PotlatchDeltic : Presentation (Link opens in a new window)

Q3 2019 Earnings

October 29, 2019

Forward-Looking Statements

& Non-GAAP Measures

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including without limitation, our expectations regarding our stepped-up capital expenditure program, the U.S. housing market and repair and remodel market; U.S housing starts; lumber demand, pricing, revenues and Q4 costs and expenses; Q4 lumber shipments; 2019 lumber shipments; effects of announced curtailments and permanent closures of sawmills; expectation that shortfall in Southern harvest will be made up in the fourth quarter of 2019; Q4 2019 Northern and Southern timber harvest volumes and sawlog prices; expected 2020 timber harvest volumes; Q4 2019 Northern and Southern sawlog mix; 2019 harvest plan; Wood Products 2019 capital expenditures; total 2019 capital expenditures; real estate sales, pricing and cost basis; development real estate sales, pricing and land basis; the direction of our business markets; business conditions; Q4 2019 Adjusted EBITDDA; Q4 2019 interest expense; Q4 2019 corporate expense; Q4 2019 income tax; dividend payout ratio; plan to refinance debt scheduled to mature in Q4; and similar matters. Words such as "anticipate," "expect," "will," "intend," "plan," "target," "project," "believe," "seek," "schedule," "estimate," "could," "can," "may," and similar expressions are intended to identify such forward-looking statements. You should carefully read forward-looking statements, including statements that contain these words, because they discuss the future expectations or state other "forward-looking" information about PotlatchDeltic. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, many of which are beyond PotlatchDeltic's control, including the U.S. housing market; changes in timberland values; changes in timber harvest levels on the company's lands; changes in timber prices; changes in policy regarding governmental timber sales; availability of logging contractors and shipping capacity; changes in the United States and international economies; changes in interest rates; changes in the level of construction activity; changes in Asia demand; changes in tariffs, quotas and trade agreements involving wood products; currency fluctuation; changes in demand for our products and real estate; changes in production and production capacity in the forest products industry; competitive pricing pressures for our products; unanticipated manufacturing disruptions; changes in general and industry-specific environmental laws and regulations; unforeseen environmental liabilities or expenditures; weather conditions; restrictions on harvesting due to fire danger; changes in raw material, fuel and other costs; transportation disruptions; share price; the successful execution of the company's strategic plans; the company's ability to meet expectations; and the other factors described in PotlatchDeltic's Annual Report on Form 10-K and in the company's other filings with the SEC. PotlatchDeltic assumes no obligation to update the information in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, all of which speak only as of the date hereof.

NON-GAAP MEASURES

This presentation includes non-GAAP financial information. A reconciliation of those numbers to U.S. GAAP is included in this presentation, which is available on the company's website at www.potlatchdeltic.com.

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Key Highlights - Q3 2019

	Performance		Strategy		Capital Allocation
Total Adjusted EBITDDA:(1)	Solid long-term lumber fundamentals	Share Repurchases:
•	$55.0 million	• Housing demand supported by	• 686,240 shares YTD at an average of
• Total Adjusted EBITDDA margin of 24%		demographics		$36.65/share - $25.2 million
		•	Restricted Canadian supply	• No share repurchases Q3 2019
Segment Adjusted EBITDDA	• Low interest rate environment	• Current stock price exceeds average stock
•	Timberlands - $43.0 million	Integrated model is a benefit		repurchase price by 17%
• 1.6 million tons harvest volume	Dividend:
		• Net log buyer in South
•	Wood Products - $5.9 million	• Low southern sawlog prices = higher	•	$1.60/share, 3.9% yield(3)
•	299 MMBF lumber shipments		lumber margins	Capital Expenditures:
• $363/MBF average lumber price	Northern Timberlands contribution
		• Expected 2019 total: $65 - $70 million
•	Real Estate - $14.7 million	benefits from indexing Idaho sawlogs to	• Wood Products portion is elevated/on track
• Sold 6 commercial acres for	lumber prices and from cedar sawlogs	Debt:
	$512,500/acre	Real Estate:
• Sold 42 residential lots for $110,500/lot	• Undrawn $380 million revolver
		•	Rural - maximize land value through	•	Investment grade rated
Cash Available for Distribution (CAD):		land stratification	• Plan to refinance $40 million maturing
	• $75.8 million(2)	• Development - high end master		December 2019; modest interest savings
			planned community in Little Rock, AR

1. Total Adjusted EBITDDA is a non-GAAP measure. See appendix for definition and reconciliation. Total Adjusted EBITDDA margin is Total Adjusted EBITDDA divided by revenues.
2. Cash Available for Distribution (CAD) is for the trailing twelve months ended September 30, 2019. CAD is a non-GAAP measure; see appendix for definition and reconciliation.
3. Based on closing stock price of $41.09 on September 30, 2019.

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Q3 2019 Consolidated Results

Total Adjusted EBITDDA - Q2 2019 to Q3 2019 Variance

($ in millions)

$16.9		$7.9	($16.6)
				($4.5)
	$2.3	$55.0

$49.0

Q2 2019 Timberlands Wood Products Real Estate Corporate Eliminations Q3 2019

Key Consolidated Highlights:

Total Adjusted EBITDDA increased $6.0 million from Q2 2019 levels

Timberlands driven by seasonally higher harvest volumes and higher sawlog prices

Wood Products Adjusted EBITDDA increase due primarily to increased lumber shipments and lower per-unit manufacturing and log costs

Real Estate sold commercial land for $3.1 million Q3; Q2 included the sale of a former Deltic tract for $19.6 million

Note: Total Adjusted EBITDDA is a non-GAAP measure. See appendix for definition and reconciliation.

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Q3 2019 Timberlands Results

Timberlands Adjusted EBITDDA - Q2 2019 to Q3 2019 Variance

			($ in millions)
$8.5	($3.5)	($0.5)		$43.0
$12.4

$26.1

Q2 2019

Harvest Volume

Sales Price & Mix

Log & Haul

Forest Mgmt/Roads

Q3 2019

Key Timberlands Highlights:

Timberlands Adjusted EBITDDA increased $16.9 million from Q2 2019 levels Northern and Southern harvest volumes increased seasonally, but were below plan

Northern sawlog prices increased 7%, reflecting slightly higher lumber prices on indexed volume and seasonally lighter logs

Increase in log & haul costs driven by higher Northern volumes

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