All right, everybody. Thanks for jumping in. We're going to go ahead and get started with the next session, the after-lunch session, so we'll try to keep you wide awake here after you've had a nice meal. Really thrilled to be able to introduce to you Weyerhaeuser and Devin Stockfish, the CEO of Weyerhaeuser, one of the largest REITs of any size, but certainly the largest timber REIT with over 11 million acres under management and one of the, I think, the second-largest producer of lumber and wood products in North America. For those who don't know me, my name is Buck Horne. I'm the Raymond James Housing as well as Timber REIT and residential analyst.
Even though lumber prices are somewhat depressed at these levels, I think there's a lot of interesting things that have been happening behind the scenes for timber as well as lumber, but really interesting developments happening on the carbon side of the timber equation. We're going to go into some of that. I'll turn it over to Devin, and we'll take some Q&A at the end.
Thanks, Buck. Appreciate the.
In 2023, we made a lot of progress last year toward all four of our key focus areas. We remain committed to growing the value of our timberlands. We made several acquisitions last year in the Carolinas and Mississippi to improve the overall value of our timberlands portfolio. We continue to grow our Natural Climate Solutions business. We had a key milestone last year, the sale of our first forest carbon credit project up in Maine, so making a lot of great progress there. We're always focused on continuing to improve our operating performance. And again, last year, we made additional progress there with $37 million of incremental OpEx captured last year in 2023. We remain number one, really, across all of our manufacturing businesses from an EBITDA margin standpoint, number one from a Western timberlands EBITDA per acre standpoint.
We've always been focused on sustainability and ESG long before that was a focus area for broader society because we think that's the right way to run a business. We continue to make progress there. Key part of that is continuing to reduce our greenhouse gas emissions. And importantly, we continue to invest in our business, deliver for our communities and our customers, and importantly, to return significant amounts of cash back to shareholders. So just really proud of the work that our employees did in 2023 to continue making us a better, stronger company. So just a little bit about Weyerhaeuser for those that aren't as familiar with the story. As Buck mentioned, we're the largest private owner of timberlands in North America. We own 10.5 million acres of high-quality, highly productive timberlands across the U.S.
We manage another 14 million acres in Canada under long-term license agreements. We're one of the largest producers of wood products in North America. We manufacture lumber, oriented strand board, a variety of other engineered wood products. We have 19 distribution facilities in key markets across the U.S. And then lastly, we have a real estate, energy, and natural resources business, which is focused on maximizing the value of every acre we own. And I'll spend a few minutes talking in more detail about that in just a minute. All of our businesses have significant scale and industry-leading performance. We manage that program or these businesses within a tax-efficient REIT structure. And as Buck mentioned, we're one of the largest REITs in the United States.
Over the many decades of running these businesses, we've developed deep, I would say, unrivaled expertise in creating and capturing value at each step of the supply chain, from the proprietary seedlings that we develop in our nurseries to the expertise that we have managing forests, our low-cost mills, all the way through to the end customer. We're always focused on being the best at every step of the process to capture value for our stakeholders. I'm incredibly proud of the work that we've done to develop industry-leading expertise, really, across each of these. And I think our integrated platform really provides the potential to drive a lot of value over time. At the foundation of the company is our timberlands business. We've been doing this for a very long time. As I said, we have 10.5 million acres.
Of that, 2.5 million acres are in the Pacific Northwest. These are some of the highest quality, best timber-growing regions on the planet, high-value Douglas Fir saw logs, strong domestic and export markets. So these are really premium assets. We also have 7 million acres across the U.S. South, highly productive southern yellow pine plantations across all of the key growing regions in the U.S. South. And then we have about 1 million acres in the Northeast with a variety of different species, including some high-value hardwood saw logs. Our export program out of the West is primarily focused on the Japanese market. This has been a market that's been key to our Northwest operations for a long time. We send our highest-value logs into that Japanese market. We've been doing that for decades. We have longstanding relationships.
That's an opportunity for us to deliver premium from the highest-value saw logs that we have. But we also have longstanding relationships in other Asian export markets, including India and China. And as we think about the growth potential of these markets over time, we're really well-positioned to serve these markets, both out of our existing scaled programs in the West as well as our emerging programs out of the Southeast. We remain committed to growing our timberlands business. As we announced a few years ago as part of our investor day, we've targeted $1 billion of acquisitions in the timberlands space between 2022 and 2025. We're making good progress. We're about $530 million into that program. We've made a number of really high-quality acquisitions of late in the Carolinas and Mississippi and Washington State.
This is an opportunity for us, I think, to continue to drive value for our stakeholders through this program. We're going to continue to be active in the timberlands acquisition space. We'll, of course, be disciplined and look to provide returns through the competitive advantages that we bring to market, through our scale, the integrated nature of our portfolio, our export programs, our AVO program, places that we can bring value to make sure that we're delivering strong returns from these timberland acquisitions. When you think about a portfolio the size of ours, there are a lot of opportunities to create value over and above just baseline timber. As you can see from this slide, there's a lot of optionality in a land base such as ours. We'll go through some of this in a bit more detail.
But we've got programs in place to really look across our portfolio to make sure that we're identifying and, importantly, capturing this value uplift from this portfolio through a variety of different programs, as you can see on the slide. When you think about our real estate business, this is primarily focused on looking across the acreage for those particular acres that have attributes that can support a higher, better use valuation. This is something we've been doing for a number of years. We've got a program called AVO or Asset Value Optimization, which really looks across the individual attributes of every single acre we own for opportunities to create an uplift on value. We do that through small sales all the way up to bigger projects in the development space. It's an opportunity to create a lot of value. We generally get significant premiums over base timber.
We refresh this analysis routinely. On balance, we generally sell a little under 1% of our acreage every year, but we're always replenishing that through our acquisition programs to make sure that this is sustainable over time. Our Natural Climate Solutions business is a group of businesses that we really launched as a whole several years ago. We've made a lot of improvement here. We've grown this business by 114% since inception. It really is comprised of four key components, two of which we've been doing some of for a number of years, so mitigation banking and conservation, as well as renewables. We've invested additional resources to really drive incremental growth here. I think there's a lot of opportunity. We've made some good progress on both of these businesses to continue to grow them. The newer businesses are our Forest Carbon and Carbon Capture and Storage business.
As I mentioned, we sold our first carbon credits out of Maine in December of last year for a very strong price of $29 a ton. We have two more projects that are in the pipeline to get approved, we think, in the H1 of this year with several others behind that. So it's a business that we're really excited about. We think the demand for high-quality forest carbon credits is very strong, and we anticipate that being a growing piece of our portfolio over time. And then the last component is our carbon capture and storage business. This is a really exciting opportunity for us. Essentially, it allows us to take advantage of the subsurface ownership that we have across our ownership. We've signed up two deals over the last couple of years with Occidental Petroleum and Exxon.
We just last week signed up a new agreement with Lapis, and we think this is an opportunity for us to really grow this business over time and expect this to be a bigger portion of our Natural Climate Solutions business out into the future. We've made a lot of progress, really, in each one of these areas over the last several years. I'm really proud of the leadership position that we have grown into just over the last couple of years. There's really no other company that we think can do this at scale like Weyerhaeuser. And we really have put ourselves into a position with the internal expertise and resources that we're developing to take advantage of this and be a true leader in the Natural Climate Solutions space. And lastly, we are one of the largest producers of wood products in North America.
We have industry-leading businesses, low-cost manufacturing, 35 mills across the U.S. and Canada. As you can see, most of those mills are located relatively close to our timberlands. We've been doing a lot of work over the last several years just improving our operating performance. And I think we've really demonstrated that we can be best in class across this manufacturing asset. We also have 19 distribution facilities located in key markets. This has been another aspect of our business. We've seen a fair amount of growth over the last several years, so really pleased about how this business is operating and some of the opportunities out in front of us. A core part of our overall strategy as a company, going back 5, 6, 7 years, has been a really intense focus on cost control and improving operating performance. And we do that across the totality of Weyerhaeuser.
It's been one of the biggest success stories, I think, at our company in many, many years. It really has permeated the DNA of the company. So really proud of the work that we've done here. We've captured $77 million of OpEx improvements just over the last two years, and we're well on our way to our multi-year goal of $175-250 million by the end of 2025. As you can see, it's yielding results. We have positioned ourselves as number one in the industry from an EBITDA margin standpoint across each of our manufacturing businesses. Our timberlands businesses are best in class, industry-leading. We expect this portfolio with this kind of operating performance to create a lot of opportunities for us out into the future. We're not done. We continue to find OpEx opportunities across the portfolio every day.
We're layering in a whole new generation of innovation across the company, which, combined with the OpEx improvements, is really going to put us in a very strong competitive position going forward. Just quickly on ESG, I mean, we've been operating our business with integrity and focus on sustainability for over 100 years. It's a core part of how we run the company. It will continue to be a core part of how we run the company. As you can see from the slide, we've got a lot going on in this space. Our commitment to environmental stewardship is really starting in the forest with our commitment to sustainable forestry, where we've been a pioneer and a leader in that space for a long time. But we're also looking at ways to reduce the environmental footprint of our manufacturing operations as well.
We're also focused on social responsibility, and that really runs the gamut from safety to diversity, inclusion, citizenship. The reason that we do this is it allows us to attract and retain talent. It ensures that we're maintaining good relationships across our stakeholder base. Really, it's a way to make sure that we're running the business in the right way for the long term. That will continue to be a core part of how we run our company. One of the underappreciated aspects of our company is the carbon platform that we have. The millions of acres of timberlands that we manage capture tens of millions of tons of CO2 out of the atmosphere every year. The wood products that we manufacture store carbon in those products for the lifetime of those products.
We are one of the few companies in the world that can say our portfolio is carbon neutral, carbon negative. In fact, we are dramatically carbon negative. We sequester more than three times the amount of CO2 that we generate every year. And in a world that is increasingly valuing the ability to provide nature-based solutions and sequester and store carbon, I think you'd be hard-pressed to find any company anywhere with a better carbon story than we have. And I think that's something that you will see really start to grow in appreciation as time goes by. We do believe that disciplined capital allocation is a core aspect of delivering value for our shareholders. We take it very seriously. We have three key priorities: returning cash to shareholders, investing in our businesses, and maintaining appropriate capital structure.
So we rolled out a few years ago a new cash return framework. Fundamentally, it's about returning the vast majority of our cash flow back to shareholders. We have a target of 75%-80% of our Adjusted FAD every year that we're going to return back to shareholders. We do that through two components, the first of which is a sustainable base quarterly dividend that is supported by the cash flow from our timberlands and our real estate business. We've committed to growing this 5% a year through the end of 2025. Importantly, this is meant to be stable and sustainable across business cycles. The second component is the additional return of cash that comes via our variable supplemental dividend and share repurchase to get us up to that 75%-80%.
I would just note one key aspect of this cash return framework is we do retain 20%-25% of that FAD every year that goes to funding strategic growth initiatives so that we can continue to grow the company over time. As you can see, last year, we returned $783 million of cash back to shareholders through the combination of dividends and share repurchase. I think, again, this just demonstrates the commitment to returning cash to shareholders across business cycles. If you go back to the beginning of this new framework, we've returned nearly $4.6 billion of cash back to shareholders. Importantly, we've done this all within this cash return framework. We didn't have to do any sort of balance sheet actions or portfolio actions to support this commitment. I think that's a really important part.
As you can see, the all-in dividend yield across this time frame has been very competitive as well. We're continuing to invest back in our businesses. I mean, these capital expenditures into our wood products and timberlands business have been a core part of improving our operating performance and really positioning our asset base to be best in class. We're going to continue to do that going forward. As you can see, we've targeted $440 million of CapEx in 2024, and that's in line with our 2023 spend. Then lastly, on capital allocation, we think it's important to maintain an appropriate capital structure, which means making sure you have an investment-grade credit profile. We have done a lot of work over the last several years to really dramatically improve our balance sheet. We've paid down $1.2 billion of debt. We've refinanced higher-cost debt.
We've reduced our annual interest expense by nearly $100 million a year. We've made dramatic improvements to our pension liabilities. That, combined with the cash balance that we have, really positions us to navigate a variety of market conditions and be opportunistic across business cycles when we see those opportunities to create value. So a lot of really good work on that front. Just real briefly on market conditions, I'll start with housing. We have seen some pretty good momentum of late in the single-family housing space. The last three months, we've seen single-family starts on an annualized basis over one million. That's a pretty good place to be. We've had conversations with our homebuilder customers and other clients. I think the general consensus is this is going to be a pretty good year from a single-family housing standpoint.
Repair and remodel, we have had a little bit of a seasonal slowdown, which is not atypical during the winter months. We do expect that to pick up as we get deeper into the spring. Overall, we're expecting repair and remodel to be up single digits year-over-year. So when you combine housing and a strong repair and remodel market, that should be a nice tailwind for all of our products. Just specifically on a couple of the product areas or product lines, OSB, EWP, both demand and pricing has held up quite well in Q1, even during a time of year which is seasonally typically a little slower. I think the setup for both of these products as we get into the spring building season is really good. Inventories across the channel are pretty lean. I think we've seen pickup in order activity.
So feel pretty good about OSB and EWP where they are. Lumber has been a little bit more subdued quarter to date, and I think that's really a result of a couple of things. One, maybe a little bit slower start to the building season in certain regions. I think some of the weather events, particularly in California with the constant rain, has probably held up a little bit of activity both on construction and repair and remodel. But I'm sensing a change in tone. You're starting to see a little bit more activity pick up. And I think as we get into the spring season, we'll see lumber prices start to pick up more materially. On the log side, in the west, the export market remains steady and solid, pretty much in line with expectations.
Domestic log prices and demand in the northwest, those are pretty tightly correlated to lumber prices, so maybe a little bit softer just because of what's going on with lumber. But the flip side of that is, as lumber prices go up, log prices follow pretty quickly. So we should have a good setup for log prices in the west. And then in the south, it's kind of more of the same, slow, steady progress. We're seeing certain markets where new capacities come in. You see log prices go up. Other areas that don't have the capacity, a little bit slower recovery trajectory. But overall, pretty solid from a log standpoint. As we look out to the back half of 2024, I think we're pretty optimistic. We see a good housing market coming this year.
We see reasonably solid repair and remodel, and that should be a nice tailwind for us. And beyond 2024, I think we all know there's a massive housing shortage in the United States, and that's true pretty much anywhere you go. We've got a strong demographic tailwind, so we're feeling pretty optimistic about the next three to five years in terms of overall demand for our products. As we think about the next couple of years in particular, we've got very specific targets that we laid out at our Investor Day a couple of years ago around growing the portfolio. As I said, we're going to continue to look for opportunities to grow our timberlands. I feel very good about the program that we have in place in order to do that.
We're focused on the $100 million of EBITDA from our Natural Climate Solutions business by the end of 2025. I'll just note that $100 million is not a reflection on where we think this business will ultimately go. It's more a comment just on that particular moment in time. We think there's more growth over time there. We're going to stay focused on operating performance. We're going to continue to drive operational excellence throughout the business. So feel very good about the trajectory toward this $175 -250 million. We're going to continue looking for ways to reduce our greenhouse gas emissions and, really importantly, just positioning the company as an investment opportunity for those that are interested in investing in sustainable companies. We think there's a good opportunity there.
And when you combine that with the work that we're doing in other parts of the business, what we think are going to be some tailwinds from a market standpoint, it's going to position us to return a lot of cash back to shareholders, which we're committed to do. So I think pretty good story there. So I'll just leave it at this. We've made good progress, strong progress across all of these value levers. We're going to continue to stay focused on them and continue to make sure we're delivering value for our shareholders and investors. So I think with that, Buck, maybe we'll go ahead and just open it up for questions.
Yeah. Thank you, Well. I appreciate that. It was a great presentation. I'm going to start us off before anybody has the question. You get that in mind. But I want to go back to Natural Climate Solutions a little bit, maybe in more detail, and maybe to your thoughts around specifically things like the Inflation Reduction Act. How has that piece of legislation in particular started to catalyze activity that you're seeing? And which maybe category because there's so many different solutions, whether it's solar, wind, CCS, carbon credits, all those things. What has the best near-term monetization potential? And then what's the economic uplift above and beyond what timber acreage could be priced at? What kind of EBITDA contribution can you get?
So the good news is, really, across every aspect of the natural climate solution, there's a value uplift that comes in doing any of those things. And so maybe I'll just kind of take it piece by piece. So when we think about forest carbon, obviously, we're at a point now where we're starting to monetize that. We've got a number of projects going, and I see that continuing to grow. The good news there is there is a lot of demand for forest carbon offset credits if they're high quality. One of the things we found with our first project is if you can go out with good data and people feel comfortable that it is real and it has credibility, the demand is very strong.
Our expectation is, in the years to come, the demand for high-quality credits is going to outstrip supply, and we think that's going to push prices up. So we're going to continue to push these forest carbon projects. There's a limit to how quickly you can scale because you have to get these projects through an approval process, which is quite rigorous. But I think directionally, we feel very good about that. As that scales broadly across the industry, there are a whole bunch of different aspects, I think, that are going to be beneficial to us. Nothing really governmental needed on that front. That's all being done in the private market. If you think about the carbon capture and storage business, that is an area where the governmental incentive changing from $50 a ton to $85 a ton did spur incremental activity.
We saw a dramatic uptick because I think just even that $35 delta is what pushed the economics to kind of get over that threshold. So there's been a lot of activity. We signed up a new agreement last week. There's just a lot of players in the space that know big emitters, oil and gas, cement, chemical, there's really no viable path to getting to net zero for those companies without carbon capture and storage. Now, it's a time-intensive process, and it takes multiple years from the time you sign up a deal to the time injection starts. But once it starts, it's a multi-decade revenue stream that, for us, is pure incremental, right, because they're just storing CO2 underground. We continue to manage the forest above ground. And so that's going to be a really nice opportunity.
And I think, over time, as you look out toward the end of the decade, that's more likely than not going to be the largest component of our Natural Climate Solutions business. So really big opportunity there. Solar and wind, those things are happening. Wind is probably on a little bit slower trajectory, but there is a tremendous amount of activity on the solar side. The amount of solar deals that are getting signed up, I mean, we're up to 50 solar deals that we've signed. Again, these things take a few years to come to fruition because you have to go through the permitting and tie into the grid, all those things. But once they happen, you've got a multi-decade revenue stream that's recurring, requiring virtually no effort from us.
When you think about the M&A market in terms of timberland transaction values, it feels like, certainly, different players are coming into the market, and they're bidding up some of this carbon optionality within the timber values. Now, you've said you're trying to grow the portfolio. How do you manage the pricing and the economics of how do you not get caught up in overbidding for assets when you're competing against all these other non-traditional bidders?
Yeah. It's a competitive space. There's no question. You have all of the traditional buyers with the REITs and the TIMOs, but we have a whole new tranche of investors that are coming into the space. And that does create more competition. So the way that we compete and you do have to be disciplined because if you overpay for timberland, it's hard to make that up over time. So you do have to be disciplined. The way we compete is we do bring, in certain instances, competitive advantages that are hard for others to match. So the export program, we have a scaled export program that most people don't. The scale, the supply chain expertise, the integrated nature of our business, so the Mississippi deal, the Carolina deals, those were both deals where that timberland was proximate to our manufacturing, so we can drive synergies there.
I think the work that Russell Hagen and our CDO organization is doing on identifying and capturing alternative values. Everybody's trying to do that. Not everybody is going to do it to the same skill level. And I think, for a period of time, we're going to have a competitive advantage in some of those things. And so it's really you have to bring to the table a number of different competitive advantages to get a deal. We bid on a lot of deals that we don't get, and that's fine. The deals that we do get, generally speaking, it's because we can bring some of these other value opportunities to bear.
Gotcha. Briefly on the lumber side of the business, housing seems like it's like you said, it's working. Builders' confidence levels going into the spring selling season, everyone's upbeat. We're not going to see a dramatic increase in volume, but certainly, everyone's growing community count, reinvesting. The existing home market feels like we're going to get a little bit more transaction volume there, so repair and remodel should, like you say, come back a little bit in the springtime. So if housing's working, what do you need to see from a supply side to really get lumber prices moving in the right direction? It just feels like we've been kind of bottoming out and flatlining for quite some time.
Is it more capacity that needs to come out of Canada first, or are we kind of moving through the hump of the supply addition or capacity additions in the U.S. South? What's your feel of the supply landscape?
Yeah. I mean, we're really not that far off. So if you look at what's happened from a supply standpoint over the last, call it, 12-15 months, last year, about 1.3 billion board feet came out of the system through either permanent shutdowns or different curtailments. And even just in Q1, 1.1 billion board feet of capacity has come out. So we have seen some supply responses. I think, as much as pricing, it's really more fiber availability for most of those. When you think about British Columbia, the Pacific Northwest, a lot of these mills just don't have adequate fiber supply to continue to run long term. So that will shake out as it will. I think what's really going on housing has been fine. I think it's improving.
But unlike OSB and EWP, which are a little bit more focused on single family, lumber has a pretty big R&R component. And I think what we've seen, to some extent, during these winter months in particular, is you see a little bit of a seasonal slowdown, and that's not atypical. It should need a little bit more R&R activity combined with what's going on with housing. I expect you're going to see lumber prices start to come up as the weather improves.
All right. Well, from your mouth to God's ears.
All right.
We appreciate the time. Thanks, everybody, for joining us. We'll see you downstairs if you want to hear the breakout. Thank you, everybody.
Thank you.