Lumber Market Outlook
Q: Why not reduce production more given weak lumber market?
A: Devin Stockfish explained that although lumber prices are at multi-year lows and lumber EBITDA has been negative, Weyerhaeuser's mills are well-positioned on the cost curve and can weather the downturn. " They are reducing production by 5% to 10% in the third quarter to balance supply with customer demand but believe prices won't stay below cash breakeven levels for long. " "

Timberlands Investments and Returns
Q: How will recent Timberlands deals enhance value and returns?
A: The company is excited about the Alabama acquisitions, which include high-quality Timberlands expected to be at the top of their Southern portfolio in cash flow per acre. " Devin Stockfish emphasized that these investments, along with Natural Climate Solutions initiatives, will support sustainable cash flow growth, helping to increase the base dividend over time. " "

Dividend Growth Outlook
Q: Is the company confident in the dividend growth outlook?
A: David Wold stated confidence in the ability to increase the base dividend, supported by ongoing increases in sustainable cash flow generation from Timberlands acquisitions, growth in Natural Climate Solutions, and operational improvements. "

EWP Pricing and Housing Market
Q: What's the outlook for EWP pricing if single-family starts decline?
A: Devin Stockfish believes that as long as single-family housing holds up, EWP pricing should remain steady. " If single-family housing falls dramatically, there could be additional price pressure, but the Trust Choice brand and customer support provide a competitive advantage. " "

Timberlands Cash Flow Improvement
Q: Will Timberlands cash flow improve over the next 2-3 years?
A: The company expects higher log realizations in the West when lumber markets normalize and increased harvest volumes in the South due to recent acquisitions. " Growth in export business and Natural Climate Solutions will also contribute to cash flow improvements. "

Operating Rates in Wood Products
Q: What were the operating rates for Wood Products in Q2?
A: In Q2, lumber operated at low 80% capacity, OSB at mid-90%, and EWP at low 80%. " EWP operating rates are expected to remain at this level in Q3 to match customer demand. "

OSB Market Expectations
Q: What is the outlook for the OSB market this year?
A: The company expects Q3 OSB sales volumes and realizations to be comparable to Q2. " New capacity coming online may put downward pressure on pricing in Q4 unless demand picks up, but over the longer term, OSB is expected to remain a strong business. "

Impact of Higher Lumber Duties
Q: How will higher lumber duties affect the market?
A: An increase in softwood lumber duty rates from 8% to 14% for Canadian producers moving lumber into the U.S. adds another headwind for them. " This could potentially lead to capacity decisions that may impact the market. "

Natural Climate Solutions Progress
Q: When will solar projects start contributing cash flow?
A: Solar development will start coming online in the back half of this year, with projects continuing to build over time. " Though the process is slow due to permitting, the demand level is extremely high, and cash flow from these projects will begin to impact the income statement. "

Cost Reduction from New Bern Closure
Q: What's the fixed cost reduction from closing New Bern mill?
A: The New Bern mill is relatively small, with a capacity of 100 million board feet. " Fixed cost reductions are relatively immaterial in the broader context, but the closure is part of efforts to navigate the current market conditions. "