PCH - Earnings call transcript Q3 2018 | PotlatchDeltic Corporation

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Operator

Good morning. My name is Angela and I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic Third Quarter 2018 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator like the now Mr. over to would call turn to I Richards, Financial Chief President for Jerry and Officer Vice opening remarks. proceed. Sir, may you

Jerry Richards

in over Thank the Officer; third slides, This forward-looking morning. and and press and can good with the are and Operating comments that Mike the fourth our Also, me the turn you, our results concerning Officer. will PotlatchDeltic's and room to a I these third warning SEC then Cremers, Angela call Chief quarter call statements. presentation www.potlatchdeltic.com. found President Chairman investor Chief Executive note be quarter in with forward-looking our Mike in our Welcome the contain at webcast Eric for please on measures filings risks XXXX now Please call quarter to website our associated some statements will Covey, review non-GAAP outlook. earnings. cover and With on release, covering reconciliation of and and I'll statements. the

Michael Covey

Jerry and Products. good operate quarter or of in including to our meet continue Deltic continues contributed nearly you, and by third measure. We Wood February by million All every $XXX of everyone. expectations adjusted the in businesses that well, our merger exceed three to generated the we morning completed Thank EBITDA $XX million

achieved million $XXX exceed above since full Potlatch peak the to Clearwater previous EBITDA for spin. year, adjusted expect by We any the XX% almost

be is schedule, the the to end Mill complete. the synergy lifting most the effective few Speaking rate of million the to and September. has production target $XX of was we This we're have run some end announce over REIT that the close. was Deltic up, ramped heavy have achieved the the merger, is treated of target of goal well integration months, merger our given annual There work to with Deltic but hit as I'm of completed pleased still as by next that ahead a harvesting is and increased, of XXXX. levels at

though a to record all-time in been prices, high fall lumber lumber Turning hit the since has an in -- in prices market June. free

expected we we decline been pace market that's and fundamentals. inconsistent we have believe surprise a length the -- of downward and are While believe correction, a -- with

We homebuilder grow than fact remain largest expect is and significant year-over-year. will strong the important the the that growth, three units, that times there relative industry rates as of healthy. rate the demand market houses multifamily in Texas, a household been formation, and start X% up demand levels. lumber the mind wage side the Factors almost torrential units, including healthy will confidence, lumber on use hurricanes continue country. and rainfall to us give historic faster much are recent to amount in effect Single-family housing of in has housing major two as keep noise employment in supply which statistics, that include and consumer remain and operating affordable a of higher It confidence that to homebuilding about

more demand, single-digits age In been has market remodel construction. housing in addition, a the through remodel lumber and new mid the growing stocks of should is repair the home which and segment The than old about of and to strong repair home remain accounts prices. segment strong high for XX% bit U.S. and

Canadian the overhang appears equation, of have that first quarter. supply issues producers reduced it side supply this by in the the transportation On caused meaningfully

capacity U.S. Canada's supply fiber will term, is additions the documented availability Continuing well the U.S. it constrain longer Over ability the supply the lumber with market. to theme, that in

two only a requiring suppliers place in each to secure deposits be There sawmill line. and measured. equipment are will South major is

lumber dynamics, pricing fundamentals about think demand we the supply current and environment. much than As the appear stronger

support We we recent as are seasonally weather which past move Field disruptions. is should expect weakest inventories recovery. once of low, year part improvement well as pricing the what the

capital several to allocation, Turning we have ongoing initiatives.

to tax a During the our benefit. contributed quarter, million third we to pension capture $XX plan

the not In announced authorized distribution in the Today, to period of closed that late end Board repurchase. special be at asset a the XXth. with any converting value. did third trading August, share quarter our We on and our is discount We paid This in associated a at REIT purchase in $X.XX per in be are a mid-September. also a million $XX net we We before million November $XXX open completed cash share Deltic or XX% the will estimate August. and will shares significant to remainder stock. window

dividend ratio last XX-month is Our achieve basis, on for of a cash to available cost distribution payout excluding around synergies. XX%

we've mentioned the calls Board our on earlier in year, fourth As will this the revisit dividend quarter.

and ahead then more our a to repurchase return However, about prospects may and to share way attractive it take to at quarter price believe back have runway be we excited I'll questions. of now that Jerry shareholders. current the turn we'll I good PotlatchDeltic's continue a to be to discuss us. capital

Jerry Richards

the now in seasonal start north increased and page results. segment quarter the Resource acres. estate lumber from volumes The by was offset on each for Information prices shipments third in segment's in seasonally which $XX.X lighter due We higher The reflects lower in to that color in increased through in in per seven. Northern days adjusted quarter. third North the second Index content. harvested basis reflected This review the slides the tons million higher sale operating spring delivered June. more quarter, moisture of million million quarter X% sawlogs were higher mid-August provide through is quarter. increase when price I'll harvested of the prices is operating due log mostly sawlog I'll million and were ton third of displayed our is the The sawlog sawlog logs fewer of in our seasonally to prices with are million our real second the XXX,XXX EBITDA Mike. of the effect were lumber on five lumber prices quarter. segments in $XX.X quarter. that $XX weaker a from third realization four tons quarter third existed XXX,XXX to in the than largely $X.X the on Thanks the EBITDA the second limited slides. of in the benefit breakup. $XXX.X up Adjusted higher

the As the flat sawlog compared our a or a on to were mix in result, second quarter quarter. basis MBF volume third prices

quarter, Turning were second good the wet the Unseasonably quarter. second to operating in we the compared in to South, XXX,XXX weather tons while tons conditions XXX,XXX the the quarter. operations harvested in third down This was quarter. hampered

Our sawlog this higher were prices Southern X% quarter.

Our The due increased in year Southern hardwood was the higher harvest third weather sawlog in activity. third price wet as the quarter constrained this sawlog sawlogs ability quarter. muted effect seasonally to our hardwood realizations typically harvest to

and was quarter. covered net prices segment's quarter-over-quarter. flat cost $XX.X This million the shift Log slides on to in volumes were products, was Wood nine. eight sawlog which due $X.X to pine relatively higher increase now million, North. quarter in The to Southern million EBITDA harvest is the caused and second the to the third in adjusted haul the were to by the the issues second over expect compared second of feet year. which feet third million quarter. We and and in in the board made ship progress billion feet lumber Lumber truck rail $XX board shortfall for compared quarter $X to quarter. is $XXX shipments board still million just increased down on the $X I'll

XX. occur Estate conservation Cost the will two MDF feet from acre prices decreased due an not the the per X% average plant. did feet third decreased to on in $X.X Real Real largely Adjusted million sales non-strategic of lumber board in our thousand slides for the to per board our now third the I a volumes. $XXX $X the X,XXX Estate's mills quarter. Our quarter. mills on entity second transaction million approximately second shutdown higher A EBITDA $XXX the comparable due thousand to at panel third annual closed the to segment shipment decreased for quarter. timberlands related in the and maintenance acres in of to $XXX sale lumber adjusted quarter quarter. cover of EBITDA increased in We per XX

XX,XXX As land the first rural rural estate property significant result, Deltic the acres X,XXX sales on real third in to and in declined quarter acres of quarter. there the former second are the in completed a activity We believe few from rural opportunities sales the quarter. third Deltic timberlands

our on efficiencies XX. slide against merger progress the has Excellent February. Turning closed occurred and in since targets to operational synergies

ended of comprised quarter. benefit $XX.X we recorded the We $X.X tax mentioned, on highlights million timber Shifting have ahead run distribute As cash synergy end at special status. presented distribution the schedule pension cash. in be completes a so that this of the in with higher contribution income rate million income most The corporate million third in at to rates. of quarter to taxes of the million September. tax the future reduction $XX will up associated Separately, in well a tax operations contributions of we're with will a remainder liquidity target conversion XXXX REIT as $XXX.X to the million and slide accelerated we of XXth. this The to on to distribution third the part stock. quarter. our Deltic's XX. $XX We November distribution as us of the allowed Mike of at our deduction achieved The Doing special shareholders of we of to claim plan

return including other evaluating dividend in are a high our additional in We acquisitions. our uses and of repurchasing mills, increase, shares, cash, investing projects

refinancing third million in were X.X% million expense per at reduce addition, current $X in our considering $XX.X we which rates. debt matures expenditures interest Capital interest In about would are the year quarter. that XXXX,

outlook on that XX. $XX The $XX expenditures our in million included expect the to range the for capital We fourth be of are million assumptions quarter year. in embedded will slide

harvest than the expect to due EBITDA be lower volumes sawlog amount and third We adjusted resource quarter quarter to slightly less half prices. fourth

lower is lower This price to the assumes lumber third third We adjusted than Products' than in shipments. quarter. XX% XX% that to lumber expect materially and an average fourth the lower the EBITDA quarter slightly quarter Wood be realization

over average quarter fourth so in the are segment and quarter. Our the was higher in the nearing Estate's than that in year's sales and third has quarter. in adjusted a correction the to the planned a their December. in prices far just rate achieved We are expanded the ahead the price estimate despite generated Deltic be schedule. XXXX bottom EBITDA prices. synergy Most EBITDA the generate to the November we year. $XXX way target higher that opportunity of feet lower Real which thousand run We lumber than development million by adjusted lumber of million believe tremendous third quarter. been expect amount slowly the quarter board significantly work per the the $XX be will merger The fourth will our quarter, will $XXX is closed XX% for occur lot We of in and provided footprint year what would fourth first

invest flexibility and strong our That balance like to a cash I'd in sheet open Finally, remarks. shareholders up our to Angela, Q&A. now businesses. return to to the provides the prepared call concludes

Operator

John first Instructions] [Operator from Merrill Lynch. of Bank Babcock with of Your comes question America the line

John Babcock

Hey good morning.

particularly Just is thinking the topic the on share capital stock is repurchases, priorities now? latest right follow-up trading capital wanted given to quickly allocation the What on here. allocation including company's where

Michael Covey

Mike. it's John, Well,

mid-September. period As closed -- about Xst of $XXX in program on a I authorized Board in window The million September. our the us repurchase open mentioned,

So, whether we own price. fourth That's trade attractive estimates quarter net were significantly it's in opportunity able the in or a with become that a analyst in believe decline quarter. today, the to a below share not even We we our more asset value execute buyback our of third community.

which the high dividend always component share increase to important shareholders. of we at buyback quarter, the remains priority. fourth look certainly return a is capital said we'd how We've in an So a

about nothing be I think acquisitions, We major. So of acquisitions our just small two focus but top would still those broadly, think are mind. things bolt-on there talked I

John Babcock

trends wondering and topic And you. pricing fundamentals Thank lumber there. the then I the on of was Okay. more and

about the will chain versus to how And supply for -- or month inventories all two first right they it just in look And prices where generally hardwood talk where a conditions ago? you stand market could think now? first then you what take change direction? If about of were now also about

Eric Cremers

chain of strong. our sense plenty is in is Yet to Well, the Yes, demand John, order talking relatively supply inventories Eric. of low customers and this levels. our that relatively it books in are are there's

were long typically San not I of incredibly be ago at to X.X and too that a Forest had of think month supply months Products that might here they there reported supply. what was compared Conference inventories RISI out half low a in Francisco levels,

which it prices the here. inventories So order optimism and will turns housing the relatively with back strong, are that is slowdown our sense corner low, again once us that going and them of picks of being up that firming get seasonal books, forward gives some demand

You're the have in also some West; starting to several out help which see ought announced curtailments downtime, balance. the supply/demand to mills

pundits QX, outlook QX think, as versus are who up, roughly I XX% like most So our prices forecasting well. that's are

So we and to think we we're -- earlier, in bottom lumber near as said turn corner. or we're the at prices, about think Jerry we're the

John Babcock

the then Products And impact of transportation constraints just what quarter? during Wood Okay. was the on

Eric Cremers

trucking a us still constraints us, things issues. quite still transportation now produce behind hardest Well a Really impact when almost shortage but capacity, There's had and modest. are of that have Trucks the rail we bit. eased hit in very the season issues was QX of trucking expensive. in QX is small,

huge So a transportation issue wasn't QX. in

John Babcock

turn then And before question over. last Okay. I it

Just how Northern pricing in wanted pricing. sense the quarter weren't get a lumber to sawlog the might trended decline for for if it have during

to would helpful ballpark be of Just just any sort -- of kind there.

Eric Cremers

our Well, prices. what Northern is pricing the lumber drives sawlog

seasonal you to so normal you is There -- into can't the impact -- impact. that that get hard really as time. are exclude heavier And they're due fact it's winter the logs to a

half with comparing is in price seasonal also month from arrangement about that So There's weather impact to lumber about lag prices. and that lag. issue a QX. months' index the pricing alone It's X% works how a QX

lumber prices about down show road. in you're decline, prices really doesn't as lower month until the and up a So it half log

or So It in mid-August we've now lumber started happen drop seen a significant prices. so. in really to

to finding that's in way to start sawlogs so going And QX. its now Northern

John Babcock

Thank you.

Operator

Mings Raymond And from James. your with is next question Collin

Collin Mings

morning Hey, guys. good

Michael Covey

Good morning.

Jerry Richards

Good morning.

Collin Mings

synergies maybe you the the me target. First additional question you on there, target. $XX but of last call opportunities that just hitting to goal think us annual touched opportunities the of on an update the maybe on just you've I on Congratulations can on additional for million identified? million $X beyond kind $XX million

So, the a could what and, of, about those? as little think talk additional impact far about you've maybe more identified we as kind just opportunities potential bit from

Eric Cremers

mill the Broadly MDF that sales at a our move we're It of on primary across Collin, of, volume that That's and the force seeing that's our $X.X harder. those totals $XX operational still are in of additional margin. $XXX,XXX we're million million going it to very seeing. taking on about working synergies. so what sending ton. call we're anywhere kind Drax, XXXX be We're now, had we're haul costs to that's range. and some That ton to million. X in buckets, the X% bucket XXXX synergies across strategy log with about There versus to Yes, vertical and shavings in sending X% that all focused loud to are per million speaking, unwound. per tons, down million $X is but the with Deltic. $X synergy a -- easy some There was their been that are mills that have shavings synergy year place. We're discounting is of from that to Hopefully, unwound There it, additional ton was four now happy But really team sales came discounts a out about X% about clear our to was is our South things like we incremental those X% margin. of we've those the integration mill. Waldo its We're Deltic commentary.

$X total about they're but synergies, these collectively; all million. So small do relatively to $XX that -- they we're optimistic million individually, very

we're happy. very So

Collin Mings

maybe that any high early this expenditures about and, we then that about just of relative together to I capital much return just capital you've CapEx year? with be opportunity about yet maybe identified, think terms early how kind And it's just referencing on maybe an next projects, tying year Okay. XXXX, allocation. of, looking you think capital as know at strategy allocation in earlier too sense but talking should to on the

Michael Covey

budgets guidance QX Board the go on We'll our with that earnings on December through the month reviewing our provide and of here call. in

Collin Mings

enough. Okay, fair

tracked know to maybe product quarter. the order walk just Lengths was during us you shipped files Any And a quarter. we've just on I in that of timing give past. this recognized that materially Random through, can in much what bit the How front? the of, back kind in But sense lumber versus Moving was discussed mix? of, that in us the pricing pricing, just was the obviously, that little than better the

Eric Cremers

Random Yes, dropped, know, that I so what Collin, XX%. quarter don't I'd the XX%, you in tell Lengths

Our dropped about GAAP prices, X%. basis, reported

So Lengths. future. always selling know, anywhere as But out we four did pricing. pricing, Random much better from our Lengths than one is to you And we're Random weeks the spot into

there's So a lag effect there.

in delta a of all that effect Pine, virtually, narrows, the kinds us mix Yellow think, It's lag is is of is studs, mix There but different MSR. Random really I across and the mix wides, effect, was due this between to effect. effect. the to hard categories, quarter Lengths Southern what isolate product all

Random together, So I say going going Lengths lag weeks. down Random up we're go would and to by just Lengths, several with to tend but to we're

Collin Mings

but acreage in the appreciate there. that? driving Jerry, was What HBU No, then color healthy it, quarter. the Okay. just I pricing on the And have may pretty missed development

Jerry Richards

off timberlands. mention, in there our that in -- terms so few to closed first of, had Collin, of Deltic sales Yes, was script we the former

-- it a acres, $X,XXX but acre. small of So it's kind sold an we at had

just there. that some we again indication have an opportunities So great

Collin Mings

it Okay. over. guys. I'll turn Thanks

Operator

Markets. Capital BMO with Mamtora Ketan from is question next your And

Ketan Mamtora

morning. Good

Michael Covey

morning. Good

Ketan Mamtora

allocation want First question. this to to I come capital again. back

that's permanently be likely probably paying it to to early too that point? this fair say? it clarification, Or the would debt off more so year, maturing than one at say on refi Just is is next

Jerry Richards

Yes, Ketan, this Jerry. is

So And our you times debt pretty of think where a over refinancing. either step as attractive. talked or we're Mike that I think, back mentioned looks about I now, couple look portion you a time, of paying at we've repurchase or trading, all share as and

would So, one fourth for Board in priorities, I capital think, in as capital the points refinancing allocation at, a with at And given well where lock rates point. other towards to as that's them we the quarter. the allocation long-term interest of our are this chance discuss we'll here lean

Ketan Mamtora

helpful. That's noticed And Got under grades. very in have more of benchmark prices, the it. driving turning grades XxX Yellow than What Pine come Southern much the that I've wider difference lumber that then is to your pressure quite because now wide? is view the

Michael Covey

to into -- Eric -- market add the just others, it's than goes that's lot Eric, it's other more things, or it. the those and But of can widths, color trusses product that XxXs wider seasonal anymore and to Well, a color? issues. treated

Eric Cremers

also they would exactly, I in no, is the so things like is normal seasonality wides, this those Yes, it's really, But to wides demand. limited. say with with not I-joist, compete due year, that's at their larger of being upside just time

Ketan Mamtora

it. terms in seeing of now? cedar you right prices Got are then And what

Eric Cremers

cedar to the incremental we're stimulated have last incremental prices bit prices to year. levels. speak. had supply come Well, pricing out to That they so rolled of high over really record where a We woods, little compared last year,

sawlogs. are we little at cedar still levels So down really for bit, cedar healthy come but seeing a we're

Ketan Mamtora

and luck very over. will Good XXXX. turn helpful. into next it That's Okay. quarter I

Michael Covey

Thank you.

Eric Cremers

Thank you.

Operator

question Dillon with is Research next Partners. Your Vertical from Chip

Salvator Tiano

Chip. in are filling you? How Tiano for Salvator is This Hi.

Michael Covey

Good morning.

Salvator Tiano

Hi.

to the North in first you're question, in the index the lumber elaborate should the expect bit how Index see XX%, not I this times, price think should but prices as sawlog QX? on you you we detail going in Length's if tracking? moving sawlog about Northern my how a to many we relationship can more move to -- index, Random quarter, it's think XX% the So average little index the down in we mentioned

Eric Cremers

time. Random a extent, our down Northern I very will to move think Lengths. WWPA or two over But complicated tied and Yes, those Lengths, formula. to really together -- very, see It's we're up sawlogs and are Random as WWPA which you some

half see prices over, lag prices. up you those when and about roll our a in there's a from shows it As month sawlog

the half. simplest to that's stop about falling and sawlog So show it. of price a way the see for If up it think prices you today, lower in wouldn't month

Salvator Tiano

the little ballpark Yes, so kind decline, would of in a for assumption? we as a XX% also correct price the decline we a sawlog average that be adjusting assuming see bit are XX% in and

Eric Cremers

in think Northern general, if a a drop I with see Yes, XX% month sawlog and about half. XX%, in eventually will prices that lag of Lengths you up Random show

Salvator Tiano

Okay, perfect.

any second harvest. you're competitors; timberlands, Western a areas I The in your we of in same from Friday on coming I was -- little saw you and margin but not happen both supplied mentioned that could in that dynamic? on the And there bit question the is from QX? some pressure some know area, on Or regions. softness could one by pricing their be seeing are

Eric Cremers

the We're influenced the side. happens in particularly lumber we're they're inland sure. not what as mean, in really -- here we're region I to for Idaho. markets, on here relates west the Coast, from prices by it us will impact export separate But West and Western

Salvator Tiano

okay. one last Perfect, And question.

system? the get happened, mills, first secondly, potential this spoke little what all, just lumber about approximately is if all? about seeing, what we market. And little for the -- you these your projects of lumber lumber new your as price first to bit across to wanted have are not of of your your lumber talk if disclose thoughts, some given mill can come and a You you breakeven of has bit footprint, a I online,

Michael Covey

not have announced of to but up. regarding expect I rolled are those that Well, the additions capacity prices be prices industry, the Southern going lumber over, gone any in log canceled. have Certainly, don't

quite the still So margins south are strong. in

of most capacity in additions all in almost here U.S. -- the the So

South.

of different see weak we've cancellations. be factors, here terms our the something And I'd that, a is disclose. first And in but that's as we further we kind still of and quarter So we're breakeven on of outlook very seasonally into XXXX very long-term don't we any view if move that for very to lots quarter to of prices, got fourth beyond. lumber surprised bullish due

Salvator Tiano

very much. you Thank Okay.

Michael Covey

good. That's Thanks. Yes.

Salvator Tiano

Yes.

Operator

Steve your And next question with Chercover is Davidson. from

Steve Chercover

Thanks. Good everyone. morning

of couple questions a on Wood also So Products.

all, any it's And but railroads? stock, freight increased or know own you supply see the to center guys actually. own and of investment that we beams snafus? I are by is any absent of aware hope weather, there third or you shouldn't rolling First your whether reason about straight a don't operate believe of transportation of year rail or

Eric Cremers

see, own do Yes, stock. rolling not our we own

think particularly, with bulk it who going rail, I we had to the to our the the is where continue side. of working as closely and issues, Union on carrier transportation transportation our ease quite to increase of our of we're to a be help relates but are Waldo rail time, spur what can that's with trucking is bit. we're that we've an issue over And Pacific, could working South and cars in at premature, which of these supply We've not the mill, possibility some doing exploring a yet, new vetted pressures. things we so ease them to it's project

Steve Chercover

the doesn't it stock, it But you got great mean I rolling they've had then if but unless spur, really the change would things?

Eric Cremers

we if another more deliver But us spur, correct. Yes, have cars. they'll

Steve Chercover

right. All

at running second wanted Okay. with Waldo now and And to shifts? with clarify of those -- both Ola, then I are again their

Eric Cremers

was their what we with for year synergies. and the million. we're their beat their established They're Yes, budgets to second very for the Budget had shifts with expected they're year by for happy running performance. $XX

of So those we're the with mills. happy very performance

Steve Chercover

at of feet? X.X think billion guess, XXXX capacity, nameplate we for about billion I to board your should So X.X

Eric Cremers

it's Well, early. still

increase X.X which haven't board I feet. process levels But you the at over through be X%, X% up roughly around would We put gone XXXX yet. billion reasonable would to assumption, budgeting expect a

Steve Chercover

don't about you we think Okay. or of plywood OSB had but contribution Thanks annual the one -- And maybe stage for million? of about the can had businesses? then those at $X I MDF, an I the us EBITDA for rates Del-Tin sorry, run much give talk two that. really just

Eric Cremers

is products mill Well, results high have a great the as sold high would industrial And is plywood, plywood furniture but It performance, you Those produces tell that out industry, thing. the we industry, you what great don't of into those we business. mill. separately, frame, know. plywood industrial sort boat RV I our a got margin are break

although, have find do it's board relatively near stable Our doesn't mill, margins produce the lumber. a volatility in that But commodity. with yet MDF industry. MDF we thin of some little in our business, a that bit we more It are

we're both So with mills. happy those

Steve Chercover

Okay. Thank you.

Operator

last from question with is your Quinn And Capital. Paul RBC

Paul Quinn

Thanks Yes. very much.

Just a question.

log haul $X You ton. mentioned the down a and was

wondering achieve able to how annual scale there I just side? or Just you're employment the inflation suspect Is that is on that?

Eric Cremers

typical Paul. raised point, yes, gallon Well, good year-over-year. also it's It's costs a you just not up diesel inflation, are $X.XX a

in part. we're we're and wages and what how both also and the costs. get So fighting I'd you What equipment inflation able it most not, optimizing to tell but fuel is by for route structures

example. the let simple So me give

ground. Deltic owned Waldo vertical their the with integration those of to was where the were own mill they a So significant County, off timber and state sits, hauling Deltic amount their harvesting our Bradley ground logs across Warren strategy, mill.

to would versus mill. That's able example get mill XX XX of haul to we're so capture short-haul to in Warren at don't specialized general, contracts. log also organization the simple haul rather the in like miles a mill, and Warren synergies. seemed to right While we have how Bradley that than miles know, get each tell haul, that, Waldo I I to in you long-haul County,

Is comparing will, synergies. So that haul other's we're capture practices, best helpful? we're if you to those implementing contracts each and

Paul Quinn

coming on seen we've U.S. Maybe to in just rates moving pretty the have in interest you helpful. that's timber, up. seen the What Yes, timber especially market,

South?

Eric Cremers

-- exchange tax you, thousand to here It X% we a a tell but acquisition some was ago, we think acre like XXXX benefits, turns a on couple Well, discount rate, with here. and a what of rate. I'd kind of we out a attractive transaction it got couple just discount very we closed -- -- rates got weeks discount are be X%

don't year though where you if two is materially ago. compare or we were I to So that anything know a changed

had what that a discount we rate We X.X%. months of transaction ago also a think lost was a couple of

is South, in still sought-after highly So timber in particular. the asset a

Paul Quinn

the strong What U.S. driving that is in demand

South? the seen obviously Yellow in disappointing we decade, prices to sawlog I Southern last be haven't mean, it's on Pine any got material over increase the side.

So demand? what is driving that

Eric Cremers

to Well, It who you're last observers. has coming But about a of industry capacity that's the over little disappointed any price mill years. bit lot the increases three, talked been next, online four right. There we earlier. in going There's haven't two, knows, a decade. be

from the year. demand should opportunity going Coast The price put other Our movements. does, parts anywhere country. supply/demand on in there isn't South XX to of that up That when go that tons West is see the to you'll And same back per or balance. million the sawlog estimates into million XX

I where opportunity U.S. in think the is the that's

South.

Paul Quinn

And file just lag. your just understand just right to its lastly, lumber, on trying is now or--? then week current What's like than your order -- Okay. the more a

Eric Cremers

mill Well, a know by lot we've deliveries. I I it mill. -- has varies one got our mean prompt got

You call weeks. the our mills you today, more afternoon. later truck, in two we'll door put that be will the one are I'd Southern out tell it out on to

So by mill. it varies

Paul Quinn

it? QX? I Is lag be shorter that that So in mean should to that we lag the way saw think QX, about that in a

Eric Cremers

sure not I I'm question. understand your

Paul Quinn

order lag because is have longer in suspect that a might than QX you file file your probably and of had order in I Well, QX. you

So, I'm that? trying understand to just

Eric Cremers

correct. that's Yes,

Paul Quinn

luck All guys. right. Thanks. all I had. Best That's of

Michael Covey

Paul. Thanks

Operator

further no have we questions. And

Jerry Richards

for will I everybody's wrap day Angela detailed a in All that's questions you, the call. PotlatchDeltic. earnings third be I rest and quarter available and for right, our modeling of appreciate interest thank

Operator

conference. today's conclude does This

now may disconnect. You

PotlatchDeltic (PCH) 29 Oct 182018 Q3 Earnings call transcript