Good morning. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic Third 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, simply press Star one again. 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, and welcome to PotlatchDeltic's Third 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 our presentation slides, and in our filings with the SEC regarding the risks associated with these forward-looking statements. Also, please note that a reconciliation of non-GAAP measures can be found on our website at www.potlatchdeltic.com. I'll turn the call over to Eric for some comments, and then he will review our third quarter results and outlook. Thank you, Wayne. Looking at our third quarter results, we reported total adjusted EBITDA of $56 million after the market closed yesterday. These solid results reflect improved financial performance across all of our business segments compared to the second quarter. Our Wood Products segment's adjusted EBITDA was $15 million in the third quarter, compared to $12 million in the second quarter. Slightly higher average lumber prices were the primary driver of the improved results. We have seen a steady decline in the composite lumber price since peaking in late July, driven by several ongoing headwinds, including higher interest rates, housing affordability challenges, and declining consumer confidence. We believe lumber prices are starting to bottom out as the lumber composite price hovers in the upper $300 per thousand board foot range. We continue to remain optimistic about long-term housing fundamentals that drive demand for our business, but overall macroeconomic concerns remain. For the third quarter, we shipped 276 million board feet of lumber, which was slightly below the volume we shipped in Q2, but 11 million feet more than we shipped in Q3 of last year. We remain focused on executing our capital project plan, including our $131 million project to modernize and expand our Waldo, Arkansas sawmill. We continue to hit our major milestones on the Waldo project, which is 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 $42 million in the third quarter, compared to $29 million in the second quarter. We harvested two million tons in the third quarter, achieving the high end of our Q3 forecast harvest range. Drier logging conditions, combined with good execution by our team, resulted in setting a record for quarterly volume in our southern Timberlands business. Southern sawlog and pulpwood markets remained stable during the third quarter. Our real estate segment contributed $14 million in adjusted EBITDA to our third quarter results. On the rural side of the business, we sold 3,300 acres at over $3,500 per acre. We continue to see strong demand for rural properties at significant premiums to core timberland values. Additionally, our real estate team capitalized on our recent stratification of the CatchMark Timberlands, as nearly half of our rural business's quarterly performance was attributable to the acquired CatchMark portfolio. On the development side of our real estate business, we sold 32 residential lots in our Chenal Valley Master Plan community at an average price of $89,000 per lot and completed a commercial land sale for $1.4 million. We have had good absorption on our lot offerings for the majority of this year, but we are starting to see modest signs of slowing by regional builders in Chenal Valley on the take-up of our new lot offerings. Turning to natural climate solution opportunities, we continue to build momentum in this area. Our team is making good progress on our carbon credit project on approximately 50,000 acres of low-lying hardwood timberlands in the South. We are currently working through the certification process with a very reputable firm to establish high-quality carbon credits. We anticipate completing the process around the end of the first quarter of next year, with submission to the market immediately following the certification and envision having the credit sold by mid-year. We are also exploring other NCS opportunities to supply mill residuals and pulpwood to pellet manufacturers, bioenergy providers, and biofuel producers. As for solar deals, we continue to see strong interest from solar farm developers in the South. We now have nearly $200 million on a net present value basis of solar land sale and lease options under contract, representing less than 2% of our timberland acreage. In fact, since last quarter, we have executed four new solar option contracts with a net present value of $70 million in the aggregate. We believe all of these natural climate solutions opportunities will increase the demand for our rural land and drive our timberland values higher. Shifting to housing, demand for new single-family residential construction has remained resilient despite an elevated mortgage rate environment. With a historically low level of existing home inventory for sale in the U.S., prospective homebuyers are looking at purchasing a new home versus an existing home. Though down from last year's 1.6 million unit run rate, housing starts have hovered around 1.4 million units this year. While new residential home demand has been relatively stable over the course of this year, persistently high mortgage rates are taking a toll on home builders' confidence. After increasing for seven months in a row, beginning in January of this year, home builder sentiment has reversed course and trended downward over the last couple of months. Current housing headwinds, including higher mortgage rates, which are approaching 8%, housing affordability, and uncertainty on the overall direction of the U.S. economy, are weighing on demand. But we continue to remain positive on longer-term housing fundamentals, which drive demand for our business. We believe an underlying shortage of housing stock, which some estimate to be between two and four million units, and favorable demographics will provide positive tailwinds to the housing market. Turning to the repair and remodel segment, demand in this area has been strong, and we expect it to remain solid. We believe that in this higher interest rate environment, the repair and remodel market is being supported by homeowners that are staying in their existing homes and renovating versus moving into a new home. An aging housing stock, remote work, and high home equity levels also support the R&R market. No doubt, high interest rates and falling existing home sales will temper repair and remodel spending over the coming year, but we remain optimistic in this market segment. In fact, our home center takeaway continues to remain strong and is up 15% year to date over last year. Moving to capital allocation, we repurchased 283,000 shares for $13 million during the third quarter and repurchased an additional 264,000 shares for $12 million since the end of September. All of these shares were repurchased for an average of $45 per share under our 10b5-1 plan. We have an additional $125 million remaining on our existing repurchase authorization. We follow a disciplined capital allocation strategy, including when we issue shares to acquire strategic assets and when we repurchase shares. For example, when we entered into the CatchMark merger in May 2022, we utilized our shares valued at $60.56 per share to fund the acquisition. Since we announced the merger, we have repurchased 1.8 million shares for $80 million at an average price of $45 per share, which we believe is well below our estimated net asset value. We continually evaluate all of our capital allocation opportunities to grow shareholder value over time, and we will not act hastily towards any of our options and will continue to remain disciplined and opportunistic in our approach. Regarding environmental, social, and governance reporting, in addition to the publication of our fourth annual ESG report in May, we issued our second annual Carbon and Climate Report in early October. Our Carbon and Climate Report highlights, among other items, the potential impact of various climate change scenarios on our Southeast Timberlands and our Lake State sourcing areas. PotlatchDeltic is committed to social and environmental responsibility and strong governance practices, and we are proud of our progress and the initiatives we have underway in these areas. To wrap up my comments, PotlatchDeltic continues to be very well-positioned with an investment-grade balance sheet and a portfolio of high-quality assets. We will continue to maintain a disciplined and opportunistic capital allocation strategy as we seek to maximize shareholder value over the long term. I will now turn it over to Wayne to discuss our third quarter results and our outlook. Thank you, Eric. Starting with page four of the slides, adjusted EBITDA was $56 million in the third quarter, compared to $46 million in the second quarter. The quarter-over-quarter increase in EBITDA was primarily driven by seasonally higher harvest volumes and improved index Idaho sawlog prices. I will now review each of our operating segments and provide more color on our third quarter results. Information for our Timberland segment is displayed on slides five through seven. The segment's adjusted EBITDA increased from $29 million in the second quarter to $42 million in the third quarter. We harvested 377,000 tons of sawlogs in Idaho in the third quarter. This volume is seasonally higher than the 319,000 tons that we harvested in the second quarter. Our Idaho sawlog prices increased 12% on a per ton basis in the third quarter compared to the second quarter. The increase in sawlog prices was the result of higher prices for index sawlogs. Our index prices reset on a one-month lag, which means the third quarter index prices reflect slightly higher lumber prices, primarily in June and July. In the South, we harvested 1.6 million tons in the third quarter, compared to 1.3 million tons in the second quarter. Our Southern sawlog prices in the third quarter were flat compared to the second quarter. Turning to Wood Products on slides eight and nine, Adjusted EBITDA increased to $15 million in the third quarter from $12 million in the second quarter. Our average lumber price realizations increased 1% from $476 per thousand board feet in the second quarter to $481 per thousand board feet in the third quarter. Our average lumber prices were consistent the first two months of the third quarter before declining approximately 3% in September. Our average lumber price realizations per thousand board feet were $486 in July, $486 in August, and $472 in September. Lumber shipments were 276 million board feet in the third quarter, compared to 280 million board feet in the second quarter. Our shipments were slightly lower in the third quarter, primarily as a result of the timing of in-transit shipments versus the second quarter. Higher lumber realizations and lower log costs on a per unit basis drove improved margins. Shifting to real estate on slides 10 and 11, the segment Adjusted EBITDA was $14 million in the third quarter, compared to $12 million in the second quarter. The increase was due to the sale of more rural acres compared to the prior quarter. Our real estate team did a good job of bringing CatchMark properties to market following the recent completion of a stratification of the portfolio. The sale of CatchMark parcels contributed to nearly half our rural business's performance this quarter. EBITDA generated by our real estate development business was lower in the third quarter compared to the second quarter, due to a decrease in residential lot sales and fewer commercial acres sold at our Chenal Valley Master Plan community. During the third quarter, we closed on the sale of 32 residential lots at a lower average price than in the second quarter, due to a different mix of lot price points. Also, we recorded over $1 million in commercial revenue in the third quarter, compared to almost $5 million in the second quarter. Turning to capital structure, which is summarized in slide 12, our total liquidity at the end of September was $602 million. This amount includes $303 million of cash on our balance sheet, as well as availability on our undrawn revolver. We plan to refinance the $40 million of debt that is scheduled to mature in December of this year. We have effectively locked in the refinance rate at approximately 2.5% after patronage credits from lenders and using a portion of our existing forward-starting interest rate swaps. Utilization of our forward-starting interest rate swaps allows us to refinance this debt at well below current market rates and lower our annual cash interest by approximately $500,000, beginning in December. After this refinancing, we will still have $200 million notional of forward swaps to deploy to keep our future borrowing costs low. We repurchased 283,000 shares at $45 per share for a total of $13 million in the third quarter. Additionally, we continued to repurchase shares under our 10b5-1 share repurchase plan after the quarter ended. So far in the fourth quarter, we have repurchased 264,000 shares at $45 per share for a total of $12 million. Therefore, year to date, we have repurchased 556,000 shares for a total of $25 million, which leaves us with $125 million remaining on our $200 million repurchase authorization. Capital expenditures were $27 million in the third 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 to $140 million, excluding any potential acquisitions. Our CapEx estimate includes approximately $74 million for the Waldo, Arkansas sawmill modernization and expansion project. During the third quarter, we finalized our Ola sawmill fire insurance claim with our insurance carriers for a total of $89 million, net of a $2 million deductible. Our insurance claim covered both property replacement and business interruption at the sawmill. Finalization of the claim resulted in the recognition of the remaining $16 million of insurance recoveries during the third quarter. As a reminder, we recognized $50 million of the settlement prior to 2023, with the remaining $35-$39 million recorded this year. We'll now provide some high-level outlook comments. The details are presented on slide 13. We expect to harvest 1.8 million to 1.9 million tons in our timberland segment in the fourth quarter. Harvest volumes in the North are planned to be lower in the fourth quarter compared to the third quarter, as our team was able to pull forward a portion of our planned annual harvest volumes to earlier in the year. We expect Northern sawlog prices to decline about 10%-15% in the fourth quarter, reflecting lower index sawlog prices and seasonally heavier logs. In the South, we plan to harvest approximately 1.5 million tons in the fourth quarter. We expect our Southern sawlog prices in the fourth quarter to be flat to the third quarter. In our wood product segment, we plan to ship 270-280 million board feet of lumber in the fourth quarter. Benchmark prices for lumber have continued to trend downward since the end of the third quarter. Our average lumber price thus far in the fourth quarter is approximately 12% lower than our third quarter average lumber price. This is based on shipments of approximately 105 million board feet of lumber. . Moving to real estate, we expect to sell approximately 6,800 acres of rural land in the fourth quarter. As for residential lot sales, we are seeing indications of softening in the new residential construction market in Chenal Valley. We are reducing our anticipated number of lots, approximately 37 in the fourth quarter and approximately 135 for the full year of 2023. Additional real estate details are provided on the slide. Overall, we anticipate our total Adjusted EBITDA to be lower in the fourth quarter compared to the third quarter. This is based on the expectations of lower lumber and indexed Idaho sawlog prices. Looking forward, high mortgage rates and macroeconomic uncertainty will continue to challenge the housing market in the near term. However, we remain bullish on longer-term housing fundamentals and believe we are well positioned to continue growing shareholder value over the long term. That concludes our prepared remarks. Sarah, I would now like to open the call to Q&A. Thank you. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, simply press star one again. One moment, please, for your first question. Your first question comes from the line of Anthony Pettinari with Citi Research. Your line is open. Good morning. Hi. Good morning. It looks like southern sawlog realizations were flat from 2Q to 3Q, and I think you expect kind of the same in 4Q. Was this, like, fairly consistent across the southern portfolio, or did you see, you know, relative strength in Arkansas versus the CatchMark regions? Or is there any kind of submarkets where you'd flag any, you know, supply differences, maybe sawmill capacity adds, reductions, or any other kind of drivers? No, I think it was from region to region, it was generally pretty consistent quarter-over-quarter. You know, we saw you know, going back to earlier in the year, we did see a little bit of a difference between our coastal or southeast market, where that tends to be, that's a more tensioned market. And with that, we saw prices decline a little bit more earlier in the year compared to our Gulf South region. But, you know, since earlier in the year, those have really, you know, kind of flattened out and remained fairly consistent. Okay. And then just shifting to wood products. You know, lumber has been under $400 for maybe over a month now. Just wondering if you could talk about maybe dealer inventory levels, maybe willingness to restock at these prices, and any, you know, capacity response that maybe you're seeing from competitors, in regions that you operate in. Yeah, Anthony, I'll take that one. This is Eric. You know, I think the way I would describe inventories is that they're, they continue to be at really low levels. I think dealers are very nervous in this environment when you've seen interest rates shoot up the way that they have shot up over the, you know, the past month or two. You know, you see a war in Ukraine continuing to linger, now you see this Middle East flare up. I think people are just really nervous about this macroeconomic environment, and consequently, they don't want to have high levels of inventory. So I think inventory levels are relatively low levels. Now, the answer to your second question, which is, are we seeing a capacity response? We saw capacity come out of the market earlier this year. There's probably 1.5 billion board feet that were permanent closures early this year, and then maybe another 1.5 billion that were, like, temporary curtailments. I think there was then a pause as lumber markets recovered through the summer. And now we're back below 400, as you noted. And there's a lot of pundits are forecasting or estimating that BC mills are losing a lot of money at these price levels, especially given the duty they have to pay to get their lumber into the U.S. market. I have not seen any announcements of late, but we're starting to enter the slow season. I'm guessing the pressure is building. And most people think the mills in BC are underwater, so we'll see how it plays out. Okay, that, that's very helpful. I'll turn it over. Your next question comes from the line of Ketan Mamtora of BMO Capital Markets. Your line is open. Thank you. Hi, Eric. Hi, Wayne. Um, morning. Maybe first question, just segueing off the last question in terms of inventory. Eric, what are you seeing in terms of, you know, the European lumber inventories that are still sitting out there on the along the Eastern Seaboard? And, do you have a sense in terms of, you know, the level of imports we might see in the coming months, given where lumber prices are? Yeah. Yeah, Ketan, I so we don't have direct insight into what those European import inventories look like, and the data is always a little bit stale. But I do look at it very closely, in fact, because I think, you know, lumber prices were under enormous pressure early this year when we saw a surge of European imports back in January. But what I can tell you is that year to date through August, imports are down 2%. Comparing Q2 of this year to Q1 this year, imports are now down 23%. And if I look at Q2 this year versus Q2 last year, imports are down 12%. So I think it's pretty clear that at these prices, European imports are set to decline. I'm guessing that they're down 500 million board feet, full year 2023 versus full year 2022. Then I would expect that we'll see even fewer imports next year. As you know, the whole idea of less Russian, Belarusian, Ukrainian wood flowing into Europe. That was, by the way, roughly 10% of Europe's lumber supply was from those three countries. And those exports out of those three countries to Europe, restrictions really went into place in kind of the back half of 2022. And so I think there's gonna continue to be fewer imports into the U.S. because more European production is gonna stay within Europe as we get into next year. So I think the outlook for European imports is on the downside. Got it. That's helpful. And, Eric, just one more on that. Do you think we worked through the inventory that was sitting there at the ports, or we still have some ways to go there? Yeah, I would. I think we have worked through those inventories, Ketan. I don't. Again, I don't have direct insight, but, you know, the way SPF prices spiked, this past summer, when the wildfires really hit Canada, and I think those European imports, their primary competition was Canadian SPF. I think that would cause me to think that those imports have been pulled down and were not as plentiful to compete with Canadian lumber. Again, right, it's just kind of trying to connect some dots here. Got it. No, that's helpful. And then just switching to timberlands. And, you know, when I look at your southern, you know, sort of pulpwood prices as well, been relatively kind of stable, yet, you know, some of the data that's been reported point to pretty sharp drops in recent quarters. Can you talk about, you know, kind of what you guys are seeing out there? And obviously, we've heard kind of, you know, weakness on the packaging side. But as you kind of look at your wood baskets, you know, can you talk to what trends you are seeing? Yeah, Ketan, I think this way. On the trending side, certainly, you know, between sawlog and pulpwood, I think certainly a little more softness, softness on the pulpwood with the pulp and paper markets, just where they are. We, you know, we've seen some economic downtime, and mills are taking, you know, having quotas. But you know, that's, that's kind of that trend is, I think that softness is we're still seeing that in the market. But, you know, having said that, we're able to move tons and still find the demand. You know, we're expecting on the pulpwood side, probably pricing our outlook is flat to maybe slightly down for us. But and part of that is a mix. A little bit of that is hardwood. So we, you know, seasonally, we typically have more hardwood in the mix in Q3 versus Q4. So you may see a very slight mix impact in Q4, but, you know, really, prices we think are holding. And I would say we're slightly a little more optimistic on the pulp side, just from what we saw earlier in the year. But, and I think that still is just keeping pricing probably fairly flat. Got it. No, that's very helpful. I'll jump back in the queue. Good luck. Thanks. Your next question comes from the line of Mike Roxland with Truist Securities. Your line is open. Thank you, Jerry, anyway, for taking my questions. Jerry, just a quick question for you on lumber prices. You mentioned, I believe I heard you correctly, you said that what you felt you're confident that lumber prices may be bottoming here. Are there any particular metrics that you follow, that you look at, that give you that confidence that lumber prices have dropped? Yeah, this is Eric, Mike. I don't think there's any one metric that we look at. This is like a mosaic, and I'm trying to put all the pieces of the puzzle together. And in my mind, I know there's a lot of mills in BC that are losing money. There's likely to be a supply response. Who knows if that'll happen? It's up to them to decide. But, you know, that's one factor. I think another factor is, you know, of late, the housing market has not completely collapsed. We've gone down from 1.6 million to 1.4 million, which is not a precipitous drop. This is not 2009. That's 200,000 starts. We're also seeing a bit of a mix shift here over towards single family, which, as you know, single family uses a lot more lumber than multifamily. So I think about that. I also don't think R&R markets are gonna collapse either. You know, when we were in COVID, everybody was buying lots of stuff, lots of stuff in boxes, by the way. But after COVID, there's been a swing back to services, and I think that's now starting to play itself out. And people are now gonna go back and look at their house and say they've got an enormous amount of home equity. They can't go buy a new home because there's very, or an existing home, because there's very little inventory out there. You know, they got good balance sheets. They got good labor market prospects. I just think it's natural that R&R is gonna hang in there. It may not be so much on the pro side. It may be more on the DIY side with these higher interest rates, but I think our R&R markets are gonna hang in there just fine. So, so getting back to your question, there's not any one metric that I look at. We look at many, many different factors. And, in balance, I, I think next year is shaping up to be an okay year. It won't be, it won't be great, but it'll, it'll be, it'll be, it'll be better than this year. Got it. Thank you, Eric, and my apologies for referencing the incorrect name. It's obviously been one hell of an earnings season already, so I apologize for the incorrect name there. No worries. But also I appreciate the color. And then just, you know, one quick question on, just to follow up on Chenal, and you mentioning the, you know, how there's been smaller take-up from builders. Obviously, that would be due to the slower housing environment, but what's the line of sight you have in that business? And whether, you know, is it just one quarter? Is it two quarters? So it may be a little bit of a smaller take-up right now in 4Q, but could this be something that could reverse, or do you, do you see it reversing, you know, 1Q, 2Q, early, early next year? Yeah, Mike, this is Wayne. I, a couple of things I would say. Look, we've had good take-up thus far, thus far this year. You know, we start to go through a process where we release the next round of lots, and so we're seeing a little bit of softness in the new lot releases. Now, what does that mean? You know, and keep in mind, these are regional builders. We're not talking large national builders. So they have y ou know, compared to a national builder, they don't have the same type of balance sheets. They definitely don't have the multiple tools available to provide incentives to prospective home buyers. So, you know, perhaps these regional builders, instead of building 10 houses, they're only gonna do eight or nine. But I think these are, we're in the early innings on what we're seeing, but this is just, you know, 'cause as we look into Q4, we're seeing a little bit of softness. Got it. Thank you very much. Yep. Your next question comes from the line of George Staphos with Bank of America. Your line is open. Hi, everyone. Good morning. Morning. Wayne, Eric. Good morning to you. I just wanted to come back to what you were saying earlier on Mike's question. So are you looking towards a better housing market next year? And specifically, are you expecting single-family construction to be up? And then you mentioned in your remarks that, you know, home center takeaway is up 15%, but no doubt it's going to be tempered into 2024, if I'm paraphrasing correctly. So what do you ultimately want us to, you know, dial in, think about, whatever the metaphor for repair and remodel as it relates to you for 2024 versus 2023? So there's two different parts to your question, George. So the first one, single family. If I had to guess right now, I'd say single family is gonna be up a little bit next year versus this year. Not a lot- Okay But a little. And I think we're starting to see signs of, you know. The housing market, like I said, has not collapsed. The latest data was actually okay. If you step back and you look at starts were up 3% month-over-month, and new home sales were up 12% month-over-month. We're gonna get to the middle of next year, and it's. I think most people believe the Fed is gonna pivot and start cutting rates. You still got an incredibly tight labor market. You've still got, you know, an underbuilt or, you know, few existing homes for sale. I don't think those factors are going away. So I do expect starts to be up a little bit next year, and I expect there to be a skew over to single family, as multifamily's got a lot of action over the last couple of years. So switching gears and talking about repair and remodel, so I can talk about the market segment in general. I cannot talk about, you know, our shipments, what percent of our shipments go into repair and remodel, simply because when we sell it to a dealer or distributor, we kind of lose track of it. Sure. I can talk specifically about our home center demand, which is going by and large into the R&R market. So you know, what I think is gonna happen is that R&R is gonna stay reasonably strong. It's not gonna fall out of bed. I've seen some of the forecasts out there that call for an eight or 9% decline. No, that's FEA. RISI says R&R is going up 3%. LIRA's got a different number. That's the housing, that's the Harvard study. But I think intuitively, I would argue that it's gonna stay strong or even go up slightly next year. As people start to pivot away from services back to goods, they invest in what is probably their favorite asset right now, their own house. You know, the work-from-home trend, that's not going away, remote work, whatever you want to call it. I just think there's a lot of reasons that people are gonna want to put money back into their house, and so I don't see R&R falling out of bed. Understood. Appreciate the color on that. Then can you talk to us a little bit, and maybe you mentioned it, what you expect for manufacturing costs in the fourth quarter for wood products relative to what we saw in the third quarter? Should it continue to be getting a bit better as you've been seeing progress this year? Well, we have been seeing progress this year, and I would tell you that our total cash costs are gonna be down just a bit in the fourth quarter compared to the third quarter. But I think in this inflationary environment, having cash costs be flat is a win. They will be lower year over year on a rate basis, you know, per thousand. But I expect costs to be just a little bit lower in the fourth quarter compared to the third quarter. One last question, and I'll turn it over. You know, hopefully, this isn't the case, and actually, I'll ask a quick follow-on to this. But let's say housing is a lot slower next year and demand's a lot slower than you—what you would have expected. Do you have the opportunity, you know, to bring Waldo up more quickly and, you know, front-load it as a way of managing against that? And then, say, differently, let's say instead of 1.4 million starts, let's say you're up a little bit, you know, it's a boomer year for whatever reason. What do you do in that kind of environment? How do you manage your operating status? What would you do differently? Thanks, guys. Yeah. So George, can we bring Waldo up faster? This is a very complex project with enormous Gantt charts involved. We met with the BID G roup just last week, and they are running ahead of schedule, which I think is great news. So we expect to finish the project in a timely manner, which is by mid-next year, as we spoke about, and then ramp up production after that. I don't think it's gonna be possible for us to beat the schedule. There's enormous work streams involved with each part of the processing process, different pieces of processing equipment that we're putting into the mill. You know, whether it's the planer or the sawmill or the kilns, there's just a lot going on. We're out there pouring concrete right now, and we're making great progress, but I do not think we can ramp up that project faster. And then the second part of your question, if it's a boom year, what would we do differently? Well, I think we would put on as many hours as we possibly could at our sawmills. There is a breaking point for people, and there is a breaking point for, you know, you need to do your preventative maintenance, or you'll run your equipment into the ground. So I think what we would do is just try to get every last P&E of lumber out the mill that we possibly can in that kind of an environment. Okay, thanks very much, guys. I'll turn it over. Okay. Thanks, George. Thanks. Your next question comes from the line of Kurt Yinger with D.A. Davidson. Your line is open. Great. Thanks, and good morning, guys. Hey, Kurt. Just wanted to start off on Timberlands. The cost structure in the north, at least here in Q3, was a bit higher than I expected. I know contractor availability was one factor that had been a challenge a couple of quarters ago, but curious if there's anything else, kinda noteworthy on the cost front that might have hit this quarter, or maybe we were just off? Yeah, Kurt, this is Wayne. I think, you know, generally speaking, you know, in the north, seasonally, you know, that tends to be our, our higher cost quarter from a log and haul standpoint, and that's really driven by, you know, two factors. One, on the logging side, you know, we're further in the backcountry, we're in steeper terrain, so based on that, that, that results in a higher, higher logging cost. And then when you're further back, then you have longer haul distances, so then that also increases your, haul costs. But the other factor, I would say, compared to last quarter is we also had, slightly higher diesel fuel prices, so we saw an uptick, in Q3 compared to Q2. So that was also a component that, we experienced this quarter. Got it. Okay, thanks for that. And then, Eric, I mean, you touched on how in the past you guys have been very nimble on the capital allocation front, and I think you've built a terrific track record there. I guess when you look at kind of the current balance sheet and cash generation in light of kind of the current lumber market, how do you think about the capacity to be more aggressive with share repurchases if kind of this discount persists? Yeah. So, good point, Kurt. We still have a fair bit of capacity. We've got $125 million outstanding on our existing $200 million authorization. That number was set at $200 million for a reason, and it's because we thought we had the capacity to go to that level. I would tell you what influences the thinking probably more than anything is, you know, M&A activity. What other projects do we have ongoing that may use up some of that capital? Now, certainly, we have our Waldo expansion, which is gonna y ou know, we're not done with paying for that project yet, so that's gonna work off some cash off the balance sheet. But yeah, to get back to your question, we still have more capacity to do stuff, but you know, I'll REITerate what I said in my prepared remarks, which is, you know, we're gonna be very careful, very cautious. We're in uncertain territories here. What's gonna happen in the Middle East? You know, does, I don't know, Israel drop a nuclear bomb on Iran? Who knows? But you can see markets really dislocate really fast in this kind of an environment. So we'll be slow and patient, careful, and we'll buy back at what we think are deep discounts to NAV, and certainly, we have the room to do more. Got it. Okay. Well, appreciate the color, and good luck here in Q4, guys. Thanks. Your next question comes from the line of Mark Weintraub with Seaport Research Partners. Your line is open. Thank you. Eric, you know, you referenced stock trading at a steep discount to NAV. Certainly, using metrics we tend to all use, it certainly looks that way. And then you also talked about, you know, use of capital and either going to share repurchase, but also considering M&A activity. So maybe sort of putting those two things together, what are you seeing out there in the timber markets and with timberland pricing? And sort of relatedly, well, let's start there, and then I'll have a follow-up. Yeah. So, you know, the timberland M&A market, it's relatively quiet right now. You know, we suspect sellers are holding off with their properties, you know, perhaps waiting for lumber prices to improve or interest rates to come down or carbon deals to become more mainstream. There's probably a host of factors there. We still wanna grow our timberland footprint through M&A, but we're only gonna do it if we think we can do it in a shareholder-friendly, value-creating sort of way. Basically buying timber with IRRs that are above our cost of capital. And given how hard and fast our cost of capital has run up, it is very hard for us to find deals that are gonna create that value. So our opportunity, Mark, is it's to find opportunities that are, that are off the beaten path, that are not being broadly auctioned. And, you know, we've shown that we can do that. We did that with Loutre. If you recall, we did that a couple of years ago. And so we might be looking at things like that now. So that's in my mind, that's the only way you can create value in this environment, 'cause timberland prices, you know, they go to broad auction, they're sky high. Right. And so just kind of just following up on that. So do you just look at it, is the acquisition better than your cost of capital and therefore green light go forward? Or given the fact that you are trading at a, you know, very large discount to NAV, that would seem to make the decision to acquire timberlands rather than buy back your stock even that much more difficult. So maybe kind of just your philosophy on that. And then second would be, I mean, are there conversely opportunities to potentially sell timberlands and arbitrage the value spreads, or does that not make sense for a number of different factors? Yeah, Mark, there's no doubt the buying back stock has become more attractive to us than buying timberland. You know, look at how quiet we've been in the market here this year. In the market in terms of buying timberland, and look at how active we've been here buying back stock. There's no doubt the pendulum has swung back towards buying stock. Now, that said, we do want to grow our timberland footprint. I think the outlook for timberland values is fantastic. And so we're always gonna be looking at trying to add to our timberland portfolio. But you're right. Right now, it's gotta compete with share repurchases. And right now, share repurchases, they've been winning out. Now, your second question, would we consider selling timberland to raise cash, to fund a buyback? You know, I think as a public company trying to maximize shareholder value, all options are on the table. You know, as portfolio managers, that sometimes means selling assets opportunistically at what we think are very attractive premiums. And we do engage in those types of discussions from time to time. So we'll see how things play out. But yeah, we would look at selling timberland, core timberland, in fact, if it was at a really attractive price, to fund even more repurchases. Yeah. So we'll, we'll see. Is it true to say that if there's no development activity on the lands, et cetera t here's no tax leakage if you do that? Can you ask that question again? When selling core timberlands, if there's been no development activity or anything of that nature on those lands, is there no tax leakage as well? You know, obviously, one of the big issues for companies selling piece, you know, assets, is there's often big tax bills against that sale. But is it true in the case of timber REITs that there wouldn't be? No. I mean, these type of sales would be, you know, REIT, that's REIT. REIT income REIT income. So yeah, there isn't any tax arbitrage with it. Got it. Okay, just wanted to confirm that. Thank you. Yep. Thanks, Mark. Once again, ladies and gentlemen, if you have a question, it is star one. Your next question comes from the line of Paul Quinn of RBC Capital Markets. Your line is open. Yeah, thanks very much. Morning, guys. Just on your Natural Climate Solutions opportunities, it sounds like you're making decent progress on the first one, that 50,000 acres in the south. What else have you got in the hopper room? What's the timeline of those? Well, on the carbon credit front, specifically, Mark, are you talking about broader NCS opportunities? Or excuse me, Paul. Yeah, just on the carbon credit. Yep, and it is Paul. Yeah. Yeah. So we are making really good progress on our first deal. And you know, we're learning a lot from that transaction. We've got more acres that we are looking at that we might potentially put into a carbon play. But we're gonna, before we execute on those, we're gonna see how the first one comes out, because it is, it's a relatively sizable transaction, 50,000 acres. Okay. And then, just moving on to, I guess wood products. Just looking at softwood lumber duties right now, you know, sort of down in the 8% mark, don't seem to be, you know, changing sort of the amount of wood that flows from Canada into U.S. And it looks like that duty rate is gonna stay the same, you know, in 2024. What's your take on that file going forward? You know, do you see a solution? And what's the path to getting that solution? And, you know, just your thoughts on softwood lumber. Yeah, I think, you know, the conversations have been incredibly quiet. You know, I don't know what it's gonna take to get to an agreement. I don't know that there are even any discussions taking place at this point. You know, I think when lumber prices drop, I think I start to hear chatter that some of the Canadian producers are willing to engage to try to find a solution, you know. But then as lumber prices come back up, you know, those conversations seem to come to a halt. This thing has been ongoing for many, many years, and I don't see an end to it anytime soon. Okay, and then just moving on to just real estate, and I know you haven't come out with your 2024 guidance yet, but just at a high level, I mean, just for the comments you've made about, you know, strength in the market on single family, and just wondering what, you know, what your expectation for 2024 on, you know, Chenal Valley lot sales, should that be flat, or down, or up next year? Yeah, Paul, this is Wayne. Yeah, I think, you know, we're. It's still a little bit early. We'll put out our 2024 outlook here, you know, Q1 next year, I think. But like we said earlier, you know, it's pretty early in the innings of what we're seeing on the market and our take-up rate. So, you know, we'll get more insight into that, you know, over the next couple of months and have a better sense of where 2024 will come out. But we, you know, we still think there's, you know, pretty good take-up. You know, like I said earlier, you know, instead of these regional builders doing, you know, 10 homes a year, maybe they do eight or nine. So it's not we don't think it's gonna just drop off, it's just a slight, maybe a slight reduction or a little softness there. And I would also say that from a pricing standpoint, you know, we have good pricing power. You know, we've increased our lot prices, 5%-10% since last year, and we're holding those and still moving them at those prices. So we continue to see solid pricing. It's just, you know, what is the regional builders you know, how much do they want to take on? And, you know, we'll see what happens over the next couple of months. Okay. That's all I had. Best luck. Thanks, Paul. Thanks, Paul. Your next question is a follow-up question from the line of Ketan Mamtora of BMO Capital Markets. Your line is open. Thank you. Hey, just coming back to the real estate question that Paul was asking. This is not a 2024 question, but, you know, with this, the stratification done on the CatchMark lands, how should we think about sort of just normalized, you know, rural land sales on an ong ing basis? What, what's the right number now? Yeah, I mean, from a acreage standpoint, you know, we've looked at we kinda target around 1% of our portfolio. You know, this year we're, you know, around 18,000 acres, so, you know, kinda slightly below that 1% threshold. But, you know, kind of over time, that, that's the, that's the target we look at from a, a real estate standpoint on the rural side. You know, pricing, yeah, it's, you know, real estate sales are pretty, you know, can be very lumpy, and it depends on the size of the, the tracts that you're selling and the end use, you know, from recreational to conservation. So that can, you know, really vary quarter to quarter, period to period, and year to year. I think, yeah, that's when we look at an outlook, we're looking at that 1% kind of the portfolio. Got it. No, that's helpful. Thank you very much. At this time, I'm showing there are no further questions. I'll now turn the call back over to Wayne Wasechek. Thank you for your questions and your interest in PotlatchDeltic. That concludes our call. This concludes today's conference call. Thank you for joining. You may now disconnect your lines.