Good morning. My name is Lisa, I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic First Quarter 2023 Conference Call. All lines have been placed on mute to prevent any background noise, and after the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star then the one on your telephone keypad. If you would like to withdraw your question, press the star one again. I would now like to turn the call over to Mr. Wayne Wasechek, Interim Vice President and Chief Financial Officer, for opening remarks. Sir, you may proceed. Thank you, Lisa. Good morning, welcome to PotlatchDeltic's first quarter 2023 earnings conference call. Joining me on the call is Eric Cremers, PotlatchDeltic's President and Chief Executive Officer. This call will contain forward-looking statements. Please review the warning statements in our press release, on the presentation slides, and in our filings with the SEC regarding the risks associated with these forward-looking statements. Please note that a reconciliation of non-GAAP measures can be found on our website at www.potlatchdeltic.com. I will turn the call over to Eric for some comments, then I will review our first quarter results and our outlook. Thank you, Wayne. I'll start with a few comments about the press release we issued last week indicating that Jerry Richards is leaving the company to pursue another opportunity with a larger company in a different industry. Jerry was our CFO for 10 years and did a terrific job. Our press release also stated that Wayne Wasechek, our current Principal Accounting Officer, is now our interim CFO. Wayne has been with the company for five years, having joined us from Vail Resorts. Thankfully, we have a deep bench of talent in our finance and accounting departments. We have a search underway and envision filling the CFO position over the coming months. Turning to the first quarter, we reported total adjusted EBITDA of $58 million after the market closed yesterday. Our wood products segment had break-even adjusted EBITDA in the first quarter. Lumber prices found a bottom in January. We are encouraged by the upward trend in lumber prices as we head into a spring building season that has been delayed by winter weather in the northern tier of the country. I am pleased with the team's strong safety performance in the first quarter. As we have discussed on the last two calls, we successfully completed our Ola, Arkansas sawmill rebuild and restarted the large log line in the third quarter of 2022. While the startup phase has taken a bit longer than we had anticipated, we are very happy with the new equipment. The mill's operating run rate has reached its expected annual capacity of 100 million board feet per year. As a reminder, Ola's rebuild significantly lowers the mill's cash cost structure. Last year, we announced a $131 million project to modernize and expand our Waldo, Arkansas sawmill. Activity is currently focused on site prep, with the majority of equipment delivery and installation to come in 2024. The project will increase the mill's annual capacity by 85 million board feet and significantly reduce the mill's cash cost. The existing mill will continue to operate during the project, with approximately three weeks of downtime expected in 2024 to tie in the new equipment. Project completion is expected by the end of 2024. Our timberland segment generated adjusted EBITDA of $47 million in the first quarter. We harvested 2.1 million tons, which is higher than planned and is also a company record. Both our teams in the North and the South contributed to that result. Our harvest plan remains unchanged for the full-year. Speaking of our southern team, we completed the process of insourcing the management of CatchMark's Timberlands in the first quarter. As a much larger company, we can conduct these same types of activities internally at a much lower cost. In this case, insourcing resulted in a synergy of $3 million per year. Our real estate segment had another solid quarter with adjusted EBITDA of $19 million. On the rural side of the business, we sold 6,900 acres at nearly $2,600 an acre. In development, we sold 24 lots at an average price of $116,000 per lot in our Chenal Valley master-planned community in Little Rock. Our team continues to make progress on natural climate solutions opportunities. We are working on a carbon credit project. We are also exploring opportunities to supply mill residuals and or pulpwood to pellet manufacturers. Finally, we have over $100 million of potential future solar land deals and leases in the pipeline. We expect solar opportunities will increase as the team finishes stratifying CatchMark's acres in the second quarter. As a reminder, we completed our first solar-related rural land sale a year ago. While it will take time for the carbon and pellet efforts to pay off, we are optimistic about overall growth tied to providing natural climate solutions, and we believe these efforts will result in higher returns as well as higher timberland values. Shifting to housing, we continue to believe there are strong positive tailwinds over the long- term. Our view is based on a fundamental shortage of housing stock, due largely to the combination of under-building after the great financial crisis and favorable demographics in the form of millennials who have reached prime home buying ages. In our view, the final element needed for housing construction to rebound is lower interest rates. To that end, we are encouraged by the recent easing in mortgage rates. Acknowledging it will take time, we continue to expect that U.S. housing starts will return to levels above the long-term average of 1.5 million units per year once mortgage rates ease further, making homes more affordable. There is also a near record low inventory of existing homes for sale in the U.S., forcing buyers to look at purchasing a new home versus an existing home. New home sales data released just this morning was also favorable. Turning to repair and remodel, which is the largest market segment for lumber demand, the underlying fundamentals continue to be favorable for a variety of reasons. Existing U.S. housing stock remains the oldest in the history of this statistic at 42 years on average. This is important because older homes are significantly smaller than new homes on average. Remote work means people need more space. Older homes typically need more repairs, and higher mortgage rates mean that people are much more likely to stay in their existing homes. Remodeling is a very attractive option for homeowners, given the strong levels of home equity across the U.S., a robust job market, and the fact that consumer balance sheets remain in good shape. Our home center customer takeaway remains strong, and we continue to be optimistic about lumber demand in the repair and remodel market segment. Moving to capital allocation, our top priority is to grow our regular dividend sustainably. The key to doing so is by increasing our stable cash flows through accretive acquisitions such as the CatchMark merger and the bolt-on timberland transactions that we completed in 2022. We increased our regular dividend 2.3% last December. We remain committed to repurchasing our shares only when they trade at a significant discount as part of our overall focus on growing shareholder value over time. To that end, we have an active 10b5-1 share repurchase plan in place, in total, we have $150 million remaining on our $200 million repurchase authorization. We will continue to carefully balance share repurchases against other capital allocation options like M&A. At the end of the quarter, we had $326 million of cash on the balance sheet and liquidity of $625 million. Our leverage remains low and our financial strength provides a solid platform to continue growing shareholder value. Regarding environmental, social, and governance, our reporting team is hard at work preparing our fourth annual ESG report, which we plan to publish in May. Recently, we are also one of six finalists for IR Magazine's Best ESG reporting (small to mid-cap) Award. PotlatchDeltic has a strong ESG story, and we are committed to doing our part to mitigate climate change and continue our legacy of responsibility across the ESG spectrum. To wrap up my comments, PotlatchDeltic remains very well-positioned with a strong balance sheet and liquidity to continue increasing shareholder value. I will now turn it over to Wayne to discuss our first quarter results and our outlook. Thank you, Eric. Starting with page four of the slides, adjusted EBITDA was $58 million in the first quarter compared to $52 million in the fourth quarter. EBITDA increased quarter-over-quarter as the sale of more rural acres in the first quarter more than offset the effect of lower lumber and index sawlog prices. I will now review each of our operating segments and provide more color on our first quarter results. Information for our timberland segment is displayed on slides five through seven. The segment's adjusted EBITDA decreased from $51 million in the fourth quarter to $47 million in the first quarter. Our Idaho team leveraged favorable logging conditions and strong mill demand to harvest 471,000 tons of sawlogs in the first quarter. The first quarter harvest volume was higher than planned and the team is off to a good start in 2023. Our Idaho sawlog prices were 19% lower on a per ton basis in the first quarter compared to the fourth quarter. The decline in sawlog prices reflects lower index prices and seasonally heavier sawlogs. In the South, we harvested 1.6 million tons in the first quarter, which is a record. This reflects our successful completion of the CatchMark merger, along with $101 million of bolt-on timberland acquisitions in the South last year. Solid execution and flexibility by our Southern Timberlands team, coupled with strong demand in Arkansas and Mississippi, were key to achieving the record harvest. Our Southern sawlog prices were 3% lower in the first quarter compared to the fourth quarter. The decrease was due to 2% lower pine sawlog prices and a seasonally lower mix of hardwood sawlogs. Moving to wood products in slides eight and nine, adjusted EBITDA declined from $2 million in the fourth quarter to break even in the first quarter. Our average lumber price realization decreased 8% compared to a 10% decline in Random Lengths Framing Lumber Composite Price in the first quarter compared to the fourth quarter. As a reminder, the lag we experience between booking and shipping orders is not captured by the composite, which is a closer to real-time indication of price. Our lumber price realizations increased each month in the first quarter. Specifically, our average lumber price realizations per 1000 board feet were 413 in January, 439 in February, and 453 in March. Lumber shipments increased 2% to 262 million board feet in the first quarter. As Eric mentioned, the team has made good progress at Ola. During the quarter, higher Ola lumber shipments more than offset the effect of planned maintenance at our other two Arkansas sawmills. Shifting to real estate on slides 10 and 11, the segment's adjusted EBIT was $19 million in the first quarter compared to $7 million in the fourth quarter. EBIT generated by rural sales increased sequentially due to the sale of more acres. EBIT generated by our Chenal Valley master plan community declined primarily due to the absence of commercial lot sales this quarter. Commercial sales tend to be lumpy, and our pipeline of future transactions remains attractive. We closed on the sale of 24 residential lots in the first quarter at a lower average price than the fourth quarter due to a different mix of price points. Turning to financial items, which are summarized on slide 12, our total liquidity was $625 million. This amount includes $326 million of cash as well as availability on our undrawn revolver. We have $40 million of debt that is scheduled to mature in December. The decision to repay or refinance this debt will occur later this year. We still have $250 million of forward-starting interest rate swaps on our balance sheet that provide the opportunity to issue debt at well below market rates. We did not repurchase any shares in the first quarter. We put another 10b5-1 re-share repurchase plan in place in connection with our ongoing commitment to repurchase our shares opportunistically at a significant discount to NAV. Capital expenditures were $13 million in the first quarter. That amount includes real estate development expenditures, which are included in cash from operations in our cash flow statement. For the full-year, we are planning to spend $135 million-$145 million, excluding any potential acquisitions. That estimate includes $74 million for Waldo, Arkansas sawmill modernization and expansion. I will now provide some high-level outlook comments. The details are presented on slide 13. Harvest volumes in the North are planned to be seasonally lower in the second quarter at a level comparable with the second quarter of 2022. We expect Northern sawlog prices to decline 5% in the second quarter compared to the first quarter. In the South, we plan to harvest approximately 1.3 million tons in the second quarter. We expect our Southern sawlog prices to decrease modestly. We plan to ship 270-280 million board feet of lumber in the second quarter. Our average lumber price thus far in the second quarter is approximately 6% higher than our first quarter average lumber price. This is based on approximately 100 million board feet of lumber. Our lumber prices have been modestly increasing, and our spot price is currently about 7% higher than our first quarter average lumber price. As a reminder, a $10 per 1,000 board foot change in lumber price equals approximately $12 million of consolidated EBITDA for us on an annual basis. Shifting to real estate, we expect to sell approximately 2,600 acres of rural land and 35 Chenal Valley residential lots in the second quarter. Additional real estate details are provided on the slide. Overall, we expect our total adjusted EBITDA will be lower in the second quarter due to a seasonally lower harvest volume and fewer rural land sales. We are encouraged by the recent improvement in lumber prices. We are well-positioned to continue growing shareholder value over the long- term. That concludes our prepared remarks. Lisa, I would like to now turn the call over to Q&A. Thank you. As a reminder, everyone, that is star one on the telephone to ask a question. We'll take our first question from Anthony Pettinari with Citi. Good morning. Morning. Um- Morning. Hey, you know, on southern log prices, I guess on a year-over-year basis, they were flattish, and I'm just wondering if it's possible to kind of parse out 1Q price performance between the legacy southern lands and the acquired CatchMark lands or maybe just directionally, and if you can comment on, you know, those two sub-markets? Yeah, good question, Anthony. I think I would characterize it this way. The legacy markets for PotlatchDeltic are relatively flat year-over-year. I would say the newer CatchMark markets, so we're talking about Georgia, South Carolina, Southeastern Alabama, we're seeing a little bit more price decline in those markets. Not dramatic. It's modestly more. Just to give you a sense of it, in the fourth quarter, we were down 3% in the CatchMark markets, and we were down just 1% in Arkansas quarter-over-quarter. As I reflect on it, what I think is going on here is that those more tensioned log markets, you're gonna see log prices fall faster and further, when you're in a down market, down lumber market like we're in today. It kinda makes sense if you step back and you think about it. It's harder for mills to make a margin in those higher-priced log markets, like a Georgia, like a South Carolina. Where you've got weak log markets like in Arkansas and Mississippi, mills can still make an adequate margin, and so they're gonna continue to run hard, whereas in those higher-priced log markets, mills aren't gonna run quite as hard. I guess that's the way I would, I would characterize log price movements from the various regions in the South. Does that make sense? Yeah. No, that's very helpful. That's very helpful. You know, you reiterated the full-year harvest guidance, I think 1Q was a bit higher than expected on harvest volumes. You referenced weather. I'm just wondering if there's anything else that was driving that in terms of, you know, labor availability or hauling or in terms of maybe pulling forward some volume in some regions. I'm just wondering if you could give any color there. Yeah, Anthony. you know the old expression, "You gotta make hay while the sun is shining," is applicable when it comes to harvesting timber. We had an extended winter here in Idaho, and it allowed our resource team, Timberlands team in Idaho to harvest longer into Q1 than normal. In Idaho, we got roughly 100,000 tons ahead of plan for the year. That's advantageous when you think about how our volumes tend to really peak as you get out into Q3. It really stresses the contractor pool in Q3 when that happens. When you can get more volume in Q1, effectively you're taking out volume from Q3. This particular year, that incremental 100,000 tons we got in Q1 is gonna come out pro rata, a volume that we were planning for Q2, Q3, and Q4. Again, make hay while the sun is shining, in Idaho. In the South, the spring generally has really wet weather, and April has been just terrible. Our southern team similarly got ahead of plan. They're about 130,000 tons ahead of plan, and we expect to give much of that outperformance right back in Q2 since we're having such a wet April. Really this is all about managing through weather, and also making sure that you're utilizing your contractors as best as you can, particularly in Idaho. Okay. That's very helpful. I'll turn it over. Thanks. We'll take our next question from Ketan Mamtora with BMO Capital Markets. Thank you. First question, maybe a little more near-term oriented. Either Wayne or Eric, is there a way to ballpark log cost relief in Q2, in the book product side, you know, from, you know, from Idaho log prices easing? Yeah, Ketan. Yeah, we had lower log costs both in Q1, as well as we expect to have lower log costs in Q2. Going from Q4 to Q1, we estimate that our mills in total were favorably impacted by about $2 million. St. Maries was favorably impacted by about $3 million, and the other mills actually went the other way, down about $1 million. Net, we were favorably impacted about $2 million. Going from Q1 to Q2, we think other mills are gonna be flat, and St. Maries is gonna see an additional, I don't know, perhaps $3 million benefit in Q2. Got it. That's helpful. Then, you know, I was wondering, you know, Eric, you mentioned in your prepared remarks about some of the alternative streams of revenue in Timberlands, whether it's solar or carbon. you know, as you think about, you know, the back half of the year 2024, what are the mile markers that we should be thinking about, you know, as we look at, you know, how this opportunity pans out over the next two to three years? Yeah, that's a great question, Ketan. I would say so the two most logical opportunities here. Well, let's start with the first one, which is solar. We've already done a solar deal. We did one last year in Mississippi. We have a number of tracks that are under option right now with the solar developers. They make option payments to us each and every year. They can pull the trigger on one of those solar developments whenever they want. It's hard to predict exactly when those are going to happen, but there are several that properties that are under option right now, so that's hard to predict. The other one, the carbon deal that we're working on, we wanna do this the right way. There's, you know, there's a lot of greenwashing that's going on in the, in the world right now. We wanna avoid being one of those companies. We wanna keep our reputation intact. We're very careful with the project that we're working on. It all starts with verifying the particular track that you're talking about, how much carbon is there today, and put yourself in a position so that you can turn around and measure that carbon each and every year thereafter. That project is taking some time. We also need to get a private letter ruling from the IRS that this is good REIT income. The IRS takes its time. I think the key milestone for that carbon deal will be late this year or early next year. That's our current guesstimate as to timeline. I think, we can just update you on each of these calls with our expected timing for that particular project. Understood. No, that's helpful. Just final question from my side. You know, y'all did not repurchase any shares in Q1. I'm just curious kind of how do you approach, you know, in 2023, especially related to, you know, kind of share repurchases given sort of the uncertainty in the market. Obviously, cash flows this year are going to be lower, but the stock is also, you know, trading below NAV. So how do you approach that, and also keeping in mind that you've got the Waldo project that's ongoing? Yeah. I would separate out the Waldo project, Ketan. When we planned that $200 million authorization that we put in place last year, we knew about the Waldo project, they're really two separate thoughts. You know, it really comes down to, you know, for us, repurchasing shares opportunistically. We're gonna do it when the share price is at a significant discount to NAV. It's a very important part of our capital allocation strategy. We do believe we've increased our NAV over the past several years, and along with it, we've increased our share repurchase limit price over time. A couple things here. In Q1, we put a new 10b5-1 plan in place, that takes, we call it seasoning. You can't be in the market buying when the 10b5-1 is seasoning. It's like a 60-day period. Then also we're out of the window, two weeks before we release our results. We were kinda had to be out of the market for much of Q1. The other important thing to highlight here, to comment on, is that we are always comparing our capital allocation options one against another. A lot of the stuff that we work on is kind of predictable, but there's stuff like M&A that's not predictable. To the extent that we see an M&A opportunity that may or may not be on the market, by the way, and we're looking at it, we're thinking about, okay, is this gonna be a user of our capital? Would this be a better way to use capital than share repurchases? Sometimes we have to go to the sidelines to evaluate M&A opportunities, and that can take us out of the market too. You know, the bottom line is we're never gonna be fast movers when it comes to things like share repurchases. We're gonna be very thoughtful, very judicious, and we're only gonna buy when we think we're on sale. Perfect. Got it. That makes a lot of sense. I'll jump back in the queue. Thank you. Thanks. We'll take our next question from Kurt Yinger with D.A. Davidson. Great. Thanks, and good morning, everyone. Morning. Morning. I just wanted to start off on Southern Harvest volumes and two questions. I mean, first, pretty big increase in frontage in Q1. Maybe you could talk about the drivers there. Second, perhaps frontage is included in kind of the sawlog mix that you've guided for the full-year. If not, it would kind of imply, you know, you're gonna sell 1 million tons of sawlogs in the south in both Q3 and Q4, which is, you know, pretty significantly above what we've seen in the last couple quarters, even including CatchMark. Can you just talk through that and any risks you see to what looks like a pretty big half, back half on Southern sawlog volumes? Yeah. Frontage prices are gonna bounce around quarter to quarter, simply based upon mix of what the frontage deal is. It's hard to read too much in the frontage price trends, you know, whatsoever. Frontage was high in the first quarter. We were very opportunistic with our frontage deals that we completed in the first quarter. I don't think we'll have a similarly high number the rest of the year. Most of the quarters are in the 2 ton-250,000 ton range, Q2 through Q4. The typical sawlog harvest, fee harvest for us for the rest of the year will be, you know, between 600,000 tons and 750,000 tons, more or less. That's a relatively, stable, outlook for our Timberlands business in the South. Got it. Okay. That's helpful. Eric, you touched on home center demand being pretty strong still. I guess could you maybe talk in a little bit more detail about the trend as the quarter progressed and here through April, and whether that's been similar in terms of the progression relative to what you've seen in the past or whether there's perhaps been some delay in terms of an inventory build ahead of spring? Yeah. You know, Kurt, I would say that home center demand was probably weaker at the start of the quarter than it was at the end of the quarter. I think that's also kind of a natural phenomenon, in that, you know, when it's, when it's winter weather outside, especially in the northern tier of the country, home center demand is a little on the weaker side just 'cause people aren't outside, you know, doing yard work and fences and decks and things. I wouldn't try to read too much into that, but I would say the demand probably progressed as we moved through the quarter, and it's very consistent with what our plan was for the home centers. Got it. Okay. Thanks for that, Eric. Appreciate the color. Yep. Thank you. We'll take our next question from Mark Weintraub with Seaport Research Partners. Thank you. First just a quick follow-up. You'd mentioned that it had been very wet down in the South. Sometimes that can have impacts on, you know, people being able to get into the woods and that then on pricing itself. Has that happened yet as well or, or not so much? Well, we struck a really sweet pulpwood deal with one of our large pulp mill customers that managed to get themselves caught short. We've seen a little bit of a price response, but not entirely across the whole South, Mark. Not really seeing it much in sawlogs yet. Okay. No real weather impact though from the wetness yet? Yeah, I would say no real impact other than we had a really strong deal in Q1, in fact, with a pulp mill. Got it. Then, you know, there's been a pretty wide divergence during the first quarter and what happened with southern lumber prices versus what was happening out West. Do you have kind of any thoughts on that and, what might happen going forward on a, on a relative basis in those regions? Yeah. It's amazing to me what's happened with lumber prices depending upon the different regions. You know, the traditional price premium of southern pine to SPF is like normally in this $50-$70 kind of range. Today the spread is more like a whopping $150. It's really broken out. I think there's a couple different reasons why southern pine's outperforming here. First, you know, southern pine is proximate to where consumption is in the U.S. I think I read the other day that something like seven of the top 10 housing markets in the U.S. are in the South, so relatively close to Southern Yellow Pine mills. Think about Florida, think about Texas. I think even Tennessee is one of the Nashville, I think, is one of the top 10 markets. Those mills are close to where the demand is, and builders, they frankly, they just don't wanna be exposed to lumber price swings. They're utilizing increasingly this kind of a just-in-time lumber delivery strategy, and if you're gonna use a just-in-time lumber delivery strategy, you can't wait to get it, you know, from a rail car from, you know, Alberta that takes that takes a month. You know, the second thing that I would say regarding this price spread is, you know, the North had a really long winter, and that impacted home construction in the North, and that's of course the traditional home for SPF lumber. I think that's probably also pushing down SPF lumber prices, and relatively speaking to the benefit of southern pine. Interesting. Thank you. You guys are obviously much more heavy in the South. I mean, is it reasonable to expect? I think the numbers you provided suggest that, so your average pricing, 2Q versus 1Q, at least at this point, is better than like the Random Lengths composite. Is that fair? Yeah, we're doing a little bit better than the Random Lengths Composite and our southern mills are doing better than our northern mills. I think pricing, if you compare the spread, it's like versus our plan, the South is ahead by like $40 a 1000 and the North is behind like $40 a 1000. It's interesting how the stuff that you read about is actually feeding right through to our mills. Okay, great. Then one last one for me is, where are we in process in terms of new capacity or new sawmills starting up in regions where you produce? Sort of relatedly, because you actually at least historically have bought a bit more than you've sold, although I don't know if that's changed in the US South in terms of timber. I mean, are there certain sub-markets where you're long versus where you're short, which are worth highlighting as we think about the possibility of timber prices going, you know, moving up in the future? All of our mills in the South are in Arkansas. If you think about outside of Arkansas, the acreage we acquired from CatchMark, for example, our acreage in Mississippi or Alabama, all of that is. That's roughly 600,000 acres, that's not going to our own mills. You know, I would say if you step back and look at the mills, our mills where we operate, you know, we're internal. At the three mills in the South, we're using about 50% internal logs and 50% external logs, and there really hasn't been much of a change in that regard. Okay, that's helpful. Thank you. Uh-huh. We'll take our next question from Paul Quinn with RBC Capital Markets. Thanks very much. Good morning, guys. Just to see how performance in real estate was interesting and the guidance for 18,000 acres of rural lands in 2023 was a little bit of a surprise. I thought it was a couple quarters ago that you were saying that, you know, now that you sold Minnesota, it was gonna go to about half the run rate, you know, of what you were doing at the time, which was about 23,000. Just wondering if 23 here with the 18,000 is a novelty and then 24 will go back to something significantly lower, or where do you sit on that? Yeah, Paul, this is Wayne. You know, you're right. I mean, when we look at, you know, in 2022, you know, we sold over, you know, 10,000 acres of land in Minnesota, and so we've, you know, essentially completed that process to liquidate our Minnesota holdings. You know, I think now our regional mix shift in 2023 is, and along with the CatchMark merger, you know, that, you know, provides new opportunities and new markets. You know, we're really excited about that. You know, we've got markets in South Carolina, you know, Georgia and, eastern Alabama. You know, really, I think we'll see that kind of shift more to the South. You know, I think, you know, moving forward, you know, over time, I think we've, you know, have a proven track record of, you know, say approximately, you know, 1% of our holdings that will, you know, or 1% of our acres that, you know, we've been able to find opportunities for. You know, you think about that and that's about, you know, 20,000 acres or so. You know, we're slightly below that this year but, you know, rural sales can be lumpy and, you know, there's, you know, it takes time to develop some of these opportunities. You know, over time, you know, we have a track record of, you know, finding these opportunities, so I really think, you know, this is sustainable and, you know, we kinda look to, you know, that 18 to, you know, that 20,000, you know, going forward. Okay. That is sustainable at that level. Okay. Just flipping over to, you know, some of the things you're doing on the carbon side and the solar opportunities. I mean, lots of companies are announcing these things. No company has yet to come forward on any kind of economics or financial metrics around them. Maybe you could just sort of help us understand what the potential upside could be on some of those. Well, I think, you know, that's a tricky one, Paul. We had a solar deal last year, as you may recall. That one was done for $7,500 an acre. It was in Mississippi. It was a $13 million transaction, more or less. You know, I think that's representative of what the potential is for solar. Every deal is gonna be a little bit different. The economics are gonna be a little bit different. I think that's representative of where the market is. Okay. That's great color. What are you expecting on the carbon side? Paul, that's the million-dollar question here. So this first project that we're gonna do, it's exploratory. It'll be meaningful, but it'll be exploratory. We're taking our time to make sure that we do it right. We think the carbon value that we're gonna get is, you know, I don't know, somewhere between 50% and 100% higher than what the value would be had we harvested these trees. So it's meaningful. But we still have several quarters to go to get it across the goal line. I still don't think carbon values are high enough in the forestry sector to cause us to change our harvesting practices on our plantations. Basically, you know, Southern Yellow Pine sawlog is worth far more to a lumber mill than it is to somebody looking to buy carbon offsets. It's in these weaker timber markets where suddenly the opportunity for carbon, those values are higher than what stumpage is worth, you know, to a mill. It's gonna take time to prove this out. You know, we got our start, you know, growing trees for mills, so we like plantation forestry. You know, there will be a subset of our acres, I think, that in time are gonna have more value in carbon versus producing logs for mills. That's totally dependent upon what the carbon price is. Okay. Just lastly, yeah, I was kind of surprised with the no share repurchases in Q1, you know, given some of the things you were saying late last year on, you know, the ability that you've had to increase your net asset value. Just wondering if you were fully restricted in Q1 from buying that back, like, you know, especially early in the quarter? We were not fully restricted. There was a period of time where we could step in and buy, but it wasn't a very long period of time. You know, I think you've known us for many years, Paul. We're cautious. We're looking for deep discounts. There's a lot of uncertainty that's in the market right now. We're looking for those big dislocations to step in and buy. All right. That's all I had. That's all I... Thanks. We'll take our next question from George Staphos with Bank of America. Yeah. Hi, guys. Good morning. Just a couple quick ones from me. I wanna go back to home center demand and what you're seeing. I think, Eric, you mentioned that demand was more or less as you expected in the first quarter, but, you know, what were your expectations if you put a bit more guardrail or two around that? When you talk to your customers and, you know, you outlined, you know, what the, what the secular trends are in terms of why you're optimistic on, you know, first of all, you know, new construction as well as repair model. What concerns you the most, or what concerns your customers the most about the repair model outlook when you talk to them? What would... If we saw it in the journal tomorrow, would cause us to maybe start to lower our forecast there or raise them? Yeah. George, I would say we never. You know, you go back over the last couple quarters, we could all see that the Fed was jacking up interest rates, and there was a little bit more economic uncertainty. We never expected our repair and remodel business to fall off. Other pundits had been expecting it to fall off, and we never thought that it would, and in fact, it hasn't or it didn't. Mm-hmm. It kinda met our plan. If you look at the home center comp store sales numbers, they haven't fallen off a cliff either. They're like, you know, I don't know, 0 to -1 or something like that. Remember, all along the way, lumber's gone from $1,400 a 1000 to $400 a 1000. Yeah, prices have come off, but their comp stores are flat to slightly negative, but lumber prices have, you know, just completely collapsed. From a volume standpoint, that means their volumes across the store are hanging in there. Right. I listen to what the home centers say. They don't, they don't have a dire outlook. They just talk about business is kinda flat, that's kinda how we see it. I think flat in a market where housing is in a recession, generally speaking, flat is good on the repair and remodel side. What would cause R&R to, you know, to go backwards here? I don't know, maybe credit availability for some of these larger projects. I mean, certainly you see banking stress across the country, Silicon Valley Bank and Signature Bank and whatnot. Does that feed into limited credit availability for large remodeling projects? I suppose it's possible. Yeah. There's so much home equity that's been built up over the past couple of years, and there's so much, you know, demand for labor in this country. The unemployment rate is still at 3.6% last I saw. It's hard for me to see that being an issue, but it's certainly a possibility. It sounds like, and I appreciate all that. It sounds like the risks are skewed to the upside from what you see. You know, we kind of bump along here unless there's some sort of other credit issue that arise, and hopefully not. Otherwise, you know, we're flat to up over time from what you're seeing over the next couple quarters. Not trying to put words in your mouth, obviously no guarantees in life. Yeah, I would say my expectation is we kinda just keep bouncing along here, steady demand in R&R. I think we've got probably two or three quarters to go of kind of a little bit of rough sledding here on the new residential construction. We get out to 2024, almost every report I read says lumber demand is going right back up for new residential construction as housing starts to come back. You know, D.R. Horton had very favorable things to say on their recent earnings release. PulteGroup just said some great things. I think home sales or home starts were up. Some data released by the government this morning, showing month-over-month, I think starts or no sales, new home sales were up 10%. You know, I think to summarize, I think R&R is stable, and I think the opportunity is for new residential construction to really pick up the pace as we get out a year from now. Eric, that's great. You know, you showed in your waterfall obviously the manufacturing cost in wood, I think benefited results overall by about $2 million. You know, from where you sit and given what you can relay, what would you, if you were in our seat, be building into our waterfalls over the next two, three quarters on the manufacturing side for the wood segment? Well, I think what you're gonna, what you're gonna find, George, is we'll continue to ramp up our volumes at our Ola sawmill. As we ramp up that volume in that Ola sawmill, we'll get better fixed cost absorption. You know, inflation was a huge deal for us last year. I would tell you that inflation, those inflationary pressures are rolling over a little bit. Processing costs for us for the full-year, we expect them on a per 1000 basis with the higher volumes coming out of Ola, to be up just 1% full-year- over- full-year. Log costs are gonna be down, you know, in total, roughly 12% full-year- over- full-year. Total cash costs for our mills, we expect to be down around 7% full-year over full-year. We're gonna get a lot of benefit from that Ola sawmill running harder. Got it. Last one from me, and I'll turn it over. I'm recognizing that you said it earlier, I mean, land sales are lumpy and all that, but when I look at the rural realizations that you're targeting, a slight erosion from current trend to the end of the year, the average, what's driving that, if anything, recognizing it's mix? If you had any points that you wanna relay to us, we'd take it. Thanks, guys. Thanks. Yeah. On the, on the rural side, you know, we, you know, we definitely planned, you know, probably two larger tracks in 2023. They just happened to fall, you know, in Q1. It's by real no change in our, you know, 18,000 acres for the year. It's just, you know, timing and, you know, definitely the lumpiness of rural sales. Okay. I'll turn it over. Thank you, guys. Thanks. We'll take our next question from Michael Roxland with Truist Securities. Thanks, Eric and Wayne. Appreciate you taking my questions. Just two quick ones here. Eric, going back to your question, your comment on the home center customer takeaways. You know, you mentioned the home builders obviously seeing improved activity. There's better optimism. You have the home centers that are doing better, where activity has picked up again. Lumber inventories still seem to be tight. You have the BC issues that are curtailing lumber into the U.S. If all that's true, why do you think we haven't seen a more pronounced improvement in lumber prices? I realize that they're up versus earlier in the year, but given all these issues, given more con-- you know, given some of the builders, to like to use about D.R. Horton and PulteGroup talking about increased construction activity, given BC not producing as much, what's constraining a breakout in lumber pricing right now? I think it's two things. One, it's, demand for new residential construction has softened considerably. I mean, we're off, I don't know, 300,000 starts, 400,000 starts per year. You're right, there's been a lot of curtailments, mostly up in BC, that's taken supply off the market, but demand has also dropped here. That's the first thing is that demand has in fact come down quite a bit. But the second thing, and this is really important, is imports coming in from Europe are at a really high run rate right now. I think I read somewhere they're approaching 10% of U.S. consumption. Europe has got this spruce beetle issue. They got dead trees, dead and dying trees. They got really cheap logs through their mills. We've had a really strong dollar here over much of the past year due to rising interest rates. Europe has been relatively weak, so they've been a lot of lumber they've been producing with these really cheap logs has been on a boat headed to the U.S. Typically, that wood only finds its way into, like, the Northeastern Seaboard. You know, recently we've seen it in markets, like, as far away as Houston. We've seen a ton of imports coming into the U.S. from Europe. We're expecting that to be flat year-over-full-year. Then we expect it to come back down again as we get out to 2024, as European demand comes back. Basically, it's because less Russian, Ukrainian, and Belarusian lumber finds its way into Europe that European wood will tend to stay home and not come to the U.S. Another favorable thing coming our way next year is less European imports. Got it. No, that makes sense. Just one quick one on Southern saw timber prices. Recent data from trade publications showed, you know, mid-single-digit% year-over-year decline in Southern saw timber prices in 1 Q. Appears that you're doing better than that. Any reason as to why there'd be a difference versus that, versus the publications? Is it where your assets are located? Is it the mix? I'm just trying to get a sense of why there's such a, you know, why the outperformance in your with your timber relative to what the publication is showing for the broader U.S. y ourself. Yeah. I mean, it's, it varies by location. You know, we're gonna be down. I guess we were down 1% in Arkansas for Southern Yellow Pine, fourth quarter to the first quarter. We were down 3% over in those, quote, "more tensioned wood baskets" over in Georgia and South Carolina. We were down 4% in Mississippi quarter-over-quarter. It just varies. My outlook for Arkansas in Q2 is flat compared to Q1. It just bounces around depending upon the specific location. You know, I think the good news is it's not completely going into the ditch, number one. Then number two, you know, anytime you have a weather event, you know, that can turn prices around so fast. It's hard to read too much into these numbers. Got it. Thanks very much. Thanks. Thanks. At this time, I'm showing there are no more questions. I'll now turn the call back over to Wayne Wasechek. Thank you, Lisa. Thank you for your questions and your interest in PotlatchDeltic. That concludes our call. Thank you. Thank you. Thank you. That does conclude today's presentation. Thank you for your participation, and you may