BEGIN YOUR DISCOVERY
Why Invest in PotlatchDeltic
PotlatchDeltic’s high-quality, well-managed portfolio of assets is ideally positioned to take advantage of favorable industry fundamentals. We have the HIGHEST DIRECT LEVERAGE to lumber prices of the timber REITs along with the STABILITY of timberlands, which support a sustainable and growing dividend.
High Quality Timberlands
Top 10 Lumber Producer in the U.S.
Stratifying Land to Deliver Value
PotlatchDeltic is a $4 Billion Timber Real Estate Investment Trust (REIT) Focused on:
HARVESTING TREES SUSTAINABLY
BEING PART OF THE SOLUTION TO CLIMATE CHANGE
MANUFACTURING LUMBER & PLYWOOD
SELLING DEVELOPED & RURAL LAND
Million Acres of Timberland
Manufacturing Facilities that Produce Lumber and Plywood
We Operate Three Business Segments
We own nearly 2.2 million acres of timberland in Idaho and the U.S. South that we manage on a sustainable basis using
ENVIRONMENTAL BEST PRACTICES.
We rank as a top 10 lumber producer in the U.S. with 1.1 billion board feet of capacity. We also own an industrial grade plywood mill with 150 million square feet of capacity. We are focused on growing our Wood Products business through HIGH RETURN CAPITAL PROJECTS.
We are the Best Timber REIT Play on Housing Because Our Integrated Strategy Provides Highest Direct Leverage to Lumber Prices
Highest Direct Leverage to Lumber Prices
1 | Source: Public filings 2016-2021.
2 | Includes average $55 million of EBITDDA expected from CatchMark for first five years after merger, assuming full synergies run rate.
3 | EBITDDA is a non-GAAP measure; reconciliation to GAAP and definition can be found in the financial performance and appendix sections.
Demand for Lumber Used in Nonresidential Construction is
Also Poised for Growth as Environmentally Beneficial Tall Wood Buildings Take Market Share from Steel and Concrete
Benefits of Mass Timber in Tall Buildings
1 | Source: The economic emissions benefits of engineered wood products in a low‐carbon future, MIT Joint Program on the Science and Policy of Global Change, June 2018.
2 | Source: Chadwick Dearing Oliver, Nedal T. Nassar, Bruce R. Lippke, James B. McCarter (2014) Carbon, Fossil Fuel, And Biodiversity Mitigation with Wood and Forests, Journal of Sustainable Forestry.
Our Natural Climate Solutions Opportunities Are Expanding
1 | Non-GAAP measure; deﬁnition and reconciliations to GAAP can be found in the appendix of this presentation.
Lumber Prices are Expected to Remain Above Historical Averages
North American Lumber Demand VS Capacity (BBF) with Lumber Prices
1 | Source: FEA.
Our Sustainably Managed Timberlands are Part of the Solution to Climate Change
Net Carbon Atmospheric Removals & Storage
Greenhouse Gas Emissions
1 | Carbon removals using land base owned at both the beginning and the end of 2022. Greenhouse gas emissions estimates using NCASI screening tool.
We are Focused on Growing Shareholder Value Over the Long Term Through a Balanced Capital Allocation Strategy
1 | EBITDDA leverage is a non-GAAP measure and target is through a cycle; see appendix for deﬁnition.
2 | Includes special dividends of $276 million and $76 million in 2021 and 2022, respectively.
3 | Includes planned expenditures on the Waldo, AR sawmill modernization and expansion.
Returning Cash to Shareholders Through a Sustainable, Growing Dividend and Opportunistic Share Repurchases is a Key Part of our Value Proposition
Sustainable and Growing Dividends
Opportunistic Share Repurchases
1 | Annual run rate.
2 | Includes $76 million special dividend.
3 | Based on closing stock price of $47.98 on February 13, 2023.
4 | Includes $5 million of repurchases through Q3 2022 under a previous share repurchase plan.
We are Growing Our Business in a Disciplined Way Over Time
Key Mergers & Acquisitions
1 | 2022 includes $15 million for the Ola, Arkansas sawmill rebuild and a $12 million deposit for the Waldo, Arkansas sawmill modernization and expansion. The Ola Sawmill rebuild funding is mostly covered by insurance..
Maintaining a Strong Balance Sheet and Ample Liquidity Provides the Flexibility to be Opportunistic
No Significant Near-Term Debt Maturities
1 | Based on closing stock price of $47.98 on February 13, 2023.
2 | December 31, 2022.
3 | Adjusted EBITDDA leverage and net debt to enterprise value are non-GAAP measures; reconciliation to GAAP and definition can be found in the financial performance and appendix sections.
4 | Weighted average cost of debt excludes amortization of deferred issuance costs and credit facility fees and includes annual estimated patronage credit on term loan debt.
The Power of Our Strategy is Evidenced by Our Strong Financial Performance
PotlatchDeltic Historical Adjusted EDITDDA
1 | Non-GAAP measure; reconciliation to GAAP and definition can be found in the financial performance and appendix sections.
We are Committed to Environmental and Social Responsibility and to Responsible Governance
1 | Data from the 2022 ESG Report.
TOTAL ADJUSTED EBITDDA
is a non-GAAP measure and is calculated as net income adjusted for interest expense, income taxes, depletion, depreciation and amortization, basis of real estate sold, non-operating pension and other post-retirement benefit costs, pension settlement charge, gains and losses on disposition of fixed assets, net gains and losses on fire damage, and other special items.
Throughout this presentation, references to EBITDDA are intended to be Adjusted EBITDDA.
ADJUSTED EBITDDA LEVERAGE
is a non-GAAP measure and is calculated as net debt divided by Total Adjusted EBITDDA.
SEGMENTED ADJUSTED EBITDDA
is a non-GAAP measure and is calculated as segment operating income (loss) adjusted for depletion, depreciation and amortization, basis of real estate sold, gains and losses on disposition of fixed assets, non-cash impairments and other special items.
CASH AVAILABLE FOR DISTRIBUTION (CAD)
is a non-GAAP measure and is calculated as cash from operations minus capital expenditures and timberland acquisitions not classified as strategic.
NET DEBT TO ENTERPRISE VALUE
is a non-GAAP measure and is calculated as net debt divided by enterprise value. Net Debt is a non-GAAP measure and, is calculated as long-term debt (plus long-term debt due within a year), less cash and cash equivalents.
is Sustainable Forestry Initiative.®
is Forest Stewardship Council.®
Forward-Looking Statements & Non-GAAP Measures
This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including without limitation, statements about the company’s business model, expectations about the contributions to EBITDDA from the CatchMark merger, expectations about the Waldo, AR sawmill expansion, including timing of completion and production impacts, effect of change in lumber prices on annual EBITDDA, expectations regarding housing fundamentals, percentage of acres harvested and number of seedlings planted per year, percent of Idaho sawlogs indexed to the price of lumber, amount of carbon removed and sequestered and greenhouse gas emitted each year, potential natural climate solutions opportunities, our ability to continuously improve our environmental performance, climate change risks and opportunities, maintenance of third-party certiﬁcations, percent of merchantable timber inventory that is comprised of sawlogs, percent of sawlogs used internally, manufacturing capacity and expansions, effect of change in log prices on company cash generation, U.S. South and specifically CatchMark capacity markets’ sawlog growth-to-drain projections, lumber volume growth trends, North American lumber demand and production, ability to increase capacity at the Ola sawmill following its rebuild, expected returns from the automatic planer grader update, projected U.S. demand for mass timber and emissions beneﬁts and carbon impact resulting from mass timber use, expectations regarding the U.S./Canadian softwood lumber import duties, forecasted real estate sales, real estate business potential and land development potential, including for solar energy opportunities, expected conservation outcomes from real estate transactions, capital allocation, growing dividend and dividend yield, share repurchases, future capital expenditures and anticipated return on capital expenditures, debt metrics, investment grade credit rating, the U.S. housing market, including housing affordability, repair and remodel activity, future company performance, and similar matters. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in: timberland values, timber harvest levels on the company’s lands, timber prices, policy regarding governmental timber sales, the United States and international economies, U.S. job growth, U.S. bank lending practices, the level of domestic construction activity, contractor shortages, labor disputes, international tariffs, quotas, and trade agreements involving wood products, domestic and international demand for wood products, production and production capacity in the forest products industry, competitive pricing pressures for the company’s products, general and industry speciﬁc environmental laws and regulations, fuel and energy costs, transportation shortages and disruptions, raw material, labor, and other costs, and tax laws that could reduce the beneﬁts associated with REIT status. Results may also differ materially because of unanticipated manufacturing interruptions, unforeseen environmental liabilities or expenditures, climate change and weather conditions, an inability to satisfy complex rules in order to remain qualiﬁed as a REIT, other events beyond our control, such as the impact of disease pandemics and other human health threats, the company’s ability to achieve the anticipated efficiency improvements of the Ola sawmill rebuild and to implement the modernization plan for the Waldo sawmill, and other risks and uncertainties described from time to time in the company’s public ﬁlings with the Securities and Exchange Commission. All forward-looking statements are made as of the date of this presentation, and the company does not undertake to update any forward-looking statements.
This presentation presents non-U.S. GAAP ﬁnancial information. A reconciliation of those numbers to U.S. GAAP is included in this presentation, which is available on the company’s website at www.PotlatchDeltic.com.