Q2 2024 Rayonier Inc Earnings Call

August 8, 2024

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

Operator: 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.

Collin Mings: 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, Capital Markets and Strategic Planning.

Collin Mings: 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, Capital Markets and Strategic Planning.

Operator: If you have any objections, you may disconnect at this time.

Collin Mings: Now, I will turn the meeting over to Mr. Collin Mings, Vice President, Capital Markets, and Strategic Planning.

Collin Mings: Thank you and good morning. Welcome to Rayonier's Investor-Tala conference, covering second quarter earnings. Our earnings statements and financial supplement are really just right 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 followed with the SEC with some of the factors that may cause actual results to differ materially from the forward-looking statements we may make. There are also references on page two of our financial supplement.

Collin Mings: Thank you and good morning. Welcome to Rayonier's Investor Teleconference covering second 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.

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

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

Mark Mchugh: Throughout 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. With that, let's start our teleconference with opening comments from Mark McHugh, our President and CEO. Mark? Mark? Mark? Mark?

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

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

Mark Mchugh: Thanks, Collin.

Mark Mchugh: Thanks Collin, 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 financials. Overall, we generated second quarter adjusted EBITDA of $56 million and proforma net income of $4 million, or two cents per share. Market conditions remain challenging in the second quarter, with much of the decline in adjusted EBITDA versus the prior year period attributable to lower harvest volumes in our timber segments, reflecting generally softer demand and the deferral of some harvest activity.

Mark Mchugh: Good morning, everyone. First, I'll make some high-level comments before turning it over to April Tyce, Senior Vice President and Chief Financial Officer, to review our consolidated financial results. Then we'll ask Doug Long, Executive Vice President and Chief Resource Officer, to comment on our US and New Zealand timber results. And following our review of our timber segments, April, we'll discuss our real-state results and our outlook for the balance of the year. Overall, we generated second-quarter adjusted EBITDAW of fixed $56 million and pro-formant income of $4 million, or $2 cents per share. Market conditions remain challenging during the second quarter.

Mark Mchugh: Thanks, Collin. 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.

Mark Mchugh: Then we'll ask Doug Long, Executive Vice President and Chief Resource Officer, to comment on our U.S. and New Zealand timber results. And following our review of our timber segments, April will discuss our real estate results and our outlook for the balance of the year.

Mark Mchugh: Overall, we generated second quarter adjusted EBITDA of $56 million and proforma net income of $4 million or 2 cents per share.

Mark Mchugh: With much of the decline in the adjusted EBITDAW versus the prior year period, attributable to lower-harvest volumes in our timber segments, reflecting generally softer demand and the deferral of some harvest activity. We expect to recoup much of this volume over the balance of the year. We should translate to stronger second half versus first half results for our timber segments collectively. Drilling down further on our timber segment operating results, our Southern timber segments generated second-quarter adjusted EBITDAW of $34 million, down $10 million from the prior year period. As a 17% decline in harvest volumes, more than offset a 2% improvement in net stumpage realizations.

Mark Mchugh: Market conditions remain challenging during the second quarter, with much of the decline in adjusted EBITDA versus the prior year period attributable to lower harvest volumes in our timber segments, reflecting generally softer demand and the deferral of some harvest activity.

Mark Mchugh: We expect to recoup much of this volume over the balance of the year, which should translate to stronger second half versus first half results for our timber segments collectively.

Mark Mchugh: Drilling down further on our timber segment operating performance, our southern timber segment generated second quarter adjusted EBITDA of $34 million, down $10 million from the prior year period as a 17 percent decline in harvest volumes more than offset a 2 percent improvement in net stumpage realization. In our Pacific Northwest Timber segment, second quarter adjusted EBITDA of $6 million was down $1 million from the prior year quarter as a 12% reduction in harvest volumes due to the Oregon sale completed late last year and lower non-timber income more than offset improved net stumpage realization.

Mark Mchugh: Drilling down further on our Timber Segment Operating Results.

Mark Mchugh: Our southern timber segment generated second quarter adjusted EBITDA of $34 million, down $10 million from the prior year period. As a 17% decline in harvest volumes, more than offset a 2% improvement in net stumpage realizations.

Mark Mchugh: In our Pacific Northwest timber segment, second-quarter adjusted EBITDAW of $6 million was down $1 million. As a 12% reduction in harvest volumes due to the Oregon sale completed late last year and lower non-timber income, more than offset improved net stumpage realizations. Turning to our New Zealand timber segment, second-quarter adjusted EBITDAW of $8 million decreased $1 million versus the prior year quarter. The decrease in adjusted EBITDAW was driven by lower net stumpage realizations and lower harvest volumes, partially offset by increased carbon credit sales and favorable foreign exchange rates. In our real estate segment, we generated second-quarter adjusted EBITDAW of $19 million, down $1 million from the prior year period.

Mark Mchugh: In our Pacific Northwest Timber segment, second quarter adjusted EBITDA of $6 million was down $1 million from the prior year quarter as a 12% reduction in harvest volumes due to the Oregon sale completed late last year and lower non-timber income more than offset improved net stumpage realizations.

Mark Mchugh: turning to our new zealand timber segment second quarter adjusted ebitda of eight million dollars decreased one million dollars versus the prior year quarter the decrease in adjusted ebitda was driven by lower net stumpageis realizations and lower harvest volumes partially offset by increased carbon credit sales and favorable foreign exchange impacts

Mark Mchugh: In our real estate segment, we generated second quarter adjusted EBITDA of $19 million, down $1 million from the prior year period. Adjusted EBITDA in our real estate segment improved significantly versus the first quarter, but was below our expectations entering the quarter due to the timing of closings in our improved development business.

Mark Mchugh: Adjusted EBITDAW in our real estate segment improved significantly versus the first quarter, but was below our expectations entering the quarter due to the timing of closings and our improved development business. However, our full-year transaction pipeline remains strong, and we expect that second half results in our real estate segment will be significantly higher than first half. Overall, as April discussed in greater detail later in the call, we are on track to achieve full-year adjusted EBITDA toward the lower end of our prior guidance range of $290-325 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 the $1 billion disposition target that we announced in November.

Mark Mchugh: However, our full-year transaction pipeline remains strong, and we expect that second-half results in our real estate segment will be significantly higher than first-half results.

Mark Mchugh: Overall, as April discussed in greater detail later in the call, we are on track to achieve full-year adjusted EBITDA toward the lower end of our prior guidance range 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 the $1 billion disposition target that we announced in November. As relates to our disposition target, we made significant progress during the second quarter, and we currently have several large transactions that are in various stages of evaluation or negotiation.

Mark Mchugh: Overall, as April will discuss in greater detail later in the call, we are on track to achieve full-year adjusted EBITDA toward the lower end of our prior guidance range of $290 to $325 million.

Mark Mchugh: 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 the $1 billion disposition target that we announced in November .

Mark Mchugh: As it relates to our disposition target, we made significant progress during the second quarter, and we currently have several large transactions that are in various stages of evaluation or negotiation. Overall, we have been encouraged by the interest received from prospective buyers as we advance our efforts to reduce leverage and capitalize on the continued disconnect between public and private values for timberland assets. We expect to be in a position to provide additional details regarding pending transactions on or before our next quarterly earnings call.

Mark Mchugh: Overall, we have been encouraged by the interest received from prospective buyers as we advance our efforts to reduce leverage and capitalize on the continued disconnect between public and private values for Timberland assets. We expect to be in a position to provide additional details regarding pending transactions on or before our next quarterly earnings call. With that, I will turn it over to April for more details on our second quarter financial results.

Mark Mchugh: We expect to be in a position to provide additional details regarding pending transactions on or before our next quarterly earnings call.

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

Mark Mchugh: With that, let me turn it over to April for more details on our second quarter financial results.

April Tice: Thanks, Mark. Moving to the financial highlight from page 5 of this supplement, sales for the second quarter totaled $174 million, while operating income was $12 million, and net income attributable to Rayonier was $2 million, or $1 per share. On a pro-forma basis, net income was $4 million, or $0.02 per share. Pro-forma items in the second quarter included $1.1 million of net costs associated with legal settlements and $700,000 of costs related to our disposition plans. Adjusted EBITDA was $56 million in the second quarter, down from $69 million in the prior year period.

April: Thanks, Mark.

April: Moving to the financial highlights on page 5 of the supplement, sales for the second quarter totaled $174 million, while operating income was $12 million, and net income attributable to Rayonier was $2 million, or $0.01 per share.

April: On a pro-forma basis, net income was $4 million, or $0.02 per share.

April: Pro forma items in the second quarter included $1.1 million of net costs associated with legal settlements and $700,000 of costs related to our disposition plans.

April: Adjusted EBITDA was $56 million in the second quarter, down from $69 million in the prior year period.

April Tice: On the bottom of page 5, we provide an overview of our capital resources and liquidity. Our cash available for distribution or CAD for the first half of the year was $60 million versus $63 million in the prior year period. The decrease was driven by lower adjusted EBITDA, partially offset by lower net cash interest paid.

April: On the bottom of page 5, we provide an overview of our capital resources and liquidity. Our cash available for distribution, or CAD, for the first half of the year was $60 million versus $63 million in the prior year period.

April: The decrease was driven by lower adjusted EBITDA, partially offset by lower net cash interest paid. A reconciliation of CAD to cash provided by operating activities and other GAAP measures is provided on page 8 of the financial supplement.

April Tice: A reconciliation of CAD to cash provided by operating activities and other gap measures is provided on page 8 of the financial supplement. We closed the second quarter with $142 million of cash and roughly $1.4 billion of debt. Our net debt to trailing 12 months adjusted EBITDA was approximately 4.3 times. At quarter end, our weighted average cost of debt was approximately 2.8%, and the weighted average maturity of our debt portfolio was approximately 5 years, with no significant debt maturities until 2026. Our net debt to enterprise value based on our closing stock price at the end of the quarter was 22%.

April Tice: A reconciliation of CAD to cash provided by operating activities and other GAAP measures is provided on page 8 of the financial supplement. We closed the second quarter with $142 million of cash and roughly $1.4 billion of debt. Our net debt to trailing 12 months adjusted EBITDA was approximately 4.3 times. Our net debt to enterprise value, based on our closing stock price at the end of the quarter, was 22%.

April Tice: we closed the second quarter with one hundred and forty two million dollars of cash and roughly one point four billion dollars of debt our net debt to trailing twelve months adjusted ebitda with approximately four point three times

April Tice: At quarter end, our weighted average cost of debt was approximately 2.8%, and the weighted average maturity of our debt portfolio was approximately 5 years, with no significant debt maturities until 2026.

April Tice: Our net debt-to-enterprise value based on our closing stock price at the end of the quarter was 22%.

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

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

Doug Long: Thanks, April. Let's start on page 9 with Southern Timber segment. Adjusted EBITDA in the second quarter of $34 million, with $10 million or 22% below the prior quarter, driven by lower volumes and higher costs, partially offset by slightly higher net stomach realization. Williams. Total harvest volumes fell 17% for a strong prior quarter due to weather-related constraints in the Gulf region as well as weaker demand from solnals. Meanwhile, non-temper revenue decreased 5% versus the prior period, as continued growth in our land-based solutions business was more than offset by lower pipeline easement revenues. Average sollogged stumpage pricing was $29 per ton, a 1% increase compared to the prior year period due to improved chip and salt pricing in most of our markets.

April Tice: Thanks, April .

Speaker Change: Let's start on page 9 with Southern Timber Segment. Adjusted EBITDA in the second quarter of $34 million was $10 million, or 22% below the prior year quarter, driven by lower volumes and higher costs, partially offset by slightly higher net stumpage realizations.

Speaker Change: Total harvest volumes fell 17% versus a strong prior year quarter due to weather-related constraints in the Gulf region as well as weaker demand from sawmills.

April Tice: Meanwhile, non-temper revenue decreased 5% versus the prior year period, as continued growth in our land-based solutions business was more than offset by lower pipeline easement revenue. Overall, weighted average stomach prices in the second quarter increased 2% versus the prior quarter to roughly $22 per ton.

Speaker Change: average sawlog stubch pricing was twenty-nine dollarsper ton a one percent increase compared to the prioryear period due to improved chip in allt pricing in most of our markets

Doug Long: Paul Quinnette stumpage pricing was 10% higher than a prior quarter at roughly $17 per ton. Overall, weighted average stumpage prices in the second quarter increased 2% versus the prior quarter to roughly $22 per ton. Improved in market demand and reduced residual somal chip availability translated into improved pulpit pricing across most of our markets in the US South. Market pulp prices have improved over the past year, and container-borne operating rates continue to rebound following the inventory destocking cycle that weighed heavily on container-borne demand in 2023. Turning to grade markets, logged demand softened throughout the second quarter due to continued weakness and senopine lumber demand, as well as drier weather across the Atlantic operating areas.

April Tice: Homewood net stumpage pricing was 10% higher than the prior year quarter at roughly $17 per ton.

April Tice: Overall, weighted average stomach prices in the second quarter increased 2% versus the prior quarter to roughly $22 per ton.

Speaker Change: Improved in-market demand and reduced residual sawmill chip availability translated into improved pulpwood pricing across most of our markets in the U.S. South.

April Tice: Market pulp prices have improved over the past year and container board operating rates continue to rebound following the inventory de-stocking cycle that weighed heavily on container board demand in 2023.

April Tice: Turning to the gray market, log demand softened throughout the second quarter due to continued weakness in Sudden Yellow Pine lumber demand, as well as drier weather across our Atlantic operating area. Some of our producers are responding by reducing production, with several mills in the region opting to reduce output in response to current market conditions. In turn, we are seeing less demand for salt timber as mills adjust their operations over the near term.

April Tice: Turning to grade markets, log demand softened throughout the second quarter due to continued weakness in Sudden Yield Pine lumber demand, as well as drier weather across our Atlantic operating areas.

Doug Long: Encouragingly, we have seen indications that the second quarter may work the low point in pricing. Additionally, over the past few months, we've seen a nearing of the price discount between Southern Yellow Pine lumber and other species. However, the overall demand picture for lumber remains challenged by continued softness in housing and repair and remodeled markets. Lumber producers are responding by reducing production, with several mills in the region opting to reduce output and respond to current market conditions. In turn, we're seeing less demand for salt timber as mills adjust their operations over the near term. That said, the relative strength and diversity of our US South footprint remains a key competitive advantage as we navigate these headwinds.

April Tice: Encouragingly, we have seen indications that the second quarter may mark the low point in pricing.

April Tice: Additionally, over the past few months, we've seen a nearing of the price discount between southern yellow pine lumber and other species.

April Tice: However, the overall demand picture for lumber remains challenged by continued softness in housing, repair, and remodel markets.

April Tice: Some of our producers are responding by reducing production, with several mills in the region opting to reduce output in response to current market conditions.

April Tice: In turn, we are seeing less demand for salt timber as mills adjust their operations over the near term.

Speaker Change: that said the relative strength and diversity of our u s soufootprint remains a key competitive vgech as we navigate these headwinds

Doug Long: We anticipate a potential rebound in the market demand following expected interest rate cuts later this year. When this occurs, we believe that our strategic positioning will allow us to capitalize on stronger log pricing as lumber production ramps up again in the US South.

April Tice: We anticipate a potential rebound in intermarket demand following expected interest rate cuts later this year. The adjusted EBITDA of $6 million was $1 million below the prior year quarter. The year-over-year decrease was primarily driven by lower harvest volumes and lower non-timber revenue, partially offset by improved net stumpage realization. The Pacific Northwest log market continued to face headwinds during the second quarter from both challenging domestic lumber markets and reduced demand for log exports.

April Tice: We anticipate a potential rebound in intermarket demand following expected interest rate cuts later this year.

April Tice: When this occurs, we believe that our strategic positioning will allow us to capitalize on stronger log pricing as lumber production ramps up again in the U.S. South.

Doug Long: Moving to our Pacific Northwest timber segment on page 10, adjusted EBITDA of $6 million was $1 million below the prior year quarter. The year-to-year decrease was primarily driven by lower harvest volumes and lower non-tember revenue, partially offset by improved net stumpage realizations. Volumes decreased 12% in the second quarter as compared to the prior year period, reflecting the large disposition we completed in Oregon during late 2023. At $91 per ton, average delivered domestic salt log pricing in the second quarter decreased 7% in the prior year period due to a combination of weaker demand from domestic lumber mills, a lower proportion of Douglas fir volumes, and reduced export market tension.

April Tice: Moving to our Pacific Northwest Timber Segment on page 10.

April Tice: Adjusted EBITDA of $6 million was $1 million below the prior year quarter. The year-over-year decrease was primarily driven by lower harvest volumes and lower non-timber revenue, partially offset by improved net stumpage realizations.

April Tice: Volumes decreased 12% in the second quarter as compared to the prior year period, reflecting the large disposition we completed in Oregon during late 2023.

April Tice: At $91 per ton, average delivered domestic saw log pricing in the second quarter decreased 7% in the prior year period due to a combination of weaker demand from domestic lumber mills, a lower proportion of Douglas fir volumes, and reduced export market tension.

Doug Long: Meanwhile, at $30 per ton, pulpwood pricing remained fairly stable during the quarter, but was down 17% versus a strong prior quarter that benefited from favorable supply-demand dynamics for pulpwood. Overall, despite lower delivered pricing, net stumpage realizations increased 10% due to favorable pricing on stumpage sales and lower per ton cut and haul costs on delivered volume. The Pacific Northwest log market continued to face headwinds during the second quarter from both challenging domestic lumber markets and reduced demand for log exports. Similar to the US South, sawmills in the region are responding to these market conditions by reducing lumber production to better align with current demand.

Speaker Change: meanwhile at third doshch per ton hope wood pricing remained fairly stable during the quarter but was down seventeen percent versus a strong prioryear quarter that benefited from favorable supply demand dynamics for pulpwith in the region

April Tice: Overall, despite lower delivered pricing, net stumpage realizations increased 10% due to favorable pricing on stumpage sales and lower per ton cut-and-haul costs on delivered volume.

April Tice: the pacific northwest log market continued to face headwinds during the second quarter from both challenging domestic limendber markets and reduced produced demand for log exports

April Tice: Similar to the U.S. South, sawmills in the region are responding to these market conditions by reducing lumber production to better align with current demand, Parsley However, this is offset by higher carbon credit sales and favorable foreign exchange impact. Offtake from Chinese ports remains subdued, reflecting weak construction demand. However, positively, though, inventory levels have generally adjusted to the weaker demand environment. Shifting to the New Zealand domestic market, the second quarter average delivered solid prices fell 6% from the prior year period, or 4% when including the foreign exchange impact.

April Tice: Similar to the U.S. South, sawmills in the region are responding to these market conditions by reducing lumber production to better align with current demand.

Doug Long: Still, our pricing has been fairly resilient thus far in 2024.

April Tice: Still, our pricing has been fairly resilient thus far in 2024.

Doug Long: We believe that the threat of potential supply constraints as we enter the peak of fire season, as well as the recent uptick in lumber prices, should translate into fairly stable pricing with some modest upside potential as we move through the balance of the year.

April Tice: We believe that the threat of potential supply constraints as we enter the peak of fire season, as well as the recent uptick in lumber prices, should translate into fairly stable pricing with some modest upside potential as we move through the balance of the year.

Doug Long: Moving to New Zealand, page 11 shows results in keep operating metrics for our New Zealand timber segment. Adjusted EBITDA in the second quarter of $8 million was $1 million below the prior year quarter. The decrease in adjusted EBITDA compared to the prior year period was primarily driven by a 12% decrease in harvest volumes and a 7% lower wage average delivered log prices, partially offset by higher carbon credit sales and favorable foreign exchange impacts. Average delivered export salt timber prices of $102 per ton declined 2% compared to the prior year quarter, as demand continued to be constrained by ongoing challenges in China's property sector.

April Tice: Moving to New Zealand.

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

April Tice: Adjusted EBITDA in the second quarter of $8 million was $1 million below the prior year quarter.

April Tice: The decrease in adjusted EBITDA compared to the prior year period was primarily driven by a 12% decrease in harvest volumes and 7% lower weight average delivered log prices.

April Tice: Partially offset by higher carbon credit sales and favorable foreign exchange impacts.

April Tice: Average delivered export salt timber prices of $102 per ton declined 2% compared to the prior year quarter as demand continued to be constrained by ongoing challenges in China's property sector.

Doug Long: Offtake from Chinese ports remains subdued, reflecting weak construction to man. After rebounding seasonally following the lunar New Year, daily port offtake has fallen back to approximately 50 to 60,000 cubic meters over the past few months. Positively, though, inventory levels have generally adjusted to the weaker demand environment. At the end of July, softwood log inventories at Chinese ports stood at approximately 3.3 million cubic meters, down roughly 10% year over year. The relatively lean log inventories in China give us optimism that modestly more favorable pricing conditions will materialize as we move through the balance of the year.

April Tice: Offtake from Chinese ports remains subdued, reflecting weak construction demand.

April Tice: after rebounding seasonally fon the lunar new year daily port offtake has fallen back approximately fifty to sixty thousand cubic meters over the past few months

Speaker Change: positively though inventory levels have generally adjusted to the weaker dem environment at the end of july sof law inventories at chinese ports stood at approximately three point three million ubit meters downdireoughly ten percent year-over-year

April Tice: The relatively lean log inventories in China give us optimism that modestly more favorable pricing conditions will materialize as we move through the balance of the year.

Doug Long: Shaking the New Zealand domestic market, second quarter average delivered solid prices fell 6% from the prior year period or 4% including foreign exchange impacts. The decline in pricing reflects soft demand and local construction market amid a higher interest rate environment, as well as reduced competition from the export market.

April Tice: Shifting to the New Zealand domestic market, second quarter average delivered solid prices fell 6% from the prior year period, or 4% when including foreign exchange impacts.

April Tice: The decline in pricing reflects soft demand in the local construction market amid a higher interest rate environment as well as reduced competition from the export market. Second quarter non-temporary income in New Zealand of $5 million increased $4 million relative to the prior year period.

April Tice: The decline in pricing reflects soft demand from the local construction market amid a higher interest rate environment as well as reduced competition from the export market.

Doug Long: Second quarter, non-timber income in New Zealand of $5 million increased $4 million relative to the prior year period. The year-over-year increase reflects higher carbon credit sales in the current year period as we temporarily suspended our sales program in the first half of 2023 amid significant market volatility. We anticipate that we will remain active in the New Zealand market over the course of 2024 as price remains healthy from a historical standpoint.

April Tice: second quarter nontemverate income in new zealand of five mion dollars increased four million dollars relative to the prioryear period

April Tice: The year-over-year increase reflects higher carbon credit sales in the current year period as we temporarily suspended our sales program in the first half of 2023 amid significant market volatility.

April Tice: We anticipate that we will remain active in the New Zealand car market over the course of 2024 as price remains healthy from a historical standpoint.

Doug Long: Lastly, in our trading segment, we registered a breaking result in the second 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 Tice: Lastly, in our trading segment, we registered a break-even result in the second 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 Tice: I'll now turn it back over to April to cover our real estate results.

April Tice: Thanks, Doug. As detailed on page 12, the contribution from a real estate segment during the second quarter was considerably higher than the first quarter, fueled in large part by a non-strategic performance sale in New Zealand. Real estate revenue totaled $31 million on 14,600 acres sold at an average price of $1,750 per acre. Real estate segment adjusted EBITDA in the second quarter with $19 million. Drilling down, sales and the improved development category totaled $2.6 million, and our Heartwood Development Project south of Savannah, Georgia, sales consisted of two residential pods for $1.6 million, or $34,000 per acre.

April Tice: i'll now turn over to aprilto cover ar results

Doug: thanks doug

April Tice: As detailed on page 12, the contribution from our real estate segment during the second quarter was considerably higher than the first quarter, fueled in large part by a non-strategic Timberland sale in New Zealand.

April Tice: Real estate revenue totaled $31 million on 14,600 acres sold at an average price of $1,750 per acre.

April Tice: Real estate segment adjusted EBITDA in the second quarter was $19 million.

April Tice: Drilling down, sales in the Improved Development category totaled $2.6 million.

April Tice: and our Heartwood development project south of Savannah, Georgia. Sales consisted of two residential pods for $1.6 million or $34,000 per acre.

April Tice: In our Wildlife Development Project north of Jacksonville, Florida, we sold an 8-acre commercial parcel for $1 million, or $125,000 per acre. Despite the elevated interest rate environment, we continue to see healthy interest from home builders as both our projects continue to benefit from favorable migration patterns as well as relatively affordable price points. Interest from developers for non-residential end uses remains stable, but some deals are taking longer to materialize in the current financing environment. While we expect that the timing of land sales will remain lumpy quarter to quarter, as we detailed in our Investor Day in February, we continue to see a growing pipeline of opportunities in our development business.

Speaker Change: In our wildlife development project north of Jacksonville, Florida, we sold an 8-acre commercial parcel for $1 million, or $125,000 per acre.

April Tice: Despite the elevated interest rate environment, we continue to see healthy interest from home builders as both our projects continue to benefit from favorable migration patterns as well as relatively affordable price points.

April Tice: Interest from developers for non-residential end uses remains stable, but some deals are taking longer to materialize in the current financing environment.

April Tice: While we expect that the timing of land sales will remain lumpy quarter to quarter, as we detailed in our Investor Day in February, we continue to see a growing pipeline of opportunities in our development business. Second quarter sales totaled $7 million, consisting of approximately 1,400 acres at an average price of roughly $5,200 per acre. The transaction included several geographically isolated parcels with above average production costs, a relatively young age class distribution, and below average operability, with only about 50 percent of the total acres classified as plantable.

April Tice: Turning to our rural category, second quarter sales totaled $7 million, consisting of approximately 1,400 acres at an average price of roughly $5,200 per acre. While elevated interest rates continue to impact the willingness of some buyers to transact, the overall demand and pricing for rural properties remains favorable. As discussed last quarter, we have seen growing interest among conservation and impact-oriented buyers looking to place capital. We continue to expect a larger contribution from these sales as we move through the balance of the year.

Speaker Change: Turning to our Rule Category.

April Tice: Second quarter sales totaled $7 million, consisting of approximately 1,400 acres at an average price of roughly $5,200 per acre.

April Tice: While elevated interest rates continue to impact the willingness of some buyers to transact, the overall demand and pricing for rural properties remains favorable.

April Tice: as discussed last quarter we have seen growing interest among conservation and impact oriented buyers looking to place capital we continue to expect a larger contribution from these sales as we move through the balance of the year

April Tice: Lastly, during the second quarter, we also closed on a non-strategic timberland sale in New Zealand. The transaction consisted of approximately 13,000 acres for roughly $16 million, or $1,200 per acre. The transaction included several geographically isolated parcels with above-average production costs, a relatively young age-class distribution and below-average operability, with only about 50% of the total acres classified as plantables. The sale price per acre reflects the below-average quality of this asset and is not indicative of the overall value of our New Zealand timberland portfolio. Notably, this transaction was initiated mid-last year.

April Tice: Lastly, during the second quarter, we also closed on a non-strategic Timberland sale in New Zealand. The transaction consisted of approximately 13,000 acres for roughly $16 million, or $1,200 per acre.

April Tice: the transaction included several geographically isolated parcels with above average production cost a relatively young age class distribution and below average operability with only about fifty percent of the total acres classified as plantiable

Operator: 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.

Speaker Change: the sale price per acre reflects the blow average quality of this asset and is not indjectcive of the overall value of our new dealandin timmberland portfolio

April Tice: Notably, this transaction was initiated mid last year. It is not related to the review of our strategic alternatives for our New Zealand joint venture interest.

April Tice: It is not related to the review of our strategic alternative for our New Zealand joint venture interest.

Operator: If you have any objections, you may disconnect at this time.

Collin Mings: Now, I will turn the meeting over to Mr. Collin Mings, Vice President, Capital Markets, and Strategic Planning. Thank you and good morning. Welcome to Rayonier's Investor-Tala conference, covering second quarter earnings. Our earnings statements and financial supplement are really just right 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, horrible provisions of federal securities laws.

April Tice: Now moving on to the outlook for the balance of 2024. Based on our first half results and our expectations for the remainder of the year, we now expect that full year adjusted EBITDA will be toward the lower end of our prior guidance range of $290 to $325 million. Further, we now expect pro forma EPS to be modestly below the low end of prior guidance.

April Tice: Now moving on to the outlook for the balance of 2024. Based on our first-half results and our expectations for the remainder of the year, we now expect that full-year adjusted EBITDA will be toward the lower end of our prior guidance range of $290 to $325 million. Lastly, we remain encouraged by the momentum of our land-based solutions business and continue to expect higher non-timber income for full year 2024 relative to full year 2023. However, despite improved pricing conditions, we expect full year New Zealand timber adjusted EBITDA to fall slightly below our priority guidance range due to lower carbon sales, softer export markets, and elevated shipping costs.

April Tice: Now moving on to the outlook for the balance of 2024.

April Tice: Based on our first half results and our expectations for the remainder of the year, we now expect that full year adjusted EBITDA will be toward the lower end of our prior guidance range of $290 to $325 million.

Collin Mings: Our earnings release and forms 10K and 10Q followed with the SEC with some of the factors that may cause actual results to differ materially from the forward-looking statements we may make. There are also reference on page two of our financial supplement. Throughout these presentations, we will also discuss non-gap financial measures, which are defined and reconciled to the nearest gap measures in our earnings release.

April Tice: Further, we now expect Pro Forma EPS to be modestly below the low end of prior guidance.

April Tice: As a reminder, our guidance excludes the potential impact from any additional effort sales as part of our previously announced $1 billion disposition target. With respect to our individual segments, in our Southern timber segment, we expect full-year harvest volumes toward the lower end of prior guidance, as we look to opportunistically flex our volume in response to market conditions. Further, we anticipate that pine-stumpage realizations will be lower in the second half of the year as compared to the first half due to a less favorable geographic mix, lower saw log prices, and a relatively higher proportion of thinning volume.

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

Mark Mchugh: With that, let's start our teleconference with opening comments from Mark McEw, our President and CEO. Mark? Thanks, Collin. Good morning, everyone.

April Tice: With respect to our individual segments.

April Tice: in our southern tenber segment we expect full year harvest volumes toward the lower end of prior guidance as we look to opportunistically flectx our volume and response to market conditions

Mark Mchugh: First, I'll make some high-level comments before turning it over to April Tyce, Senior Vice President and Chief Financial Officer to review our consolidated financial results.

April Tice: Further, we anticipate that pine stumpage realizations will be lower in the second half of the year as compared to the first half due to a less favorable geographic mix, lower saw log prices, and a relatively higher proportion of thinning volume.

Mark Mchugh: Then we'll ask Doug Long, Executive Vice President and Chief Resource Officer to comment on our US and New Zealand timber results.

Mark Mchugh: And following our review of our timber segments, April, we'll discuss our real-state results and our outlook for the balance of the year. Overall, we generated second-quarter adjusted EBITDAW of fixed $56 million and pro-formant income of $4 million or $2 cents per share. Market conditions remain challenging during the second quarter. With much of the decline in the adjusted EBITDAW versus the prior year period, attributable to lower-harvest volumes in our timber segments, reflecting generally softer demand and the deferral of some harvest activity.

April Tice: Lastly, we remain encouraged by the momentum of our land-based solutions business and continue to expect higher non-timber income for full year 2024 relative to full year 2023. Overall, we anticipate full year Southern timber adjusted EBITDA toward the lower end of our prior guidance range. In our Pacific Northwest timber segment, we expect to achieve full-year volumes slightly below our prior guidance. As Doug discussed, pricing conditions have been relatively stable this far in 2024, but our ability to increase deliver log prices has been constrained by challenging domestic and export market conditions. While we believe there is some modest upside potential as we move through the balance of the year, we have tempered our pricing expectations as compared to earlier in the year.

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

April Tice: Overall, we anticipate full-year southern timber adjusted EBITDA toward the lower end of our prior guidance range.

Mark Mchugh: We expect to recoup much of this volume over the balance of the year. We should translate to stronger second half versus first half results for our timber segments collectively. Drilling down further on our timber segment operating results, our Southern timber segments generated second-quarter adjusted EBITDAW of $34 million, down $10 million from the prior year period. As a 17% decline in harvest volumes, more than offset a 2% improvement in net stumpage realizations.

April Tice: in our pacific northwest timmber segment we expect to achieve full year volumes slightly below our prior guidance

April Tice: As Doug discussed, pricing conditions have been relatively stable thus far in 2024, but our ability to increase delivered log prices has been constrained by challenging domestic and export market conditions.

April Tice: while we believe there is some modest upside potential as we move through the balance of the year we have tempered our pricing expectations as compared to earlier in the year

April Tice: Overall, we expect full year Pacific Northwest timber adjusted EBITDA toward the lower end of our prior guidance range. In our New Zealand timber segment, we are on track to achieve our full year volume guidance as we anticipate relatively higher harvest volumes during the second half of the year as compared to the first half. Further, we continue to expect that full year domestic and export saw timber pricing will improve modestly relative to the full year pricing achieved in 2023. Despite improved pricing conditions, we expect full year New Zealand timber adjusted EBITDA to fall slightly below our prior guidance range due to lower carbon sales, softer export markets, and elevated shipping costs.

April Tice: Overall, we expect full year Pacific Northwest Timber Adjusted EBITDA toward the lower end of our prior guidance range.

April Tice: In our New Zealand timber segment, we are on track to achieve our full year volume guidance as we anticipate relatively higher harvest volumes during the second half of the year as compared to the first half.

April Tice: Further, we continue to expect that full-year domestic and export saw timber pricing will improve modestly relative to the full-year pricing achieved in 2023.

Mark Mchugh: In our real estate segment, we generated second-quarter adjusted EBITDAW of $19 million, down $1 million from the prior year period. Adjusted EBITDAW in our real estate segment improved significantly versus the first quarter, but was below our expectations entering the quarter due to the timing of closings and our improved development business. However, our full-year transaction pipeline remains strong, and we expect that second half results in our real estate segment will be significantly higher than first half.

April Tice: Despite improved pricing conditions, we expect full-year New Zealand timber adjusted EBITDA to fall slightly below our prior guidance range due to lower carbon sales, softer export markets, and elevated shipping costs.

April Tice: In our real estate segment, we continue to see healthy interest in our development projects and rural properties. We continue to anticipate full year adjusted EBITDA within our prior guidance range, with transaction activity heavily concentrated in the fourth quarter.

April Tice: in our real estate segment we continue to see healthy interest in our development projects and ruralle properties we continue to anticipate full year adjusted ebitda within our prior guidance range with transaction activity heavily concentrated in the fourth quarter

Mark Mchugh: Overall, as April discussed in greater detail later in the call, we are on track to achieve full-year Adjusted EBITDA toward the lower end of our prior guidance range of $290-325 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 the $1 billion disposition target that we announced in November. As it relates to our disposition target, we made significant progress during the second quarter, and we currently have several large transactions that are in various stages of evaluation or negotiation. Overall, we have been encouraged by the interest received from prospective buyers as we advance our efforts to reduce leverage and capitalize on the continued disconnect between public and private values for timberland assets.

Mark Mchugh: I'll now turn the call back over to Mark for closing comments.

April Tice: I'll now turn the call back over to Mark for closing comments.

Mark Mchugh: Thanks, April. As I reflect on the first half of the year, I'm proud of how our team has continued to navigate challenging operating conditions with an unwavering focus on making decisions in the best long-term interest of Rainier and its shareholders. To this end, we elected to strategically defer some harvest in more challenge markets to preserve value in the face of ongoing headwinds posed by soft domestic lumber markets and lower export market demand. Despite the headwinds facing sautamer markets this year, we are encouraged by the sustained improvement in pulp mill operating rates across our U.S. South footprint and the corresponding gains in public pricing that we've been able to capture.

April Tice: Thanks, April . As I reflect on the first half of the year, I'm proud of how our team has continued to navigate challenging operating conditions with an unwavering focus on making decisions in the best long-term interests of Rayonier and its shareholders.

Mark Mchugh: To this end, we elected to strategically defer some harvests in more challenged markets to preserve value in the face of ongoing headwinds posed by soft domestic lumber markets and lower export market demand. The prospect of rate cuts later this year, coupled with continued low log inventories in China, give us additional reasons for optimism over the balance of the year. On the real estate front, we've been pleased by the continued demand for both rural and development properties despite the higher interest rate environment.

Mark Mchugh: Despite the headwinds facing saw timber markets this year, we are encouraged by the sustained improvement in pulp mill operating rates across our U.S. South footprint and the corresponding gains in pulpwood pricing that we've been able to capture.

Mark Mchugh: We expect to be in a position to provide additional details regarding pending transactions on or before our next quarterly earnings call.

Mark Mchugh: The prospect of rate cuts later this year, coupled with continued low log inventories in China, give us additional reasons for optimism over the balance of the year. On the real estate front, we've been pleased by the continued demand for both rural and development properties despite the higher interest rate environment. As previously discussed, we expect a significantly stronger contribution from our real estate segment during the second half of the year versus the first half. We also believe that more favorable financing conditions could further bolster the already healthy demand we're seeing across our real estate categories.

April Tice: With that, let me turn it over to April for more details on our second quarter financial results. Thanks, Mark. Moving to the financial highlight from page 5 of this supplement, sales for the second quarter totaled $174 million, while operating income was $12 million, and net income attributable to Rayonier was $2 million or $1 per share. On a pro-forma basis, net income was $4 million or $2 cents per share. Pro-forma items in the second quarter included $1.1 million of net costs associated with legal settlements and $700,000 of costs related to our disposition plans.

Mark Mchugh: the prospect of rate cuts later this year coupled with continued low log inventories in china gives us additional reasons for optimism over the balance of the year

Mark Mchugh: on the real estate front we've been pleased by the continued demand for both rural and development properties despite the higher interest rate environment

Mark Mchugh: As previously discussed, we expect a significantly stronger contribution from our real estate segment during the second half of the year versus the first half. Throughout the first half of the year, we've also continued to advance important strategic initiatives. On the land-based solutions front, our team is energized by the pipeline of opportunities we are pursuing with high-quality counterparts. We continue to believe that our land base leaves us uniquely well-positioned to grow these revenue streams over time.

Mark Mchugh: As previously discussed, we expect a significantly stronger contribution from our real estate segment during the second half of the year versus the first half. We also believe that more favorable financing conditions could further bolster the already healthy demand we're seeing across our real estate categories.

Mark Mchugh: Throughout the first half of the year, we've also continued to advance important strategic initiatives. On the land-based solutions front, our team is energized by the pipeline of opportunities we are pursuing with high-quality counterparties. We continue to believe that our land-based leads us uniquely well positioned to grow these revenue streams over time. And as I discussed earlier, we are pleased with the progress we've made toward executing our $1 billion disposition target. There remains a strong bid for Timberland assets in the private market, but we continue to advance a variety of options to achieve this target.

April Tice: Adjusted EBITDA was $56 million in the second quarter, down from $69 million in the prior year period. On the bottom of page 5, we provide an overview of our capital resources and liquidity. Our cash available for distribution or CAD for the first half of the year was $60 million versus $63 million in the prior year period. The decrease was driven by lower adjusted EBITDA partially offset by lower net cash interest paid.

Mark Mchugh: And, as I discussed earlier, we are pleased with the progress we've made toward executing our $1 billion disposition target. There remains a strong demand for Timberland assets in the private market, and we continue to advance a variety of options to achieve this target. We look forward to sharing more details regarding our disposition efforts in the coming months.

Mark Mchugh: And as I discussed earlier, we are pleased with the progress we've made toward executing our $1 billion disposition target. There remains a strong bid for Timberland assets in the private market, but we continue to advance a variety of options to achieve this target. We look forward to sharing more details regarding our disposition efforts in the coming months.

Operator: We look forward to sharing more details regarding our disposition efforts in the coming months. That concludes our prepared remarks, and I'll turn the call back to the operator for questions.

Speaker Change: that concludes prepared remarks and i'll turn the call back to the operator for questions

Operator: Thank you. If you would like to ask a question, please press star one. To withdraw your question, press star two. Once again, to ask a question, please press star one. One moment for our first question.

Operator: Thank you. If you would like to ask a question, please press star 1. To withdraw your question, press star 2. Once again, to ask a question, please press star 1. One moment for our first question. Our first question comes from Mark Weintraub with Seaport Research Partners. Your line is open.

April Tice: A reconciliation of CAD to cash provided by operating activities and other gap measures is provided on page 8 of the financial supplement. We closed the second quarter with $142 million of cash and roughly $1.4 billion of debt. Our net debt to trailing 12 months adjusted EBITDA was approximately 4.3 times. At quarter end, our weighted average cost of debt was approximately 2.8%, and the weighted maturity average maturity of our debt portfolio was approximately 5 years, with no significant debt maturities until 2026. Our net debt to enterprise value based on our closing stock price at the end of the quarter was 22%.

Mark Weintraub: Our first question comes from Mark Weintraub with Seaport Research Partners. Your line is open.

Speaker Change: our first question comes to mark wine trp with seort research partner yourline is open

Mark Weintraub: Thank you.

Mark Weintraub: Two quick questions. One, when you originally announced the disposition plan, you had suggested an 18-month time frame. Is that still the right duration to be thinking about, or any update there?

Mark Weintraub: Thank you. Two quick questions. One, when you originally announced the disposition plan, you had suggested an 18-month time frame. Is that still the right duration to be thinking about, or any update there?

Mark Mchugh: Hey, Mark. This is Mark. Good morning. Yeah, that is still the right time frame to be thinking of. As we said in the prepared remarks, as well as in the release, we've made quite a bit of progress here in the last several months.

Operator: Hey Mark, this is Mark. Good morning. Yeah, that is still the right time frame to be thinking of. As we said in the prepared remarks as well as in the release, we've made quite a bit of progress here in the last several months and we look forward to sharing more details on or before our next earnings call.

Doug Long: I'll now turn the call over to Doug to provide a more detailed review of our timber results. Thanks, April.

Mark Mchugh: And we look forward to sharing more details on or before our next earnings call.

Doug Long: Let's start on page 9 with Southern Timber segment. Adjusted EBITDA in the second quarter of $34 million with $10 million or 22% below the prior quarter driven by lower volumes and higher costs, partially offset by slightly higher net stomach realization. Williams. Total harvest volumes fell 17% for a strong prior quarter due to weather related constraints in the Gulf region as well as weaker demand from solnals. Meanwhile, non-temper revenue decreased 5% versus the prior period, as continued growth in our land-based solutions business was more than offset by lower pipeline easement revenues.

Mark Weintraub: Okay, I appreciate that. And then, any additional specifics in terms of things that might have moved forward on land-based solutions? You made some general comments, but were there any updates that you could give us in terms of things concretely?

Mark Weintraub: Okay.

Mark Weintraub: Appreciate that.

Gregory Andreopoulos: And then any additional specifics in terms of things that might have moved forward on land-based solutions, and you made some general comments. But were there any updates that you can give us in terms of things concretely seen done during the quarter?

Mark Weintraub: okay appreciate that and then any additional specifics in terms of

Mark Weintraub: things that might have moved forward on landbased solutions and you may be made some code soto general comments but were there any any updates that you can give us in terms of things concretely seen done during the quarter

Doug Long: Sure. Good morning. This is Doug. Yeah, on the land-based solutions front, our team continues to advance a range of opportunities with high quality counterparts, which before, but to your point recently, we've added another 5,000 acres of executed carbon capture storage leases. And as we discussed in our last call, we're still well on the way to achieving our ear and goals of having over 70,000 acres under lease for carbon capture storage, and targeting over 50,000 acres under options for solar. So we continue to believe our portfolio is uniquely well positioned to provide these solutions as many large corporations are setting ambitious sustainability goals.

Doug: sure moreningin this is doug on the landbbas utions front our team continues to advance a rangeof opportunities in with high-quality counamerterparts age before but your point recentlywe've added another five thousand makers of executed caron cacap torage leases

Doug Long: Average sollogged stumpage pricing was $29 per ton, a 1% increase compared to the prior year period due to improved chip and salt pricing in most of our markets. Paul Quinnette stumpage pricing was 10% higher than a prior quarter at roughly $17 per ton. Overall, weighted average stumpage prices in the second quarter increased 2% versus the prior quarter to roughly $22 per ton. Improved in market demand and reduced residual somal chip availability translated into improved pulpit pricing across most of our markets in the US south.

Speaker Change: And as we discussed in our last call, we're still well on the way to achieving our year-end goals of having over 70,000 acres under lease for carbon capture storage and targeting over 50,000 acres under options for solar.

Speaker Change: So we continue to believe our portfolio is uniquely well-positioned to provide these solutions as many large corporations are setting ambitious sustainability goals, including those committed to reduce their carbon footprint and increase their use of renewable energy. So we did have some success in the current quarter and are seeing great progress as we move forward for the rest of the year.

Doug Long: And clean those comments to reduce their carbon footprint and increase the use of renewable energy.

Doug Long: So we did have some success in the quarter cap. Current quarter, and we're seeing great progress has moved forward for this. Right.

Mark Mchugh: And in curiosity, back in February, you provided some targets. I guess we're six months on from that. How do you feel about those targets today versus how you felt about them back in February? Yeah, I'd say we

Gregory Andreopoulos: In curiosity, back in February, you provided some targets. I guess we're six months forward from that. How do you feel about those targets today versus how you felt about them back in February? Yeah, I'd say we still feel very good about those targets, and if anything else, we're seeing them probably more interested than we had in February for these type of opportunities.

Speaker Change: right any in curiosity no backin february you provided some targets i guess we're six months forward from that how do you feel about those targets today versus how you felt about them back in february

Doug Long: Market pulp prices have improved over the past year and container-borne operating rates continue to rebound following the inventory destocking cycle that weighed heavily on container-borne demand in 2023. Turning to grade markets, logged demand softened throughout the second quarter due to continued weakness and senopine lumber demand as well as drier weather across the Atlantic operating areas.

Speaker Change: Yeah, I'd say we still feel very good about those targets, and if anything else, we're seeing probably more interest than we had in February for these type of opportunities.

Gregory Andreopoulos: Okay, thanks so much. Thank you.

Speaker Change: Okay, thanks so much.

Anthony Pettinari: Our next question comes from Anthony Pettinari. Lucidie, your line is open.

Speaker Change: thank you our next question comees from anthony peenary the city your line is open

Gregory Andreopoulos: Hi, good morning. This is Gregory on for Anthony. First, I guess I'm sorry, Timberlands.

Mark Mchugh: Hi, good morning. This is Gregory on for Anthony.

Doug Long: Can you just comment on what you saw across your various other regions in the second quarter and maybe what's implied in the full year guidance? And then I'm wondering also if there are any disparities locally in the South? Are the main drivers there kind of sawmill operating rates, or are there more kind of nuanced drivers of prices regionally? We'll have to hear your thoughts there.

Speaker Change: First, I guess on Southern Timberlands, can you just comment on what you saw across your various sub-regions in the second quarter and maybe what's implied in the full year guidance? And then I'm wondering also if there are any disparities locally in the South?

Speaker Change: Are the main drivers there kind of sawmill operating rates or are there more kind of nuanced drivers of prices regionally?

Doug Long: In turn, we're seeing less demand for salt timber as mills adjust their operations over the near term. That said, the relative strength and diversity of our US south footprint remains a key competitive advantage as we navigate these headwinds. We anticipate a potential rebound in the market demand following expected interest rate cuts later this year.

Doug Long: When this occurs, we believe that our strategic positioning will allow us to capitalize on stronger log pricing as lumber production ramps up again in the US south.

Doug Long: Sure, this is Doug again. I'll be happy to start there. Yeah, I think one thing that's important is to keep in mind that we do a combination of stumpage sales and delivered sales, and we don't have exact control in the quarter when a stumpage track is going to be harvested. And those buyers simply have a year to harvest, and we'll start selling toward the end of Q4 the prior year and in the beginning of the current year. And so the extent there's market softness or weather issues such as we saw in Texas and Louisiana, there can be some short-term timing differences.

Speaker Change: We'd love to hear your thoughts there.

Mark Mchugh: Sure, this is Doug again. I'll be happy to start there.

Speaker Change: Yeah, I think one thing that's important is, you know, to keep in mind that we do a combination of stumpage sales and delivered sales, and we don't have exact control in the quarter when a stumpage tract is going to be harvested.

Speaker Change: Those buyers typically have a year to harvest and will start selling towards the end of Q4 of the prior year and the beginning of the current year. So to the extent there's market softness or weather issues, such as we saw in Texas and Louisiana, there can be some short-term timing differences.

Mark Mchugh: And to your point, I think it's worth noting that for the first half of the year, the southern portion of our Southwest Resource Unit, so kind of Texas, Louisiana, along the Gulf Coast there, received more rain than the historical yearly average. So in the first six months, they received over a year's worth of rain. And if you saw any of the news stories, you probably saw the flooding in Houston, things like that. So you can appreciate that.

Doug Long: And to your point, I think it's worth noting that for the first half of the year, the southern portion of our southwest resource unit, so kind of the Texas and Louisiana along the Gulf Coast there, receives more rain than the historical yearly average. So, in the first six months, they received over a year's worth of rain. And if you saw in the news story, you probably saw the flooding in Houston, things like that, so you can appreciate that. So we did see some reductions in harvest in those areas where it was just too wet to harvest, but we've seen improvements there.

Speaker Change: and hereyour point i think it's worthnoting that for the firsthalfof the year thesouother portion of our southwest resouring so kind of the texas ouisianaalongthe ast there receiive more rain than historical yearly average in the first six months they received over years' th of rain

Mark Mchugh: And if you saw any of the news stories, you probably saw the flooding in Houston, things like that, so you can appreciate that. So we did see some, you know, reductions in harvest in those areas where it was just too wet to harvest, but we've seen improvements there.

Mark Mchugh: So we did see some reductions in harvest in those areas where it was just too wet to harvest, but we've seen improvements there. And plus, given the market conditions, we've been pretty deliberate about what we brought to market, and we didn't look to chase volume. So that said, after a challenging kind of second quarter and the stumpage, our removals are ahead of forecast for July across all of our southern units, so we've seen some improvements there as we move forward.

Doug Long: And plus, given the market conditions, we've been pretty delivered about what we brought to market, and we didn't look to chase volume. So that said, after a challenging kind of second quarter in the stumpage, our removals are head of forecast for July across all of our southern units. So we've seen some improvements across there as a new forward.

Mark Mchugh: and plus given them the market conditions within pretty deli aboutwhat we brought to market and we didn't look to chase volume so that said you after challenging kind of second quarter and the stumphage our removals are ahead of forecast for july across all thern units so we've seensome improvements across their and new forward

Doug Long: Meanwhile, at $30 per ton, pulpwood pricing remained fairly stable during the quarter, but was down 17% versus a strong prior quarter that benefited from favorable supply demand dynamics for pulpwood in Overall, despite lower delivered pricing, net stumpage realizations increased 10% due to favorable pricing on stumpage sales and lower per ton cut and haul costs on delivered volume. The Pacific Northwest Log Market continued to face headwinds during the second quarter from both challenging domestic lumber markets and reduced demand for log exports. Similar to the US South, sawmills in the region are responding to these market conditions by reducing lumber production to better align with current demand. Still, our pricing has been fairly resilient thus far in 2024.

Operator: Thank you for that. Thank you for that!

Gregory Andreopoulos: There may be a figure to just have one follow-up on carbon credits. So, you know, based on the data I'm seeing, it looks like New Zealand carbon credits kind of leveled off. They dropped off pretty sharply in March, April, and they've kind of leveled off since then.

Speaker Change: Thank you for that. Thank you for that. And maybe if I could just have one follow-up on carbon credits. So, you know, based on the data I'm seeing, it looks like New Zealand carbon credits

Mark Weintraub: And then maybe I could just have one follow-up on carbon credits. So, you know, based on the data I'm seeing, it looks like New Zealand carbon credits kind of leveled off, they dropped off pretty sharply in March and April, and they've kind of leveled off since then. So I'm wondering if you can kind of put some context around what's kind of allowed prices to stabilize there, whether demands come back a little bit or supply is tightened.

Mark Weintraub: kind of leveled off. They dropped off pretty sharply in March, April , and they've kind of leveled off since then.

April Tice: So I'm wondering if you can kind of put some context around what's kind of that our supply is tightened. And then, you know, can you for your New Zealand credits that you have on the balance sheet, are these able to be sold into the US market at all? And, you know, I'm only asking because it seems like the credits on your balance sheet are pretty high quality, pretty rigorously tested. And, you know, Bloomberg put out the headline recently about, you know, 32% of all credits failing this approval test. So, you know, in my mind, you may be able to get better pricing in the US market, you know, if good credits are recommending premiums, or is that not right?

Mark Weintraub: So I'm wondering if you can kind of put some context around what's kind of allowed prices to stabilize there, whether demands come back a little bit or supplies tighten.

Doug Long: We believe that the threat of potential supply constraints as we enter the peak of fire season, as well as the recent uptick and lumber prices should translate into fairly stable pricing with some modest upside potential as we move through the balance of the year.

Mark Weintraub: And then, can you for your New Zealand credits that you have on the balance sheet, are these able to be sold into the US market at all? And you know, I'm only asking because it seems like the credits on your balance sheet are pretty high quality, pretty rigorously tested, and Bloomberg put out the headline recently about 32% of all credits failing this approval test. So in my mind, you may be able to get better pricing in the US market if good credits are commanding premiums, or is that not the right way to think about it?

Speaker Change: and then can you for your newzealand credits you have on the balance sheet or

Mark Weintraub: Are these able to be sold into the U.S. market at all?

Mark Weintraub: I'm only asking because it seems like the credits on your balance sheet are pretty high quality, pretty rigorously tested. Bloomberg put out the headline recently about...

Mark Weintraub: You know, 32% of all credits failing this approval test. So, you know, in my mind, you may be able to get better pricing in the U.S. market, you know, if good credits are commanding premiums, or is that not the right way to think about

Gregory Andreopoulos: What do you think about it?

April Tice: Hi, Greg. This is April. I'll take that.

April Tice: So I'll just like the first half of your question, then I'll turn it up to turn it over to Doug to follow up. So, you know, as we detailed in our supplement, we sold about $4.4 million worth of carbon credits in New Zealand in the second quarter. And that was that was up from 400,000 and Q2 of 2023. So, you know, as we talked about in and Doug said in our prepared remarks, you know, last year we deferred our New Zealand sales early in 2023 because there was such volatility in the market, but we'll resume sales later in the year.

Mark Weintraub: Hi Greg, this is April , I'll take that. So I'll address like the first half of your question then I'll turn it up to turn it over to Doug to follow up so

Speaker Change: As we detailed in our supplement, we sold about $4.4 million worth of carbon credits in New Zealand in the second quarter, and that was up from $400,000 in Q2 of 2023.

Mark Weintraub: So...

Mark Weintraub: As we talked about and Doug said in our prepared remarks, last year we deferred.

Doug Long: Average delivered export salt timber prices of $102 per ton declined 2% compared to the prior year quarter, as demand continued to be constrained by ongoing challenges in China's property sector. Offtake from Chinese ports remains subdued, reflecting weak construction to man. After revounding seasonally following the lunar New Year, daily port offtake has fallen back to approximately 50 to 60,000 cubic meters over the past few months. Positively though, inventory levels have generally adjusted to the weaker demand environment.

Speaker Change: our New Zealand sales early in 2023 because there was such volatility in the market. But we'll resume sales later in the year. So we'll, that's what we're doing now we're being opportunistic about how we're selling them in New Zealand.

April Tice: So we'll, that's what we're doing now. We're being opportunistic about how we're selling them in New Zealand. as far as like the stability in the market. So overall, the regulatory backdrop has been stabilized. It's been that way for, you know, it was last quarter, this quarter; it's continued. The government has indicated that they're not really contemplating any significant changes to the ETS in the near term. What drove some price drop earlier in the year was that there was an auction in March and the it failed to reach the full subscription. So the pricing pretty much backdroped off of that point.

Speaker Change: As far as like the stability in the market, so overall the regulatory backdrop has been stabilized It's been that way for you know it was last quarter this can this quarter It's continued the government has indicated that they're not really contemplating any significant changes to the ETS in the near term

Doug Long: At the end of July, softwood log inventories at Chinese ports stood at approximately 3.3 million cubic meters, down roughly 10% year over year. The relatively lean log inventories in China give us optimism that modestly more favorable pricing conditions will materialize as we move through the balance of the year.

Speaker Change: would drove some price drop lier in the year was that there was an auction in march and the

Speaker Change: It failed to reach the full subscription, so the pricing pretty much backdropped.

April Tice: And so, but overall, the pricing is still strong from a historical perspective. It's leaning around 50 to 55 NCD, which is pretty strong. And so we're continuing to be active in that market.

Speaker Change: off of that point. And so but overall, the pricing is still strong from a historical perspective, it's leaning around 50 to 55 NCD, which is pretty strong. And so we're continuing to be active in that market. Transcribed by https://otter.ai

Doug Long: Shaking the New Zealand domestic market, second quarter average delivered solid prices fell 6% from the prior year period or 4% including foreign exchange impacts. The decline in pricing reflects soft demand and local construction market amid a higher interest rate environment as well as reduced competition from the export market.

Doug Long: Yeah, and I'll just address your question a little more around them, the quality of markets and things like that. So, as we discussed in our Investor Day, we continue to be very deliberate in how we're thinking about moving forward in that voluntary carbon market. Given our discussion of potential buyers, who are very focused on those high quality carbon credits. And we see that market really evolving towards that higher quality, as you mentioned. You know, that given our high timber, but it just hasn't made sense for us yet to move forward. That said, we're very encouraged by the progress of the Integrity Council for Voluntary Carbon Markets, ICVCM, and their comic core principles accreditation process.

Mark Mchugh: Yeah, and I'll just address your question a little bit more on the quality of markets and things like that. So, as we discussed at our investor day, we continue to be very deliberate in how we're thinking about moving forward in that voluntary carbon market, given our discussions with potential buyers who are very focused on those high-quality carbon credits. And we see that market really evolving towards that higher quality, as you mentioned. But, given our high timber EBITDA, it just hasn't made sense for us yet to move forward.

Mark Mchugh: and i'll just address your question a little more around them the qualityof markets and and things like that so as we discussed in our investor day we continue tobe very liberate and how we're thinkingabout moving forwardin that voluntary carard market giour discussion potential buyers who are very focused on those high quality carbon credits

Mark Mchugh: And we see that market really evolving towards the higher qualities you mentioned. That, given our high timber EBITDA, it just hasn't made sense for us yet to move forward.

Mark Mchugh: That said, we're very encouraged by the progress of the Integrity Council for Voluntary Carbon Markets, ICBCM, and their Common Core Principles accreditation process. And what that's going to do is create, basically, an approved credit that, from our discussions with customers, is something that they really believe will be recognized globally as a benchmark for high-quality carbon credits, you know, ensuring that they represent real, verifiable, and additional emission So, we think this is a major milestone that we've really been waiting for and paves the way for verified high-quality credits to come into this market in the near future and clear out the less meaningful ones that are really lower quality and, therefore, lower price from supply.

Mark Mchugh: That said, we're very encouraged by the progress of the Integrity Council for Voluntary Carbon Markets, ICVCM, and their Common Core Principles accreditation process.

Doug Long: And what that's going to do is create basically an approved credit that from our discussions with customers is something they really believe. We'll be recognized globally as a benchmark for high quality carbon credits, you know, and showing that they represent real, verifiable, and additional mission reductions. So we think this is a major milestone that we've really been waiting on and paved the way for verified high quality credits to come into this market in the near future and clear out the less meaningful ones that are really lower quality and therefore lower price from supply. So really, over that longer time horizon, we still believe the man will outpace supply approaching 2030 as people focus on their net zero commitments and really beyond that.

Mark Mchugh: And what that's going to do is create basically an approved credit that from our discussions with customers is something that they really believe will be recognized globally as a benchmark for high-quality carbon credits, you know, ensuring that they represent real, verifiable, and additional emission reductions.

April Tice: I'll now turn it back over to April to cover our real estate results. Thanks, Doug. As detailed on page 12, the contribution from a real estate segment during the second quarter was considerably higher than the first quarter fueled in large part by a non-strategic performance sale in New Zealand. Real estate revenue totaled $31 million on $14,600 acres sold at an average price of $1,750 per acre. Real estate segment adjusted EBITDA in the second quarter with $19 million.

Mark Mchugh: So we think this is a major milestone that we've really been waiting on and paves the way for verified high-quality credits to come into this market in the near future and clear out the less meaningful ones that are really lower quality and therefore lower price from supply.

Mark Mchugh: So, really, over that longer time horizon, we still believe demand will outpace supply, approaching 2030, as people focus on their net-zero commitments and really beyond that. And so we're positioning ourselves to support that growth and demand and immediately contribute to this project, you know, by pursuing pilot projects that incorporate these latest improvements to the core carbon principles. So we still think this market has some time to develop and that prices have room to run, and we're being patient.

Speaker Change: so really that longer time risiseon we still believe the manwout pay supply proaching two thousand and thirty as people focus on net erk ments

Doug Long: And so we're pushing ourselves to support that growth and demand and immediately contribute to this project, you know, with pursuing product projects that incorporate these latest improvements with the core carbon principles. So we still think this market has some time to develop in that I'm pricing has room to run, and we're being patient.

Mark Mchugh: and really beyond that. And so we're positioning ourselves to support that growth and demand and immediately contribute to this project, you know, with pursuing pilot projects that incorporate these latest improvements to the core carbon principles. So we still think this market has some time to develop and that pricing has room to run and we're being patient.

Doug Long: Yeah, as it relates to just the ability to monetize New Zealand credits, you know, in the voluntary market in the US, you know, recognize those are two different markets and those credits are not those credits are not fungible. There has been a lot of press about, you know, some of the quality issues with credits that have been issued historically in the voluntary carbon market, whereas obviously the regulated market. Credit is a credit is a credit. So I think as we see, you know, better standards evolve in the voluntary market. Yeah, you'd like to get to a point where they are considered, you know, more or less fungible, but we're certainly not there yet.

April Tice: Drilling down, sales and the improved development category totaled $2.6 million, and our Heartwood Development Project south of Savannah, Georgia, sales consisted of two residential pods for $1.6 million or $34,000 per acre. In our Wildlife Development Project north of Jacksonville, Florida, we sold an 8 acre commercial parcel for $1 million or $125,000 per acre. Despite the elevated interest rate environment, we continue to see healthy interest from home builders as both our projects continue to benefit from favorable migration patterns as well as relatively affordable price points.

Speaker Change: Yeah, as it relates to just the ability to monetize New Zealand credits, you know, in the voluntary market in the U.S., you know, recognize those are two different markets and those credits are not fungible. There has been a lot of press about, you know, some of the quality issues with credits that have been issued historically in the voluntary carbon market, whereas obviously in a regulated market, a credit is a credit is a credit. So I think as we see, you know, better standards evolve in the voluntary market, you'd like to get to a point where they are considered, you know, more or less fungible, but we're certainly not there yet.

Gregory Andreopoulos: Thank you very much. Thank you.

Operator: Thank you. Our next question comes from Matthew McKellar with RBC Capital Markets. Your line is open.

Matthew Mckellar: Thank you very much.

Matthew Mckellar: Our next question comes from Matthew McCleller with RBC Capital Markets. Your line is open.

Speaker Change: Thank you. Our next question comes from Matthew McKellar with RBC Capital Markets. Your line is open.

Matthew Mckellar: Hi, good morning. Take a take my questions. Could you share how you're thinking about the pace of a lot of absorption and development wildlife over the next year? So that communities built a lot of moments over the past few years, and you mentioned good interest, but just want to see any signs of caution from builders in the area. You know, I'd say that the single-family home building market has held up reasonably well. I mean, that's in there's been a lot of, you know, it's been pretty well publicized in terms of how that market is held up in the face of higher interest rates.

April Tice: Interest from developers for non-residential end uses remains stable, but some deals are taking longer to materialize in the current financing environment. While we expect that the timing of land sales will remain lumpy quarter to quarter, as we detailed in our investor day in February, we continue to see growing pipeline of opportunities in our development business.

Matthew Mckellar: Hi, good morning. Thanks for taking my questions. Could you share how you're thinking about the pace of lot absorption and development, wildlife over the next year or so? That community has built a lot of momentum over the past few years and you mentioned good interest, but just wondering if you see any signs of caution from builders in the area?

Matthew Mckellar: You know, I'd say that the single-family home building market has held up reasonably well. I mean, there's been a lot of, it's been pretty well publicized in terms of how that market has held up in the face of higher interest rates.

Matthew Mckellar: You know, I'd say that the single-family home building market has held up reasonably well. I mean, there's been a lot of – you know, it's been pretty well publicized in terms of how that market has held up in the face of higher interest rates. You know, the benefit of hindsight, we now know that a lot of existing homeowners are essentially locked into low-rate mortgages, which has really dried up supply in the resale market, so much of that demand for homes has transitioned into the new home construction market, and particularly large national home builders have been very successful in essentially buying down rates in order to further stimulate demand in that market. Yeah, I think given the demographics of our projects in Wildlight and Hartwood, as well as the relatively –

Matthew Mckellar: With the benefit of hindsight, we now know that a lot of existing homeowners are essentially locked into low-rate mortgages, which has really dried up supply in the resale market. So much of that demand for homes has transitioned into the new home construction market. And particularly large national home builders have been very successful in essentially buying down rates in order to further stimulate demand in that market. I think given the demographics of our projects in Wildlight and Hartwood, as well as the relatively affordable price point, when you look at those markets relative to other areas of the state or even more broadly the U.S., we do think that those areas have remained very attractive.

Mark Mchugh: You know, the benefit of hindsight, we now know that a lot of existing homeowners are essentially locked into low-rate mortgages, which has really dried up supply and the retail market for so much of that demand for homes is transition. Into the new home construction market, and particularly large national home builders, have been very successful in essentially buying down rates in order to stimulate demand in that market. Yeah, I think given the demographics of our projects and Wild Light and Heartwood, as well as the relatively affordable price point when you look at those markets relative to other areas of the state or even more broadly the US.

April Tice: Lastly, during the second quarter, we also closed on a non-strategic timberland sale in New Zealand. The transaction consisted of approximately 13,000 acres for roughly $16 million or $1,200 per acre. The transaction included several geographically isolated parcels with above-average production costs, a relatively young age-class distribution and below-average operability, with only about 50% of the total acres classified as plantables. The sale price per acre reflects the below-average quality of this asset and is not indicative of the overall value of our New Zealand timberland portfolio. Notably, this transaction was initiated mid-last year.

Matthew Mckellar: affordable price point when you look at those markets relative to other areas of the state even more broadly the u s we do think that those those areas have remained very attracve and we've certainly transition that in terms ofthe scale that project we've certainly transitioned more towards dealing with large national home builders and so you know i think the the market is certainly more cautious today than it was you know couple of years ago but overall we still feel pretty good about the pace of absorption and the levelof interest that we're seeingin those markets

Mark Mchugh: We do think that those areas have remained very attractive, and we've certainly transitioned in terms of scale that project. We've certainly transitioned more towards dealing with large national home builders, and so you know, I think the look, the market is certainly more cautious today than it was a couple years ago, but overall we still feel pretty good about the pace of absorption and the level of interest that we're seeing in those markets. Ricketts.

Matthew Mckellar: And we've certainly transitioned, in terms of the scale of that project, we've certainly transitioned more towards dealing with large national home builders. And so, you know, I think that the market is certainly more cautious today than it was, you know, a couple years ago, but overall, we still feel pretty good about the pace of absorption and the level of interest that we're seeing in those markets.

Matthew Mckellar: Okay, thanks very much for that color.

Doug Long: And then for Q3 specifically, do you expect any impact to your business, whether it be disruption to harvest operations or otherwise in the South with some of the heavy rain from the Debbie tropical storm, or even conversely, would you expect to potentially benefit in some areas given maybe better road infrastructure versus other owners of timberland in the area?

Collar: Okay, thanks very much for that, Collar. And then for Q3 specifically,

Matthew Mckellar: Do you expect any impact to your business, whether it be disruption to harvest operations or otherwise, in the south with some of the heavy rain from the Debbie tropical storm, or maybe even conversely, would you expect to potentially benefit in some areas given any better road infrastructure versus other owners of Timberland in the area?

Matthew Mckellar: Do you expect any impact to your business, whether it be disruption to harvest operations or otherwise, in the south with some of the heavy rain from the Debbie tropical storm, or maybe even conversely, would you expect to potentially benefit in some areas, given maybe better road infrastructure versus other owners of timberland in the area?

April Tice: It is not related to the review of our strategic alternative for our New Zealand joint venture interest.

Doug Long: Yeah, sure, this is Doug. I'll be happy to have you answer that question. Yeah, I mean, in localized areas, obviously we've seen rainfall from seven inches up to well over a foot. So it's going to have a short-term impact on being able to produce some produce logs. But same point in time, it's reducing a lumber capacity to say NSO at the pulp mills and things like that. So short term, we do believe that, you know, there's a slowdown in removals, but we're already moving crews around and, into your point, our infrastructure investments. So we do think there's an opportunity for for lanners like ourselves. We've made those investments to recognize increased volume into the mills as well as potentially some pricing comes from that.

Doug: Sure, this is Doug. I'll be happy to answer that question.

Doug: Yeah, I mean, in localized areas, obviously, we've seen rainfall from seven inches up to well over a foot. So it's going to have a short-term impact on being able to produce logs. But at the same point in time, it's reducing lumber capacity, as you say, and that's all at the pulp mills and things like that. So, short-term, we do believe that, you know, there's a slowdown in removals, but we're already moving crews around, and to your point, our infrastructure investments.

Doug: Yeah, I mean, in localized areas, obviously, we've seen rainfall from seven inches up to well over a foot, so it's going to have a short-term impact on being able to produce logs.

Doug: But same point in time, it's reducing lumber capacity, as you say, and that's all at the pulp mills and things like that. So, short term, we do believe that, you know, there's a slowdown in removals, but we're already moving crews around. And to your point, our infrastructure investments.

Doug: So we do think there's an opportunity for landowners like ourselves who've made those investments to recognize increased volume into the mills, as well as potentially some pricing comes from that. So it is a short-term, but long-term, we don't think it's a major impact there. And with our geographic diversity, you know, it impacts kind of our coastal Florida, Georgia, but the rest of our operations, it's had no impact

Doug: So we do think there's an opportunity for landowners like ourselves who've made those investments to recognize.

April Tice: As a reminder, our guidance excludes the potential impact from any additional effort sales as part of our previously announced $1 billion disposition target. With respect to our individual segments, in our Southern timber segment, we expect full year harvest volumes toward the lower end of prior guidance, as we look to opportunistically flex our volume in response to market conditions. Further, we anticipate that pine-stumpage realizations will be lower in the second half of the year as compared to the first half due to a less favorable geographic mix, lower saw log prices, and a relatively higher proportion of thinning volume.

Doug Long: So it is a short term, but the long term, we don't think has made your impact there. And with our geographic diversity, you know, impacts kind of our coastal Florida, Georgia, but the rest of our operations, it's had no impact on.

Doug: Increased volume into the mills, as well as potentially some pricing comes from that. So it is a short term, but long term we don't think it's going to be a major impact there. And with our geographic diversity, you know, it impacts kind of our coastal Florida, Georgia, but the rest of our operations it's had no impact on.

Matthew Mckellar: Okay, great.

Operator: Okay, great. So then last one for me, just touching on the log exports out of the Pacific Northwest. Have you seen any change in market conditions there or any additional attention to the markets compared to what you saw in Q2?

Matthew Mckellar: So then last one for me, just, just touching on the log exports out of the Pacific Northwest. Have you seen any change in market additions there? Any additional pension in the markets compared to what you saw in Q2? I would say it's pretty much the same.

Operator: Okay, great. So then, last one for me, just touching on the log exports out of the Pacific Northwest, have you seen any change in market conditions there, any additional tension in the markets compared to what you saw in Q2?

Doug Long: So we're still, you know, the opportunities for additional exports into China have pretty much remained the same quarter of a quarter, a little bit of improvement to Japan, from what we've seen, but nothing significant to change. Okay, thanks.

Operator: I would say it's pretty much the same. So we're still, you know, the opportunities for additional exports into China have pretty much remained the same quarter over quarter. A little bit of improvement to Japan from what we've seen, but nothing significant to change.

April Tice: Lastly, we remain encouraged by the momentum of our land-based solutions business and continue to expect higher non-timber income for full year 2024 relative to full year 2023. Overall, we anticipate full year Southern timber adjusted EBITDA toward the lower end of our prior guidance range. In our Pacific Northwest timber segment, we expect to achieve full year volumes slightly below our prior guidance. As Doug discussed, pricing conditions have been relatively stable this far in 2024, but our ability to increase deliver log prices has been constrained by challenging domestic and export market conditions.

Matthew Mckellar: That's all for me.

Operator: I'll turn it back. Thank you.

Speaker Change: Okay, thanks. That's all for me. I'll turn it back.

Operator: If you would like to ask a question, please press star one.

Speaker Change: Thank you.

Speaker Change: If you would like to ask a question, please press star 1. Our next question comes from Buck Horne with Raymond James. Your line is open.

Buck Horne: Our next question comes from Black Horn with Raymond James. Your line is open.

Buck Horne: Hey, thanks.

Buck Horne: Good morning. I just want to follow up on the kind of the weather update situation with the ground, you know, post Debbie. I guess my follow up would be, you know, if we continue to have a very busy storm season across the Southeast. Feels like your guidance is somewhat dependent on really ramping up harvest activity throughout the third and fourth quarters to kind of recover for the two Q deferrals. Just wondering, you know, what's, you know, what's the flexibility, I guess, across the region if we continue to have a fairly active storm season across the region?

Speaker Change: Hey, thanks for the morning. I just kind of want to follow up on the kind of the weather update situation with the grounds, you know, post-Debbie. I guess my follow-up would be, you know, if we continue to have a very busy storm season across the Southeast, it feels like your guidance is...

Speaker Change: is somewhat dependent on really ramping up harvest activity.

Speaker Change: throughout the third and fourth quarters to kind of recover for the 2Q deferrals. Just wondering, you know, what's, you know, what's the flexibility, I guess, across the region if we continue to have a fairly active storm season across the region?

April Tice: While we believe there is some modest upside potential as we move through the balance of the year, we have tempered our pricing expectations as compared to earlier in the year. Overall, we expect full year Pacific Northwest timber adjusted EBITDA toward the lower end of our prior guidance range. In our New Zealand timber segment, we are on track to achieve our full year volume guidance as we anticipate relatively higher harvest volumes during the second half of the year as compared to the first half.

Mark Mchugh: Hey, Buck, this is Mark, and I'll maybe start and then kick it over to Doug for an additional detail. But, you know, recognize as well when you mentioned that the guidance was contingent upon higher harvest levels in the back half the year, that's really more around the Pacific Northwest and New Zealand and less so in the South. We did have a very large harvest volume in Q one on the US South. We had actually guided towards lower harvest volumes for the balance of the year in the US. South in particular, so that commentary around, you know, recouping some volume over the balance of the year was really more specific to New Zealand and the Pacific Northwest more so than the South. But, you know, certainly we could have some impacts to, you know, removal activity given the storms that we've seen. But again, recognize that can also be a double it short in the sense that when you when volume is constricted due to what weather events and due to the inoperability of timber harvest tracks, we tend to see some pricing tension developed.

Speaker Change: but this is market maybe started and over to additional detail but recognizeas well when you mentioned that the guidance was contingent upon higherharvest levels in the back half of the year that's really more around the the ciacific northwest and new zeal and unless so in the south we did have a very large harvest volume and in q one the u s sou we had actually guided towards lower harvest volumees for the balance of the year in the us sou and particular so that commentary around you know grouping some volallme over the oundanceof the year wasreally more specific to and the acific northwest more so than the south butyou know certainly we could have some impact to you know rmove activity given given the torms that we

April Tice: Further, we continue to expect that full year domestic and export saw timber pricing will improve modestly relative to the full year pricing achieved in 2023. Despite improved pricing conditions, we expect full year New Zealand timber adjusted EBITDA to fall slightly below our prior guidance range due to lower carbon sales, so softer export markets and elevated shipping costs. In our real estate segment, we continue to see healthy interest in our development projects and rural properties. We continue to anticipate full year adjusted EBITDA within our prior guidance range with transaction activity heavily concentrated in the fourth quarter.

Doug: Rayonier is a large owner of timberlands and a well-invested road infrastructure, often stand to benefit from that in the sense that we have better access to our lands than perhaps some of the non-industrial private landowners. And so, you know, again, there's some puts and takes there, but I don't know, Doug, if you'd add anything to that. Mark, I think you did a great job with that. I would just reiterate to your point that typically if we've seen...

Doug Long: And we ran here is a large owner of timberlands in a well-invested road infrastructure. Often, we stand to benefit from that in the sense that we have better access to our lands than perhaps some of the, you know, non-industrial private landowners. And, you know, again, there's some puts and takes there, but Doug, if you'd add anything to that, Mark, I think you did a great job with that. I would just reiterate to your point that typically, if we've seen our operations constrain, that simply means that everyone else has been constrained to the point where pricing oftentimes offsets the impact the reduced risk volume.

Mark Mchugh: I'll now turn the call back over to Mark for closing comments. Thanks, April. As I reflect on the first half of the year, I'm proud of how our team has continued to navigate challenging operating conditions with an unwavering focus on making decisions in the best long-term interest of Rainier and its shareholders. To this end, we elected to strategically defer some harvest in more challenge markets to preserve value in the face of ongoing headwinds posed by soft domestic lumber markets and lower export market demand.

Unknown Executive: I would just reiterate your point that, typically, if we've seen our operations constrained, that typically means that everyone else has been constrained to the point where pricing oftentimes offsets the impact of reduced volumes, pretty much as you said.

Speaker Change: Our operations constrain, that typically means that everyone else has been constrained to the point where pricing often times offsets the impact of reduced volumes, pretty much to what you said.

Buck Horne: It's pretty much what you said or to ask. Gotcha.

Buck Horne: Thanks, guys. That's really helpful color.

April Tice: And then I guess, you know, related to, I guess this kind of combination question, but it's related to, you know, the dividend policy and dividend sustainability here, you know, cash load trends seem to be trending, you know, well below the payout schedule at the moment, you know, with the dispositions that are planned for, you know, the back app this year or in the next year, you know, what's the, you know, the thought process around, you know, near term dividend sustainability or addressing the payout ratio sometime in the near future, what's the, kind of, what's the outlook and what's the, what's the flexibility on the balance sheet?

Speaker Change: Thanks guys, that's really helpful color. And then I guess, you know, related to, I guess it's kind of combination question, but it's related to, you know, the dividend policy and dividend sustainability here, you know, cash flow trends.

Mark Mchugh: Despite the headwinds facing sautamer markets this year, we are encouraged by the sustained improvement in pulp mill operating rates across our U.S. South footprint and the corresponding gains in public pricing that we've been able to capture. The prospect of rate cuts later this year, coupled with continued low log inventories in China, give us additional reasons for optimism over the balance of the year. On the real estate front, we've been pleased by the continued demand for both rural and development properties despite the higher interest rate environment.

Speaker Change: seem to be trending wellbelow the payout schedule at the moment with the dispositions that are planned for the back half this year and into next year what's the the

Speaker Change: You know, the thought process around, you know, near term dividend sustainability or addressing the payout ratio sometime in the near future. What's the kind of what's the outlook and what's the what's the flexibility on the balance sheet?

Mark Mchugh: As previously discussed, we expect a significantly stronger contribution from our real estate segment during the second half of the year versus the first half. We also believe that more favorable financing conditions could further bolster the already healthy demand we're seeing across our real estate categories.

April Tice: Yeah, I mean, it's a release to this year, Buck. You know, keep in mind, we don't manage our dividend funding or really focus on the payout ratio on a quarter-by-quarter basis.

Unknown Executive: Yeah, I mean, as it relates to this year, Buck, keep in mind, we don't manage our dividend funding or really focus on the payout ratio on a quarter-by-quarter basis. Rather, we're really focused on long-term dividend sustainability and growth.

Unknown Executive: Yeah, I mean, as it relates to this year, Buck, you know, keep in mind, we don't manage our dividend funding or really focus on the payout ratio on a quarter-by-quarter basis.

April Tice: You know, rather, we're really focused on long-term dividend sustainability and growth. Clearly, this year has gotten off to a slower start than we anticipated, but as we discussed during the prepared remarks, you know, some of this is really timing related with respect to harvest activity and real estate closings. It's also worth noting that, you know, even with the slower start of the year, our year-to-date CAD is only about $4 million short of where we were last year at this point in time. And that's largely due to the payout of some of our higher cost debt late last year with the proceeds of the Oregon disposition.

Speaker Change: you rather really focused on long-term dividends sustainability and growth clearly this year has gotten off to to a slower start that we anticipated but as we discussed during the prepared remarks youknow some of this is really timing related with respect to harest activity and real estate closings

Unknown Executive: Clearly, this year has gotten off to a slower start than we anticipated, but as we discussed during the prepared remarks, some of this is really timing-related with respect to harvest activity and real estate closings. It's also worth noting that even with the slower start to the year, our year-to-date CAD is only about $4 million short of where we were last year at this point in time. That's largely due to the paydown of some of our higher-cost debt late last year with the proceeds of the Oregon disposition.

Unknown Executive: It's also worth noting that, you know, even with the slower start to the year, our year-to-date CAD is only about $4 million short of where we were last year at this point in time. And that's largely due to the pay down of some of our higher cost debt late last year with the proceeds of the Oregon disposition.

Unknown Executive: Of course, right now, we're really focused on further advancing our asset disposition target, which we continue to believe will be accretive to CAD on a per-share basis. We also expect that second-half cash flow will be significantly higher than first-half cash flow. When you put all these factors together, we're still targeting a dividend that is fully funded this year, or at least very close to it. Going forward, as we see the run rate impact of our disposition and the leveraging plan take effect, we expect that dividend funding should further improve from there.

April Tice: You know, of course, right now we're really focused on further advancing our asset disposition target, which we continue to believe will be accretive to CAD on a per share basis. We also expect that second half cash flow will be significantly higher than the first half cash flow. So, you know, when you put all these factors together, you know, we're still targeting a dividend that is fully funded this year, at least very close to it.

Speaker Change: yeah of course rightnow we're really focused on on further advancing our asset disposition target which we continue to believe will be accretive to c a on a per sure basis we also expected second half cash flow be significantly higher than than first half cash flow so youknowwhen you put all these factors together we're still targeting a dividend that is fully funded this year asts very close to it and going forward as we see the run rate impact of our disposition and de leveraging planant take a fectfact you knowwe expect the dividendfunding should fur prove from there

Operator: That concludes our prepared remarks, and I'll turn the call back to the operator for questions. Thank you. If you would like to ask a question, please press star one. To withdraw your question, press star two. Once again, to ask a question, please press star one. One moment for our first question.

April Tice: And going forward, as we see the run rate impact of our disposition and the leveraging plant take effect, you know, we expected dividend funding should further improve from there.

Buck Horne: Thanks, guys.

Buck Horne: Good luck. Thanks, Buck.

Mark Weintraub: Our first question comes from Mark Weintraub with Seaport Research Partners. Your line is open. Thank you.

Speaker Change: Thanks guys, good luck.

Operator: I am showing no further questions at this time.

Buck: Thanks, Buck.

Collin Mings: I will turn the conference back to Colin. We can have.

Mark Mchugh: Two quick questions. One, when you originally announced the disposition plan you had suggested an 18-month time frame, is that still the right duration to be thinking about, or any update there? Hey, Mark. This is Mark. Good morning. Yeah, that is still the right time frame to be thinking of. As we said in the prepared remarks as well as in the release, we've made quite a bit of progress here in the last several months. And we look forward to sharing more details on or before our next earnings call.

Unknown Executive: I am showing no further questions at this time. I will turn the conference back to Collin.

Collin Mings: Mr. Colin Bing, I'd like to thank everybody for joining us. Please contact us with any follow-up questions. Thank you for your participation.

Unknown Executive: This is Collin Mings. I'd like to thank everybody for joining us. Please contact us with any follow-up questions.

Operator: Thank you for your participation. Please, participants, you may disconnect at this time.

Operator: Participants, you may disconnect at this time.

Operator: Thank you for your participation. Participants, you may disconnect at this time.

Doug Long: Okay. Appreciate that. And then any additional specifics in terms of things that might have moved forward on land-based solutions, and you made some general comments. But were there any updates that you can give us in terms of things concretely seen done during the quarter?

Doug Long: Sure.

Doug Long: Good morning. This is Doug. Yeah, on the land-based solutions front, our team continues to advance a range of opportunities with high quality counterparts, which before, but to your point recently, we've added another 5,000 acres of executed carbon capture storage leases. And as we discussed in our last call, we're still well in the way to achieving our ear and goals of having over 70,000 acres, under lease for carbon capture storage, and targeting over 50,000 acres under options for solar.

Doug Long: So we continue to believe our portfolio is uniquely well positioned to provide these solutions as may large corporations are setting ambitious sustainability goals. And clean those comments to reduce their carbon footprint and increase the use of renewable energy. So we did have some success in the quarter cap. Current quarter, and we're seeing great progress has moved forward for this. Right.

Mark Mchugh: In curiosity, back in February, you provided some targets. I guess we're six months forward from that. How do you feel about those targets today versus how you felt about them back in February? Yeah, I'd say we still feel very good about those targets and if anything else, we're seeing them probably more interested than we had in February for these type of opportunities. Okay, thanks so much. Thank you.

Gregory Andreopoulos: Our next question comes from Anthony Pettinari. Lucidie, your line is open. Hi, good morning. This is Gregory on for Anthony. First, I guess I'm sorry, Timberlands. Can you just comment on what you saw across your various other regions in the second quarter and maybe what's implied in the full year guidance? And then I'm wondering also if there are any disparities locally in the South? Are the main drivers there kind of sawmill operating rates or are there more kind of nuanced drivers of prices regionally?

Gregory Andreopoulos: We'll have to hear your thoughts there. Sure, this is Doug again. I'll be happy to start there. Yeah, I think one thing that's important is to keep in mind that we do a combination of stumpage sales and delivered sales and we don't have exact control in the quarter when a stumpage track is going to be harvested. And those buyers simply have a year to harvest and we'll start selling toward the end of Q4 the prior year and in the beginning of the current year.

Gregory Andreopoulos: And so the extent there's market softness or weather issues such as we saw in Texas and Louisiana, there can be some short-term timing differences. And to your point, I think it's worth noting that for the first half of the year, the southern portion of our southwest resource unit, so kind of the Texas and Louisiana along the Gulf Coast there, receive more rain than the historical yearly average. So in the first six months, they received over a year's worth of rain.

Gregory Andreopoulos: And if you saw in the news story, you probably saw the flooding in Houston things like that, so you can appreciate that. So we did see some reductions in harvest in those areas where it was just too wet to harvest, but we've seen improvements there. And plus, given the market conditions, we've been pretty delivered about what we brought to market and we didn't look to chase volume. So that said, after a challenging kind of second quarter in the stumpage, our removals are head of forecast for July across all of our southern units.

Doug Long: So we've seen some improvements across there as a new forward. Thank you for that. There may be a figure to just have one follow-up on carbon credits. So, you know, based on the data I'm seeing, it looks like New Zealand carbon credits kind of leveled off. They dropped off pretty sharply in March, April, and they've kind of leveled off since then. So I'm wondering if you can kind of put some context around what's kind of that our supply is tightened.

Doug Long: And then, you know, can you for your New Zealand credits that you have on the balance sheet, are these able to be sold into the US market at all? And, you know, I'm only asking because it seems like the credits on your balance sheet are pretty high quality, pretty rigorously tested. And, you know, Bloomberg put out the headline recently about, you know, 32% of all credits failing this approval test. So, you know, in my mind, you may be able to get better pricing in the US market, you know, if good credits are recommending premiums, or is that not right?

Doug Long: What do you think about it? Hi, Greg. This is April. I'll take that. So I'll just like the first half of your question, then I'll turn it up to turn it over to Doug to follow up. So, you know, as we detailed in our supplement, we sold about $4.4 million worth of carbon credits in New Zealand in the second quarter. And that was that was up from 400,000 and Q2 of 2023.

Doug Long: So, you know, as we talked about in and Doug said in our prepared remarks, you know, last year we deferred our New Zealand sales early in 2023 because there was such volatility in the market, but we'll resume sales later in the year. So we'll that's what we're doing now. We're being opportunistic about how we're selling them in New Zealand, as far as like the stability in the market. So overall, the regulatory backdrop has been stabilized.

Doug Long: It's been that way for, you know, it was last quarter, this quarter, it's continued. The government has indicated that they're not really contemplating any significant changes to the ETS in the near term. What drove some price drop earlier in the year was that there was an auction in March and the it failed to reach the full subscription. So the pricing pretty much backdroped off of that point. And so, but overall, the pricing is still strong from a historical perspective.

Doug Long: It's leaning around 50 to 55 NCD, which is pretty strong. And so we're continuing to be active in that market. Yeah, and I'll just address your question a little more around them, the quality of markets and things like that. So as we discussed in our investor day, we continue to be very deliberate and how we're thinking about moving forward in that voluntary carbon market. Given our discussion of potential buyers, who are very focused on those high quality carbon credits.

Doug Long: And we see that market really evolving towards that higher quality, as you mentioned, you know, that given our high timber, but it just hasn't made sense for us yet to move forward. That said, we're very encouraged by the progress of the integrity council for voluntary carbon markets, ICVCM and their comic core principles accreditation process. And what that's going to do is create basically a approved credit that from our discussions with customers is something they really believe.

Doug Long: We'll be recognized globally as a benchmark for high quality carbon credits, you know, and showing that they represent real verifiable and additional mission reductions. So we think this is a major milestone that we've really been waiting on and paved the way for verified high quality credits to come into this market in the near future and clear out the less meaningful ones that are really lower quality and therefore lower price from supply.

Doug Long: So really over that longer time horizon, we still believe the man will outpace supply approaching 2030 as people focus on their net zero commitments and really beyond that. And so we're pushing ourselves to support that growth and demand and immediately contribute to this project, you know, with pursuing product projects that incorporate these latest improvements with the core carbon principles. So we still think this market has some time to develop in that I'm pricing has room to run and we're being patient.

Doug Long: So I think as we see, you know, better standards evolve in the voluntary market. Yeah, you'd like to get to a point where they are considered, you know, more or less fungible, but we're certainly not there yet. Thank you very much. Thank you.

Matthew Mckellar: Our next question comes from Matthew McCleller with RBC Capital Markets. Your line is open. Hi, good morning.

Mark Mchugh: Take a take my questions. Could you share how you're thinking about the pace of lot of absorption and development wildlife over the next year? So that communities built a lot of moments over the past few years and you mentioned good interest, but just want to see any signs of caution from builders in the area. You know, I'd say that the single family home building market has held up reasonably well. I mean, that's in there's been a lot of, you know, it's been pretty well publicized in terms of how that market is held up in the face of higher interest rates.

Mark Mchugh: You know, the benefit of hindsight, we now know that a lot of existing homeowners are essentially locked into low rate mortgages, which is really dried up supply and the retail market for so much of that demand for homes is transition. Into the new home construction market and particularly large national home builders have been very successful and essentially buying down rates in order to stimulate demand in that market. Yeah, I think given the demographics of our projects and wild light and heartwood as well as the relatively affordable price point when you look at those markets relative to other areas of the state or even more broadly the US.

Mark Mchugh: We do think that those areas have remained very attractive and we've certainly transitioned in terms of scale that project. We've certainly transitioned more towards dealing with large national home builders and so you know, I think the look, the market is certainly more cautious today than it was a couple years ago, but overall we still feel pretty good about the pace of absorption and the level of interest that we're seeing in those markets. Ricketts. Okay, thanks very much for that color.

Doug Long: And then for Q3 specifically, do you expect any impact to your business, whether it be disruption to harvest operations or otherwise in the South with some of the heavy rain from the Debbie tropical storm or even conversely, would you expect to potentially benefit in some areas given maybe better road infrastructure versus other owners of timberland in the area?

Doug Long: Yeah, sure, this is Doug. I'll be happy to have you to answer that question. Yeah, I mean, in localized areas, obviously we've seen rain rainfall from seven inches up to well over a foot. So it's going to have a short term impact on on being able to produce some produce logs. But same point in time, it's reducing a lumber capacity to say NSO at the pulp mills and things like that. So short term, we do believe that, you know, there's a slowdown and removals, but we're already moving crews around and into your point, our infrastructure investments.

Doug Long: So we do think there's an opportunity for for lanners like ourselves, we've made those investments to recognize increased volume into the mills as well as potentially some pricing comes from that. So it is a short term, but the long term, we don't think has made your impact there.

Doug Long: And with our geographic diversity, you know, impacts kind of our coastal Florida, Georgia, but the rest of our operations, it's had no impact on. Okay, great.

Operator: So then last one for me, just, just touching on the log exports out of the Pacific Northwest. Have you seen any change in market additions there? Any additional pension in the markets compared to what you saw in Q2? I would say it's pretty much the same. So we're still, you know, the opportunities for additional exports into China have pretty much remained the same quarter of a quarter, a little bit of improvement to Japan, from what we've seen, but nothing significant to change. Okay, thanks. That's all for me. I'll turn it back. Thank you. If you would like to ask a question, please press star one.

Buck Horne: Our next question comes from Black Horn with Raymond James. Your line is open. Hey, thanks. Good morning. I just want to follow up on the kind of the weather update situation with the ground, you know, post Debbie. I guess my follow up would be, you know, if we continue to have a very busy storm season across the southeast. Feels like your guidance is somewhat dependent on really ramping up harvest activity throughout the third and fourth quarters to kind of recover for the two Q deferrals. Just wondering, you know, what's, you know, what's the flexibility I guess across the region if we continue to have a fairly active storm season across the region?

Mark Mchugh: Hey, Buck, this is Mark and I'll maybe start and then kick it over to Doug for an additional detail, but you know, recognize as well when you when you mentioned that the guidance was contingent upon higher harvest levels in the back half the year, that's really more around the Pacific Northwest and New Zealand and less so in the South, we did have a very large harvest volume in Q one on the US South. We had actually guided towards lower harvest volumes for the balance of the year in the US.

Mark Mchugh: South in particular, so that commentary around, you know, recouping some volume over the balance of the year was really more specific to New Zealand and the Pacific Northwest more so than the South, but, you know, certainly we could have some impacts to, you know, removal activity given given the storms that we've seen, but again, recognize that can also be a double it short in the sense that when you when volume is constricted due to what weather events and due to the inoperability of timber harvest tracks, we tend to see some pricing tension developed. And we ran here is a large owner of timberlands in a well-invested road infrastructure often stand to benefit from that in the sense that we have better access to our lands than perhaps some of the, you know, non industrial private landowners and so, you know, again, there's some puts and takes there, but Doug, if you'd add anything to that, Mark, I think you did a great job with that.

Mark Mchugh: I would just reiterate to your point that typically if we've seen our operations constrain, that simply means that everyone else has been constrained to the point where pricing oftentimes offsets the impact the reduced risk volume. It's pretty much what you said or to ask. Gotcha. Thanks, guys. That's really helpful color.

Mark Mchugh: And then I guess, you know, related to, I guess this kind of combination question, but it's related to, you know, the dividend policy and dividend sustainability here, you know, cash load trends seem to be trending, you know, well below the payout schedule at the moment, you know, with the dispositions that are planned for, you know, the back app this year or in the next year, you know, what's the, you know, the thought process around, you know, near term dividend sustainability or addressing the payout ratio sometime in the near future, what's the, kind of, what's the outlook and what's the, what's the, what's the flexibility on the balance sheet? Yeah, I mean, it's a release to this year, Buck.

Mark Mchugh: You know, keep in mind, we don't manage our dividend funding or really focus on the payout ratio on a quarter by quarter basis. You know, rather, we're really focused on long-term dividend sustainability and growth. Clearly this year has gotten off to a slower start that we anticipated, but as we discussed during the prepared remarks, you know, some of this is really timing related with respect to harvest activity and real estate closings.

Mark Mchugh: It's also worth noting that, you know, even with the slower start of the year, our year-to-date CAD is only about $4 million short of where we were last year at this point in time. And that's largely due to the payout of some of our higher cost debt late last year with the proceeds of the Oregon disposition. You know, of course, right now we're, we're really focused on, on further advancing our asset disposition target, which we continue to believe will be accretive to CAD on a per share basis.

Mark Mchugh: We also expect that second half cash flow will be significantly higher than, than first half cash flow. So, you know, when you put all these factors together, you know, we're still targeting a dividend that is fully funded this year, at least very close to it. And going forward, as we see the run rate impact of our disposition and the leveraging plant take effect, you know, we expected dividend funding should further improve from there. Thanks, guys. Good luck. Thanks, Buck. I am showing no further questions at this time. I will turn the conference back to Colin. We can have.

Operator: Mr. Colin Bing, I'd like to thank everybody for joining us. Please contact us with any follow-up questions. Thank you for your participation. Participants, you may disconnect at this time.

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