Rayonier Inc. REIT

Welcome and thank you for joining Rainier's fourth quarter and full year 2024 conference call. At this time, all participants are in a listen-only mode. During the question and answer session, please press star one 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 Ming, 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 by the SEC, list some of the factors that may cause actual results to differ materially from the forward-looking statements we may make. They're 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 material. With that, let's start our teleconference with opening comments from Mark McHugh, our President and CEO. Mark? Mark McHugh Thanks, Colin.

Good morning, everyone. First, I'll make some high-level comments before turning it over to April Tice, Senior Vice President and Chief Financial Officer, to review our consolidated financial results. Then Doug Long, Executive Vice President and Chief Resource Officer, will comment on our U.S. and New Zealand timber results. And following the review of our timber segments, April will discuss our real estate results and our outlook for 2025. We were pleased to finish 2024 with better than expected fourth quarter financial results, which allowed us to deliver full-year adjusted EBITDA of $299 million, roughly 3 percent above the high end of our prior guidance range and slightly above the prior year. Full-year pro forma net income was $70 million, or 47 cents per share. These full-year results demonstrate our resilience and nimble execution amid persistent market headwinds. In the fourth quarter, we generated adjusted EBITDA of $115 million and pro forma net income of $41 million, or 27 cents per share. The 23 percent increase in adjusted EBITDA versus the prior year quarter was driven primarily by significantly improved results in our real estate and New Zealand timber segment. Our real estate segment delivered adjusted EBITDA of $63 million, up $10 million from the prior year period. The increased contribution from our real estate business was bolstered by an extraordinarily strong weighted average price per acre of roughly $7,200, excluding improved development and large dispositions, demonstrating our team's ability to optimize the value of our portfolio by generating significant HBU premiums above Timberland value. Shifting to our timber segment operating results, our southern timber segment generated fourth quarter justity bidop of $35 million, up modestly from the prior year period. A significantly higher non-timber income was largely offset by a 3% decline in harvest volumes and 15% lower weighted average net stumpage realizations. The decline in stumpage prices was driven in large part by the impact of salvage volume on the market throughout the quarter following Hurricane Helene. In our Pacific Northwest timber segment, fourth quarter adjusted EBITDA of $6 million was flat versus the prior year quarter as a 3% decrease in harvest volumes and a 9% decrease in average delivered log prices were largely offset by lower costs and higher non-timber income. Turning to our New Zealand timber segment, fourth quarter adjusted EBITDA of $20 million increased $8 million versus the prior year quarter. The increase in adjusted EBITDA was driven by favorable foreign exchange impacts higher volume, higher net stumpage realizations, and lower costs, partially offset by lower carbon credit sales. In addition to the strong finish to the year operationally, we successfully closed on $495 million of previously announced large dispositions, totaling approximately 200,000 acres during the fourth quarter. As discussed on our November earnings calls, these transactions have allowed us to reduce leverage and return capital to shareholders while also generating accretion to CAD per share. To date, we've now closed on roughly $737 million of dispositions, approximately 74 percent of our original $1 billion target, which has allowed us to reduce net leverage to below three times and return over $110 million of capital to shareholders in the form of cash, special dividends, and share repurchases, including $15 million of share repurchases in the fourth quarter. Turning to our outlook for 2025, as April will discuss in greater detail later in the call, we're providing full-year adjusted EBITDA guidance of $270 to $300 million. The slight decline at the midpoint relative to 2024 adjusted EBITDA reflects the dispositions completed in the fourth quarter, as well as modestly lower expectations in our real estate segment following the extraordinarily strong results realized last year. Overall, as we move into the new year, we are cautiously optimistic that timber prices will gradually improve along with end market demand. In addition, we expect another strong contribution from a real estate platform this year, given the continued favorable demand trends for our rural HBU and development properties. Lastly, we remain encouraged by the pipeline of opportunities that continue to build on the land-based solutions front, especially as it relates to solar and carbon capture and storage, which we expect will drive meaningful cash flow growth in the coming years. With that, let me turn it over to April for more details on our fourth quarter financial results.