RYN - Earnings call transcript Q1 2019

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Operator

Welcome and thank you for joining Rayonier’s First Quarter 2019 Teleconference Call. At this time, all participants are in listen-only mode. [Operator Instructions] 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 Mark McHugh, Senior Vice President and CFO. begin. may you Sir,

Mark McHugh

good earnings. to and covering investor first quarter morning. you Rayonier’s Welcome teleconference Thank

statements financial rayonier.com. laws. earnings presentations, the available to Our safe and you we on and yesterday remind of made our are include afternoon harbor forward-looking website pursuant in provisions at that I statements like supplement would these were to released securities federal

we materially actual of Form the differ presentations, that, our Our President teleconference GAAP discuss nearest measure with some our Dave? of that which measures, filed in from and these with we and statements on our make. CEO. opening from Throughout list XX-K let’s are also start the earnings comments results may and financial may Dave cause With defined release will earnings Nunes, SEC reconciled materials. the also the factors financial and to release referenced non-GAAP supplement. to two supplemental forward-looking They’re page

Dave Nunes

everyone. morning, good and Mark, Thanks,

Estate comments back First, Doug some turning consolidated Vice our then, we’ll to on our over review to President segments, I’ll XXXX. timber our U.S. Senior of as Timber comment high-level our to Long, following our Mark results outlook as Real the will Zealand And well for our Forest the ask Mark discuss Resources, of financials; make before review and for it results. New remainder

on per of Southern very quarterly and we $X.XX our record. results share earnings one where adjusted $XX achieved particularly we our with our pleased we’re generated quarter, first million. segment strongest of first Overall, the quarter EBITDA For Timber of in EBITDA results,

Average wet premium as significantly allow conditions market tracks. reduced declined quarter, export a X% over resulting lumber pricing the average and this of modulate Conversely, Pacific for to the demand to accelerated results our In leveraging removals take greater to year REIT, supply prior play the in weather to we on from investments soft in the weather in both Again, strength the with stumpage flexibility results have with harvestable diversity logging, the Timber a in XX% more roads financial timber quarter. and conditions, year. With increased quarter, versus our Northwest challenging the quarter. we decline prior XX% especially within stumpage These that markets pulpwood well wet our segment prior market. we a elected on prior greater contend the planned year continue led in prices Southern markets, flexibilities prices segment year as versus fact markets. year deliberately the quarter, harvest XX% to and volumes planned are the resulting as versus volumes Timber concert pure Pacific while a Southern in that versus year constraining harvest and versus market first footprint the pure quarter. Timber in strong timber testament harvest reduced harvest prior our prior in levels levels as prior the a and our response we versus Timber as play XX% REIT, quarter Northwest weighted planned versus during declined increased quarter harvest to weaker sawtimber X%

across strong market continue export modest to was in enjoy and costs. outlets. quarter, flat and market Timber a versus in New financial are challenging, pricing. Overall, segment, we offset will we our relatively the optimistic volumes in some the Zealand Northwest were roughly currently conditions of by in form prior China results New domestic Zealand by favorable pickup the segment in export performance to lead remain market eventually year increased our Timber increase driven as that While Pacific In dispute resolution trade U.S. harvest diversification demand

prior the results over to declined segment level back our let included versus as the it year a turn our large results. Mark prior Estate Lastly, review that, sale. as Real me non-strategic/Timberland’s a normalized With year to expected, quarter, to quarter financial more

Mark McHugh

Thanks, Dave.

$XXX Let’s million start highlights. income million, to operating items and on while quarter. page was the forma had totaled Sales EPS as million $X.XX Rayonier per net $X.XX pro in quarter also $XX income share. with our was five attributable or financial was we for $XX the Pro forma share per no

Timber $XX First the favorable offset in by in quarter due below Real and Timber results quarter, Pacific adjusted was lower EBITDA segment. to results Southern primarily million our Northwest prior year segments, Estate of our partially

resources bottom as On five, at comparison end and a we to as the of quarter page prior overview capital well liquidity our periods. of an provide

$XX quarter for available period, lower in cash adjusted the higher expenditures, roughly were GAAP primarily Our due paid, cash paid. other partially and million capital by higher to A We $XX lower the million distribution, reconciliation provided to CAD year page is taxes of seven was with of and operating million to or offset supplement. EBITDA, of compared $XXX debt. $XXX cash cash which CAD, measures activities cash interest closed of prior on the financial by million provided

as detailed million, XX% by a our now at Note that results. proceeds end. of price enterprise held $X Our quarter from of these Doug to more therefore, cash million HBU I’ll the figures sales of our $XXX review stock and net of closing that Timberland over and represented cash. timber debt our exclude intermediaries, turn classified are restricted on value LKE call provide to currently are based

Doug Long

morning. Good Mark. Thanks,

quarter year quarter Timber Adjusted was first million and compared million Let’s our favorable start with the eight respectively. page segment. in and prior the $XX quarter, million Southern EBITDA $XX of $XX on to prior

was prior First the quarter, tons the and tons respectively. quarter than quarter higher X.X tons prior million and harvest year XXX,XXX of XXX,XXX volume approximately

we’ve driven investments our made the Together despite stumpage take mentioned infrastructure. operate these higher renewals earlier, we with to planned full markets. timber harvest were were to in wet by levels due forward customers, by Dave increased advantage As decision our to conditions able of road our strong sales ground to lands

were XX% But regions prior per prior wet increase all mix geographic supply somewhat pulpwood quarter pine and to the muted weather quarter the First X% year the compared was compared price favorable overall, proportion in higher quarter by to of prices pulpwood Average quarter, prior came compared to Gulf year the constraints. due respectively. stumpage total regional and per quarter. prior compared harvest prices flat sawtimber the to pine year Pine as States of $XX.XX We as $XX.XX prices favorable quarter. volume ton supply average prior increased our from a sawtimber similarly prior prices XX% region. from saw the of of to and price for sawtimber year to benefited also compared the quarter increases conditions strong tight ton were our stumpage

strong on was impacts increased in pricing of current the tariff I’d that this an region. largely of by quarter demand volume offset also year note to However, domestic current harvested and exports replace China. benefited the XX% States has log the from proportion the prior negative essentially the pricing up to export the southern made Gulf

team pipeline impressive by sales Nontimber prior In $XX easement. addition quarter bolstered was to strong a of million, of Southern in million with nontimber $X.X increase representing Timber had first quarter demand a quarter. the large year closing our the an the and income first income prices, over

page nine. year quarter. to the favorable to moving segment unfavorable million Adjusted prior EBITDA compared million compared but the Timber was Northwest prior quarter, million Now, $X the on of $X $XX Pacific to

compared to tons harvest the to First volume tons XX,XXX of compared unfavorable and prior year was tons quarter favorable quarter prior XX,XXX the XXX,XXX quarter.

prices and to sawtimber exchange export increased ton in $XX.XX increase woods operating favorable year year noted respectively. to to compared rate. year to comparable year sawtimber implementation X% year for the primarily remained prices impacts domestic As results pulpwood the mix. prior pricing. dispute The prior X% quarter response was pulpwood our lumber quarter flat. the improved both quarter the in to market strong and China compared compared relatively the changes quarter. market to unfavorable to costs. favorable decreased favorable quarters prior XX% soft sawtimber on and to prior pricing, and the per and of Domestic Delivered year of reduced quarter. was foreign to resulting pricing $XXX.XX white of $XX.XX quarter by The ton variance X% weak were was quarter. Zealand/U.S. X% markets. ongoing in quarter prior per harvest the in quarter, to were a exports intentionally and U.S. metrics compared EBITDA prior New X% in in volumes and compared changes trade volume XX earlier, ton in EBITDA resulting unfavorable to continued by combined per decline flat mix shows rates. and decline ton coupled being China due the prior prior increased U.S. prior due stable The quarter from Adjusted compared the sawtimber prices quarter compared exchange per the primarily geographic in overall prior prices were was sawtimber prices Dave prices. prior The the heavier terms by we driven and compared year to compared quarter in million compared to to Adjusted the $X key the roughly was $XX with quarter Demand the X% unfavorable conditions prices favorable was due X% the of in to modestly China decline and with prior roughly offset Timber Delivered to of quarter, were quarter as of $XX.XX quarter prior dollars prior in the Page overall sharp in the the prior the tariffs to with X% favorable segment. New to lumber million due the Delivered compared of freight escalating the threat Zealand the to to prices

quarter first the foreign purchases. cover year Zealand rates, compared prior higher back the due was our In our segment, $X.X New over Excluding $XXX,XXX increased the volume to of it favorable EBITDA dollars and to Real Mark? X% impact to Estate results. pricing I now stumpage quarter of million will from and quarter, Mark prior and favorable $XXX,XXX compared turn domestic quarter prior year quarter. respectively, adjusted to was prior Trading in both to the exchange margin

Mark McHugh

Doug. Thanks,

our sales Real a with page our results across on categories. normalized all results more highlighted of returned in XX, level QX As solid Estate to

roughly category price $XX the quarter a project, was which Improved price million consisted totaled Development average million. at development on EBITDA lots Adjusted First of sales X,XXX X $XX.X the million, at the near I-XX, million Sales acre. Georgia, on of residential acre. acres lot. $XXX,XXX, $X,XXX Wildlight in average County, sold average acres in per an per totaled price in totaled In $XX of quarter for an category Unimproved an in $XXX,XXX Rural $XX,XXX Bryan Development which price acre. per X,XXX at totaled Sales consisted at per roughly $X the category, X a $X,XXX sold acres the of sales of of

sales Florida All in category QX the Texas. of Rural and located properties in were our

sales Non-strategic X,XXX of price Lastly, Timberlands in totaled of the acre. $X,XXX category $X at per average an million, and consisting acres

for to of remainder the outlook moving Now the year. on

segment, Timber X.X QX. the harvest of we achieve in $XXX million In to following noted with remainder quarterly we activity harvest to achieve the although remain volume full pleased As to release, XXXX we EBITDA million start our our X.X $XXX our full to expect strong track of guidance volumes million. in anticipate we to Southern for elevated our of year and million year adjusted lower our earnings year on are guidance tons,

we volume of to continue Northwest We Gulf proportion be year. million as of expect X.X Pacific year. guidance with harvest regional a modest coming harvest our our moderated Timber in tons in of greater region In increased volumes X.X will expect year markets, price second geographic half the to by to activity our full States this segment, mix the million improvements certain from the achieve which

over uncertainty We export resolution market. until continues remain market we conditions have future to expect China challenging of trade will the dispute, the loom U.S. some regarding that as levels tariff

versus our we of segment, to may and expect guidance plans market X.X harvest We based to average monitoring closely achieve year shift will be our million on million stable harvest volume pricing the full In tons, New Zealand the developments. expect situation X.X Timber relatively while XXXX. are we our

Dave with Real year our for this in remain relative segment, year track I’ll Lastly, pace to -- now to guidance activity to normalized XXXX. Estate the call more full turn volume our on we our comments. full of year a achieve closing back

Dave Nunes

in to response our Thanks, Mark. adjust talked of planned the levels the frequently of benefits REIT We’ve the flexibility as a pure to harvest diversification and we market portfolio well about importance timber added as enjoy the market play as conditions.

I our benefits in once were think, results. again quarter evident these first

market Northwest said, and As pleased midst a to conditions, where year. you and challenges China particularly some dispute team our deliver the heavily trade navigated export our challenging uncertain the how weighing all at the I’m these levers to on in is strong in market start very That of pulled their the various know, optionality. quarter we’re disposal first with

noted, Mark puts full we that adjusted takes believe to and markets. some on year in As we achieve despite solidly guidance, our are our track EBITDA different

through resilient comprises as we’re we’ve in the Importantly, we’re summary, about continuing That to and with now our decision disciplined for look well and questions. years In to optimistic our it turn forward in component building the strong -- per I’ll largest South, remarks. as the assets nimble we prospects of positioned call capital allocation. to believe the several back back long-term momentum operator a which Rayonier’s the sustained been for towards share prepared over and last making diverse price the concludes portfolio. operational in work markets I value

Operator

first Instructions] is [Operator Our from Citi. Pettinari with Anthony question

Randy Toth

This there. mention related of on from New increased export and a actually lower elaborate lower release, lumber seeing in Randy I to species. for there wondering imports you’re fitting Anthony. cost competition was Toth in you alternative In was what is if could the Zealand prices

Doug Long

and This increased South Russia Randy. China pricing. lumber we some the Yes. around of Sure, over that’s And both come and stable Doug. year we’ve That’s and from months the X seen a Europe said, as primarily from wood last we America. influx -- to volume expect that’s is into

from think I demand really pressure Zealand. Northwest with that lot New to has do So a rest on seeing logs we’re more Pacific that and for

Randy Toth

just and have sense. April And you volumes those far? offtake log May Okay. in on what Can the the inventories That Chinese China talk makes and staying topic. of been thus about

Doug Long

Sure.

the China. that in X we’re of demand intel XX,XXX inventory market the cubic range cubic currently per is robust right in our And meters suggests the seeing meters around So, day. million now XXX,XXX to daily

we during a before, during that saw months exceeded we quarter And more believe between we inventory As the currently the is X the important X.X discussed to healthy. this the more levels. prices now softening But just April. we’ve first sits consider range ratio tracking demand and than inventory the ratio ratio months X in

supply And and have than should and quarter. we stabilize into as believe we in prior New holidays, from prices coming moved inventory So of levels. to second bringing that appeared so Easter the -- also Australia the logs down both Anzac that but the less Zealand will help months, be

Operator

Collin Mings, open, is James. from your Raymond line

Collin Mings

Dave, It on expand some during opportunities regions? found like just just quarter? the the can X Timberland you all you looks First, acquisitions across

Dave Nunes

Sure.

the We continued have these at fly late transactions. focus that tend transactions negotiated We to looking of little smaller to on under a bolt-on screen. find radar

acres acres happy move return in to in Georgia. each much, of X,XXX add about needle in while from transaction a acres don’t with We’re Zealand, pleased under and the X to and Washington completed too these We And in X continuing portfolio. our our we’re X,XXX them projected to standpoint geographies. just just New acquired have X,XXX

out Another with of we these perfectly matching thing dispositions. the an of we’ve need collectively to segment the the that that acres is acquisitions from sold certainly investors almost standpoint, year. lands level your talked Estate be volume of this about match And with Real

that track on we’re So well. sort in of context as

Collin Mings

cut cut maybe down up. color. I just to that? relatively drove help And and and year-over-year there, volume the operations costs haul were the Timberland haul moving far Pacific helpful quarter. costs? reconcile That’s during mean, XX% Can In but you Northwest, the Okay. was the as as then, what high

Dave Nunes

harvest And the Multiple and percent our with Sure, and but mills we think things. types ground operating during haul typically have and is, we from do big were costs one winter based other normal. go away of One, type up, times, cut the lower tower Collin. had. I we had the had farther of had than so the harvesting crews we more impact so some tracks pretty also mix a we that on

some And impacts we also. so saw there

Doug Long

Colin, it’s delivered of QX QX XXX% that noting also in sales of our worth sales, whereas were a XX%. in XXXX,

you have make as well. to would ton on of that basis a kind And adjustment so per

Collin Mings

you. Got

of the over been? has a with months some good you as power wet sticky sticky how for the the weather that That’s of optimism the as then has there, been timber couple sustained and pricing just last -- And point. about in had Okay. far sticking in year, pricing some talk start some of just kind as to that of improvement the the South, how conditions, how we’ve

Doug Long

of a additional average coast the more And to capacity to this and close been to Atlantic in increases Chinese in Inland, increased looking exports continue Atlantic we prices Alabama sawmill it’s basins, year-over-year has increase On under along tariffs. coast marginal new price X% markets. but away pine see Georgia a the quarter more But online. Yes. taken year-over-year, wood tariffs, where additional seen we’re but about then basis, still and also have come year-over-year with even of XX% our kind these tension due some seeing we’ve muted I’m begun volume to pleasing those in

we the year. impact, wet continue go through definitely the an -- had to out increased also we weather rest seeing but on see, demand the So we’re as of

Collin Mings

last Mark. housekeeping All right. for then, And one one just

is plaintiffs there just driving we is a there? or release that just that driven forward? going year-over-year. Just you legal I I number the highlighted but you something Is huge costs Could costs, press on mean, the else overhead guess, the litigation touch expect what’s the maybe that? should not higher number, and in legal by specifically on

Mark McHugh

we a and higher-than-normal out laid they when matters we significant make incurring thinking not guidance they’re legal adjustment. were our While so that factored of And into we right expenses. pending pro for to XXXX. so couple litigation segment But compelled felt got now, are forma a we’ve our also corporate

So of otherwise really the the impacted IP expectations overall, guidance. prior was the in heavily addresses in and QX relative much increase corporate say, of more our range generally of year quarter sale to the let’s it’s by the year, in expense last

Operator

Our with Capital or Ketan from BMO Mamtora is Markets. next BMW -- question

Ketan Mamtora

Congrats bad. a start not to XXXX. BMW, on strong

start I question, U.S. want to First with off the

South, as really quite hasn’t much. pricing South. fallen it Obviously, the not But as lumber has In done mean, year. generally, West. in muted lumber I has been pricing this the much

So of kind are back the you any U.S. signs seeing projects in throttling formulas some of on

South?

Doug Long

No, pretty we that. getting really December as they this that -- couple the ago, been it’s all than the a our forward. going anything, If a than steam just full quarters greenfield, to are slower I customers announced to labor still was little ahead kind other X haven’t over on, past seen through that A of move not sign weather they February. wet much of lot mills January, anticipated, due were and much bit with it’s think, projects go forward working of current that but there of

down of moving are So our projects I’m that’s I’ve I talk that lot forward what think we of slated slowed still But of customers. heard as them aware to too. all

Ketan Mamtora

you you Zealand, update give to Got turn any helpful. are of there? to with seeing then, valuation it. of regards of And you sort what can kind terms or any in That’s color if New

Mark McHugh

transaction seen the the lot mean, there tend not moving as positive of parties there’s a be wide own and the over definitely moving we’ve site-specific that again, that I those of range a up. publicly But tends pretty last parties, of seen I X activity we -- lot values activity third disclosed. be X a prices direction very appraisals basis, certainly do see the third like-for-like appraisals and of can values. We’ve that the seen transaction to of course in mean, a a are or well on years. we’ve as large our And

Dave Nunes

compression period think, earlier at rate similar discount the an that, Ketan, a time I of U.S. is to we in of some what of general And saw

the just what’s I that’s in performance. think to to that part addition stronger of contributing

Ketan Mamtora

my Got sheet allocation, capital pretty balance side. About strong. very sort it. just And question helpful. then, of That’s from final is

to that seeing that up, the -- a of talk You larger deal to some mentioned about you you you regions preferences and extent the your think are deals, an opportunities come that? can how but were of among if to more in would for X about opportunity the kind smaller were

Dave Nunes

that, available also approach capital to in think respect I terms issue have at you think the always our we And of we first of to cash. sort feel equity, we a mindset Well, with of allocation where that nimble. the if chest disposal sit of full remaining of we all, tool potential with capacity, think, our debt I

finding And needs. really down boils then fit properties so, to it the that right our

for a busy we’ve be properties have properties will few looking our We all that improve desire had very really regions. years portfolio to looking and last across a always at X

at looking We X we’re that at across looking regions. currently all time. opportunities at heavy reasonably We’re in one tend opportunities a negotiated point of any mix have as to --

busy pretty the lot to have the So feel there. right after we and is across if like now, spectrum, go and I really transactions larger is small flexibility fit both group a looking of our

Operator

Next question of Lynch. Babcock Merrill from is with America Bank John

John Babcock

was in discussion to and and out wondering, have trading tariffs of any negotiations South underway. you the logs just start with on I I on want West? U.S. could heard happen China to what

Dave Nunes

line sight what the our can Unfortunately, read into that any better in than you isn’t of press.

Doug Long

the guess, side, $XXX about that someone familiar obviously -- the know with Wall billion, Yes. reduction Journal I of but who type X talks, is, article thing. I talked would Street down the The a about talked this $XX agree. the to we billion recent most don’t but

don’t insight have that. line really beyond So but there’s any reducing about them, talk we of

John Babcock

in U.S. then, -- of of sort that from I will demand mean, trade get about sort you some bounce assuming think And assuming China some you in just how negotiations. Okay. the Northwest? the back

Doug Long

off competition. XX% QX dropped and of now Yes. in from pricing of I exports exports to last dropped year mean, removals Basically, the year this that’s QX both the and off one hindering right total lack volume see like things China XX%. with we

And lower lumber So obviously, to the the market domestic against are export the the sawmills export. quarter. not prices, over really last that meant that’s has beat plummeted with as domestically hard happened

So are Well, come not be at there China for if least that ultimately trade logs fact off of drive tariffs we threats in improved resolution is tariffs. believe definitely, help also or competition. additional would increase some to the with pricing positive should they demand that and

John Babcock

how And would that little it about of that the to volume, think return? or would back a you immediately you come expect to would for ramp it do you take think while

Doug Long

I not Yes. I mean, it ramp-up, is think, it’s a immediate.

would caught the enough And on right months. that now secure seeing wasn’t for for currently customers export of increased was wood on it seeing interest, more water. Whereas month I not and They to volume we’re are Although, the about our just starting that and would ahead. starts that’s before, so say, very tariffs secure they’re the stops. out optimistic we’re any current couple much going volume

of headed where that on, talking to about means slow But I several to So be as several we’re a that starting they’re more time kind little a months you’re a build to. we’re about already. goes -- see but ramp-up think starting optimistic do

John Babcock

maintain the would increased volumes? of that does to kind interest it make before? had efficient it you Or to with still are sense interest, is -- adjust guidance you -- that And harvest

Doug Long

I here today, on. achieve we’re guidance currently expecting sit our mean, look, we as to volume

feel is momentum positive the that we though think today. I some And market there so again, in

forecasting achieve we our still meaningfully our to something guidance. so, And current changes expectations, are unless volume from

John Babcock

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

volumes access has sense, Just weather XXXX impeded a wanted from in to mean, logs? get are starts the to wet you and the market harvest seeing hurricanes I or gaining salvage those the

Doug Long

impacted salvage significantly to there, for wood area. has in the weather the ability that wet landowners unfortunately The Yes. the

is I’m did for year, read, what So quarter been see this of fourth wood ability off. we minimal. -- through the first while, through the dropped hearing of that and the some very much the I’ve quarter, And salvage more it’s quarter to what in specifically impact really from

and all had roll -- to to the over that in we we from of backed area moved moved there are So our crews down. our operate that over harvesting had over areas

volume still going months there later. major this point at be it’s be in some but to will think, X in a salvage, I not So opportunity the time, now

John Babcock

Okay.

mean, quickly Just not some that, actually follow before long it had anything? volume is essentially a last just of that I on year take how -- from worth salvage would

Doug Long

at stain the funguses soon. it woods wood, most are I’ve increased looking but And thinking, not also a still what seeing already months wet with I’m the pulpwood X sure, read, degraded not going turning another to a this where weather, but of is people be After things lot to temperatures. -- lot maybe we’re read from I’ve I’m that of it. are of and and like there’s attacking

pulpwood to be short is, May kind opportunity the my term pellets. of have So that more very it’s gut they after much that might chance to salvage. be last pellets for

Operator

our Steve with question from Chercover is And next Instructions] [Operator Davidson.

Steve Chercover

naïve, to up and demonstrate this southern that go but hope costs in wet due the QX the roads as doesn’t distinct weather. whatnot. I prices harvest So And I seasonality to assume pulpwood due sound well

stage it to maybe QX, it QX of it in that? or kind the do filter is to accelerate possible harvest already you and in So,

Doug Long

markets it’s the Yes. is what I wood at mean, time. very the dependent in on

So happen that’s ultimately, with one supply we strategy to But the the basis, daily, markets, weekly, we you the on where could take. year, if wet but see towards how they’re to the don’t because I they that. patterns, we’re up every fairly for going ourselves to and try not mean, look and mills we opportunities where we have evaluate repeatable. set evaluate then weather do see monthly a work

do sale. they’re sure our of opportunities sales our advantage roads can are and for look that when how make to at in and So take we we have place there ready

Dave Nunes

mind that in on a areas is a volume the well keep as sold lot in basis. stumpage Steve, pulpwood that of

pull is the to typically customers then So timing harvest to a that have the the and the year sale really we lever have of that.

And various crews -- terms in of directing of making really those decisions so really order you effect are that it’s onto landholders’ of customers a their the properties. many second

Steve Chercover

then, thought despite Zealand And that Russia switching been a for inroads disputes. quite I from Dave. years. of Europe That’s couple it’s New to trade a New the nice the ultimately beneficiary of a was And U.S. recent last really into China that story clarification, good Zealand, and China

is China a U.S. New Zealand? to be So would detrimental and between the resolution that accurate and

Dave Nunes

the I in the in really historically, And largest a for was tariff emphasis net in an has different there, the that that China keep put on countries. imports supplier time, in mind parts need period place to by lumber They don’t has to of a export large into -- many on the wood you lot side that’s but that the met that market side. of And very market have their a you recognize was being and been Russia. have log moving -- really ‘XX. -- subsequent market

decline the And meaningful China into largely and so, that benefited New they’ve logs has very coming on U.S. -- the going to Zealand, extent of had a decline the out lesser Russia

of parts. so, New there’s wood on lots a Zealand out need to feel to we but net capitalize And pretty coming good comfortable of China, continue that is moving position really that in

of substitution. have, you’ve lumber log Doug got versus earlier, mentioned as You the dynamic

got You’ve rates. of dynamic the currency

from over really coming all got the You’ve world. supplies

New our But around comfortable our of exposure that China as to So there’s certainly we a it the that. investment. relates lot influence market to things feel Zealand

Steve Chercover

India Well, stage. could be embryonic knows were assume buyers. I market are a everyone some few baby discussing years at savvy that commodity Okay. New pretty Zealand, just a ago, an with big and you sticking as the Chinese And

on going what’s India? with So

Dave Nunes

for in down they India I banking translated thing log last opened the had into that some a that changes to time the of of harder with and letters the imports. biggest be slowing implemented And flows it effect of is have credit rate up. currency their think, really year

the And so demand. down tamped has that

primarily We still access believe a capital. of out India they’ve to is but to at shipping continue there equilibrium reach when you that of banking look the We’re potential to volume as to demographics, got system just term relates their an certainly it Zealand. New there to still longer lot and

We’re letters there of not without wood comfortable shipping credit.

growing little to market, longer a I think of potential terms an large pushed so, it is really extent. is important out still And in but it the probably a

Operator

Our [Operator question is Instructions] with last Mark Seaport Global. from Weintraub

Mark Weintraub

nontimber to say I the in something a increase related I you the about U.S. think, heard pipeline in sales the

just that please? South. more, bit Could explain you little a

Doug Long

over won’t like I this come real hit Pipelines definitely itself, was nontimber business, was say that the team. that, beat of pun they our things estate We’ve coming and one on like that specifics online. a kind actual on lumps, pipeline on pipeline we a intended, easements prior go the and something the income into steady have quarter are kind of but proud real been of, but quarter. go things Yes. that of the of but

team has acre. XX% Over X of a to delivered the the past approximately the yield $XX an years, CAGR during suite businesses

for is growing. timber And there. So been out our outcome are busy great very a to this they’ve complementary that business

they that’s and pipelines, say, need a right So considerably. that, there let’s growing the these go, is, come but of also is also core I it business

real strong the team. So results from

Mark Weintraub

of income. XX% more you sales was that equivalent are expenses operating say, sales? it’s XX% to at costs it sale Because looking of Is item? -- the of noticeable the in there much nontimber line with equivalent that significantly. much as EBITDA How than there associated nontimber And the were it’s those to grown way of the basically last year, way about related nontimber in and of

Doug Long

straight bottom working staff some or great Sure. of line. overhead it. the through lot There’s question. It’s to a that some A that are goes

the things to Some bottom is, line of a very and minor that. hunting on insurances right for But leases strong straight EBITDA. like the it’s it contributor

Mark Weintraub

out, point it’s been XX%-or-so. you as And growing

the kind How stream this about How be should forward, you thinking significant fairly earnings should at upside? part we look there -- are there As there be of it’s the the a that more about? Because in we actually of thinking is point. become more is of -- business? part

Doug Long

I years. CAGR I mentioned Yes. we more we’ve over than the has last five as last XX% actually mean, kind was -- decade, really of been mentioned, that

So, and don’t it’s has been successful we to opportunity, it’s business. think grow. And mature completely room yet

new in resources them last and this months to additional to X business some that we’ve and added the ways. grow looking continuing to for find So actually

Dave Nunes

level Mark, new of the new and sort of level it in what income to always at properties of we sort also acquisitions bring. looking we’re of of look see sophistication context and

to comes new that properties own our of we’re more from a some on bringing standard up that to used often So portfolio. growth

Mark Weintraub

of carbon credits perhaps, to how nontimber the nontimber would that if roughly big place related it, as Zealand? able significant exists quantify were Zealand, you carbon for part recognizing the be in the vaguely New to it be you Zealand business, And And market but that the business? I New you soon U.S. in in of other the to New same have the credit Is know the in have part anytime would dynamics U.S. income. in happening income nothing’s

Doug Long

States Yes. New of in considerable happen carbon it United part Zealand lot that, something wouldn’t be our are under mentioned, Zealand to the business became sales is cap -- you trade what I trying comfortable the a there. and New that’s significant of our there. there’s of carbon mean, I like business the But, quantify system nontimber as a would operations. or a speculation income portion

Mark Weintraub

anything be I -- may a forecast not one the it business what were or might place to? New if in U.S. like on use what if But would in it is -- in question is be that, recognizing even were Zealand that understand put what ways But to answered. this of one your to that. can that it’s and amount and

Mark McHugh

gotten sort say, be I would of an speculative, longer But, magnitude anybody of really That the quantifying Yes. view it that. Mark. it Suffice opportunity think don’t highly as to we upside certainly term. into

Operator

turn further it I’ll no see this can any over remarks. I at back to questions the And speakers And time. closing for

Mark McHugh

for everybody Thanks call. the joining

to to everybody. follow-up feel reach any out me. have free you Thanks, If questions,

Operator

call. conclude Thank today’s does conference you. This

You we may your disconnect it. lines. appreciate And,

Rayonier (RYN) 4 May 192019 Q1 Earnings call transcript