Devin Stockfish
President and Chief Executive Officer at Weyerhaeuser
Thanks, Andy. Good morning, everyone, and thank you for joining us. Yesterday, Weyerhauser reported full-year GAAP earnings of $396 million or $0.54 per diluted share on-net sales of $7.1 billion. Excluding special items, full-year 2024 earnings totaled $384 million or $0.53 per diluted share. Adjusted EBITDA totaled $1.3 billion for the year. For the fourth quarter, we reported GAAP earnings of $81 million or $0.11 per diluted share on-net sales of $1.7 billion. Adjusted EBITDA was $294 million, a 25% increase over the third quarter. I'll start this morning by expressing my sincere gratitude to our Weyerhaeuser employees for their solid execution and dedication in 2024 in what was a very challenging market backdrop. Through their collective efforts, we continued to serve our customers, delivered industry-leading operating performance and drove meaningful improvements across each of our value levers in the investment thesis. Notably, we grew our timberlands through acquisitions in Alabama, announced plans to expand our Engineered Wood Products portfolio, advanced our Natural Climate Solutions business and captured additional operational excellence improvements. We also increased our base dividend by more than 5% and returned $735 million of cash to shareholders based on our 2024 results, including $153 million of share repurchase. I'm incredibly proud of these accomplishments, all of which support our growth strategy and drive long-term value for our shareholders. Before moving into the business segment results, I'd like to comment briefly on an exciting growth initiative within our EWP business, which is summarized on Page 24 of our earnings slides. As we announced in the fourth quarter, we plan to invest approximately $500 million to build a state-of-the-art timber strand facility in Arkansas. Timber strand is a proprietary and versatile engineered wood product with applications in residential, industrial and mass timber end-markets. The new facility will address an underserved and growing market for the product in the US South and showcases Weyerhaeuser's innovation in wood products. Notably, we combined institutional expertise from our existing Timber strand facility in Canada with extensive research and development to enable manufacturing of the product with Southern Yellow Pine as the primary feedstock. Given its location in Arkansas, the new facility will deliver seamless integration with our existing timberlands and distribution network. In fact, approximately 80% of the raw-material sourcing for the facility will come from fee timberlands, resulting in an excellent new outlet for our Southern fiber logs in the region. The construction of the facility will begin this year with start-up expected in 2027. Once fully operational, the facility will add 10 million cubic-feet of production, doubling Weyerhauser's timber strand offering and increasing total company EWP capacity by approximately 24%. In addition, the facility is expected to generate over $100 million of annual adjusted EBITDA with additional upside from portfolio integration benefits. We're excited to bring this new facility online and look-forward to expanding our footprint and workforce in Arkansas. With that, I'll now turn to our fourth quarter business results, starting with Timberlands on Pages 7 through 10. Timberlands contributed $62 million to fourth quarter earnings. Adjusted EBITDA was $126 million, a slight increase compared to the third quarter. In the West, adjusted EBITDA was comparable to the third quarter. Turning to the Western domestic market. Log demand improved in the fourth quarter as mills responded to strengthening lumber prices and a seasonal reduction in log supply across the system. As a result, pricing for grade logs increased as the quarter progressed and moved substantially higher in December. That said, our average domestic sales realizations were comparable to the third quarter due to mix. Our sales volumes to domestic customers increased moderately as we reduced shipments to our customers increased moderately as we reduced shipments to customers in China. Per unit log and haul costs were comparable to the third quarter and forestry and road costs were seasonally lower. Our fee harvest volumes were slightly lower, largely due to fewer working days in the fourth quarter. Moving to our Western export business. In Japan, log markets remained soft in the fourth quarter due to ongoing consumption headwinds and elevated inventories of finished products for our customers. As a result, our sales volumes and average realizations for export logs to Japan were slightly lower compared to the third quarter. However, inventories and shipments of European lumber imports decreased as the quarter progressed, allowing our customers to pick-up market-share. As a result, we expect stronger demand for our Japanese export logs in the first-quarter. In China, despite ongoing consumption headwinds, log markets remained relatively stable in the fourth quarter and demand from our strategic customers was steady. That said, our sales volumes into China were significantly lower as we intentionally flex logs to our domestic customers. Our average sales realizations were comparable to the third quarter. Turning to the South. Adjusted EBITDA for Southern Timberlands increased by $2 million compared to the third quarter. Southern sawlog markets remained muted in the fourth quarter as log supply was ample and mills continued to align capacity with lower takeaway of finished goods. This was partially driven by the seasonal reduction in lumber demand around the holidays. In contrast, Southern fiber markets were generally stable. On-balance, takeaway for our logs remained steady given our delivered programs across the region and our average sales realizations increased slightly compared to the third quarter, largely driven by a higher mix of grade logs. Our fee harvest volumes and forestry and road costs increased in the fourth quarter as operating activities in certain regions shifted from the prior quarter due to wet weather conditions. Per unit log and haul costs were comparable to the third quarter. In the North, adjusted EBITDA increased slightly compared to the third quarter, largely driven by higher-fee harvest and sales volumes given favorable weather conditions. Turning now to real-estate, energy and Natural Resources on pages 11 and 12. In the fourth quarter, real-estate and E&R contributed $46 million to earnings. Adjusted EBITDA was $76 million and largely in-line with third quarter results. For the full-year, the segment generated $349 million of adjusted EBITDA, slightly higher than our revised full-year guidance and $29 million higher than our initial outlook. These results were largely driven by solid 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 Natural Climate Solutions business. As shown on Page 23, full-year adjusted EBITDA for NCS was $84 million, a 79% increase compared to 2023, primarily driven by strong contributions from our conservation, mitigation banking and renewables business where we continue to see solid demand. In Forest Carbon, we achieved notable milestones in 2024, including the approval and credit issuance from our second project located in the US South and a new issuance of credits from our project in Maine. In the fourth quarter, we sold approximately 50,000 credits in the voluntary market. We continue to see strong demand and premium pricing for our credits, given our commitment to developing projects that meet high standards for quality and integrity. Looking-forward, our forest carbon pipeline is developing rapidly, and we currently have seven additional projects in-progress. For 2025, we expect a significant increase in credit generation and sales relative to the last couple of years. In renewables, demand continues to increase for large-scale solar development, and we're well-positioned to capitalize on opportunities as markets continue to expand. We've signed approximately 70 agreements for potential solar projects across our portfolio and our first solar site commenced operations in the fourth quarter, and we have two additional sites currently under-construction. With respect to wind, operations commenced on our seventh site in December, and we expect an additional project to come online in the coming months. Turning briefly to our carbon capture and sequestration business. We continue to work closely with the developers on our three announced agreements and are in discussions with new counterparties for additional projects. While the timeline for CCS and the permitting queue in particular has extended beyond our initial expectations, we remain confident that projects will ultimately be developed and continue to expect CCS to be a meaningful contributor to our NCS growth strategy over-time. So in summary, we continue to make excellent progress in our Natural Climate Solutions business and we remain on-track to reach $100 million of adjusted EBITDA by the end of this year. As we've said all along, early growth has largely been supported by our existing businesses. That said, we expect 2025 NCS results to include a meaningful increase in contributions from forest carbon credits. And as we look beyond 2025, we see additional upside across the carbon and renewables businesses as those markets continue to develop. We built a world-class team with deep technical expertise and strong commercial focus, and we continue to believe there's no company in this space with the capabilities or asset-base to deliver on this value-creation opportunity at-scale like Weyerhauser. Now moving to Wood Products on Pages 13 through 15. Wood Products contributed $106 million to fourth quarter earnings. Adjusted EBITDA was $161 million, a 77% increase compared to the third quarter, largely driven by an increase in lumber and OSB pricing. Starting with lumber. fourth quarter adjusted EBITDA was $21 million, a $50 million improvement compared to the third quarter. Benchmark prices entered the fourth quarter on an upward trajectory, largely driven by supply constraints from recent curtailments and closures across the North American market, combined with a slight increase in-demand as buyers replenished lean inventories. As the quarter progressed, demand signals moderated given typical seasonal slowdowns in-building activity over the winter months. As a result, benchmark pricing declined slightly through year-end and has remained relatively stable in January. For our lumber business, production volumes were moderately higher in the fourth quarter as we return to a more normal operating posture following market-related production adjustments in the prior quarter. Our sales volumes were comparable to the third quarter. Our average sales realizations increased by 9% in the quarter. Unit manufacturing costs were comparable and log costs were slightly lower. Turning to OSB. fourth quarter adjusted EBITDA was $63 million, a $24 million increase compared to the third quarter. Average benchmark pricing for OSB increased by 16% in the fourth quarter, primarily driven by resilient demand from single-family construction activity and limited open-market supply. Our average sales realizations increased by 5% compared to the prior quarter with the relative difference largely due to the length of our order files, which results in a lag effect for OSB realizations. Our sales volumes were moderately higher and unit manufacturing costs were moderately lower as production levels increased given less downtime for planned annual maintenance. Fiber costs were comparable to the prior quarter. Engineered Wood delivered $69 million of adjusted EBITDA, an increase of $8 million compared to the third quarter. Demand for EWP products was steady at the outset of the fourth quarter given favorable weather conditions for homebuilding activity, but softened seasonally as the quarter progressed. On-balance, our sales volumes increased slightly compared to the third quarter, largely attributable to solid section products. Our average sales realizations decreased for most products as previously determined price adjustments took effect in certain markets. Our unit manufacturing costs improved compared to the third quarter and raw-material costs were slightly lower for most products. In distribution, adjusted EBITDA decreased by $4 million compared to the third quarter, largely due to seasonally lower sales volumes, primarily in December.
With that, I'll turn the call over to Davi to discuss some financial items and our first-quarter and full-year 2025 outlook.
