RYN - Earnings call 2 2021

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Operator

Welcome, and thank you for joining Rayonier's Second Quarter 2021 Teleconference Call. [Operator Instructions]

Today's conference is being recorded. [Operator Instructions].

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

Collin Mings

Welcome investor teleconference you, and second Rayonier's morning. good Thank covering to quarter earnings.

and on rayonier.com. Our and statements financial released were earnings yesterday are available our at website supplement afternoon

we I would you securities harbor statements remind like laws. safe pursuant the of include these to that made provisions forward-looking in to presentations, federal

from we cause the of the some make. earnings and actual to also Page Our results list referenced release statements Form financial X SEC XX-K the differ are They of materially that may supplement. filed may forward-looking with on factors our

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

comments Dave? and from Dave let's that, With Nunes, opening CEO. start our with President teleconference

David Nunes

and Thanks, morning, everyone. Collin, good

to President of our make over and comment of review real before Doug some Senior Mark the discuss results. will Then comments as Mark outlook we'll following McHugh, President, our segments, estate for New results. our Resources, financial Long, And and Vice high-level our Financial I'll on consolidated turning Chief balance Zealand as timber ask the to Forest First, it Senior well timber XXXX. Officer, review our results to U.S. Vice

We all are momentum our encouraging continued pleased across the to second quarter. report we businesses XXXX, experienced that the into to start

in EBITDA Adjusted adjusted million the EBITDA our EPS results quarter and than segments of $XX offset generated favorable of the EBITDA XX% segment. Estate exceeded lower Timber share. we prior $X.XX each Specifically, in pro as per Real by forma of adjusted more year

market our the compared and We're with export strong opportunities. pleased year was reflect lumber capitalize real on we market the As to continues period. environment estate the improving operating markets, prior team domestic on trends markedly as improved to quarter, how

our XXXX based we Mark the adjusted for half raising solid the are balance and year, of greater guidance. discuss in first our As our modestly will on detail, results expectations EBITDA

our down to segments. different operating Drilling

was segment a the increased $XX year adjusted wet South. quarter. Timber across which harvest second X% XX% above EBITDA productions offset the quarter, more impacted prices in conditions reduction Southern of as prior volumes than stumpage Our weather generated the XX%, which million for Net

Pacific of Pope In million, EBITDA adjusted XX% as driven as million an and Northwest increase markets sawtimber demand a stemming delivered export increased segment, This adjusted in we following -- from in achieved higher increase domestic domestic our by Timber well favorable versus prices, of Resources. log $XX $XX merger year with prior EBITDA improvement the sharp volumes quarter. was market the lumber

severely million. headwinds second was adjusted and XX% our as both a significantly by export In XXXX EBITDA year-over-year the tripled log EBITDA New second higher demand. Timber log as of that and in quarter Zealand result domestic to nearly of was $XX average weighted due The adjusted volumes segment, to robust quarter harvest COVID-XX-related prices increase impacted increased

versus segment, prices. $XX higher our exceptionally the down prior -- a XX% significantly per prior of acres an reduction we generated last million, partially strong decline year. EBITDA quarter Estate offset by adjusted by Real million from the $XX acre In driven year sold, was period The in in

Commerce estate in our significant the team both Wildlight projects Belfast real our closed Importantly, during transactions and development quarter. Park

third the results. reflected Timber as price Funds as quarter the stake in be Fund we through the like ago, weeks transaction provide Pope $XX.X both Resources. these financial our last to business to well on Switching X with that I'd our an manage of that gears our we merger results, co-investment update year was we quarter second in Timber had from purchase acquired announced funds. the sold and The of rights aggregate Two million, will

not was had us to we We the and priorities. allows our As previously it Timber this other strategic as reflects simplify strategic capital business communicated, fit operations for favorable equity believe shareholders a for Rayonier. outcome a our Funds transaction long-term allocate private to

investment this in acres as in a well at X manage XX% own comprising Following if Northwest. fund fund co-investment XX,XXX the in stake of term, from the it included Fund will business. we its as Timber the this to Since have commenced we successful, sale end exit transaction, was continue fund, is this to not Pacific transaction. the process our assets the liquidate Rather, a from complete which,

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

Mark McHugh

Thanks, Dave.

net series $X.XX were share. per forma as I will quarter income or $XXX adjustments to the million for discuss financial Rayonier was net debt that per totaled million start the as million Sales was while a highlights. our was of disposition Pro for Page pro with Let's a million forma associated share. income Pacific or primarily large a basis, $XX momentarily. On X operating quarter $XX and on with $XX attributable well the income actions in Northwest $X.XX

of contribution Dave quarter As adjusted Estate segment. results the segments $XX Real as from was prior of our across on, million Timber higher more above our all period offset than EBITDA year second touched a lower

as bottom Page our liquidity a comparison end at of overview provide quarter the resources as X, On of we to capital an and well year-end.

was first prior higher $XXX adjusted to interest in to period, and X for for distribution, of partially the versus taxes, year of by the the or million and other expenditures. CAD is reconciliation cash due primarily $XX million financial available on Page cash the provided expense operating cash year supplement. EBITDA, Our of half higher by activities provided capital CAD, measures GAAP A offset

Consistent through during raised average $XX.XX of program quarter second million price our capital the with $XX per we at offering approach equity share. an allocation, our at-the-market to nimble

opportunistically strengthen the we discussed, bolt-on view previously fund As acquisitions. and program sheet match balance as tool to cost-effective ATM our a raise capital,

borrowing our debt We are the XXXX and market cost. average our the profile steps taking address weighted our improve also bond quarter, during maturity to active in maturity, debt lower

notes million we May, issued due senior in Specifically, of X.XX% $XXX XXXX.

delayed a a for to executed for remains would million, loan up Additionally, mature undrawn, draw if XXXX. it while $XXX in which term utilized, currently credit agreement we

credit the rate loan debt also maturing the debt this assumed to revolving to on the lowered well acquisition due obtained XXXX. facility make we XXXX the pricing its debt to repay also million a we our as the the extended that have $XXX XXXX. of loan were lower as Pope amended a term We of April Furthermore, unsecured. from of was maturity in and in terms term May the an interest by completely used we portion amendment A the in to year proceeds offering

prepaid term loan that the of the in the position Additionally, balance $XXX million cash XXXX, given completed strong our we million. following during the $XXX matures outstanding large reducing disposition quarter, to

of of recorded In conjunction Collectively, these items adjustments an the share translated actions, associated with per we as million interest these in $X.X rate well of with as swap $X.XX related to and $X.X the to million termination pro cost quarter. loss debt modifications. a extinguishments forma

we years. leave early for believe ahead, with Looking weighted interest bond gives forma the expense. facilitate quarter us cost of fixed, to us our debt our ample the X%, next debt XXXX of been to average optimal actions the visibility average forecasted Moreover, X has of XXXX term weighted fund structure will the to strong on almost during and helped year. our our which repayment we liquidity an capital roughly that maturity bond maturity, our Pro maturity and all repayment our taken of below swapped will extend expect drop to

future with markets tapping credit increased by at we system, Lastly, time, the us farm bond within the additional providing advantageous preserve financing into an debt capacity flexibility.

both In sum, quarter $XXX the cash and which the of attributable is cash Timber Rayonier. we to debt, Funds nonrecourse of million $X.X closed debt of billion with segment, to which exclude and

on closing of $X.X enterprise the stock price value net of quarter. based billion Our second our end at XX% of debt our represented the

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

Douglas Long

Mark. Good morning. Thanks,

was Southern volume, offset during higher Let's improvement in lower net Timber wet start due with our lost days. was largely the $XX harvest second decline than million, offset quarter to though, above in partially was decline X% attributable Adjusted by albeit million Page resulting in EBITDA The production volumes. prices. the modest This on to The quarter. in volume year more largely quarter of by year-over-year weather stumpage segment. was second prior $X higher the pricing, X

Specifically, roughly average ton, demand a Improved reflects pricing in sawmills stumpage increase certain quarter. year $XX prior was per well pricing strong the sawlog as markets. XX% as log compared from demand to export improved

sawtimber. prices the to a favorable reflecting tighter also wet weather year-over-year Atlantic Pulpwood as XX% strong prior weighted contributed customer pricing A toward comparison. as increased our the prices mix average climbed well due supply prior and coastal higher mix year pine year XX% stumpage conditions. favorable of coupled more from sawtimber the pulpwood demand, quarter, robust versus quarter due to Overall, markets shift to with

We local timber the by across of registered gains quarter, market underscore the importance dynamics are the encouraged pricing U.S. during the which

South, across the our construction and of markets. those portfolio

to of Moving segment export year strong pricing created the improved tension The quarter. year-over-year the on attributable $XX Page million to XX. Northwest was EBITDA due demand. Pacific increase prior $XX Adjusted domestic significantly incremental [indiscernible] Timber our million and above was to lumber largely markets

even the sawmill the export residuals was above support year levels quarter fell as in Resources. average X% sawlog volume additional throughout part record proceeded the sustained stronger pricing prior pulpwood during was quarter. Second last lumber Meanwhile, relative merger second remain $XX our Pope amid from year's Strong quarter second prior increased volume created plentiful XX% the quarter to pricing due quarter per in set from in delivered harvest the quarter lumber pricing demand. ton, the prices production. as quarter year year price to was the by to At due up May, prior from market with XX%

to log environment exports Japanese from As of last it flow demand has spruce to constricted discussed improved an in Australian our call salvage into exports market a recent in ban on months. to region. demand Pacific favorable and relates Northwest, have China on the logs, the contributed European the improvement for log The we all continued export

the as flow a relatively market sawmills stable Northwest environment forces into the Pacific of into demand We rise demand export support We will half Northwest. second seen in tension the the domestic as well believe from translate created the exports healthy have log continue inventories We continued log China of believe in for logs recent by in to strong in weeks. year. these pricing Pacific

While we remains supply lumber the particular, for logs in healthy. underlying by robust monitoring caused believe the wildfires prices, are other demand log regions. demand closely disruptions remains In correction green we given the in

few that like XXXX. fires the by regarding that our I'd recent Western On across offer properties region in parts none to far, impacted seriously United States. have of the threatened note, the of comments Thus a been also wildfires have the

year's last fire by As either, XX,XXX a impacted Fund fires reminder, none properties our properties feed timber Timber damage. sustained of although of roughly were acres

While that be there on operations year, our the fires continues efforts pressure over materially areas to salvage from by been others. have been upward past conducted have not impacted impacted the costs in by hauling the directly

and Increased much more in by volumes Zealand versus level of the second prior disruptions. XX in $XX for constrained credit we pricing Page and and segment. quarter operating stronger triple that COVID-XX quarter. was of by adjusted EBITDA shows were sales. increase metrics reduced EBITDA the pricing nearly was million year a our harvest partially Timber the results activity prior driven offset reported year by period normalized key million Adjusted in The carbon New a $XX

value quarter during the as We appreciation. for these continue we credits of expect is carbon to the that defer price poised sales further credit

Average export improved and the salvage exports ton, China demand, reduced jumped the sawtimber log per into to prior quarter period Australian spruce XX% in the to flow European Turning from the of China. delivery ban second $XXX to China for reflecting prices pricing. year logs on

to in by Zealand. New softened log during have of XX% highs China shipments previously second supplying record recent into A-grade in healthy pricing coupled prices levels, costs remained surpassed the of the logs constrained as Australia in into by translated response spruce an previous log constraints of European we imported pricing on been China the has exceptionally environment, to though, there [indiscernible] China strong lack the total demand China. volume in salvage to weeks the China. has flow logs logs and Since reaching These transportation prior As was of pricing demand favorable ban, with Underscoring pullback inventories in container export higher the export when noted, a Furthermore, approximately for higher record quarter. the availability.

prior primarily in prices by The the foreign was increase rates prior quarter. pulpwood quarter market. delivered period in to Zealand quarter. as U.S. Shifting Average the X% climbed New ton. per prior from to domestic the by Average New Zealand domestic as to a $XX year more the increased pricing sawlog compared exchange dollar pricing pricing driven XX% second year domestic modest improved XX% versus the year

expect In export continue sum, continue the We New we believe market the to to from balance while net well strong lower year, generate market Europe over of are strong as our a Australia capture Zealand benefit we the share realizations. from domestic to as and demand. positioned pricing stumpage well and operations

discuss look-through the the million. $X reflects briefly Timber Highlight XX, EBITDA from second harvest XXX,XXX now volume Timber Page Funds in the I'll from segment of EBITDA, on which generated Funds quarter on tons. results was Funds of our segment. Timber Adjusted $X consolidated contribution million

moving and expect negligible from forward. we earlier, the discussed segment are be the process business As of Funds will contribution this exiting Timber in

Trading of the EBITDA Lastly, segment, $XXX,XXX adjusted second quarter. reported in our in we

generate As provide now back trading economies Mark? export our timber are for turn primarily additional to it Mark a our margins reminder, to of activities our designed estate results. business. low to scale and cover real over feed typically I'll

Mark McHugh

Thanks, Doug.

Page Estate quarter. second the detailed on strong results XX, in our segment As delivered Real

acres. real estate a large million X,XXX on included acres roughly sales XX,XXX Second disposition of consisting in quarter which sold, Washington, $XX totaled roughly

per this $XX the Excluding transaction, at of an sold price EBITDA million quarter roughly million. acre. on quarter acres $X,XXX second $XX sales was for average totaled Adjusted X,XXX

projects. significant Belfast addition significant post-closing will community. acres category both of our Sales roughly phase complementary Park community additional million deferred this the million obligations, a The will recognized and adult Wildlight a development record adult active from Jacksonville, as Florida, second million within the $X.X is north $XX we of as future quarter Wildlight we which in development for and XXX to of market periods. high in in the In project be development catalyze for national an help to Commerce Wildlight active it segment, homebuilder sale milestone sales included of a transaction improved an a of $X demand. totaled our closed transactions Due a believe project, the first revenue adds downstream was to

we lot. closed Savannah, developer for per on parcel to development XX a per industrial our $X.X a or residential Commerce project Wildlight our $X.X million XXX-acre in South in addition, Georgia, of Park project, national properties of lots million acre. sold Meanwhile, In $XX,XXX Belfast $XX,XXX we for or

Wildlight, infrastructure are Overall, by into served projects. pleased West with opportunities the pipeline additional and Puget is the the for our land that of momentum translating entitled we demand Hill development Sound in Washington. across encouraged We Richmond remain of area

buyers. In to over activity. attract of rural an properties privacy nearly X,XXX-acre the our to opportunities land space, the by the a quarter per X,XXX acres bulk second average offered remains rural at of roughly totaled demand and category, Georgia continue just Fund Conservation in acre, sales $X,XXX these More for as recreational price broadly, healthy the comprised sale

positioned well moving values. and are realizations above trends timberland capitalize to We forward on focused achieving remain demand price well on these

Conservation We million this Easement in was Port Pope a of second Washington in merger was the $X acres acquired in with the part Resources. covering covered closed also XX The Gamble, as sale of quarter. easement town on by the which property for

X,XXX for roughly closed process. relatively quarter region sold acre. we bid was during us million the strategic roughly disposition Western $XX less or on acre This through $X,XXX per in the a Lastly, a was for a and large Washington competitive holding property in

of the increase our million In production expect of trucking we conditions million half which expectations the to X.X to regional full X% reflects X.X of raising our midpoint volumes by our we Southern moving $XXX for Based a harvest a million, year $XXX Timber from segment, guidance. original at tons now the for results range outlook adjusted our solid been and constrained on on our has are to EBITDA year, year. and guidance full year as Now first our weather the balance availability. to million

strong in improving average as above well will expect weighted domestic that driven and mills demand year as export levels, pulp remain lumber We demand by prior U.S. pricing select from continued

markets. South

However, the could we year. trucking the over the in which upside stumpage net costs, higher of are limit realizations seeing balance

prior Timber measures sales to modest distances from optimizing on targeting increase customers our our haul on with great We delivered and costs mitigate upward guidance. taking by expect EBITDA to segment, log sales are $XXX million the pressure we Overall, adjusted these stumpage year advantages. in Southern of $XXX full million a to

EBITDA Northwest adjusted along are full million tons, to million. Pacific segment, of of our In Timber our $XX maintaining guidance year million million year to guidance full with $XX we our X.X X.X volume

We will demand favorable. and log as stable relatively domestic both expect the remain export pricing across in the region remains markets

we of million to X.X Timber our In New X.X year guidance volume our are Zealand segment, tons. million maintaining full

XXXX, Given $XX $XX year million. the over and demurrage in export inventories that year lower weeks. the half will of full remain now robust pricing elevated. China That of to expect expect significantly we have start anticipate increased as adjusted EBITDA recent the said, log million costs shipping second we in relatively we Further, to

In expect our to segment, $XX Real million Estate we million. adjusted year of $XX EBITDA full now

in We Page earnings commercial well as our segment of properties strong as development the real demand expect project activity. X updated in release estate More residential Page guidance details the can XX half and found on within our this given the rural second year financial the regarding for land as a of healthy continued be sales well strength as supplement. of

the to comments. closing for turn now Dave back I'll call

David Nunes

very about for the of pleased the balance and outlook our year. Overall, optimistic we're Mark. quarter Thanks, the with

successfully other quarter, second in very this to priorities. integrated through I'm addition also proud Pope subtraction. of continuing To while holding end, total while on the us pandemic-related capital months, both on the timberland $XX flows to closing We several us nonstrategic strategic a As U.S. the portfolio per state improve portfolio we team acquisitions. opportunistically XX how over continued has and Zealand, our improve and on our Washington Resources, markets These execute should and time. log a of both I disruptions reflect positioning navigated last our share bolt-on strongest cash grow of and of in out the softwood in moves which have help also value in million helped recycled New

Funds, a Timber exiting strategic the of Meanwhile, business are to is on towards we've of Rayonier. end, important for fit increasingly front strategic closed realized private the steps not real optimize the the quarter Subsequent balance sheet benefits on the growth being that also to equity we as second reached during quarter. improved high development step X position our sale of fund an long-term made investments quarterly capital a real the equity estate took Furthermore, accessing both a cost sales quarter. for debt and the markets better estate we and by record our in

achieving governance stakeholders embrace In addition and the to practices. increased interest environmental, and to also important we in financial continue the goals, operational our social from

our to the aligned while well this sustainability on inaugural disclosures. the previously further we ESG in will providing planning with key carbon the steward we lands as which of earlier our release is believe a mission that of returns weeks, comprehensive we're responsible discussed, published serving report coming As to we're year, enhance looking a Building industry-leading ESG advance. report principles

the better they to long-term Rayonier employees I work success. and as be our of dedication continue together position impressed by to focus Overall, for

the now to and remarks, I'll concludes over call This the back for prepared questions. operator turn our

Operator

[Operator Wilde Capital Mark BMO Markets. Instructions] from

Jesse Barone

for on Barone Jesse It's Mark.

driving would into slower in Is you dive it deeper kind more be a question, a of kind China? Just additional just Is just of little rise inventories any European color First China? of in into helpful. could return supply demand? there the what's guys

Douglas Long

I'll one. Sure. This Doug. that is take

did China That's So around meters. at up European log only making about to July, [indiscernible] the we and of pine down actually X.X end XX%. up of inventories go significantly that, around see spruce to cubic million XX%

weeks per couple at construction a summer where Port We a regulation some was that. of XX,XXX are electricity weaker a of to there like lockdown than the cubic there of and of of the is shortage of There cost. the June day in There's areas materials demand also to first the due government the saw monsoons, on due was about typically while normal deferrals demand antipollution July. then or in mills That lack things during things. [indiscernible] meters less months, and hot lot storms, was even of of high of operate. So

just lumber, So also. other products just beyond for

normal Over meters kind the past we that. pick into the typically move begins recent cubic weeks, to per and rains, of cooler up and we into of log for months year. August, little day we've back seen construction fall demand a the And return typically more get XX,XXX-plus get as time after this as to bit inventories

it may in this day of demand per fall, time So year, XX,XXX to happen. XXX,XXX starting trend we demand. we we about that with this increase XX,XXX And recently in to cubic meter appears the cubic be as into log of saw, last saw going meters per day moved year

of encouraged pre-COVID. XXXX up in to Chinese first the half investment XX% Lastly, is XXXX we're that Bureau estate also real of compared reported Statistics that National over for

So forward. I go for demand there's construction think a as out we strong there still

Jesse Barone

update then you QX? And on could Great. around guys on there legislation give kind any of the ban? the And update log an is Russian you legislation if mentioned Australian in then guys

Douglas Long

ban take ongoing. Australian that again. is log Right I'll Sure, still the now,

actually any suppliers. haven't time some us and We've to some that this We folks and going isn't seen sawmillers of are anything the -- seen going here make more forward. some think Australian making changes repositioning wood for other happen

we for think here is a this while. So

expect on the sawlogs regulations way this exporting China. that be still of So for no to we're at forward there'd just a in short goes But drawn logs January X, out seeing indications as themselves, out. all log the also looking actual reposition on how increased there's Russian I demand ban, term, and people going in be procure that markets the of the but to particularly appears into And the for it ban time update positioning are some midterm. those come lumber United it, be looks And States. mean that we've will the themselves real either logs Russia seen we will or more lumber.

Jesse Barone

And freight one especially kind logistics sounds side? the U.S. front, the the me. you It then alleviation seen Great. of like on in Have guys last for any on ocean trucking

tight. remains pretty still South

there, turn any it I'll then and Just over. color

Douglas Long

happy Sure. answer one I'll that to again.

freight ocean of a of and rates issue we've go up in don't freight economies So on very there. is When ourselves for it still the comes New major The to so States, lines, out we up world. containers. the seeing and have back lot pick United Zealand, -- far, containers for with but procure container want We're a particularly competition out positioned also us. ships multiple of we competitive, to seen

So slowdowns there been The of of the the been at the mentioned, too has and issue, us. ports. much a trucking bigger for you as -- ports problem hasn't

X see a issue hours So X times turnaround around. is for or biggest where turn where to ports can we the that it truck and trucks those take and getting

to have So -- as say don't that enough of long so the deliver it's of drivers trucks, port as that us it's causing is not the much that possible. we not to time

Operator

comes Our Pettinari Research. from from next question Anthony Citi

Unknown Analyst

is for Anthony. Soden Ashu in sitting This ] [

question. first my Just

into Europe Global bought their asset plan time, carbon During a Campbell to carbon unveiled management get to the the quarter, go market. firm neutral. same think I At the large

wondering any to values? needle creep coming accelerating. this impacting timberland the be you carbon to you go It's can talk seeing Are Just seems in just how business. this drive you about different neutral to premium years? stakeholders, in for financially me So could the move how by which

David Nunes

very mean, are I certainly this carefully. we watching

is the for Global, leave mean, I think of there's role. address. that Campbell sort of JPMorgan terms to to I'll speculation a in purchase how of the of And now, right lot rationale a Chase I playing carbon around

a there's I as think is to that there that equities. people segregate private are at that's to one space, are a out. certainly on as well side hard some carbon but valuations, the the And to starting equity that making in various public number value creep both of pretty look assumptions

of And is the of I us that awareness I use be when there's is place forward that other going greater carbon we products are think working construction key solution. materials. sequestration wood part the a going though to think for the relative to taking

a So in is overall wood monetization that demand it's related scheme regulatory level generally an on well advantage participate I kind emissions markets And of sector, future, see of evolving it. wood. as an for private that thing under we've we're just we're continuing that's an the New the both view for little as feel a to this a positive and in used a been operating we years. of in to have for carbon that going a Zealand of think But level, there's in or we more and a bit whether to trading number

U.S. seen evolves over too And so we've time. as how over that has participate the in time. evolved And expect it to

Unknown Analyst

with talk biggest top factors biggest regards maybe that Or of end demand the you raised that say mind? guidance. are sources about or keep and what high to the range? just you to factors we Is other to get there New maybe the China fair it could low And helpful. Can swing Zealand then should of your of are that That's variability? the

Mark McHugh

pretty going estate And terms overall to U.S. segments, transaction always just be larger there. biggest in lumpiness dial terms I just stability is significantly. the move the our the kind one doubt, business of mean different can of a mean obviously, really swing real without I of of of factor the revenue in

clearly, more followed going build Pacific some followed likely stable estate, year that inventory some Northwest, bit We've China muted to But back giving by the are half Zealand. New of be price We by see Zealand. followed biggest in upside extraordinarily of New little the strong in be to and tends real the generally predictable New South I'd that's obviously by a if of speaking, Zealand could us first say had as most swing seen the upside second resolves, view half half, the well. there but the factors. in year we

Operator

Partners. comes from Seaport next Research Our Mark question Weintraub from

Mark Weintraub

impact the about for -- weather of think you when stronger the in question, U.S. First demand versus

again sawlogs on of as again mean at Or that demand-driven? in of be most how think I you to the that pulpwood Recognizing things maybe would assume trying pricing levels that a do get that we've be But demand segregate. stayed -- it's one and types pricing would to if to would Just weather-driven much hard South dried of much out versus think were be well. and given been seeing, you the is feel just back? do retained? net for

Douglas Long

Sure. This is one. Doug. that I'll answer

increase across XX% stumpage South. saw the you in that So

Wet And to would right, cost of factors say X similar whether And is of demand You're think part think is that, and business, are as then of factors I about export the kind I the year multiple about, drivers. demand. you had the that market chain we went each increase these a through mix as what geographic about the contribution relatively of main the quarter. supply market we or think through out impact the to overall increases, improved when there.

Mark Weintraub

and to a sense how any business, one being use that makes a point? give of us in the understand starting contribution us evolve, New sense additional any how you and to even about to Okay. And whatsoever. if want your to look that But of where things from lot Can operate Zealand they what to that type a financial color now were at cautionary give provide? then now. terms you change things the as that American North might carbon on of how as could that question if credits in And can are apply

David Nunes

policy focus of a that one, lot are a Yes. questions for That's a system treat offsets. carbon carbon versus around key to public you There's evolve. Zealand lot as effort to emissions of that's Mark, such additionality. There gauge strong because of policy reductions New come also how took to a hard afoot it that time of on a debate And ultimately play. more will into kind

the New We've took to going U.S. place to the of and this. take It is same system while and both think hard to the some of we the sort So pretty in the to nature into a seen in timing place, that. kind U.S. test of predict Zealand get efforts for

We to bit. have a annual system, been areas more seen have We've another little don't that's for has that that's for deferrals. around and -- strong effort that is at us. It the in cap-and-trade a market operate as looking tended California

we itself this going continue market some and to testing evolving, And time. expect and so for that's is

Mark Weintraub

the And credits over the how much of magnitude to this Zealand order business, contribution is -- Okay. last say, what from year? year, carbon New

David Nunes

I our is minimis. intentional right that it's de of pretty it's on And mean, now, part. part --

withhold have sales pressure We elected we pricing. carbon on credit credit see because to carbon increasing

that that make -- decision we that. sort of a have as And so look year we that's each we across

-- going of and it's timber large increments in wherever it's a So them. value not you looking for those to But get be economics, you're super contribution.

Mark McHugh

prices $X Last year, trajectory there. back been million. really of This that minimis. Dave holding Last our supplement. about carbon financial roughly we've view it year, the on we year disclosed of Because like carbon it's was in sales credits our pretty optimistic de been said, given

Mark Weintraub

to were dead don't it. Got be if the were want annual that monetizing though. kind of that curious, -- come the you the representative about? would kind you million, credits And I your of was monetize they as roughly to you of that that Is be first what if provided, credits horse $X more

Mark McHugh

that give detail the bit you more on more maybe Mark. scheme little a bit We emissions how than a complex works It's trading can I that. take offline, there. can

Mark Weintraub

Sure.

David Nunes

are forestry can mix more that a ongoing Yes. a Mark, operations. you onetime have through others you credits mix be of then liquidated, normal have essentially that of

Mark Weintraub

Okay. if could. Understood. one, And I one last

year, for say. guidance estate talk I through of the may that? went On me real sort up on follow-up EBITDA Can the guidance to the what a and some have lot. then a full the And you went EBIT up business, you the

So...

Mark McHugh

necessarily Yes, it's got real better from volume. of just I'd and really mix estate more come say the a visibility year function seen the that the on of price as of pipeline. as we transaction progressed has and and not we've there upside activity the has properties

stronger that's of I'd say drives what what's having And basis on price differential. DD&A just that kind per that's figures driving acre. the kind getting is And lower and so the noncash the of

Mark Weintraub

just types in you're you the realizations an is businesses? -- mix primarily that seeing purely are actually the a And property. getting Or given improvement of that a of for of function is

would the value presumably if the of the assessment your be -- up it's case? So going were latter

Mark McHugh

as the having both. see realizations in the as balance just well we pipeline strong It's and what's mix issue It's of for gotten It's on what both. transacted a the year.

Operator

[Operator Instructions] Our Horne next Raymond caller Buck with from comes James.

Buck Horne

for I how is Maybe of in pipeline and shaping seeing? types wanted can question the exactly a well additional the next you're that's interested up there what to offer development. in back If maybe seeing as any little of if on types residential follow half up capital additional of opportunities you on into terms you're estate the year bit. color real different

multifamily interest is you or think what land for operators kind these of great adult other up pipeline single-family -- seeing or Are a active perhaps the what's community developers shaping rental I addition. days? even from development the any in

Mark McHugh

seeing front strong I'd have may representative of I'd development from other probably Buck, of mixed-use real our within say is last that's you're that seeing here segments projects. and pretty it's of And your been of definitely in categories upside seen say board homebuilding say demand some XX probably on our estate, we're kind I'd the interest what projects real surprise, we've the across development not a necessarily -- been in within development. months. estate the that, different a some what

David Nunes

To add to that.

that based an full think absorption I mix, seeing on also of I both the think it covers the acceleration but you're demand.

breadth been from perspective. so timing positive value And and and a it's both

Buck Horne

flow? additional because capital Is investing land development into that growing that do to some demand, reinvest And of anticipate opportunity cash you activities?

David Nunes

Mark. Go ahead,

Mark McHugh

we our It's be that is prefer minimize stance capital. development need Yes. to We're I'd to -- really the capital catalyze on to of going we really our where not I see that to say business. core demand. that investing always investment our mean so we do

Wildlight infrastructure that of now much you with the saw phase think more we And that active of it. to less of said It [ that doing can so sold. do early we masqueraded I kind of sort adult And that, just site of and land. in ] We're development. seeking like horizontal were see the was we more in kind of

feel to that with like but the X downstream Puget we demand we're by see capital, of appetite area of And I have in need only minimize to kind Pope. really But as really going acquisition to when to of Sound is driven so opportunity. of think around Wildlight, our capitalize that that so Georgia, we think demand. on kind do we activities. investment seek kind Richmond I We be what generally going of our I West we're area we areas primary of focused recognize of the as Washington well It's Hill development that mean speaking,

activity of And to and really kind more is demand that markets. think be But quite the capital demand. is appetite that pace to be of the again, of that the that opportunity so our going the invest of among driven to see capital flow differential capital and I those to we catalyze need kind by to invest going investment

Buck Horne

sellers' Does offerings in of additional Got it. it of all the at you activity right of out well That what and M&A there kind pricing sheet And positioned look opportunities? so of congratulations availability afford more balance the or quarter. on with makes you are last accelerate a to expectations the what And now? question and sense. lot in kind the terms are is seeing of now, flexibility

David Nunes

the across all think geographies. I of -- our of of I first mean couple we're all, I really we're mean things. a market always in

at So all that's something times. monitoring that we're

we've to do may to diligence. I that, of on-the-ground to travel due a to And that different to I seen market more people the an tending think you're have are last one you're year right that of the little more, to come properties starting some to now. market have because think as starting the that's availability now of starting see is things that come

us, at And on one be to But this we a prepared us. in to at regions plenty it sheet all certainly approach. So of now. where that to mind working properties might kind fit quarter got we our for and that continue to it's as across We're have looking had look we've improve for -- trying of can. was and balance really looked we portfolio of we the right things our things flexible

Operator

America. John Babcock from question comes from Bank of next Our

John Babcock

activity First one, I lumber with in the you seen sawlog lower? just wondering, notable Southern change markets was have any prices settling in

Douglas Long

cover is the is seen I'll unsustainable that. in we've well, Yes, This historic high. correction lumber again. of an Doug Yes,

the flow. headline South at peaked in price generating sawmills current so while strong And are drop still the the is very eye-catching, cash

log customers inherently the the discussion bad particularly point our for have discussed and And also as so while our we've have demand and are inventories doing but are side. lumber pricing now, a before, we quite on still with low weather, well trends, customers, they both wet good just

limiting the remains earlier demand as South the very the so pending an Northwest. market fire logs. well than as nervous about normal That And restriction in strong fire in There's shutdowns, season. available has

pretty the So demand ramp Northwest us. also it British trying Columbia that that hearing lost mills And about in seems are we're has for fires, from remained capture up constant capacity. to really and with that shutdowns

the across seen United States we've strong demand overall, for So sawlogs.

John Babcock

And fiber paper mills. on and increased reasonably similar about costs fair also topic, bit from I mean paperboard heard a we've

in was increases just able the greatest if end that have quarter? since be also how seeing the on some South the you provide prices or seeing on to And are prices? which point, fared pulpwood wondering And I so the color might of in regions those

Douglas Long

Yes.

So as U.S. talk is we the about pricing across differential

we fiber South. where the are we where seeing on both and from in sawlogs, increased side export demand And particular. have

of in been across pricing encouraged that and So the South. Georgia, some there's markets coastal we've particular, see pricing. board Atlantic to Florida But really in the the seen Coast. strong area across we've

I'd where the have that But export. been seen So market place uptick increase. as leveraged in only of area. much Mississippi we've overall, has haven't probably a we a where the seen stronger we say really with there's [indiscernible] response general

John Babcock

that of the some that -- little kind challenges on in better? and bit mean, more also, broad-based signs trucking Northwest South South? I you And the seeing talk what transportation across are also, a about of did Is then you getting focused And Okay. side. the or

Douglas Long

So United trucking availability actually Zealand China. is States, and New the across

with long-term suppliers. some So is a pandemic. across back issue have kind the but up our What contracts lot we've ramp we seen of an trucking is after of board, post there's

had is And where markets, new area, South. and relatively around good And the products. the to of for strongly in trucks competing we're I get compete development like the mentioned, the and cases, and ports had there, trucking that's so to in and developing so opportunity most we've we've except other for exports new availability to

yards. And it's down get kind us So woods longer roads takes a hampering weather It in trucks as the that. of well the to as really, major log there. in been the has to for impact the wet

might a when the you you're capacity but a sound lose driver load capacity, a could a doesn't So XX% truck losing of workforce. the in like day, lose lot, at max load a day, a

it's So not we a of constrained been to matter of and around really ports. more by issue the being necessarily the get trucks, utilization really able been haven't been of trucks, it's

John Babcock

that? availability I to Okay. Just I having increases And also, mean, And curious provide what is sort able just trucking then rates? some on front, of if on all you an the something did be think color you impact on then that. you're that on seeing around freight that's mention

increase so prices, be? be on based that just some past-through freight sustainable would just log that variable that's effect does into Or something how overall, And would rates? mean, if have that I

Douglas Long

chain, that. break Yes. specific increase. that export, similar cost each but relatively And not to give contributions of it want there's supply to back and I improved mentioned the we multiple on geographic things a of before of -- And market just I'm kind mix of there, increase any of where I'll down to had. than going are with lie. factors in further It's too I that sense go kind demand. kind don't broken get increases, those you factors

Operator

RBC Quinn Markets. from Paul Capital

Paul Quinn

like Just guidance. the see to results, and I'd increased strong

increase areas that increase we corporate also that related saw in increase as What is the an of to? costs. One

Mark McHugh

to allocation, dependent Yes. where -- of bonus X tracking the the our of components -- going accrue budget. I will I guess be be of our mean we we're measure to basis and corporate kind it's as on so relative costs would

some the that. that a corporate, of also just the Paul. working through it, But of sort overall we're and integration so of of Resources be with And still component rightsizing definitely Pope will

So I'd say biggest X components. those are probably the

Paul Quinn

know Okay. just the I then pickup Pacific Northwest. big on exports, it's And in a

increase in seeing And sort you're, what seeing in you the overall? in are markets? I Southern of what U.S. sales as on guess, parallel with we're exports Just

Douglas Long

a mentioned Sure, I competitive uplift as I is with one on say, Since answer won't major you other before, this net this developing market, mentioned our detail is prices. stumpage as efforts, and providing I again. Doug, it's I'll granular Rayonier's that before, to provide than to Southern

of kind the pleased with very far. about I'll of May, talk outcome we're So as But more terms. so U.S. general And

cubic And Yellow recovered achieved open log meters being seeing Southern XXXX. in the XXX,XXX a up we're exports to including have tariffs looking per export South, to prior at trying Pine month few quite implemented parties to the ourselves. new yards,

flow leading are logs While the of other Savannah, out that several also the Port of of U.S. the ports from are the contributing shipments bulk of

the port one operate Jacksonville of is particular, in we out South, of.

And logs continue we And supply is really for a what our ability and chain on our ports, Yellow before by for [ that see interesting demand pricing to supply tension China. as it's doing China exceeded ton at monthly basis. Pine Northwest both mentioned monthly a the currently due that as well have U.S. restriction here quite now to So sending coastal our markets. the in I exceeds ] incremental these be exports mix to export the in to to the encouraged demand

growth Vietnam. business, And China. to in bulk are South looking exported growing we're now, potential of export out also logs for optimistic at of But being this quite And to the South this about India part the markets the more So such still our going I'm bit too. a to logs and of the we're as from market. seeing of

are the And ports well move in of believe as we multiple and southern positioned so to particularly ports, opportunities ahead Savannah. we've us, before, timberlands got largest mentioned we and our to

Paul Quinn

Anything the Gulf? going of out

Douglas Long

out out Yes, is of Coast. there stable going Gulf the of volume out as Gulf. some is there as East not Shipping is

logs on out area. see but going And East more and are the [indiscernible] so there container variability Mobile Coast, we the Gulf,

Operator

showing At time, I'm you. Thank further no questions. this

Collin Mings

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

Operator

This Thank conference today's concludes you. call.

time. You this disconnect may and ahead go at

Rayonier (RYN) 5 Aug 212021 Q2 Earnings call transcript