Financial Data and Key Metrics Changes - The company generated adjusted EBITDA of $45 million in Q2, a 35% increase compared to the prior year quarter, driven by improved results in the Pacific Northwest Timber and Real Estate segments [7][11] - Pro forma net income was $10 million or $0.06 per share, reflecting a $4 million gain from the sale of the New Zealand joint venture [10][11] - Cash available for distribution (CAD) for the first half of the year was $47 million, up from $38 million in the prior year [11][12] Business Line Data and Key Metrics Changes - Southern Timber segment adjusted EBITDA was $28 million, down 16% year-over-year due to a 5% decrease in harvest volumes and a 14% decline in weighted average net stumpage realizations [15][16] - Pacific Northwest Timber segment adjusted EBITDA increased 17% to $7 million, despite a 15% decline in harvest volumes, due to lower costs and higher log prices [20][21] - Real Estate segment adjusted EBITDA was $19 million, significantly above expectations, driven by strong demand and accelerated transaction timing [23][24] Market Data and Key Metrics Changes - Average sawlog stumpage pricing in the Southern Timber segment decreased by 9% to $27 per ton, while pulpwood pricing fell 25% to approximately $13 per ton [16] - In the Pacific Northwest, average delivered domestic sawlog pricing increased 6% to $96 per ton, with pulpwood pricing up 4% to $32 per ton [20][21] - The company anticipates improved market conditions for pulpwood due to increased mill operating rates and reduced salvage volume [19] Company Strategy and Development Direction - The company completed the sale of its New Zealand joint venture for $710 million, exceeding its original target of $1 billion in asset dispositions [4][5] - Plans to use at least 50% of the sale proceeds to reduce leverage and return capital to shareholders through share repurchases and a special dividend [5][6] - The company remains focused on opportunistic capital allocation, including share buybacks and potential reinvestment into synergistic acquisitions [53][54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of 2025, expecting improved timber market conditions due to reduced Canadian lumber supply and normalization of demand for green logs [30][31] - The company anticipates a stronger contribution from the Real Estate segment in the second half, with full-year adjusted EBITDA expected to be at or above the high end of prior guidance [28][33] - Management highlighted ongoing efforts in land-based solutions, including solar and carbon capture projects, as areas for future growth [34][35] Other Important Information - The company closed the second quarter with $892 million in cash and approximately $1.1 billion in debt, with a weighted average cost of debt around 2.4% [12][13] - The company's credit rating was upgraded from BBB- to BBB following the New Zealand transaction [14] Q&A Session Summary Question: Are you seeing increasing tension in timber prices due to upcoming Canadian duties? - Management noted improved pricing during the quarter, with steady conditions expected as mills increase demand [43][44] Question: What are the next steps for the company after completing the transformation? - The company plans to focus on share buybacks and opportunistic capital allocation while maintaining a leverage target below 3x net debt to EBITDA [49][53] Question: How does the upcoming hurricane season impact timber assets? - Management indicated that they have adapted their practices to reduce vulnerability to storm damage, but the impact of future storms remains uncertain [57][60] Question: What is the outlook for real estate demand? - Demand remains strong across various categories, with significant transactions anticipated in the second half of the year [62] Question: What is the impact of the One Big Beautiful Bill on solar projects? - The company continues to see robust activity in solar development despite uncertainties, with a strong pipeline of projects [68][69]

Financial Data and Key Metrics Changes - The company generated adjusted EBITDA of $45 million in Q2 2025, a 35% increase compared to the prior year quarter, driven by improved results in the Pacific Northwest Timber and Real Estate segments [6][11] - Pro forma net income was $10 million or $0.06 per share, with total sales of $107 million and operating income of $15 million [10][11] - Cash available for distribution (CAD) for the first half of the year was $47 million, up from $38 million in the prior year period [11] Business Line Data and Key Metrics Changes - Southern Timber segment adjusted EBITDA was $28 million, down 16% from the prior year due to a 5% decrease in harvest volumes and a 14% decline in weighted average net stumpage realizations [14][15] - Pacific Northwest Timber segment adjusted EBITDA increased 17% to $7 million, despite a 15% decline in harvest volumes, due to lower costs and higher log prices [19][20] - Real Estate segment adjusted EBITDA was $19 million, significantly above expectations, driven by strong demand and accelerated transaction timing [23][26] Market Data and Key Metrics Changes - Average sawlog stumpage pricing in the Southern Timber segment decreased by 9% to $27 per ton, while pulpwood pricing fell 25% to approximately $13 per ton [15] - In the Pacific Northwest, average delivered domestic sawlog pricing increased 6% to $96 per ton, with pulpwood pricing up 4% to $32 per ton [19][20] - The company anticipates improved market conditions for pulpwood due to increased mill operating rates and reduced salvage volume [18] Company Strategy and Development Direction - The company plans to use at least 50% of the sale proceeds from the New Zealand transaction to reduce leverage and return capital to shareholders through share repurchases and a special dividend [5] - The company remains focused on opportunistic capital allocation, including share buybacks and potential reinvestment into synergistic acquisitions [5][51] - The company is optimistic about the long-term growth potential in its land-based solutions business, particularly in solar and carbon capture projects [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for improved timber market conditions in the second half of 2025, driven by reduced salvage operations and increased lumber production in the U.S. [30][32] - The company expects a stronger contribution from the Real Estate segment in the second half of the year, with significant closing activity anticipated [26][28] - Management highlighted the importance of adapting to climate change and improving resilience against potential hurricane impacts on timber assets [60] Other Important Information - The company completed the sale of its New Zealand joint venture interest for $710 million, exceeding its original target of $1 billion in asset dispositions [4] - The company’s credit rating was upgraded from BBB- to BBB following the New Zealand transaction [13] Q&A Session Summary Question: Are you seeing increasing tension in timber prices due to upcoming Canadian duties? - Management noted improved pricing during the quarter, with steady conditions expected as the market anticipates the impact of duties [42][44] Question: What is the company's growth strategy post-transformation? - Management emphasized a nimble and opportunistic approach to capital allocation, focusing on share buybacks and maintaining a leverage target below 3x net debt to EBITDA [50][53] Question: How does the upcoming hurricane season affect timber assets? - Management indicated that while predictions suggest an above-average hurricane season, they have adapted their practices to reduce vulnerability to storm damage [58][60] Question: What is the outlook for real estate demand? - Management reported strong demand across various real estate categories, with significant transactions expected in the second half of the year [62] Question: What impact does the One Big Beautiful Bill have on solar projects? - Management remains optimistic about solar development activity, with ongoing negotiations for new projects despite uncertainties from the legislation [68][70]