Weyerhaeuser (WY) 27 Jan 232022 Q4 Earnings call transcript

Greetings, and welcome to the Weyerhaeuser Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Andy Taylor, Vice President of Investor Relations. you. Thank Mr. begin. may you Taylor,

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

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

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

Stockfish, On Financial the call Chief this Executive and morning Chief are Wold, Devin Davie Officer; Officer.

will I Stockfish. Devin to call turn now over the

Thanks, sales Yesterday, $X.XX billion Andy. for or you full of everyone, diluted of joining thank share on $X.X $XX.X Weyerhaeuser per Good billion. net us. year morning, and reported GAAP earnings

our $X.XX or billion items, $X.X special totaled per the diluted full-year year. XXXX totaled $X.X Adjusted EBITDA for earnings billion Excluding share.

or For the diluted we earnings net reported share GAAP fourth $XX quarter, of billion. $X.XX on per sales $X.X million of

$XXX decrease and charge by Products $XXX per housing we $X.XX softening items, $XXX Excluding the the macroeconomic earned third an the as a markets special the driven sentiment in or near-term million and share is XX% Adjusted weigh This cautious for EBITDA on million million. for quarter. was was largely to from quarter diluted Wood after-tax further of continued outlook.

entering our our strong adjusted to our efforts, the delivered morning employees our over record are and I’ll EBITDA serve and operated our their more the environment customers market disruptions my second XXXX. positioned of in drove to and safely, across their annual of year, meaningful we a market well for businesses. a dynamic begin on this and challenged course highest number XXXX. chain supply by appreciation navigate Through continued expressing improvements to performance execution teams Notwithstanding conditions

billion slides, than in our industry-leading of distribution for combining our the generated in on unmatched adjusted as demonstrating assets we XXXX, capability of $X.X available of highlighted page generation XX again with more portfolio earning Additionally, funds cash performance. operating strong

declared to XX% to annual XXth. that in We $X.XX XXth base record results, Board announced Including of XXXX supplemental on holders February during per repurchase to share. of to $X.XX per targeted cash the combined of per our dividends of returning payable dividends $X.XX is adjusted shares of share, cash year, range a line $XXX with our on shareholders of share, February yesterday with shareholders payout returning of dividend is $X.XX When which of on we’re quarterly or total our million billion of FAD, XX% Weyerhaeuser XXXX based total Directors XX%.

XX, Upon the now new dividend, returned cash shareholders completed share will As and of based to on of summarized dividends than have more we’ve on we the payment return full and of year through page repurchase. a cash cash billion XXXX framework. results, our combination second $X.X supplemental total XXXX in

amounts to of our our believe deliver conditions back shareholders of market value total meaningful appropriate cash long-term shareholder shareholders. returning framework to continue to We by yield range enhance ability attractive to and a dividend this across will an drive and

cash quarterly XXXX, into annually forward return will to by through grow we sustainable our X% intend supported be XXXX. by commitment Moving dividend, continue our to base which

supplemental opportunistic XXXX, the in XXXX demonstrated in as share or dividend cash achieve form flexibility page XX% the XX, to appropriate, framework additional we And As of to cash our cash, outlined in to an and in targeted FAD. repurchase. adjusted we this annual our return our cash a with base plan return return to of have XX% additional of dividend, supplement payout framework on our of as

through sales X results. lower realizations $XX million now I’ll our $XX an EBITDA on I’ll in XX of million, Timberlands million $XXX the was to to decrease slides. that, business to driven Adjusted quarter quarter fourth fourth was the with earnings earnings. by turn West. our compared With pages third begin largely contributed This Timberlands quarter.

full compared to XX% Timberlands year, resiliency XXXX. I results, and adjusted the demonstrated XXXX. our proud strong EBITDA increased of These extremely the in by For teams focus by and were am

domestic to log the by to levels and lower log log the quarter. Domestic early in supply our This driven Turning the at in pricing of quarter, primarily western the softened ample lumber Timberlands market operations. lower outset system. fourth drove pricing

availability. temporary seasonal progressed, As December. a dynamic quarter of into constrained, a in resulted price supply log This in log into log market reduction period the resulting from the became more stability

the our quarter. moderately realizations domestic than average were third lower For quarter, the

were as harvest fee the rate higher, work full volumes in stoppage business deferred and run harvest We our domestic XXXX. from work to returned plan resolution volume quickly operations of capture the majority the following sales stoppage. the of the to Our

to costs unit third haul and the and Forestry per comparable. were compared costs were lower quarter log and road seasonally

replenish program in Japan, export the sales Turning to the said, third customers our from our demand fourth Japan as to volumes our were compared to fourth quarter, In to sought our logs resulting stoppage inventories work key impacts strong were our was lean to as export for related slightly disproportionately quarter. quarter That in our the lower higher work export markets. stoppage.

kept domestic opportunities. due was lower lumber and third we by demand sales export driven significantly Log the to log softened China customers in market margin to as in significantly intentionally housing in reduced increased when to the primarily the our well capture sales lower quarter, fourth of levels as market volume compared higher solid volumes more were the imports, quarter, lower Japan, consumption from our in realizations activity. oversupply average an as Our European broader

quarter, lower markets consumption real average Our were the sales significantly challenges in in to log Chinese disruptions Chinese estate the from market. fourth realizations lower softened due resulting COVID as and broader

Moving to the south.

fiber quarters, to remained mitigate from notwithstanding the stable fairly to log adequate and inventory southern product fourth the as demand weather several levels during adjusted slightly steady was softening quarter. last and quarter. sawlog potential Southern EBITDA Similar increased Timberlands risks mills continued to finished third carry the compared supply chain Log markets supply challenges. and higher to pricing,

As realizations of to higher quarter. a volumes our sales generally most comparable remained Fee quarter. favorable harvest were for weather slightly as were the result, the third conditions

Forestry and and costs decreased road slightly, quarter. per comparable and log were third unit the to costs haul

On regulators. paused by the export remains program rules phytosanitary side, to China to imposed our southern due Chinese ongoing

to Asian and unclear markets. to when business export have to China. will resolved, will we we outlook While grow positive the export in it’s our our a continue business issue southern interim, continue for term longer this be other into India And

compared adjusted slightly quarter, due EBITDA to were north, to as the increased conditions volumes third higher significantly the favorable. sales In weather

decreased Our moderately. sales realizations

XX. Turning Resources to Real pages XX on Natural Estate, and Energy and

Real was for energy exceptionally and million slightly for adjusted properties and driven full higher Estate by of the of year. higher EBITDA, the HBU ENR than than our XXXX natural primarily revised XX% XXXX. For $XXX much as and generated strong full This resources guidance, year, activity in year demand robust well as

quarter, earnings. contributed fourth the In the to segment $XX million

Excluding the estate million coal to $XX due $XX of primarily the resulting a a sold. was assets, impairment real Adjusted from the in quarter. reduction a $XX legacy divestiture planned of from decrease million, $XX EBITDA million in segment prior earned acres charge, the million quarter, noncash

high an macroeconomic we our the transactions seeking Although acre interest environment. in steady with concerns, value continue the from safety quarter. These on our timber fourth to are HBU value. buyers hard see sales demand of Notably, average land for price has premiums to response to assets we moderated of per all highest broader inflationary somewhat in significant in delivered XXXX

Natural Solutions our I’ll comments business. Climate now make few on a

As driven with business increase to mitigation contributions by million, year conservation activity, year page full ongoing and energy was from shown XXXX. adjusted our primarily EBITDA from during compared XX, Growth the banking renewable was on businesses. a this $XX XX%

announcement announced carbon Oxy on In addition, milestones both agreements, announced capture to our of our storage Denbury emerging will in XXXX, come we we projects to in Similar in in in our of production, XXXX, years two and quarter notable one was and expect Low businesses agreement carbon in Carbon XXXX. the line the partnership or Ventures with project will begin take the first achieved earlier fourth which XXXX several Denbury. including with

to to continue storage U.S. our capture of Southern and carbon on of and advance announce high-quality with additional expect agreements we forward, Moving developers in acreage portions discussions future. the

of positions carbon projects Turning completion briefly nearing and carbon in approval soon. our offsets, to project additional for a pilot third-party Weyerhaeuser advance to serves project proof of XXXX. as we’re forest us well in expect Maine forest This concept and

year Solutions we developments, continue our Natural our million multiyear exciting target $XXX reaching the Climate end business of and these of to from EBITDA by growth potential of With maintain per XXXX. see

XX% earnings continued quarter in Products Wood to and million lower adjusted pricing. on Fourth reduction pages Products third contributed Moving million was largely EBITDA to softening quarter, XX XX. and adjusted from to quarter by product markets driven fourth $XXX a the Products through $XXX Wood Wood EBITDA.

the adjusted Wood business a year, new annual EBITDA business engineering over and generated $X.X full of established record. billion EBITDA, For Products our Wood Products our

challenges in XX of team’s notwithstanding years. distribution Additionally, this highest These our annual outstanding proud and level over deliver numerous results, to in our business ability the performance, generated EBITDA are XXXX. I’m of

the OSB signs OSB to and the third after falling prices of the some showing Turning markets. commentary stabilization fourth and Benchmark of quarter much Lumber on Lumber entered for quarter. for

in cautious This buyer addition from limited through a broader sentiment, to prices concerns economy progressed, inflation. purchases about necessity housing quarter OSB exhibited and Lumber fourth As orders and to lean for drove in the benchmark Buyers quarter. lower softening market both, the both the resulting inventories and maintained markets year-end.

stabilized projects lumber XX% as for pricing the XX%. to composite and third by the OSB framing pricing result, lean products both to said, inventories. a market quarter reentered January pricing replenish by -- That benchmark As the the composite buyers decreased decreased in compared

quarter. EBITDA million third by the business Adjusted our lumber compared for decreased to $XX

mix. XX% fourth benchmark, primarily outperformance Our average regional our compared to in by realizations decreased quarter resulting product relative the with and from sales the

from of production weather sales several third resulted mills Our challenged and the at the December combination to a adverse impacts These in decreased Northwest, the the quarter. quarter. stoppage-related and reliability in work decreases significantly during volumes conditions compared

unit modestly manufacturing costs the primarily for lower, significantly result, Log costs a As logs. were increased during quarter. western

log purchased Northwest stoppage, were lumber sold when we fourth in November following the prices logs the higher. operations much manufactured third using work our the which the of was quarter to quarter Specific mills, resumed in in

levels. and through a result, expected log current we remain pricing to Northwest work lower prices lumber adjust the reflect in to are the inventories and higher-cost log compressed margins until As

decrease Adjusted by EBITDA pricing. for the our quarter, third million $XX business due commodity to in the primarily OSB decreased compared to

average Our in were quarter. decreased fourth volumes the comparable. sales XX% Production realizations by

quarter. weather-related costs the quarter. costs challenge and in in late decreased slightly disruption volumes lower in manufacturing resulting However, the -- fiber sales Unit Canada moderately slightly, from challenges transportation weather-related decreased were

by third decreased for EBITDA adjusted building $XX million Products which recent in the softening Wood result to is compared This single-family directly home used products are Engineered primarily tied to quarter. demand applications. in EWP

see for winter case. the a in often the we slow QX the somewhat during market would pullback than broader Engineered the Wood Products ordinarily housing Although slowdown be demand more of in caused months,

result products several our elected of quarter. to decreased Production the were we as a to the dynamic, downtime at As during this lower take third all compared volumes EWP sales facilities also quarter. for volumes holiday temporary

the realizations for for third web million by costs the were In costs all decreased moderately raw EWP stock. in for primarily quarter, primarily the to volumes, and manufacturing I-joist, quarter. Distribution, $XX comparable products, except adjusted sales sales by Our material driven which lower fourth compared EBITDA OSB were largely decreased quarter, lower, products. to were third comparable for Unit

With and to outlook. XXXX to quarter Davie I’ll our first discuss items financial call and over turn that, the some

key outlook. Devin, begin key financial fourth quarter financial morning, and financial first which into you, summarized are be and XX. moving page I’ll items good our with performance I year covering XXXX quarter everyone. on Thank will items, full before and

cash million from record. second the in bringing quarter, fourth highest cash We on generated total operations than billion, our year $X.X of full for to more operating our flow the $XXX year

shareholders mentioned, XXXX million share we based results, repurchases. which billion includes to are returning of As Devin $X.XX on $XXX

million $XXX program repurchase announced share million we capacity of $X totaled have billion of approximately quarter $XXX under XXXX. the and the third Fourth activity share repurchase remaining quarter in we

repurchase to create will leverage we and opportunistically it value. believe continue will We our cash when look to flexible return framework shareholder shares

be is Turning and paid million the of We announced yesterday year ended equivalents, will $X.X which to we cash the billion $XXX approximately supplemental the balance with of for dividend February. cash earmarked sheet. in that

XX. we balance sheet strong debt. of remains and liquidity, page Our Fourth results unallocated items are with the for year ended $X with gross on quarter approximately our ample summarized billion

increase This health discount increased the third compared increased obligations. EBITDA $XX adjusted by LIFO to lower-than-expected as primarily as attributable workers’ elimination resulting compensation in rates quarter. from well care expenses was on changes benefits profit Unallocated intersegment and million to and

In was of contribution with purchase the million from contract carrier. which to insurance funded plan required. fourth $XXX of the Canadian The assets was contract, quarter, approximately we pension group a completed an our pension no liabilities annuity our company cash Canadian purchase

As million reduce our series quarter charge. a billion transaction, in year-end from included latest plan fourth decreased we result to have our $X.X pension the the as This items XXXX. executed transaction $XXX in Since billion began we special the of settlement efforts have pretax of to $X.X noncash a obligations. XXXX, these pension obligations is

signs higher earnings quarter and pages slightly the markets entered adjusted quarter first ample along and for with Timberland log continued full items of mills. the inventories XX. result lower quarter outlook of XX Timberlands Beginning weather quarter. In will and quarter majority for the disruptions. to quarter, showing EBITDA our the Regional fourth Key Western expected improved finished we softening presented first takeaway the at notwithstanding are elevated winter the is has be than XXXX operations, first on with as our business, a log of compared of fourth and log to and expect first remain domestic pricing supply year products,

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

operations as following the fee have haul harvest as stoppage, of fourth lower-cost full to sales moderately and which in are to lower expected rate and volumes quarter. first domestic expected seasonal work are run costs Our quarter one significantly the be to operations. higher the the returned harvest affected month unit log transition in to Per make be elevation operations we and lower we

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

for remained our activity to as construction second in the quarter. Moving product the in logs Japan in Demand seasonally and finished for inventories steady work preparation build export China markets. customers to stronger

export headwinds We expect was fourth we resulting advantage soften, of sales expected also take are quarter opportunities. quarter, export both volumes shift to to reduced expect lower slightly previously to China broader continue mentioned. to stoppage, to volume from our resulting the our affected realizations to from of markets work sales to the in significantly increase to month higher-margin first That said, the export Devin as our be additional compared log markets by one activity but which

softening In the XXXX, fiber expect remain to in log in first South, East. showing we demand markets fairly of particularly are markets steady the we enter and slight quarter, fiber although signs as the grade

to first result, the quarter. expected sales lower haul realizations harvest lower and be unit volumes expected wet fourth to compared in log be slightly costs seasonally due are to to slightly a to expect forestry fourth are we quarter. our the and weather Per Fee to the quarter. As costs be road comparable and

to the first slightly expected sales are North, realizations lower be fee quarter. and volumes In the harvest in

our plan. full harvest year to Turning

increase volumes will capture deferred we our In tons. higher approximately stoppage. plan fee XX harvest we anticipate be the XXXX from harvest work For West, we than harvest resulting expect majority volumes our total to moderately as to the XXXX, the of company to volumes million

weather expect conditions, a third volumes reduced adverse harvest normalized from XXXX to the We resume quarter of primarily moderately more level to levels of harvest resulting our as increase compared activity in XXXX. following Southern we

will year-over-year. harvest Northern volumes higher our expect We be slightly

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

timber demand consistent our are we steady value. and premiums transactions flow said, response significant As broader continue estate of we real to Devin expect concerns. still seeing to mentioned, somewhat with to a demand moderated HBU has for macroeconomic in That properties,

for adjusted segment. XXXX for anticipate XX% is year be $XXX this Basis full year. the Consistent percentage previous of will expect real our XX% of with approximately EBITDA first estate activity approximately as half estate real to sales the of year. we towards million expected be a years, weighted the We heavily to

be million expected special of higher, real mix to $XX and before the quarter, than fourth adjusted while the earnings quarter timing EBITDA to First are to approximately expected due estate items primarily is be approximately higher $XX sales. million

to Wood Turning Products segment. our

for market buyers That As reentered benchmark Devin stabilized in buyer prices cautious. OSB and to the sentiment Lumber as mentioned, replenish lean remains have said, inventories. January

average will and of first for the realizations in EBITDA we Excluding and be fourth moderately quarter changes Lumber sales compared expect effect adjusted the to OSB, earnings higher quarter.

the For and operations stoppage resumed lumber, sales significantly our first production manufacturing following as costs Northwest lower higher we the volumes mills the unit quarter. fourth we expect in in quarter and work in

lower, We moderately also the costs anticipate expected system. are improved Western be to for reliability primarily logs. across Log

moderately and expect for weather production due quarter be maintenance networks downtime in December. transportation planned higher we OSB, winter annual sales less and following first to improved volumes to in For the extreme

expect fiber fourth unit quarter. We and costs lower to compared the to be costs manufacturing

on for XX, lower are quarter-to-date averages. than OSB average realizations shown As the and our page current sales Lumber and fourth both quarter moderately

Products, For for stock. are products. we softening lower lower expect be quarter, web expected OSB the costs, expected for first moderately sales in higher. solid anticipate demand sales Engineered are volumes primarily significantly material raw to I-joist volumes lower be while from to for Wood resulting Sales EWP products realizations significantly section We slightly

lower expecting all For lower first business, products. margins quarter in EBITDA we for due our distribution to adjusted the are

additional items year wrap with on XX. highlighted full some I’ll up outlook page

the expense to interest prior the Our $XXX a first we year, of quarter full million. transaction year was strategic refinancing $XX in represents due largely million XXXX XXXX. the This from reduction completed

at we expense XXXX, be interest will expect full approximately For unchanged year $XXX million.

to taxes. Turning

approximately rate special excluding items. effective XXXX was year XX%, full Our tax

earnings based items on and our rate between before subsidiary. and taxable the year we be forecasted will tax effective REIT our and quarter expect first of special mix For between REIT XX% XXXX, XX% full

slightly excluding higher $XXX taxes, full the tax was paid year XXXX, timing items, due of special our payments. we than for expense, Canadian tax cash to which million For

tax our expect XXXX our We will taxes cash to comparable be expense. overall

pension improved due $XXX funded to year-end million, to primarily and the For approximately higher by XXXX XXXX. post-employment year-end plans, rates compared status discount

Excluding approximately XXXX. our and was fourth settlement in noncash, $XX quarter charge, million post-employment expense non-operating pension our

approximately at not cash million we We expect cash our required our of $XX was $XX In any other approximately and plans XXXX. paid million. to be total pension plans all $XX Cash XXXX U.S. contributions qualified post-employment record similar to do a pension XXXX, and million. for in in will for plan, payments anticipate expense

expenditures. capital to now Turning

year full of $X spend Our capitalized interest. million million XXXX $XXX plus capital totaled

spend million, which be inclusive capital for includes will for costs, for approximately total million for IT $XXX million $XXX reforestation $XX XXXX corporate Products $XXX expect million planned Timberlands, system investments. of We and Wood

I’ll to Devin back questions. your now to turn the look and call forward

Davie. Thanks,

to remodel we As make markets. and up morning, begin on a brief and housing comments wrap repair I’ll this the few

Residential construction levels from single-family segment. softened activity has the XXXX, peak of particularly in the clearly

ongoing As affordability headwinds. we buyer new by two driven by is enter notable sentiment years. brought last homes remains mortgage rates, increased increases is Most XXXX, and existing in the about over numerous prices for with combined home cautious and being the challenge significant

we about believe addition, buyer trajectory by being economy the uncertainty of many in markets. mortgage influenced concerns related home rates, the general psychology In to prices is and falling

a As to that there being compared XXXX. challenged said, market housing a couple the be particularly may last the signs of half some first we recently environment years, are in of improving. result, anticipate more the That

picked over and several highs. mortgage weeks. the application in Mortgage has sentiment rates from improved activity last up have January down Homebuilder ticked recent

are to in and see in at market the still are There want least very the trends. shape. generally we the home mortgage, until get Additionally, housing-related household likely but remains good improvements, and but overall remain some sidelines labor plenty still a and are macroeconomic people on balance who sheets stabilization certain some of buyers a many fairly can strong

near however, our of stock. what the the housing a longer-term continue will by that strong term, note, demographic very vastly a be may choppiness I period view favorable, on be supported and underbuilt fundamentals trends housing despite in to

soften remodel Activity to level couple what returned remodel demand from a demand do-it-yourself and quarter has at from the continued market and the repair pre-pandemic steady segment. seen level. In remained the from slightly to Demand stable term, lower fairly of the Turning supported over segment, in to by segment fourth from near the normalized the a expect levels years than elevated repair we’ve of last the stable the remodel. of and more couple continue and be years. to and professional albeit in last repair we the perhaps

key most levels remain stock. healthy beyond demand Looking XXXX, and an bullish drivers out repair of housing equity our aging intact more supporting including outlook, remodel and long-term home the support favorable and

into targets update Day move provide like progress in the XXXX. out against we in made our during we Investor an we set I’d XXXX before on Now, questions, multiyear to September of the

XX% year, our of Solutions progressing by $XXX Timberland We As and Climate on highlighted capture million we to all fronts. on and well we to EBITDA Carolinas grow approximately two on $XXX compared Natural announced million storage track Last deployed to remain first XXXX. on including slide deals, transaction. EBITDA XX, our grew carbon this we’re acquisitions, XXXX and business by year-end our

greenhouse businesses and Last teams pleased $XX across XXXX. margin approximately returning dividend I’m considering year, to pressures inflationary of $X.XX XXXX by this extremely billion in by finally, captured made increasing meaningful gas against quarterly our allocation OpEx X.X% based progress our progress other our demonstrated on experienced result, ongoing we our made our XXXX our commitment and We priorities. also the improvements results. to with disciplined million emissions reduction capital we target. against shareholders, And

XXXX, all structure, well disciplined in and our a allocation. closing, navigate our on competitive have long-term our exceptionally conditions. of balance strong value in focused capital performance industry-leading We’ll through execution we performance, portfolio, servicing cost driving our and and ESG through So, customers are to unrivaled sheet solid range for Entering shareholders our remain market positioned across strong, of XXXX businesses. is reflected a we foundation

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

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

on get question the year? came of of the couple bit of Can as Good is, you. first you talk this Wood into demand some on you into relative the a a within the closed My to about then, for the more selling are some a we comments inventory first obviously ground your Products peers? based morning, trying the the weeks the supply opportunities perhaps structure trying bit, have builders the we on and everyone. and given spring Thank pickup ground your on things season, and to conditions of as go to that, can ramping details and up the Weyerhaeuser for give business us cost

look, Yes. side. last Good bit seen questions, really I of the weeks Sue. here few have mean, pickup over we little a a Products on the Wood

I think that’s few reflection a a of things.

Number And end was most in concern think inventories. the buyers the of one, very had year, going the going of what housing was into just really to of that reflection be I a market. happening low over a lot

inventory a think, on whether seen were new low home green We’ve I year, the the from the really few, housing down up of sales side, last levels month-over-month. numbers, into quite going end shoots it’s bit So, a year. the albeit

a little up sentiment pick homebuilder bit. seen You’ve

ago. bit think than there’s little more maybe there a month perhaps optimism I So, was a

a so, And sentiment. driving bit of that’s little

I think a the bit action even curtailment of the other on one up last supply week is piece few just seen We’ve of months this fair competitors. of to it, another side. from is the our impactful, activity probably over more which

activity. still I from think bit I to be balance. seeing driving spring really a building if more probably month, so, not we’re a And things a that’s meaningful pickup weeks, do think in from several little

months. we a certainly period the But into shaping down. tougher it’s have we deeper But, get how sense start building February a been better overall, as we to up. over as the season, mortgage spring as into head see tick that’s rates we’ll last think I several

few will was optimistic little think be it than ago. even it expected, just better a bit I a that we’re months

structure, of success The around when really OpEx have work been, over at I after us we’re we’ve our just standpoint, year year good think, but put on that year the true done you stories very becomes a a is last has and this one terms after it, that’s very cost these focused think, years. always several the always I of In market competitive company particularly dips, important, in, important. which cost from position improvements it driving

with place half think the for the the structure market year. they what of to in navigate we’re the of well cost I So being end through we scale, really have positioned first conditions, that up regardless

Our next with Bank the America. from question comes of of line Staphos George

to in us a down see in in color, opportunities lot the and high-margin on end two China, in also bit? Japan the timber into the west? Congratulations export lag give opportunities some of why at activity of bit markets Could around discussion year And I are in more are well, will softwood ask, what as quite a on There questions think we Devin what certainly as there’s the the realization some exports headwinds realizations. in be year. seem of on away My take should that it, terms we and on a be mentioned I go in good the yet was ultimately, we timber. China there outlook, particularly and you given terms to that, to you and the Davie, on market least of terms from day the a

timber My expect you terms to question prospects and to business the talk you is And the a bit support the the your guys. quarter. see Climate and in pricing when where would for in the tension can markets, second of Climate Solutions good you, future? from helping most Solutions in about luck impact Thank ultimately which is of timber

that’s the Well, question George. is Thanks, Northwest. now about a dynamic driven and respect primarily, I with think, being question really Pacific first The your by to right Sure. lumber prices.

of China, see exports export activity back period, pickup and out So, to Japan of a we’re particularly going say, our in Year do Northwest, we’re as think expecting China to the New to Lunar both ramp really you the to I coming Pacific up. out

going going and healthy more volume that’s offtake of the going we’re to so, Northwest. the export nice be market out to And to a see

so, And support ordinarily, see pricing. that you would tension up things and

And reality frankly, a given range prices down prices to going lumber are the domestic log market, been, manufacturers still to challenge. see bit little prices where be within until a those have the have a come the in can that’s profit. been But where is a log generate you real

Northwest what’s And what ultimately, in I the to pricing lumber so, governor really prices. on is think be going the happens with

of Now, follow. you’ll we lumber see if up building enter important season of the you spring more takeaway back coming weather the lumber prices see I issues so the start up, think some prices see extent market, then log you were and in to out California to come prices resolve, as that

prices, It of see of the as we continues reflected to there’s Northwest, prices prices, in and not a you’re log that lumber stay lower level. be to log pick again, Pacific be shortage a extent a at the But just just very see exports will going supply particularly tension lumber basket. wood to in up. that that Regardless ultimately

that’s side. the the log answer So, on

Climate time candidly, we’re that for still for think, opportunity, not going be Just to do the in Solutions I and forest log early Natural business that us of developing. market still doing we’re just tool terms primary big for think other side. a landowners. in over think, from that ways a the is of I is but I carbon to But away innings, on that. tensioning the The markets, going be

commentary on the read can it. You

these I market carbon how is a exactly figuring out whole, are going work. as think still markets the to

probably got So, has time real any bit of before that material still impact. that’s a little

United there’s in land think do States. remember, forest of lots just I frankly, And the

a real still out before ways issue. think that’s becomes I that probably So a

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

above with or that have that could talked there lumber wondering, capacity of the in maybe about, actions kind to just course that curtailments seen of seasonal very dynamic if are of assuming lumber, out seasonal lumber, Devin, -- sort a was BC run in kind see the somewhere a maybe could of curtailments I go, some prices. in meaningful in play we how large its more about I if think, BC. close was you do we’ve And sort current year, back we’re back? could this XXX, aggregate, has of talk of the I you wondering coming to and still you was sense number

outset, hard structure my the to it’s for at look, competitors. comment of Well, on me Yes. just specifically I’ll the say cost

do some have offer commentary broad just in BC. because I’ll operations some obviously we So,

think I for now. A don’t unexpected, we’ve discussed that think cost British of see capacity of we’ve curtailment. past. the that, higher And the structure a in and seen variety that that in given amount fair was reasons certainly, just Columbia I you

the curtailment I be think dependent where going activity to go. lumber is just prices on

much I for it for British the to challenging economics fourth the of Columbia. very at in the think end for of would make quarter, year, we where the be sense were particularly

a seen up we’ve little Now, prices come bit. just

mechanism so adjustment will down quarterly, region price you very it know, the As a that little bit. adjust high-cost does manufacture happen But, a remains log lumber. to

the so, seen And say work averages the in too I’d to probably to that been that we’ve the the lumber to has And are for historical that Pacific economics of to The have stay Pacific Northwest. cost for pretty prices north Northwest recently well challenging log going in lumber geography. matter. for ratio

been well. have that number are there a producers And so, of this as I environment challenged in suspect

activity. you go or you until challenging, prices see curtailment and up So, prices the down, go log see continued could are economics lumber

up helpful. following Okay. George’s just And That’s question then Climate on on Solutions. very Natural

any first if Day? or Just pain color there curious there’s to obstacles compared any wind pursue solar than Analyst kind you or look whether there, unveiled and activities partner there. the slower projects? interest sense those these expected you the are different points work of If and expected maybe additional there maybe or sort kind faster than sort or is look streams different CCS, some you at carbon progressing at if a as that adoption when your is targets at those categories or you it’s of of of forest And of the

XXQ be banking, first across the about would to has tax those interest activity with all significant up carbon. say, I of conservation, very happen to since on that’s up storage, a forest with we gone all to this next level Yes. true the And going that’s lot interest announced across carbon infrastructure amount talking you’re really several of going capture the the $XX, board, There’s there’s over years, for whether a balance, the going categories. of credit need wind, target. really solar particularly mitigation and mitigation

the solar the come fruition. about challenge just get things go And to demand into is and permitting is to there’s there you renewables, happen. of The time true, line projects talk a challenge The to these think the every process has to tied chart. particularly is activity that make off than through that’s when one grid. local is about get way more for support administrative to these to And the you solar. The

things, and these So, going time to carbon capture fruition. et come it’s line these the cetera, for storage, to for time to take just things

in the But the time it opportunity That’s higher line. confidence would Climate Solutions we these in when targets is set today in just question. than XXXX. big I the It’s was announced our say Natural

from Ketan with comes question BMO Markets. Mamtora next Capital of line the Our

you three and good Products Within the key projects Wood CapEx two that you, of can morning. this for your sort you have talked year? sort that talk about for outlook you of XXXX, or Thank about

Yes.

highlight. the of couple been Part the mean, would exception things not and are kinds that’s The project are system. projects doing majority Dierks case our our Holden new of our ongoing -- really this vast the new replication big the a it’s Millport of with a So, of gangsaw, and enormous I across capital are our of currently. project that project, CDK, a a they’re those projects, has merchandiser, we’re projects whether the I projects that really program,

some by a road drive we and to costs, roadblocks And and then obviously, come mill that bottlenecks reliability, those is according the well. all part out multiyear that volume along mill in there’s so going can efficiencies map, taking so about of as drive finding it’s that and a down improve

Holden, other which at end up it’s year, So, planer starting this than any be last the we the up particular did of not we’ll sawmill start project year. the big mill later

So, all that are well. other that would any in of project already we’ve replications things number It’s going particular facilities. really of done than a Holden, there’s is project highlight. of which not largely that projects, I just other But

XXXX? Got it. way see That’s lumber think room for European kind helpful, its Devin. And into then, to just Do that very quickly, make more the there we you to that in is grow are U.S. more of starting

I We’ve European market. the around lumber into coming potentially certainly case more margins. the that’s the think seen

American a on year-over-year, basis, percentage. percentage pretty consumption, it a relative But might lot. the it’s So, like look small overall still North a to

even But bans supply-demand the to of it’s so, are see to overall a pickup through if to a the And you’re piece a would harvest The Russian we more and little work is bit go thing going I dynamic. impact in if say fundamentally of I one away. supply don’t going lumber fiber to into going with do the is state, think that coming elevated just near Europe, term, there number then that Europe, one, ultimately, beetle somewhat a years being you couple expect Belarus would lumber second of levels would salvage. fires, that and reasons. et time, supply to the see over domestic. Central kill I go that on stay normal to Europe we’ve in European the European lumber the for Number have of down a And that that to across is, with seen expect the cetera,

now. case because Now right economic general of obviously, the that’s conditions not in the Europe

I into any have, would go expect But that a I of that event, U.S. to still the fair not coming you lumber the bit So over down. term, in moderate, longer if think,

comes Weintraub of Research question Seaport from with Partners. line next Our Mark the

given even But would you and where so FAD a not wasn’t very Thank ended even would the really contemplation assessed that meet that? Or projecting it base One you. question, be the at were if weak would and XX%, case. that this just still at that I’m haven’t you the question. again, up markets year in in meet you now, it’s universe certainly right your a dividend, level not

Resources when we establishing innovation. over been to doing the different to meet that increase Climate were Mark, and think Carolinas primarily work of dividend that. to helps at to with number businesses, a scenarios confident being to that established meet of base back tied we doing looked for time, confidence And Timberlands along target additionally, to us day-to-day the the -- look, over acquisition, base and our dividend that been Real base have the the Natural coming time put OpEx in we’ve increase that commitment we and Energy in where we’ve with in mean, ability and and dividend I some feel Estate, I we Yes. and ability Natural to business in our that level that example, framework, the going Solutions we’ve our the things

confidence a time. ability meet gives of would that us to I say in that lot So our over

for that that this the cover it whatever a was very, is that over is to very short-term Sure. fair philosophically, reasons, you then And say high it’s time, shortfall were led there fair? there then with to you have of it that confidence would just a degree manageable that if issue number,

Yes, absolutely.

Devin, in U.S. kind in other price has we’ve about challenges South, you quite out in you housing. and of weak see packaging some do that much there of the Timber seen ones. expect Two framework? So, to pricing business. laid the the obviously, the quick for talked Northwest the kind you also recently. what stickier of In demand And Is One, a been drivers realizations, Pacific just

realizations for the South proceeds? as year

right. you’re of I absolutely Mark. mean, first Yes, all,

pricing less With the volatile than see West. South, in dynamic a just it’s the much you

to those not year-over-year big you’re in the going in So South. quarter-over-quarter, swings see pricing

first down probably XXXX, reflection and pricing pulp side little end the the And I think going of but the think that’s also side in in true paper to when the pricing bit. we to general. half, some a that’s do of we’re dynamic, a moderation a I look One, couple particularly out see terms just be Wood things. we market softening, Product of do and both on see

high one -- been I general in But I of that’s South logs. keep to the inventory it, was of years because downside the has mills think to chain And of capacity, et of challenges, the behalf of risk mitigate been a cetera. issue that drivers the on levels prices just call bigger keeping is the last couple supply logging trucking, the would urgency high really

for I bit little last think pricing of support the couple a of was So, years. that over a mechanism

logging South, of or around an in overcapacity think where it’s have place a we’re capacity the you hauling eased in but still margin. I don’t the

the will over additions up South we with up of kind trajectory really last the So, just still that couple bit, broadly But time of a the pricing same the that of I in been South, and pricing drivers have expect to the capacity believe be soften first in pushing over little half. the across all speaking, years.

And lastly, quick. just real

or kind So, any and seen more more -- forward? the supply happened perspective than going you’re OSB. in of response because any lumber why bounce overshot other in to getting have and to we you more of BC, that’s Is just have date it some a that as of thoughts

I mean, think that’s Mark. I right, exactly Yes.

it’s think lumpy few where is the on response. you function Unlike of OSB here, capacity really a haven’t and seen there, little largely just and shifts that. can terms off, in different. is OSB pretty you of Lumber few supply a a I a coming take ships

So, I think difference. that’s really the primary

Our next Mike Roxland of Securities. with line question the comes from Truist

taking for Thank questions. my you, and Andy Devin, Davie

on thoughts eliminated you China for just one, wanted exports, restriction. potential particularly First a and around from to how get sense China has its COVID your given --

the potential reducing restrictions are those they’ve even is country the that -- potential for demand COVID? -- now greater around there seeing to you the So,

Yes. mean, is short answer the yes. I Well,

an of also they of interesting will in been industry lockdowns, There been has in the out has the shakeup for think restrictions, of lot opportunity. a more just COVID market down a takes. that COVID of little create result have been the puts more come I as but estate China late. clearly Demand But broader a as China. and just primarily a real context,

China log has a been lot well. also of impacts So, I’d down supply have in say But demand, on lumber as late. demand of there balance, been

the activity the ban, little salvage seeing think of the bit. I European a to from wane log log you’re Russian ban, the start flow log with some So Australian

there of on ledger. have think, both So, been, I sides impacts the

demand we’ve the opportunities volume than of higher better domestically. actually customers. that long-term was margin The there us For we’ve function us year. the a we last sent really specifically, as that just capturing said, And for got was

going But volume in QX. think come bit are little pick soft our think of into China costs would that been New balance, China, down, on to case a going up have those of be They’ve have relative you’re need see wood. up. Lunar log freight while. customers China, come the a out anticipating lumber demand spot I in our in And the just we As into Year two I because ramping a and more regardless -- for what’s that’s that coming do

I to going China. be So, opportunity there’s of plenty to export think for to our volumes us up ramp

the on in I thus the pretty appreciate well up held And the far and just it’s you repair you. Got quarter this markets, then color. remodel reiterated professional obviously, segment. that

activity to during If sort starts into follows really starts whether as you maybe look repair started of housing and back And general housing typically steady historically, there progressed? in repair with quarters. if is -- quarter housing that cadence -- or repair of a and you or remodel it the correlation have remodel remodel and between by couple and decline any single-family Wondering starts a -- insights of XQ? the is

persist working And forward home, to then the has the going an people and R&R of rate? over that remodel should occurred years with elevated repair confidence just the that several you quickly, last what from at continue gives all

repair drivers Yes. in remodel, place. remodel are harder do most are Well, and behind think And the it bit think last a play. seen little we’ve of the than there still number I in repair several a over extent, variables I and to to some it years forecast that at of makes strong normal.

homeowners got lot of equity. a with You’ve

and have lot than You’ve layouts of newer different homes. got smaller housing are older an the some of aging these stock. houses A

homeowners think I an on older to for add upgrade homes. existing to provides and that So, incentive

I that purchasing with than be going people think keeps also at many existing a having a house at the home the mortgages to and a that’s and repair lower think other more catalyst so refinanced in mortgage, for them remodel new rather dynamic could higher extent somewhat that activity. new rates out I

home one mentioned, the projects. people remodel you course, historically, often and as do is buying of a selling times and repair of Now,

headwind that the extent down a could a that bit. little And be so, dies bit activity of little to a

takes. and year, bit still puts of activity solid I we’re the expecting a remodel than this But lots over we’ve probably couple good still But So, seen albeit repair years. and little last seeing lower activity. we’re of think

question of mean always I into trend that the Now, cold there’s bit little get did about a the you to how when your quarter, seasonality fourth in months.

be You’re decks not be going December they build the like having in in to spring. people would

would balance, demand and But still expect in we’re XXXX. there’s So, to solid seasonality that a continue on impact. seeing

with line Our of Paul next question comes Markets. from Capital Quinn the RBC

just to question, sneak it the under one hour on Just lumber.

and of little But the goal appreciate growing were the impacted it got volumes ‘XX. X% sales X% strike a a U.S. down in by You’ve the bit I and year, over in

‘XX? up South, X% in was your production

just to Yes, wasn’t. board getting about by end reiterate, we X.X the it goal that that’s And billion to XXXX. of when talk so and feet multiyear

We capital through programs are our that doing work to year-to-year get the to level.

in the production. accommodate year-to-year, again, year-over-year. that underlying for expect of system reduce depending And production with there. on just But, dealt still year it within what the terms supply that X.X chain, Now we’re volume the issues a strike, vary year-to-year, what’s the actual of did other will you dynamics et But on last our year to depend on. that track the are see labor, production going look build we capacity happened COVID, get billion, and on what to cetera, number at market with last will between projects we the

Davidson. question line Yinger the of with from next Our comes Kurt D.A.

Great. morning, Thanks, everyone. good and

supplemental side. you mean, at to you think the all term matching front cash year kind cash as foot much a ensure flow likely repurchase what’s progresses? about leaner a of at be some Just given do generation starting your to to on or gas how on do off near next year, expect take with cash for activity the the can I buyback the share least underlying accrue you dividend

Yes.

You bet, Kurt.

the evaluating share constantly way value for in weighing dynamic comes at us we’re repurchase, looking to the all shareholders. long-term about allocating most back the the process, to factors, how available it think options a So, and we all really, that creates capital the

were we’ve million supplement we’ve $XXX progressing ability dividend And to base authorization. with did of in or either the as repurchase. We the us our framework we active know, overall demonstrated, you as allow well share cash against got with XXXX. repurchase, cash our the share So, return to

to XXXX, will framework, I remains FAD assess with your of committed our the remains generated. evaluating repurchases amount about we’ll really, of to to going the on But is we report on as cash to flex return priorities cash activity. framework us note, along the up you to to based quarterly our ahead it, amount to for from it we and consistent, available our to all back that the process with shareholders of think from a looking same. all year-to-year course, other perspective, return and it how evaluate that So, down or continue point,

left, quarter is just of then, it product a greater And QX? or sense. where but EWP, have Makes could Okay. commodity. you’re on there’s lot range a the thinking what in on sequential pricing some kind maybe numbers put a you you around of relative than Obviously, visibility should

So, helpful. would any be there thoughts

Yes. tied EWP closely the Well, know, as is housing. most you market single-family to

EWP in we’ve numbers And market downtime to our take so, demand impact has better see you of we did and could an extra slow, to that try seen that. had match quarterly in on some as production, holiday terms it

pre-pandemic on trying we’re the to generally, we’re not pricing pick out what EWP. Probably reduction competitive like. We’ll in cetera. to housing the operating rest up looks And just we give we price pricing see think that feel pricing note, our always good I I we would So, competitive obviously going We but a the for with how that did to did again, to quarter a the of extent take we Wood share, like kind position trajectory -- in plays above still balance margins, specifics reasons, start market as posture, Engineered levels. think see implement et targeted really of it’s about to determine Products.

question Goldman this comes morning from Susan line Sachs. the Maklari with Our of final

a talk Timberlands, kind overall to wanted I of little the Devin, there. sentiment about you. bit Thank

the And you the about think secular and into this there year, by are the appetite trends seeing those cyclical coming is we what any sentiment for region? assets? versus As overall differences

Timberlands in of years, Yes. REITs, we’ve this last class. the from to There of Well, And I is really is traditional really the the year, think lot integrators, seen in this driven we from think types seeing and transaction TMOs, the I over going my And of asset over the expectation new a billion investors. there. also interest But interest of we’re has were a players, been private the just activity. couple lot of of continue. that’s the Timberlands Last activity. reality, lot come $X and interest a some that’s

of expectation north Our still be $X we’ll billion for is year. this

So, lot there. a just of interest

I think timberlands I much a But be climate. so lot more some piece owning of have there’s a there’s we the one, in just little bit, focus Number bigger And driving properties so is think could things. up prices on an trending seen ESG of few interest where in it. environment a log the that

are et better real of that to they’re alternative and be of owning and carbon, starting renewables, some a realization Timberlands, I values cetera. recognition that’s inherent estate, think, the in

that’s going interest there. to XXXX. is a just So, expectation into My continue of lot

Timberlands years Our view in the that for to trajectory is come. the is positive very

Okay. Thank you.

that right. was Well, I last think question. All our

day. So, and your I’ll continued Have us everyone just in morning, a interest thank great thanks for Weyerhaeuser. to for joining you this say

today’s call. concludes Thank conference you. This

participation. you your lines Thank You your this disconnect time. may at for