- Earnings call transcript Q3 2022

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Operator

Welcome and thank you for joining Rainier's Third Quarter 2022 Teleconference Call. At this time, all participants are in a 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 Mr. Capital Strategic President, Vice Mings Markets Planning. and Collin

Collin Mings

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

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

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

David Nunes

Collin. morning, Thanks, everyone. Good

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

to U.S. acquisitions the results our first I'd for highlight discussing the the like Before quarter, in

release. earnings with announced that yesterday we South concurrent our afternoon

leading lease. commercial a and located acres investment acreage separate an fee manager. XX% of $XXX the consists agreements purchase Louisiana of consists price for of Management, in into Texas, Approximately Specifically, we high remaining acquire to two XX% long-term a Alabama Investment announced approximately Manulife that while for million of timber ownership, aggregate of Georgia, the entered XXX,XXX timberlands quality we've

about the additions timberlands as they excited of a highly in these very well-stocked market to the portfolio strongest markets comprise We are some productive and timber in our located U.S.

come extremely of South. with portfolio. to quality, fit opportunity rare our with It's unique an existing across scale combination this and acquisition

age plantable XX XX properties, which profile the This of have timber Express is XX% tons in average industry merchantable inventory. XXX,XXX Based translates is tons acre, XX are above average to stocking and fee decade feet. lands, acquisitions index mature on yield our levels. which of from we annual contribution XXX,XXX next properties of an the a U.S. an also approximately plantation site well with harvest and acre per an an level factors, per X.X anticipate the level is leased The fee age and expected or For year per of sustainable years average with is acquired the high over product. of average class average productivity along The approximately tons XX% a the these from the extraordinarily tons grade per increase year

year. per South tons X sustainable to XX% of yield million

in strong and the the in stocking, to located characteristics productivity U.S. of are addition also In the inventory markets some properties best

South.

in markets, on above the weighted of XX% X.X composite roughly acre the average the ranking the based is composite representing Specifically, that acquisitions of market stumpage U.S. price South average out TimberMart is composite XX median pricing, price an

we've which of segment Southern expect Putting Timberland XX from will market together, a million of multiple in EBITDA trading of the all timber seen higher The years climate of favorably with natural multiples over adjusted EBITDA upside we average only our that contribute the other Timber real this roughly use X, to NCREIF XXXX. XX U.S. implied multiples. additional on next better which the solutions. public quarter South and potential and compares represents third the multiple estate $XX with sales Index acquisitions This annual and

South assets transact recently.

acquisitions the and $XXX the financing as through close end, Farm term Credit to loan million expect hand system. before as we with year We well anticipate a cash the on acquisitions

located strategy As this our ultimately discussed we to and in acquire contributes better the high past, markets, quality strong in returns. financial to long-term properties optionality improves as believe

Following our these acquisitions, U.S.

South We in quartile stumpage as measured million believe timberland X TimberMart-South portfolio that composite markets of XX% will the which pricing. acres by be total will top U.S. the

American strongest increased chip U.S. capture regional market wood production the fiber overall well believe as that is We in South North markets the well as lumber share positioned and to of markets. global further

long-term that forward are and positioned strategy forward, our demand these managing excellent given integrating diverse both with fit our pricing represent sheet to of timber We a look customer to relative and inventories capital we and value properties strong their use and capacity. creation. for an competitive going acquisitions In allocation balance favorable tension. capture balanced relative into South gains sawlog for and sum, pricing to our compelling them believe well pulpwood portfolio products the mix,

further earnings Timber Zealand million XX% as U.S. broadly, We the our real in Now and quarter. and pulpwood $X.XX in Notably, most our continued period. EBITDA XX% favorable increased favorable by New I'd demand in the strong scale the for EBITDA log markets timber was like segment which above segment. per net quarter quarter in our period. of some discuss from contributed total Drilling to switch quarter, our more the and in offset contribution down the estate third gears development Timber significant benefit Southern transactions and drove prior strong increased our prior Adjusted to our sawtimber, logging conditions was year volumes. XX% stumpage versus quarter, realizations adjusted EBITDA further $XX while adjusted harvest Weighted XX%, More the Timber results two driven from increase a prior a in on of achieved million tensioned of segment across our below segment lower Timber average share year to our EBITDA Southern third by concentration the as adjusted results XX% operating and both than segments, Southern results. third exceptionally year segments the year of $XX prior generated

well as In in by have and XX% us from our allowed a quarter. million, XX% strong South primarily supply year-over-year volumes. we relationships $XX achieved to The Northwest prior up X% navigate costs an as the successfully chain Pacific EBITDA segment, log Timber cost to attributable challenging environment. prices, which contractor weighted adjusted year and partially higher increase reduction average was harvest of higher offset

in pulpwood export by Timber region continued the In favorable Conversely, year favorable record supply to the demand and with export from our competed driven to strong quarter, Our demand and Zealand domestic adjusted markets as dynamics a end contend limited as on the logs. markets our supply well for U.S. generate to benefit and operations Timber New market. pricing challenging tension full supply as sum, localized of in performance lumber both continued markets, segments particularly EBITDA. third financial segment gains market to achieve pace a remain continues in environment operating segments

prior declined Third quarter XX% $XX year from period. EBITDA adjusted the of million

a in in in continues to response to inventories $XX have demand of as Real slowdown year prior construction a constrained period, million measures normalized the as closing as level, in development well down While lockdown Estate adjusted market. be to by prior declined we port EBITDA significant the from COVID-XX outbreaks more gradually In the transactions. our of generated segment, two the year period benefited $X from million, China

pricing both rural While encouraged momentum we as and quarter-to-quarter, we across Heartwood for by the continued timing of remain Wildlight land will our land strong that markets development our well positive sales expect the projects. as remain lumpy in the

Timber discuss $XXX full adjusted our million As Mark to let track Northwest Southern to in guidance XXXX. of years later greater expected our Timber we in post to on for Mark it the $XXX on will million details and remain segments, Pacific third achieve me to quarter more results. EBITDA detail that, record our over turn year call, in with financial With both

Mark McHugh

Dave. Thanks,

totaled $X.XX net related fire financial to million $XX $XX income $X.XX a third Page per forma a million, share. million Sales income a while basis, for was On in on attributable share for Washington. our write-off operating Rayonier adjusting start $X.X X was or per $XX Let's highlights. or timber was to the pro and net after with million income quarter million $XXX

year Third prior as quarter by an in contribution adjusted was in mentioned, period. EBITDA driven was million period, $XX million, the which considerably the year from down real strong $XXX estate prior Dave exceptionally

liquidity. and of we our resources On an Page capital the bottom overview provide of X,

to of the Zealand $XXX X $X.X estimated of financial Note NOLs the available paid, Our quarter that in nine of on taxes to following capital million driven measures provided $XXX We CAD, elevated activities the Page cash was was EBITDA, due the primarily or of of XXXX. other debt. provided is cash higher required expenditures. third and CAD were decrease first of year The year in reconciliation the timing utilization for subsidiary the the for and New payments operating our by million in by higher tax full and of the for the GAAP first nine prior year adjusted higher supplement. A period. interest billion $XXX cash closed lower cash its versus months of with million cash taxes distribution, cash months

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

including a on closing five acquisitions. or $XXX the with loan fund Farm like new to in pending be will our million anticipate through on cash partially funded hand, the we year noted, of Dave balance kind earmarked quarter Credit exchange. fourth restricted As term system cash million $XX The

in rates, weighted account portfolio weighted cost to X.X%. term over of approximately translate forma swap to new should we of be payments swap a loan X% taking of a new estimated loan to of and a expect maturity fixed and We the on expect will of effective debt patronage estimated cost into the debt total term approximately our basis, new that SOFR, spread the loan of a portion On average all-in pro this years. term range the six average the

$XXX of cash provide of more I'll to to our to review call Following turn of acquisitions, the million credit our revolving Doug expect liquidity approximately timber and of a $XX the the $XXX over quarter detailed completion remaining facility million now including from third we hand. million, results. approximately maintain on

Douglas Long

morning. Mark. Thanks, Good

ton. market mills demand and driven favorable ton, Timber was per prior Southern of quarter in significant and other per EBITDA geographic robust $XX increasing XX% volume XX% margins on a a quarter, segment. to net primarily costs. nearly increase Page pulp to million Overall, the XX% prices period. the continued higher above which versus higher stumpage execute our the $XX operating sawmills Let's by supply. stumpage stumpage prior roughly stumpage with non-timber The our the from to with improved volumes sawlog year conditions demand mills. year-over-year partially in a prior per driven as on was X harvest period, volume million well year quarter. year competition $XX of XX% versus us year-over-year compared among quarter. third the ton. was shift drier secure also as allowed prior competition from pricing This increase year prior end income for demand from higher in Adjusted $XX plan by nearly and Strong pricing net pricing, mix improved to customer reflects coupled start chip-n-saw the areas by pricing with Average was most Heartwood to $XX offset weighted weather increase average improved benefit across harvest our from significantly overhead strong to healthy and our The increasing year improvement

in have our of We to delivered margins XXXX log normalized as moderate there in prices continue past to have mill on in compared sales. years. also believe markets step seen net the inventories markets many relative stumpage has costs said, certain we several log and our higher change been to compressed That as have realizations early a

As previously year. policies constrained by this by discussed, Southern log implemented China Nematode earlier the Wood Pine exports remain

our now, For U.S.

quarter. non-timber our the Vietnam to potential the while $X program export about term, sales further relatively log are were expand of year China And has quarter markets the presence both pivoted over to long in $X India. prior million we versus these million of note, markets up to small currently. South and Also over are excited third compared

and Moving end declined our in market a several quarters. Timber to past early the wood retirement sized million from demand was availability limited constraints during EBITDA by to segment $XX a Pacific price Page meeting were third prior as and prior stumpage been ton, prior by a largely Adjusted XX% well the strong as volume. $XX XX% with contract climbed $XXX At demand prior of nearly over pulp harvest very Douglas of from lost over mix and one crew mills our prices realizations delivered driven compared increased Volume quarter per strong that residuals around let the higher lower supply logs. from quarter by continued reflecting similar with quarter the sawlog mills of we've third another constraints year the third higher not safety proportion was year volumes quarter, ton on XX. due of year XX% pricing pulp go year and to favorable per fewer Overall, Northwest in lumber as to income to as was the due as Pacific the or quarter higher the domestic net non-timber fir to up smart average costs. we encouraged expectations. pulpwood our crew supply offset Northwest trajectory quarter, coupled species Meanwhile, of the competition quarter

the New largely was The $X prior Zealand compared segment. Timber lower per quarter, as by Moving Adjusted results and sales, EBITDA the shows prior partially realizations costs, by below driven the was favorable adjusted of higher reduced XX% harvest compared stumpage sawtimber quarter. Page our million of metrics and operating Zealand. prices quarter third EBITDA year Average foreign impacts. the million $XXX export to China. for demand in higher quarter declined higher prior XX $XX to New exchange year key from in reflecting offset year credit decline delivered ton carbon net in volumes to

a sawmills more lack and in these factors Zealand U.S. market reduction pricing. from Longer of in While by Australian will COVID-XX to log expect ultimately term, flow China, making negatively gradual a in the this once the the back to near backdrop ports is salvage commenced on we've Most running export the beginning Russian of capacity new we inventory in dollar ban year, continue demand remain up. more favorable optimistic logs our balance imports to Despite will expensive. China, all log log which decline Shifting on U.S. largely dollar, continued Collectively, U.S. to prices our the that yuan normalize containment quarter, and which a reluctant in are picks relatively more a ongoing ban backlogs, orders declined construction the improvement environment. market year. of export export demand including supply we levels prior driven China impact activity. log of the at the to term to New weaker relatively New depreciated been encouraged market that remained XX% Chinese side Zealand versus to to log will New demand and to gradual current well the business started below translate the translate exports, by constraints, disruptions has to Zealand weak industrial against markets favorable reduced including inventory logs have Despite of collectively denominated offtake Furthermore, remained exchange are European imports, likely China the cool by for although due build domestic inventories recently. year strong domestic continue sharp in conditions, in these construction the has dollar should dollar, headwinds, framing due rate. market, steady due sawtimber and

to prior the export likewise dollar weaker declining were exchange prices by exchange the foreign pulpwood basis quarter. X%, competition reflecting compared sawtimber on rates prices market. New in foreign year a impacted domestic Excluding U.S. XX% decreased impacts, Domestic from Zealand

impacts, competition declined for lower foreign reflecting prices quality pulpwood logs. markets export XX%, domestic Excluding exchange from less

sales While in bolster log in markets during million Zealand, been in $X.X continued New income results New which Zealand primarily of credit have non-timber third the challenging, carbon our quarter. to reflects financial has revenue

credits the pricing has carbon defer above last Our average has of carbon sale levels. XXXX year to off as paid increased decision pricing

plan in conditions our Going pricing market sale depending expectations. and carbon opportunistic credits carbon our to forward, we of remain on

third operating posted we in segment, slight Trading a our in profit Lastly, the quarter.

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

Mark McHugh

Thanks, Doug.

half following estate million $XX the sales As strong sold detailed X,XXX per nearly on during acres $X,XXX Page year was first acre. XX, Real expectations, of price roughly a our on of consistent with quarter. Real our the and Estate contribution third light from an average segment at totaled the relatively

of improved of in to in as million. in benefited totaled in XX total, from care $X multiphase expect time. health $XX,XXX of is high sale over health collaborating million. was the grow joint development as of health and also results relatively is another number closed lots across quarter, campus, with medical demographic Heartwood site and third a which it an benefits of commercial early part average well sale a residential strategic development trends serve as we venture affordable $XX,XXX $X.X takedown a of in the price we held Real attributable site care Savanna, merger Drilling offers by $X.X sales per for project. an We north XX residential of projects the price Rayonier average Overall, million sales per during In a this In migration during Heartwood a our with Joseph as $XXX,XXX first complex build care believe will Jacksonville, Heartwood from base by as Washington, of sales closed Georgia the Island from $X momentum will our of of roughly quality that as a development Pope on adjusted XXXX. multifamily estate The quarter to are segment real at south per Candler the will development quarter, XX project the of notable consisting of Florida, provider and roughly lot project, benefit Wildlight both roughly acre development $XX,XXX the for which price catalyst for In Our the St. EBITDA projects Estate Resources continues lot. well consisting of a on apartment continue Wildlight acre. in our we and we that favorable to base Bainbridge down, gain in acquired for million as the was encouraged points. lots expect our category

rural Sales totaled price consisting Turning approximately of roughly to the million, of acres category. acre. $X,XXX $X an at per X,XXX average

said, financial encouraged pricing premiums are generate that our indications the are land to HBU interest that to we to and in see on environment. hesitant business, volatility. While by we market starting and reliant continued see to strong offered demand and transact increase not Overall, rural buyers a recent we buyers we mortgage the rural sales post-pandemic That to to in from by we've expect some will are recreational opportunities given rural continue the solid that continue space, attract privacy financing. rates properties buyers that in cash are continue

the the on Now balance to our year. outlook moving for of

the year EBITDA full to we earnings in guidance million provided achieve on release, X.X to to of Southern August. As ton X.X consistent harvest range we individual our still with our in Timber expect million. segments, noted track segment, respect year to million in With our $XXX adjusted prior $XXX million we volumes our are full

areas remain the we our in we've across that change pricing by registered most of the U.S. operating While in encouraged step

in Overall, South, results bit soften Timber weighted Timber million. we the compared third with we Pacific of earlier. in expect EBITDA Note as our August. contribution to year million line adjusted that end Dave to full we pricing prior provided segment, average Southern the range million segment does record $XXX the $XXX the this that our harvest year expect discussed fourth from quarter X.X guidance the full that log continue with expect in our to now million reflect X.X guidance to ton In range our lower of will acquisitions a volumes toward quarter. Northwest we in not any pending

quarter end to million of by to prices, we pricing in segment, record year end prior our pullback now cost While ongoing expect the we volumes seen segment, million segment continued to the for we of expect to sawtimber some year, albeit million with toward August. in we decline adjusted pricing our of full Timber our in have New year log harvest partially Timber response lower pressures. fourth in both the our Timber Pacific EBITDA as a prior compared range and favorable expect guidance Similar the continue million. in provided higher pulpwood Southern we X.X to Northwest lumber In offset $XX towards ton $XX Zealand the X.X to the in

year In As due the to of in $XX our modest turn a in few full been activity. Dave headwinds. delayed Accordingly, the back segment, million. $XX lower while guidance have million, toward of expect inventory to log as adjusted Doug call range trending for lower end land now various due to our to I'll our to $XX rural million full million EBITDA lower year Estate a transactions of well end of constrained demand levels guidance sales adjusted slowdown of discussed, $XX China comments. timing the as we remains closing primarily Real prior expect now toward the we prior EBITDA

David Nunes

Moreover, and continue pure-play results portfolio active we operational commitment REIT the management well our our the by the cost third in Mark. by as underscore challenges given these recent which U.S. quarter as Overall, our Despite slowdown by and presented afforded it headwinds believe our these remain export encouraged pending model. We China the relative as U.S. operate relates Thanks, market business. in the results, XXXX. our housing of markets to challenges, to strength particularly flexibility on U.S. track in to year timber record another in pressures continued expect we segments to Timber that our deliver I'm ongoing

positioning. will bolster our competitive acquisitions further South

and historically in we the fastest-growing the profile addition recently the been housing Southern the cash the component capacity term, U.S. Despite near also the of segment most our has has flow slowdown the manufacturing stable region over Our believe of more lumber component. been significant leaves Timber the in market

South favorable dynamics. we cash enjoy flow long-term very demand uniquely our for positioned supply well growth, where particularly and pricing markets in core

such, to we're and very to a our excited presence meaningfully region. in yield capital be As position to deploy in the sustainable expand

important report addition report how to shareholders. long-term management together to on continues related for and team remarks, as ecosystem XXXX and back achieving supplemental In sustainability potential build to on advance the activities, economic continued pleased All growth an said, this our to disclosure teams to carbon goals landscape portfolio our come also to continues environmental, for as focus opportunities governance and call evolving existing we prepared I'll services questions. to released our assets, well the financial natural initiatives ongoing our evaluate very in value emerging turn with and practices. over operator solutions navigate of opportunities social -- our execute associated now concludes end, I'm This the and in with our maximize effort an and August. of our ever our climate we To and the

Operator

Pettinari Thank [Operator sir. you, from Instructions] Anthony Citi.

ahead, sir. may go Your

Anthony Pettinari

morning. Good

to it digits to sort And overall low-single higher that assume it is the yield market, recently? just have you sort overall you maybe of X% price any something acquisitions, wondering, general or environment Timberlands higher that estimate then, to responded observations decade? Timberland the talk Timberlands possible look On extent Is you've how seen the improvement the the a level log there? Southern does have certain strength of that when the of rates over cap I'm EBITDA the at rate given next you

Mark McHugh

three current Anthony. relates haven't current a forecast. more the in just essentially base in think from from as for it assume Yeah. in this terms Sure, pricing. the we This to And pricing or been because elevated we the of back forecast below to material of I But of EBITDA couple has it we I been kind acquisitions, I'll look levels. where prior where has I years. two lift current that a nominal for a roll to any kind modeled significantly is of and get we've price on of year didn't rate that. mean acquisition take Mark. average then of year forward sort been mean relative any kind inflationary modeled that's pricing obviously to improvement assumed fact,

relates it I'm As September late sorry. to --

Anthony Pettinari

please, ahead. please No, go

Mark McHugh

I'd a relates about kind as it As inflation environment, inflationary rates, of to very impact we effective timber as just values the the of I of and viewed current think Timberland timber generally a cap guess make couple observations. is hedge.

years, back DCF that than And XX valued somewhat long-range real are you U.S. to using XX timberlands related rates. the last a generally is look on or basis over that rather nominal discount I if mean

around very been cap rate, that's been at South timberlands really been of where interest any irrespective and consistently at point in have X.X% a time. valued have EBITDA rates

to this over notion the a of reflects some the term. that to going I extent, plus return inflationary base return real deliver think So kind is component of some long Timberland

moved a It's from is couple to longer-term market historical year significantly XX a relative the currently the timberland extent that's months, elevated significantly are on that not So the rates. going but we're the higher of necessarily in today one-to-one reflective assumption, around cap certainly of not basis I'd seeing to rates same argue not X.X%. that extent, inflation rates perspective. to higher tips up impact interest last to yield

I anything, say increase think that's rates, compress. perceived to we've extent, the transactions if I the in cap within recent values embedded that's Timberland think optionality timberlands So suggested that cap And today. rates certainly of I'd seen that seen an that in have to carbon some continued we reflective not have

David Nunes

sort fee if flow markets, hit lands you stocking soils then could based percent and at Yeah. from on of this, on strong of both on XX per plantable Anthony, tack issue which average XX. I mean, level also this. very and that. is on cash really I age that's strong but the on key good tons And the just productivity from really high the to properties And acre an

unique EBITDA $XX very acre. with last improvement the acre. five a the XX% that $XXX that to years of in see to per a returns And anticipated we gets it's And we to year $XX those our sector-leading EBITDA And of NCREIF the averages out EBITDA per performance ends So per our that up over up XXXX that XX driving And property that where already end last respect. compare are is in did of to substantially acre. -- higher you $XX. than of $XX that

And unique cash lower better costs really execution a on dialed think and just it. a could generating And relative very of flow fit just us go after it's in don't standpoint. on existing that which top is we this. adding gives And a then footprint, our desire asset our to risk, base of so to from much have our fit you managing lower overhead quality than with the asset

Anthony Pettinari

talk maturities pro housing of could any for be 'XX opportunity in just of into a given so capital South given forma one you'll a the seems very be deleverage the log environment. very helpful. you and about one, I strength number to if a conservative price in. have wondering tougher I'm On could basis if on may sneak years. that don't you're leverage, That's sort seeing And maybe the X.X the acquisition turns you maybe last and on Okay. assumptions you allocation those below in just

Mark McHugh

I'll take is Anthony, Sure that. Yeah. this Mark.

XX at where to I'd but going about transaction this these pretty to at up the level above As of in going well going of allocation put are Resources the in program a actually last for wake merger, we capital to effectively than with as that XXXX. leverage offering Pope or that delever acquisitions kind we a taken we're be through had level higher think we're was we leverage certainly we've place months equity thereafter we so. dispositions at-the-market post say late in able been forward, the large our as

lot to levers So at we that the a believe have we continue our balance sheet. to manage of disposal

standpoint, fund from partially debt capacity where go X%, very conservative million from of more sheet of average is post very this to interest debt to balance all we a still up $XXX overall these and to into at. our attractive in transactions, our going cost from a X.X% entering weighted limited Obviously, acquisition. so was we're while pretty balance modestly allocation and point. around so sheet our still we're capital very attractive loan And still feel higher be vantage term cost but will good the -- debt a fixed Obviously, new about environment, rate of

David Nunes

down. a flexibility have kind work of in we something our can I'd also to add just floating, in reason levers that we little a to that, and do, debt of some playbook of fair flexibility bit of It's that's to we the ourselves giving can on part bring bit that of that's we why that pull forward. things try that terms of left going

Anthony Pettinari

I'll That's helpful. turn Okay. it over.

Operator

Our Market. is from next caller BMO Ketan Capital Mamtora

You ahead, sir. may go

Ketan Mamtora

Hi, Mark. Dave. Thank you. Hi,

David Nunes

morning. Good

Ketan Mamtora

seeing, are stabilization terms you're China. seeing there? on of are weakness worsening The trends are or in trends that demand you signs question seeing seeing First you the you of

Douglas Long

that I'll one. Doug is this Long. take Ketan,

are end hard at is COVID which But October, where never any the the about basically lockdowns, because the the in of on to less at focus trends million you we a at are going. cubic have current seen gradual it's than inventories meters cubic XXX,XXX September. point very time happening things X.X reduction, With that know meters

basically. here outgoing the we're is so now, of good to incoming a And kind seeing the balance see which and

is $X.X inventory which month. than is XX,XXX less million, [indiscernible] so about And last around meters

has but on said, does whether I like not. these over us softened balanced, So it and impact really lockdowns demand the the depend year, it's or fairly

at really slowdown lockdowns they do we now, now, coming but to exacerbate the right supply it a is and and the are COVID right say do economic down. predict, hard are we I'd a thing, gradually So good which see balance

is the that I been incoming the think than So the has good actually volume demand. thing less

seeing we're So that come balance down.

to lockdown and open we're hopefully think waiting up this there. So and some happen restocking it's see positive, I just from COVID and things for

Ketan Mamtora

landscape Got again. switching the And to it. That's helpful, Doug. M&A then

was So acquisition to the sort interest of capture big just yesterday, seeing announcement increased there an guys in carbon here? of focus of kind offset I general, you mostly opportunity M&A of a are mean, pretty market. in sort

streams starting So are alternative priced these seeing you sort are to revenue valuation. kind of into signs that get of

David Nunes

that that think an into space seeing as with priced that much. This do explicitly consideration. increased that transactions into seeing capital we're I think I we a is Dave. the of don't are flow as

And so in that prices in of additionality low. you compression factor more that think the carbon mind, have. in to from probably I having very still rate And are our effect vantage we having point, of keep see discount an that

have are high don't as valuation I going I a that explicitly acquisition perspective we juncture. well. at people needle do from think they're that an certainly our thinking, that opportunities. and folks as option more new to from in they into about it's not they so I And at think more enough But factor forward, standpoint. mean, really pricing as but that a for thinking moving we look the factor this that And

Mark McHugh

really range the not It's exist that really competition of and Yeah, around fiber. use Ketan. the competition just whole for opportunities It's in for carbon for us. value land

a solar be opportunities economy. exist a of fuels, that bioenergy, storage trajectory pellets, capture timberlands sustainable towards we installations carbon it as enter and opportunities whole low-carbon the just So aviation for range or wood

focus or And it's I have -- think so think the a that timberland the of -- impacted around just perception range are of decarbonization on we but there values. and ESG to whole tend opportunities other I timberland carbon, of kind

Ketan Mamtora

turn it. Got That's over. it helpful. I'll No. very

Operator

Research with you. Partners. Seaport Instructions] [Operator Thank Mark Weintraub

sir. You ahead, may go

Mark Weintraub

Thank you.

going the harvest question, XX to or expect similar. quickly speaking something to quickly on something over to up expect over tons that average that's the million pretty over years, getting and First up Is you And time? that to the is something EBITDA the you next or getting XXX,XXX $XX ramps be that next years, maybe similarly, is that that is to the over time? XX something ramp

Mark McHugh

to an and mature class, average very We above that expect properties age well-stocked expect gate. with to right we of a kind These so which get the XX very years, Mark. would very that get are quickly, out Yes. is pretty to actually to average would much plantation well of age

Mark Weintraub

in has have those couple Okay. it has step-up of levels harvest a been? -- where the levels been this last the years or at Great. been volumes harvest is And from

Mark McHugh

have can't underwriting forward-looking and to not been. I backwards -- timberland we're volumes when necessarily the acquisitions, We it don't very harvest speak where generally tends be looking. much to

speaking, time sustainable operating period because yield And allow that that for though, for it's see stocked, like properties when so been stocking. well of below are generally they've inventory to a some this very you

where of be I again, over of -- to a very they'll from So the XX to three today, don't kind of five next last they've good modeling great have been the inventory stands a sense sense have we a years. the where standpoint But where harvest we years. in five

David Nunes

And to the sort markets Mark, that's you're in. that understand another reason of why important it's

the with has We're Sometimes it you'll for higher currently property markets. very that weak in downstream we familiar this a see very operate a reason with might very familiar good stocking, that in that are these but them. got markets they've be And case, customers. we're

of And the to confidence bring have so from market. lot on risk we execution a that standpoint volume ability to an

to is certainly, And this we're in of expect familiarity that But important. the expect yes, year wouldn't pretty we this the likely started. until where the But gates close XXXX. come end I close to going getting of that's to so because year. much isn't And pretty out

Douglas Long

been a manage we're since going the add already the stumpage because announcement, that, down. bit to sales just have property to going during of and would to the we're wanting how and if just sales had the to seen process, I harvest that wind interest we've know quite

been a not Dave’s resume period a off of short when there's contracts will time the of lot over But property. do to already in significant we there's very take So close. to point, sales when customer demand

Mark's I do to pretty quickly. believe be New able going the into earlier point Year, move So to that we'll

Mark Weintraub

That's if That's our start was of so think million exactly a lastly, if CAD with we understand. helpful. to or trying I so kind then what about perspective, we from And EBITDA. of this $XX

with you offsets CAD, CAD? about a so As what as the up the end what likely and do are think I

Mark McHugh

will we cost could to we'd transaction and interest-bearing with obviously, Mark, couple securities different to apply look loan of cash. that, that that that being We get A to is of look I hand. a being that. kind cash protection. thought way known any we would funded sort a one of on inflation that guess wouldn't of -- the be of at part and have couple mean, about new in cash it the return ways a million accretion the balance the opportunity cost attached there known but just I are is of invest CAD $XXX with financed ways to at term get on kind that

raised to about look through was it of Another program cash an at is way ATM at average hand the share. that on $XX.XX largely a price

as program. on accretive to as the we was a at And thought per really the share equity about that issuance portion a accretion, per kind of of CAD equity thought And share modestly of so with on issuance ATM essentially basis. through basis, deal the funded equivalent CAD it's we that

Mark Weintraub

relatively needs the I capital $XX minimal type And against assume Okay. million?

Mark McHugh

for that see say would for typical I'd fairly they're what Yeah. we Southern Timberland.

acre to you our more be we going per at portfolio. because see rest in CapEx the range end but of have in kind Perhaps for existing that of the heavily, CapEx line higher kind obviously, of it's bit of front a the higher harvesting So the when portfolio. reestablishment would with generally you're

Mark Weintraub

And Great. one. one last

you On be be execute the Does reenergized? able that are do ATM, have can to the you on to this before closed -- immediately? transaction ATM

Mark McHugh

$XXX at an authorization in in at raised $XXX place put I mean, had the this program largely time. had point. the was that we essentially, we through million We've in XXXX that we're that place million ATM authorization under Well,

Mark Weintraub

Okay.

And you're you share about So how if us you'd with that have to do Can a planning you as capital? raising new issue of -- a ATM? one. a felt have another way to

Mark McHugh

comment an think really prospective standpoint, mean from can't I I I Yeah. on offerings. SEC any

Mark Weintraub

Thanks Okay. much. so

Operator

Thank you.

Capital caller is Markets. Quinn Paul RBC next Our with

You may go sir. ahead,

Paul Quinn

Yeah. very Thanks Good much. morning, guys.

David Nunes

morning. Good

Paul Quinn

Hey.

lease. South understanding Just on a the acquisition that's property years left question break But trying this the got out congratulations. the to just is eight lease. and around Georgia My

What's XX additional breakdown XXX,XXX go over that for where tons the wondering just I'm volume the XX So years? next following the years?

Mark McHugh

Yeah.

be some value haven't we that attribution recognize specifically, breakdown. but specific volume around lease. sensitivity the provided information We around provided that could a to There that some

of X% or X.X% value transaction. roughly was overall it in the the so And

I a value of given lease. and kind flow cash so to And significant wouldn't the that EBITDA attribution of that say it's driver

Paul Quinn

Okay.

So attributed the How the that? value lease. to to X.X% get to X% do you

Mark McHugh

fee to terms If the look put lease to versus the supplemental that information the some of provides you value the out, we ascribed in properties. value presentation ascribed at it the

$X,XXX it's in So about that's the was in that acre $XXX the per about properties. per and acre fee lease

Paul Quinn

lease is as the in different simple? the to stuff helpful. materially fee And That's stocking opposed inventory Okay.

Mark McHugh

the you The lease. leased stocking these kind in much stocking. have generally long-term you plantation manage properties, endpoint age or different terms certain the stocked of have I is But in average properties. speaking, when the leases, more fee to mean, Yeah. of generally are speaking, inventory I a timberland in to them would say, heavily average

Paul Quinn

luck. of Okay. had Great. That's Best all I ahead.

David Nunes

of reasons could if make them people Yes. bit little understand sort just And we Paul, better. spend that so segregated the we that to -- wanted that the we those in that you a of was sure one some time attributes deck, supplemental of

Paul Quinn

Yeah. helpful. guys. Thanks, It’s really

Operator

Thank you.

is Raymond Buck Horne caller next James. with Our

You sir. may ahead, go

Buck Horne

process was made to Hey. Was the to maybe Thanks. kind for I out deal, anything that your there specific what you morning, were characterize of seeing Good was if the there less bidding just or Manulife? bid this marketplace. it guys. wondering you competitive could particular in how more attractive

David Nunes

that's their I or can't speak base. mean I their Manulife or for client -- --

laid a as on based And where number as and that that to that think of out of on our the bids were market was. one know, bidding level peers a the materials. and at at of it's transactions you basis. this own in had of successful our closely, there to we in sense reasons year a by We've getting relative looked the sort transactions participating some I a very side-by-side some we couple of supplemental of our benefit

where we market in of have players interest particular kind we be was. footprint look and a flows asset the and have in that. So some going you're of an general of at a particular the a had geographies. where sense where sense feel have we different a always look pieces And people for might what of had you And capital interested of to

there. time that something transaction there's every we that's out do a that's so And

Mark McHugh

I Buck, think fair is were many it's highly high a coveted that sure asset. parties in. it to this I'm -- interested It's extraordinarily quality say, was that asset

David Nunes

something this Yeah. a offering think decade in our type minds, our year it's that's way. of probably with footprint premier from standpoint, and have sort that And well-regarded that I a of easily your it was, of and of once couple the a once kind opportunity or to to good decade existing point, of fit was Mark's

Buck Horne

relatively some resilient manage And how curious soft more -- period? it Very remain stable, softness the looking spell but will rates is that a lumber tough to All with for through at where Appreciate hang timber I'm right. be market versus And the about sawtimber helpful. think they're the there. color seem housing mortgage pulpwood housing ahead prices in Could curious or during lead pricing you saw in here economic rough to pulpwood thinking pricing. could probably this I'm how environment? you're

Douglas Long

Doug. take is This I'll Yeah, it.

in back we've vice of versa right. owners before, seen fast it way. You're couple way in the there's that other softening the seen the things. -- market to all a of I and the about muted down lumber markets, we've flowed is timberland mean, One, little a as the lumber but coming bit back hasn't it's increases we've talked possibly

drastic pricing. residual. there. lag strong effect that a swing it's lumber due to reduction there's But that floor kind sawlog pulpwood of provide offset And a is natural through seen And happen been a have help in we demand. like hasn't can a really it in does we've So markets hedge

about necessarily seen up tons kind X pretty growth the our to they're So hedge and softness that count if or million seeing. that's this lumber a seeing across the forecasting year significant. tons point. just from haven't another demand pellets past to from your new XXXX, had on kind for And And the so some in in that's and pulpwood pellet like is we XX% this And we've basically of slows that's of it's demand. some down, globe, XXXX And reductions market, then of the in which chips of we're and U.S. first we're another pellets thing exported have then lot to helping there's million we offset and in opportunity fewer the time, the expected X.X strengthening the

and year, that's of of U.S. the the in builds that new about tracking and pellets shipments tons currently capacity this Asia, to we're and X.X million new South first

South.

structural in believe the right there there's shifts offset pulpwood seen So that. South. or strength of in the any the now, real any we I there's sawlogs, some both But in that haven't in said, help that like we if underlying Northwest will

We in is have same but right now. and climb really time to weakening pricing point seen that some the the Northwest, offsetting in pulp seen seeing really pricing, we've that sawlog is we're

David Nunes

the Buck, the add the in that that of in this context transactions that is keep I'd mind other to thing U.S. these particularly --

for South lumber. has a other producing material cost regions advantage relative to

so lumber we And the in even U.S. environment, that feel a declining

U.S. even looking decrease to see supplemental at both we've gain And a to you're well cost in tried home going deck very also looking still with market some substantial new scenarios is out position, South of our where lay construction, to in positioned relative but at that that share.

were production level in softwood was South that XXXX. lumber pre-pandemic in where we the to equivalent back

from a forward. standpoint those as as going thought was we And market risk we some mitigation that about us something conditions gave so that about those thought comfort

Buck Horne

luck. guys. Appreciate it. Good Thanks,

Operator

queue. There over the back call further are I'll Thank no now turn questions you. in Collin. the to

Collin Mings

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

Operator

Thank today's conference you. This concludes call.

You time. may and disconnect at this go ahead

Rayonier (RYN) 3 Nov 222022 Q3 Earnings call transcript