Welcome and thank you for joining Rayonier's second quarter 2010 teleconference call. At this time all participants are in a listen-only mode. (Operator instructions) 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. Hans Vanden Noort, CFO. Sir, you may begin.

Thank you and good afternoon. Welcome to Rayonier's investor teleconference covering second quarter earnings. Our earnings statements and presentation materials were released this morning and are available on our website at www.rayonier.com. I'd 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 as well as our Form 10-K filed with the SEC lists some of the factors, which may cause actual results to differ materially from the forward-looking statements we may make. They’re also referenced on page two of our presentation material. With that, let’s start our teleconference with comments from Lee Thomas, Chairman, President and CEO. Lee?

Thanks, Hans. Well, I feel like we really had a good solid quarter. Good performance from each one our businesses. I had an eye procedure last night and as a result I am not able to read for the next couple of days or at least the doctor asked me not to. But I did have a statement and I am going to ask Hans to read that and when Hans finishes that, we’re going to turn it over to Paul and Charlie and Jack to talk about their businesses and then I’ll come back to participate in the Q&A session. Go ahead, Hans.

Alright, thanks, Lee. We are pleased to report earnings per share of $0.48 in the second quarter and continued strong cash flow, which not only reflected our operating results, but also included receipt of the $180 million tax refund for the alternative fuel mixture credit. Markets remain dynamic throughout the quarter as customers restocked inventory and the housing industry cycled through the impacts of the homebuyers tax credit program. While we have seen sustained improvement in many of our markets, we are particularly proud of the actions we took to capture the value of these opportunities in this quarter and for the rest of the year. In Timber, we pulled forward a number of (inaudible) sales to lock in higher pricing created by supply-demand imbalances. We’ll see the benefits in future months when these tracks are harvested. We also took advantage of strong export markets in the west and steady pulpwood markets in the east by adjusting our harvest plans to meet demand. In Performance Fibers, we continue to focus on operational excellence to increase reliability and improve our competitive cost position. As a result, we came out of our scheduled shutdowns faster than expected, positioning us to meet growing demand for our sales of specialties products. The actions our businesses are taking not only drove strong results in the second quarter, they also create the basis for the increased guidance that we’ll describe in more detail during the call. Let’s turn now to page three with the overall financial highlights. We had a very strong second quarter with sales totaling $312 million while operating income totaled $56 million and net income of $39 million or $0.48 a share. We had no special items in the second quarter. However, Last year’s second quarter included a benefit of the alternative fuel…

Thanks, Hans. Overall, we are pleased to report operating income of $8.7 million for the second quarter compared to $400,000 for the same period in 2009. On page eight you will notice that our prices for our western timbers stumpage continued their upward trend and they increased 20% in the second quarter over first quarter and were up 67% over the year ago period. Now, since a substantial portion of our volume is currently generated from delivered logs, we have also included the corresponding price trend, which you can see has had a similar track. Continued strong export demand driven mainly by China and improved domestic saw log demand lifted second quarter prices. With a significant portion of third quarter volume under contract, we expect selling prices in the third quarter to be comparable to the second quarter. However, with prices still below historical levels, we will continue to defer approximately 30% of our sustainable harvest levels in 2010 to preserve value. In the east, on page nine, pine prices remained relatively flat to first quarter levels, declining $0.34 a ton and was 31% above second quarter 2009. Supply constraints due to wet weather and strong pulpwood demand supported higher prices during most of the first half. In the second quarter we continued to pull stumpage sales forward and have locked in the majority of our 2010 volume at these higher price levels. As mentioned last quarter, 2010 pine harvest volume is planned to be below that of 2009 as thinnings mature into more normal levels. And overall for the year, operating income should be substantially above 2009. And with that, let me turn it over to Charlie Margiotta to review our Real Estate business.

Thanks, Paul. The real estate markets in which we operate remain reasonably consistent with continued strength in Texas and Alabama. Non-strategic Timberland sale opportunities continue to be identified and during the second quarter we completed an auction of 5000 acres to 50 separate buyers. Chart 10 is the HBU sales in acres, which show second quarter sales of approximately 3000 acres. Sales were completed in every state in which we have ownership. Land sales for 2010 will be somewhat second half loaded and we continue to project that 2010 sales volume will be above 2009. Chart 11 indicates the per acre sale prices. Overall, prices were steady with the lower second quarter prices driven primarily by mix, which included sales in New York and a 1000-acre conservation sale in the Okefenokee swamp. We expect the second quarter average rural price per acre to be the low point of the year. Chart 12 details our non-strategic timberland sales program. As I mentioned, during the second quarter, we conducted a successful auction of scattered properties in Georgia. While 2010 will have fewer acres than 2009, we do continue to find opportunities to sell properties at attractive prices. We continue to make progress with our entitlement projects and our experience and increased interest in our large industrial site, one located just off the Savannah and the other west of Jacksonville. Both sides have superior attributes including real access. With that, let me turn it over Jack to review our Performance Fibers business.

Thanks, Charlie. Strong Performance Fibers results continued through the second quarter due to the growing demand for our cellulose specialties and absorbent materials products and good overall operational performance. On page 13, you will see net selling prices for our two Performance Fibers product lines. Cellulose specialties prices were comparable to the previous quarter. However, compared to the same quarter prior year, Q2 prices were down $69 a ton, or $0.05. As we have discussed previously, this decrease is due to removal of our cost surcharge late last year. Excluding this surcharge prices were up $26 per ton, or 2% compared to the same quarter last yr. As projected, absorbent material prices, which consists principally of fluff pulp, increased $81 a ton, or 12% from the previous quarter and $120, or 19% from the same quarter in the prior year as market conditions continue to improve. Moving on to page 14 and looking at volumes, our second quarter cellulose specialties sales volume of 115,000 tons was favorable 24,000 tons or 26% compared to the same quarter in the prior year and absorbent materials volume of 51,000 tons was unfavorable 14,000 tons, or 22%. These volume shifts were largely due to mix optimization to meet customer demands. As expected, overall cost for the second quarter were higher than Q1 driven by higher transportation costs, higher chemical prices, primarily caustic, and the completion of our planned annual maintenance outage at Jesup. For the full year, we see continued strong demand for our cellulose specialties products with the volume 2% to 4% greater than the prior year. Overall, we expect cost to stay flat to Q2 for the remainder of the year. In summary, Performance Fibers’ strong second quarter and first half results have us on track for another strong year of financial results. Now, let me turn it back over to Hans.

Thanks, Jack. Now I’d like to update some of the key statistics to assist you in refining your 2010 model. We expect depreciation, depletion and amortization of $146 million and a non-cash cost basis of land sold of about $8 million, or approximately $154 million in total. Capital expenditures excluding acquisitions are expected to total $141 million versus $92 million in 2009 and a normalized run rate about $100 million to $110 million. The significant increase will primarily occur in Performance Fibers, cost reduction in the efficiency projects as well as additional environmental projects. We expect interest expense net of interest income of about $50 million for the year. Our pension expense for the year should be about $11 million. We expect a significant amount to our pension plans, possibly in the $40 million to $0 million range. Finally, our full year effective tax rate is expected to range between 16% and 18% consistent with our prior guidance. When you put all these elements together with the AFMC refund, we insist [ph] a very strong cash flow despite continuing to defer the harvest of our higher value sawtimber. We expected adjusted EBITDA to be well above 2009 and cash should also be well above 2009 and in that $360 million to $380 million range, reflecting the AFMC refund, net of the higher CapEx and pension contributions. And we expect pro forma EPS to now be between $2.05 and $2.20 per share excluding the gain of a New Zealand joint venture transaction. Now, let me turn it back to Lee. Lee?

Okay, Hans. Well I think as you all heard, it was not only a good, solid second quarter, but we have projections for the rest of the year that have allowed us to increase our guidance in terms of earnings and cash flow. Feel very positive about our business and how it’s performing at this point, but, Hans, why don’t you finish reading our statement then myself will have the questions.

Okay, thanks, Lee. We recognize that our timber markets will remain dynamic until the housing recovery gains momentum. And we have the operational flexibility to continue being opportunistic and demands [ph] for the long term. Over time, we see the value of our timberlands increasing, as this resilient asset benefits from improving markets. Our timberland is further enhanced by the value we capture through rural conversation and development sales. As the global leader in cellulose specialty products, we see continued strong demand for our products and tight market supply. With our major plant shutdowns successfully executed, we are running above plan, supplying our customers with a premium product that is a critical part of their value chain. Our unique business mix, conservative balance sheet and substantial liquidity provide the operating flexibility to take advantage of opportunities for growth. Our actions to drive value reflect our strategy of providing shareholders with an attractive dividend funded by strong operating cash flows and a growing investment in geographically diverse timberlands. We see tremendous value in our timberland portfolio and expanding our land base continues to be a top strategic priority. With that, I’d like to close the formal part of the presentation and turn the call back to operator for questions.

Thank you. (Operator instructions) The first question comes from Chip Dillon, Credit Suisse. Your line is open. Chip Dillon – Credit Suisse: Yes, and good afternoon to you all.

Hi, Chip. Chip Dillon – Credit Suisse: First question is – and you know I just have to make the comment, it’s great to see you raising guidance and not really selling land to do it. When you look at the second half of the year, is most of the earnings distribution pretty even to through the two, the third and fourth? I know you can't tell us exactly, but is there any sort of skewedness to the two quarters based on I guess land sales or harvest profiles or may be event that the way you view pulp pricing?

Well, overall, Chip, I’d say relatively even, but Hans, why don’t you comment on that because it is probably a little stronger in the third quarter, at least looking at where we think things will close?

That’s right. We right now, we would expect the Q3 to be somewhat stronger, as always, Chip, with the timing of land sales, it makes it a little dicey, but where we sit today, we think Q3 actually may be a little bit stronger than Q4. Chip Dillon – Credit Suisse: And I am just curious, would you – I would expect I guess in the Performance Fibers for the specialty cellulose probably to not change a lot in price. I don’t think there is any reason for it to, you can correct me on that. But do you assume that I guess fluff pulp prices stay kind of stable with where they are now?

Well, I’d say you are right cellulose specialties. You know I think we commented in the past on how we basically negotiate price on the – on most of those – most of that product on an annual basis. It’s pretty steady. It just depends on exactly the mix of products we ship and I think pretty steady. As far as fluff pulp is concerned, we at this point feel like it’s – there is good demand out there and fairly steady as we look out into the year. It could weaken a little in the fourth quarter, but it’s hard to predict at this point. Chip Dillon – Credit Suisse: Okay. And I guess lastly, you mentioned again the long term goal of expanding the land base. Are you – I guess two kinds of questions tied to that. Number one, are you seeing any increased opportunities that you feel are attractive and secondly, just – to refresh our memories as a Timber REIT, either through the TRS or even in the REIT able to may be hold on to some of the cash especially since I guess black liquor counts as earnings, so that you have a – you have more of an ability to execute a transaction without taking on a lot of debt.

Well, absolutely we do, but let me – I going to let Paul comment just a minute on your first part of your question, which had to do with what we see as (inaudible) and transaction. We did comment in the past as far as large tracks of land, we really don’t see many in the market, at least domestically. We do see smaller tracks and we are pretty attractive as far as looking at that and we’ve seen some larger tracks outside the U.S. that we’ve taken a look at. But, Paul, you may want to comment on what we are seeing.

Yes, Lee, I think directionally you right on and – with regards to your comments as we are seeing the overall market relatively quiet, smaller tracks certainly out there, but now I think by and large just the uncertainty of the economy. There is a lot of cash sitting on the sidelines. I think as a timber owner you are happy to be in timber. And since the fact that it’s still growing in these uncertain times and you don’t know what to do with your cash at this point, you stay there. So, the market is relatively quiet and we’ll be patient. We’ll keep looking out there.

Hans, you want to comment a little bit on -- Chip’s second part of his question.

Sure. Well, the cash from the black liquor credit is sitting in the TRS. It’s just basically been converted, Chip from a receivable to cash. So, as far as the acid test, we are really in no different position than we were at the end of the year if you think along those terms. So, we are fine when we look at the acid test. All of our debt is in the TRS as well, so you’ll recall that test is done on a net asset basis. So, we are just going to be opportunistic and very disciplined in looking forward to investing that cash. Chip Dillon – Credit Suisse: And the very last question, and I guess may be, because you didn’t mention it, and may be that is the answer, but only one company so far as kind of come out and said there might be – or likely would be a different action towards the tax credit by going after the cellulosic biofuels credit. Have you all looked at that and is there a chance we might get a little extra bump from that?

Well, we -- go ahead Hans.

I am sorry, Lee, just to say, we are just in the middle (inaudible) Chip, there is a number of technical issues involved with it. I mean obviously the gross amount of the credit even on an after tax basis is greater. However, you are likely limited to the time period that you can actually use it. The mechanics of going through the process aren’t clear and obviously there is some political risk. So we are still evaluating all that, but at this point we are not that deep into it yet. Chip Dillon – Credit Suisse: Thanks very much.

The next question comes from Christopher Chun, Deutsche Bank. Your line is open. Christopher Chun – Deutsche Bank: Thanks. Good afternoon, guys.

Hey, Chris. Christopher Chun – Deutsche Bank: Hey, congrats on the quarter. I was just wondering though, last quarter you thought that 2Q might be sort of comparable to last year’s quarter and I was wondering what were the – what was the positive surprise that developed during the quarter.

You know, Chris, I think that the biggest thing that affected the second quarter was the Performance Fibers business and the way we came out of our maintenance shutdowns or annual shutdowns. I felt there was a lot of good work during -- and I think as I commented, we are operating above plan. So, I think that’s primarily what drove the upside. I think we are pretty much own as far as what we had forecasted in our timberland real estate business. So, I really think it was more the Performance Fibers improvement more than anything. Christopher Chun – Deutsche Bank: Okay, great. Can you talk about sort of what a typical cost for the maintenance shuts might be and how much it was this year?

What our cost would be? Christopher Chun – Deutsche Bank: Right, between the expenses that you incur, it’s actually to your maintenance as well as the lost tonnage.

I don’t know whether we have those kind of figures right at the top of our hand here. Jack, I don’t know whether it is something generally you can comment on that. You know, what these are, Chris, is that sort of annual shutdowns. Typically they will last as long as 30 days. The headwind at both mills not at the same time but at different times. And I don’t think we – I think if anything, we came out of the plants sooner than we thought which – we produced more pulp than we thought and we are able to sell more. And our plant cost were in line if not a little better than in line. The other thing I would say on Performance Fibers, and jack you can correct me, but I think we ended up with more domestic sales in the second quarter than export sales. And that mix actually helps quite a bit as far as transportation cost, but Jack, have you got any thoughts – if you want to add to that?

Lee, I think you covered it. And you are exactly right on the mix issue for Q2. Christopher Chun – Deutsche Bank: Yes. Okay. Switching gears to timber, can you tell us what the mix is in the west between delivered and stumpage sales?

Paul, if you got that?

Yes. I will give you a kind of a rough – hand on here just a second, because let me. Christopher Chun – Deutsche Bank: Okay.

Yes. Just looking the number up. Chris, about 15% stumpage, 85% delivered. And we are pretty good at selecting that through time and depending on the market conditions. I think that is one thing that we do actually fairly well is move that around in response, so that’s about where it is at the current time. Christopher Chun – Deutsche Bank: Okay. And then can you tell us of the delivered, how much of that is export business?

Typically, of our total volume, export is in the range of 10% to 20%, I think in this type of market. It’s closer to the 20% again of our total in the west. Christopher Chun – Deutsche Bank: Okay. And then, in the south, is that all stumpage sales then?

No, in the south it’s also a mix between delivered and stumpage and again one of the things I think we do fairly well as an operational team is move that depending on the markets and what we saw. And so the split – currently I don’t have the number. Hans is kind of pulling this up for me, but–

It’s almost the reverse I think, Paul. I think the vast majority is stumpage in the south.

It is, Lee, and I think we’ve kind of – maybe it’s 65%-70%.

Yes, we are running probably around 70%, 70% plus of stumpage in the south, Chris. Christopher Chun – Deutsche Bank: Okay. Can you talk a little bit about how you view strategically what the right mix is there? Why the stumpage sales predominantly in the south whereas the delivered sales predominantly in the west?

Yes. It just varies for a lot of different reasons. Certainly is demand. We see for example, as we did earlier this year with – in the southeast with some heavy rains, a spike in interest in timber, we moved towards that and put it more out onto the stumpage and tried to take advantage of that. So, that would be the (inaudible) the thing we do, we kind of reflex that way depending on if there is a hotter market. We kind of look at our markets on a very micro way and move in flex accordingly.

The other thing I would just mention, Chris, is out west, this is a probably unusually a high percentage for us because what we are deferring out west would typically be stumpage sales.

Right, as we mentioned, Hans, adding to that, we are deferring probably about 30% of our sustainable harvest right now. Christopher Chun – Deutsche Bank: Okay. So, may be some of the larger saw log type–?

Yes, absolutely. We see that obviously have more value going out in the future, so to the extent we can hold that for future sales, we will. Christopher Chun – Deutsche Bank: Okay. And then I was a little surprised that you said that at least in the west prices would be flat quarter over quarter in 3Q. I am just looking at what product prices in general, they are off quite a bit in 3Q. Do you not see that impacting log prices?

So, yes, what we have is in the west, we’ve got several customers with contracts that will see the benefit of the higher prices that we’ve seen in the first half of the year continue to flow through in the second half of the year, keeping this pretty steady and strong out there.

And on the stumpage sales, those actually had locked in prices. Christopher Chun – Deutsche Bank: Okay. How long are they locked in?

Well, typically on a stumpage sale, the person who buys and has a year in which to harvest. Christopher Chun – Deutsche Bank: I see. Okay, I will withdraw [ph] and turn it over. Thanks for your help, guys.

Your next question comes from Mike Roxland, Bank of America-Merrill Lynch. Your line is open. Mike Roxland – Bank of America-Merrill Lynch: Thank you very much. Great quarter, guys. Lee, hope you are doing better.

Thank you. Mike Roxland – Bank of America-Merrill Lynch: Just a little bit more color on what’s happening in fluff pulp. Obviously, you are starting to see some pricing weakness in community pulp, which could undercut fluff pricing at some point. So I just want to get your thoughts on the fluff pulp market.

You know, overall, I think the demand continues to be strong as far as fluff pulp, at least based on what we have seen. But as we have said in the past the price as far as fluff pulp is concerned is largely set by much larger suppliers than us. We are relatively a smaller supplier, but we’ve got a great customer base and – but Jack, you want to provide any more input on that.

Just a couple of comments. I think you guys are well aware that fluff pricing tends to lag the broader paper pulp market. So, right now we are seeing a little bit of softness in the paper pulp market and should that continue, it’s going to be at least a few months before we see any type of activity in the fluff market. Mike Roxland – Bank of America-Merrill Lynch: Got it. You could see some – potentially see some weakness in fluff pulp in 4Q.

Potentially. Mike Roxland – Bank of America-Merrill Lynch: Potentially. Okay.

Yes. Mike Roxland – Bank of America-Merrill Lynch: Now, just going back to the guidance question, obviously you’ve raised guidance for $2 – from $2 to $2.20 from $1.85 to $2, so I just wondered does that guidance, so that increase imply or is that all being driven by Performance Fibers or do you expect in the second half the results also improve with some of your other operations as well?

You know I think a lot of that is driven by basically the strength of where we think we are in each one of your businesses, kind of where we our land sales, what we think we’ve already got under contract as far as timber sales and our outlooks on timber. But also continue to improve as far as Performance Fibers. As I said, we are operating above plan. We think we are – we are doing well there. So I think it’s a combination of all of it. But I do think, as I’ve said in the second quarter, I think Performance Fibers is doing better than we had planned. Good production and good sales. Hans, you want to comment on that any further?

That’s exactly right, Lee. Really like across the board certainly stronger than when we were – in early May, as I recall in our first quarter call. Mike Roxland – Bank of America-Merrill Lynch: Okay, got you. And just lastly on – I just want to get your sense of what is the export trend for log sales given that China’s growth has slowed a little bit. Do you see that – has there been any corresponding effect on export so then obviously we had a export sales to China in 2Q, but what you really currently saying with respect to export of log sale?

You know, we continue to see strength in our exports out of New Zealand, particularly owing to China as well as Korea and as a matter of fact if you look over the last three years, China went from no exports out of Korea from us to now our number one customer. So, I mean it is back out some, but they are still quite strong. Paul, do you want to comment further on it?

Yes. Lee, I think that’s right. We get two views of China, what’s happening there, one of the west coast and as we comment of New Zealand as well. We still see volume flowing, easing may be a little bit prices off of the peak, may be of three, two months ago. But still historically above what they have been. So, we anticipate that – and they remain relatively off that peak here for the next couple of months then they’ll be coming into what we would consider perhaps a stronger back half of the year. So, it’s a stronger fourth quarter. Mike Roxland – Bank of America-Merrill Lynch: Got you. Good luck in the quarter.

Thanks.

Your next question comes from Claudia Hueston, JPMC. Your line is open. Claudia Hueston – JPMC: Hi, thanks very much. I just wanted to go back to your (inaudible) question and I was hoping you could just elaborate on how you are prioritizing potentially growing your land base outside of the U.S.

You know, Claudia, we have focused primarily on growing inside the U.S. over the last several years. We have looked at properties outside, particularly in New Zealand and Australia because of our presence in New Zealand. We’ve also looked down in South America. Basically what we’ve concluded after looking at a lot of it is that we think there is probably more value in investing in Timberland in the U.S. than it is outside at least based on the ones we’ve looked at, at this point. And that didn’t stop us from continuing to look at them. But the ones we’ve seen so far and the sales we’ve done in the last four [ph] years had all been U.S. but– Claudia Hueston – JPMC: Okay. That’s helpful. And then other than just sort of maintaining you patience in the acquisition environment instead of waiting for more land to come on the market and prices sort of become attractive, how are you thinking about your cash more broadly? Are you thinking at all about the dividend or stock buybacks at this point or are there capital investments that you might be able to make within the Performance Fibers business?

Yes to all of that. As a matter of fact, dividend is clearly something that we are taking a hard look at. Our board has looked at that over the course of their last couple of meetings and generally what they do is look at it in the context of our updated five-year long range plan, which we do every fall. But that’s clearly a high priority for us, always has been and will be. We have invested a little more in our capital projects this year as you could see from our capital spending in our mills. There are some additional opportunities there we are looking at. We have decided to put some additional funding into our pension plan, which we will do over in the fourth quarter. And then we are pretty active on looking at some timberland, different tracks. They are not large tracks, but we do find in the 10,000 to 20,000 acre range timberland that’s available in the market. So, I think there is going to be good opportunities on that whole range for us to deploy this cash in a way that really gives good value to our shareholders. Claudia Hueston – JPMC: Okay. Thank you very much. I appreciate the color.

Your next question comes from Steve Chercover, D.A. Davidson. Your line is open. Steve Chercover – D.A. Davidson: Thank you. I was just wondering if you could expand on the benefits or what precisely the capital projects at the pulp mills were that are supposed to drive down costs?

Jack, you want to comment a little bit on some of those projects as some of them were not just costs, some of them were associated with environmental upgrades that we are doing at our mills, but, Jack, you want to comment some on it?

Yes. We have invested in both of our facilities, Fernandina and Jesup during the shutdowns quite significantly to improve our overall performance, which is a big driver in our cost improvement. The performance of our Fernandina mill as a result of some design investments in our boilers is – has resulted in it running extremely well. We’ve also invested in a number of other quality cost improvement projects, typically in a return of 20% plus type level. A big chunk of the – of the incremental spending is associated with some environmental investments in our operations. Steve Chercover – D.A. Davidson: So, this is where you are getting that capacity creep of 2% to 4% annually as well?

Yes. You know, I think the productivity improvement I mean the investments for instance in the boilers are a good example of that, but also some investments related to our – helped drive Fernandina and those are the kind of things that from a volume improvement and associated cost improvement allow us to look at the kind of increases you referenced. Steve Chercover – D.A. Davidson: So, I suppose I was a little surprised to hear that your costs wouldn’t come down given the benefits of the project and the down time that was incurred in the quarter. Did I hear that correctly?

Well, I think the costs you are referring to are the comments we made more on the commodity input cost. We’ve seen wood cost go up. Those were the costs that to some extent uncontrollable kind of cost, more of our input cost. Jack, you want to comment further on that?

Yes, I think I guess quarter-over-quarter our manufacturing costs have gone up 1% to 2%. And again driven largely by those other factors that – such as external price for transportation and chemicals that you have little direct control over at this – within the year. Steve Chercover – D.A. Davidson: Sure. And those guys who control the trees can be loggers too.

Yes. Steve Chercover – D.A. Davidson: Final question and I hope I didn’t miss this. But how does the board evaluate the dividend? Is it quarterly or annually because I mean last year it made sense I suppose to hoard cash but you guys are now earning more than the dividend?

Well I did last year, I think we went through a period of really – well I mean the whole economy went through an incredibly difficult period and the board decided last year not to increase the dividend event though we had done it for a number of years. Just from a liquidity point of view and this year they have taken a look at it, they typically do it in the – on an annual basis and they typically do it in the context of looking at the projections we give them on our five-year plan to ensure that it’s sustainable and it’s a part of an overall business going forward and cash management going forward. And so they are in the process of doing that. They will do that – we started that process in July and they will do it as we go on over into October but typically they do it on an annual basis. Steve Chercover – D.A. Davidson: Great. Thank you all.

(Operator instructions) Your next question comes from Peter Ruschmeier, Barclays. Your line is open. Peter Ruschmeier – Barclays: Thanks. Good afternoon. And congratulations on the quarter.

Thank you, Peter. Peter Ruschmeier – Barclays: Couple of questions. Unless I missed it, did you quantify the production tons lost related to Jesup and Fernandina in the quarter or could you, Jack?

Of course, there wasn’t a production ton loss. I am not sure– Peter Ruschmeier – Barclays: Related to the maintenance.

No – I mean relative to our plan, there is an improvement. Now, certainly we plan to have these annual outages of a number of days and you take production out associated with that, but relative to the plan, there is an improvement. Peter Ruschmeier – Barclays: Okay. And–

But, Peter, to your question, I mean, typically on a sequential basis let’s just say you are going to lose and this kind of vary year by year depending on the difficulty and the length of the shutdown but this year sequentially we are down roughly 22,000, 23,000 tons as a result of the outage. Peter Ruschmeier – Barclays: Okay. And are you still looking for full year volumes to be flat to up slightly for cellulose specialties and absorbent materials?

Cellulose specialties, yes. We plan to be up slightly on that I think 2% to 4% overall for the year to year. AM will be down slightly. Peter Ruschmeier – Barclays: Okay. And just a – so that means I think some fairly significant second half volumes. Is it – can you help us to understand the split between 3Q-4Q, is it split evenly between 3Q and 4Q?

Q4 is typically a higher quarter in terms of sales, one is the longer quarter, and as usual you also have tendency of moving more volume in the final quarter of the year. Peter Ruschmeier – Barclays: Okay. And, Jack, I will be curious if from 30,000 feet you could may be help describe the – what you are seeing in end market demand. If we look at acetates and ethers and viscose, are there any particular pockets of strength or weakness and how do you keep up with the market? In other words, isn’t the market still growing, how do you maintain your share of the global market?

Yes, let me cover that. The overall market in the CS side of the business continues to grow. It’s growing at roughly 40,000 a year in the markets that we serve, which is about 1.4 million ton overall market. And all of those markets that the acetate, the ethers have come back to pre-economic downturn levels. And so you will – you are seeing growth in the acetate of roughly 2%, in the ether some 4% to 6%. So, there is good, strong growth out there. The other factor impacting our markets is the strong community viscose market. And it is distracted – may be distracted isn’t the right word, but our competitors are going after that volume that is – has been recently very high priced and as a result of that, that presents even more opportunity for us to participate in some of the markets that they are not participating. Peter Ruschmeier – Barclays: Okay.

So, overall, up here it’s a very strong market for us at the current time and we see that going into the future.

I think to the second part of your question, which is how we look at our position as a leader in that acetate area as well as some of the others is that the kind of 2% to 4% creep we were talking about, we are constantly looking at how we can increase the volume out of our mills. Some of that has to do with just good productivity improvement and some of that has to do with investments. And we are constantly looking at that because we want to continue to provide the leadership in that area that we’ve had for a long time. Peter Ruschmeier – Barclays: Okay. It’s very helpful. Maybe just lastly, if I can shift gears back to the timber business, I think you said that close to 20% of your volume in the northwest is going offshore. Can you help us to understand how much of that is actually going to China today and what is your two to five year outlook, do you expect that to go up much and are you seeing any shift in the types of logs, they tend to be the low end logs, are you seeing demand from China for the high end logs? Can you give us some color on that?

Paul?

Sure. First of all, that volume again has been relative steady this year. It’s been pretty of course in the first part. Where it’s going, we expect to see overall that the Asian – Asia basin is going to be relatively tight as we see it in the long term just with the product availability and traditional markets that they have sourced from relative, Russia, Indonesia, other places. It has created a bit of a constrained opportunity and therefore we do see some good opportunities for us out of New Zealand, out of the west coast. So we expect that – I can't give you a definitive year to year, but overall we see some good strength coming out of there.

And Paul it’s primarily our hemlock off the west and Radiata out off New Zealand.

That’s correct. And for us out of the west hemlock mainly markets like Korea, New Zealand divided between China, Korea and India. So, we see some healthy opportunities across the board there. Peter Ruschmeier – Barclays: Thank you very much, guys.

Thanks, Pete.

Your next question comes from Anna Torma, Soleil Securities. Your line is open. Anna Torma – Soleil Securities: Thanks, good afternoon. I was wondering if you can give us an update on any interest you are seeing for long term contracts for biomass especially from European utilities?

Well, we’ve continued to have interest from – and you are right, European utilities who are looking for contracts to support pilot plants, I mean there is a major one as you know in our area over near the Okefenokee that is being constructed by a large utility. There is another one that is in process as far as discussions and negotiations, but I think we continue to see the European interested driven primarily by the regulatory regime in Europe. But, Paul, is anything new on that that you see?

Yes, it’s – just to add to it, just not only pellets [ph] domestically for the European market but also direct souring to Europe off – out of the ports on the east coast. So we think we are well positioned and we are having a lot of good discussion. Anna Torma – Soleil Securities: Great. Thanks very much.

I will now turn the call back to Mr. Vanden Noort for closing comments.

Alright. I will like to thank everybody for joining us and please contact Carl Kraus with any followup questions. Thanks.