Rayonier Inc. REIT

Welcome and thank you for joining Rainier's fourth quarter and fully year 20 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 Mings, Vice President, Capital Markets and Strategic Planning.

Thank you and good morning. Welcome to Rainier's Investor Teleconference covering fourth quarter earnings. Our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rainier.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 filed with the SEC list some of the factors that may cause actual results different 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 2024. We are pleased with our overall financial performance in 2023, particularly in light of the challenging and uncertain market conditions that we faced throughout the year. For the full year, we generated gap earnings per share of $1.17, pro forma earnings per share of $0.36, and adjusted EBITDA of $297 million. Full year adjusted EBITDA declined 6% versus the prior year, as lower results in our timber segments were largely offset by a significantly higher contribution from our real estate segments. Our southern timber segment full-year adjusted EBITDA was relatively flat versus the prior year, as the segment benefited from recent acquisitions, which contributed to increased volumes, as well as the operational flexibility to target more resilient saw log markets. Additionally, non-timber income generated by our southern timber segment increased $9 million, or 35%, relative to the prior year, largely driven by increased revenue from our Burgundy land-based solutions business. In our Pacific Northwest timber segment, we chose to defer roughly 150,000 tons of planned harvests in response to soft market conditions, which contributed to the significant decrease in adjusted EBITDA versus the prior year. In our New Zealand timber segment, adjusted EBITDA declined modestly versus the prior year, as reduced volumes and lower log prices were largely offset by higher carbon credit sales and significantly lower export shipping costs. Finally, in our real estate segment, we capitalized on strong demand in both the rural HBU market and our improved development projects, generating adjusted EBITDA well above our initial expectations entering the year. Overall, I'm proud of how our team was able to navigate an ever-evolving market environment to deliver solid full-year financial performance. As Mark will discuss in greater detail later in the call, we're providing full-year 2024 adjusted EBITDA guidance of $290 to $325 million. As we move into 2024, we are cautiously optimistic that timber market conditions have generally stabilized across our portfolio, and we further expect to capitalize on a growing pipeline of land-based solutions opportunities. as well as continued strong demand for both rural HBU and improved development real estate properties. Our 2024 guidance reflects a similar contribution from our U.S. timber segments as compared to last year, a meaningfully higher contribution from our New Zealand timber segment and another strong contribution from our real estate segment. Importantly, this guidance excludes the potential impact of any additional asset sales as part of the $1 billion disposition target that we established late last year. Turning back to the fourth quarter, we generated adjusted EBITDA of $94 million and pro forma net income of $25 million, or 17 cents per share. Exceptionally strong results in our real estate segment more than offset weaker results across our timber segments. Drilling down further on our operating segments, Our southern timber segment generated fourth quarter adjusted EBITDA of $32 million, down $1 million from the prior year period. The 12% decline in net stumpage realizations was largely offset by a 17% increase in harvest volumes versus the prior year period, primarily due to incremental volume from the acquisitions completed in late 2022. In our Pacific Northwest timber segment, fourth quarter adjusted EBITDA of $6 million was down $9 million from the prior year quarter, driven by a 12% decline in weighted average log prices, as well as a 25% reduction in harvest volumes as we elected to defer planned harvest in response to weaker domestic and export market demand. Turning to New Zealand timber segment, fourth quarter adjusted EBITDA of $12 million decreased $2 million versus the prior year quarter. The decline in adjusted EBITDA was driven by lower carbon credit sales, a 9% decrease in export saw timber prices, and 8% lower harvest volumes, partially offset by favorable foreign exchange impacts and a significant reduction in port and freight costs. In our real estate segment, we generated fourth quarter adjusted EBITDA of $54 million. up $39 million from the prior year period, as we closed on a significant rural transaction during the quarter, while transaction volume in the prior year period was relatively light. Additionally, I'd like to provide an update on the $1 billion disposition program we announced in November. In the fourth quarter, we were pleased to close on our previously announced sale of 55,000 acres of timberland in southwest Oregon for $242 million or $4,400 per acre. We subsequently deployed $150 million of the proceeds to pay down our only floating rate debt and approximately $30 million toward a special dividend that was paid in January. The remaining proceeds are being retained for further debt reduction or other capital allocation purposes. There remains a strong bid for timberland assets in the private market, and we are actively working to bring additional timberland assets to market over the next several months in order to capitalize on the disconnect between public and private market timberland values and to reduce leverage in a higher interest rate environment. With that, let me turn it over to Mark for more detail on our fourth quarter financial results.