Q4 2021 Rayonier Inc Earnings Call

Welcome and thank you for joining ran near its fourth quarter and year end 2021 teleconference call. At this time all participants are in a listen only mode.

Speaker 1: Welcome and thank you for joining Ray and Mears 4th quarter and year end 2021 teleconference call. At this time, all participants are in a listen only mode. During the question and answer session, please press star one on your touch tone phone.

The question and answer session. Please press star one on your Touchtone phone.

Speaker 1: Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now, I will turn the meeting over to Mr. Colin Ming, Vice President Capital Markets and Strategic Planning. Please go ahead.

Today's conference is being recorded if you have any objections you may disconnect. At this time now I will turn the meeting over to Mr. Collin Mings, Vice President capital markets and strategic planning. Please go ahead.

Speaker 2: Thank you and good morning. Welcome to Ray and your investor telecomference, covering fourth quarter earnings. Our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rayanear.com. I would like to remind you that that in these presentations, we include four looking statements made pursuant to the safe harbor provisions of federal securities laws.

Thank you and good morning, welcome to <unk> Investor teleconference, covering fourth quarter earnings our earnings statements and financial supplement were released yesterday afternoon and are available on our website at <unk> Dot com I would like to remind you that in these presentations. We include forward looking statements made pursuant to the safe Harbor provisions of Federal Securities laws, our earnings release and Form 10-K .

Speaker 2: Our earnings release and Form 10-K files with the SEC list some of the factors that may cause actual results to differ materially from the forward-looking statements we may make. They are also referenced on page 2 of our financial analysis.

Filed with the SEC list some of the factors that may cause actual results to differ materially from the forward looking statements we may make.

They are also referenced on page two of our financial supplement throughout these presentations. We will also discuss non-GAAP financial measures, which are defined and reconciled to the nearest GAAP measure in our earnings release and supplemental materials with that let's start our teleconference with opening comments from Dave Nunez, President and CEO Dave.

Speaker 2: Throughout these presentations, we will also discuss non-GAAP financial measures, which are defined and reconciled to the nearest GAAP measure in our earnings release and supplemental material.

Speaker 2: With that, let's start our teleconference with opening comments from Dave Nunes, President and CEO . Dave 11 asks a question about the

Speaker 3: Thanks Colin, good morning everyone. First I'll make some high level comments before turning it over to Mark McQ, Senior Vice President and Chief Financial Officer, to review our consolidated financial results. Then we'll ask Doug Long, Senior Vice President for us resources to comment on our US and New Zealand timber results. And following the review of our timber segments, Mark will discuss our real estate results as well as our guidance for 2022.

Thanks, Colin good morning, everyone.

First I'll make some high level comments before turning it over to Mark Mchugh Senior Vice President and Chief Financial Officer to review, our consolidated financial results and then we'll ask Doug long Senior Vice President of Forest resources to comment on our U S and New Zealand timber results and following the review of our timber segments, Mark will discuss our real estate results.

As well as our guidance for 2022.

Speaker 3: We concluded 2021 with solid operational results and are very pleased with our overall full-year financial performance. We achieved record, full-year, agacity-bidob results in both our southern timber and Pacific Northwest timber segments, despite contending with increased costs as well as volume constraints driven by inclement-wide-their conditions.

We concluded 2021 was solid operational results and are very pleased with our overall full year financial performance, we achieved record full year adjusted EBITDA results in both our southern timber and Pacific northwest timber segments, despite contending with increased costs as well as volume constraints driven.

By inclement weather conditions.

Speaker 3: Our New Zealand timber segment achieved our third highest ever full year a just city but dollar result despite navigating a myriad of export market challenges and COVID-19 related headwinds during the course of the year.

Our New Zealand timber segment achieved our third highest ever full year. Adjusted EBITDA result, despite navigating a myriad of export market challenges and COVID-19 related headwinds during the course of the year means.

Speaker 3: Meanwhile, in our real estate segment, we achieved the second highest adjustity of the result, and highest weighted average pricing since our separation into a pure play timber read. underscoring our focus on optimizing our portfolio and maximizing HPU premiums.

Meanwhile, in our real estate segment, we achieved the second highest adjusted EBITDA result, and highest weighted average pricing since our separation into a pure play timber REIT underscoring our focus on optimizing our portfolio and maximizing HBU premiums.

Speaker 3: We further achieved record improved development sales of roughly $52 million for the year.

We further achieved record improved development sales of roughly $52 million for the year.

Speaker 3: Overall, for the full year, we generated GAP EPS of $1.8 per share, performance EPS of $0.67 per share, and adjusted EBITDA of $330 million.

Overall for the full year, we generated GAAP EPS of $1 <unk> per share pro forma EPS of <unk> 67 per share and adjusted EBITDA of $330 million.

While the pandemic continued to pose challenges throughout the year, we were able to achieve very strong results across the company due in large part to the unwavering focus of our people the relative strength of our markets and our nimble approach to operational decision making.

Speaker 3: These factors coupled with improving end market demand are setting the foundation for another strong year in 2022. As Mark will discuss in greater detail, we're providing full year 2022, a just-a-debit dog guidance of $310 to $340 million. Notably, the midpoint of our initial 2022 guidance is down only slightly from 2021, despite our expectation that the contribution from real estate

These factors coupled with improving end market demand are setting the foundation for another strong year in 2022.

As Mark will discuss in greater detail, we're providing full year 2022, adjusted EBITDA guidance of $310 million to $340 million.

Notably the midpoint of our initial 2022 guidance is down only slightly from 2021, despite our expectation that the contribution from real estate.

Speaker 3: activity will return to a more normalized level this year.

Activity will return to a more normalized level this year.

Speaker 3: Stepping back to the fourth quarter, we generated total Adjusted Evidda of $50 million and pro forma EPS of 1 cent per share. Drilling down to our different operating segments, our Southern Timber segment generated Adjusted Evidda of $34 million for the quarter, which was 44% above the prior year fourth quarter. We were encouraged to see net stumpage prices increase by 25% as well as a 14% increase in harvest volume.

Stepping back to the fourth quarter, we generated total adjusted EBITDA of $50 million and pro forma EPS of <unk> <unk> per share drilling down to our different operating segments. Our southern timber segment generated adjusted EBITDA of $34 million for the quarter, which was 44% above the prior year.

This quarter, we were encouraged to see net stumpage prices increase by 25% as well as a 14% increase in harvest volumes and.

Speaker 3: In our Pacific Northwest Timber segment, we achieved adjusted EBITDAV $13 million, down 8% from the prior year quarter. The year-over-year decrease was primarily attributable to higher costs partially offset by higher net stumpage prices and higher non-timber income.

In our Pacific Northwest timber segment, we achieved adjusted EBITDA of $13 million down 8% from the prior year quarter.

The year over year decrease was primarily attributable to higher costs, partially offset by higher net stumpage prices and higher non timber income.

Speaker 3: In our New Zealand timber segment, fourth quarter, adjusted EBITDAF fell to $10 million down from $17 million in the prior year quarter. As higher pricing was more than offset by 9% lower production volumes and compressed margins due to significantly higher shipping costs.

And our New Zealand timber segment fourth quarter, adjusted EBITDA fell to $10 million.

Down from $17 million in the prior year quarter as higher pricing was more than offset by 9% lower production volumes and compressed margins due to significantly higher shipping costs.

Speaker 3: In our real estate segment, we generated a justed EBITDAW of $3 million, down significantly from $26 million in the prior year period. As a 90% reduction in acres sold was partially offset by a significant increase in weighted average price.

In our real estate segment, we generated adjusted EBITDA of $3 million down.

Down significantly from $26 million in the prior year period as a 90% reduction in acres sold was partially offset by a significant increase in weighted average prices.

The moderation in real estate activity to end 2021 was anticipated following an exceptionally strong third quarter.

Speaker 3: The moderation and real estate activity to end 2021 was anticipated following an exceptionally strong third quarter.

Speaker 3: Switching gears from fourth quarter results, I'd like to highlight the active quarter we had on the portfolio management front. As previously disclosed, we closed the final two transactions associated with our sale of the timber funds business during the fourth quarter, and have now completely exited this business.

Switching gears from fourth quarter results I'd like to highlight the active quarter, we had on the portfolio management front as previously disclosed we closed the final two transactions associated with our sale of the timber funds business during the fourth quarter and have now completely exited this business and some we gen.

Speaker 3: In some we generated toll proceeds to rain year of approximately $73 million through our divestiture of the Timberfunds business.

<unk> total proceeds to rainier of approximately $73 million through our divestiture of the timber funds business. We're very pleased to have successfully exited this business as it allows us to simplify our corporate structure and financial reporting.

Speaker 3: We're very pleased to have successfully exited this business as it allows us to simplify our corporate structure and financial reporting.

Speaker 3: We're further pleased to have returned significant capital from this non-core asset at a favorable valuation relative to our initial underwriting in 2020.

Further pleased to have returned significant capital from this non core asset at a favorable valuation relative to our initial underwriting in 2020.

Speaker 3: Additionally, we closed the acquisition of 66,800 acres in Texas and Georgia for $124 million, or roughly $1,860 per acre, during the fourth quarter. These properties are positioned in strong timber markets with a diverse customer base, and we expect that they will generate a sustainable harvest of approximately 220,000 tons annually.

Additionally, we closed the acquisition of 66800 acres in Texas, and Georgia for $124 million or roughly $1860 per acre during the fourth quarter. These.

These properties are positioned in strong timber markets with a diverse customer base and we expect that they will generate a sustainable harvest of approximately 220000 tons annually.

Speaker 3: The opportunistic use of our at the market equity offering program, as well as proceeds from the sale of the timber funds business, provided us with ample balance sheet flexibility to fund this acquisition with cash on hand. With that, let me turn it over to Mark for more details on our fourth quarter financial result.

The opportunistic use of our at the market.

The equity offering program as well as proceeds from the sale of the timber funds business provided us with ample balance sheet flexibility to fund this acquisition with cash on hand with that let me turn it over to Mark for more details on our fourth quarter financial results.

Speaker 3: Thanks, Dave. Let's start on page 5 with our financial highlights. Sales for the quarter totaled $262 million, while operating income was $34 million, and net income attributable to Rainier was $9 million, or $0.06 per share.

Thanks, Dave let's start on page five with our financial highlights sales for the quarter totaled $262 million while.

Getting income was $34 million and net income attributable to rayonier was $9 million or.

<unk> per share.

Speaker 3: On a pro forma basis, net income was $2 million or one cent per share. Pro forma adjustments for the quarter were primarily associated with the actions taken to exit the timber funds business.

On a pro forma basis, net income was $2 million or <unk> <unk> per share.

Pro forma adjustments for the quarter were primarily associated with the actions taken to exit the timber funds business, we generated fourth quarter adjusted EBITDA of $50 million, which was down from the prior year period, primarily due to a much smaller contribution from our real estate segment for.

Speaker 3: We generated fourth quarter adjusted EBITDA of $50 million, which was down from the prior year period, primarily due to a much smaller contribution from our real estate segment.

Speaker 3: For the full year, Adjusted-Abit. of $330 million increased significantly over 2020 Adjusted-Abit. of $267 million, as each of our key operating segments registered meaningful year-over-year improvements.

For the full year adjusted EBITDA of $330 million increase significantly over 2020, adjusted EBITDA of $267 million as each of our key operating segments registered meaningful year over year improvements.

On the bottom of page five we provide an overview of our capital resources and liquidity at yearend as well as a comparison to the prior year, our cash available for distribution or <unk>.

For the full year was $208 million versus $162 million in the prior year, primarily driven by higher adjusted EBITDA, which was partially offset by higher cash taxes interest expense and capital expenditures a reconciliation of <unk> to cash provided by operating activities and other GAAP measures is provided on page <unk>.

Speaker 4: A reconciliation of CAD to cash provided by operating activities and other GAAP measures is provided on page 8 of the financial supplement.

Eight of the financial supplement.

Speaker 4: Consistent with our nimble approach to capital allocation, we raised $66 million through our at-the-market equity offering program during the fourth quarter at an average price of $39.70 per share. As previously discussed, we view the ATM program as a cost-effective tool to opportunistically raise equity capital, strengthen our balance sheet, and match fund bolt-on acquisitions.

Consistent with our nimble approach to capital allocation, we raised $66 million through our aftermarket equity offering program during the fourth quarter at an average price of $39 70 per share.

As previously discussed we view the ATM program as a cost effective tool to opportunistically raise equity capital strengthen our balance sheet and match fund bolt on acquisitions, we closed the.

Speaker 4: We closed the quarter with $359 million of cash and $1.4 billion of debt. Our net debt of $1 billion represented 14% of our enterprise value based on our closing stock price at the end of the year.

The quarter with $359 million of cash and $1 4 billion of debt our net debt of $1 billion represented 14% of our enterprise value based on our closing stock price at the end of the year.

Speaker 4: Subsequent to quarter end, as previously announced, we redeemed $325 million of senior notes due to 2022 with cash on hand and proceeds from the $200 million delayed raw term loan executed in mid-2021.

Subsequent to quarter end as previously announced we redeemed $325 million of senior notes due 2022 with cash on hand, and proceeds from the $200 million delayed draw term loan executed in mid 2021.

Speaker 4: Pro-Cormor for these financing actions are weighted average cost of debt declined to roughly 2.7% while our weighted average maturity was extended to roughly seven years. I now turn the call over to Doug to provide a more detailed review of our fourth quarter timber results. Thanks Mark.

Pro forma for these financing actions, our weighted average cost of debt declined to roughly two 7%, while our weighted average maturity was extended to roughly seven years.

Now I'll turn the call over to Doug to provide a more detailed review of our fourth quarter timber results.

Thanks, Mark and good morning.

Speaker 3: Let's start on page 9 with our Southern Timber segment. Adjusted EBITDA in the fourth quarter of $34 million with $10 million above the prior year quarter. The year-over-year improvement was primarily driven by a significant increase in net stumpage pricing and higher harvest volumes, partially offset by higher costs.

Let's start on page nine with our southern timber segment adjusted EBITDA in the fourth quarter of $34 million was $10 million above the prior year quarter. The year over year improvement was primarily driven by a significant increase in net stumpage pricing and higher harvest volumes, partially offset by higher costs.

Speaker 3: More specifically, volume climbed 14% during the fourth quarter as drier conditions enabled customers to ramp up production to meet demand.

Specifically volume climbed 14% during the fourth quarter as drier conditions enabled customers to ramp up production to meet demand.

Speaker 3: Despite ongoing constraints on trucking availability, Sawlog Stomach Pricing rose 21% versus the prior year quarter.

Despite ongoing constraints on trucking availability, it's all long so much pricing rose, 21% versus the prior year quarter.

Speaker 3: At nearly $31 per ton, forest quarter pricing reflected the highest average southern sawlog realizations we have registered since our separation into a pure-play timberland reek in 2014.

At nearly $31 per ton fourth quarter pricing reflected the highest average southern saw log realizations, we have registered since our separation into a pure play timberland REIT in 2014.

Speaker 3: The improved pricing reflects strong demand from sawmills, the impact of weather-related constraints on supply, upward pressure on chip and saw pricing due to increased competition from pulp and pellet mills, as well as export log demand in certain markets.

The improved pricing reflect strong demand from sawmills the impact of weather related constraints on supply.

Upward pressure on shipping salt pricing due to increased competition from pulp and pellet nodes as well as export log demand in certain markets.

Pulpwood pricing also improved significantly increasing 34% from the prior year quarter.

Speaker 3: Whole food pricing also improved significantly, increasing 34% from the prior year quarter.

Speaker 3: primarily driven by strong domestic demand and constrained supply due to wet weather conditions leading into the fourth quarter.

Primarily driven by strong domestic demand and constrained supply due to wet weather conditions, leading into the fourth quarter.

Speaker 3: Overall, weighted average stumpage prices improved 25% year over year.

Overall weighted average stumpage prices improved 25% year over year.

We were pleased with the pricing gains we achieved during the quarter and are encouraged that this positive momentum has continued into the new year as customer demand across our southern footprint remains very robust even as weather conditions have normalized.

Speaker 3: We were pleased with the pricing gains we achieved during the quarter and are encouraged that this positive momentum has continued into the new year as customer demand across our southern footprint remains very robust, even as weather conditions have normalized.

Speaker 3: Moving to our Pacific Northwest Timber segment on page 10, adjusted EBITDA of $13 million was $1 million below the prior year quarter. The year-over-year decrease was attributable to slightly lower harvest volumes and higher costs, partially offset by higher net stumpage prices and higher non-timber income.

Moving to our Pacific Northwest timber segment on page 10 adjusted.

Adjusted EBITDA of $13 million was $1 million below the prior year quarter.

The year over year decrease was attributable to slightly lower harvest volumes and higher costs, partially offset by higher net stumpage prices and higher non timber income.

Speaker 3: Volume declined 2% in the fourth quarter as compared to the prior year quarter as unfavorable weather conditions impacted harvest activity.

Volume declined 2% in the fourth quarter as compared to the prior year quarter as unfavorable weather conditions impacted harvest activity.

Speaker 3: Turning to pricing, at roughly $98 per ton, our average delivered saw log price in the fourth quarter was up 2% from the prior quarter.

Turning to pricing at roughly $98 per ton our average delivered solid price during the fourth quarter was up 2% from the prior year quarter.

Speaker 3: Strong pricing was generally sustained throughout the quarter, and we've seen positive price momentum in early 2022 amid the recent surge in lumber prices and improving export market demand.

Strong pricing was generally sustained throughout the quarter and we are seeing positive price momentum in early 2022 amid the recent surge in lumber prices and improving export market demand.

Speaker 3: Meanwhile, pulpwood pricing increased 9% in the fourth quarter relative to prior quarter, due to improved demand as pulp mills in the region resumed full production.

Meanwhile, pulpwood pricing increased 9% in the fourth quarter relative to the prior year quarter due to improved demand as pulp mills in the region resumed full production.

Speaker 3: Page 11 shows results and key operating metrics for our New Zealand Timmer segment.

Page 11 shows results and key operating metrics for our New Zealand timber segment.

Speaker 3: Adjusted EBITDA in the fourth quarter of $10 million was $7 million below the prior year quarter. The decline in adjusted EBITDA was driven by lower harvest volumes, higher freight and demerge costs, higher logging costs, and lower carbon credits.

Adjusted EBITDA in the fourth quarter of $10 million was $7 million below the prior year quarter.

The decline in adjusted EBITDA was driven by lower harvest volumes higher freight and demurrage costs higher logging costs and lower carbon credit sales, partially offset by stronger delivered log prices and favorable foreign exchange impacts.

Speaker 3: partially offset by stronger delivered log prices and favorable foreign exchange impacts.

Speaker 3: Volume declined 9% in the fourth quarter as compared to the prior year quarter, primarily due to above-average production in the prior quarter following COVID-related disruptions earlier in the year.

Volume declined 9% in the fourth quarter as compared to the prior year quarter, primarily due to above average production in the prior quarter following COVID-19 related disruptions earlier in the year.

Speaker 5: Turning to pricing, average delivered prices for export salt timber increased 27% in the fourth quarter and the prior year quarter to nearly $133 per ton.

Turning to pricing average deliver prices for export sawtimber increased 27% in the fourth quarter and the prior year quarter to nearly $133 per ton.

Speaker 5: The improvement in export software prices versus the prior year period reflected our ability to pass on some of the higher costs we're experiencing to customers, as well as the restriction on competing log imports into China from Australia.

The improvement in export sawtimber prices versus the prior year period reflected our ability to pass on some of the higher costs, we're experiencing customers as well as the restriction on competing log imports into China from Australia.

Speaker 5: However, as compared to the previous two quarters, the pricing environment for radiograph pine logs weakened during the fourth quarter response to elevated log inventories in China and softer demand.

However, as compared to the previous two quarters, the pricing environment for radio pine logs weakened during the fourth quarter in response to elevated log inventories in China and softer demand.

A slowdown in construction activity adverse weather conditions and power shortages in China collectively reduced the offtake from ports and resulted in pricing pressure on log exports.

Speaker 5: A slowdown in construction activity, adverse weather conditions, and power shortages in China collectively reduced the offtake from ports and resulted in pricing pressure on log exports.

Speaker 5: That said, we believe pricing likely bottomed in December and we've seen pricing improve to start 2022.

That said, we believe pricing likely bottomed in December when we have seen pricing improve to start 2022.

Speaker 5: The reduced flow of European spruce salvage logs into China, the continued ban on Australian log imports by China, and the ban on Russian log exports are collectively translating into improving supply-demand dynamics ahead of the Lunar New Year.

Flow of European spruce salvage logs into China. The continued ban on Australian log imports by China and the ban on Russian log exports are collectively translating in to improving supply demand dynamics ahead of the lunar new year.

Speaker 5: We expect log inventories in China to normalize as demand picks up following the holiday, which should translate into

We expect log inventories in China to normalize as demand picks up following the holiday.

Which should translate into improved export pricing.

Speaker 5: Shifting to the New Zealand domestic market. Demand remains healthy, albeit constrained to some degree by COVID-related restrictions and the availability of labour. During the fourth quarter, average delivered saw log prices increased 10% from the prior year period to $81 per tonne.

Shifting to the New Zealand domestic market demand remains healthy, albeit constrained to some degree by COVID-19 related restrictions and availability of labor.

During the fourth quarter average delivered saw log prices increase.

Increased 10% from the prior year period to $81 per ton.

Speaker 5: Excluding the impact of foreign exchange rates, domestic sold to our prices improved 6% versus the prior year period, following the upward trend in the export market.

Excluding the impact of foreign exchange rates domestic software prices improved 6% versus the prior year period, following the upward trend in the export market.

Speaker 5: As a reminder, domestic salt pricing normally follows export pricing with a lag.

As a reminder, domestic sawtimber pricing normally follows export pricing with a lag.

Speaker 5: Average domestic pulpwood pricing climbed 20% as compared to the prior year quarter.

Average domestic pulpwood pricing climbed 20% as compared to the prior year quarter.

As it relates to carbon credits, we continue to defer sales during the fourth quarter. However.

Speaker 5: As it relates to carbon credits, we continue to defer sales during the fourth quarter. However, we have resumed carbon credit sales in 2022, following a doubling of carbon pricing over the past year.

However, we have resumed carbon credit sales in 2022, following a doubling of carbon pricing over the past year.

Speaker 5: Moving ahead, we will continue to remain opportunistic in our sale of carbon credits depending on market conditions.

Moving ahead, we will continue to remain opportunistic in our sale of carbon credits depending on market conditions.

I will now briefly discuss the results from our timber fund segment.

Speaker 5: Highlighted on page 12, the Timber Fund segment registered slightly negative consolidated EBITDA in the fourth quarter on harvest volume of only 22,000 tons.

Highlighted on page 12, the timber fund segment registered slightly negative consolidated EBITDA in the fourth quarter on harvest volume of only 22000 tons.

Speaker 5: Adjusted EBITDA, which reflects the look-through contribution from the timber ponds, was also slightly negative.

Adjusted EBITDA, which reflects the look through contribution from the timber funds was also slightly negative.

Speaker 5: As Dave discussed earlier, we've completed our exit from the timber funds business and will discontinue reporting this segment next quarter.

As Dave discussed earlier, we have completed our exit from the timber funds business and we will discontinue reporting the segment next quarter.

Lastly, in our trading segment, we posted a slight operating loss in the fourth quarter.

Speaker 5: Lastly, in our trading segment, we posted a slight operating loss in the fourth quarter. As a reminder, our trading activities typically generate low margins and are primarily designed to provide additional economies of scale to our feed timber export business. I'll now turn it back over to Mark to cover our real estate.

As a reminder, our trading activities typically generate low margins and are primarily designed to provide additional economies of scale to our fee timber export business.

I'll now turn it back over to Mark to cover our real estate results Mark.

Thanks, Doug as detailed on page 13 as expected the contribution from our real estate segment was relatively light during the fourth quarter compared to the exceptionally strong results posted in the third quarter fourth quarter real estate sales totaled $11 million on roughly 200 acres sold at an average price of just over $8600 per <unk>.

Speaker 4: Thanks, Doug. As detailed on page 13, as expected, the contribution from our real estate segment was relatively light during the fourth quarter compared to the exceptionally strong results posted in the third quarter. Fourth quarter real estate sales totaled $11 million on roughly 1,200 acres sold at an average price of just over $8,600 per acre. Adjusted EBITDA for the quarter was $3 million.

Adjusted EBITDA for the quarter was $3 million.

Speaker 4: Sales in the improved development category totaled $4 million in the fourth quarter. In our Richmond Hill development project, south of Savannah, Georgia, we closed $3 million of sales, including our first non-industrial parcels, which consisted of two residential lots and a five-acre commercial property. We also completed an industrial sale consisting of 12 acres. Meanwhile, within our wildlife development project north of Jacksonville, Florida, we closed on roughly five acres of commercial property for approximately $1 million.

Sales in the improved development category totaled $4 million in the fourth quarter, and our Richmond Hill Development project South of Savannah, Georgia, We closed $3 million of sales, including our first Nonindustrial parcels, which consisted of two residential lots in a five acre commercial property. We also completed an industrial sale consisting of 12 acres.

Meanwhile, within our within our Wildlife development project North of Jacksonville, Florida, We closed on roughly five acres of commercial property for approximately $1 million.

Speaker 4: While the timing of development-related land sales will remain lumpy quarter to quarter, the location and increasing maturity of our projects offer us a strong foundation to capitalize on the migration and demographic trends that we believe will benefit our land holdings in Wildlife, Richmond Hill, and the West Puget Sound area of Washington for years to come.

While the timing of development related land sales will remain lumpy quarter to quarter, the location and increasing maturity of our projects offer us a strong foundation to capitalize on the migration and demographic trends that we believe will benefit our land holdings and Wildlife Richmond Hill, and the West Puget Sound area of Washington for years to come.

Speaker 4: Turning to the rural category, sales totaled roughly $6 million, consisting of 1,200 acres at an average price of just over $5,100 per acre.

Turning to the rural category sales totaled roughly $6 million consisting of 200 acres at an average price of just over $5100 per acre.

Speaker 4: Thus far in 2022, demand for rural land has remained healthy as the space, privacy, and recreational opportunities offered by these properties continue to attract buyers.

Thus far in 2022 demand for rural land has remained healthy as the space privacy and recreational opportunities offered by these properties continue to attract buyers we remain intently focused on achieving significant premiums.

Speaker 4: We remain intently focused on achieving significant premiums to standalone timberland value through activities of our real estate platform and are encouraged by the pipeline of sales we are building for the year ahead.

Indalone timber timberland value your activities of our real estate platform and are encouraged by the pipeline of sales. We are building for the year ahead.

Now moving onto our outlook for 2022 page 15 shows our financial guidance by segment and schedule G of our earnings release provides a reconciliation of our adjusted EBITDA guidance to our net income attributable to rayonier as well as EPS.

Speaker 4: Now moving on to our outlook for 2022. Page 15 shows our financial guidance by segment, and Schedule G of our earnings release provides a reconciliation of our adjusted EBITDA guidance to our net income attributable to reineer as well as EPS.

Speaker 4: For full year 2022, we expect to achieve adjusted EBITDA of $310 to $340 million, net income attributable to REINEAR of $83 to $92 million, and EPS of 57 to 64 cents.

For full year 2022, we expect to achieve adjusted EBITDA of $310 million to $340 million.

Net income attributable to rayonier of $83 million to $92 million and.

And EPS of <unk> 57 to 64.

In our southern timber segment, we expect to achieve full year harvest volumes of six 3% to $6 6 million tonnes.

Speaker 4: In our Southern Timber segment, we expect to achieve full-year harvest volumes of 6.3 to 6.6 million tons. The anticipated increase relative to the prior year reflects a rebound in harvest activity following the wet weather conditions and supply chain constraints that negatively impacted full-year 2021 volumes, as well as the expected contribution from recent acquisitions.

The anticipated increase relative to the prior year reflects a rebound in harvest activity following the wet weather conditions and supply chain constraints that negatively impacted full year 2021 volumes as well as the expected contribution from recent acquisitions.

Speaker 4: We also expect a meaningful improvement in weighted average stumpage realizations relative to full year 2021, driven by strong demand, partially offset by higher harvest and transportation costs. Notably, our guidance range also contemplates the near-term uncertainty associated with southern log exports to China due to the recently implemented pinewood nematode policies. All said, we expect full year adjustability of 145 to 153 million dollars in our southern timber segment.

We also expect a meaningful improvement in weighted average stumpage realizations relative to full year 2021, driven by strong demand, partially offset by higher harvest and transportation costs.

Notably our guidance range also contemplates the near term uncertainty associated with southern log exports to China due to the recently implemented Pinewood NEMA towed policies. All said, we expect full year adjusted EBITDA of $145 to $153 million in our southern timber segment.

Speaker 4: In our Pacific Northwest timber segment, we expect full-year harvest volumes of 1.7 to 1.8 million tons. We have seen improved domestic log demand following the recent increase in lumber prices. We are also seeing signs of increased export demand to start 2022, and expect continued momentum as a reduced flow of logs from other markets drives increased export demand in the Pacific Northwest.

In our Pacific Northwest timber segment, we expect full year harvest volumes of one 7% to $1 8 million tonnes. We have seen improved domestic log demand. Following the recent increase in lumber prices were also seeing signs of increased export demand to start 2022, and expect continued momentum as it reduced flow of logs from other markets.

The increased export demand in the Pacific Northwest.

Speaker 4: Based on these supply-demand dynamics, we expect that weighted average log pricing will increase modestly relative to full year 2021. However, we expect that higher delivered prices will be largely offset by increased harvest and transportation costs. Overall, we expect full-year adjusted EBITDA of $55 to $60 million.

Based on the supply demand dynamics, we expect that weighted average log pricing will increase modestly relative to full year 2021. However, we expect that higher delivered prices will be largely offset by increased harvest and transportation costs. Overall, we expect full year, adjusted EBITDA of $55 million to $60 million.

Speaker 4: In our New Zealand timber segment, we expect full-year harvest volumes of 2.6 to 2.8 million tons. While current log pricing remains below 2021 average levels, we expect the pricing will improve as log inventories in China, normalize, and export demand picks up following the lunar new year. For the full year, we expect that average export and domestic pricing will be only modestly below 2021 levels. That said, we expect that increased harvest and transportation costs will continue to put pressure on net-stumpage realization.

And our New Zealand timber segment, we expect full year harvest volumes of two six to $2 8 million tonnes. While current log pricing remains below 2021 average levels, we expect that pricing will improve as log inventories in China normalize and export demand picks up following the lunar new year for the full year, we expect that average export and domestic.

Pricing will be only modestly below 2021 levels that said, we expect that increased harvest and transportation costs will continue to put pressure on net stumpage realizations lastly.

Speaker 4: Lastly, as Doug noted earlier, we expect that our New Zealand timber segment will benefit from the resumption of carbon credit sales in 2022.

Lastly, as Doug noted earlier, we expect that our New Zealand timber segment will benefit from the resumption of carbon credit sales in 2022.

Overall, we expect full year, adjusted EBITDA of $68 million to $75 million. However, due to seasonally lower volumes continued supply chain disruptions and lower current pricing relative to the levels. We expect for the full year, we expect a lower adjusted EBITDA contribution from this segment in the first half versus the second half of the year.

Speaker 4: Overall, we expect full-year adjustity of a DAB of $68.75 million. However, due to seasonally lower volumes, continued supply chain disruptions, and lower current pricing relative to the levels we expect for the full year, we expect a lower adjustity of a DAB contribution from this segment in the first half versus the second half of the year.

Speaker 4: In our real estate segment, we expect four-year adjusted EBITDA of $70 million to $80 million. As previously discussed, following exceptionally strong real estate results in 2021, we anticipate more normalized transaction activity in 2022.

And our real estate segment, we expect full year adjusted EBITDA of $70 million to $80 million as previously discussed following exceptionally strong real estate results in 2021, we anticipate more normalized transaction activity in 2022.

Speaker 4: More details regarding our 2022 guidance can be found on page G of the earnings release, as well as page 15 of the financial sub.

More details regarding our 2022 guidance can be found on page <unk> of the earnings release as well as page 15 of the financial supplement.

Speaker 4: In sum, the market backdrop generally remains positive across our business.

In sum the market backdrop generally remains positive across our businesses that said as discussed last quarter. We are not immune from the supply chain and inflationary pressures that are impacting many parts of the global economy. We expect these challenges will likely persist through at least 2022.

Speaker 4: That said, as discussed last quarter, we are not immune from the supply chain and inflationary pressures that are impacting many parts of the global economy. We expect these challenges will likely persist through at least 2022. However, our team continues to work diligently to optimize haul distances, leverage our scale and dependability in both domestic and export markets, and make prudent silviculture investment decisions tied to localized supply demand dynamics.

However, our team continues to work diligently to optimize haul distances leverage our scale and dependability, and both domestic and export markets and make prudent silviculture investment decisions tied to localized supply demand dynamics.

Speaker 4: Overall, we believe we are well positioned to navigate logistical challenges and largely recoup the impact of cost increases in our long pricing. Now now we'll turn the call back to Dave.

Overall, we believe we are well positioned to navigate logistical challenges and largely recouped the impact of cost increases in our long pricing.

I'll now turn the call back to Dave for closing comments.

Speaker 3: Thanks Mark. As I reflect on 2021, I'm proud of both our exceptional financial performance as well as our teams relentless focus on executing against our strategic priorities and what was a challenging and ever evolving operating environment.

Thanks Mark.

As I reflect on 2021, I'm proud of both our exceptional financial performance as well as our team's relentless focus on executing against our strategic priorities in what was a challenging and ever evolving operating environment.

Speaker 3: Following a very tumultuous 2020, with the introduction of vaccines early in 2021, we were hopeful that we would return to some form of normalcy as the year progressed. However, with the emergence of two new variants, the operating environment remained challenged by periodic COVID-related disruptions and supply chain constraints.

Following a very tumultuous 2020 with the introduction of vaccines early in 2021, we were hopeful that we would return to some form of normalcy as the year progressed, however, with the emergence of two new variance the operating environment remains challenged by periodic COVID-19 related disruptions and supply chain constraints.

We further had to contend with labor shortages and persistent wet weather in many of our regions, which then which when combined with the challenges posed by Covid reduced our harvest volumes versus our original plan.

Speaker 3: We further had to contend with labor shortages and persistent wet weather in many of our regions.

Speaker 3: which then, which when combined with the challenges posed by COVID, reduced our harvest volumes versus our original plan.

Speaker 3: Despite these headwinds, our team worked diligently to adapt to fast-changing market conditions and logistical challenges to capitalize on a favorable pricing environment and post excellent financial results.

Despite these headwinds our team worked diligently to adapt to fast changing market conditions and logistical challenges to capitalize on a favorable pricing environment and post excellent financial results.

Our real estate team also did a stellar job in 2021 of capitalizing on market opportunities and successfully leveraging the breadth of product offerings across our portfolio.

Speaker 3: Our real estate team also did a stellar job in 2021 of capitalizing on market opportunities and successfully leveraging the breadth of product offerings across our portfolio.

Speaker 3: Due in part to a general shortage of residential lots within our markets, we made a strategic decision to sell undeveloped pods in both Wildlife and the Pacific Northwest.

Due in part to a general shortage of residential lots within our markets. We made a strategic decision to sell undeveloped pods and both wildlife and the Pacific Northwest.

Speaker 3: Meanwhile, the favorable momentum associated with the expansion of the port of Savannah, as well as the new I-95 interchange in Richmond Hill, allowed us to accelerate the absorption of industrial parcels.

Meanwhile, the favorable momentum associated with the expansion of the port of Savannah, as well as the new 95 interchange enrichment Hill allowed us to accelerate the absorption of industrial parcels.

Speaker 3: In some real estate results benefited from both strong pricing and faster absorption. Looking ahead, we're encouraged by the momentum across our development projects and believe that they are ideally positioned for further success.

Some real estate results benefited from both strong pricing and faster absorption.

Looking ahead, we are encouraged by the momentum across our development projects and believe that they are ideally positioned for further success.

Speaker 3: Beyond our favorable full-year financial performance, we tackled a number of important initiatives in 2021. In the wake of the Pope Resources Transaction, a major initiative this past year was to create some added balance sheet capacity for future growth.

Beyond our favorable full year financial performance, we tackled a number of important initiatives in 2021 in the wake of the Pope resources transaction. Our major initiative. This past year was to create some added balance sheet capacity for future growth.

To this end we successfully sold over 16600 acres of less strategic holdings in Washington State as well as completed our exit of the timber funds business at a value that exceeded our initial underwriting.

Speaker 3: To this end, we successfully sold over 16,600 acres of less strategic holdings in Washington State, as well as completed our exit of the timber funds business at a value that exceeded our initial underwriting.

Speaker 3: Further, we opportunistically issued a total of $236 million of equity through our ATM program in 2021 and a weighted average price of $37.5 per share. As well as restructured our debt portfolio through a series of actions that extended our weighted average maturity and lowered our weighted average cost of debt.

Further we opportunistically issued a total of $236 million.

<unk> equity through our ATM program in 2021 at a weighted average price of $37 <unk> per share as well as restructured our debt portfolio through a series of actions that that extended our weighted average maturity and lowered our weighted average cost of debt.

These portfolio and balance sheet moves allowed us to remain nimble and active acquiring timberland in 2021.

Speaker 3: These portfolio and balance sheet moves allowed us to remain nimble and active acquiring Timberland in 2021. As we close nine acquisitions in the US and New Zealand, totaling 102,000 acres for $179 million.

As we closed nine acquisitions in the U S and New Zealand totaling 102000 acres for $179 million.

Speaker 3: With year-end net debt to Adjusted EBITDAV of 3.1 times, we believe we are well positioned to execute on future high-quality growth opportunities and other capital allocation priorities.

With year end net debt to adjusted EBITDA of three one times. We believe we are well positioned to execute on future high quality growth opportunities and other capital allocation priorities.

Speaker 3: While this was a very busy year on the operational, capital markets, and transaction fronts, we also made significant strides in advancing ESG-related initiatives.

While this was a very busy year on the operational capital markets and transaction fronts. We also made significant strides in advancing ESG related initiatives.

Speaker 3: We believe Rainier is uniquely well positioned for a low carbon economy. And we're proud to publish our first ever carbon report covering 2019 data earlier this year. We follow this report in August with the publication of our 2020 carbon report as well as our inaugural sustainability report.

We believe <unk> is uniquely well positioned for a low carbon economy, and we're proud to publish our first ever carbon report covering 2019 data earlier. This year. We followed this report in August with the publication of our 2020 carbon report as well as our inaugural sustainability report.

Speaker 3: Beyond the publications of these reports, I would also note that we continue to advance many other ESG-related initiatives and have further set out ambitious ESG objectives for 2022.

Beyond the publications of these reports I would also note that we continue to advance many other ESG related initiatives and have further set out ambitious ESG objectives for 2022.

Speaker 3: As we enter 2022, I'm encouraged by strong end market demand and believe we have the team and portfolio to capitalize on favorable pricing momentum across many of our timber markets, as well as continued strong interest in rural land and entitled development properties.

As we enter 2022 I am encouraged by strong end market demand and believe we have the team and portfolio to capitalize on favorable pricing momentum across many of our timber markets as well as continued strong interest in rural land entitled Development properties there.

Speaker 3: The resiliency and dedication of our employees over the past two years demonstrates their ownership mentality. As market conditions and opportunities continue to evolve, I'm confident this collective mindset will continue to drive long-term value creation for our shareholders.

Resiliency and dedication of our employees over the past two years demonstrates their ownership mentality as market conditions and opportunities continue to evolve I am confident this collective mindset will continue to drive long term value creation for our shareholders.

This concludes our report our prepared remarks, and I'll now turn the call back over to the operator for questions.

Speaker 3: This concludes our report of prepared remarks, and I'll now turn the call back over to the operator for questions.

Speaker 1: Thank you. We will now begin the question and answer session.

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Speaker 1: Our first question is from Anthony Pedinari with City. You may go ahead.

Our first question is from Anthony Pettinari with Citi. You May go ahead.

Hi, good morning.

Good morning, good morning.

In real estate last year, you generated a $100 million in EBITDA, which was well above the guidance you initially gave for the year.

Speaker 5: In real estate, last year you generated a hundred million in EBITDA, which was well above the guidance you.

I think in 2020, you did $90 million, which was at the high end of the initial guidance, even with the pandemic hitting so when we think about the 'twenty two guide of 70 to 80.

Speaker 5: I'm just wondering if you could kind of talk or help us sort of frame the dynamics in that business, which is obviously won't be, but...

I was just wondering if you could kind of talk or help us sort of frame the dynamics in that business, which is obviously lumpy, but it's been beating expectations in recent years and is there a level of conservatism in the guide just given how hot end markets in the south appear to be.

Yes. Thanks, Anthony this is mark I'll take that.

Speaker 4: Yeah, thanks, Anthony. This is Mark. I'll take that.

Look it's a very tough business to forecast because the nature of the transactions.

Speaker 4: it look at the very tough business to forecast because you know the nature of the transactions um... you know they're they're binary they occur they don't occur you know last year in particular we obviously had the arborwood transaction um... in the Pacific Northwest which was a thirty seven a half million dollar transactions though you know that meaningfully moved the dial to the to the positive and you know from time to time we we have those and it does um... you know can can can dramatically change your outlook for the year when you have a single transaction of that nature um... that it comes in because we were not anticipating that transaction coming into the year in 2020

Our binary they either occur they don't occur last year in particular, we obviously had the <unk> transaction.

The Pacific Northwest, which was at $37 $5 million of transactions, so that meaningfully move the dial to the positive and from time to time, we have those and it does.

It can dramatically change your outlook for the year when you have a single transaction of that nature.

It comes in because we were not anticipating that transaction coming into the year and 2021.

Speaker 4: So, I think we've tended to outperform in real estate. We're obviously in a very hot real estate market. We built a pipeline of development properties. I'd say the development properties in particular tend to be a bit more predictable. I mean, they have to be at a sort of state of readiness to go out to market with. It's really the rural and the unimproved development where from time to time, we'll have some outsized wins that we weren't anticipating going into the year. But it's a little bit, we're always a little bit reluctant to assume that we're going to see that type of activity because if it doesn't happen, you end up meaningfully underperforming your outlook for the year. So, we always think it's...

<unk>.

I think we've tended to outperform it and real estate.

We're obviously in a very hot real estate market, we built a pipeline of development properties and I'd say the development properties in particular tend to be a bit more predictable I mean, they have to be at a sort of state of readiness to <unk> to go out to market with its really the rural in the unimproved development, where from time to time, we will have some some outsized wins that we work.

Anticipating going into the year, but it's a little bit.

Always a bit reluctant to kind of assume that we're going to see that type of activity because.

If it doesn't happen you end up sort of you can end up meaningfully underperforming your outlook for the year. So we always think it's prudent to be a bit conservative in our outlook for the year end and we'd prefer to kind of outperform that outlook versus underperform, but keep in mind from a very long term perspective, we do try to kind of model this business base.

On our historical experience and our historical experience if going back 15 years is that on average we sold about 25000 acres a year into that HBU market generally at premiums in the range of 50% to 100% above timberland value, obviously last year was quite a bit stronger than that.

But when we think about the longer term and sort of a steady state.

For that business, that's kind of where we come out and so I think what we've guided to for for next year is very consistent with that I'll be it leaning more towards some higher value opportunities, particularly on the development front.

Speaker 3: So I think what we've guided to for next year is very consistent with that. I'll be leaning more towards some higher value opportunities, particularly on the development front. Okay, that's very helpful. And then last year your weighted Southern Timberland pricing was up, I think 15%. I know there's a lot in there with mix and weather and higher costs, but looking to 22 year outlook for US South pricing seems to be, I'll give some intro and then Doug can kind of pick up. I mean, this is something that we've been.

Okay, that's very helpful.

Speaker 5: And then last year your weighted Southern Timberland pricing was up, I think 15%. I know there's a lot in there with mix and weather and higher costs, but looking to 22, your outlook for US South pricing.

And then last year your weighted southern Timberland pricing was up I think 15% I know theres a lot in there with mix and weather and higher costs, but looking into 'twenty to your outlook for U S. South pricing seems upbeat or maybe a little bit more upbeat than peers I'm just wondering from a big picture perspective, if you could talk about your sort of degree of.

Visibility or degree of confidence in pricing momentum in the south and 22.

Compared to previous years.

Yes, Anthony this is Dave I'll give some intro and then Doug can kind of pick up I mean, this is something that we've been.

Speaker 3: yeah anthony this is davil all i'll give some intro and then and uh... can kind of pick up i mean this is something that we've been uh... talking about you know for for a long time as you know you know i think i think an element of this is

Talking about.

For a long time as you know I think I think an element of this is certainly.

Speaker 3: certainly uh... you know geographic mix and and keep in mind you know as as we've discussed the majority of our

Geographic mix and keep in mind as we've discussed the majority of our southern ownership is in wood baskets with balanced growth drain relationships ratios and so.

Speaker 3: and ownership is in wood baskets with balanced growth-drain relationships ratios and so.

Speaker 3: These create greater price elasticity during times of rising lumber markets. And so I think that fact gives us a fair bit of bullishness as we think about those markets. And we've certainly seen that this last year and starting this year. I think another nuance to kind of keep in mind is as a pure play timber read.

These create greater price elasticity during times of rising lumber markets and so I think that that.

That fact.

It gives us a fair bit of.

Bullishness as we think about those markets and we certainly seen that.

This last year and starting this year I think another.

Another new wants to kind of keep in mind is as a pure play timber REIT.

Speaker 3: uh... we have a fair bit of flexibility in the form of sale and we pride ourselves in that uh... you know some people like to say they're all delivered we we believe in a mix of delivered sales and stumpage sales which we think gives us

We have a fair bit of flexibility in the form of sale and we pride ourselves in that.

Some people like to say Theyre all delivered we believe in a mix of delivery sales and stumpage sales, which we think gives us a nimble sales posture.

Speaker 3: a nimble sales posture, where we don't have internal mills to feed, we feel like we can pull that lever.

Where we don't have internal mills to fee, we feel like we can pull that lever and extract.

Speaker 3: and extract value from time to time. And then thirdly, I think a breadth of product offerings. You know, we vary our regimes species to species, region to region. You know, some where we're heavier to saw timber, others where we're heavier to pulpwood markets.

Value it from time to time and then.

Thirdly, I think a breadth of product offerings.

We vary our regimes species to species region to region.

Somewhere we have were heavier to saw timber others, where we're heavier to pulpwood markets trying to capitalize on what the market gives us and then I think lastly is the role that exports play and we feel that helps tension markets in the south on the margin and really that's how prices are ultimately determined maybe.

Speaker 3: trying to capitalize on what the market gives us. And then I think lastly,

Speaker 3: is the role that exports play and we feel that helps tension uh... markets in the south uh... on the margin and and really you know that's how prices are ultimately determined maybe maybe dug can provide some additional color to your question

Maybe Doug can provide some additional color to your question.

Speaker 5: Yeah, I would agree with me. Dave said that very well. I think the key thing we see, particularly we've been talking about is...

Yes, I would agree with David that very well I think the key thing we see particularly we've been talking about is the.

Speaker 4: increased capacity of fallen mills in our operating area. I'm particularly along that Atlantic coast. And so we've really seen those come to play. You know, in the past few years we've seen about a half-day and work-feet come into the Florida market.

Increased capacity of saw mills in our operating area in particular that Atlantic coast and so we've really seen those come to play.

Past few years, we've seen about a halfway in board feet come into the Florida markets. Another $1 3 billion in the Georgia markets.

Speaker 5: Another 1.3 billion in the Georgia markets and 0.7 in the South Carolina. Another call it 1.5 billion worth of feed kind of in the Alabama market. And so we're really seeing a lot of growth in those areas, a lot of competition for saw logs. And so we've really seen demand, even as weather normalized.

Seven.

In the South Carolina, and another call it $1 5 billion board feet kind of in the Alabama market and so we're really seeing a lot of growth in those areas a lot of competition for saw logs and so we've really seen demand even as weather normalized.

Speaker 5: We've just seen increased demand and pricing in those markets. So we're really seeing that reaction that Dave mentioned to the supply demand there. And really, really pleased that in all of our areas, except for Arkansas, we saw a meaningful price improvement across all of our grades. So really just the one lagged that we had in that area. And thankfully, we're about done with our harvesting in that area. And we'll be moving on past those. So it was a really strong year for us. And we see that continuing to this year's Dave mentioned, capitalizing on the Stumpichelge program really in the year.

We've just seen increased demand in pricing in those markets. So we're really seeing that reaction that Dave mentioned to the supply demand there and really really pleased that in all of our areas except for Arkansas, we saw a meaningful price improvement across all of our grades. So it really just the one lagging that we had in that area and thankfully, we're about done with our harvesting in that area and we'll be moving on pass those so it was a very strong year for us.

We see that continue into this year as Dave mentioned capitalizing on the stumpage sales program or linear.

Okay. That's very helpful I'll turn it over.

Thank you. The next question is from Mark <unk> with BMO capital markets. You May go ahead.

Speaker 1: Thank you. The next question is from Mark Wildey with BMO Capital Markets. You may go ahead.

Speaker 2: Good morning, guys, it's Jesse Brown on for Mark, I guess, just to start, could you give your kind of outlook for Timberland activity in 2022? Um, kind of what valuations look like, and kind of what you're seeing on the front, how that's impact in this valuation.

Good morning, guys, it's Jesse Barone on for Mark.

I guess just to start could you give your kind of outlook for timberland M&A activity in 2022.

What valuations look like and kind of what youre seeing on the ESG front, how thats embedded in those valuations.

Yes, I think we are definitely I think we are definitely in a mode where.

Speaker 3: Yeah, I think we're definitely in a mode where the markets are pretty strong right now. We're seeing a fair bit of capital continue to flow into those markets and I think that's translated into some compressed discount rates in terms of

The markets are pretty strong right now we're seeing.

We're seeing a fair bit of capital continue to flow into into those markets and I think that's translated into some compressed discount rates in terms of behavior.

Speaker 3: It's always hard to predict fully, you know, in a year forward sense, the level of transactions activity. I can say that we're, you know, we're active in all three of our primary geographic segments looking at properties, but at the same time, we're being careful to stay disciplined and really looking for those opportunities that are nice, bolt-on.

It's always hard to predict fully.

A year forward.

The level of <unk>.

Transactions activity I can say that we're we're active in all three of our primary geographic segments looking at properties, but at the same time, we're being careful to stay disciplined and really looking for those opportunities that are nice bolt on.

Speaker 3: uh... fits were were were a believer in and uh... you know sort of smaller smaller is better in terms of of complimentary fit

Fits we're we're a believer in.

Sort of smaller smaller is better in terms of complementary fit and so we just continue to kind of plug away in that respect.

Speaker 3: And so we just continue to kind of plug away in that respect.

Yeah.

Speaker 6: And then just one other for me, on the Southern export side, could you just kind of give more details around kind of what those volumes look like, where they could eventually get to in kind of a couple years and how much of an impact they've really had on pricing in the short term. Thanks.

And then just one other familiar on the southern export side could you just kind of give more details around kind of what those volumes look like where they could eventually get to and kind of a couple of years.

And how much of an impact they've really had on pricing in the short term.

Yes. This is Doug I'll take that.

Speaker 5: Yeah, well, as I mentioned before, for competitive reasons, I won't really go into our specific volumes and things like that on these markets. But I can talk a little bit overall about what we're seeing right now. And basically, with the Pinewood-Nematode policy that's been implemented in China, we're seeing quite a few exporters that have left the market. As a matter of fact, over a dozen exporters along the Atlantic coast have shut down exports to China.

Yes, well as I mentioned four for competitive reasons I won't really go into our specific volumes and things like that when these markets.

But I can talk a little bit overall, but what we're seeing right now.

Basically with the Pinewood NIM to a policy that's been implemented in China, we're seeing quite a few experts that have left the market matter of fact over it doesn't export as long as Atlantic coast of shutdown exports to China.

Speaker 5: So expectancy is pretty sharp to climb and then you'll find exports in China in the Q1, at least, in fact, between October and November , which normally goes down because of the new year, but we saw 50% decline, so we've seen a significant decline there. To make up for that though, we've heard China importers have acquired three pan-mex vessels from Uruguay and for Q1.

<unk> expect to see a pretty sharp decline in sanya upon exports in China, and the Q1 at least and matter of fact between October November which it normally goes down because of the new year, but we.

We saw a 50% decline so we've seen a significant decline there.

To make up for that though we've heard im trying to importers have acquired three panamax vessels from Uruguay and for Q1 in.

Speaker 5: And Uruguay has been a large importer of senile pine into India, so their pivot from India to China has opened up the market for senile pine.

In Uruguay has been a large employer of senior upon into India. So theyre pivot from.

India to China has opened up the market for Sina opine into India, and so we're working on moving volume into India have been an increased our volumes in there in Q1.

Speaker 4: We're working on moving volume into India have been and increased our volumes in their Q1.

Speaker 5: And so while we analyze that China supply side implementation of the new nematodes, we're looking at growing our business into China and Vietnam. So we do believe there's going to be a reduction, at least in the first half of your overall across the south of exports as people try to react to what things look like, but that it favors the larger exports as we look to position ourselves into different markets.

And so while we analyze that China supply side implantation of the <unk>, we're looking at growing our business into China and Vietnam. So we do believe there's going to be a a reduction at least in the first half of your overall across the south of exports as people try to react to what things look like but that it favors the larger export or as we look to position ourselves into different markets.

Great. Thanks, I'll turn it over.

Thank you. The next question is from Mark Weintraub with Seaport Research Partners you May go ahead.

Speaker 1: you. The next question is from Mark WineTrop with Seaport Research Partners. You may go ahead.

Thank you.

Speaker 7: So just following up a little bit on the notion of more lumber production in the South helping your business.

So just following up a little bit on the notion of more lumber production in the south helping your business.

Speaker 7: It's sort of interesting if you actually look at the data

It's sort of interesting if you actually look at the data.

Speaker 7: It doesn't seem like there was that much more lumber production in the South this year overall. But maybe it's been different in your specific markets. And I guess there's a good and a bad interpretation of that. On the one hand, I may ask the question, was it weather or more demand that was helping pricing in the South to date? And then I guess the follow up would be if we didn't have that production increase.

It seemed like there was that much more lumber production in the south this year overall.

But maybe it's been different in your specific markets and I guess there there is a good and a bad interpretation of that on the one hand I may ask the question was it weather or more demand that was helping pricing in the south to date and then I guess the follow up would be if we didn't have that.

Production increase show up.

Speaker 7: do we have a big step up that's ahead of us? And obviously that could be a positive, I would think. So any thoughts or color around those observations?

We have a big step up that's ahead of us and obviously that that could be a positive I would think so just any thoughts or color around those observations.

Yes, I'll start there I mean, we definitely had a wet.

Speaker 5: Yeah, I'll start there. I mean, we definitely had a wet summer in particular, and so we definitely saw some wet weather impacts on things we went through. But really in Q4, that started to moderate and dry out and has been reasonable, actually below the prior year as we move into the first quarter. So while there were wet weather impacts, we also have just seen that increased demand from the mills.

Some are in particular and so we definitely saw some wet weather impacts on things, we went through but really in Q4 that start to moderate and dry out and has been reasonable actually below the prior year as we move into the first quarter. So while there were weather impacts. We also have just seeing that increased demand from the mills.

Speaker 5: I can't really comment to myself because I don't own any of the mills on their production levels or where they are, but we continue to see, we had a wet weather impact, but after that things have moderated and we continue to see just increased demand for every time we put wood out for sale or we have a delivered negotiation.

Can't really comments myself don't own any of the mills on their production levels are where they are but we continue to see we had a wet weather impact, but after that things have moderated and with Tennessee just increased demand for every time, we put up for sale or we have delivered negotiation.

Speaker 3: Mark, I'd add to that, you know, keep in mind that you have fairly long ramp-ups on some of these CAPEX announcements on the sawmill side. And then that's been exacerbated by COVID outbreaks from time to time. And so I think that's acted, you know, those two things.

Mark I would add to that keep in mind that you have fairly long ramp ups on some of these capex capex announcements on the sawmill side and then that's been exacerbated by Covid.

Outbreaks at from time to time, and so I think that's that's acted those two things plus general backlog on equipment. That's been ordered for part of these new facilities I do think youre going to see kind of a gradual increase in <unk>.

Speaker 3: you know general backlog on on on equipment that's been ordered for part of these new facilities i do think you're going to see kind of a a gradual increase

Speaker 3: in southern production as those things kind of get ironed out over time, but I think to Doug's point, you know, we're encouraged that we're seeing that already in a demand sense.

Southern production as those things kind of get ironed out over time, but I think to Doug's point, we're encouraged that we're seeing.

We're seeing that already in of demand.

Speaker 3: even though we've got a ways to go to get to those kind of name plate production levels.

Even though.

We've got a ways to go to get to those kind of nameplate production levels.

Speaker 7: I guess I was just trying to get a read as to whether or not there is the potential for a more compressed step up because of the issues you referenced with COVID, etc., that sort of maybe prevented the industry from really running at its production, full production capabilities as supply chain and absenteeism potentially become less of a problem.

And I guess I was just trying to get.

Read as to whether or not.

There is the potential for a more compressed desktop.

Because of the issues you referenced with Covid.

Et cetera that sort of maybe prevented the industry from really running.

At its production.

Production capabilities.

Our supply chain and absenteeism potentially become less of a problem.

Speaker 7: Do you get a sense from your customers that there could be a big step-up that arrives? I think I heard you suggesting it would be, in all likelihood, more gradual, so I just wanted to push on that a little bit.

Do you think there is.

Do you get from a sense from your customers that are there.

There could be a big step up that that arrives or is it.

I think I heard you, suggesting it would be in all likelihood more gradual so just wanted to push on that a little bit.

Speaker 5: Yeah, I'll take a step at this dug again. I mean, I'll give you some annual evidence, I guess, from customer discussion.

Yeah, I'll take a step at this is Doug again, I mean, I will give some annual evidence I guess from customer discussions and to your point, we're well aware of multiple mills a lot of the mills have been take downtime, one or two weeks due to COVID-19 overtime. So I do think as Dave mentioned there is there is incremental capacity will come online and continue to work.

Speaker 5: To your point, we're well aware of multiple mills, a lot of the mills happen to take downtime, you know, one to two weeks due to COVID over time. So I do think, as Dave mentioned, there's, you know, there's incremental capacity that will come online and continue to work. I wouldn't want to try to guess on whether it's a compressed increase or not, but what we're seeing is just that sustained price momentum and growth as we go. And I do believe there'll be increased demand because we have seen a lot of the mills that we supply have taken downtime, particularly on the sawmill side of things over the course of the past year.

I wouldn't want to try to guess on whether it's compressed increase or not but what we're seeing is just a sustained price momentum and growth as we go and I do believe will be increased demand because we have seen a lot of the mills that we supply have taken downtime probably on the sawmill side of things over the course of the past year.

Speaker 7: Okay, great. And one quick other follow-up on the Timberlands question. So, based on your comments and what we've heard from some others, it sounds like, you know, the market's heating up, discount rates are low again, etc.

Okay, Great and one quick other follow up on the the timberlands question.

So based on your comments and what we've heard from some others. It sounds like the market is heating up discount rates are low again et cetera.

Speaker 7: And yet you're very selective. I mean, how hard is it going to be for you to get the types of opportunities to grow the business at the prices that make sense to you? Are you feeling at all discouraged at this point given what's going on or conversely are there reasons for optimism?

And yet you.

Youre very selective I mean, how hard is it going to be for you to.

Get the types of opportunities to grow the business.

At the prices that make sense to you are you feeling at all discouraged at this point given what's going on or Conversely are there reasons for optimism.

I mean, it certainly is competitive I don't want to I don't want to mislead you there, but I'd say also we.

Speaker 3: i mean it's it's certainly is competitive i don't want to i don't want to sort of mislead you there but i'd say also you know we we you know we we we we purchased uh... hundred two thousand acres last year which is not you know insignificant uh... we tend to put uh... affair bed of emphasis on negotiated bolt-on sales that tend to get less visibility so we we like that

We we.

We purchased 102000 acres last year, which is not insignificant we tend to put a fair bit of emphasis on negotiated bolt on sales that tend to get less visibility. So we like that.

Speaker 3: that posture and you know we're happy with we're happy with the growth that that we've had you know we placed $179 million into those transactions all of which were we're both on some we added you know lands and strong markets you know roughly a quarter in Florida and Georgia roughly a half in Texas and the balance a small amount in

That posture and we're happy with.

We're happy with the growth that we've had we placed $179 million into those transactions all of which were were bolt ons and we added lands in strong markets.

Roughly a quarter in Florida, and Georgia, roughly a half in Texas and the balance a small amount and in New Zealand and so we think these are all very nice from a complementary fit with our existing.

Speaker 3: in New Zealand and so you know we we think these are all very nice from a complimentary fit with our existing

Speaker 3: land-based, nice quality lands. They're not encumbered by wood supply agreements, so we think that gives us lots of optionality going forward.

Land base nice quality lands.

Theyre not encumbered by wood supply agreement. So we think that gives us lots of optionality.

Going forward.

Speaker 3: and in this recently announced transaction that had lands in about roughly 52,000 acres in Texas, you know, that's

And in this recently announced.

<unk> transaction that had.

<unk> and <unk>.

Roughly 52000 acres in Texas.

Speaker 3: you know within three hours of of of two of the nation's top ten single-family housing markets and so you know we're excited about kind of the strategic location of that and and the fit with our existing operations in texas

Within three hours of.

<unk>.

Two of the nation's top 10 single family housing markets and so we're excited about kind of the the strategic location of that and the fit with our existing operations in Texas.

Okay, great. Thanks, I appreciate the color and the insights.

Thank you. The next question is from Paul Quinn with RBC capital markets. You May go ahead.

Speaker 1: Thank you. The next question is from Paul Quinn with RBC Capital Markets. You may go ahead.

Yeah. Thanks, guys good morning.

Speaker 6: Yeah, thanks guys, good morning. Just started off on maybe in Timberlands, just kind of stand a conservatism that sort of, I expected a higher guide on Pacific Northwest and New Zealand just because of that logics for ban in Russia. So just wondering what the log inventories are currently in China when you expect them to normalize and why you aren't seeing further or more outside on the process.

To start off on <unk>.

Maybe tomorrow.

Just trying to understand the conservatism that sort of I guess I.

I expected a higher.

Right.

It got worse in New Zealand, just because of that.

Log export ban in Russia. So just wondering what the log inventories are currently in China. When do you expect them to normalize and why you arent seeing further.

Or more upside on the pricing side.

Sure. This is Doug I'll start off on this one so currently we're seeing the China inventory level estimate around $5 4 million cubic meters, which is actually down from December .

Speaker 5: Sure, this is Doug, I'll start off on this one. So currently we're seeing the China Amitware level that's mid around 5.4 million cubic meters, which is actually down from December .

Speaker 5: So that's a good force. December and early January , demand actually prior to the New Year surprised us to the upside and then December was running around 8,000 cubic meters per day and then around average of 45,000 cubic meters per day in January , which includes the impact of holiday shutdown. Pretty strong demand going into the holidays. So we're upside on that.

That's a good for us.

December and early January demand actually prior to lunar new year surprised us to the upside.

And in December is running around 8000 cubic meters per day, and then around average of 45000 cubic meters per day.

In January which includes the impact of the holiday shutdown. So so pretty strong demand going into the holidays, so were upside on that.

Speaker 5: And the customers are beginning to see that the future impacts of the reductions in the softwood log supply that you mentioned from Russia and reduced European spruce salvage, the continued Australia ban, and now the uncertainty over U.S. semi-alpine due to the nematode policies, as well as the strong U.S. domestic demand. But what we did have, though, was that kind of a real estate correction that loomed over the markets in late Q3 and early Q4. And so the market did drop off of where it wasn't in 2021.

And the customers are beginning to see that the future impacts of the reductions in softwood log supply that you mentioned from from Russia, and reduced European Spruce salvage continued Australia ban and now the uncertainty over them, yes, I'm, saying alpine due to the <unk> policies as well as the strongest domestic demand, but we did have though was that kind of.

Our real estate correction that loomed over the markets in late Q3, and early Q4, and so the market did drop off of where it wasn't in 2021.

Speaker 5: But with the government stepping in to restructure of many of those highly indebted companies, kind of with more...

And what the government stepping in to restructure them may those highly indebted companies kind of a more state owned entities.

Speaker 5: We're starting to see that worry lessen in the market. And the government's already lifted some of the constraints on mortgage borrowers and reduced the bank-reserve ratio to put more liquidity in that market.

We're starting to see that were less than the market and the government already lifted some of the constraints on mortgage borrowers and reduce the bank reserve ratio to put more liquidity in that market.

Speaker 5: In addition, they're investing more in infrastructure projects to help boost economic growth. And that's a good single to our lumber and plywood cussed.

In addition, they're investing more in infrastructure projects to help boost economic growth and that's a good signal to our lumber and plywood customers.

Speaker 5: We've dealt significantly often in the housing downturn. So we see good strong demand coming out of coming out of China after the Lunar New Year. One of the big things we have working against us, though, is still shipping. So shipping prices are still extremely high. There's plenty of press out there in the world about everything that's happening. Vessel times are getting better going into China.

That was significant offsetting the housing downturn. So we see good strong demand coming out of coming out of China. After the lunar new year, one of the big things, we have working against us, though it's still shipping.

So shipping prices are still extremely high.

Plenty of precedent out there in the world about the everything is happening vessel times are getting better going into China.

Speaker 5: But you still are subject to individual port lockdowns to the strict COVID policies they have there. So any given vessel can be can be locked down and we've had vessel sit for

But you still are subject to individual port lockdowns due to the strict credit policy. They have there so any given vessel can be it can be locked down.

Had vessel sit for upwards of 30 to 40 days, sometimes trying to trying to get in so there's a few things out there that kind of give us a cautiousness around what we're looking at we see strong demand, but we still see supply chain challenges as we go through there.

Speaker 5: upwards of 30 to 40 days sometimes trying to get in. So there's a few things out there that kind of give us a cautiousness around what we're looking at. We see strong demand, but we still see supply chain challenges as we go through there. But you know, we mentioned about the logs that you mentioned and then also this is coupled with a significant decrease of over 25% in lumber imports in 2021, did the strengthening of the markets in US and Europe . We do see it positive on the demand side, but we're just being a bit cautious there around the, the can.

You mentioned about the logs that you mentioned and then also this is coupled with a significant decrease of over 25% lumber imports in 2021 due to the strengthening of the markets in U S and Europe , we do see a positive on the demand side, but we're just being a bit cautious there around them.

The supply chain constraints in the market right now.

Speaker 5: And it's a great color thanks. And then just...

Okay.

Great color. Thanks, and then just.

Speaker 3: Over on the carbon side, with respect to North America, one of your competitors has been pretty well started to set out some goals, some longer-term goals. Just wondering how you think about monetizing your carbon sequestration on your Timberlands in North America?

We're on the carbon side.

Yes.

With respect to North America, one of your competitors has been pretty well started to set out some goals longer term goals just wondering what how you think about.

Monetizing your carbon sequestration on your timberlands in North America.

Hey, this is Marc I'll take that.

Speaker 4: you know it's the the market opportunity there i think it's still you know fairly speculative on you know we we continue to believe the carbon represents a very significant opportunity for our sector uh... you know not only to be part of the solution to climate change but also to improve the economics of uh... of our forest

Yeah.

The market opportunity there I think is still fairly speculative on we continue to believe that carbon represents a very significant opportunity for our sector.

Not only to be part of the solution to climate change, but also to improve the economics of our forests.

Speaker 4: The path to net zero is going to require negative emissions. You know, the key issue going forward is how negative emissions are counted for and how the market for negative emissions ultimately evolves over time. The demand for carbon offsets in the voluntary market was about 100 million units in 2020. Various forecasts show that demand growing by, you know, 10 to 15 times by 2030 and by 50 to 100 times by 2050.

The path to net zero is going to require negative emissions.

A key issue going forward is how negative emissions are accounted for and how the market for negative emissions ultimately evolves over time.

Demand for carbon offsets in the voluntary market was about 100 million units in 2020, various forecasts show that demand growing by 10% to 15 times by 2030 and by by 50 to 100 times by 2050.

Speaker 4: You know, so that sort of gets you to imply demand for negative admissions of at least five billion metric tons of CO2 equivalents and 25.

So that sort of gets you to imply demand for negative emissions.

At least 5 billion metric tons of Cotwo equivalents in 2050 with an escalating path to that figure between now and then.

Speaker 4: with an escalating path to that figure between now and then. To put that in context, the global industrial roundwood harvest in 2019 was about 2 billion times.

To put that in context, the global industrial Roundwood harvest in 2019 was about 2 billion tonnes.

Speaker 4: So there's a big disconnect between sort of the demand for carbon and kind of the available fiber supply to provide that carbon, at least within the forestry market. So we think this could become a big opportunity for our sector. Working forests are the most readily available and cheapest technology that's out there today to generate negative emissions. It's not the only technology. There are other technologies like direct carbon capture and storage, but those types of technologies are going to require much higher economic incentives to really get off the ground. In the form of higher offset pricing, for example.

There's a big disconnect between sort of the demand for carbon in kind of the available fiber supply to provide that carbon at least within the forestry market. So we think this could become a big opportunity for our sector.

Working for US are the most readily available and cheapest technology, that's out there today to generate negative emissions.

The only technology there are other technologies like direct carbon capture and storage, but those types of technologies are going to require much higher economic incentives to really get off the ground in the form of higher offset pricing for example.

Speaker 4: I think it's also worth noting that even when you kind of putting aside carbon, there are various other potential uses of wood fiber on this path to net zero that we also think could be pretty impactful for our industry, such as sustainable aviation fuels, biomass energy, and mass timbers.

I think it's also worth noting that even when you're kind of putting aside carbon their various other potential uses of wood fiber on this path to net zero, but we also think it would be pretty impactful for our industry.

As such is sustainable aviation fuels.

<unk> energy and mass timber so as.

Speaker 4: You know, as we kind of think about, you know, the broad opportunity around, you know, economic opportunity around ESG, you know, any one of these uses could have a very significant effect on the demand for wood, fiber, and land use.

As we kind of think about the broad opportunity around economic opportunity around ESG.

One of these uses could have a very significant effect on the demand for wood fiber and land use.

Specially if they really scale up taken together, we think it sets a pretty compelling backdrop as we look forward around the role that working for us could could play in climate change, but it's still very difficult to estimate kind of what that value looks like on a go forward basis.

Speaker 5: you know it's still very difficult to estimate kind of what that value looks like on a go-forward basis. Right now the voluntary market prices carbon at a level that isn't really going to incentivize a meaningful change in our behavior. So we're really going to need to see that market scale up over time and the price of carbon in the voluntary market move up over time to really kind of start to assess how that's going to affect our industry. Yeah I just add to that kind of what our New Zealand experience and you know our participation in the Emission of Strengths given New Zealand gives a unique perspective as it relates to monetizing carbon and the news.

Right now the voluntary market prices carbon at a level that isn't really going to incentivize a meaningful change in our behavior. So we're really going to need to see that market scale up over time.

The price of carbon in the voluntary market move up over time.

It really kind of start to assess how thats going to affect our industry.

Speaker 5: Yeah, I just add to that kind of modern New Zealand experience.

Yes, I'd just add to that kind of wondering as you won't experience.

Speaker 5: Our participation in the Immersion of Tranges Game New Zealand gives a unique perspective as it relates to monetizing carbon.

Our participation in the emission strengths given New Zealand gives us a unique perspective as it relates to monetizing carbon.

Speaker 5: The New Zealand government implemented changes to the program in 2020 that we believe would significantly increase the value of carbon and it actually did result in the doubling of the prices to currently over $7. So those changes included at floor and a cost containment cap with $70 in 2022 to reduce price?…

And then again government implement changes to the program in 2020 that we believe with significantly increased the value of carbon and they actually did result in a doubling of the prices to currently over $7. So those changes included a floor and a cost containment capital of $70 in 2022 to help reduce price volatility.

Speaker 5: And we believe that's now been fully recognized in the market, so we're starting to opportunistically sell into that market. And that's an example of what Mark said, where there's still, you know, things working out there trying to understand, but the value that we see, there's a lot more opportunity in New Zealand and that pricing that we saw compared to what the current voluntary markets are. And we've seen New Zealand prices move a lot as it got regulated over time, so I think we have to be careful as we think about how we move into this market.

We believe it has now been fully recognized the market. So we're starting off very optimistically sell into that market and Thats. An example of what Mark said, where there are still things working out there trying to understand but the value that we see there is a lot more opportunity in new Zealand and that pricing that we saw compared to what the current voluntary markets are and we've seen NGL prices move a lot as it got regulated over time. So I think we have to be careful as we think about how we move into the.

Market.

Speaker 5: Even the secondary market and New Zealand right now is trading above that cost containment cap, which we also saw in 2021. So based on individual midter's needs, they're stopped for pricing improvement even in a market where we have cost containment caps. So it's a very fluid market with a lot of potential upside and we participate in that New Zealand market. It's a lot of insight in which

Even in the secondary market in New Zealand right now staying above that cost containment cap, which we also saw in 2021, so based on individual meters needs. This opportunities for price improvement even in a market, where we have cost containment caps. So it's a very fluid market with a lot of potential upside and we participate in the New Zealand market and that gives us a lot of insight and we think about north American process spices.

Speaker 4: It suffices to say we're spending a lot of time looking at this and thinking about it right now and looking to kind of scale up resources to really tackle this. We think it's a bit premature to start to put out a financial forecast around what we think is achievable in the near term.

To say, we're spending a lot of time looking at this and thinking about it right now and looking to kind of scale up resources to really tackle this.

I think it's a bit premature to start to put out a financial forecast around what we think is achievable achievable in the near term.

Alrighty, Hey, thanks, Thanks for the help us all I had.

Thank you and as a reminder, if you'd like to ask a question. Please press star followed by one.

Speaker 1: And as a reminder, if you'd like to ask a question, please press star followed by one.

Speaker 1: Our next question is from John Babcock with Think of America. You may go ahead.

Our next question is from John Babcock with Bank of America, You May go ahead.

Speaker 6: Thanks for taking my question. I guess actually just following up on that last point, you talked about the doubling in prices in New Zealand on the carbon front. Is there any way you could provide some sense as to what the contribution is to sales or earnings down in that region at all, recognizing this is still a pretty small part of your overall business?

Hey, Thanks for taking my question I guess is actually just following up on that last point you talked about the doubling in prices in New Zealand on the carbon front.

I mean is there any way you could provide some sense as to what the contribution is to sales our earnings down in that region that all recognizing this is still pretty small part of your overall business.

Speaker 4: Yeah, essentially all of our non-timber sales within New Zealand are carbon credit sales. And so we actually provide that disclosure in our supplement, and so if you look at the non-timber sales line item, the vast majority of that is carbon credit.

Yes, essentially all of our non timber sales within New Zealand, our carbon credit sales and so we actually provide that disclosure in our supplement and so if you look at the non timber sales line item. The vast majority of that is as carbon credit sales.

Speaker 4: I'd like to say that we didn't have them in 2021, but we have started to monetize carbon in 2022 with the big increase in prices.

Gotcha I would like to say, we didn't have them in 2021, but we have started to to monetize carbon in 2022 with the big increase in prices.

Speaker 8: Okay, that's helpful. And then, next question, just kind of back to the southern saw log pricing. You know, recognizing there are a lot of different factors here that could play into that, but with lumber prices as high as they are, I mean, are you seeing any sort of carryover from that into saw log pricing at this point?

Okay. That's helpful.

And then next question just kind of back to the southern saw log pricing.

Recognizing there are a lot of different factors here that could play into that but with lumber prices as high as they are I mean.

And are you seeing any sort of carryover from that into in saw log pricing at this point.

Speaker 5: Um, yeah, I mean, that's as we discussed before, uh, we have, I mean, obviously there's real strength in the market. We talked about an Atlantic coast. And so, um, we continue on a, on a daily basis, if not weekly basis, we negotiate our sales and delivered and stumpage. And we're seeing that pricing on the lumber, as Dave mentioned, very elastic market due to spite.

Yes, I mean, thats as we discussed before.

We have I mean, obviously there is <unk>.

Real strength in the market, we talked about Atlantic Coast and so we continue on a on a daily basis, if not weekly basis as we negotiate our sales and delivered and stumpage and we're seeing that pricing on the lumber as Dave mentioned very elastic market. Despite some.

Speaker 5: tight supply and demand ratio. So we're absolutely seeing that translate straight into.

Tight supply and demand ratio. So we're absolutely seeing that translate straight into stumpage pricing.

Okay, and then really just I guess the last question on my side.

Speaker 8: Okay. And then, you know, really just, I guess, the last question on my side, you know, can you just talk about how you're thinking about the level of the dividend and ultimately what it would take to see an increase in the dividend level?

Can you just talk about how youre thinking about the level of the dividend and ultimately what it would take to see an increase in the dividend level.

Speaker 3: sure i mean we we evaluate the the dividend uh... periodically uh... with the board and uh... we you know we take it we take into account other capital allocation priorities as we do that uh... but ultimately you know our goal is to stay nimble uh... with respect to those capital allocation priorities with that with an eye you know always on on maximizing uh... our long-term value per share

Sure I mean, we evaluate the dividend periodically with the board and.

We take it we take into account other capital allocation priorities as we do that.

But ultimately our goal is to stay nimble with respect to those capital allocation priorities with an eye on.

Louise on maximizing our long term value per share.

Speaker 3: We do want to ultimately grow the dividend over time, but we also want our dividend to be sustainable and predictable from the perspective of our shareholders. And because of that, whenever we make an increase, we view that as a fairly permanent decision. So therefore, we make those decisions on a pretty measured and deliberate basis.

We do we do want to ultimately grow the dividend over time, but we also.

We also want our dividend to be sustainable and predictable from the perspective of our shareholders and because of that whenever we can.

Make an increase we view that as a fairly permanent decision. So therefore, we make those decisions on a pretty measured and deliberate basis. We don't we don't sort of look for short term reactions to changing market conditions, we really.

Speaker 3: We don't look for short-term reactions to changing market conditions. We really have a mindset where, at the beginning of COVID, for example, we chose not to reduce our dividend because we saw that as a situation. It was going to last a few years and I think that's proved to be the case.

We really have a mindset.

Where.

At the beginning of Covid for example.

We chose not to reduce our dividend because we saw that as a.

A situation that was going to last a few quarters not a few years and I think that's proved to be the case.

Speaker 3: You know, obviously we've seen a major uptick in market conditions of late, and I think now the key is to sort of prudently assess the staying power of those recent market trends as we think about the dividend going forward, but, you know, keep in mind, you know, this is definitely something that we look at on a pretty regular basis with our board.

Obviously, we've seen a major uptick in market conditions of late and I think now the key is to sort of prudently assess the staying power of those recent market trends as we think about the dividend.

Going forward, but keep.

Keep in mind. This is definitely something that we look at on a pretty regular basis with our board.

Okay. Thank you.

Thank you and that was our final question I will now turn it back to the speakers for any closing remarks.

Speaker 2: All right. Thank you. This is Colin Mings. I'd like to thank everybody for joining us. Please contact us with any follow-up questions.

Alright. Thank you. This is Collin mings I'd like to thank everybody for joining us please contact us with any follow up questions.

Thank you and that does conclude today's conference. Thank you all for participating you may disconnect at this time.

[music].

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Speaker 9: So.

[music].

Speaker 1: Welcome and thank you for joining Ray and Mears 4th quarter and year end 2021 teleconference call. At this time, all participants are in a listen only mode. During the question and answer session, please press star one on your touch tone phone.

Welcome and thank you for joining ran near its fourth quarter and year end 2021 teleconference call. At this time all participants are in a listen only mode. During the question and answer session. Please press star one on your Touchtone phone.

Speaker 1: Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I will turn the meeting over to Mr. Colin Ming, Vice President, Capital Markets and Strategic Planning. Please go ahead. Thank you.

Today's conference is being recorded if you have any objections you may disconnect at this time no.

Now I will turn the meeting over to Mr. Collin Mings, Vice President capital markets and strategic planning. Please go ahead.

Thank you and good morning, welcome to <unk> Investor teleconference, covering fourth quarter earnings our earnings statements and financial supplement were released yesterday afternoon and are available on our website at <unk> Dot com I would like to remind you that in these presentations. We include forward looking statements made pursuant to the safe Harbor provisions of Federal Securities laws, our earnings release and form 10.

Speaker 2: Thank you and good morning. Welcome to Rainier's Investor Teleconference, covering fourth quarter earnings. Our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rainier.com. I would like to remind you that in these presentations we include forward-looking statements made pursuant to the safe harbor provisions of federal securities laws.

Speaker 2: Our earnings release and form 10K files with the SEC lists some of the factors that may cause actual results to differ materially from the forward-looking statements we may make. They are also referenced on page two of our finance.

<unk> filed with the SEC lists some of the factors that may cause actual results to differ materially from the forward looking statements. We may make they are also referenced on page two of our financial supplement throughout these presentations. We will also discuss non-GAAP financial measures, which are defined and reconciled to the nearest GAAP measure in our earnings release and supplemental materials with that let's start our teller.

Speaker 2: Throughout these presentations, we will also discuss non- GAAP financial measures, which are defined and reconciled to the nearest GAP measure in our earnings release and supplemental materials.

Speaker 2: With that, let's start our teleconference with opening comments from Dave Nunez, President and CEO . Dave.

Conference with opening comments from Dave Nunez, President and CEO Dave.

Thanks, Colin good morning, everyone.

Speaker 3: Thanks Colin, good morning everyone. First I'll make some high level comments before turning it over to Mark McQ, Senior Vice President and Chief Financial Officer, to review our consolidated financial results. Then we'll ask Doug Long, Senior Vice President for us resources to comment on our US and New Zealand timber results. And following the review of our timber segments, Mark will discuss our real estate results as well as our guidance for 2022.

First I'll make some high level comments before turning it over to Mark Mchugh Senior Vice President and Chief Financial Officer to review, our consolidated financial results and then we'll ask Doug long Senior Vice President of Forest resources to comment on our U S and New Zealand timber results and following the review of our timber segments, Mark will discuss our real estate results.

<unk> as well as our guidance for 2022.

Speaker 3: We concluded 2021 with solid operational results and are very pleased with our overall full-year financial performance. We achieved record full-year adjusted EBITDA results in both our southern timber and Pacific Northwest timber segments, despite contending with increased costs as well as volume constraints driven by inclement weather conditions.

We concluded 2021 was solid operational results and are very pleased with our overall full year financial performance, we achieved record full year adjusted EBITDA results in both our southern timber and Pacific northwest timber segments, despite contending with increased costs as well as volume constraints driven.

By inclement weather conditions.

Speaker 3: Our New Zealand timber segment achieved our third highest ever full year adjust city but dollar result. Despite navigating a myriad of export market challenges and COVID related headwinds during the course of the year.

Our New Zealand timber segment achieved our third highest ever full year. Adjusted EBITDA result, despite navigating a myriad of export market challenges and COVID-19 related headwinds during the course of the year.

Speaker 3: Meanwhile, in our real estate segment, we achieved the second highest adjustity bit die result and highest weighted average pricing since our separation into a pure play timber read. Underscoring our focus on optimizing our portfolio and maximizing HPU premiums.

Meanwhile, in our real estate segment, we achieved the second highest adjusted EBITDA result, and highest weighted average pricing since our separation into a pure play timber REIT underscoring our focus on optimizing our portfolio and maximizing HBU premiums.

Speaker 3: We further achieved record improved development sales of roughly $52 million for the year.

We further achieved record improved development sales of roughly $52 million for the year.

Speaker 3: Overall for the full year we generated GAP EPS of $1.08 per share, Proforma EPS of $0.67 per share, and adjusted EBITDA of $330 million.

Overall for the full year, we generated GAAP EPS of $1 <unk> per share pro forma EPS of <unk> 67 per share and adjusted EBITDA of $330 million.

Speaker 3: While the pandemic continued to pose challenges throughout the year, we were able to achieve very strong results across the company, due in large part to the unwavering focus of our people, the relative strength of our markets, and our nimble approach to operational decision making.

While the pandemic continued to pose challenges throughout the year, we were able to achieve very strong results across the company due in large part to the unwavering focus of our people the relative strength of our markets and our nimble approach to operational decision making.

Speaker 3: These factors coupled with improving end market demand are setting the foundation for another strong year in 2022. As Mark will discuss in greater detail, we're providing full year 2022 adjusted EBITDA guidance of $310 to $340 million. Notably, the midpoint of our initial 2022 guidance is down only slightly from 2021, despite our expectation that the contribution from real estate

These factors coupled with improving end market demand are setting the foundation for another strong year in 2022.

As Mark will discuss in greater detail, we're providing full year 2022, adjusted EBITDA guidance of $310 million to $340 million.

Notably the midpoint of our initial 2022 guidance is down only slightly from 2021, despite our expectation that the contribution from real estate.

Speaker 3: activity will return to a more normalized level this year.

Activity will return to a more normalized level this year.

Speaker 3: Stepping back to the fourth quarter, we generated total adjusted EBITDA of $50 million and pro forma EPS of one cent per share. Drilling down to our different operating segments, our southern timber segment generated adjusted EBITDA of $34 million for the quarter, which was 44% above the prior year fourth quarter. We were encouraged to see net stumpage prices increase by 25% as well as a 14% increase in harvest volume.

Stepping back to the fourth quarter, we generated total adjusted EBITDA of $50 million and pro forma EPS of <unk> <unk> per share drilling down to our different operating segments. Our southern timber segment generated adjusted EBITDA of $34 million for the quarter, which was 44% above the prior year fourth.

Quarter, we were encouraged to see net stumpage prices increase by 25% as well as a 14% increase in harvest volumes and.

Speaker 3: In our Pacific Northwest Timber segment, we achieved adjusted EBITDAV $13 million, down 8% from the prior year quarter. The year-over-year decrease was primarily attributable to higher costs partially offset by higher net stumpage prices and higher non-timber income.

Our Pacific Northwest timber segment, we achieved adjusted EBITDA of $13 million down 8% from the prior year quarter.

The year over year decrease was primarily attributable to higher costs, partially offset by higher net stumpage prices and higher non timber income.

And our New Zealand timber segment fourth quarter, adjusted EBITDA fell to $10 million down from $17 million in the prior year quarter as higher pricing was more than offset by 9% lower production volumes and compressed margins due to significantly higher shipping costs.

Speaker 3: In our New Zealand timber segment, fourth quarter adjusted EBITDA fell to $10 million, down from $17 million in the prior year quarter, as higher pricing was more than offset by 9% lower production volumes and compressed margins due to significantly higher shipping costs.

Speaker 3: In our real estate segment, we generated a just-to-die-but-die of $3 million, down significantly from $26 million in the prior year period, as a 90% reduction in acres sold was partially offset by a significant increase in weighted average prices.

Our real estate segment, we generated adjusted EBITDA of $3 million down significantly from $26 million in the prior year period as a 90% reduction in acres sold was partially offset by a significant increase in weighted average prices.

Speaker 3: The moderation and real estate activity to end 2021 was anticipated following an exceptionally strong third quarter.

The moderation in real estate activity to end 2021 was anticipated following an exceptionally strong third quarter.

Speaker 3: Switching gears from fourth quarter results, I'd like to highlight the active quarter we had on the portfolio management front. As previously disclosed, we closed the final two transactions associated with our sale of the timber funds business during the fourth quarter, and have now completely exited this business.

Switching gears from fourth quarter results I'd like to highlight the active quarter, we had on the portfolio management front as previously disclosed we closed the final two transactions associated with our sale of the timber funds business during the fourth quarter and have now completely exited this business and some with <unk>.

Speaker 3: In sum, we generated total proceeds to Rainier of approximately $73 million through our divestiture of the timber funds business.

<unk> total proceeds to rainier of approximately $73 million through our divestiture of the timber funds business. We're very pleased to have successfully exited this business as it allows us to simplify our corporate structure and financial reporting.

Speaker 3: We're very pleased to have successfully exited this business as it allows us to simplify our corporate structure and financial reporting.

Speaker 3: We're further pleased to have returned significant capital from this non-core asset at a favorable valuation relative to our initial underwriting in 2020.

We are further pleased to have returned significant capital from this non core asset at a favorable valuation relative to our initial underwriting in 2020.

Speaker 3: Additionally, we closed the acquisition of 66,800 acres in Texas and Georgia for $124 million, or roughly $1,860 per acre, during the fourth quarter. These properties are positioned in strong timber markets with a diverse customer base, and we expect that they will generate a sustainable harvest of approximately 220,000 tons annually.

Additionally, we closed the acquisition of 66800 acres in Texas, and Georgia for $124 million or roughly $1860 per acre during the fourth quarter. These.

These properties are positioned in strong timber markets with a diverse customer base and we expect that they will generate a sustainable harvest of approximately 220000 tons annually.

Speaker 3: The opportunistic use of our at-the-market equity offering program, as well as proceeds from the sale of the timber funds business, provided us with ample balance sheet flexibility to fund this acquisition with cash on hand. With that, let me turn it over to Mark for more details on our fourth quarter financial results.

The opportunistic use of our at the market.

The equity offering program as well as proceeds from the sale of the timber funds business provided us with ample balance sheet flexibility to fund this acquisition with cash on hand with that let me turn it over to Mark for more details on our fourth quarter financial results.

Speaker 4: Thanks, Dave. Let's start on page 5 with our financial highlights. Sales for the quarter totaled $262 million, while operating income was $34 million, and net income attributable to Rainier was $9 million, or $0.06 per share.

Thanks, Dave let's start on page five with our financial highlights sales for the quarter totaled $262 million while.

Getting income was $34 million and net income attributable to rayonier was $9 million or.

<unk> per share.

Speaker 4: On a pro forma basis, net income was $2 million or one cent per share. Pro forma adjustments for the quarter were primarily associated with the actions taken to exit the timber funds business.

On a pro forma basis, net income was $2 million or <unk> <unk> per share.

Pro forma adjustments for the quarter were primarily associated with the actions taken to exit the timber funds business, we generated fourth quarter adjusted EBITDA of $50 million, which was down from the prior year period, primarily due to a much smaller contribution from our real estate segment for.

Speaker 4: We generated fourth quarter of just the bit of $50 million, which was down from the prior year period, primarily due to a much smaller contribution from our real estate sink.

Speaker 4: For the full year, the electricity but dov $330 million increased significantly over 2020 the dov $267 million as each of our key operating segments registered meaningful year over year improvements.

For the full year adjusted EBITDA of $330 million increase significantly over 2020, adjusted EBITDA of $267 million as each of our key operating segments registered meaningful year over year improvements.

On the bottom of page five we provide an overview of our capital resources and liquidity at yearend as well as a comparison to the prior year, our cash available for distribution or <unk>.

Speaker 4: On the bottom of page 5, we provide an overview of our capital resources and liquidity at year-end, as well as a comparison to the prior year. Our cash available for distribution, or CAD, for the full year was $208 million versus $162 million in the prior year, primarily driven by higher adjusted EBITDA, which was partially offset by higher cash taxes, interest expense, and capital expenditures.

For the full year was $208 million versus $162 million in the prior year, primarily driven by higher adjusted EBITDA, which was partially offset by higher cash taxes interest expense and capital expenditures a reconciliation of <unk> to cash provided by operating activities and other GAAP measures is provided on page <unk>.

Speaker 4: A reconciliation of CAD to cash provided by operating activities and other GAT measures is provided on page 8 of the financial support.

Eight of the financial supplement.

Consistent with our nimble approach to capital allocation, we raised $66 million through our aftermarket equity offering program during the fourth quarter at an average price of $39 70 per share.

Speaker 4: Consistent with our nimble approach to capital allocation, we raised $66 million through our at-the-market equity offering program during the fourth quarter at an average price of $39.70 per share. As previously discussed, we view the ATM program as a cost-effective tool to opportunistically raise equity capital, strengthen our balance sheet, and match fund bolt-on acquisition.

As previously discussed we view the ATM program as a cost effective tool to opportunistically raise equity capital strengthen our balance sheet and match fund bolt on acquisitions.

Speaker 4: We closed the quarter with $359 million of cash and $1.4 billion of debt. Our net debt of $1 billion represented 14% of our enterprise value based on our closing stock price at the end of the year.

We closed the quarter with $359 million of cash and $1 4 billion of debt our net debt of $1 billion represented 14% of our enterprise value based on our closing stock price at the end of the year subs.

Speaker 4: Subsequent to quarter end, as previously announced, we redeemed $325 million of senior notes due 2022 with cash on hand and proceeds from the $200 million delay draw term loan executed in mid-2021.

Subsequent to quarter end as previously announced we redeemed $325 million of senior notes due 2022 with cash on hand, and proceeds from the $200 million delayed draw term loan executed in mid 2021.

Speaker 4: Pro forma for these financing actions, our weighted average cost of debt declined to roughly 2.7 percent, while our weighted average maturity was extended to roughly seven years. I'll now turn the call over to Doug to provide a more detailed review of our fourth quarter timber results. Thanks, Mark.

Pro forma for these financing actions, our weighted average cost of debt declined to roughly two 7%, while our weighted average maturity was extended to roughly seven years.

I'll now turn the call over to Doug to provide a more detailed review of our fourth quarter timber results.

Thanks, Mark good morning.

Speaker 5: Let's start on page 9 with our Southern Timber segment. Adjusted EBITDA in the fourth quarter of $34 million with $10 million above the prior year quarter, the year-over-year improvement was primarily driven by a significant increase in debt-stummage pricing and higher harvest volumes, partially offset by higher cost.

Let's start on page nine with our southern timber segment adjusted EBITDA in the fourth quarter of $34 million with $10 million above the prior year quarter. The year over year improvement was primarily driven by a significant increase in net stumpage pricing and higher harvest volumes, partially offset by higher costs.

Speaker 5: More specifically, volume climbed 14% during the fourth quarter as drier conditions enabled customers to ramp up production to meet demand.

More specifically volume climbed 14% during the fourth quarter as drier conditions enabled customers to ramp up production to meet demand.

Speaker 5: Despite ongoing constraints on trucking availability, Sawlog Stomach Pricing rose 21% versus the prior year quarter.

<unk> ongoing constraints on trucking availability, so all long so much pricing rose, 21% versus the prior year quarter.

Speaker 5: At nearly $31 per ton, Boris quarter pricing reflected the highest average southern saw log realizations we have registered since our separation into a pure play template rate in 2014.

At nearly $31 per ton fourth quarter pricing reflected the highest average southern saw log realizations, we have registered since our separation into a pure play timberland REIT in 2014.

The improved pricing reflects strong demand from sawmills the impact of weather related constraints on supply.

Speaker 5: The improved pricing reflects strong demand from sawmills, the impact of weather-related constraints on supply, upward pressure on chip and saw pricing due to increased competition from pulp and pellet mills, as well as export log demand in certain markets.

Upper pressure on chip and saw pricing due to increased competition from pulp and pellet nodes as well as export log demand in certain markets.

Speaker 5: Whole food pricing also improved significantly, increasing 34% from the prior year quarter.

Pulpwood pricing also improved significantly increasing 34% from the prior year quarter.

Speaker 5: Primarily driven by strong domestic demand and constraints apply due to wet weather conditions leading into the fourth quarter.

Primarily driven by strong domestic demand and constrained supply due to wet weather conditions, leading into the fourth quarter.

Speaker 3: Overall, weighted average stumpage prices improved 25% year over year.

Overall weighted average stumpage prices improved 25% year over year.

Speaker 5: We were pleased with the pricing gains we achieved during the quarter and are encouraged that this positive momentum has continued into the new year as customer demand across our southern footprint remains very robust, even as weather conditions have normalized.

We were pleased with the pricing gains we achieved during the quarter and are encouraged that this positive momentum has continued into the new year as customer demand across our southern footprint remains very robust even as weather conditions have normalized.

Moving to our Pacific Northwest timber segment on page 10 adjust.

Speaker 5: Moving to our Pacific Northwest Timber segment on page 10, adjusted EBITDA of $13 million was $1 million below the prior year quarter. The year-over-year decrease was attributable to slightly lower harvest volumes and higher costs, partially offset by higher net-stumpage prices and higher non-tempor income.

Adjusted EBITDA of $13 million was $1 million below the prior year quarter.

The year over year decrease was attributable to slightly lower harvest volumes and higher costs, partially offset by higher net stumpage prices and higher non timber income.

Speaker 5: Volume to climb 2% in the fourth quarter as compared to the prior quarter as unfavorable weather conditions impacted harvest activity.

Volume declined 2% in the fourth quarter as compared to the prior year quarter as unfavorable weather conditions impacted harvest activity.

Turning to pricing at roughly $98 per ton our average delivered solid price during the fourth quarter was up 2% from the prior year quarter.

Speaker 5: Turning to pricing at roughly $98 per ton, our average delivered solid price then the fourth quarter was up 2% from the prior quarter.

Strong pricing was generally sustained throughout the quarter, we've seen positive price momentum in early 2022 amid the recent surge in lumber prices and improving export market demand.

Speaker 5: Strong pricing was generally sustained throughout the quarter. We have seen positive pricing momentum in early 2022 amid the recent surge in number prices and improving export market damage.

Speaker 5: Meanwhile, pulpwood pricing increased 9% in the fourth quarter relative to prior quarter, due to improved demand as pulp mills in the region resumed full production.

Meanwhile, pulpwood pricing increased 9% in the fourth quarter relative to the prior year quarter due to improved demand as pulp mills in the region resumed full production.

Speaker 3: Page 11 shows results in key operating metrics for our New Zealand tamer segment.

Page 11 shows results and key operating metrics for our New Zealand timber segment.

Speaker 5: Adjusted EBITDA in the fourth quarter of $10 million was $7 million below the prior quarter.

Adjusted EBITDA in the fourth quarter of $10 million was $7 million below the prior year quarter.

Speaker 5: The decline in adjusted EBITDA was driven by lower harvest volumes, higher freight and emerge costs, higher logging costs, and lower carbon credits.

The decline in adjusted EBITDA was driven by lower harvest volumes higher freight and demurrage costs higher logging costs and lower carbon credit sales, partially offset by stronger delivered log prices and favorable foreign exchange impacts.

Speaker 5: Partially offset by stronger delivered log prices and favorable foreign exchange impacts.

Volume declined 9% in the fourth quarter as compared to the prior year quarter, primarily due to above average production in the prior year quarter. Following COVID-19 related disruptions earlier in the year.

Speaker 5: Volume to climb 9% in the fourth quarter as compared to the prior year quarter. Primarily due to above average production in the prior quarter, following COVID-related disruptions earlier in the year.

Speaker 5: Turning to pricing, average delivered prices for export salt timber increased 27% in the fourth quarter and the prior year quarter to nearly $133 per ton.

Turning to pricing average deliver prices for export sawtimber increased 27% in the fourth quarter and the prior year quarter to nearly $133 per ton.

Speaker 5: The improvement in export salt and prices versus the prior year period reflected our ability to pass on some of the higher costs we're experiencing customers as well as the restriction on competing log imports in the China from Australia.

The improvement in export sawtimber prices versus the prior year period reflected our ability to pass on some of the higher costs, we're experiencing customers as well as the restriction on competing log imports into China from Australia.

Speaker 5: However, as compared to the previous two quarters, the pricing environment for RADIF pine logs weakened during the fourth quarter response to elevated log inventories in China and software demand.

However, as compared to the previous two quarters, the pricing environment for radar pine logs weakened during the fourth quarter respond to elevated log inventories in China and softer demand.

Speaker 3: If slowed down in construction activity, adverse weather conditions and power shortages in China collectively reduce the offtake from ports, it resulted in pricing pressure on log exports.

A slowdown in construction activity adverse weather conditions and power shortages in China collectively reduced the offtake from ports and resulted in pricing pressure on log exports.

Speaker 5: That said, we believe pricing likely bottoms in December , and we've seen pricing improve to start 2022.

That said, we believe pricing likely bottomed in December we've seen pricing improve to start 2022.

Speaker 5: The reduced flow of European spruce salvage logs into China, the continued ban on Australian log imports by China, and the ban on Russian log exports are collectively translating into improving supply-demand dynamics ahead of the Lunar New Year.

Reduced flow of European spruce salvage logs into China. The continued ban on Australian log imports by China and the ban on Russian log exports are collectively translating in to improving supply demand dynamics ahead of the lunar new year.

Speaker 5: We expect log inventories in China to normalize as demand picks up following the holiday, which should translate into... We expect log inventories in China to normalize as demand picks up following the holiday, which should translate into...

We expect log inventories in China to normalize as demand picks up following the holiday.

Which should translate into improved export pricing.

Shifting to the New Zealand domestic market demand remains healthy, albeit constrained to some degree by COVID-19 related restrictions and availability of labor.

Speaker 5: Shifting to the New Zealand domestic market, the man remains healthy albeit constrained to some degree by COVID-related restrictions and a build-buddy of labor. During the fourth quarter, average delivered saw-log prices increased 10% from the prior year period to $81 per ton.

During the fourth quarter average delivered saw log prices increase.

Increased 10% from the prior year period to $81 per ton.

Speaker 5: including the impact of foreign exchange rates, domestic assault prices improved 6% versus the prior year period, following the upward trend in the export market.

Excluding the impact of foreign exchange rates domestic sawtimber prices improved 6% versus the prior year period, following the upward trend in the export market.

Speaker 5: As a reminder, domestic saw timber pricing normally follows export pricing with a lag.

As a reminder, domestic sawtimber pricing normally follows export pricing with a lag.

Speaker 5: Average domestic pulpwood pricing climbed 20% as compared to the prior year quarter.

Average domestic pulpwood pricing climbed 20% as compared to the prior year quarter.

Speaker 5: As it relates to carbon credits, we continue to defer sales during the fourth quarter. However, we have resumed carbon credit sales in 2022, following a doubling of carbon pricing over the past year.

As it relates to carbon credits, we continue to defer sales during the fourth quarter. However.

However, we have resumed carbon credit sales in 2022.

Doubling of carbon pricing over the past year.

Speaker 3: Moving ahead, we will continue to remain opportunistic in our sale of carbon credits, depending on market conditions. Oh, now.

Moving ahead, we will continue to remain opportunistic in our sale of carbon credits depending on market conditions.

I will now briefly discuss the results from our timber fund segment.

Speaker 5: Highlighted on page 12, the Timberfund segment registered slightly negative consolidated EBITDA in the fourth quarter on harvest volume of only 22,000 tons.

Highlighted on page 12, the timber fund segment registered slightly negative consolidated EBITDA in the fourth quarter on harvest volume of only 22000 tons.

Speaker 5: Adjusted EBITDA, which reflects the look-through contribution from the TMR funds, was also slightly negative.

Adjusted EBITDA, which reflects the look through contribution from the timber funds was also slightly negative.

Speaker 5: As Dave discussed earlier, we've completed our exit from the timber funds business and we'll discontinue reporting the segment X-quarter.

As Dave discussed earlier, we have completed our exit from the timber funds business and we will discontinue reporting the segment next quarter.

Speaker 5: Lastly, in our trading segment, we posted a slight operating loss in the fourth quarter. As a reminder, our trading activities typically generate low margins and are primarily designed to provide additional economies of scale to our fee timber export business. I'll now turn it back over to Mark to cover our real-

Lastly, in our trading segment, we posted a slight operating loss in the fourth quarter.

As a reminder, our trading activities typically generate low margins and are primarily designed to provide additional economies of scale to our fee timber export business.

I will now turn it back over to Mark to cover our real estate results Mark.

Speaker 4: Thanks, Doug. As detailed on page 13, as expected, the contribution from our real estate segment was relatively light during the fourth quarter compared to the exceptionally strong results posted in the third quarter. Fourth quarter real estate sales totaled $11 million on roughly 1200 acres sold at an average price of just over $8,600 per acre. Adjusted EBITDA for the quarter was $3 million.

Thanks, Doug as detailed on page 13 as expected the contribution from our real estate segment was relatively light during the fourth quarter compared to the exceptionally strong results posted in the third quarter fourth quarter real estate sales totaled $11 million and roughly 200 acres sold at an average price of just over $8600 per <unk>.

Adjusted EBITDA for the quarter was $3 million.

Speaker 4: Sales in the improved development category totaled $4 million in the fourth quarter. In our Richmond Hill Development Project, South of Savannah, Georgia, we closed $3 million of sales, including our first non-industrial parcels, which consisted of two residential lots and a five acre commercial property. We also completed an industrial sale consisting of 12 acres. Meanwhile, within our Wildlife Development Project, north of Jacksonville, Florida, we closed on roughly five acres of commercial property for approximately $1 million.

Sales in the improved development category totaled $4 million in the fourth quarter, and our Richmond Hill Development project South of Savannah, Georgia, We closed $3 million of sales, including our first Nonindustrial parcels, which consisted of two residential lots in a five acre commercial property. We also completed an industrial sale consisting of 12 acres.

Meanwhile, within our within our Wildlife development project North of Jacksonville, Florida, We closed on roughly five acres of commercial property for approximately $1 million.

Speaker 4: While the timing of development-related land sales will remain lumpy quarter to quarter, the location and increasing maturity of our projects offer us a strong foundation to capitalize on the migration and demographic trends that we believe will benefit our land holdings in Wildlife, Richmond Hill, and the West Puget Sound area of Washington for years to come.

While the timing of development related land sales will remain lumpy quarter to quarter, the location and increasing maturity of our projects offer us a strong foundation to capitalize on the migration and demographic trends that we believe will benefit our land holdings and Wildlife Richmond Hill, and the West Puget Sound area of Washington for years to come.

Speaker 4: Turning to the rural category, sales totaled roughly $6 million, consisting of 1,200 acres at an average price of just over $1,100 per acre.

Turning to the rural category sales totaled roughly $6 million consisting of 200 acres at an average price of just over $5100 per acre.

Speaker 4: Thus far in 2022, demand for rural land has remained healthy as the space, privacy, and recreational opportunities offered by these properties continue to attract buyers.

Thus far in 2022 demand for rural land has remained healthy as the space privacy and recreational opportunities offered by these properties continue to attract buyers. We remain intently focused on achieving significant premiums to standalone timber timberland value your activities of our real estate platform and are encouraged by the pipeline of <unk>.

Speaker 4: We remain intently focused on achieving significant premiums to stand alone timberman value through activities of our real estate platform and are encouraged by the pipeline of sales we are building for the year ahead.

<unk>, we are building for the year ahead.

Speaker 4: Now moving on to our outlook for 2022. Page 15 shows our financial guidance by segment and Schedule G of our earnings release provides a reconciliation of our adjusted EBITDA guidance to our net income attributable to REINEAR as well as EPS.

Now moving onto our outlook for 2022 page 15 shows our financial guidance by segment and schedule G of our earnings release provides a reconciliation of our adjusted EBITDA guidance toward net income attributable to rayonier as well as EPS.

Speaker 4: For full year 2022, we expect to achieve a justity bidot of $310 to $340 million, net income attributable to Rainier of $83 to $92 million, and EPS of 57 to 64 cents.

For full year 2022, we expect to achieve adjusted EBITDA of $310 million to $340 million net income attributable to rain here of $83 million to $92 million and.

And EPS of <unk> 57 to 64.

Speaker 4: In our southern timber segment, we expect to achieve full-year harvest volumes of 6.3 to 6.6 million tons. The anticipated increase relative to the prior year reflects a rebound in harvest activity following the wet weather conditions and supply chain constraints that negatively impacted full-year 2021 volumes, as well as the expected contribution from recent acquisitions.

In our southern timber segment, we expect to achieve full year harvest volumes of six 3% to $6 6 million tonnes.

The anticipated increase relative to the prior year reflects a rebound in harvest activity following the wet weather conditions and supply chain constraints that negatively impacted full year 2021 volumes as well as the expected contribution from recent acquisitions.

Speaker 4: We also expect a meaningful improvement in weighted average stumpage realizations relative to full year 2021 driven by strong demand, partially offset by higher harvest and transportation costs. Notably, our guidance range also contemplates the near-term uncertainty associated with southern log exports to China due to the recently implemented pinewood nematode policies. All said, we expect full-year adjusted EBITDA of $145 to $153 million in our southern timber segment.

We also expect a meaningful improvement in weighted average stumpage realizations relative to full year 2021, driven by strong demand, partially offset by higher harvest and transportation costs.

Notably our guidance range also contemplates the near term uncertainty associated with southern log exports to China due to the recently implemented Pinewood NEMA towed policies. All said, we expect full year adjusted EBITDA of $145 million to $153 million in our southern timber segment.

Speaker 4: In our Pacific Northwest timber segment, we expect full-year harvest volumes of 1.7 to 1.8 million tons. We have seen improved domestic log demand following the recent increase in lumber prices. We are also seeing signs of increased export demand to start 2022 and expect continued momentum as a reduced flow of logs from other markets drives increased export demand in the Pacific Northwest.

In our Pacific Northwest timber segment, we expect full year harvest volumes of one 7% to $1 8 million tonnes. We have seen improved domestic log demand. Following the recent increase in lumber prices were also seeing signs of increased export demand to start 2022, and expect continued momentum as it reduced flow of logs from other markets.

<unk> increased export demand in the Pacific Northwest.

Speaker 7: Based on these supply-demand dynamics, we expect that weighted average log pricing will increase modestly relative to full year 2021. However, we expect that higher delivered prices will be largely offset by increased harvest and transportation costs. Overall, we expect full-year adjusted EBITDA of $55 to $60 million.

Based on the supply demand dynamics, we expect the weighted average log pricing will increase modestly relative to full year 2021. However, we expect that higher delivered prices will be largely offset by increased harvest and transportation costs. Overall, we expect full year, adjusted EBITDA of $55 million to $60 million.

Speaker 4: In our New Zealand timber segment, we expect full-year harvest volumes of 2.6 to 2.8 million tons. While current log pricing remains below 2021 average levels, we expect the pricing will improve as log inventories in China normalize and export demand picks up following the Lunar New Year. For the full year, we expect that average export and domestic pricing will be only modestly below 2021 levels. That said, we expect that increased harvest and transportation costs will continue to put pressure on net stumpage realization.

And our New Zealand timber segment, we expect full year harvest volumes of two six to $2 8 million tonnes. While current log pricing remains below 2021 average levels, we expect that pricing will improve as log inventories in China normalize and export demand picks up following the lunar new year for the full year, we expect that average export and domestic.

Pricing will be only modestly below 2021 levels.

Said, we expect that increased harvest and transportation costs, we will continue to put pressure on net stumpage realizations.

Speaker 4: Lastly, as Doug noted earlier, we expect that our New Zealand timber segment will benefit from the resumption of carbon credit sales in 2022.

Lastly, as Doug noted earlier, we expect that our New Zealand timber segment will benefit from the resumption of carbon credit sales in 2022.

Speaker 4: Overall, we expect full-year Adjusted Evidob of $68.75 million. However, due to seasonally lower volumes, continued supply chain disruptions, and lower current pricing relative to the levels we expect for the full year, we expect a lower Adjusted Evidob contribution from this segment in the first half versus the second half of the year.

Overall, we expect full year, adjusted EBITDA of $68 million to $75 million How's.

However, due to seasonally lower volumes continued supply chain disruptions and lower current pricing relative to the levels. We expect for the full year, we expect a lower adjusted EBITDA contribution from this segment in the first half versus the second half of the year.

And our real estate segment, we expect full year adjusted EBITDA of $70 million to $80 million as previously discussed following exceptionally strong real estate results in 2021, we anticipate more normalized transaction activity in 2022.

Speaker 4: In our real estate segment, we expect four-year adjusted-bit-daw of $70 to $80 million. As previously discussed, following exceptionally strong real estate results in 2021, we anticipate more normalized transaction activity in 2022.

Speaker 4: More details regarding our 2022 guidance can be found on page G of the earnings release as well as page 15 of the financial supplement.

More details regarding our 2022 guidance can be found on page <unk> of the earnings release as well as page 15 of the financial supplement.

Speaker 4: In sum, the market backdrop generally remains positive across our business.

In sum the market backdrop generally remains positive across our businesses that said as discussed last quarter. We are not immune from the supply chain and inflationary pressures that are impacting many parts of the global economy. We expect these challenges will likely persist through at least 2022.

Speaker 4: That said, as discussed last quarter, we are not immune from the supply chain and inflationary pressures that are impacting many parts of the global economy. We expect these challenges will likely persist through at least 2022. However, our team continues to work diligently to optimize haul distances, leverage our scale and dependability in both domestic and export markets, and make prudent silviculture investment decisions tied to localized supply-demand dynamics.

However, our team continues to work diligently to optimize haul distances leverage our scale and dependability in both domestic and export markets and make prudent silviculture investment decisions tied to localized supply demand dynamics.

Speaker 4: Overall, we believe we are well positioned to navigate logistical challenges and largely recoup the impact of cost increases in our log pricing. I'll now turn the call back to Dave.

Overall, we believe we are well positioned to navigate logistical challenges and largely recouped the impact of cost increases in our log pricing.

I'll now turn the call back to Dave for closing comments.

Speaker 3: Thanks Mark. As I reflect on 2021, I'm proud of both our exceptional financial performance, as well as our teams relentless focus on executing against our strategic priorities and what was a challenging and ever-evolving operating environment.

Thanks Mark.

As I reflect on 2021, I'm proud of both our exceptional financial performance as well as our team's relentless focus on executing against our strategic priorities in what was a challenging and ever evolving operating environment.

Speaker 3: Following a very tumultuous 2020, with the introduction of vaccines early in 2021, we were hopeful that we would return to some form of normalcy as the year progressed. However, with the emergence of two new variants, the operating environment remained challenged by periodic COVID-related disruptions and supply chain constraints.

Following a very tumultuous 2020 with the introduction of vaccines early in 2021, we were hopeful that we would return to some form of normalcy as the year progressed, however, with the emergence of two new variance the operating environment remained challenged by periodic COVID-19 related disruptions and supply chain constraints.

Speaker 3: We further had to contend with labor shortages and persistent wet weather in many of our regions.

We further had to contend with labor shortages and persistent wet weather in many of our regions, which then which when combined with the challenges posed by Covid reduced our harvest volumes versus our original plan.

Speaker 3: which when combined with the challenges posed by COVID reduced our harvest volumes versus our original plan.

Speaker 3: Despite these headwinds are teamwork diligently to adapt to fast-changing market conditions and logistical challenges to capitalize on a favorable pricing environment and post excellent financial results.

Despite these headwinds our team worked diligently to adapt to fast changing market conditions and logistical challenges to capitalize on a favorable pricing environment and post excellent financial results.

Speaker 3: Our real estate team also did a stellar job in 2021 of capitalizing on market opportunities and successfully leveraging the breadth of product offerings across our portfolio.

Our real estate team also did a stellar job in 2021 of capitalizing on market opportunities and successfully leveraging the breadth of product offerings across our portfolio.

Speaker 3: Do in part to a general shortage of residential lots within our markets, we made a strategic decision to sell undeveloped pods in both wildlife and the Pacific Northwest.

Due in part to a general shortage of residential lots within our markets. We made a strategic decision to sell undeveloped pods and both wildlife and the Pacific Northwest.

Speaker 3: Meanwhile, the favorable momentum associated with the expansion of the Port of Savannah, as well as the new I-95 interchange in Richmond Hill, allowed us to accelerate the absorption of industrial parcels.

Meanwhile, the favorable momentum associated with the expansion of the port of Savannah, as well as the new 95 interchange enrichment Hill allowed us to accelerate the absorption of industrial parcels.

Speaker 3: In some real estate results benefited from both strong pricing and faster absorption. Looking ahead, we're encouraged by the momentum across our development projects and believe that they are ideally positioned for further success.

Real estate results benefited from both strong pricing and faster absorption.

Looking ahead, we are encouraged by the momentum across our development projects and believe that they are ideally positioned for further success.

Beyond our favorable full year financial performance, we tackled a number of important initiatives in 2021 in the wake of the Pope resources transaction. Our major initiative. This past year was to create some added balance sheet capacity for future growth.

Speaker 3: Beyond our favorable full-year financial performance, we tackled a number of important initiatives in 2021. In the wake of the Pope Resources Transaction, a major initiative this past year was to create some added balance sheet capacity for future growth.

Speaker 3: To this end, we successfully sold over 16,600 acres of less strategic holdings in Washington State, as well as completed our exit of the Timberfunds business and a value that exceeded our initial underwriting.

To this end we successfully sold over 16600 acres of less strategic holdings in Washington State as well as completed our exit of the timber funds business at a value that exceeded our initial underwriting.

Speaker 3: Further, we opportunistically issued a total of $236 million of equity through our ATM program in 2021 at a weighted average price of $37.05 per share, as well as restructured our debt portfolio through a series of actions that extended our weighted average maturity and lowered our weighted average cost of debt.

Further we opportunistically issued a total of $236 million.

Equity through our ATM program in 2021 at a weighted average price of $37 <unk> per share as well as restructured our debt portfolio through a series of actions that debt extended our weighted average maturity and lowered our weighted average cost of debt.

Speaker 3: These portfolio and balance sheet moves allowed us to remain nimble and active acquiring Timberland in 2021. As we close nine acquisitions in the US and New Zealand, totaling 102,000 acres for $179 million.

These portfolio and balance sheet moves allowed us to remain nimble and active acquiring timberland in 2021.

As we closed nine acquisitions in the U S and New Zealand totaling 102000 acres for $179 million.

Speaker 3: With year-end net debt to adjusted EBITDA of 3.1 times, we believe we are well positioned to execute on future high-quality growth opportunities and other capital allocation priorities.

With year end net debt to adjusted EBITDA of three one times. We believe we are well positioned to execute on future high quality growth opportunities and other capital allocation priorities.

Speaker 3: While this was a very busy year on the operational, capital markets, and transaction fronts, we also made significant strides in advancing ESG-related initiatives.

While this was a very busy year on the operational capital markets and transaction fronts. We also made significant strides in advancing ESG related initiatives.

Speaker 3: We believe Rainier is uniquely well-positioned for a low-carbon economy, and we're proud to publish our first-ever carbon report covering 2019 data earlier this year. We followed this report in August with the publication of our 2020 carbon report, as well as our inaugural sustainability report.

We believe <unk> is uniquely well positioned for a low carbon economy, and we're proud to publish our first ever carbon report covering 2019 data earlier. This year. We followed this report in August with the publication of our 2020 carbon report as well as our inaugural sustainability report.

Speaker 3: Beyond the publications of these reports, I would also note that we continue to advance many other ESG-related initiatives and have further set out ambitious ESG objectives for 2022.

Beyond the publications of these reports I would also note that we continue to advance many other ESG related initiatives and have further set out ambitious ESG objectives for 2022.

Speaker 3: As we enter 2022, I'm encouraged by strong end market demand and believe we have the team and portfolio to capitalize on favorable pricing momentum across many of our timber markets, as well as continued strong interest in rural land and entitled development property.

As we enter 2022 I am encouraged by strong end market demand and believe we have the team and portfolio to capitalize on favorable pricing momentum across many of our timber markets as well as continued strong interest in rural land entitled Development properties there.

Speaker 3: The resiliency and dedication of our employees over the past two years, demonstrates their ownership mentality. As market conditions and opportunities continue to evolve, I'm confident this collective mindset will continue to drive long-term value creation for our shareholders.

Resiliency and dedication of our employees over the past two years demonstrates their ownership mentality as market conditions and opportunities continue to evolve I am confident this collective mindset will continue to drive long term value creation for our shareholders.

Speaker 3: This concludes our prepared remarks and I'll now turn the call back over to the operator for questions.

This concludes our report our prepared remarks, and I'll now turn the call back over to the operator for questions.

Speaker 1: Thank you. We will now begin the question and answer session.

Thank you we will now begin the question and answer session to ask a question. Please ensure that your phone is on muted press star one and record your name clearly when prompted.

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Speaker 1: Again, to ask a question, please press star 1. One moment for the first question.

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Our first question is from Anthony Pettinari with Citi. You May go ahead.

Speaker 1: Our first question is from Anthony Pedinari with City. You may go ahead.

Hi, good morning.

Good morning, good morning.

Speaker 5: In real estate, last year you generated $100 million in EBITDA, which was well above the guidance you had.

In real estate last year, you generated a $100 million in EBITDA, which was well above the guidance you initially gave for the year.

I think in 2020, you did $90 million, which was at the high end of the initial guidance, even with the pandemic hitting so when we think about the 'twenty two guide of 70 to 80.

Speaker 3: I'm just wondering if you could kind of talk or help us sort of frame the dynamics in that business, which is obviously lumpy.

I'm just wondering if you could kind of talk or help us sort of frame the dynamics in that business, which is obviously lumpy, but it's been beating expectations in recent years and is there a level of conservatism in the guide just given how hot land markets in the south appear to be.

Speaker 4: Yeah, thanks, Anthony. This is Mark. I'll take that.

Yes. Thanks, Anthony this is mark I'll take that.

Speaker 4: it look at the very tough business to forecast because you know the nature of the transactions uh... you know they're they're binary they've occurred they don't occur you know last year in particular we obviously have the arbor which transaction uh... in the pacific northwest which was a thirty seven a half million dollar transaction so you know that meaningfully move the dial to the to the positive and you know from time to time we we have those and it does uh... you know can think and became dramatically uh... change your your outlook for the year when you have a a single transaction of that nature uh... that that that comes in uh... because we were not anticipating that transaction coming into the year in twenty

Look it's a very tough business to forecast because the nature of the transactions.

Binary they either occur they don't occur last year in particular, we obviously had the Arbor wood transaction.

Pacific Northwest, which was at $37 $5 million of transactions, so that meaningfully move the dial to the positive and from time to time, we have those and it does.

It can dramatically change your outlook for the year when you have a single transaction of that nature.

It comes in because we were not anticipating that transaction coming into the year and 2021.

Speaker 4: So, I think we've tended to outperform in real estate. We're obviously in a very hot real estate market. We built a pipeline of development properties. I'd say the development properties in particular tend to be a bit more predictable. I mean, they have to be at a sort of state of readiness to go out to market with. It's really the rural and the unimproved development where from time to time, we'll have some outsized winds that we weren't anticipating going into the year. But it's a little bit, we're always a little bit reluctant to kind of assume that we're going to see that type of activity because...

So.

I think we've tended to outperform it and real estate.

We're obviously in a very hot real estate market, we built a pipeline of development properties and I'd say the development properties in particular tend to be a bit more predictable I mean, they have to be at.

State of readiness to go.

Go out to market with its really the rural in the unimproved development, where from time to time, we'll have some some outsized wins that we weren't anticipating going into the year, but it's a little bit.

We're always a bit reluctant to kind of assume that we're going to see that type of activity because.

Speaker 4: You know if it doesn't happen, you know you end up sort of you could end up meaningfully underperforming your outlook for the year. So we always think it's

If it doesn't happen you end up sort of you could end up meaningfully underperforming your outlook for the year. So we always think it's prudent to be a bit conservative in our outlook for the year end.

We'd prefer to kind of outperform that outlook versus underperform, but keep in mind from a very long term perspective, we do try to kind of model. This business based on our historical experience and our historical experience if going back 15 years is that on average we sold about 25000 acres a year into that HBU market generally at <unk>.

Premiums in the range of 50% to 100% above timberland value, obviously last year was quite a bit stronger than that.

But when we think about the longer term and sort of a steady state.

For that business, that's kind of where we come out and so I think what we've guided to for for next year is very consistent with that I'll be it leaning more towards some higher value opportunities, particularly on the development front.

Speaker 3: And so, I think, you know, what we've guided to for next year is very consistent with that, albeit leaning more towards some higher value opportunities, you know, particularly on the development front. Okay. That's very helpful. And then, you know, last year, your weighted Southern Timberland pricing was up, I think, 15%. You know, I know there's a lot in there with mix and weather and higher costs, but, you know, looking to 22, your outlook for U.S. South pricing, you know, seems a beat or maybe a little bit more upbeat than peers. Just wondering, from a big picture perspective, if you could talk about your sort of degree of visibility or degree of confidence in pricing momentum in the South in 22, you know, maybe compared to previous years. Yeah. Anthony, this is Dave. I'll give some intro, and then Doug can kind of pick up. I mean, this is something that we've been...

Okay, that's very helpful.

Speaker 3: And then, last year your weighted Southern Timberland pricing was up, I think, 15%. I know there's a lot in there with mix and weather and higher costs, but looking to 22, your outlook for U.S. South pricing...

And then last year your weighted southern Timberland pricing was up I think 15% I know theres a lot in there with mix and weather and higher costs, but looking at 'twenty to your outlook for U S. South pricing seems upbeat or maybe a little bit more upbeat than peers I'm just wondering from a big picture perspective, if you could talk about your sort of degree of.

Visibility or degree of confidence in pricing momentum in the south and 22.

Maybe compared to previous years.

Speaker 3: yeah, Anthony, this is Dave, I'll give some intro and then Doug can kind of pick up. I mean, this is something that we've been talking about, you know, for a long time, as you know, you know, I think, I think an element of this is

Yes, Anthony this is Dave I'll give some intro and then Doug can kind of pick up I mean, this is something that we've been.

Looking about.

For a long time as you know I think I think an element of this is certainly.

Speaker 3: certainly, you know, geographic mix. And keep in mind, you know, as we've discussed, the majority of our.

Geographic mix and keep in mind.

We've discussed the majority of our southern ownership is and wood baskets with balanced growth drain relationships our ratios and so.

Speaker 3: southern ownership is in wood baskets with balanced growth-drain relationships, ratios.

Speaker 3: these create greater price elasticity during times of rising lumber markets. And so I think that fact gives us a fair bit of bullishness as we think about those markets. And we've certainly seen that, you know, this last year and starting this year. I think another nuance to kind of keep in mind is as a pure-play timber reed.

These create.

Greater price elasticity during times of rising lumber markets and so I think that.

That fact.

It gives us a fair bit of.

Bullishness as we think about those markets and we've certainly seen that.

This last year and starting this year I think another another new wants to kind of keep in mind is as a pure play timber REIT.

Speaker 3: We have a fair bit of flexibility in the form of sale and we pride ourselves in that. Some people like to say they're all delivered. We believe in a mix of delivered sales and stumpage sales, which we think gives us.

We have a fair bit of flexibility in the form of sale and we pride ourselves in that.

Some people like to say Theyre all delivered we believe in a mix of delivery sales and stumpage sales, which we think gives us a nimble sales posture.

Speaker 3: a nimble sales posture, where we don't have internal mills to feed, we feel like we can pull that lever and extract value from time to time. And then thirdly, I think a breadth of product offerings. We vary our regimes, species to species, region to region. Some where we're heavier to saw timber, others where we're heavier to pulpwood markets.

Where we don't have internal mills to fee, we feel like we can pull that lever and extract.

Value it from time to time and then.

Thirdly, I think a breadth of product offerings.

We vary our regimes species to species region to region.

Somewhere we have we're heavier to saw timber others, where we're heavier to pulpwood markets trying to capitalize on what the market gives us and then I think lastly is the role that exports play and we feel that helps tension markets in the south on the margin and really that's how prices are ultimately determined.

Speaker 3: trying to capitalize on what the market gives us. And then I think lastly,

Speaker 3: is the role that exports play, and we feel that helps tension markets in the South on the margin, and really that's how prices are ultimately determined.

Maybe Doug can provide some additional color to your question.

Speaker 5: Yeah, I would agree. I mean, Dave said that very well. I think the key thing we see, you know, particularly we've been talking about is

Yes, I would agree with David that very well I think the key thing we see particularly we've been talking about is the.

Speaker 5: increased capacity of saw mills in our operating area, particularly on that Atlantic coast. And so we really seen those come to play in the past few years we've seen about a half-day and word-feet come into the Florida market.

Increased capacity of saw mills in our operating area in particular with Atlantic Coast, and so we've really seen those come to play.

Past few years, we've seen about a halfway in board feet come into the Florida markets. Another $1 3 billion in the Georgia markets.

Speaker 5: another 1.3 billion in the Georgia markets, and 0.7 in the South Carolina, and another, call it 1.5 billion board feet kind of in the Alabama market. And so we're really seeing a lot of growth in those areas, a lot of competition for saw logs. And so we've really seen demand, even as weather normalized.

Seven.

In the South Carolina, and another call it $1 5 billion board feet kind of in the Alabama market and so we're really seeing a lot of growth in those areas a lot of competition for saw logs and so we've really seen demand even as weather normalized.

Speaker 5: We've just seen increased demand and pricing in those markets, so we're really seeing that reaction that Dave mentioned to the supply demand there, and really pleased that in all of our areas except for Arkansas, we saw meaningful price improvement across all of our grades. So really just the one laggard that we had in that area, and thankfully we're about done with our harvesting in that area, and we'll be moving on past those, so it was a very strong year for us. And we see that continue into this year, as Dave mentioned, capitalizing on the Stumpet Shells program early in the year.

We've just seen increased demand and pricing in those markets. So we're really seeing that reaction that Dave mentioned to the supply demand there and really really pleased that in.

All of our areas, except for Arkansas, we saw a meaningful price improvement across all of our grades. So it really just the one laggard that we had in that area and thankfully, we're about done with our harvesting in that area and we'll be moving on past those that was a really strong year for us and we see that continue into this year as Dave mentioned capitalizing on the stumpage sales program or linear.

Okay. That's very helpful I'll turn it over.

Speaker 1: Thank you. The next question is from Mark Wilby with BMO Capital Markets. You may go ahead.

Thank you. The next question is from Mark <unk> with BMO capital markets. You May go ahead.

Speaker 6: Good morning, guys, it's Jesse Brown on for Mark, I guess, just to start, could you give your kind of outlook for Tamerlan activity in 2022? Um, kind of what valuations look like, and kind of what you're seeing on the front, how that's impacted in this valuation.

Good morning, guys, it's Jesse Barone on for Mark.

I guess just to start could you give your kind of outlook for timberland M&A activity in 2022.

Kind of what valuations look like and kind of what youre seeing on the ESG front, how thats embedded in those valuations.

Speaker 3: Yeah, I think we're definitely in a mode where the markets are pretty strong right now. We're seeing a fair bit of capital continue to flow into those markets, and I think that's translated into some compressed discount rates in terms of...

Yes, I think we are definitely I think we are definitely in a mode where.

The markets are pretty strong right now we're seeing.

We're seeing a fair bit of capital continued to flow into into those markets and I think thats translated into some compressed disk.

Discount rates in terms of.

Speaker 3: It's always hard to predict fully, you know, in a year forward sense, the level of transactions activity. I can say that we're, you know, we're active in all three of our primary geographic segments looking at properties, but at the same time, we're being careful to stay disciplined and really looking for those opportunities that are nice, bolt-on.

Behavior.

It's always hard to predict fully.

In a year forward.

The level of <unk>.

Transactions activity I can't say that we're we're active in all three of our primary geographic segments looking at properties, but at the same time, we're being careful to stay disciplined and really looking for those opportunities that are nice bolt on.

Speaker 3: uh... fits were were were a believer in and uh... you know sort of smaller smaller is better in terms of of complimentary fit

<unk>, we're we're a believer in.

Sort of smaller smaller is better in terms of complementary fit and so we just continue to kind of plug away in that respect.

Speaker 3: And so we just continue to kind of plug away in that respect.

Yeah.

Speaker 6: And then just one other for me, on the Southern export side, can you just kind of give more details around kind of what those volumes look like, where they could eventually get to in kind of a couple of years and how much of an impact they've really had on pricing into the short term. Thanks.

And then just one other familiar on the southern export side could you just kind of give more details around kind of what those volumes look like where they could eventually get to and kind of a couple of years.

And how much of an impact they've really had on pricing in the short term.

Yes. This is Doug I'll take that.

Speaker 5: Yeah, well, as I mentioned before, for competitive reasons, I won't really go into our specific volumes and things like that on these markets. But I can talk a little bit overall about what we're seeing right now. And basically, with the Pinewood-Nimeto policy that's been implemented in China, we're seeing quite a few exporters that have left the market. As a matter of fact, over a dozen exporters along the Atlantic coast have shut down exports to China.

Yes, well as I mentioned more for competitive reasons I won't really go into our specific volumes and things like that when these markets.

But I can talk a little bit overall, but what we're seeing right now.

And basically with the Pinewood NIM to a policy that's been implemented in China, We're seeing quite a few export or is that have left the market matter of fact over it doesn't export as long as Atlantic coast of shutdown exports to China.

Speaker 5: So expect to see a pretty sharp decline in senile plant exports in China in the Q1, at least, in fact, between October and November , which normally goes down because of the new year, but we saw 50% decline, so we've seen a significant decline there. To make up for that though, we've heard China importers have acquired three pan-mex vessels from Uruguay and for Q1.

So expect to see a pretty sharp decline in southern yellow pine exports in China, and the Q1 at least and matter of fact between October November which normally goes down because of the new year, but we.

We saw a 50% decline so we've seen a significant decline there.

To make up for that though we've heard im trying to importers have acquired three panamax vessels from Uruguay and for Q1 in.

Speaker 5: And Uruguay has been a large importer of senile pine into India, so their pivot from India to China has opened up the market for senile pine into India.

In Uruguay has been a large importer of senior upon into India. So theyre pivot from.

India to China has opened up the market for the alpine into India, and so we're working on moving volume into India have been an increased our volumes and they are in Q1.

Speaker 5: We're working on moving volume into India, have been and increased our volumes in their Q1.

Speaker 5: And so while we analyze that China supply side implementation of the new nematodes, we're looking at growing our business into China and Vietnam. So we do believe there's going to be a reduction, at least in the first half of the year overall, across the south of exports as people try to react to what things look like, but that it favors the larger exporters as we look to position ourselves in the different markets.

And so while we analyze that China supply side implantation of the <unk>, we're looking at growing our business into China and Vietnam. So we do believe there's going to be a reduction at least in the first half of the year overall across the south of exports as people try to react to what things look like but that it favors the larger export or as we look to position ourselves into different markets.

Great. Thanks, I'll turn it over.

Thank you. The next question is from Mark Weintraub with Seaport Research Partners you May go ahead.

Speaker 1: Thank you. The next question is from Mark Weintraub with Seaport Research Partners. You may go ahead.

Thank you.

Speaker 7: So just following up a little bit on the notion of more lumber production in the south helping your business.

So just following up a little bit on the notion of more lumber production in the south helping your business.

Speaker 7: It's sort of interesting, if you actually look at the data.

It's sort of interesting if you actually look at the data.

Speaker 7: uh... it doesn't seem like there was that much more lumber production in the south this year overall uh... but maybe it's been different in your specific market and and and i guess they're there's a a good and a bad interpretation of that on the one hand i i i can make me ask the question was it weather or or more demand that was helping pricing in the south today and then i guess the the follow-up would be if we didn't have that production increase

It doesn't seem like there was that much more lumber production in the south this year overall.

But maybe it's been different in your specific markets and I guess there there is a good and a bad interpretation of that on the one hand I may ask the question was it weather or more demand that was helping pricing in the south to date and then I guess the follow up would be if we didn't have that.

Production increase show up.

Speaker 7: Do we have a big step up that's ahead of us? And obviously that could be a positive, I would think. So any thoughts or color around those observations?

We have a big step up that's ahead of us and obviously that that could be a positive I would think so any thoughts or color around those observations.

Speaker 5: Yeah, I'll start there. I mean, we definitely had a wet summer in particular, and so we definitely saw some wet weather impacts on things we went through. But really in Q4, that started to moderate and dry out and has been reasonable actually below the prior year as we move into the first quarter. So while there were wet weather impacts, we also have just seen that increased demand from the mill.

Yes, I'll start there I mean, we definitely had a wet.

Some are in particular and so we definitely saw some wet weather impacts on things, we went through but really in Q4 that start to moderate and dry out and has been reasonable actually below prior year as we move into the first quarter. So while there were weather impacts. We also have just seeing that increased demand from the mills.

Speaker 5: I can't really comment to myself because I don't own any of the mills on their production levels or where they are, but we continue to see, we had a wet weather impact, but after that things have moderated and we continue to see just increased demand for every time we put wood out for sale or we have a delivered negotiation.

Can't really comments myself don't own any of the mills on their production levels are where they are but we continue to see we had a weather impact but after that things have moderated and we continue to see increased demand for every time, we put up for sale or we have delivered negotiation.

Mark I would add to that keep in mind that you have fairly long ramp ups on some of these capex capex announcements on the on the sawmill side and then that's been exacerbated by Covid.

Speaker 3: Mark, I'd add to that, you know, keep in mind that you have fairly long ramp-ups on some of these CapEx announcements on the sawmill side. And then that's been exacerbated by COVID outbreaks from time to time. And so I think that's acted, you know, those two things.

Outbreaks at from time to time, and so I think that's that's acted those two things plus general backlog on equipment. That's been ordered for part of these new facilities I do think youre going to see kind of a gradual increase in <unk>.

Speaker 3: you know general backlog on on on equipment that's been ordered for part of these new facilities i do think you're going to see kind of a uh... a gradual increase

Speaker 3: in southern production as those things kind of get ironed out over time, but I think to Doug's point, you know, we're encouraged that we're seeing that already in a demand sense.

Southern production as those things kind of get ironed out over time, but I think to Doug's point, we're encouraged that we're seeing.

We're seeing that already in of demand.

Speaker 3: uh... you even though you know what were we've got a ways to go to get to those kinda nameplate uh... production level

Even though.

We've got a ways to go to get to those kind of nameplate production levels.

Speaker 7: I guess I was just trying to get a read as to whether or not there is the potential for a more compressed step-up because of the issues you referenced with COVID, etc., that sort of maybe prevented the industry from really running at its full production capabilities as supply chain and absenteeism potentially become less of a problem.

And I guess I was just trying to get a.

Read as to whether or not.

There is the potential for a more compressed step up.

Because of the issues you referenced.

Covid et cetera that sort of maybe prevent the industry from really running.

At its production.

<unk> production capabilities.

Our supply chain and absenteeism potentially become less of a problem.

Speaker 7: Do you get a sense from your customers that there could be a big step-up that arrives? I think I heard you suggesting it be, in all likelihood, more gradual, so just wanted to push on that a little bit.

Do you think there is.

Do you get from a sense from your customers that there could be a big step up that that arrives or is that.

I think I heard you, suggesting it would be in all likelihood more gradual so just wanted to push on that a little bit.

Yeah, I'll take a step at this is Doug again, I mean, I will give some annual evidence I guess from customer discussions and to your point, we're well aware of multiple mills a lot of the mills have to take downtime one or two weeks due to COVID-19 over time. So I do think as Dave mentioned, there is theres Ingram.

Speaker 5: Yeah, I'll take a step at this, Doug, again. I mean, I'll give you some annual evidence, I guess, from customer discussions.

Speaker 5: To your point, we're well aware of multiple mills. A lot of the mills happen to take downtime, you know, one to two weeks due to COVID over time. So I do think, as Dave mentioned, there's, you know, there's incremental capacity that will come online and continue to work. I wouldn't want to try to guess on whether there's a compressed increase or not, but what we're seeing is just that sustained price momentum and growth as we go. And I do believe there'll be increased demand because we have seen a lot of the mills that we supply have taken downtime, particularly on the sawmill side of things over the course of the past year.

Incremental capacity will come online and continue to work I wouldn't want to try to guess on whether it's a compressed increase or not but what we're seeing is just a sustained price momentum and growth as we go and I do believe there will be increased demand because we have seen a lot of the mills that we supply have taken downtime on the sawmill side of things over the course of the past year.

Speaker 7: Okay, great. And one quick other follow-up on the Timberlands question. So, based on your comments and what we've heard from some others, it sounds like, you know, the market is heating up, discount rates are low again, etc.

Okay, Great and one quick other follow up on the Timberlands question.

So based on your comments and what we've heard from some others. It sounds like the market is heating up discount rates are low again et cetera.

Speaker 7: And yet you're very selective. I mean, how hard is it going to be for you to get the types of opportunities to grow the business at the prices that make sense to you? Are you feeling at all discouraged at this point given what's going on, or conversely, are there reasons for optimism?

And yes.

Youre very selective I mean, how hard is it going to be for you too.

Get the types of opportunities to grow the business.

At the prices that make sense to you are you feeling at all discouraged at this point given what's going on or Conversely are there reasons for optimism.

Speaker 3: I mean, it certainly is competitive. I don't want to sort of mislead you there, but I'd say also we purchased 102,000 acres last year, which is not insignificant. We tend to put a fair bit of emphasis on negotiated bolt-on sales that tend to get less visibility, so we like that.

I mean, it certainly is competitive I don't want to I don't want to mislead you there, but I would say also we.

We.

We purchased 102000 acres last year, which is not insignificant we tend to put a fair bit of emphasis on negotiated bolt on sales that tend to get less visibility. So we like that.

That posture and we're happy with.

We're happy with the growth that we've had we placed a $179 million into those transactions all of which were were bolt ons and we added lands in strong markets.

Roughly a quarter in Florida, and Georgia, roughly a half in Texas and the balance a small amount and in New Zealand and so we think these are all very nice from a complementary fit with our existing land.

Speaker 3: a small amount in New Zealand. And so, you know, we think these are all very nice from a complimentary fit with our existing land base, nice quality lands. They're not encumbered by wood supply agreements. So we think that gives us lots of optionality going forward. And in this recently announced transaction that had lands in about roughly 52,000 acres in Texas, you know, that's, you know, within three hours of...

Speaker 3: land-based, nice quality lands. They're not encumbered by wood supply agreements, so we think that gives us lots of optionality going forward.

Land base nice quality lands.

Theyre not encumbered by wood supply agreement. So we think that gives us lots of optionality going forward.

Speaker 3: uh... and in this recently announced uh... transaction that that had uh... lands in uh... but roughly fifty two thousand acres in texas you know that

And then this recently announced.

Transaction that had lands in RA.

Roughly 52000 acres in Texas.

Speaker 3: you know, within three hours of two of the nation's top ten single-family housing markets. And so, you know, we're excited about kind of the strategic location of that and the fit with our existing operations in Texas. Okay, great. Thanks.

Within three hours of.

<unk>.

Two of the nation's top 10 single family housing markets and so we're excited about kind of the the strategic location of that and the fit with our existing operations in Texas.

Okay, great. Thanks, I appreciate the color and the insights.

Speaker 1: Thank you. The next question is from Paul Quinn with RBC Capital Markets. You may go ahead.

Thank you. The next question is from Paul Quinn with RBC capital markets. You May go ahead.

Speaker 6: Yeah, thanks, guys. Good morning. To start off on, maybe in summer lines, just trying to understand that conservatism that sort of I expected a higher guide on Pacific Northwest and New Zealand just because of that log export ban in Russia. So just wondering what the log inventories are currently in China, when you expect them to normalize and why you aren't seeing further or more upside on the price.

Yeah. Thanks, guys good morning.

Just to start off on <unk>.

Maybe just.

Trying to understand the conservatism that sort of.

I expected a higher guide on Pacific Northwest and New Zealand, just because of that.

Log export ban in Russia, So just wondering what the log.

<unk> are currently in China, when do you expect them to normalize and why you are seeing further.

Or more upside on the pricing side.

Speaker 5: Sure. This is Doug. I'll start off on this one. So currently we're seeing the China inventory level, it's made around 5.4 million cubic meters, which is actually down from December .

Sure. This is Doug I'll start off on this one.

So currently we're seeing the China inventory level estimate around $5 4 million cubic meters, which is actually down from December so thats a good for us.

Speaker 5: So that's a good force. December and early January demand actually prior to the New Year surprised us to the upside. And then December was running around 8,000 cubic meters per day. And then around average of 45,000 cubic meters per day in January , which includes the impact of holiday shutdown. So pretty strong demand going into the holidays. So we're upside on that.

December and early January demand actually prior to lunar new year surprised us to the upside and in December . It is running around 8000 cubic meters per day, and then around average of 45000 cubic meters per day.

In January which include the impact of a holiday shutdown, so pretty strong demand going into the holidays, so were upside on that.

Speaker 5: And the customers are beginning to see that the future impacts of the reductions in the softwood log supply that you mentioned from Russia and reduced European spruce salvage, the continued Australia ban, and now the uncertainty over U.S. sun-yellow pine due to the nematode policies, as well as the strong U.S. domestic demand. But what we did have, though, was that kind of a real estate correction that loomed over the markets in late Q3 and early Q4. And so the market did drop off where it wasn't in 2021.

And the customers are beginning to see the future impacts of the reductions in softwood log supply that you mentioned from from Russia, and reduced European Spruce salvage continued Australia ban and now the uncertainty over yes, I'm, saying alpine due to the <unk> policies as well as the strongest domestic demand, but we did have though was that kind of.

Our real estate correction that loomed over the markets in late Q3, and early Q4, and so the market did drop off of where it wasn't in 2021, but with the government stepping in to restructure them may those highly indebted companies kind of a more state owned entities.

Speaker 5: But with the government stepping in to restructure made those highly-debted companies, kind of with more...

Speaker 5: we're starting to see that worry less than the market. And the government's already lifted some of the constraints on mortgage borrowers and reduced the bank reserve ratio to put more liquidity in that market.

We're starting to see that were less than the market and the government already lifted some of the constraints on mortgage borrowers and reduce the bank reserve ratio to put more liquidity in that market.

Speaker 5: In addition, they're investing more in infrastructure projects to help boost economic growth, and that's a good signal to our lumber and plywood customers.

In addition, they are investing more infrastructure projects to help boost economic growth and that's a good signal to our lumber and plywood customers.

Speaker 5: we've dealt significantly offsetting the housing downturn. So we see good, strong demand coming out of China after the Lunar New Year. One of the big things we have working against us, though, is still shipping. So shipping prices are still extremely high. You know, there's plenty of press out there in the world about everything that's happening. Vessel times are getting better going into China.

That will significant offsetting the housing downturn. So we see good strong demand coming out of coming out of China. After the lunar new year, one of the big things, we have working against US, though it is still shipping.

So shipping prices are still extremely high.

Plenty of precedent out there in the world about the I think it's happening vessel times are getting better going into China.

Speaker 5: But you still are subject to individual port lockdowns due to the strict COVID policies they have there. So any given vessel can be locked down, and we've had vessels sit for

But you still are subject to individual port lockdowns due to the strict credit policy. They have there so any given vessel can be it can be locked down.

<unk> had vessels sit for upwards of 30 to 40 days, sometimes trying to trying to get in.

Speaker 5: upwards of 30 to 40 days sometimes trying to get in. So there's a few things out there that kind of give us a cautiousness around what we're looking at. We see strong demand, but we still see supply chain challenges as we go through there. But, you know, we mentioned about the logs that you mentioned, and then also this is coupled with a significant decrease of over 25 percent in lumber imports in 2021 due to the strengthening of the markets in the U.S. and Europe . We do see it positive on the demand side, but we're just being a bit cautious there

There's a few things out there that kind of give us a cautiousness around what we're looking at we see strong demand, but we still see supply chain challenges as we go through there.

We mentioned about the logs that you mentioned and then also this was coupled with the significant decrease of over 25% in lumber imports in 2021 due to the strengthening of the markets in U S and Europe , we do see a positive on the demand side, but we're just being a bit cautious there around them.

Supply chain constraints that are in the market right now.

Speaker 5: And it's a great color. Thanks. And then just.

Okay.

Great color. Thanks, and then just.

We are on the carbon side.

Speaker 3: Over on the carbon side, with respect to North America, one of your competitors has set out some goals, some longer-term goals. I'm just wondering how you think about monetizing your carbon sequestration on your Timberlands in North America?

With respect to North America, one of your competitors has been pretty well started to set out some goals longer term goals. Just wondering what how you think about monetizing your carbon sequestration on your timberlands.

In North America.

Hey, This is this is Marc I'll take that.

Speaker 4: You know, the market opportunity there, I think, is still, you know, fairly speculative. You know, we continue to believe that carbon represents a very significant opportunity for our sector. You know, not only to be part of the solution to climate change, but also to improve the economics of our forests.

The market opportunity there I think is still fairly speculative on we continue to believe that carbon represents a very significant opportunity for our sector.

Not only to be part of the solution to climate change, but also to improve the economics of our forests.

Speaker 4: The path to net zero is going to require negative emissions. You know, the key issue going forward is how negative emissions are counted for and how the market for negative emissions ultimately evolves over time. The demand for carbon offsets in the voluntary market was about 100 million units in 2020. Various forecasts show that demand growing by, you know, 10 to 15 times by 2030 and by 50 to 100 times by 2050.

The path to net zero is going to require negative emissions.

The key issue going forward is how negative emissions are accounted for and how the market for negative emissions ultimately evolves over time the demand for carbon offsets in the voluntary market was about 100 million units in 2020, various forecasts show that demand growing by 10% to 15 times by 2030 and by by 50 to 100.

Times by 2050.

Speaker 4: So that sort of gets you to implied demand for negative emissions of at least five billion metric tons of CO2 equivalents in 2050.

So that sort of gets you to imply demand for negative emissions.

Or at least 5 billion metric tons of Cotwo <unk> in 2050.

Speaker 4: with an escalating path to that figure between now and then. To put that in context, the global industrial roundwood harvest in 2019 was about 2 billion tons.

And escalating path to that figure between now and then.

Put that in context, the global industrial Roundwood harvest in 2019 was about 2 million tonnes. So there's a big disconnect between sort of the demand for carbon in kind of the available fiber supply to provide that carbon at least within the forestry market. So we think this could become a big opportunity for our sector.

Speaker 4: So there's a big disconnect between sort of the demand for carbon and kind of the available fiber supply to provide that carbon, at least within the forestry market. So we think this could become a big opportunity for our sector. Working forests are the most readily available and cheapest technology that's out there today to generate negative emissions, but it's not the only technology. There are other technologies like direct carbon capture and storage, but those types of technologies are going to require much higher economic incentives to really get off the ground in the form of higher offset pricing, for example.

Working for US are the most readily available and cheapest technology, that's out there today to generate negative emissions, but it's not the only technology. There are other technologies like direct carbon capture and storage, but those types of technologies are going to require much higher economic incentives to really get off the ground in the form of higher <unk>.

Offset pricing for example.

Speaker 4: I think it's also worth noting that even when you're putting aside carbon.

I think it's also worth noting that even when you're kind of putting aside carbon their various other potential uses of wood fiber on this path to net zero, but we also think it would be pretty impactful for our industry such.

Speaker 4: There are various other potential uses of wood fiber on this path and at zero that we also think would be pretty impactful for our industry. Such as sustainable aviation fuels, biomass energy, and mass timber.

Such as sustainable aviation fuels.

<unk> energy and mass timber so.

Speaker 4: You know, as we kind of think about, you know, the broad opportunity around, you know, economic opportunity around ESG, you know, any one of these uses could have a very significant effect on the demand for wood, fiber, and land use.

As we kind of think about the broad opportunity around economic opportunity around ESG any one of these uses could have a very significant effect on the demand for wood fiber and land use, especially if they really scale up taken together, we think it sets a pretty compelling backdrop as we look forward around the role that working for us.

Could play in climate change, but it's still very difficult to estimate kind of what that value looks like on a go forward basis.

Speaker 5: know, it's still very difficult to estimate kind of what that value looks like on a go-forward basis. Right now, the voluntary market prices carbon at a level that, you know, isn't really going to incentivize a meaningful change in our behavior. So we're really going to need to see that market scale up over time and the price of carbon in the voluntary market move up over time to really kind of start to assess how that's going to affect our industry. Yeah, I just add to that kind of New Zealand experience and, you know, our participation in the Emissions Trading Scheme in New Zealand gives a unique perspective as it relates to monetizing carbon.

Right now the voluntary market prices carbon at a level that isn't really going to incentivize a meaningful change in our behavior. So we're really going to need to see that market scale up over time and the price of carbon in the voluntary market move up over time.

So really kind of start to assess how that's going to affect our industry.

Speaker 5: Yeah, I just add to that kind of water and he's gonna experience.

Yes, I'd just add to that kind of wondering as you don't experience.

Speaker 5: Our participation in the Emissions Trading Scheme in New Zealand gives a unique perspective as it relates to monetizing carbon.

Dissipation in the emission strengths given New Zealand gives us a unique perspective as it relates to monetizing carbon.

Speaker 5: And the New Zealand government implemented changes to the program in 2020 that we believe would significantly increase the value of carbon and it actually did result in the doubling of the prices to currently over $7. Those changes included a floor and a cost containment cap with $70 in 2022 to help reduce price Adding the operating conditions to the child model Green Legend nearly 272% will still be durable in July

And then again government implement changes to the program in 2020 that we believe will significantly increase the value of carbon and they actually did result in a doubling of the prices to currently over $70. So those changes has included a floor and a cost containment capital of $70 in 2022 to help reduce price volatility.

Speaker 5: And we believe that's not been fully recognized in the market. So we're starting to optically sell into that market. And that's an example of Mark said where there's still things working out there trying to understand, but the value that we see, there's a lot more opportunity in New Zealand and that price that we saw compared to what the current voluntary markets are. And we've seen New Zealand prices move a lot as they got regulated over time. So I think we have to be careful as we think about how we move into this market.

And we believe it has now been fully recognized the market. So we're starting to optimistically sell into that market and Thats. An example, what Mark said, where Theres still you know.

He is working out there trying to understand but the value that we see there is a lot more opportunity in new Zealand and that pricing that we saw compared to what the current voluntary markets are and we've seen as prices move a lot because it got regulated over time. So I think we would be careful as we think about how we move into this market.

Speaker 5: Even the secondary market in New Zealand right now is trading above that cost containment cap, which we also saw in 2021. So based on individual emitters' needs, there's opportunities for price improvement, even in a market where we have cost containment caps. So it's a very fluid market with a lot of potential upside, and we participate in that New Zealand market, and they give us a lot of insight.

And even the secondary market in New Zealand right now staying above that cost containment cap, which we also saw in 2021, so based on individual meters needs there's opportunities for price improvement even in a market, where we have cost containment caps. So it's a very fluid market with a lot of potential upside and we participate in the New Zealand market.

That gives us a lot of insight when we think about north American process suffices to say, we're spending a lot of time looking at this and thinking about it right now and looking to kind of scale up resources to really tackle this.

Speaker 4: Suffice it to say, we're spending a lot of time looking at this and thinking about it right now and looking to kind of scale up resources to really tackle this. We think it's a bit premature to start to put out a financial forecast around what we think is achievable in the near term.

We just think it's a bit premature to start to put out a financial forecast around what we think is achieve achievable in the near term.

Alrighty. Thanks.

Thanks for the help us all I had.

Speaker 1: you. And as a reminder, if you'd like to ask a question, please press star followed by one.

Thank you and as a reminder, if you'd like to ask a question. Please press star followed by one hour.

Speaker 1: Our next question is from John Babcock with Bank of America. You may go ahead.

Our next question is from John Babcock with Bank of America, You May go ahead.

Speaker 8: Thanks for taking my question. I guess actually just following up on that last point, you talked about the doubling in prices in New Zealand on the carbon front. Is there any way you could provide some sense as to what the contribution is to sales or earnings down in that region at all? Recognizing this is still a pretty small part of your overall business.

Hey, Thanks for taking my question I guess actually just following up on that last point, you talked about the doubling in prices in New Zealand.

The carbon front.

I mean is there any way you could provide some sense as to what the contribution is to sales our earnings down in that region that all recognizing this is still pretty small part of your overall business.

Yes, essentially.

All of our non timber sales within New Zealand, our carbon credit sales and so we actually provide that disclosure in our supplement and so if you look at the non timber sales line item. The vast majority of that is as carbon credit sales.

Speaker 4: We didn't have them in 2021, but we have started to monetize carbon in 2022 with the big increase in prices.

Gotcha I would like to add we didn't have them in 2021, but we have started to to monetize carbon in 2022 with the big increase in prices.

Speaker 8: And then next question, just kind of back to the Southern Solid pricing, recognizing there are a lot of different factors here that could play into that. But with lumber prices as high as they are, I mean, are you seeing any sort of carryover from that into Solid pricing at this point?

Okay. That's helpful.

And then next question just kind of back to the southern saw log pricing.

Recognizing there are a lot of different factors here that could play into that but with lumber prices as high as they are.

Are you seeing any sort of carryover from that into a solid pricing at this point.

Speaker 5: Um, yeah, I mean, that's as we discussed before, uh, we have, I mean, obviously there's real strength in the market. We talked about an Atlantic coast, and so, um, we continue on a, on a daily basis, if not weekly basis, we negotiate our sales and delivered and stumpage, and we're seeing that pricing on the lumber, as Dave mentioned, very elastic market due to spite.

Yes, I mean, as we discussed before.

We have I mean, obviously there is.

Real strength in the market, we talked about Atlantic Coast and so we continue on a on a daily basis, if not weekly basis, we negotiate our sales and delivered and stumpage and we're seeing that pricing on the lumber as Dave mentioned very elastic market. Despite Tom.

Speaker 5: tight supply and demand ratio. So we're absolutely seeing that translate straight into.

Tight supply and demand ratio. So we're absolutely seeing that translate straight into stumpage pricing.

Speaker 8: Okay. And then, you know, really just, I guess, the last question on my side, you know, can you just talk about how you're thinking about the level of the dividend and ultimately what it would take to see an increase in the dividend level?

Okay and then.

Then really just I guess the last question on my side can you just talk about how youre thinking about the level of the dividend and ultimately what it would take to see an increase in the dividend level.

Speaker 3: sure i mean we we evaluate the the dividend uh... periodically uh... with the board and uh... you know we take it we take into account other capital allocation priorities as we do that uh... but ultimately you know our goal is to stay nimble uh... with respect to those capital allocation priorities with that with an eye you know always on on maximizing uh... our long-term value per share

Sure I mean, we evaluate the dividend periodically with the board and we take it we take into account other capital allocation priorities as we do that but.

But ultimately our goal is to stay nimble with respect to those capital allocation priorities with an eye.

These on maximizing our long term value per share.

Speaker 3: We do want to ultimately grow the dividend over time, but we also want our dividend to be sustainable and predictable from the perspective of our shareholders, and because of that, whenever we make an increase, we view that as a fairly permanent decision. So therefore, we make those decisions on a pretty measured and deliberate basis.

We do we do want to ultimately grow the dividend over time, but we also.

We also want our dividend to be sustainable and predictable from the perspective of our shareholders and because of that whenever we can.

Make an increase we view that as a fairly permanent decision. So therefore, we make those decisions on a pretty measured and deliberate basis. We don't we don't sort of look for short term reactions to changing market conditions, we really we really have a mindset.

Speaker 3: We don't sort of look for short-term reactions to changing market conditions. You know, we really have a mindset where, you know, at the beginning of COVID, for example, we chose not to reduce our dividend because we saw that as a situation that was going to last a few quarters, not a few years, and I think that's proved to be the case.

Where.

At the beginning of Covid for example.

We chose not to reduce our dividend because we saw that as a.

Our situation was going to last a few quarters not a few years and I think that's proved to be the case.

Speaker 3: And, you know, obviously we've seen a major uptick in market conditions of late, and I think now the key is to sort of prudently assess the staying power of those recent market trends as we think about the dividend going forward. But, you know, keep in mind, you know, this is definitely something that we look at on a pretty regular basis with our board.

Obviously, we've seen a major uptick in market conditions of late and I think now the key is to sort of prudently assess the staying power of those recent market trends as we think about the dividend.

Going forward, but keep.

Keep in mind. This is definitely something that we look at on a pretty regular basis with our board.

Okay. Thank you.

Speaker 1: and that was our final question. I'll now turn it back to the speakers for any closing remarks.

Thank you and that was our final question I will now turn it back to the speakers for any closing remarks.

Speaker 2: All right. Thank you. This is Colin Mings. I'd like to thank everybody for joining us. Please contact us with any follow-up questions.

Alright. Thank you. This is Collin mings I'd like to thank everybody for joining us please contact us with any follow up questions.

Speaker 1: Thank you, and that does conclude today's conference. Thank you all for participating. You may disconnect at this time.

Thank you and that does conclude today's conference. Thank you all for participating you may disconnect at this time.