Rayonier Inc. REIT

Welcome and thank you for joining Rainier's second quarter 2025 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 would like to turn the meeting over to Colin Mings, Vice President Capital Markets and Strategic Planning.

Thank you and good morning. Welcome to Rainier's Investor Teleconference covering second 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 informs 10K and 10Q, followed by the SEC, lists 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 Mark McHugh, our President and CEO. Mark?

Thanks Colin. Good morning everyone. First, I'll make some high-level comments before turning it over to April Teis, Senior Vice President and Chief Financial Officer to review our consolidated financial results. Ben Doug Long, Executive Vice President and Chief Resource Officer, will comment on our timber results. And following the review of our timber segments, April will discuss our real estate results and our outlook for the balance of the year. Before turning to our second quarter results, I'd like to briefly touch on the sale of our New Zealand business. On June 30th, we closed on the previously announced sale of our New Zealand joint venture interest to the Rahatun Group, or TRG, for $710 million, marking a significant milestone in our asset disposition and capital structure realignment plan. I want to once again extend our appreciation to the team in New Zealand for their diligence and professionalism throughout this process, as well as for the outstanding job that they did in managing these assets for value creation over the 30-plus years of Rainier's ownership in the region. We are pleased to transfer the stewardship of this business to TRG, a well-regarded manager of forestry assets in the region. With the closing of the New Zealand transaction, we have now completed dispositions totaling $1.45 billion, significantly exceeding our original $1 billion target. The success of this plan has allowed us to achieve our new leverage target in a manner that is been accretive to both CAD and NAB per share, as well as better position Rainier to create long-term value for our shareholders going forward. As previously discussed, we anticipate using at least 50% of the sale proceeds from the New Zealand transaction to reduce leverage and return capital to shareholders through share repurchases and a special dividend, details of which will be announced later this year. The remaining proceeds will be deployed opportunistically to fund other capital application priorities, including additional share buybacks or potential reinvestment into synergistic acquisitions. With that said, given where the stock currently sits, we believe share repurchases represent the most compelling use of capital. To this end, we completed $35 million of buybacks during the second quarter. Moving to our second quarter financial results, excluding the contribution from New Zealand, which were reported as discontinued operations, we generated adjusted EBITDA of $45 million and pro forma net income of $10 million or $0.06 per share. Adjusted EBITDA increased 35% versus the prior year quarter, reflecting improved results in our Pacific Northwest timber and real estate segments, as well as reduced overhead, partially offset by lower results in our Southern timber segment. In our Southern timber segment, we generated second quarter adjusted EBITDA of $28 million, down from the prior year period as harvest volumes decreased 5% and weighted average net stumpage realizations were down 14%. The availability of salvage volume in certain markets, coupled with extended mill downtime, continued to weigh on timber prices during the second quarter. However, the markets most impacted by salvage operations are normalizing, and we expect both volume and pricing in this segment to improve in the second half of the year. Turning to the Pacific Northwest timber segment, second quarter adjusted EBITDA of $7 million increased 17% versus the prior year quarter, as lower costs and higher log prices more than offset a 15% decline in harvest volumes due to the Washington dispositions we completed at the end of last year. We are pleased to generate higher adjusted EBITDA in the Pacific Northwest, despite the reduction in acreage and volume, underscoring the relative quality of our residual portfolio in the region. In our real estate segment, we generated adjusted EBITDA of $19 million in the second quarter, up $14 million from the prior year period. Adjusted EBITDA in our real estate segment improved significantly versus the first quarter and exceeded our expectations entering the quarter due to the accelerated timing of several transactions. Turning to our outlook for the balance of 2025, we remain on track to achieve our full year adjusted EBITDA guidance as we anticipate a significantly stronger second half fueled by higher contributions from our southern timber and real estate segments. As we'll discuss later in the call, we're optimistic that increased lumber production at US mills as a result of higher duties on Canadian lumber, coupled with a reduction in salvage volume in our Atlantic region, should provide a tailwind through the second half of the year. With that, let me turn it over to April for more details on our second quarter financial results.