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What changed in POTLATCHDELTIC CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of POTLATCHDELTIC CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+430 added−420 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-15)

Top changes in POTLATCHDELTIC CORP's 2024 10-K

430 paragraphs added · 420 removed · 331 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

229 edited+55 added−46 removed140 unchanged
Biggest changeOur information technology systems and those of our third-party providers are vulnerable to a variety of disruptions, including but not limited to: cyber attacks, including from computer hackers, foreign governments and cyber terrorists; data breaches; malicious software programs (such as malware, viruses and ransomware); other attacks including those using techniques that change frequently, may be 29 Table of Contents disguised or difficult to detect, or designed to remain dormant until a triggering event; the process of upgrading or replacing software; an intentional or unintentional personnel action; a natural disaster or other catastrophic event; a hardware or software corruption, failure or error; a telecommunications or utility failure; system failures; a service provider failure or error; or any one or more other causes of a security breach, failure or disruption.
Biggest changeThere can be no assurance that our security measures and controls will be effective against the risks we face from cyber-attacks, including from: computer hackers; foreign governments and cyber terrorists; malicious code (such as malware, viruses and ransomware); an intentional or unintentional personnel action; a natural disaster; a hardware or software corruption, failure or error; a telecommunications system failure; a service provider failure or error; or any one or more other causes of a security breach, failure or disruption.
Our procurement foresters purchase wood fiber for our facilities from our timberlands or from private, state and federal sources. We are committed to producing wood products that meet both customer demand and quality expectations as well as responsibly sourcing the raw materials.
Wood Procurement. Our procurement foresters purchase wood fiber for our facilities from our timberlands or from private, state and federal sources. We are committed to producing wood products that meet both customer demand and quality expectations as well as responsibly sourcing the raw materials.
Logging contractors must be on an approved contractor list and receive annual training, and we require that all contractors implement applicable BMPs during forest management activities on our lands by following specific prescriptions for the tract being harvested and for planting following final harvests.
Logging contractors must be on an approved contractor list and receive annual training, and we require that all logging contractors implement applicable BMPs during forest management activities on our lands by following specific prescriptions for the tract being harvested and for planting following final harvests.
Further, from May to October, our agreements with both logging and silviculture contractors require them to have on site specific firefighting resources such as water, water pumps and hand tools. Prescribed burning is an important tool in forest management to remove post-logging woody debris known as slash and to help prepare sites for replanting.
Further, from May to October, our agreements with both logging and silviculture contractors require them to have specific firefighting resources such as water, water pumps and hand tools on site. Prescribed burning is an important tool in forest management to remove post-logging woody debris known as slash and to help prepare sites for replanting.
Additional risks not currently known to us or that we currently deem immaterial also may adversely affect our business, our financial condition, our results of operations, our cash flows and the price of our common stock. Industry and Business Risks Economic Conditions The cyclical nature of our business could adversely affect our results of operations.
Additional risks not currently known to us or that we currently deem immaterial may also adversely affect our business, our financial condition, our results of operations, our cash flows and the price of our common stock. Industry and Business Risks Economic Conditions The cyclical nature of our business could adversely affect our results of operations.
Logger and truck driver shortages or failures of a third-party transportation provider to timely deliver our products to our mills and our customers could harm our supply chain, negatively affect our customer relationships and have a material adverse effect on our financial condition, results of operations and our reputation.
Logger and truck driver shortages, or failures of a third-party transportation provider to timely deliver our products to our mills and to our customers, could harm our supply chain, negatively affect our customer relationships and have a material adverse effect on our financial condition, results of operations and our reputation.
The full extent to which a global health crisis could impact our business and operating results depends on future developments that are highly uncertain and cannot be accurately predicted and may also trigger the occurrence, or exacerbate, other risks discussed herein, any of which could have a material adverse effect on our business, results of operation, cash flows and financial condition.
The full extent to which a global health crisis could impact our business and operating results depends on future developments that are highly uncertain and cannot be accurately predicted and may also trigger the occurrence of, or exacerbate, other risks discussed herein, any of which could have a material adverse effect on our business, results of operation, cash flows and financial condition.
Future actions involving our qualified and unqualified defined benefit and other postretirement plans, such as annuity buyouts and lump-sum payouts could cause us to incur significant pension and postretirement settlement and curtailment charges and may require cash contributions to maintain a legally required funded status.
Future actions involving our qualified and unqualified defined benefit and other postretirement plans, such as annuity buyouts and lump-sum payouts, could cause us to incur significant pension and postretirement settlement and curtailment charges and may require significant cash contributions to maintain a legally required funded status.
Our certificate of incorporation and bylaws include, among other things, the following provisions: • a classified board of directors with three-year staggered terms; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval; • stockholder action can only be taken at a special or regular meeting and not by written consent and stockholders cannot call a special meeting except upon the written request of stockholders entitled to cast not less than a majority of all of the votes entitled to be cast at the meeting; • advance notice procedures for nominating candidates to our board of directors or presenting matters at stockholder meetings; • removal of directors only for cause; • allowing only our board of directors to fill vacancies on our board of directors; • in order to facilitate the preservation of our status as a REIT under the Internal Revenue Code (IRC), a prohibition on any single stockholder, or any group of affiliated stockholders, from beneficially owning more than 9.8% of our outstanding common or preferred stock, unless our board waives or modifies this ownership limitation; 26 Table of Contents • unless approved by the vote of at least 80% of our outstanding shares, we may not engage in business combinations, including mergers, dispositions of assets, certain issuances of shares of stock and other specified transactions, with a person owning or controlling, directly or indirectly, 5% or more of the voting power of our outstanding common stock; and • supermajority voting requirements to amend our bylaws and certain provisions of our certificate of incorporation.
Our certificate of incorporation and bylaws include, among other things, the following provisions: • a classified board of directors with three-year staggered terms; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval; 24 Table of Contents • stockholder action can only be taken at a special or regular meeting and not by written consent and stockholders cannot call a special meeting except upon the written request of stockholders entitled to cast not less than a majority of all of the votes entitled to be cast at the meeting; • advance notice procedures for nominating candidates to our board of directors or presenting matters at stockholder meetings; • removal of directors only for cause; • allowing only our board of directors to fill vacancies on our board of directors; • in order to facilitate the preservation of our status as a REIT under the Internal Revenue Code (IRC), a prohibition on any single stockholder, or any group of affiliated stockholders, from beneficially owning more than 9.8% of our outstanding common or preferred stock, unless our board waives or modifies this ownership limitation; • unless approved by the vote of at least 80% of our outstanding shares, we may not engage in business combinations, including mergers, dispositions of assets, certain issuances of shares of stock and other specified transactions, with a person owning or controlling, directly or indirectly, 5% or more of the voting power of our outstanding common stock; and • supermajority voting requirements for our stockholders to amend our bylaws and certain provisions of our certificate of incorporation.
On a local level, supplies can fluctuate depending upon factors such as changes in weather conditions and harvest strategies of local timberland owners, as well as occasionally high timber salvage efforts due to events such as unusual pest infestations or fires. Our timberlands are primarily located in Alabama, Arkansas, Georgia, Idaho, Louisiana, Mississippi and South Carolina.
On a local level, supplies can fluctuate depending upon factors such as changes in weather conditions and harvest strategies of local timberland owners, as well as occasionally high timber salvage efforts due to events such as unusual pest infestations, storms or fires. Our timberlands are primarily located in Alabama, Arkansas, Georgia, Idaho, Louisiana, Mississippi and South Carolina.
Our capital projects typically are designed to enhance safety, extend the life of a facility, lower costs and improve efficiencies, increase capacity and comply with regulatory standards. Under the Clean Air Act (CAA) and our site-specific Renewable Operating Permits, our Wood Products facilities closely monitor operating parameters and air emissions, including hazardous air pollutants to help minimize those emissions.
Our capital projects typically are designed to enhance safety, extend the life of a facility, lower costs and improve efficiencies, increase capacity, and comply with regulatory standards. Under the Clean Air Act (CAA) and our site-specific air operating permits, our Wood Products facilities closely monitor operating parameters and air emissions, including hazardous air pollutants to help minimize those emissions.
Strategic initiatives and goals have been developed within each of our pillars that are connected to the SDGs. Maintaining a strong foundation of corporate responsibility is a key component of our ability to drive long-term stakeholder value, and these principles guide us in how we conduct our business every day. Forests Sustainable Forestry Practices .
We have developed strategic initiatives and goals within each of our pillars that are connected to the SDGs. Maintaining a strong foundation of corporate responsibility is a key component of our ability to drive long-term stakeholder value, and these principles guide us in how we conduct our business every day. Forests Sustainable Forestry Practices .
A number of factors, including availability of credit, cost of financing, a slowing of residential and commercial real estate development, availability of funding to support conservation land purchases by governmental and other entities, zoning rules, population shifts, types and location of land available for sale, and changes in demographics could reduce the demand for our real estate and negatively affect our results of operations.
A number of factors, including availability of credit, cost of financing, a slowing of residential and commercial real estate development, availability of funding to support conservation land purchases by governmental and other entities, zoning rules, governmental incentives, population shifts, types and location of land available for sale, and changes in demographics, could reduce the demand for our real estate and negatively affect our results of operations.
Our timberland management promotes clean air and high water and soil quality, while providing biodiversity and wildlife habitat. Our timberlands also provide abundant recreational opportunities for our communities. We recognize the role forests play in combating climate change, with our timberlands providing a powerful source of carbon removal, storage and cycling.
Our timberland management promotes clean air and high water and soil quality, while caring for biodiversity and wildlife habitat. Our timberlands also provide abundant recreational opportunities for our communities. We recognize the role forests play in combating climate change, with our timberlands providing a powerful source of carbon removal, storage, and cycling.
As the owner and operator of land, we have been and may be in the future liable under environmental laws for cleanup, closure and other damages resulting from the presence and release of hazardous substances on or from our properties or operations we currently own or have owned and operated in the past.
As the owner and operator of land and manufacturing operations, we have been and may be in the future liable under environmental laws for cleanup, closure and other damages resulting from the presence and release of hazardous substances on or from our properties or operations we currently own or have owned and operated in the past.
Enactment of new environmental laws or regulations, or changes in existing laws or regulations, particularly relating to air, wildlife, water quality and climate change, or their enforcement, may require significant expenditures by us or may adversely affect our timberland management, harvesting activities and manufacturing operations.
Enactment of new environmental laws or regulations, or changes in existing laws or regulations, particularly relating to air, wildlife, water quality and climate change, or their interpretation and enforcement, may require significant expenditures by us or may adversely affect our timberland management, harvesting activities and manufacturing operations.
The board of directors oversees our corporate governance, including our environmental management; sustainability strategy; social responsibility; health and safety program performance; public policy; advocacy and government relations; corporate governance policies and practices; human capital management initiatives; organizational culture and climate-related risks and opportunities.
The board of directors oversees our corporate governance, including our environmental and biodiversity management; sustainability strategy; social responsibility; health and safety program performance; public policy; advocacy and government relations; corporate governance policies and practices; human capital management initiatives; organizational culture and climate-related risks and opportunities.
Our acute risks could include: 1) potential increases in flooding and extreme weather events; 2) changes in precipitation patterns including volume, type (snow and rain) and timing; 3) changes in soil moisture conditions; 4) changes in risks from insects and disease; and 5) heightened wildfire risks.
Our acute impacts could include: 1) potential increases in flooding and extreme weather events; 2) changes in precipitation patterns including volume, type (snow and rain) and timing; 3) changes in soil moisture conditions; 4) changes in risks from insects and disease; and 5) heightened wildfire risks.
Attempted cyber attacks and other cyber incidents are occurring more frequently, are constantly evolving in nature, are becoming more sophisticated and disruptive to our business operations, and are being made by groups and individuals with a wide range of motives and expertise.
Attempted cyber-attacks and other cyber incidents are occurring more frequently, are constantly evolving in nature, are becoming more sophisticated and disruptive to business operations, and are being made by groups and individuals with a wide range of motives and expertise.
Global temperature increases can result in significant regional differences in weather patterns that affect tree growth. Further, changes in precipitation resulting in droughts have made and could in the future make wildfires more frequent or more severe.
Global temperature increases can result in significant regional differences in weather patterns that affect tree growth. Changes in precipitation resulting in droughts have made and could in the future make wildfires more frequent or more severe.
As a result of weak business conditions in the timber industry that persisted for several years, there are fewer logging and hauling contractors in certain markets to harvest and deliver our logs.
As a result of weak business conditions in the timber industry that have persisted for several years, there are fewer logging and hauling contractors in certain markets to harvest and deliver our logs.
Our Real Estate segment is affected by a variety of factors, including the general state of the economy, local real estate market conditions, the level of construction activity in the U.S., and the evolution of natural climate solutions markets. No third-party customer represented more than 10% of our consolidated revenues in 2023, 2022 or 2021. Timberlands Segment Industry Background.
Our Real Estate segment is affected by a variety of factors, including the general state of the economy, local real estate market conditions, the level of construction activity in the U.S., and the evolution of natural climate solutions markets. No third-party customer represented more than 10% of our consolidated revenues in 2024, 2023 or 2022. Timberlands Segment Industry Background.
We continue to emphasize the importance of sourcing talent from these local communities and retaining that talent at our company so that our workplace demographics reflect the communities in which we operate. Overall, 21% of our workforce is comprised of individuals that identify as a member of one or more racial minority groups. Performance Responsible Sustainability Governance.
We continue to emphasize the importance of sourcing talent from these local communities and retaining that talent at our company so that our workplace demographics reflect the communities in which we operate. Overall, 21% of our workforce is comprised of individuals who self-identify as a member of one or more racial minority groups. Performance Responsible Sustainability Governance.
Prices for our products are affected by many factors outside of our control, and we have no influence over the timing and extent of price changes, which often are volatile. Our profitability with respect to these products depends, in part, on managing our costs, particularly raw material and energy costs, which represent significant components of our operating costs.
Prices for our products are affected by many factors outside of our control, and we have no influence over the timing and extent of market price changes, which often are volatile. Our profitability with respect to these products depends, in part, on managing our costs, particularly raw material, labor and energy costs, which represent significant components of our operating costs.
Our debt requires interest and principal payments. At December 31, 2023, the total outstanding principal on our long-term debt was approximately $1.0 billion. Subject to the limits contained in our debt instruments, we may be able to incur additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions or for other purposes.
Our debt requires interest and principal payments. At December 31, 2024, the total outstanding principal on our long-term debt was approximately $1.0 billion. Subject to the limits contained in our debt instruments, we may be able to incur additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions or for other purposes.
Using wood products for building stores tree carbon and using biomass for energy retains carbon within a natural loop. The trees we plant then grow, renewing the cycle and growing net carbon storage. Active forest management enhances carbon removal from the atmosphere compared to unmanaged forests. As forests mature, the rate of carbon sequestration slows and natural tree mortality increases.
Using wood products for building stores tree carbon and using biomass for energy retains carbon within a natural loop. The trees we plant then grow, renewing the cycle and growing net carbon storage. Active forest management enhances carbon removal from the atmosphere compared to unmanaged forests. As forests mature, the rate of carbon sequestration slows.
Our Southern timberlands are less susceptible to wildfires than our Western timberlands as they are located in areas that have relatively high humidity. Our Southern harvesting operations result in less slash at final harvest and the slash deteriorates more rapidly. In the South the terrain allows slash to be mechanically spread back into the tract returning nutrients to the soil.
Our Southern timberlands are less susceptible to wildfires than our Western timberlands because they are located in areas that have relatively high humidity. Our Southern harvesting operations result in less slash at final harvest and the slash deteriorates more rapidly. In the South, the terrain allows slash to be mechanically spread back into the tract returning nutrients to the soil.
If litigation of this type is brought against us, it could result in substantial costs and divert management’s attention and resources. Additionally, shareholder activism regarding our governance, strategic direction and operations could result in negative impacts to our business by adversely affecting our ability to effectively and timely implement our strategies and initiatives.
If litigation of this type is brought against us, it could result in substantial costs and divert management’s attention and resources. Additionally, stockholder activism regarding our governance, strategic direction and operations could result in negative impacts to our business by adversely affecting our ability to effectively and timely implement our strategies and initiatives.
Additionally, our Northern mills also produce less during the winter months due to colder operating conditions and frozen logs. Rural real estate dispositions and acquisitions can be adversely affected when access to any properties to be sold or considered for acquisition are limited due to adverse weather conditions.
Additionally, our Northern mills also produce less during the winter months due to colder operating conditions and frozen logs. Rural real estate dispositions and acquisitions can be adversely affected when access to any properties to be sold or considered for acquisition is limited due to adverse weather conditions.
However, such insurance may not be sufficient or may be cost prohibitive to obtain to cover all our damages and losses in the future. 21 Table of Contents Our capital investments may not have the expected financial impacts. We invest in maintenance and discretionary capital improvements at our Wood Products facilities.
However, such insurance may not be sufficient or may be cost prohibitive to obtain to cover all our damages and losses in the future. 19 Table of Contents Our capital investments may not have the expected financial impacts. We invest in maintenance and discretionary capital improvements at our Wood Products facilities.
If a resurgence of COVID-19 or a potentially more severe global health crisis occurs, we or our suppliers, contractors, customers and others may be restricted or prevented from conducting business activities for indefinite or intermittent periods of time, including as a result of employee health and safety concerns, shutdowns, supply chain disruptions, shelter in place orders, travel restrictions and other actions and restrictions that may be prudent or required by governmental authorities.
If a resurgence of COVID-19 or another severe global health crisis occurs, we or our suppliers, contractors, customers and others may be restricted or prevented from conducting business activities for indefinite or intermittent periods of time, including as a result of employee health and safety concerns, shutdowns, supply chain disruptions, shelter in place orders, travel restrictions and other actions and restrictions that may be prudent or required by governmental authorities.
We are a leading timberland REIT with operations in nine states and ownership of nearly 2.2 million acres of timberland in seven of those states. We also own six sawmills and an industrial grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program.
We are a leading timberland REIT with operations in nine states and ownership of 2.1 million acres of timberland in seven of those states. We also own six sawmills and an industrial grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program.
Our ability to access such capital on favorable terms could be hampered by a number of factors, many of which are outside of our control, including a decline in general market conditions, decreased market liquidity, a downgrade to our debt rating by third-party rating agencies, increases in interest rates, an unfavorable market perception of our growth potential, a decrease in our current or estimated future earnings or a decrease in the market price of our common stock.
Our ability to access such capital on favorable terms could be negatively affected by a number of factors, many of which are outside of our control, including a decline in general market conditions, decreased market liquidity, a downgrade to our debt rating by third-party rating agencies, increases in interest rates, an unfavorable market perception of our growth potential, a decrease in our current or estimated future earnings or a decrease in the market price of our common stock.
The primary goal of our reforest program is to utilize the best planting stock possible that is selectively bred to achieve superior disease resistance, produce excellent form, exhibit high growth rates and be well-adapted to the local climate and growing conditions.
The primary goal of our reforestation program is to utilize the best planting stock possible that is selectively bred to achieve superior disease resistance, produce excellent form, exhibit high growth rates and be well-adapted to the local climate and growing conditions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations . Indebtedness Our indebtedness could materially adversely affect our ability to generate sufficient cash to pay dividends to stockholders and fulfill our debt obligations, our ability to react to changes in our business and our ability to incur additional indebtedness to fund future needs.
Management’s Discussion and Analysis of Financial Condition and Results of Operations . Indebtedness Our indebtedness could materially adversely affect our ability to generate sufficient cash to pay dividends to stockholders and fulfill our debt obligations, our ability to respond to changes in our business and our ability to incur additional indebtedness to fund future needs.
Ball (age 58) has served as Vice President of Timberlands since December 2017. From 2012 to December 2017, he served as Manager of our Idaho Timberlands business. William R. DeReu (age 57) has served as Vice President, Real Estate since February 2018 and as Vice President, Real Estate and Lake States Timberlands from February 2012 to February 2018. Michele L.
Ball (age 59) has served as Vice President of Timberlands since December 2017. From 2012 to December 2017, he served as Manager of our Idaho Timberlands business. William R. DeReu (age 58) has served as Vice President, Real Estate since February 2018 and as Vice President, Real Estate and Lake States Timberlands from February 2012 to February 2018. Michele L.
Detailed harvest information for the years ended December 31, 2023 and 2022, by region and product is presented in Part II – Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . Wood Products Segment Operations. We are a top 10 softwood lumber manufacturer in the U.S. with 1.1 billion board feet of capacity.
Detailed harvest information for the years ended December 31, 2024 and 2023, by region and product is presented in Part II – Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . Wood Products Segment Operations. We are a top 10 softwood lumber manufacturer in the U.S. with 1.2 billion board feet of capacity.
Cremers (age 60) has been a director since March 2013 and our President and Chief Executive Officer since January 2021. Mr. Cremers also served as President and Chief Operating Officer from March 2013 through December 2020, Chief Financial Officer from March 2013 through August 2013, and Executive Vice President and Chief Financial Officer from February 2012 to March 2013. Mr.
Cremers (age 61) has been a director since March 2013 and our President and Chief Executive Officer since January 2021. Mr. Cremers also served as President and Chief Operating Officer from March 2013 through December 2020, Chief Financial Officer from March 2013 through August 2013, and Executive Vice President and Chief Financial Officer from February 2012 to March 2013. Mr.
Our business is particularly dependent upon the health of the U.S. housing market, and specifically demand for new homes and home repair and remodeling which are subject to fluctuations due to changes in economic conditions, changes in employment levels, consumer confidence, financial markets, interest rates, housing affordability, access to affordable mortgage financing and credit availability (including homebuyers’ ability to qualify for mortgages), supply chain disruptions, availability of labor and developable land, inflation, population change, weather conditions and other factors.
Our business is particularly dependent upon the health of the U.S. housing market, and specifically on the demand for 16 Table of Contents new homes and home repair and remodeling, which are subject to fluctuations due to changes in economic conditions, changes in employment levels, consumer confidence, financial markets, interest rates, housing affordability, access to affordable mortgage financing and credit availability (including homebuyers’ ability to qualify for mortgages), supply chain disruptions, availability of labor and developable land, inflation, population change, weather conditions and other factors.
The market price of our common stock may be influenced by several factors, many of which are beyond our control, including those described herein under Risk Factors and the following: • actual or anticipated fluctuations in our operating results or our competitors’ operating results; • announcements by us or our competitors of capacity changes; 25 Table of Contents • acquisitions or strategic investments; • our growth rate and our competitors’ growth rates; • the financial markets, interest rates and general economic conditions; • changes in stock market analyst recommendations regarding us or lack of analyst coverage of our common stock; • our competitors or the forest products industry; • failure to pay cash dividends or the amount of cash dividends paid; • sales of our common stock by our executive officers, directors and significant stockholders or sales of substantial amounts of common stock; and • changes in accounting principles and changes in tax laws and regulations.
The market price of our common stock may be influenced by several factors, many of which are beyond our control, including those described herein under Risk Factors and the following: • actual or anticipated fluctuations in our operating results or our competitors’ operating results; • announcements by us or our competitors of capacity changes; • acquisitions or strategic investments; • our growth rate and our competitors’ growth rates; • the financial markets, interest rates and general economic conditions; • changes in stock market analyst recommendations regarding us or lack of analyst coverage of our common stock; • our competitors or the forest products industry; • failure to pay cash dividends or a change in the amount of cash dividends paid; • sales of our common stock by our executive officers, directors and significant stockholders or sales of substantial amounts of common stock; and • changes in accounting principles and changes in tax laws and regulations.
The third quarter is typically our Timberlands segment's strongest production quarter. Demand for our manufactured wood products typically decreases in the winter months when construction activity is slower, while demand typically increases during the spring, summer and fall when construction activity is generally higher.
The third quarter is typically our Timberlands segment's strongest production quarter. Demand for our manufactured wood products typically decreases in the winter months when construction activity is lower, while demand typically increases during the spring, summer and fall when construction activity is generally higher.
Qualification as a REIT involves the application of highly technical and complex provisions of the IRC to our operations, including satisfaction of certain asset, income, organizational, dividend, stockholder ownership and other requirements, on an ongoing basis.
Qualification as a REIT involves the application of highly technical and complicated provisions of the IRC to our operations, including satisfaction of certain asset, income, organizational, dividend, stockholder ownership and other requirements, on an ongoing basis.
We cannot therefore provide any assurance of what our actual pension plan costs will be in the future, or if we will be required under applicable law to make future material plan contributions. For additional information regarding this matter, see Note 15: Savings Plans, Pension Plans and Other Postretirement Employee Benefits in the Notes to Consolidated Financial Statements .
We cannot therefore provide any assurance of what our actual pension plan costs will be in the future, or if we will be required under applicable law to make future material plan contributions. See Note 15: Savings Plans, Pension Plans and Other Postretirement Employee Benefits in the Notes to Consolidated Financial Statements for additional information regarding these plans.
The BMPs include practices such as leaving streamside management zones during harvest, properly designing and constructing logging roads, and using logging methods and equipment that protect water quality. 10 Table of Contents Conservation. As a custodian of our timberlands, we recognize that the best outcome for some of our timberlands could be to conserve them as forestland in perpetuity.
The BMPs include practices such as leaving streamside management zones during harvest, properly designing and constructing logging roads, and using logging methods and equipment that protect water quality. Conservation. As a custodian of our timberlands, we recognize that the best outcome for some of our timberlands could be to conserve them as forestland in perpetuity.
Transition risks could include a carbon tax, a change in the methodology for calculating biogenic emissions, as well as operational impacts such as changes in energy costs and regulatory impacts in environmental management. People We strive to make PotlatchDeltic a workplace of excellence through our company culture, fair compensation, and comprehensive benefit options.
Transition risks could include a carbon tax, changes to certification of carbon offset projects, a change in the methodology for calculating biogenic emissions, as well as operational impacts such as changes in energy costs and regulatory impacts in environmental management. People We strive to make PotlatchDeltic a workplace of excellence through our company culture, fair compensation, and comprehensive benefit options.
In addition, the actions of activist shareholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals of our business.
In addition, the actions of activist stockholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals of our business.
Potential opportunities could include market opportunities arising from the increased use of innovative wood products, such as mass timber and policies and incentives that encourage greater use of wood-based products in buildings. Growth in carbon offset markets and bio-circular markets could also provide opportunities as sustainably managed forests are recognized as a natural climate solution.
Potential opportunities could include market opportunities arising from the increased use of innovative wood products, such as mass timber and policies and incentives that encourage greater use of wood-based products in buildings. Growth in carbon offset markets and bio-circular markets could also provide opportunities as sustainably managed forests are recognized 11 Table of Contents as a natural climate solution.
Under the CWA, state and EPA water quality standards, we are subject to discharge limits and other provisions established at each site for processing water and stormwater discharges through the National Pollutant Discharge Elimination System.
Under the CWA and state and federal water quality standards, we are subject to discharge limits and other provisions established at each site for processing water and stormwater discharges through the National Pollutant Discharge Elimination System.
Such practices include installing and maintaining a series of dip ponds across our ownership, maintaining our road infrastructure for access, and participating in fire protection districts or cooperative agreements with state, federal and private timberland owners where participants contribute assets and resources to fight fires regardless of the location of the fire.
Such practices include installing and maintaining a series of dip ponds across our ownership, maintaining our road infrastructure for access, and participating in fire protection districts or 9 Table of Contents cooperative agreements with state, federal and private timberland owners where participants contribute assets and resources to fight fires regardless of the location of the fire.
We focus on meeting the needs of our stakeholders, now and into the future, and are committed to responsible corporate citizenship, and environmental, social and governance considerations are integrated in the way we do business every day. Environmental Stewardship is a company core value instilled by managing a renewable resource for the long-term.
We focus on meeting the needs of our stakeholders, now and into the future, and are committed to responsible corporate citizenship, and corporate responsibility considerations integrated in the way we do business every day. Environmental Stewardship is a company core value instilled by managing a renewable resource for the long term.
Although the CWA, ESA and related regulations have not had, and we do not expect in 2024 that they will have a material effect on our operations, they could do so in the future. Regulations affecting our manufacturing operations.
Although the CWA, ESA and related regulations have not had, and we do not expect in 2025, that they will have a material effect on our operations, they could do so in the future. Regulations affecting our manufacturing operations.
We expect approximately the same percentage of our 2023 total harvest volume to be sold to third parties under log supply agreements in 2024. The segment also generates revenue from other timber and non-timber sources such as hunting leases, recreation permits and leases, mineral rights leases and carbon sequestration.
We expect approximately the same percentage of our total harvest volume to be sold to third parties under log supply agreements in 2025. The segment also generates revenue from other timber and non-timber sources such as hunting leases, recreation permits and leases, mineral rights leases and carbon sequestration.
Our values are safety, inclusion and respect, integrity, operational excellence, community, and environmental stewardship. We execute our mission through the lens of our strategy across four pillars: Forest, Planet, People, and Performance.
Our values are safety, inclusion and respect, integrity, operational excellence, community, and environmental stewardship. We execute our mission through the lens of our strategy across four pillars: Forests, Planet, People, and Performance.
A strike or other work stoppage, or our inability to renew collective bargaining agreements timely and on favorable terms, could adversely affect our financial results. Certain employees at one of our sawmills, representing 14% of our total workforce, are covered under a collective bargaining agreement that expires in 2026.
A strike or other work stoppage, or our inability to renew collective bargaining agreements timely and on favorable terms, could adversely affect our financial results. Certain employees at one of our sawmills, representing approximately 13% of our total workforce, are covered under a collective bargaining agreement that expires in 2026.
Available Information We make our periodic and current reports that we file with, or furnish to, the Securities and Exchange Commission (SEC) available on or through our website, www.PotlatchDeltic.com (under “Investors – Financial Information”), at no charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC.
Available Information We make our periodic and current reports that we file with, or furnish to, the Securities and Exchange Commission (SEC) available on or through our website, www.PotlatchDeltic.com (under “Investors – Financial Information – SEC Filings"”), at no charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC.
Credit rating agencies rate our debt securities on factors that include our operating results, actions that we take, their view of the general outlook for our industry and their view of the general outlook for the economy.
Credit rating agencies rate our debt securities on factors that include our operating results, actions that we take level of outstanding debt, and their view of the general outlook for our industry and the economy.
Additionally, our 2022 Repurchase Program could diminish our cash reserves to a level which may impact our ability to pursue possible future strategic opportunities and acquisitions or meet future obligations.
Further, our 2022 Repurchase Program could diminish our cash reserves to a level which may impact our ability to pursue possible future strategic opportunities and acquisitions or meet future obligations.
We are subject to a wide range of general and industry-specific laws and regulations relating to the protection of the environment, including those governing: • silvicultural activities, including use of pesticides and herbicides, harvesting, and road building, • endangered and at-risk species, • stormwater and surface water management, • air emissions, • the cleanup of contaminated sites, • health and safety matters, and • building codes. 22 Table of Contents We have incurred, and we expect to continue to incur, significant capital, operating and other expenditures to comply with applicable environmental laws and regulations.
We are subject to a wide range of general and industry-specific laws and regulations relating to the protection of the environment, including, but not limited to, those governing: • silvicultural activities, including use of pesticides and herbicides, harvesting, and road building, • endangered and at-risk species, • stormwater and surface water management, • air emissions, • the cleanup of contaminated sites, • health and safety matters, and • building codes. 20 Table of Contents We have incurred, and we expect to continue to incur, significant capital, operating and other expenditures to comply with applicable environmental laws and regulations.
In addition, we expect our core operational contractors to review a training video, and comply with our Supplier Code of Conduct. 12 Table of Contents Employee Development. We recognize that employing a highly skilled and diverse workforce is a competitive advantage and leads to better team member engagement.
In addition, we expect our core operational contractors to review a training video, and comply with our Supplier Code of Conduct. Employee Development. We recognize that employing a highly skilled and diverse workforce is a competitive advantage and leads to better team member engagement.
The term of office of the officers of the company expires at the annual meeting of our board and each officer holds office until the officer’s successor is duly appointed and qualified or until the earlier of the officer’s death, resignation, retirement, removal by the board or as otherwise provided in our bylaws. 17 Table of Contents ITEM 1A.
The term of office of the officers of the company expires at the annual meeting of our board and each officer holds office until the officer’s successor is duly appointed and qualified or until the earlier of the officer’s death, resignation, retirement, removal by the board or as otherwise provided in our bylaws. ITEM 1A.
Likewise, while we undertake continuous improvements to our manufacturing facilities to meet or exceed future applicable legal requirements, there can be no assurance that our commitments will be successful, that regulation in the future will not have a negative competitive impact or that economic returns will reflect our capital investments.
There can be no assurance that our commitments to undertake continuous improvements to our manufacturing facilities to meet or exceed future applicable legal requirements will be successful, that regulation in the future will not have a negative competitive impact or that economic returns will reflect our capital investments.
However, future growth and yield estimates are inherently inexact and uncertain and subject to many external variables that could further affect their accuracy including, among other things, disease, infestation, natural disasters, changes in weather patterns and changes in product merchandizing specifications.
However, future growth and yield estimates are inherently inexact and uncertain and subject to many external variables that could further affect their accuracy including, among other things, disease, infestation, natural disasters, levels of precipitation, changes in weather patterns and changes in product merchandizing specifications.
Typically, prices in our Southern region contracts are adjusted every three months based on prevailing market prices for logs and our Southern log supply agreements are in place for one to five years. During 2023, 2022, and 2021, approximately 28%, 31% and 34%, respectively, of our total harvest volume was sold under long-term log supply agreements with third-parties.
Typically, prices in our Southern region contracts are adjusted every three months based on prevailing market prices for logs, and our Southern log supply agreements are in place for one to five years. During 2024, 2023, and 2022, approximately 29%, 28%, and 31%, respectively, of our total harvest volume was sold under long-term log supply agreements with third parties.
Cremers joined the company in 2007 as Vice President and Chief Financial Officer. Wayne Wasechek (age 53) has served as Vice President and Chief Financial Officer since August 2023. Mr.
Cremers joined the company in 2007 as Vice President and Chief Financial Officer. Wayne Wasechek (age 54) has served as Vice President and Chief Financial Officer since August 2023. Mr.
Therefore, if we were to be restricted from harvesting on a significant portion of our timberlands for a prolonged period of time we could suffer materially adverse effects to our results of operations and cash flows. We typically experience seasonally lower harvest activity during the winter and early spring due to weather conditions.
Therefore, if we were to be restricted from harvesting on a significant portion of our timberlands for a prolonged period of time, we could suffer materially adverse effects to our results of operations and cash flows. We typically experience seasonally lower harvest activity during the winter and early spring due to weather that impacts logging and hauling conditions.
Any of our manufacturing facilities or machines could unexpectedly cease to operate due to a number of events, some of which have occurred in the past, including unscheduled maintenance outages, prolonged power failures, equipment failures, raw material shortages, equipment and maintenance part shortages, cyber-events, labor difficulties or labor availability due to quarantine requirements for those exposed to flu or other viruses, disruptions in the transportation infrastructure, such as roads, bridges, railroad tracks and tunnels, fire such as the fire at our Ola, Arkansas sawmill in June 2021, ice storms, floods, windstorms, tornadoes, hurricanes or other catastrophes, terrorism or threats of terrorism, governmental regulations and other operational problems.
Any of our manufacturing facilities or machines could unexpectedly cease to operate due to a number of events, including unscheduled maintenance outages, prolonged power failures, equipment failures, raw material shortages, equipment and maintenance part shortages, cyber-events, labor difficulties or labor availability due to quarantine requirements for those exposed to flu or other diseases, disruptions in the transportation infrastructure, such as roads, bridges, railroad tracks and tunnels, fire such as the fire at our Ola, Arkansas sawmill in June 2021, ice storms, floods, windstorms, tornadoes, hurricanes or other catastrophes, terrorism or threats of terrorism, governmental regulations and other operational problems.
We value an environment of safety, inclusion and respect, integrity, operational excellence, community, and environmental stewardship, and look to attract talent with diverse backgrounds and experience. Our Team. At December 31, 2023, we employed 1,384 team members across our business with hourly workers representing approximately 73% of the total employed.
We value an environment of safety, inclusion and respect, integrity, operational excellence, community, and environmental stewardship, and look to attract talent with diverse backgrounds and experience. Our Team. At December 31, 2024, we employed 1,383 team members across our business with hourly workers representing approximately 73% of the total employed.
Our commitment to human rights is embodied in our Human Rights Policy and supported by our Corporate Conduct and Ethics Code, Supplier Code of Conduct, and Diversity, Equity, and Inclusion Policy, Forest Stewardship Policy, Environment, Health, and Safety Policy, among other policies, standards, and practices. We respect Indigenous peoples and traditional livelihoods and value stakeholder engagement on these issues.
Our commitment to human rights is embodied in our Human Rights Policy and supported by our Corporate Conduct and Ethics Code, Supplier Code of Conduct, Workforce Engagement Policy, Forest Stewardship Policy, and Environment, Health, and Safety Policy, among other policies, standards, and practices. We respect Indigenous peoples and traditional livelihoods and value stakeholder engagement on these issues.
Actual sawmill production for 2023 was 1,106 MMBF. 2 MMBF stands for million board feet; MMSF stands for million square feet, 3/8-inch panel thickness basis. Our Wood Products segment manufactures and sells lumber, plywood and residual products at seven mills located in Arkansas, Idaho, Michigan and Minnesota.
Actual sawmill production for 2024 was 1,120 MMBF. 2. MMBF stands for million board feet; MMSF stands for million square feet, 3/8-inch panel thickness basis. Our Wood Products segment manufactures and sells lumber, plywood and residual products at seven mills located in Arkansas, Idaho, Michigan and Minnesota.
A strike or other work stoppage in the facilities of any of our major customers or suppliers could also have similar effects on us. ITEM 1B. UNRE SOLVED STAFF COMMENTS None. 31 Table of Contents
A strike or other work stoppage in the facilities of any of our major customers or suppliers could also have similar effects on us. ITEM 1B. UNRE SOLVED STAFF COMMENTS None.
The Timberlands segment sells a portion of its logs at market prices to our Wood Products facilities. Intersegment sales to our Wood Products facilities were approximately 27%, 33% and 37% of our total Timberlands segment revenues for 2023, 2022 and 2021, respectively. The segment also sells sawlogs and pulpwood to a variety of forest products companies located near our timberlands.
The Timberlands segment sells a portion of its logs at market prices to our Wood Products facilities. Intersegment sales to our Wood Products facilities were approximately 26%, 27%, and 33% of our total Timberlands segment revenues for 2024, 2023, and 2022, respectively. The segment also sells sawlogs and pulpwood to a variety of forest products companies located near our timberlands.
Our Wood Products segment employs approximately 82% of our total workforce and is the only segment that includes an hourly workforce. Certain employees at one of our sawmills, representing approximately 14% of our total workforce, are covered under a collective bargaining agreement, which expires in 2026. Health and Safety. Our employees are our greatest assets.
Our Wood Products segment employs approximately 84% of our total workforce and is the only segment that includes an hourly workforce. Certain employees at one of our sawmills, representing approximately 13% of our total workforce, are covered under a collective bargaining agreement, which expires in 2026. Health and Safety. Our employees are our greatest assets.
All seven of our facilities are certified to the SFI ® Fiber Sourcing Standard, which provides structure to how we, as an SFI ® Program Participant, purchase fiber from both certified and non-certified forestland. In 2023, 100% of the timber consumption at all our Wood Products facilities were SFI ® Fiber Sourcing certified.
All seven of our facilities are certified to the SFI Fiber Sourcing Standard, which provides structure to how we, as an SFI Program participant, purchase fiber from both certified and non-certified forestland. In 2024, 100% of the timber consumption at all our Wood Products facilities was SFI Fiber Sourcing certified.
This assessment also includes identifying non-core timberlands that may be better suited for NCS activities, including forest carbon offsets, carbon capture and storage projects, and selling or leasing timberlands to third parties for renewable energy projects such as solar for power generation facilities.
This assessment also includes identifying land that may be better suited for NCS activities such as forest carbon offsets, carbon capture and storage projects, and selling or leasing timberlands to third parties for renewable energy projects such as solar power generation facilities.
Because environmental regulations are constantly evolving, we will continue to incur costs to maintain compliance with those laws and our compliance costs could increase materially. In addition, air emissions, stormwater, and surface water management regulations may present liabilities and are subject to change.
Because environmental regulations and agency interpretations of them are constantly evolving, we will continue to incur costs to maintain compliance with those laws and our compliance costs could increase materially. In addition, air emissions, stormwater, and surface water management regulations may present liabilities and are subject to change.
As a result, our activities in or adjacent to the habitat of these species may be subject to restrictions on the harvesting of timber, reforestation activities and the construction and use of roads.
As a result, our activities in or adjacent to the habitat of these species may be subject to restrictions on the harvesting of timber, 14 Table of Contents reforestation activities and the construction and use of roads.
Although some risks are not insurable and some coverage is limited, we purchase insurance on our manufacturing facilities for damages and business interruption losses resulting from events such as fires, floods, windstorms, earthquakes and catastrophic equipment failure.
Although some risks are not insurable and some coverage is limited, we purchase insurance on our manufacturing facilities for damages and business interruption losses resulting from events such as fires, floods, windstorms, earthquakes and catastrophic equipment failure, subject to applicable deductibles.
The principles underlying our commitment to diversity and inclusion are reflected through our policies, including our Diversity, Equity, and Inclusion Policy, Human Rights Policy, Corporate Conduct and Ethics Code, Equal Employment Opportunity Policy and Americans with Disabilities Act Policy. We strive to recruit, develop and retain a workforce that is representative of the communities in which we operate.
The principles underlying this commitment are reflected through our policies, including our Workforce Engagement Policy, Human Rights Policy, Corporate Conduct and Ethics Code, Equal Employment Opportunity Policy, and Americans with Disabilities Act Policy. We strive to recruit, develop, and retain a workforce that is representative of the communities in which we operate.
One hundred percent of our timberlands are certified to the SFI ® Forest Management standards and approximately 70% of our combined timberlands in Arkansas and Louisiana are also certified to the FSC ® Forest Management standards. Generally, we are able to realize price premiums for pulpwood from our FSC ® certified lands.
All of our timberlands are certified to the SFI Forest Management standards and approximately 70% of our combined timberlands in Arkansas and Louisiana are also certified to the FSC Forest Management standards. Generally, we are able to realize price premiums for pulpwood from our FSC certified lands.
We review our compensation and benefit plans annually to help ensure that we are providing competitive, contemporary, and inclusive programs to attract and retain the best people and support the health and well-being of our employees and their families.
We review our compensation and benefit plans annually in an effort to ensure that we are providing competitive, contemporary, and inclusive programs to attract and retain the best people and support the health and well-being of our employees and their families.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWood Products Adjusted EBITDDA The following table summarizes Adjusted EBITDDA variances for the year ended December 31, 2023 compared with the year ended December 31, 2022: (in thousands) 2023 vs 2022 Adjusted EBITDDA - prior year $ 290,907 Lumber: Price (283,368 ) Log costs per unit 29,048 Manufacturing costs per unit 5,026 Volume 174 Inventory charge 4,259 Residuals, panels and other (25,559 ) Adjusted EBITDDA - current year $ 20,487 41 Table of Contents 2023 compared with 2022 Wood Products Adjusted EBITDDA for 2023 was $20.5 million, a decrease of $270.4 million compared to 2022 primarily due to the following: • Lumber Price: Average lumber sales prices decreased to $452 per MBF during 2023 compared to $737 per MBF during 2022. • Log Costs Per Unit: Log costs per unit were lower primarily as a result of lower indexed log costs at our Idaho sawmill and improved production recoveries at our Southern sawmills. • Manufacturing Cost Per Unit: Lower manufacturing cost per unit was primarily a result of increased production at our Ola, Arkansas sawmill which restarted late in the third quarter of 2022 after a fire in June 2021. • Inventory Charge: Inventory write-downs were lower at the end of 2023 due to lower log costs and established market pricing at the end of 2023 compared to 2022.
Biggest changeWood Products Adjusted EBITDDA The following table summarizes Adjusted EBITDDA variances for the year ended December 31, 2024 compared with the year ended December 31, 2023: (in thousands) 2024 vs 2023 Wood Products Adjusted EBITDDA - prior year $ 20,487 Lumber: Price (31,224 ) Manufacturing costs per unit (7,825 ) Log costs per unit 9,930 Volume (78 ) Inventory charge 2,827 Residuals, panels and other (1,771 ) Wood Products Adjusted EBITDDA - current year $ (7,654 ) 2024 compared with 2023 Wood Products Adjusted EBITDDA for 2024 decreased $28.1 million compared to 2023 primarily as a result of the following: • Lumber Price: Average lumber sales prices decreased to $425 per MBF during 2024 compared to $452 per MBF during 2023. • Manufacturing Cost Per Unit: Higher manufacturing costs per unit were primarily due to the impact of downtime and the restart related to the expansion and modernization project at our Waldo, Arkansas sawmill and increased labor costs from normal wage adjustments, partially offset by an increase in production at our Ola, Arkansas sawmill. • Log Costs Per Unit: Log costs per unit were lower primarily due to lower indexed log costs at our Idaho sawmill and improved production recoveries at our Southern sawmills. • Inventory Charge: Lower log costs and improved market pricing during 2024 resulted in no inventory write-downs at the end of 2024 compared to the end of 2023. • Residual Sales, Panels and Other: Soft demand from industrial customers resulted in lower plywood price realization during 2024 compared to 2023, which more than offset higher residual sales. 38 Table of Contents Real Estate Segment 2024 Year Ended December 31, vs.
Financial Covenants The Amended Credit Agreement and the Amended Term Loan Agreement (collectively referred to as the Agreements) contain certain covenants that limit our ability and that of our subsidiaries to create liens, merge or consolidate, dispose of assets, incur indebtedness and guarantees, repurchase or redeem capital stock and indebtedness, make certain investments or acquisitions, enter into certain transactions with affiliates or change the nature of our business.
Financial Covenants The Amended Credit Agreement and the Amended Term Loan Agreement (collectively referred to as the Financing Agreements) contain certain covenants that limit our ability and that of our subsidiaries to create liens, merge or consolidate, dispose of assets, incur indebtedness and guarantees, repurchase or redeem capital stock and indebtedness, make certain investments or acquisitions, enter into certain transactions with affiliates or change the nature of our business.
The Agreements also contain financial maintenance covenants including the maintenance of a minimum interest coverage ratio and a maximum leverage ratio. We are permitted to pay dividends to our stockholders under the terms of the Agreements so long as we expect to remain in compliance with the financial maintenance covenants.
The Financing Agreements also contain financial maintenance covenants including the maintenance of a minimum interest coverage ratio and a maximum leverage ratio. We are permitted to pay dividends to our stockholders under the terms of the Financing Agreements so long as we expect to remain in compliance with the financial maintenance covenants.
These non-GAAP financial measures should be considered only as supplemental to, are not intended to be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
These non-GAAP financial measures should be considered only as supplemental to, and are not intended to be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
Our Company We are a leading timberland REIT with ownership of nearly 2.2 million acres of timberland. We also own six sawmills and an industrial grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program. Our operations are organized into three business segments: Timberlands, Wood Products and Real Estate.
Our Company We are a leading timberland REIT with ownership of 2.1 million acres of timberland. We also own six sawmills and an industrial grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program. Our operations are organized into three business segments: Timberlands, Wood Products and Real Estate.
Item 1A. Risk Factors and Part II – Item 8. Financial Statements and Supplementary Data contained in this report. This section generally discusses the results of operations for 2023 compared to 2022.
Item 1A. Risk Factors and Part II – Item 8. Financial Statements and Supplementary Data contained in this report. This section generally discusses the results of operations for 2024 compared to 2023.
For further detail on our debt, lease, and pension and other postretirement plans obligations and timing of expected future payments see Note 9: Debt , Note 13: Leases, and Note 15: Savings Plans, Pension Plans and Other Postretirement Employee Benefit Plans in the Notes to Consolidated Financial Statements .
For further detail on our debt, lease, and pension and other postretirement plan obligations and timing of expected future payments see Note 9: Debt , Note 13: Leases , and Note 15: Savings Plans, Pension Plans and Other Postretirement Employee Benefits in the Notes to Consolidated Financial Statements .
See Note 15: Savings Plans, Pension Plans and Other Postretirement Employee Benefits in the Notes to Consolidated Financial Statements for additional information. See Note 1: Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements for further information on our accounting policies and new accounting pronouncements. 49 Table of Contents
See Note 15: Savings Plans, Pension Plans and Other Postretirement Employee Benefits in the Notes to Consolidated Financial Statements for additional information. See Note 1: Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements for further information on our accounting policies and new accounting pronouncements.
For a discussion comparing our results of operations and liquidity and capital resources for the year ended December 31, 2022 to 2021, refer to this same section (Part II, Item 7) in our 2022 annual report on Form 10-K as filed with the SEC on February 16, 2023.
For a discussion comparing our results of operations and liquidity and capital resources for the year ended December 31, 2023 to 2022, refer to this same section (Part II, Item 7) in our 2023 annual report on Form 10-K as filed with the SEC on February 15, 2024.
The timing, manner, price and amount of repurchases will be determined according to the trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934 (the Trading Plan), and, subject to the terms of the Trading Plan, the 2022 Repurchase Program may be suspended, terminated or modified at any time for any reason. 45 Table of Contents Dividends to Shareholders The following table summarizes the historical tax characteristics of dividends to shareholders for the year ended December 31: (Amounts per share) 2023 2022 Capital gain dividends $ 1.31 $ 2.72 Non-taxable return of capital 0.49 — Total dividends $ 1.80 $ 2.72 On February 9, 2024, the board of directors approved a quarterly cash dividend of $0.45 per share payable on March 29, 2024, to stockholders of record as of March 8, 2024.
The timing, manner, price and amount of repurchases will be determined according to a trading plan adopted from time to time in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934 (Trading Plan), and, subject to the terms of a Trading Plan, the 2022 Repurchase Program may be suspended, terminated or modified at any time for any reason. 41 Table of Contents Dividends to Shareholders The following table summarizes the historical tax characteristics of dividends to shareholders for the year ended December 31: (Amounts per share) 2024 2023 Capital gain dividends $ 1.80 $ 1.31 Non-taxable return of capital — 0.49 Total dividends $ 1.80 $ 1.80 On February 7, 2025, the board of directors approved a quarterly cash dividend of $0.45 per share payable on March 31, 2025, to stockholders of record as of March 7, 2025.
Additionally, based on interest rates on our long-term debt at December 31, 2023, we expect net interest payments on long-term debt, including the impact of any associated interest rate swaps and estimated patronage credits from lenders, to be approximately $105.0 million over the term of the loans, of which approximately $25.0 million is expected to be paid in 2024.
Additionally, based on interest rates on our long-term debt at December 31, 2024, we expect net interest payments on long-term debt, including the impact of any associated interest rate swaps and estimated patronage credits from lenders, to be approximately $135.3 million over the term of the loans, of which approximately $25.0 million is expected to be paid in 2025.
Our business segments have been and will continue to be influenced by a variety of other factors, including tariffs, quotas and trade agreements, changes in timber prices and in harvest levels from our timberlands, competition, timberland valuations, demand for our non-strategic timberland for higher and better use purposes, lumber prices, weather conditions, disruptions or inefficiencies in our supply chain including the availability of transportation, the efficiency and level of capacity utilization of our Wood Products manufacturing operations, changes in our principal expenses such as log costs, inflation, asset dispositions or acquisitions, impact of pandemics (such as COVID-19 and its variants), fires at our mills and on our timberlands, other natural disasters and other factors.
Our business segments have been and will continue to be influenced by a variety of factors, including tariffs, quotas and trade agreements, changes in timber prices and in harvest levels from our timberlands, competition, timberland valuations, demand for our non-strategic timberland for higher and better use purposes, lumber prices, weather conditions, disruptions or inefficiencies in our supply chain including the availability of transportation, the efficiency and level of capacity utilization of our Wood Products manufacturing operations, changes in our principal expenses such as log costs, inflation, asset dispositions or acquisitions, impact of pandemics, fires at our Wood Product facilities or on our timberlands, other natural disasters, government regulation and enforcement actions, and other factors.
We believe we are well positioned to help entities achieve these commitments through natural climate solutions, including forest carbon offsets, carbon capture and storage projects, selling or leasing timberlands to third parties for renewable energy projects such as solar for power generation facilities, selling pulpwood and sawmill residuals for green energy production, and other emerging technologies that allows wood fiber to be used in applications ranging from biofuels to bioplastics.
We believe we are well positioned to provide products and services that entities may utilize to achieve these commitments through natural climate solutions, including selling or leasing timberlands to third parties for renewable energy projects such as for solar power generation facilities, selling pulpwood and sawmill residuals for green energy production, forest carbon offsets, carbon capture and storage projects, and other emerging technologies that allow wood fiber to be used in applications ranging from biofuels to bioplastics.
Pension expense for 2024 will be based on a 5.55% discount rate. Holding all other assumptions constant, a 25-basis point decrease in the discount rate would increase the total projected benefit obligation at December 31, 2023 by approximately $6.1 million and have a minimal impact on estimated pension expense for 2024.
Pension expense for 2025 will be based on a 5.75% discount rate. Holding all other assumptions constant, a 25-basis point decrease in the discount rate would increase the total projected benefit obligation at December 31, 2024 by approximately $6.0 million and have a minimal impact on estimated pension expense for 2025.
The table below sets forth the financial covenants for the Agreements and our status with respect to these covenants at December 31, 2023: Covenant Requirement Actual Interest Coverage Ratio ≥ 3.00 to 1.00 10.2 Leverage Ratio ≤ 40% 19% Credit Ratings Two major debt rating agencies routinely evaluate our debt and our cost of borrowing can increase or decrease depending on our credit rating.
The table below sets forth the financial covenants for the Financing Agreements and our status with respect to these covenants at December 31, 2024: Covenant Requirement Actual Interest Coverage Ratio ≥ 3.00 to 1.00 8.5 Leverage Ratio ≤ 40% 18% Credit Ratings Two major debt rating agencies routinely evaluate our debt and our cost of borrowing can increase or decrease depending on our credit rating.
Our Timberlands segment is also influenced by the availability of harvestable timber. In general, our Idaho log market is typically in balance but can be tensioned from time to time, while Southern log markets have more available supply. However, additional mill capacity being added in the U.S. South has led to tightening of markets in certain geographies.
In general, our Idaho log market is typically in balance but can be tensioned from time to time, while Southern log markets have more available supply. However, additional mill capacity being added in the U.S. South has led to tightening of markets in certain geographies.
Purchase obligations primarily include open purchase orders for goods or services, future payments due under timber cutting contracts, commitments for construction contracts which include the Waldo, Arkansas sawmill project discussed below, commitments to complete real estate development projects and commitments to acquire property and equipment in the next twelve months.
Purchase obligations primarily include open purchase orders for goods or services, future payments due under timber cutting contracts, commitments for construction contracts, commitments to complete real estate development projects and commitments to acquire property and equipment in the next twelve months.
Of our total long-term debt outstanding at December 31, 2023, $971.0 million was drawn under an amended and restated credit agreement dated as of March 22, 2018 (Amended Term Loan Agreement) with our primary lender. AgWest Farm Credit, PCA (as successor in interest to Northwest Farm Credit Services, PCA).
Long-Term Debt and Credit Agreement At December 31, 2024, our total outstanding long-term debt was $1.0 billion, all of which was drawn under an amended and restated credit agreement dated as of March 22, 2018 (Amended Term Loan Agreement) with our primary lender, AgWest Farm Credit, PCA (as successor in interest to Northwest Farm Credit Services, PCA).
At December 31, 2023, there were no borrowings under the revolving line of credit and approximately $0.7 million of the revolving line of credit was utilized by outstanding letters of credit. See Note 9: Debt in the Notes to the Consolidated Financial Statements for additional information on our debt and credit agreements.
At December 31, 2024, there were no borrowings under the revolving line of credit and approximately $0.6 million of the revolving line of credit was utilized by outstanding letters of credit. See Note 9: Debt and Note 10: Derivative Instruments in the Notes to the Consolidated Financial Statements for additional information on our debt, credit, and interest rate swap agreements.
In addition, we sold 12 acres of commercial land in Chenal Valley for an average price of $572,614 per acre during 2023 compared to 46 acres for an average price of $289,722 per acre during 2022.
In addition, we sold 12 acres of commercial land in Chenal Valley for an average price of $492,746 per acre during 2024 compared to 12 acres for an average price of $572,614 per acre during 2023.
The Interest Coverage Ratio is EBITDDA, which is defined in the Agreements as net income adjusted for interest expense, net, income taxes, depreciation, depletion and amortization, the basis of real estate sold and non-cash equity compensation expense, divided by interest expense, net for the same period.
The Interest Coverage Ratio is EBITDDA, which is defined in the Financing Agreements as net income adjusted for interest expense, net, income taxes, depreciation, depletion and amortization, the basis of real estate sold and non-cash equity compensation expense, divided by interest expense, net for the same period. 42 Table of Contents The Leverage Ratio is our Total Funded Indebtedness divided by our Total Asset Value (TAV).
Net Cash Flows from Investing Activities Changes in cash flows from investing activities were primarily a result of the following: • Cash expenditures for property, plant and equipment, timberlands reforestation and road construction projects during 2023 and 2022 was $119.8 million and $74.7 million, respectively, which includes capital expenditures for the Waldo, Arkansas sawmill expansion and modernization project of $74.2 million and $12.2 million, respectively.
Net Cash Flows from Investing Activities Changes in cash flows from investing activities were primarily a result of the following: • Cash expenditures for property, plant and equipment, timberlands reforestation and road construction projects during 2024 and 2023 was $88.7 million and $119.8 million, respectively, which includes payments for capital expenditures for the Waldo, Arkansas sawmill expansion and modernization project of $37.9 million and $74.2 million, respectively. • Cash expenditures for timberland acquisitions in 2024 was $32.3 million which included the acquisition of 16,000 acres of mature timberlands in Arkansas.
The year ended December 31, 2023, includes capital expenditures for the rebuild of the Ola, Arkansas sawmill of $0.6 million, and excludes $1.4 million of insurance proceeds for property losses at the Ola sawmill.
Additionally, the year ended December 31, 2023 includes payments for capital expenditures for the rebuild of the Ola, Arkansas sawmill of $0.6 million, and excludes $1.4 million of insurance proceeds for the Ola, Arkansas property losses. The claim with the insurance carriers was finalized by the end of 2023. 4.
Refer to the Business Segment Results below for further discussions on activities for each of our segments. See Liquidity and Performance Measures for a reconciliation of Total Adjusted EBITDDA to net income, the closest comparable GAAP measure, for each of the periods presented. 39 Table of Contents BUSINESS SEGMENT RESULTS Timberlands Segment 2023 Year Ended December 31, vs.
See Liquidity and Performance Measures for a reconciliation of Total Adjusted EBITDDA to net income, the closest comparable GAAP measure, for each of the periods presented. BUSINESS SEGMENT RESULTS Timberlands Segment 2024 Year Ended December 31, vs.
The year ended December 31, 2022, includes capital expenditures for the rebuild of the Ola, Arkansas sawmill of $18.2 million and excludes $8.8 million of insurance proceeds for property losses at the Ola sawmill. 3 Net cash from investing activities includes payments for capital expenditures, which is also included in our reconciliation of CAD. 48 Table of Contents Critical Accounting Policies and Estimates In preparing our Consolidated Financial Statements in accordance with GAAP and pursuant to the rules and regulations of the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities.
Net cash from investing activities includes payments for capital expenditures, which is also included in our reconciliation of CAD. 44 Table of Contents Critical Accounting Policies and Estimates In preparing our Consolidated Financial Statements in accordance with GAAP and pursuant to the rules and regulations of the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities.
Rural real estate sales vary period-to-period with the average price per acre fluctuating based on both the geographic area of the real estate and product mix. • Development Real Estate Sales: During 2023, we sold 128 residential lots at an average lot price of $104,241 compared with 181 lots at an average lot price of $111,545 during 2022.
Rural real estate sales vary period-to-period with the average price per acre fluctuating based on both the geographic area of the real estate and type of land sold. 39 Table of Contents • Development Real Estate Sales: During 2024, we sold 135 residential lots at an average lot price of $146,366 compared with 128 lots at an average lot price of $104,241 during 2023.
Long-Term Debt and Credit Agreement At December 31, 2023, our total outstanding long-term debt was $1.0 billion. All interest rates on our outstanding long-term debt are fixed either under fixed-rate loans or variable-rate loans with an associated interest rate swap that fixes the variable benchmark interest rate component.
All interest rates on our outstanding long-term debt are fixed either under fixed-rate loans or variable-rate loans with an associated interest rate swap that fixes the variable benchmark interest rate component.
We have a $300.0 million revolving line of credit with a syndicate of lenders, providing loans for us through February 14, 2027 (Amended Credit Agreement). Under the terms of the Amended Credit Agreement, the amount of available principal may be increased up to an additional $500.0 million.
We expect to refinance this $100.0 million term loan at maturity. We have a $300.0 million revolving line of credit with a syndicate of lenders that matures February 14, 2027 (Amended Credit Agreement). Under the terms of the Amended Credit Agreement, the amount of available principal may be increased up to an additional $500.0 million.
At December 31, 2023, our purchase obligations were approximately $102.2 million, of which $75.3 million is expected to be paid in the next twelve months.
At December 31, 2024, our purchase obligations were approximately $69.6 million, of which $37.4 million is expected to be paid in the next twelve months.
In our Timberlands segment, a significant portion of our Idaho sawlog prices are indexed on a four-week lag to lumber prices. The Northern region experienced a decrease in sawlog prices during 2023 because of lower indexed lumber prices compared to the prior year. In the Southern region, sawlog and pulpwood prices have been relatively stable year over year.
The Northern region experienced a decrease in sawlog prices during 2024 because of lower indexed lumber prices compared to the prior year. In the Southern region, sawlog and pulpwood prices have been relatively stable year over year.
Stumpage sales provide our customers the right to harvest standing timber. As such, the customer contracts the logging and hauling and bears such costs.
Sawlog and pulpwood sales prices are on a delivered basis, which includes logging and hauling costs. Stumpage sales provide our customers the right to harvest standing timber. As such, the customer contracts the logging and hauling and bears such costs.
Timberlands Adjusted EBITDDA The following table summarizes Adjusted EBITDDA variances for the year ended December 31, 2023 compared with the year ended December 31, 2022: (in thousands) 2023 vs 2022 Adjusted EBITDDA - prior year $ 249,373 Sales price and mix (98,925 ) Harvest volume 12,638 Logging and hauling cost per unit (10,539 ) Forest management, indirect and other (1,226 ) Adjusted EBITDDA - current year $ 151,321 40 Table of Contents 2023 compared with 2022 Timberlands Adjusted EBITDDA for 2023 was $151.3 million, a decrease of $98.1 million compared to 2022 primarily due to the following: • Sales Price and Mix: Sawlog prices in the Northern region decreased 35.7%, to $117 per ton, primarily due to the effect of lower indexed sawlog prices in Idaho.
Timberlands Adjusted EBITDDA The following table summarizes Adjusted EBITDDA variances for the year ended December 31, 2024 compared with the year ended December 31, 2023: (in thousands) 2024 vs 2023 Timberlands Adjusted EBITDDA - prior year $ 151,321 Sales price and mix (16,803 ) Harvest volume (2,985 ) Logging and hauling cost per unit 6,589 Forest management, indirect and other 607 Timberlands Adjusted EBITDDA - current year $ 138,729 2024 compared with 2023 Timberlands Adjusted EBITDDA for 2024 was $138.7 million, a decrease of $12.6 million compared to 2023 primarily as a result of the following: • Sales Price and Mix: Sawlog prices in the Northern region decreased 6.0%, to $110 per ton, primarily due to the effect of lower indexed sawlog prices in Idaho.
The following table provides a reconciliation of net income to Total Adjusted EBITDDA for the respective periods: Year Ended December 31, (in thousands) 2023 2022 Net income $ 62,101 $ 333,900 Interest expense, net 24,218 27,400 Income taxes (216 ) 65,412 Depreciation, depletion and amortization 119,518 96,700 Basis of real estate sold 31,392 29,921 CatchMark merger-related expenses 2,453 27,325 Environmental charge — 5,550 Gain on fire damage (39,436 ) (34,505 ) Pension settlement charge — 14,165 Non-operating pension and other postretirement benefit costs 914 8,138 Loss on fixed assets 557 82 Other (1,267 ) 67 Total Adjusted EBITDDA $ 200,234 $ 574,155 We define CAD as cash from operating activities adjusted for capital spending for purchases of property, plant and equipment, timberlands reforestation and roads and timberland acquisitions not classified as strategic.
The following table provides a reconciliation of net income to Total Adjusted EBITDDA for the respective periods: Year Ended December 31, (in thousands) 2024 2023 Net income $ 21,876 $ 62,101 Interest expense, net 28,923 24,218 Income taxes (13,689 ) (216 ) Depreciation, depletion and amortization 111,497 119,518 Basis of real estate sold 86,870 31,392 CatchMark merger-related expenses — 2,453 Gain on fire damage — (39,436 ) Non-operating pension and other postretirement employee benefits (803 ) 914 Loss on disposal of assets 541 557 Other (3,115 ) (1,267 ) Total Adjusted EBITDDA $ 232,100 $ 200,234 We define CAD as cash from operating activities adjusted for capital spending for purchases of property, plant and equipment, timberlands reforestation and roads and timberland acquisitions not classified as strategic.
Concurrently, the board of directors terminated the remaining repurchase authorization under a previously authorized repurchase program. At December 31, 2023, we had remaining authorization of $125.0 million for future stock repurchases under the 2022 Repurchase Program.
At December 31, 2024, we had remaining authorization of $90.0 million for future stock repurchases under the 2022 Repurchase Program.
The demand for timber is directly affected by the underlying demand for lumber and other wood products, as well as by the demand for pulp, paper and packaging. Our Timberlands and Wood Products segments are impacted by both demand for new homes and home improvement and repair of existing homes in the United States.
Our Timberlands and Wood Products segments are impacted by both demand for new homes and home improvement and repair of existing homes in the United States. Our Timberlands segment is also influenced by the availability of harvestable timber.
Cash from operating activities for the year ended December 31, 2022, includes cash paid for CatchMark merger-related expenses and cash paid for real estate development expenditures of $17.8 million and $8.1 million, respectively. 2 The years ended December 31, 2023 and 2022, includes Waldo, Arkansas sawmill expansion and modernization related capital expenditures of $74.2 million and $12.2 million, respectively.
Net cash from operating activities for the year ended December 31, 2024 includes cash paid for real estate development expenditures of $8.1 million. Net cash from operating activities for the year ended December 31, 2023 includes cash paid for real estate development expenditures and cash paid for CatchMark merger-related expenses of $11.5 million and $0.9 million, respectively 2.
The decrease in our income tax expense in 2023 was due to lower lumber prices reducing the pre-tax income generated by our TRS, both overall and relative to pre-tax income generated by our REIT.
The increase in our income tax benefit in 2024 was due to lower lumber prices reducing the pre-tax income generated by our TRS, both overall and relative to pre-tax income generated by our REIT, and changes in our unrecognized tax positions, primarily due to the lapse of the statute of limitations.
We expect cash and cash equivalents and cash generated from operating activities, supplemented by borrowings under our credit agreement, if needed, to be adequate to meet our future cash requirements over the next twelve months. 44 Table of Contents Our material cash commitments arising in the normal course of business under our known contractual and other obligations as of December 31, 2023 primarily relate to purchase obligations, repayments of long-term debt and related interest, payments under operating and financing leases and pension and postretirement benefits.
Our material cash commitments arising in the normal course of business under our known contractual and other obligations as of December 31, 2024 primarily relate to purchase obligations, repayments of long-term debt and related interest, payments under operating and financing leases and pension and postretirement benefits.
Including this 34,000-acre disposition, we expect to sell approximately 51,000 rural acres, and 130 residential lots in Chenal Valley during 2024. Consolidated Results The following table sets forth year-over-year changes in items included in our Consolidated Statements of Operations . Our Business Segment Results provide a more detailed discussion of our segments. 2023 Year Ended December 31, vs.
Consolidated Results The following table sets forth year-over-year changes in items included in our Consolidated Statements of Operations . Our Business Segment Results provide a more detailed discussion of our segments. 2024 Year Ended December 31, vs.
Real Estate Segment Statistics Rural Real Estate Year Ended December 31, 2023 2022 Acres sold 17,775 20,451 Average price per acre $ 3,068 $ 2,349 Development Real Estate Year Ended December 31, 2023 2022 Residential lots 128 181 Average price per lot $ 104,241 $ 111,545 Commercial acres 12 46 Average price per acre $ 572,614 $ 289,722 42 Table of Contents Real Estate Adjusted EBITDDA The following table summarizes Adjusted EBITDDA variances for the year ended December 31, 2023 compared with the year ended December 31, 2022: (in thousands) 2023 vs 2022 Adjusted EBITDDA - prior year $ 73,258 Rural real estate sales 7,426 Development real estate sales (12,248 ) Selling, general and administrative expenses (1,333 ) Other costs, net 672 Adjusted EBITDDA - current year $ 67,775 2023 compared with 2022 Real Estate Adjusted EBITDDA for 2023 was $67.8 million, a decrease of $5.5 million compared with 2022 primarily due to the following: • Rural Real Estate Sales: The increase in rural real estate sales is primarily a result of higher per acre sales realization in 2023 compared to 2022 generated from sales of CatchMark timberlands that were acquired in late 2022.
Real Estate Segment Statistics Rural Real Estate Year Ended December 31, 2024 2023 Acres sold 57,389 17,775 Average price per acre $ 2,302 $ 3,068 Development Real Estate Year Ended December 31, 2024 2023 Residential lots 135 128 Average price per lot $ 146,366 $ 104,241 Commercial acres 12 12 Average price per acre $ 492,746 $ 572,614 Real Estate Adjusted EBITDDA The following table summarizes Adjusted EBITDDA variances for the year ended December 31, 2024 compared with the year ended December 31, 2023: (in thousands) 2024 vs 2023 Real Estate Adjusted EBITDDA - prior year $ 67,775 Rural real estate sales 77,169 Development real estate sales 4,563 Selling, general and administrative expenses (1,504 ) Other costs, net (982 ) Real Estate Adjusted EBITDDA - current year $ 147,021 2024 compared with 2023 Real Estate Adjusted EBITDDA for 2024 was $147.0 million, an increase of $79.2 million compared with 2023 primarily as a result of the following: • Rural Real Estate Sales: The increase in rural real estate sales is primarily due to increased rural acres sold compared to 2023.
Income taxes Income taxes are primarily due to income from our TRS. For 2023, we recorded an income tax benefit of $0.2 million on TRS pre-tax income of $15.4 million as compared to income tax expense of $65.4 million on TRS pre-tax income of $270.3 million in 2022.
For 2024, we recorded an income tax benefit of $13.7 million on TRS pre-tax loss of $54.9 million as compared to an income tax benefit of $0.2 million on TRS pre-tax income of $15.4 million in 2023.
Additionally, in January 2024, we acquired approximately 16,000 acres of timberlands in Arkansas for approximately $31.0 million. We funded the acquisition with cash on hand. Share Repurchase Program On August 31, 2022, our board of directors authorized management to repurchase up to $200.0 million of our common stock with no set time limit for the repurchases (the 2022 Repurchase Program).
Share Repurchase Program On August 31, 2022, our board of directors authorized management to repurchase up to $200.0 million of our common stock with no set time limit for the repurchases (the 2022 Repurchase Program). Concurrently, the board of directors terminated the remaining repurchase authorization under a previously authorized repurchase program.
Adjusted EBITDDA further excludes certain specific items that are considered to hinder comparison of the performance of our businesses either year-on-year or with other businesses. We reconcile Total Adjusted EBITDDA to net income for the consolidated company as it is the most comparable GAAP measure.
We define EBITDDA as net income before interest expense, net, income taxes, basis of real estate sold, depreciation, depletion and amortization. Adjusted EBITDDA further excludes certain specific items that are considered to hinder comparison of the performance of our businesses either year-on-year or with other businesses.
Cash flows from these above market interest rate swaps reduce our interest costs on the corresponding variable-rate debt. • We acquired $23.6 million of cash in our merger with CatchMark in 2022.
Cash flows from these interest rate swaps reduce our interest costs on the corresponding variable-rate debt.
The project is expected to increase the mill’s annual capacity from 190 million board feet of dimensional lumber to approximately 275 million board feet. The investment is also expected to reduce the mill’s cash processing costs significantly. The Waldo investment includes upgrades to the log yard and planer, a new saw line, and a new continuous dry kiln.
The Waldo Modernization Project included upgrades to the log yard and planer, a new saw line, and a new continuous dry kiln and is expected to increase the sawmill’s annual capacity and reduce its operating costs significantly.
The existing mill will continue to operate during the project and completion is expected by the end of 2024. We expect to spend approximately $131.0 million on the project, of which a total of $86.4 million has been spent through December 31, 2023, and $44.6 million is expected to be spent in 2024.
We capitalized approximately $131.0 million on the modernization project, of which a total of $124.4 million has been paid through December 31, 2024, and the remaining $6.6 million is expected to be paid in the first quarter of 2025.
See Note 2: Segment Information in the Notes to the Consolidated Financial Statements for information related to the use of segment Adjusted EBITDDA. 36 Table of Contents Business and Economic Conditions Affecting Our Operations The operating results of our Timberlands, Wood Products and Real Estate business segments have been and will continue to be affected by the cyclical nature of the forest products industry.
See Note 2: Segment Information in the Notes to the Consolidated Financial Statements for information related to the use of segment Adjusted EBITDDA. 33 Table of Contents Business and Economic Conditions Affecting Our Operations The demand for timber is directly affected by the underlying demand for lumber and other wood products, as well as by the demand for pulp, paper and packaging.
While spending in the sector for owner-occupied homes has moderated, we believe long-term favorable underlying fundamentals, including solid household balance sheets, strong levels of home equity and an aging existing housing stock, will continue to support repair and remodel demand for our products.
We believe long-term favorable underlying fundamentals, including a strong labor market, solid household balance sheets, strong levels of home equity, an aging existing housing stock, and expected increases in sales of existing homes will support repair and remodel demand for our products. 34 Table of Contents In our Timberlands segment, a significant portion of our Idaho sawlog prices are indexed on a four-week lag to lumber prices.
The timing of these sales can also be impacted by contractor availability to complete the necessary infrastructure and other improvements.
The timing of these sales can also be impacted by contractor availability to complete the necessary infrastructure and other improvements. The operating results of our Timberlands, Wood Products and Real Estate business segments have been and will continue to be affected by the cyclical nature of the forest products industry and the real estate industry.
See Note 2: Segment Information in the Notes to Consolidated Financial Statements . Wood Products Segment Statistics 2023 Year Ended December 31, vs. 2023 2022 2022 Lumber shipments (MBF) 1 1,103,089 1,009,748 93,341 Lumber sales prices ($ per MBF) $ 452 $ 737 $ (285 ) 1 MBF stands for thousand board feet.
Wood Products Segment Statistics 2024 Year Ended December 31, vs. 2024 2023 2023 Lumber shipments (MBF) 1 1,106,974 1,103,089 3,885 Lumber sales prices ($ per MBF) $ 425 $ 452 $ (27 ) 1. MBF stands for thousand board feet.
(in thousands) 2023 2022 2022 Revenues $ 87,988 $ 91,491 $ (3,503 ) Costs and expenses Costs of goods sold 14,147 13,500 647 Selling, general and administrative expenses 6,066 4,733 1,333 Adjusted EBITDDA 1 $ 67,775 $ 73,258 $ (5,483 ) 1 Management uses Adjusted EBITDDA to evaluate the performance of the segment.
(in thousands) 2024 2023 2023 Revenues $ 170,629 $ 87,988 $ 82,641 Costs and expenses Costs of goods sold 16,040 14,147 1,893 Selling, general and administrative expenses 7,568 6,066 1,502 Real Estate Adjusted EBITDDA 1 $ 147,021 $ 67,775 $ 79,246 1. Management uses Adjusted EBITDDA to evaluate the performance of the segment.
In 2023, notable rural real estate sales on the acquired CatchMark timberlands included a 2,240-acre conservation sale in Alabama, a 2,700-acre sale in Georgia, and a 1,660-acre sale in South Carolina. For 2022, real estate sales included a 1,760-acre sale in Mississippi to an energy provider for a planned commercial solar farm and a 10,700-acre timberland conservation sale in Minnesota.
Rural real estate sales in 2023 included a 2,240-acre conservation sale in Alabama, a 2,700-acre sale in Georgia, and a 1,660-acre sale in South Carolina.
Additionally, during 2023 and 2022, we spent $0.6 million and $18.2 million, respectively, for the reconstruction of our fire-damaged Ola, Arkansas sawmill, which was largely covered by insurance. • During 2023, we received insurance proceeds of $1.4 million for property losses as a result of the fire at our Ola, Arkansas sawmill compared to $8.8 million during 2022. • Cash expenditures for timberland acquisitions in 2023 was $1.8 million compared to $110.1 million in 2022, which included three bolt-on timberland acquisitions in the South aggregating to approximately 46,000 acres for $101.0 million. • We received $23.8 million during 2023 from certain interest rate swaps that contained an other-than-insignificant financing element at inception, which is required to be classified as an investing activity.
Cash expenditures for timberland acquisitions in 2023 was $1.8 million. 40 Table of Contents • We received $27.6 million during 2024 compared to $23.8 million during 2023 from certain interest rate swaps that contained an other-than-insignificant financing element at inception, which is required to be classified as an investing activity.
Overall, we believe long-term underlying housing fundamentals remain favorable due to a shortage of homes, lower than historical-average existing inventory for sale, the remote work evolution, and a large millennial demographic in their prime home-buying years. The repair and remodel sector is the largest market segment for lumber demand.
Nonetheless, we remain optimistic about the long-term outlook for housing, as the market continues to grapple with an undersupply of homes, historically low inventory levels, and a large millennial demographic entering their prime home-buying years. The repair and remodel sector is the largest market segment for lumber demand.
Management believes that this non-GAAP measure, when read in conjunction with our GAAP financial statements, provides useful information to investors and other interested parties by facilitating the comparability of our ongoing operating results over the periods presented, the ability to identify trends in our underlying business, can be used to evaluate the operational performance of the assets under management, and the comparison of our operating results against analyst financial models and the operating results of other public companies that supplement their GAAP results with non-GAAP financial measures. 47 Table of Contents We define EBITDDA as net income before interest expense, net, income taxes, basis of real estate sold, depreciation, depletion and amortization.
Management believes that this non-GAAP measure, when read in conjunction with our GAAP financial statements, provides useful information to investors and other interested parties by facilitating the comparability of our ongoing operating results over the periods presented and the identification of trends in our underlying business.
Changes in significant sources of cash for the years ended December 31, 2023 and 2022 are presented by category as follows: Year Ended December 31, (in thousands) 2023 2022 Change Net cash from operating activities $ 159,111 $ 491,901 $ (332,790 ) Net cash from investing activities $ (95,304 ) $ (147,520 ) $ 52,216 Net cash from financing activities $ (171,710 ) $ (295,562 ) $ 123,852 Net Cash Flows from Operating Activities Net cash from operating activities decreased $332.8 million in 2023 compared to 2022 primarily as a result of the following: • Cash received from customers decreased $314.0 million primarily due to lower lumber and Idaho sawlog prices and fewer development real estate sales in Chenal Valley.
Changes in significant sources of cash for the years ended December 31, 2024 and 2023 are presented by category as follows: Year Ended December 31, (in thousands) 2024 2023 Change Net cash from operating activities $ 188,470 $ 159,111 $ 29,359 Net cash from investing activities $ (92,062 ) $ (95,304 ) $ 3,242 Net cash from financing activities $ (182,371 ) $ (171,710 ) $ (10,661 ) Net Cash Flows from Operating Activities Net cash from operating activities increased $29.4 million in 2024 compared to 2023 primarily as a result of the following: • Cash received from customers increased $35.6 million primarily due to increased rural real estate acres sold, including the 34,100-acre sale to FIA, higher average lot prices in Chenal Valley, and higher Southern sawlog harvest volumes.
Net Cash Flows from Financing Activities Changes in cash flows from financing activities were primarily a result of the following: • We paid dividends of $143.6 million during 2023 compared to $208.1 million in 2022. Dividend payments for 2022 include a special dividend totaling $75.7 million.
Net Cash Flows from Financing Activities Changes in cash flows from financing activities were primarily a result of the following: • During 2024 and 2023, we repurchased 0.8 million and 0.5 million shares, respectively for approximately $35.0 million and $25.0 million, respectively. • Dividend payments of $142.4 million during 2024 compared to $143.6 million in 2023 due to fewer shares outstanding following share repurchases.
The following table provides a reconciliation of net cash provided by operating activities to CAD: Year Ended December 31, (in thousands) 2023 2022 Net cash from operating activities 1 $ 159,111 $ 491,901 Capital expenditures 2 (121,613 ) (184,804 ) CAD $ 37,498 $ 307,097 Net cash from investing activities 3 $ (95,304 ) $ (147,520 ) Net cash from financing activities $ (171,710 ) $ (295,562 ) 1 Cash from operating activities for the year ended December 31, 2023, includes cash paid for CatchMark merger-related expenses and cash paid for real estate development expenditures of $0.9 million and $11.5 million, respectively.
The following table provides a reconciliation of net cash from operating activities to CAD: Year Ended December 31, (in thousands) 2024 2023 Net cash from operating activities 1, 2 $ 188,470 $ 159,111 Capital expenditures 3 (120,996 ) (121,613 ) CAD $ 67,474 $ 37,498 Net cash from investing activities 4 $ (92,062 ) $ (95,304 ) Net cash from financing activities $ (182,371 ) $ (171,710 ) 1.
We expect to spend a total of approximately $100 million to $110 million for capital expenditures during 2024, including capital expenditures for the Waldo sawmill expansion and modernization project discussed below. In June 2022, we announced a project to expand and modernize our Waldo, Arkansas sawmill.
We expect to spend a total of approximately $60 million to $65 million for capital expenditures during 2025, which excludes a final closeout payment of approximately $6.6 million related to the expansion and modernization of our Waldo, Arkansas sawmill (the Waldo Modernization Project). During the third quarter of 2024, we completed the construction phase of the Waldo Modernization Project.
See Note 2: Segment Information in the Notes to Consolidated Financial Statements . Timberlands Segment Statistics 2023 Year Ended December 31, vs.
Prior to elimination of intersegment fiber revenues of $102.6 million and $110.7 million in 2024 and 2023, respectively. 2. Management uses Adjusted EBITDDA to evaluate the performance of the segment. See Note 2: Segment Information in the Notes to Consolidated Financial Statements . 36 Table of Contents Timberlands Segment Statistics 2024 Year Ended December 31, vs.
In conjunction with the new term loan, we terminated a $50.0 million forward-starting interest rate swap and transferred the value realized from its termination into a new swap to fix the interest rate at 3.35%, before patronage, on the new $40.0 million term loan.
In connection with the refinancing, we terminated $125.0 million of our $200.0 million forward-starting interest rate swaps and transferred the value realized from their termination into three new interest rate swaps to hedge the variability in future cash flows on the New Term Loans.
Southern sawlog prices remained relatively flat. • Harvest Volume: We harvested 6.2 million tons in the Southern region during 2023 which was 25.7% higher than 2022 primarily due to harvest activity on the CatchMark timberlands acquired in September 2022 and increased stumpage sales.
Southern sawlog prices remained relatively flat. • Harvest Volume: We harvested a total of 7.6 million tons across our Northern and Southern regions, which was in line with our plan at the beginning of the year. In our Southern region we harvested 6.2 million tons during both 2024 and 2023.
Capital Structure (in thousands) December 31, 2023 December 31, 2022 Long-term debt (including current portion) $ 1,033,728 $ 1,032,680 Cash and cash equivalents (230,118 ) (343,809 ) Net debt 803,610 688,871 Market capitalization 1 3,896,822 3,505,255 Enterprise value $ 4,700,432 $ 4,194,126 Net debt to enterprise value 17.1 % 16.4 % Dividend yield 2 3.7 % 4.1 % Weighted-average cost of debt, after tax 3 2.3 % 2.4 % 1 Market capitalization is based on outstanding shares of 79.4 million and 79.7 million times closing share price of $49.10 and $43.99 at December 31, 2023 and December 31, 2022, respectively. 2 Dividend yield is based on annualized dividends per share of $1.80 divided by share price of $49.10 and $43.99 at December 31, 2023 and December 31, 2022, respectively. 3 Weighted-average cost of debt excludes deferred debt costs and revolving line of credit fees and includes estimated annual patronage credits from lenders on term loan debt.
Capital Structure (in thousands) December 31, 2024 December 31, 2023 Long-term debt (including current portion) $ 1,034,652 $ 1,033,728 Cash and cash equivalents (151,551 ) (230,118 ) Net debt 883,101 803,610 Market capitalization 1 3,088,347 3,896,822 Enterprise value $ 3,971,448 $ 4,700,432 Net debt to enterprise value 22.2 % 17.1 % Dividend yield 2 4.6 % 3.7 % Weighted-average cost of debt, after tax 3 2.3 % 2.3 % 1.
Gain on fire damage During 2023, we recognized insurance recoveries of $39.4 million for fire damage at our Ola, Arkansas sawmill. During 2022, we recognized $35.4 million of insurance recoveries and incurred $0.9 million of disposal costs for fire damage at our Ola, Arkansas sawmill.
The prior year included a $1.0 million reduction in stock compensation expense due to employee forfeiture of stock awards. Gain on fire damage During 2023, we recognized insurance recoveries of $39.4 million for fire damage at our Ola, Arkansas sawmill. The claim with insurance carriers was finalized by the end of 2023.
These increases were partially offset by a reduction in CatchMark merger-related costs compared to the prior year. 43 Table of Contents • During 2023 and 2022, we received $36.4 million and $26.7 million, respectively, in insurance proceeds for business interruption insurance primarily as a result of the fire at our Ola, Arkansas sawmill. • Reclassification of $25.6 million received from interest rate swaps that contain an other-than-insignificant financing element at inception as investing ($23.8 million) and financing ($1.8 million) activities, partially offset by a $13.6 million decrease in cash paid for interest, net of interest income and proceeds from interest rate swaps.
These declines were partially offset by costs associated with higher Southern sawlog harvest volumes, increased professional service costs and implementation costs of new systems. • During 2024, we received the final $1.7 million of insurance proceeds related to business interruption insurance following the fire at our Ola, Arkansas sawmill in June 2021, compared to $36.4 million received during 2023. • Cash paid for interest, net increased by approximately $10.1 million primarily due to lower interest income earned as a result of lower average cash balances in interest bearing accounts partially offset by increased patronage dividends from our lenders.
(in thousands) 2023 2022 2022 Revenues $ 635,672 $ 912,612 $ (276,940 ) Costs and expenses 1 Fiber costs 299,511 322,487 (22,976 ) Manufacturing costs 220,645 214,338 6,307 Freight, logging and hauling 78,520 75,554 2,966 Finished goods inventory change 2,992 (3,606 ) 6,598 Selling, general and administrative expenses 13,139 12,528 611 Other 378 404 (26 ) Adjusted EBITDDA 2 $ 20,487 $ 290,907 $ (270,420 ) 1 Prior to elimination of intersegment fiber costs of $110.7 million and $158.9 million in 2023 and 2022, respectively. 2 Management uses Adjusted EBITDDA to evaluate the performance of the segment.
(in thousands) 2024 2023 2023 Revenues $ 601,924 $ 635,672 $ (33,748 ) Costs and expenses 1 Fiber costs 289,456 299,511 (10,055 ) Manufacturing costs 232,910 220,645 12,265 Freight, logging and hauling 75,978 78,520 (2,542 ) Finished goods inventory change (3,189 ) 2,992 (6,181 ) Selling, general and administrative expenses 14,059 13,139 920 Other 364 378 (14 ) Wood Products Adjusted EBITDDA 2 $ (7,654 ) $ 20,487 $ (28,141 ) 1.
Total Adjusted EBITDDA Total Adjusted EBITDDA for 2023 decreased $373.9 million compared to 2022, primarily due to lower lumber, plywood and Northern sawlog prices, higher manufacturing, logging, and hauling costs, and fewer development real estate sales. The decrease in Total Adjusted EBITDDA was partially offset by increased harvest volume and rural land sales.
These increases were partially offset by lower lumber and plywood prices, and lower Northern sawlog volume and prices. Cost of goods sold Cost of goods sold increased $46.1 million compared to 2023 primarily due to increased rural real estate acres sold and increased employee related costs.
We expect to harvest approximately 7.6 million tons during 2024, with approximately 80% of the volume in the Southern region. 37 Table of Contents During the second quarter of 2021, we experienced a fire at our Ola, Arkansas sawmill. The damage was principally limited to the large log primary breakdown machine center, which significantly impacted the sawmill’s lumber production.
Our total harvest volume in 2024 was 7.6 million tons and we expect to harvest approximately 7.4 million tons during 2025, with approximately 80% of the volume in the Southern region. During the third quarter of 2024, we completed the construction phase of the expansion and modernization of our Waldo, Arkansas sawmill (the Waldo Modernization Project).
Federal Reserve during most of 2023, the overall condition of the economy, and fluctuations in financial markets are all factors that have influenced long-term interest rates. Over the past decade, the average 30-year fixed mortgage rate was below 4.0% and began rising above this rate late in the first quarter of 2022 before peaking at approximately 7.8% in October 2023.
Data from Freddie Mac shows that from the end of 2011 to the end of 2021, the average 30-year fixed mortgage rate remained below 4.0%. However, it began rising in the first quarter of 2022, peaking at around 7.8% in October 2023. The Federal Reserve reduced key benchmark interest rates by 100 basis points between late September and December 2024.
Approximately $175.7 million of our outstanding long-term debt was classified as current as of December 31, 2023 on our accompanying Consolidated Balance Sheets , including a $110.0 million term loan and a $65.7 million revenue bond that mature during 2024.
At December 31, 2024, we had one remaining forward-starting interest rate swap of $75.0 million available to fix the interest rate on future debt refinancing. At December 31, 2024, approximately $100.0 million of our outstanding long-term debt that matures in August 2025 was classified as current on our accompanying Consolidated Balance Sheets.
The new single-family housing market has remained resilient in 2023, supported by limited existing home inventory and homebuilder's ability to offer mortgage rate buy-down incentives. In January 2024, the U.S. Census Bureau reported total housing starts for December 2023 were nearly 1.5 million on a seasonally-adjusted annual basis, which was up 7.6% from December 2022.
In January 2025, the U.S. Census Bureau reported 1.5 million total housing starts in December 2024 on a seasonally-adjusted basis, nearly 16% higher than November and the highest rate since February 2024.
Our Total Funded Indebtedness consists of long-term debt, including any current portion of long-term debt, finance lease liabilities, revolving line of credit borrowings and the amount outstanding under the letter of credit subfacility. 46 Table of Contents The following table presents the components and applicable limits of TAV at December 31, 2023: (in thousands) Estimated timberland fair value $ 4,815,980 Wood Products manufacturing facilities book basis (limited to 10% of TAV) 271,147 Cash and cash equivalents 230,118 Other 1 96,406 Total Asset Value $ 5,413,651 1 Includes, as applicable, Construction In Progress (limited to 10% of TAV), Company-Owned Life Insurance (limited to 5% of TAV) and Investments in Affiliates (limited to 15% TAV) as defined in the Agreements.
The following table presents the components and applicable limits of TAV at December 31, 2024: (in thousands) Estimated timberland fair value $ 5,207,322 Wood Products manufacturing facilities book basis (limited to 10% of TAV) 393,590 Cash and cash equivalents 151,551 Other 1 10,409 Total Asset Value $ 5,762,872 1.
At December 31, 2023, we were in compliance with all covenants under the Agreements.
Includes, as applicable, Construction In Progress (limited to 10% of TAV), Company-Owned Life Insurance (limited to 5% of TAV) and Investments in Affiliates (limited to 15% of TAV) as defined in the Financing Agreements. At December 31, 2024, we were in compliance with all covenants under the Financing Agreements.
In our Wood Products segment, we shipped just over 1.1 billion board feet of lumber during 2023. Lumber shipments during 2023 benefited from the restart of the Ola sawmill in September 2022. For 2024, we expect to ship approximately 1.1 billion board feet of lumber.
During 2024, our Wood Products segment was challenged by a relatively weak lumber pricing environment which only began to improve towards the latter half of the year. Despite the pricing challenges, we shipped just over 1.1 billion board feet of lumber during 2024.
Harvest volumes in the Northern region were 5.9% lower primarily due to planned lower harvesting for 2023 compared to 2022. • Logging and Hauling Cost per Unit: Logging and hauling costs per unit were higher primarily due to inflationary operating cost increases and constrained contractor capacity in Idaho. These increases were partially offset by lower diesel costs.
These increases were partially offset by lower raw material costs and lower logging and hauling costs on reduced rates in the Northern region. 35 Table of Contents Selling, general and administrative expenses Selling, general and administrative expenses increased $7.5 million compared to 2023 primarily due to higher professional service fees, including costs for implementation of new systems, and employee related costs.
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Uncertainty on the overall direction of the U.S. economy and housing affordability, which has been negatively impacted by higher interest rates and rising construction costs, have dampened consumer confidence and contributed to a decline in the overall average for new home construction and existing home sales activity during 2023 compared to 2022. Actions by the U.S.
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Interest rates affect our business primarily through their impact on mortgage rates, the broader U.S. economy, and our capital allocation strategies. Although mortgage rates are not directly set by the U.S. Federal Reserve, they tend to follow the movement of 10-year U.S. Treasury bonds, which are influenced by investor expectations regarding future Federal Reserve monetary policy.
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Rates have since declined nearly 120 basis points ending 2023 at approximately 6.6%.
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Despite this, stronger-than-expected economic growth and uncertainties around long-term inflation and the U.S. deficit have kept mortgage rates elevated, ending 2024 at approximately 6.85%. Factors such as inflation, unemployment, and the overall economic climate can influence the Federal Reserve's decisions regarding short-term borrowing rates. Single-family housing supply remains below the historical average, with affordability continuing to hinder home ownership.
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Further, the National Association of Home Builders (NAHB) reported the NAHB/Wells Fargo Housing Market Index (HMI) was 44 in January 2024, up from 35 in January 2023 and the second consecutive month the index has increased as builders are reporting an uptick in traffic as lower mortgage rates have improved housing affordability, bringing some buyers back into the market after being sidelined by higher borrowing costs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe audit committee of the board of directors is responsible for the oversight of the company’s enterprise risk management program, including reviewing and discussing with management at least annually (i) management’s report on risk management, including management’s assessment of risk exposure (for example, risks relating to operations, climate change, cybersecurity threats and regulatory compliance, among others), the processes in place to identify and manage significant risks, and steps taken by management to control or mitigate such exposures, and (ii) management’s report on cybersecurity risk management, which may include a review of the company’s cybersecurity framework, priorities, risk profile, and processes, controls and strategy to mitigate data protection and cybersecurity risks.
Biggest changeThe audit committee’s oversight includes reviewing and discussing with management (at least annually) management’s report on assessment of risk exposure and risk management, the processes in place to identify and manage significant risks, steps taken by management to control or mitigate such exposures, and management’s report on cybersecurity risk management, which includes strategies to mitigate data protection and 30 Table of Contents cybersecurity risks.
Pursuant to the company's incident response plan, management would discuss with the audit committee any significant cybersecurity incidents that may have a material effect on the company’s business or its financial statements and management’s mitigation and remediation plan for such incidents.
Pursuant to the company’s incident response plan, if a significant cybersecurity incident occurs that may have a material effect on the company’s business or its financial statements, management will discuss the incident and management’s mitigation and remediation plan for such incident with the audit committee.
Our IT Director also reports at least annually to the audit committee about cybersecurity threat risks, among other cybersecurity related matters, and our Chief Executive Officer reports regularly to the chair of our board of directors, and the full board of directors, as appropriate, about any emerging threats to our operations, at scheduled board meetings and through communications between board meetings.
Additionally, the IT Director reports at least annually to the audit committee on cybersecurity threat risks, and our Chief Executive Officer reports regularly to the chair of our board of directors, and the full board of directors, as appropriate, about emerging threats to our operations, both at scheduled board meetings and through communications between board meetings.
For more information about cybersecurity risks we face, see the risk factor titled “Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations” included as part of our risk factor disclosures within Part I – Item 1. Business, Item 1A. Risk Factors contained in this report.
For more information on cybersecurity risks, see the risk factor entitled “Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations” in Part I – Item 1. Business, Item 1A. Risk Factors contained in this report.
We do not believe that risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect our overall business strategy, results of operations, or financial condition over the long term.
As of the date of this report, we have not identified any cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, financial results, or long-term financial condition.
Our IT Director reports directly to the Chief Financial Officer, which enables quick notification to the entire management team of any significant cybersecurity incidents.
The IT Director reports directly to the Chief Financial Officer, ensuring timely notification of significant cybersecurity incidents to the senior management team.
Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including those in our supply chain or who have access to our customer and employee data or our systems.
As part of this process, we regularly engage with third-party assessors and consultants to review and improve our cybersecurity program, focusing on compliance and areas for improvement. Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including those in our supply chain who have access to our customer and employee data or our systems.
Third-party risks are included within our enterprise risk management assessment program, as well as our cybersecurity 32 Table of Contents specific risk identification program, both of which are discussed above. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers.
Third-party risks are included within our enterprise risk management assessment program, as well as our cybersecurity specific risk identification program, both of which are discussed above. Oversight of Cybersecurity Risk Our cybersecurity risk management strategy is led by the Information Technology Director (IT Director) and the Director of Information Security (IS Director).
Together, our IT Director and IS Director hold numerous credentials, including a Bachelor of Science in Cybersecurity & Information Assurance, Certified Information Systems Security Professional (CISSP), Certified Cloud Security Professional (CCSP), Global Information Assurance Certification (GIAC), Certified Forensics Analyst (GCFA), GIAC Certified Incident Handler (GCIH), and others.
Our IS Director has over eleven years of experience managing information security, developing cybersecurity strategy and implementing relevant and effective cybersecurity programs. Together, our IT Director and IS Director hold numerous credentials, including a Bachelor of Science in Cybersecurity & Information Assurance. Both have extensive experience in cybersecurity management with credentials including CISSP, CCSP, GIAC, GCFA, GCIH, and others.
Our incident response plan coordinates the activities we take to prepare for, detect, respond to, and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as comply with potentially applicable legal obligations and mitigate brand and reputational damage.
Cybersecurity Incident Response Process Our incident response plan outlines the steps we take to prepare for, detect, respond to, and recover from cybersecurity incidents. This process includes assessing severity, escalating, containing, investigating, and remediating incidents, while ensuring compliance with applicable legal obligations and protecting our brand reputation.
We also have a cybersecurity specific risk assessment process, which helps identify our cybersecurity threat risks by comparing our processes to standards set by the National Institute of Standards and Technology (NIST), as well as by engaging with experts to attempt to infiltrate our information systems (as defined in Item 106(a) of Regulation S-K).
Our data security plan incorporates a specialized cybersecurity risk assessment process, which helps us identify potential risks by benchmarking our procedures against National 29 Table of Contents Institute of Standards and Technology (NIST) standards and engaging third-party experts to test the security of our information systems .
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ITEM 1C. CYBERSECURITY We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats. These risks include, among other things, operational risks; intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy or security laws; other litigation and legal risk; and reputational risk.
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ITEM 1C. CYBERSECURITY Risk Management and Strategy We understand the importance of identifying, assessing, and managing risks related to cybersecurity threats and data protection. We acknowledge the potential adverse effects of cybersecurity incidents on our business. As part of our enterprise risk management program, cybersecurity risks are evaluated alongside other company risks within the broader risk assessment process.
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We have implemented several cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage such material risks. To identify and assess material risks from cybersecurity threats, our enterprise risk management program considers cybersecurity threat risks alongside other company risks as part of our overall risk assessment process.
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Key aspects of our risk management program include: • Monitoring Regulatory Changes: We monitor emerging data protection laws and, if necessary, implement changes to our policies and employee training processes. • Cybersecurity Policy Reviews: We regularly review and update (when applicable) our policies and procedures related to cybersecurity. • Security Tools and Response Exercises: We use various tools, such as network and endpoint monitoring, vulnerability assessments, penetration testing, and tabletop exercises, to assist in risk identification and assessment.
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Our enterprise risk professionals collaborate with subject matter specialists, as necessary, to gather insights for identifying and assessing material cybersecurity threat risks, their severity, and potential mitigations.
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We then use these findings (where applicable) to enhance our processes and technologies. • Employee Training: We conduct annual cybersecurity awareness training for all employees with computer access, as well as specific training for those who handle sensitive data or are involved in cybersecurity management. • Expert Collaboration: We work with third-party subject matter experts to assess cybersecurity threats, their severity, and potential mitigation strategies. • Safeguard Third-Party Data: Through policy, practice, and contracts (as applicable), we require employees, as well as third parties providing services on our behalf, to treat customer information and data with care. • Use of Third-Party Service Providers: As cybersecurity considerations affect the selection and oversight of our third-party service providers, we also conduct pre-engagement assessments for third-party providers based on the sensitivity of the data they handle, and annually review SOC 1 or 2 reports for certain outsourced service providers whose systems are utilized in processing company or employee data. • Phishing Simulations: Regular phishing simulations help employees recognize and respond to potential email threats, with additional training provided, as necessary • NIST Framework: We leverage the NIST incident handling framework to guide our responses to actual or potential cybersecurity incidents, covering identification, protection, detection, response, and recovery.
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We devote significant resources to protecting and improving the security of our systems and employ a range of tools and services, including network and endpoint monitoring, vulnerability assessments, penetration testing, and tabletop exercises, to inform our professionals’ risk identification and assessment.
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The enterprise risk committee, which includes the Chief Financial Officer, IT Director as well as other members of senior management , review cybersecurity risk management as a component of our overall enterprise risk management. The audit committee of the board of directors is responsible for the oversight of the company’s enterprise risk management program.
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To provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and to protect against, detect, and respond to cybersecurity incidents (as defined in Item 106(a) of Regulation S-K), we undertake the below listed activities: • closely monitor emerging data protection laws and, if necessary, implement changes to our policies and employee training processes designed to comply; • undertake regular reviews of our policies and statements related to cybersecurity; • conduct annual cybersecurity awareness training for all relevant employees to increase their awareness and responsibilities when faced with cybersecurity threats; • conduct annual cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data; • conduct regular phishing email simulations for all employees to enhance awareness and responsiveness to such possible threats and provide supplemental training when appropriate; • through policy, practice, and contract (as applicable) require employees, as well as third parties who provide services on our behalf, to treat customer information and data with care; • run tabletop exercises to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies; • leverage the NIST incident handling framework to help us identify, protect, detect, respond, and recover when there is an actual or potential cybersecurity incident; and Additionally, we carry information security risk insurance coverage that we believe to be appropriate for the potential losses arising from a cybersecurity incident.
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However, this insurance may be subject to certain exceptions and may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.
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As part of the above processes, we regularly engage with assessors, consultants, auditors, and other third parties, including by regularly having a third-party qualified security assessor review our cybersecurity program to help identify areas for continued focus, improvement and/or compliance.
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We perform pre-engagement assessments for all third-party service providers based on the sensitivity of the data that will be handled and stored by that third-party service provider. Annually, we review Service Organization Control (SOC) 1 or 2 reports for certain outsourced service providers whose systems are utilized in processing and recording company or employee data.
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Cybersecurity is an important part of our risk management processes and an area of continued focus for our board and management.
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Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by our Information Technology Director (IT Director) and Director of Information Security (IS Director). Our IS Director has over ten years of experience managing information security, developing cybersecurity strategy and implementing relevant and effective cybersecurity programs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGA L PROCEEDINGS We believe there is no pending or threatened litigation that could have a material adverse effect on our financial position, results of operations or liquidity. ITEM 4. MINE SAFET Y DISCLOSURE Not applicable. 33 Table of Contents P ART II
Biggest changeITEM 3. LEGA L PROCEEDINGS We believe there is no pending or threatened litigation that could have a material adverse effect on our financial position, results of operations or liquidity. ITEM 4. MINE SAFET Y DISCLOSURE Not applicable. P ART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 51 Consolidated Statements of Operations 53 Consolidated Statements of Comprehensive Income 54 Consolidated Balance Sheets 55 Consolidated Statements of Cash Flows 56 Consolidated Statements of Stockholders' Equity 57 Index for Notes to Consolidated Financial Statements 58 Notes to Consolidated Financial Statements 59
Biggest changeFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 47 Consolidated Statements of Operations 49 Consolidated Statements of Comprehensive Income 50 Consolidated Balance Sheets 51 Consolidated Statements of Cash Flows 52 Consolidated Statements of Stockholders' Equity 53 Index for Notes to Consolidated Financial Statements 54 Notes to Consolidated Financial Statements 55
ITEM 4. MINE SAFETY DISCLOSURES 33 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 34 ITEM 6. RESERVED 35 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 36 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 50 ITEM 8.
ITEM 4. MINE SAFETY DISCLOSURES 31 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 31 ITEM 6. RESERVED 32 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 33 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 45 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides information with respect to purchases of common stock made by the company during the fourth quarter of 2023: Common Share Purchases Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - October 31 264,366 $ 44.93 264,366 $ 125,000,061 November 1 - November 30 — $ — — $ 125,000,061 December 1 - December 31 — $ — — $ 125,000,061 Total 264,366 $ 44.93 264,366 $ 125,000,061 EQUITY COMPENSATION PLAN INFORMATION Information required by this item with respect to equity compensation plans is included under the caption “Equity Compensation Plan Information” in our definitive Proxy Statement to be filed with the SEC on or about March 28, 2024, and is incorporated herein by reference. 34 Table of Contents Company Stock Price Performance The following graph and table show a five-year comparison of cumulative total stockholder returns for our company, the NAREIT Equity Index, the Standard & Poor’s 500 Composite Index and a group of four companies that we refer to as our peer group index for the period ended December 31, 2023.
Biggest changeThe following table provides information with respect to purchases of common stock made by the company during the fourth quarter of 2024: Common Share Purchases Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - October 31 98,654 $ 42.01 98,654 $ 93,456,403 November 1 - November 30 81,716 $ 42.30 81,716 $ 90,000,107 December 1 - December 31 — $ — — $ 90,000,107 Total 180,370 $ 42.14 180,370 $ 90,000,107 31 Table of Contents EQUITY COMPENSATION PLAN INFORMATION Information required by this item with respect to equity compensation plans is included under the caption “Equity Compensation Plan Information” in our definitive Proxy Statement to be filed with the SEC on or about March 27, 2025, and is incorporated herein by reference.
We record share repurchases upon trade date as opposed to the settlement date when cash is disbursed. We record a liability to account for repurchases that have not been cash settled. We retire shares upon repurchase. Any excess repurchase price over par is recorded in accumulated deficit. There were no unsettled repurchases at December 31, 2023 and 2022.
We record share repurchases upon trade date as opposed to the settlement date when cash is disbursed. We record a liability to account for repurchases that have not been cash settled. We retire shares upon repurchase. Any excess repurchase price over par is recorded in accumulated deficit. There were no unsettled repurchases at December 31, 2024 and 2023.
The total stockholder return assumes $100 invested at December 31, 2018, with quarterly reinvestment of all dividends.
The total stockholder return assumes $100 invested at December 31, 2019, with quarterly reinvestment of all dividends.
ITEM 5. MARKET FOR REGIST RANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on The Nasdaq Global Select Market (Nasdaq) with the ticker symbol “PCH”. There were approximately 2,284 stockholders of record as of February 12, 2024. RECENT SALE OF UNREGISTERED SECURITIES None.
ITEM 5. MARKET FOR REGIST RANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on The Nasdaq Global Select Market (Nasdaq) with the ticker symbol “PCH.” There were approximately 2,131 stockholders of record as of February 10, 2025. RECENT SALE OF UNREGISTERED SECURITIES None.
At December 31, 2019 2020 2021 2022 2023 PotlatchDeltic Corporation $ 142 $ 169 $ 223 $ 173 $ 200 NAREIT Equity Index $ 126 $ 116 $ 166 $ 126 $ 143 S&P 500 Composite Index $ 131 $ 156 $ 200 $ 164 $ 207 2023 Peer Group Index $ 144 $ 165 $ 217 $ 177 $ 220 Our peer group index for 2023 consists of Rayonier Inc., St.
At December 31, 2020 2021 2022 2023 2024 PotlatchDeltic Corporation $ 119 $ 157 $ 122 $ 141 $ 118 NAREIT Equity Index $ 92 $ 132 $ 100 $ 113 $ 123 S&P 500 Composite Index $ 118 $ 152 $ 125 $ 158 $ 197 2023 Peer Group Index $ 114 $ 151 $ 123 $ 153 $ 129 Our peer group index for 2024 consists of Rayonier Inc., St.
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Company Stock Price Performance The following graph and table show comparison of cumulative total stockholder returns for our company, the NAREIT Equity Index, the Standard & Poor’s 500 Composite Index and a group of four companies that we refer to as our peer group index for the five-year period ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeITEM 7. MANAGEMENT'S DISCUSS ION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A) The following discussion is intended to promote understanding of the results of operations and financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, Part I – Item 1. Business,
Biggest changeITEM 7. MANAGEMENT'S DISCUSS ION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A) The following discussion is intended to promote understanding of our results of operations and financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, Part I – Item 1. Business,

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2023, we had forward-starting interest rate swap contracts designated as cash flow hedges with an aggregated notional amount of $200.0 million associated with anticipated future refinancing of term loan debt maturing through January 2029 that require settlement on the maturity date.
Biggest changeWe use forward-starting interest rate swaps to manage interest rate exposure related to the anticipated refinancing of existing term loan debt. At December 31, 2024, we had one forward-starting interest rate swap designated as a cash flow hedge with a notional amount of $75 million available to fix the interest rate on future debt refinancing.
We are exposed to interest rate volatility on existing variable-rate debt instruments and future incurrences of fixed or variable rate debt, which exposure primarily relates to movements in various interest rates. We use interest rate swaps and forward-starting swaps to hedge our exposure to the impact of interest rate changes on existing debt and future debt issuances, respectively.
We are exposed to interest rate volatility on existing variable-rate debt instruments and future incurrences of fixed or variable rate debt, which exposure primarily relates to movements in various interest rates. We use interest rate swaps and forward-starting interest rate swaps to hedge our exposure to the impact of interest rate changes on existing debt and future debt issuances, respectively.
We do not attempt to mitigate the effects of short-term interest rate fluctuations on our revolving line of credit borrowings through the use of derivative financial instruments. There were no borrowings under our revolving line of credit at December 31, 2023. At December 31, 2023, we have interest rate swaps associated with $761.0 million of term loan debt.
We do not attempt to mitigate the effects of short-term interest rate fluctuations on our revolving line of credit borrowings through the use of derivative financial instruments. There were no borrowings under our revolving line of credit at December 31, 2024. At December 31, 2024, we have interest rate swaps associated with $937 million of term loan debt.
Notional amounts are used to calculate the contractual payments to be exchanged under the contract and weighted-average variable rates are based on implied forward rates in the yield curve. The table excludes our forward-starting interest rate swaps.
For interest rate swaps, the table presents notional amounts and weighted-average interest rates by expected (contractual) maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged under the contract and weighted-average variable rates are based on implied forward rates in the yield curve. The table excludes our forward-starting interest rate swap.
Our cash flow hedges are expected to be highly effective in achieving offsetting cash flows attributable to the hedged interest rate risk through the term of the hedge. See Note 10: Derivative Instruments in the Notes to Consolidated Financial Statements for additional information.
Our cash flow hedges are expected to be highly effective in achieving offsetting cash flows attributable to the hedged interest rate risk through the term of the hedge.
Quantitative Information about Market Risks The table below provides information about our long-term debt, weighted-average interest rates and associated interest rate swaps. For debt obligations, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates. For interest rate swaps, the table presents notional amounts and weighted-average interest rates by expected (contractual) maturity dates.
See Note 10: Derivative Instruments in the Notes to Consolidated Financial Statements for additional information. 45 Table of Contents Quantitative Information about Market Risks The table below provides information about our long-term debt, weighted-average interest rates and associated interest rate swaps. For debt obligations, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates.
Expected Maturity Date (in thousands, except interest rates) 2024 2025 2026 2027 2028 Thereafter Total Fair Value Variable-rate debt: Principal due $ — $ — $ 27,500 $ 138,750 $ 100,000 $ 494,750 $ 761,000 $ 761,000 Average interest rate — — 6.31 % 5.79 % 5.75 % 5.69 % 5.74 % Fixed-rate debt: Principal due $ 175,735 $ 100,000 $ — $ — $ — $ — $ 275,735 $ 269,504 Average interest rate 3.93 % 4.05 % — — — — 3.98 % Interest rate swaps: Variable to fixed $ — $ — $ 27,500 $ 138,750 $ 100,000 $ 494,750 $ 761,000 $ 95,994 Average pay rate — — 1.42 % 0.50 % 2.79 % 0.73 % 0.99 % Average receive rate — — 4.11 % 3.79 % 3.75 % 3.69 % 3.73 % 50 Table of Contents
Expected Maturity Date (in thousands, except interest rates) 2025 2026 2027 2028 2029 Thereafter Total Fair Value Variable-rate debt: Principal due $ — $ 27,500 $ 138,750 $ 100,000 $ 190,000 $ 480,750 $ 937,000 $ 937,000 Average interest rate — 6.32 % 5.99 % 6.02 % 5.70 % 6.17 % 6.03 % Fixed-rate debt: Principal due $ 100,000 $ — $ — $ — $ — $ — $ 100,000 $ 98,608 Average interest rate 4.05 % — — — — — 4.05 % Interest rate swaps: Variable to fixed $ — $ 27,500 $ 138,750 $ 100,000 $ 190,000 $ 480,750 $ 937,000 $ 122,821 Average pay rate — 1.42 % 0.50 % 2.79 % 0.60 % 1.23 % 1.17 % Average receive rate — 4.08 % 3.99 % 3.98 % 3.97 % 3.98 % 3.98 % 46 Table of Contents
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We use forward-starting interest rate swap contracts to manage interest rate exposure in periods prior to the anticipated refinancing of existing term loan debt.

Other PCH 10-K year-over-year comparisons