Welcome and thank you for joining Rayonier’s Third Quarter 2011 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’ll 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 third quarter earnings. Our earnings statements and presentation materials were released this morning and are available on our website at 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 are also referenced on page two of our presentation material. With that, let’s start our teleconference with opening comments from Lee Thomas, Chairman and CEO. Lee?

Thanks, Hans. First, let me say how pleased I am with the election of Paul Boynton as CEO effective January 1st. I’ll remain as Chairman until May when Paul will assume that role in addition to being President and CEO. As many of you know, Paul has successfully led all three business units at Rayonier and most recently served as President and as a member of our board of directors. Paul has been instrumental in shaping and implementing our strategies. This has been a well-planned transition and I’m confident the company will continue the successful execution of our strategies under Paul’s leadership. Turning now to our quarterly results. I’ll make a few overall comments before turning it back over to Hans to review our financial results and I’ll ask Paul to review the results of each business. When we finish our prepared remarks, we’ll invite Lynn Wilson, our Vice President of U.S. Forest Resources; Charlie Margiotta, our Senior Vice President of Real Estate and Jack Kriesel, our Senior Vice President of Performance Fibers to join us in responding to your questions. We continue to deliver strong operating results this quarter with pro forma earnings per share of $0.71 and cash flows that more than support the 11% dividend increase our board approved in July. At $1.60 per share, our annualized dividend is now 20% higher than a year ago. These results reflect strong execution across all our businesses. In Forest Resources, we continue to take advantage of attractive pricing for Asian exports, selling 38% of this quarter’s harvest in the Pacific Northwest to overseas market and locking in future volume. At the same time, we increased volumes in the Atlantic region as we completed the salvage of wood damaged by recent fires. In Performance Fibers, global demand for our unique high-purity cellulose specialties products remained strong. We also made significant progress on key strategic initiatives, which we reviewed in detail during our recent Investor Day. In September, we announced our agreement to acquire 250,000 acres of Southeastern Timberland for approximately $330 million. This transaction, which is scheduled to close in November, will generate attractive returns and enhance our overall Timberland portfolio. We are also moving forward with our 190,000 tons cellulose specialties expansion project at our Jesup mill. Our customer meetings are going very well resulting in commitments for over 70% of this new volume. Now with that, let me turn it over to Hans for a review of the financials.

Thanks, Lee. Let’s start on page three with the overall financial highlights. As Lee Noted, we had a strong third quarter with sales of $385 million, operating income of $108 million, net income of $105 million or $0.84 per share, and pro forma net income of $89 million or $0.71 per share. We had one special item in the third quarter, which was a $16 million tax benefit from reversing a reserve established back in 2009 relating to the alternative fuel mixture credit. This also reflects the successful completion of IRS audit covering 2009. The first quarter of 2010 included a $12 million gain or $0.09 per share from the sale of a portion of our New Zealand joint venture. Both of these items are excluded to arrive at the year-to-date amounts used for the comparisons throughout this call. On the bottom of page three, we provided outline of cash resources and liquidity. Our year-to-date cash flow was strong with adjusted EBITDA of $380 million and cash available for distribution of $242 million. Note that last year’s cash available for distribution of $400 million included receipt of $189 million from the alternative fuel mixture credit. Our debt level was comparable to year end, while our debt to capital ratio declined slightly. We ended the quarter with approximately $362 million in cash. So, on a net debt basis, we are at a very manageable $430 million. We also increased our bank revolver from $300 million to $450 million during the third quarter, of which $370 million is undrawn. Let’s now run through the variance analysis. On page four, we prepared a sequential quarterly variance analysis. In Forest Resources, operating income declined due to lower volume and higher logging cost in the Northern region and softer pricing in the Atlantic and Gulf…

Thanks, Hans. Good afternoon. Let’s first start and cover Forest Resources. If you go to page eight in our Northern region, which is primarily Washington state, strong export demand continued throughout the quarter, primarily from China. Year-to-date approximately 38% of the Washington volume has been sold into the export market compared to less than 20% in 2010. As a result of the increased demand, prices for delivered logs rose 13% from second quarter levels and were up 30% over the prior year period. Overall, we expect delivered log pricing for the full year to be approximately 35% above 2010 levels and 2011 volume to be 12% above 2010. Now, if you turn to Atlantic and Gulf regions on page nine, pine stumpage prices decreased from the second quarter levels as expected due to the abundance of salvage wood from the spring and summer fires. However, we expect fourth quarter prices to return to second quarter levels. Harvest volumes in the nine months of 2011 were significantly lower than 2010 when we accelerated sales to take advantage of the tight market due to weather related supply constraints. For the full year 2011, pine harvest volume and price are projected to be slightly below 2010, primarily as a result of salvage operations related to the fires. Overall, Forest Resources’ operating income should be substantially above 2010. Now turning to Real Estate. Real estate operating income of $28 million for the third quarter was up substantially from the prior quarter primarily due to two factors. First, a sale of 6,300 acres non-strategic parcel in Washington state at $4,000 an acre. And second, the settlement of a long-standing property tax issue in Florida, which had a favorable impact of $6 million. On page 10, we show rural and development sales volume. Although lumpy quarter-to-quarter,…

Thanks Paul. Now, I like to update some key statistics to assist you in refining your model for Rayonier. So we expect depreciation, depletion and amortization of $133 million and the non-cash cost basis of land sold of about $4 million or approximately $137 million in total. Capital expenditures, excluding strategic investments for Timberland acquisitions and the cellulose specialties expansion, are expected to total about $145 million. We expect 2011 spending on the cellulose specialties expansion to range between $45 million and $50 million. Spending on Timberland acquisitions should approximate $433 million. We expect interest expense, net of interest income of about $49 million. Finally, our third quarter tax expense included a $9 million benefit associated with the sale of HBU properties from the REIT to the TRS. When you factor in this benefit, we expect our full-year effective tax rate to approximate 15%, excluding the $16 million FMT special item. When we put all these elements together with the strength of Performance Fibers and Forests Resources businesses, we anticipate very strong earnings and cash flow. We are increasing our earnings guidance for the year from $1.90 to $2.07 per share to a range of $2.07 to $2.15 per share, reflecting the favorable Florida property tax settlement, lower effective tax rate, net of the expected fourth quarter Performance Fibers, environmental equipment write-off. Note that this EPS guidance excludes the special item, which is the $60 million tax benefit from reversing the AFMC reserves. We expect adjusted EBITDA to range from $490 million to $510 million while CAD is still expected in the $285 million to $310 million range. Now let me turn it back to Lee for some closing comments.

As you’ve heard, we continue to perform well in 2011 and have raised our guidance. For the remainder of the year, we’ll stay focused on operational excellence across all of our businesses, positioning us to finish strongly this year, establishing a firm foundation for continued improvements in earnings in 2012. Our long-term strategy remains the same. We’re committed to growing our dividend funded by strong operational cash flows, building on our track record of increasing the dividend three times in the last four years. We are executing our strategy to expand our Timberland portfolio over time, with acquisitions expected to approximate 315,000 acres in 2011. We’ve achieved the land use changes we were seeking for several development properties and now have 39,000 acres of entitled properties that represent a future solicit value when market recover. And in Performance Fibers, our $300 million expansion project and ongoing investments in manufacturing excellence are key elements of our strategy to remain the global leader in high-purity cellulose specialties. With our strategy in place, strong operating cash flow and solid balance sheet, I’m confident the company will continue to drive superior value creation under Paul’s leadership. With that, I’d like to close the formal part of the presentation, turn the call back to the operator for questions.

Thank you, sir. (Operator Instructions) And our first question comes from Michael Roxland with Bank of America. Your line is open. Michael Roxland – Bank of America: Thanks very much. Congratulations on a very good quarter, guys.

Thank you. Michael Roxland – Bank of America: Just first question I guess just relates to Performance Fibers, obviously the sales volume for cellulose specialties was down 3.1% year-on-year. Can you just provide a little more color on what happened there and whether maybe it’s a timing issue due to something like shipping?

Yes. This is Jack. It is all based on timing and scheduling of shipments. Michael Roxland – Bank of America: So we should see an improvement then in 4Q. So we should be making up that volume?

Yes. Michael Roxland – Bank of America: Got you. And, Jack how was pricing shaping up thus far for 2012? At this juncture I would assume you are at the – for the tail-end of your negotiations process with customers. Would it be fair to say that you should be getting something, at least 8% to 9% increase on the sale of especially side for 2012?

We’re still in negotiations process and like in previous years, we’ll give you an accurate update in our next call on that. Michael Roxland – Bank of America: Thanks a lot.

The next question comes from Chip Dillon with Vertical Research. Your line is open. Chip Dillon – Vertical Research Partners: Yes. Hi, good afternoon. The Northern obviously segment is very impressive with the shipments to Asia and other companies have talked about the demand backing off a little bit and as you look at it both near-term and especially it would be interesting to hear what your perspective is say beyond the winter months. What do you think 2012 is going to look like there?

I’ll let Lynn answer that. I would say overall though Chip as we talked about on our Investor Day, we’ve done a lot of work and we feel there is very fundamental long-term demand as far as China is concerned for wood products, both logs as well as lumber from North America. So, we feel confident in terms of the demand from China. But, Lynn, why don’t you talk about what you think is going to occur over the shorter term?

Hi Chip. This is Lynn. In the short-term, what we see is that the seasonal ups and downs and the supply on the market will obviously affect the near-term shipments, but we feel very strongly as we move into 2012 that those fundamentals are strong and the five ports and the brokers that we’re utilizing in Washington are well positioned to continue on with very similar business in 2012. Chip Dillon – Vertical Research Partners: Got you. And then, shifting gears a little bit to the Timberland sales program, the non-strategic sales, can you give us a view and it hasn’t changed much since we were down there to visit in September of what 2012 might look like and in particular, I guess, you’ve seen some pull back in some areas of the economy and in other areas you haven’t seen any? And I just didn’t know if there has been any change sort of in the appetite for your non-strategic land sales or for that matter the rural HBU as well, as you look at 2012.

Chip, as we’ve said, over the course of the last year, non-strategic land sales for us is a declining category in terms of acreage. We’ve worked through an awful lot of what we considered non-strategic, so those acres have gone down. We’ve not seen any diminished demand for acreage when we put it on the market. And then, the flip side of that, which is the sales of our rural Timberland continues to be good and steady. I mean, we see good demand for our rural Timberland. It changes over time from different parts of the country, but it’s been a very steady program for us.

Yeah, Chip. This is Paul. I’ll just add to that. We recently went in and looked at an opportunity to acquire a property and there is 15 bidders in on that property and we were not the top bidder and we didn’t get the property. But I think it just shows there is pretty robust market out there. Chip Dillon – Vertical Research Partners: Got you. And Lee, I’m not sure if this is your last call or not, but thanks very much for all the help through the years both in Atlanta and in Jacksonville and Paul, good luck.

Thanks Chip. I appreciate that and I got a lot of confidence in Paul’s ability to keep this company headed in exactly the same direction we’ve been on for the last number of years.

Thanks Chip.

Our next question comes from Steve Chercover with D. A. Davidson. Your line is open. And we’ll go to the next question. Mark Wilde with Deutsche Bank. Your line is open. Mark Wilde – Deutsche Bank: Good afternoon.

Good afternoon, Mark.

Hey Mark. Mark Wilde – Deutsche Bank: Just curious to know, it sounded like when we were in Jesup that the response from your customers for the expansion had been a little better than you had expected. I just wondered if there had been any incremental news since we were down there a little over a month ago in terms of commitments.

I think that we’ve firmed up commitments. I think that when you were there we said almost 70%. I think we now say over 70%. Jack. I think we’re still in negotiation with lot of customers. We also have a lot of new customers that we’re talking to about volume, but we are still very confident in where we are with. Demand is very good. Mark Wilde – Deutsche Bank: Okay. And then Lynn – and a question about China, you’ve often said to us that sometimes that the New Zealand business is a little bit of an early read. Can you just give us some sense of what you’re seeing between New Zealand and Asia right now?

Yeah. I just – just kind of building on what Lynn commented. We did see kind of a little bit of a drop off on pricing and the supply was abundant coming out of the Northwest U.S. and Canada. And so we saw that and that has happened. We again attribute it to seasonality and a little bit of oversupply. And we think that we’ll see in the coming New Year and after the Chinese New Year that that will come back again. So we feel, as Lee mentioned, positive in the long-term. And I think we’re just going to see which is fairly typical to China and our short-term pushback. Mark Wilde – Deutsche Bank: Okay. And finally, Lee, I would just like to echo Chip Dillon. Over the last 18 years, I’ve really both enjoyed and appreciated watching you as a Manager in both Atlanta and Jacksonville and I’d also like to acknowledge your years in public service. I think we could use more of your temperament in Washington DC these days.

Very, very kind, Mark. I appreciate that. You remind me about how long I’ve been in this business and that’s why I’m looking forward to retirement. Mark Wilde – Deutsche Bank: Good luck.

Thanks.

And the next question comes from Joshua Barber with Stifel, Nicolaus. Your line is open. Joshua Barber – Stifel Nicolaus: Hi. Good afternoon. I was wondering if you could talk a little bit about the fluff pulp market. I know we’ve seen that pullback somewhat. We had some comments yesterday from one of the major users that they are seeing some demand moderating...

I didn’t hear the last part of that, Josh. Joshua Barber – Stifel Nicolaus: I am sorry. Can you hear me now?

Yeah. Joshua Barber – Stifel Nicolaus: On the fluff pulp side, we had some comments from one of the major users of fluff pulp yesterday talking about some moderation in demand. Have you guys seen that market continue to go soft in the fourth quarter or has that just been modestly down sort of like we saw in the third quarter?

We have seen that – seen a drop off globally over the last few months, and I think RISI price was up around $10.40 and it’s dropped down to, I think, about $10.15. And then, the spot market is a little softer than the contract price. So, it’s – the reasons are kind of varied. We think one, there is some more supply out there in the market, but two, just the total demand for it is off a little bit, users are not consuming as many of the absorbent material products as they have in the past. Joshua Barber – Stifel Nicolaus: Okay. You had made just some earlier comments about having some additional – some of the new additional production capacity committed to. Is that viscose or is that specialty? And could you also clarify if any of the viscose volume that’s been committed to is on basically just a spot basis for that year or is that a longer-term contract?

I’m assuming you’re talking about when we started up the facility. Joshua Barber – Stifel Nicolaus: That’s right.

The majority of the volume that we have committed and contracted for is the high value sale of specialty. We do have a small amount of volume that is in the commodity viscose, but that is purely for that transition period.

The intent, Josh, as we started up is we will bring it up with portion of that volume is commodity viscose, while we trial and qualify that specialty cellulose. Now that – as Jack said, that’s where most of our contract volume is for these commitments. So there is a period of time and I think we estimate 12 months to 18 months for that qualification period as we bring all of that specialty on. Joshua Barber – Stifel Nicolaus: Okay. And turning to the balance sheet, now especially once you close the Timberland deal in November because you’ll have a lot less capacity left on the line and you have a convert coming due next year, what are you guys thinking about in terms of the right side of the balance sheet, being able to finance that at the 10-year bond? We really haven’t a re-bond issue since August. What do you think the market is for you guys out there today and what are your financing plans, I guess, for the next six months?

Yeah, Josh. It’s Hans. Well, I think the market was certainly pretty opened for us to go out with 10-year from the REIT. So, likely in the first quarter will be the time that we look seriously terming out some of the debt related to the Timberland acquisition. I mean, indications for us are now somewhere between 5.1%, 5.2% of 10-year money. So, that will give you a relevant range, but – so we will look at that. As far as the longer term on that convert that’s due in a year, I mean, we’ll kind of evaluate that as we get a little bit closer. My inclining now though would be probably to go to shorter term as that convert is in the TRS and we expect to have some pretty significant cash flow generated in the TRS once we complete the CSE expansion, but we will have to get a little closer to that timeframe. Joshua Barber – Stifel Nicolaus: Okay. Thank you very much. And Lee, best of luck.

Thanks a lot, Josh.

(Operator Instructions) Mark Weintraub with Buckingham Research. Your line is open. Mark Weintraub – Buckingham Research: Thank you. One just quick clarification, so the $5.5 million write-off, that is included in the earnings guidance that you gave? Okay. Okay. And then, I am sorry, maybe I just got distracted, but I know there had been a question on fluff pulp just before and you had talked about you were expecting prices in chemical cellulose to be relatively flat 4Q v. 3Q, did you share with us order of magnitude, what might be happening in the fluff pulp business 4Q v. 3Q?

No, we didn’t. The majority of our fluff pulp business is a contract type pricing and its related to a RISI price. So we don’t see – we aren’t subject as much to the spot market as maybe some others might be, but the general market, we see dropping off maybe about $20, $30 a ton into Q4. Mark Weintraub – Buckingham Research: Okay. And so basically you just will tend to follow these indexes, any significant lag or fairly real time?

There is a little bit of a lag, correct. Mark Weintraub – Buckingham Research: Okay. A month or two month type lag?

Correct. Mark Weintraub – Buckingham Research: Yeah. Okay. And then can you share with us your expectations, order of magnitude on your shipments next year in the Performance Fibers business, what the break down between chemical cellulose and then the absorbent or the fluff products might be?

I mean, it will be fairly consistent. It will be a little bit stronger on CS, as we continue to strengthen that part of our business, but in rough terms it’s about the same.

Yeah, Mark, in January we’ll give the guidance on that along with some pricing guidance as well for the year. Mark Weintraub – Buckingham Research: Okay. Thanks very much and congrats, Lee. I’m sure you’ve enjoyed these last couple of years at Rayonier.

I really have. Thanks a lot, Mark.

Our next question comes from Steve Chercover, D.A. Davidson. Your line is open. Steve Chercover – DA Davidson: Thanks, and sorry about that technical difficulty. I was wondering if you could give us the sense of the incremental volume and perhaps even the EBITDA that we’ll see from the 250,000 acres you’re acquiring.

Well, I think, Steve, we had kind of leave that out on the Investor Day in the longer term. And I don’t think anything is changed from our expectations there. And as far as what we expected next year, I don’t think we’ve really – we’re in the midst of doing our budgets now. I believe longer term five years out or so, Lynn we’re up about 1.5 million tons, was that about the incremental terms.

That’s right. Within the five-year period, we’ll be moving to 1.5 million tons annually of incremental volumes that will be added from the acquisition. Steve Chercover – DA Davidson: Okay. Because those lands are fairly mature presently. Okay. That’s helpful. And then just two other quick ones, is there anymore alternative fuel tax credits to be monetized?

We’ll see. We’re always looking. And really the only thing that would be left I think would be the exchange of the AFMC for the cellulosic biofuel credit. That’s something that once again the 2012 will probably look at that I don’t expect it that would be too significant in ‘12 however. Steve Chercover – DA Davidson: Yeah. And you’ll probably answer this one in January as well, but tax rates 2012 somewhere to this year or back to that 20% to 22% that you used to guide us towards.

I’d have to just give you an update in January. We’re still internally just going through our budgeting process as we speak and so I’ll have to wait till January to give you that. Steve Chercover – DA Davidson: Understood. Thank you very much.

Steve, this is Paul. I just want to follow up on your question about the added harvest volume from the acquisition. So I think Lynn gave guidance, which is good guidance out there, may be 1.5 million tons in five years or so. I would think in the first three years because a lot of that, the majority of that property is younger timber and you’ll see maybe less than half of that amount in the first three years. Steve Chercover – DA Davidson: Okay. So, it will ramp. Thanks for that color Paul.

Thank you. And our last question comes from Joshua Barber with Stifel Nicolaus. Your line is open. Joshua Barber – Stifel Nicolaus: Hi, I’m sorry. Just a quick follow up. Hans, I believe you said, you expect the CapEx for the full year of $145 million and that would be almost $60 million in the fourth quarter ex-Jesup. Can you just talk about why CapEx would be that much higher in the fourth quarter this year?

Yeah, it’s actually for both of the business units for both EF and on our timber side of business. The ability to do the replanting on the timber side has been skewed a little bit to the fourth quarter weather related. And then just a number of the projects at both Fernandina and Jesup have kind of gravitated towards the backend of the year. Joshua Barber – Stifel Nicolaus: Okay. Thanks.

I’m showing no further questions.

Hey, well, thank everybody for participation. And please contact Carl Kraus for any follow-up. Thanks.

Thank you. This does conclude today’s conference call. You may disconnect at this time. Have a great day.