Welcome, and thank you for joining Rayonier's Third Quarter 2025 Conference Call. 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 third 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're 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 Mark McHugh, our President and CEO. Mark?

Thanks, Collin. Good morning, everyone. Before turning to our third quarter results, I'd like to briefly touch on the proposed merger of equals transaction that we announced with PotlatchDeltic on October 14. As detailed on our joint conference call a few weeks ago, we believe that this transaction will deliver significant strategic and financial benefits beyond what either company could achieve independently, including roughly $40 million of estimated run rate synergies. The combination will create a premier land resources company with a high-quality and well-diversified timberland portfolio spanning over 4 million acres, a dynamic real estate platform and a well-positioned wood products manufacturing business. The merger will further drive enhanced opportunities to grow our land-based solutions and Natural Climate Solutions business, given our increased scale and complementary revenue streams. The combined company will benefit from a strong balance sheet, exceptional talent pool and a shared focus on disciplined capital allocation. I'm both excited and confident about the long-term value creation potential of this merger for our shareholders. The merger remains on track to close in late first quarter or early second quarter of 2026, subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals and the approval of Rayonier and PotlatchDeltic shareholders. I've been pleased by the progress made during the initial phases of our integration planning, which is a testament to the cultural alignment of the two companies. Both organizations are very focused on the opportunity to create value for our shareholders through synergies, operational efficiencies and the sharing of best practices, and we look forward to providing further updates as we get closer to closing. Moving to our third quarter financial results. I'll make some high-level comments before turning it over to April Tice, Senior Vice President and Chief Financial Officer, to review our consolidated financial results. Then Doug Long, Executive Vice President and Chief Resource Officer, will comment on our Timber results. And following the review of our Timber segments, April will discuss our real estate results and our outlook for the balance of the year. In the third quarter, we generated adjusted EBITDA of $114 million and pro forma net income of $50 million or $0.32 per share. Adjusted EBITDA roughly doubled compared to the prior year quarter, driven by strong performance in our Real Estate segment, improved results in our Southern Timber segment and favorable overhead costs, which were partially offset by lower results in our Pacific Northwest Timber segment. In our Southern Timber segment, we generated third quarter adjusted EBITDA of $43 million, which was up 13% from the prior year period as increased harvest volumes more than offset a modest decline in weighted average net stumpage realizations. The 24% increase in harvest volumes versus the prior year quarter reflects drier weather conditions as well as the normalization of green log demand following significant salvage activity during the first half of the year. While overall market conditions continue to be challenging, we are pleased with our operational execution and financial results during the quarter. Turning to the Pacific Northwest Timber segment. Third quarter adjusted EBITDA of $6 million was roughly $2 million below the prior year quarter as higher log prices and lower costs were more than offset by a 34% decline in harvest volumes due to the Washington dispositions we completed at the end of last year. In our Real Estate segment, we generated adjusted EBITDA of $74 million in the third quarter, up $54 million from the prior year period. The significant increase in adjusted EBITDA reflects a large contribution from a conservation sale in Florida as well as strong results in our real estate development business. Turning to our outlook for the balance of 2025. We are on track to achieve full year adjusted EBITDA at or above the higher end of our prior guidance range, driven largely by the continued strong momentum in our real estate business. With that, let me turn it over to April for more details on our third quarter financial results.

Thanks, Mark. As you review our financial results for the quarter, please note that all periods presented have been retrospectively adjusted to recast the historical results of the former Trading segment into the Southern Timber and Pacific Northwest Timber segments as we have eliminated the Trading segment following the sale of our New Zealand business. Moving to the financial highlights on Page 5 of the supplement. For the third quarter, sales totaled $178 million, while operating income was $42 million and net income attributable to Rayonier was $43 million or $0.28 per share. On a pro forma basis, net income was $50 million or $0.32 per share. Pro forma items in the quarter included a $7 million asset impairment charge associated with the fair value assessment of certain real estate assets that were part of the Pope Resources acquisition. Our adjusted EBITDA was $114 million in the third quarter, up from $57 million in the prior year period. Moving to our capital resources and liquidity at the bottom of Page 5. Our cash available for distribution, or CAD, for the first 9 months of the year was $154 million versus $77 million in the prior year period. The significant increase was driven by a combination of higher adjusted EBITDA, lower cash interest expense, higher interest income and lower capital expenditures. A reconciliation of CAD to cash provided by operating activities and other GAAP measures is provided on Page 8 of the financial supplement. During the third quarter, we repurchased 1.2 million shares at an average price of $24.55 per share or $30 million in total, as we continue to believe that share repurchases represent a compelling use of capital. As of September 30, we had $232 million remaining on our current share repurchase authorization. However, given our pending merger with PotlatchDeltic, our ability to repurchase shares has been and will continue to be limited prior to the closing. We finished the third quarter with $920 million of cash and roughly $1.1 billion of debt. At quarter end, our weighted average cost of debt was approximately 2.4% and the weighted average maturity on our debt portfolio was approximately 4 years. Our net debt to enterprise value based on our closing stock price at the end of the quarter was 3%, and our net debt was less than 1x the midpoint of our adjusted EBITDA guidance. As a result of the taxable gains arising from the sale of our New Zealand joint venture interest, we declared a $1.40 per share special dividend on October 14, which will be paid on December 12 in a combination of cash and shares. The number of common shares issued as a result of the dividend will be calculated based on the volume weighted average trading prices of the company's common shares on the New York Stock Exchange on December 1st, 2nd and 3rd. Similar to the dividend paid earlier this year by issuing shares to meet part of our REIT taxable income distribution requirement, we have retained significant flexibility for allocation priorities. I'll now turn the call over to Doug to provide a more detailed review of our Timber results.

Thanks, April. Let's start on Page 9 with our Southern Timber segment. Adjusted EBITDA in the third quarter of $43 million was 13% above the prior year quarter as higher harvest volumes more than offset lower net stumpage realizations. Total harvest volumes increased 24% versus the prior year quarter as production improved due to drier weather conditions and increased demand for green logs as salvage operations in our Atlantic region subside. Meanwhile, non-timber revenue was modestly lower compared to an exceptionally strong prior year period due to lower pipeline easement revenue. Average sawlog net stumpage pricing was $27 per ton, a 3% decrease compared to the prior year period, primarily due to reduced sawmill demand, coupled with the lingering market impacts of elevated salvage volume earlier in the year. Pulpwood net stumpage pricing of roughly $14 per ton was 20% lower than the prior year quarter, driven by weaker demand following recent mill closure announcements, excess supply due to prior salvage operations and an unfavorable shift in geographic mix. Overall, third quarter weighted average net stumpage realizations fell 5% versus the prior year quarter to roughly $20 per ton as lower pulpwood pricing was partially offset by an increased proportion of sawtimber volume. Last quarter, we noted that salvage volume from hurricanes in 2024 was normalizing in our Atlantic markets, with mills shifting back to a green log procurement. While salvage operations are largely in the rearview mirror, pricing improvements to date have been limited as recent mill closure announcements have tempered the pulpwood demand outlook in certain market areas. Looking beyond the current market headwinds, we continue to expect the supply side of the equation to tighten significantly in these markets over the next several years. The Georgia Force Association estimates that approximately 26 million tons of pine and 30 million tons of hardwood were impacted by last year's hurricanes, a substantial hit to regional supply that the market will contend with for years to come. In gray markets, soft in-market demand, coupled with weaker residual markets, led some sawmills to reduce production during the quarter. Although construction activity is slowing seasonally, we expect U.S. lumber production to eventually ramp up in response to higher duties on Canadian lumber imports, the recently announced Section 232 tariffs of 10% on all softwood lumber imports and the prospect of additional interest rate cuts and improved housing demand as we move forward. In pulpwood markets, conditions remain challenging through Q3. Mill closures announced earlier this year in the Gulf region, followed by more recent announcements in Atlantic markets have reduced regional demand and weighed on pricing. In our Gulf markets, dry conditions led to softer pricing but allowed us to harvest some difficult access areas. In the Atlantic, recent mill closures have resulted in some pricing pressure as wood flows adjust to these new demand patterns. As we move forward, we are optimistic that the recent capacity reductions to support improved operating rates across the remaining containerboard mill base, although the benefits will vary by region given the localized nature of pulpwood markets. Moving to our Pacific Northwest Timber segment on Page 10. Third quarter adjusted EBITDA of $6 million was 26% below the prior year quarter due to lower harvest volumes, partially offset by higher log prices and costs. Total harvest volumes decreased 34% in the third quarter as compared to the prior year period, reflecting the impact of the Washington dispositions we completed late last year. At $100 per ton average delivered domestic sawlog pricing, the third quarter increased 5% from the prior year period, primarily due to a favorable species mix. Meanwhile, at $36 per ton, pulpwood pricing was up 20% versus the prior year quarter. While lumber prices softened during the quarter, leading mills to build inventories, reduce production and implement quotas, we remain confident in the region's positioning for the structural changes ahead. Lumber produced in the Pacific Northwest competes more directly with Canadian production making those in the region particularly well positioned to capture market share as higher duties constrain the supply heard from Canada. The region should also benefit from the Section 232 tariffs on imported lumber further supporting domestic producers over time. I'll now turn it back over to April to cover our real estate results.

Thanks, Doug. As detailed on Page 11, the contribution from our Real Estate segment during the third quarter was significantly above the prior year quarter due to a higher number of acres sold, partially offset by a lower weighted average price per acre. Real estate revenue totaled $91 million on roughly 23,300 acres sold at an average price of $3,500 per acre, which included a 21,600-acre conservation sale in Florida. Real Estate segment adjusted EBITDA in the third quarter was $74 million, above our prior guidance range of $50 million to $65 million due to the successful closing of the large conservation sales as well as better-than-expected results in our improved development category. Drilling down, sales in our improved development category totaled $21 million, with our Wildlight development project contributing $17 million, and our Heartwood development project contributing $4 million. Sales in Wildlight consisted of 3 residential pods totaling 212 acres at an average price of $78,000 per acre. These sales represent the first closings within the second phase of entitlements at Wildlight or DSAP 2, which allows for the development of about 15,000 homes and 1.4 million square feet of commercial uses. Key infrastructure supporting DSAP 2 was completed during the third quarter, and we were excited to announce the initial builders involved in this new phase of Wildlight during September. As we have discussed in the past, we will capture additional value from these pod sales through participation fees received from the homebuilders as deliveries occur based on the final home sale prices. Heartwood sales in the quarter consisted of a 14-acre parcel for the development of a senior living community for $4 million or $271,000 per acre. We also sold a 2-acre commercial used parcel in Kitsap County, Washington, for roughly $400,000 or $200,000 per acre. Overall, we continue to see a favorable growth trajectory for both Wildlight and Heartwood moving forward. The work we've done over the last several years to build our entitlements pipeline, enhance infrastructure and catalyze these markets continues to translate into strong interest from both commercial and residential end users. In the rural category, third quarter sales totaled $7 million, consisting of approximately 1,500 acres at an average price of roughly $4,800 per acre. We experienced a fairly light quarter of closing activity, but our pipeline for rural land sales remains strong, and we continue to see healthy interest from potential buyers. Timberland and nonstrategic sales during the quarter totaled $53.5 million, which consisted of a 21,600-acre property in Levy County, Florida, sold to a conservation-oriented buyer for roughly $2,500 per acre. We view this property as nonstrategic as it was only 55% plantable, had an average plantation age class of just 7 years and was fairly distant from our core holdings in the region. The pricing we achieved on this sale reflects a strong premium to timberland value and a strong return on our original investment, and we're pleased that the property will now provide a unique recreation and conservation area in the state of Florida. Now turning to our outlook for the balance of 2025. As Mark discussed earlier, we are on track to achieve full year adjusted EBITDA and pro forma EPS at or above the higher end of our prior guidance range of $215 million to $235 million and $0.34 to $0.41, respectively. With respect to our individual segments, starting with our Southern Timber segment, we expect full year adjusted EBITDA will be modestly below our prior guidance range, due to continued softness in end market demand and lower anticipated harvest volumes. In our Pacific Northwest Timber segment, we expect full year adjusted EBITDA toward the lower end of our prior guidance range, as the anticipated improvement in lumber markets from the increase in duties on Canadian imports has been slower to materialize than previously expected. In our Real Estate segment, we expect full year adjusted EBITDA to exceed the high end of our prior guidance range due to our strong third quarter results and our transaction pipeline for the remainder of the year. And as in recent quarters, we are providing quarterly guidance for our overall adjusted EBITDA and EPS to help manage expectations around quarter-to-quarter variability. For the fourth quarter, we currently expect net income attributable to Rayonier of $13 million to $17 million, EPS of $0.08 to $0.11 and adjusted EBITDA of $50 million to $60 million. I'll now turn the call back over to Mark for closing comments.

Thanks, April. As we wrap up our comments on the quarter, I'd like to commend our team for their relentless focus on operational execution amid challenging market conditions. We continue to focus on optimizing our near-term financial results while also advancing important strategic initiatives and allocating our capital with a view towards building long-term value per share. As we discussed last quarter, housing starts and repair and remodel activity have underwhelmed in 2025. However, we are optimistic as we approach 2026 that a combination of factors, including higher duty rates, new tariffs stemming from the Section 232 investigation and lower mortgage rates will collectively drive increased U.S. lumber production, which should be a positive for U.S. timberland owners. In addition, with greater clarity on tariffs, and anticipated improvements in pulp and paper mill operating rates, we're optimistic that our pulpwood customers will see fundamentals improve next year as well. In our real estate business, we are on pace for another strong year in 2025. We continue to capitalize on opportunities to unlock value across our portfolio given the continued strong demand for our rural properties, the healthy interest from conservation-oriented buyers and the favorable momentum at both our Wildlight and Heartwood development projects. On the land-based solutions front, our team continues to advance solar, carbon capture and storage and carbon offset project opportunities with high-quality counterparties. I remain very encouraged about the long-term value creation potential from our land-based solutions business. In particular, the substantial capital that continues to flow into AI and data center infrastructure is driving significant growth in energy demand and utility solar remains poised to play a major role in meeting the need for cost-effective renewable energy. Turning to the merger with PotlatchDeltic. I see a tremendous runway for the combined company as significant strategic and financial benefits will be realized by combining our portfolios and our teams. Our shareholders will benefit from a more diversified timberland portfolio, a complementary Wood Products manufacturing business and an enhanced platform to unlock value through HBU real estate opportunities as well as natural climate and land-based solutions. We continue to estimate run rate synergies of $40 million by the end of year 2, which will be primarily driven by corporate and operational cost optimization. Integration planning is progressing well, and our teams are working to position the combined company to hit the ground running following the closing of the merger. In sum, while timber markets continue to face some headwinds, our team is focused on navigating the current environment with a long-term perspective and we're energized by the significant value creation potential that we see on the horizon. That concludes our prepared remarks, and I'll now turn the call back to the operator for questions.

The first question in the queue is from Mark Weintraub with Seaport Research Partners.

So definitely lots of positive developments, it seems on the real estate side. And maybe I wanted to get a little bit of an update on how sustainable some of the increased activity in the various categories might be as you see it? And then separately, though, also on the pulpwood side, it's quite challenging. And in the past, there have been conversations about alternative demand sources. And just curious whether or not you have any updated views on whether there might be any developments there to help offset some of the lost demand we've seen as mills have shut.

Mark, this is Mark. I'll take the first question on real estate, and then I'll turn it over to Doug to address the pulpwood question. As we discussed in the past, real estate sales are invariably going to be lumpy. And in this particular quarter, we had a large conservation sale as well as pretty strong results in our development business. Recognize that it can take quite a while for a conservation transaction of this scale to come together, this particular transaction has actually been in the works for about a year now. So even though it's a lower price per acre than we typically see for some of our smaller rural HBU transactions, we still felt that the value was pretty compelling given the timberland attributes relative to the conservation potential of this particular property. And look, if we can realize a significant premium to underlying timberland value and even more significant premium to the implied public market trading value of our lands, we see that as a smart arbitrage opportunity. So this level of real estate activity is certainly not going to be the type of thing we're going to see on a regular basis. But we were very pleased to have a couple of major transactions get over the finish line in the third quarter.

Mark, this is Doug. I'll address the second part of your question about pulpwood. We are consistently exploring strategic alternatives to diversify our pulpwood markets beyond our traditional domestic pulp and paper customers. Although the situation is not as significant as it was prior to the China ban on U.S. logs, we are beginning to observe renewed export activity to various markets, particularly around the Port of Savannah. As part of the broader trade barrier negotiations, the Trump administration is actively seeking regulatory relief for timber exports to Europe, specifically contesting the EU’s restrictions on fumigation for Southern Yellow Pine chips. This market is crucial for pulpwood chips, and we are engaged in this effort while monitoring developments. There is also renewed interest from Europe as they look for fiber compliant with European deforestation-free regulations. We are pushing for these opportunities, and there is reciprocal interest, which we will watch closely. Regarding the volatility and policy changes in the last year, it certainly adds more risk to large-scale investments for biofuel refineries. However, we are still witnessing an increase in global demand for products, notably fuels and biofuels for industries that are difficult to decarbonize, such as aviation and shipping. This opportunity is ongoing, albeit more discreetly now, meaning there are fewer announcements and press releases as companies focus on their efforts behind the scenes. Announced projects in Louisiana and East Texas represent over $10 billion in investment, supported by major airlines and some Japanese investors, potentially consuming several million tons of woody biomass annually. So far, to our knowledge, others have not reached final investment decisions, but the successful execution of these facilities will help establish the biofuels market and significantly boost demand for Southern Timber markets. Additionally, our land-base solutions team continues to see strong interest in the voluntary carbon market, not only for Improved Forest Management (IFM) projects but also for using pine biomass to generate carbon dioxide removal credits. This includes initiatives like biochar or biocoke. While these projects may not reach the scale of a multibillion-dollar refinery, they are relatively inexpensive to set up and can be replicated, costing tens of millions of dollars to build. Therefore, if you have specific wood baskets, these opportunities can be meaningful for the area. We are actively collaborating on such projects and believe there is good potential for them in the near future.

The next question in the queue is from Matthew McKellar with RBC Capital Markets.

First for me, the comment about the volume of timber destroyed in Georgia through last year's hurricanes was pretty interesting. Do you have a sense in percentage terms of how much less potential supply there should be in that market over the next few years?

Yes. I don't have a specific percentage, but based on what I've observed, the impact is definitely significant. Georgia is a major timber production state, and while there's still plenty of timber available for the current mills, the situation has certainly been affected. Many younger stands were harvested earlier than they should have been, and a lot of mature stands have also been removed. I can't provide a quantifiable measure, but qualitatively, I can confidently say this will have a substantial impact in the near term.

That's fair enough. That's helpful. And then just a quick one on real estate. Are you seeing any differences in strength of rural real estate sales by geography compared to maybe 1 or 2 years ago?

Yes, I wouldn't say it's really changed. I mean our strongest HBU markets continue to be Texas and Florida. And really, that's where we see the most opportunity. And again, I think it's worth noting that we have a large portfolio in both areas. And so if you look at our historical HBU realizations, I think that they've generally been sector-leading. And so we expect that, that will continue.

And the next question in the queue is from Ketan Mamtora with BMO Capital Markets.

Maybe to start with, on the Southern Timber, there was a pretty nice uptick in that non-timber sales line. Can you just give us some sense of kind of what is driving that? And how should we think about it going forward?

Yes, this is Doug. I'll address that. The increase in Q3 was likely related to pipeline easements, which we also experienced last year. These occurrences tend to be episodic, yet we typically see them almost every year. It's just coincidence that both happened in Q3 this time. We see ongoing opportunities for pipelines, especially with growth in the oil and gas industry and carbon capture storage. However, that uptick in Q3 was a one-time event. We anticipate more such opportunities, as we are actively negotiating with various parties. These discussions are continuous each year, and the timing of occurrences can vary, similar to real estate transactions.

Understood. That's helpful. I have one more question about the pulpwood dynamics. You mentioned several other potential revenue streams. Can you provide insight on when we might see actual demand for pulpwood materialize? Are we looking at a timeframe of a couple of years or more like 3 to 5 years? What is your perspective on this? We've noticed several mill curtailments in the pulp paper sector in the U.S. South, and aside from the cyclical aspects, there appears to be significant structural demand pressure on the pulpwood market.

Yes. The traditional expansions we're aware of, like Georgia-Pacific Alabama River and IP Riverdale, are likely to happen soon. These are standard manufacturing adjustments and will be more immediate. However, when it comes to biofuels and biorefineries, those developments will take longer, potentially around five years. The smaller initiatives using biomass seem to have a shorter timeline, possibly a few years. It's important to note that pulpwood markets are very regional. While we prefer not to see mills shut down, closures in certain areas can improve operating rates in others. We have noticed some regions where mills are operating 5% to 10% more than previously. We are optimistic about the recovery of those end markets and anticipate progress.

Got it. In the short term, over the next one to two years, can you adjust the harvest for pulpwood given the current pricing dynamics? Do you have much flexibility to do that?

There is some capacity to adjust our approach, primarily focusing on sawlogs, while pulpwood often comes along as part of the sawlog harvest or our thinning practices. We can make some modifications, but ultimately, much of it is integrated into our current process. Our flexibility allows us to shift operations geographically, from South Carolina to Texas and throughout the South. If we encounter weakness in a specific market, we can redirect our efforts temporarily and harvest in other regions, aiming for a better balance. Therefore, the ability to redistribute volumes across our diverse assets is a crucial element of our strategy.

Ketan, this is Mark. I want to highlight that we are continuing to adjust our product mix more towards sawtimber. While we experienced a significant decrease in pulpwood pricing compared to the previous period, the proportion of sawtimber has improved. As a result, the overall decline was not as severe. We expect this trend to continue, which is a positive indication for our long-term outlook.

And the next question in the queue is from Buck Horne with Raymond James.

Just a quick question on capital allocation thoughts going into year-end. I fully appreciate that you guys are somewhat limited on repurchases until the deal closes, and you still have to get through the special dividend process and all those calculations. But thinking out maybe into early next year, if this massive public versus private market timber disconnect were to persist. I'm wondering as you've had a chance to kind of evaluate both the combined portfolios, what would your thoughts be around potentially accelerating some noncore timber dispositions to try to either prove out this disconnect or reallocate capital to more accretive uses?

Yes. Maybe just at a high level from a capital allocation standpoint, recognizing that we're anticipating the merger with PotlatchDeltic to close early next year. As we discussed in the merger call a few weeks ago, I'd say the Rayonier and PotlatchDeltic share a very similar philosophy on capital allocation. I'd say we've both been nimble and opportunistic with a view towards building long-term value per share. We both shied away from putting out prescriptive targets as market conditions and the merits of different capital allocation strategies can certainly change over time. And sometimes it can change pretty rapidly. I'd say the playbook we've followed historically as two separate companies will likely be very similar going forward as a combined company. We laid out some of those key capital allocation priorities in the presentation materials for the merger call. That includes maintaining an investment-grade balance sheet, growing our dividend over time and investing in growth opportunities when we think it makes sense to do so. To your point, we also see share buybacks as very compelling at the current share price, and we expect to have ample flexibility to be opportunistic on that front after we close the merger as well, recognizing that at least in the near term, we will be navigating some of these regulatory hurdles.

Appreciate that. And just kind of as a follow-up. I mean as it stands today, obviously, the stock price is dynamic and things like that. But if we were in a similar position a few months out from now, what would be a more accretive or attractive use of incremental capital for you potentially repurchases? Or reinvesting or growing the Potlatch Wood Products division?

Yes. Our approach to capital allocation is to work with the circumstances we face. In the current situation, assuming the stock price remains as it is after closing, we still believe that buybacks are very attractive. However, we also see the Wood Products manufacturing business as another option in our capital allocation strategy. If we identify high-return opportunities there, we will certainly consider them. We will evaluate this with the same perspective we use for any other capital allocation decision, focusing on long-term value per share and determining the best alternative. That said, achieving external growth is quite challenging at this time, given the current stock price.

The next question in the queue is from Michael Roxland with Truist Securities.

Congratulations on all the progress. Doug, I just wanted to follow up. Regarding pulpwood in the U.S. South, you mentioned that once some of these mills are closed, the remaining assets of these companies could operate at higher utilization rates, which would lead to increased pulpwood consumption. However, it seems that this will still result in a net loss, right? So, we shouldn't expect a one-for-one replacement. Is that correct?

Yes, that's fair to say. I'd say we've seen growth in both the pulp business and the OSB business over time and continue to see more investments in that. But to your point, in specific markets, there's going to be excess pulpwood over demand.

Got it. Perfect. Regarding the Pacific Northwest, last quarter you mentioned there was no tension, and it seems those conditions have continued into the third quarter. Are there any signs that things might change? What is your perspective on the Pacific Northwest? Previously, there were concerns about lumber inventories in the channel, but from what I've heard, a lot of that has been addressed. Is the Pacific Northwest now in a better position to experience some tension, whether due to reduced supply or an increase in housing demands next year? I'm curious about what's currently happening in the Pacific Northwest and why there's still a lack of tension when I think there should be.

Yes, I understand your questions. Regarding the pulpwood sector, there are many inquiries. One point I want to emphasize is that with the recent pulp mill closures in non-operating areas, specifically like the IP mills that closed, we still have eight major pulpwood outlets within 100 miles of those shut-down mills. This is different from situations where a mill closure led to low demand, as we still have several functioning mills in close distance in the northeast corner. Although the impacts are significant, we've also encountered challenges from hurricanes in that region. As we analyze the situation, we remain hopeful that the operational improvements at other mills will help address these challenges, and the fiber supply will circulate appropriately. Shifting to the Northwest, that market has indeed softened recently, which was unexpected. Initially, there was a significant premium on Douglas lumber that supported log pricing, but this premium has diminished as demand has not grown as anticipated. Previously, we noted the influx of Canadian lumber into the Pacific Northwest and beyond, and we are still experiencing muted demand as this situation evolves. This could explain why the market hasn't responded as we hoped. On a positive note, many facilities have excess capacity and can ramp up production quickly when demand increases. Typically, log inventories begin to tighten during this season due to weather conditions, which is crucial. However, lumber inventories in that region remain somewhat high, which needs to be addressed. In the South, some mills are slowing down production around the holiday season to manage their inventories more effectively as they approach the new year. We are seeing similar actions in the Northwest, with some mills reducing shifts. In general, companies are attempting to limit lumber inventory, having anticipated a more robust market following the tariffs. Demand in housing, repairs, and remodeling needs to rebound, and we are cautiously optimistic about the forecasted rate reductions for next year that could facilitate this. The historical support from the China market is missing now, but I believe the Douglas fir and SPF markets are resilient and can recover rapidly. We have witnessed significant fluctuations in this market before. If housing demand begins to rise, those markets should respond quickly.

And I'm showing no further questions at this time, and we'll turn the call over to Collin Mings.

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

This concludes today's call. Thank you for your participation. You may disconnect at this time.