Good morning. My name is Henry, and I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic Second Quarter 2023 conference call. All lines have been placed on mute to prevent any background noise. 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 number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I would now like to turn the call over to Mr. Wayne Wasechek, Vice President and Chief Financial Officer, for opening remarks. Sir, you may proceed. Good morning, welcome to PotlatchDeltic's second 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, and then I will review our second quarter results and outlook. Well, thank you, Wayne. Looking at our second quarter, we reported total adjusted EBITDA of $46 million after the market closed yesterday. Our wood product segment's adjusted EBITDA was $12 million in the second quarter, compared to breakeven results in the first quarter. Higher lumber prices were the primary driver of the improved results. We have seen a steady uptick in the composite lumber price since mid-June, driven by several factors, including favorable housing data, wildfires in Canada, falling European lumber imports, and additional capacity constraints from mill closures and curtailments, particularly in British Columbia. We continue to expect that lumber prices will remain above long-term averages. We shipped 280 million board feet of lumber in the second quarter, which was 18 million feet more than we shipped in Q1, and 26 million feet more than we shipped in Q2 of last year. In June of 2022, we announced a $131 million project to modernize and expand our Waldo, Arkansas sawmill. Project activity is currently focused on site prep and engineering, and the project remains on track to be completed by the end of 2024. The project will increase the mill's annual capacity by 85 million board feet and significantly reduce the mill's cash costs. 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. Our timberland segment generated adjusted EBITDA of $29 million in the second quarter. We harvested 1.6 million tons in the quarter, which includes the impact of Idaho harvest volumes being at their seasonal low point due to the typical pause for spring breakup. Our southern team achieved planned harvest volume in the second quarter, despite adverse operating conditions due to significant rainfall across the region. Both our northern and southern timberlands teams did a great job of exceeding our harvest plan in the first half of the year. Our real estate segment had a solid quarter, with adjusted EBITDA of $12 million. On the rural side of the business, we sold 900 acres at nearly $5,000 an acre. Additionally, our real estate team completed the stratification of the CatchMark Timberlands and has now identified approximately 70,000 acres that have the potential to be sold for significantly higher values than core timberlands. The development side of our real estate business remains strong despite the higher interest rate environment. Residential lot inventory in our Chenal Valley Master Plan community remains at low levels, and we continue to have good take-up on our lot offerings. During the second quarter, we sold 42 residential lots at an average price of $107,000 per lot and completed nearly $5 million in commercial land sales, which averaged over $800,000 per acre. As it relates to natural climate solution opportunities, we continue to make great progress in this area. Our team is working on a carbon credit project, which could come to fruition as early as the first half of next year. We are also exploring opportunities to supply mill residuals and pulpwood to pellet manufacturers and biofuel producers. In addition, we continue to see strong interest from solar farm developers to complete solar deals in the South. Our pipeline of potential solar land sales and leases is at nearly $200 million on a net present value basis. We expect this pipeline to grow. All these natural climate solutions opportunities will increase the demand for our rural land, likely driving timberland values higher. Shifting to housing, we are seeing signs of improvement. Sales and net orders for large home builders have recently improved. There is a record low level of existing homes for sale in the U.S., forcing prospective home buyers to look at purchasing a new home versus an existing home. This is translated into higher single-family housing starts, as June was the second month in a row where single-family starts were above 900,000 units. This is important, as a single-family unit uses approximately three times the lumber as a multifamily unit. Also, homebuilder sentiment has increased seven months in a row and is at the highest level since June of 2022. We continue to believe there are strong positive tailwinds to the housing market. 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 fully rebound is lower interest 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, making homes more affordable. Turning to the repair and remodel segment, which represents about 40% of lumber demand, the underlying fundamentals remain favorable for several reasons. Existing U.S. housing stock remains the oldest in the history of the statistic of 42 years on average. This is important because older homes are significantly smaller than new homes on average. Remote work means more people need more space, and older homes typically need more repairs. Remodeling is a very attractive option for homeowners, given strong levels of home equity across the U.S., a robust job market, and the fact that consumer balance sheets are generally in good shape. With higher mortgage rates, prospective homebuyers are more likely to stay in their existing home and remodel versus move up. As one indicator of continued strength of the repair-remodel segment, our volume sold to big box home center retailers is up 17% year-to-date over last year. Moving to capital allocation, we repurchased 9,000 shares for $400,000 during the quarter at $45 per share under our 10b5-1 plan. We continually evaluate all of our capital allocation opportunities to grow shareholder value over time, we will not act hastily towards any one of these options. Far too many companies indiscriminately buy back shares, destroying shareholder value. We remain committed to repurchasing shares, only when they trade at a significant discount to our estimated net asset value. Analysts on average peg our NAV at around $63 per share. As a reminder, we have $150 million remaining on our $200 million repurchase authorization. At the end of the quarter, we had $331 million in cash on the balance sheet and liquidity of $630 million. Our strong balance sheet with low leverage and significant liquidity provides us with the flexibility and a solid platform to continue growing shareholder value. Regarding environmental, social, and governance, we published our fourth ESG report in May. Our ESG report formally links our ESG strategy to four pillars: forest, planet, people, and performance, and advances our ESG strategic initiatives through short and long-term goals. PotlatchDeltic is committed to social and environmental responsibility and strong governance practices. We are proud of our progress and the initiatives we have underway in these areas. To wrap up my comments, PotlatchDeltic remains very well-positioned with an investment-grade balance sheet and a portfolio of high-quality assets. Our strategy is well-aligned with industry fundamentals and emerging opportunities. We remained a disciplined and opportunistic capital allocation approach. These attributes demonstrate our strong commitment to increasing shareholder value over the long term. I will now turn it over to Wayne to discuss our second quarter results and our outlook. Thank you, Eric. Starting with page 4 of the slides, adjusted EBITDA was $46 million in the Q2, compared to $58 million in the 1Q. EBITDA decreased quarter-over-quarter, as the effect of higher lumber prices in the Q2 was more than offset by lower seasonal harvest volumes and the sale of fewer rural acres. I will now review each of our operating segments and provide more color on our Q2 results. Information for our Timberland segment is displayed on slides 5-7. The segment's adjusted EBITDA decreased from $47 million in the Q1 to $29 million in the Q2. Our team leveraged good logging conditions to harvest 319,000 tons of sawlogs in Idaho in the Q2. This volume is seasonally lower than the 471,000 tons that we harvested in the Q1 due to typical spring breakup. Our Idaho sawlog prices increased 2% on a per-ton basis in the Q2 compared to the Q1. The higher sawlog prices were a result of the positive effect of a normal seasonal decrease in the density of sawlogs. In the South, we harvested 1.3 million tons in the Q2, compared to 1.6 million tons in the first quarter. Our Q2 harvest volume was impacted by challenging operating conditions due to unusually wet weather and softer log demand. Our southern sawlog prices in the second quarter were flat compared to the first quarter. Moving to Wood Products on slides 8 and 9, adjusted EBITDA increased to $12 million in the second quarter from break even in the first quarter. On average, our average lumber price realizations increased 9% from $435 per thousand board feet in the first quarter to $476 per thousand board feet in the Q2. By comparison, the Random Lengths framing lumber composite price was 1% lower in the second quarter compared to the first quarter. Note that our regional mix and product mix is not the same as the composite. Furthermore, there is a timing difference between our sales and the composite. As a reminder, the lag we experience between booking and shipping orders is not captured by the composite, which is closer to a real-time indication of price. Lumber shipments increased 7% to 280 million board feet in the second quarter. Our shipments were higher in the second quarter as a result of increased production at our Ola sawmill, higher cut rates in our northern mills due to warmer weather, and planned maintenance at our Warren mill that impacted production in the first quarter. Shifting to real estate on slides 10 and 11. The segment's EBITDA was $12 million in the second quarter, compared to $19 million in the first quarter. EBITDA generated by rural sales declined sequentially due to the mix and timing of transactions. EBITDA generated by our Chenal Valley Master Plan community was higher in the second quarter compared to the first quarter due to an increase in residential lot sales, along with 2 commercial real estate sales for a total of 6 acres, with prices that averaged over $800,000 per acre. During the second quarter, we closed on the sale of 42 residential lots at a lower average price than in the first quarter due to a different mix of lot price points. Turning to capital structure, which is summarized on Slide 12, our total liquidity at the end of June was $630 million. This amount includes $330 million of cash, as well as availability on our undrawn revolver. We have $40 million of debt that is scheduled to mature in December. We are currently evaluating our options on whether to pay off or refinance this debt. We still have $250 million of forward-starting interest rate swaps on our balance sheet that we can utilize to refinance debt at well below market rates. We repurchased 9,000 shares at $45 per share for a total of $400,000 in the second quarter. As a reminder, we have a 10b5-1 share repurchase plan in place, with $150 million remaining on our $200 million repurchase authorization. This reflects our ability and commitment to repurchase our shares at attractive prices as part of our broader capital allocation strategy, focused on increasing shareholder value over the long term. Capital expenditures were $12 million in the second quarter. That amount includes real estate development expenditures, which are included in cash from operations in our cash flow statement, and excludes timberland acquisitions. For the full year, we are planning to spend $135 million-$145 million, excluding any potential acquisitions. Our capital expenditure estimate includes $74 million for the Waldo, Arkansas sawmill modernization and expansion project. We received $23 million of insurance recoveries in the second quarter for property damage and business interruption related to the Ola sawmill fire. Since our claim was filed in 2021, we have received $73 million of insurance recoveries and expect to finalize our claim before the end of the year. 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 higher in the third quarter, but lower than a typical for a third quarter, as our team was able to pull forward a portion of our planned third quarter harvest volumes into the first half of the year. We expect Northern sawlog prices to rise about 8% in the third quarter compared to the second quarter. In the South, we plan to harvest 1.6 million tons in the third quarter. We expect our Southern sawlog prices in the third quarter to be flat to the second quarter. We plan to ship 270 million-280 million board feet of lumber in the third quarter. Our average lumber price thus far in the third quarter is approximately 2% higher than our second quarter average lumber price. This is based on shipments of approximately 120 million board feet of lumber. Our lumber prices have been increasing recently, and our spot price is currently about 6% higher than our second 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 third quarter. We're also still expected to sell approximately 18,000 acres of rural land in 2023. Additional real estate details are provided on the slide. Overall, we anticipate our total adjusted EBITDA will be higher in the third quarter compared to the second quarter. This is based on the expectations for higher lumber prices and a seasonal increase in harvest volumes. We are encouraged by the resiliency of new home demand and the steady improvement in home builder sentiment. We remain bullish on long-term housing fundamentals and believe we are well positioned to continue growing shareholder value over the long term. That concludes our prepared remarks. Henry, I'd like to now turn the call over to Q&A. At this time, I would like to remind everyone, in order to ask a question, press star, then 1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Our first question comes from George Staphos from Bank of America. Please go ahead. Thanks, everyone. Good morning, Wayne and Eric, thanks for the details. A couple of questions. First of all, is there a way to quantify what the effect of the weather was, particularly in the South, in Timberlands, what that might have cost you, either in terms of volume or EBITDA from, you know, what a normal 2Q would be, recognizing the weather always is something that you need to contend with? ... Yeah, thanks, George. Yeah, as it relates to, the impacts from weather, you know, we talked about in Q1, you know, the team did a great job of really exceeding the plan in the first quarter. You know, we, going into the second quarter, we knew, you know, the adverse weather conditions, and we knew that we were gonna kind of end up with our planned volume for, for year to date. You know, Q2, while there was adverse weather, you know, we really met our plan given what we had done in the, the first quarter of the year. You know, I think the, the key takeaway is, you know, we'll be there, you know, our planned harvest volume for the full year is what we would expect, so. You know, on the, on the pricing side, George, I would, I would say that mills never got so low on volume, that there was price pressure. You know, sometimes when mills get low on logs, you see a run in pricing, we didn't really see that in Q2. It was just, it was just a really challenging quarter, the, the team had to work around that, that weather. Yeah, actually, that was gonna be one of my next questions, Eric, so, so thank you for that. In terms of the pull forward on volume, into 2Q from 3Q, what do you, what do you estimate that is? Again, recognizing that you're on plan for your volume and your harvest profile for the year, but any way to quantify that if, if you didn't, and I, perhaps I missed it. Yeah, I, Well, I think to look at 2 things. One, if you look at our northern volume, so for year to date, we're probably 100,000 ahead, and so that will impact, you know, Q2 or Q3 and Q4, probably half in each of Q3 and Q4. Then for the South, you know, we're on track, so, you know, we're kind of normal volumes for the, the back half of the year, you know, in the kind of the 1.6 million range in the South for each quarter. Okay. two last ones for me, and, and I'll turn it over. One, to the extent that you have any view on this, what are you seeing in the fiber markets in terms of timber right now? Are you seeing, you know, customers coming back to, to the market and, and buying? Obviously, there's been a little bit of a through the first half, reduction in demand from, from the, from the paper mills. What are you seeing there, to the extent that you can, can offer any commentary? Then, you know, part of the story on, on wood products and housing this year has been driven significantly by the fact that rates are high. You're seeing not as much in the way of existing home sales because people who have a home are locked in at a lower rate, and so that's propelling more new home construction. With rates starting to come down, what are your contacts telling you in terms of what that might mean for the pace of existing home sales, and then in turn, what that might mean for new construction? Thanks, guys. Yeah. George Staphos, I'll, I'll take the first one on, on pricing. I think, you know, for the You know, going from Q2 to Q3, I think we're looking for, you know, southern prices to be, you know, relatively flat. I think from a demand standpoint, certainly, you know, we saw some mills take, you know, take some economic downtime, some quotas. You know, this is all market dependent, so probably where we see more tension on the coastal side, you know, our legacy CatchMark, you know, we've seen more, you know, more quotas and downtime taken. I think we're encouraged by- we're, we're seeing that start to loosen up here, going into Q3. You know, I think demand, we're seeing a little bit of pickup in demand there. Like I said, you know, pricing, you know, relatively flat, we're expecting from Q2 to Q3. I'll take, I'll take the second half of your question, George, regarding, you know, rates roll over, what I think is gonna happen to existing. I, I do think existing home sales will start to pick back up again if rates come down, and the reason existing will pick back up again is because people won't feel like they're, they're trapped in their existing home. Hopefully, that means they're looking to buy a new home in a, in a different location, perhaps. I don't think if rates come down, I don't, I don't see new home sales necessarily rolling over, and I, I think that's really driven by the fact that the U.S. is just flat out underbuilt, somewhere between 2 million and 4 million units, number one, and number two, you've got this age cohort, it's in the low 30s, that's anxious to buy a home. Rates rolling over, yeah, it'll. Existing home sales will pick up, but I don't, I don't envision that impacting new home sales. Sounds good. Thanks, Eric. I'll turn it over. Thanks. Our next question comes from Ketan Mamtora from BMO. Please go ahead. Thank you, and thanks for taking my question. First question, you know, coming back to U.S. South, I'm, I'm more curious about, you know, southern pulpwood prices. There's a pretty big drop reported by TimberMart-South. I'm just curious, as you think about your wood baskets, you know, do you see any impact, you know, in, in your kind of regions as you move into sort of Q3 and the, and the back half, in terms of pressure on pulpwood prices? Yeah, Ketan, this is Wayne. Yeah, it, it's difficult or a bit challenging to compare. You know, certainly, our prices aren't as down as much as TimberMart-South. I think when you look at, you know, TimberMart-South data, you know, a couple factors: one, it's, it's, you know, it's pretty thin on the data, and two, I think my understanding is they use a, a simple average for versus a weighted average. That, that information really, you know, can cause some volatility in, in pricing, especially when you compare it to ours. I, I think as it relates to pulpwood, you know, we're probably, you know, still a little bit flat to maybe slightly down. We expect, you know, going from Q2 to Q3, you know, still, like I said, we see... quotas and downtime on the, you know, pulp and paper business. Yeah, that's reflective of where we see pricing, you know, kind of into Q3 and maybe the latter half of the year. I think it's, I think it's interesting, Keaton, if you, if you, if you step back and look at it from a long-term perspective, this renewable energy that's taking off across the United States right now, solar, wind, there's a lot of biofuel work and sustainable jet fuel work and bioplastics work that's going on right now. I think I read the other day, there's something like $70 billion worth of new capital investment that's going into the U.S. South, announced projects, that by and large, are gonna use pulpwood and/or mill residuals to, you know, to provide the, the raw material feedstock for those mills. You know, you could look at it and say, "Well, prices are gonna be down quarter-over-quarter." I think long term, especially in the weaker pulpwood markets across the South, and I would include, you know, Mississippi, Louisiana, Arkansas, and in that, in that region, I think the long-term outlook is, is actually quite, quite, quite bright, given all the work that's, that's underway. Got it. No, that's that's helpful color, Eric. Other question that I had was around European lumber. I know that, you know, the, the amount of lumber that's coming in has come down. I'm just curious, in terms of the inventory that's sitting out, you know, along the East Coast, do you have a sense of, you know, kind of, where it stands, just qualitatively? Have we worked through most of that, or is there still some inventory that's, that's sitting out on the port? I, I don't know specifically, Ketan. I mean, I can only get, get my information from our, our sales team, which, you know, this is all anecdotal information, but I think those volumes have come down quite a bit. We're not-- it seems like, it feels like we're not running into European wood in places like, like Houston, for example. I think we ran into some European wood. I mean, I, I think it all makes sense that European imports into the U.S. would be coming down. You know, lumber prices have really collapsed over the past, you know, 12 months or so. The dollar has, has gotten weaker here since year-end. Just a whole bunch of reasons why Europe would, would not find the U.S. quite so attractive. You're right, we are seeing, we are seeing those imports start to roll over, and I, I think that trend is gonna, is gonna continue as we, as we move through the year. Got it. One final question from my side. In, in terms of the solar deals, Eric, I thought I heard you say about $200 million of, you know, kind of opportunity. You know, can you talk about, you know, at least, you know, for us, how should we think about, you know, sort of, sort of cadence? Not trying to, you know, pin you down with a specific number and, and a year, but in terms of sort of timeline of this opportunity, you know, how, how should we think about that? Well, that's a, that's a good question, Keaton. You know, what I'd, what I'd tell you right now is that what we have under option is five different deals. And of those 5 different deals, it's roughly 16,000 acres. That's roughly two-thirds of those are sale transactions, and roughly one-third is a, is a, is a lease type of a transaction. Now, the options that are in place for these deals they run anywhere from two to five years, so the developer has the option to pull the trigger and proceed with the deal for anywhere from two to five years. I think these guys are they're all scurrying about, trying to line up their equipment, trying to line up, you know, who they're gonna sell the power to, all the engineering work that needs to be done. They won't, they won't pull the trigger on exercising the option for the land until the very last minute. I would, I would tell you, we've seen a couple solar deals close now. One closed on CatchMark ground, and one closed on, on, on Potlatch ground. We've got, we've got five deals that are, that are under option. We've got another four deals that we're negotiating right now that we think are gonna be done by the end of the year. Then we're having conversations with, with a bunch of more folks that I'm not even really talking about here today. The momentum is only building for this, for this solar opportunity. I think it's remarkable when you think about, you know, what's under option and what we're negotiating, this roughly $200 million of NPV, it's roughly 20,000 acres of our land that we're talking about, transacting for, for a solar outcome. 20,000 acres, roughly 1% of our land, but yet $200 million, you know, out of our, you know, our, our enterprise value of, who knows, call it $5 billion. You know, 1% of our land for, call it, 4% of our enterprise value, that's, that's a, that's a pretty good trade. It, again, it feels to me like the momentum in this business is only picking up. That IRA legislation that was passed, provided a lot of incentives for renewable energy, and that's, that's really what's behind all this momentum. Got it. No, that's very helpful. I'll jump back in the queue. Good luck in the back half. Thanks, Ketan. Thanks. Our next question comes from Anthony Pettinari from Citi. Please go ahead. Good morning, Eric Cremers, Wayne Wasechek. This is, Greg on for Anthony. Greg? Hey, Greg. Just a quick question for me on real estate. I think you mentioned 70,000 acres in the acquired CatchMark portfolio can be sold at higher values than, than timberlands. It, it seems like a pretty large amount to me. I'm just hoping you could provide some color on the types of opportunities you identified and what premium you expect you can capture on these HBU lands. Just as a point of clarification, how many of those 70,000 acres-... are included in the $200 million for solar land sales and leases? Yeah, Greg, when it comes to the CatchMark stratification that we just completed, yeah, we about, you know, we acquired 350,000 acres, and so we identified almost 20% of those acres, or about 70,000 acres. 20% of those acres, or about 70,000 acres, is, is higher premiums to timber values, and that's driven off of, you know, recreation, potential, conservation, you know, adjacent landowners, you know, even solar, solar potentials. You know, and the reason I think for that higher percentage is, you know, we're near some large population areas, so just that increases the has increased the potential for, you know, premiums on those values. I think, you know, the next thing is when we look at, you know, what CatchMark had, had historically done, they were selling timberland for, for a premium to timber values. Our approach is, you know, we're selling HBU for a higher premium, you know, and we're providing a little bit different product to the market than what CatchMark did, you know, historically had done. I think we're looking at more tracks, but a higher value per, per acre. And again, that's driven off of these opportunities around recreation, conservation, you know, adjacent landowners and so forth. You know, and, and we've already started listing some of these properties and, you know, we're really seeing some. We're, we're pleased with the activity that we've seen so far. Then, as it relates to, your, your question on the solar, no, none of this stratification is included in, you know, the $200 million that Eric referred to. Okay. That, that's very helpful. Thank you. Then just, just a quick one on, the lumber sales to... or lumber volumes, excuse me, to big box retailers, you mentioned are up 17% year-over-year. Can you speak, if, if it's possible, can you speak to how much of that may have been driven by an inventory rebuild? You know, inventories reached very low levels, you know, in, in the first half. How much of that was driven by a rebuild? I guess, where are inventories now at these big box retailers in August, and what level of fall demand do you think they're preparing for? Yeah, Greg, I don't, I don't think I can answer your, your question. All I would say is we've, we've seen pretty steady takeaway at the end of the day from, from the home centers. I don't think this was driven by, you know, an inventory rebuild. I also don't know that their lumber volumes are necessarily up 17% year to date. I think it may have something to do with the specific product that we're selling them, which are, which are studs, which tend to be used in a wide variety of applications. I wouldn't, I wouldn't read into this, that their, their lumber business is up 17%. I would, I would just reiterate that our, our sales through those channels have been very, very steady, which indicates to me that the repair and remodel business is, is also very steady. It's not going through some, you know, catastrophic decline here. It's, it's hanging in there pretty good. That's what I would read into it. Okay, great. Thank you very much. Our next question comes from Michael Roxland, from Truist Securities. Please go ahead, Michael. Thank you, Eric and Wayne, for taking my questions. Just one. With respect to the housing, the improvement in housing, what are you seeing regarding lumber curtailments? Have you seen any mills jump back into the fray to try to capitalize on better demand at higher prices? No. You know, Michael, we've, we've seen, we've seen roughly 3 billion board feet of curtailments now. You know, roughly half of that has, has been announced as a permanent closure, and roughly half is a temporary curtailment. It's, it's really hard to get good data on what individual mills are, are, are doing. I, I don't know that I've heard of any mills that are starting back up again just to, just for home center or in our demand. Prices have come up. That, that, that could compel people to, to, to restart their mills, but I, I have not heard of any at this point. Got it. Thanks, Eric. Just one quick one as well. In terms of what's, what's happened with, with housing and obviously improved housing market, have you seen any increased tension resulting from in certain timber markets, in wood baskets, from an improvement in demand for wood products? No. Too early? Yeah, I, I would say it's too early. I mean, we've, you know, prices are, you know, down slightly, but, you know, compared to last year. I think, you know, they've held up, you know, quite well, what we've expected. You know, I, I think that's we're encouraged by that, but, you know, I think those will kind of hold steady. You know, we You know, I think on the long term, we expect those markets to continue the tension, and we would expect, you know, those summer- southern prices to continue to increase. Thanks. Just one last one. Is there typically a lag that you see, is it six months, nine months, where if you have housing improving, wood products improving, is it, you know, what, what type of lag do you have between when you start to see a tension in the wood baskets versus the wood product side? Yeah, You know, I don't know if I think there's a lot of factors that go into the prices around, not only, the, the demand, but, you know, there can be some volatility with weather-related and, and other factors. You know, I, I think, yeah, I don't know if there's a specific, you know, timetable on, on what that lag looks like. ... I think one of the biggest drivers, Michael, is just going to be lumber inventory that's in the system. Do dealers, do they feel compelled, like they have to buy the lumber, or do they look at their existing inventories and say, "You know, I got enough now to meet demand?" I think to Wayne's point, there's just a whole host of factors that weigh into how long that, that, that process takes. Gotcha. Thanks, guys. Good luck in the second half. Thanks. Our next question comes from Kurt Yinger from D.A. Davidson. Please go ahead, Kurt. Great, thanks, and good morning, Eric and Wayne. Hey, Kurt. Hey, I, I just want to start out on wood products. Could you just talk about how you're thinking about log and unit manufacturing costs kind of heading into Q3, and, and also just give us an update on the industrial plywood business? I mean, looks like that was a decent drag in Q2, and, I'm curious if that's tied to the weakness in the RV market at all. Yeah, Kurt. The first thing is going into third quarter, I do think that processing costs and log costs are going to be lower in third quarter versus second quarter. You know, we'll continue to get benefits out of our Ola mill, our cost per 1,000 at Ola is going to continue to decline. Similarly, some of our mills in the South, like Warren, for example, lost some shifts in second quarter to a power outage, and, you know, that cost us some volume in second quarter, so we'll get better absorption of overhead costs in Q3 versus Q2. Fiber costs at St. Maries have been coming down. I, I think we are going to see lower costs per thousand in Q3 versus Q2 to answer your first question. Your second question regarding, yeah, plywood and residuals, they, they were a drag, nearly $4 million comparing Q2 to Q1. You know, our industrial-grade plywood business, I think we've talked about this before, but we're really producing high-quality plywood for use in things like boats and RVs and truck panels, things that are typically financed by consumers. As we've seen interest rates increase, of course, demand for these items has dropped. As demand has dropped, pricing has dropped. The plywood business has been under pressure. We do think that's going to turn around as we get into Q3. We do think demand is starting to come back. Some of our dealers really brought their inventory levels to rock bottom levels in Q3. We think they're going to start rebuilding in Q2. They're going to start rebuilding inventories in Q3. We think demand is starting to come back to that, to that business. On the residual side, yeah, we had some outages from some customers in the second quarter, in particular, Packaging Corp's Wallula container board mill in Washington State. They're taking downtime. I don't think they're going to start back up until, I don't know, fourth quarter, perhaps. Out in Michigan, Billerud's got a, I think, a paper mill that took 3 weeks of downtime. You may recall they had some kind of a fungus that was running through their mill. They took three weeks of downtime in, in Q2 due to some fungus outbreak. You know, frankly, I think the way I would characterize it is that Q2 is a low point, and I think when you look at our results for, for third quarter, you'll see that, that, that variance, you'll see that, that flip back to a, a positive variance again. Got it. Fungus outbreak, that's, that's a new one. I guess turning to the forest carbon project, could you maybe talk about where that's located and, and any more color that I guess you're willing to provide at this stage around that? Yeah, Kurt. It is in the- it is in the US South. It is in some hardwood bottomlands. It's roughly 50,000 acres in size. I think we're going to get it done across the goal line sometime in the first half of next year. We think that our project is going to involve about the highest quality carbon credits that are- that are possible. Consequently, we expect pricing for our, our carbon credits to be quite high. I'm, I'm really quite optimistic about, about this piece of our, our business. When you think about all the net zero pledges that are being made out there by companies around the world, and I, I read something the other day, it's like 9,000 international companies have pledged to get to net zero. You got to get there somehow. You know, even Delta Air Lines was just written up as buying, you know, flaky credits not, not too long ago. Increasingly, companies that have made net zero pledges, they, they want high-quality credits, and that's the type that we're going to- that we're going to offer them. You know, the other thing that I would highlight is that there's a lot of private capital that's now flowing into the carbon credit space in, in forestry. Think about Oak Hill, Manulife, JP Morgan. We think our, our-- I think I heard Weyerhaeuser say something about, I don't know, $20 a ton or something like that. I think that our, our carbon prices, it's, it's early to say, but they could be $20-$40 a ton, somewhere in, in that range, and it could be roughly 100,000 tons of credits a year or roughly $3 million a year, of, of EBITDA, more or less. We got a long ways to go to get from here to there to get good, high-quality credits issued. It's a lot of work, but the team is working very hard to, to get it done. We'll give you progress updates on this every, every quarter, but to wrap it up on this, I really am quite optimistic about it. Got it. Okay. Yeah, that's, that's super helpful color, Eric. I appreciate it. Then just lastly, I guess talking broadly, what are you seeing out there in, in terms of timberland transaction activity and, and the opportunity set for, for PotlatchDeltic Deltic at this stage? ... Yeah, well, the, the Timberland M&A market, it's relatively quiet right now. We think people are holding off with their properties. I don't know if they're waiting for lumber prices to improve, they're waiting for interest rates to come down, they're waiting for some carbon deals to, to get accomplished, so people have more, more faith in that, that value stream. The market's kinda, kinda quiet right now, and the stuff that is getting brought to market is going for a very high price. I think we've competed over the past year or so in seven different M&A transactions, and we've been in the, the bottom half in virtually every single bottom half of bidders in, in, in every one of those, those transactions. We're, we're sticking to our traditional valuation metrics. Our cost of capital has gone up, yet it seems as though the value of timberland has, has, has only gone up. What that's forcing us to do is to... And we've always done this, but I think we're actually particularly good at it, we're, we're, we're proceeding with deals that are off the auction market. They're one-off deals, where we think we can get a particular, particularly good deal at the end of the day. It's hard to create value when you've got- well, there's one deal that we did where there were 48 bidders, if you can, if you can imagine that. You're not gonna create shareholder value winning an auction where you're competing against 47 other bidders. We're gonna, we're gonna try to go find those one-off deals where the auction intensity is not, not quite so high, and we think we can, we can get a, a good deal on a, on an off-market property. Okay, makes sense. Good luck here in the second half, guys. Thank you. All right, thanks, Kurt. Our next question comes from Mark Weintraub from Seaport Research Partners. Please go ahead. Thank you. A few follow-ups. First, just on, on the CatchMark stratification, I, I think you've been selling order of magnitude 15,000-20,000 rural acres the last couple of years, and I think that's sort of what, what you, you view as trend line, correct me if I'm wrong there. And with the CatchMark stratification, might that bump up a bit in the next couple of years? And by how much perhaps, if indeed that's the case, or does it sort of get folded in, and you just keep going at a most likely similar rate? Yeah, there's a couple of things there, Mark. you know, one, when we look at- when we think about our rural sales program, you know, we really target, and, and based on our history and what we've been able to accomplish, you know, probably about looking to sell about 1% of our portfolio. you know, our run rate would be around 20,000 acres a year. I think, you know, with the stratification, that, that still maintains that level. I think one reminder, you know, if you look back for even, for example, 2022, you know, we sold around 20,000 acres, well, half of those acres were tied into Minnesota, so we had about 10,000 acres of Minnesota. Now we've, you know, we've liquidated our, our portfolio in, in Minnesota, and now that's shifted to the South. Really, I think where we've seen, you know, because of the liquidation in Minnesota, that's, you know, being made up by, you know, what, what we see in our program in the South. Okay. On the carbon credits, Eric, you threw out kind of 100,000 tons per year. Is that specific to the 50,000 acres where you were working, or is that a kind of more, is that number perhaps based on something beyond the 50,000? Did I hear you right, that you would expect that to be a recurring number as opposed to having to go out and create new projects to, to keep that number in the 100,000 tons per year range? Yeah, I. It, we think the property that we're, we're, we're looking at, it will generate roughly 100,000 tons, or excuse me, 100,000 credits per year for the life of the project. We're not, we're not done finalizing the project, but it could be a 30-year kind of a, a project where we sell these credits every year. And at roughly, if we pick the midpoint, $20-$40 a ton range, we pick the midpoint, $30, that would be roughly $3 million a year of carbon credit sales. Okay. That would be pretty good. Let's just see, one last question. You know, lumber markets, it, it kind of feels like pricing's a little bit wobbly again. I, I guess seasonality could be part of the explanation, but, you know, we've talked about housing being strong, you've talked about repair models still being pretty stable. What, what's, what are your thoughts? What's, what's going on, and, what's your crystal ball tell you as to how things might play out through, through the rest of this year, if you're willing to share? Yeah, Mark, I, I wouldn't say they're wobbly necessarily. I, I would say they feel like they're kind of plateauing here. You're right, we've had several weeks of Random Lengths, just every week it was higher, higher and higher and higher. You know, that was driven by a whole bunch of things: fires up in Canada, European imports rolling over, better housing data. Now I think about those factors, for example. Well, fires are starting to impact the US West. We've seen some pop up out here in the, in the west. No impact to our ground, by the way, but we've seen fire activity start to pick up. The fire activity up in Canada, I feel like, is kind of starting to roll over a little bit. I heard Weyerhaeuser talk about they've restarted their two mills in Alberta that were impacted, for example. We've also seen European imports roll over, and we've also, the latest housing print was not quite as strong as the, the, the prior ones. And you're also getting into the time of the year where you do get into a little bit of seasonal weakness as we, we get out into those winter months. I don't anticipate a collapse in prices. Clearly, the first quarter was, was, was a low point in, in my mind, for the year. We've had a nice run here, and I expect these prices to kind of stay where they're at or maybe drift slightly lower as we move into, into Q4. Okay. Appreciate the color. Thanks, Eric. Thanks, Mark. Our next question comes from Paul Quinn, from RBC Capital Markets. Please go ahead. Yeah, thanks very much. Morning, guys. Morning. Following up on this, carbon capture. Just wondering if you could help us understand the 50,000 acre project you've got. What are the timberlands like in that area? Is that marginal timberlands? You know, are you planning any kind of projects for, for, say, some of the stuff that you've got, you know, in, in northern areas like Idaho? Yeah. This is our, our, our first deal that we're looking at getting done, Paul. It's, it's, it's a very, again, to, to issue good credits, high quality credits, which is where the, where the money is, it's a painstaking process. This is not a high quality, industrial-grade plantation forestry in the South. This is hardwood bottomlands that can be harvested, but it may not be harvested year-round. It may be difficult to, to harvest, tracks. Yet it's still, it's, it's still property that we would, we would look to harvest, if we didn't put it into a carbon program. You know, carbon values are not yet to the point where they impact plantation forestry. We'll, we'll see, with, with demand being what it is for carbon credits and supply being where it is, demand is just far outpacing supply. Assuming companies stick to their net zero commitments, there's upward price pressure on carbon credits. As it relates to Idaho, yeah, once we get this first deal done, I think we're gonna, we're gonna learn a lot from this deal, and we'll apply that knowledge to, to, to all of our acres, just like we always do. We're out to maximize the value of each and every acre that we own. I'm sure we'll look at, at acreage in Idaho to see if, you know, carbon makes sense in Idaho. Okay. Thanks for that. Given that it's bottomland hardwoods, I suspect that the harvesting impact, long-term harvesting impact by setting this up in a carbon project is not gonna be material? Yeah, I, I wouldn't expect it to be material at the end of the day. Okay. Then on, on the, carbon storage front, any opportunities there for you guys? You know, we're still, we're still looking at it. We've got great geological formations in southern Arkansas, where we can, we can store carbon. The, the key is to have your geological formation be close to where the emitters are. So that way you don't have to pipe it, and there's not a lot of capital cost to, to, to get the carbon to the formation. We're, we're, we're exploring, and, you know, this is, this is gonna take time. We're also having conversations with, with folks that want to build biofuel plants of one form or another in Arkansas, and then immediately carbon capture and store, you know, the carbon that comes off the process. It's, it's, it's definitely an opportunity for us. It's just, it's several years out. All right. That's all I had. Best of luck. Thanks. All right. Thanks, Paul. Thanks, Paul. Our next question comes from Buck Horne, from Raymond James. Please go ahead. Hey, thanks, guys. Most of my questions have been answered. I've just got one quick one for you on the commercial land sales at Chenal Valley. Just, can you just give a little color on that particular acreage and how you were able to achieve such a high price point? You know, what else do you have? Any other crown jewels at Chenal Valley similar to that, we could factor into the portfolio? Yeah, Buck Horne. This Wayne Wasechek. Yeah, a couple of things. I think the, the two properties that we sold this quarter, one was for, I believe, a bank, and the other one was a medical office. They were at prime locations, so, you know, depending on the location, that, you know, really drives, you know, the price per acre. You know, I think we have, you know, just under 300 acres of commercial land available at Chenal Valley. You know, I think as we continue to develop the pipeline, and, you know, as you know, that can be lumpy, and it's a little bit challenging to predict when those commercial sales will close. I think as we continue to increase, you know, with residential being positive, and that's continuing to go strong, I think as that continues to grow, rooftop density increases it continues to increase, and then I think that'll only benefit commercial, so. Okay. That's helpful. That's all I got. Thank you, guys. Thanks, Buck. Thanks, Buck. At this time, I'm showing that there are no more questions. I'll now turn the call over back to Wayne Wasechek. Yes. Thank you for your questions and your interest in PotlatchDeltic. That concludes our call. Ladies and gentlemen, thank you for all joining. You may now disconnect.