Welcome, and thank you for joining Rayonier's Fourth Quarter and Full Year Teleconference Call. [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. Collin Mings, Vice President, Capital Markets and Strategic Planning.

Thank you, and good morning. Welcome to Rayonier's investor teleconference covering fourth quarter earnings. Our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rayonier.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 to differ materially from the forward-looking statements we may make. They are also referenced on Page 2 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, Collin. 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 GAAP 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 segment. 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 sawlog markets. Additionally, non-timber income generated by the Southern Timber segment increased $9 million, or 35%, relative to the prior year, driven in part by increased revenue from our burgeoning 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,…

Thanks, Dave. Let's start with our financial highlights on Page 5 of the supplement. Sales for the fourth quarter totaled $467 million while operating income was $145 million and net income attributable to Rayonier was $127 million or $0.85 per share. On a pro forma basis, net income was $25 million or $0.17 per share. Pro forma items in the fourth quarter included $105 million of income from a large disposition, a $2 million noncash pension settlement charge and a $200,000 net recovery associated with the legal settlement. Adjusted EBITDA was $94 million in the fourth quarter, up from $68 million in the prior year period. On the bottom of Page 5, we provide an overview of our capital resources and liquidity. Our cash available for distribution or CAD for the year was $164 million versus $192 million in the prior year period. The decrease was driven by lower adjusted EBITDA, higher cash interest paid and higher capital expenditures, partially offset by lower cash taxes. A reconciliation of CAD to cash provided by operating activities and other GAAP measures is provided on Page 8 of the financial supplement. As Dave mentioned earlier, during the fourth quarter, we completed our disposition of 55,000 acres of Timberland in Oregon for $242 million and used $150 million of the proceeds to pay down our only floating rate debt. This was an important step towards reaching our enhanced leverage targets, including net debt to adjusted EBITDA of 3 times or less and net debt to asset value of 20% or less. We closed the fourth quarter with $208 million of cash and roughly $1.4 billion of debt, implying net debt to 2023 adjusted EBITDA of approximately 3.9 times. At quarter end, our weighted average cost of debt was approximately 2.8%, and the weighted average maturity on our debt portfolio was approximately 5 years with no floating rate exposure until August 2024 and no significant debt maturities until 2026. Our net debt to enterprise value based on our closing stock price at the end of the quarter was 19%. With a long-dated and well-staggered debt maturity profile as well as a low-cost fixed-rate debt structure, we plan to be selective and opportunistic in achieving our enhanced leverage targets over the next several quarters. I'll now turn the call over to Doug to provide a more detailed review of our timber results.

Thanks, Mark. Let's start on Page 9 with our Southern Timber segment. Adjusted EBITDA in the fourth quarter of $32 million was $1 million or 4% below the prior year quarter, driven by lower net stumpage prices and higher costs, partially offset by higher volumes and higher non-timber income. Total harvest volume rose 17% versus the prior year quarter, primarily driven by an increase in pine sawtimber volumes from the successful integration of acquisitions we completed in late 2022. Meanwhile, the year-over-year improvement in non-timber income was driven in part by revenue from our initial carbon capture and storage lease signed in early 2023. Average sawlog stumpage pricing was $29 per ton, a 15% decrease compared to the prior year period. The moderation in pricing reflected reduced market tension across our operating areas relative to the prior year quarter due to softer demand from sawmills as well as less competition from pulp mills for chip-n-saw volume. Meanwhile, pulpwood net stumpage pricing fell 16% versus the prior year quarter to roughly $18 per ton as weaker end-market demand weighed on pricing. Overall, weighted average stumpage prices in the fourth quarter fell 12% versus the prior year quarter to roughly $23 per ton. Market conditions in the U.S. South, particularly for pulpwood, were challenging throughout 2023, as many of our customers recalibrated production and shut down underperforming mills amid weakening end market demand. While our markets have not been immune from the pulp mill closures that have been announced over the past several months, we have seen some offsetting demand from production increases at other mills within our operating areas. As the overall market rationalizes production capacity for a post-COVID environment. As we enter 2024, we're increasingly optimistic that the inventory stocking cycle that has weighed on containerboard demand is largely complete…

Thanks, Doug. As detailed on Page 12, our Real Estate segment delivered strong fourth quarter results. Real Estate sales totaled $310 million on roughly 75,500 acres sold, which included the large disposition in Oregon consisting of 55,000 acres for $242 million. Excluding this transaction, fourth quarter sales totaled $68 million on roughly 20,500 acres sold at an average price of $3,300 per acre. Real Estate segment adjusted EBITDA in the fourth quarter was $54 million. Drilling down sales, in the improved development category totaled $11 million. In our Wildlight development project north of Jacksonville, Florida, sales consisted of a 58-acre industrial park site for $5.8 million or roughly $100,000 per acre and an 11-acre commercial site to a church for $3.1 million or roughly $300,000 per acre. Our Heartwood development project, South of Savannah, Georgia, sales consisted of 21 finished residential lots to a national homebuilder for $930,000 at an average base price of roughly $44,000 per lot as well as a 2-acre commercial site to a day care provider for $635,000 or roughly $360,000 per acre. We also generated $200,000 of other net revenue during the quarter, which primarily consisted of $2.6 million of lot true-ups and marketing fees in our Wildlight and Heartwood development projects, largely offset by $2.4 million of deferred revenue recognition on land sales with post-closing construction obligations. Overall, we continue to believe that both of these development projects are very well positioned and will continue to benefit from favorable migration and demographic trends, relatively affordable price points and a diverse mix of residential, commercial and industrial end uses. Lastly, I'd like to take a moment to recognize an important milestone achieved during the quarter in our Wildlight project. In November, we received unanimous entitlement approval from Nassau County for the next phase of our…

Thanks, Mark. I appreciate the kind words and I have thoroughly enjoyed my -- our partnership over the last 10 years. I'm confident that Rayonier will thrive under your leadership, and I'm excited to watch as you and the rest of the team continue to work towards creating long-term value for our shareholders and other stakeholders, especially amid the secular tailwinds that are emerging for the timberland asset class. I'd like to wrap up our prepared remarks by first thanking our team for the tremendous effort exerted throughout 2023. You learn a great deal observing how a team navigates through a challenging market environment, and this past year was no exception. I was extremely encouraged to see how our organization came together during difficult market conditions to collaborate and ultimately deliver full year adjusted EBITDA results generally in line with our initial expectations. Consistent with our focus on maximizing long-term shareholder value, we did not seek to compensate for timber pricing headwinds by pushing additional timber volume into the market, but instead took advantage of our pure-play timber model by reshuffling our harvest plans to pivot towards relatively favorable markets while also deferring harvest in more challenged markets. Despite some transitory pressures on timber pricing, timberland and rural HBU land prices held up remarkably well this past year, allowing us to execute on land sales at a significant premium to underlying timberland values. In addition, the recent 15,000-acre entitlement approval within our Wildlight project will serve to further enhance our real estate development platform where we have assembled a powerful combination of valuable land use entitlements in growing markets along with a talented team of real estate professionals. While managing our core timber and real estate businesses, we also continued to advance our land-based solutions business. As discussed previously, we…

Thank you. Our first question comes from Ketan Mamtora. Your line is open.

Thank you. Dave, I would like to extend my congratulations and wish you all the best in this next chapter. We've really enjoyed working with you and always your thoughtful discussions. Thank you. Maybe switching over. Can you talk a little bit about what you are seeing on the -- in terms of opportunity on the natural climate solutions, where you're seeing kind of most interesting kind of developments over the next, let's say, 1 to 3 years? And has that view changed at all here as you've done more work?

Sure. This is Doug. I'll start with that question. So yes, our teams quietly have been building capabilities and relationships in the land-based solutions markets for the past several years. And given the newness of these new businesses, many of the projects are under NDA, so we aren't really at liberty to speak in detail about them. But what I can say is that the pipeline of opportunities in the carbon capture storage, the solar wind and bioenergy that Dave mentioned as well as the carbon sequestration continues to grow, and I'm excited about seeing those results start to meaningfully flow through into our financials as we saw this past year. So really, we're going to get a deeper dive into these types of opportunities and the scale at our upcoming Investor Day.

Understood. Okay. And then to the extent you can, can you provide a little more color on sort of how is the asset sale program kind of evolving here as you kind of look at opportunities. You had initially talked about sort of that 18-month time period -- as you kind of look at the timberland market, as you look at your portfolio and sort of where your leverage is, can you talk about kind of how you see that evolving over the next 12 months or so?

Yes, sure, Ketan, this is Mark. I'll take that. Obviously, when we announced the plan, it was a target of $1 billion. Concurrent with that, we announced the Oregon disposition which was $240 million. And we laid out a goal of achieving that $1 billion total target over the course of the next 18 months. In terms of where we're at today, we've identified a number of assets that we think are well suited to accomplish our objectives, really with a focus in concentrating our capital in markets with the strongest cash flow attributes and the most favorable growth prospects that we laid out at the announcement of the plan. Given the quality and diversity of our portfolio, there are a variety of different asset disposition combinations that would allow us to achieve our target. And we're working simultaneously on various different options. I'd also highlight that unlike our peers, which have manufacturing assets to consider, our pure-play structure affords us pretty considerable flexibility to determine which assets make the most sense for us to recycle capital out of to create value for shareholders. So we're still confident in our initial plan, but we're not quite ready at this point to provide detail on any specific asset -- additional asset sales or target areas at this point. But just suffice it to say that we are -- we have a number of different options that we've made pretty significant progress on and we'll update you in the investment community in due course.

Okay. Perfect. That’s helpful. I’ll turn it over and jump back in the queue. Thank you.

Thank you. The next question comes from Harman Dodd [ph]. Your line is open.

This is Harman Dodd on behalf of Matt McKellar from RBC Capital Markets. First off, thanks for taking my question and congratulations on the upcoming retirement date. I guess a quick question we would have had is just a clarification, I suppose, but for carbon credit sales that you flagged in New Zealand, would you be expecting a pickup in sales? Or would that be in terms of dollar amount? Or would that be in terms of credit sold?

Sure. This is Doug again. I'm happy to answer that one. So we are anticipating a pickup in the dollar amount per unit. Over the course of last year, there was a lot of volatility at the beginning of the year when the New Zealand government made some comments about how they might change the markets. That caused some chaos, I'd say in the markets, but generally, that sold itself. And as we moved into this year, we've seen prices start to increase. So that's on a dollar per ton basis.

Got you. That's helpful. And I suppose just a quick follow-up and I suppose shifting gears as well. With New Zealand, I note that you mentioned the ratio in terms of inventory to demand in China. How do you expect changes on this front to impact the New Zealand and Pacific Northwest export businesses over the next couple of years coming out of the Lunar New Year and into the balance of 2024 or even 2025 as a result?

Yes. I'll happy to answer that. Again, this is Doug. So to your point, as we mentioned before, we've seen the inventory at lowest point since pre-pandemic. And one of the things I think it's important, while we acknowledge the property market still weak in China, one thing that's also not talked about as much is that while demand is down from the peak, so as supply. It is down by 20 million cubic meters with New Zealand recouping in the market share as port inventories are at those low levels. And we have seen in China, recovery in the economy was around exports, kind of industrial and retail and [Indiscernible] is good use in those things. It's a very versatile species that can use everything from furniture to pallets to construction lumber type of thing. So -- as we're very optimistic as we discussed, that coming out of this Lunar New Year that the positive pricing trajectory we've typically seen in the past is when this inventory-to-demand ratio gets below 2 months, typically, yield a price recovery. And so I think long-term, we're seeing less and less supply. The bark beetle in Europe has pretty much run its course. The cost of shipping from Europe also to China has gotten very expensive. And we've seen less wood coming out of South America. So net-net, we think that the opportunities for New Zealand are very strong as well as we've seen an increase over the first couple of quarters from the U.S. going into China too from Northwest exports. So I think we've hit a somewhat of a low from the U.S. basically and believe that we've passed the low watermark for China and really do believe that West Coast exports will be in greater demand as time moves forward.

Awesome. Thanks again. I’ll pass it back to the queue.

Thank you. The next question comes from Gregory [ph] Andreopoulos. Your line is open.

Good morning. Mr. Nunes, Mr. McHugh. I'm on the line for Andre this morning. Thank you for all the detail, and thank you for providing 2021 guidance this year. Just one question for me on the transaction market. So we've seen, from our perspective, deal flow pick up a little bit into year-end 2023 and now in the first quarter. So I'm curious, how would you characterize the quality of packages coming to market from your perspective, the competitive bidding process, bid-ask spreads and interest from nontraditional owners in January?

Sure. This is Dave. I'll take that. If you think about last year, we had roughly $1.5 billion to $2 billion of timberland M&A activity. That was a fairly low level versus historic patterns. As we look out into this year, I think we're in a mode where -- the demand for timber continues to outpace the supply. We estimate that there's roughly $3 billion to $4 billion of dry powder waiting to be deployed. A lot of that is on the TIMO side and particularly with separate account investors. There are also a number of TIMOs that have raised carbon-related or carbon-centric funds. And so we look to see those players playing a bigger role in the markets going forward. This tends to be a slow time of the year in general, but we have -- we are aware of a couple of quality properties that are in the market in the U.S. South right now as well as one larger transaction in New Zealand. There's also a number of smaller packages in markets that are outside of our area. We're seeing a lot of activity in Latin America right now as well. And so I'd say it's kind of -- the market is heating up. And as we kind of indicated in our prepared remarks, I think -- this is a positive environment right now on the timber M&A space, and we're anticipating to participate that in that with our asset disposition plan.

Thank you. In terms of drivers there, I mean, are you thinking Fed rate cut expectations, incremental capital into the space, carbon opportunities are all drivers? Or are there other factors you think are at play?

I mean, I think those are all in play. Keep in mind, I think as the timber asset class has matured, it's also gained additional favor. It's always been an asset class that has a low volatility. And so you see a lot of people wanting to add it to portfolios for that reason. So it's -- when you see periods of market disruption, you tend to see a flight to quality and timber tends to be a beneficiary of that. There's been a lot of research around timber as an inflation hedge. So we see that. And I think increasingly, we're seeing capital flow into the asset class as it relates to ESG-related matters, and we see that on both the asset level as well as the public equity level in terms of where our investors are coming into the stock and the reasons why they're coming into the stock. And I think all of that also applies to the timber M&A space. So it gets back to that idea that there's more capital trying to get into the space right now than there is available properties.

Okay, thank you very much Mr. Nunes for the detail and congratulations.

[Operator Instructions] The next question comes from Michael Roxland. Your line is open.

Thank you Dave, Mark for taking my questions. This is Niko Pachino [ph] on for Mike. Congrats Dave on your retirement. I guess just first question around pulpwood. Thanks for the color on that. And you had mentioned prices may be looking more stable now. Just as it affects your harvest guidance? And maybe how you think about given the mill closures and line closures, your harvest rotations, harvest planning going forward?

Sure. This is Doug. I'll take this one. So yes, as noted in our prepared remarks, we're encouraged about that pricing that by and large seems to have stabilized. And we've seen some positive signs on the containerboard side over the past few months as supply-demand dynamics are coming into balance after the destocking occurred over much of last year. Industry data is suggesting that U.S. containerboard operating rates have increased to 89% in Q4, which is above 81% in the prior year period. With no new major plants in our construction, it appears that containerboard capacity remains stable over that near-term and operating rates really should continue to improve on recovering demand as there's a very strong relationship with population growth and containerboard demand, particularly in the food and beverage sector. So we're seeing some positive movement right now on capacity rates at the mills over there as well as market pulp prices have also stabilized since the correction early in 2023 and some grades such as southern [indiscernible] softwood kraft in the U.S. have restore pricing improvements there at the end of the year, and we've also seen some most operating rate improvements there. And kind of one of the last things we've also seen as a 10% increase in softwood chip exports in the U.S. over the first 3 quarters of 2023, and that was almost none going to China in Q2 and Q3. So this global growth in softwood fiber demand has been slowly growing and the global supply trends look favorable for the U.S. and New Zealand has made softwood plantations in South America are converting to eucalyptus. So I think there's been some discussion around those that have shut down and there have been some that have. But what we've seen is, also, there are mills that were running at lower operating rates that have picked back up that capacity. And some of those mills have been in our -- favorable to our market wood baskets. So that's why we're feeling pretty good about what we see. And as we've moved out of Q4 and into Q1, we've seen those operating rates tick up. We've seen demand improve and seeing some pricing opportunities along there also. And additionally, kind of over the near-term, as Mark mentioned before, about the wet weather and El Nino, we typically position ourselves to be there to provide wood whatever those the conditions persist and investing capital in our roading systems, and we believe those investments will drive some benefits as we go forward in this kind of El Nino spring.

Mike, another thing I'd add to that is that keep in mind that some of these facilities that have been shut down may indeed end up converting into future fiber uses in the context of the growing demand for bioenergy. And so why you don't expect that to be necessarily a short-term phenomenon, we think longer-term, you'll see some recovery in those markets as those uses of the fiber change.

Yes, I would agree with Dave. Given, for example, the one in Orange, Texas, given the proximity of refineries and ports in Texas and Louisiana, I don't think there's going to be a long-term structural shift in pulpwood demand in that market. And this closure may actually, as Dave said, turning to a catalyst for new types of demand. Anecdotally, we've heard of multiple nontraditional users who expressed interest in that area. So I do think it's some short-term maybe headwinds, but medium- to long-term, I think it's an opportunity for new markets.

Perfect. That was very helpful. I appreciate it. You guys dialed in my follow-up as well. I guess you've been hearing about the alternative uses in the biomass, bioenergy. Have you to the extent you can comment connected with any potential customers on that? Or is that something you can talk about?

Yes, I can't talk specifically about that, but I can say that we're in lots of discussions with many potential users of wood fiber that would be for products that are non-traditional.

Got it. Thank you very much. Thanks for the color guys. I’ll turn it over.

Thank you. The next question comes from Buck Horne. Your line is open.

Hey thanks, good morning guys. Quickly, great color on the alternative uses in the biomass. Curious if you've also explored any additional optionality on solar projects or solar leases? Or what are your thoughts about utilizing more land for land leases around solar usage?

Yes. This is an area we're very active in, and we'll speak more about that in our upcoming Investor Day. But sure, we see a significant growth in demand for land for solar and particularly large tracks of land that are close to markets as well as have the capacity for power lines and space in the grid. So certainly we built a team around and we explore that and have a lot of interest and a lot of opportunities for that and continue to work on that and share more about that at our Investor Day.

Buck, I'd also note that a lot of that activity, especially in the U.S. South on the solar front, utility scale solar that is really concentrated in Texas and Florida. And if you look at the proportion of our land base in the South, it's in those 2 states, we think we've got a really good opportunity, both on an absolute basis and on a relative basis relative to other timberland owners.

Awesome. Great. And on the Wildlight new entitlements there. So I maybe ran through this a little bit too quickly. Could you run that by me again in terms of how many additional residential lots you guys were able to get entitlement for at Wildlight?

Sure. This is Dave. If you go back to the initial entitlements at Wildlight, we had roughly 3,300 residential units and 6.2 million square feet of commercial space on approximately 2,900 acres. And since that time, from those initial entitlements, we've sold roughly 63% of the residential units, entitlement and 33% of the commercial space. So we still have a decent amount left, roughly 1,200 residential units and 4.2 million square feet of commercial space. The new entitlement will add nearly 15,000 additional residential units and 1.4 million additional square feet of commercial space to the project. And we've worked on this for a number of years, and we're really excited to have this completed and have the entitlement approved. And Wildlight has -- particularly in the post-COVID environment has enjoyed a tremendous success and is drawing more and more interest from major homebuilders and retailers. And we believe that the new entitlement will both -- will help us to both improve our sales absorption pace as well as provide a runway for many, many years' worth of future sales. So we're super excited about it. And it's just -- it's fun to see all the changes going on here.

Yes. No doubt. Well, congratulations, that's a big deal. So good job, guys. Thanks for the color.

Thank you. There are no other questions at this time.

This is Collin Mings. I'd like to thank everybody for joining us. Please contact us with any follow-up questions.

Thank you. That does conclude today's conference call. We appreciate your participation. Have a wonderful rest of your day, and you may disconnect.