Financial Data and Key Metrics Changes - The company reported core FFO per share of $1.26, representing a 5.8% increase year over year [14] - As of March 31, the company's debt balance stood at $7.4 billion with a weighted average interest rate of 4.1% [14] - The net debt to trailing twelve month recurring EBITDA ratio was 5.9 times [14] Business Line Data and Key Metrics Changes - North American same property portfolio delivered 4.6% NOI growth, driven by an 8.9% increase in manufactured housing same property NOI [9][10] - Revenue from manufactured housing grew 7.3%, supported by strong rental rate increases and a 150 basis point occupancy gain [10] - The RV segment saw a 7.8% increase in revenue year over year, but same property NOI declined by 9.1% due to softness in the transient RV business [11] Market Data and Key Metrics Changes - In the UK, total same property NOI saw a modest decrease of $600,000 compared to the prior year, primarily due to higher payroll and real estate taxes [11] - Revenue in the UK grew 0.2%, supported by higher manufactured housing income and home sales volumes [12] Company Strategy and Development Direction - The company is repositioning towards a pure play owner and operator of manufactured housing and recreational vehicle communities [5] - A new long-term net debt to EBITDA target of 3.5x to 4.5x has been established as part of the capital allocation plan [6] - The company is focused on operational excellence and disciplined execution through consistent organic growth and selective expansions [9] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the company's platform and long-term opportunities in the manufactured housing and RV segments [7] - The fundamentals driving demand for affordable housing remain intact, supporting a positive outlook [7] - Management acknowledged macroeconomic uncertainties affecting the transient RV business but emphasized the importance of annual revenue growth [34] Other Important Information - The company plans a one-time cash distribution of $4 per share and a planned increase to the quarterly distribution by approximately 10.6% to $1.04 per common share [16] - A $1 billion stock repurchase program has been adopted to allow for future repurchases of common shares [17] Q&A Session Summary Question: Can you walk us through the increase in manufactured housing NOI guidance? - Management noted good occupancy gains, strong renewal performance, and effective expense management as reasons for the revised guidance [24][25] Question: What is the outlook for RV guidance? - Management attributed the decline in transient RV revenue to seasonality and a shift towards shorter booking windows, particularly affecting Canadian guests [34][36] Question: What is the expected cash balance for the rest of the year? - Management confirmed that the expected cash balance is around $1.7 billion, which is embedded in guidance [40] Question: Can you discuss the types of properties targeted for acquisitions? - Management indicated a focus on high-quality single manufactured housing assets and small portfolio opportunities, emphasizing a disciplined approach [42][43] Question: What is the status of the CEO succession process? - Management stated that the search committee is actively engaged and making progress, with the possibility of an announcement before year-end [47][48] Question: What is the expected recurring CapEx for 2025? - Management expects recurring CapEx for the MH, RV, and UK portfolio to be just over $70 million for the year [99]

Financial Data and Key Metrics Changes - The company reported core FFO per share of $1.26, representing a 5.8% increase year over year [13] - As of March 31, the company's debt balance stood at $7.4 billion with a weighted average interest rate of 4.1% [13] - The net debt to trailing twelve month recurring EBITDA ratio was 5.9 times [13] Business Line Data and Key Metrics Changes - The North American same property portfolio delivered 4.6% NOI growth, driven by an 8.9% increase in manufactured housing same property NOI [8][9] - Revenue from manufactured housing grew 7.3%, supported by strong rental rate increases and a 150 basis point occupancy gain [9] - The RV segment experienced a 7.8% revenue increase year over year, but same property NOI declined by 9.1% due to softness in the transient RV business [10] Market Data and Key Metrics Changes - In the UK, total same property NOI saw a modest decrease of $600,000 compared to the prior year, primarily due to higher payroll and real estate taxes [10] - The company noted that Canadian guests accounted for roughly 4% of the annual base and 5% of transient RV revenue, impacting overall performance [10] Company Strategy and Development Direction - The company is repositioning towards a pure play owner and operator of manufactured housing and recreational vehicle communities [4] - A new long-term net debt to EBITDA target of 3.5x to 4.5x has been established as part of the capital allocation plan [5] - The company is focused on operational excellence and disciplined execution through consistent organic growth and selective expansions [8] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the company's platform and long-term opportunities across the manufactured housing and RV segments [5] - The fundamentals driving demand for affordable housing remain intact, supporting a positive outlook [5] - Management acknowledged challenges in the transient RV business due to macroeconomic uncertainty and reduced Canadian guests [10] Other Important Information - The company plans a one-time cash distribution of $4 per share and a planned increase to the quarterly distribution by approximately 10.6% to $1.04 per common share [16] - A $1 billion stock repurchase program has been adopted to allow for future repurchases of common shares [17] Q&A Session Summary Question: What is driving the increase in manufactured housing NOI guidance? - Management noted good occupancy gains, strong renewal performance, and effective expense management as key factors [23][25] Question: Is the repurchase authorization opportunistic or a consistent strategy? - Management indicated that it is part of a larger thoughtful program related to the company's positioning and financial flexibility [28][30] Question: What is the reason for the revision in RV guidance? - Management attributed the revision to a shift towards shorter booking windows and challenges with Canadian guests [34][36] Question: What is the expected cash balance for the rest of the year? - The expected cash balance is around $1.7 billion, which is embedded in guidance [40][41] Question: What types of properties are being targeted for acquisitions? - The company is focused on high-quality single manufactured housing assets and small portfolio opportunities [45] Question: What is the status of the CEO search? - The search committee is actively engaged and hopes to secure a candidate by year-end [49][50] Question: What is the expected recurring CapEx for 2025? - The expected recurring CapEx for the MH, RV, and UK portfolio is just over $70 million for the year [98]

Financial Data and Key Metrics Changes - The company reported core FFO per share of $1.26, representing a 5.8% increase year over year [14] - As of March 31, the company's debt balance stood at $7.4 billion with a weighted average interest rate of 4.1% [14] - The net debt to trailing twelve month recurring EBITDA ratio was 5.9 times [14] - The company established a new long-term net debt to EBITDA target of 3.5x to 4.5x [6] Business Line Data and Key Metrics Changes - North American same property portfolio delivered 4.6% NOI growth, driven by manufactured housing performance [9] - Manufactured housing same property NOI increased by 8.9% in the first quarter, with revenue growing by 7.3% [10] - RV segment revenue increased by 7.8% year over year, but same property NOI declined by 9.1% due to softness in the transient RV business [11] - In the UK, total same property NOI saw a modest decrease of $600,000 compared to the prior year [12] Market Data and Key Metrics Changes - The company noted that Canadian guests account for roughly 4% of the annual base and 5% of transient RV revenue, impacting overall performance [11] - The company experienced a shift towards shorter booking windows in the RV segment, affecting transient revenue [36] Company Strategy and Development Direction - The company is focused on a strategic repositioning toward a pure play owner and operator of manufactured housing and recreational vehicle communities [5] - A capital allocation plan was executed post-Safe Harbor transaction, emphasizing debt reduction and financial flexibility [15] - The company is underwriting high-quality single assets and small portfolio manufactured housing opportunities [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the company's platform and long-term opportunities in the manufactured housing and RV segments [7] - The fundamentals driving demand for affordable housing remain intact, supporting a positive outlook [7] - Management acknowledged macroeconomic uncertainties affecting the transient RV business but remains optimistic about future performance [36] Other Important Information - The company plans a one-time cash distribution of $4 per share and a planned increase to the quarterly distribution by approximately 10.6% [16] - A $1 billion stock repurchase program was announced, allowing for future repurchases of common shares [17] Q&A Session Summary Question: What led to the increase in manufactured housing NOI guidance? - Management indicated that the increase was due to good occupancy gains, strong renewal performance, and effective expense management [24][25] Question: Is the repurchase authorization opportunistic or a consistent strategy? - Management clarified that it is part of a larger thoughtful program related to the company's positioning and financial flexibility [28] Question: What factors contributed to the revision in RV guidance? - Management attributed the revision to a shift towards shorter booking windows and challenges with Canadian guests [34][36] Question: What is the expected cash balance for the rest of the year? - Management confirmed that the expected cash balance is around $1.7 billion, which is embedded in guidance [41] Question: What types of properties are being targeted for acquisitions? - Management is focused on high-quality single manufactured housing assets and small portfolio opportunities [44] Question: What is the status of the CEO succession process? - Management indicated that the search for a new CEO is ongoing, with a possibility of an announcement before year-end [48][49] Question: What is the expected recurring CapEx for 2025? - Management expects recurring CapEx for the MH, RV, and UK portfolio to be just over $70 million for the year [99]

Financial Data and Key Metrics Changes - Consolidated first quarter sales were $1.5 billion, down 7% from Q1 2024 [7] - Net income was $40.3 million or $1.06 per share, compared to $104.1 million or $2.61 per share in the prior year quarter [7] - Wood Products sales were $415.8 million, down 11% year-over-year [9] - Wood Products segment EBITDA decreased to $40.2 million from $95.6 million in the previous year [9] - BMD sales were $1.4 billion, down 7% from Q1 2024, with segment EBITDA of $62.8 million compared to $83.6 million [10] Business Line Data and Key Metrics Changes - Wood Products segment saw lower EWP and plywood sales prices and volumes, with a significant impact from the Oakdale outage [9] - BMD's gross margin was 14.7%, a decline of 40 basis points year-over-year [10] - LVL and I joists volumes were down 3%, better than the 6% decline in single-family housing starts [10] - Plywood sales volume was 363 million feet, down from 372 million feet in Q1 2024 [11] Market Data and Key Metrics Changes - U.S. housing starts decreased 26% year-over-year, impacting demand [7] - Daily sales pace in BMD improved in April, approximately 13% higher than Q1 2025 [15] - Weather significantly influenced sales activity, with January and February below $21.5 million daily, rebounding in March [12] Company Strategy and Development Direction - The company is focused on strategic investments and capital returns to shareholders, supported by a strong balance sheet [8] - Continued emphasis on two-step distribution model to support customer inventory management [26] - Ongoing modernization projects at Oakdale are expected to enhance EWP production capabilities [17] Management's Comments on Operating Environment and Future Outlook - The management expressed uncertainty regarding 2025 end market demand, with forecasts ranging from flat to mid-single digit declines [21] - Long-term demand drivers remain strong, characterized by housing undersupply and aging housing stock [22] - The company remains agile and prepared to respond to economic changes while focusing on customer service [22] Other Important Information - Capital expenditures in Q1 were $53 million, with a range of $220 million to $240 million expected for 2025 [17] - The company repurchased $71 million of common stock in the first four months of 2025 [19] - The Oakdale facility is expected to be fully operational by the end of Q2 2025 [17] Q&A Session Summary Question: Thoughts on general line side of the business and inventory positions - Management noted that customers are relying on two-step distribution for inventory management and new product introductions [26] Question: Update on Oakdale project and ramp-up - The Oakdale facility is expected to shift veneer back into EWP production as it comes back online [29] Question: Capital allocation priorities and M&A pipeline - Management indicated a quiet M&A pipeline but remains open to opportunities while focusing on organic growth and share repurchases [30] Question: EWP pricing expectations for Q2 - Management expects low single-digit sequential pricing declines, with competitive pressures remaining [40] Question: Competitive pressures in EWP - Competitive challenges are primarily from existing EWP producers rather than dimensional lumber or open web trusses [52] Question: Impact of recent transactions in the industry - Management emphasized the importance of executing at a high level amidst ongoing industry consolidation [82]

Financial Data and Key Metrics Changes - The company generated $35 million of free cash flow in Q1 2025 and $214 million over the last twelve months [5] - Free cash flow from the mineral rights business was $44 million in Q1 2025, with a decline in prices for metallurgical coal, thermal coal, and soda ash negatively impacting results [6][12] - Net income for the mineral rights segment decreased by $15 million compared to the prior year's first quarter [11] Business Line Data and Key Metrics Changes - The mineral rights segment generated $45 million of net income, $43 million of operating cash flow, and $44 million of free cash flow in Q1 2025, with significant decreases attributed to weaker steel demand [11][12] - The soda ash business saw a net income decrease of $1 million, with both operating and free cash flow down by $11 million compared to the prior year [12] - Cash distributions from Shisha Jam Wyoming dropped to $3 million, an 80% decline from the previous quarter [8] Market Data and Key Metrics Changes - Prices for metallurgical coal, thermal coal, and soda ash have declined significantly, with current prices at or near the cost of production for many producers [5][6] - The soda ash market is experiencing a bear market due to a supply-demand imbalance, with prices expected to remain low for several years [9] Company Strategy and Development Direction - The company is focused on debt reduction, with remaining debt standing at $118 million, and anticipates significant increases in unitholder distributions as debt is paid off [5][6] - The company does not plan to sell any assets and aims to be a long-term holder of its mineral rights [24] - Future acquisitions are not a priority at this time, as the company is focused on completing its deleveraging strategy [26] Management's Comments on Operating Environment and Future Outlook - Management expects weak prices for key commodities to persist, impacting performance in the near term [5][6] - Despite current market headwinds, the outlook for equity holders is considered brighter than in the past decade [47] - The company is monitoring legislative developments but does not foresee any material impact on its business from the current administration [42] Other Important Information - The company paid a distribution of $0.75 per common unit for Q1 2025, with a special distribution of $1.21 per common unit paid in March 2025 [13][14] Q&A Session Summary Question: Anticipation of future dividends - Management does not have an anticipation for dividends one year from now but prioritizes distributions as a cash flow priority [16][17] Question: Prioritization between share buybacks and dividends - The order of cash uses prioritizes liquidity and balance sheet strength, followed by distributions, then unit repurchases, and lastly opportunistic acquisitions [18][19] Question: Opportunities to sell or monetize assets - Management does not plan to sell assets but would consider monetizing if an opportunity arises at a value exceeding intrinsic worth [24] Question: Future mineral rights acquisitions - The company is focused on completing its current strategy and is not actively seeking acquisitions at this time [26] Question: Impact of met coal index pricing on production - Management acknowledges that current prices are at or below marginal costs for many operators, which may lead to idling of production, but no material changes in volumes are expected [34][35] Question: Legislative impacts on the business - Management monitors legislative developments but has not identified any that would materially impact the business [42]

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q2 2025 was $1.90, up 7% compared to $1.78 in Q2 2024, and up 10% for the first half of fiscal 2025 compared to the same period in fiscal 2024 [5][14] - Cash flow from operations was $73 million, with discretionary free cash flow at $110 million, and a cash balance of $213 million at the end of the quarter [14][15] - The company announced a 5% increase in its quarterly dividend, marking ten consecutive years of annual dividend increases [9][24] Business Segment Data and Key Metrics Changes - EBIT in Reinforcement Materials was $131 million, down 12% year-over-year, primarily due to lower tire demand [6][15] - Performance Chemicals saw EBIT increase by 61% year-over-year, driven by improved margins and higher volumes, particularly in the fumed silica product line [6][7] - Year-over-year volume growth of 10% was achieved in the battery materials product line during the first half of fiscal 2025 [8] Market Data and Key Metrics Changes - In The Americas, volumes were down 9%, with South America experiencing a significant decline due to lower contract outcomes [15][29] - Asia Pacific volumes decreased by 8%, primarily driven by reduced production during the Lunar New Year holiday [30] - European volumes remained flat year-over-year, with some gains in the contract season [32] Company Strategy and Development Direction - The company is focusing on high-performance segments in China and developing business with customers building battery plants in Western economies [8][12] - The "Creating for Tomorrow" strategy aims to position the company for long-term shareholder value creation [12][24] - The company is executing fixed cost and procurement initiatives expected to contribute $30 million in savings for fiscal 2025 [12][21] Management's Comments on Operating Environment and Future Outlook - Management noted that the current tariff landscape is dynamic, causing customers to adopt a cautious posture regarding inventory levels [11][19] - The company expects volumes in Reinforcement Materials to decline in the low single-digit percentage for the fiscal year, while Performance Chemicals is expected to see low single-digit percentage growth [22][24] - Despite uncertainties, management remains confident in the company's fundamentals and cash generation capabilities [24][25] Other Important Information - Capital expenditures for Q2 2025 were $72 million, with a revised full-year forecast of $250 million to $275 million [14][66] - The company maintains a strong liquidity position of approximately $1.2 billion [15] Q&A Session Summary Question: Can you provide context on the reinforcement volume changes? - Management explained that the volume picture varies by region, with significant declines in South America and a more cautious approach from customers in North America [27][28] Question: How do volumes split between North America and South America in the Reinforcement Materials segment? - Management indicated that approximately 60% of volumes come from North America and 40% from South America, with South American volumes down sharply [38][39] Question: What are the underlying price dynamics in the Reinforcement Materials segment? - Pricing remains largely flat due to contract negotiations, with steady margins in Asia Pacific's spot market [41][42] Question: What is the expected impact on energy center revenues? - Management expects a mid-single-digit million impact headwind in the second half due to declining oil prices [44] Question: Can you elaborate on the cost savings initiatives? - The $30 million in cost savings includes a mix of temporary and structural measures, with most savings expected to be recognized in the second half of the year [54][56] Question: What is the current capacity utilization across the industry? - Capacity utilization varies by region, with North America in the low 80s, Europe in the upper 80s, and Asia Pacific around 90% [62][63]

Financial Data and Key Metrics Changes - The company generated $35 million of free cash flow in Q1 2025 and $214 million over the last twelve months [5] - The current debt stands at $118 million, with expectations of significant increases in unitholder distributions as debt is paid off next year [5][6] - Net income for the mineral rights segment in Q1 2025 was $45 million, with operating cash flow at $43 million and free cash flow at $44 million, showing a decrease compared to the prior year's first quarter [11] Business Line Data and Key Metrics Changes - The mineral rights business generated $44 million of free cash flow in Q1 2025, but net income decreased by $15 million compared to the previous year due to weaker steel demand [6][12] - The soda ash segment saw a significant decline, with cash distributions from Shisha Jam Wyoming dropping 80% to $3 million, attributed to low sales prices and high inventories [7][8] - The corporate and financing segment performance was relatively flat, with slight improvements in operating cash flow and free cash flow due to lower interest payments [13] Market Data and Key Metrics Changes - Prices for metallurgical coal, thermal coal, and soda ash have declined significantly, impacting overall performance [5][6] - The soda ash market is currently experiencing a bear market, with prices trading below production costs for many producers [8][12] - International soda ash pricing has decreased significantly from record highs in 2023, primarily due to weakened demand from the construction and automobile markets [12] Company Strategy and Development Direction - The company is focused on debt reduction and maintaining a solid capital structure, with cash flow priorities including liquidity and balance sheet strength [18] - There is no current plan to sell assets, as the company prefers to be a long-term holder of its mineral rights [23] - The company is monitoring legislative developments but does not anticipate significant impacts on its business from the new administration [40] Management's Comments on Operating Environment and Future Outlook - Management expects weak prices for key commodities to persist, which will continue to affect performance [5][6] - Despite current market headwinds, the outlook for equity holders is considered brighter than in the past decade [44] - The company is optimistic about long-term opportunities in carbon neutral initiatives, despite current market challenges [10] Other Important Information - The company paid a fourth quarter 2024 distribution of $0.75 per common unit and announced a similar distribution for Q1 2025 [13][14] - The company is making small-scale progress in geothermal, solar, and lithium initiatives [10] Q&A Session Summary Question: Anticipation of future dividends - Management does not have an anticipation for dividends one year from now but prioritizes distributions as cash flow allows [16][17] Question: Opportunities for asset monetization - The company does not plan to sell assets but would consider monetizing if opportunities arise at favorable valuations [23] Question: Future of M&A and coal industry sentiment - Management is focused on executing their current strategy and is not actively pursuing acquisitions at this time [24] Question: Volumes in the Illinois Basin and met coal production - The uptick in volumes is expected to persist, but management acknowledges that prices are at or below marginal costs for many operators, which may lead to production reductions [30][32]

Financial Data and Key Metrics Changes - In 2024, revenue increased by 9% and adjusted operating cash flow increased by 32% compared to the previous year. However, for 2025, revenue growth is expected to be modest at 1% with a 6% increase in adjusted operating cash flow [9][10] - The company reported a significant increase in adjusted operating cash flow from $142 million in 2021 to $278 million in 2024, marking a growth of approximately 95% [11] - As of March 31, the company had over $1.1 billion in cash and marketable securities against approximately $865 million in debt, indicating strong liquidity [21] Business Line Data and Key Metrics Changes - Kaplan's revenue increased by 7% in 2024, with adjusted operating cash flow rising by 13% [12] - Graham Healthcare Group's consolidated revenue grew by 33% to $611 million in 2024, with adjusted operating cash flow increasing by 67% to $75 million [24] - The Automotive Group's revenue grew by 11% in 2024, but adjusted operating cash flow was flat compared to 2023 [18] Market Data and Key Metrics Changes - The revenue mix of the company has evolved, with significant growth in manufacturing, healthcare, and automotive sectors, which collectively grew from $1.33 billion in 2021 to approximately $2.56 billion in 2024 [10] - The IG therapy market is valued at over $13 billion and is expected to grow at an annual rate of 8%, with a significant portion of infusions being administered at home [46] Company Strategy and Development Direction - The company aims to focus on organic growth, selective acquisitions, and new partnerships within the healthcare sector, particularly through Graham Healthcare Group [49] - The management emphasizes the importance of maintaining a diverse portfolio to mitigate risks associated with tariffs and economic downturns [52][54] - The company is committed to improving operational efficiencies and expanding its service offerings in home health and hospice care [27] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operating environment, noting potential challenges from political advertising cycles affecting revenue comparisons in 2025 [9] - The management highlighted the resilience of U.S. businesses in adapting to tariff impacts and economic uncertainties, indicating a focus on innovation and efficiency [51][63] - There is an acknowledgment of macroeconomic risks, particularly the potential for a recession impacting most business units, except for Kaplan and Graham Healthcare [64] Other Important Information - The company redeemed a significant portion of its mandatorily redeemable noncontrolling interest, paying $205 million in cash, which resulted in a $66.4 million interest expense [17] - The management team is actively monitoring tariff policies, especially concerning prescription drug imports, which could impact operations at CSI Pharmacy [57] Q&A Session Summary Question: Opportunities in Home Health Care in Michigan, Illinois, and Pennsylvania - Management noted that there is continued growth potential in these states due to alignment with health system partners and increasing demand for home care services [70][74] Question: Trends in Kaplan's International Operations - The macro trends for international education are positive, with a billion people expected to enter the global middle class, increasing demand for education [77] Question: Capital Reinvestment Opportunities - The company has primarily focused on share repurchases as the best use of capital, with recent redemptions of noncontrolling interests also seen as a strategic move [79] Question: Framebridge Expansion and Operational Constraints - Management indicated improvements in store payback models and emphasized the importance of careful site selection and operational processes to ensure quality service during expansion [83][86]

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q2 2025 increased by 7% to $1.9 compared to Q2 2024, with a 10% growth in the first half of fiscal 2025 compared to the same period in fiscal 2024 [5][14][25] - EBIT in Reinforcement Materials was $131 million, up 1% sequentially but down 12% year over year [6][16] - EBIT in Performance Chemicals increased by 61% year over year, driven by improved margins and higher volumes [6][18] Business Line Data and Key Metrics Changes - Reinforcement Materials experienced a 7% decline in global volumes year over year, with regional declines of 9% in The Americas, 8% in Asia Pacific, and 1% in Europe [16][17] - Performance Chemicals saw a 4% increase in volumes year over year, particularly in the fumed silica product line [18] Market Data and Key Metrics Changes - The Americas market was heavily influenced by South America, where lower contract volumes were noted, while North America saw a small decline in volumes due to weak demand [30] - In Asia, volumes were down 8%, primarily due to a more normalized Lunar New Year holiday and cautious production adjustments by customers [31] Company Strategy and Development Direction - The company is focusing on high-performance segments in China and developing business with customers building battery plants in Western economies [7][12] - A 5% increase in quarterly dividends was announced, consistent with the capital allocation framework to increase dividends as earnings grow [9][25] - The company is executing fixed cost and procurement initiatives expected to contribute $30 million in savings for fiscal 2025 [12][21] Management's Comments on Operating Environment and Future Outlook - Management noted that the current tariff landscape is dynamic, causing customers to adopt a cautious posture regarding inventory levels [11][20] - The company expects volumes in Reinforcement Materials to decline in the low single-digit percentage for the fiscal year, while Performance Chemicals is expected to see low single-digit percentage growth [22][24] Other Important Information - Cash flow from operations was $73 million, with discretionary free cash flow of $110 million for the quarter [15] - Capital expenditures for Q2 2025 were $72 million, with a full-year forecast of $250 million to $275 million [15][67] Q&A Session Summary Question: Can you provide insight on the reinforcement volume changes? - Management explained that the volume picture varies by region, with significant declines in South America and a small decline in North America due to economic uncertainty [28][30][34] Question: How do volumes split between North America and South America? - Management indicated that approximately 60% of volumes come from North America and 40% from South America, with South American volumes down sharply [40][42] Question: What are the underlying price dynamics in the Reinforcement Materials segment? - Pricing is largely flat due to contract negotiations, with steady margins in Asia Pacific but lower than in the West [43][45] Question: What is the expected impact on energy center revenues? - Management expects some impact in the second half due to declining oil prices, with a mid-single-digit million headwind anticipated [46] Question: How is the seasonal trend expected to play out in Performance Chemicals? - Management noted that while seasonal trends remain, customers are exhibiting caution in inventory levels due to tariff uncertainties [52][55] Question: What is the current capacity utilization across the industry? - Capacity utilization varies by region, with North America in the low 80s, Europe in the upper 80s, and Asia Pacific around 90%, but a cautious approach is expected to lower these levels [62][64][66] Question: How is the CapEx split between growth and maintenance? - Approximately $100 million of the $250 million to $275 million CapEx is growth-related, primarily for new capacity in Indonesia [68]

Financial Data and Key Metrics Changes - Realty Income reported an AFFO per share of $1.06, reflecting a year-over-year growth of 2.9%, continuing a long-standing trend of positive AFFO per share growth [7][10] - The company achieved total operational returns of 8.9% for the quarter, supported by a 6% dividend yield [7] - The portfolio occupancy rate was 98.5%, slightly down from the previous quarter but above the historical median of 98.2% [11] Business Line Data and Key Metrics Changes - The portfolio consists of over 15,600 properties across 91 industries, with 65% in U.S. retail, which has shown resilience through economic cycles [6][10] - The company invested a total of $1.4 billion in the quarter, with 72% of this volume coming from five transactions over $50 million [8] - In the U.S., $479 million was invested at an 8.3% weighted average initial cash yield, while Europe accounted for $893 million at a 7% yield, representing 65% of total investment volume [9] Market Data and Key Metrics Changes - The company noted that over 34% of its client base is investment grade, with an average rent coverage of 2.9 times [10] - The rent recapture rate across 194 leases was 103.9%, with 92% of leasing activity generated from renewals by existing clients [11] Company Strategy and Development Direction - Realty Income is focused on diversifying its business model across client types, asset classes, and geographies, which has proven valuable in the current macroeconomic environment [5][6] - The company is expanding into the private capital business with its U.S. Core Plus Fund, which aims to broaden capital sources and investment capabilities [15] - The strategy includes targeting retail parks in Europe, where rents are below market levels, allowing for potential value creation through repositioning [25][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering on expectations for 2025, maintaining an AFFO per share outlook of $4.22 to $4.28 despite market uncertainties [13] - The company remains vigilant regarding geopolitical uncertainties but believes its resilient business model positions it well to navigate challenges [13] - Management highlighted that the current economic environment has not introduced new material headwinds to the business [36] Other Important Information - Realty Income successfully closed a $600 million unsecured bond offering at a 5.34% yield and expanded its multi-currency unsecured credit facility to $5.38 billion [17][18] - The company ended the quarter with a net debt to annualized pro forma adjusted EBITDA ratio of 5.4 times and a fixed charge coverage ratio of 4.7 times [19][20] Q&A Session Summary Question: Activity in Europe vs. U.S. Opportunities - Management noted that 65% of investment volume came from Europe due to compelling opportunities, particularly in retail parks, with rents below market levels [24][26] Question: Rent Recapture Rate - Management indicated that the rent recapture rate of 103.9% was a strong outcome, despite a slight decline in re-leasing rates, attributing it to a one-off situation [28][29] Question: Investment Guidance and Market Uncertainty - Management chose to maintain investment guidance due to market uncertainty and the need to find the right risk-adjusted opportunities [32][34] Question: Tariff Impact on Portfolio - Management stated that they do not expect any new impacts from tariffs, as previous assessments have been incorporated into their guidance [35][36] Question: U.S. Core Plus Fund and Competition - Management expressed optimism about raising private capital despite current market conditions, highlighting the company's unique position in the sector [39][40] Question: Balance Sheet and Liquidity - Management discussed the funding sources available to meet acquisition guidance, indicating confidence in raising necessary capital [45][46] Question: Investment in Plenty - Management provided an update on the investment in Plenty, indicating a capital at risk of $40 million but expressing confidence in the company's potential recovery [85]