Rayonier Inc. REIT

Welcome and thank you for joining Ryanair's fourth quarter and year-end 2022 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 telephone keypad. 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. Colin Wings, Vice President, Capital Markets and Strategic Planning.

Thank you and good morning. Welcome to Ray Anear's Investor Teleconference, covering fourth quarter earnings. Our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rayanear.com. I would like to remind you that in these presentations, we include forward-looking statements made pursuant to the safe harbor provisions of federal securities laws. Our earnings release and forms 10-K and 10-Q, followed with the SEC, 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 measures in our earnings release and supplemental materials. With that, let's start our teleconference with opening comments from Dave Nunes, our CEO. Dave?

Thanks, Colin. Good morning, everyone. First, I'll make some high-level comments before turning it over to Mark McHugh, President and Chief Financial Officer, to review our consolidated financial results. Then we'll ask Doug Long, Executive Vice President and Chief Resource Officer, to comment on our U.S. and New Zealand timber results. And following the review of our timber segments, Mark will discuss our real estate results as well as our outlook for 2023. We are pleased with our overall financial performance in 2022, particularly given the challenging macroeconomic backdrop that developed during the course of the year. For the full year, we generated GAAP earnings per share of 73 cents, pro forma earnings per share of 62 cents, and adjusted EBITDA of $314 million. Notably, our three timber segments generated total adjusted EBITDA of $275 million, representing the highest ever result for the company and roughly 8% above the previous record achieved in 2021. Despite deteriorating market conditions toward the end of 2022, in response to rising interest rates, growing macroeconomic uncertainty, and a slowing U.S. housing market, we still achieved record full-year adjusted EBITDA in both our southern and Pacific Northwest timber segments. We believe this underscores the relative strength of our timber markets and the ability of our team to navigate an ever-evolving operating environment. The strong full-year results in our US timber operations were partially offset by lower adjusted EBITDA versus the prior year in our New Zealand timber segment, which contended with slower economic activity in China as well as higher operating costs. Meanwhile, in our real estate segment, we achieved solid results that were generally in line with our expectations entering the year. reflecting our continued focus on optimizing the value of our portfolio through the sale of rural and recreational properties, land entitled for development, and non-strategic holdings. As Mark will discuss in greater detail later in the call, we are providing full year 2023 adjusted EBITDA guidance of $280 to $320 million. This is a wider range than we've historically provided for full year adjusted EBITDA guidance. which reflects heightened macroeconomic uncertainty, as well as log pricing headwinds entering the year. That said, we've seen some recent signs of end market improvement, including increased wood products pricing, a more stable interest rate environment, and improving homebuilder sentiment, which suggests that timber market conditions may be poised to rebound to some extent, which is reflected in the higher end of our guidance range. Stepping back to the fourth quarter, we generated adjusted EBITDA of $68 million and pro forma earnings per share of 11 cents. Fourth quarter adjusted EBITDA increased 36% versus the prior year quarter, as stronger results in our Pacific Northwest and New Zealand timber segments, as well as a higher contribution from our real estate segment, more than offset a slightly lower contribution from our southern timber segment. Drilling down further on our operating segments, our southern timber segment generated a just-a-debit DAH of $33 million in the fourth quarter, which was 1% below the prior year period. While weighted average net stumpage realizations increased by 7% versus the prior year quarter, this was more than offset by an 11% decrease in harvest volumes. In general, our southern timber segment continued to benefit from our concentration in some of the most tensioned log markets across the U.S. South, although both demand and pricing were impacted late in the fourth quarter as market conditions deteriorated. In our Pacific Northwest timber segment, we achieved fourth quarter adjusted EBITDA of $16 million, up 18% from the prior year quarter. The year-over-year increase was attributable to 17% higher weighted average log prices and a 3% increase in harvest volumes. Our operations in the region continued to benefit throughout the fourth quarter from favorable supply-demand dynamics as domestic lumber markets, export markets, and pulpwood markets competed for a limited supply of logs. Turning to our New Zealand timber segment, fourth quarter adjusted EBITDA of $14 million increased 39% from the prior year period due to increased carbon credit sales and 7% higher harvest volumes, which more than offset lower log pricing amid continued export market headwinds. In our real estate segment, we generated adjusted EBITDA of $14 million in the fourth quarter, up significantly from $3 million in the prior year period. The improved results were driven by increased sales in the Wild Light Development Project north of Jacksonville, Florida, as well as a higher number of rural acres sold and higher per acre value realizations versus the prior year period. Despite the increase in interest rates as compared to a year ago, demand for rural land remains strong as we enter 2023, and we continue to be pleased by the favorable momentum in both our wildlife and heartwood development projects. As previously announced, in the fourth quarter we also completed the acquisition of approximately 137,800 acres of high-quality commercial timberlands located in Texas, Georgia, Alabama, and Louisiana for an aggregate purchase price of $454 million from Manulife Investment Management, a leading timberland investment manager. The acquired properties are well-stocked and highly productive timberlands located in some of the strongest timber markets in the U.S. South. We are pleased to have successfully integrated these properties into our portfolio and have been encouraged by the customer response to our initial timber sales from these assets. Looking ahead, we're very excited about managing these timberlands for long-term value creation. And with that, let me turn it over to Mark for more details on our fourth quarter financial results.