PotlatchDeltic(PCH) - 2025 Q1 - Quarterly Report

PART I. - FINANCIAL INFORMATION ITEM 1. Financial Statements (unaudited) This section presents the company's unaudited condensed consolidated financial statements, including statements of operations, comprehensive income, balance sheets, cash flows, and stockholders' equity, along with detailed notes providing context and disclosures for the interim periods Condensed Consolidated Statements of Operations The Condensed Consolidated Statements of Operations show a significant improvement in financial performance for the three months ended March 31, 2025, moving from a net loss to a substantial net income, driven by increased revenues and operating income | (in thousands, except per share amounts) | 2025 | 2024 | | :-------------------------------------- | :----- | :----- | | Revenues | $268,260 | $228,127 | | Operating income (loss) | $27,510 | $(4,760) | | Net income (loss) | $25,805 | $(305) | | Net income (loss) per share: Basic | $0.33 | $— | | Net income (loss) per share: Diluted | $0.33 | $— | | Dividends per share | $0.45 | $0.45 | Condensed Consolidated Statements of Comprehensive Income The Condensed Consolidated Statements of Comprehensive Income reflect the net income/loss alongside other comprehensive income/loss components, primarily driven by changes in cash flow hedges and pension/OPEB adjustments | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) | $25,805 | $(305) | | Other comprehensive income (loss), net of tax | $(16,757) | $15,696 | | Comprehensive income | $9,048 | $15,391 | Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets show a slight decrease in total assets and stockholders' equity from December 31, 2024, to March 31, 2025, while total liabilities also decreased | (in thousands) | March 31, 2025 | December 31, 2024 | | :------------- | :------------- | :---------------- | | Total assets | $3,255,191 | $3,305,443 | | Total liabilities | $1,245,298 | $1,267,773 | | Total stockholders' equity | $2,009,893 | $2,037,670 | Condensed Consolidated Statements of Cash Flows The Condensed Consolidated Statements of Cash Flows indicate a significant increase in net cash from operating activities, while investing activities saw a reduced outflow and financing activities resulted in a higher outflow, leading to a net decrease in cash and cash equivalents | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------- | :-------------------------------- | :-------------------------------- | | Net cash from operating activities | $49,051 | $16,029 | | Net cash from investing activities | $(12,808) | $(36,996) | | Net cash from financing activities | $(40,400) | $(36,571) | | Change in cash, cash equivalents and restricted cash | $(4,157) | $(57,538) | Condensed Consolidated Statements of Stockholders' Equity The Condensed Consolidated Statements of Stockholders' Equity show a decrease in total equity, primarily influenced by net income, dividends on common stock, and negative impacts from cash flow hedges, partially offset by equity-based compensation | (in thousands) | Balance, December 31, 2024 | Net income | Repurchase of common stock | Cash flow hedges, net of tax | Dividends on common stock | Balance, March 31, 2025 | | :------------- | :------------------------- | :--------- | :------------------------- | :------------------------- | :------------------------ | :---------------------- | | Total Stockholders' Equity | $2,037,670 | $25,805 | $(4,147) | $(16,609) | $(35,435) | $2,009,893 | Notes to Condensed Consolidated Financial Statements These notes provide essential details and context for the condensed consolidated financial statements, covering accounting policies, segment performance, debt, derivatives, equity compensation, and other financial components Note 1: Basis of Presentation This note outlines the company's business as a timberland REIT with operations in timberland management, wood products, and real estate, and confirms the preparation of interim financial statements in accordance with SEC rules and GAAP, including an update on the Thomson Reservoir Project accrual - PotlatchDeltic Corporation is a leading timberland Real Estate Investment Trust (REIT) engaged in timberland management, wood products manufacturing, and real estate development across nine states[24] - The unaudited Condensed Consolidated Financial Statements are prepared under SEC rules for interim financial statements and should be read in conjunction with the Annual Report on Form 10-K for December 31, 2024[25] - An additional $0.5 million was accrued during Q1 2025 for the Thomson Reservoir Project, bringing the total accrued amount to $2.7 million as of March 31, 2025[28] Note 2: Segment Information This note details the company's three reportable segments—Timberlands, Wood Products, and Real Estate—providing a breakdown of revenues, costs, and Adjusted EBITDDA for each, highlighting their distinct products and management strategies - The company's operations are organized into three reportable segments: Timberlands, Wood Products, and Real Estate, each managed separately due to different products and marketing strategies[32] | Segment | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (YoY) | | :------------------ | :--------------------------------- | :--------------------------------- | :----------- | | Timberlands Revenues | $102,451 | $92,950 | +$9,501 | | Wood Products Revenues | $164,645 | $148,598 | +$16,047 | | Real Estate Revenues | $27,591 | $11,107 | +$16,484 | | Total consolidated revenues | $268,260 | $228,127 | +$40,133 | | Segment | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (YoY) | | :------------------ | :--------------------------------- | :--------------------------------- | :----------- | | Timberlands Adjusted EBITDDA | $42,370 | $34,748 | +$7,622 | | Wood Products Adjusted EBITDDA | $11,640 | $(139) | +$11,779 | | Real Estate Adjusted EBITDDA | $22,757 | $6,228 | +$16,529 | | Total Adjusted EBITDDA | $76,767 | $40,837 | +$35,930 | Note 3: Earnings Per Share This note reconciles basic and diluted weighted-average shares outstanding and provides details on the company's share repurchase program, including activity during the quarter and remaining authorization | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Basic weighted-average shares outstanding | 79,000 | 79,677 | | Diluted weighted-average shares outstanding | 79,173 | 79,677 | - During the three months ended March 31, 2025, the company repurchased 93,100 shares of common stock for $4.1 million under the 2022 Repurchase Program, with no shares repurchased in the prior year period[53] - As of March 31, 2025, $85.9 million remained authorized for future stock repurchases under the 2022 Repurchase Program[53] Note 4: Certain Balance Sheet Components This note provides detailed breakdowns of key balance sheet components, including inventories, property, plant and equipment, timber and timberlands, and accounts payable and accrued liabilities, showing changes from the prior year-end | (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------ | :--------------- | :---------------- | | Total inventories, net | $81,285 | $82,926 | | (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------ | :--------------- | :---------------- | | Total timber and timberlands, net | $2,339,296 | $2,357,151 | | (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :--------------- | :---------------- | | Total accounts payable and accrued liabilities | $73,733 | $95,628 | Note 5: Debt This note details the company's term loans and revolving credit facility, including outstanding amounts, interest rate structures, and confirms compliance with all debt covenants as of March 31, 2025 - Approximately $1.0 billion was outstanding under the Amended Term Loan Agreement at March 31, 2025, with $127.5 million classified as current debt[60] - The company has a $300.0 million revolving line of credit, with no borrowings outstanding and approximately $0.6 million utilized for outstanding letters of credit at March 31, 2025[62] - The company was in compliance with all debt and credit agreement covenants at March 31, 2025[63] Note 6: Derivative Instruments This note explains the company's use of interest rate swaps as cash flow hedges to manage interest rate risk on its variable-rate debt, detailing the notional amounts, fixed rates achieved, and the fair values of these derivative instruments - The company uses interest rate swaps to convert variable SOFR-indexed term loan debt ($761.0 million and $176.0 million) to fixed rates ranging from 2.14% to 4.83% and 4.02% to 4.28%, respectively[65] | (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------------------ | :--------------- | :---------------- | | Derivatives designated in cash flow hedging relationships: Interest rate contracts | $118,768 | $138,354 | - Approximately $15.0 million in net gains from cash flow hedges are expected to be reclassified into earnings within the next 12 months, subject to SOFR rate volatility[68] Note 7: Fair Value Measurements This note presents the estimated fair values of the company's financial instruments, including derivative assets, long-term debt, and company-owned life insurance, categorized by valuation input levels | (in thousands) | March 31, 2025 (Carrying Amount) | March 31, 2025 (Fair Value) | December 31, 2024 (Carrying Amount) | December 31, 2024 (Fair Value) | | :------------------------------------------ | :------------------------------- | :-------------------------- | :-------------------------------- | :-------------------------- | | Derivative assets related to interest rate swaps (Level 2) | $118,768 | $118,768 | $138,354 | $138,354 | | Long-term debt, including current portion (Level 2) | $(1,036,732) | $(1,036,122) | $(1,036,569) | $(1,035,608) | | Company owned life insurance asset (COLI) (Level 3) | $6,332 | $6,332 | $6,026 | $6,026 | Note 8: Equity-Based Compensation This note details the company's equity-based compensation plans, including Performance Share Awards (PSAs) and Restricted Stock Units (RSUs), outlining granted shares, compensation expense, and key valuation inputs - Approximately 1.3 million shares were available for future use under the company's stock incentive plans as of March 31, 2025[73] | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Performance share awards | $1,431 | $1,369 | | Restricted stock units | $1,306 | $1,142 | | Deferred compensation stock equivalent units expense | $22 | $49 | | Total equity-based compensation expense | $2,759 | $2,560 | - PSAs granted in Q1 2025 had a weighted-average grant date fair value of $66.00 per share with a three-year performance period, while RSUs had a fair value of $45.19 per share[75][77] Note 9: Income Taxes This note clarifies that as a REIT, the company is generally exempt from federal and state corporate income taxes on distributed real estate income, with tax expense primarily arising from its taxable REIT subsidiaries (TRSs) involved in wood products and certain real estate investments - As a REIT, the company is generally not subject to federal and state corporate income taxes on income from real estate investments that are distributed to stockholders[78] - Income tax expense or benefit is primarily attributable to the pre-tax income or loss of the company's taxable REIT subsidiaries (TRSs), which conduct wood products manufacturing and certain real estate investments[78] Note 10: Leases This note provides supplemental balance sheet and cash flow information related to the company's operating and finance leases, detailing lease assets, liabilities, and associated costs | (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------- | :--------------- | :---------------- | | Total lease assets | $22,594 | $22,433 | | Total lease liabilities | $22,274 | $22,273 | | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------- | :-------------------------------- | :-------------------------------- | | Operating lease costs | $895 | $839 | | Finance lease costs: Amortization of leased assets | $1,445 | $1,269 | | Finance lease costs: Interest expense | $159 | $134 | | Net lease costs | $2,499 | $2,242 | Note 11: Pension and Other Postretirement Employee Benefits This note details the components of net periodic cost (benefit) for the company's pension and other postretirement employee benefit (OPEB) plans, including service cost, interest cost, and expected return on assets, along with funding contributions | (in thousands) | Pension 2025 | Pension 2024 | OPEB 2025 | OPEB 2024 | | :------------- | :----------- | :----------- | :-------- | :-------- | | Service cost | $1,266 | $1,321 | $14 | $23 | | Interest cost | $3,228 | $3,123 | $252 | $219 | | Expected return on plan assets | $(2,932) | $(3,237) | — | — | | Total net periodic cost | $1,605 | $1,232 | $26 | $(89) | - Funding for non-qualified pension and OPEB plans was $0.9 million for both Q1 2025 and Q1 2024, with a $0.7 million contribution made to the qualified pension benefit plan in Q1 2025[82] Note 12: Components of Accumulated Other Comprehensive Income This note provides a detailed breakdown of changes in Accumulated Other Comprehensive Income (AOCI) by component, specifically for pension and other postretirement employee benefits and cash flow hedges, net of tax | (in thousands) | March 31, 2025 | March 31, 2024 | | :------------------------------------------ | :--------------- | :--------------- | | Pension and Other Postretirement Employee Benefits (Balance at end of period) | $(28,799) | $(19,154) | | Cash Flow Hedges (Balance at end of period) | $126,183 | $137,882 | | Accumulated other comprehensive income, end of period | $97,384 | $118,728 | ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's comprehensive analysis of the company's financial performance, condition, and operational results for the quarter, including forward-looking statements, business trends, consolidated results, and segment-specific performance, along with a detailed discussion of liquidity and capital resources Forward-Looking Information This subsection highlights the presence of forward-looking statements in the report, covering various aspects of the company's future expectations, and outlines the inherent risks and uncertainties that could cause actual results to differ materially from these projections - The report contains forward-looking statements regarding economic conditions, interest rates, seasonal business fluctuations, hedging effectiveness, pension assets, future share repurchases, dividend payments, cash flows, capital expenditures, and climate change initiatives[85] - The realization of these expectations is subject to various risks and uncertainties, including general economic conditions, labor availability, construction activity, trade policies, demand changes, timber prices, supply chain disruptions, weather, environmental liabilities, and market incentives for natural climate solutions[86][93] Our Company This section reiterates the company's core identity as a timberland REIT with diverse operations across three segments and discusses the key internal and external factors, including climate change opportunities, that influence its business performance - PotlatchDeltic is a leading timberland REIT, owning 2.1 million acres of timberland, six sawmills, a plywood mill, and real estate development businesses, organized into Timberlands, Wood Products, and Real Estate segments[88] - The company's business segments are influenced by U.S. tariff and trade policies, timber prices, harvest levels, competition, lumber prices, weather conditions, supply chain disruptions, inflation, and natural disasters[89] - Global efforts to address climate change present growth opportunities through natural climate solution offerings, such as land for renewable energy projects, biomass for green energy, and participation in carbon offset projects[91] Non-GAAP Measures This subsection introduces the non-GAAP financial measures, Total Adjusted EBITDDA and Cash Available for Distribution (CAD), explaining their purpose as supplemental tools for evaluating performance and liquidity, while emphasizing they are not substitutes for GAAP measures - The company presents non-GAAP measures, Total Adjusted EBITDDA and Cash Available for Distribution (CAD), to supplement GAAP financial statements[92] - These non-GAAP measures are used by management to evaluate operating performance, allocate resources, and facilitate comparability, but are not intended to be considered in isolation or as a substitute for GAAP measures[92] Business and Economic Trends Affecting Our Operations This section discusses the cyclical nature of the forest products and real estate industries, highlighting seasonal variations in timber harvesting, the impact of elevated interest rates on the housing market, and specific market dynamics for timber, lumber, and real estate sales - Operating results are influenced by the cyclical nature of the forest products and real estate industries, with Timberlands harvest volumes typically lower in the first half of the year due to adverse weather conditions[95] - Elevated home mortgage rates, averaging 6.65% in Q1 2025, continue to hinder home buying and new home construction, despite an undersupply of homes and historically low inventory levels[98][99] - The Wood Products segment saw improved results due to strengthening lumber pricing and increased lumber shipments (290 million board feet), primarily from the ramp-up of the Waldo, Arkansas sawmill[102] - The Real Estate segment benefited from increased rural real estate acres sold in Q1 2025, with expectations to sell approximately 8,000 rural acres and 20 residential lots in Chenal Valley during Q2 2025[103] Consolidated Results This section provides a consolidated overview of the company's financial performance for the first quarter of 2025 compared to 2024, showing significant increases in revenues, operating income, and net income, along with a substantial rise in Total Adjusted EBITDDA | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :------- | | Revenues | $268,260 | $228,127 | $40,133 | | Operating income (loss) | $27,510 | $(4,760) | $32,270 | | Income (loss) before income taxes | $25,461 | $(4,422) | $29,883 | | Net income (loss) | $25,805 | $(305) | $26,110 | | Total Adjusted EBITDDA | $63,367 | $29,722 | $33,645 | - Revenues increased by $40.1 million, primarily driven by higher lumber prices and shipments, increased Idaho sawlog harvest volume and price, and more rural real estate acres sold[105] - Net income improved significantly from a loss of $0.3 million in Q1 2024 to a net income of $25.8 million in Q1 2025[104] Business Segment Results This section provides a detailed analysis of the financial and operational performance of each of the company's three business segments: Timberlands, Wood Products, and Real Estate, highlighting key drivers of change in revenues and Adjusted EBITDDA Timberlands Segment The Timberlands segment experienced an increase in Adjusted EBITDDA, driven by higher Northern sawlog prices and harvest volumes, partially offset by lower Southern sawlog prices and stumpage sales, and improved logging and hauling costs per unit | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :------------------------ | :-------------------------------- | :-------------------------------- | :------- | | Revenues | $102,451 | $92,950 | $9,501 | | Timberlands Adjusted EBITDDA | $42,370 | $34,748 | $7,622 | | Harvest Volumes (in tons) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :------------------------ | :-------------------------------- | :-------------------------------- | :------- | | Northern region (Total) | 368,017 | 329,286 | 38,731 | | Southern region (Total) | 1,567,482 | 1,593,814 | (26,332) | | Total harvest volume | 1,935,499 | 1,923,100 | 12,399 | - Northern region sawlog prices rose by 20.4% to $124 per ton due to higher indexed and cedar sawlog prices in Idaho, while Southern sawlog prices fell by 6.3% due to product mix and market dynamics[116] Wood Products Segment The Wood Products segment significantly improved its Adjusted EBITDDA, primarily due to higher average lumber sales prices and lower manufacturing costs per unit, benefiting from increased production at the modernized Waldo, Arkansas sawmill | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :------------------------ | :-------------------------------- | :-------------------------------- | :------- | | Revenues | $164,645 | $148,598 | $16,047 | | Wood Products Adjusted EBITDDA | $11,640 | $(139) | $11,779 | | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :------------------------ | :-------------------------------- | :-------------------------------- | :------- | | Lumber shipments (MBF) | 289,810 | 271,148 | 18,662 | | Lumber sales prices ($ per MBF) | $454 | $430 | $24 | - Wood Products Adjusted EBITDDA increased by $11.8 million, driven by a $24 per MBF increase in average lumber sales price and lower manufacturing costs per unit due to increased production at the Waldo, Arkansas sawmill following its Modernization Project[121][122] Real Estate Segment The Real Estate segment saw a substantial increase in Adjusted EBITDDA, primarily driven by a significant rise in rural real estate sales, including large conservation land transactions, despite a decrease in residential development lot sales | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :------------------------ | :-------------------------------- | :-------------------------------- | :------- | | Revenues | $27,591 | $11,107 | $16,484 | | Real Estate Adjusted EBITDDA | $22,757 | $6,228 | $16,529 | | Rural Real Estate | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------- | :-------------------------------- | :-------------------------------- | | Acres sold | 7,043 | 1,801 | | Average price per acre | $3,303 | $3,069 | - Real Estate Adjusted EBITDDA increased by $16.5 million, primarily due to a significant increase in rural real estate acres sold, including a 2,200-acre conservation land sale and an 1,100-acre sale in Georgia[126][127] Liquidity and Capital Resources This section details the company's cash flow activities, future liquidity outlook, capital expenditure plans, share repurchase program, debt obligations, and compliance with financial covenants, emphasizing its strong credit ratings and capital structure Net Cash Flows from Operating Activities Net cash from operating activities significantly increased, driven by higher cash receipts from customers due to improved lumber and timber sales, partially offset by increased cash payments for operational activities and development projects | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Net cash from operating activities | $49,051 | $16,029 | $33,022 | - Cash received from customers increased by $40.4 million, primarily due to higher lumber prices and shipments, increased Northern sawlog prices and harvest volumes, and more rural real estate acres sold[129] - Cash payments increased by $9.3 million due to higher sawlog and pulpwood harvests, increased production at the Waldo, Arkansas sawmill, and increased real estate development project spend[129] Net Cash Flows from Investing Activities Net cash outflow from investing activities decreased significantly, primarily due to substantially lower timberland acquisitions compared to the prior year, despite increased capital expenditures for property, plant, and equipment | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Net cash from investing activities | $(12,808) | $(36,996) | $24,188 | - Cash expenditures for property, plant and equipment, timberlands reforestation, and road construction projects totaled $19.5 million in Q1 2025, including a $6.6 million final payment for the Waldo sawmill Modernization Project[129] - Timberland acquisitions were approximately $0.1 million in Q1 2025, a significant decrease from $31.4 million in Q1 2024, which included a 16,000-acre acquisition[129] Net Cash Flows from Financing Activities Net cash outflow from financing activities increased due to share repurchases in Q1 2025, while dividend payments remained consistent with the prior year, reflecting fewer shares outstanding | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Net cash from financing activities | $(40,400) | $(36,571) | $(3,829) | - The company repurchased 93,100 shares of common stock totaling $4.1 million in Q1 2025, compared to no repurchases in Q1 2024[136] - Dividend payments were $35.4 million in Q1 2025, a slight decrease from $35.8 million in Q1 2024, primarily due to fewer shares outstanding[136] Future Sources and Uses of Cash The company anticipates sufficient liquidity from existing cash, operating activities, and its credit facility to meet future cash requirements, with planned capital expenditures for 2025 and remaining authorization for share repurchases - The company expects cash on hand, cash generated from operating activities, and available borrowing capacity under its Credit Agreement to be adequate for future cash requirements[130] - Capital expenditures for 2025 are projected to be $60.0 million to $65.0 million, excluding the final $6.6 million closeout payment for the Waldo sawmill Modernization Project[131] - As of March 31, 2025, $85.9 million remained authorized for future stock repurchases under the 2022 Repurchase Program[132] Term Loans, Credit Agreement, and Interest Rate Swap Agreements This section details the company's $1.0 billion outstanding long-term debt, all of which has fixed interest rates, and outlines plans to refinance maturing term loans. It also describes the $300.0 million revolving line of credit, which remains largely undrawn - Total outstanding long-term debt was $1.0 billion at March 31, 2025, with all interest rates fixed either through fixed-rate loans or associated interest rate swaps[133] - The company plans to refinance a $100.0 million term loan maturing in August 2025 and is evaluating options for a $27.5 million term loan maturing in February 2026[133] - A $300.0 million revolving line of credit is available, with no borrowings outstanding and approximately $0.6 million utilized for outstanding letters of credit at March 31, 2025[134] Financial Covenants This section confirms the company's compliance with all financial maintenance covenants, including the interest coverage ratio and leverage ratio, under its financing agreements as of March 31, 2025 - The company's financing agreements contain financial maintenance covenants, including a minimum interest coverage ratio and a maximum leverage ratio[137] - As of March 31, 2025, the company was in compliance with all covenants, reporting an Interest Coverage Ratio of 9.1 (covenant ≥ 3.00 to 1.00) and a Leverage Ratio of 18% (covenant ≤ 40%)[139] Credit Ratings This section states that both Moody's and S&P maintain investment-grade ratings for the company's debt, with no changes occurring during the first quarter of 2025 - Both Moody's and S&P rate the company's debt as investment grade, with no changes in credit rating during the three months ended March 31, 2025[140] Capital Structure This section provides key metrics of the company's capital structure, including net debt, market capitalization, enterprise value, and dividend yield, showing changes from the prior year-end | (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :--------------- | :---------------- | | Long-term debt (including current portion) | $1,034,917 | $1,034,652 | | Net debt | $887,440 | $883,101 | | Market capitalization | $3,550,718 | $3,088,347 | | Enterprise value | $4,438,158 | $3,971,448 | | Net debt to enterprise value | 20.0% | 22.2% | | Dividend yield | 4.0% | 4.6% | | Weighted-average cost of debt, after tax | 2.3% | 2.3% | Liquidity and Performance Measures This section defines and reconciles the non-GAAP measures Total Adjusted EBITDDA and Cash Available for Distribution (CAD), which management uses to evaluate operating performance, allocate resources, and assess overall liquidity - Total Adjusted EBITDDA and Cash Available for Distribution (CAD) are non-GAAP measures used by management to evaluate performance, allocate resources, and assess liquidity, providing supplemental information to GAAP financial statements[143][144][146] | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income (loss) | $25,805 | $(305) | | Total Adjusted EBITDDA | $63,367 | $29,722 | | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash from operating activities | $49,051 | $16,029 | | Capital expenditures | $(19,536) | $(44,307) | | CAD | $29,515 | $(28,278) | Critical Accounting Policies and Estimates This section states that there have been no significant changes to the company's critical accounting policies or estimates since those presented in its 2024 Annual Report on Form 10-K - No significant changes occurred during 2025 to the company's critical accounting policies or estimates as presented in its 2024 Annual Report on Form 10-K[148] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to market risk, primarily interest rate risk on its financial instruments, and its strategy of using interest rate swaps and forward starting swaps to hedge against interest rate volatility - The company's market risk exposure on financial instruments primarily includes interest rate risk on its bank credit facility, term loans, and interest rate swap agreements[149] - Interest rate swaps and forward starting swaps are utilized to hedge exposure to interest rate changes on existing debt and future debt issuances, respectively, with all instruments entered into for non-trading purposes[149] - The company's exposures to market risk have not materially changed since December 31, 2024[150] ITEM 4. Controls and Procedures This section reports on the effectiveness of the company's disclosure controls and procedures and confirms that no material changes occurred in internal control over financial reporting during the first quarter of 2025 Disclosure Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, ensuring timely and accurate reporting of information under the Exchange Act - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[151] - These controls are designed to ensure that information required for Exchange Act reports is recorded, processed, summarized, and reported within specified time periods[151] Changes in Internal Control over Financial Reporting This section states that no changes in the company's internal control over financial reporting occurred during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting - No changes occurred in the company's internal control over financial reporting during the three months ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[154] PART II. - OTHER INFORMATION ITEM 1. Legal Proceedings This section states that the company believes there is no pending or threatened litigation that would have a material adverse effect on its financial position, operations, or liquidity - The company believes there is no pending or threatened litigation that could have a material adverse effect on its financial position, operations, or liquidity[155] ITEM 1A. Risk Factors This section highlights a new risk factor concerning tariffs and other import measures, which could adversely impact the company's business, operations, and financial results by increasing costs, disrupting supply chains, and affecting demand - No material changes to risk factors previously disclosed in the 2024 Form 10-K, except for a new risk factor concerning tariffs and other import measures[156] - Tariffs imposed by the U.S. or retaliatory actions by other countries could increase costs, disrupt supply chains, reduce margins, decrease demand for products, or diminish the company's competitive position[158][159] - The volatility and unpredictability of trade policies could complicate the company's ability to effectively forecast, plan operations, and execute its capital allocation strategy[160] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds This section provides details on the company's common stock repurchases during the first quarter of 2025 under the 2022 Repurchase Program, including the number of shares bought back, average price paid, and remaining authorization - The board of directors authorized a $200.0 million common stock repurchase program on August 31, 2022, with no set time limit[161] | Common Share Purchases | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :--------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------------------------- | | January 1 - January 31 | — | $— | $90,000,107 | | February 1 - February 28 | 43,800 | $44.41 | $88,054,956 | | March 1 - March 31 | 49,300 | $44.62 | $85,855,311 | | Total | 93,100 | $44.52 | $85,855,311 | - As of March 31, 2025, $85.9 million remained authorized for future stock repurchases under the 2022 Repurchase Program[162] ITEM 5. Other Information This section reports that none of the company's officers or directors adopted, modified, or terminated any Rule 10b5-1 trading arrangements during the first quarter of 2025 - None of the company's officers or directors adopted, modified, or terminated any Rule 10b5-1 trading arrangements during the three months ended March 31, 2025[163] ITEM 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, certifications, and the iXBRL formatted financial information - Exhibits include the Fourth Restated Certificate of Incorporation, Amended and Restated Bylaws, Rule 13a-14(a)/15d-14(a) Certifications, CEO and CFO statements under 18 U.S.C. Section 1350, and iXBRL formatted financial information[164] SIGNATURE SIGNATURE This section formally attests to the due authorization and signing of the report on behalf of PotlatchDeltic Corporation - The report was duly signed on behalf of PotlatchDeltic Corporation by Glen F. Smith, Chief Accounting Officer, on May 2, 2025[166]