Welcome, and thank you for joining Rayonier's Second Quarter 2022 Teleconference Call. At this time, all participants are in a listen-only mode. 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 of Capital Markets and Strategic Planning.

Thank you, and good morning. Welcome to Rayonier's investor teleconference, covering second 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 measure in our earnings release and supplemental materials. With that let's start our teleconference with opening comments from Dave Nunes, President and CEO. Dave?

Thanks, Collin. Good morning, everyone. First, I'll make some high-level comments before turning it over to Mark McHugh, Senior Vice President and Chief Financial Officer, to review our consolidated financial results. Then we'll ask Doug Long, Senior Vice President, Forest Resources, to comment on our US and New Zealand timber results. Following the review of our Timber REIT segments, Mark will discuss our real estate results as well as our outlook for the balance of 2022. We achieved earnings per share of $0.16 and adjusted EBITDA of $83 million in the second quarter. Adjusted EBITDA was 13% below the prior year quarter, as favorable results in our Southern Timber and Pacific Northwest Timber segments were more than offset by lower adjusted EBITDA in our New Zealand Timber and Real Estate segments. Drilling down further, our Southern Timber segment generated adjusted EBITDA of $39 million in the second quarter, which was 27% above the prior year period. Weighted average net stumpage realizations increased by 18%, driven by strong demand for both pulpwood and sawtimber, while favorable logging conditions further contributed to a 4% increase in harvest volumes. The construction of our southern timberlands portfolio, with 73% of our ownership located in top quartile markets, helps us benefit from some of the most competitive markets across the US South, which in turn allowed us to register higher stumpage realizations despite increased cut and haul costs. In our Pacific Northwest Timber segment, we achieved adjusted EBITDA of $14 million, up 3% from the prior year quarter. The year-over-year increase was primarily attributable to 19% higher weighted average log prices, partially offset by a 6% reduction in harvest volumes and higher costs. Our operations in the region continued to benefit from favorable domestic lumber markets as well as incremental pressure created by export market demand. In sum, our US Timber segments continued to generate strong financial performance and pricing gains driven by favorable end market demand as well as localized supply constraints, and both segments are on pace to achieve record adjusted EBITDA for the full year. Conversely, our New Zealand segment continues to be impacted by various export market headwinds. Second quarter adjusted EBITDA of $15 million declined 46% from the prior year period. Our team contended with compressed margins due to significantly higher fuel, shipping, and port costs, coupled with lower delivery log pricing. Export demand continued to be impacted by China's strict lockdown measures in response to COVID-19, which led to persistently high port inventories. In our Real Estate segment, we generated adjusted EBITDA of $25 million, down from $29 million in the prior year period. Significantly higher per acre values in the current quarter were more than offset by a 41% reduction of acres sold. While the timing of land sales will remain inconsistent quarter-to-quarter, our real estate team continues to capitalize on strong demand for rural land as well as positive momentum across both our Wildlight and Heartwood development projects. As Mark will discuss in greater detail later in the call, we are updating our full year adjusted EBITDA guidance to $310 million to $330 million. Following an excellent start to 2022, we are on track for a stronger year than we had originally anticipated in both our Southern Timber and Pacific Northwest Timber segments and expect that both segments will post record years. Additionally, our real estate segment outlook is fairly consistent with our prior guidance. However, in our New Zealand Timber segment, export market headwinds have persisted longer than we had anticipated and have negatively impacted our full year outlook. Overall, the net impact of our revised outlook by segment translates to a modest reduction in the upper end of our total full year adjusted EBITDA guidance versus our prior guidance. With that, let me turn it over to Mark for more details on our second quarter financial results.

Thanks, Dave. Let's start on Page 5 with our financial highlights. Sales for the second quarter totaled $246 million, while operating income was $36 million and net income attributable to Rayonier was $24 million or $0.16 per share. Pro forma EPS was also $0.16 per share, as we had no pro forma items in the quarter. Second quarter adjusted EBITDA was $83 million, down from $95 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 first half of the year was $120 million versus $111 million in the prior year period. The increase was primarily driven by higher adjusted EBITDA and lower cash interest paid, partially offset by higher cash taxes and capital expenditures. Note that cash taxes were elevated in the first half of the year due to the required timing of estimated tax payments for our New Zealand subsidiary following the full utilization of its NOLs in 2020. A reconciliation of CAD to cash provided by operating activities and other GAAP measures is provided on Page 8 of the financial supplement. We closed the second quarter with $279 million of cash and $1.3 billion of debt. Our net debt of $1 billion represented 15% of our enterprise value, based on our closing stock price at the end of the second quarter. We believe that our balance sheet is well-positioned for a higher interest rate environment following the steps we took in 2021 to extend our debt maturities and lower our average cost of debt. Currently, our weighted average maturity is roughly seven years, our weighted average cost of debt is 2.7%, and essentially all of our debt is fixed. I'll now turn the call over to Doug to provide a more detailed review of our second quarter timber results.

Thanks, Mark. Good morning. Let's start on Page 9 with our Southern Timber segment. Adjusted EBITDA in the second quarter of $39 million was $8 million above the prior year quarter. The year-over-year improvement was primarily driven by a significant increase in net stumpage pricing, higher non-timber income, and modestly higher harvest volumes partially offset by higher overhead costs. Strong customer demand and drier weather conditions across most of our operating areas allowed us to execute on our harvest plan, with volume increasing 4% versus the prior year quarter despite ongoing challenges with trucking availability. Average sawlog stumpage pricing was roughly $34 per ton, a 22% increase compared to the prior year period. The improved pricing reflects robust demand from sawmills, which continued to benefit from strong lumber prices as well as increased competition for chip-n-saw volume from pulp mills. Pulpwood net stumpage pricing also improved significantly from the prior year quarter, increasing 18% to over $21 per ton. Despite an unfavorable shift in our geographic mix compared to the prior year period, strong end market demand and competition among mills to secure supply allowed us to capture favorable price increases. Overall weighted average lumber prices improved 18% year-over-year. We have been encouraged by our ability to maintain strong pricing throughout the summer and believe there has been a step change in log prices in many of our markets as compared to the past several years. As expected, our net stumpage realizations in certain markets have moderated relative to early 2022, as mill inventories have normalized and rising costs, led by diesel fuel, have compressed margins on delivered log sales. While domestic demand for both sawtimber and pulpwood remains strong across our operating areas, Southern log exports remain constrained by the pinewood nematode policies implemented by China earlier this year. Several exporters in the U.S. South have exited the market, and we have largely shifted our U.S. South log exports to Vietnam and India. While these markets are relatively small compared to China, we saw a significant increase in log exports to both countries during the second quarter and are excited about the potential to further expand our presence in these markets over the long-term. Also of note, second quarter non-timber sales of $8 million were up over $2 million versus the prior year quarter with a large pipeline easement sale driving the increase. Moving to our Pacific Northwest Timber segment on page 10, adjusted EBITDA of $14 million was up 3% from the prior year quarter, with higher net stumpage realizations more than offsetting lower harvest volumes, higher costs, and lower non-timber income. Volume declined 6% in the second quarter as compared to the prior year quarter as wet weather conditions hindered production early in the quarter. At nearly $117 per ton, our average delivered selling price during the second quarter was up 19% from the prior year quarter, driven by continued strong demand from domestic lumber mills as well as a favorable species mix as a higher proportion of Douglas fir sawtimber was harvested in the current year quarter. Meanwhile, second quarter pulpwood pricing of $45 per ton was up 56% year-over-year, reflecting strong end market demand as well as the resumption of chip exports, which resulted in greater competition from pulp mills to secure supply. Page 11 shows results and key operating metrics for our New Zealand Timber segment. Adjusted EBITDA in the second quarter of $15 million was $13 million below the prior year quarter. The decline in adjusted EBITDA was largely driven by higher costs and lower delivered log pricing, partially offset by higher carbon credit sales, favorable foreign exchange rate impacts, and a slight increase in harvest volumes compared to the prior year quarter. Average delivered export sawtimber prices of $140 per ton were down 5% compared to the prior year quarter, reflecting reduced demand stemming from the COVID-19 lockdowns in China. Net stumpage realizations for export sawtimber were further reduced by elevated fuel prices, significantly higher port costs, and freight costs, as well as increased demurrage charges due to port congestion. While log inventory levels in China continue to gradually trend lower, they are still elevated as the offtake from ports remains weak given the country's Zero COVID strategy and strict lockdown measures. Ongoing COVID-19 containment efforts in China will likely continue to negatively impact log demand over the near term and there remains uncertainty regarding the degree to which Chinese policymakers will implement stimulus measures as they look to balance COVID-19 prevention, economic growth, and growing inflationary pressures. Despite these near-term headwinds, we expect that log inventories in China will continue to normalize as the year progresses, which should lead to improved export pricing. Longer-term we remain optimistic that ongoing supply-side constraints, including a reduced flow of European logs into China, the continued ban on Australian log imports by China, and the ban on Russian log exports, which commenced at the beginning of this year, will collectively translate to a more favorable export market backdrop as COVID-related headwinds ease. Shifting to the New Zealand domestic market, demand has remained quite resilient due to strong construction backlogs. However, the sharp decline in the New Zealand dollar drove a 10% decline in US dollar domestic sawtimber prices. Excluding foreign exchange impacts, domestic sawtimber prices decreased 2% in the second quarter, reflecting less competition from the export market. Domestic pulpwood prices in New Zealand were likewise impacted by foreign exchange rates, declining 20% in US dollars, versus 14% in New Zealand dollars. The decline in New Zealand dollar domestic pulpwood prices was driven by less competition from export markets for lower quality logs. While log markets in New Zealand have been challenging, this has been partially offset by higher non-timber income, which increased to $3.8 million in the current quarter. Non-timber income in New Zealand primarily reflects carbon credit sales. Carbon pricing has generally stabilized and remained well above 2021 average pricing, following a sharp pullback earlier this year when carbon markets globally were disrupted due to the Russian-Ukraine war. Moving ahead, we plan to remain opportunistic in our sale of carbon credits depending on carbon market conditions and pricing expectations. Lastly, in our trading segment, we posted a slight operating loss in the second quarter. As a reminder, our trading activities typically generate low margins and are primarily designed to provide additional economies of scale to our fee timber export business. I'll now turn it back over to Mark to cover our real estate results.

Thanks Doug. As detailed on page 12, our real estate segment delivered strong second quarter results. Real Estate sales totaled $34 million on roughly 4,700 acres sold at an average price of nearly $7,500 per acre. Real estate adjusted EBITDA in the second quarter was $25 million. Sales in the improved development category totaled $12 million. In our Wildlight development project north of Jacksonville, Florida, we closed on $10.5 million of sales during the quarter, including a 22-acre multifamily apartment site for $4.8 million, a 31-acre single-family build for rent site for $4.4 million, and 19 residential lots for $1.3 million or roughly $70,000 per lot. In our Heartwood development project, south of Savannah, Georgia, we closed on $1.1 million of sales during the quarter, consisting of 26 residential lots at an average price of roughly $42,000 per lot. Overall, we are encouraged by the momentum that continues to build across our Wildlight and Heartwood development projects and expect that both projects will continue to benefit from favorable migration and demographic trends. Turning to the rural category, sales totaled $23 million, consisting of approximately 4,600 acres at an average price of roughly $5,100 per acre. Notably, over half of our rural sales during the quarter consisted of a 2,300-acre sale in St. Johns County, Florida for $13.7 million or $58.50 per acre. On the rural sales front, we have seen some indications that higher interest rates and recent financial market volatility are impacting the willingness of certain buyers to transact. However, the overall level of demand and pricing for rural land, especially larger tracts, remains favorable relative to pre-pandemic levels, as buyers continue to be attracted to the space, privacy, and recreational opportunities offered by these properties in a post-pandemic environment. Moving on to our updated outlook for the full year, based on our first half results and our expectations for the balance of the year, we now anticipate full year adjusted EBITDA of $310 million to $330 million, reflecting a modest reduction in the upper end of our total full year adjusted EBITDA guidance relative to our prior guidance. With respect to our individual segments, we now expect that our Southern Timber segment will achieve full-year harvest volumes of 6.4 million to 6.6 million tons, which is at the higher end of our prior guidance, reflecting strong year-to-date production. We further expect that pricing in the US South will remain relatively strong, although we expect that stumpage realizations in the second half of the year will moderate primarily due to increased cut and haul costs. Overall, we expect to achieve record full year adjusted EBITDA in our Southern Timber segment of $156 million to $162 million, which represents a 7% increase at the midpoint from our prior guidance and roughly a 30% increase from the prior record we set in 2021. In our Pacific Northwest Timber segment, we now expect full year harvest volumes of 1.6 million to 1.7 million tons due in part to a modest adjustment in our harvest plan to reflect land sales as well as reduced China export volume. We further expect that weighted average delivered log prices will remain well above prior year levels for the balance of the year. However, we anticipate these pricing gains will be partially offset by higher cut and haul costs due to elevated diesel fuel prices. Similar to our Southern Timber segment, we are on track for a record year in our Pacific Northwest Timber segment and are now expecting adjusted EBITDA of $59 million to $63 million. In our New Zealand Timber segment, we now expect full year harvest volumes of 2.6 million to 2.7 million tons. While domestic log demand was strong throughout the first half of the year, export market dynamics were negatively impacted by ongoing COVID-19 lockdowns in China. We remain optimistic that export sawtimber prices will stabilize in the second half of the year in response to improved offtake from Chinese ports and a reduction in competing log supply. However, we expect net stumpage realizations on export volume to continue to be constrained by elevated port and freight costs. In the domestic market, we anticipate log demand will remain strong although we expect that pricing will be modestly lower in the second half of the year compared to the first half due to added supply pressure from reduced export volume. Partially offsetting these headwinds, we expect increased carbon credit sales for the second half of the year compared to the first half. Overall, we now expect the New Zealand Timber segment will generate full year adjusted EBITDA of $55 million to $60 million. In our Real Estate segment, we now expect full year adjusted EBITDA of $74 million to $79 million. Following a strong start to the year, we expect relatively lighter real estate transaction activity in the third and fourth quarters. Lastly, we now expect corporate segment expense of $33 million to $34 million. The increase from prior guidance is largely due to the accelerated realization of equity compensation expense for retirement-eligible employees. More details regarding our updated guidance can be found on Page 14 of the financial supplement and Schedule G of our earnings release. I'll now turn the call back to Dave for closing comments.

Thanks, Mark. Overall, as we reflect on the second quarter, we were pleased with how our team worked together to navigate the challenges posed by the inflationary environment that is impacting many parts of the global economy as well as the transitory impacts of the COVID-related lockdowns in China. Despite these challenges, our US Timber segments are on track to deliver another record year in 2022, highlighting the relative strength of the markets in which we operate, the operational flexibility afforded by our pure play timber REIT model, and our relentless focus on active portfolio management to create long-term shareholder value. While the near-term operating environment in New Zealand is more challenging, we believe that our operations there are very well positioned over the long term, given China's significant fiber supply deficit coupled with our broad export market capabilities. Underscoring the sustainability of our core businesses, the advantageous positioning of our timberland portfolio, and the company's strong capital structure, our Board of Directors approved a 5.6% increase in our quarterly cash dividend to $0.285 per share in May. We have consistently communicated that a stable and growing dividend is a fundamental component of our capital allocation strategy and long-term value proposition. This recent dividend increase reflects our commitment to growing our dividend over time in a measured and sustainable manner. In addition to our focus on achieving important operational and financial goals, we also continue directing efforts toward improving the disclosure of our environmental social and governance practices. To this end, we are planning to release our 2021 sustainability report in the coming weeks. We look forward to reporting on how we are advancing various ESG-related initiatives in the pursuit of our mission to provide industry-leading financial returns while also serving as a responsible steward of the environment. In sum, we're very pleased with our strong first half results and relatively stable outlook for the balance of the year, particularly in light of the significant export challenges and inflationary headwinds that we've contended with. As we move forward, I remain confident that the strength of our markets, our nimble approach to capital allocation, and the dedication of our employees leave us very well positioned to execute on our growth strategy and to build long-term value for our shareholders across the economic cycle. This concludes our prepared remarks, and I'll now turn it back to the operator for questions.

We will now start the question-and-answer session. Our first question will come from Greg Andreopoulos with Citi. Your line is open.

Hi. Good morning, everyone. This is Greg on for Anthony. Congrats on the solid quarter despite all the challenges. So I'm just thinking about Southern log prices. So I'm looking on a year-over-year basis, Southern log prices were up about 5% to 6% in the first half of 2021, accelerated to the mid-teens in the second half, and then now, in the first half of this year, somewhere around 25% year-over-year. Is it fair to say that Southern log price growth has met or exceeded your expectations? If so, can you give us some context around what has driven that, whether it be general inflation, sawmills coming online sooner than expected, or more favorable weather? I'm just trying to think about the drivers as I consider pricing in the second half of the year?

Sure. This is Doug. I would say we've been expecting to see this price shift. We've been talking about it for quite a few years now as we see more capacity come online in the wood baskets we operate. We continue to see new capacity announcements across the South. This company is repositioning itself in the region. With the high cost of lumber from British Columbia, we have seen a lot of lumber production moving to the south. We believe this is beneficial to us. The price announcements made since 2020 total roughly six billion board feet across the US South, about half of that falls into our operating area, and we've seen about $1.8 billion of it start to become operational. We have observed the impact of those operations, particularly in Florida and Georgia, as well as Alabama. We expect additional new capacity to add options and further tighten our markets as facilities complete their various ramp-up schedules over the remaining approximately 1.2 billion board feet in our marketing baskets. When you think about that one billion board feet, it is roughly equivalent to 4 million green tons of demand, so it's a significant amount of demand in our wood basket. The recent announcement by Canfor regarding their new 250 million board feet greenfield mill in Alabama serves as a good example of what we're seeing. Overall, we have seen an increase in demand.

That makes sense. That's very helpful.

If I could add to that. Keep in mind that 73% of our Southern portfolio is in top quartile markets. The distinctive feature of those markets is that the growth to drain relationship is roughly balanced. Thus, those markets are poised for greater price elasticity than lower quartile markets that have had inventory build for several years. When you combine that with the added capacity Doug mentioned and the pressure from log exports, we are not surprised to see this kind of response in those top markets.

That's very helpful. I appreciate it. Just one more question if I may about the market for Timberlands. In May, we saw a merger announcement between two of your large peers, and another one of your peers purchased almost 90,000 acres in the Carolinas. I guess I'm wondering what those transactions say about the current market for Timberlands. You mentioned the increase in rates has changed fire psychology a little bit. Where do you see the most opportunity in terms of Timberland acquisition or sales? Do you see yourselves as a net buyer or seller of Timberlands in the current market?

We are always looking in the market for opportunities and analyzing deals. There's more deal flow in the South than in the Northwest or New Zealand, and we are actively evaluating opportunities in all of our regions. Some of the transactions you've seen highlight a flight to quality as capital flows into the timberland asset class in the currently deteriorating macro environment. We've seen foreign capital in direct timber investments as well as through public companies. Meanwhile, integrated players are investing heavily their cash generated from high lumber prices back into timberland assets. We aim to remain disciplined, but we find it a pretty active and vibrant market for Timberlands right now. We're always looking to grow but will be careful and thoughtful where we do that. Our bias is toward looking for properties that complement our existing age class structure. We feel good about how we're positioned from a balance sheet standpoint with our ATM program and the cash flow that exceeds our dividend level, putting us in a good position to pursue properties that have a strong fit for us.

That's very helpful. Thank you. And just one more in New Zealand. I'm wondering what you're seeing in terms of transaction trends there, along with any observations about deal size or dollar per acre values, especially given the headwinds you are encountering due to Chinese demand and freight costs.

Yes, New Zealand has followed similar trends. Notably, there is the added element of a regulated carbon market there, which attracts a lot of capital pursuing carbon metrics. The positioning of New Zealand with China has also drawn much of that capital. The New Zealand deal flow tends to be smaller compared to what we see in the US South and so we tend to see smaller, more localized transactions.

Thank you. Our next question will come from Mark Wilde with Bank of Montreal. Your line is open.

Thanks. Good morning, Dave, Mark, Doug.

Good morning.

Good morning.

Just to follow on a question about Southern timber markets. I know you probably want to avoid broad generalizations. But do you think we can finally say that the Southern timber market has turned after 15 difficult years?

We can say this for a subset of it, but not for the whole. The lower quartile markets have a growth drain in excess of two, meaning those markets are not seeing price increases for a long time. This reflects in the relative results.

Yes. It seems to me that you're starting to see capital being allocated to some of these markets where timber prices have been rather weak. So, in terms of capital put toward converting projects, do you think that's fair?

We have always said that many components are needed to draw that capital. Right now, we have strong lumber markets, historically a strong residual market is needed to draw that capital. If there is not a strong residual market and we see low pulpwood prices, that will be an impediment. Additionally, labor is becoming increasingly challenged. Thus, you are not seeing a one-for-one relationship of where capital flows to where inventory builds occur. This leads to a differential price elasticity going forward. As you can see in our investor materials, there is a significant spread between the top and bottom markets measured by stumpage prices. We are fortunate that we have 73% in the top quartile and nothing in the bottom quartile, explaining why our overall stumpage prices are performing well.

Yes. Dave, can you also help us understand any impact from the Ukrainian war and the drop in Russian wood volumes to the West and how that might impact the New Zealand business, if it does at all?

Yes, we see this scenario as a positive for New Zealand. Much of the focus on New Zealand presently is due to the COVID restrictions in China that are temporary. However, Russia has a long-term goal of eliminating log exports and has been working on that from as far back as 2007. With the recent outright ban on log exports, they were a sizeable log supplier to China. In Western Russia, the decline in lumber exports has begun and will continue to influence the traditional European lumber market, and as those volumes decline, we expect increased demand for New Zealand.

Okay. That makes sense. That's helpful. Finally, I have a question for Mark. You mentioned investor interest from different parts of the world. We're seeing a shift in capital flows to Canada and Europe. Can you discuss Rayonier's perspective regarding the trends that we have heard about in the private market?

Yes, the interest continues to be diverse. We have seen a considerable increase among European investors in our shareholder base over recent years. Multiple factors contribute to this rise. Certainly, ESG initiatives and the recognition of timberland as a solution for climate change, as well as the potential to monetize natural climate solutions within our portfolio, drive interest in this sector, contributing to outsized interest relative to five years ago.

Thank you. Surely, the step change in your markets in the US South has been evident. My question pertains to how the context has changed. We've seen stronger housing, which has driven lumber production demand, although COVID likely kept it lower than expected due to operational issues. With containerboard demand also strong, if housing weakens and containerboard demand growth slows, does that create a pullback or due to structural shifts, particularly in lumber, do you foresee continued strength in your markets focused on the US South?

There are many facets to that question. As we observe housing, we do not view this as a globally financial crisis type event, which saw a collapse in housing. We are looking at the relationship between new home inventory and current existing home inventory, and we note existing home inventory is historically low. A structural shift exists where the US has depended significantly on Western Canadian lumber, particularly from British Columbia. The capacity is shifting into the South, and these changes occur simultaneously with shifts in the housing market. We believe this context presents a stable scenario not replicating the declines observed in previous cycles.

In shorter time frames, do timber markets operate at different velocities? Would short-term hiccups not importantly impact your markets, and would changes only resonate if prolonged? Additionally, how far in advance do you establish contracts for wood?

Sure. It varies, and I won't go into percentages, as that constitutes part of our marketing strategy. We have sales where we lock in pricing for 12 to 18 months, which protects us from downside risk. Meanwhile, we also work with various agreements ranging from monthly to six-month arrangements that enable us to capitalize on upside opportunities. Therefore, our strategy is well-protected against potential fluctuations while allowing flexibility to seize opportunities.

Timber prices historically have been more stable than lumber prices. In the wake of the global financial crisis, timber prices did not bottom out for three to four years. The process of recovering prices took a long time, so it is difficult to accurately predict the effects of general economic declines on timber prices in the South and Northwest. Generally, timber prices exhibit slower movement than market prices for lumber.

Lastly, regarding New Zealand, do you see a similar structural step change as you do in the US South? What factors have influenced your outlook for that business?

The primary step change that I referenced involves the gradual decline in Russian log volume that began in 2007. Our investor materials align with the growth in New Zealand, which is increasingly capturing that market share in missing log volume from Russia. The sector is experiencing near-term noise driven by COVID lockdowns, but fundamentally New Zealand is well-positioned for the future.

Yes. Thank you very much. Good morning, gentlemen. I want to start by discussing lumber markets. We've noticed a significant correction in cash prices, and futures are down to about $480 this morning. You mentioned that you have not observed any slowdown in Southern log prices during the summer. Is this also true for the Pacific Northwest?

In the Pacific Northwest, we have maintained steady demand from our customers with no slowdown observed. Strengthened supply growth and drain ratios have supported this region, as has the opportunity for exports, which have helped maintain a price floor. Our exports from the Northwest to China have risen 3% over the last quarter, while we also noted a decline in exports to Japan. There has not been any perceived falloff in demand within these markets, and customers continue to seek logs.

The current carbon markets in New Zealand face hurdles tied to the idea of additionality; only post-1990 tree planting generates credits. We do have an extensive inventory of carbon credits and are positioned to sell when prices are favorable. Market prices have stabilized above 2021 averages following disruptions early this year due to the geopolitical climate. We expect to see year-over-year carbon sales continuing.

This is Mark McHugh. Thanks for joining us today. Please don't hesitate to follow up with me or Collin regarding any additional questions. Thank you.

Thank you. That does conclude today's conference. Thank you for participating. You may disconnect at this time.