Q1 2024 Rayonier Inc Earnings Call

Operator: Welcome, and thank you for joining Rayonier's first quarter 2024 conference call. At this time, all participants are in a listen-only mode.

Welcome and thank you for joining <unk> first quarter 2024 conference call. At this time all participants are in a listen only mode. During the question and answer session. Please press star one on your telephone Keypad. Today's conference is being recorded if you have any.

Operator: During the question and answer session, please press star 1 on your telephone keypad. 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 of Capital Markets and Strategic Planning. Thank you. Good morning.

Operator: 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.

Collin Philip Mings: Welcome to Rayonier's Investor Teleconference covering first quarter earnings. Our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rayonier.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 Forms 10-K and 10-Q, which are 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.

Collin Philip Mings: Thank you and good morning, welcome to Rangers Investor Teleconference, covering first quarter earnings our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rainy or dot com.

Collin Philip Mings: I'd 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, and 10-Q 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're also referenced on page two of our financial supplement.

Collin Philip Mings: These presentations, we will also discuss non-GAAP financial measures, which are defined and reconciled to the nearest GAAP measures in our earnings release and supplemental materials.

Collin Philip Mings: They are also referenced on page 2 of our financial statements. Throughout these presentations, we will also discuss non-GAAP financial measures, which are defined and reconciled to the nearest gap measures in our earnings release and supple. With that, let's start our teleconference with opening comments from Mark McHugh, our President and CEO. Thanks, Collin. Good morning, everyone.

Collin Philip Mings: With that let's start our teleconference with opening comments from Mark Mchugh, our president and CEO Mark.

Mark D. McHugh: First, I'll make some high-level comments before turning it over to April Tice, Senior Vice President and Chief Financial Officer, to review our consolidated financial statements. Then we'll ask Doug Long, Executive Vice President and Chief Resource Officer, to comment on our U.S. and New Zealand... And following the review of our timber segments, April will discuss our real estate results and our outlook for the balance. As this is my first earnings call since officially stepping into the CEO role, I want to reiterate how honored I feel that our board has entrusted me to lead Rayonier at this exciting time for our company.

Mark D. McHugh: Thanks, Colin Good morning, everyone first I'll make some high level comments before turning it over to April Tice, Senior Vice President and Chief Financial Officer to review, our consolidated financial results, then watched Doug long Executive Vice President and Chief Resource Officer to comment on our U S and New Zealand timber results and following the review of our timber segments April will discuss our real estate.

Mark D. McHugh: And our outlook for the balance of the year.

Mark D. McHugh: This is my first earnings call since officially stepping into the CEO role I want to reiterate how honored I feel that our board has entrusted me to lead Rainier at this exciting time for our company I'm fortunate to be partnering with an experienced and dedicated team of senior leaders all of whom are incredibly energized by the refreshed vision that we've laid out for rainier and eager to air.

Mark D. McHugh: Acute on our future growth opportunities.

Mark D. McHugh: I'm fortunate to be partnering with an experienced and dedicated team of senior leaders, all of whom are incredibly energized by the refreshed vision that we've laid out for Rayonier and eager to execute on our future growth operations. On that note, I'd also like to formally welcome April to her earnings call this quarter in her new role as CFO. April has held multiple positions of increasing responsibility within the Finance and Accounting Department since she joined Rayonier in 2010, most recently serving as our Chief Accounting Officer for the last three years before she assumed the CFO role last summer.

Mark D. McHugh: On that note I'd like to also formally welcome April two earnings call this quarter and her in her new role as CFO April has held multiple positions of increasing responsibility within finance and accounting department since she joined bringing the year in 2010, most recently, serving as our Chief accounting officer for the last three years before she assumed the CFO role last month April's ban.

Mark D. McHugh: Instrumental in building out our finance and accounting department as well as implementing a transparent financial reporting framework for the company I'm confident that her transition into the CFO role will continue to be seamless.

Mark D. McHugh: April has been instrumental in building out our finance and accounting department, as well as implementing a transparent financial reporting framework for the company. I'm confident that her transition into the CFO role will continue to be. Now I'll switch gears and discuss our first quarter results, which were modestly improved relative to the prior year quarter and in line with our expectations at the start of the year. Specifically, we generated adjusted EBITDA of $56 million and pro forma net income of $7 million, or $0.05 per share.

Mark D. McHugh: The 3% increase in adjusted EBITDA versus the prior year period was driven by stronger results from our Southern Timber and New Zealand Timbers, partially offset by lower results in our Pacific Northwest timber and real estate. Drilling down further on our operating segment. Our Southern Timber Segment generated first quarter Jesse E. Bida of $45 million, up $2 million from the prior year period, as a 6% increase in harvest volumes more than offset a 4% decline in net stumpage rate.

Mark D. McHugh: Now I'll switch gears and discuss our first quarter results, which were modestly improved relative to the prior year quarter and in line with our expectations at the start of the year, specifically, we generated adjusted EBITDA of $56 million and pro forma net income of $7 million or five cents per share a 3% increase in adjusted EBITDA versus the prior year.

Mark D. McHugh: Period was driven by stronger results from our southern timber New Zealand timber segments, partially offset by lower results in our Pacific northwest timber and real estate segments drilling down further on our operating segment results. Our southern timber segment generated first quarter adjusted EBITDA of $45 million up $2 million from the prior year period as a six.

Mark D. McHugh: Were sent increase in harvest volumes more than offset a 4% decline in net stumpage realizations in our Pacific Northwest timber segment first quarter adjusted EBITDA of $5 million was down $2 million from the prior year quarter, driven by a 17% reduction in harvest volumes due to the Oregon sale completed late last year as well as an 11% decline.

Mark D. McHugh: In our Pacific Northwest Timber Segment, first quarter adjusted EBITDA of $5,000,000 was down $2,000,000 from the prior year quarter, driven by a 17% reduction in harvest volumes due to the Oregon sale completed late last year, as well as an 11% decline in weighted average log price. Turning to our New Zealand timber segment, first quarter adjusted EBITDA of $11 million increased $5 million versus the prior year quarter. The increase in Adjusted EBITDA was driven by higher carbon credit and Favorable Foreign Exchange Impacts, partially offset by a 4% decrease in export saw timber. In our real estate segment, we generated first quarter revenue of $5 million, down $2 million from the prior year period. Consistent with our prior guidance, real estate closings were relatively light to start the year.

Mark D. McHugh: And weighted average log prices.

Mark D. McHugh: Turning to our New Zealand timber segment first quarter, adjusted EBITDA of $11 million increased $5 million versus the prior year quarter. The increase in adjusted EBITA was driven by higher carbon credit sales and favorable foreign exchange impacts, partially offset by a 4% decrease in export sawtimber prices.

Mark D. McHugh: Our real estate segment, we generated first quarter, adjusted EBITDA of $5 million down $2 million from the prior year period consistent with our prior guidance real estate closings were relatively light to start the year. However, our full year real estate pipeline remains strong and we expect a significant increase in closing activity during the second quarter.

Mark D. McHugh: However, our full year real estate pipeline remains strong, and we expect a significant increase in closing activity during the second quarter. As April will discuss in greater detail later in the call, we are on track to deliver on our full year 2024 Adjusted EBITDA guidance of $290 to $325 million. As we indicated at the beginning of the year, our full year 2024 financial guidance excludes the potential impact of any additional asset sales as part of our $1 billion disposition target that we announced in November.

Mark D. McHugh: As April will discuss in greater detail later in the call. We were on track to deliver on our full year 'twenty 'twenty four adjusted EBITDA guidance of $290 million to $325 million as we indicated at the beginning of the year, our full year 2024 financial guidance excludes the potential impact of any additional asset sales as part of our $1 billion.

Mark D. McHugh: <unk> target that we announced in November.

Mark D. McHugh: As it relates to the disposition target, we are continuing to make progress and are actively evaluating several large-scale transactions. Specifically, we are currently marketing approximately 115,000 acres in Washington State, and we have further identified approximately 100,000 acres in the U.S. South that may be suitable for disposition. In addition to these opportunities in the U.S., we are evaluating strategic alternatives for our New Zealand joint venture interest and have engaged a financial advisor to assist us with this process.

Mark D. McHugh: As it relates to the disposition target we are continuing to make progress and are actively evaluating several large scale transaction. Specifically we are currently marketing approximately 115000 acres in Washington State and we have further identified approximately 100000 acres in the U S. South that may be suitable for disposition. In addition to these.

Mark D. McHugh: Knees in the U S. We are evaluating strategic alternatives for our New Zealand joint venture interest and have engaged a financial advisor to assist us with this process. We look forward to sharing additional progress on our disposition program in the coming quarters as we continue to advance our efforts to reduce leverage in a higher interest rate environment and capitalize on the continued disconnect.

April J. Tice: We look forward to sharing additional progress on our disposition program in the coming quarters as we continue to advance our efforts to reduce leverage in a higher interest rate environment and capitalize on the continued disconnect between public and private values for Timberland. With that, let me turn it over to April for more details on our first quarter financial results. Thanks, Mark. Before covering the financial highlights from the quarter, I would first like to express that I'm very honored to be leading such a talented accounting and finance organization and look forward to building on an already strong foundation.

April: Between public and private values for timberland assets.

April J. Tice: With that let me turn it over to April for more details on our first quarter financial results.

April J. Tice: I'm intently focused on maintaining Rayonier's position as an industry leader in transparency, and it's as well as further enhancing our finance platforms to support data-driven decisions across our organization. Our balance sheet and liquidity position are strong, and as Mark highlighted earlier, we are actively taking steps to achieve the new leverage targets we communicated in November. Moving on to the financial highlights on page 5 of the supplement, sales for the first quarter totaled $168 million, while operating income was $16 million, and net income attributable to Rayonier was $1 million, or one cent per share. On a pro forma basis, net income was $7 million, or five cents per share.

April J. Tice: Mark.

April: Before covering the financial highlights from the quarter I would first like to express I am very honored to be leading such a talented accounting and finance organization and look forward to building an already strong foundation and intently focused on maintaining <unk> position as an industry leader and transparency and it's <unk>.

April J. Tice: Well as further enhancing our finance platform to support Cabot driven decisions across our organization.

April J. Tice: Our balance sheet and liquidity position is strong and as Mark highlighted earlier, we are actively taking steps to achieve the new leverage targets, we communicated in November.

April J. Tice: Pro forma items in the first quarter included a $4.5 million pension settlement charge and $1.3 million of net costs associated with the legal settlement. Adjusted EBITDA was $56 million in the first quarter, up slightly from $55 million in the prior year period. On page 5, we provide an overview of our capital resources and liquidity. Our cash available for distribution, or CAG, for the first quarter was $37 million versus $30 million in the prior year period.

April J. Tice: Moving onto the financial highlights on page five of the supplement.

April J. Tice: Sales for the first quarter totaled $168 million, while operating income was $16 million and net income attributable to rainier with $1 million or one cent per share on a pro forma basis net income was $7 million or five cents per share pro forma items.

April J. Tice: In the first quarter included a $4 $5 million pension settlement charge and $1 3 million dollar of net costs associated with the legal settlement.

April J. Tice: Adjusted EBITDA was $56 million in the first quarter up slightly from $55 million in the prior year period.

April J. Tice: On the bottom of page five we provide an overview of our capital resources and liquidity, our cash available for distribution or C. G for the first quarter was $37 million versus $30 million in the prior year period.

April J. Tice: The increase was driven primarily by higher adjusted EBITDA and cash interest received during the quarter. A reconciliation of CAD to cash provided by operating activities and other gap measures is provided on page 7 of the financial supplement. We closed the first quarter with $160 million of cash and roughly $1.4 billion of debt, implying a net debt to trailing 12-month adjusted EBITDA of approximately 4.1 times. At quarter end, our weighted average cost of debt was approximately 2.8%, and the weighted average maturity on our debt portfolio was approximately 5 years, with no significant debt maturities until 2026.

April J. Tice: The increase was driven primarily by higher adjusted EBITDA and cash interest received during the quarter a.

April J. Tice: Filiation, a C E D to cash provided by operating activities and other GAAP measures is provided on page seven of the financial supplement.

April J. Tice: We closed the first quarter with $160 million of cash and roughly one $4 billion of debt, implying a net debt to trailing 12 month adjusted EBITDA of approximately four one times.

April J. Tice: At quarter end, our weighted average cost of debt was approximately two 8% and a weighted average maturity on our debt portfolio was approximately five years with no significant debt maturities until 2026.

April J. Tice: We expect to use our cash on hand to pay $150 million of debt that becomes unhedged in August, which will keep our debt 100% fixed rate. Our net debt to enterprise value based on our closing stock price at the end of the quarter was 19%.

April J. Tice: We expect to use our cash on hand to pay $150 million of debt that becomes unhedged in August which will keep our debt 100% fixed rate.

April J. Tice: Our net debt to enterprise value based on our closing stock price at the end of the quarter was 19%.

Douglas M. Long: I'll turn the call over to Doug to provide a more detailed review of our timber results. The adjusted EBITDA in the first quarter of $45 million was $2 million or 5% above the prior year quarter, driven by higher volumes and lower costs, partially offset by lower pricing and a decline in non-different. Total harvest volumes rose 6% versus the prior year quarter, primarily driven by healthy demand from customers due to wet weather-related constraints on competing logs.

April J. Tice: I'll turn the call over to Doug to provide a more detailed review of our timber results. Thanks April let's start on page eight with our southern timber segment.

Douglas M. Long: Adjusted EBITDA in the first quarter, a $45 million was $2 million or 5% above the prior year quarter, driven by higher volumes and lower costs, partially offset by lower pricing and a decline in non timber income.

Douglas M. Long: Total harvest volumes rose, 6% versus the prior year quarter, primarily driven by healthy demand from customers due to wet weather related constraints on competing log supply.

Douglas M. Long: Our continued investment in road infrastructure and dry land optionality proved to once again be competitive advantages amid wet weather conditions that limited the ability of other Timberland owners to bring volume to the market. Meanwhile, non-temporary income declined 3% from the prior year period as continued growth in our land-based solutions revenue was more than offset by lower pipeline easement rates. Average saw log stumpage pricing was $31 per ton, a 3% decrease compared to the prior year period.

Doug: Our continued investment and road infrastructure and dry ground Optionality proved to once again be competitive advantages amid wet weather conditions that limited the ability of other timberland owners to bring volume to the market.

Douglas M. Long: Meanwhile, non timber income declined 3% from the prior year period as continued growth in our land based solutions revenue was more than offset by lower pipeline easement revenue.

Douglas M. Long: Average saw logs stumpage pricing was $31 per ton, a 3% decrease compared to the prior year period.

Douglas M. Long: Meanwhile, pulpwood net stumpage pricing fell 2% versus the prior quarter to roughly $17 per ton. The moderation in pricing for both saw logs and pulpwood was largely driven by a shift in geographic mix toward lower priced operating areas versus the prior year period. Overall, weighted average stomach prices in the first quarter fell 4% versus the prior quarter to roughly $23.

Douglas M. Long: Meanwhile, pulpwood stumpage pricing fell 2% versus the prior quarter to roughly $17 per ton.

Douglas M. Long: Okay.

Douglas M. Long: The moderation in pricing for both saw logs and pulpwood was largely driven by a shift in geographic mix toward lower priced operating areas versus the prior year period.

Douglas M. Long: Overall weighted average stumpage prices in the first quarter fell 4% versus the prior year quarter, it's roughly $23 per ton.

Douglas M. Long: Improved in-market demand, coupled with wet weather conditions, translated into fairly stable pulpwood pricing to start the year across most of our markets in the U.S. South. Additionally, we believe the inventory de-stocking cycle that weighed on container board demand in 2022 and 2023 has largely run its course. Mill operating rates are generally improving, giving us reason for optimism as we move through the balance of the Train-to-Grade Market. Marking conditions were generally stable throughout the first quarter despite some softness and sudden increases in yellow pine lumber prices, as the El Nino climate pattern resulted in wet weather conditions that limited the supply of competing logs.

Douglas M. Long: Improved end market demand, coupled with wet weather conditions translated into fairly stable pulpwood pricing to start the year across most of our markets and yourself.

Douglas M. Long: <unk>, we believe inventory destocking cycle that weighed on containerboard demand in 2022, and 2023 has largely run its course.

Douglas M. Long: Operating rates are generally improving giving us reason for optimism as we move through the balance of the year.

Douglas M. Long: Turning to great markets market conditions were generally stable throughout the first quarter. Despite some softness in southern yellow pine lumber prices as the El Nino climate pattern resulted in wet weather conditions that limited the supply of competing logs.

Douglas M. Long: However, saw log pricing has been under some pressure in recent weeks, as demand from lumber mills has softened amid the continued pullback in sudden-yield pine lumber prices and drier weather conditions. Looking ahead, we believe the significant discount that Sun-Yellow pine lumber currently trades at compared to other species will likely narrow, which should translate to improved demand and pricing for salt. Moving to our Pacific Northwest Timber Segment on page 9, adjusted EBITDA of $5,000,000 was $2,000,000 below the prior year quarter.

Douglas M. Long: However, solid pricing has been under some pressure in recent weeks as demand from lumber Mills has softened amid the continued pullback in southern yellow pine lumber prices and dry weather conditions.

Douglas M. Long: Going ahead, we believe the significant discount that's in your pine lumber currently trades at compared to other species will likely narrow.

Douglas M. Long: Which should translate to improved demand and pricing for saw timber.

Douglas M. Long: Yeah.

Douglas M. Long: Moving to our Pacific Northwest timber segment on page nine adjusted.

Douglas M. Long: Adjusted EBITDA of $5 million was $2 million below the prior year quarter.

Douglas M. Long: The year-over-year decrease was driven by lower harvest volumes and lower net stump yield. Volumes decreased 17% in the first quarter as compared to the prior period, reflecting the large disposition we completed in Oregon during late 2020. At $84 per ton, average delivered domestic solid pricing in the first quarter fell 9% from the prior year period due to a combination of weaker demand from domestic lumber mills, reduced export market tension, and an unfavorable species mix, as a lower proportion of Douglas First Salt Timber was harvested in the current year period.

Douglas M. Long: The year over year decrease was driven by lower harvest volumes and lower net stumpage realizations.

Douglas M. Long: Volumes decreased 17% in the first quarter as compared to the prior year period.

Douglas M. Long: The large decision we completed in Oregon during late 2023.

Douglas M. Long: At $84 per ton average delivered domestic solid pricing in the first quarter fell 9% from the prior year period.

Douglas M. Long: Due to a combination of weaker demand from domestic lumber mills reduced export market tension and an unfavorable species mix as a lower proportion of Douglas fir sawtimber was harvested in the current year period.

Douglas M. Long: Meanwhile, at $29 per ton, pulpwood pricing appears to stabilize. However, it was down 39% versus a prior year comp that benefited from exceptionally favorable supply-demand dynamics for pulpwood innovation. The Pacific Northwest log market has faced headwinds in the form of both soft domestic lumber markets and limited demand for log exports to start the year. However, we are optimistic that demand has bottomed and is poised to improve over the course of 2024 as we have seen mill inventories normalize. Moving to New Zealand.

Douglas M. Long: Meanwhile, at $29 per ton pulpwood pricing appears to stabilize those down three 9% versus the prior year comp that benefited from exceptionally favorable supply demand dynamics for pulpwood in the region.

Douglas M. Long: Okay.

Douglas M. Long: The Pacific Northwest log market has faced headwinds in the form of both soft domestic lumber markets and limited demand for log exports to start the year. However.

Douglas M. Long: However, we are optimistic that the man has bottomed and is poised to improve over the course of 'twenty 'twenty four as we have seen mill inventories normalize in recent weeks.

Douglas M. Long: Page 10 shows results and key operating metrics for our New Zealand timber sector. Adjusted EBITDA in the first quarter of $11 million was $5 million above the prior quarter. The increase in adjusted EBITDA compared to the prior year period is primarily driven by higher carbon credit sales and favorable foreign exchange impact, partially offset by a lower net stumba driller. Average delivered export salt prices of $109 per ton declined 4% compared to the prior quarter as demand continues to be constrained by ongoing challenges in China's property sector.

Douglas M. Long: Moving to New Zealand.

Douglas M. Long: Page 10 shows results and key operating metrics Barneys Yolande timber segment adjusted.

Douglas M. Long: Adjusted EBITDA in the first quarter of $11 million was $5 million above the prior year quarter.

Douglas M. Long: The increase in adjusted EBITDA compared the prior year period was primarily driven by higher carbon credit sales and favorable foreign exchange impacts.

Douglas M. Long: Partially offset by lower net stumpage realizations.

Douglas M. Long: Average delivered export sawtimber prices of $109 per ton declined 4% compared to the prior year quarter as demand continues to be constrained by ongoing challenges in China's property sector.

Douglas M. Long: While improving seasonally following the Lunar New Year, offtake from Chinese ports has remained relatively subdued at approximately 70,000 cubic meters per day. However, softwood log inventories at Chinese ports are currently 9% below year-ago levels at roughly 3.9 million cubic meters. In response to the ongoing weakness in construction activity, we have seen many exporters reduce log shipments into China. In turn, we anticipate log inventories are poised to decline over the course of the second quarter, which you expect will lead to more favorable pricing conditions in the second half.

Douglas M. Long: While improving seasonally following the lunar new year offtake from Chinese ports has remained relatively subdued at approximately 70000 cubic meters per day.

Douglas M. Long: However, softwood log inventories at Chinese ports are currently 9% below year ago levels at roughly $3 9 million cubic meters.

Douglas M. Long: Our response to the ongoing weakness in construction activity, we have seen many exporters reduced log shipments into China.

Douglas M. Long: In turn we anticipate log inventories are poised to decline over the course of the second quarter, which we expect will lead to more favorable pricing conditions in the second half of the year.

Douglas M. Long: Shifting to New Zealand domestic, the first quarter average delivered solid prices of about 5% from the prior year period, or 3% when excluding foreign exchange impact. The decline in pricing reflects continued challenges facing the local construction market amid a higher interest rate environment, as well as reduced competition from the expo. First quarter non-timber income in New Zealand of $4 million increased $3 million relative to the prior year period.

Douglas M. Long: Shifting to the New Zealand domestic market.

Douglas M. Long: First quarter average delivered solid prices fell 5% from the prior year period or 3% when excluding foreign exchange impacts.

Douglas M. Long: The decline in pricing reflects continued challenges facing the local construction market amid a higher interest rate environment as well as reduced competition from the export market.

Douglas M. Long: First quarter non timber income in New Zealand, a $4 million increased $3 million relative to the prior year period.

April J. Tice: The year-over-year increase reflects higher carbon credit sales in the current year period as we temporarily suspended our sales program in early 2023 amid significant market volatility. We anticipate that we will remain active in the New Zealand car market over the course of 2024, as pricing remains healthy from a historical standpoint, albeit down in recent weeks as compared to the beginning of the year. Lastly, in our training segment, we registered a break-even result in the first quarter.

Douglas M. Long: The year over year increase reflects higher carbon credit sales in the current year period as we temporarily suspended our sales program in early 2023 and had significant market volatility.

April J. Tice: We anticipate that we will remain active and then as your own car market over the course of 'twenty 'twenty four.

April J. Tice: Pricing remains healthy from a historical standpoint, albeit down in recent weeks as compared to the end of the year.

April J. Tice: Lastly, in our trading segment.

April J. Tice: The restaurant a breakeven result in the first 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.

April J. Tice: As a reminder, our trading activities typically generate low margins and are primarily designed to provide additional economies of scale to our fee-timber expectations. I'll now turn it back over to April to cover a real example. Thanks, Doug. As detailed on page 11, the contribution from our real estate segment during the first quarter was relatively light, consistent with our expectations entering the year. Real estate revenue totaled $16 million, including roughly 1,900 acres sold at an average price of $5,800 per acre.

April J. Tice: I'll now turn it back over to April to cover our real estate results.

April: Thanks, Doug.

April J. Tice: As detailed on page 11, the contribution from our real estate segment during the first quarter with relatively light consistent with our expectations entering the year real estate revenue totaled $16 million, including roughly 1900 acres sold at an average price of $5800 per acre real estate.

April J. Tice: The real estate segment adjusted EBITDA in the first quarter was $5 million. Drilling down, sales in the improved development category totaled $2 million and were driven by two transactions in our Heartwood development project south of Savannah, Georgia. The Heartwood sales consisted of a 3.1-acre multi-tenant retail parcel for $1 million, or $321,000 per acre, as well as 18 residential lots for $800,000, reflecting an average base price of approximately $46,000 per lot. While the first quarter was relatively light in terms of closing activity, we continued to see favorable momentum at both of our development projects. In February, the St. Joseph Candler Health Care System opened the initial phase of its Health and Wellness Campus at Hartwood.

Speaker Change: <unk> segment adjusted EBITDA in the first quarter with $5 million.

April J. Tice: Drilling down sales in the improved development category totaled $2 million and were driven by two transactions in our heartwood development project South of Savannah, Georgia.

April J. Tice: <unk> sales consisted of a 3.1 acre multi tenant retail parcel for $1 million or $321000 per acre as well as 18 residential lots for $800000, reflecting an average base price of approximately $46000 per lot.

April J. Tice: While the first quarter was relatively light in terms of clothing activity. We continue to see favorable momentum at both of our development projects in February the Saint Joseph Candler Health care system opened the initial phase of its health and wellness campus at Heartwood. This was an important milestone and as.

April J. Tice: This was an important milestone, and as we move forward, we expect that Hartwood's diverse mix of residential, commercial, and industrial end uses will serve to further catalyze demand. In wildlife, home builder interest in the next phase of development has continued to increase. We expect initial sales over the next year within the 15,000-acre area that we received entitlement improvement for in November. Overall, we continue to see a tremendous runway for both our wildlife and Hartwood development projects going forward. Turning to the rural category, first quarter sales totaled $9 million, consisting of approximately 1,500 acres at an average price of roughly $5,800 per acre.

April J. Tice: We move forward, we expect that heartwood step first mix of residential commercial and industrial end users will serve to further catalyze demand and wildlife homebuilder interest in the next phase of development has continued to increase we expect initial sales over the next year within the 15000 acres.

April J. Tice: Area that we received entitlement improvement for in November overall, we continue to see a tremendous runway for both our wildlife and heartwood development projects going forward.

April J. Tice: Key transactions during the quarter included the sale of 409 acres in Texas for $2.3 million, or over $5,500 per acre, as well as the sale of two properties totaling 364 acres in South Carolina for a total of $1.4 million, or nearly $3,800 per acre. Overall, demand from prospective buyers for rural lands remains healthy, and we expect a larger contribution from these sales as we move through the balance of the year. While interest in smaller tracts has moderated somewhat amid the current interest rate environment, demand for larger tracts remains strong.

April J. Tice: Turning to the rural category.

April J. Tice: First quarter sales totaled $9 million, consisting of approximately 1500 acres at an average price of roughly $5800 per acre.

April J. Tice: Key transactions during the quarter included the sale of 409 acres in Texas for $2 $3 million or over $5500 per acre.

April J. Tice: As well as the sale of two properties totaling 364 acres in South Carolina for a total of $1 $4 million or nearly $3800 per acre.

April J. Tice: Overall demand from prospective buyers unrolled lands remains healthy and we expect a larger contribution from these sales as we move through the balance of the year, while interest in smaller tracks has moderated somewhat amid a current interest rate environment demand for the larger tracks remains strong in addition.

April J. Tice: In addition, we have recently seen growing interest among conservation and impact-oriented buyers looking to place capital. Lastly, during the quarter, we also closed on a 430-acre non-strategic timberland sale in Louisiana for roughly $600,000, or $1,400 per acre.

April J. Tice: We have recently seen growing interest among conservation and impact oriented buyers looking to place capital.

April J. Tice: Lastly, during the quarter. We also closed on a 430 acres of non strategic timberland sale in Louisiana for roughly $600000 or $1400 per acre.

April J. Tice: Now moving on to the outlook for the balance of 2024. Based on our first quarter results and our expectations for the remainder of the year, we are on track to achieve our prior full year adjusted EBITDA guidance of $290 to $325 million. As a reminder, our guidance excludes the potential impact of any additional asset sales as part of our previously announced $1 billion disposition target. With respect to our individual segments, in our southern timber segment, we expect to achieve our full-year volume guidance, but following strong harvest activity at the start of the year, we anticipate lower quarterly volumes for the remainder of the year. Furthermore, we anticipate that pine stumpage realizations will decrease modestly over the remainder of the year due to a less favorable geographic mix and a relatively higher proportion of thinning volume.

Speaker Change: Now moving on to the outlook for the balance of 'twenty 'twenty four.

April J. Tice: Based on our first quarter results and our expectations for the remainder of the year. We are on track to achieve our prior full year adjusted EBITDA guidance of $290 million to $325 million.

April J. Tice: As a reminder, our guidance excludes the potential impact of any additional asset sales as part of our previously announced $1 billion disposition target.

April J. Tice: With respect to our individual segments and our southern timber segment, we expect to achieve our full year volume guidance, but following strong harvest activity to the start of the year, we anticipate lower quarterly volumes for the remainder of the year.

April J. Tice: Further we anticipate that pine stumpage realizations will decrease modestly over the remainder of the year due to a less favorable geographic mix and a relatively higher proportion of thinning volume.

April J. Tice: Lastly, we remain encouraged by the momentum in our land-based solutions business, and we continue to expect higher non-timber income for the full year 2024 relative to the full year 2023. In our Pacific Northwest Timber Segment, we remain on track to achieve our full year volume guidance, as we expect harvest volumes to increase during the second half of the year. We believe that market conditions have stabilized and anticipate that end market demand will improve modestly over the course of the year given the continued favorable dynamics in single-family construction activity.

April J. Tice: Lastly, we remain encouraged by the momentum in our land based solutions business and we continue to expect higher non timber income for the full year 2024 relative to the full year 2023.

April J. Tice: In our Pacific Northwest timber segment, we remain on track to achieve our full year volume guidance as we expect harvest volumes to increase during the second half of the year.

April J. Tice: We believe that market conditions have stabilized and anticipate that end market demand will improve modestly over the course of the year given the continued favorable dynamics in the single family construction activity. We further expect weighted average levered log prices will increase modestly into the second half of the year as log.

April J. Tice: We further expect weighted average delivered log prices to increase modestly into the second half of the year as log inventories at mills continue to normalize. In our New Zealand Timber segment, we are on track to achieve our full-year volume guidance as we anticipate higher quarterly harvest volumes for the remainder of the year. We expect weighted average log prices to decline modestly in the near term before rebounding in the second half of the year as the inventory to demand ratio normalizes.

April J. Tice: Tories at Mills continue to normalize.

April J. Tice: And our New Zealand timber segment, we are on track to achieve our full year volume guidance as we anticipate higher quarterly harvest volumes for the remainder of the year we.

April J. Tice: We expect weighted average log prices to decline modestly in the near term before rebounding in the second half of the year as the inventory to demand ratio normalizes.

Mark D. McHugh: Following the recent pullback in carbon credit pricing, we now anticipate the full-year contribution from carbon credit sales to be comparable with the prior year. In our real estate segment, we remain on track to achieve our prior adjusted EBITDA guidance following a relatively light first quarter, as our full-year pipeline of transactions remains strong. Consistent with our prior guidance, we expect a significant uptake in transaction volume and operating results in the second quarter. I'll now turn the call back to Mark for closing comments. Thanks, April.

April J. Tice: Following the recent pullback in carbon credit pricing, we now anticipate the full year contribution from carbon credit sales to be comparable with the prior year.

Mark D. McHugh: And our real estate segment, we remain on track to achieve our prior adjusted EBITDA guidance. Following a relatively light first quarter as our full year pipeline of transactions remained strong.

Mark D. McHugh: Consistent with our prior guidance, we expect just a significant.

Mark D. McHugh: <unk> uptake in the transaction volume and operating results in the second quarter.

Mark D. McHugh: I'll now turn the call back to Mark for closing comments.

Mark D. McHugh: As we wrap up today's call, I'd like to recognize the extraordinary efforts of our team during what has been an incredibly busy period of time for our entire organization. Amid challenging market conditions, our team has worked diligently to make value-optimizing decisions throughout our operations, while also advancing several important strategic initiatives. As we move through the remainder of the year, we are optimistic the continued favorable dynamics for single-family housing, higher operating rates for many of our pulpwood customers, and lower log inventories in China will translate to improving fundamentals in our timber industry.

Mark: Thanks April as we wrap up today's call I'd like to recognize the extraordinary efforts of our team during was what has been an incredibly busy period of time for our entire organization.

Mark D. McHugh: Challenging end market conditions. Our team has worked diligently to make value optimizing decisions throughout our operations. While also advancing several important strategic initiatives.

Mark D. McHugh: As we move through the remainder of the year. We are optimistic the continued favorable dynamics for single family housing higher operating rates for many of our pulpwood customers and lower log inventories in China will translate to improving fundamentals in our timber segments on.

Mark D. McHugh: On the real estate front, we've been pleased by the continued strong demand for our rural land and development properties, despite the higher interest rate environment. We are especially excited to start executing on new opportunities in wildlife, stemming from the entitlements that our team secured last November. We've also continued to make progress on our land-based solutions. Specifically, we've increased the number of acres we have under lease for carbon capture and storage to 70,000 acres as of today, up from 59,000 acres at the time of our investment.

Mark D. McHugh: On the real estate front, we've been pleased by the continued strong demand for our rural land and development properties. Despite the higher interest rate environment, we were especially excited to start executing on new opportunities and wildlife stemming from the entitlements that our team secured last November. We've also continued to make progress in our land based solutions business, specifically, we've increased the number of acres.

Mark D. McHugh: As we have under lease for carbon capture and storage. The 70000 acres as of today up from 59000 acres at the time of our Investor Day. In addition, we now have 33000 acres under option for solar development up from 27000 acres at the end of 2023 as we've expanded our pipeline of opportunities in land based solutions, we continue to focus on work.

Mark D. McHugh: In addition, we now have 33,000 acres under option for solar development, up from 27,000 acres at the end of 2022. As we've expanded our pipeline of opportunities and land-based solutions, we've continued to focus on working with high-caliber counterparties that we believe will ultimately see a stronger conversion rate to operations. All said, I'm very proud of how we've worked together to effectively manage through some difficult market conditions while also advancing these important strategic initiatives.

Mark D. McHugh: With high caliber Counterparties that we believe will ultimately see a stronger conversion rate to operational facilities. All said I'm very proud of how we work together to effectively manage through some difficult market conditions. While also advancing these important strategic initiatives.

Mark D. McHugh: In closing, I'd further like to thank our board, as well as our recently retired CEO, Dave Nunes, for guiding us through a smooth leadership transition process over the past two years. Their collective efforts helped ensure that the organization didn't skip a beat amid a very dynamic market environment. Lastly, I also want to take a moment to recognize the significant contributions of our Board Chair, Dodd-Fraser, who will be retiring from our Board in May. Dot has served on the board of Rayonier since the 2014 spinoff of the performance fibers business, including as chair for the past four years, as well as as audit chair for the prior six.

Mark D. McHugh: In closing I further like to thank our board as well as our recently retired CEO, Dave Nunez for guiding us through a smooth leadership transition process over the past two years their collective efforts helped ensure that the organization didn't skip a beat amid a very dynamic market environment. Lastly, I also want to take a moment to recognize the significant contribution.

Operator: Throughout this time, he's demonstrated impeccable leadership, dedication, and judgment. On behalf of the board and the entire company, I want to thank Dodd for his invaluable contributions to the governance of Rayonier and wish him well in his future endeavors. That concludes our prepared remarks, and I'll now turn the call back to the operator for questions. Thank you, sir. At this time, if you do have any questions or comments, you may press star 1. You may also press star 2 to withdraw your questions.

Operator: Our board Chair, Dod Frazier, who will be retiring from our board in May.

Operator: <unk> has served on the board of Ranier since the 2014 spinoff of the performance fibers business, including as chair for the past four years as well as audit chair for the prior six years throughout this time, he's demonstrated impeccable leadership dedication and judgment on behalf of the board and the entire company I want to thank Don for his invaluable contributions the <unk>.

Operator: Governments of Rainier and wish him well in his future endeavors.

Operator: That concludes our prepared remarks, and I'll now turn the call back to the operator for questions.

Operator: Thank you Sir at this time, if you do you have any questions or comments you May Press Star. One you May also press star two to withdraw your question one moment. Please for the first question.

Operator: One moment, please, for the first question. Ketan Mamtora, with BMO Capital Markets, you may go ahead. Thank you, and good morning.

Ketan Mamtora: Keeping mentor with BMO capital markets you May go ahead.

Ketan Mamtora: Oh, Thank you and good morning.

Ketan Mamtora: Perhaps we'll start with... Mark, can you talk a little more about the progress on the land-based solution side? As you look at, you know, you talked about solar, you talked about CCS, as you think about the next two, three, five years, where do you think, sort of, from your standpoint, you see the most opportunity? And how should we sort of think about when this starts to have an impact on EBITDA? Sure, this is Doug.

Ketan Mamtora: Well I have to start with.

Ketan Mamtora: Mark can you talk a little bit more about you know some of the progress on the land based solution side. As you look at you know you talked about how you talk about Ccs as you.

Ketan Mamtora: You think about next door three five years, where do you think sort of you know from your standpoint, you'll see the most opportunity and and how should we sort of think about when this starts to have an impact on EBITDA.

Douglas M. Long: I'll start off with that. So, you know, as we laid out at our investor day, we talked about kind of a process here with respect to getting this pipeline built out in our land-based solutions, particularly on the CCS side of things, as well as solar. And then there's that, you know, depending on what it is, a multi-year project to get it permitted and get it into the grid, if it's solar, and then to get it built.

Ketan Mamtora: Sure. This is Doug I'll I'll stop with that so now as we laid out at our Investor day, we talked about kind of as a process here with respect to them getting these the pipeline built out Orlando solutions, particularly on the Ccs side of things as well as the the solar and then there's that's you know depending on what it is a multi year project to get it permitted and get it in.

Douglas M. Long: And to the into the grid if its a solar and then they get it built so we are building that out as we talked about and very very happy where we're at on those and I'll talk about kind of progress each of those in a second but when it comes to delivering on those things as we mentioned at Investor day, there's kind of incremental steps, which is why we put out kind of the interim targets to share with that so we see that building, but there is gonna be a slight delay.

Douglas M. Long: So we are building that out, as we talked about, and we are very, very happy with where we are on those. And I'll talk about progress on each of those in a second. But when it comes to, you know, delivering on those things, as we mentioned at investor day, there's kind of these incremental steps, which is why we put out kind of the interim targets to share with that. So we see that building, but there is going to be a slight delay as we get these in the pipeline, which we do recognize, you know, option values and lease payments at that point in time.

Douglas M. Long: As we get these in the pipeline, which would you recognize you know option values and lease payments that point in time, but it's really the point in time when they start to produce either power or we sequester carbon where we'll see the real benefit of those hit in and we see that still kind of in that three to five year time horizon.

Douglas M. Long: But it's really the point in time when these start to produce either power, or we sequester carbon, where we'll see the real benefit of those hit in, and we see that still kind of in that three to five year time horizon.

Douglas M. Long: Yes.

Douglas M. Long: We did lay out you know our targets at our Investor Day back in February you know $75 million of adjusted EBITDA by 2030, and that interim target that Doug referenced of $30 million by 2027. We've also started to breakout our land based solutions contribution.

Douglas M. Long: And Ketan, we did lay out, you know, our targets at our investor day back in February, you know, $75 million of Jet City Bida by 2030 and that interim target that Doug referenced of $30 million by 2027. We've also started to break out our land based solutions contribution in our southern timber segment detail in our supplement, just so you know, investors can start to track our progress against those targets. Yeah, what I would say is that we're seeing really strong interest in both those areas. On the carbon capture and storage, that market continues to grow for us.

Douglas M. Long: And in our southern timber.

Douglas M. Long: Segment detail in our supplement just so you know investors can start to track our progress against those targets.

Douglas M. Long: Yeah, well, what I would say that we're seeing really strong interest in both those areas on the carbon capture storage that Mark just continues to grow for us and we're seeing just a lot of interest from other people, we start off in the oil and gas industry, but really start to see more interest broader from them utilities pulp and paper industries.

Douglas M. Long: And we're seeing, you know, just a lot of interest from other people. We started off in the oil and gas industry, but we're really starting to see more interest from utilities, pulp, and paper industries. We have our pipeline of projects is really strong. And we're advancing multiple large-scale opportunities across the south that we think will meaningfully contribute towards our goals in 2024. Mark mentioned that we've increased our actual lease acres up to 70,000 acres in his comments, and we're actively in exploration discussions on an additional 200,000 acres with several other companies.

Douglas M. Long: Our pipeline of projects is really strong and we're advancing multiple large scale opportunities across yourself, and we think will meaningfully contribute towards our goals in 2024.

Douglas M. Long: Mark mentioned that we've increased our our actual lease acres up to 70000 acres in his comments.

Douglas M. Long: And we're actively in exploration discussions on additional 200000 acres with several other companies. So we feel good about the progress, we're making our carbon capture storage.

Douglas M. Long: So we feel good about the progress we're making in our carbon capture storage. And on the solar side of things, I'm also really, really happy with the progress we're seeing there. So our pipeline project, again, is really strong and growing. We now have over 33,000 acres under option for solar development, which is up from 27,000 at the end of 2023. And we're on track to achieve our year-end objective of having 50,000 acres under options.

Douglas M. Long: And on the solar on the solar side of things also really really happy with the progress we're seeing there. So our pipeline projects again is really strong and growing we now have over 30 33000 acres under option for solar development, which is up from 27000 at the end of 2023, and we're on track to achieve our year and objective, having 50000 acres under under options and were advancing.

Douglas M. Long: And we're advancing quite a few multiple large-scale solar relationships across the South, and we think those will contribute meaningfully over the next few years as we go forward. And what we're really excited to see is that some of the ISOs, those independent system operators for regional transmissions. They've started to implement interconnection queue reforms with the goal of ensuring that projects that are going to basically have a high-level success get brought up in the queue.

Douglas M. Long: Quite a few multi multiple large scale solar relationships across the south and we think that will contribute meaningfully over the next few years as we go forward and we're really excited to see is that some of the isos independent system operators for the regional transmissions, they've started to implement and Ah interconnection queue reforms with the goal of ensuring that projects.

Douglas M. Long: We're going to basically have a high level success get brought up in the queue and as in the past we talked about we've seen where there's been a lot of projects clogging of Q and some of US had low probably success and we're seeing reforms to help with that and we believe that our focus on working with high quality Counterparties, who are in a lot of cases, the utility companies themselves that will help speed that process up and move us up the Qs we do.

Douglas M. Long: And so in the past, we've talked about, we've seen where there are a lot of projects clogging the queue, and some of those have a low probability of success. And we're seeing reforms that help with that. And we believe that our focus on working with high-quality counterparties, who are, in a lot of cases, the utility companies themselves, will help speed that process up and move it up the queue.

Douglas M. Long: So we do believe that that will bring some of these forward. And we've seen one of those projects kind of moving forward, and we believe it will be under construction this year. And just on solar, are you looking mostly at leased land or are you also looking at outright sale? And this is just specific to solar. Yes, Civic Solar.

Douglas M. Long: And believe that that will bring some of these board and we've seen one of those projects kind of moving forward and we believe we'll be under construction this year.

Speaker Change: Got it that's very helpful and just one on solar.

Douglas M. Long: Looking at mostly to lease land or are you also looking at outright sale and this was just specific to solar.

Douglas M. Long: We're particularly looking at the leasing opportunity. We believe that's the best option for us from a financial standpoint, as well as we find a lot of our customers also find it favorable not to put that much capital up front. So it's worked out to be a good solution for most of our customers. And then just switching to, you know, just China, you talked about sort of offtake, a little bit slower, you know, curious kind of to see, you know, in terms of just activity level, have you seen sort of things pick up at all? Or is it, you know, sort of, pretty similar? Any more color there?

Civic Solar: Yes, civic solar we're particularly looking at the at the leasing opportunities. We believe that's the best option for us from financial standpoint, as well as we're finding a lot of our customers also find that verbal knocks without high capital upfront. So its worked out to be a good solution for most of our customers.

Douglas M. Long: Understood and then just switching to you know just China.

Douglas M. Long: You talked about sort of all I'll take us a little bit slower you know curious kind of to see you know in terms of just activity level have you seen things pick up at all is it.

Douglas M. Long: Pretty similar and any more color there.

Douglas M. Long: Sure, this is Doug again. I'll grab on to that one also. So, yeah, the economy's coming out of the Lunar New Year relatively strong. That hasn't really spread to the property sector yet, but we have seen with that GDP running over 5%. We're seeing strength in areas like infrastructure and manufacturing, and exports are recovering also, which is really positive for the packaging industry, as well as for furniture exports. We saw those increase by over 25% year over year in the first quarter. So we're seeing growth in a lot of areas, and these trends tend to favor Radiata, particularly from New Zealand, due to the wood qualities there.

Douglas M. Long: Sure. This is Doug again, I'll I'll I'll grab on that one also so yes economies come out of the lunar new year is grown relatively strong now that hasnt really spread in the property sector, yet, but we have seen what that GDP running over 5%, we're seeing strength in areas like the infrastructure and manufacturing and exports are recovering also which is really positive for the packaging industry as well as.

Douglas M. Long: The furniture exports casinos increased by over 25% year over year in the first quarter. So we're seeing growth in lot of areas.

Douglas M. Long: These trends tend to favor radiata, particularly from New Zealand due the wig qualities. There. So it's a very versatile virtual product.

Douglas M. Long: So it's a very versatile product, and while we saw relatively strong pricing at the start of the year, that was due to low port stocks that came in. And so we were pleased with that. But then Chinese New Year came along, and we saw that kind of build back up. So going into the year, we were at an inventory to demand ratio below 1.5 months, which historically yields strong prices, and we saw that. But during the Lunar New Year, it built up to over four million cubic meters at the ports.

Speaker Change: And while we saw relatively strong pricing at the start of the year that was due to low port stocks that came into there and so we're pleased with that but then the Chinese new year came along and we saw that kind of built back up so going into the year. We were at our inventory to demand ratio below 1.5 months, which historically yields on strong pricing and we saw that but through the lunar new year built up to over 4 million cubic meters.

Douglas M. Long: At the ports and we're happy to say, though that at the end of April it's dropped down below $3 9 million cubic meters and where we're seeing off takes in the 40 to 60000 cubic meters per day.

Douglas M. Long: And we're happy to say, though, that at the end of April, it's dropped down below 3.9 million cubic meters. And where we were seeing offtakes in the 40 to 60,000 cubic meters per day range, kind of over the first quarter of the year, we're now seeing that offtake up from 70 to 80,000 in the last couple of weeks. And so that inventory-to-demand ratio has fallen back below two months, which has historically led to that upward pressure on prices.

Douglas M. Long: First quarter year, we're now seeing them that off take up in the 70 to 80000 recently in the last couple of weeks.

Douglas M. Long: So the inventory demand ratio has fallen back below two months, which again historically has led to that upward pressure on prices.

Douglas M. Long: And we're seeing a lot of increase in shipping costs from the rest of the world. You know, don't have to talk about that too much; probably most people understand that, particularly from Europe. And so we think that both log and lumber supply will be constrained over the coming months. So that's why our comments; we believe that we've kind of seen the build-up, but that's drawing down, and we're seeing increased off-take with less input coming in, so we have seen that inventory ratio drop below 2. So we believe that will lead to improved pricing and demand going forward, particularly for radio-op-on. No, that's very helpful.

Douglas M. Long: And we're seeing a lot of increase in shipping costs from us from the rest of the world. Yeah. So I'll talk about that too much by most people understand that particularly from Europe, and so we think that both log and lumber supply will be constrained in the coming months. So that's why our comments, we believe that we've kind of seen the buildup, but that's drawing down and we're seeing increased offtake with less input coming in so we have seen that inventory ratio dropped below.

Douglas M. Long: So we believe that will lead to improve pricing and demand going forward, particularly for rate upon.

Speaker Change: Got it no that's very helpful I'll jump back in the queue. Good luck.

Ketan Mamtora: I'll jump back in the queue. Good luck. Thank you. Our next caller is Matthew McKellar with RBC Capital Markets. You may go ahead. Hi, good morning.

Douglas M. Long: Thank you our next caller is Matthew Mckellar with RBC capital markets. You May go ahead Sir.

Matthew McKellar: Thanks for taking my questions. First, does weak southern yellow pine lumber pricing represent a potential risk to your outlook for harvest volumes in the U.S. South this year? Yeah, this is Doug again.

Matthew McKellar: Hi, good morning, Thanks for taking my questions.

Matthew McKellar: Good morning, this week southern yellow pine lumber pricing.

Matthew McKellar: Represent a potential risk to your outlook for harvest volumes in the U S. Silica is here.

Douglas M. Long: I'll cover that. Yeah, you know, it's always hard to predict exactly how things are going to work out with respect to that. But what we've seen is that operating rates for pulp customers have really picked up over the year, too, so we have that ability to flex between. As we did last year, we flexed more towards lumber and saw logs. And this year, we're seeing a lot of demand, basically, on the pulp side, as well as still continuing demand on our log side.

Matthew McKellar: Yeah. This is Doug and I'll cover that yeah, you know, it's always hard to predict exactly how things are going to work out with respect to that but what we've seen is that operating rates for pulp wiccans customers have really picked up over the over the year. Two so we have the ability to flex between as we did last year, we we flex more towards towards lumber and saw logs and this year, we're seeing a lot of.

Douglas M. Long: A lot of demand basically on the pulp side as well as still continuing demand on our our alongside so we're pleased to see that the operating rates for our pulp customers have moved from the mid Seventy's up in the low nineties now so we're really seeing increased demand there. It seems like most of that are the closures and economic downtime that followed that post COVID-19 I'm, sorry, you're stocking cycle or over and that we've seen again.

Douglas M. Long: So we're pleased to see that the operating rates for pulp customers have moved from the mid-70s up into the low 90s now. So we're really seeing increased demand there. It seems like most of the closures and economic downtime that followed that post-COVID inventory stocking cycle are over, and that we've seen these increases in prices.

Douglas M. Long: So we're still seeing strong demand on the pulp side, and while we have seen some weakness on the lumber side, overall, the mills are still running, and we see that demand. So it's hard to say exactly how that would look.

Douglas M. Long: Creases in pricing so we're still seeing strong demand on the pulp side and what we have seen some weakness in the lumber side overall, we're still in the mills are still running you know still running and we see that demand. So it's a it's hard to say exactly how that would look where the ability to flex between those two so we still believe we're comfortable as we put in our outlook on our removals.

Douglas M. Long: We have the ability to flex between those two. So we still believe we're comfortable as we put our outlook on our removal. Matthew, I think we also believe that that, you know, price divergence that we've seen is likely going to tighten. I mean, we just haven't, it's pretty unprecedented the disconnect that we're seeing right now between SYP and SPF lumber prices.

Douglas M. Long: Yeah, Matthew I think we also believe that that price divergence that we've seen is likely going to tight I mean, we just havent, it's pretty unprecedented that disconnect that were seeing right now between S. Y P. S. P F <unk> lumber prices and so our expectation is that we'll start to converge as the year progresses.

Douglas M. Long: And so our expectations that will start toconverge as the year progresses. Yeah, absolutely. One of the things we've seen is that, particularly in the repair and remodel, there's been some weakness for those higher grade saw logs that are usually destined for treating facilities. And so that's where we've seen some of the weakness to date.

Douglas M. Long: But overall, we've still seen reasonable demand. Great, that's helpful. Thanks very much.

Speaker Change: Yeah absolutely.

Douglas M. Long: Once the one thing we've seen is that particularly in the repair and remodel theres been some weakness for this higher grade saw logs, they're duston, usually for treating facilities since that's where we've seen some weakness to date, but overall, we still seeing reasonable demand.

Matthew McKellar: Next, I was wondering if you could just provide a bit more color on how you're thinking about your evaluation of strategic options for the New Zealand business at this point. I think you talked about that process potentially taking a little while due to the JV governance structure. So my question would be how you proceed with that process or evaluate your options that are contingent on the outcomes of the Washington state sale and any potential sales processes you might run on 100,000 plus acres you've identified as suitable for disposition in the U.S. so far?

Douglas M. Long: Great. That's helpful. Thanks very much.

Matthew McKellar: Next I was wonder if you could just provide a bit more color on how youre thinking about your evaluation of strategic options for the New Zealand business. At this point I think you've talked about that process potentially taking a little while to get the JV governance structures. So.

Matthew McKellar: My question would be is how you proceed with that process or evaluate your options are contingent on the outcomes of the Washington State sale and any potential sales process as you might run out of 100000 plus acres, you've identified as suitable for disposition in the U S up.

Matthew McKellar: Yeah, I guess the way that we're approaching that, Matthew, is that we're really looking at, you know, structuring a number of different options that would ultimately get us to that $1 billion disposition target. We haven't sort of laid out one specific path that gets us there, but really assessing a number of different options, various combinations of which could ultimately get us to that $1 billion target.

Speaker Change: Yes, I guess the way that we're approaching that Matthew is that we're really looking at.

Matthew McKellar: Structuring a number of different options that would ultimately get us to that $1 billion disposition target, we haven't sort of laid out a one specific path that gets us there, but really assessing a number of different options various combinations of which could ultimately get us to that $1 billion target as it relates to the New Zealand specifically you know as we noted in our in there.

Mark D. McHugh: As it relates to New Zealand specifically, you know, as we noted in our release, we've engaged a financial advisor to assist with an evaluation of strategic alternatives there. As part of that process, one of the alternatives that we will consider is exiting our position in New Zealand. I can't really comment beyond that at this point. But, you know, again, we have entered into that process in earnest, and we expect that we'll have further updates in the next couple of quarters. Okay, thanks for that.

Mark D. McHugh: At least we've engaged a financial adviser to assist with an evaluation of strategic alternatives. There as part of that process. One of the alternatives that we will consider us exiting our position in New Zealand.

Mark D. McHugh: Can't really comment beyond that at this point, but again, we are we have entered into that processing and in earnest and we expect that we'll have further updates in the up in the next couple of quarters.

Mark D. McHugh: Yeah.

Matthew McKellar: And then last one for me, just on carbon credit prices in New Zealand. It sounds like you've tempered your expectations there slightly with prices trending lower over the past couple of months. Can you talk about what you think has driven prices lower and what your expectations would be for prices for the balance of the year?

Speaker Change: Okay. Thanks for that and then last one for me just on carbon credit prices in New Zealand. It sounds like you've tempered your expectations there slightly with price is trading lower over the past couple of months can you talk about what you think has driven prices lower and what your expectations would be for prices for the balance of the year.

April J. Tice: Yeah, as we detail in our supplement, we sold about $3.4 million worth of carbon credits in New Zealand in the first quarter, and that's relative to zero in Q1 2023. Recall that we elected to defer NZU sales in early 2023 due to the significant volatility that we were seeing in the carbon market, and that we ultimately ended up resuming sales later in the year as the market recovered. So we've continued to be opportunistic as it relates to how we've approached carbon credit sales in New Zealand.

Speaker Change: Yes, it was as we detail our supplement we sold about $3 $4 million worth of carbon credits in New Zealand in the first quarter and that's relative to to zero in Q1 2023.

April J. Tice: Recall that we elected to defer NZ use sales in early 2023 due to the significant volatility that we're seeing it in the carbon market now we ultimately ended up resuming sales later in the year as the market recovered.

April J. Tice: So we continue to be opportunistic as it relates to how we've approached carbon credit sales in New Zealand overall, the regulatory backdrop I would say is stabilized relative to last year. The government has indicated that they're not contemplating any significant changes to the etfs and in the near term, which is really driving some of that volatility last year.

April J. Tice: Overall, the regulatory backdrop, I would say, has stabilized relative to last year. The government has indicated that they're not contemplating any significant changes to the ETS in the near term, which was really driving some of that volatility last year.

April J. Tice: That said, the most recent NZU auction failed to reach full subscription, so the pricing has backed up some from where it was at the start of the year. Overall, though, pricing, which has recently been in the range of $50-$60 per unit, is still relatively strong from a historical perspective. So we've continued to be active in that market. Thanks very much. That's all for me. I'll turn it back.

April J. Tice: That said the most recent NZ you auction failed to reach full subscription. So the pricing has backed up some from where it was at the start of the year overall, though pricing, which has recently been in the range of 50 to 60, New Zealand dollars per unit are still relatively strong from an historical perspective. So so we've continued to be to be active in that market.

Speaker Change: Thanks, very much it's all for me and I'll turn it back.

Mark Adam Weintraub: Thank you. Our next caller is Mark Weintraub with Seaport Research Partners. You may go ahead, sir.

April J. Tice: Thank you. Our next caller is Mark Weintraub with Seaport Research partners you May go ahead Sir.

Mark Adam Weintraub: Thank you. So I guess there are sort of two related questions. One is, to the extent that you can provide an update on where you are in the process on the 115,000 acres in the Pacific Northwest and the 100,000 acres in the U.S. South. And then also, though, in conjunction with that, if one of the alternatives for New Zealand that is being considered as the potential exit of the position, I would imagine to get to the billion dollars, that would take you pretty far away, given you've already done the 55,000

Mark Adam Weintraub: Thank you. So I guess, there's sort of two related questions. One is to the extent that you can provide an update on where you are in the process on the 115000 acres of Pacific Northwest and 100000 acres in the U S. South and then also though in conjunction with that if one of the alternatives for New Zealand.

Mark Adam Weintraub: And that is being considered as the potential exit of the the position.

Mark Adam Weintraub: I would imagine to get to that $1 billion you are.

Mark Adam Weintraub: That would take you are pretty far away given you've already done the 55000 acre sale.

Mark Adam Weintraub: And so I'm just sort of trying to understand, would you potentially, and is there a scenario where you might end up selling more than a billion dollars? Or are there ways you're juggling that so that wouldn't happen?

Mark Adam Weintraub: And so.

Mark Adam Weintraub: I'm just sort of trying to understand would you potentially and is there a scenario where you might end up.

Mark Adam Weintraub: Selling more than the 1 billion or more than $1 billion or are there ways, you're juggling that so that wouldnt happen or how should we just.

Mark D. McHugh: Or how should we just think that all through? Yeah, you know, like I said earlier, Mark, we've really laid out a number of different options, any number of combinations of which could ultimately get us to that $1 billion target. Our objective as we sit here today is not to deliberately exceed that target, certainly not as it relates to our capital allocation objectives, in terms of the deleveraging and the return of capital to shareholders, but to recognize that if we do find compelling values in the market for some of these different assets that we're exploring, say, alternatives around, we certainly have the ability to redeploy that capital into acquisitions through like-kind exchanges. And so, you know, the top priority is to achieve the new leverage targets, return capital to shareholders, and then we'll evaluate, you know, how much further beyond that we wish to go.

Mark D. McHugh: I think that all through.

Mark D. McHugh: Yeah, like I said earlier marketing, we've really laid out a number of different options.

Mark D. McHugh: Number of combinations of which could ultimately get us to that $1 billion target or our objective as we sit here today. It is not to deliberately exceed that that targets certainly not as it relates to our capital allocation objectives are in terms of the deleveraging and the return of capital to shareholders, but recognize that if we do find new compelling values and in the market for you.

Mark D. McHugh: Some of these different assets that we are exploring say alternatives around yeah. We certainly have the ability to redeploy that capital into acquisitions through through like kind exchanges and so the top priority is to achieve the new leverage targets are return capital to shareholders and then we'll evaluate them you know how much further beyond that that we wish.

Speaker Change: To go Yeah look as a general matter, we don't comment on M&A until there's a closed transaction or at least a signed contract.

Mark D. McHugh: You know, look, as a general matter, we don't comment on M&A until there's a closed transaction or at least a signed contract. That said, we recognize that there's going to be an elevated level of interest around our disposition plans, given the $1 billion target that we announced last November. You know, we also recognize that there is invariably going to be chatter in the industry regarding assets that we've taken to market or are considering taking to market.

Mark D. McHugh: That said, we recognize that there's going to be an elevated level of interest around our disposition plans given the $1 billion target that we announced last November.

Mark D. McHugh: We also recognize that there is invariably going to be chatter in the industry regarding assets that we've taken to market or considering taking to market. So given these factors, we try to be more transparent and specific around some of the efforts that we currently have underway, but just given that you're still in the evaluation phase on a number of these different potential.

Mark D. McHugh: So, you know, given these factors, we try to be more transparent and specific around some of the efforts that we currently have underway. But just given that you're still in the evaluation phase on a number of these different potential transactions, again, we don't want to comment much more beyond that. Fair enough. But if I heard you right, there's a scenario where you are not prevented from moving forward on doing something in the U.S. until you've sort of decided what you're doing with New Zealand, though.

Mark D. McHugh: <unk> again, we don't want to comment much more beyond that.

Speaker Change: Fair enough, but if I heard you right I mean, there's a scenario where.

Mark D. McHugh: You you are not prevented from moving forward on doing something in the U S until.

Mark D. McHugh: Until you sort of decided what youre doing with New Zealand, though you could do something in the U S. And then ultimately if you were to do something in New Zealand. You May then just repositioned some of those monies to acquire so is that so so again, there's no reason to be thinking you're going to delay making decisions in the U S is that fair.

Mark Adam Weintraub: You could do something in the U.S., and then, ultimately, if you were to do something in New Zealand, you could then just reposition some of those monies to acquire it. So again, there's no reason to be thinking you're going to delay making decisions in the U.S. Yeah, I think that's fair. I mean, look, when we laid out, at the outset of this plan, you know, we laid out two objectives, and they were really to concentrate capital in the markets we think have the most favorable long-term growth prospects and the most favorable cash flow attributes.

Mark Adam Weintraub: Yeah, I think that's fair I mean look when we laid out at the outset of this plan, we laid out two objectives and it was really to concentrate capital are in the market. So we think that had the most favorable long term growth prospects in the most favorable cash flow attributes.

Mark Adam Weintraub: And so, you know, we don't have a billion dollars of assets that I would characterize as non-strategic, but we have a billion dollars worth of assets that we could characterize as less strategic and potentially able to recycle that capital into kind of higher-returning areas or areas in which we feel as though we have a unique ability or opportunity to add value.

Mark Adam Weintraub: So we don't we don't have a $1 billion of assets that I would characterize as non strategic but we have $1 billion worth of assets that we could characterize as less strategic and potentially.

Mark Adam Weintraub: <unk> able to recycle that capital into higher returning areas, where areas of which we feel as though we have a unique.

Mark Adam Weintraub: Ability or opportunity to add value and so you know again, we've identified those properties that we believe are less strategic and will help us to achieve our $1 billion target within the parameters that we've laid out in terms of.

Mark Adam Weintraub: The the features on under which we're kind of evaluating different transactions.

Mark Adam Weintraub: And as we proceed through that as we see you know transaction outcomes, we'll recalibrate, our plans and expectations our thereafter.

Speaker Change: Okay. Appreciate it thanks Mark.

Mark D. McHugh: And so, you know, again, we've identified those properties that we believe are less strategic and will help us to achieve our $1 billion target within the parameters that we've laid out in terms of, you know, the features under which we're kind of evaluating different transactions. And as we proceed through that, as we see, Okay, appreciate it. Thanks, Mark. Thank you. Our next caller is Anthony Pettinari from City. You may go ahead. Good morning; this is Gregory speaking for Anthony this morning.

Speaker Change: Thank you. Our next caller is Anthony Petrone Ari from Citi. You May go ahead.

Gregory: Good morning. This is Greg around forever here. This morning, Austin covered already in the prepared remarks, and Q&A, but I did want to just bring something that.

Anthony James Pettinari: A lot's been covered already in the prepared remarks for Q&A, but I did want to just bring something up that was said in the prepared remarks. I think what was mentioned about southern yellow pine was that there is a significant discount right now between southern yellow pine and other species. So I just was wondering if you could provide a little bit more context on, you know, what other species you're comping southern yellow pine to when you say that, and then, you know, in line for that discount to narrowing like key drivers, and then I want to follow on after that. Sure, this is Doug.

Doug: That was that in the prepared remarks, I think what was mentioned about southern yellow pine was there was a significant discount right now between southern yellow pine and other species. So I just was wondering if you could provide a little bit more context on you know what others do you choose your comping southern yellow pine to when you say that and then.

Doug: Timeline for that discount to narrowing like key drivers and then I had one follow on after that.

Douglas M. Long: I'll, I'll talk about that. So, um, yeah, as Mark mentioned, we do believe this historically unprecedented discount that Pine Lumber is trading at compared to, you know, SPF and other Western grades will eventually correct. And there are a few factors there at play, you know, as you mentioned, there are different species preferences for different end uses, but in the long run, we think we'll see increasing substitution for Sun-Yellow Pine for SPF as the market adjusts to those.

Anthony James Pettinari: Sure. This is Doug I'll I'll talk to that so.

Douglas M. Long: As Mark mentioned, we do believe this historically unprecedented account soon you'll find numbers training compared to U S. P. S. Neither western grades will eventually correct.

Douglas M. Long: And there are a few factors that are at play you know as you mentioned there are different specie preferences and uses but long run we think we will see increasing substitution for southern yellow pine for SPF as the market adapts those in the near term as I mentioned, there is some weakness in repair and remodel activity and that particularly plays out in our higher grade logs and those are going to be used in outdoor and DIY project.

Douglas M. Long: In the near term, as I mentioned, there's some weakness in repair and remodel activity, and that particularly plays out in our higher grade logs. And those are going to be used in outdoor and DIY projects where sun-yield pine is favored for treating and outdoor use. And on top of that, some weaker multifamily construction also plays a role in this. So, spruce is increasingly being utilized in prefabricating trusses and wall panels, as well as engineered wood products, which make up a larger share of the lumber consumption for multifamily or commercial construction compared to single-family construction.

Douglas M. Long: We're selling them upon his favorite for treating an outdoor use.

Douglas M. Long: And on top of that kind of some weaker multifamily construction also plays a role in this southern yellow pine is increasingly being utilized and pre fabricating trusses and wall panels as well as engineered wood products, which make up a larger share of the lumber consumption for multifamily or commercial construction compared to single family construction, but we believe that it's very much can be used in that process and so.

Douglas M. Long: But we believe that, you know, it can be used in that process. And so the market's just going to fill that gap as we think, as we see things, you know, work their way out. And then Canadian tariffs are set to increase from 8% to 14% as we go into the summer. So voters who prefer those Western grades have been more active in buying ahead, basically. And that's particularly true in single-family home construction.

Douglas M. Long: The market is just going to go to fill that gap as we think as we see things work its way out.

Douglas M. Long: And then Canadian tariffs are set to increase from 8% to 14% as we go into the summer so boaters, who prefer those western grades that have been more active buying ahead, basically and that's particularly in a in a single family home construction.

Douglas M. Long: But as we said before, eventually, we believe that builders and other consumers will continue to move towards the value that's presented by Southern Yellow Pine, and these markets will normalize, as we've seen in the past, are a little bit stronger than you're anticipating. Sure. Yeah. So, um, yeah, you're right.

Douglas M. Long: It's as we said before eventually we believe that builders and other consumers will continue to move towards the the value that's presented by southern yellow pine and these markets will normalize that we've seen in the past.

Speaker Change: Okay. That's helpful. Thank you.

Douglas M. Long: And you know just thinking about southern saw like returning to southern saw log pricing in the first quarter.

Speaker Change: You know you called out the year over year decline, but you know I was just looking pricing it looks like it was up about 6% herself from the fourth quarter. So I'm wondering if you can just kind of comment on what drove that increase whether it was mix or the fact that our competitors couldn't bring logs to market.

Douglas M. Long: And then you know how you think that kind of dynamic plays out over the second quarter and then into the second half if lumber off rates are a little bit stronger than you were anticipating.

Douglas M. Long: On a quarter of a quarter basis, we did see improvement in that pricing. And, um, you know, there was some of that due to the wet weather we saw, but also, I think going into the year, there was, you know, some encouraging encouragement in the mills. So we saw, we saw relative strength basically in the sawmills, and going into that.

Speaker Change: Sure Yeah, so yeah, you're right on a quarter over quarter basis, we did see improvement in that pricing and.

Douglas M. Long: You know there was some of that was due to the wet weather. We saw but also I think going into year. There was some encouraging encouragement in the mills. So we saw we saw lots of strength basically in the sawmills and going into that and that has tempered a little bit as we've gone through the through the rest of the rest of the quarter basically as we see that when we talked about that you know some of our pricing that we're seeing going from Q1 kind of Q2.

Douglas M. Long: And that has tempered a little bit as we've gone through the rest of the rest of the quarter, basically, as we see that when we talked about that, you know, some of our pricing that we're seeing in going from Q1 kind of Q2 and thinking going on Outlook really is a shift in geography, basically. So we're going to have a shift in our harvest moving a little bit from the Atlantic over towards the Gulf States, which typically have just slightly lower prices, as well as an increase in, um, our thinning harvest throughout the rest of the year. And that typically produces either more, um, more pulpwood, but also lower grade saw logs. So, um, and smaller ones.

Douglas M. Long: Two and thinking go on an outlook, where there was a shift in geography basically so we were gonna have a shifting of harvest moving away from Atlantic over more towards the Gulf States, which typically have a slightly lower pricing as well as we're going to have an increase in and or thinning harvest.

Douglas M. Long: Throughout the rest of the year and that typically produces either more or pulpwood bus was lower grade saw logs, so a woman and smaller ones.

Gregory Andreopoulos: Thank you very much. I'll turn it over to you. Thank you. Once again, if you would like to ask a question, you may press star 1. And our last question is from Michael Roxland with Truist Securities.

Speaker Change: Thank you very much I'll turn it over.

Michael Andrew Roxland: Well. Thank you once again, if you would like to ask a question you May press Star one.

Michael Andrew Roxland: And our last caller is Michael Rockland Trust Securities You May go ahead Sir.

Michael Andrew Roxland: You may go ahead. Hi guys, thanks for taking the time to answer my questions. This is Nico Piccinion for MyCrockett. Just on the $1 billion disposition disposition, Can you comment, maybe, on where you're seeing the most interest in public companies, TMOs, things like that? And then... On the Washington parcel, the non-strategic qualities that make it attractive for disposition, is that similar to the Oregon parcel in that it may be geographically dislocated from the rest of your holdings in the area?

Michael Andrew Roxland: Hi, guys. Thanks for taking my questions. This is Nick opportunity on for Mike <unk>.

Michael Andrew Roxland: Just on the on.

Michael Andrew Roxland: On the $1 billion.

Michael Andrew Roxland: Disposition plan.

Michael Andrew Roxland: Can you comment maybe on where you're seeing the most interest.

Michael Andrew Roxland: The public companies <unk> things like that and then.

Michael Andrew Roxland: On the Washington parcel.

Michael Andrew Roxland: Non strategic qualities that make it attractive for disposition is that similar to the Oregon parcel them that it maybe it's geographically dislocated from the rest of your holdings in the area.

Mark D. McHugh: Yeah, I mean, in terms of the first question, I'd say that we're seeing a pretty wide range of interest across the board. I mean, the TMOs continue to have, you know, a fair amount of capital to spend, by our estimates, about $4 billion that's actively looking for Timberland acquisitions. I think there's also a fair amount of capital that's flowing into the space or looking to get into space just around, you know, carbon-related or impact-related investments.

Speaker Change: Yeah, I mean in terms of the first question I'd say that we're seeing a pretty wide range of interest across the board I mean that the T. Mo is continue to have you know a fair amount of capital to place them by our estimates about a $4 billion. That's actively looking for timberland acquisitions I think there's also a fair amount of capital that's flowing in.

Mark D. McHugh: The space Youre looking at to get into this space just around you know carbon related or impact related investments and so again, we continue to see pretty strong bid in the timberland market and just you know pretty robust M&A market overall.

Mark D. McHugh: And so, again, we continue to see, you know, pretty strong bids in the Timberland market and just, you know, pretty robust M&A market overall. As it relates to the Washington properties, you know, again, we're not commenting, you know, specifically on the nature of those properties at this juncture. You know, to say the least, as we've looked at potential properties for disposition, we have really looked at trying to maintain strategic scale within each of our regions. And so, you know, again, we've generally focused on properties that we think will allow us to maintain that across our three different operating areas.

Mark D. McHugh: As it relates to the the Washington properties, you know again, we're not commenting specifically on the nature of those properties at this juncture you know spice it to say as we've looked at a potential properties for disposition, we have really looked at trying to maintain strategic scale within within each of our regions and so you know again.

Mark D. McHugh: We've generally focused on properties that we think will allow us to maintain that across our three different operating areas.

Mark D. McHugh: Yeah, thank you very much. And then, I guess, just switching gears, you talked about some of the demand for your development projects. What are you hearing from some of your customers that are home builders on take up on interest demand? Can you give any update on that, please? Again, you know, single family dynamics continue to be pretty strong and favorable, and then we've certainly seen that in our development projects, you know, recognize that a lot of the activity that we are focused on right now is around, you know, single-family residential, including age restricted. And so we've continued to see pretty robust demand in both of our major development projects.

Speaker Change: Got it. Thank you very much and then I guess just switching gears you talked about.

Mark D. McHugh: Some of the demand for your development projects.

Michael Andrew Roxland: Got it. Thank you very much. That's all for me.

Mark D. McHugh: What are you hearing from some of your customers that with homebuilders.

Speaker Change: Take up on interest demand.

Michael Andrew Roxland: Any update on that please.

Michael Andrew Roxland: Yeah again, you know single family dynamics continue to be pretty strong and favorable and we've certainly seen that in our development projects. You know recognize that a lot of the activity that we are focused on right now is around your single family residential.

Michael Andrew Roxland: Including age restricted and so we've continued to see pretty robust demand in both of our major development projects.

Speaker Change: Got it. Thank you very much that's all for me.

Operator: And thank you. There are no further questions at this time. I'll turn the call over to Collin Mings. Thank you.

Michael Andrew Roxland: And thank you there are no further questions at this time I'll turn the call over to Collin Mings.

Collin Philip Mings: I'd like to thank everybody for joining us. Please contact us with any follow-up questions. Thank you. This concludes today's conference call. You may go ahead and disconnect at this time.

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

Collin Philip Mings: Thank you. This concludes today's conference call you May go ahead and disconnect at this time.