Weyerhaeuser Company Declares Supplemental Dividend on Common Shares

Rhea-AI Summary

Weyerhaeuser Company (NYSE: WY) has declared a supplemental dividend of $0.14 per share on the common stock of the company, payable in cash on February 27, 2024, to holders of record of such common stock as of the close of business on February 16, 2024. In 2023, Weyerhaeuser generated Adjusted Funds Available for Distribution (Adjusted FAD) of $986 million. Including the supplemental dividend to be paid on February 27, 2024, Weyerhaeuser is returning $0.90 per share of cash dividends to shareholders based on 2023 financial results, including $556 million, or $0.76 per share, of quarterly base dividends paid in 2023 and $102 million, or $0.14 per share, from the supplemental dividend declared today. Including $125 million of shares repurchased during 2023, Weyerhaeuser is returning $783 million in total cash to shareholders based on 2023 results, or approximately 80 percent of 2023 Adjusted FAD, which is at the high end of the company's targeted annual payout range of 75 to 80 percent of Adjusted FAD.

Insights

Financial Analyst

The supplemental dividend announcement by Weyerhaeuser Company signifies a strong cash position and a commitment to shareholder returns. The decision to return $783 million, or approximately 80% of the Adjusted Funds Available for Distribution (Adjusted FAD), aligns with the company's targeted payout range. This high payout ratio suggests a robust financial health and confidence in the company's cash flow stability. However, investors should consider the sustainability of such high payouts in the long term, especially in the context of the cyclical nature of the timber and real estate markets that Weyerhaeuser operates in.

Furthermore, the company's strategy to grow the base dividend by 5% annually through 2025 indicates a forward-looking confidence in its earnings potential. Yet, it's crucial to monitor the market conditions and the company's operational performance closely, as these projections are contingent on continued financial success and market stability.

Market Research Analyst

Weyerhaeuser's share repurchase program, with $250 million of remaining capacity, reflects a strategic approach to capital allocation that can potentially increase earnings per share and provide support to the stock price. Share buybacks, when executed at opportune times, can be accretive to shareholder value. However, it's important to analyze the opportunity cost of these repurchases compared to potential investments in growth or debt reduction.

Moreover, the company's ability to adjust its cash return between dividends and share repurchases provides flexibility to adapt to changing market conditions. This approach can be attractive to a diverse investor base, offering a mix of income through dividends and potential capital appreciation through share buybacks.

Economist

Weyerhaeuser's financial strategy must be viewed within the broader economic context. The timber and construction markets are sensitive to macroeconomic factors such as interest rates, housing demand and economic cycles. A strong dividend and share repurchase policy might suggest that the company anticipates stable or growing demand in its markets.

However, the economic outlook, including potential headwinds such as inflation or a slowdown in the housing market, could affect the company's financial performance and, consequently, its ability to maintain such a high cash return to shareholders. Continuous evaluation of economic indicators and their potential impact on Weyerhaeuser's business segments is essential for a comprehensive understanding of the company's future cash return capabilities.

• Returning $0.14 per share supplemental dividend, resulting in $0.90 per share of total dividends based on 2023 results
• Delivering total cash return to shareholders of $783 million, or approximately 80 percent of Adjusted Funds Available for Distribution, based on 2023 results

SEATTLE, Jan. 25, 2024 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today announced that its board of directors declared a supplemental dividend of $0.14 per share on the common stock of the company, payable in cash on February 27, 2024, to holders of record of such common stock as of the close of business on February 16, 2024.

In 2023, Weyerhaeuser generated Adjusted Funds Available for Distribution (Adjusted FAD) of $986 million. Including the supplemental dividend to be paid on February 27, 2024, Weyerhaeuser is returning $0.90 per share of cash dividends to shareholders based on 2023 financial results, including:

• $556 million, or $0.76 per share, of quarterly base dividends paid in 2023; and
• $102 million, or $0.14 per share, from the supplemental dividend declared today.

Including $125 million of shares repurchased during 2023, Weyerhaeuser is returning $783 million in total cash to shareholders based on 2023 results, or approximately 80 percent of 2023 Adjusted FAD, which is at the high end of the company's targeted annual payout range of 75 to 80 percent of Adjusted FAD. As of December 31, 2023, the company had approximately $250 million of remaining capacity under the previously announced $1 billion share repurchase program authorized by the Weyerhaeuser board of directors in September 2021.

"We are pleased to announce the supplemental dividend and total cash return associated with our 2023 financial results," said Devin W. Stockfish, president and chief executive officer. "Upon payment of the supplemental dividend declared today, we will have returned nearly $4.6 billion through cash dividends and share repurchase since the first full year of our new cash return framework in 2021. We continue to believe this framework will enhance our ability to drive long-term shareholder value by returning meaningful and appropriate amounts of cash back to our shareholders across a variety of market conditions."

"As we move forward in 2024," Stockfish continued, "our cash return commitment will continue to be supported by our sustainable quarterly base dividend, which we intend to grow by 5 percent annually through 2025. We plan to supplement our base dividend, as appropriate, with an additional variable return of cash to achieve a targeted total return to shareholders of 75 to 80 percent of annual Adjusted FAD. As we have demonstrated, we have the flexibility to return this additional cash either in the form of a supplemental cash dividend or through opportunistic share repurchase."

ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control approximately 10.5 million acres of timberlands in the U.S. and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood products in North America. Our company is a real estate investment trust. In 2023, we generated $7.7 billion in net sales and employed approximately 9,300 people who serve customers worldwide. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.

FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES
This news release contains statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning the company's dividend framework and its expectations concerning the amount, timing, growth and occurrence of future cash dividends and share repurchase activity, as well as the company's ability to drive long-term shareholder value and its commitment to return cash to shareholders in the form of cash dividends and share repurchase. Forward-looking statements are generally identified by words such as "annual," "believe," "commitment," "continue," "forward," "intend," "plan," "sustainable," "targeted," "will," and similar words and expressions referencing future events and dates. Forward-looking statements are based on our current expectations and assumptions, the accuracy of which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, those identified in our 2022 Annual Report on Form 10-K, as well as those set forth from time to time in our other public statements and reports, including reports, registration statements, prospectuses, information statements and other filings with the Securities and Exchange Commission.

It is not possible to predict or identify all risks and uncertainties that might affect the accuracy of our forward-looking statements and, consequently, our descriptions of such risks and uncertainties should not be considered exhaustive. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

Also included in this news release are references to Adjusted FAD, which is a non-GAAP financial measure. Adjusted FAD may not be comparable to similarly named or captioned non-GAAP financial measures of other companies due to potential inconsistencies in how such measures are calculated. Adjusted FAD measures, when presented, should not be considered in isolation from, and are not intended to represent an alternative to, our GAAP results.

RECONCILIATION OF ADJUSTED FAD TO NET CASH FROM OPERATIONS
Adjusted FAD, a non-GAAP measure, is defined by Weyerhaeuser as net cash from operations adjusted for capital expenditures and significant non-recurring items. We reconcile Adjusted FAD to net cash from operations, as that is the most directly comparable U.S. GAAP measure. We believe the measure provides meaningful supplemental information for investors about our liquidity.

The table below reconciles Adjusted FAD to net cash from operations:

(millions)			2023 Full Year
Net cash from operations			$1,433
Capital expenditures(1)			(447)
Adjusted FAD			$986
(1) Includes $7 million of capitalized interest.

 

For more information contact:
Analysts – Andy Taylor, 206-539-3907
Media – Nancy Thompson, 919-861-0342

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SOURCE Weyerhaeuser Company

FAQ

What is the amount of the supplemental dividend declared by Weyerhaeuser Company?

Weyerhaeuser Company has declared a supplemental dividend of $0.14 per share on the common stock of the company.

When will the supplemental dividend be paid by Weyerhaeuser Company?

The supplemental dividend declared by Weyerhaeuser Company will be paid in cash on February 27, 2024, to holders of record of such common stock as of the close of business on February 16, 2024.

What is the total cash return to shareholders based on 2023 results by Weyerhaeuser Company?

Weyerhaeuser is returning $0.90 per share of cash dividends to shareholders based on 2023 financial results, including $556 million, or $0.76 per share, of quarterly base dividends paid in 2023 and $102 million, or $0.14 per share, from the supplemental dividend declared today.

What is the total amount of cash returned to shareholders by Weyerhaeuser Company based on 2023 results?

Weyerhaeuser is returning $783 million in total cash to shareholders based on 2023 results, or approximately 80 percent of 2023 Adjusted FAD, which is at the high end of the company's targeted annual payout range of 75 to 80 percent of Adjusted FAD.

What is the remaining capacity under the share repurchase program authorized by the Weyerhaeuser board of directors?

As of December 31, 2023, the company had approximately $250 million of remaining capacity under the previously announced $1 billion share repurchase program authorized by the Weyerhaeuser board of directors in September 2021.