Weyerhaeuser Company

Greetings and welcome to the Weyerhaeuser Third Quarter 2026 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's remarks, there will be a question and answer session. To ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. If anyone should require operator assistance during the conference, please press star 0. As a reminder, this conference is being recorded. It is now my pleasure to introduce Andy Taylor, Vice President of Investor Relations. Thank you, Mr. Taylor. You may begin.

Thank you, Rob. Good morning, everyone. Thank you for joining us today to discuss Weyerhaeuser's third quarter 2026 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 Davey Wold, Chief Financial Officer. I will now turn the call over to Devin Stockfish.

Thanks, Andy. Good morning, everyone, and thank you for joining us. Yesterday, Wehrhaeuser reported third quarter gap earnings of $61 million, or $0.08 per diluted share, on net sales of $1.9 billion. Adjusted EBITDA totaled $248 million, a 14% increase compared to the third quarter of 2025. I'd like to start by thanking our teams for their continued focus and resilience against an increasingly challenging market backdrop. Elevated interest rates continue to weigh on consumers and housing activity, while rising diesel and transportation costs have added to the broader inflationary environment. Notwithstanding recent headwinds, we remain well positioned given the strength of our portfolio and balance sheet, our deeply ingrained OpEx culture, and the flexibility of our capital allocation framework. And as we outlined at our investor day last December, We're advancing growth initiatives across our integrated portfolio to increase the value and resilience of our company over time. Our objective is to increase cash generation capabilities, reduce volatility across market cycles, and improve our competitive position. The current environment only reinforces the importance of this strategy, and we've made meaningful progress on several growth initiatives in recent months. Construction of our Monticello EWP facility is progressing well, with startup expected in mid-2027. In biocarbon, we broke ground on our first facility in Macomb, Mississippi, and are making good progress on site selection for additional locations across our portfolio. Construction also commenced on two additional solar sites, bringing our portfolio to two operational sites and five under construction. Turning to forest carbon, we've monetized approximately 340,000 credits year to date, putting us on pace for our highest annual sales volume since the program's inception. And finally, we recently signed an agreement to explore geothermal energy opportunities across 145,000 acres in Oregon and Washington. We are making meaningful progress, and I'm incredibly proud of what our teams have achieved as we've continued to execute against our growth strategy. Before moving on to our business results, I'll comment briefly on a recent action to optimize our Timberlands portfolio. As we reported yesterday, we entered into an agreement to divest approximately 81,000 acres of non-core Timberlands in Arkansas for $146 million. The transaction is expected to close by year end and further demonstrates our ongoing commitment to active portfolio management and our disciplined approach to enhancing the quality and value of our Timberlands over time. As always, we will continue to evaluate strategic opportunities to optimize the return profile of our Timberlands while also creating additional flexibility for broader capital allocation and growth priorities. More broadly, we remain focused on allocating capital in a manner that creates the most long-term value for our shareholders. Consistent with this approach and given where our shares are currently trading, We view share repurchase as a particularly attractive opportunity right now and expect to increase repurchase activity in the fourth quarter. Turning now to our third quarter business results, I'll start with Timberlands on pages six through nine of our earnings slides. Timberlands contributed $67 million to third quarter earnings. Adjusted EBITDA was $133 million, an 8% increase compared to the second quarter largely driven by higher sales volumes in the South. In the West, adjusted EBITDA was $67 million, which was comparable to the prior quarter. Starting with the Western domestic market, log demand was healthy at the outset of the third quarter as mills responded to a stronger lumber market and maintained elevated log inventories during wildfire season. As the quarter progressed, the typical seasonal increases in logging activity by non-industrial landowners Combined with a lighter than expected fire season in western Washington and Oregon, added log supply to the system. At the same time, western fiber markets became more challenging due to operational disruptions at several pulp and paper mills. For our operations, fee harvest volumes were comparable to the second quarter, while domestic sales volumes were moderately lower, largely due to a decrease in fiber log sales. Our average domestic sales realizations increased slightly, driven by a higher mix of grade logs. Forestry and road costs were comparable to the prior quarter, and per unit log and haul costs decreased, primarily due to a lower mix of export volumes, which carry higher associated costs. This was partially offset by higher fuel costs. Moving to our western export business. Log markets in Japan were relatively stable in the third quarter. and our customers remain well positioned relative to imported European lumber, which continues to face challenges in the Japanese market. Demand and pricing for our logs were comparable to the second quarter. Our sales volumes were lower due to the timing of vessels. Turning briefly to China, during the quarter we delivered one vessel to strategic customers in the region and our average sales realizations were comparable to the prior quarter. Also on a positive note, As a result of the recent meetings between President Trump and President Xi, we understand that the 10% tariff on logs exported into China will be removed relatively soon. Turning to the south, adjusted EBITDA for southern Timberlands was $65 million, a 12% increase compared to the second quarter. Southern log markets were relatively balanced in the third quarter, as improved weather conditions supported greater log availability alongside steady mill demand. Sawmills continued to replenish inventories after weather-related supply constraints in the second quarter, while fiber mill activity increased following spring outages. Given favorable weather conditions, our fee harvest and sales volumes increased significantly compared to the second quarter. That said, our average sales realizations decreased slightly, reflecting a higher mix of fiber logs from increased thinning activity. Despite higher fuel costs, our per unit log and haul costs decreased slightly, benefiting from operating efficiencies associated with higher volumes. And forestry and road costs were moderately higher, reflecting typical seasonal activity. In the north, adjusted EBITDA increased slightly, largely due to higher sales volumes, resulting from the seasonal increase in harvest activity that's typical in the third quarter. Turning now to our strategic land solutions business on pages 10 and 11. In the third quarter, Strategic Land Solutions contributed $67 million to earnings. Adjusted EBITDA was $86 million, a $43 million decrease compared to the second quarter, largely driven by the timing and mix of real estate sales. It's worth noting that real estate results are typically more heavily weighted towards the first half of the year. That being said, real estate markets have remained steady year to date, and we continue to capitalize on steady demand and pricing for real estate properties with significant premiums to timber value. We've also seen steady demand for our climate solutions offerings in 2026. Through the third quarter, we've generated $140 million of adjusted EBITDA from this business, already exceeding our full year results in 2025. We're encouraged by the momentum in this business and the opportunities that we see to drive continued growth in the years ahead. Now moving to wood products on pages 12 through 14. Wood products contributed $32 million to third quarter earnings. Adjusted EBITDA was $91 million, a $38 million decrease compared to the second quarter. This was largely driven by lower pricing across most products and higher costs, including increased transportation costs from record high diesel prices. It's worth noting that we continue to pass along these higher transportation costs in our delivered realizations wherever possible. Starting with lumber, the framing lumber composite entered the third quarter on an upward trajectory, reaching a multi-year high in late July. Pricing was supported by a seasonal improvement in building activity, along with tighter supply following previously enacted mill curtailments and closures, as well as lower European imports. Elevated transportation costs and trucking availability constraints have also provided support to lumber pricing this year. As the quarter progressed, however, composite pricing steadily declined as housing activity softened amid higher interest rates and typical late summer seasonality. For our lumber business, third quarter adjusted EBITDA was $69 million, a 5% decrease from the prior quarter, primarily due to slightly higher unit manufacturing and log costs. Production and sales volumes increased as transportation-related operating challenges from second quarter eased. Our average delivered sales realizations were slightly higher compared to the prior quarter. Now, turning to the OSB market. Demand was relatively stable in the third quarter, with very little movement in composite pricing for much of the period. Pricing moved higher in September, albeit from a low base, as buyers responded to newly announced mill curtailments. and pricing has since stabilized over the last couple of weeks. For our OSB business, third quarter adjusted EBITDA was a loss of $18 million, a $12 million decrease compared to the prior quarter. This was largely driven by slightly lower production and sales volumes and higher unit manufacturing costs due to more extensive planned annual maintenance relative to the second quarter. Resin costs were also higher while fiber costs were comparable. Our average sales realizations decreased by 2%, which was slightly unfavorable to the OSB composite. This is largely due to the length of our order files, which results in a lag effect for OSB realizations. Moving to engineered wood products. Adjusted EBITDA was $41 million, a $13 million decrease compared to the second quarter, primarily driven by lower average sales realizations and higher freight costs. A key driver impacting sales realizations in the quarter was an unfavorable mix shift in solid section products. In addition, previously announced price increases came through at a slower pace than initially anticipated, given the more challenging macro environment and softer home building activity. That said, as we enter the fourth quarter, we're seeing incremental benefit from these recent price increases across solid section and iJoyce products. and we currently expect our average sales realizations for EWP to be slightly higher sequentially. Our sales volumes increased slightly for most products compared to the second quarter and raw material and unit manufacturing costs were slightly higher. In distribution, adjusted EBITDA decreased by $4 million compared to the second quarter. Results reflect lower sales volumes and margins as we reduced inventory of certain siting and decking products following recent changes in supplier and distributor relationships. We anticipate some continued impact from this transition in the fourth quarter as we work through remaining inventory. Looking further out, we've aligned with leading brands to ensure we maintain an attractive offering of signing and decking products across our distribution network. With that, I'll turn the call over to Davey to discuss some financial items in our fourth quarter outlook.