Rayonier Inc. REIT

Welcome and thank you for joining Ray and Nier's third quarter 2020 teleconference call. At this time, all participants are in a listen-only mode. During the question and answer session, please press star 1 on your touch-tone phone to ask a question. 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. Collin Mings, Vice President, Capital Markets and Strategic Planning. Sir, you may begin.

Thank you and good morning. Welcome to Rainier's Investor Teleconference covering third quarter earnings. Our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rainier.com. In these presentations, we include forward-looking statements made pursuant to the safe harbor provisions of federal security laws. Our earnings release and SEC filings list some of the factors that may cause actual results to differ materially from the forward-looking statements we may make. They are also referenced on page two of our financial supplement. Throughout these presentations, we will also discuss non-GAAP financial measures, which are defined and reconciled to the nearest GAAP measure in our earnings release and supplemental materials. With that, let's start our teleconference with opening comments from Dave Nunes, President and CEO. Dave?

Thanks, Collin, and welcome aboard. I'll begin the call by making some high-level comments before turning it over to Mark McHugh, our Senior Vice President and CFO, to review our consolidated financial results. Then we'll ask Doug Long, Senior Vice President Forest Resources to comment on our U.S. and New Zealand timber results. And following the review of our timber results segments, Mark will discuss our real estate results as well as our outlook for the remainder of 2020. We generated adjusted EBITDA of $67 million and pro forma net income of $7.5 million or six cents per share in the third quarter. We delivered strong operating results across our three regional timber segments, as well as within our real estate business. Despite facing some ongoing challenges associated with the COVID-19 pandemic, we benefited from robust new residential construction activity, continued strong repair and remodel spending, improved demand from key export log markets, and strong market dynamics for our pulpwood customers. Our collective results underscore the strength of the markets we operate in, the diversity of our portfolio, and the resiliency of our business. Despite strong operating results, we had to navigate multiple casualty events during the quarter, including Hurricane Laura in the U.S. South, as well as wildfires in Oregon. Our thoughts go out to all those who were affected by these tragic events. While we sustained some property damage, fortunately no Rainier employees were injured. From an operational standpoint, we expect only limited near-term disruptions to our business, given the geographic diversity of our footprint. While the direct impact to us was limited, we've taken steps to help those communities get back on their feet through financial donations to disaster relief efforts. Drilling down to our different reporting segments, our southern timber segment generated a just-a-dee-ba-dah of $26 million for the quarter. which was 16% above the prior year third quarter. Results were bolstered by a 16% increase in harvest volumes and 8% higher saw log stumpage prices relative to the prior year quarter. Saw log pricing benefited from healthy mill demand amidst record lumber prices, as well as growth in log exports along the Atlantic coast. In our Pacific Northwest timber segment, we achieved adjusted EBITDA of $9 million, and many others. In our New Zealand timber segment, we reported adjusted EBITDA of $18 million, slightly above the prior year quarter. Modestly lower log prices were offset by a slight increase in harvest volumes, as well as higher carbon credit sales. In contrast to our prior two quarters during which we experienced COVID-related lockdowns, our New Zealand business was fully operational throughout the third quarter. Our real estate segment reported very strong third quarter adjusted EBITDA of $22 million, driven by the sale of over 10,000 acres of rural land. Overall, we have continued to see healthy demand across all our real estate sales categories, which we will elaborate on later in the call. Before turning the call back over to Mark, I'd like to provide a brief update on our ongoing response to the COVID-19 pandemic. The work from home model we instituted for all U.S. employees in mid-March remains in place, and field employees continue to observe enhanced safety guidelines. Given the current state of the pandemic, we anticipate remaining in this mode in many of our locations through at least the end of the year. While the pandemic has been extremely disruptive to all aspects of life, I continue to believe that Rainier has been managing through it very well. Despite the challenges posed by the pandemic, our team has managed to operate very efficiently and has also advanced several important strategic initiatives this year, most notably the closing and integration of the Pope Resources acquisition, and has continued to respond in a nimble manner to rapidly changing market conditions. On that note, I want to reiterate how pleased we've been with the Pope Resources transaction to date. Since closing the deal on May 8th, the collaboration among our employees has been tremendous, supporting our view that the combined organization would benefit from the blending of best practices and the talent associated with each company. We're also already seeing the benefits associated with our increased scale and operational flexibility in the Pacific Northwest, We have managed to achieve synergies modestly ahead of our initial estimates. With that, let me turn it over to Mark to review our financial results and highlights from the quarter.