Weyerhaeuser Q4 2025 Weyerhaeuser Co Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Weyerhaeuser Co Earnings Call
Speaker #1: Greetings, and welcome to the Weyerhaeuser Q4 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speakers' remarks, there will be a question-and-answer session.
Operator: Greetings, and welcome to the Weyerhaeuser Q4 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's remarks, there'll be a question-and-answer session. To ask a question during that time, you will need to press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.
Greetings, and welcome to the Weyerhaeuser Q4 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's remarks, there'll be a question-and-answer session. To ask a question during that time, you will need to press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.
Speaker #1: To ask a question during that time, you will need to press star one (*) on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
Speaker #1: If anyone should require operator assistance during the conference, please press star zero on your telephone. This conference is being recorded. It is now my pleasure to introduce your host, Andy Taylor, Vice President of Investor Relations.
Andy Taylor: ... As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andy Taylor, Vice President of Investor Relations. Thank you, Mr. Taylor. You may begin.
... As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andy Taylor, Vice President of Investor Relations. Thank you, Mr. Taylor. You may begin.
Speaker #1: Thank you, Mr. Taylor. You may continue.
Speaker #1: Thank you, Mr. Taylor. You may begin. Thank you, Rob.
Andy Taylor: Thank you, Rob. Good morning, everyone. Thank you for joining us today to discuss Weyerhaeuser's Q4 2025 earnings. This call is being webcast at www.weyerhaeuser.com. Our earnings release and presentation materials can also be found on our website. Please review the warning statements in our earnings release and on the presentation slides concerning the risks associated with forward-looking statements, as forward-looking statements will be made during this conference call. We will discuss non-GAAP financial measures, and a reconciliation of GAAP can be found in the earnings materials on our website. On the call this morning are Devin Stockfish, Chief Executive Officer, and David Wold, Chief Financial Officer. I'll now turn the call over to Devin Stockfish.
Andy Taylor: Thank you, Rob. Good morning, everyone. Thank you for joining us today to discuss Weyerhaeuser's Q4 2025 earnings. This call is being webcast at www.weyerhaeuser.com. Our earnings release and presentation materials can also be found on our website. Please review the warning statements in our earnings release and on the presentation slides concerning the risks associated with forward-looking statements, as forward-looking statements will be made during this conference call. We will discuss non-GAAP financial measures, and a reconciliation of GAAP can be found in the earnings materials on our website. On the call this morning are Devin Stockfish, Chief Executive Officer, and David Wold, Chief Financial Officer. I'll now turn the call over to Devin Stockfish.
Speaker #2: Good morning, everyone. Thank you for joining us today to discuss Weyerhaeuser's Q4 2025 earnings. This call is www.weyerhaeuser.com. Our earnings release and presentation materials can also be found on our website.
Speaker #2: Please review the warning statements in our earnings release and on the presentation slides concerning the risks associated with forward-looking statements, as forward-looking statements will be made during this conference call.
Speaker #2: We will discuss non-GAAP financial measures and a reconciliation of GAAP can be found in the earnings materials on our website. On the call this morning are Devin Stockfish, Chief Executive Officer, and David Wold, Chief Financial Officer.
Speaker #2: I'll now turn the call over to Devin.
Speaker #2: Stockfish. Thanks, Andy.
Devin W. Stockfish: Thanks, Andy. Good morning, everyone, and thank you for joining us. Yesterday, Weyerhaeuser reported full-year GAAP earnings of $324 million, or $0.45 per diluted share on net sales of $6.9 billion. Excluding special items, full-year 2025 earnings totaled $143 million, or $0.20 per diluted share, and adjusted EBITDA totaled $1 billion for the year. For the fourth quarter, we reported GAAP earnings of $74 million, or $0.10 per diluted share on net sales of $1.5 billion. Excluding special items, we reported a loss of $67 million, or $0.09 per diluted share for the quarter. Adjusted EBITDA was $140 million. I'll start this morning by thanking our employees for their solid execution and resilience in 2025.
Devin W. Stockfish: Thanks, Andy. Good morning, everyone, and thank you for joining us. Yesterday, Weyerhaeuser reported full-year GAAP earnings of $324 million, or $0.45 per diluted share on net sales of $6.9 billion. Excluding special items, full-year 2025 earnings totaled $143 million, or $0.20 per diluted share, and adjusted EBITDA totaled $1 billion for the year. For the fourth quarter, we reported GAAP earnings of $74 million, or $0.10 per diluted share on net sales of $1.5 billion. Excluding special items, we reported a loss of $67 million, or $0.09 per diluted share for the quarter. Adjusted EBITDA was $140 million. I'll start this morning by thanking our employees for their solid execution and resilience in 2025.
Speaker #3: Good morning, everyone, and thank you for joining us. Yesterday, Weyerhaeuser reported full-year GAAP earnings of $324 million, or $0.45 per diluted share, on net sales of $6.9 billion.
Speaker #3: Excluding special items, full-year 2025 earnings totaled $143 million, or $0.20 per diluted share. Adjusted EBITDA totaled $1 billion for the year. For the fourth quarter, we reported GAAP earnings of $74 million, or $0.10 per diluted share, on net sales of $1.5 billion.
Speaker #3: Excluding special items, we reported a loss of $67 million, or $0.09 per diluted share, for the quarter. Adjusted EBITDA was $140 million. I'll start this morning by thanking our employees for their solid execution and resilience in 2025.
Speaker #3: Notwithstanding extremely challenging market conditions, we delivered on the multi-year targets we established back in 2021 and launched an ambitious company-wide growth strategy through 2030.
Devin W. Stockfish: Notwithstanding extremely challenging market conditions, we delivered on the multiyear targets we established back in 2021 and launched an ambitious company-wide growth strategy through 2030. Specific to 2025, we further optimized our timberlands portfolio, expanded our climate solutions offerings, broke ground on our new TimberStrand facility in Arkansas, and captured additional operational excellence improvements. We also increased our base dividend by 5% and returned $766 million of cash to shareholders, including $160 million of share repurchase. These are notable accomplishments given the headwinds our industry faced in 2025, and they demonstrate the power of our integrated portfolio, deeply embedded OpEx culture, and flexible capital allocation framework.
Notwithstanding extremely challenging market conditions, we delivered on the multiyear targets we established back in 2021 and launched an ambitious company-wide growth strategy through 2030. Specific to 2025, we further optimized our timberlands portfolio, expanded our climate solutions offerings, broke ground on our new TimberStrand facility in Arkansas, and captured additional operational excellence improvements. We also increased our base dividend by 5% and returned $766 million of cash to shareholders, including $160 million of share repurchase. These are notable accomplishments given the headwinds our industry faced in 2025, and they demonstrate the power of our integrated portfolio, deeply embedded OpEx culture, and flexible capital allocation framework.
Speaker #3: Specific to 2025, we further optimized our Timberlands portfolio, expanded our climate solutions offerings, broke ground on our new timber strand facility in Arkansas, and captured additional operational excellence improvements.
Speaker #3: We also increased our base dividend by 5% and returned $766 million of cash to shareholders, including $160 million of share repurchases. These are notable accomplishments given the headwinds our industry faced in 2025.
Speaker #3: And they demonstrate the power of our integrated portfolio, deeply embedded OPEX culture, and flexible capital allocation framework. Looking forward, we remain constructive on the longer-term fundamentals that support our businesses.
Devin W. Stockfish: Looking forward, we remain constructive on the longer-term fundamentals that support our businesses, and as we outlined at our Investor Day in December, we're uniquely positioned to accelerate growth and drive significant value creation for shareholders through the balance of the decade. Before getting into the business segments, I'll provide a brief update on recent actions to further optimize our timberlands portfolio, all of which were previously announced. During Q4, we completed two divestiture transactions covering noncore timberlands in Oregon, Georgia, and Alabama, for total proceeds of $406 million. In addition, we entered into an agreement to divest approximately 108,000 acres in Virginia for $193 million, and we expect this transaction to close next month.
Looking forward, we remain constructive on the longer-term fundamentals that support our businesses, and as we outlined at our Investor Day in December, we're uniquely positioned to accelerate growth and drive significant value creation for shareholders through the balance of the decade. Before getting into the business segments, I'll provide a brief update on recent actions to further optimize our timberlands portfolio, all of which were previously announced. During Q4, we completed two divestiture transactions covering noncore timberlands in Oregon, Georgia, and Alabama, for total proceeds of $406 million. In addition, we entered into an agreement to divest approximately 108,000 acres in Virginia for $193 million, and we expect this transaction to close next month.
Speaker #3: And as we outlined at our Investor Day in December, we're uniquely positioned to accelerate growth and drive significant value creation for shareholders through the balance of the decade.
Speaker #3: Before getting into the business segments, I'll provide a brief update on recent actions to further optimize our Timberlands portfolio, all of which were previously announced.
Speaker #3: During the fourth quarter, we completed two divestiture transactions covering non-core timberlands in Oregon, Georgia, and Alabama, for total proceeds of $406 million. In addition, we entered into an agreement to divest approximately 108,000 acres in Virginia for $193 million.
Speaker #3: And we expect this transaction to close next month. Moving forward, we will continue to evaluate capital-efficient opportunities that enhance the return profile of our Timberlands while balancing other growth initiatives and levers across our capital allocation framework to drive long-term value for our shareholders.
Devin W. Stockfish: Moving forward, we will continue to evaluate capital-efficient opportunities that enhance the return profile of our Timberlands, while balancing other growth initiatives and levers across our capital allocation framework to drive long-term value for our shareholders. Turning now to our Q4 business results. I'll begin with Timberlands on pages 7 through 10 of our earnings slides. Excluding special items, Timberlands contributed $50 million to Q4 earnings. Adjusted EBITDA was $114 million, a $34 million decrease compared to the Q3, largely driven by lower sales volumes and realizations in the West. Starting with the western domestic market. Log demand and pricing softened in the Q4 as supply remained ample and mills continued to carry elevated log inventories and navigate a very challenging lumber market. As a result, our average domestic sales realizations decreased moderately compared to the prior quarter.
Moving forward, we will continue to evaluate capital-efficient opportunities that enhance the return profile of our Timberlands, while balancing other growth initiatives and levers across our capital allocation framework to drive long-term value for our shareholders. Turning now to our Q4 business results. I'll begin with Timberlands on pages 7 through 10 of our earnings slides. Excluding special items, Timberlands contributed $50 million to Q4 earnings. Adjusted EBITDA was $114 million, a $34 million decrease compared to the Q3, largely driven by lower sales volumes and realizations in the West. Starting with the western domestic market. Log demand and pricing softened in the Q4 as supply remained ample and mills continued to carry elevated log inventories and navigate a very challenging lumber market. As a result, our average domestic sales realizations decreased moderately compared to the prior quarter.
Speaker #3: Turning now to our fourth quarter business results. I'll begin with Timberlands on pages 7 through 10 of our earnings slides. Excluding special items, Timberlands contributed $50 million to fourth quarter earnings.
Speaker #3: Adjusted EBITDA was $114 million, a $34 million decrease compared to the third quarter, largely driven by lower sales volumes and realizations in the West.
Speaker #3: Starting with the Western domestic market, log demand and pricing softened in the fourth quarter, as supply remained ample and mills continued to carry elevated log inventories and navigate a very challenging lumber market.
Speaker #3: As a result, our average domestic sales realizations decreased moderately compared to the prior quarter. Our fee harvest volumes were lower, largely due to fewer working days in the fourth quarter and the pull-forward of volume over the summer months, given a relatively light wildfire season.
Devin W. Stockfish: Our fee harvest volumes were lower, largely due to fewer working days in Q4 and the pull forward of volume over the summer months, given a relatively light wildfire season. Per-unit log and haul costs decreased, and forestry and road costs were seasonally lower. Despite a challenging Q4, it's worth noting that regional log markets are trending towards a more balanced state as supply moderates into the winter months and mills work through elevated log decks. As a result, we expect stable domestic log pricing in Q1, with upside potential if lumber prices further improve from current levels. Moving to our western export business. In Japan, finished goods inventories remained elevated in response to ongoing consumption headwinds. As a result, demand for our logs softened in Q4, and our sales volumes decreased compared to the prior quarter.
Our fee harvest volumes were lower, largely due to fewer working days in Q4 and the pull forward of volume over the summer months, given a relatively light wildfire season. Per-unit log and haul costs decreased, and forestry and road costs were seasonally lower. Despite a challenging Q4, it's worth noting that regional log markets are trending towards a more balanced state as supply moderates into the winter months and mills work through elevated log decks. As a result, we expect stable domestic log pricing in Q1, with upside potential if lumber prices further improve from current levels. Moving to our western export business. In Japan, finished goods inventories remained elevated in response to ongoing consumption headwinds. As a result, demand for our logs softened in Q4, and our sales volumes decreased compared to the prior quarter.
Speaker #3: Per unit log-in haul cost decreased, and forestry and road costs were seasonally lower. Despite a challenging fourth quarter, it's worth noting that regional log markets are trending toward a more balanced state.
Speaker #3: As supply moderates into the winter months, and mills work through elevated log decks, as a result, we expect stable domestic log pricing in the first quarter, with upside potential if lumber prices further improve from current levels.
Speaker #3: Moving to our Western export business, in Japan, finished goods inventories remained elevated in response to ongoing consumption headwinds. As a result, demand for our log softened in the fourth quarter, and our sales volumes decreased compared to the prior quarter.
Speaker #3: That said, our average sales realizations for export logs to Japan were moderately higher, largely driven by freight-related benefits. Looking forward, we expect demand for our logs to improve over time, as inventories normalize in the Japanese market and as our customers continue to take market share from competing imports of European lumber.
Devin W. Stockfish: That said, our average sales realizations for export logs to Japan were moderately higher, largely driven by freight-related benefits. Looking forward, we expect demand for our logs to improve over time as inventories normalize in the Japanese market and as our customers continue to take market share from competing imports of European lumber. Turning briefly to China. In November, the ban on log imports from the US was lifted. As a result, we're in the early stages of reestablishing our log export program to strategic customers in the region. However, we expect limited shipments in the near term, given the weakness in the Chinese real estate sector and the seasonal slowing of construction activity around the Lunar New Year holiday. For Q4, we delivered one vessel to China and expect to send a second vessel in Q1.
That said, our average sales realizations for export logs to Japan were moderately higher, largely driven by freight-related benefits. Looking forward, we expect demand for our logs to improve over time as inventories normalize in the Japanese market and as our customers continue to take market share from competing imports of European lumber. Turning briefly to China. In November, the ban on log imports from the US was lifted. As a result, we're in the early stages of reestablishing our log export program to strategic customers in the region. However, we expect limited shipments in the near term, given the weakness in the Chinese real estate sector and the seasonal slowing of construction activity around the Lunar New Year holiday. For Q4, we delivered one vessel to China and expect to send a second vessel in Q1.
Speaker #3: Turning briefly to China, in November the ban on log imports from the U.S. was lifted. As a result, we're in the early stages of reestablishing our log export program to strategic customers in the region.
Speaker #3: However, we expect limited shipments in the near term, given the weakness in the Chinese real estate sector and the seasonal slowing of construction activity around the Lunar New Year holiday.
Speaker #3: For the fourth quarter, we delivered one vessel to China and expect to send a second vessel in the first quarter. Turning to the South, adjusted EBITDA for Southern Timberlands was $69 million.
Devin W. Stockfish: Turning to the South, Adjusted EBITDA for Southern Timberlands was $69 million, a $5 million decrease compared to Q3. Southern saw log markets remained muted in Q4 as dry weather conditions kept log supply ample and mills continued to align capacity with lower takeaway of finished goods. In contrast, southern fiber markets were relatively stable, outside of a few localized regions impacted by recent mill closures. On balance, takeaway for our logs remained steady, given our delivered programs across the region, and our average sales realizations increased slightly compared to Q3, largely due to a higher mix of grade logs and export volumes to India. Our fee harvest volumes were moderately lower compared to the prior quarter, primarily driven by fewer working days. Per unit log and haul costs increased, and forestry and road costs were seasonally lower.
Turning to the South, Adjusted EBITDA for Southern Timberlands was $69 million, a $5 million decrease compared to Q3. Southern saw log markets remained muted in Q4 as dry weather conditions kept log supply ample and mills continued to align capacity with lower takeaway of finished goods. In contrast, southern fiber markets were relatively stable, outside of a few localized regions impacted by recent mill closures. On balance, takeaway for our logs remained steady, given our delivered programs across the region, and our average sales realizations increased slightly compared to Q3, largely due to a higher mix of grade logs and export volumes to India. Our fee harvest volumes were moderately lower compared to the prior quarter, primarily driven by fewer working days. Per unit log and haul costs increased, and forestry and road costs were seasonally lower.
Speaker #3: A $5 million decrease compared to the third quarter. Southern saw log markets remained muted in the fourth quarter, as dry weather conditions kept log supply ample and mills continued to align capacity with lower takeaway of finished goods.
Speaker #3: In contrast, Southern fiber markets were relatively stable, outside of a few localized regions impacted by recent mill closures. On balance, takeaway for our logs remained steady, given our delivered programs across the region.
Speaker #3: And our average sales realizations increased slightly compared to the third quarter, largely due to a higher mix of grade logs and export volumes to India.
Speaker #3: Our fee harvest volumes were moderately lower compared to the prior quarter, primarily driven by fewer working days. Per-unit log-in haul cost increased, and forestry and road costs were seasonally lower.
Speaker #3: In the North, adjusted EBITDA was comparable to the third quarter. Turning now to Real Estate, Energy, and Natural Resources. On pages 11 and 12, in the fourth quarter, Real Estate and E&R contributed $84 million to earnings.
Devin W. Stockfish: In the North, adjusted EBITDA was comparable to Q3. Turning now to Real Estate, Energy, and Natural Resources on pages 11 and 12. In Q4, Real Estate and ENR contributed $84 million to earnings. Adjusted EBITDA was $95 million, a slight increase compared to the prior quarter, and approximately $19 million higher than our Q4 guidance. This outperformance was largely driven by the timing of transactions, including the completion of a conservation easement in May. Notably, our average price for real estate sales reached a record high in Q4 at over $8,200 per acre. This was mostly attributable to some high-value development transactions in South Carolina.
In the North, adjusted EBITDA was comparable to Q3. Turning now to Real Estate, Energy, and Natural Resources on pages 11 and 12. In Q4, Real Estate and ENR contributed $84 million to earnings. Adjusted EBITDA was $95 million, a slight increase compared to the prior quarter, and approximately $19 million higher than our Q4 guidance. This outperformance was largely driven by the timing of transactions, including the completion of a conservation easement in May. Notably, our average price for real estate sales reached a record high in Q4 at over $8,200 per acre. This was mostly attributable to some high-value development transactions in South Carolina.
Speaker #3: Adjusted EBITDA showed a slight increase compared to the prior quarter, and was approximately $19 million higher than our fourth quarter guidance. This outperformance was largely driven by the timing of transactions, including the completion of a conservation easement in May.
Speaker #3: Notably, our average price for real estate sales reached a record high in the fourth quarter, at over $8,200 per acre. This was mostly attributable to some high-value development transactions in South Carolina.
Speaker #3: For the full year, Real Estate and E&R generated $411 million of adjusted EBITDA, moderately higher than our revised full year guidance and $61 million higher than our initial outlook.
Devin W. Stockfish: For the full year, Real Estate and ENR generated $411 million of adjusted EBITDA, moderately higher than our revised full-year guidance, and $61 million higher than our initial outlook. These results were largely driven by strong demand and pricing for HBU properties in our real estate business, resulting in high-value transactions with significant premiums to timber value. They also reflect a significant year-over-year increase in contributions from our Climate Solutions business. As shown on page 19, full-year adjusted EBITDA for Climate Solutions was $119 million, a 42% increase compared to 2024, primarily driven by strong contributions from our conservation, mitigation, banking, and renewables businesses. Importantly, we exceeded our multi-year target to reach $100 million of annual adjusted EBITDA by year-end, 2025.
For the full year, Real Estate and ENR generated $411 million of adjusted EBITDA, moderately higher than our revised full-year guidance, and $61 million higher than our initial outlook. These results were largely driven by strong demand and pricing for HBU properties in our real estate business, resulting in high-value transactions with significant premiums to timber value. They also reflect a significant year-over-year increase in contributions from our Climate Solutions business. As shown on page 19, full-year adjusted EBITDA for Climate Solutions was $119 million, a 42% increase compared to 2024, primarily driven by strong contributions from our conservation, mitigation, banking, and renewables businesses. Importantly, we exceeded our multi-year target to reach $100 million of annual adjusted EBITDA by year-end, 2025.
Speaker #3: These results were largely driven by strong demand and pricing for HBU properties in our real estate business, resulting in high-value transactions with significant premiums to timber value.
Speaker #3: They also reflect a significant year-over-year increase in contributions from our Climate Solutions business. As shown on page 19, full-year adjusted EBITDA for Climate Solutions was $119 million.
Speaker #3: A 42% increase compared to 2024, primarily driven by strong contributions from our conservation, mitigation banking, and renewables businesses. Importantly, we exceeded our multi-year target to reach $100 million of annual adjusted EBITDA by year-end 2025.
Speaker #3: And at our investor day this past December, we announced a new target to grow the business to $250 million of annual EBITDA by 2030.
Devin W. Stockfish: At our Investor Day this past December, we announced a new target: to grow the business to $250 million of annual EBITDA by 2030. I'll briefly discuss some recent highlights today and would refer you to our Investor Day materials for a comprehensive overview of each Climate Solutions business, including growth projections through the balance of the decade. In Q4, we received approval for our fifth forest carbon project and have four additional projects in the development pipeline. In 2025, we generated approximately 630,000 credits, a significant increase relative to the prior year, and we sold 120,000 credits in the voluntary market. We continue to see growing demand and solid pricing for credits, given our commitment to developing projects that meet high standards for quality and integrity.
At our Investor Day this past December, we announced a new target: to grow the business to $250 million of annual EBITDA by 2030. I'll briefly discuss some recent highlights today and would refer you to our Investor Day materials for a comprehensive overview of each Climate Solutions business, including growth projections through the balance of the decade. In Q4, we received approval for our fifth forest carbon project and have four additional projects in the development pipeline. In 2025, we generated approximately 630,000 credits, a significant increase relative to the prior year, and we sold 120,000 credits in the voluntary market. We continue to see growing demand and solid pricing for credits, given our commitment to developing projects that meet high standards for quality and integrity.
Speaker #3: I'll briefly discuss some recent highlights today and would refer you to our Investor Day materials for a comprehensive overview of each climate solutions business, including growth projections through the balance of the decade.
Speaker #3: In the fourth quarter, we received approval for our fifth forest carbon project and have four additional projects in the development pipeline. In 2025, we generated approximately 630,000 credits.
Speaker #3: A significant increase relative to the prior year. And we sold 120,000 credits in the voluntary market. We continue to see growing demand and solid price increases for credits, given our commitment to developing projects that meet high standards for quality and integrity.
Speaker #3: And finally, on climate solutions, we announced an exciting new business opportunity at our Investor Day in December. We're partnering with Aemium, a global leader in biocarbon technology, to produce and sell up to 1.5 million tons of biocarbon annually by 2030.
Devin W. Stockfish: And finally, on Climate Solutions, we announced an exciting new business opportunity at our Investor Day in December. We're partnering with Aymium, a global leader in biocarbon technology, to produce and sell up to 1.5 million tons of biocarbon annually by 2030. We're advancing the first facility adjacent to our lumber mill in McComb, Mississippi, and the companies are working to identify additional sites to construct new facilities across Weyerhaeuser's footprint over the next five years. At full scale, the platform of biocarbon facilities will have the potential to convert over 7 million tons of wood fiber on an annual basis, to be provided primarily by Weyerhaeuser. This is an excellent example of how we can leverage our scale and expertise to go on offense and create new pathways for growth across our integrated portfolio.
And finally, on Climate Solutions, we announced an exciting new business opportunity at our Investor Day in December. We're partnering with Aymium, a global leader in biocarbon technology, to produce and sell up to 1.5 million tons of biocarbon annually by 2030. We're advancing the first facility adjacent to our lumber mill in McComb, Mississippi, and the companies are working to identify additional sites to construct new facilities across Weyerhaeuser's footprint over the next five years. At full scale, the platform of biocarbon facilities will have the potential to convert over 7 million tons of wood fiber on an annual basis, to be provided primarily by Weyerhaeuser. This is an excellent example of how we can leverage our scale and expertise to go on offense and create new pathways for growth across our integrated portfolio.
Speaker #3: We're advancing the first facility adjacent to our lumber mill in Macomb, Mississippi. And the company is working to identify additional sites to construct new facilities across Weyerhaeuser's footprint over the next five years.
Speaker #3: At full scale, the platform of biocarbon facilities will have the potential to convert over 7 million tons of wood fiber on an annual basis, to be provided primarily by Weyerhaeuser.
Speaker #3: This is an excellent example of how we can leverage our scale and expertise to go on offense and create new pathways for growth across our integrated portfolio.
Speaker #3: Now moving on to Wood Products. On pages 13 through 15, earnings for Wood Products was a $78 million loss in the fourth quarter, and adjusted EBITDA was $20 million.
Devin W. Stockfish: Now moving on to Wood Products on pages 13 through 15. Earnings for Wood Products was a $78 million loss in Q4, and Adjusted EBITDA was a $20 million loss. These results reflect extremely challenging lumber and OSB markets in the quarter, with pricing hovering near historically low levels on an inflation-adjusted basis. Starting with lumber, the Framing Lumber Composite began Q4 on a slight upward trajectory, largely supported by improving Western SPF pricing and broader concerns around the Section 232 tariff, which took effect in October. As the quarter progressed, ample product supply and seasonally softer demand drove composite pricing lower through early December. By quarter end, the market improved slightly as buyers replenished lean inventories and lumber volumes from Canadian producers declined noticeably. Collectively, these dynamics supported increased pricing recently, albeit from a low starting point.
Now moving on to Wood Products on pages 13 through 15. Earnings for Wood Products was a $78 million loss in Q4, and Adjusted EBITDA was a $20 million loss. These results reflect extremely challenging lumber and OSB markets in the quarter, with pricing hovering near historically low levels on an inflation-adjusted basis. Starting with lumber, the Framing Lumber Composite began Q4 on a slight upward trajectory, largely supported by improving Western SPF pricing and broader concerns around the Section 232 tariff, which took effect in October. As the quarter progressed, ample product supply and seasonally softer demand drove composite pricing lower through early December. By quarter end, the market improved slightly as buyers replenished lean inventories and lumber volumes from Canadian producers declined noticeably. Collectively, these dynamics supported increased pricing recently, albeit from a low starting point.
Speaker #3: These results reflect extremely challenging lumber and OSB markets in the quarter, with pricing hovering near historically low levels on an inflation-adjusted basis. Starting with lumber, the framing lumber composite began the fourth quarter on a slight upward trajectory.
Speaker #3: Largely supported by improving Western SPF pricing and broader concerns around the Section 232 tariff, which took effect in October. As the quarter progressed, ample product supply and seasonally softer demand drove composite pricing lower through early December.
Speaker #3: By quarter end, the market improved slightly, as buyers replenished lean inventories and lumber volumes from Canadian producers declined noticeably. Collectively, these dynamics supported increased pricing recently, albeit from a low starting point.
Speaker #3: In particular, Southern Yellow Pine prices have steadily improved over the past two months. For our lumber business, fourth quarter adjusted EBITDA was a $57 million loss.
Devin W. Stockfish: In particular, Southern Yellow Pine prices have steadily improved over the past two months. For our lumber business, Q4 adjusted EBITDA was a $57 million loss. Production volumes decreased 14% compared to Q3, and this reflects our election to moderate production across our mill set in response to the softer demand environment, as well as the volume impact associated with our Princeton sawmill, which we sold late in Q3. As a result, our sales volumes were lower in Q4, and unit manufacturing costs were slightly higher. Our average sales realizations decreased 3% compared to Q3, which was favorable to the Framing Lumber Composite, and our log costs were moderately lower. Looking forward, we are encouraged by the recent increase in lumber pricing and expect demand to improve into the spring building season.
In particular, Southern Yellow Pine prices have steadily improved over the past two months. For our lumber business, Q4 adjusted EBITDA was a $57 million loss. Production volumes decreased 14% compared to Q3, and this reflects our election to moderate production across our mill set in response to the softer demand environment, as well as the volume impact associated with our Princeton sawmill, which we sold late in Q3. As a result, our sales volumes were lower in Q4, and unit manufacturing costs were slightly higher. Our average sales realizations decreased 3% compared to Q3, which was favorable to the Framing Lumber Composite, and our log costs were moderately lower. Looking forward, we are encouraged by the recent increase in lumber pricing and expect demand to improve into the spring building season.
Speaker #3: Production volumes decreased 14% compared to the third quarter. This reflects our decision to moderate production across our mill set in response to the softer demand environment, as well as the volume impact associated with our Princeton sawmill, which we sold late in the third quarter.
Speaker #3: As a result, our sales volumes were lower in the fourth quarter, and unit manufacturing costs were slightly higher. Our average sales realizations decreased 3% compared to the third quarter, which was favorable to the framing lumber composite.
Speaker #3: And our log costs were moderately lower. Looking forward, we are encouraged by the recent increase in lumber pricing and expect demand to improve into the spring building season.
Speaker #3: As a result, we anticipate stronger performance from our lumber business in the first quarter. Now, turning to OSB. Fourth quarter adjusted EBITDA was a $10 million loss, primarily driven by weaker product pricing in response to the seasonal reduction in residential construction activity.
Devin W. Stockfish: As a result, we anticipate stronger performance from our lumber business in Q1. Now, turning to OSB. Q4 Adjusted EBITDA was a $10 million loss, primarily driven by weaker product pricing in response to the seasonal reduction in residential construction activity. I'll note that composite pricing stabilized in December after decreasing for most of Q4, and we've seen pricing move slightly higher here over the last several weeks. For our OSB business, average sales realizations decreased by 6% compared to Q3, largely in line with the composite. Our production and sales volumes were slightly higher, and unit manufacturing costs were comparable. Fiber costs were slightly lower in Q4. Engineered wood products Adjusted EBITDA was $49 million, a $7 million decrease compared to Q3.
As a result, we anticipate stronger performance from our lumber business in Q1. Now, turning to OSB. Q4 Adjusted EBITDA was a $10 million loss, primarily driven by weaker product pricing in response to the seasonal reduction in residential construction activity. I'll note that composite pricing stabilized in December after decreasing for most of Q4, and we've seen pricing move slightly higher here over the last several weeks. For our OSB business, average sales realizations decreased by 6% compared to Q3, largely in line with the composite. Our production and sales volumes were slightly higher, and unit manufacturing costs were comparable. Fiber costs were slightly lower in Q4. Engineered wood products Adjusted EBITDA was $49 million, a $7 million decrease compared to Q3.
Speaker #3: I'll note that composite pricing stabilized in December, after decreasing for most of the fourth quarter. And we've seen pricing move slightly higher here over the last several weeks.
Speaker #3: For our OSB business, average sales realizations decreased by 6% compared to the third quarter, largely in line with the composite. Our production and sales volumes were slightly higher, and unit manufacturing costs were comparable.
Speaker #3: Fiber costs were slightly lower in the fourth quarter. Engineered Wood Products adjusted EBITDA was $49 million, a $7 million decrease compared to the third quarter.
Speaker #3: This was driven by a seasonal decline in sales volumes across products and slightly higher unit manufacturing costs. We continue to align our production with customer demand and single-family home building activity, both of which moderated into the winter months.
Devin W. Stockfish: This was driven by a seasonal decline in sales volumes across products and slightly higher unit manufacturing costs. We continue to align our production with customer demand and single-family home building activity, both of which moderated into the winter months. Notably, our average sales realizations were comparable to Q3. Raw material costs were also comparable. It's worth pointing out that both Q3 and Q4 results included a small benefit from insurance proceeds associated with the early 2025 fire at our MDF facility in Montana. In distribution, adjusted EBITDA decreased by $2 million compared to the prior quarter, largely driven by lower sales volumes for most products. With that, I'll turn the call over to David to discuss some financial items and our Q1 and full year 2026 outlook.
This was driven by a seasonal decline in sales volumes across products and slightly higher unit manufacturing costs. We continue to align our production with customer demand and single-family home building activity, both of which moderated into the winter months. Notably, our average sales realizations were comparable to Q3. Raw material costs were also comparable. It's worth pointing out that both Q3 and Q4 results included a small benefit from insurance proceeds associated with the early 2025 fire at our MDF facility in Montana. In distribution, adjusted EBITDA decreased by $2 million compared to the prior quarter, largely driven by lower sales volumes for most products. With that, I'll turn the call over to David to discuss some financial items and our Q1 and full year 2026 outlook.
Speaker #3: Notably, our average sales realizations were comparable to raw material costs in the third quarter. It's worth pointing out that both third and fourth quarter results included a small benefit from insurance proceeds associated with the early 2025 fire at our MDF facility in Montana.
Speaker #3: In Distribution, adjusted EBITDA decreased by $2 million compared to the prior quarter, largely driven by lower sales volumes for most products. With that, I'll turn the call over to David to discuss some financial items and our first quarter and full year 2026.
Speaker #3: outlook. Thank you,
David M. Wold: Thank you, Devin, and good morning, everyone. I'll begin with key financial items, which are summarized on page 17. For the full year, we generated $562 million of cash from operations. Excluding a $200 million contribution related to pension liability management, cash from operations would be $762 million for the year. We ended the year with just under $500 million of cash and total debt of $5.6 billion. As Devin mentioned, we returned $766 million of cash to shareholders during the year. This includes quarterly-based dividends, which we increased by 5% in 2025, and $160 million of share repurchase activity. It's worth noting that we completed our prior $1 billion share repurchase program and announced a new $1 billion authorization in 2025.
David M. Wold: Thank you, Devin, and good morning, everyone. I'll begin with key financial items, which are summarized on page 17. For the full year, we generated $562 million of cash from operations. Excluding a $200 million contribution related to pension liability management, cash from operations would be $762 million for the year. We ended the year with just under $500 million of cash and total debt of $5.6 billion. As Devin mentioned, we returned $766 million of cash to shareholders during the year. This includes quarterly-based dividends, which we increased by 5% in 2025, and $160 million of share repurchase activity. It's worth noting that we completed our prior $1 billion share repurchase program and announced a new $1 billion authorization in 2025.
Speaker #2: Devin: Good morning, everyone. I'll begin with key financial items, which are summarized on page 17. For the full year, we generated $562 million of cash from operations.
Speaker #2: Excluding a $200 million contribution related to pension liability management, cash from operations would be $762 million for the year. We ended the year with just under $500 million of cash and total debt of $5.6 billion.
Speaker #2: As Devin mentioned, we returned $766 million of cash to shareholders during the year. This includes quarterly-based dividends, which we increased by 5% in 2025, and $160 million of share repurchase activity.
Speaker #2: It's worth noting that we completed our prior $1 billion share repurchase program and announced a new $1 billion authorization in 2025. This provides capacity for future opportunistic share repurchase activity and represents a meaningful lever for driving long-term value for our shareholders.
David M. Wold: This provides capacity for future opportunistic share repurchase activity and represents a meaningful lever for driving long-term value for our shareholders. Notwithstanding the challenging market backdrop in 2025, we continued to operate from a position of strength. In addition to returning a meaningful amount of cash back to shareholders, we made significant enhancements to our timberlands portfolio, grew our climate solutions business, deployed capital towards strategic growth opportunities, and launched an ambitious multi-year growth strategy. As we've demonstrated over the last several years, we have a strong and proven track record of disciplined capital allocation and a cash return framework that's aligned with the cyclicality of our businesses. Looking forward, our balance sheet, liquidity position, and financial flexibility remain solid, and we are well positioned to navigate a range of market conditions and execute our accelerated growth plan.
This provides capacity for future opportunistic share repurchase activity and represents a meaningful lever for driving long-term value for our shareholders. Notwithstanding the challenging market backdrop in 2025, we continued to operate from a position of strength. In addition to returning a meaningful amount of cash back to shareholders, we made significant enhancements to our timberlands portfolio, grew our climate solutions business, deployed capital towards strategic growth opportunities, and launched an ambitious multi-year growth strategy. As we've demonstrated over the last several years, we have a strong and proven track record of disciplined capital allocation and a cash return framework that's aligned with the cyclicality of our businesses. Looking forward, our balance sheet, liquidity position, and financial flexibility remain solid, and we are well positioned to navigate a range of market conditions and execute our accelerated growth plan.
Speaker #2: Notwithstanding the challenging market backdrop in 2025, we continued to operate from a position of strength. In addition to returning a meaningful amount of cash back to shareholders, we made significant enhancements to our Timberlands portfolio, grew our climate solutions business, deployed capital towards strategic growth opportunities, and launched an ambitious multi-year growth strategy.
Speaker #2: As we've demonstrated over the last several years, we have a strong and proven track record of disciplined capital allocation. And a cash return framework that's aligned with the cyclicality of our businesses.
Speaker #2: Looking forward, our balance sheet, liquidity position, and financial flexibility remain solid, and we are well-positioned to navigate a range of market conditions and execute our accelerated growth plan.
Speaker #2: In the fourth quarter, we took advantage of a favorable opportunity to complete the purchase of a group annuity contract that transferred approximately $455 million of our U.S.
David M. Wold: In Q4, we took advantage of a favorable opportunity to complete the purchase of a group annuity contract that transferred approximately $455 million of our US pension liabilities to an insurance carrier. This was funded with $440 million from our US pension plan assets and resulted in a non-cash $111 million after-tax settlement charge, which was included as a special item in our results. As previously mentioned, we also made a $200 million voluntary cash contribution to the plan in conjunction with this transaction. These liability management activities represent the latest in a series of actions we've taken to reduce our pension obligations, minimize the costs associated with servicing the liabilities, and lower volatility.
In Q4, we took advantage of a favorable opportunity to complete the purchase of a group annuity contract that transferred approximately $455 million of our US pension liabilities to an insurance carrier. This was funded with $440 million from our US pension plan assets and resulted in a non-cash $111 million after-tax settlement charge, which was included as a special item in our results. As previously mentioned, we also made a $200 million voluntary cash contribution to the plan in conjunction with this transaction. These liability management activities represent the latest in a series of actions we've taken to reduce our pension obligations, minimize the costs associated with servicing the liabilities, and lower volatility.
Speaker #2: Pension liabilities to an insurance carrier. This was funded with $440 million from our U.S. pension plan assets and resulted in a non-cash $111 million after-tax settlement charge, which was included as a special item in our results.
Speaker #2: As previously mentioned, we also made a $200 million voluntary cash contribution to the plan in conjunction with this transaction. These liability management activities represent the latest in a series of actions we've taken to reduce our pension obligations, minimize the costs associated with servicing the liabilities, and lower volatility.
Speaker #2: Since we began these efforts in 2018, our gross pension plan obligations have decreased approximately $5 billion to $1.9 billion as of year-end 2025, and we've improved our funded status by more than $1 billion as well.
David M. Wold: Since we began these efforts in 2018, our gross pension plan obligations have decreased approximately $5 billion to $1.9 billion as of year-end 2025, and we've improved our funded status by more than $1 billion as well. Key outlook items for Q1 and full year 2026 are presented on pages 21 and 22. In our Timberlands business, we expect Q1 earnings before special items and Adjusted EBITDA to be comparable to Q4 of 2025. Starting with our Western Timberlands operations. As Devin mentioned, domestic log markets are trending towards a more balanced state, largely driven by a seasonal reduction in log supply, which is typical in the winter months. As a result, we expect increased demand for our logs and slightly higher domestic sales volumes compared to the prior quarter.
Since we began these efforts in 2018, our gross pension plan obligations have decreased approximately $5 billion to $1.9 billion as of year-end 2025, and we've improved our funded status by more than $1 billion as well. Key outlook items for Q1 and full year 2026 are presented on pages 21 and 22. In our Timberlands business, we expect Q1 earnings before special items and Adjusted EBITDA to be comparable to Q4 of 2025. Starting with our Western Timberlands operations. As Devin mentioned, domestic log markets are trending towards a more balanced state, largely driven by a seasonal reduction in log supply, which is typical in the winter months. As a result, we expect increased demand for our logs and slightly higher domestic sales volumes compared to the prior quarter.
Speaker #2: Key outlook items for the first quarter and full year 2026 are presented on pages 21 and 22. In our Timberlands business, we expect first quarter earnings before special items and adjusted EBITDA to be comparable to the fourth quarter of 2025.
Speaker #2: Starting with our Western Timberlands operations, as Devin mentioned, domestic log markets are trending toward a more balanced state, largely driven by a seasonal reduction in log supply, which is typical in the winter months.
Speaker #2: As a result, we expect increased demand for our logs and slightly higher domestic sales volumes compared to the prior quarter. Our average domestic sales realizations are expected to be comparable to the fourth quarter, but could see upside if lumber takeaway and pricing improve into the spring building season.
David M. Wold: Our average domestic sales realizations are expected to be comparable to Q4, but could see upside if lumber takeaway and pricing improve into the spring building season. Absent weather-related disruptions, fee harvest volumes, forestry, and road costs are expected to be comparable, and per-unit log and haul costs are expected to decrease, given the seasonal transition to lower elevation harvest operations. Moving to the export markets. In Japan, we anticipate steady demand from our customers and stable pricing for our logs in Q1. That said, we expect higher sales volumes compared to the prior quarter due to the timing of vessels. Our average sales realizations are expected to decrease slightly, largely attributable to freight-related impacts. Turning to China. As Devin mentioned, we are in the early stages of reestablishing our log export program and expect to deliver one vessel to China in Q1.
Our average domestic sales realizations are expected to be comparable to Q4, but could see upside if lumber takeaway and pricing improve into the spring building season. Absent weather-related disruptions, fee harvest volumes, forestry, and road costs are expected to be comparable, and per-unit log and haul costs are expected to decrease, given the seasonal transition to lower elevation harvest operations. Moving to the export markets. In Japan, we anticipate steady demand from our customers and stable pricing for our logs in Q1. That said, we expect higher sales volumes compared to the prior quarter due to the timing of vessels. Our average sales realizations are expected to decrease slightly, largely attributable to freight-related impacts. Turning to China. As Devin mentioned, we are in the early stages of reestablishing our log export program and expect to deliver one vessel to China in Q1.
Speaker #2: Absent weather-related disruptions, bee harvest volumes and forestry and road costs are expected to be comparable. Per-unit log and haul costs are expected to decrease, given the seasonal transition to lower elevation harvest operations.
Speaker #2: Moving to the export markets, in Japan, we anticipate steady demand from our customers and stable pricing for our logs in the first quarter. That said, we expect higher sales volumes compared to the prior quarter due to the timing of vessels.
Speaker #2: Our average sales realizations are expected to decrease slightly, largely attributable to freight-related impacts. Turning to China, as Devin mentioned, we are in the early stages of reestablishing our log export program and expect to deliver one vessel to China in the first quarter.
Speaker #2: As a result, our sales volumes will be comparable to the prior quarter, and we expect slightly higher average sales realizations. Moving to the South, southern log markets are expected to be fairly stable in the first quarter.
David M. Wold: As a result, our sales volumes will be comparable to the prior quarter, and we expect slightly higher average sales realizations. Moving to the South. Southern log markets are expected to be fairly stable in Q1. Mills continue to carry elevated log inventories and navigate lower pricing and takeaway of finished goods. That said, demand signals could improve as the quarter progresses, particularly if weather conditions limit log supply or if we see a strengthening lumber market into the spring building season. On balance, we expect our average sales realizations to decrease slightly compared to Q4, largely driven by a higher mix of fiber logs and lower export volumes to India. Our fee harvest volumes are expected to be slightly lower due to wet weather conditions that are typical in Q1.
As a result, our sales volumes will be comparable to the prior quarter, and we expect slightly higher average sales realizations. Moving to the South. Southern log markets are expected to be fairly stable in Q1. Mills continue to carry elevated log inventories and navigate lower pricing and takeaway of finished goods. That said, demand signals could improve as the quarter progresses, particularly if weather conditions limit log supply or if we see a strengthening lumber market into the spring building season. On balance, we expect our average sales realizations to decrease slightly compared to Q4, largely driven by a higher mix of fiber logs and lower export volumes to India. Our fee harvest volumes are expected to be slightly lower due to wet weather conditions that are typical in Q1.
Speaker #2: Mills continue to carry elevated log inventories and navigate lower pricing and takeaway of finished goods. That said, demand signals could improve as the quarter progresses, particularly if weather conditions limit log supply or if we see a strengthening lumber market into the spring building season.
Speaker #2: On balance, we expect our average sales realizations to decrease slightly compared to the fourth quarter, largely driven by a higher mix of fiber logs and lower export volumes to India.
Speaker #2: Our fee harvest volumes are expected to be slightly lower due to wet weather conditions that are typical in the first quarter. Forestry and road costs are expected to increase moderately compared to the prior quarter, and we anticipate slightly lower per-unit log and haul costs.
David M. Wold: Forestry and road costs are expected to increase moderately compared to the prior quarter, and we anticipate slightly lower per-unit log and haul costs. In the North, our fee harvest volumes are expected to be slightly lower compared to the fourth quarter, and we anticipate comparable sales realizations. Turning to our full-year harvest plan. For 2026, we expect total company-wide fee harvest volumes of approximately 35.5 million tons. From a regional perspective, we anticipate the South will be slightly higher than last year, the West will be comparable, and the North will be slightly lower. Moving to Strategic Land Solutions. As we announced at our Investor Day in December, this is the new name for our Real Estate, Energy, and Natural Resources segment. Beginning with Q1 results, we will expand our disclosure for the segment to three business lines: Real Estate, Natural Resources, and Climate Solutions.
Forestry and road costs are expected to increase moderately compared to the prior quarter, and we anticipate slightly lower per-unit log and haul costs. In the North, our fee harvest volumes are expected to be slightly lower compared to the fourth quarter, and we anticipate comparable sales realizations. Turning to our full-year harvest plan. For 2026, we expect total company-wide fee harvest volumes of approximately 35.5 million tons. From a regional perspective, we anticipate the South will be slightly higher than last year, the West will be comparable, and the North will be slightly lower. Moving to Strategic Land Solutions. As we announced at our Investor Day in December, this is the new name for our Real Estate, Energy, and Natural Resources segment. Beginning with Q1 results, we will expand our disclosure for the segment to three business lines: Real Estate, Natural Resources, and Climate Solutions.
Speaker #2: In the North, our fee harvest volumes are expected to be slightly lower compared to the fourth quarter, and we anticipate comparable sales realizations. Turning to our full-year harvest plan, for 2026, we expect total company-wide fee harvest volumes of approximately 35.5 million tons.
Speaker #2: From a regional perspective, we anticipate the South will be slightly higher than last year, the West will be comparable, and the North will be slightly lower.
Speaker #2: Moving to Strategic Land Solutions, as we announced at our investor day in December, this is the new name for our Real Estate, Energy and Natural Resources segment.
Speaker #2: Beginning with first quarter results, we will expand our disclosure for the segment to three business lines: real estate, natural resources, and climate solutions. The new name reflects our broadening scope and growth focus across these businesses, and the new reporting structure enhances the cadence of disclosure for our climate solutions activities.
David M. Wold: The new name reflects our broadening scope and growth focus across these businesses, and the new reporting structure enhances the cadence of disclosure for our climate solutions activities. For the segment, we expect full-year 2026 adjusted EBITDA of approximately $425 million. Basis as a percentage of real estate sales is expected to be between 25% and 35% for the year. Entering 2026, we anticipate steady demand in pricing for our real estate properties, resulting in a consistent flow of transactions with significant premiums to timber value. Additionally, we expect to deliver steady growth from our climate solutions business in 2026. Q1 earnings for the segment are expected to be approximately $75 million higher than the Q4 of 2025, while adjusted EBITDA is expected to be approximately $90 million higher.
The new name reflects our broadening scope and growth focus across these businesses, and the new reporting structure enhances the cadence of disclosure for our climate solutions activities. For the segment, we expect full-year 2026 adjusted EBITDA of approximately $425 million. Basis as a percentage of real estate sales is expected to be between 25% and 35% for the year. Entering 2026, we anticipate steady demand in pricing for our real estate properties, resulting in a consistent flow of transactions with significant premiums to timber value. Additionally, we expect to deliver steady growth from our climate solutions business in 2026. Q1 earnings for the segment are expected to be approximately $75 million higher than the Q4 of 2025, while adjusted EBITDA is expected to be approximately $90 million higher.
Speaker #2: For the segment, we expect full year 2026 adjusted EBITDA of approximately $425 million. Expected margins are projected to be between 25 and 35 percent for the year.
Speaker #2: Entering 2026, we anticipate steady demand and pricing for our real estate properties, resulting in a consistent flow of transactions with significant premiums to timber value.
Speaker #2: Additionally, we expect to deliver steady growth from our climate solutions business in 2026. First quarter earnings for the segment are expected to be approximately $75 million higher than the fourth quarter of 2025, while adjusted EBITDA is expected to be approximately $90 million.
Speaker #2: This reflects a very strong first quarter for our Strategic Land Solutions segment, largely driven by the timing and mix of real estate sales, and the completion of a sizable conservation easement transaction in Florida.
David M. Wold: This reflects a very strong Q1 for our Strategic Land Solutions segment, largely driven by the timing and mix of real estate sales, and the completion of a sizable conservation easement transaction in Florida. This transaction closed in January and involved approximately 61,000 acres of Weyerhaeuser Timberlands. We received nearly $94 million of proceeds to convey our acreage into a permanent conservation easement, the largest of its kind in the state of Florida. The easement adds acreage to a larger wildlife corridor, protecting the land from future development. Importantly, the easement allows Weyerhaeuser to retain ownership of the land for continued sustainable forest management. This is an excellent example of how we can leverage our size, scale, and sophistication to drive material value uplift opportunities across our timber holdings, while also demonstrating our commitment to sustainable land stewardship and long-term conservation outcomes.
This reflects a very strong Q1 for our Strategic Land Solutions segment, largely driven by the timing and mix of real estate sales, and the completion of a sizable conservation easement transaction in Florida. This transaction closed in January and involved approximately 61,000 acres of Weyerhaeuser Timberlands. We received nearly $94 million of proceeds to convey our acreage into a permanent conservation easement, the largest of its kind in the state of Florida. The easement adds acreage to a larger wildlife corridor, protecting the land from future development. Importantly, the easement allows Weyerhaeuser to retain ownership of the land for continued sustainable forest management. This is an excellent example of how we can leverage our size, scale, and sophistication to drive material value uplift opportunities across our timber holdings, while also demonstrating our commitment to sustainable land stewardship and long-term conservation outcomes.
Speaker #2: This transaction closed in January and involved approximately 61,000 acres of warehouse or timberlands. We received nearly $94 million of proceeds to convey our acreage into a permanent conservation easement, the largest of its kind in the state of Florida.
Speaker #2: The easement adds acreage to a larger wildlife corridor, protecting the land from future development. Importantly, the easement allows Weyerhaeuser to retain ownership of the land for continued sustainable forest management.
Speaker #2: This is an excellent example of how we can leverage our size, scale, and sophistication to drive material value uplift opportunities across our timber holdings, while also demonstrating our commitment to sustainable land stewardship and long-term conservation outcomes.
Speaker #2: Turning to our Wood Products segment, excluding the effect of changes in average sales realizations for lumber and OSB, we expect first quarter earnings and adjusted EBITDA to be slightly higher compared to the fourth quarter of 2025.
David M. Wold: Turning to our Wood Products segment. Excluding the effect of changes in average sales realizations for lumber and OSB, we expect Q1 earnings and Adjusted EBITDA to be slightly higher compared to Q4 of 2025. Benchmark prices for lumber have increased steadily over the last couple of months, and we've seen OSB composite pricing move slightly higher in January. As the quarter progresses, we expect demand for both products to improve seasonally into the spring building season. It's worth noting that a $10 change in commodity prices translates to approximately $50 million of annual EBITDA for lumber and approximately $30 million for OSB. For our lumber business, we expect higher production and sales volumes in Q1 and lower unit manufacturing costs as we return to a more normal operating posture. Log costs are expected to be slightly lower.
Turning to our Wood Products segment. Excluding the effect of changes in average sales realizations for lumber and OSB, we expect Q1 earnings and Adjusted EBITDA to be slightly higher compared to Q4 of 2025. Benchmark prices for lumber have increased steadily over the last couple of months, and we've seen OSB composite pricing move slightly higher in January. As the quarter progresses, we expect demand for both products to improve seasonally into the spring building season. It's worth noting that a $10 change in commodity prices translates to approximately $50 million of annual EBITDA for lumber and approximately $30 million for OSB. For our lumber business, we expect higher production and sales volumes in Q1 and lower unit manufacturing costs as we return to a more normal operating posture. Log costs are expected to be slightly lower.
Speaker #2: Benchmark prices for lumber have increased steadily over the last couple of months, and we've seen OSB composite pricing move slightly higher in January. As the quarter progresses, we expect demand for both products to improve seasonally into the spring building season.
Speaker #2: It's worth noting that a $10 change in commodity prices translates to approximately $50 million of annual EBITDA for lumber and approximately $30 million for OSB.
Speaker #2: For our lumber business, we expect higher production and sales volumes in the first quarter, and lower unit manufacturing costs. As we return to a more normal operating posture, log costs are expected to be slightly lower.
Speaker #2: For our oriented strand board business, we anticipate slightly higher sales volumes and slightly lower unit manufacturing costs compared to the fourth quarter. Fiber costs are expected to increase slightly.
David M. Wold: For our Oriented Strand Board business, we anticipate slightly higher sales volumes and slightly lower unit manufacturing costs compared to Q4. Fiber costs are expected to increase slightly. In our Engineered Wood Products business, we continue to anticipate close alignment between product demand and single-family home building activity. As a result, we expect relatively stable sales volumes for most of our products in Q1, with some slight seasonal improvement as the quarter progresses. Our average sales realizations are expected to be slightly lower, and raw material costs are expected to be comparable. For our distribution business, we expect Adjusted EBIT to increase compared to Q4, largely due to improved sales volumes. I'll wrap up with some additional full-year outlook items highlighted on page 22. In 2026, we expect our interest expense to be approximately $255 million.
For our Oriented Strand Board business, we anticipate slightly higher sales volumes and slightly lower unit manufacturing costs compared to Q4. Fiber costs are expected to increase slightly. In our Engineered Wood Products business, we continue to anticipate close alignment between product demand and single-family home building activity. As a result, we expect relatively stable sales volumes for most of our products in Q1, with some slight seasonal improvement as the quarter progresses. Our average sales realizations are expected to be slightly lower, and raw material costs are expected to be comparable. For our distribution business, we expect Adjusted EBIT to increase compared to Q4, largely due to improved sales volumes. I'll wrap up with some additional full-year outlook items highlighted on page 22. In 2026, we expect our interest expense to be approximately $255 million.
Speaker #2: In our engineered wood products business, we continue to anticipate close alignment between product demand and single-family home building activity. As a result, we expect relatively stable sales volumes for most of our products in the first quarter, with some slight seasonal improvement as the quarter progresses.
Speaker #2: Our average sales realizations are expected to be slightly lower, and raw material costs are expected to be comparable. For our distribution business, we expect adjusted EBITDA to increase compared to the fourth quarter, largely due to improved sales volumes.
Speaker #2: I'll wrap up with some additional full-year outlook items, highlighted on page 22. In 2026, we expect our interest expense to be approximately $255 million.
Speaker #2: For taxes, we expect our full-year effective tax rate to be between 8% and 12% before special items, based on the forecasted mix of earnings between our REIT and taxable REIT subsidiary.
David M. Wold: For taxes, we expect our full-year effective tax rate to be between 8% and 12% before special items, based on the forecasted mix of earnings between our REIT and taxable REIT subsidiary. Our non-cash, non-operating pension and post-employment expense is expected to be approximately $60 million. We do not anticipate any required cash contributions to our US qualified plan in 2026, but expect approximately $20 million of required cash payments for all other plans. Turning to capital expenditures. We expect our typical programmatic CapEx to be between $400 and $450 million in 2026, in line with our new multi-year target. This excludes the investment required for the construction of our new EWP facility in Arkansas, which we expect to be approximately $300 million in 2026.
For taxes, we expect our full-year effective tax rate to be between 8% and 12% before special items, based on the forecasted mix of earnings between our REIT and taxable REIT subsidiary. Our non-cash, non-operating pension and post-employment expense is expected to be approximately $60 million. We do not anticipate any required cash contributions to our US qualified plan in 2026, but expect approximately $20 million of required cash payments for all other plans. Turning to capital expenditures. We expect our typical programmatic CapEx to be between $400 and $450 million in 2026, in line with our new multi-year target. This excludes the investment required for the construction of our new EWP facility in Arkansas, which we expect to be approximately $300 million in 2026.
Speaker #2: Our non-cash, non-operating pension and post-employment expense is expected to be approximately $60 million. We do not anticipate any required cash contributions to our U.S.
Speaker #2: Qualified plan in 2026, but expect approximately $20 million of required cash payments for all other plans. Turning to capital expenditures, we expect our typical programmatic capex to be between $400 and $450 million in 2026, in line with our new multi-year target.
Speaker #2: This excludes the investment required for the construction of our new EWP facility in Arkansas, which we expect to be approximately $300 million in 2026.
Speaker #2: As we previously communicated, capital expenditures associated with this project will be excluded for purposes of calculating the company's annual adjusted FAD, as used in our flexible cash return framework.
David M. Wold: As we previously communicated, capital expenditures associated with this project will be excluded for purposes of calculating the company's annual Adjusted FAD, as used in our flexible cash return framework. With that, I'll now turn the call back to Devin and look forward to your questions.
As we previously communicated, capital expenditures associated with this project will be excluded for purposes of calculating the company's annual Adjusted FAD, as used in our flexible cash return framework. With that, I'll now turn the call back to Devin and look forward to your questions.
Speaker #2: With that, I'll now turn the call back to Devin and look forward to your questions. Thanks, David. I'll make a few brief comments on the housing and repair and remodel markets.
Devin W. Stockfish: Thanks, Davey. I'll make a few brief comments on the housing and repair and remodel markets. Starting with housing. Overall, housing activity was lackluster in 2025, but we don't yet have the most recent housing data. We do expect total starts to come in somewhere around 1.3 million units, and single-family starts a fair bit below 1 million units. The combination of weak consumer confidence and ongoing affordability challenges continue to be headwinds for housing activity. While mortgage rates have declined in the below 6% range here recently, many potential home buyers remain on the sidelines, given elevated uncertainty about unemployment and the economy. Based on conversations with our home builder customers, we've heard some modest optimism for 2026 in response to the administration's recent actions and commentary to support the housing market, most notably, their decision to purchase $200 billion of mortgage-backed securities.
Devin W. Stockfish: Thanks, Davey. I'll make a few brief comments on the housing and repair and remodel markets. Starting with housing. Overall, housing activity was lackluster in 2025, but we don't yet have the most recent housing data. We do expect total starts to come in somewhere around 1.3 million units, and single-family starts a fair bit below 1 million units. The combination of weak consumer confidence and ongoing affordability challenges continue to be headwinds for housing activity. While mortgage rates have declined in the below 6% range here recently, many potential home buyers remain on the sidelines, given elevated uncertainty about unemployment and the economy. Based on conversations with our home builder customers, we've heard some modest optimism for 2026 in response to the administration's recent actions and commentary to support the housing market, most notably, their decision to purchase $200 billion of mortgage-backed securities.
Speaker #2: Starting with housing, overall housing activity was lackluster in 2025, but we don't yet have the most recent housing data. We do expect total starts to come in somewhere around 1.3 million units.
Speaker #2: And single-family starts are a fair bit below 1 million units. The combination of weak consumer confidence and ongoing affordability challenges continue to be headwinds for housing activity.
Speaker #2: While mortgage rates have declined into the low 6 percent range here recently, many potential homebuyers remain on the sidelines. Given elevated uncertainty about unemployment and the economy, based on conversations with our homebuilder customers, we've heard some modest optimism for 2026 in response to the administration's recent actions and commentary to support the housing market.
Speaker #2: Most notably, their decision to purchase $200 billion of mortgage-backed securities. Well, it's too early to gauge the full impact of federal housing-related policies. They should be directionally positive.
Devin W. Stockfish: While it's too early to gauge the full impact of federal housing-related policies, they should be directionally positive, especially if we see mortgage rates trend lower. Aside from federal policies, we're also seeing state and local governments expressing an increased level of interest in supporting the housing market. All of this should create some tailwinds for housing activity, but it will likely take some time to play out. In the near term, I suspect we'll continue to see choppiness in the housing market as consumers navigate ongoing affordability challenges and uncertainty around the economy. That said, our longer-term outlook on housing fundamentals remains favorable, supported by strong demographic trends and a vastly underbuilt housing stock. Turning to the repair and remodel market.
While it's too early to gauge the full impact of federal housing-related policies, they should be directionally positive, especially if we see mortgage rates trend lower. Aside from federal policies, we're also seeing state and local governments expressing an increased level of interest in supporting the housing market. All of this should create some tailwinds for housing activity, but it will likely take some time to play out. In the near term, I suspect we'll continue to see choppiness in the housing market as consumers navigate ongoing affordability challenges and uncertainty around the economy. That said, our longer-term outlook on housing fundamentals remains favorable, supported by strong demographic trends and a vastly underbuilt housing stock. Turning to the repair and remodel market.
Speaker #2: Especially if we see mortgage rates trend lower. And aside from federal policies, we're also seeing state and local governments expressing an increased level of interest in supporting the housing market.
Speaker #2: All of this should create some tailwinds for housing activity. But it will likely take some time to play out. In the near term, I suspect we'll continue to see choppiness in the housing market as consumers navigate ongoing affordability challenges and uncertainty around the economy.
Speaker #2: That said, our longer-term outlook on housing fundamentals remains favorable, supported by strong demographic trends and a vastly underbuilt housing stock. Turning to the repair and remodel market, activity decreased somewhat in 2025, largely driven by many of the same factors impacting the residential construction market.
Devin W. Stockfish: Activity decreased somewhat in 2025, largely driven by many of the same factors impacting the residential construction market, namely lower consumer confidence, higher interest rates, and concerns around the trajectory of the economy. And to some degree, the repair and remodel market continues to be impacted by the lower turnover of existing homes as a result of the lock-in effect. Looking out into 2026, we could see an uptick in R&R activity, especially if interest rates move lower and we get some improvement in existing home sales. In addition, the deferral of large discretionary projects over the last few years should ultimately serve as a tailwind, particularly as the macro environment improves. But similar to housing, a material pickup in repair and remodel activity likely will require an improvement in overall consumer confidence.
Activity decreased somewhat in 2025, largely driven by many of the same factors impacting the residential construction market, namely lower consumer confidence, higher interest rates, and concerns around the trajectory of the economy. And to some degree, the repair and remodel market continues to be impacted by the lower turnover of existing homes as a result of the lock-in effect. Looking out into 2026, we could see an uptick in R&R activity, especially if interest rates move lower and we get some improvement in existing home sales. In addition, the deferral of large discretionary projects over the last few years should ultimately serve as a tailwind, particularly as the macro environment improves. But similar to housing, a material pickup in repair and remodel activity likely will require an improvement in overall consumer confidence.
Speaker #2: Namely, lower consumer confidence, higher interest rates, and concerns around the trajectory of the economy. And to some degree, the repair and remodel market continues to be impacted by the lower turnover of existing homes as a result of the lock-in effect.
Speaker #2: Looking out into 2026, we could see an uptick in R&R activity, especially if interest rates move lower and we get some improvement in existing home sales.
Speaker #2: In addition, the deferral of large discretionary projects over the last few years should ultimately serve as a tailwind, particularly as the macro environment improves.
Speaker #2: But, similar to housing, a material pickup in repair and remodel activity likely will require an improvement in overall consumer confidence. Putting the near-term uncertainty aside, our long-term outlook continues to be positive.
Devin W. Stockfish: Putting the near-term uncertainty aside, our long-term outlook continues to be positive, as many of the key drivers supporting healthy repair and remodel demand remain intact, including favorable home equity levels and an aging housing stock. Finally, I'll make a few comments regarding the multi-year targets we set in 2021 and touch briefly on the accelerated growth strategy we outlined at our recent Investor Day in December. As highlighted on page 19, we successfully delivered on the ambitious multi-year targets we announced at our previous Investor Day back in 2021. Starting with our portfolio, with the transactions we completed and advanced in 2025, we achieved our multi-year billion-dollar timberlands growth target.
Putting the near-term uncertainty aside, our long-term outlook continues to be positive, as many of the key drivers supporting healthy repair and remodel demand remain intact, including favorable home equity levels and an aging housing stock. Finally, I'll make a few comments regarding the multi-year targets we set in 2021 and touch briefly on the accelerated growth strategy we outlined at our recent Investor Day in December. As highlighted on page 19, we successfully delivered on the ambitious multi-year targets we announced at our previous Investor Day back in 2021. Starting with our portfolio, with the transactions we completed and advanced in 2025, we achieved our multi-year billion-dollar timberlands growth target.
Speaker #2: As many of the key drivers supporting healthy repair and remodel demand remain intact, including favorable home equity levels and an aging housing stock. Finally, I'll make a few comments regarding the multi-year targets we set in 2021 and touch briefly on the accelerated growth strategy we outlined at our recent investor day in December.
Speaker #2: As highlighted on page 19, we successfully delivered on the ambitious multi-year targets we announced at our previous Investor Day back in 2021. Starting with our portfolio, with the transactions we completed and advanced in 2025, we achieved our multi-year billion-dollar Timberlands growth target.
Speaker #2: In the process, we offset a substantial portion of our acquisitions with the divestitures of non-core acreage, effectively recycling capital to enhance the quality and value of our portfolio.
Devin W. Stockfish: In the process, we offset a substantial portion of our acquisitions with divestitures of non-core acreage, effectively recycling capital to enhance the quality and value of our portfolio. In Climate Solutions, we exceeded our 2025 growth target by $19 million. We've built a world-class team, we've expanded our offerings, and have a strong pipeline of future opportunities to drive incremental growth. In lumber, we made disciplined investments to reduce costs across the mill set, and these investments will ultimately enable production growth as market conditions improve. In terms of our operations, we maintained strong relative performance across our businesses and met our multi-year OpEx targets, a notable achievement, given the inflationary and market-related headwinds we faced during this period.
In the process, we offset a substantial portion of our acquisitions with divestitures of non-core acreage, effectively recycling capital to enhance the quality and value of our portfolio. In Climate Solutions, we exceeded our 2025 growth target by $19 million. We've built a world-class team, we've expanded our offerings, and have a strong pipeline of future opportunities to drive incremental growth. In lumber, we made disciplined investments to reduce costs across the mill set, and these investments will ultimately enable production growth as market conditions improve. In terms of our operations, we maintained strong relative performance across our businesses and met our multi-year OpEx targets, a notable achievement, given the inflationary and market-related headwinds we faced during this period.
Speaker #2: In climate solutions, we exceeded our 2025 growth target by $19 million. We built a world-class team, expanded our offerings, and have a strong pipeline of future opportunities to drive incremental growth.
Speaker #2: In lumber, we made disciplined investments to reduce costs across the mill set, and these investments will ultimately enable production growth as market conditions improve.
Speaker #2: In terms of our operations, we maintain strong relative performance across our businesses and met our multi-year OPEX targets—a notable achievement given the inflationary and market-related headwinds we faced during this period.
Speaker #2: And finally, we continue to demonstrate our commitment to returning meaningful amounts of cash back to shareholders. Through four consecutive annual increases to our quarterly-based dividend and over $6 billion of cash returned from 2021 through 2025, including nearly $1.1 billion of share repurchases.
Devin W. Stockfish: Finally, we continue to demonstrate our commitment to returning meaningful amounts of cash back to shareholders through 4 consecutive annual increases to our quarterly base dividend and over $6 billion of cash return from 2021 through 2025, including nearly $1.1 billion of share repurchase. I'm incredibly proud of these accomplishments, all of which enhance our strong foundation and position us for our next chapter, which is accelerated growth. Page 20 summarizes the key takeaways from our Investor Day in December, which is a target to deliver $1.5 billion of incremental Adjusted EBITDA by 2030, measured against the 2024 base. Over the next 5 years, we intend to catalyze growth initiatives across the entirety of our integrated platform to significantly grow the value and cash generation capabilities of our company and further strengthen our competitive position.
Finally, we continue to demonstrate our commitment to returning meaningful amounts of cash back to shareholders through 4 consecutive annual increases to our quarterly base dividend and over $6 billion of cash return from 2021 through 2025, including nearly $1.1 billion of share repurchase. I'm incredibly proud of these accomplishments, all of which enhance our strong foundation and position us for our next chapter, which is accelerated growth. Page 20 summarizes the key takeaways from our Investor Day in December, which is a target to deliver $1.5 billion of incremental Adjusted EBITDA by 2030, measured against the 2024 base. Over the next 5 years, we intend to catalyze growth initiatives across the entirety of our integrated platform to significantly grow the value and cash generation capabilities of our company and further strengthen our competitive position.
Speaker #2: I'm incredibly proud of these accomplishments, all of which enhance our strong foundation and position us for our next chapter—which is accelerated growth. Page 20 summarizes the key takeaways from our Investor Day in December.
Speaker #2: This is a target to deliver $1.5 billion of incremental adjusted EBITDA by 2030, measured against a 2024 base. Over the next five years, we intend to catalyze growth initiatives across the entirety of our integrated platform to significantly grow the value and cash generation capabilities of our company, and further strengthen our competitive position.
Speaker #2: I'll note that most of our growth initiatives are, to a large extent, within our control and already underway. These actions will enhance our ability to maximize cash flow per share while maintaining a stable foundation across market cycles.
Devin W. Stockfish: I'll note that most of our growth initiatives are, to a large extent, within our control and already underway. These actions will enhance our ability to maximize cash flow per share while maintaining a stable foundation across market cycles, and ultimately, position Weyerhaeuser to deliver industry-leading shareholder returns. I'm very confident in our ability to achieve our 2030 growth plan and excited to deliver on this transformational program for our stakeholders. So in closing, our performance in 2025 reflects solid execution across our businesses, notwithstanding the persistent and significant headwinds in many of our end markets. Entering 2026, our foundation is strong, and we're well positioned to capitalize as market conditions improve. We remain focused on serving our customers and advancing our strategy to accelerate growth and drive significant long-term value for shareholders. So with that, I think we can open it up for questions.
I'll note that most of our growth initiatives are, to a large extent, within our control and already underway. These actions will enhance our ability to maximize cash flow per share while maintaining a stable foundation across market cycles, and ultimately, position Weyerhaeuser to deliver industry-leading shareholder returns. I'm very confident in our ability to achieve our 2030 growth plan and excited to deliver on this transformational program for our stakeholders. So in closing, our performance in 2025 reflects solid execution across our businesses, notwithstanding the persistent and significant headwinds in many of our end markets. Entering 2026, our foundation is strong, and we're well positioned to capitalize as market conditions improve. We remain focused on serving our customers and advancing our strategy to accelerate growth and drive significant long-term value for shareholders. So with that, I think we can open it up for questions.
Speaker #2: And ultimately, position Weyerhaeuser to deliver industry-leading shareholder returns. I'm very confident in our ability to achieve our 2030 growth plan and excited to deliver on this transformational program for our stakeholders.
Speaker #2: So in closing, our performance in 2025 reflects solid execution across our businesses, notwithstanding the persistent and significant headwinds in many of our end markets.
Speaker #2: Entering 2026, our foundation is strong, and we're well positioned to capitalize as market conditions improve. We remain focused on serving our customers and advancing our strategy to accelerate growth and drive significant long-term value for shareholders.
Speaker #2: So with that, I think we can open it up for questions.
Speaker #1: Thank you. We will now be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad.
Operator: Thank you. We will now be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Hamir Patel with CIBC. Please proceed with your question.
Operator: Thank you. We will now be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Hamir Patel with CIBC. Please proceed with your question.
Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question. For participants using a handset.
Speaker #1: Speaker equipment: it may be necessary to pick up your receiver before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Hamir Patel with CIBC.
Speaker #1: Please proceed with your question.
Speaker #2: Hi, good morning. Devin, on the pricing front, do you think the improvement we've seen so far this year for both lumber and OSB is largely a reflection of curtailments, or is underlying demand actually picking up?
Operator: Hi, good morning. Devin, on the pricing front, do you think the improvement we've seen so far this year for both lumber and OSB is largely a reflection of curtailments, or is underlying demand actually picking up?
Hamir Patel: Hi, good morning. Devin, on the pricing front, do you think the improvement we've seen so far this year for both lumber and OSB is largely a reflection of curtailments, or is underlying demand actually picking up?
Speaker #2: up? Yeah, I
Devin W. Stockfish: Yeah, I mean, I think the reality is it's primarily driven by curtailment activity. I think on the lumber side, piece two, just the reduction in the volumes coming across the border from Canada. You know, that being said, as we continue to approach the spring building season, you do typically start to see some level of pickup in demand. Obviously, across the South, we've had a pretty significant weather event here, so I'm not sure there's been a lot of construction activity. But that being said, you know, every week that you progress towards spring building season, people are starting to ramp up. And so that's probably a small piece, but I do think at present, it's largely a supply-side driven increase.
Devin W. Stockfish: Yeah, I mean, I think the reality is it's primarily driven by curtailment activity. I think on the lumber side, piece two, just the reduction in the volumes coming across the border from Canada. You know, that being said, as we continue to approach the spring building season, you do typically start to see some level of pickup in demand. Obviously, across the South, we've had a pretty significant weather event here, so I'm not sure there's been a lot of construction activity. But that being said, you know, every week that you progress towards spring building season, people are starting to ramp up. And so that's probably a small piece, but I do think at present, it's largely a supply-side driven increase.
Speaker #3: I mean, I think the reality is it's primarily driven by curtailment activity. I think on the lumber side, a piece, too, is just the reduction in the volumes coming across the border from Canada. That being said, as we continue to approach the spring building season, you do typically start to see some level of pickup in demand.
Speaker #3: Obviously, across the South, we've had a pretty significant weather event here, so I'm not sure there's been a lot of construction activity. But, that being said, every week that you progress towards spring building season, people are starting to ramp up.
Speaker #3: And so that's probably a small piece, but I do think at present it's largely a supply-side-driven increase.
Speaker #1: Okay, thanks, Devin. And then just given how much Southern prices have moved, it looks like they're quite comfortably above break-even for the industry. Are there any constraints that would stop us from seeing a more meaningful production response?
Operator: Okay. Thanks, Devin. And then, just given how much southern prices have moved, it looks like they're quite comfortably above breakeven, for the industry. Are there any constraints that would stop us seeing a more meaningful production response?
Hamir Patel: Okay. Thanks, Devin. And then, just given how much southern prices have moved, it looks like they're quite comfortably above breakeven, for the industry. Are there any constraints that would stop us seeing a more meaningful production response?
Speaker #3: Yeah, I mean, a couple of things I would highlight. I mean, I think you're right. Obviously, we've seen a nice run-up in southern lumber prices, and that's probably moved most of the industry above cash flow break-even—whether it's all of the industry or not, open question, I suppose.
Devin W. Stockfish: Yeah, I mean, a couple of things I would highlight. I mean, I think you're right. Obviously, we've seen a nice run-up in southern lumber prices, and that's probably moved most of the industry above cash flow breakeven. Whether it's all of the industry or not, open question, I suppose. But, you know, you can see some level of increase in production. I think overall, the industry's been pretty restrained in terms of running overtime shifts, running a full operating posture. So there's probably a little bit of flex in the system. But that being said, I do think you're gonna continue to see less volume coming across the border from Canada. So, you know, part of this story is really about how quickly we can convert some of these traditional SPF markets to Southern Yellow Pine.
Devin W. Stockfish: Yeah, I mean, a couple of things I would highlight. I mean, I think you're right. Obviously, we've seen a nice run-up in southern lumber prices, and that's probably moved most of the industry above cash flow breakeven. Whether it's all of the industry or not, open question, I suppose. But, you know, you can see some level of increase in production. I think overall, the industry's been pretty restrained in terms of running overtime shifts, running a full operating posture. So there's probably a little bit of flex in the system. But that being said, I do think you're gonna continue to see less volume coming across the border from Canada. So, you know, part of this story is really about how quickly we can convert some of these traditional SPF markets to Southern Yellow Pine.
Speaker #3: But you can see some level of increase in production. I think, overall, the industry's been pretty restrained in terms of running overtime shifts and running at a full operating posture.
Speaker #3: So, there's probably a little bit of flex in the system. But that being said, I do think you're going to continue to see less volume coming across the border from Canada.
Speaker #3: So, part of this story is really about how quickly we can convert some of these traditional SPF markets to southern yellow pine. And I will say on that front, I mean, we're encouraged by some of the early activity that we've been involved in making that happen.
Devin W. Stockfish: And I will say on that front, I mean, we're encouraged by some of the early activity that, you know, we've been involved in making that happen. So there's a little bit of additional volume that, you know, we could see if the producers really start ramping up production. But I still think, particularly as demand picks up into the spring building season, it feels like there's still probably some room to run on southern lumber prices.
And I will say on that front, I mean, we're encouraged by some of the early activity that, you know, we've been involved in making that happen. So there's a little bit of additional volume that, you know, we could see if the producers really start ramping up production. But I still think, particularly as demand picks up into the spring building season, it feels like there's still probably some room to run on southern lumber prices.
Speaker #3: So, there's a little bit of additional volume that we could see if the producers really start ramping up production. But I still think, particularly as demand picks up into the spring building season, it feels like there's still probably some room to run on southern lumber.
Operator: Our next question comes from Susan Maklari with Goldman Sachs. Please proceed with your question.
Operator: Our next question comes from Susan Maklari with Goldman Sachs. Please proceed with your question.
Speaker #1: Next question comes from Susan McLarry with Goldman Sachs. Please proceed with your question.
Speaker #5: Good morning. This is actually Charles, so there’s that. Perronen for Susan. Thanks for taking my—
[Analyst] (Goldman Sachs Group Inc.): Good morning, this is actually Charles Perron in for Susan. Thanks for taking my question. I just wanted to follow up, Devin, on the last question that was asked about the demand. You know, considering the commentary and the increased optimism that we've seen over the past few weeks from the builders, I was wondering if you can talk about, you know, the thoughts on inventory and how you approach the spring and busy season here, and especially any thoughts on the retailers and how they're approaching this market, given the potential for some inflation in commodity prices.
Charles Perron: Good morning, this is actually Charles Perron in for Susan. Thanks for taking my question. I just wanted to follow up, Devin, on the last question that was asked about the demand. You know, considering the commentary and the increased optimism that we've seen over the past few weeks from the builders, I was wondering if you can talk about, you know, the thoughts on inventory and how you approach the spring and busy season here, and especially any thoughts on the retailers and how they're approaching this market, given the potential for some inflation in commodity prices.
Speaker #5: question.
Speaker #1: I just want to follow
Speaker #1: Up, Devin, on the last question that was asked about the demand, considering the commentary and the increased optimism that we've seen over the past few weeks from the builders.
Speaker #1: I was wondering if you can talk about your thoughts on inventory and how you’re approaching spring and the busy season here, and especially any thoughts on the retailers and how they’re approaching this market given the potential for some inflation in commodity prices.
Speaker #3: Yeah, when you're talking about inventory, are you talking about home inventory, or lumber and OSB inventory?
Devin W. Stockfish: Yeah. When you're talking about inventory, are you talking about home inventory or lumber and OSB inventory?
Devin W. Stockfish: Yeah. When you're talking about inventory, are you talking about home inventory or lumber and OSB inventory?
Speaker #1: Sorry, lumber and OSB
[Analyst] (Goldman Sachs Group Inc.): Sorry, lumber and OSB inventory.
Charles Perron: Sorry, lumber and OSB inventory.
Speaker #1: inventory. Yeah, I mean, I
Devin W. Stockfish: Yeah, I mean, I think, you know, on balance, the inventories across the channel are in a pretty reasonable state for this time of year. I wouldn't say, for the most part, they're either lean or heavy. The one maybe minor exception to that would be in certain regions with OSB. I do think towards the end of last year, a lot of folks really ran their OSB volumes and inventories pretty low, and so that might be a minor exception. But on balance, I think the inventory levels across the channel and all of the products are adequate for the level of building activity.
Devin W. Stockfish: Yeah, I mean, I think, you know, on balance, the inventories across the channel are in a pretty reasonable state for this time of year. I wouldn't say, for the most part, they're either lean or heavy. The one maybe minor exception to that would be in certain regions with OSB. I do think towards the end of last year, a lot of folks really ran their OSB volumes and inventories pretty low, and so that might be a minor exception. But on balance, I think the inventory levels across the channel and all of the products are adequate for the level of building activity.
Speaker #3: I think, on balance, the inventories across the channel are in a pretty reasonable state for this time of year. I wouldn't say, for the most part, they're either lean or heavy.
Speaker #3: The one maybe minor exception to that would be in certain regions with OSB. I do think towards the end of last year, a lot of folks really ran their OSB volumes and inventories pretty low.
Speaker #3: And so, that might be a minor exception. But on balance, I think the inventory levels across the channel in all of the products are adequate for the level of building activity.
Speaker #3: Now, clearly, as the weather improves and we start getting deeper into the spring, people will have to start building inventory because demand just seasonally picks up, regardless of what you think is going to happen in terms of overall housing improvement.
Devin W. Stockfish: Now, clearly, as the weather improves and we start getting deeper into the spring, people will have to start building inventory because demand just seasonally picks up, regardless of what you think is gonna happen in terms of overall housing improvement. So I think we're pretty well set, you know, and a lot of this will just depend on, you know, when people start building inventories, when the building season really starts ramping up. There's a weather component to that. But I think, you know, we're optimistic that we could see, you know, some nice pickup in demand as we hit the seasonal spring building season.
Operator: Now, clearly, as the weather improves and we start getting deeper into the spring, people will have to start building inventory because demand just seasonally picks up, regardless of what you think is gonna happen in terms of overall housing improvement. So I think we're pretty well set, you know, and a lot of this will just depend on, you know, when people start building inventories, when the building season really starts ramping up. There's a weather component to that. But I think, you know, we're optimistic that we could see, you know, some nice pickup in demand as we hit the seasonal spring building season.
Speaker #3: So, I think we're pretty well set. In a lot of this, we'll just depend on when people start building inventories, when the building season really starts ramping up.
Speaker #3: There's a weather component to that, but I think we're optimistic that we could see some nice pickup in demand as we hit the seasonal spring building season.
Speaker #1: Got it. That's helpful color. And then, switching to the timberland portfolio, how are you approaching your A&D decisions into 2026, considering the strong appetite that you noted for HBU properties in this environment?
[Analyst] (Goldman Sachs Group Inc.): Got it. That's helpful color. And then switching to the Timberland portfolio, how are you approaching your A&D decisions into 2026, considering the strong appetite that you noted for HBU properties in this environment?
Charles Perron: Got it. That's helpful color. And then switching to the Timberland portfolio, how are you approaching your A&D decisions into 2026, considering the strong appetite that you noted for HBU properties in this environment?
Speaker #3: Yeah, Charles, you bet. This is Davie. I'll take that one. I mean, right now, I think you're right. We continue to see a very solid market right now.
Devin W. Stockfish: Yeah, Charles, you bet. This is Davey. I'll take that one. I mean, right now, I think you're right. We continue to see a very solid market right now. I guess, just reflecting on the market as a whole, we typically think about that being in somewhere the $2 to 3 billion range on the timber acquisitions and divestiture market. Came in towards the upper end of that range for 2025. You know, and I think as we move into 2026, expect to see a similar normal level of activity. There's plenty of capital that's pursuing these transactions. A significant amount raised over the last several years with a mandate to invest in this asset class.
Devin W. Stockfish: Yeah, Charles, you bet. This is Davey. I'll take that one. I mean, right now, I think you're right. We continue to see a very solid market right now. I guess, just reflecting on the market as a whole, we typically think about that being in somewhere the $2 to 3 billion range on the timber acquisitions and divestiture market. Came in towards the upper end of that range for 2025. You know, and I think as we move into 2026, expect to see a similar normal level of activity. There's plenty of capital that's pursuing these transactions. A significant amount raised over the last several years with a mandate to invest in this asset class.
Speaker #3: I guess, just reflecting on the market as a whole, we typically think about that being somewhere in the $2 to $3 billion range on the timber acquisitions and divestiture market.
Speaker #3: Came in towards the upper end of that range for 2025. And I think as we move into 2026, expect to see a similar, normal level of activity.
Speaker #3: There's plenty of capital that's pursuing these transactions—a significant amount raised over the last several years—with a mandate to invest in this asset class.
Speaker #3: So I think what we continue to expect is to see that demand, with the growing appreciation for all the alternative land-based value opportunities that are inherent.
Devin W. Stockfish: So I think we continue to expect to see that demand with the growing appreciation for all the alternative land-based value opportunities that are inherent. And I think you also see that in our HBU transactions over the course of the fourth quarter. Our real estate team did a great job capitalizing on a couple of transactions in the Charleston area. We talked about some of our real estate development opportunities at our December Investor Day, and those were some great opportunities for capitalizing on some high-value acreage, really unlocking the value of our portfolio. And so we're really pleased to be able to see that.
So I think we continue to expect to see that demand with the growing appreciation for all the alternative land-based value opportunities that are inherent. And I think you also see that in our HBU transactions over the course of the fourth quarter. Our real estate team did a great job capitalizing on a couple of transactions in the Charleston area. We talked about some of our real estate development opportunities at our December Investor Day, and those were some great opportunities for capitalizing on some high-value acreage, really unlocking the value of our portfolio. And so we're really pleased to be able to see that.
Speaker #3: And I think you also see that in our HBU transactions over the course of the fourth quarter. Our real estate team did a great job capitalizing on a couple of transactions in the Charleston area.
Speaker #3: We talked about some of our real estate development opportunities at our December investor day, and those were some great opportunities for capitalizing on some high-value acreage, really unlocking the value of our portfolio.
Speaker #3: And so, we're really pleased to be able to see
Speaker #3: That. And just to follow up on the—
[Analyst] (Goldman Sachs Group Inc.): Just to follow up on the last comment, is there any other opportunities you could see to make similar deals to the large conservation easement transaction that you've done in Florida? Is this something like that could happen again across your portfolio?
Charles Perron: Just to follow up on the last comment, is there any other opportunities you could see to make similar deals to the large conservation easement transaction that you've done in Florida? Is this something like that could happen again across your portfolio?
Speaker #1: Last comment, is there any other opportunity you could see to make similar deals to the large conservation easement transaction that you've done in Florida?
Speaker #1: Is this something that could happen again across your...
Speaker #1: portfolio? Yeah, certainly.
Devin W. Stockfish: Yeah, certainly. I mean, we have a dedicated team that's focused in this area. Really, the transaction that we executed on in December was a really unique opportunity that our scale, sophistication, the talent that we built up uniquely positioned us to be able to execute on a transaction like that. And similarly, in the future, we'll evaluate all sorts of opportunities to do transactions such as those.
Devin W. Stockfish: Yeah, certainly. I mean, we have a dedicated team that's focused in this area. Really, the transaction that we executed on in December was a really unique opportunity that our scale, sophistication, the talent that we built up uniquely positioned us to be able to execute on a transaction like that. And similarly, in the future, we'll evaluate all sorts of opportunities to do transactions such as those.
Speaker #3: I mean, we have a dedicated team that's focused in this area. Really, the transaction that we executed on in December was a really unique opportunity that our scale, sophistication, and the talent that we built up uniquely positioned us to be able to execute on a transaction like that.
Speaker #3: And similarly, in the future, we'll evaluate all sorts of opportunities to do transactions such as—
Speaker #3: those. All right, great.
[Analyst] (Goldman Sachs Group Inc.): All right, great. Thank you for the time, and good luck with the quarter, guys.
Charles Perron: All right, great. Thank you for the time, and good luck with the quarter, guys.
Speaker #1: Thank you for the time, and good luck with the quarter, guys.
Speaker #3: Thank you.
Devin W. Stockfish: Thank you.
Devin W. Stockfish: Thank you.
Speaker #1: Our next question comes from Anthony Pettinari with Citigroup. Please proceed with your question.
Operator: Our next question comes from Anthony Pettinari with Citigroup. Please proceed with your question.
Operator: Our next question comes from Anthony Pettinari with Citigroup. Please proceed with your question.
Speaker #6: Good
Devin W. Stockfish: Good morning. Morning. Hey, I was wondering if you'd talk about operating rates in lumber and OSB, and then, you know, in the spirit of black at the bottom, you know, what kind of steps you've taken to improve profitability, you know, ex product price improvement? And if we stay, you know, 1.3 million starts, maybe single family, 1 million or below 1 million, if that were to continue for a few years, just kind of how you think about the footprint and the size and, just sort of general thoughts there. Yeah. Well, first, on the operating rates, in Q4, in lumber, we were sort of in that mid-70 percent operating rate.
Speaker #6: morning. I was wondering if you Good morning. could hey, I was wondering if you could talk about operating rates in the lumber and OSB and then in the spirit of black at the bottom, what kind of steps you've taken to improve profitability ex-product price improvement.
Anthony Pettinari: Good morning. Morning. Hey, I was wondering if you'd talk about operating rates in lumber and OSB, and then, you know, in the spirit of black at the bottom, you know, what kind of steps you've taken to improve profitability, you know, ex product price improvement? And if we stay, you know, 1.3 million starts, maybe single family, 1 million or below 1 million, if that were to continue for a few years, just kind of how you think about the footprint and the size and, just sort of general thoughts there. Yeah. Well, first, on the operating rates, in Q4, in lumber, we were sort of in that mid-70 percent operating rate.
Speaker #6: And if we stay at 1.3 million starts, maybe single-family a million or below a million, if that were to continue for a few years, just kind of how you think about the footprint and the size and just sort of general thoughts.
Speaker #6: there. Yeah.
Speaker #3: First, on the operating rates—in Q4 in lumber, we were sort of in that mid-70% operating rate. As we noted, we took some steps to intentionally dial that back, just given the dynamic in the market.
Devin W. Stockfish: You know, as we noted, we took some steps to intentionally dial that back, just given the dynamic in the market. OSB, kind of in that mid-90% range, was pretty typical for us. You know, as we think about the overall market, you know, obviously, the Q4 pricing environment for lumber and OSB was about as tricky and challenging as we've seen in a very long time. And so, you know, while we're certainly not pleased to have been underwater in Q4, we weren't alone. I think that was something that impacted the industry as a whole. I think over time, what you'll see is that we have navigated this better than the rest of the industry. You know, we're always focused on OpEx.
Devin W. Stockfish: You know, as we noted, we took some steps to intentionally dial that back, just given the dynamic in the market. OSB, kind of in that mid-90% range, was pretty typical for us. You know, as we think about the overall market, you know, obviously, the Q4 pricing environment for lumber and OSB was about as tricky and challenging as we've seen in a very long time. And so, you know, while we're certainly not pleased to have been underwater in Q4, we weren't alone. I think that was something that impacted the industry as a whole. I think over time, what you'll see is that we have navigated this better than the rest of the industry. You know, we're always focused on OpEx.
Speaker #3: OSB, kind of in that mid-90% range, was pretty typical for us. As we think about the overall market, obviously, the Q4 pricing environment for lumber and OSB was about as tricky and challenging as we've seen in a very long time.
Speaker #3: And so, while we're certainly not pleased to have been underwater in Q4, we weren't alone. I think that was something that impacted the industry as a whole.
Speaker #3: I think, over time, what you'll see is that we have navigated this better than the rest of the industry. We're always focused on OPEX.
Devin W. Stockfish: You know, certainly, you know, in a market where you're at sort of trough pricing, that becomes pretty challenging. But over time, you know, it all comes down to where are you on the cost curve relative to the rest of the industry. And the work that we've been doing over the past decade, the focus that we've had on OpEx, I think has positioned us very well on the cost curve, and that will show up over time. You know, the reality is you're not gonna see pricing at levels where the majority of the industry is underwater. We've seen that, you know, play out perhaps for a little bit longer period than we'd expected. But, you know, you've seen a fair bit of mill closure announcement. You've seen mill capacity curtailments.
You know, certainly, you know, in a market where you're at sort of trough pricing, that becomes pretty challenging. But over time, you know, it all comes down to where are you on the cost curve relative to the rest of the industry. And the work that we've been doing over the past decade, the focus that we've had on OpEx, I think has positioned us very well on the cost curve, and that will show up over time. You know, the reality is you're not gonna see pricing at levels where the majority of the industry is underwater. We've seen that, you know, play out perhaps for a little bit longer period than we'd expected. But, you know, you've seen a fair bit of mill closure announcement. You've seen mill capacity curtailments.
Speaker #3: Certainly, in a market where you're at sort of trough pricing, that becomes pretty challenging. But over where are you on the cost curve relative to time, it all comes down to the rest of the industry and the work that we've been doing over the past decade, the focus that we've had on OPEX.
Speaker #3: I think that has positioned us very well on the cost curve, and that will show up over time. The reality is, you're not going to see pricing at levels where the majority of the industry is underwater.
Speaker #3: We've seen that play out, perhaps for a little bit longer period than we'd expected. But you've seen a fair bit of mill closure announcement.
Speaker #3: You've seen mill capacity curtailments. You're starting to see the results of that activity and some of the pricing uplift. So I know it's tricky when you are at that trough, but when you look out over a broader period of time, certainly, I think we're going to be positioned well relative to the rest of the industry.
Devin W. Stockfish: You're starting to see the results of that activity in some of the pricing uplifts. So, you know, I know it's tricky when you are at that trough, but when you look out over a broader period of time, certainly I think we're gonna be positioned well relative to the rest of the industry, and I expect us to get back to profitability here, in the very near term.
You're starting to see the results of that activity in some of the pricing uplifts. So, you know, I know it's tricky when you are at that trough, but when you look out over a broader period of time, certainly I think we're gonna be positioned well relative to the rest of the industry, and I expect us to get back to profitability here, in the very near term.
Speaker #3: And I expect us to get back to profitability here in the very near term.
Speaker #1: Got it, got it. That's very helpful. And then just switching gears on EWP and Monticello—given the weakness in single-family housing construction, if you had all that capacity with Monticello, if it was online today, is the performance of the product such, and the market kind of the share gain such, that you'd be able to kind of be sold out?
[Analyst] (Citigroup Inc.): Got it. Got it. No, that's very helpful. And then just switching gears on EWP and Monticello, like, I mean, given the weakness in single family housing construction, if, if you had all that capacity in with Monticello, if it was online today, is the, the performance of the product such, and the market, you know, kind of the share gain such that you'd be you'd be able to kind of, you know, be sold out? Or I'm just trying to understand, like, if, if single family starts continues to be kind of tepid, and Monticello comes online, is the, is the demand for the product such that, you know, you're just gonna sell it out anyways, or, would the ramp be slower? Or just how should we think about that in the context of sort of different, levels of single family demand?
Anthony Pettinari: Got it. Got it. No, that's very helpful. And then just switching gears on EWP and Monticello, like, I mean, given the weakness in single family housing construction, if, if you had all that capacity in with Monticello, if it was online today, is the, the performance of the product such, and the market, you know, kind of the share gain such that you'd be you'd be able to kind of, you know, be sold out? Or I'm just trying to understand, like, if, if single family starts continues to be kind of tepid, and Monticello comes online, is the, is the demand for the product such that, you know, you're just gonna sell it out anyways, or, would the ramp be slower? Or just how should we think about that in the context of sort of different, levels of single family demand?
Speaker #1: Or I'm just trying to understand, if single-family starts continue to be kind of tepid and Monticello comes online, is the demand for the product such that you're just going to sell it out anyways?
Speaker #1: Or would the ramp be slower? Or just, how should we think about that in the context of sort of different levels of single-family?
Speaker #1: demand? Yeah, I think a
Devin W. Stockfish: Yeah, I think a couple of things to keep in mind with respect to TimberStrand, specifically. Number one, you know, we do think we can take market share from other products with the TimberStrand product line. It's got a cost structure and a performance structure that we think we can effectively go out and take market share from other products, whether that's lumber or other EWP products. Second, it is a pretty broad end-use opportunity, whether you're talking about single family, multifamily. I think there's opportunities in commercial, in mass timber. So it's got a pretty broad set of opportunities beyond single family. And so, you know, we're feeling very optimistic about, you know, this mill coming online and our ability to sell it out relatively quickly.
Devin W. Stockfish: Yeah, I think a couple of things to keep in mind with respect to TimberStrand, specifically. Number one, you know, we do think we can take market share from other products with the TimberStrand product line. It's got a cost structure and a performance structure that we think we can effectively go out and take market share from other products, whether that's lumber or other EWP products. Second, it is a pretty broad end-use opportunity, whether you're talking about single family, multifamily. I think there's opportunities in commercial, in mass timber. So it's got a pretty broad set of opportunities beyond single family. And so, you know, we're feeling very optimistic about, you know, this mill coming online and our ability to sell it out relatively quickly.
Speaker #3: Couple of things to keep in mind with respect to timber strands specifically. Number one, we do think we can take market share from other products with the timber strand product line.
Speaker #3: It's got a cost structure and a performance structure that we think we can effectively go out and take market share from other products, whether that's lumber or other EWP products.
Speaker #3: Second, it is a pretty broad end-use opportunity. Whether you're talking about single-family, multifamily—I think there's opportunities in commercial, in mass timber. So it's got a pretty broad set of opportunities beyond single-family.
Speaker #3: And so we're feeling very optimistic about this mill coming online and our ability to sell it out relatively quickly. Now, obviously, when you're starting up a new mill, it's not going to come out of the box on day one at 10 million cubes, right?
Devin W. Stockfish: Now, obviously, you know, when you're starting up a new mill, it's not gonna come out of the box on day one at 10 million cubes, right? It takes a little time to ramp these up. But we've got a sales and marketing plan in place to be able to go out there and move this product. And, you know, it is, as we've mentioned previously, one of the top products in our suite of EWP products. So we're encouraged and excited about it, and, you know, even if we are in this kind of housing market, we feel good about our ability to move it.
Now, obviously, you know, when you're starting up a new mill, it's not gonna come out of the box on day one at 10 million cubes, right? It takes a little time to ramp these up. But we've got a sales and marketing plan in place to be able to go out there and move this product. And, you know, it is, as we've mentioned previously, one of the top products in our suite of EWP products. So we're encouraged and excited about it, and, you know, even if we are in this kind of housing market, we feel good about our ability to move it.
Speaker #3: It takes a little time to ramp these up, but we've got a sales and marketing plan in place to be able to go out there and move this product in.
Speaker #3: It is, as we've mentioned previously, one of the top products in our suite of EWP products. So we're encouraged and excited about it. And even if we are in this kind of housing market, we feel good about our ability to move it.
Speaker #6: Okay, that's very helpful. I'll turn it.
[Analyst] (Citigroup Inc.): Okay. That, that's very helpful. I'll turn it over.
Anthony Pettinari: Okay. That, that's very helpful. I'll turn it over.
Speaker #6: over. Thank
Devin W. Stockfish: Thank you.
Devin W. Stockfish: Thank you.
Speaker #1: Our next question comes from George Staffos with Bank of America. Please proceed with your question.
Operator: Our next question comes from George Staphos with Bank of America. Please proceed with your question.
Operator: Our next question comes from George Staphos with Bank of America. Please proceed with your question.
Speaker #5: Thanks, everyone. Good morning. Thanks for the details. Thanks for the question. Hey,
[Analyst] (BofA Securities): Thanks. Hi, everyone. Good morning. Thanks for the details.
George Staphos: Thanks. Hi, everyone. Good morning. Thanks for the details.
Speaker #6: Good morning.
Devin W. Stockfish: Morning.
Devin W. Stockfish: Morning.
[Analyst] (BofA Securities): Thanks for taking the question. Hey, guys. So Devin, Devin and Andy, I guess the first question I had, you did a real nice job in the South on mix from what we were looking for. You had mentioned a lot of things that you were sort of challenged by. We had heard log decks were pretty full and the like, and yet you had nice mix. You were up. A lot of that you said was from fiber log sales in the quarter. Was wondering what else, you know, contributed to the mix benefits, I know you mentioned exports to India, and why that doesn't continue into Q1, because it sounds like mix will be down, even though you're gonna be selling a bit more on the side of fiber logs.
George Staphos: Thanks for taking the question. Hey, guys. So Devin, Devin and Andy, I guess the first question I had, you did a real nice job in the South on mix from what we were looking for. You had mentioned a lot of things that you were sort of challenged by. We had heard log decks were pretty full and the like, and yet you had nice mix. You were up. A lot of that you said was from fiber log sales in the quarter. Was wondering what else, you know, contributed to the mix benefits, I know you mentioned exports to India, and why that doesn't continue into Q1, because it sounds like mix will be down, even though you're gonna be selling a bit more on the side of fiber logs.
Speaker #5: Guys, so Davy, Devin, Andy, I guess the first question I had—you did a real nice job in the South on mix from what we were looking for.
Speaker #5: You had mentioned a lot of things that you were sort of challenged by. We had heard log decks were pretty full and the like, and yet you had a nice mix.
Speaker #5: You were up. A lot of that, you said, was from fiber log sales in the quarter. Was wondering what else contributed to the mix benefits.
Speaker #5: I know you mentioned exports to India. And why that doesn't continue into the first quarter? Because it sounds like mix will be down, even though you're going to be selling a bit more on the side of fiber logs.
Speaker #5: It's just that exports will dissipate sequentially into one cube. And what are the risks to the upside on that to follow?
Speaker #5: It's just that exports will dissipate sequentially into one cube. And what are the risks to the upside on that to follow on? Yeah.
[Analyst] (BofA Securities): Is it just that exports will dissipate, you know, sequentially into Q1, and what are the risks to the upside on that front? And I had a follow on.
George Staphos: Is it just that exports will dissipate, you know, sequentially into Q1, and what are the risks to the upside on that front? And I had a follow on.
Speaker #3: I mean, the answer to your initial question is really just, we have this scale and diversity of customers to be able to operate through a whole variety of different markets.
Devin W. Stockfish: Yeah, I mean, you know, the answer to your initial question is really just we have the scale and diversity of customers to be able to operate through a whole variety of different markets. And that's really what we've been doing here over the last several quarters, where you've seen some headwinds, largely related to end markets in lumber and OSB. But, you know, as we think about Q1 and the mix, I mean, to a degree, these are all around the margins, right? And so in any particular quarter, you know, your harvest plans might have a little bit more big logs versus small logs, or vice versa. You may have a little bit more thinning activity in the mix.
Devin W. Stockfish: Yeah, I mean, you know, the answer to your initial question is really just we have the scale and diversity of customers to be able to operate through a whole variety of different markets. And that's really what we've been doing here over the last several quarters, where you've seen some headwinds, largely related to end markets in lumber and OSB. But, you know, as we think about Q1 and the mix, I mean, to a degree, these are all around the margins, right? And so in any particular quarter, you know, your harvest plans might have a little bit more big logs versus small logs, or vice versa. You may have a little bit more thinning activity in the mix.
Speaker #3: And that's really what we've been doing here over the last several quarters, where you've seen some headwinds, largely related to end markets in lumber and OSB.
Speaker #3: But as we think about Q1 and the mix, I mean, to the degree these are all around the margins, right? And so in any particular quarter, your harvest plans might have a little bit more big logs versus small logs, or vice versa.
Speaker #3: You may have a little bit more thinning activity in the mix. And so, really, in the South, the Q1 is we just have a little bit more thinning activity.
Devin W. Stockfish: And so really in the South, the Q1 is, we just have a little bit more thinning activity, so there's just a little bit more pulpwood in the mix. I don't think there's any sort of material change in how we're operating the business. You see those sort of minor fluctuations quarter-over-quarter, and that's really just a reflection of that. You know, in terms of India export program, you know, we're really excited about how that's going. In any particular quarter, just depending on how the shipping schedule plays out, you might have one break bulk ship versus two or vice versa. And so that's really just the mix story is nothing material. It's just kind of those minor differences you see quarter from time to time.
And so really in the South, the Q1 is, we just have a little bit more thinning activity, so there's just a little bit more pulpwood in the mix. I don't think there's any sort of material change in how we're operating the business. You see those sort of minor fluctuations quarter-over-quarter, and that's really just a reflection of that. You know, in terms of India export program, you know, we're really excited about how that's going. In any particular quarter, just depending on how the shipping schedule plays out, you might have one break bulk ship versus two or vice versa. And so that's really just the mix story is nothing material. It's just kind of those minor differences you see quarter from time to time.
Speaker #3: So there's just a little bit more pulpwood in the mix. I don't think there's any sort of material change in how we're operating the business.
Speaker #3: You see those sort of minor fluctuations quarter over quarter, and that's really just a reflection of that. In terms of India export program, we're really excited about how that's going.
Speaker #3: In any particular quarter, just depending on how the shipping schedule plays out, you might have one break bulk ship versus two, or vice versa.
Speaker #3: And so that's really just the mix story—it's nothing material. It's just kind of those minor differences you see quarter over quarter, from time to time.
Speaker #3: And so that's really just the mix story; it's nothing material. It's just kind of those minor differences you see quarter over quarter, time to time.
Speaker #5: Thanks, Devin. And then, follow-on question. On EWP, we're seeing at least some pickup in dimensional lumber markets. Again, as was discussed earlier, a lot of that at this juncture is probably more supply- than demand-driven.
[Analyst] (BofA Securities): Thanks, Devin. And then a follow-on question in EWP. You know, we're seeing at least some pickup in dimensional lumber markets. Again, as was discussed earlier, a lot of that at this juncture is probably more supply than demand, but nonetheless, prices are heading higher. It, you know, we'll see what happens, but it sounds like, you know, construction markets will be stable or better this year. And just wondering why we're not seeing that yet show up in EWP pricing. And it's not significant. You didn't say it would be down a lot, but you are signaling, you know, a modest decline in EWP pricing sequentially into Q1, and just wondering how you see that market in terms of supply, demand, competition, mix this year, and in particular, what's driving Q1. Thank you.
George Staphos: Thanks, Devin. And then a follow-on question in EWP. You know, we're seeing at least some pickup in dimensional lumber markets. Again, as was discussed earlier, a lot of that at this juncture is probably more supply than demand, but nonetheless, prices are heading higher. It, you know, we'll see what happens, but it sounds like, you know, construction markets will be stable or better this year. And just wondering why we're not seeing that yet show up in EWP pricing. And it's not significant. You didn't say it would be down a lot, but you are signaling, you know, a modest decline in EWP pricing sequentially into Q1, and just wondering how you see that market in terms of supply, demand, competition, mix this year, and in particular, what's driving Q1. Thank you.
Speaker #5: But nonetheless, prices are heading higher. We'll see what happens. But it sounds like construction markets will be stable or better this year. And just wondering why we're not seeing that yet show up in EWP pricing.
Speaker #5: Didn't say it would be down a lot, and it's not significant. But you are signaling a modest decline in EWP pricing sequentially into one cube.
Speaker #5: And just wondering how you see that market in terms of supply-demand competition and mix this year, and in particular what's driving one cube. Thank you.
Speaker #3: Yeah. I mean, as you know, George, it's really all about what's going on in single-family. That's the primary driver for EWP. And we have seen 2025 was the fourth down year in a row in terms of housing starts.
Devin W. Stockfish: ... Yeah, I mean, you know, as, as you know, George, it's really all about what's going on in single family. That's the primary driver for EWP. And, you know, we have seen 2025 was the fourth down year in a row in terms of housing starts. And so that just puts some pressure on EWP. Unlike OSB and lumber, you just haven't really seen mill shutdowns or the level of curtailments that you've seen in some of those other product lines. So, you know, on the demand side, you know, we're expecting, our base case is that housing is gonna be up slightly in 2026 relative to 2025. And, you know, look, perhaps if we could see even more downward pressure on mortgage rates, perhaps there's even some upside.
Devin W. Stockfish: ... Yeah, I mean, you know, as, as you know, George, it's really all about what's going on in single family. That's the primary driver for EWP. And, you know, we have seen 2025 was the fourth down year in a row in terms of housing starts. And so that just puts some pressure on EWP. Unlike OSB and lumber, you just haven't really seen mill shutdowns or the level of curtailments that you've seen in some of those other product lines. So, you know, on the demand side, you know, we're expecting, our base case is that housing is gonna be up slightly in 2026 relative to 2025. And, you know, look, perhaps if we could see even more downward pressure on mortgage rates, perhaps there's even some upside.
Speaker #3: And so that just puts some pressure on EWP, unlike OSB and lumber. You just haven't really seen mill shutdowns or the level of curtailments that you've seen in some of those other product lines.
Speaker #3: So, on the demand side, we're expecting our base case is that housing is going to be up slightly in 2026 relative to 2025. And look, downward pressure on mortgage rates, perhaps there's even some upside, so that's just kind of where we are.
Devin W. Stockfish: So that's just kind of where we are in an environment where housing's been going down for four years in a row. That puts a little bit of pressure on the EWP. But that being said, I, I think when you look at our performance relative to others, our realizations have held up better than others, and we're out there really trying to take advantage of the moment and pick up market share and really deliver value to our customers. And, you know, markets go up and down with housing, and you just got to be able to navigate both the highs and the lows, and that's what we're doing. So we're still feeling very good about the EWP business. The team's doing a great job, service model, product quality. We're, we're gonna be rolling out some new products at the builder show.
So that's just kind of where we are in an environment where housing's been going down for four years in a row. That puts a little bit of pressure on the EWP. But that being said, I, I think when you look at our performance relative to others, our realizations have held up better than others, and we're out there really trying to take advantage of the moment and pick up market share and really deliver value to our customers. And, you know, markets go up and down with housing, and you just got to be able to navigate both the highs and the lows, and that's what we're doing. So we're still feeling very good about the EWP business. The team's doing a great job, service model, product quality. We're, we're gonna be rolling out some new products at the builder show.
Speaker #3: And in an environment where housing's been going down for four years in a row, that puts a little bit of pressure on the EWP.
Speaker #3: But that being said, I think when you look at our performance relative to others, our realizations have held up better than others. And we're out there really trying to take advantage of the moment and pick up market share and really deliver value to our customers.
Speaker #3: And markets go up and down with housing, and you just have to be able to navigate both the highs and the lows. And that's what we're doing.
Speaker #3: So we're still feeling very good about the EWP business. The team's doing a great job—service model, product quality—and we're going to be rolling out some new products at the Builders’ Show.
Speaker #3: So we're excited about the opportunities in that business.
Devin W. Stockfish: So we're excited about the opportunities in that, in that business.
Devin W. Stockfish: So we're excited about the opportunities in that, in that business.
Speaker #5: Thank you, Devin. I'll turn it over. Have a good quarter.
[Analyst] (BofA Securities): Thank you, Devin. I'll turn it over. Have a good quarter.
George Staphos: Thank you, Devin. I'll turn it over. Have a good quarter.
Speaker #3: Yep. Thank
Devin W. Stockfish: Yep, thank you.
Devin W. Stockfish: Yep, thank you.
Speaker #3: you. Our next
Operator: Our next question comes from Mark Weintraub with Seaport Research Partners. Please proceed with your question.
Operator: Our next question comes from Mark Weintraub with Seaport Research Partners. Please proceed with your question.
Speaker #1: The question comes from Mark Weintraub with Seaport Research Partners. Please proceed with your question.
Speaker #1: question. Thank you.
[Analyst] (Seaport Research Partners): Thank you. Thanks for the color, Devin. Lots of commentary on, housing, single family. Just curious, maybe a bit more in the way of detail, what you're seeing in repair and remodel, and what type of pull-through maybe you've already started to see, and any indications that might suggest, and what you're hearing from customers in terms of potential outlook for the year. Presumably, it's mostly important for your lumber business, but if this is important for anything else, maybe, maybe share that, that with us as well.
Mark Weintraub: Thank you. Thanks for the color, Devin. Lots of commentary on, housing, single family. Just curious, maybe a bit more in the way of detail, what you're seeing in repair and remodel, and what type of pull-through maybe you've already started to see, and any indications that might suggest, and what you're hearing from customers in terms of potential outlook for the year. Presumably, it's mostly important for your lumber business, but if this is important for anything else, maybe, maybe share that, that with us as well.
Speaker #6: Thanks for the color, Devin. Lots of commentary on housing, single-family. Just curious—maybe a bit more in the way of detail on what you're seeing in repair and remodel, and what type of pull-through maybe you've already started to see or any indications that might suggest, and what you're hearing from customers in terms of potential outlook for the year. Presumably, it's mostly important for your lumber business, but if this is important for anything else, maybe share that with us as well.
Speaker #6: well. Yeah.
Speaker #3: You're right. It's primarily a lumber play for us. Although, I mean, there's still some OSB takeaway out of that market. And increasingly—and still around the margins—but a growing piece.
Devin W. Stockfish: Yeah, you're right. It's primarily a lumber play from us, although, I mean, there's still some OSB takeaway out of that market. And, you know, increasingly, and still around the margins, but a growing piece, I think there's an opportunity with EWP into that market as well. But, you know, I'd say right now, I don't know that we've seen any sort of material pickup in activity on the ground today. Obviously, the weather issue that we just had across the South has not been helpful for construction activity. But I would say, in terms of outlook, you know, our customers in the R&R channel are expecting to see some level of growth year-over-year, probably in the low single digits, but certainly that's an improvement over what we've seen over the last couple of years.
Devin W. Stockfish: Yeah, you're right. It's primarily a lumber play from us, although, I mean, there's still some OSB takeaway out of that market. And, you know, increasingly, and still around the margins, but a growing piece, I think there's an opportunity with EWP into that market as well. But, you know, I'd say right now, I don't know that we've seen any sort of material pickup in activity on the ground today. Obviously, the weather issue that we just had across the South has not been helpful for construction activity. But I would say, in terms of outlook, you know, our customers in the R&R channel are expecting to see some level of growth year-over-year, probably in the low single digits, but certainly that's an improvement over what we've seen over the last couple of years.
Speaker #3: I think there's an opportunity with EWP into that market as well. But I'd say, right now, I don't know that we've seen any sort of material pickup in activity on the ground today.
Speaker #3: Obviously, the weather issue that we just had across the South has not been helpful for construction activity. But I would say, in terms of outlook, our customers in the R&R channel are expecting to see some level of growth year over year, probably in the low single digits.
Speaker #3: But certainly, that's an improvement over what we've seen over the last couple of quarters.
Speaker #3: years. Okay.
[Analyst] (Seaport Research Partners): Okay. Recognize this is a tough question, but what type of single-family starts or housing starts level do you think are required in the different businesses to sort of sustain balance in the market for the course of the year, at this point, taking into account some of the mill closures that you, you've been seeing kind of begin to add up?
Mark Weintraub: Okay. Recognize this is a tough question, but what type of single-family starts or housing starts level do you think are required in the different businesses to sort of sustain balance in the market for the course of the year, at this point, taking into account some of the mill closures that you, you've been seeing kind of begin to add up?
Speaker #6: And I recognize this is a tough question, but what type of single-family starts or housing starts level do you think are required in the different businesses to sort of sustain balance in the markets for the course of the year at this point, taking into account some of the mill closures that you've been seeing kind of begin to add up?
Speaker #3: Yeah, I mean, I don't think we're really that far off in lumber. We've certainly seen a whole lot of mills closing down over the last several years.
Devin W. Stockfish: Yeah, I mean, I don't think we're really that far off in lumber. You know, we've certainly seen a whole lot of mills closing down over the last several years. It doesn't feel like we're really all that far out of balance from a lumber standpoint. And, you know, I think from an OSB standpoint, we're probably not that far off there either. Obviously, one of our competitors announced a pretty large closure that's gonna be taking effect in March. So we're probably not that far away in OSB either. You know, EWP is a little different. You just haven't really seen any sort of meaningful curtailments or closures there.
Devin W. Stockfish: Yeah, I mean, I don't think we're really that far off in lumber. You know, we've certainly seen a whole lot of mills closing down over the last several years. It doesn't feel like we're really all that far out of balance from a lumber standpoint. And, you know, I think from an OSB standpoint, we're probably not that far off there either. Obviously, one of our competitors announced a pretty large closure that's gonna be taking effect in March. So we're probably not that far away in OSB either. You know, EWP is a little different. You just haven't really seen any sort of meaningful curtailments or closures there.
Speaker #3: It doesn't feel like we're really all that far out of balance from a lumber standpoint. And I think from an OSB standpoint, we're probably not that far off there either.
Speaker #3: Obviously, one of our competitors announced a pretty large closure that's going to be taking effect in March. So, we're probably not that far away in OSB either.
Speaker #3: EWP is a little different. You just haven't really seen any sort of meaningful curtailments or closures there. So when we think about housing starts—I mean, not that it's not relevant, of course it is.
Devin W. Stockfish: So, you know, when we think about housing starts, I mean, not that it's not relevant, of course it is, but it's really, you know, what housing starts do we need relative to the supply that's available in the system? And those two things do balance out. Sometimes it's a painful period to get there. But what I would say, Mark, is you know, the silver lining here is, at some point, we're gonna see an improvement in housing activity. I really do believe that fundamentally. And as the overall supply base has worked its way down to be more appropriate for a 1.3-ish million housing starts scenario, as the housing demand picks up, you do typically have a run on the other side, where, you know, demand gets a little bit stretched as that, you know, the overall housing activity picks up.
So, you know, when we think about housing starts, I mean, not that it's not relevant, of course it is, but it's really, you know, what housing starts do we need relative to the supply that's available in the system? And those two things do balance out. Sometimes it's a painful period to get there. But what I would say, Mark, is you know, the silver lining here is, at some point, we're gonna see an improvement in housing activity. I really do believe that fundamentally. And as the overall supply base has worked its way down to be more appropriate for a 1.3-ish million housing starts scenario, as the housing demand picks up, you do typically have a run on the other side, where, you know, demand gets a little bit stretched as that, you know, the overall housing activity picks up.
Speaker #3: But it's really what housing starts we need, relative to the supply that's available in the system. And those two things do balance out.
Speaker #3: Sometimes it's a painful period to get there. But what I would say, Mark, is the silver lining here is at some point, we're going to see an improvement in housing activity.
Speaker #3: I really do believe that, fundamentally. And as the overall supply base has worked its way down to be more appropriate for a 1.3-ish million housing starts scenario, as the housing demand picks up, you do typically have a run on the other side where demand gets a little bit stretched as the overall housing activity picks up.
Speaker #3: So, at some point, we'll hit that, and we should have a nice run in both lumber and OSB.
Devin W. Stockfish: So at some point, we'll hit that, and, you know, we should have a nice run in both Lumber and OSB.
Devin W. Stockfish: So at some point, we'll hit that, and, you know, we should have a nice run in both Lumber and OSB.
Speaker #6: Great. And maybe a little bit off the beaten track, but so Potlatch, Rainier closes. Today, have you guys given thought as to kind of any implications and maybe there's not much, but that you think having them as one competitor instead of two just too timber reeks out there instead of three?
[Analyst] (Seaport Research Partners): Great. And maybe one a little bit off the beaten track, but, so Potlatch and Rayonier closes today. Have you guys given thought as to kind of any implications? And maybe there's not much, but that you think, you know, having them as one competitor instead of two, just two timber REITs out there instead of three, any thoughts that you've been having about that?
Mark Weintraub: Great. And maybe one a little bit off the beaten track, but, so Potlatch and Rayonier closes today. Have you guys given thought as to kind of any implications? And maybe there's not much, but that you think, you know, having them as one competitor instead of two, just two timber REITs out there instead of three, any thoughts that you've been having about that?
Speaker #6: Any thoughts that you've been having about
Speaker #6: that? Yeah.
Devin W. Stockfish: Yeah, I mean, I can't see any sort of meaningful impact to us. We competed with them individually. We'll compete against them collectively. It's not really gonna make a whole lot of difference in the marketplace with our customers. So I don't think it's gonna have any sort of meaningful impact to us.
Devin W. Stockfish: Yeah, I mean, I can't see any sort of meaningful impact to us. We competed with them individually. We'll compete against them collectively. It's not really gonna make a whole lot of difference in the marketplace with our customers. So I don't think it's gonna have any sort of meaningful impact to us.
Speaker #3: I mean, I can't see any sort of meaningful impact to us. We competed with them individually; we'll compete against them collectively. It's not really going to make a whole lot of difference in the marketplace with our customers.
Speaker #3: So I don't think it's going to have any sort of meaningful impact, to—
Speaker #3: us. Fair enough.
[Analyst] (Seaport Research Partners): Fair enough. Thank you.
Mark Weintraub: Fair enough. Thank you.
Speaker #6: Thank
Speaker #6: you. All right.
Devin W. Stockfish: All right. Thanks.
Devin W. Stockfish: All right. Thanks.
Speaker #3: Thanks. Our
Speaker #1: Next question comes from Kurt Yinger with D.A. Davidson. Please proceed with your question.
Operator: Our next question comes from Kurt Yinger with D.A. Davidson. Please proceed with your question.
Operator: Our next question comes from Kurt Yinger with D.A. Davidson. Please proceed with your question.
Speaker #1: question. Great.
[Analyst] (D.A. Davidson & Co.): ... Great, thanks, and good morning, everyone. I wanted to go back to the Investor Day targets. If we were to just kind of hone in on the next 12 or 24 months, can you talk about maybe a few of the main areas that you expect could be kind of more meaningful contributors? And any sense of kind of guideposts in thinking about how much of that $1 billion we might expect over that timeframe?
Kurt Yinger: ... Great, thanks, and good morning, everyone. I wanted to go back to the Investor Day targets. If we were to just kind of hone in on the next 12 or 24 months, can you talk about maybe a few of the main areas that you expect could be kind of more meaningful contributors? And any sense of kind of guideposts in thinking about how much of that $1 billion we might expect over that timeframe?
Speaker #4: Thanks, and good morning, everyone. I wanted to go back to the investor day targets. If we were to just kind of hone in on the next 12 or 24 months, can you talk about maybe a few of the main areas that you expect could be kind of more meaningful contributors? And any sense of kind of guideposts in thinking about how much of that $1 billion we might expect over that time frame?
Speaker #3: Yeah, you bet, Kurt. I mean, as we think about those targets, really, I'd have you look back at the growth in our climate solutions business over the last several years, right?
David M. Wold: Yeah, you bet, Kurt. I mean, as we think about those targets, you know, really, I'd have you look back at the growth in our Climate Solutions business over the last several years, right? It's not necessarily going to be linear, especially in the early portions of this growth. We got a lot of work done over the course of 2025. Of course, we laid out our targets publicly at the end of the year, but really, over the course of 2025, we did a tremendous amount of work laying the groundwork, building out the project plans, identifying resources to go after these initiatives in a thoughtful and detailed, aggressive way through 2030.
David M. Wold: Yeah, you bet, Kurt. I mean, as we think about those targets, you know, really, I'd have you look back at the growth in our Climate Solutions business over the last several years, right? It's not necessarily going to be linear, especially in the early portions of this growth. We got a lot of work done over the course of 2025. Of course, we laid out our targets publicly at the end of the year, but really, over the course of 2025, we did a tremendous amount of work laying the groundwork, building out the project plans, identifying resources to go after these initiatives in a thoughtful and detailed, aggressive way through 2030.
Speaker #3: It's not necessarily going to be linear. Especially in the early portions of this growth, we got a lot of work done over the course of 2025.
Speaker #3: Of course, we laid out our targets publicly at the end of the year. But really, over the course of 2025, we did a tremendous amount of work laying the groundwork, building out the project plans, and identifying resources to go after these initiatives.
Speaker #3: In a thoughtful and detailed, aggressive way through 2030. So as we think about the larger buckets, we've already made some progress towards some of those growth areas, thinking about going back to the climate solutions space.
David M. Wold: So, you know, as we think about the larger buckets, we've already made some progress towards some of those growth areas. Thinking about going back to the climate solutions space, that's an area that we demonstrated progress on from our 2024 baseline to 2025, growing that from $84 million to $119 million. The growth that we've done with the timberlands optimization, that's gonna contribute. Some of the other buckets, thinking about timber strand, some of the biocarbon initiatives, those are gonna be a little bit more chunky as those facilities come online later into it. So again, I think it's not something we can necessarily give you granular guidance, but we're really pleased with the progress that we've made to date. We'll continue to report out on our progress as we progress through 2030.
So, you know, as we think about the larger buckets, we've already made some progress towards some of those growth areas. Thinking about going back to the climate solutions space, that's an area that we demonstrated progress on from our 2024 baseline to 2025, growing that from $84 million to $119 million. The growth that we've done with the timberlands optimization, that's gonna contribute. Some of the other buckets, thinking about timber strand, some of the biocarbon initiatives, those are gonna be a little bit more chunky as those facilities come online later into it. So again, I think it's not something we can necessarily give you granular guidance, but we're really pleased with the progress that we've made to date. We'll continue to report out on our progress as we progress through 2030.
Speaker #3: That's an area that we demonstrated progress on from our 2024 baseline to 2025, growing that from $84 million to $119 million. The growth that we've done with the Timberlands optimization—that's going to contribute to some of the other buckets, thinking about timber strand, some of the biocarbon initiatives.
Speaker #3: Those are going to be a little bit more chunky as those facilities come online later into it. So, again, I think it's not something we can necessarily give you granular guidance on, but we're really pleased with the progress that we've made to date.
Speaker #3: We'll continue to report on our progress as we move through 2030.
Speaker #4: Got it. Okay, that's helpful. And then on the acquisition and divestiture front, I guess net of the deals that you did in 2025, with what you've added, is that expected to be a net positive in terms of Timberlands profitability in 2026?
[Analyst] (D.A. Davidson & Co.): Got it. Okay, that's helpful. And then, on the acquisition and divestiture front, you know, I guess net, net of the deals that you did in 2025, with what you've added, is that expected to be like a net positive in terms of Timberlands' profitability in 2026? And then kind of looking at the Virginia transaction specifically, how would you have us think about, you know, what that property was doing from kind of an EBITDA or cash flow perspective?
Kurt Yinger: Got it. Okay, that's helpful. And then, on the acquisition and divestiture front, you know, I guess net, net of the deals that you did in 2025, with what you've added, is that expected to be like a net positive in terms of Timberlands' profitability in 2026? And then kind of looking at the Virginia transaction specifically, how would you have us think about, you know, what that property was doing from kind of an EBITDA or cash flow perspective?
Speaker #4: And then, kind of looking at the Virginia transactions specifically, how would you have us think about what that property was doing from kind of an EBITDA or cash flow perspective?
Speaker #4: perspective? Yeah.
David M. Wold: Yeah. Yeah, sure, Kurt. You know, I guess, first of all, just on the broader timberlands portfolio optimization, obviously a lot of that can get lost in the noise of, of market dynamics, with things being a little bit more challenging, particularly with Western log pricing over the past period of time. So it can be a little bit challenging to see that in the results at times. But, you know, really, I'd point you back to the investor materials that we presented at Investor Day. We showed that the portfolio optimization work going back to 2020 is gonna drive $60 million on average of incremental cash flow in the timber space. So, you know, you got to slice and dice that a little bit to think about the 2024 period onward in terms of the growth target.
David M. Wold: Yeah. Yeah, sure, Kurt. You know, I guess, first of all, just on the broader timberlands portfolio optimization, obviously a lot of that can get lost in the noise of, of market dynamics, with things being a little bit more challenging, particularly with Western log pricing over the past period of time. So it can be a little bit challenging to see that in the results at times. But, you know, really, I'd point you back to the investor materials that we presented at Investor Day. We showed that the portfolio optimization work going back to 2020 is gonna drive $60 million on average of incremental cash flow in the timber space. So, you know, you got to slice and dice that a little bit to think about the 2024 period onward in terms of the growth target.
Speaker #3: Yeah, sure, Kurt. I guess, first of all, just on the broader Timberlands portfolio optimization—obviously, a lot of that can get lost in the noise of market dynamics, with things being a little bit more challenging, particularly with Western log pricing over the past period of time.
Speaker #3: So it can be a little bit challenging to see that in the results at times. But really, I'd point you back to the materials that we presented at Investor Day.
Speaker #3: We showed that the portfolio optimization work, going back to 2020, is going to drive $60 million, on average, of incremental cash flow in the timber space.
Speaker #3: So you’ve got to slice and dice that a little bit to think about the ’24 period onward in terms of the growth target. But very pleased at that.
David M. Wold: But very pleased at that. And absolutely, the activity that we did over the course of 2025 is going to be net positive to our cash flow generation capabilities. You know, the Virginia properties in particular, you know, I don't know that we're gonna get into specifics on the EBITDA levels there, but you know, anytime we're thinking about the candidate for divestitures, we're looking to continue our journey to improve the overall cash flow generation capabilities of the portfolio. So while these were high quality assets in the broader market, great interest from other parties, they were certainly below average for our portfolio in terms of cash flow per acre, harvest tons per acre, without significant integration. So, you know, not something that we anticipate having a meaningful impact on our Timberlands EBITDA generation.
But very pleased at that. And absolutely, the activity that we did over the course of 2025 is going to be net positive to our cash flow generation capabilities. You know, the Virginia properties in particular, you know, I don't know that we're gonna get into specifics on the EBITDA levels there, but you know, anytime we're thinking about the candidate for divestitures, we're looking to continue our journey to improve the overall cash flow generation capabilities of the portfolio. So while these were high quality assets in the broader market, great interest from other parties, they were certainly below average for our portfolio in terms of cash flow per acre, harvest tons per acre, without significant integration. So, you know, not something that we anticipate having a meaningful impact on our Timberlands EBITDA generation.
Speaker #3: And absolutely, the activity that we did over the course of 2025 is going to be net positive to our cash flow generation capabilities. The Virginia properties in particular—I don't know that we're going to get into specifics on the EBITDA levels there—but anytime we're thinking about the candidate for divestitures, we're looking to continue our journey to improve the overall cash flow generation capabilities of the portfolio.
Speaker #3: So, while these were high-quality assets in the broader market, with great interest from other parties, they were certainly below average for our portfolio in terms of cash flow per acre and harvest tons per acre.
Speaker #3: Without significant integration, so not something that we anticipate having a meaningful impact on our Timberlands EBITDA.
Speaker #4: Okay. Generation. Perfect. Appreciate the color. Thank you.
Kurt Yinger: Okay, perfect. Appreciate the color. Thank you.
Speaker #1: Our next question comes from Keaton Mantora with BMO Capital Markets. Please proceed with your question.
Operator: Our next question comes from Ketan Mamtora with BMO Capital Markets. Please proceed with your question.
Operator: Our next question comes from Ketan Mamtora with BMO Capital Markets. Please proceed with your question.
Speaker #5: Thank you. Good morning. Maybe a couple of questions on capital allocation, driven out heavy leverage. Trying to five times this quarter, and it looks like it could move higher depending on what happens to lumber, OSB prices in the coming quarters.
[Analyst] (BMO Capital Markets Equity Research): Thank you, good morning. Maybe a couple of questions on capital allocation, Devin or Dave. You know, leverage climbed to 5 times this quarter, and it looks like, you know, could move higher, you know, depending on what happens to, you know, lumber OSB prices in the coming quarters. Curious, kind of, you know, where is your comfort level as we move through 2026? I know kind of having an investment grade, you know, rating is very important for Weyerhaeuser. But I'm just curious, kind of, where is your comfort level so far as net leverage is concerned?
Ketan Mamtora: Thank you, good morning. Maybe a couple of questions on capital allocation, Devin or Dave. You know, leverage climbed to 5 times this quarter, and it looks like, you know, could move higher, you know, depending on what happens to, you know, lumber OSB prices in the coming quarters. Curious, kind of, you know, where is your comfort level as we move through 2026? I know kind of having an investment grade, you know, rating is very important for Weyerhaeuser. But I'm just curious, kind of, where is your comfort level so far as net leverage is concerned?
Speaker #5: Curious kind of where your comfort level is as we move through 2026? I know having an investment-grade rating is very important for Weyerhaeuser.
Speaker #5: But I'm just curious, kind of, where is your comfort level so far as net leverage is concerned?
Speaker #3: Yeah. Look, Keaton, I would say a couple of things on the leverage topic. As we think about capital allocation, there's a couple of foundational elements.
David M. Wold: Yeah. Look, Ketan, I would say a couple things on the leverage topic. As we think about capital allocation, there's a couple foundational elements. You mentioned the investment-grade credit rating, that's foundational. Upholding the base dividend, that is foundational. So yes, we have tracked higher from a leverage perspective, but as you know, again, that 3.5x net leverage target that we have is a mid-cycle number. And so, you know, certainly we would like to see our leverage number lower today, but just as we saw a couple of years ago when markets were really strong and we were hovering around 1x leverage, you know, that's not necessarily something that's going to persist.
David M. Wold: Yeah. Look, Ketan, I would say a couple things on the leverage topic. As we think about capital allocation, there's a couple foundational elements. You mentioned the investment-grade credit rating, that's foundational. Upholding the base dividend, that is foundational. So yes, we have tracked higher from a leverage perspective, but as you know, again, that 3.5x net leverage target that we have is a mid-cycle number. And so, you know, certainly we would like to see our leverage number lower today, but just as we saw a couple of years ago when markets were really strong and we were hovering around 1x leverage, you know, that's not necessarily something that's going to persist.
Speaker #3: You mentioned the investment-grade credit rating, and that's foundational. I'm holding the base dividend—that is foundational. So yes, we have tracked higher from a leverage perspective.
Speaker #3: But as you know, again, that three-and-a-half times net leverage target that we have is a mid-cycle number. And so, certainly, we would like to see our leverage number lower today, but just as we saw a couple of years ago when markets were really strong and we were hovering around one times leverage, that's not necessarily something that's going to persist.
Speaker #3: I think you have to look at the commodity pricing environment, and the impact that's having on the EBITDA portion of the net debt-to-EBITDA calculation.
David M. Wold: I think you have to look at the commodity pricing environment and the impact that's having on the EBITDA portion of the net debt to EBITDA calculation. And I also think I'd point out a couple things in terms of context on the work we've done on our balance sheet over the last several years. We paid down a significant amount of debt. If you go back to 2019 and compare our interest expense, we've reduced our annual interest expense by $100 million during that time period. We've optimized our portfolio. So notwithstanding the current state with the denominator in that net debt to EBITDA calculation, we feel really good about the strength of our balance sheet and the work we've done to strengthen that. So we have a tremendous amount of flexibility as we think about the balance sheet moving forward.
I think you have to look at the commodity pricing environment and the impact that's having on the EBITDA portion of the net debt to EBITDA calculation. And I also think I'd point out a couple things in terms of context on the work we've done on our balance sheet over the last several years. We paid down a significant amount of debt. If you go back to 2019 and compare our interest expense, we've reduced our annual interest expense by $100 million during that time period. We've optimized our portfolio. So notwithstanding the current state with the denominator in that net debt to EBITDA calculation, we feel really good about the strength of our balance sheet and the work we've done to strengthen that. So we have a tremendous amount of flexibility as we think about the balance sheet moving forward.
Speaker #3: And I also think I'd point out a couple of things in terms of context. On the work we've done on our balance sheet over the last several years, we've paid down a significant amount of debt.
Speaker #3: If you go back to 2019 and compare our interest expense, we've reduced our annual interest expense by $100 million during that time period.
Speaker #3: We've optimized our portfolio. So, notwithstanding the current state with the denominator in that net debt-to-EBITDA calculation, we feel really good about those strengths of our balance sheet and the work we've done to strengthen that.
Speaker #3: So, we have a tremendous amount of flexibility as we think about the balance sheet moving forward. And I'd even say, I mean, this is working exactly as we would have expected.
Devin W. Stockfish: And I'd even say, I mean, this is working exactly as we would have expected. When you tell me that, you would have told me that at peak pricing, we'd be at 1, and at trough pricing, we'd be at 5, and we'd kind of bounce around in between over the course of, you know, the interim, I would say that's pretty much exactly how we would expect this to work.
And I'd even say, I mean, this is working exactly as we would have expected. When you tell me that, you would have told me that at peak pricing, we'd be at 1, and at trough pricing, we'd be at 5, and we'd kind of bounce around in between over the course of, you know, the interim, I would say that's pretty much exactly how we would expect this to work.
Speaker #3: When you tell me that you would have told me that at peak pricing, we'd be at one, and at drop pricing, we'd be at five, and we'd kind of bounce around in between over the course of the—we would expect this to interim—I would say that's pretty much exactly how we work.
Speaker #5: Got it. Okay, that's helpful. And then just one other question. Given sort of the disparity between public and private market values in Timberlands, would you be open to doing more divestitures in addition to the one that you're doing in Virginia, if the right opportunity came along?
[Analyst] (BMO Capital Markets Equity Research): Got it. Okay, now, that's, that's helpful. And then, just one other question. Given sort of the disparity between public and private market values in Timberland, would you be open to doing more, you know, divestitures, you know, in addition to kind of the one that you are doing in Virginia, if the right opportunity presented?
Ketan Mamtora: Got it. Okay, now, that's, that's helpful. And then, just one other question. Given sort of the disparity between public and private market values in Timberland, would you be open to doing more, you know, divestitures, you know, in addition to kind of the one that you are doing in Virginia, if the right opportunity presented?
Speaker #5: presented? Yeah,
Speaker #3: Absolutely. I mean, Keaton, we're going to do anything that we think drives long-term shareholder value. I think we've shown we've been open to divesting portions of our portfolio.
David M. Wold: Yeah, absolutely. I mean, Ketan, we're gonna do anything that we think drives long-term shareholder value. I think we've shown we've been open to divesting portions of our portfolio. The activity that we do in our real estate business also capitalizes on the value that we can unlock in our portfolio. So absolutely, we'd be open to anything that's ultimately going to drive value. I think that's something that we've demonstrated. We can be adding value anytime we transact on our portfolio, whether that's on the buy or the sell side. So we'll continue to look for opportunities to optimize our portfolio.
David M. Wold: Yeah, absolutely. I mean, Ketan, we're gonna do anything that we think drives long-term shareholder value. I think we've shown we've been open to divesting portions of our portfolio. The activity that we do in our real estate business also capitalizes on the value that we can unlock in our portfolio. So absolutely, we'd be open to anything that's ultimately going to drive value. I think that's something that we've demonstrated. We can be adding value anytime we transact on our portfolio, whether that's on the buy or the sell side. So we'll continue to look for opportunities to optimize our portfolio.
Speaker #3: The activity that we do in our real estate business also capitalizes on the value that we can unlock in our portfolio. So, absolutely, we'd be open to anything that's ultimately going to drive value.
Speaker #3: I
Speaker #1: think that's that's something that we've demonstrated we can be adding value anytime we transact on our whether that's on the portfolio , buy or the sell side .
Speaker #1: So, by or the side—so we'll sell to look for opportunities, continue to optimize our portfolio, too.
[Analyst] (BMO Capital Markets Equity Research): In the near term, though, would you say that you would be more of a net seller versus a net buyer, or not necessarily?
Ketan Mamtora: In the near term, though, would you say that you would be more of a net seller versus a net buyer, or not necessarily?
Speaker #2: Near term, would you say that you would be more of a net seller versus a net buyer, or not necessarily?
David M. Wold: Again, I think we're gonna look at all the opportunities that are available. You know, we're gonna look to optimize shareholder value for the long term, and so we'll look to be active in that portfolio anytime that it makes sense to transact on our portfolio.
David M. Wold: Again, I think we're gonna look at all the opportunities that are available. You know, we're gonna look to optimize shareholder value for the long term, and so we'll look to be active in that portfolio anytime that it makes sense to transact on our portfolio.
Speaker #1: Again ,
Speaker #1: I think we're going . to look at all the opportunities that are available . So , you know , I we're look to going to optimize shareholder value long term .
Speaker #1: And so we'll look to be active in that portfolio anytime that it makes sense to transact on our portfolio.
[Analyst] (BMO Capital Markets Equity Research): Got it. That's helpful. I'll turn it over. Good luck.
Ketan Mamtora: Got it. That's helpful. I'll turn it over. Good luck.
Speaker #2: Got it. I'll turn it over. Good luck.
David M. Wold: Thanks.
David M. Wold: Thanks.
Speaker #3: Thanks .
Operator: Our next question comes from Matthew McKellar with RBC Capital Markets. Please proceed with your question.
Operator: Our next question comes from Matthew McKellar with RBC Capital Markets. Please proceed with your question.
Speaker #4: Our next question comes from Matthew Mackellar with RBC Capital Markets. Please proceed with your question.
[Analyst] (RBC Capital Markets): Good morning, and thanks for taking my questions. First, you talked about upside potential in western sawlog markets if lumber prices pick up. Could you help us just give us a sense of what kind of increase in prices or sawmill demand, however you'd like to frame it, that you'd need to see to create real tension and price momentum there? And then from the supply side, it seems like a bit of a marginal change, but will you expect the expansion of buffer zones around the non-fish-bearing streams in western Washington later this year to have an impact on log markets there in the west? Thanks.
Matthew McKellar: Good morning, and thanks for taking my questions. First, you talked about upside potential in western sawlog markets if lumber prices pick up. Could you help us just give us a sense of what kind of increase in prices or sawmill demand, however you'd like to frame it, that you'd need to see to create real tension and price momentum there? And then from the supply side, it seems like a bit of a marginal change, but will you expect the expansion of buffer zones around the non-fish-bearing streams in western Washington later this year to have an impact on log markets there in the west? Thanks.
Speaker #5: Good morning . Thanks for taking my questions . you talked First , about upside potential in Western markets . If lumber prices pick up , could you Just give help us ?
Speaker #5: us a sense of what kind of increase in prices or sawmill demand . However you'd like to frame it . That need to see you'd to create real tension in price , in there .
Speaker #5: And then supply side, from a momentum, it seems like a bit of a marginal change. But what do you expect the expansion of buffer zones around the non-fish-bearing streams in Western Washington later this year to have—do you expect that to have an impact on log markets there in the West?
Speaker #5: Thanks .
Devin W. Stockfish: Yeah, on your first question, you know, the markets are fundamentally tensioned in the West, and, you know, what we've seen from a western log pricing is really just a reflection of really weak lumber pricing. And you'll see periods of time where buyers will purchase logs at prices that put them underwater, but they just can't do that, you know, for extended periods of time. So you typically see a pretty strong log price reaction as you see lumber prices move up. Now, there may be a month or 2-month lag in that catch up, but, you know, if you continue to see lumber prices move up in the West, we've seen a bit of that here recently, you'll see log prices follow along shortly thereafter.
Devin W. Stockfish: Yeah, on your first question, you know, the markets are fundamentally tensioned in the West, and, you know, what we've seen from a western log pricing is really just a reflection of really weak lumber pricing. And you'll see periods of time where buyers will purchase logs at prices that put them underwater, but they just can't do that, you know, for extended periods of time. So you typically see a pretty strong log price reaction as you see lumber prices move up. Now, there may be a month or 2-month lag in that catch up, but, you know, if you continue to see lumber prices move up in the West, we've seen a bit of that here recently, you'll see log prices follow along shortly thereafter.
Speaker #6: Yeah. On your first question, you know the markets are fundamentally a tension in the West. And you know what we've seen from a Western log pricing is really just a reflection of really weak lumber pricing.
Speaker #6: You'll see periods of time where buyers will purchase logs at prices that put them underwater, but they just can't do that.
Speaker #6: You know, for extended periods of time. So, you typically see a pretty strong log price reaction as you see lumber prices move up.
Speaker #6: Now , there may be a month or two month lag in that catch up , but you know , if you continue to see lumber prices move up in the West , we've seen a bit of that here recently .
Speaker #6: You'll see log prices follow along shortly thereafter. With respect to your second question, you know that relates to some happening in regulatory Washington state.
Devin W. Stockfish: With respect to your second question, you know, that relates to some regulatory changes happening in Washington state. You know, look, as with almost all regulations in Washington or Oregon or really any environment where we operate, we have the scale and expertise to navigate those pretty well. So I wouldn't expect that to have a meaningful impact on us. It may to others, particularly smaller landowners. There were some, I would say, flaws in the rulemaking process to bring that forward, which is why there are several lawsuits underway. So it's not even entirely clear to me that those rules will ultimately come to fruition. But if they do, we'll manage through it, and it shouldn't be too impactful to us.
With respect to your second question, you know, that relates to some regulatory changes happening in Washington state. You know, look, as with almost all regulations in Washington or Oregon or really any environment where we operate, we have the scale and expertise to navigate those pretty well. So I wouldn't expect that to have a meaningful impact on us. It may to others, particularly smaller landowners. There were some, I would say, flaws in the rulemaking process to bring that forward, which is why there are several lawsuits underway. So it's not even entirely clear to me that those rules will ultimately come to fruition. But if they do, we'll manage through it, and it shouldn't be too impactful to us.
Speaker #6: You know, you look, as with almost all regulations in Washington or Oregon or really any environment where we operate, we have the expertise to navigate those pretty well.
Speaker #6: So I wouldn't expect that to have a meaningful impact on us . It may to others , particularly smaller landowners , there were some I would say , flaws in the rulemaking process to forward , bring that why there are several underway .
Speaker #6: which is So it's lawsuits even not to me that those rules will ultimately come to fruition . But if they do , we'll manage through it , and it shouldn't be too impactful to us .
[Analyst] (RBC Capital Markets): Great. That's very helpful. And then, just quickly, you mentioned elevated log inventories at mills in the South. Could you just give us a sense of how those inventories would compare to where they'd normally be this time of year? Thank you.
Matthew McKellar: Great. That's very helpful. And then, just quickly, you mentioned elevated log inventories at mills in the South. Could you just give us a sense of how those inventories would compare to where they'd normally be this time of year? Thank you.
Speaker #5: Great . That's very helpful . And then just quickly , you mentioned elevated log inventories at Mills in the South . Could you maybe just give us a sense of how those inventories would compare to where they'd normally be this year ?
Devin W. Stockfish: Yeah, I mean, when we say that, it, you know, we're talking about if a mill typically carries 7 or 8 days of inventory, maybe they're carrying 8, 9, 10. So, you know, you can, in the South, it's not like in Canada, where they're, you know, carrying really, really large log decks. You can work through these pretty quickly if you have either a weather event that limits log supply into the system, or if you see a pickup in lumber demand and people start running full and picking up overtime shifts. So you can move through that pretty quickly. The impact in the near term is just, you know, if your log deck's full, you don't necessarily have to get too aggressive on pricing. You can take a little bit more risk around the margins.
Devin W. Stockfish: Yeah, I mean, when we say that, it, you know, we're talking about if a mill typically carries 7 or 8 days of inventory, maybe they're carrying 8, 9, 10. So, you know, you can, in the South, it's not like in Canada, where they're, you know, carrying really, really large log decks. You can work through these pretty quickly if you have either a weather event that limits log supply into the system, or if you see a pickup in lumber demand and people start running full and picking up overtime shifts. So you can move through that pretty quickly. The impact in the near term is just, you know, if your log deck's full, you don't necessarily have to get too aggressive on pricing. You can take a little bit more risk around the margins.
Speaker #5: Thank you .
Speaker #6: Yeah . I mean , when we say that , you know , we're talking about if a mill typically carries 7 or 8 days of inventory , they're ten .
Speaker #6: maybe carrying eight , nine , know , you can , you in the South , it's not like Canada in in where they're , you know , carrying really , really large log decks .
Speaker #6: You can work through these quickly if you have a weather event, either that limits log supply into the system, or if you see a pickup in lumber demand and people start running full and picking up overtime shifts.
Speaker #6: So you can move through that pretty quickly. The impact in the near term is just, you know, if you're logged at school, you don't get to necessarily have to be aggressive on pricing.
Speaker #6: You can take a little bit of risk around margins. But, more again, that can reverse itself pretty quickly depending on circumstances.
Devin W. Stockfish: But again, that can reverse itself pretty quickly, depending on circumstances.
Devin W. Stockfish: But again, that can reverse itself pretty quickly, depending on circumstances.
[Analyst] (RBC Capital Markets): Very helpful. Thanks very much. I'll turn it back.
Matthew McKellar: Very helpful. Thanks very much. I'll turn it back.
Speaker #5: Very helpful. Thanks very much. I'll turn it back.
Devin W. Stockfish: Thanks.
Devin W. Stockfish: Thanks.
Speaker #3: Thanks . .
Operator: Our next question is from Hong Zhang with JP Morgan. Please proceed with your question.
Operator: Our next question is from Hong Zhang with JP Morgan. Please proceed with your question.
Speaker #4: Our next question is from Hong Hang with Morgan. Please proceed with your question.
David M. Wold: Yeah, hey, I guess two questions for me. Number one, how are you thinking about the pace of share buyback activity given the recent rally in the stock? And for my second question, it's encouraging that export shipments are resuming to China. Do you expect export volumes to, I guess, normalize sometime this year, or is that more of an outer year, outer year thing?
Hong Zhang: Yeah, hey, I guess two questions for me. Number one, how are you thinking about the pace of share buyback activity given the recent rally in the stock? And for my second question, it's encouraging that export shipments are resuming to China. Do you expect export volumes to, I guess, normalize sometime this year, or is that more of an outer year, outer year thing?
Speaker #7: Yeah . Hey , I guess two questions for me . Number one , how are you thinking about the pace of share buyback Given the activity ?
Speaker #7: recent rally in the stock ? And for my question , second encouraging that export resuming in shipments are China . Do you expect export volumes to , I guess , normalize sometime this year , or is that more of an outer year ?
Speaker #7: Outer year thing ?
Devin W. Stockfish: Yeah, maybe I'll take the export question, then, and Davey can hit the share repo question. You know, the export piece. You know, I do expect that to ramp up a bit over the course of the year, but I do not expect it to get back to where it was, you know, a handful of years ago. And that's just really a reflection of the lower real estate activity that we're seeing in China. Until that picks up, I don't know that you're necessarily gonna see the ramp back up to kind of those more, you know, teens, you know, two thousand teens levels of China log demand. But nevertheless, super excited about getting that program ramped up. Any option for log customers is great for us, and that will be helpful for our Western system.
Devin W. Stockfish: Yeah, maybe I'll take the export question, then, and Davey can hit the share repo question. You know, the export piece. You know, I do expect that to ramp up a bit over the course of the year, but I do not expect it to get back to where it was, you know, a handful of years ago. And that's just really a reflection of the lower real estate activity that we're seeing in China. Until that picks up, I don't know that you're necessarily gonna see the ramp back up to kind of those more, you know, teens, you know, two thousand teens levels of China log demand. But nevertheless, super excited about getting that program ramped up. Any option for log customers is great for us, and that will be helpful for our Western system.
Speaker #6: Yeah , maybe I'll take the export question . And David can hit the share question . repo You know , on the export piece , you know , I do expect that to ramp up a bit over the course of the year .
Speaker #6: But I do not expect it to get back to where it was . You know , a handful of years ago . just And that's really a reflection of the , the lower real estate activity that we're seeing in China .
Speaker #6: Until that picks up , I don't know that you're necessarily going to see the up to kind of ramp back those more , you know , teens let you know 2000 teens levels of of China log demand .
Speaker #6: But nevertheless, super excited about getting that program ramped up. Any option for log customers is great for us, and that will be helpful for the Western system.
David M. Wold: Yeah, and then with respect to share repurchase, look, we've said that's a useful tool in the right circumstance to return cash to shareholders. We have a framework that we've used consistently to evaluate capital allocation decisions. Obviously, the factors that go into that, the math is dynamic, but the process is consistent. We've been very active over the course of 2025, and our share repurchase activity completed $160 million. That was our highest annual level in a few years. Closed out the prior $1 billion authorization, announced the new one. So yeah, at recent trading ranges, we continue to view that as a very attractive lever. But of course, we're gonna continue to weigh all the opportunities available, not just share repurchase.
David M. Wold: Yeah, and then with respect to share repurchase, look, we've said that's a useful tool in the right circumstance to return cash to shareholders. We have a framework that we've used consistently to evaluate capital allocation decisions. Obviously, the factors that go into that, the math is dynamic, but the process is consistent. We've been very active over the course of 2025, and our share repurchase activity completed $160 million. That was our highest annual level in a few years. Closed out the prior $1 billion authorization, announced the new one. So yeah, at recent trading ranges, we continue to view that as a very attractive lever. But of course, we're gonna continue to weigh all the opportunities available, not just share repurchase.
Speaker #1: Yeah, and then with respect to Sherry—look, respect said, that's a useful tool in the right circumstance to return cash to shareholders.
Speaker #1: We have a framework that we've used consistently to evaluate capital allocation decisions . Obviously the factors that go that , the math is dynamic , but the into is consistent .
Speaker #1: We've been very active over the course of our share repurchase activity in 2025. That was our highest annual level in a few years.
Speaker #1: Closed out $160 million . the prior 1 billion authorization , announced the new one . So yeah , it recent trading ranges . We continue to view a as a attractive very lever .
Speaker #1: But of course we're going to continue to weigh all the that as opportunities available , not just share repurchase . And so that includes maintaining the the focus on ensuring we've got a strong balance sheet , capacity having for future growth opportunities .
David M. Wold: And so that includes maintaining the focus on ensuring we've got a strong balance sheet, having capacity for future growth opportunities. So as always, we'll continue to look to allocate our cash in a way that creates the most value for shareholders.
And so that includes maintaining the focus on ensuring we've got a strong balance sheet, having capacity for future growth opportunities. So as always, we'll continue to look to allocate our cash in a way that creates the most value for shareholders.
Speaker #1: So, as always, we'll continue to look to allocate our cash in a way that creates the most shareholder value for.
Devin W. Stockfish: Uh, thanks.
Devin W. Stockfish: Uh, thanks.
David M. Wold: I hope the weather treats you better over there than it's gonna treat us over here.
David M. Wold: I hope the weather treats you better over there than it's gonna treat us over here.
Speaker #7: Thanks. I hope the weather treats you better over there than it's going to treat us over here.
Devin W. Stockfish: All right. We hope that too.
Devin W. Stockfish: All right. We hope that too.
Speaker #3: All right .
Speaker #6: We hope that to .
Operator: Our final question is from Michael Roxland with Truist Securities. Please proceed with your question.
Operator: Our final question is from Michael Roxland with Truist Securities. Please proceed with your question.
Speaker #4: Our final question is from Michael Rocklin with Truist Securities. Please proceed with your question.
[Analyst] (Truist Securities Inc.): Hey, guys. Thanks for taking my questions. This is Nico Pacini on for Mike. Just starting off, you know, the Q1 timberlands EBITDA guide seems maybe a little light relative to history. I think there's usually a bump up from Q4 to Q1. You know, we've had some commentary so far, but I guess, how does that reconcile with comments that regional log markets are kind of trending more towards balanced supply demand, even if you have some inventory out of whack?
Niccolo Pacini: Hey, guys. Thanks for taking my questions. This is Nico Pacini on for Mike. Just starting off, you know, the Q1 timberlands EBITDA guide seems maybe a little light relative to history. I think there's usually a bump up from Q4 to Q1. You know, we've had some commentary so far, but I guess, how does that reconcile with comments that regional log markets are kind of trending more towards balanced supply demand, even if you have some inventory out of whack?
Speaker #8: Hey , guys . Thanks for taking my questions . This is Nico Piccini on for Mike . I just starting off , you know , the one Q Timberlands EBITDA guide seems maybe a little light relative to history .
Speaker #8: I think there's usually a bump up from four one Q . Q to know , we've had some commentary but so far , I guess how reconcile with comments that does that regional log markets are kind of trending more towards balanced supply demand , even if you have some inventory out of whack .
Devin W. Stockfish: Yeah. So, you know, the way I would, I would frame that up for you is, when you look at Q4 and Q1 to date, we've just seen, largely because of what's happened in the lumber market, we've seen pretty soft log prices. And so, you know, to some degree, last year, we kind of saw that trending that direction, and so we pulled a little bit more volume into the summer months so that we could take advantage of higher pricing. And so what you saw is volume coming off in Q4 as well. As we've trended into Q1, you know, when we entered Q1, and so for January and, and to date, log prices are still softer than we would like. And so you look at our Q1 volume in Western Timberlands, it's down relative to what you'd normally see in Q1.
Devin W. Stockfish: Yeah. So, you know, the way I would, I would frame that up for you is, when you look at Q4 and Q1 to date, we've just seen, largely because of what's happened in the lumber market, we've seen pretty soft log prices. And so, you know, to some degree, last year, we kind of saw that trending that direction, and so we pulled a little bit more volume into the summer months so that we could take advantage of higher pricing. And so what you saw is volume coming off in Q4 as well. As we've trended into Q1, you know, when we entered Q1, and so for January and, and to date, log prices are still softer than we would like. And so you look at our Q1 volume in Western Timberlands, it's down relative to what you'd normally see in Q1.
Speaker #6: So , you know , the Yeah . way I would I would frame that up for you is when you look at Q4 and Q1 to date , we've just seen largely because of what's happened in the lumber market .
Speaker #6: We've seen pretty soft log so , you know , to some degree , last year we kind of saw that prices . trending that direction .
Speaker #6: And so we pulled a little bit and volume more into the months so that we could take advantage of higher summer pricing. And so what you saw is volume coming off in Q4, as well as we've trended into Q1, you know, when we entered Q1.
Speaker #6: And so, for January and to date, log prices are still softer than we would like. And so, you look at our Q1 volume in Western Timberlands, it's down relative to what you'd normally see in Q1.
Devin W. Stockfish: Now, we still have comparable volumes across the year, and so we're gonna spread that out as the year progresses, when we expect to see pricing a little higher. So, you know, quarter to quarter, you might have these little fluctuations in volume, depending on what's going on in the market, but our primary goal, obviously, is to maximize profitability across the year. And so that's really the context around Q1, is we pulled a little bit of volume back, primarily because January and, you know, early February, we think pricing is going to improve as we get deeper into the spring and the building season. So we're gonna put a little bit more log volume into the market when pricing is better.
Now, we still have comparable volumes across the year, and so we're gonna spread that out as the year progresses, when we expect to see pricing a little higher. So, you know, quarter to quarter, you might have these little fluctuations in volume, depending on what's going on in the market, but our primary goal, obviously, is to maximize profitability across the year. And so that's really the context around Q1, is we pulled a little bit of volume back, primarily because January and, you know, early February, we think pricing is going to improve as we get deeper into the spring and the building season. So we're gonna put a little bit more log volume into the market when pricing is better.
Speaker #6: Now, we still have comparable volumes across the year, and so we're going to spread that out as the year progresses, when we expect to see pricing a little higher.
Speaker #6: So, you know, quarter to quarter, you might have these little fluctuations in volume depending on what's going on in the market.
Speaker #6: But our primary goal obviously is to maximize profitability across the year . And so that's really the context around Q1 . As we pulled a little bit of volume back primarily because January and you know , early February , we think we think pricing is going to improve as we get deeper into the spring and the building season .
Speaker #6: So, we're bit more—a little log volume—into the market when going to put better.
[Analyst] (Truist Securities Inc.): Got it. Thank you. That makes sense. And then just following up, you know, in your base CapEx target of $400 to 450 million, excluding Monticello, what are some of the key projects there that you're looking to complete in 2026?
Niccolo Pacini: Got it. Thank you. That makes sense. And then just following up, you know, in your base CapEx target of $400 to 450 million, excluding Monticello, what are some of the key projects there that you're looking to complete in 2026?
Speaker #8: Got it . Thank you . That makes sense . And then following up you just know in your base CapEx target of $450 million excluding Monticello , what are some of the key projects there that you're looking to complete in 2026 ?
David M. Wold: Yeah, you bet. So yes, we, we did guide $400 to $450 million. That is in line with the guidance that we provided back in, in December at our Investor Day. You know, really thinking about it, it's the typical suite of projects. On the Timberlands side, that's reforestation, silviculture, roads, bridges, those kind of things. On the Wood Products side, it's thinking about the projects that we've successfully completed, in some of our lumber mills, replicating those elsewhere, really with a focus on, reducing cost, improving recovery, improving reliability. So really more of the same in terms of the, the themes that we've been, working on in our CapEx program over the last several years.
David M. Wold: Yeah, you bet. So yes, we, we did guide $400 to $450 million. That is in line with the guidance that we provided back in, in December at our Investor Day. You know, really thinking about it, it's the typical suite of projects. On the Timberlands side, that's reforestation, silviculture, roads, bridges, those kind of things. On the Wood Products side, it's thinking about the projects that we've successfully completed, in some of our lumber mills, replicating those elsewhere, really with a focus on, reducing cost, improving recovery, improving reliability. So really more of the same in terms of the, the themes that we've been, working on in our CapEx program over the last several years.
Speaker #1: Yeah , you bet . So yes , we did guide to 400 to $450 million . That is in line with the guidance that we back in in December .
Speaker #1: At our Investor Day . provided You know , really thinking about it , it's the typical suite of projects on the Timberland side that's reforestation , silviculture , roads , bridges , those kind of things .
Speaker #1: On the wood side, it's product thinking about the projects that we've successfully completed and some of our lumber mills replicating those elsewhere, really with a focus on reducing costs and improving reliability.
Speaker #1: So, more of really the terms, same in the themes that we've been working on in our CapEx program over the last years.
[Analyst] (Truist Securities Inc.): Yeah. No, no, you know, one particular big project to call out or anything outside of Monticello?
Niccolo Pacini: Yeah. No, no, you know, one particular big project to call out or anything outside of Monticello?
Speaker #8: Got it . No . You know , one particular big call out or project to anything outside of Monticello ?
David M. Wold: No.
David M. Wold: No.
Devin W. Stockfish: Nope.
Devin W. Stockfish: Nope.
David M. Wold: That's right.
David M. Wold: That's right.
Speaker #1: No. Nope. That's right.
[Analyst] (Truist Securities Inc.): Thank you very much. I appreciate it.
Niccolo Pacini: Thank you very much. I appreciate it.
Speaker #8: Thank you very much. I appreciate it.
Operator: We have reached the end of the question and answer session. I would now like to turn the floor back over to Devin Stockfish for closing comments.
Operator: We have reached the end of the question and answer session. I would now like to turn the floor back over to Devin Stockfish for closing comments.
Speaker #4: We have reached the end of the question and answer session. I would now like to turn the floor back over to Devin Stockfish for closing comments.
Devin W. Stockfish: All right. Well, thanks everyone for joining us this morning, and thank you for your continued interest in Weyerhaeuser. Have a great day.
Devin W. Stockfish: All right. Well, thanks everyone for joining us this morning, and thank you for your continued interest in Weyerhaeuser. Have a great day.
Speaker #4: . All
Speaker #6: right . Well , thanks everyone for joining us this And morning . thank you for your interest continued in Weyerhaeuser . Have a great day .
Operator: This concludes today's teleconference. You may disconnect your lines at this time, and we thank you for your participation.
Operator: This concludes today's teleconference. You may disconnect your lines at this time, and we thank you for your participation.
