seek premiums activity continue resulting broader hard to uncertainty, assets, continue the moderating demand to transactions value. for Although buyers with we see to response as significant safety macroeconomic timber HBU to in high-value steady properties

Regarding Solutions which our passage Natural with encouraged opportunities for Act, renewable continue capture and support Natural across Reduction carbon demand Climate Climate growth the engage the drive and by developers our and further Solutions we storage recent to markets high-quality Inflation energy should acreage. these incremental of business, our strategy. for And we're

and well project forest in Additionally, for the pilot Maine project we positioned to continue carbon are advance months. over next approval our few

EBITDA. third through Wood earnings quarter adjusted Pages XX Products Moving to to $XXX million million Wood XX. contributed to and $XXX on Products

was cautious rising the through bolster July Third stabilized lean products. sentiment the having the Buyers of improved concerns mortgage lumber in in lower during housing significant benchmark Benchmark quarter This largely buyers third lumber affordability quarter. starts the quarter from in purchases. brief turned the to again in By steady necessity than markets. adjusted EBITDA limiting the OSB following data. dynamic mortgage solid data. June by and driven Buyer July, prices inventories. orders remain rates OSB entered sentiment housing to pricing and as $XXX year housing through for resulting of most Starting earlier market pricing early August, in buyer the and slightly to the continued a end largely declines in decline in quarter, response quarter, reentered from cautious once million a increase and and with unfavorable second starts OSB rapidly response resulting decrease the lumber to rates, both

lower prices September, prices end OSB in stabilized lumber gradually the of throughout the moved While quarter.

each Although the decreased business healthy for prices context, on OSB historical note a remained lumber it's to Adjusted basis. lumber that at and million important to compared second quarter. our levels for by EBITDA $XXX

by the lumber framing decreased average decreased pricing composite sales Our XX%. XX%, by while realizations

for our quarter Oregon costs quarter. million sales second Our Washington by the driven business the were by compared to higher decreased decreased of our the decreased stoppage to compared during moderately second mills. work quarter volumes log Unit manufacturing EBITDA costs at Adjusted impact moderately. largely and and the $XXX and OSB production the

XX%. average XX%, realizations OSB while by by the sales Our decreased pricing composite decreased

decreased production the volumes planned to sales Our for slightly to due annual and maintenance. downtime second compared quarter

in Third sales volumes impacted in and for allocation compared by transportation for higher the most the quarter the the third to in facilities. third I'll quarter. were for result Sales decreased volumes certain Canada were quarter, million stock. the adjusted for planned costs sales throughout fiber our significantly was over by further fourth annual were discuss Sales Sales outlook. higher compared volumes third rail quarter, Products lower EWP material costs were quarter costs by reduction, manufacturing OSB to adjusted downtime items Unit by our adjusted most Canada. Engineering Unit lower call and were further production $X primarily maintenance. for we quarter-over-quarter Davie the at ongoing decreased comparable. remained quarter were quarter, $X that, EBITDA were and quarter to EBITDA realizations strongest and for distribution for EBITDA Despite products manufacturing in challenges turn web were to impacted due raw higher on and the largely quarter. In in business. some costs products on ongoing million driven Products. this distribution, the constraints labor Wood most financial record products lower and the Specialty challenges volumes by With and to second second

Devin, growing are approximately year-to-date. generated equivalents this quarter Page third everyone. key to debt quarter. third shareholders the by outlook. to moving I be billion. quarter cash for expenditures performance I'll This covering the We a the begin nearly quarter ended which approximately through into will is fourth position with $X you, billion for and a We items and level We quarter $X.X of the Thank million financial XX. and remain good quarter through our in from typical before dividend which strong billion operations annually items, and with morning, base morning, over on cash the with million, summarized $X.X million our $XXX financial quarterly XXXX. financial X% and third of of payment $XXX were $XX just Capital liquidity cash returned and total of key committed

shareholders also under returned program. end, share $XXX $XXX activity. billion we of to We through And million million repurchase our share repurchase quarter $X of remaining capacity had as

to return and totaled our continue repurchase look of shares billion funds flexible third will distribution the leverage approximately adjusted FAD $XXX Page available XX, million, generated Adjusted for as year-to-date. cash quarter We and we opportunistically. have for $X.X framework to on highlighted

XX% reminder, of of we payout each dividends an FAD. adjusted achieve of our annual XX% will the base to additional targeted a cash year As supplement with return to

or form to dividend of in the demonstrated cash opportunistic our repurchase. combination in a flexibility of a framework additional a the XXXX, supplemental share and have return As in dividend we supplemental this

of fiscal has year this and for was variable year our cash through mostly active. achieved repurchase base share While XXXX cash been dividends, our more activity return supplemental

repurchase That strong represent share of our of portion larger this As be anticipate meaningful said, FAD to a as on result will throughout this Key in of result, quarter cash first Page XXXX. the of paid XX% adjusted XX. expect year. XX% fourth a are outlook a we items a quarter year, generation return still the to we cash supplemental presented for the dividend

a fourth by be to That Oregon to returning to operating and lumber return the EBITDA levels we mentioned, and stoppage X- Timberlands October, Devin earnings our businesses. will operating capacity. third will period includes expect In lower said, full impacts adjusted than XX-day soon business, outlook and work significantly our we our quarter normal in fourth quarter be followed quarter. ramp-up As Timberlands to through Washington

majority fourth to constraints. of the quarter conditions supply Turning reduced Timberlands the expected demand has log the Western the for our operations. quarter, of elevated adverse at products log prior finished Domestic is log at notwithstanding remain ample softened chain to inventories and outset mills. takeaway weather from resulting Regional fourth and improved the of or from supply quarter,

realizations we the log expect third domestic to our lower significantly compared sales result, quarter. a to be As

sales domestic stoppage, fourth quarter volumes from now to expected and in our log harvest West to by to of the volumes harvest fourth be deferral impacts in the work year that fee than we in largely Our capture quarters be are lower volumes lower unit full XXXX. expected be to This after in we the driven lower anticipate and and guidance prior over a reduction are costs the represents expect several Per normal operations. haul returning quarter. to slightly harvest

are be of the to due to these expected lower Forestry and seasonal significantly road nature costs activities.

steady logs markets, expect our demand for the Moving export to the we quarter. in fourth

in in resulted As a Devin temporary work the log our activity. export reduction mentioned, stoppage

the quarter. volumes compared sales result, a As export expect we to lower third

logs quarter. the demand remain from in our the steady logistics mills as lower chain quarter ongoing we fourth South, to elevated supply we risks export be inventories to maintain In expect sales Additionally, log realizations fourth and continue to in anticipate mitigate the for to challenges.

of result, from the Fee year than slightly a higher weather third improved conditions our we the Because volumes. quarter, quarter. higher have prior outlook third compared now expect quarter. realizations the slightly full XXXX to prior to to our comparable in volumes higher to expected to as our harvest volumes are South better-than-expected be the in weather As be we moderately conditions anticipate of be harvest sales

fourth In significantly road North, per log to realizations to anticipate costs fee We volumes the quarter the slightly unit costs. to mix. harvest higher be expect compared quarter. sales higher forestry expected third moderately haul We comparable the and are and and in due lower

Natural Resources Turning and to segment. our Real Energy Estate,

Resources lower and expect mix We Energy EBITDA and quarter lower and of will our in and be royalty estate the sales real adjusted income to earnings business. Natural than due timing third fourth quarter

now continue of adjusted full of basis to sales expect anticipate a approximately to be XXXX we We as full the year approximately for percentage $XXX estate XX% EBITDA to XX% million, and real year.

we fourth changes the and board. realizations Products sales and strand expect adjusted quarter third for our lower Wood segment, effects be lumber excluding the of will earnings in For than oriented average quarter, EBITDA

benchmark sentiment Following below stabilization. prices the and a signs reduction majority in benchmark during month lumber pricing In showing are at entered or quarter, October, target slightly. downward lumber the levels the and of have for Benchmark prices for inventories for quarter through fourth Buyers slight third as remains fairly the OSB increasing the cautious. before prices on continued trajectory OSB of stable for stabilizing remained October. maintaining

for Page quarter-to-date the lower our on shown quarter As third lumber and XX, OSB, than both are realizations moderately current averages. and

October, our lumber sales costs. For lower in volumes we fourth anticipate quarter, from costs log resulting Western mills partially significantly work the expect lower manufacturing our offset unit by stoppage in in and the comparable we business,

during Fiber to planned volumes costs are and For our manufacturing third oriented to annual less comparable slightly for we higher to the maintenance downtime strand expect be quarter. sales due expected unit fourth the primarily costs, significantly board business, lower quarter.

Wood fourth expect sales Engineered our the quarter. lower business, we in For volumes Products

We with realizations This I-joists sales OSB costs, section products compared will also lower off be to the solid record partially quarter offset significantly for highs. and stock. for most web by pricing lower coming raw primarily material expect third

in quarter be we than EBITDA to fourth but result, expect quarter, still XXXX. a any higher As lower in adjusted the

to third look For the quarter to for back adjusted I'll volumes our distribution and than EBITDA your questions. due realizations forward turn business, sales now most we to call and be are lower expecting lower Devin products. the to

Davie. Thanks,

markets. on and up this and comments make remodel housing the a I'll repair morning, Before wrapping few

from should outlook builder rapid more increase favorable by been new Over in and new in continued negative. housing existing the mortgage favorable of additional And of early all a some high and for largely challenges, significantly homebuilder remain the That demand inflation the and remainder softening last for reported particularly about compared given the stock, has we construction peak in sentiment residential a offer sales There turned backlog including building last activity Consequently, home being near-term April, ongoing growing reductions support in concerns fundamentals, economy. several to less said, couple headwinds, see segment. expect to housing sheets. single-family affordability continue months, to wood housing notable years, XXXX and driven on rates, in the products term, a have we've several strong the market labor household underbuilt housing we view home and into balance XXXX. a demographic longer to and trends, have healthy solid activity

repair by remodel. continue off the come the remodel continued fairly softening normalized more to and supported segment. and demand do-it-yourself activity third the returning and in the in demand peaks professional repair a to to to quarter stable Turning segment pandemic housing from from market, Demand level. remained Despite pre-pandemic the steady recent has be

home sales remodeling a we remodel an and home challenged spending, rate projects This mortgage a segment, new remodel be longer-term repair their of we and professional may, if provide in optimistic fact, see projects and elect repair in more fundamentals supporting in home environment. drag and invest stock remodel lower homeowners including Although as to on aging especially on and from the out spend near-term this activity, in for favorable activity remodel homes should repair housing support Further, remain existing incremental segment. the equity ordinarily additional purchasing levels. priced some would on they're repair

and XXXX levels. steady and We focus $X.X generated billion funds for results billion. resiliency of of proud despite solid year-to-date have to delivered adjusted I'm repair the adjusted teams. third in increasing collective by we year distribution for and activity and the of Their $X.X macroeconomic pre-pandemic demonstrated of In with available closing, efforts continued quarter across into expect And businesses to support our our next these demand balance EBITDA the comparable dynamics levels headwinds. incredibly

we near-term support businesses. have demand a maintain conditions that market the constructive our outlook for fundamentals Although moderated, longer-term

sheet strong. our balance exceptionally forward, is Looking

We and have We driving disciplined capital performance long-term a well positioned conditions. focused are to customers full industry-leading unmatched value of very our on competitive remain shareholders and assets, cost navigate allocation. through structure range for an portfolio of and market a we our through serving

move our that we quantify to to we'll just I'm now. question, impacts fourth been decrease Now deferred, before cover results would like I lost. some that sure volume briefly is help is to details to the quarter stoppage so work quarter provide would have third outlook. and ahead it merely to this not note the important in with a questions, Timberlands, go Starting that and during period

will over the meantime, the We in And volume so. to that capture deferred continue on year volume will grow next stump. this or the

point period, silviculture as we we and spend such that I'd of for long-term we items out roads level any in that to given base a ensure forestry, maintain Additionally, that value. capture have

of work compared in is stoppage in to harvested plan. approximately our an volume impact deferred But incur costs significantly Taking course we that future of most translated to the typical future be quarter but when during our log third next million. year. levels original volume. into resulted $XX in to in consideration, all the period EBITDA margins during of the of harvest deferred periods recovered will then tons which ultimately continued the So be will approximately work above increase means we've will margins volumes when XXX,XXX that those again, that This lower of period, the stoppage, this the

quarter quarter, average third half of and from the decrease expect to to other Western realizations will to EBITDA we stoppage half to market that work deferred the the lower during volume million sales general conditions. Looking the from attributable due expected with $XX decrease approximately due by fourth approximately quarter, Timberlands the ahead

from quarter of volumes tons deferred the stoppage. fourth XXX,XXX approximately expect in We the work resulting

lowered quarter, million work the Products, volumes impact Wood XXX expect production and by XX of third fourth we the feet in around board board quarter. For feet approximately stoppage in the million

EBITDA lumber pace lumber production a until impact the in margins which versus logs last and Given on October the in quarters. fourth the accordingly, West, the compresses material hasn't or third erosion in more price in log rapid adjust prices September of had

go can ahead we think it up for questions. open I that, and with So

[Operator Goldman Susan question Our first Instructions] with Maklari comes from Sachs.

Devin, you question, to of could input bit the into continue products little a see first that feels like costs My and you wood the some is talked the quarter, started that end and in about it year. the deflation in

cost in we that as on broadly, structure your ability you coming what talk over As business of can think for that and we down do 'XX? about in think to that the through is given could mean hold price going of and last about housing years about some the what perhaps going seen EWP profitability couple the you've

Yes, sure, Sue. Yes.

costs some I are some, down. on we So mean, certainly, of the wood side product the coming to see input going

And fuel stock, see in little web a so in to the West, some relief of of particular, may bit instance, the transportation. related log on costs costs OSB for we

time. on years, when some to So for we is do we the move lumber the over of time. think, pricing, respect dynamic are Open that's able I of year. us at we reasonably But prices other to come EWP undersupply from With supply-demand think there that market as -- some over go building some really we see saw housing the in share were to structural, back run think opportunities activity some do that were the couple with we over the think EWP. earlier Web, I I as to can up to we'll space take a There we'll in this hold of the be forced of expect alternative forward, the move last builders well. talk here height products where there down do about I a primarily those further OSB last is business, during and specific, going EWP to that's

better a as think to prices be able I we little do So forward. move we'll those hold bit

And Timberlands. then over moving That's to helpful.

as on year? there is healthy. of go fact the the with And about pretty term we Timberlands think and dynamics what talked demand valuations overall Solutions? you're remains with tie-in thinking obviously, supply-demand as You you about Natural Climate going just there next how about into longer that the Can we talk

a Timberlands we we of as about XX market have undoubtedly the the to last Well, seen lot the in over Sure. asset class. think interest XX months,

I prices clear deals, deals. see are that on we also the number folks of in terms just paying but bidders Timberlands think that's of that the for

think few about come are think into in things X is a I mentioned, interest piece. forward, that play. we as going there And the those Climate you As the Solutions of

I increased alternative this I are is Timberland think forward. driving really do that know think of to in I at that interest the don't underwriting it's people Candidly, all assets fully but piece folks assets. other are of those carbon equation values a and value going as point, those trying

prices are. wouldn't off they to fall necessarily I So of where expect

We see of in are lot continuing interest to timberland acquisitions. a

so tailwind that next very be a forward. forward. think year trend next we're where X I that X, if market continue we the we going competitive a do going be see expecting X, will to carbon they to prices timberland for and years, are Particularly, And over values think

to I'm mentioned, then in, squeeze stepped the activity obviously, X up year. And more this Okay. just buyback you going you've which is

on current still stock more thinking You to you're the room capital? continued remaining on trading the relative buybacks some other the is Any given of alternatives for some have authorization. where thoughts of how

think thoughts about changed right shareholders. Sue, the cash return I Yes, mean repurchase you substantially. haven't a in useful Sure. our to there tool We share circumstances as really, bet. to

of with supplement variable supplemental then commitment base, the can start significant or to share through we returning that through amount always, we repurchase that return and shareholders in dividend. to the in the So the a as form

all further we'll we that to or share cash So evaluate above amongst to of other in additional can debt use for our repurchase. XX%, investing that continue that growth, options XX% paydown

repurchase certainly X of consider available we'll as share opportunities us. the to So

up have volume stepped over the year. of that of the We course the

So that do a useful we it's certainly, believe to way that indicates that.

there to forward. evaluate continue our we'll So opportunities moving

with everything. luck Good

Our the Citi. Pettinari next comes line with question from Anthony of

you in and impact year? that any Or the recovering strike, Or it that volumes more from kind that year lost volumes cadence this the the timberland side, the the on the there's sort the of to of XQ of it say accurate of and the in next deferred something point first that be XQ XQ On over half in will on could put finer wondering ultimately we discussed next year? is see mostly can you is volumes recovered of XQ year? you if the those of just

sprinkle Sure. our that across next year. plan be would Yes, in to

wouldn't targeted the to or we'll would provide the plan So our just that call little that QX And more QX. it year on be magnitude full as for January. XXXX. specifically on overall of add guidance We bit provide we into the harvest specifics a earnings in

impediment Okay. That's have inventories helpful. an work negatively kind of about impacted lot quarters become And It and then customer to take buildup materials large companies talked of of have a just a demand. of through. that might a couple

customers have you year chain wondering, the I'm for I for And of of in that supply of bit compensate inventory the on maybe -- said ordered risk a headwind into got or be right. of that supply in to eases chain -- just maybe that, any if contrast situation side, early you 'XX? log issues. inventory then Wood Products, especially could if helpful. with lumber, that build pretty do a you becomes fully end see just that demand mill the think just if quickly kind I I'm maybe would

sure. Yes,

capacity saw system, So back on not if into certainly logging the you real extent the but and comfortable the capacity the term. in is logging suppose flowing the and material here term. across near I around West. be carrying a lower risk some the I'm inventories. me some a But log in more margins, to challenge that's mills to would near There capacity be even to frank, maybe highly that unlikely real getting around trucking trucking the seems South, sure in side,

continue I So carry are risk. suspect to to going mills a inventory heavier to levels little that bit most mitigate

So I issue on side. don't know that, the that's a Timberland big

for again, of speak high inventories, we're us, competitors, have can't On I Products excess obviously right inventories mills the but inventory. now. don't I know set mill across our to necessarily Wood goods levels finished carrying that side, not our

it's So I meaningful risk think a don't there.

I think would folks, carrying side look environment. whole, all other is thing interested heavy uncertainty given light Nobody the product I in most across The the if particularly channel particularly say the inventories. is, wood distributors on the in inventories are macro you in carrying relatively dealers,

very I'll over. turn it That's helpful. Okay.

with Staphos Our next America. question is from George of Bank

to goal Thanks that think you time, the and the for see you okay? the growth How is X% in where and We know and your flex what details. a about bit in parameters are First you ability this maybe the potential strategy. that? over markets us recognizing Or pretty year? what could feel about juncture, of cyclical you policy have a for the seems no have pullback given next it's the be year at X% per a this decision where Board would that hear company you we around capital with cycle? you a that your slow over given reasonable, matter bit Davie's guardrail talked question, about dividend the you and during regular the the increase. remarks, Could to Can me you know talk its return

question. great a that's No, Yes.

decision. I that's of think all, first Board ultimately you said, a as

is, in So board say out front different per was modeling. But put X% a out obviously, on that would year when the based of get what that. we're I of on to we lot target, not going that

be is the business. you Estate, our funded the the by Real Natural Resources As going dividend Timberlands Energy and to growth base dividend -- largely and growth in know,

interest structure acquisitions about of on Timberland we today, as our to think around work it side. done the a We've So done several the costs. lot debt we've reduce

base the I grow need of in to X% do what So are year are by continue to like dividend per business that doing to cycle. regardless where feel we we we

would I I directionally, going is had downturn and the happening of question, color we're have been market market more through West, us of Weyerhaeuser bit deferred the But can realizations, terms you Next declining a the why in that would give with with in log available a that mean, surprise. of obviously, recognizing they're stoppages logs bit in nonetheless, the a wouldn't been on that again that what a be did, it and available market. have dictate the the and some work harvest would have the doesn't

So least there? kind of point, vantage help log seeing West at going in some we're the constraints, why even pricing supply what's realizations me the your stoppage and on understand with and from down

Yes.

really So things couple on George. in of going West, the a

work of all, with keep the to first respect So to things stoppage, mind. X in

done First contractors. of is of log haul all, by nearly and our X/X

idle we the we during feeding did market the Northwest side work mills And the the So largest the have still into that even work stoppage. flip had X during is logs of were in the also stoppage.

So the side. it on also hit demand

impact So sure a X it net-net, had or way significant not really the other.

And markets changing what's What's anytime domestic that extent, in the be what's to what's tension on prices I think primarily basket. wood a is on going on log with as future. to to with lumber the well. going with is of fundamentally prices. drive in going export West the foreseeable prices going some of really function lumber and going I see West a don't more realizations The is

So for the pay able just are on lumber come and down, as what willing logs. a you've to hit ceiling mills you prices seen

that's to the So going be driver. primary

And be export potential again, Can happening export, housing over. on quarter. that you so last what going West would turn particularly in markets, this in your of terms obviously outlook and a for tension remains color China what's the out positive have more recognizing bit issues supply. we're we're be global Good why the able quarter slowdown. right to I'll got less perhaps luck you and one, now? through -- its What's and terms you now, in realizations of right export West, fourth the from would of a give seeing us it you if

I'll I'll really Well, so different that with in take Japan. There are sure. headwinds X Yes, start parts, Japan. in some

I market. Japanese went QX As here the the to in a that that beams glulam that's there's with QX, customers the mentioned, fair into direct amount market competitor of European our they a into for dug supply and early

additional decks to Certainly, with of yen customers. That headwind there. their said, log relative have have Japan our little of plenty that's depleted. cost bit a think a we with all the to headwind being And move work I for opportunity to bit a the volume obviously, doing what little stoppage. been dollar, is do the an So

that volume a market, and to are some keep domestic get got on them running. flow those need that those down in up we've what's going so usually going get Realizations, we but into And up to market the depending and to on domestic, to premium are X correlated.

market realizations. see you're similar a Japanese we domestic as with see going the to soften, move So realization

our to in I more the real those this softens domestic. China we Notwithstanding the China. opportunity capture fir market so believe, volumes we customers been as in do side, et to estate demand we comparable for premiums our still we likely to domestic solid the into with the to intentionally move over issues be to volume lockdowns, we year think realizations have cetera, Doug for better move log, pricing flexing all volume On West, and increased -- some have China can, the have from the China, will and

Thank you, Devin. Good luck.

from Our Securities. Roxland Truist with next question is Mike

the guidance Just in for U.S. a on timber prices quick X

South.

expecting mentioned You that you're flat U.S.

stumpage pricing. get timber of basis? last prices stumpage I'm noted and declining trying to deliberate South years prices timber a to up. a X to what's has quarters, South that's where that over or sense is have get I'm trying market Is themselves. even at others underlying quarters. the number happening What gone following of And Timber a stumpage

guidance to, of just your get -- to I'm pricing. relative your trying relative to sense guess, guidance So I stumpage a

Yes.

So a delivered on we guide basis.

direction terms you're overwhelmingly of stumpage. absolutely And is delivered to disconnect model versus bit There a our opposed of right. the has as been So in delivered pricing a stumpage. in selling of little

challenging. largely finding that's a of been many and think really has function hauling geographies logging in contractors I

I this we're, And little even haul, picking probably advantage. more the is ability think throughout And so model the I on opposed us In with really And et more our delivered gives stumpage versus the the as a that's chain, pressure do a think competitive drive delivered stumpage. think, It a log, supply to model that's up efficiencies market market. I the market, opportunity I so. bit cetera. to delivered put little think that bit margin more always

But you clarification. some fair on down, noted it. could put and obviously, the that with prices delivered it as coming harvest stumpage pressure to I the cost be that be point will down. coming would at say appreciate if well, particularly whole Got

So think decline -- products. how I looseness you overall delivered what pricing ultimately looking do do And housing at pricing in think we're in function market is think wood out to some a is stumpage plays what in driving well? of that you the the and seeing as the --

Yes.

to to So a they South standpoint, if you're in is what's it mill the thinking cost the about what the from particular, mill. get ultimately, care about

can deliver our And the so it they we delivered that we through a can more get we chain. because higher price bring delivered through as customers, to supply model -- than efficiencies we stumpage get think can

there's haul lot the know going I terms that. higher direction. we us Our of and scale down. that a than to stumpage at of for where what is in delivered that rates going competition do don't to keep the think relative drive a haul and log be pricing local you'd costs competition, to find I are and pricing that log little expertise have level think, down I allows to

more the That's the that that log allow haul when it's doing and those and stumpage competitive what's us really, to scale to to think, get bottom and again, and can others a prices line. keep going out space delivered contractor price So bring deals. what our the they're advantage than base expertise us, drive to for with to of I we going keep that lower

Got it. sense. That makes

quick final question. X Just

respect order normal, files. a file little to longer Last Just EWP on order you lumber was mentioned allocation. that was an that OSB, quarter, with and

do over now? last transpiring stand the they what's where Given couple of months,

and the allocation an ordinary X to range. X we're weeks ranges generally still It in OSB, in Yes. we're in spots. EWP, lumber still normal on On environment. On

starting think softening I still open market in the see little in we've you're as available on become to but spots. allocation a purchases single-family some seen space,

of luck Got for you. balance the Good the year.

Mark Montreal. question from with is next Bank Our Wilde of

is Devin, to Wood opening. I back a historically. $XXX you million when mean quarter remarkable say I want just quite an Products in look

any cash standards. level, So to we're but it's West by market remind generate kind base question to rather what timberland is I year-to-year the you depending just lot, think, know I of dividend. in ability you is can just down want to us of kind to first My remarkable still conditions. cover flex on the your on that a a side, continue

market kind and employed. your them to down what of You want to your the on of is? up contractors have some depending keeping But and dial is log dial stability ability where in terms

is in West, building other. the really the I unit the terribly getting not XX% it. Mark, general, there's or overly X where can roads would the you South, go a more process time-consuming. in laid Yes, to not lot West, In X% for into the In most complicated. The say, is way out regulatory goes unlike that is a

to worth built. try so X to generally have roads quarters' of And we X

start to limit towers. there's the we cable flexibility some capacity run of So unit standpoint, But on a also to logging but or of it, some contracting you up down. is particularly both to an level do beyond that, and into available have the flex some from constraints,

can you flex need are to obviously, workforce do of coming up. downside, you're need that are there sure on of limits so always you a you dip. you as much them when as want. flex so some much out you down in And they keeping contract as the But available how make that terms there practical whatever your And can matter,

So or period. you're X% max as a particular is any XX% go really year-over-year practical to to the matter, going

in Pacific is lumber produce Okay. question lumber just Northwest. in up you had the I BC, other the you And produce

what kind wondered see of if BC into down kind in sense the of you lumber kind those coming looks probably that's to down produce and and just could happening regional costs at coming low us I moment see they're a the of also like the you you it give of first You across and [indiscernible]. profitability are the in costs carry quarter. to because going Northwest, how Pacific

standpoint. structures cost that's No the most right. you think, depending I there is different region. a challenged the from say, doubt, Mark, Yes, And BC. on as are cost

QX of supply but bit available to on a challenged. of a I it's next the just a of bit timber further least X, the reasons, still little BC not came is prices come for manufacture variety expect little side. region relief nevertheless, log down. a they'll seeing in the cost which are October But log year. higher We in of down is

And as so down prices make to to think come place challenging I log be, even a it's going do money. frankly, in BC,

our mill. BC. Now It's not is we've if cost top mill structure got Princeton in mill, top only decile X quartile, it

that profitability give challenging in drive it's BC. bit think us to little in So I more will market. be to a tougher But maybe going a latitude

lumber going for in costs The are it's dip case. tough be for challenged have In time prices I and see down. saw more logs Mills the to then. -- gone I some to the a to money more think Northwest profitable. up clearly we since in the do environment. a folks last think will still the is make XXXX, Northwest, log we than pay not that's going adjust can think they be I

making, to this is you back in have and to business little be really a that probably successful back point just And So dip we've structure, really than higher for time. to floor that's that cost the focus been it have a was goes our been good of it the last XXXX. long in in strategy

mills, low-cost some our very Northwest. mills some got Pacific efficient we've across So

in regardless So story. the just drive of our in because is to cost where think, a position we able industry. I the relative South profitability, to different we'll others be cycle are The

Mark, cost structure -- As those just it's than X regions. you know, change other is the lower there step a

standpoint. should where producers, of So regardless a south drive from lumber vast be the the producers profit of to majority are a in pricing able we most

the Good Okay. year. and next quarter luck fourth helpful. That's in

it's do over decade would very, pointing pre-pandemic, the time for Yes. pricing think thanks lot. even that important Thanks, At I though just come any down we to the the make, last across out pleased have And context. getting really historical a with have prices very point Mark. products. the been a we're

question Partners. next with Research Weintraub is Mark Seaport from Our

Timberland Real talked markets, for kind assets, we're a and well business, to, the in as certainly had kind in also and you hard being alluded well. Estate your appetite as Devin, you carbon about of of factor seeing that

use? for recent on, what's are of best be some that put to it appropriate are versus these years Given that line might being ago years the acre typical assessment going what of what coming whatever or more now a is southern ago, time Southern your market, was to types you X deals valuations of X particularly think

a Yes, pine on long hard to Mark, industry versus you've give I a it's on the much stocking, you'll markets, around cetera. et vary for typical percentage and been time, so this on planted a answer. value so depending because mean appreciate acre they depending

few say, to years deals that timberlands $X,XXX high values So $X,XXX seen We've a seen have it's specific north and seen over ago few that we've XXXX will hard this can definitely I what a going the months, been XX last certainly in years But value. to mid-XXXX, dollar deals been some give acre, of acre up. said the to that, you deals. that think were see deals an of I where We've of a you an would XX you going done maybe the would ago are lately kind too. that some closer have have

very think, strong seen are good, deals Those days. in I When deals, real, see the timberland you price timberlands say, these quality market. So certainly we've very, deals. some appreciation value would high-quality particularly, to I of getting come valuations

how fundamental extremely a anything repurchases timberland behavior allocation, markets driving share but times And seem is dynamic where part on change this be do? capital private to respects, obviously, But anything valuations in in strategically you is that that of to is How this part? there can this perspective else this perhaps. does robust. certain in Or tricky we're enable from that your

Mark. Yes,

about changes I things. fundamentally think not at sure level, think it high a I'm how we

a We sell of have been on for actively years. is number managing the the that the side portfolio and buy-side and

improve are opportunities looking for We the portfolio. to always

priorities timberland more asset willing deals share a used those on us can that's allocation of then that And all sell-side. do debt things. any pay capital And we those when for substantially whether repo, happy of the have be the is worth, buyer to the think that acquisitions, have, additional we're so is we cash paydown, than to we that

just opportunity is really time, values time. as a extent the the this us over baseline, certainly across on will And think for an gives our of but on prices redeploy that of values drive why in in ownership. as a all say much can that's up general, anything as an us. to you some timberland view our log whether are areas, view alternative create are reasons variety other go to that, timberland So it's there that, that we to opportunity capital I to going over

about consideration of assets. so And of price also these some longer-term as that goes into we think appreciation the the

Our next question RBC Capital is from with Markets. Paul Quinn

Solutions. Climate Maybe just start Natural in your

mentioned next that? any project forest pilot your What that kind couple approvals of potential curbing months. does in you can economic the from quantify of over involve? You And upside

Yes.

this more economics Paul, this economics, first of contract be expertise so to to to out the ourselves. -- it's going economics really The have that purpose the to really X On not the is internal of keep and project get we first project. build a pilot out, don't smaller it material. The we are was

the it those Maine. registry, involves that's to of submissions, from -- process of running reviews, The third-party that's involved. in is feedback We're pretty reviews, first a up the changes the X through So and purpose submission. really Carbon that series this third-party primary American

of But a and streamlined more work, third-party quicker and internal insights but our think the been how of I reviewers we've really make this process good also this both we've it's number months, some the own course submissions. on takes a and So through process year. to do that with gained the with that over working

and through really pleased start to pipeline. so putting think the it's start and going how bigger to more I going, projects scaling this set to it with us up And is

for from I in in is And $XXX know Great. on And you at late EWP? QX? volumes and half Products, from Wood momentum adjusted of but you're comes Okay. in over why that guiding are that I sustainable how that the pointed typically EWP lower EBITDA, then distribution, mean, Mark million that cycle, which seeing is

Yes.

we really a reflection of mean the anything, both guide I much kind market. So of softening where but as overall, just the as housing of also just are a is seasonally, bit in

into upside there, residential. there's But single-family maybe much -- EWP that a see. So goes very speaking, is generally product we'll some

that think was as about period how is is the again, there. enough housing. so where is not a And much over EWP a gone there to We've to limit of through sustainable we cover there level how time, just out

a that we period, builders had number of see even to to meet lumber their did open that During other or convert building over needs. and products to web

which think I for be overabundance alternative to there not to just realistically, bit, try some back supply. housing a us that there some into happen, where is will expect the that As convert opportunities to It's EWP. of an of do slows a we product

hold help be will And so to but share think I if in prices, we're even [indiscernible] able us [downward] a our market that both and importantly, serve customers

just then question. And bonus Okay. slipping a

forward. lower Just on going OSB, you've significantly got cost

is. that why wondering Just

missed I again? Paul. that the there, say of part kind last you Can

Sorry, guidance that costs on have your significantly just what for side. you lower to. I'm OSB, wondering the pertains manufacturing in

that Yes. input OSB and from stock primarily our on the It's goes of OSB, does into product our come EWP OSB it Most lag. internal down. prices web it's the go so we've a as seen costs, mills

Yes.

Sorry, Devin. cost segment about itself, the the OSB. I'm talking I OSB of manufacturing you. confused

QX. You've got in that down going

wondering Just why.

Yes.

Sorry.

Yes. Paul. Sorry,

that's we of don't and down, specifically, mills QX. had shut because annual maintenance. have annual less that OSB, QX, we have that So we their just a for maintenance in number took

Davidson. is Kurt question D.A. final from Our Yinger with

Great.

X Just me. X quick for

over timberland pretty as increases years, been the last favorable been also but side some cost the side, the meaningful On X well. log pretty pricing on has environment there's the

there? are you relief think or expect guess, there take areas you cost look can XXXX, buckets where to you As into I see out any some you

Yes.

On cost. on that both also the Timberland I in the would has something side. side, the say been fuel side That but on overall biggest haul driver is the logging plays

XX be the that months, So side. To will that from had certainly costs cost down the we for come to us impact positive a a fuel the over year a see on that's standpoint. real next extent cost

that, transportation got going got overall costs, are loaded to initiative cost. labor down whole of a mile, of a drive on a that timberlands we've -- it's automation try to driving projects whether on mechanization higher number initiatives Beyond got reduce we've across we've to host focused

fuel in say the But I standpoint probably So costs. we're a is near would term, biggest that. opportunity always magnitude focused on from around the

Got color sense. it. That the luck QX. here in makes Appreciate and good

question-and-answer for reached have to of the to over back closing I floor end session. We like the Stockfish the would Devin turn comments.

Well, us Weyerhaeuser. today, nice everyone, Have All thank you Thank for day. and you, in your right. thank you. a for interest joining again, continued

today's concludes conference. This

You disconnect your this may and thank lines we for at time, you participation. your