Welcome, and thank you for joining Rayonier’s First Quarter 2023 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, Capital Markets and Strategic Planning.

Thank you, and good morning. Welcome to Rayonier’s investor teleconference covering first 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 the remainder of 2023. For the first quarter, we generated adjusted EBITDA of $55 million and pro forma net income of $1.1 million or $0.01 per share as our team navigated numerous market challenges. The total adjusted EBITDA generated by our Timber segments collectively declined 30% relative to an extraordinarily strong first quarter 2022 amid weaker end market demand, continued macroeconomic headwinds, and the harvest disruptions associated with tropical Cyclone Gabrielle, which hit New Zealand’s North Island in February. As anticipated, real estate closings were relatively light in the first quarter. However, our full-year real estate pipeline remains relatively strong, and we continue to expect that closing activity will be heavily weighted toward the second half of the year. Drilling down further on our operating segments. Our Southern Timber segment generated first quarter adjusted EBITDA of $43 million, down $6 million from the prior year period as weaker demand for pulp products and lumber coupled with drier weather conditions drove a 14% reduction in net stumpage prices. Both demand and pricing were impacted by softer market conditions during the quarter as our customers worked through elevated log inventories and recalibrated for slower end market demand. Compared to less tensioned markets in the U.S. South, the relative price elasticity in a majority of our markets translated to a sharper pullback in pricing from 2022 levels. However, our absolute pricing levels, EBITDA per acre, and EBITDA per ton remained very favorable compared to the U.S. South overall. In our Pacific Northwest Timber segment, first quarter adjusted EBITDA of $7 million was down $14 million from the prior year quarter. The decrease versus the prior year period was attributable to a 24% decrease in harvest volumes and a 12% decline in domestic sawtimber prices. Overall, market conditions in the region softened due to weaker lumber demand and pricing, less tension from the export market, and general macroeconomic uncertainty. Given the pricing declines we saw during the quarter, we opted to defer some planned harvest until end market demand and mill inventories normalize. Turning to our New Zealand Timber segment, first quarter adjusted EBITDA of $6 million declined $4 million versus the prior year due to lower carbon credit sales, unfavorable foreign exchange impacts, and a 7% decline in harvest volumes resulting from the impacts of Cyclone Gabrielle. While delivered export sawtimber prices also declined by roughly 11% and stumpage realizations were relatively flat as shipping costs returned to more normalized levels. As it relates to Cyclone Gabrielle, our thoughts go out to all of those affected by the storm. While we sustained some timber and property damage, fortunately, no Rayonier employees or contractors were injured by the storm. During the quarter, we completed our damage assessment and determined that a $2.3 million write-off was necessary due to timber damage on roughly 2,600 acres. From an operational standpoint, we also lost several production days during the first quarter. However, access to the forest has been restored, and we currently expect that much of this production will be recaptured by the end of the year. In our Real Estate segment, we generated adjusted EBITDA of $7 million for the first quarter, down $18 million from the prior year period as higher weighted average per acre prices were more than offset by 76% fewer acres sold. Despite the increase in interest rates compared to a year ago, demand for rural land remains strong, and we remain pleased by the favorable momentum in both our Wildlight and Heartwood development projects. With that, let me turn it over to Mark for more details on our first quarter financial results.

Thanks, Dave. Let’s start on Page 5 with our financial highlights. Sales for the first quarter totaled $179 million, while operating income was $11 million and net income attributable to Rayonier was $8 million or $0.06 per share. On a pro forma basis, net income was $1.1 million or $0.01 per share. Pro forma items in the first quarter included a $9 million net recovery associated with the legal settlement as well as a $2.3 million timber write-off resulting from Cyclone Gabrielle. Adjusted EBITDA was $55 million in the first quarter, down from $98 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 quarter was $30 million versus $65 million in the prior year period. The decrease was driven by lower adjusted EBITDA and higher capital expenditures, partially offset by lower cash taxes and interest paid. A reconciliation of CAD to cash provided by operating activities and other GAAP measures is provided on Page 7 of the financial supplement. We closed the first quarter with $99 million of cash and $1.5 billion of debt. At the end of the first quarter, our weighted average cost of debt was approximately 3.1%, and the weighted average maturity of our debt portfolio was approximately six years with no significant debt maturities until 2026. Our net debt of approximately $1.4 billion represented 22% of our enterprise value based on our closing stock price at the end of the quarter. 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 8 with our Southern Timber segment. Adjusted EBITDA in the first quarter of $43 million was 12% below the prior year quarter, driven by lower net stumpage pricing and higher costs, partially offset by higher non-timber income. Total harvest volume was relatively flat versus the prior year quarter as an increase in pine sawtimber volume offset reduced pine pulpwood and hardwood volumes. Average sawlog stumpage pricing was $32 per ton, an 11% decrease compared to the prior year period. The moderation in pricing reflected reduced market tension across our operating areas due to drier weather conditions, softer demand from sawmills, and less competition from pulp mills for chip-n-saw volume. Meanwhile, pulpwood net stumpage pricing fell 28% versus the prior year quarter to roughly $17 per ton as weaker end-market demand, drier weather conditions, and extended maintenance outages at pulp mills all contributed to softer market conditions. Overall, weighted average stumpage prices in the first quarter fell 14% versus the prior year quarter to roughly $24 per ton. As we had anticipated entering the year, both sawtimber and pulpwood pricing reverted from the exceptionally strong levels we saw a year ago, given the slowdown in residential construction activity and weaker end market demand for pulp products. While we expect that macroeconomic-related headwinds will persist over the near term and constrain log pricing to some degree, we continue to believe that the relative strength and diversity of our U.S. South footprint is a key strategic advantage for us. Moving to our Pacific Northwest Timber segment on Page 9, adjusted EBITDA of $7 million was $14 million lower than the prior year quarter. The year-over-year decrease was primarily driven by lower net stumpage realizations, lower harvest volumes, and higher costs. Volume decreased 24% in the first quarter compared to the prior year period as some planned harvests were deferred in response to soft market conditions. At $93 per ton, average delivered domestic sawlog pricing in the first quarter was down 12% from the prior year period, primarily due to weaker demand from domestic lumber mills as well as reduced tension from the export market. Meanwhile, at $48 per ton, pulpwood pricing increased 28% over the prior year first quarter but did moderate from the exceptionally high levels achieved in the second half of 2022. Overall, sawmills in the Pacific Northwest had an ample supply of logs to start the year, which negatively impacted market conditions. However, as we progressed into the spring, we started to see some indications that log inventories are declining. As we look ahead to the remainder of the year, we expect declining mill inventories, coupled with improving end market demand to translate into positive momentum and solid prices. Turning to pulpwood. We expect pricing realizations will continue to moderate as the supply constraints that helped drive exceptional pricing in the second half of 2022 normalize over the near-term. Moving to New Zealand, Page 10 shows results and key operating metrics for our New Zealand Timber segment. Adjusted EBITDA in the first quarter of $6 million was $4 million below the prior year quarter. The decrease in adjusted EBITDA compared to the prior year period was driven by fewer carbon credit sales, unfavorable foreign exchange impacts, higher costs, and lower harvest volumes due to lost production days as a result of Cyclone Gabrielle. Average delivered export sale prices of $113 per ton declined 11% compared to the prior year quarter. However, stumpage realizations on export volume were relatively flat as shipping costs fell to more normalized levels. Encouragingly, the Chinese economy appears to be showing some signs of recovery on the relaxation of COVID-19 containment measures in late 2022 and the implementation of government stimulus measures designed to boost confidence in the real estate market. While port off-take in China remains below normal for the post-winter New Year period, port inventories have trended lower as consumption has outpaced the inflow of logs, giving us optimism that the export market will gradually improve as the year progresses. Shifting to the New Zealand domestic market, first quarter average delivered sawlog prices fell 6% from the prior year period to $72 per ton, largely reflecting the change in the New Zealand dollar – U.S. dollar exchange rate. Excluding foreign exchange impacts, domestic sawlog prices were relatively flat from the prior year period. Domestic pulpwood prices in New Zealand were likewise impacted by foreign exchange rates, declining 5% on a U.S. dollar basis compared to the prior year quarter but up 1% when excluding foreign exchange impacts. Non-deferred income in the New Zealand segment declined during the first quarter relative to the prior year period as we deferred the sale of carbon credits amid pricing volatility and regulatory uncertainty. Going forward, we plan to remain opportunistic in our sale of carbon credits, depending on carbon credit market conditions and our pricing outlook. Lastly, in our Trading segment, we posted a slight operating profit in the first 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 11, the first quarter contribution from our Real Estate segment was relatively light, consistent with our expectations entering the year. Real estate sales totaled $16 million on roughly 2,100 acres sold at an average price of $6,200 per acre. Real Estate segment adjusted EBITDA in the first quarter was $7 million. Drilling down, sales in the improved development category consisted of two transactions in our Heartwood development project, south of Savannah, Georgia. During the quarter, we closed on a 27-acre multifamily site to a regional developer for $4.5 million or $169,000 per acre as well as six residential lots to a national homebuilder for $300,000, reflecting an average base price of $50,000 per lot. In addition to these closings, we’re also very excited about two sites that broke ground in Heartwood during the quarter. The first is the initial phase of the St. Joseph Healthcare campus, which will provide the community with convenient access to primary care, urgent care, and specialty medical services. The second is the Hyundai Mobis manufacturing plant at Belfast Commerce Park, which will supply power systems and control units for electric vehicles. Combined with the Hyundai Metaplant that’s currently under construction within a 30-minute drive from Heartwood, these facilities are expected to create an estimated 9,500 jobs in the area. We believe that the two Hyundai plants and the new healthcare campus will drive further demand within the Heartwood development project going forward. Overall, we continue to believe that both our Wildlight and Heartwood development projects are well positioned and will benefit from favorable migration and demographic trends, relatively affordable price points, and a diverse mix of residential, commercial, and industrial end uses that each help catalyze demand for one another. Turning to the rural category, first quarter sales totaled $6 million, consisting of approximately 1,500 acres at an average price of roughly $4,200 per acre. Key transactions included the sale of 439 acres in Allen Parish, Louisiana for $1.6 million or $37.50 per acre and the sale of 360 acres in Marion County, Florida, for $1.5 million or $4,300 per acre. Overall, we’re encouraged by the fact that demand for rural land has held up well, particularly from buyers not reliant on mortgage financing. Lastly, during the first quarter, we also closed on the sale of just over 500 acres of nonstrategic holdings in Harden County, Texas, for $1.6 million or roughly $3,100 per acre. Moving on to our outlook for the balance of 2023 based on our first quarter results and our expectations for the balance of the year, we now anticipate full-year adjusted EBITDA toward the lower end of our prior guidance range of $280 million to $320 million. Similarly, we anticipate pro forma EPS towards the lower end of our prior guidance range of $0.36 to $0.50. With respect to our individual segments, in our Southern Timber segment, we are on track to achieve our full-year volume guidance but anticipate lower quarterly harvest volumes for the remainder of the year following a relatively strong first quarter. Over the near term, we expect weighted average net stumpage realizations to remain below first quarter levels as demand, particularly for pulpwood, has been negatively impacted by the macroeconomic environment. We continue to anticipate higher non-timber income for full-year 2023 as compared to full-year 2022. In our Pacific Northwest Timber segment, we expect harvest volumes toward the lower end of our prior guidance as we have deferred some planned harvest in response to unfavorable market conditions. Following the pullback in pricing to start the year, we anticipate the weighted average delivered log prices to improve modestly from first quarter levels over the balance of 2023 as end market demand and mill inventories normalize. In our New Zealand Timber segment, we expect harvest volumes toward the lower end of our prior guidance given the lost production days resulting from Cyclone Gabrielle. Compared to the first quarter, we anticipate the weighted average delivered log prices to remain relatively flat over the balance of the year. We further anticipate a higher contribution from carbon credit sales over the balance of the year following no activity in the first quarter. In our Real Estate segment, we remain encouraged by the interest in our development projects and rural properties. Overall, there continues to be strong demand for HBU properties and timberland assets despite the higher interest rate environment. Consistent with our prior guidance, we expect significantly higher transaction volume and operating results in the second half of the year from this segment. I’ll now turn the call back to Dave for closing comments.

Thanks, Mark. While the current macroeconomic backdrop and near-term outlook are challenging, we remain optimistic about the long-term prospects for our business and have been pleased with the progress made over the past few years in both growing and improving the quality of our portfolio. We believe that favorable long-term housing fundamentals, coupled with burgeoning business opportunities around nature-based solutions should support long-term growth in timberland cash flows and corresponding valuations over time. As we discussed in our recent annual shareholder letter, timber as an asset class is enjoying somewhat of a renaissance in terms of its investment appeal given the role forests can play to address the impacts of climate change. In addition to sequestering carbon, a variety of alternative uses for land and wood fiber are evolving to support the transition to a low-carbon economy. We are advancing several initiatives to better understand how these opportunities can add value to our timberland portfolio over time. While we are excited about these new opportunities, our team remains extremely focused on navigating the near-term headwinds associated with a challenging macroeconomic environment. The operational flexibility afforded by our pure-play timber REIT model, coupled with the diversity and relative strength of the markets we operate in, remain a key competitive advantage for us. On this note, the integration of the 137,800 acres of timberland we acquired back in December has gone very well and has afforded us greater flexibility to navigate the rapidly evolving market conditions that we’ve seen so far this year. That said, it’s important to reiterate that we don’t believe in growth for growth’s sake. Pursuant to our active portfolio management strategy, we also continuously evaluate opportunities to recycle less productive capital towards uses with a better risk-return profile. In sum, I believe that our team, our culture, our timberland and real estate assets, and our strategies are well aligned to achieve future success. I’m very proud of how our team is working together to adapt quickly to changing market conditions while also advancing important initiatives that will enable us to continue to build long-term value for our shareholders. This concludes our prepared remarks, and I’ll now turn the call back over to the operator for questions.

Thank you. Our first question comes from Anthony Pettinari with Citi. Your line is open.

This is Greg Andreopoulos on for Anthony. Thanks for taking my questions.

Good morning.

Quickly, looking across your broader Southern portfolio, are there any regional trends in pricing maybe log inventories in mills, mills approaches holding inventories or end market demand as you identified in your various operating markets? And maybe if you could just touch on the Southern acquisitions versus the legacy Rayonier portfolio?

Yes, good morning. This is Doug. I’ll start with that. So as we noted in our prepared remarks, the recent pressure on log price in the U.S. South has been most pronounced in the markets that registered the largest pricing gains last year. It's really reflective of the price elasticity that we see in our more tensioned markets. A few additional points I’d like to make on that are that much of the price realization in most of our markets remains quite favorable compared to the U.S. South overall, reflecting the favorable growth dynamics that exist in the areas where our portfolio is concentrated and where we’ve grown through recent acquisitions you mentioned. That said, the year-over-year comparisons are down given the tough year-ago Q1 comps we had. Heading into 2022, most of our wood baskets had very strong end market demand for both soft timber and pulpwood products, and we also had a wet winter at the end of 2021 to constrain the amount of supply available. So overall, a significant amount of tension was created in markets that already had favorable supply-demand dynamics, which drove that particularly strong pricing we achieved a year ago. This is in contrast to some operating areas in the U.S. South that didn’t see the same momentum last year, given those markets didn’t have the underlying dynamics that allowed for such an increased tension to have such an impact on pricing. While there’s quite a bit of volatility in our markets, we still believe these more tensioned baskets are better positioned for the long term, given the absolute pricing levels and superior EBITDA per ton generation that we have. To your question around where we’re seeing things across the region, rainfall patterns are definitely different across the South. The Mississippi River Delta area has had a particularly wet winter and spring while here along the Atlantic Coast, it’s been much drier, so we've been below normal rainfall. We have seen some differences in markets, as I mentioned about the wet weather. Additionally, mills here have a higher percentage of exports, so we’ve seen some weakness as there’s been less demand for exports to both Europe and China. So there’s been a little bit of difference between the East Coast versus our Gulf state mills and regions.

Interesting, that’s very helpful. Thank you. And just a quick follow-up. Last year, you provided us an update on global log flows after the Russian invasion of Ukraine and the weaker European economy. So my question is, given your global footprint, can you discuss the current global log supply-demand environment? And any notable export trends you identify out of Russia and Europe? And on your end, what’s the opportunity to flex New Zealand and Pacific Northwest volumes to other destinations outside of China?

Yes, I’ll take a stab at that also. Things have sorted out the way we thought they would with respect to the Russian-Ukraine volumes. One of the biggest things has probably been the ramp-up in China. As we mentioned before in the prepared remarks, we’re encouraged by the fact that the port inventories in China are trending lower over the past few months as consumption has outpaced the inflow of logs. The latest reports we have from April show that softwood port inventories are at 4.3 million cubic meters and that’s down about 8% compared to March. We are seeing some drawdown, and that’s the good news for us. What we have seen, less than the logs in China, is the fact that logs from Europe through the Ukraine war were moving to China, and that seems to have slowed down now. Those salvage logs and contracts that were in place have slowed down. We’re seeing a reduction in European spruce starting to move into China. We haven’t seen an increase in Russian logs to China. What we’ve seen more is lumber being produced and shifted into China basically from the Russian area. The weakness in Europe overall on a macro level has kept a dampener here. On the log side, we’re seeing demand in China now starting to pick up. We’ve seen, post the lunar holiday in April, estimated daily takeaway in China was around 75,000 cubic meters, which is up 55% compared to April 2022 during the height of the COVID lockdowns, but it’s typically in the 80,000 to 90,000 cubic meter range. So good progress from where we were last year, but still some room to go there. However, there are a few factors giving us some optimism that prices will improve once log imports normalize and demand increases. China’s National Bureau of Statistics reported a year-over-year GDP expansion of 4.5% in the first quarter of 2023, which indicates improvement in the residential construction market materials our export logs are used for.

Thank you very much for the color. Appreciated.

Thank you. Our next question comes from Ketan Mamtora with BMO Capital Markets. Your line is open.

Thank you and good morning. I’m curious if you can provide some color on kind of what you’re seeing around carbon credits, both in New Zealand and also in the U.S., which is kind of increasingly becoming a very topical area? And what is the work you guys have been doing around that?

Sure. Ketan, this is Dave. Yes, keep in mind, New Zealand has a regulated carbon market. That’s something we’ve been participating in for a number of years. Carbon prices were very strong last year, and so we’ve always taken an opportunistic approach to selling carbon. We sold a fair number of carbon credits last year. We were off the market earlier this year. The market was softer due to some uncertainty from a regulatory standpoint within New Zealand and the perception of that market. We’re waiting for things to firm. That market is a lot further developed than in the U.S. I think the U.S. is really looking at a voluntary carbon market, and as many have pointed out, there’s lots of concern around the potential for greenwashing. A number of participants, ourselves included, have taken a cautious approach to ensure that any carbon projects we advance pass the smell test for things like additionality. We’re continuing to progress those projects, but we do not have one that’s up and running as of yet for those reasons, similar to many other participants. We are seeing a lot of interest related to carbon capture and storage. That’s an area that has progressed faster than we thought. We have put in place our first lease on our carbon capture and storage project. We have several others that we’re working on right now. So that’s one we’re encouraged by. Keep in mind it will take a number of years for revenues to start flowing as the permitting process is fairly complex, but we’re very encouraged by the general market interest in that.

Got it. That’s helpful. If you can provide any quantitative insight into kind of what the prices are, both in New Zealand and the U.S. around carbon credits and how you guys view that?

Yes. Last year, the carbon credits in New Zealand were roughly $50 per New Zealand unit. They’re down right now from where they were last year. That’s a substantially higher price than the U.S. market, reflecting the difference between a regulated and a voluntary market. We’ve seen voluntary carbon prices in the U.S. really all over the map from low single digits to prices that are over $10 per metric ton. But I’d say that until carbon prices get to a meaningfully higher level, you’re likely not to see a lot of change in the way that industrial timberlands are managed vis-à-vis that trade-off between log production and carbon sequestration.

Got it. That’s very helpful. And then last question from my side. It just sounds like there is incrementally more pressure on the southern pulpwood market. Can you talk about how much of this is specific issues related to Q1? Or is it kind of more of a cyclical thing where you are actually seeing pressure on the demand side, which could continue through kind of 2023 at least?

Yes. This is Doug. I’ll answer that one. A lot of the pressure we saw on the pulpwood market was a result of Q4 of last year. We really saw operating rates for many mills reduced in Q4 as demand decreased. This has weighed through, and we’re starting to see things pick up a little bit. But through Q1, we saw that reduced capacity. A lot of the mills at this time of the year take their spring shutdown, and we saw those extend a little bit. What we’re hearing now is that a lot of their end customers have started that destocking process, and they start to ripple back. Some mills have come back from their spring maintenance and are increasing their production rates. Most weakness has occurred through Q4 into Q1. As we look at our average weighted net stumpage going forward, much of what we’re seeing is increased activity in Q2 and Q3, which is a seasonal trend. Overall, we're seeing prices stabilize.

Got it. That’s very helpful, Doug. I’ll turn it over. Good luck.

Thank you.

Thank you. Our next question comes from Buck Horne with Raymond James. Your line is open.

Hey thanks. Good morning guys. I kind of wanted to follow up a little bit on the pulpwood discussion in more detail. Just can we isolate exactly what the demand drivers in the end markets were that created some of that softness while the mills are taking or slowing down their operating rates for pulp production? And I guess the follow-up to that is, do we see any near-term catalysts on the horizon that could increase pulpwood pricing, whether that be pellets or some sort of sustainable aviation fuel uses, or anything else on the pulpwood side that could increase that demand usage?

Yes. Like I was mentioning before, I think what we’ve heard is that coming through COVID, many of the end users of boxes and different linerboard materials had stocked up. This created a need for destocking at that end level, particularly in Europe but also in China. Mills have noted this, and we’re starting to see some destocking both in China and Europe. However, demand remains strong for wood pellets in Europe, and we’ve seen that. Some of the pulp mills we’ve provided to have experienced maintenance issues that prevented them from running at full capacity, but we’re seeing them back up and running now. We believe this will provide some upside. Additionally, there’s potential for us to supply fiber for bioenergy and sustainable aviation fuel manufacture facilities. This is an emerging opportunity we are exploring with potential partners, and we believe it will grow. However, like carbon capture storage, building those facilities will take time; the first I’m aware of in our operating area is in Texas, and they’re beginning construction. We view this as a growing opportunity in the future.

Awesome. Okay. I appreciate the color there. And secondly, with the stock price being where it is these days and the disconnect with your NAV, is there an interest or do you have any authorizations for potentially using stock repurchases or selling acreage to fund repurchases to close the disconnect here?

Yes. Buck, I’d say, first of all, we are maintaining a nimble approach to capital allocation. We always have an open buyback authorization as well as an open ATM authorization. So we have both of those levers at our disposal. We’ve always felt that land and timber is an asset that can be sold readily if such an opportunity were present. I think we continue to believe we have flexibility on that front.

Got it. All right, thanks. Good luck guys.

Thank you. Our next question comes from Paul Quinn with RBC Capital Markets. Your line is open.

Yes, thanks very much. Good morning guys. Can you provide some overall comments on North American timberland markets themselves? It sounds like according to third-party sources, do you see that improving over the year?

Yes, there have been a few transactions to date, Paul. The ones that have closed have generally been of lower quality, and you see that reflected in the pricing. There are roughly 10 transactions currently in the market for about a couple hundred thousand acres in total. The majority of those are TMOs that are selling. We keep a pretty active look on the market, but it was a relatively quiet quarter for us. We closed on four small bolt-on transactions, two in Florida, one in Georgia, and one in Washington during the first quarter for about 2,500 acres. So not a very large volume for us, but we’re continuing to monitor those markets. Generally, this time of the year, we start to see offerings for the second half beginning to flow into the market.

Okay. Thanks. And then I appreciate the color on Cyclone Gabrielle. How do you characterize the rest of New Zealand’s forest products industry and the effect of that cyclone? Is your competitive position improved or hurt through that cyclone?

Yes. This is Doug. In the longer term, I’d say it’s somewhat improved that some of our peers had significantly more damage than we did in mature forests. That will have a knock-on effect over time, particularly in the central North Island. As we mentioned, some areas experienced considerable damage compared to us. That will result in reduced supply of sawlogs and especially in pruned volume over the next couple of years. Currently, we have a short-term influx of salvage volume that’s going to hit the market. We’re working through that as we go forward. Crews are shifting to salvage timber that was not damaged, so we think that will help in the long run. Overall, a year or two from now, it’s probably a competitive advantage as there’ll be less mature wood out there to compete with.

Paul, I’d add that our footprint in New Zealand is fairly dispersed across the country. We had roughly 2,600 acres that were affected, which is a small area of impact. About two-thirds of the write-down we took was around pre-merchantable timber. As Doug mentioned, we are seeing some market weakness right now due to a lot of mature timber being blown down, which has clogged the market from a supply standpoint. We feel fortunate that we weren’t very heavily impacted, and again, the less blocked up you are, that is a risk mitigator, and that certainly played out that way in New Zealand.

Okay. Thanks for that. Lastly, regarding the extra salvage volume, is that going to clear in the quarter, or is it dragging into 2024?

It’s hard to tell with salvage, but it’s definitely going to take more than a quarter. I think this is going to be a 2023 event and shouldn’t drag too long into the next year. The quality of the wood will start to deteriorate as they move into their winter, which will help some, but it will still be a problem. Typically, this kind of hurricane salvage volume will take less than a year. I expect it will play out in 2023, a couple of quarters, and then we will see the impact of less volume in the market.

Okay. Understood. Lastly on carbon. You mentioned New Zealand has a regulated market, while North America has basically a voluntary one. How do we get from a voluntary market to a regulated market? And what is Rayonier doing to accelerate the transition?

Yes, it’s not clear to us, Paul, that the U.S. is going to see a regulated market anytime soon. Think about some of the political elements surrounding this too. That’s why you’re seeing a lot of market participants really pursuing various efforts along the voluntary front. There are programs designed around improved forest management, lengthening rotation, and deferring harvests for periods of time. We’re also seeing opportunities around afforestation, where you convert land that hasn’t been in timber production, which is a cleaner way of looking at carbon. We’re exploring opportunities for direct discussions with counterparties who value the need for carbon sequestration, but that will take some time.

All right. That’s all I had. Best of luck guys. Thanks.

We have no further questions. I will turn the conference back to Collin. Thank you.

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

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