Weyerhaeuser (WY) 25 Oct 242024 Q3 Earnings call transcript

Greetings, and welcome to the Weyerhaeuser Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

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

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

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

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

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

call I will now to turn the over Stockfish. Devin

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

special $X.XX earned EBITDA a quarter. item, Adjusted share. for or $XXX diluted million totaled $XX per million the we Excluding

the given operating market current well delivered environment solid backdrop. Our on relative ingrained the cost recent position performance positioned headwinds, Notwithstanding challenging curve. teams quarter remain our culture OpEx we in against and a the deeply in third

continue Our our cycles. demonstrate strong, is and to balance market and we across capital the portfolio durability allocation sheet framework of

into Looking growth for market forward, that will and that conditions outlook we're a maintain for constructive the improve fundamentals optimistic demand businesses. longer-term XXXX support our

to announced July. in on like to Alabama we that provide results, moving our Before I'd the business acquisitions an update timberland on

through were third to this the second the completed reminder, transactions, the and report in sourced and a acquisitions first As multiple transactions the we million of acres totaled remaining that XX,XXX pleased month. closed earlier $XXX the approximately I'm quarter. in quarter which or

with opportunity timberlands to acquisitions returns generate well-managed These high-quality, for that our an enhance our solid attractive portfolio shareholders. represent

against Including strategic end our $X target meaningful multiyear of our billion reach approximately demonstrate these and timberland million $XXX progress target. the of acquisitions they addition, we XXXX. on are to have In track deployed transactions, growth timberlands toward by

business third results. our to quarter now Turning

and million, X through realizations to Timberlands second on to decrease Pages earnings. $XX the I'll remained elevated pressure million and Western pricing quarter quarter with with to the downward of as $XX sales Log ample, and faced X third in market. West. supply quarter, challenging by contributed continue $XXX slides. log compared very third our begin mills volumes in domestic lower Timberlands log a was million earnings navigate driven EBITDA inventories the largely Starting the market. lumber carried Adjusted a

sales realizations As quarter. a to decreased the domestic result, our second average compared

harvest higher volumes lower we lower and were productivity fee elevation transition Our moderately operations. as into harvest the made seasonal

although activity Northwest conditions certain to operating compared our was in areas, quarter. in third the log-in and additional dry decreased and quarter. costs haul reducing Per road unit limited Additionally, costs in forestry wildfire harvest second timberlands, across resulted our Pacific further volumes the restrictions the in

Western Moving products Japan. headwinds export housing softened given with Japanese finished quarter, our to business, of starting market ongoing consumption Log in elevated inventories our markets and third in customers. for the the

earlier this increase In of Finland market. to the This Japanese labor into following year. European Japan imports was a the strike resolution in significant addition, there led a competition in increased in lumber

Given this strategic customers dynamic, demand moderated third in from quarter. the our

to volumes second As logs the realizations export average lower our compared Japan a were to and result, for quarter. sales

inventories of lower consumption signs the showed the and the to markets third levels of log China, at quarter response In log in moderation at ports. outset elevated

volumes second volume we to shipped lower their improved and our log were fell our more That and steadily levels quarter balance, quarter. to from than for our January. realizations strategic China lowest customers inventories the initial progressed, said, quarter. On the and compared was consumption to plan solid As demand since sales average the

Southern the second Turning quarter. for compared slightly increased to EBITDA Timberlands the South. to Adjusted

the adjusted log remained steady as soften mills logs programs balance, Southern further takeaway of our pricing fiber for lower market, the given Southern to sawlog delivered On generally In markets takeaway it's continued remained stable. and our supply contrast, lumber. and across ample, region.

a second realizations result, our comparable were quarter. As to average the sales

volumes as harvest region road multiple and forestry systems at quarter. impacted the were weather lower costs tropical third fee in Our the

It's mix the volumes decreased that the seasonal the third significantly were the by second comparable costs higher, normal our quarter. were largely lower log resulting quarter. in and EBITDA due while the slightly the geographies. to these increase quarter. prior activities harvest conditions that's harvest typical storms, worth whether noting were and limited our compared haul realizations to in adjusted timberlands moderately Sales from operating unit fee certain activity in North, In were undamaged Per to

year-to-date, Turning and and real ENR and of the noting estate have a $XX and Adjusted demand solid steady timber on to the It's to third XX driven for to properties real timing that Real million and energy HBU EBITDA resources estate, by natural and contributed decrease continue markets we Pages with was XX. million, to earnings. mix premiums now estate largely to second million remained sales. pricing $XX quarter value. compared quarter, estate significant $XX on capitalize real worth

the a comments Solutions our approval U.S. on I'll Natural receive few to business. for X carbon Climate track forest on projects make We now remain in

generate the the from main over coming Between issuance to and credits credits. these project, our projects we pilot expect next in months. XXX,XXX South from initial the

growing projects in increasing have voluntary carbon the additional we for and the credits markets. demand forward, development Looking are pipeline support and by for high-quality several encouraged

to renewables. Turning

approximately for development X we by year-end. see Notably, to developments one we to under is currently to expected projects. XX solar operational have be demand In and continue positioned solar opportunity large-scale continue on solar are We capitalize construction, well this for which potential total, markets expand. agreements as of strong signed to

wind to online Additionally, we're new from expecting X active months, sites. X to active which coming sites come portfolio projects wind our in X will increase the

Pages to now on XX through Moving Products Wood XX.

lower second in OSB, a $XX compared million unit higher product across our $XX and was the Products earnings. a as special Excluding decrease by item, segment. million, particularly well contributed $XXX Wood to sales quarter to volumes pricing, Wood driven largely costs as Products third EBITDA million lower manufacturing Adjusted quarter,

lumber. with Starting

loss adjusted for a as outset particularly was million reached across American third U.S. persisted the North $XX EBITDA Benchmark of in headwinds the the lumber at Third the quarter levels historically quarter pricing low market. significant

several was demand. ongoing including driven and sentiment, This market South. cautious buyer by end dynamics, ample supply soft

As demand supply state improved began balanced slightly. and benchmark the towards quarter progressed, pricing a more trending and

prices in U.S. noting It's the worth that lumber

and and South buyers inventories recent supply response tropical have events constraints steadily a curtailments remain across in the to and October lean increased region. mill weather navigate series closures of following in as

the and started in remodel we've to an U.S. see addition, in In improvement repair demand

the segment. South, treater particularly from

production mill quarter third response reduced curtailment took we announced operating and lumber the business, previously volumes decreased new demand sawmill. across For our to our softer the in of This our included place set our a environment. as in posture burn

moderately As moderately third costs a unit were were the sales and in lower quarter, result, manufacturing our higher. volumes

Our to by X% average sales slightly realizations the decreased and quarter second compared were log lower. costs

industry. fourth cycle on OpEx we lumber relative quarter, by more the focus return We're operate the a curve, For commodity to compared to given posture. market. positioned encouraged normal our position to and business we're the the better recent And cost our operating plan much the in of southern to through lumber improvements

Turning to OSB.

balanced lower lower $XX American in decrease due demand at quarter. an adjusted product were was the Supply than the market relatively the pricing $XX And quarter EBITDA the OSB and across second a quarter, million, Third was pricing. to benchmark million stable, compared quarter much North to albeit third second average. primarily level

quarter. the second OSB realizations by XX% decreased business, average sales to compared our For

that were volumes lower our seen the quarter. sales prices maintenance third trend outages manufacturing in were moderately weeks, quarter. to Our files due moderately the that costs OSB up and typical I recent note were Fiber lower costs are November. through higher in extended planned are would out slightly now and order annual unit we've in

$XX $XX million July production section demand was Products quarter. products and Wood the realizations lower compared to our and higher of costs driven at decrease activity. to quarter. inventories second aligned comparable manufacturing second adjusted Notably, I-joist to largely as EBITDA This we Engineered in our were volumes appropriate to was keep match light levels sales a sales and by solid for customer average unit weaker the housing million,

home EWP will segment. Looking activity. forward, products demand with particularly construction single-family the remain in new aligned closely for

environment months. the EWP That winter dynamic, this slightly fourth the a expect do housing being typically spring the season. demand we a in demand quarter building and favorable softer in said, have we for as Given transition year's next into we housing decreases activity outlook as

decreased EBITDA commodity $X to second due to adjusted by the In volumes and decrease in quarter, sales compared a million margins. Distribution, largely

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

on fourth our key and quarter financial financial are with moving items, everyone. XX. third good into begin quarter before morning, Thanks, covering financial items Page outlook. be which summarized Devin, key performance and I'll I'll

million quarter the We $XXX $XXX ended with under of earlier we the this was the which just timberland closed earmarked of Alabama of month. for final acquisitions million tranche cash,

and Our We and in million million. million. cash our the generated $XXX of $XXX were now expenditures from targeted which balance operations expenditures XXXX, flexibility multiyear at million strong. million lower end approximately $XXX is to remains position we the liquidity of sheet, In quarter, third of of $XX financial capital range expect $XXX capital

capacity to alternative worth adjustments we're execute successfully to the uses CapEx cash always have on conditions, annual make allocation and flexibility to and within of our capital levers program. the It's evaluating framework noting that response our our in market

Importantly, are cycles challenging to we pleased remain our are within in despite market businesses CapEx and the our conditions committed across XXXX. to investing market range in multiyear

million as at approximately third end, billion $XX shares $XXX $XXX of and were and million repurchase share base These returned average under had of $X of price an our our in payment authorization. the quarterly activity We shareholders repurchased million quarter to $XX.XX quarter. we through of through dividend approximately the completed repurchase

our continued repurchase that navigate the commitment in our conditions a our to timberland remain we range take our to positioned advantage opportunities shareholders. compelling to well base the As increases solid demonstrated generate and dividend, capital and businesses, allocation activity market investing by returns recent of of transactions, share for

Adjusted items on by XX. Page results for $XX attributable quarter, million segment quarter lower unallocated Third function to partially to expenses. variable second this our compared summarized compensation increased for and EBITDA the corporate are

are items XX several Page presented updates on Looking full on the for Page are forward, quarter outlook fourth items and key year XX. outlook presented to

fourth comparable expect be we XXXX. business, and the adjusted to Timberlands EBITDA to of earnings quarter third our quarter In

Western our operations. to Timberlands Turning

stable quarter and We our for expect to market fourth domestic the demand steady logs. be log the relatively anticipate in

pricing mix a a of be decrease the we grade result, said, domestic realizations to slight for grade anticipate expected That largely a driven by logs in third As lower sales quarter. is our comparable average logs. our to

as to to expected in our fourth Our the to are increase customers customers shipments domestic sales China. volumes reduced quarter in we

costs haul harvest days lower. expected and and log anticipate volumes moderately fewer to given be we are quarter. lower slightly Forestry fourth and the fee costs road per unit And working in

in Moving the expect export to finished soft due headwinds markets. consumption to products. markets ongoing we In the to quarter fourth and log elevated Japan, inventories of remain

anticipate realizations are As That we to a the third expected slightly to sales said, sales result, volumes quarter. average comparable. lower our compared be

consumption flex from said, our strategic to markets expected logs be Turning and quarter compared Chinese decrease domestic third to volumes fourth the to a a the in quarter, customers. as are customers. log ongoing to we That China. anticipate Despite demand we stable we anticipate in challenges, to sales China relatively steady

realizations sales slightly. increase Our to average are expected

pricing. the we recent quarter as operating increased the fourth In improvement the stable sawlog to lumber in expect rates demand mills in South, response in

fiber Regarding shifts an the activity we increase Helene. supply following at could and as regional in fourth relatively see fiber supply of the demand That Hurricane capacity logs, quarter. to salvage said, were balanced logging outset

in geographies. damage systems As quarter, from the minimal limited tropical Devin operating Timberland weather mentioned, wet the in although certain our conditions our activities sustained third

lower now we in and a harvest over the the volumes next plan to year slightly to up than As make be result, our quarters. these we fee full several expect South XXXX, volumes

higher volumes note, that we the fourth anticipate harvest On in slightly fee quarter.

of as the Our third activity shifted forestry also are and from quarter. costs expected some this to increase road

log unit to expected sales realizations the are costs haul and quarter, and third average comparable expected are to Our to increase slightly. per be

higher harvest be In mix. compared to volumes due and expected the to third are our are our higher sales slightly fee to quarter the north, be realizations expected moderately to

have solid Turning to for estate Real properties. HBU on and remained Resources Real pricing capitalized and Natural have Estate, demand Energy steady we segment. and markets year-to-date, our

million, a an our guidance XXXX EBITDA million $XX As million guidance full outlook and our $XXX to segment. year for increasing increase a we of are $XX from our prior for approximately result, adjusted the increase initial from

and continue EBITDA we in our be by to a XX% we contributions Climate estate business $XXX our the as for sales Solutions We track on increase now expect a remain [indiscernible] to advance million of XXXX. year-end as sizable XX% real Natural percentage toward from year. to target for

to to quarter, For earnings the and approximately we to be fourth the mix million the timing estate adjusted quarter third real EBITDA of $XX expect and due lower sales. compared

before more in For entered and our effects slightly balanced lumber Benchmark prices to be and average fourth sales have quarter Wood trajectory quarter, special an upward EBITDA excluding Products segment, items the for to and supply earnings of quarter changes state. we expect OSB. third the lumber higher demand adjusted approached a for realizations the as on fourth compared

prices benchmark quarter, third for stable OSB, were into but entire For October. increased the have

moderately current than and on the XX, Page higher average As our lumber shown quarter for average. quarter-to-date are third realizations sales

which to than effect realizations. of files, slightly are due For OSB, in and a OSB the the average, current third length our realizations quarter order sales largely result our lag for average quarter-to-date lower

business, Devin we the return quarter. in lumber a mentioned, plan normal to more operating as our For posture fourth to

we As sales manufacturing volumes higher and lower a result, unit costs. anticipate

Our log costs be are quarter. lower slightly expected than the to third

For expect the to compared third higher sales quarter, planned we manufacturing maintenance. moderately lower our downtime unit less business, volumes for costs annual moderately and given OSB

to expected slightly are costs fiber higher. be Our

close our a Devin softer as environment alignment Wood dynamics business, In we anticipate months. winter And we mentioned, Products the Engineered over seasonal expect homebuilding single-family product and slightly to fourth demand continue activity. given quarter, the in between housing

and the sales are a raw realizations lower to result, third and expected anticipate decrease. As compared we costs material volumes quarter to

expect we slightly largely third sales be lower volumes. business, by quarter, compared to our lower EBITDA seasonally distribution the adjusted to For driven

that, turn back to With and Devin I'll call now forward your to the questions. look

Davie. Thanks,

housing unchanged. in on is activity this starting and of remodel wrapping single-family repair the housing. up July, comments softer-than-expected affordability balance, challenges. On and the for morning, view market housing, Before actions housing on demand largely taken up macro markets, a has the well market I'll larger and to on brief limited homebuilders this make few existing our Despite segment held offset and reasonably the be public supported year. inventory homebuilding underlying healthy to continues by the by homes with

remain remains interest we In impact given rates dynamic we In and higher and excess new the contrast, segment in expect multifamily into this supply through and environment the activity XXXX. of activity on follow to And the expect term, typical building a a months. this compared the healthy, stronger the assuming expect we'd to pattern in XXXX single-family construction winter single-family to macro place challenged remain seasonal consumer sentiment year. projects, near

from housing demographic face That lower down supported sidelines anticipation said, strong the housing a our recent have to although mortgage market rates remain buyers rates affordability. continues the on choppiness highs, and in favorable, view mortgage improving near-term by vastly housing some certain Regardless, on longer-term trends be come and could underbuilt fundamentals of as stock.

Turning the market. remodel and to repair

last by inflationary several cautious consumer do-it-yourself in stable the and sales to rate in this softer to was In compared the the an the home environment. has has largely pressures third existing Pro segment outperformed general, years, response fewer in generally elevated segment in activity sentiment and XXXX. repair While been remodel year demand quarter, driven

As we fourth uptick and improvement segment. by encouraged the demand enter we're a [indiscernible] our from in warehouse quarter, the customers recent from home

term, interest as an moderation sentiment will we activity stock. of levels drivers including optimistic supporting equity While activity we're many aging favorable intact And repair and seasonal remodel a remodel improves. housing in key rates around recover holidays, the that consumer and home remain do solid demand repair and and expect the lower longer

and despite we our So to people against in closing, our our quarter, resilience demonstrate and the third of portfolio. continue a strategy challenging execute

capital for and and allocation our appropriate strong, is across the sustainable we flows position both cash is framework that market financial cycles. generate Our

driving we targets, our forward, Looking peer-leading on delivering value growth remain performance, focused achieving and serving multiyear our customers shareholders. for our long-term

for XXXX. And stronger demand finally, optimistic in recent and that a in improvements the products we encouraged see market are to environment by lumber going we're we're our

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

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

in you just will on in about for think color talked And for building dynamics production? just look are industry see seeing across what do you'll that comments. to the My respond as some you're And the next first in give next us do XXXX? you how the thinking supply-demand ability quarters. the coming general Can quickly on about and improving quarters? going of into through if like yourselves you we then the over quarter, ramp fourth to on question lumber demand that recovery the think that several that couple how not your but is how more focusing and we you

Sure. when in a combination now, happening what's at demand look right lumber there Good is dynamic. and market we of it's question, the X There's things. dynamic Sue. a I mean, a supply really

think amount obviously, of coming it's out of near the term. suggest this in we've either the maybe back indefinite permanently I of realm, in that's would feet seen side, on come significant out board system. that or supply coming that, year, somewhere billion or the a X.X Much fairly not curtailments capacity

a There's softer reductions of production terms lot also supply within mill set. of been existing dialing their in people back

from usually of So time a amount has that while we're is to an that the those really system. lumber announcement of of see little the out the from some fairly the from made significant takes I until think It time the a come mill. starting starts impacts supply closures. And shipping

And XXXX. some saw component. the mill closures So in top last that on way, that that's comes we by a of, year

a of in capacity. reduction period So pretty significant it's been

side, is reasonably we single-family well. up holding demand housing the On mentioned, as

from [treater] little activity increased demand the in R&R seeing up and that from the to seeing expect stores. that box activity picking pickup We're a We big buying continue. encouraged We're even we're some side.

positive. that's So

our a particularly As see we're to housing we to side, and single-family into expectation up going expect pick better that is on well. XXXX, we as roll the environment, R&R

a of industry rate. that's the And latent that at capacity going of all capacity system the people operate in back, terms at But near slightly of a I come maybe in from there's an term, out really could the is operating all. bit challenge if think, higher coming little there standpoint not to of is

pressure if year. in I uptick So into we roll upward puts the season demand, meaningful some you a building next spring that think on pricing as get

on been talk then the the which of Can you Okay. course of very coming effective through That's obviously mean very what And about a that for the here. How bit little that cost do helpful you over could of OpEx there? are tighten that, has up? the opportunities focusing it. seeing as color. side maybe other your is piece And the things margins 'XX,

mean, have unique that's every been to that and the I pressures we've the seen, clearly, us, inflationary few last by That's years the with pretty not way. Yes. much industry. challenging

a that's So been question. no headwind,

to continue lot every to That's week, of going pulling a whether stay we're controllable on. every costs year. day, focused the it's whether every we we're cost whether of something initiatives out on automation, always just it's think I do. system. working got underway, We've reliability, as it's

levels operating I we're environment think the and big capacity roll demand our lot up ramp costs. a can opportunity if for to us get the more we next unit year, get of normalized the as production to benefit higher into rates, a in we we

from OpEx year a pretty margin in standpoint our us standpoint. And environment tailwind so for production and be an next that significant could a

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

know gave export 'XX? no contacts field particular, in the what But color in fourth West for we first macro but you quarter your half? policy any particular are get the in view the are guarantees recognizing we Western trade it. Timberland in I saying, of in for what's the life, have first consideration there's to about and the there and question are saying partners on First don't if this on markets, exports mix in need As we the your what your and outlook half exports

Yes.

first. I'll to speak Japan So

there play we into dynamics in at mentioned, of that pretty QX. now a the was that's of Europe volume One amount is, in Japan right significant as came

would that is margin in pressures competitive probably a at some market. think puts that do Japan current lot so in of I pricing negative. that And

going work flow year some So into get some you're of my into as dial that expectation is we and European through see next inventory. to of the back existing Japan

they customers will market share. very I Our that that go competitive, are out regain and expect and

about those year. But next the So solid tandem. environment. first a the as should what think typically pricing expectation move with markets, be correlation things in half that fine Japan I is move we as next Japan, on be into there's should year, domestic Western we some demand our happens side into think of log

the we China a It's think are wildcard. margin for is customers the some we a a that as more if bit into look generally China legs some try market what Pacific ability could our some of like. opportunity spur I China If so to logs strides see repair mean And real demand there. in move head I I in always And speaking, does there usually China. obviously seen of try upside a volume to unknowns to little you there's Northwest just think gets China. question We've the year. we estate from policy economy. the fiscal They're into into next have real to desire. making

Europe I expect from off is as Zealand say in to we've the New tailwind of flowing drop in volume. the of in China. from be coming salvage dramatically through that a continue other There's that about these some work and logs One they I seen and supply to Australia thing question volume will always regions. do volumes

market. a that I that whole for pickup of market takes China But So see improve. don't that of lot to say, go I as variables think a into in us lot demand it

it. Appreciate Okay.

that it's getting it better -- the of half sounds provides from sounds year. it probably like second where So us,

certainly. Japan, Into

It's you that be -- for you up with 'XX, you recognizing for a job Weyerhaeuser comes the periodically. for up Or Will improvement, OpEx what constant you you in if with done to at with done lumber in quotes? market to foreseeable or the a me How wood, EBITDA able place right, black For And tremendous do the will assuming a and lately, future? there's -- there this in question get there's hold can have improvement you a to lumber no margins to it's the breakeven we business market bottom. whatever and losses has on hopefully, ourselves is no have need that? if would be, modest there resign the program in think like? challenging us have OpEx EBITDA but very about in

I XXXX Yes. mean I'm for couple certainly of a lot a about more optimistic reasons.

First of to demand all, going the environment think I up. is pick do

So aside, time putting of you dynamic. long one that's portfolio, has view. on curve, an prices cost lumber we've that But on positioned we at look are recession our very house basis, that lumber challenging been great of are in the this notwithstanding when seen kind inflation-adjusted our markets lumber these a most the well type

of that in industry a sure sustainable Certainly, and as we're to system, continue not of lot cash we're to would work that. the an just what lumber. in costs not got losing But market. out money with flow negative I say across is it's pleased. have We've make We're whole place to not the we everybody take satisfied doing

That's of here just And of the seen capacity of a even out things amount seen recently. very with you've we've that up. that result so coming the significant tightened system,

prices seeing up. come You're

term, make money So over we the in will long lumber.

businesses. brighter we I all of make it manufacturing capital are in challenging in. a navigate we've businesses to and difficult, been the market I been got above money our expect think certainly our will this ahead than in It's of I profit frankly, better again, think, most, we've days put and earn context, and but cost well our to

So be my that for would XXXX. expectations

lumber add just -- George, expect current EBITDA to would prices, Davie. we positive. be At I'd is this

expect on And be and prices sequentially we Understood. XQ to current up flat Understood. EWP should OSB to of to kind XQ? down based

further Yes. pickup a the here few obviously, not because length time mean, quarter-to-date of and of you a said, our lag in there's our files earnings if pushed I that's of at look little time just reflected in over have fully over quarter, our last that files. But the we've bit I the order for seen weeks. normal project you When out a materials, with this now order year. prices course the out like than OSB

directionally, we We're think don't expecting volume OSB I positive. have annual outages. more maintenance that's So in since

and And So I there. think given pricing directionally, our similarly volume. on EWP you're around right expectations

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

couple positive the the consumer a I of South, touched seasonal from of stage better trends in of price looks And the kind even the a do levels? guess, times inflection treaters. year-over-year buck takeaway on improvement demand at a on maybe that's indication you perhaps Devin, think you an like basis? attractive seeing this improved from end specifically that typical secondarily, Does inventory or an positioning what and

saw where build I buying be Yes. QX mean historical that inventory point a they to them advantageous. for treaters, the they hit patterns if in for prices the a little it wouldn't could be thought unusual

say little several history. Over years, patterns would I has last been treaters different than a buying prior the from

opportunistic year. throughout the they've so more And been

for terms we both. now. of of suspect little activity we've next In year do different of -- I seen bit a seeing demand, I that in I right customer probably bit is pickup that think R&R pickup inventory in channels, because building of or in it's a think just we're couple a a this a little

to It's component much both. hard And but exactly versus how so say I well. a a the that's of as little think it's other, one I that's think of

it. Got

be availability. years couple stem in look shifts of I-joist discussion from in Okay. But I EWP part to at That they're the systems, mid-teens Curious forward Web will lot moving maybe And if starts year, EWP, floor starts think percentage. a maybe I-joist down Open of recapture? versus like seemed the going some past sense. relative this be in difference to potential for looks of to peak, how you how going reconcile that around you to truss, volumes down would XX% it share about from makes demand that certainly and about

you're exactly I right. mean, I Yes. think

products wood of the the During general and the years, engineered in stretched. availability pandemic peak I-joist was pretty of

today's little been whatever had is that bit challenge from of to environment. And My so that's normalized will a that that, Open The keep do to And a could be they more as certainly, market been to difficult recapture That's hits pricing to have so level, for over to share. present find Web. that expectation builders building think homes. will a ultimately, time. in recapture be more most our we over at switch I lumber that products been prices low. has able expectation pricing lumber easier little just

And just then that how FAD. that factors or supplemental of on curious returns potential outpaced one a base is level at and one important that how process thought returns. share Okay. you some of dividend And Year-to-date within the variable supplemental having in into capital dividend for have more kind and framework least I'm have? quick repurchases dividends

Yes.

You still bet, we've plays say time in out. the year pricing left just commodity got to Kurt. I mean some how see I'd

As we've up mentioned, Pine. here Southern past the pricing weeks, has Yellow several ticked particularly the over

the point, in of pricing continue. covering with base momentum doesn't adjusted FAD ballpark I'd the at So even dividend we'll that this be if expect

XX talked doing repurchase that beyond have the that, And under would beyond XX framework so yes, in it's that even to we've beyond and and supplemental a preclude amount past. in as from but a XX, possible above dividend there's share thinking nothing about that XX us above our that we framework and substantial wouldn't our about above or

been out designed repurchase. despite point had able markets, we we when this that is type in business, organic the share positioned all We've challenging exactly invest inevitably of to be active the We've all year well going And been But regardless that, mind We've in improve. ultimately, this of the I'd both able of the very to leave increased the acquisitions, dividend. in to to continue when through framework. Timberland are base those markets things our us of CapEx. growth

for really, value us So cash just cash in it the action us, the in framework over most power and flexible return to creates shareholders to that of our way time. demonstrates allocate our allows

Pettinari Anthony Citi. from comes question next with The

up Timberlands. Just question following on on George's

export improvement just since wondering, you're drivers being outlook talk what you merger. lowest Creek at wondering up 'XX I'm talked driving the U.S. can end kind year if of potential improvement the I'm year kind Looking about in you one for West XQ of for potentially the Timberland might and the in seeing EBITDA markets. just And next Plum of suggests about

South?

as been a are Yes. I happening in a tension business whole, to it's Western a levels prices. really think even basket as mostly wood they've the of log Timberlands that about And at market it's what's the lumber year. prices prices so up log when we most mean, with this of drive function challenging a really

prices lumber to Timberlands you'll just say West extent would on Coast will, I whole, as they improve, an we So have they see follow and a the as which some prices outset, that. believe as log already,

than That's this In less had timberlands about weather we expected. now, if it of volume get year had thing The later. events. a some volume the get is a we've don't South, it little largely function you'll you always

that markets environment, into in in And roll into the the that come many new future rolled of capacity pressure. those more over is pricing think time so quarters. And the as volume get do years that additional South. we'll over normalized some capacity have we've will seen seen a We that

continuing out U.S. We're the to for export opportunities of look

South that should help those of markets well. as tension some

pretty on prices overall a we you meaningful been West that. to impact improvement think the to to over the And long more normalized you'll pick see I up, timberlands in in ultimately, So working see in But a return the continue our prices as as see you're Timberland term, going going to earnings holistically South. Obviously, the business level, more at has the we're segment. slow price think lumber in that's West a log which come.

sorry is the there just of of Okay. That's Just And impact I'm missed you the sort typically, on on is incremental estimate but of demand of how that, you lumber kind an see then or this, you'd I hurricanes, hurricanes then is the demand deferred, is measure for impact? OSB And if created? kind for destroyed, sort piggybacking or all-in of hurricanes of maybe when however these EWP, and EBITDA helpful. very or some kind or the it? terms characterize of it in tons

Yes. our path timberland. lot hurricane foremost, a traveled fortunate I really the and in so were of mean, of because between very we the first

meaningful impact terms have in timberlands. really didn't we So to of damage any our

to the weren't move in able the we was impact planned. as we volume So had real much as South

in quarter. so frankly, impact grade. not that, South. as call of terms impact X%, volume margin was much it side, in fiber Much impacting was the X% the at a maybe in so the And if of on of it as

right? have as operations. impact it's moves The market it Because mill going on on it it to specific through, depends impact some really dynamics, overall on storm, the

demand through half the [indiscernible] there. So weather on the side, and

of Now as demand the wood happens. also is pickup see in side you flip a reconstruction the oftentimes that

takes it so really And there and puts supply are depends and side. the the both demand just on

least at this on didn't markets. impact have the I a us, think it in for meaningful one,

in their -- usually and that activity. into certain that a heavier bit fiber timberlands than the geographies, see market of go you'll little salvage the markets. out did damage excess start as see to bit fiber little flowing hits people That markets You'll a grade have the

bit see So sure be little I'm QX, that's but going us. not we in whole the on that may to a material of to

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

how we've Products under starting development can much a on Timberlands, us Maybe sense NCS Since ask solar of I'd construction? X lot tied covered projects questions. you Wood some are to that give acreage -- a I and are the with thought

follow my don't can acres. Mark, I of covered if projects these I with mean agreements don't like. but XXX,XXX total specifics is you on at tip the solar by individual that up about have the at fingers. acreage fingertips, my our I have we you'd

off might to don't Right. something projects the type what to development? really And cuff. I under the was you forthcoming economics know be of to, with trying can if get that's speak I

I'll not Mark. reason we're Yes. to these for we're economics up trying economics getting the tell into is day, I mean, deals. always every And intentionally improve the new you, the projects, we're and deals of out new signing

on of coming much think EBITDA pretty I thoughtful primarily program, of if overall, you mean, assess And trying our lease I the deals as $XX about neighborhood from kind people in be projects. the projects. we how these that so we're give wind payments specific information just and these and of to was step the renewables back, million had we

be call behind coming wind will that other got projects with be whole it, online X got We've the online next year. X projects to over online X months X that. wave new of will X and X them shortly We've in here the next, solar the the next

will to NCS I our of time, it a on So and component more overall balance, business. over mean, it's pick going material become up

can is in give heighten are And that necessarily of that on the Right. Or to maybe solar, or contracts that way -- And XXXX? color number moving you not us that about it any the expiring forward? that possibility in options start the specifically? think does those

in few the every have you'll replace and mean, solar, in a I we those expire year, Yes. typically, that pipeline.

really what over pipeline, years, signing several So of the are last you've that seen expiring. new the we're in is the that putting and exceeds it far the agreements numbers number

new the bunch we're in agreements. of them in And of few off, so a see we've XX, for right but whole now, pipeline somewhere neighborhood roll you'll a got the

over I So time. would to that number increase expect

on So lot lot side. a demand, of of the solar activity a

Right.

expiring? refilling recognizing So sounds terms necessarily though like of hit high as in the moving your that super it are forward actually people ratio, yet isn't projects the

to wouldn't vicinity. necessarily comes X XX% that time The it in somewhere industry years general fruition. you it to that characterize time in that just rates to from projects sign around up typically ultimately take Yes, conversion the X I are these because the way an agreement

think that meaningfully are success the that agreement think a be project sophisticated high not have and little rate fruition. be sign general. partners than will will up higher we But to in going in end with coordinate I you result and to coming certainly, we're I bigger higher every more that. a because But choosing to on we're solar a

And just That's the for frame lastly, update on helpful then might permits. forward? on how be on CCS, that time moving any progress color. Any

permitting Yes. I'd frankly, longer just time just slow. sequestration capture and are than anyone lines the say, lot broadly taking initially speaking, on shockingly with expected. the -- a the they're had is And carbon these process

thinking previously versus we what as point, this how think So at between is X now had we progressing, at years probably thought. about X to we're I'm looking delays this

to originally we So where really had through but We be pushed in anticipated is a pipeline reform more injections much going 'XX or expected. we out bit. permitting to in place that's seeing the to it these than get get quickly. probably projects 'XX, need going slower

we have confidence lot said, just the fruition, being but still a to initially would of come thought large extended to opportunity they be. had I these there things line is think the set fairly That that still where is time relative ultimately and ultimately

you And Okay. mentioned...

pleased have and pleased And some work mean, by I but little that add the end $XXX frames this here we're really more in time the broadly Mark, trends towards of mitigation We space. of to may speaking the see more in the really XXXX, towards making I'd we expanded with million just spaces. had with overall circumstances, NCS while bit across some legacy longer-term progress banking target these a that. businesses conservation, like continuing in some we're

sort approval about in else are you we of Anything be the additional thinking forest that terms NCS mentioned X got had you projects. in the carbon impactful? that of And meaningful Great. in should details

the carbon demand the by say projects really forest Yes. there. that trajectory uptick. a projects, particular for I seeing the just specifically, would The encouraged is these meaningful seeing high-quality in we're on really I'm

-- We've approval should a in that development. more so the are got the And the projects, that or earlier that that we've got X the stages X the and the then in and X in of shortly. got we've pipeline X bunch main projects, behind South here whole are have

remember that. It's So we're out building nice a to pipeline. important

be after of these projects, an Obviously, will year incremental year. there each issuance with

So pricing demand that like of level from they I good build. expecting seeing high-quality we're think pretty And a the And like customers. we're wind, solid. solar, the some be the should

think I meaningful EBITDA revenues next we'll you'll And be year, see good. that pretty a generating. feeling the and carbon we're pretty forest So in uptick

it's obviously, conversion. And got Great. magnificent cash

that's good, too. So all

Capital Our Matthew McKellar Markets. next comes RBC from question with

demand particularly First, what we think do demand in play you soft? pricing lumbering role an and European see if if European lumber in boards remained uptick XXXX,

always variable. think a Yes. I mean, I that's

in dynamic that achieved, to pretty call the down largely, see have seen if meaningfully in a months. is could that XX that seen take softness in just to come think, to into margin uptick consideration. That's continued of the over Europe have the a we've here that an it, function supply. We've U.S. there You last, be extent you the meaningful pricing European I

Russian you one of first though, is The is coming that you're dynamics whole, would into as lumber of to the in certainly which couple I not see play, going look there in that if a thing, remain term. a say will are at Europe near Europe

beetle And I of just gone all dynamic with for is supply mean from future. component Central significantly. foreseeable that's dialing be other pretty wood going the salvage the is in of Europe, that activity a infestation the to there's then the So salvage really back

they're really, going not convert here. it's to fiber as have and over really So cheap send though to

that certainly in situation. an could dubious you're lower of pricing volume U.S. even it's And from a margins, given the we'll we see volumes not there. around pickup European Canada, going see into But that's necessarily years. a in saw sure you pandemic offset coming U.S. by if the possible during maybe magnitude improved in I'm the the So to the environment coming see

And That's are you helpful. mining longer-term potential opportunity as lithium a revenue stream related just for relates to to the me. in your seeing it then last land U.S.

size of particular? in would about maybe you South, time those think Arkansas, maybe And opportunities? Louisiana and have potential so, Texas, if us the around how line

little the I overlap. deposits you there's pretty think mean land I -- a I look lithium that some and But magnitude, that. against at to significant point, you at overlay and can think it's those base, timing this early see Yes. you where quantify big are our if

we say, think not conversations point. around probably that. So we beyond I much this should I that But that, we've an opportunity. had share at And is think can do that some else

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

understand challenges sort OSB engineered lower modest Can in better to are help benefit start or just prices. X Devin, quarter-over-quarter, on Wood X the a little cost you were side. flat from me I side the would quarter? the key of on pressure prices some business of sequential maybe in just What the the Engineered wood terms that in with given imagine the and

just of Yes. to what happen in high I quarter level, the if volume. building. was going into mean very rolled it's a certain mean, with you around expectations really at I we the sort summer

a bit saw So above little not July normal, maybe bit I And a was pretty but above inventories housing normal. you that market a were significant, little then would weak. say

dialed production. And back so our we

philosophy general that there's for market a the if not have We a wood.

have You to about move significant a and to inventories because up want to price. comes be really thoughtful up production which building keeping you're levels going that, at typically

So also look costs production have the obviously, lost we with over related you're up lower which matching you unit on. higher with volume, we comes -- a to as you the housing volume. picked at costs thoughtful fixed about volume, demand your And our went you quarter, impact, to primarily volume, production in as obviously lower section, it XX% some was environment. were solid the because look the across XX% to quarter-over-quarter but But I-joist the quarter in lowered just spreading have our

less we down And so volume the produce given really, it market. just dynamic comes the in to

demand into be I going years. to expect with what business what and season, match Now in get we ramp we're But that typically, up, you've year, in and months, would mindful point in at spring the environment. of about to housing in you we the colder happen reflect so as on of you XXXX building up that. picks a back as easily a we prior to track as production think Obviously, slowdown this think the fully can fairly that building see little kind activity the bit seen and of is

That's And Got operating lumber in quickly, EWP, it. were QX? and helpful. rates then either what in your OSB very

Yes.

and EWP were in high mid- So talking mid-XXs. lumber, kind high in OSB, somewhere the to XXs in you XXs of

it. Got

terms in one Okay. me. log And exports out U.S. last one just Devin, of on anything then for of going

this South that there point. front? anything on happening at Is

It is. Yes.

still up of China, at what's latitude we've that of given silver context, again would the the the silver opportunities. focus for to obviously, about with like excited overall some relatively -- China on the small is challenges harvest As the volumes. the open time some fact, it's happened there to we mean But But to a point. lining I and matter really compared and seen opportunities. we're with it's that lining with market us market some other

been India. And growing business export so into we've our

we're I is ship demand a lot India, think to there more for in logs able our and currently.

out looking the building U.S. And so we're export additional facilities in at

that market. serve to South

come we there of the into across We've that out Vietnam. really We that interesting high-quality are logs growing value South. some our send the volumes can customers

I looking markets some well. think other host opportunities we're in as there Pakistan And at a and are Turkey, as So in other of that well.

some us. China will so And that still a opportunity the we And that's focus area certainly, back. at believe for point, come

with think, chain And and low-cost on a business. from market our focused expertise in supply It's our that so we're holdings something, our U.S. we can that. It's I the serve South.

how over that's And about so going we're excited time. grow pretty to

Our next question is from Michael Roxland with Truist Securities.

to uptick year. same is of to season that just Is operating seasonally heard XQ? EWP rate Do matching lower? stay or light next of thought maybe going the to XQ spring into in expect then you entered on question. just seasonally go and This And we're before [indiscernible] Maybe the I maybe maybe the of kind for that looking we kind demand. at the I to in mid-XXs. that I forward Mike. demand production follow-up your rate low X guess

going we us think next I more be we posture be roll year, the up mean see typical as think it's about as for in that you of QX, I what think QX slightly. would about as Yes. into think I But to normally. we

some to volumes dynamic would a expect our see I little -- given extent, that to QX see just operating in down to seasonality. and ramp and bit play to for normal in you're normal -- back the QX the going But going So at years, you're up come posture.

Got then we like think? that just operating XXs? normal in Or it. where XQ, And

would think under a low good Yes. I conditions. you'd about be I XXs in think that ordinarily, EWP, way mean XXs, see high to normal

over comments. There to turn to further I'd questions the like are for time. closing floor no Devin Stockfish at back this

for you a thank day. great interest And for us morning. joining everyone, Well, All Terrific. your in Weyerhaeuser. thanks, this Have continued right.

teleconference. concludes This today's

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