Good morning and welcome to the CatchMark Timber Trust’s Results for the First Quarter 2021. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Ursula Godoy, Chief Financial Officer of CatchMark. Please go ahead..

Good morning. And thank you for joining us for our review of CatchMark Timber Trust results for fourth quarter 2021. I am Ursula Godoy, Chief Financial Officer of CatchMark. Joining me today on the call are, Chief Executive Officer, Brian Davis; Chief Resources Officer, Todd Reitz; and John Rasor, President of Triple T Timberlands.

During this call, CatchMark's management will make forward-looking statements. These forward-looking statements are based on management's current beliefs and the information currently available.

CatchMark's actual results will be affected by certain risks and uncertainties that are beyond its control or ability to predict and could cause our actual results to differ materially from expectations.

For more information about the factors that could cause such differences, we refer you to our 2020 annual report on Form 10-K and subsequent reports that we filed with the SEC. Today's presentation includes certain non-GAAP financial measures.

Reconciliations of these measurements are included in our first quarter 2021 earnings release and financial supplement, which are posted on our website. And our form 10-Q filed with the SEC yesterday May 6, 2021. After our presentation, Brian, Todd, John and I will be pleased to answer any of your question.

Now, I'll turn over the call to Chief Executive Officer, Brian Davis..

Thanks, Ursula. And thank you all for being on the call with us today. However, CatchMark hope you, your colleagues, families and friends continue to stay healthy and safe. 2021 got off to an exceptionally strong start for CatchMark driven by a higher timber prices both in the U.S. South and Pacific Northwest.

Now we continue to achieve significant pricing premiums over south-wide market averages for our harvest in the U.S. South while capturing prices significantly higher year-over-year in the Pacific Northwest.

Low interest rates, strong housing market demand and increased home repair and remodeling activity together with continued strong mill activity resulted in higher timber prices during the quarter. As discussed in our last call, the market has been building to a point of price inflection for some time.

This began with British Columbian mill closures a couple of years ago, the re-location of capital and corresponding mill capacity expansion in the U.S. South and now the potential for a more sustained endurable housing recovery.

These factors are all now driving improved product pricing and select southern micro market and the resilient housing market is encouraging consumption of wood products, reducing the log over supply in the U.S. South.

Various demographic trends including millennials forming household and ageing and place baby boomers are helping generate demand for housing that has outstripping supply and igniting new construction.

In fact, privately owned housing units authorized by building permits will add a seasonally adjusted annual rate of nearly $1.8 million in March; more than 30% above the level a year ago and the highest since 2006. Add in the ongoing significant economic stimulus and the result is a buoyant timber product market which CatchMark is benefiting from.

In addition, we should continue to gain from pricing premiums we consistently achieve from our prime timberlands located in premier mill markets as well as outstanding as a preferred and reliable supplier to our customer base as we utilize a differentiated operating model. Employing delivered sales, supplemented by opportunistic stumpage sales.

We believe our business model is particularly well-suited to excel in the current market. For the first quarter, tracking longstanding company performance CatchMark realized increases in U.S. South pulpwood and sawtimber stumpage prices of 8% and 9% respectively compared to prior year quarter, outpacing 3% and 4% increases in U.S.

Southwide average prices. Our Pacific Northwest sawtimber price increased 15% year-over-year due to continued strong demand fundamentals. As planned, total harvest volumes during the quarter were lower year-over-year.

Importantly, harvest volumes remain on track to meet full-year guidance as we maintain consistent annual productivity on a per acre basis with the potential to sustain current strong timber pricing. Timberland sales are also on course to meet full-year guidance.

On the first quarter, timberland sales were lower year-over-year due to selling 40% pure acres. Per acre timberland sales pricing increased significantly and we expect to complete a substantial number of sales in the second quarter.

Investment management results improved during the quarter due to contributions from the Dawsonville Bluffs joint venture and last years amended Triple T asset management agreement.

Dawsonville capitalized on the strong market demand for mitigation credits while higher asset management fees earned from Triple T resulted from last year's successful renegotiation of the wood supply agreement with Georgia-Pacific.

We continue to make progress in pursuing recapitalization opportunities for Triple T and the wake of the renegotiated Georgia-Pacific wood supply agreement which allows Triple T to capture market-based pricing for harvest and expands Triple T's ability to sell harvest in timberlands to third parties.

Return on investment with a consortium of institutional joint venture partners nearly three years ago, we believe we are significantly increased Triple T's per acre value and delivered improved financial performance.

Through a superior operational management and as a result of the renegotiated Georgia-Pacific wood supply agreement, increased opportunities to market products to third parties within Triple T's deep regional wood basket and enhanced force management in several cultural practices which have improved force attributes in standing forest inventory.

Looking at our capital structure, there are no major changes during the quarter. We maintain healthy liquidity, stable leverage and advantageous management of debt capital. Yesterday, we also declared a cash dividend up $0.135 per share for common stockholders of record as of May 28 payable on June 15.. In sum, was a very strong quarter.

Timber sales, harvest EBITDA, investment management EBITDA, net loss and adjusted EBITDA improved year-over-year. Again most telling, timber sales revenue increased on the strength of higher pricing resulting from improving timber market dynamics.

With a positive outlook for pricing, our business model can continue to leverage the benefits from the current operating environment and we remain well-positioned to generate predictable, stable cash flow and deliver fully covered dividends our primary objectives.

Now, Ursula will cover first quarter results in greater detail and review our capital position..

Thank you, Brian. We've had an excellent quarter with results boasted by our harvest operation. Was not only benefited from higher pricing for timber sale but also captured pricing which comfortably outperformed market averages in the U.S. South while we concentrate our activities.

Our three business segment, harvest operations, real-estate and investment management are all performing well. And we are on plan to meet full-year guidance. With the quarter ended March 31, 2021 CatchMark generated revenues of $27.7 million compared to $27 million in first quarter 2020; a 3% increase.

Timber South revenue totaled $20.1 million 11% higher than first quarter 2020 as a result of higher timber prices practically offset by lower harvest volumes. As expected in our harvest plan, total harvest volume decreased to 525,000 tons from 595,000 tons a year earlier.

The planned year-over-year harvest volume reduction we felt that from recent timberland sale and strategic capital recycling initiative as we have maintained consistent annual productivity on a per acre basis. Net loss improved by 87% to $0.6 million compared to $4.2 million in first quarter 2020. Driven by higher total revenues and lower expenses.

Adjusted EBITDA of $12.9 million with comparable to first quarter 2020 despite lower harvest volume and fewer acres sold. Highlighting strong pricing for timber and timberland sales. Raising or adjusted EBITDA by segment. For the first quarter harvest EBITDA was $8.9 million compared to $8.6 million in first quarter 2020, a 4% increase.

Real-estate EBITDA decreased 30% year-over-year to $3.1 million due to selling 1200 fewer acres but we achieved an 18% higher per acre price over the first quarter 2020.

Investment management EBITDA increased 32% year-over-year to $3.8 million helped by strong market demand for Dawsonville Bluffs mitigation credit and the increased asset management fees from Triple T. We also paid a dividend of $0.135 per share to stockholders on March 15 which was fully covered by cash from operations.

Now let's turn to CatchMark's capital position.

We have maintained ample liquidity in both the strong capital foundation for growth, at the same time we continue to evaluate strategic capital recycling opportunity to generate proceeds for funding desirable timberland investment bringing down outstanding debt, repurchasing shares of our common stock and taking on other capital allocation priority.

As of March 31 2021, the company had $151 million of borrowing capacity available under our credit facilities consisting of $116 million under the multi-draw term facility, a $35 million under the revolving credit facility.

Attractive borrowing cost stagger long-term maturity in a favorable mix of fixed floating rate debt continue to highlight our active debt and interest rate management strategy.

As of March 31, $13.7 million still remain in our share repurchase program for future common stock repurchases as we did not repurchase any shares under the program during the quarter. Our overriding objective and commitment remained to deliver fully covered quarterly dividend.

And during the quarter, stockholders received $6.6 million in dividend distribution fully covered by net cash provided by operating activities. Now, Todd will review operation which is we have highlighted produced extremely solid results in the quarter.

Todd?.

Thank you, Ursula. A strong fourth quarter 2020 housing fundamentals carried over into the first quarter. CatchMark continues to benefit from prime timberland holdings and leading mill markets both in the U.S. South and Pacific Northwest as well as from our delivered wood model supplemented by opportunistic stumpage sales.

Robust housing continued to drive strong saw mill production which has been running at better than 90% capacity. Mills have now been building finish lumber inventories but rather selling lumber product as quickly as they can produce it with order files being filled four to six weeks out.

New mill consumption helped generate increased deliver rates within our superior mill micro markets which contribute to a 9% increase in harvest EBITDA per acre year-over-year. Wet weather also limited overall logging production which contributed the light mill inventories and added pressure on both saw mills and pulp operators to meet market demand.

In addition to our study delivered production we also capitalize on exceptional stumpage sale opportunities that captured excellent pricing which helped boost our overall harvest EBITDA.

Total timber sales revenue increased 11% year-over-year to $20.1 million driven by a $3 million increase in the Pacific Northwest offset by a $1.1 million decrease in the U.S. South in line with the planned decrease and a regional harvest volume. In the U.S.

South, we again realized stumpage prices for both pulpwood and sawtimber significant premiums to timber mark south, south wide averages. 57% for sawtimber and 27% for pulpwood. In the Pacific Northwest, timber sales revenue increased a 161% year-over-year to $4.9 million and harvest volume increased 96%.

We capitalized on both favorable market conditions and our delivered wood sales model to generate a 15% increase in sawtimber pricing. Now let's review timberland sales. Due to market timing, we saw fewer acres in first quarter 2021 compared to first quarter 2020. 1800 acres versus 3000 a year ago.

But we achieved an 18% increase in average price per acre of $1923 and improved per acre sales price resulted in part from higher year-over-year average merchantable timber stocking levels. While higher than first quarter 2020 sales, restocking levels were still well below the company portfolio average. 21 tons per acre versus 41 ton per acre.

The sales also generated an improved margin, 36% in first quarter 2021 versus 28% in first quarter 2020. As we continue to focus sales on acres that are less productive or have lower near term cash flow potential. As a result of selling fewer acres, timberland sales revenue and real-estate EBITDA were down 30% year-over-year.

However, we are benefitting from a strong pipeline of timberland sales transactions in the second quarter and have closed on nearly $4.4 million in sales quarter-to-date. We could transact up to $10 million in total timberland sales for the full quarter. Market pricing remains favorable and we're on track to make disposition targets for the full-year.

Looking ahead, we expect saw mills to continue to run in their full capacity with the nation's housing market and the repair and remodeling business staying robust. In addition, export markets are reviving to compete with domestic markets for volume creating more price tension in many of our micro markets both in the U.S. South and Pacific Northwest.

Strong OSB markets also should help support pulpwood prices as we move into summer months when thinning activity occurs and prices typically trend down. We reiterate our full-year guidance for harvest production of between $2.0 million and $2.2 million tons, reflecting consistent annual productivity on a per acre basis.

We also continue to anticipate third quarter will be our highest production quarter that's seasonally tends to be the case. Regarding regional activity, we continue to expect 95% of full-year harvest to come from the U.S. South and most of our Pacific Northwest harvest to occur during the first two quarters.

In short, all signs point to a solid second quarter for CatchMark's harvest operations supported by our delivered wood model and stumpage sales with momentum carrying forward to meet full-year 2021 guidance. Brian, back to you..

Thanks, Todd. The United States appears to be emerging from the COVID-19 pandemic. The economy looks strong, CatchMark's timber sales are benefitting from the improving housing market, advantageous mill expansions in and around our micro markets and solid demand for pulpwood products.

Our extremely focused improving operating strategy using delivered wood sales in opportunistic stumpage sales continue to produce pricing premiums. We continue to benefit from concentrating on investments and premier timberlands in select leading mill markets. And we're profiting from superior execution of our strategy.

During the year, we will continue to move forward on the Triple T recapitalization strategy, a prime objective since last year's renegotiated Georgia-Pacific wood supply agreement.

And we will continue to evaluate new growth opportunities while remaining committed to optimizing our portfolio and strengthening our balance sheet further including to retractive capital recycling opportunities as they arise.

As noted, we are on track to meet full-year guidance delivering an attractive dividend fully covered by cash flow from operations and continue to create long-term shareholder value to sustainable and responsible stewardship of our highly valuable timberlands. Thank you, for your attention today.

And now Ursula, Todd, John, and I will be happy to take your questions..

[Operator Instructions] The first question comes from Anthony Pettinari with Citi. Please go ahead..

Hi, good morning, guys. This is actually Randy Toth sitting in for Anthony..

Hi Randy, good morning..

You guys talked about -- good morning. You talked about strong plan sales pipeline with up to 10 million in sales in 2Q if everything goes well.

Do you anticipate timberland sales roughly exceeding the $13 million to $15 million for the full-year that you have guided to previously?.

Hi Randy, this is Todd. As it stands right now, that would get us right in line with kind of that 1% to 2% we target for the years. We really don’t see pushing beyond that..

Got you..

Approaching territory as we look at that but no..

Okay, yes. So this is to know a different volume, got it. And then, maybe just switching to actual timber sales. Can you just comment broadly on what you're hearing from mill customers to the expand you can, maybe how well walked exit the mills, are customers adding shifts.

Just any color there would be very helpful?.

Absolutely. So as far as kind of whatever logged there to look like it's kind of a continuation of what we saw coming out of Q4 and roll it into Q1 and that. They weren’t really building a lot of inventory on either inbound or outbound because everything that was rolling in was being produced just as fast as they could.

As we worked through kind of the following winter months, we begin to see a little bit of log inventory building not much. Lumber inventory still remains very light.

And that's kind of across the board that any producers that were looking at or working with at this point, additionally as you move into summer months traditionally, they do not carry a real heavy log inventory because you can run into if you had.

For some reason you were turning your inventory over, you could run into some blue stain issues and things like that. So really a lot of equilibrium in there right now between productions out of the woods also aligning up with mill production there. As far as adding shifts, yes I think a lot of the producers would love to do that.

As far as adding shifts, yes I think a lot of the producers would love to do that. They're running the shifts they have right now at kind of the max capacity if you will but the biggest constraint being labor.

We've heard multiple stories of our employees walking in and kind of saying hey I'm going to I think I'm going to go home for a little while because my stimulus check is come in and which is a little bit of a head scratch because these are pretty good paying jobs in these areas.

$20 an hour and these are typically rural areas, so they are just labor constrained in order to add additional shifts and capacity there. So we're running as hard as I can at this point and should other shifts get out of that therefore would a adder and you would see an uptick in production.

But right now everything we're hearing and seeing is kind of the two shifts add near max capacity for the mills right now..

Got it. Got it. And maybe shifting over the freight. A lot of companies are reporting higher freight cost with expectation for that to continue into the summer. Are you seeing any impact from that and does the delivered log model kind of shield you from that because you're talking with the same guys or just any color there will be helpful as well..

Yes, absolutely. And you kind of really hit the nail on the head there from another aspect of the delivered model benefit that we see is it's not just to the end user and the customer, it goes back to the contractor force that we work with. Because of the areas that consistency there and year-over-year kind of ability to know where you're working.

You're going to have a steady place to go. It helps manage our cause a little better.

From a customer standpoint, we have quite a few fuel adjustment adders in place or that can be positive or negative depending on what is going on a fuel with the time but we have adjustments in place so that it's not something that has to be completely borne on the land owner as far as covering night costs.

So hauling traditionally kind of to allude your question here, hauling tends to be the greatest bottleneck that we see in the industry and that's been that way for a long time. Just trucking can be troublesome and you've seen it go from where producers hauling all their own trucks to where they contracted it all out. It's been back and forth.

Because of that and fuel cost being the biggest driver there. We do monitor those very closely, we work very proactively with producers so that not getting cut short on the production side of things. So it's on our radar consistently but fortunately we have some ways to mitigate some of that impact..

Got it, okay. Yes, that's very helpful. I'll turn it over, thank you..

You bet, thanks Randy..

The next question comes from Paul Quinn with RBC. Please go ahead..

Yes thanks, very much. And good morning, guys..

Good morning, Paul..

Okay, good morning. Just maybe you could give us some more color on these timberland sales in the quarter. I mean, it look like the stock can be down a higher percentage of hardwood.

Is there something specific about the location that gave you that sort of quarter-over-quarter premium in price?.

Yes. So really it falls in line with the focus we've had and really trying to continue to focus on tracks that might be a little less productive, lower cash flow, yes near term cash flows we talked about.

The real driver behind it's been interesting as that it's the adjacent sea owners, the Joiners, one who own a little bigger piece of the pie if you will. We're not growing any more land, so there's some scarcity there. You've got this greater demand of flight of folks coming out of cities wanting to maybe have a little more space.

So really it's been a host of different buyers from family trust, individuals to those that just would rather place money in hard assets instead of potentially speculating on the market and those kind of things. So there's been some [indiscernible] money that needed to be placed as well. And you're just seeing a greater demand.

We knew Q1 will be a little light and in Q2 is coming very positive for us. And just kind of the demand -- supply demand dynamics, there are nothing really unique about the location other than we have high quality holdings on the front and that we required and that carries through to the back end too whenever you have a disposition opportunity..

Okay.

So for the Q2 expected sales that are around the 10 million mark, that should be after the $1900 break or as supposed to the high $1600?.

It's going to track higher than the 16. There are others still few deals pending, we're working through but yes we would anticipate that being stronger than anything around 1600 and then probably closer to that 1800, 1900 mark..

Okay. And then, I guess back to Triple T, I get you're working through this recapitalization but just wondering what is the main obstacles to be able to get that done. I mean, it seems like we've been talking it for a while and just kind of understand that a little bit more..

Well Paul, its Brian. Yes, we have been talking through it. So you have to remember it is a sequencing of managing 1.1 million acres is not a small thing. So pretty much for the first year. We are getting that operation up and running. It was not performing as well. When we took it over with John Rasor's leadership, we got that asset up and humming.

The next step was getting a market based wood supply agreement which we completed last summer. The next part after that, Paul, you have to really think about is when you are a buyer for that asset, you want to make sure any amendments to the wood supply agreement or tracking to what you wrote down and what you negotiated.

And so you have to demonstrate that track record that the wood supply agreement and the market price mechanism is working. And so, really when the calendar turn is when we really worked in earnest.

We engaged last year probably Weinberg Partners as well as Raymond James to help us with the execution of the recapitalization strategy to familiar with probably Weinberg Partners the banker on that has represented this asset a couple of times including the original disposition from this from the industrial ownership of this.

And so, we have a great team working on this. And so, the next part of this is really the positive sentiment that has gone into this sector capital formation around this. And so anything of this size will take some time to close on and move on. It's not a 60,000 discreet acres sitting Western Alabama that can close inside of 90 days.

These things do take time, we indicated July of last year we're operating on a two year clock and we feel from a progressing standpoint while may not be as transparent to you or the market. We're encouraged by the amount of work that we've been able to complete internally. And we're on track to hit our hurdles.

And so we're encouraged to the point-in-time where we can demonstrate that to the marketplace..

Okay. Thanks for that. And then, just lastly, we've had some of your peers on the timberland REIT side report, pretty much flat pricing in the U.S. South specifically for quite a while.

You guys seem to have seen an uptick, just wondering how sustainable you think your, I guess price inflation is going to be going forward?.

Right. So, that's under the category you want the bad or you're going to win the war. And so, Paul, you've been following the sector as long as anyone else has and everybody said it's been around the corner. And we're cautiously optimistic.

I think we talked about on our last earnings call which you're expecting price depreciation and kind of that mid 3% -- 5% and obviously we out shut down on a positive basis. But it's rather reasons what we thought. It’s really is micro market driven.

You have the demand fundamentals, we showed the heat maps and there is nothing as we sit here four weeks into this 13 week quarter. We still feel very confident of where we are relative to be able to reproduce the type of pricing that we showed in the first quarter.

The sustainability on that, you have to sit there and think well what would cause something for to go in the other direction is going where we're really think about it. It is, is there another relapse associated with COVID.

Is there change in sentiment housing but when you sit here today you listen to the house builders? But yesterday that one builder was able to pass along between January and March a 10% increase in sales price of their homes. And so you have this pent up demand element.

We think this is a three to four year run but we won't know until we get a chance to look back, Paul. So I'm cautious and but I do like where we are as we said here during four weeks into the second quarter..

Okay, thanks for the color. And best of luck, guys..

Thanks Paul, I appreciate it..

[Operator Instructions] The next question comes from Dave Rodgers with Baird. Please go ahead..

Hey, good morning everybody. I just wanted to follow-up on something you touched on earlier. I guess harvest revenues up 11% EBITDA up only 4% so it’s costing you more to kind of get that product to market. I don’t know if that's just a mix shift and you're seeing more pressure on labor.

And I guess I was curious on what you're seeing kind of as you move into the second quarter with kind of broader labor issues not necessarily at the mills but maybe getting your own product into market. And if you be able to hold margin, what that's going to become a greater pressure as the year moves on..

Sure, Dave. And really what you saw on some of the cost side of things is the reflection of as you know we've actually doubled quarterly production and presumably Northwest. We got some higher inherent cause of logging out there. There was some additional load work and those kind of things. But kind of associate.

And then also you did have some wet weather in the south and so a little bit of increased cost might be able to keep production going if you will. But nothing out there that says hi this is going to be a trend going forward.

We still feel very much in line with kind of what we look at on an annual basis tied directly back to the total production that we have scheduled. So nothing alarming there or anything real trending a different way. In regards to labor, kind of goes back to Randy's question earlier around the hauling side.

We're not seeing any real issues from a let's call it a long production here stumped the truck where there tend to be a little more pressure, little bit more of the bottleneck, I guess around the hauling side. And so, just the ability to keep drivers and trucks has turned it always been a little bit of a challenge.

Nothing that is causing us concern at this point-in-time because we do have dedicated crews that we've been working with. And these are crews that while we may we're track to track. This is like 10 year 15 year relationships with these guys. So I have a long track record history here, it's all about the relationship that we build with them.

And so, a lot of them knowing they have stability behind our business and what we're doing. If they're utilizing a lot of contract labor and that becomes an issue.

They would have the ability even though they may not want to, they would have the ability to go out and they could purchase their own truck and to fill in those gaps and have steady employee unit.

So it's an heaven for all part of the business we monitor closely but we are not really seeing anything that would lead us down the path of major increase costs.

I mean, you'll have the seasonality of you do more thinning you'll see some that you're catalogue cost go up just because there is more handling a lot more labor involved in moving that product. Should fuel begin to go up? Well, we would see pressure on and we'd have to work very closely with our end-customers.

Just making sure those fuel adjustments are in place and that we're able to kind of pass some of that through the whole value chain and not trying to bear that cost all on our own..

That's helpful, Todd thanks for that. And then, I guess Brian maybe just to follow-up on the Triple T question and if I missed this part of the answer I apologize.

But you described the process, I guess I loved to know where you are in the process in terms of are you actually negotiating with a small number of people, is it still marketing, is it still [feelers], or I guess any added color down that road might be a little more helpful..

Dave, great question. Do appreciate and understand the desire to understand where we are in the process. I would explain is that we're in the -- I would call the bottom of the third inning maybe early fourth inning as it relates to a non-ending game. And hopefully that can help with you give some context around where we are in the process..

All right, thank you..

The next question comes from Albert Sebastian with Prospect Advisors. Please go ahead..

Thank you and good morning..

Good morning, Al..

Couple of questions. First, on the land that was sold in the quarter. You indicated 21 tons per acre versus your existing portfolio 41 tons per acre.

Can you give us some sort of indication to EBITDA associated with the land sales?.

Are you talking about the productivity from the land and which we would be selling now?.

Yes. I'm just trying to get a feel, Brian, for sort of the multiple it was sold out on an EBITDA per basis the 1800 acre sold..

Yes. So yes, we do work with U.S. offline but the way to think about it is if you have an average portfolio of 41 that means we sold off 20 tons off of that asset. And so you've taken off the productivity associated with that asset and of itself.

And so your near term expectations on cash contribution will be limited really to recreational leases and which you'd be earning on our property which would be offset by property taxes.

So on our approach to regular way at retail sales is essentially we do a cash flow analysis in that present value of saying it's better to sell at these prices or called it. And so, essentially from an accretive of a deluded basis we feel like hitting the bid at those prices is actually accretive to us..

Well, it sounds like --..

We can ship where the mechanic may go along with that.

Yes?.

It sounds like the EBITDA was pretty negligible, I mean it's of course is there to the EBIT..

Correct. And that's right..

Yes. And it looks --. That's a good thing to be able to sell land at very high multiples even when your share prices is trading at. So I assume it's the land sales that you're going to have the 10 million this quarter, sort of would be of a similar nature where the EBITDA associated with the land sales is pretty low.

Similar to the type of sales you had in the first quarter?.

That's right. I don’t see anything that we've got out there is going to be drastically different than what we've already been moving to. It really fits into the model and kind of our approach and focus on what we're moving. As far as the disposition programs, so yes I'd be very much in line..

Yes. I guess touching on a little, or these have asked about higher cost. There's one thing I will say that does sort of stick out in your numbers here. This contract logging and hauling cost went from up about $1.5 million in the quarter year-over-year.

So just drilling down, what can we expect there, is it going to be that because you would expect I mean if you're harvest volumes are down, one would expect that hauling cost would be maybe flat to down. But they were up actually quite a bit.

So can you give us some sort of indication of where you think that's going to go for the remainder of the year?.

Hey. So on the contact logging and hauling side, you're right the cost went up by about $1.5 million. But really that is driven by the mix, the regional mix if you will. As Todd alluded to earlier, we increased our harvest volumes on the Pacific Northwest which has a higher contact logging hauling rate than in the southern region.

And so really it's really driven by the regional mix. In the prepared remarks, Todd also touched on we continue to expect that overall for the year. 95% of our harvest is going to come from the U.S. South and the other 5% is coming from the Pacific Northwest.

So hopefully that can still give you a little bit more guidance as to the remainder of the year in what you could expect..

Yes. And Ursula, since I have you on the line, just one other quick question. I noticed that other liabilities was down quite a bit, $32 million to $15.8 million.

Yes, so what was the reduction there, tell us for just for the quarter, what was the reduction there?.

Yes. The reduction there really has to do with the mark-to-market on the swaps that we have in place. So it’s a non-cash..

Okay. Fantastic, thank you. I appreciate it..

Thanks, Al..

This concludes our question and answer session. I would like to turn the conference back over to Brian Davis for any closing remarks..

Thanks, Andrew. And thank you for joining us today. And until our next call, have a great summer and remember to show your mum's appreciation this weekend. Take care..

The conference has now concluded. Thank you for attending today's presentation. You may not disconnect..