Welcome to the 9:15 session at Citi's 2023 Global Property CEO Conference. I'm Anthony Pettinari with Citi Research, and we're very pleased to have with us PotlatchDeltic, and CEO Eric Cremers. This session is for Citi clients only, so if media or other individuals are on the line, please disconnect. Disclosures are available on the webcast and at the AV desk. For those in the room or the webcast, you can sign on to liveqanda.com and enter code GPC23 to submit any questions if you don't wanna raise your hand. Eric, I'll turn it over to you to introduce PotlatchDeltic and, you know, give us an introduction to your business. Yeah, thanks, Anthony. PotlatchDeltic is a timber REIT. We have about a $4.5 billion enterprise value. We have three different business units that roll up into our company. The first one is our timberlands business. We have 2.2 million acres of timberlands all in the United States, about 600,000 acres up in Idaho, and about 1.6 million acres down in the U.S. South. With those acres, we harvest about 7.7 million tons per year of saw logs and pulpwood. Our second business unit is our wood products business. We're the tenth largest lumber producer in the United States. We produce a little over 1 billion board ft of lumber. We do it with six lumber mills, three in the north and three down in Arkansas. In our wood products business, we also have an industrial-grade plywood business. We sell industrial-grade plywood to boat producers, manufacturers, truck panels, things like that. It's a higher end use for plywood. The last business unit that we have is the real estate business. Our real estate business has got two different product lines. One is the sale of rural land. We sell about 1% of our 2.2 million acres per year, so think about 20,000 acres per year, for higher and better use values. Could be a conservation play, it could be for a solar farm, myriad different uses for rural land. We extract values that are multiples of what the underlying timberland value would be worth, so it's a great business for us. The other piece of our real estate business is we have a master-planned community that we inherited from the Deltic merger back in 2018. This master-planned community is Chenal Valley. It's in Little Rock, Arkansas. We sell about 150 residential lots per year in Chenal. We don't do any vertical development, just basic structural stuff to improve the lots. We also sell commercial land inside Chenal. Last year, we sold those 150 lots for about $100,000 apiece, and our commercial business sold about $13 million worth of acreage inside of Chenal. It's a great, great business for us. I think a couple different things that distinguish us from our peers. We are the most leveraged lumber of all the timber REITs, primarily because we index our log prices in Idaho to the price of lumber. We go up and down with the lumber market in Idaho. Another thing that makes us unique is that we've got a relatively strong balance sheet. Our borrowing costs are all the way down in the mid 2% range compared to our peers that are in the, you know, 4%-5% kinda range. We have a lot of borrowing capacity with just 13% net debt to enterprise value. I think the other thing that's worth highlighting is there's an emerging carbon opportunity for the company. We have yet to put up a carbon deal, but we have some underway, as we speak. With that, Anthony, I will turn it back over to you. Great. Great. Thank you, Eric. You know, looking at your three businesses, maybe we can start off with wood products and lumber specifically. Can you talk about how lumber demand is kind of currently as we go into the spring building season? The way to think of lumber demand is you have to look at what's going on within each of the different segments. The largest segment for lumber demand is repair and remodel. Repair and remodel, think about the aftermarket for wood products. Somebody buys a house, now they decide they wanna put up a deck. Now they decide they wanna build a fence. Now they decide they wanna finish off a basement. That business right now is strong. We have great relationships with home center customers, Home Depot, Lowe's, Menards, et cetera. That volume is relatively stable for us. Takeaway is stable. It kinda makes sense when you step back and you think about it, why it's stable. First of all, home equity values in the United States are at, you know, near record levels. That helps support people putting cash back into their house. The second thing is homes, on average in the United States, are 42 years old. The older a house gets, the more work it needs done to it. That helps spur lumber demand. Repair and remodel markets are actually pretty stable, pretty solid right now. They're not growing like they were just in the past year or two, but they're stable. The next largest segment for lumber demand. Joining me is my CFO, Jerry Richards. The next largest segment for lumber demand is new residential construction, 35% of lumber demand, more or less. That has come under pressure. We don't sell directly to the builders. We sell to distributors and to dealers. You know, you can go read the newspaper and, you know, affordability is an issue right now. There's an inflation problem in the country, and that's higher interest rates, and it means higher mortgage rates. With those higher mortgage rates comes declining affordability. Housing starts this year gonna come down from last year. We'll go from, I don't know, 1.6 million last year to, I don't know, 1.3 million this year. That's not a complete disaster for the industry. It does mean lower lumber demand, and lower lumber demand is gonna mean lower prices. It's not a, it's not a complete disaster. Things are, things are kinda bouncing along the bottom, I guess, Anthony, is the way I would best describe it. Great. Maybe two follow-ups to that. I guess first, could you talk about the state of, you know, dealer inventories or channel inventories in lumber? With regards to price, you know, obviously very volatile and won't ask you to forecast it, but can you talk about kind of maybe current lumber prices versus cash costs for maybe some of the higher cost producers in the industry? Yeah, I would say dealer inventories are very, very low levels. Everybody is, you know, when you see interest rates take off like they have, everybody panics, thinks the world is coming to an end, they keep their inventories at really, really low levels. They're probably at record low levels right now, if I had to speculate. Prices, they declined all the way down to roughly $370 per thousand board feet, Random Lengths, which is the industry benchmark, in January. They've since bounced back to the, I don't know, $420 kind of a range. That's about where they sit today. They've come up quite a bit from the bottom. A lot of the reason why they've come up is because the higher cost mills, particularly up in British Columbia, have begun curtailing capacity. Those mills have got cost structures up in the 450 kind of range, 475 kind of range. They're underwater at today's prices. We've seen roughly, I don't know, 3 billion board ft of capacity come out of the industry, and I expect that we'll see another 1 billion board ft or 2 billion board ft of capacity come out of the industry, most of it up in British Columbia, by the time the year is done. This is really good for the industry, not just in the near term, but, you know, longer term, obviously. You're seeing capacity go from British Columbia down to the U.S. South. Great. You know, you talked about, I guess first, have you seen curtailments extend to the U.S. South or maybe Idaho? I wouldn't guess so, but can you talk about that? Then, you know, you talked about maybe $1 billion-$2 billion additional curtailments, maybe primarily in BC. We've been hearing about BC curtailments for a long time now. Is this something that you think can extend for maybe a few more years? Or, you know, what inning are we in in terms of BC curtailments, maybe broadly? We have seen, some curtailments in the U.S. I think West Fraser had a mill in Florida, a relatively small undersized one that also closed up shop. I think I've heard about a couple of mills up in the Pacific Northwest that may have closed. I think there's a lot of curtailments taking place that are kinda quiet curtailments, not necessarily, you know, big announcements associated with them. The Canfor announcement was a big one. That was 750 million ft. So that was a big one. As a public company, they had to make a big announcement. So yeah. I think there's still more room to go up in British Columbia. The forest products industry in general is under enormous pressure up there. That provincial government is not a big fan of forest products. It seems they're constantly under attack. This really all started, I don't know, two decades ago with the mountain pine beetle epidemic. It just destroyed the forest up in British Columbia. There are still some trees that were standing and alive, and the industry was limping along, but it made trees expensive and harder to get. Then you fast-forward 10 years from then, now we've seen the provincial government take a strong interest in protecting caribou, protecting old-growth forests, First Nations' right to the trees. There's been a lot of developments that just make it harder and harder for converting industry, pulp mills, sawmills, what have you, keep doing the business the way they've done it historically. The, the industry continues to be under pressure, and I don't see that pressure loosening up anytime soon. It's a pretty liberal government up there, and business conditions are tough, and I don't expect that to change. Great. Great. In that context, can you talk a little bit more about your sawmill footprint, you know, kinda where you are potentially on the cost curve, and then maybe a little bit about some of the capital projects that you've pursued recently? Jerry, you wanna take that one? No, that's No, for us, stepping back is about a $1 billion-$1.1 billion board ft system. You know, put that in the, in the broader context. It's six sawmills. We have one industrial-grade plywood mill. We're fortunate that half of our sawmills are located in the U.S. South, which has the highest or, I'm sorry, the lowest fiber costs in the free world. You know, the only place where fiber is cheaper is Russia. Obviously, there's all, you know, there's even more challenges than traditionally the infrastructure challenges they've had in the past. We're situated pretty well, competitively, from a company standpoint. You know, in terms of capital projects, I mean, certainly we've seen pretty high inflation, you know, inflationary environment recently, and costs have gone up. There are things that we can and are doing to bring costs back down. We had a mill in Ola, Arkansas, that burned in June of 2021. You know, the rebuild is done now, and it's coming up the startup curve nicely. You know, we think by the end of Q1, it goes from, you know, historically been about 130 million board ft per year, and we're gonna get an extra 20 million board ft-25 million board ft of production out of that mill. Like I said, we're nearing, getting to that nameplate capacity. That also reduces our cost structure in that mill about 15, maybe 20%, as well as increase log yield. The importance of that log yield increase, and think about it as getting more lumber out of the same volume of log. You know, the importance is that's 60%-70% of your input cost for a mill. There's certainly a cost benefit there in addition to the 15%-20% cash cost that I talked about. That'd be one. We also announced in June of last year that we're gonna modernize and expand our Waldo, Arkansas sawmill. That's a $131 million project, a 22% IRR in the base case. You know, so, you know, really excited about that opportunity. What it's gonna do is similar to what I just described. It's gonna expand capacity by 85 million board ft, so much more significant growth, in manufacturing. It's gonna reduce costs somewhere in the 20%-30% range. Log yield improves about 10%. Those are some pretty meaningful step shifts. The other thing I will mention is we index the price of our logs in Idaho, and I just tee that by saying we're also gonna have some log price relief in our Idaho mill complex because not only do we sell externally to customers on an index basis, but we sell internally, and that's a meaningful drop in our cost structure as well. Great. Great. I'm wondering if we could maybe switch from wood products to your southern timberlands footprint, if you can give us an overview of your southern timberland holdings and then maybe talk a little bit about the CatchMark acquisition. Yeah. We're in several different states across the U.S. South: Arkansas, Mississippi, Alabama, Georgia, South Carolina, Louisiana, with our 1.6 million acres. Now, we do have, gosh, in Arkansas alone, I don't know, 900,000 acres or so, almost 1 million acres in Arkansas. We're spread across the U.S. South. I'm sorry, Anthony, what was the second part of your question? On CatchMark. CatchMark. Yeah, yeah. We completed a big merger last year. It was a $800 million, $900 million deal. We acquired CatchMark, which was roughly 350,000 acres in some of the best U.S. markets in the U.S. South. We've now fully integrated that business into our company. We're realizing synergies. I think we initially forecast $16 million of CAD, cash available for distribution synergies, our run rate right now is around $19 million, and I think we're on our way to $21 million. The acquisition is exceeding our expectations. We're extraordinarily happy with that timberland, we think we'll beat our acquisition model at the end of the day. Can you talk a little bit more about sort of valuation or targeted returns from CatchMark? You know, whether EBITDA per acre or EBITDA yield, IRR, however you wanna define it. I think the simplest way to think about it is real IRR at the end of the day. Our discount rate for timberland, roughly 5%, real, is kind of our hurdle rate that we need. I think we won that acquisition because we were willing to value that timberland with our 5% return, but that's after we realized the synergies from the deal. We had to do a lot of work to consummate that transaction and integrate that transaction and bring it into the fold, but that's what allowed us to win the deal. To us, we looked at it and we said, "These synergies are not high risk. We don't need two CEOs, two CFO, two boards of directors, two headquarters, all that." They were outsourcing their timberland management. We've got a low-cost strategy of managing our own timberlands. It's roughly a 5% return, but real return. That met our return threshold. Great. Then maybe taking a step back as we think about the South and southern logs, can you talk about demand and pricing and what you've sort of seen year- to- date? You know, it's funny. Everybody thinks, "Oh, gee, lumber prices are just falling through the floor. Gee, log prices must be following." The reality is they're not. They're relatively flat. Pulpwood is maybe a little bit stronger than the fourth quarter. Sawlogs are maybe just a touch weaker. Really, I would characterize it as flat quarter-over-quarter. That's one of the beautiful things about timberland. If, you know, if you don't like today's prices, you can just choose to not harvest it and save it for another day. You talked about the cheap fiber costs in the South, which I think you're really were referring more to Arkansas. Just wondering, you know, do you expect price tension ultimately in that wood basket? I mean, is it, you know, a certain level of housing starts or timber inventories need to be drawn down to a certain level, or is this something that is maybe just kind of structural? Can you contrast maybe pricing dynamics for logs in Arkansas with the acquired CatchMark land? You want that one, Jerry? Yeah, you bet. You know, at the end of the day, if we step back, you know, we've seen southern log prices in our legacy wood baskets, think largely Arkansas, have been below trend levels, you know, ever since the great financial crisis. Really what's happened there is there's an excess of standing inventory in the forest, you know, as the fundamental situation. Originally, people would talk about harvest deferrals during the great financial crisis. Really goes back to some ungoverned incentives to shift row crop land over to timberlands. You know, science of growing trees has got better, land's more productive, you know, but there's a standing excess. We've seen progress. I mean, at the end of the day, it's always been about increasing the installed manufacturing base. When you think about, Eric touched earlier about British Columbia and other parts of the country or North America are scaling back and closing capacity, the South has been the place where capacity's been growing. In the last five years, it's probably been 4 billion board ft or 5 billion board ft that's been installed. Consequently, we've seen our southern log prices in our legacy basket, again, over in Arkansas, have increased 5% each year in the last two years. You just heard Eric talk about flattish for 2023, we're certainly not giving that up in a weaker economic environment. I think that's evidence that, you know, the right trend is happening. The other thing I'm gonna just lay on the table and let you come back to it maybe at some point here is natural climate solutions. We certainly see opportunities there that will increase the demand on the forest, and I think that's an exciting new trend as well that will cause log prices to go up as across the board and particularly in Arkansas. If you step back and you think about the U.S. South, it's easy to characterize it as a whole, "Well, there's converting capacity going into the South." But if you're somebody thinking about putting up a $200 million mill, do you wanna put it in a tensioned wood basket that exists today, or do you wanna put it in an untensioned wood basket? The reality is, you wanna put it in an untensioned wood basket, 'cause that's where the log prices are the lowest. Our region, like in Arkansas, which has seen below-trend pricing, you know, is poised to gain the most in an upmarket, in our view. The reality is both markets are gonna do well because it's the cheapest fiber in the world. If you drill down even further, it's cheapest in Arkansas and Mississippi. Can you contrast that, those log price trends and the tension with the CatchMark? Yeah. Certainly CatchMark has realized extraordinary margins, particularly for pulpwood, compared to what we're seeing over in our traditional legacy baskets. Those prices are staying strong as well. They maybe are giving back just a little bit here with the recent pullback in lumber prices and saw log demand, but certainly no collapse. Right. Maybe last question. In terms of the installed capacity or installed sawmill capacity, maybe adding some tension to that southern timberlands, especially in Arkansas. If you look over the last five years, I mean, has the pace of capacity adds, has it surprised you to the upside, to the downside if things, you know, taken longer to put in, you know, the pandemic obviously impacted things? Like, how would you just... Yeah, I think it's easy to say you wanna go out and build a sawmill and to find the capital to go out and build a sawmill than it is to actually execute on the idea and get it up and running and get it operational. I'd tell you the biggest challenge in my opinion is the labor side of the equation. You think about where a sawmill gets located. It tends to be in a really small town in the rural South. In really small towns in the rural South, you're not gonna find electricians plentiful, millwrights plentiful, computer technicians. Today's modern mills are sophisticated pieces of equipment, very sophisticated skill sets are required to run these mills. In these small rural towns, it's hard to find the labor. What you've seen is mills that have been built recently and have started up, they're taking longer and longer to get to their full run rate. We actually when we did the analysis on modernizing our Waldo mill, we did the analysis of thinking, oh, let's just go build a greenfield mill instead somewhere else. It, you know, costs us a little bit more money, but, you know, that was a viable option for us. When we sat back and we thought about it's like, well, gosh, how are we gonna staff this new mill? Where are we gonna find the talent? Because people tend to not want to move. That's the reality. Yeah, we could find a location to put up a greenfield mill, but we wouldn't have the talent to run it. What we did at Waldo is we utilized our existing talent. We're modernizing the mill. We're gonna have only a three-week downtime in late 2024 when there's the cut over to the new, more modern mill. All of our talent is gonna stay with us. We'll that'll be I say relatively easy. It'll be an easier transaction than had we built a new greenfield mill. The pace of new mills and startup has taken longer, and I think it's because of the labor side of the equation. In the South, you have the Arkansas timberlands that are kind of forward integrated to your sawmills. As you think about the acquired CatchMark timberlands, is there opportunities to either acquire or build or JV or have a sawmill footprint that's, you know, adjacent to those lands? Yeah, great question. That's one of the primary reasons we — Well, we underwrote the deal with acceptable return on our investment, the 5% real. That's point number one. One of the next factors that was a strong consideration was the best deals to be had are the bolt-on deals, either in timberland or in sawmills. If it's a totally new region for you're not just gonna venture across the South and go acquire some freestanding sawmill somewhere. Now that we are operating in those areas and we have an integrated model, we have the timberlands that are proximate to these mills. Yeah, I think the likelihood of us finding a mill and kicking the tires and consummating something are reasonably high. Not just on the mill side, but also on the timberland side. Our footprint has expanded dramatically in a really positive way after the CatchMark merger. Great. You talked a little bit about Idaho. I'm wondering if you could just talk a bit more about kinda your unique market position there, the end markets and kinda the demand that you're seeing there. Jerry? Idaho is a great place to do business. We're the largest private landowner by a wide margin. We own over 600,000 acres in the state. The next largest commercial product, you know, industrial timberland owner, you know, by comparison, is just under 100,000 acres. It drops off really quickly. What Anthony's referring is we have a unique contract in place or market approach, and we index the price of our saw logs in Idaho. 75% of the volume is indexed to the price of lumber in a one-month lag. That arrangement's been in place for 12 years. You know, 'cause often the question is, you know, how durable is it? It's also a five-year evergreen contract. Every year that we go through, we sit with the primary customer, and we always have agreed to tack on that year that just ran. That's how it stays evergreen. Why is that in place? It's the only place in the industry that that direct pricing mechanism exists. It starts with our land position. It's a tight wood basket. If you are gonna buy logs or be in the business of manufacturing lumber in the state of Idaho, you're gonna deal with us, you're gonna buy logs from us. You know, for the customer, the large customer, it's actually our largest log customer for the whole company, owns and operates five sawmills in North Idaho. You know, it really effectively operates as a toll manufacturing arrangement for them. You know, a big book of their business is with the home centers. They like the fact that even in down markets like today, you know, they still have a bit of a margin. It also, the supply allows them to go get financing from banks and capitalize their mills well, which we like as a, as a log seller, as well. It's just a unique arrangement, a unique place. This arrangement at the end of the day has added a ton of value. You know, we, in our materials, our IR materials, we benchmark the EBITDA per acre over a long period of time, and it's higher than west side of Oregon and Washington, which are widely viewed as some of the most productive timberlands in, on the planet. You know, biology, you know, the rate of growth, you know, and the density of the wood is probably a little less than Idaho, but this pricing arrangement, you know, causes the financial performance to exceed, you know, again, what are widely viewed on a, on a performance basis, what are widely viewed as some of the most productive timberlines in the world. Great. Maybe just wrapping up timberlands. Can you talk about kind of the current market for timberlands and maybe, you know, if there's any kind of general, you know, dollar- per- acre- type valuations you're seeing for good quality, maybe industrial timberlands in the south and maybe how pricing trends have contrasted with the kind of pre-pandemic period and during the pandemic? Yeah, great question, Anthony. The market for timberlands is slow right now. There's not much timberland on the market. I think demand for timberland is extraordinarily high. Timberland is producing great cash flows. It's an inflation hedge. If you don't like today's prices, just don't harvest the trees. You know, wait a little while. We're now seeing emerging value streams for timberland in natural climate solutions, whether it's for carbon sequestration or for solar farms or, you know, selling to pellet mills. There's all kinds of new income streams that are showing up for timberland owners. I think that's driven up the price of timberland. Even though discount rates have moved up here in the last year or so, you've seen timberland prices only move higher. Naturally, all things equal, higher discount rates mean lower values for timberland. What has more than offset that move in discount rates are these new income streams that are appearing for timberland owners. I think the timberland market is slow right now. The M&A market is slow because people are waiting for these new income streams to be even more apparent. We're working on a carbon deal. I know Weyerhaeuser is working on a carbon deal. I don't know, something like I read a survey the other day, 2/3 of TIMO investors are working or are putting in carbon values for their M&A work. TIMOs are like the private equity of timberland investing. The markets are slow right now, but I think timberland prices are poised to move higher. And we're seeing that with the record prices that were set last year. To answer the second part of your question, typical industrial timberland, I think if you're in an untensioned wood basket in the south, kinda even age, it's probably around $2,000 an acre. You get over into some of the better markets like our CatchMark deal, for example, you could easily be in the $3,000-$4,000 an acre kinda range. The reality is, for timberland, it's like no two tracks are the same. When you go to value timberland, you really have to do your homework. You really have to do your due diligence to understand what the opportunity is. You know, segueing into kind of carbon solutions or climate solutions, you know, it seems like there's a number of different opportunities, whether it's, you know, solar and wind or credits or CCS or mitigation banking. Can you kinda walk through the opportunities and the extent to which you've sort of participated and where you see maybe the opportunity going forward? Jerry? You bet. I'll do it in a, I'll do it in a whirlwind tour here, 'cause there's a lot going on. We have seen the inbound pace of calls has really picked up, you know, starting in the back half of 2022. You know, this is a company that was a bit skeptical, you know, about the proximity of the opportunity, and it really was carbon credits were too low, you know, to talk about one of the legs on the stool. What we've seen is a live example, European construction firms, so think steel and concrete, is looking for offsets. They've doubled the price per ton of carbon sequestration they're willing to pay us. Over about a two-year period, we've been having these conversations. That's the live opportunity that Eric just referenced. That's real. That'll take time to consummate. You have to go get a private letter ruling from the IRS, is a good REIT income, you know, which has tax implications. You know, you gotta go certify the credits. You know, that's some work that has to happen. The first contract, guess what? You know, a lot of things you gotta go figure out. What happens if the forest burns, for example? A lot of things to sort out. We're very excited about that. We think the price for carbon credits will continue to go up, which means opportunity expands across a broader part of our footprint over time. Carbon capture, again, I promise this is gonna be a whirlwind. Carbon capture, we've done studies, you know. We own timberlands and the oil and gas kinda plays in the U.S. South. Again, Arkansas, 900,000 acres, Louisiana, Mississippi. We have the right geological structures, you know, for that to be a real business opportunity. That's a matter of continuing to work on specific business opportunities. There'll be some more development that goes on before it'll, at some point, that'll become a revenue stream. You know, we think about solar. We did what we think is the first solar deal last year. We took 1,400 acres, we harvested it, which is where most of your timberland value is, and then we sold bare dirt that might have been worth $800 an acre for $7,500 an acre to a solar developer. A really nice premium and value capture. We have roughly $100 million of revenue opportunities in the pipeline. Some are under option agreement today. Typically, they're under option for two-three years, you know, for all the diligence and, you know, everything to get sorted out, government permits and things to get sorted out. We've got $100 million in the pipeline, some under contract, some in negotiation to go under contract, and some we just look at and say, "Well, that's, you know, that's quality stuff," and we see the demand increasing for those opportunities. This is largely in the U.S. South. The last thing that Eric just touched on is pellets. You know, we had a large Japanese company as one example, and it's just one anecdotal of a bunch of conversations that we're having, is looking at siting two large pellet mills in South Arkansas. It would torrefy the pellets. They boat them over to Japan. There's a mandate in place that they shift to more green sources to produce energy. Now you have a coal-fired power plant, for example, that's facing obsolescence unless it can find a way to put a component of biomass, you know, in as their furnish, mix it with the coal, burn and generate power and to get within compliance. That's a live opportunity. Each of those pellet plants would be 3 million tons-4 million tons of fiber, both sawmill residuals and pulpwood. Back to my earlier thing that I alluded to. Not only is manufacturing capacity going in, which is gonna lift prices over time, but now there's competition for the existing finite resource as well through, you know, these pellet mills as an example. Overall, when you step back, I was just at another conference, an investor dinner on Sunday. I'll tell you there's a lumber manufacturer, a large one, you know, and they're already thinking about our log costs are going up. When you add all that up, that's the next lift in timberland valuations that we're facing. None of that has fully traded in the M&A market, and certainly is not reflected in our stock price today. Great. before we finish up, I definitely wanna, you know, touch on kind of optimal capital structure and capital return. You know, you have a wood products business that can generate a lot of cash. How do we think about that, you know, in a, in a restructure? You bet. That's been a meaningful source of cash, $1.6 billion over three years, by the way, that we've generated as a company. You know, the way we manage our capital structure is we think about cash flow streams into really two components. There's stable cash, so think timberlands. We have obviously the variable cash flows and think lumber price dependent, you know, back to our leverage to lumber and integrated strategy. The stable cash flows really underpin the regular dividend. In fact, every time we get ready to and we have a great track record, as Eric said, 45% increase per share since 2012. Three years in a row we've increased that dividend. That's really based upon the stable, think timberlands cash flows primarily. We stress test the heck out of it to make sure we don't get over our skis with that dividend. You know, and also maintenance capital and debt service, you know, is stable. You know, the variable has provided a really nice opportunity to fund growth, you know, with some bolt-on timberland acquisitions. You know, we recently, with our stock price being under pressure, we bought $50 million of shares back, you know, with some of that variable cash flow. You know, it'd be another example of like a couple of big special dividends two years in a row. I think investors should not expect a special dividend. That's not our preferred way to return cash. We'd rather buy shares opportunistically, and we're willing to be patient and do that at the right time, and that's been our track record. You know, really, that special dividend is more about, as you generate all this cash in your C Corp or your taxable REIT subsidiary, you know, there's a cap on the value of that entity. As you're shipping $1,500 lumber and you're piling up cash, the value of that entity is going up. The release valve is the special dividend. you know, easily solved. It's not anything shareholders should be worried about, but that's really the premise of the special. When you step back, that's kinda how we think about capital structure and how it all kind of fits together. Great. Great. Well, we're coming up on the shot clock, so, Eric, Jerry, thank you very much. Thank you. Thanks, Anthony.