Weyerhaeuser at Citi’s Global Property CEO Conference: Strategic Growth Insights

On Tuesday, 04 March 2025, Weyerhaeuser Company (NYSE: WY) participated in Citi’s 30th Annual Global Property CEO Conference. The discussion, led by CEO Devin Stockfish, highlighted the company’s strategic positioning in the lumber market, its focus on operational excellence, and the challenges posed by tariffs and duties. While expressing optimism about future growth, the company also acknowledged the impacts of market fluctuations and regulatory changes.

Key Takeaways

• Weyerhaeuser is investing in a new TimberStrand facility in Arkansas, expecting significant EBITDA returns.
• Tariffs and duties on Canadian lumber imports are set to increase, affecting supply dynamics.
• The company aims to achieve $100 million in EBITDA from Natural Climate Solutions by 2025.
• A strong focus is placed on expanding the Timberlands portfolio through disciplined investments.

Financial Results

• Lumber demand decreased in mid-single digits due to lower repair and remodel activities and multifamily housing construction.
• Approximately 4 billion board feet of lumber capacity was removed from the North American market following mill closures.
• Lumber duties are projected to rise to 25%-30% later this year, impacting Canadian imports.
• Weyerhaeuser’s Natural Climate Solutions business generated $84 million in EBITDA, with a target of $100 million by 2025.

Operational Updates

• Weyerhaeuser operates three lumber mills in Canada, contributing 20% to its overall production, with limited exports to the U.S.
• A new $500 million TimberStrand facility in Arkansas will use 80% of its wood supply from Weyerhaeuser timberlands.
• The company manages 10.5 million acres of timberlands in the U.S. and 14 million acres in Canada under long-term licenses.

Future Outlook

• The company anticipates a slight improvement in single-family housing starts year-over-year.
• Plans to invest $1 billion in expanding the Timberlands portfolio by the end of 2025.
• Continued growth in the renewables sector, with new solar and wind projects in development.

Q&A Highlights

• Import duties and tariffs on Canadian lumber could reach 50%-55% this summer, influencing price trends.
• High-quality timberland packages are attracting strong interest from diverse global investors.
• Carbon capture and sequestration projects are progressing slower than expected due to permitting challenges.

In conclusion, Weyerhaeuser’s strategic initiatives and market positioning suggest promising growth prospects. For more detailed insights, refer to the full transcript of the conference call.

Full transcript - Citi’s 30th Annual Global Property CEO Conference:

Anthony Pettenari, Analyst, City Research: Alright. Good afternoon. I’m Anthony Pettenari with City Research, and we’re very pleased to have with us, Warehauser and CEO, Devin Stockfish. This session is for Citi clients only, and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqanda.com and enter code g PC25 to submit a question.

Devin, I’m gonna turn it over to you, and maybe you can start with a short introduction to Weyerhaeuser and the portfolio, and then we can jump into q and a.

Devin Stockfish, CEO, Weyerhaeuser: Sure. Well, glad to be here. Thanks, Anthony. Really high level, I think most folks are probably familiar with the story. We are one of the largest private owners of timberlands in North America, perhaps the world.

We have 10,400,000 acres of timberlands in The United States. We manage another 14,000,000 acres in Canada under long term license agreements. We also have a real estate, energy, and natural resources segment, which is really focused on looking across that portfolio and land base to make sure that we’re maximizing the potential and returns from all of our acreage. We can dive into those specifics if you’d like. That includes our natural climate solutions business in that segment.

And then lastly, we are one of the largest producers of wood products in North America. We manufacture lumber, oriented strand board, a variety of other engineered wood products, as well as 19 distribution facilities across The US and Canada. We manage all of these businesses at scale with industry leading performance, and it’s all underneath a very tax efficient REIT structure. So that’s at the high level. Maybe we’ll keep it brief, Anthony, because I think there are probably lots of things to talk about today.

Anthony Pettenari, Analyst, City Research: Yes. So maybe we can start off and if you can give us maybe a current state of the lumber market, and then we got two executive orders from President Trump over the weekend, one on lumber, the other on timber. Maybe we can start off with lumber and maybe talk about where the market is and then the impact of the executive order.

Devin Stockfish, CEO, Weyerhaeuser: Yes, sure. Well, there’s a lot going on in the lumber market today, and maybe I’ll back up just a minute here to provide some context for what’s going on in the market. So if you look at last year, it was a tough year in the lumber space. We saw repair and remodel demand down, somewhere in the mid single digits. We saw multifamily housing construction down a fair bit, and so overall demand for lumber last year was down.

And it was a pretty, challenging environment for most of the lumber industry. What that resulted in over the course of the year was a pretty significant amount of mill closures across North America. So if you think about the North American manufacturing base, call it 72,000,000,000 board feet of capacity, about 4,000,000,000 board feet of capacity came out of the market last year. That was a little bit more weighted toward the back end of the year. And so as we head into 2025, regardless of whether you see any meaningful uptick in demand, which we think we will and we can talk about that a little bit more, Just the overall supply demand dynamics in North America will be more favorable for lumber this year just because there is 4,000,000,000 board feet less, supply in the market.

So that’s that’s the backdrop. There’s a lot going on, with respect to the new administration, particularly around tariffs. And I wanna just make sure everyone’s clear. Tariffs are distinct from lumber duties, and both of these things do have some impacts on what’s going on in the lumber market. The tariffs are the 25% tariff that the president put in place here yesterday, and those impact all wood products coming into The United States.

And so that includes lumber, oriented strand board, engineered wood products. Just for context, about 25% of the lumber that is used in The US comes from Canada. About 30% of the OSB that is used in The US comes from Canada. So there is a fairly material amount of wood that is flowing across the border into The US, and the tariffs will impact all of that coming in. If you look at tariffs by itself, that’s one component.

Duties are another component, and that is specific to lumber, and that is a result of a long standing dispute between The United States and Canada over how logs are priced in Canada. And so currently, there’s a 14 and a half percent duty that’s separate from the tariffs that applies to lumber coming into The US. That lumber duty is going to go up later this year in August. That should go up to 25 to 30%. And so those two things are different.

The tariffs are pursuant to the executive order from the president. The duties are pursuant to a trade case. So putting all of that together, there’s been some turmoil in the market. We have seen lumber prices going up here recently. Now that would have happened anyway because as you get into the warmer months and out of the winter months, that’s when the building activity really starts to pick up.

And so you’d see more demand as you head into the March, April time frame anyhow, but we’ve also had that additional component of the tariffs in play as well. So it’s been a dynamic market here recently, but we have seen lumber prices trending up recently.

Anthony Pettenari, Analyst, City Research: Great. And to follow-up on that and just to be clear, you’ve got a duty that in this summer is going to go to 25% to 30%. We’re talking about a tariff of 25%. So it’s possible, maybe probable that there’ll be a 50% to 55% total import duty plus tariff on Canadian lumber this summer?

Devin Stockfish, CEO, Weyerhaeuser: Correct. Those two do stack on top of each other, yes.

Anthony Pettenari, Analyst, City Research: Right. So what actually happens or how do you see the market playing out? Do the Canadians kind of hold on? Do you see capacity closures? Do you see your, you know, supply response in the South?

How how

Devin Stockfish, CEO, Weyerhaeuser: Yeah. I mean, I think it’s really a function largely of the demand environment, right? And so to the extent that the demand is there for lumber, there are only so many places that you can produce lumber, and so that would presumably cause some increase in pricing to accommodate that tariff for the Canadian producers. If you see the demand environment wane, and you see just not enough price support for those marginal producers on the cost curve, presumably, they will at some point have to take some of that capacity out, so further impacting the overall supplydemand dynamic in North America.

Anthony Pettenari, Analyst, City Research: And you said earlier, you thought that there was some signs of improvement or hope for improvement in underlying demand. Can you talk a little bit about on the R and R side and

Devin Stockfish, CEO, Weyerhaeuser: on the newbuild side? Sure. Yeah. So as we think about it, you know, the primary drivers for our business are really residential construction and repair and remodel. We will look at last year, multifamily was down quite a bit, but single family actually was reasonably good.

With a million housing starts, that’s not a bad year in single family. As we look out into 2025, our base case is a very slight improvement year over year in single family. And, you know, the components of what makes that up, I I do think you’re gonna continue to see the large national builders continue to take market share. They’ve shown a, you know, a a really strong ability to navigate this environment through offering different home sizes, amenity packages, buying down mortgages. They’ve navigated this time period fairly successfully, and I see that continuing to happen.

You know, there’s always the risk with interest rates. You know, if that were to go meaningfully higher, over the course of the year, obviously, that’s a headwind. And I think there’s still some, uncertainty in terms of how the tariffs will play into the overall affordability calculation. But that all being said, this country needs to build a lot of houses, and I think the big national builders are inclined to keep churning them out, as long as they can get a reasonable margin. And I think that will probably be the case for 2025.

And

Anthony Pettenari, Analyst, City Research: can you talk a little bit more about your lumber footprint in terms of maybe your cost position in North America, where the assets are located, how you think you’re positioned to meet the demand?

Devin Stockfish, CEO, Weyerhaeuser: Yes. So when you think about and maybe I’ll even just talk about our wood products manufacturing footprint in general, particularly relative to Canadian operations. So we have three lumber mills in Canada, and that represents about 20% of our overall production. Of that Canadian production, a relatively small percentage of that comes into The US. About 20% of the Canadian manufactured lumber within Weyerhaeuser’s footprint comes into The US.

We send a fair bit to Japan and keep some, locally in the domestic Canadian market. So, obviously, that 20% that comes over the border is subject to tariffs and duties. On the OSB side, we have two mills in Canada. The majority of that production does come into The US, and so we’ll have tariffs on that. Similarly, we have two engineered wood products mills in Canada.

So, you know, there will be some pressure, when you look at those individual mills, but the market as a whole is going to have to adjust to that. And our overall footprint is primarily in The US. So we’ll have to deal with that around the margins for our Canadian operations, but the majority are in The U. S. And will not be subject to those tariffs.

Anthony Pettenari, Analyst, City Research: Great. Great. And we talked about the lumber market. Can you give us a brief overview of OSB and how the exposures are a little bit different and your footprint there?

Devin Stockfish, CEO, Weyerhaeuser: Yeah. So again, you know, the majority of our assets are in The US on the OSB side. That market hasn’t been quite as volatile as the lumber market here. Over the last few years, we’ve seen relatively strong OSB prices for the last several years. A little bit of a dip in the December, January time frame, which is not unusual just because seasonally, there’s less building going on during the cold months.

But overall, we’ve got a very low cost production, manufacturing asset base, and that’s true for OSB. But really across the board, we’ve been working for a number of years on our operational excellence initiatives, and we’ve really positioned all of our manufacturers, manufacturing businesses to be industry leading from a margin standpoint. So we sit in a good place on the cost curve really across all of our manufacturing operations.

Anthony Pettenari, Analyst, City Research: Rounding it out, engineered wood products, can you talk about those product offerings? And you made an announcement of a large capacity project there?

Devin Stockfish, CEO, Weyerhaeuser: Yes. I mean, we’re really pleased with how well our Engineered Wood Products business is operating. Our Trust Choice brand within the Engineered Wood portfolio is a premium brand. We get premium pricing, very strong product offering. We have a variety of different products that we provide to the market, some of which LSL is more of a proprietary product, our ParaLand product similarly, and others, LVL is similar to products that others produce.

But overall, very strong product offering, good relationships with the builder. We’re really pleased with the position that we have in the market, which is one of the reasons we had just announced a new mill that we’re going to be building in Arkansas, a new Timber Strand facility. And just a little background about Timber Strand, most engineered wood products are made by gluing veneer together to make a variety of beams, and those are really good products. But veneer comes from bigger sawlogs. Right?

You need the bigger logs, they peel the veneer, and that’s what you use as the input. The thing that is really beneficial about Timber Strand is you can use lower value logs to make that product. So think pulp logs, which have a much lower input cost. And so you take the pulp logs, you you generate these strands, which you glue together just at the right angles, and you get the strength profile you need to sell a high value beam but with a low input cost. And so that makes it one of our highest margin products.

It’s very much in demand, has a lot of different end uses all over the home in single family, industrial applications, all the way through to mass timber applications. So a lot of optionality, high margin product. We’re building it in Arkansas, which is an area with, a, a lot of timberlands that we own. So 80% of the wood that feeds into that mill is gonna be from our timberlands. But it’s also a geography that has not very good pulpwood demand.

There have been several pulp and paper mills that have closed down in that region, and so this is an opportunity for us to get that integration benefit of putting that mill in an area where we have a lot of timber, which will tension up the pulpwood market there. So you get sort of that double benefit, both the returns that you get on the mill, but also the benefit and uplift you get in the Timberland. So gonna gonna be a good project, $500,000,000 investment, generate $100,000,000 of EBITDA plus additional synergies on the Timberland side when it’s up and running. So really pleased with that product and looking forward to growing our EWP business.

Anthony Pettenari, Analyst, City Research: Great. Great. Maybe switching gears to Timberlands. President Trump also had a executive order on timber, and I’m wondering if you could give us some context for that and if there’s any potential impact direct or indirect to your business. Sure.

Devin Stockfish, CEO, Weyerhaeuser: You know, if you if you sort of step back, the the good news story here for our industry is I think if you go back forty or fifty years, you probably have not seen a president talk more about lumber than we’ve seen in this administration. And so while that does carry some risk around the margin, I think the important thing is this administration appreciates the importance of protecting the forest and managing them in a way to prevent forest fire, etcetera, and also the importance of having a strong domestic lumber manufacturing environment. So I think there’s some opportunity there, and and that’s something that we’re excited about. In terms specifically of the executive order, you know, there were two pieces of it. One was investigating essentially whether other countries, beyond Canada are subsidizing their wood products manufacturing, and so that was one component.

And the other component was looking into ways to facilitate more harvesting on federal forest. With respect to increasing harvest in the federal forest, you know, there is a component of that that would be beneficial for everyone in the sense that there is a lot of forest management at the federal level that needs to take place to keep the forest healthy. So think thinning, think clearing out underbrush to prevent forest fire, disease, pest. That’s good for everyone. The reality is I don’t know that it’s practical in the near term to meaningfully increase the amount of harvest in the federal forest just because, you know, one, there are still laws that people use to challenge harvest on the federal land.

So think Endangered Species Act, NEPA, etcetera. Those are still in play. Additionally, I just think the mill environment has been, created to manufacture a log that’s a little smaller than typical logs on the Federal Forest. We typically harvest in the West. I call it forty to forty five year age class because that’s when it hits financial maturity.

Whereas in the federal forest, they’ve had the they’ve had a pretty extensive period of not harvesting, so those trees are just a little bigger. And most mills aren’t really designed to take a log of that diameter. So I think probably limited here in the near term in terms of that component of the executive order.

Anthony Pettenari, Analyst, City Research: Great. Yeah, please.

Devin Stockfish, CEO, Weyerhaeuser: Yeah. To to a degree, yes. So if you look at last year, most regions in The US that manufacture lumber were operating at a reduced operating rate just because of the price environment. As you see prices go up, my expectation is The U. S.

Mill set is going to operate at or they might even push extra hours, more shifts to ramp up volume. So to a degree, there is some flex in the system to ramp up production. Over time, if you think the demand is going to be there and these tariffs are gonna stay in place for an extended period, people can add capacity to the system. Now that takes a little time. You can’t do that overnight.

That would be over a series of years. But we do have we have the trees available, particularly in The US South, to increase lumber production in The US if that is the policy of The U. S. To do that. You know, the the cost of lumber specifically, and I don’t have the all in, you know, all of the wood used in a house off the top of my head, but the the percentage of the overall cost of a house just for the lumber is 1.5%.

So it’s not it’s not as impactful perhaps as some might have you believe. Now obviously, the engineered wood and the OSB is in addition to that, but there are a lot of other components within a house that are a bigger driver of the cost than the wood.

Anthony Pettenari, Analyst, City Research: Devin, maybe to give a sense, if you if one were to build a greenfield lumber mill in The U. S. South, how long would it take? How much would it cost just to get

Devin Stockfish, CEO, Weyerhaeuser: Yeah. I mean, so generally speaking, you can probably get one built in eighteen to twenty four months if you’re really hustling and you can get all the permits and you don’t have to deal with any wetland issues. That’s, generally speaking, kind of where you are now. You know, going back to the pandemic, that got extended a little bit just because the order files with everybody, you know, doing all these big capital investments, That got a little stretched out, but that is largely normalized at this point, so you can move it along a little bit more quickly. In terms of the cost, it sort of depends on how big of a mill you’re talking about, but $180,000,000 to $200,000,000 is probably in the right ballpark for a medium sized sawmill.

Anthony Pettenari, Analyst, City Research: Got it. And we were talking about your Timberlands portfolio. For your 10,000,000, 10 point five million acres, can you tell us about where those are located in the South Pacific Northwest and sort of some of the characteristics of those markets?

Devin Stockfish, CEO, Weyerhaeuser: Yes, sure. I mean, we really do have a unique portfolio. It would be nearly impossible to recreate that, both in terms of the scale but also the quality, since we’ve been working on this portfolio for you know, a hundred years. So two and a half million acres are in the Pacific Northwest. For those of you that are familiar with Washington and Oregon, all of the lands that we have are on the West Side Of The Cascade Mountains.

You get a lot more rain. These are really, really good growing regions in the Pacific Northwest, some of the best in the world for growing trees. So we have a pretty significant component of our ownership that’s in the Pacific Northwest. Really good for growing trees, really strong domestic grade markets as well as access to export markets in Japan, China, Korea, etcetera. So that’s a really important component.

We have about 7,000,000 acres of Timberlands across The US South that kinda go from Texas all the way up the coast to Virginia. Really, you know, The US South grows trees really fast. Those are southern yellow pine trees that, you know, are used in a whole host of different construction applications. Really favorable regulatory environment. Labor costs are are more competitive in the South.

So a really good place to own Timberlands. We’re growing an export program out of the South as well, to supplement that customer base. And then the remainder are Timberlands up in the Northeast. Little different type of Timberlands there, more of a mix of different types of hardwoods. And so forestry is a little different there.

Lower input costs, but not quite as productive in terms of volume growth as some of the other regions.

Anthony Pettenari, Analyst, City Research: Great. And can you say a few words on log price trends in those regions and maybe what drives log prices in the South versus Pacific Northwest?

Devin Stockfish, CEO, Weyerhaeuser: Yeah. Sure. Well, one of the one of the benefits of owning Timberlands in the Pacific Northwest is that it is a very tensioned, constrained wood basket. Meaning, generally speaking, if all of the mills are running full out, there there aren’t enough logs to go around. So what that means in practice for log prices is you see a much tighter correlation between lumber prices and log prices in the Northwest.

So as you see lumber prices go up, and we’ve seen this here just recently, western species lumber, has been on a nice little run here. You see log prices following close behind that. The US South in general is a different story. Coming out of the great recession, there were just a lot of sawmills that shut down, and so there was a lot of build in forest inventory over the last decade or so. And so in a lot of wood baskets, it’s oversupplied, so you don’t necessarily see that same correlation when lumber prices go up.

The the general price in the South, if you look at an average, has been pretty stagnant for, you know, call it ten years plus. We are seeing signs of improvement in specific wood baskets. And generally, what happens is when you get a new sawmill and there has been a lot of new capacity coming into the South for that very reason, it’s it’s got affordable logs to manufacture lumber. When you see a new mill come into a region, generally speaking, you can draw an 80 mile circle around that mill, and you’re gonna see tensioning in that particular wood basket, and you’ll see some uplift in price. And so ultimately, what’s gonna happen over time, and it has been slow going, admittedly, as new mills continue to come into the region, as we can grow export programs, that will, wood basket by wood basket, tension those markets and ultimately put upward pressure on pricing.

But it doesn’t move nearly as quickly as the West.

Anthony Pettenari, Analyst, City Research: Couple of follow ups there. When you harvest logs in the South And Pacific Northwest, what percentage roughly of those logs are going to go to a warehouse or sawmill versus selling it to a competitor sawmill or putting it on a boat or

Devin Stockfish, CEO, Weyerhaeuser: Yeah. Well, I’ll answer that in two ways. If you look at it from the Timberland’s perspective, about 25% of our overall harvest will go into a warehouse or mill. Now if you’re looking at it from the lumber perspective, about 50% of the logs that we manufacture in our lumber manufacturing facilities come from Weyerhaeuser land. So the piece that makes that, you have to remember in the South, when you think about the harvest, about 50% of the harvest is gonna go to manufacturing lumber and plywood and veneer, and 50% is gonna go into a pulp and paper end use application.

And we don’t we got out of the pulp and paper business. So all of the pulpwood is going to go to a third party manufacturer. So if you take that out of the equation, a little bit heavier mix in terms of grade will go into our internal mills.

Anthony Pettenari, Analyst, City Research: Got it. And then the South, obviously, a bigger geographic region than Pacific Northwest. Are you seeing any regional variations that are worth noting in terms of like coastal versus inland or states that are stronger than others or where you

Devin Stockfish, CEO, Weyerhaeuser: Yeah. You know, each individual geography has its own dynamics. The Eastern Seaboard has been stronger from a pricing standpoint for a number of years. Part of that is there there are a lot of pulp and paper mills along the Eastern Seaboard, and oftentimes when they get jammed up for wood, they’ll buy not just pulpwood, but ship and saw logs, which kinda raises the price of grade wood overall. And also when you think about being on the coast, instead of having a sourcing region that’s a hundred and eight or 360 degrees, you only have a 80.

So that puts a little bit of log press pricing pressure on the Eastern Seaboard. In terms of other geographies, I would I would say Oklahoma in the areas that we are in. You’ve seen some some good log price appreciation. There are spots in Arkansas, some sub regions in Mississippi, a little bit in Northern Louisiana. I mean, again, if you look at where the new mills are coming in, that’s generally speaking where you’re going to see things tensioning up from a log price standpoint.

Anthony Pettenari, Analyst, City Research: Got it. Got it. And so we’ve talked about the market for lumber and OSB and the market for logs. Can you talk about the market for the Timberlands themselves in terms of dollar per acre values or just the amount of transactions, kind of average price of transactions?

Devin Stockfish, CEO, Weyerhaeuser: Yes. Well, I mean, what we’ve seen here really over the last several years is pretty strong pricing for high quality timber packages. That’s been true really for years, and it’s equally true today. I think for the quality Timberland packages, you have all of the traditional buyers, the REITs, the TMOs, private, private entities that have manufacturing. You’re also seeing some new participants.

So there’s money coming in from Europe into the space, some Asian, investments as well, some folks that are looking at Timberlands for a climate play. So there have been some acquisitions here recently where they’re looking to do carbon projects on the land base. So it’s pretty active. More people at the table, particularly for projects that go out to auction. So pretty pretty strong demand.

You can see that in the price per acre trend that you’ve seen both in the West and in the South. Those continue to tick up and have for a number of years. The one nuance I would say that’s a little different maybe versus the the peak in the pandemic was lower quality packages during the pandemic were getting bid up perhaps beyond what was reasonable. I think people have kind of gotten a little more rational around the lower quality, timber packages that have come to market. But for the quality stuff, the prices are still very, very strong and lots of people at the table.

Great. Great.

Anthony Pettenari, Analyst, City Research: And that really segues into Natural Climate Solutions. Can you talk about you had the Investor Day where you laid out a target for Natural Climate Solutions. Can you talk about sort of what makes up that target and your progress there?

Devin Stockfish, CEO, Weyerhaeuser: Yes. Making good progress. So, you know, Natural Climate Solutions encompasses a bunch of sub businesses. So it’s things like conservation, mitigation banking, solar, wind. It captures our forest carbon business as well as carbon capture and storage.

So a lot of things that fall under that umbrella. We really created this business back in 2021. We came out with goals and a target to get to $100,000,000 of EBITDA by the end of twenty twenty five. We saw a pretty meaningful jump last year, up to $84,000,000 of EBITDA in that business, and I think we’re on track to get to $100,000,000 You know, I would say looking back to where we thought we would get some of that revenue when we kick this off, the one area that is, you know, slower, I think, than we had anticipated is the carbon capture and sequestration component. I absolutely think that’s going to be a big business for us someday, but the timeline to get those projects through the permitting process has been painstakingly slow.

And so still think it’s a a big opportunity, but, you know, today, it’s not as big as we had originally planned. But that being said, we’ve seen some nice growth in mitigation banking. The conservation market has stayed strong, and our renewables business continues to progress nicely. We’ve signed in the neighborhood of 70 agreements for solar projects. We’ve got our first operational project with two more in construction.

We’ve got seven operating wind sites. One more, will be completed here shortly with a nice pipeline behind. And the beauty about those renewables prod projects is they just stack on top of each other. So every new project you you bring to to fruition and completion, it’s a revenue stream that lasts twenty to thirty years, and they stack on top of each other. So that will just continue to grow over time.

Really pleased with the progress of our forest carbon business. So just real quick framework for what that is. When you have a parcel of land, typically, how we would manage it is to maximize the financial return. So you have a certain number of trees per acre, you have a certain harvest age that you target maximum financial return on that acre. If your goal was to create the most carbon on that acre, you can manage that differently.

More trees per acre, longest heart longer harvest rotation. That delta in how you manage it differently and the additional CO2 that that captures over the time of a harvest rotation, you can sell as a carbon credit. And so all of these companies, financial institution, tech, oil and gas that are looking to offset greenhouse gas emissions, by far, the most cost effective way to offset that is through these carbon offsets. We’ve spent a lot of time and energy building the credibility of these markets. I say we, and that’s the industry, but specifically, we warehaeuser, and I think we’ve made a lot of progress there.

We’ve done the work to build the pipeline. This is gonna be an inflection year in that market. We should see our sales in carbon go up five x to 10 x this year. So really pleased with the development of that, and I think we’re on track to not just get the 100,000,000 this year, but continue to grow that over time.

Anthony Pettenari, Analyst, City Research: And have you seen any impact on climate solutions from the new administration in terms of, you know, I guess, Trump giveth with the tariffs? Does he taketh away on the climate solutions?

Devin Stockfish, CEO, Weyerhaeuser: Or I mean, it’s gonna be differential depending on which component of natural climate solutions you’re talking about. The rhetoric has changed. No question about it. You know, when I look across the portfolio, you know, it’s not gonna have an impact on the carbon offset business. CCS has tax credits.

Renewables have tax credits. And so to the extent that those change, we’ll have to navigate through that. But, you know, ultimately, longer term story, if you’re a heavily emitting facility, oil and gas, chemical, concrete, etcetera, there’s really no other viable solution other than carbon capture and storage over time, which is why I think the people in that space are continuing to build out the infrastructure. On the renewables business, yeah, there’s no question that the rhetoric around renewables, is different than under the prior administration. But, ultimately, we have a need for power in The US.

The delta between demand and supply is going to gap out at some point. If you wanna, you know, if you wanna go out and buy and build a new gas turbine, I mean, you can’t get that equipment till 2029, ’2 thousand and ’30. We’ve got a pretty significant need, particularly with all the data centers, to generate a lot more electricity, and renewables will have to be a part of that, notwithstanding some noise and some bumps in the road. The longer term trajectory, I mean, that is what it is.

Anthony Pettenari, Analyst, City Research: Right. And just to be clear, on the solar and wind, when you engage in these projects, you’re not committing any capital or there’s

Devin Stockfish, CEO, Weyerhaeuser: To date, we’re just leasing the land. So the way it works, we will a solar developer will or wind developer will option a component of our land. They pay us an option fee while they assess the viability and while they’re working through the process. If they go forward with the project, we’ll take the trees off the land. We get the money for that.

They will put their capital to work, build the solar facility. It’s usually a thirty to forty year agreement after which they have to remove it and then presumably we can replant. So what you’re what you’re really doing is you’re giving up a harvest rotation for a solar rotation at a higher value uplift.

Anthony Pettenari, Analyst, City Research: Great, great. Any questions on that? All right. Well, we’re coming up on the shot clock. Devin, you’re the largest private landowner in The U.

S. You have, I think, the largest lumber business in The U. S. Seems like a very good place to be right now. Is there anything you just maybe leave us with as we end?

Devin Stockfish, CEO, Weyerhaeuser: Yes. The only thing I would say is we’ve been doing the work for the last several years to build the foundation, getting the balance sheet in the right place, getting the cash return framework in the right place, getting to a position where we have industry leading margins across all of our businesses. We’ve been putting the resources into growing our manufacturing base. We’re gonna start getting some tailwinds here at some point in the not too distant future, and I think you’re really gonna see that start flowing into the financial results. So we’re excited about where we sit.

You know, there will be some bumps in the road, of course, but I think we’re really well positioned to start really turning the dial on some of the growth initiatives that we’ve been investing in over the last several years. So excited to see what comes this year and in the near future.

Anthony Pettenari, Analyst, City Research: Alright. Thank you, Devin.

Devin Stockfish, CEO, Weyerhaeuser: Yep. Thank you.

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