CTT - Earnings call transcript Q4 2018 | CatchMark Timber Trust Inc

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Operator

Good morning, everyone, and welcome to the CatchMark Timber Trust Fourth Quarter 2018 Earnings Call and Webcast. All participants today will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that today’s event is being recorded. And with that, I’d like to turn the conference over to Brian Davis. ahead. go Please

Brian Davis

XXXX. Good for Brian. for thank for December you XXXX Financial the Thank of Officer review morning, of us CatchMark. XX, ended period a the results Brian CatchMark joining Davis, and Chief you, three-month and I’m Timber full-year Trust

Jerry Joint Todd today President Reitz; on CEO, of our Venture, President Vice our President call, me Senior of T John and Rasor. Joining and Triple the Barag; Forest Resources,

These results forward-looking management current risks CatchMark this results affected beyond statements. or to differ are on information make During its from by that are will management’s actual ability statements to materially forward-looking predict beliefs currently call, based available. will certain the could and and uncertainties our expectations. control CatchMark’s and actual be cause

the these of certain to about on answer in website. annual after I XXXX that we Jerry join file Reconciliations posted Today’s factors our will to Todd, of such with John measures. your our is subsequent that could report which measurements this you any refer differences, questions reports on non-GAAP financial information SEC. more release, and earnings included presentation. are include For we our Form and XX-K cause presentation

Now, XXXX I to the for the results Jerry and guidance cover to results, Barag turn over call full-year company quarter fourth year ahead.

Jerry Barag

Thanks, and you us. Brian. everybody, joining morning, Good for thank

products been patch model The unscathed, lumber CatchMark, especially six Northwest. timberland of lumber a through past our and pure this XX% the challenging volatility. the been by wood rough impacting certain in XX% effectively down somewhat fourth owners and have with navigate in led particularly design, know, categories. months all we As to price for industry, have to we lumber to prices Pacific At for timber able U.S. This circumventing difficult play manufacturers, the volatile quarter,

prices. strengthening steady expansions, are Furthermore, stand of close concentrated should to result micro-markets, we by prices pine today future other mill as trend period species during lumber steadily assembling long-term been company, announced are timberland inception our and compared in properties. CatchMark’s a operations which highest-quality under and remained Southern have the way unchanged to yellow affected industry’s have have operating and and outlook driven South unit improving, public where less our and recent frankly, at for so prices. Since expanded portfolio we consistently consistently this Quite CatchMark-owned does targets. our meeting

pure We our play have to reduced exposure volatility through nature.

company. a We’re a investor, timberland not lumber

mill by acquisitions the markets. proved right locations to Our out the have picking with best proximity

our agreements load sales to wood supply and through base delivered strategy and help revenue continue relationships fiber creditworthy Our optimize timber with sales counterparties.

their diversified business and optimize downside very to volatility, future and streams investment capture managed investors, maximize have joint growth, incentive our including ventures fees. enabled fees, strategic opportunities protect delivers effectively with provides to attractive harvest institutional flow defer management asset capital to cash into We’ve to upside. entering management helps Our new against

specifically, our and grow a always we our and operations, prime from flow, our generate over time. took extremely flows, business strategy, deliver to seeking XXXX reliable is of CatchMark result durable and In well-positioned As bold to dividends to strategic steps portfolio position. significant timberland reinforce cash initiatives capital top results harvest markets, to longstanding increase execute maximize mill expand in our cash

to the of of an in fees, in acres and the disposition. superior Bandon executed target expanded In timberlands, managed in opportunities the million timberlands Texas $XX.X Prime of T timberlands million After increasing for rebalanced pipeline. stable extremely accomplished $XX.X our capturing for We asset performance-based included leading entering our of returns regional million million our diversified rates. for the by the incentive holdings the million, for investment million in streams, by investment $XXX mill management assets year. Pacific Timberlands Southwest million we mitigate the land revenue a from rising growth XXXX, range acquisition and addition, solidifying ongoing and meeting increased we by company total robust raised In term XXX% into Northwest sustainable new through more recycled and to $XXX to to of exposure within secured $XXX X.X and long-term X% improved the offers further million business, and for the million capital capacity replace advanced again pursue acres we acres venture, We That $XXX our in $XX.X the investing to borrowing we which year-end facilitate capital has provides purchase X% interest Triple a equity other XX,XXX our We joint We transaction. to guidance HBU seven-year purchase. and $XX significantly swaps of of potential offering $XX.X fees. of to diversifying at holdings acres. rate upgraded of significant opportunity sale Triple with management met secured attractive and than in management That existing liquidity disposed. high-quality Oregon was investment approximately the Louisiana, and portfolio, Texas the acreage interest sales X,XXX Bandon year debt, the our markets by completed loan sawtimber to we million XX,XXX T

Looking million, XXXX. adjusted management specifically increased XXXX We by at total asset half Triple XX%. X% we T increased full-year were EBITDA primarily $X.X the year-over-year. increased to by revenues generated result during fees which of We by highlights, second

a also we income in dividends Bluffs and totaling venture; or Dawsonville from million the due losses We T operations demonstrated highest-quality year, per our CatchMark strategy we disciplined excellence support our joint to also payable first assembling and of cycle. again meeting allocated declared net the through produced dividend a stockholders million, together business the paid cash joint venture $XXX for flow consistently quarter results we in accordance the maximize $X.X cash $X.XX Triple were ongoing to XX. effectively per incurred $XX rules. on the of of These portfolio XXXX share. share dividend $X.XXX In during our million XXXX, all And full-year for fully-covered phases in from March GAAP and and overwhelmingly XXXX. guidance for received loss for with distributions yesterday, $X.X timberlands million

meet in our took is advantages our in profile. Triple wood yield by productivity markets, REITs leading timberlands Their agreements, dividend proved are and supply the industry-leading Northwest the among joint coverage. to which delivered step prime the Pacific characteristics an fiber risk-adjusted are stocking in and timber venture and superior criteria, through with first Our out highest In we in investment, strategy offer investment reinforced entering keeping our completed investment XXXX, sales premium stringent the which T and continues the future. with deliver enhance these in investments enabling mills holdings register and the of operation throughout Triple acquisition. portfolio. and to our Bandon They well T, proximity both predictable the and are and a advantages durable dividend to quality in results flow. into our payoff especially We customers. further operating superior significant helping expansion flow growth of continue operate support to superior and leading designed micro-markets, And cash our represents cash consistent

strategic mill fiber supply operate sales counterparties. delivered executing U.S. design, on extensive we benefit with our we those We continue agreements in creditworthy markets from in strategies the By long-term where wood and markets, gain to mill the our from

we higher wood averages. continue even quarter South-wide has premium been X% South in cash been pine delivered foundation maintained our and more sawtimber category can in from sales the has of supply XXXX. The harvest to Through chain our XX% outperform XXXX stable had sales flows. since to delivered and sales wood strategy, XX%. management of percentage the we at first XX% increased total stumpage as better Delivered philosophy over ranging produce average of chip-n-saw ranging CatchMark’s wood XXXX. in to XX% South-wide premium to up price keep from averages predictable the control the and our a

defer in tactical We pricing. anticipation decision harvests earlier of stronger in the a year to some made also future

year-over-year, the result declined harvest these pricing about in gross timber deferrals. help as declined decline pulpwood our of discretionary But X% increased the to X% year-over-year, sales offset per-ton harvest Our volume X% stumpage quarter for to averages, Timber the which sawtimber Mart $XX tracked and according quarters price South. compared eight our below per past to $XX have a South-wide fourth ton registered volume pine

In execution ongoing our asset revenue performance cash company planned provide fees and addition, timberland T to and sales are of in and from overall new dispose less new significant notable Triple management the year. predictable streams significant a of asset HBU source diversifying management fees The holdings buttressed during flow. productive the

recognized T operations Bluffs forward. plan, addition, are fees been to Both and Dawsonville $X.X have planned date. well-managed attractive to and earn credits. HBU With performance In during meeting the sale mitigation operating our the and Triple of Timberland our we regard we incentive from integration Triple and million income to T of year, performance-based Dawsonville bank going the joint to efficient ventures in of objectives generated has primarily opportunity Bluffs,

moved received investment of monetize this in we distributions, million $XX we to ahead as life fully addition, million In finite $X.X schedule.

adjusted $X.X In Dawsonville terms contributed EBITDA, of million.

net XXXX. primarily for loss turning revenues share We period approximately fourth X,XXX million. produced we $X.X $X.XXX results $X.X in of million $X.X accounting a compared fees, of million, million, to X% We Now primarily acres of completed dividend generated EBITDA the a specifically year-over-year. We GAAP XXXX. XX, T. quarter paid of management ending to $XX in Triple increased we Triple adjusted XXXX. on to sales to stockholders December $X.X operating of million allocated the XX, record CatchMark’s incurred for December three-month losses asset from We timberland T, and from due per

CatchMark our in for pricing defer of quarter from a environment, decrease in stronger fourth strategically XXXX due of timber the timberlands and XX% to for fourth year-over-year a the the harvests on transactions were gross at price future higher in harvest sales quarter sales quarter, region volume. by XX,XXX fourth Timberland Texas quarter completed an result of series In a Louisiana, a revenue As to XX% quarter XX% anticipated acres the decreased plan more acres due XXXX. to closing disposition. fourth per coordinated sale acre Southwest above of the selling

As of from XXX,XXX Bandon for Southwest we harvested disposition approximately acquisition. recycled the pay tons used years. down next Proceeds the be the summer’s two inventory last sale, retained merchantable part over a of to debt were to

T, Triple improved our of Triple in transactions T two ownership reduced and we these to of post the investment. result Southwest regional timberlands exposure quality overall in their a the As the

and We million $X position. also million the holdings August prime we fourth the in of in $XX CatchMark approximately repurchased redeployed XX,XXX Northwest overall capital repurchase in our under share common sawtimber open our announced program quarter, shares market to strengthened XXXX, to in close for Pacific capital stock Also transactions.

the under As of CatchMark up to XXXX, repurchase may additional shares $XX.X XX, million of program. an December worth

flow including relative cash the taken the to disposition, we’re sheet. balance Southwest stability very Given reduce of our our debt, recent and with steps comfortable

capacity million swapped to $XXX into exposure of to at pipeline. During are rate average loan. quarters of XXXX. a dry $XXX in rate reduce first was our not the we support $XXX debt, debt powder investment under maturities entered year, XXXX. to total of After outstanding year-end year-end, rate million million, as three refinancing maturities we to to weighted was raised our interest increasing had million our rates. our equity existing swaps which refinanced million We our term of potential rising multi-draw Approximately interest $XX.X borrowing $XXX facility, securing exposure improved fixed and our and until of we This now

going capacity record of result, to time. new the venture growth and appropriate our the track investments continue sufficient a joint select we flexibility acquisitions As through into at year, and have

tariff market at by capacity. and uncertainty. activity, robust mills well concern in trade as we are our XXXX, housing help growth navigate through business. EBITDA Demand to year, finished global volatility, all supported level repair last the micro-markets as and as will expected near together, for in we initiatives well for set the or operating current is adjusted are from issues, future. and that stemming general we the And completed economic Taken as the believe for in remodel including of full well-positioned lumber, stage about housing Lumber good

see shifts. across with US prices. lumber announced and timber overall Furthermore, for well South input prices previously region, recent mills capacity with pine or lumber able to multiple current no to based in levels our also That finished to production drive in We sign payoff pullback at run finished inventories mill produce levels. expansion comfortable log is demand are light, yellow capital bodes lumber margins in micro-markets investments beginning projects are mills the and still levels another improved the beginning with increased which near positive of Southern on lumber to manufacturers are

markets all Our across strong products. remained also pulp

for fiber customers our result, throughout appear partners steady pulp and other a well-positioned production supply the agreement ahead. year As

X% are $XX.X prices XX% from into conditions Lastly, and increase we to adjusted our an $XX or the drive are in last attributable forecast guidance, Harvest in tons weather consideration, from net disposition EBITDA Southwest year million, million to Taking This historically, range volumes. will should also anticipate to million, in to and to and harvest range of increase as increasing tons X.X to mixed to a full-year for are new XX%. X.X In deferred a higher harvest timber in timber of market. million from Bandon supporting XXXX. harvest result even million expected U.S. XXXX increase our increase volumes all anticipated share of factors T increases reservations, XX% of full-year timber earning from sawtimber the of acquisition. full-year compared the into fees a asset Bandon and Beginning range quarter, well of revenue management Triple help as the primarily in second $XX the

we our harvest as consistent years target in an our volume $X to $XX of range to Bluffs, Dawsonville original of The X% South, agreements to in delighted slight select of past and delivered X% We’ve which million. fiber within adjusted million, $X million. increase had supply year-end remains $X.X investment micro-markets. the million of sales acreage. approximately result by sales XXXX also million generated wood surpassing fee with X% a Dawsonville anticipate timberland $XX $XX We of generating EBITDA with also anticipate a of additional been

which any recycling part of pursue dispositions. ongoing outlook potential ventures, Our from capital we does contributions include include potential acquisitions not joint not our as strategy and future growth and from does

and and and favorable executed prudently opportunities, are: our capital timberlands price CatchMark’s derives that guidance leading resulted and customers year programs prime in near from management derive creditworthy consistently durable from has from capture further agreements revenue with growth counterparties to for into shareholders from demand fiber volatility; provide the capturing entry focusing the benefiting Dawsonville also in the new cushion and in those Triple highly delivered support summary, directly management strategy formulated cash dividend. in finally, from of supply streams – our flow stability; They disciplined to the predictable markets deliver So upside to ahead upside Bluffs. sales and and for against business; in investment well our investment markets selected investing mill which T

had objectives, to and CatchMark and XXXX revenues move and conclusion, EBITDA adjusted in well-positioned in So investments expanding meeting strategic successfully believe and successful management extremely year we our our we’re in year-over-year significantly platform, investment XXXX. higher in ahead an registering

in from our to and of execution our CatchMark, at have our group, deliver outstanding dividend to on Brian, All and our our that year to I of everybody company employees take and available and And excellence our appreciate today. the Board, cash of John will focused on focus extremely any us ahead. worked strategy being be hard clear executive now dedicated flow I grow our Rasor the continue support your promise to the Todd, and position shareholders, to call a operations questions. are

Operator

go the question question-and-answer ahead. it with begin Please Raymond from first James. And be Collin looks now today’s session. Mings will Instructions] We’ll [Operator

Collin Mings

Thanks. Good morning, guys.

Brian Davis

Good morning.

Jerry Barag

Good morning, Collin.

Collin Mings

have XXXX additional the leverage Jerry, To active here And or other pipeline capital the to lines, do how do in further along about start, recycling? potential think with acquisitions you now? any those some right you in just dispositions reduce

Jerry Barag

Okay.

your XXXX a closing those the in We frenetic that to our sure answer purposefully Southwest made Triple into make we the to appropriately Bandon So decision disposition, and first of of changes part it No. easy the end integrated T, question? had post of is an portfolio. all

a that have seek effectively the for happened dislocation we didn’t our And with to at we share so it And time and the think new then, price, was acquisitions time aggressively looking investments. that go stopped opportune in particularly being.

of that, tactical standpoint, in a price share and we we So unrealistically us would which the liquidity, liquidity are shares. down to I best spent some that combination right think, use opportune that, is assuming particular, very a for low be capital paying repurchases on focused on and from having level said very, think a share of debt repurchase at our and remains now

you reevaluate I So we’re be that anything of that. you first have what doing add? want and six will think to certainly continue focus do the to for of we’ll the months XXXX, Brian,

Brian Davis

look for reflects as the Triple profile guidance stated No, the associated T, another another Bandon naturally full-year we’re reduce impact turn leverage well in of from we by quarter. I levels today, a a guess, which does here, Collin, to when turn point our with basis XXXX, emphasis is our the at as take on

what our an So capital to that share additional be leverage recycling you portfolio us and opportunities Jerry basis you asset a that realizations, on maximize also put opportunities is about that top per reduction. would our talking of opportunity on some see for – that for of CAD neutral review would inside some

Collin Mings

Okay.

So on fair where and more, is – sounds the or and go like the either bring it nothing buyers but on stand, acquisition or be under given leverage would one margin something to on to other, really little – disposition sell may that the a be right would contract way balancing to recap? the are down fear be a – bit it now things front, just active

Jerry Barag

way is I we’re accurate the very think as things. that thinking about

Collin Mings

years or really And us recognizing to the just any towards any you well again, both provide progress event as operationally an well as activity other helpful? highly very be guys as value sawtimber of value-creation the that agreement can T, helpful. of creation in that’s Triple update switching unlock an any operationally both deal, incentivized value as update Okay, to sort restructuring so are first supply few you then would there

Jerry Barag

Yes.

well joining with we that the just I’m there. will I’m to team have talk rate opportunities agreement today, the and about diligently. all at That take it’s the point, we as a over of meant minimum go begun an the that detail to significant some on to little at that? we or time. we continues question about operational for done deliveries process, to and towards going a to to more bit of and time. property, an John X.X be But that met acres We’ve supply turn is purchased everybody It to So us to that value going don’t working been will a running involved as full continues think little John Rasor to not of of bit future the specifics expected improve when trying full With well operations, million job we process a counterparties respect that you of identified have deliveries here bit add report it T little agreement a to T in have this and him. was But Triple the the into Triple remarkable John, property. to he are give overnight to that. to pleased we that we’re the the southwest, and get have run integrating opportunity the why

John Rasor

Okay.

than there, of have that sales a agreements move – market. with has of feeling quarter it support anybody day into the additional as described size make volume supply the and historically and that previously, like and that XXX the the am well meaning headline been weather the property best rain to for amount anything challenge. with we the over with to being and does truckloads more to absolutely rain met I the the think this is And rain has we just seen I epic over has rainfall

we but As challenges and an That we agreement numbers the alone. I satisfied agreement all the come volumes, that with the big the did said, both the quite weather faced access requirements. requirements the could because tracks. supply not we we on on Pacific would Jerry volumes, short was IP add accomplishment, Georgia supply the simply while the up hit to hardwood we

prepared the we We to of XXXX. a that and there less the XXXX, by we that Texas in be be And look fully these three-month rain after as then. will will over advantage again at prepared opportunity get intend to in Flatwoods bottom window lands. have Surely, of into to really about be to you get take only

less some than On revenue pricing seeing side, but the has we bit I tell had expected, now. can you harvest uplift been we’re a

So expected encouraged the significant income looking we prime component at a around value-added, to sale the we’re good we quite of pulp kind of gas there modest – specifically we really started our become a we and has tough and six and we’re a we upward January been months, that and that has it and use implement the looking the interest moving our was prices in forward sawtimber got to oil will than see program, wood XXXX. prime business a land and been better by start Also very products. so surface have we’re and that’s and activity getting, I’m with pricing but

Jerry Barag

Yes.

I NAV standpoint time. standpoint, fees. there from value to from are it’s CatchMark, from The earnings that we really able So essentially that these to on be everybody a property barometer a flow But cash move to and things an have receives that all for happened of expect the investment what and property EBITDA are over remind of CatchMark management important. over all the that accomplishments will

from really in any So XXXX get prices, CatchMark changes to going have investment. EBITDA realistically, is bearing changes that the on won’t its in income for

Collin Mings

over. That’s Okay. quick very helpful guys. I’ll me, other turn a and update from ones it Two

you CapEx if looks front? XXXX apologize, XXXX. below in just about guidance. missed we think little budget bit should in I it the a Brian, How for CapEx, like guys this on came I Just the on

Jerry Barag

quarter million quarter to in the to million It’s next about so had $X from XXXX. $X million year, to fourth year, first million $X we $X carryover this a

Collin Mings

on management does collectively and the fees notably – necessarily but were just dollar amounts, all look at least. a G&A, huge not for the variance then kind up sequentially like it expenses other forestry was of operating overall, quarter. side notable that in fourth And Again, us cost Okay. just

Just anything, be should we in particular,, mindful which of?

Jerry Barag

included G&A, about QX So and the costs in pursue it $XXX,XXX.

that’s EBITDA inside noted I the think line. reconciliation adjusted

expense terminations to As deed of related and the expirations line lease timber we operating it stands timber and with losses basis other In operating within casualty the item. fourth expenses, expense quarter, we can to just operating these entry charges activity. be non-cash The cash of had $XXX,XXX under related non-cash on these our reflecting found expenses section. the corresponding flow statement in

two So areas, can those which are – on. the detail can you we notable provide

Collin Mings

over queue. I’ll back in the Okay. turn it to – guys. Thanks,

Jerry Barag

you. Thank

Brian Davis

Thanks, Collin.

Operator

question from Citi. ahead. Next Please with will be Anthony go Pettinari

Randy Toth

This Randy in guess, Good Toth sitting question first morning, I actually is… guys. Anthony. my for is

Jerry Barag

Good morning.

Randy Toth

you $X – and Triple you from little I million know Can $XX T. to from I a good coming coming have XXXX in? what your million about around baked …can talk $X million guidance morning. you bit and Dawsonville, imagine

pricing in around U.S. the assumptions of the kind Just

South?

Jerry Barag

that. to answer let going Todd I’m

Todd Reitz

Sure.

of think market fourth XXXX, nice out we’ll overall rate up finished that to run coming conditions we So quarter a about we’re point. where and coming Had strong. very

and his weather-related. of initiated that, takeaway steady some see XXXX XXXX late part improved, being capital are mentioned been beginning the online. that beginning Jerry improvements to have to the come build that some is we’re and of As in of the in bigger stable this comments, consumption But

view stable you going pricing, seeing of demand forward. we’re if that some some we’re will, pull. being of So more said, anticipating That

uptick forward. what that X% So kind we’re very be the if X% would a looking modest year, saw over of we going to at

we mix Additionally, little sawtimber in there. a stronger of have

positioned As Jerry to mentioned, with XX% in going coming that and XX% on this harvest to to we’re Bandon be year range. more

well. with added associated that as some value So

Jerry Barag

a that we owns over Yes. put operating would probably this of in properties. spite call, like think, yellow And if result that the U.S. from words where see some my of improvement in were headwinds a CatchMark remind derailed as that did that didn��t exports areas fact, we in that the disappointed on, I’d modest some were when exact were particularly I from prices And, its pine ago everybody to punitive year be Southern delivered that tariffs effectively came tariffs we we

South.

conditions feel we’re and confident I to more strengthening think XXXX. being that saw And going delivered very will being at able do relatively proud able that. think We And strengthening we We into it. certainly so we we that. see do some to

Randy Toth

just Okay, staying that’s then helpful. in U.S. the And

sawmill XX Just question a coming next and how capacity relationship, to capacity think especially pricing My pulpwood XX in months, sawmill you online of that impact South, the about is, over it’s – for of will quite Georgia. how residuals? how all capacity curious bit Alabama kind because this of of the that?

Jerry Barag

Sure.

that of being going see that to at we’re associated in very look to well-positioned has customers is the So, come have being for that. has that stable. you a That where lot We that will for very, a pulpwood customers come strong with operating that logs Pricing and load been and forward base they general, in. raw in, have component be consistent.

on going the see overall that think are that As into movement their some far work as mix. to forward. And the residuals going we we’re market concerned, that positive

are Additionally, with customers little marketplace. – the allows That future, downs, the bit the that a forth that years working supply we ups XX any with into XX, have agreements, if set will, to of and our insulated strong in are position us and with. stable be you our to a who of

Randy Toth

turn it you. Thank I’ll that’s over. Okay, helpful.

Jerry Barag

you. Thank

Operator

[Operator Quinn will be Markets. RBC go Please with Capital Instructions] question Next from ahead. Paul

Paul Quinn

Yes, Good thanks guys. very morning, much.

Jerry Barag

Paul. morning, Good

Brian Davis

Good morning, Paul.

Paul Quinn

just harvest you deferred? you in it like quantify harvest question deferral just the out to XXXX? from of a what could that me you’re sounds help going And part of a was maybe on just XXXX, or Hey, the that all it

Jerry Barag

Sure.

or XXX,XXX a call XXX,XXX, it, So, it back into pulled year-over-year, XXXX. we you when look at as tons so that going

we’re that Going up amount in. to XXXX, going adding back into end about

a of with So a it’ll rebalancing and then where the reservation be difference the timber the work in regional to having well. coming we out it’s coming previous. kind Northwest of as compared of Again, Southwest

that So XXXX. throughout online be much all of brought pretty back will

Paul Quinn

that that harvest stuff timber advantage coming So I to guess, was the increased you’re as of deferral the mix, the the result down for XXXX in of a of original take the XXXX a the on going in the higher deferral of that Is in regional is you’re result prices to expecting? in X% X% kind sort to but price reason in, higher round.

Brian Davis

throughout that year, for We that’s would throughout the modest the increase year going potential the or correct. anticipate

Paul Quinn

don’t seen – just a in of lot And seems we throughout I year-and-a-half, we XXXX. It that? Have underwriting timberlands seen or years now, criteria around had steady a a you transactions. now, you pretty shifting rates haven’t and increase changing interest yourself two like, experience know,

Jerry Barag

think generally stable, Paul. been I underwriting has somewhat criteria

Now where where the lot it’s been but to a Pacific you’ve volatility the timber has downside prices. volatility the in the part more for out outside, in recently really been, most to of the had Northwest,

there, interesting closed two so, that offered in the properties were since we the were there Pacific out transaction, Northwest. Bandon on And

become XXXX previously. couple One seeing has into going other first to transacted, couple become much failed more important forward was is, important the price. things, That actually them of One Northwest the we’re time even quality sometime in it that. It’s a much didn’t meet important. of of one trends. Pacific in quite clearing that are transact into was property in What more a

Northwest that the in and there year. a are properties to the coming anticipation that point seen valuations are given, Interestingly, transactions lot transactions an supporting they properties them international are flatten is offerings some may pressure a be going liquidate. at And that they that’s weaker seemingly had been the do, properties portfolio, floor Pacific best properties. in this be of what have so one. at heard off out because we there this fall. And to least seems lot Pacific might property getting trading. significant have I pressure are or old is of people’s better to the think, Northwest to who But number the X, so higher-quality still a the to selling as opposed transaction, there in going cycling or TIMOs Number happen from decade because coming or year U.S. it’s that pricing, on number a is harder that of to through the And investments interesting have there the potentially is, you be their for early TIMOs of

active so we like And that. be things in won’t naturally, very a participant

Paul Quinn

Thanks luck, guys. much. right. very All Best of

Jerry Barag

Paul. Thanks,

Brian Davis

Paul. Thanks,

Operator

is from ahead. question Please Collin go follow-up Mings. Next a

Collin Mings

Thanks. A me housekeeping things of couple from here.

Triple be, Just as there perspective give of with can that, you remind kind what just of net big the maybe a losses some us associated future that how should guidepost from as a least driver? timing far and at us given T, just

Brian Davis

Certainly, Collin.

about how then million for XXXX. and to we’re $XX remaining is $XX thinking QX So quarter in QX million per the about QX

Collin Mings

as more far kind I be And a apologize a give number Brian. Again, little XXXX? but missed then, can pieces, explicit guess, you have some I this, you I But there? G&A as quantified other of for you – if us puzzle

Brian Davis

corners give you the Collin. We’ll to puzzle, your

backing after for includes So basis, about of where compensation gross increase X% these about equity to in property of we X% of occurred flat And operating equity note the million expense year, million our we fill million this even to year-over-year, expense. of of that we increase about – And real ventures anticipate we things thing fourth for $XXX,XXX which expenses other about I of into management should quarter to on is increase will operating their G&A added allocate G&A to a or expenses $X.X $X.X One approximately resulting we this out taxes. management as this forestry inclusive $X.X compensation. joint our from is line other year-over-year net to item. remain kind from as expected

Collin Mings

some is may of outlook Northwest, for that detail. just helpful as the of market, as trajectory potential driven if maybe much pricing around couple maybe the a much Jerry, years the as be evolution clarify longer-term by being some that’s in concerns can they have of And near-term pricings, would and the just specifically the benefit, Okay, Is transaction bidders, you not Paul’s of it ago. bit far as for as the emerging little How you a will. back just of as markets. far question, to timberlands U.S. our in or going

simply it more of pool South? environment changed it potential impacted? where has or underwriting some Just maybe curious has and is buyers their been of the the maybe has changed

Brian Davis

all the is, I yes, the to of above. think answer

a really liquidity. the And year year. transaction backdrop it liquidity starts would to big with tell is, you, I was So the last markets

spotty to it going liquidity. is used the there is certainly, last that So change. from it it’s be trend It years, is don’t to around places been And ago. compared what – I is different that to for a and and coming has decade couple it of think

names, those last different over have look be of you the tend it’s likely a buyers If and around property last of little to would seen couple decade bit mean, different. transactions at rotation the year, it’s ago, in names years, the the I you philosophies than a over

the the under similar other times, transacted interesting, a actually was – ultimately some the of lesser large, story. the after end Triple are T much previously have to are transacting. at much now. begun productive much and markets, was price transactions of been different less by ones those Alabama mill it an although, trade property trade property that to quality at $X,XXX and really have being it marketed some last And a some in a higher-quality So, T of And multiple just I pretty properties. as high-quality markets worse It properties was Triple that year than There actually for transaction, acre. of mentioned,

the They’re transact And investments I going actually more I that for may And probably domestic there’s be the portfolio real sellers. And properties. now, around is and properties to than believe the their of that so right they you to believe right liquidity, think those from some international come especially looking pockets to see are strength in made. market market now that for they’ve pockets properties, TIMO XXXX. be properties in finally But going now focus international in of strength. that international of really

Collin Mings

just those lines, environment timberland market might you how But impact lower-quality Along curious optionality marketplace? just through clear just that. the on an built recognizing, some out of some you though, that the the around appraisals point that, are you which T from again, appraisal Triple in maybe properties that and standpoint device have from have at concerned, actually you think might this these

Brian Davis

Yes.

with but appraisal comfortably that properties in would be the any coverage at the outcome at downward we’re As you or insulated our issue the And issue. biggest end we the the of ratios And types that The the of an on we’re around think appraisers made least really debt. it. for the from pressure – day, properties higher-quality We distinction go appraisal not market it becomes loan-to-value the point out, if much us, the we has own. lower-quality general do between that of believe properties. feeling and and that ratios

an us, But cause which of think for different I may it’s headlines. some which the ultimately a going have don’t NCREIF problems. impact should Timberland there’s expect Index, properties, operationally to on be state I interesting

Collin Mings

all I appreciate color. extra Okay. the

Jerry Barag

Great. Thanks, Collin.

Operator

At turn Jerry today’s to like over remarks. session. this any question-and-answer time, conclude I’d this the conference will to Barag for back closing

Jerry Barag

XX the for everybody again, will for always and quarter. is we in, days. hanging everybody Thanks, us appreciate fourth in I us. joining talk everybody This call for a marathon And to

Operator

everyone time, We for do has you attending thank want now to presentation. At concluded. this The now conference disconnect. may today’s

CatchMark Timber Trust (CTT) 15 Feb 192018 Q4 Earnings call transcript