PotlatchDeltic Corporation (NASDAQ:PCH) today reported net income of $23.7 million, or $0.29 per diluted share, on revenues of $265.5 million for the quarter ended September 30, 2023. Excluding an after-tax gain on insurance recoveries, adjusted net income was $11.4 million, or $0.14 per diluted share for the third quarter of 2023. Net income was $46.0 million, or $0.64 per diluted share, on revenues of $306.7 million for the quarter ended September 30, 2022. Excluding an after-tax gain on insurance recoveries and CatchMark merger-related expenses, adjusted net income was $53.2 million, or $0.74 per diluted share, for the third quarter of 2022.

Third Quarter 2023 Highlights

Generated Total Adjusted EBITDDA of $56.3 million and Total Adjusted EBITDDA margin of 21.2%
Repurchased 283,000 shares for $12.7 million, or $45 per share
Maintained strong liquidity position of $602 million as of September 30, 2023

"Our third quarter 2023 results reflect improved financial performance across all of our business segments," said Eric Cremers, president and chief executive officer. "Each of our teams delivered solid results amid the backdrop of higher interest rates and an uncertain macroeconomic environment. During the third quarter, we continued to focus on strategically deploying our capital including returning $49 million to shareholders in the form of dividends and share repurchases. We remain positive on long-term housing-related fundamentals that drive demand in our business. Our balance sheet and liquidity remains strong, providing flexibility to navigate the current economic environment and grow shareholder value over the long-term," stated Mr. Cremers.

Financial Highlights

($ in millions, except per share data)	Q3 2023			Q2 2023			Q3 2022
Revenues	$	265.5		$	246.1		$	306.7
Net income	$	23.7		$	22.3		$	46.0
Weighted average shares outstanding, diluted (in thousands)		80,379			80,416			71,623
Net income per diluted share	$	0.29		$	0.28		$	0.64

Adjusted Net Income¹	$	11.4		$	5.2		$	53.2
Adjusted Net Income per diluted share¹	$	0.14		$	0.06		$	0.74

Total Adjusted EBITDDA¹	$	56.3		$	45.5		$	101.1
Total Adjusted EBITDDA Margin¹		21.2	%		18.5	%		33.0	%
Dividends per share²	$	0.45		$	0.45		$	0.44
Net cash from operations	$	41.0		$	37.2		$	80.3
Cash and cash equivalents	$	302.8		$	331.2		$	484.0

¹ Adjusted Net Income, Adjusted Net Income per diluted share, Total Adjusted EBITDDA and Total Adjusted EBITDDA Margin are non-GAAP measures. Refer to "Non-GAAP Measures" and "Non-GAAP Reconciliations" below for more information and reconciliations to GAAP, where applicable.
² The regular dividend was increased 2.3% to $0.45 per quarter in Q4 2022.

Business Performance: Q3 2023 vs. Q2 2023

Timberlands

Third Quarter 2023 Highlights

Timberlands Adjusted EBITDDA increased $12.6 million from Q2 2023
Northern and Southern harvest volumes increased seasonally
Northern sawlog prices increased 12% primarily due to higher indexed sawlog prices
Southern sawlog and pulpwood prices were stable

($ in millions)	Q3 2023		Q2 2023		$ Change
Timberlands Revenues	$	109.8	$	88.7	$	21.1

Timberlands Adjusted EBITDDA¹	$	42.0	$	29.4	$	12.6

¹ Refer to "Segment Information" below for additional information.

Wood Products

Third Quarter 2023 Highlights

Wood Products Adjusted EBITDDA increased $3.2 million from Q2 2023
Average lumber price increased 1% to $481 per MBF, or thousand board feet, in Q3 2023
Per-unit log costs decreased on lower log costs and improved recoveries

($ in millions)	Q3 2023		Q2 2023		$ Change
Wood Products Revenues	$	165.1	$	167.7	$	(2.6	)

Wood Products Adjusted EBITDDA¹	$	15.1	$	11.9	$	3.2

¹ Refer to "Segment Information" below for additional information.

Real Estate

Third Quarter 2023 Highlights

Real Estate Adjusted EBITDDA increased $2.0 million from Q2 2023
Sold 3,275 acres of rural land at an average price of $3,546 / acre
Sold 32 residential lots at an average price of $89,122 / lot
Sold 1 commercial lot for $1.4 million, or $972,222 / acre

($ in millions)	Q3 2023		Q2 2023		$ Change
Real Estate Revenues	$	19.2	$	17.0	$	2.2

Real Estate Adjusted EBITDDA¹	$	14.2	$	12.2	$	2.0

¹ Refer to "Segment Information" below for additional information.

Non-GAAP Measures

This press release includes certain financial measures that are not in accordance with accounting principles generally accepted in the United States (GAAP). Management believes that these non-GAAP measures, when read in conjunction with our GAAP financial statements, provide useful information to investors and other interested parties as described below. The presentation of 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. Additionally, these non-GAAP financial measures may not be the same as or comparable to other similarly titled non-GAAP measures presented by other companies due to potential inconsistencies in methods of calculation.

Adjusted Net Income and Adjusted Net Income per diluted share are non-GAAP measures that represent GAAP net income and GAAP net income per diluted share before certain items, net of tax, that management believes impact the ability to compare the performance of our business, either period-over-period or with other businesses.

Total Adjusted EBITDDA and Total Adjusted EBITDDA Margin are non-GAAP measures that remove the impact of specific items that management believes do not directly reflect the core business operations on an ongoing basis and can be used to evaluate the operational performance of assets under management.

We define Total Adjusted EBITDDA Margin as Total Adjusted EBITDDA divided by Revenues.

Reconciliations of Total Adjusted EBITDDA, Adjusted Net Income and Adjusted Net Income per diluted share to their most comparable GAAP measures are set forth in the accompanying "Non-GAAP Reconciliations" at the end of this release.

Conference Call Information

A live conference call and webcast will be held Tuesday, October 31, 2023, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time). Investors may access the webcast at www.potlatchdeltic.com by clicking on the Investors link or by conference call at 1-888-510-2008 for U.S./Canada and 1-646-960-0306 for international callers. Participants will be asked to provide conference I.D. number 7281983. Supplemental materials that will be discussed during the call are available on the above website.

A replay of the conference call will be available two hours following the call until November 7, 2023 by calling 1-800-770-2030 for U.S./Canada or 1-647-362-9199 for international callers. Callers must enter conference I.D. number 7281983 to access the replay.

About PotlatchDeltic

PotlatchDeltic Corporation (NASDAQ:PCH) is a leading Real Estate Investment Trust (REIT) that owns nearly 2.2 million acres of timberlands in Alabama, Arkansas, Georgia, Idaho, Louisiana, Mississippi and South Carolina. Through its taxable REIT subsidiary, the company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program. PotlatchDeltic, a leader in sustainable forest management, is committed to environmental and social responsibility and to responsible governance. More information can be found at www.potlatchdeltic.com.

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 the company's revenues, costs and expenses; long-term housing market fundamentals; disciplined and opportunistic capital allocation strategy; and similar matters. Words such as "over the long term," 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, such as changes in 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 and effects on our customers and suppliers; changes in interest rates; credit availability and homebuyers' ability to qualify for mortgages; availability of labor and developable land; changes in the level of construction and remodeling activity; changes in foreign 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; disruptions or inefficiencies in our supply chain and/or operations; changes in general and industry-specific environmental laws and regulations; unforeseen environmental liabilities or expenditures; weather conditions; fires at our facilities and on our timberland and other catastrophic events; 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; 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.

PotlatchDeltic Corporation Condensed Consolidated Statements of Operations Unaudited

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(in thousands, except per share amounts)	2023			2023			2022			2023			2022
Revenues	$	265,509		$	246,101		$	306,693		$	769,572		$	1,077,640
Costs and expenses:
Cost of goods sold		226,303			215,063			220,876			665,716			592,057
Selling, general and administrative expenses		19,303			17,585			18,878			55,118			55,584
CatchMark merger-related expenses		—			244			26,007			2,453			26,007
Gain on fire damage		(16,326	)		(23,110	)		(24,913	)		(39,436	)		(34,505	)
		229,280			209,782			240,848			683,851			639,143
Operating income		36,229			36,319			65,845			85,721			438,497
Interest expense, net		(7,971	)		(7,613	)		(8,280	)		(15,783	)		(18,593	)
Pension settlement charge		—			—			—			—			(14,165	)
Non-operating pension and other postretirement employee benefit costs		(228	)		(229	)		(1,808	)		(685	)		(5,546	)
Other		370			258			(1	)		638			(1	)
Income before income taxes		28,400			28,735			55,756			69,891			400,192
Income taxes		(4,725	)		(6,429	)		(9,801	)		(7,650	)		(70,135	)
Net income	$	23,675		$	22,306		$	45,955		$	62,241		$	330,057

Net income per share:
Basic	$	0.30		$	0.28		$	0.64		$	0.78		$	4.70
Diluted	$	0.29		$	0.28		$	0.64		$	0.78		$	4.69
Dividends per share	$	0.45		$	0.45		$	0.44		$	1.35		$	1.32
Weighted-average shares outstanding:
Basic		80,132			80,145			71,486			80,102			70,171
Diluted		80,379			80,416			71,632			80,279			70,308

PotlatchDeltic Corporation Condensed Consolidated Balance Sheets Unaudited

(in thousands, except per share amounts)	September 30, 2023			December 31, 2022
*ASSETS*
Current assets:
Cash and cash equivalents	$	302,799		$	343,809
Customer receivables, net		30,762			22,813
Inventories, net		82,537			67,958
Other current assets		56,606			36,955
Total current assets		472,704			471,535
Property, plant and equipment, net		334,350			318,184
Investment in real estate held for development and sale		55,928			55,490
Timber and timberlands, net		2,459,508			2,508,372
Intangible assets, net		16,085			17,420
Other long-term assets		209,703			179,554
Total assets	$	3,548,278		$	3,550,555

*LIABILITIES AND STOCKHOLDERS' EQUITY*
Current liabilities:
Accounts payable and accrued liabilities	$	115,334		$	94,861
Current portion of long-term debt		39,996			39,979
Current portion of pension and other postretirement employee benefits		4,926			4,926
Total current liabilities		160,256			139,766
Long-term debt		993,562			992,701
Pension and other postretirement employee benefits		80,581			77,396
Deferred tax liabilities, net		38,419			41,790
Other long-term obligations		36,363			35,749
Total liabilities		1,309,181			1,287,402
Commitments and contingencies
Stockholders' equity:
Common stock, $1 par value, 200,000 and 100,000 shares authorized and 79,628 and 79,683 shares issued and outstanding		79,628			79,683
Additional paid-in capital		2,301,301			2,294,797
Accumulated deficit		(267,725	)		(208,979	)
Accumulated other comprehensive income		125,893			97,652
Total stockholders' equity		2,239,097			2,263,153
Total liabilities and stockholders' equity	$	3,548,278		$	3,550,555

PotlatchDeltic Corporation Condensed Consolidated Statements of Cash Flows Unaudited

	Three Months Ended									Nine Months Ended
(in thousands)	September 30, 2023			June 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
*CASH FLOWS FROM OPERATING ACTIVITIES*
Net income	$	23,675		$	22,306		$	45,955		$	62,241		$	330,057
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, depletion and amortization		30,658			27,496			27,707			90,327			67,960
Basis of real estate sold		6,109			4,884			6,845			21,624			25,024
Change in deferred taxes		(1,764	)		(2,609	)		730			(3,979	)		(1,359	)
Pension and other postretirement employee benefits		1,610			1,612			3,539			4,833			10,936
Pension settlement charge		—			—			—			—			14,165
Equity-based compensation expense		2,616			1,577			11,717			6,472			16,141
Gain on fire damage		(16,326	)		(23,110	)		(24,913	)		(39,436	)		(34,505	)
Interest received under swaps with other-than-insignificant financing element		(6,884	)		(6,313	)		—			(18,651	)		—
Other, net		1,792			1,911			144			5,648			(455	)
Change in working capital and operating-related activities, net		(9,773	)		2,871			(5,901	)		(24,107	)		14,071
Real estate development expenditures		(2,939	)		(1,896	)		(1,796	)		(7,243	)		(6,986	)
Funding of pension and other postretirement employee benefits		128			(1,217	)		(1,026	)		(2,176	)		(3,290	)
Proceeds from insurance recoveries		12,049			9,706			17,250			21,755			26,678
Net cash from operating activities		40,951			37,218			80,251			117,308			458,437

*CASH FLOWS FROM INVESTING ACTIVITIES*
Property, plant and equipment additions		(17,933	)		(5,880	)		(7,223	)		(28,068	)		(44,000	)
Timberlands reforestation and roads		(6,299	)		(4,596	)		(3,832	)		(17,013	)		(12,220	)
Acquisition of timber and timberlands		(55	)		(1,621	)		(53,863	)		(1,676	)		(96,081	)
Proceeds from property insurance		1,356			—			—			1,356			—
Cash acquired in CatchMark merger		—			—			23,571			—			23,571
Interest received under swaps with other-than-insignificant financing element		6,375			5,849			—			17,279			—
Other, net		36			242			2,318			700			935
Net cash from investing activities		(16,520	)		(6,006	)		(39,029	)		(27,422	)		(127,795	)

*CASH FLOWS FROM FINANCING ACTIVITIES*
Distributions to common stockholders		(35,960	)		(35,958	)		(35,530	)		(107,880	)		(96,578	)
Repurchase of common stock		(11,012	)		(394	)		(371	)		(11,406	)		(4,527	)
Proceeds from issuance of long-term debt		—			—			277,500			—			277,500
Repayment of long-term debt		—			—			(300,000	)		—			(303,000	)
Other, net		(360	)		(1,117	)		(4,026	)		(2,315	)		(6,120	)
Net cash from financing activities		(47,332	)		(37,469	)		(62,427	)		(121,601	)		(132,725	)
Change in cash, cash equivalents and restricted cash		(22,901	)		(6,257	)		(21,205	)		(31,715	)		197,917
Cash, cash equivalents and restricted cash, beginning		336,777			343,034			515,894			345,591			296,772
Cash, cash equivalents and restricted cash, ending¹	$	313,876		$	336,777		$	494,689		$	313,876		$	494,689

¹ Includes $11.1 million, $5.6 million and $10.7 million at September 30, 2023, June 30, 2023 and September 30, 2022, respectively, that were or are intended to be reinvested in timber and timberlands and classified as restricted cash in Other current and long-term assets in the Condensed Consolidated Balance Sheets.

PotlatchDeltic Corporation Segment Information Unaudited

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(in thousands)	2023			2023			2022			2023			2022
Revenues
Timberlands	$	109,808		$	88,617		$	134,576		$	313,663		$	363,719
Wood Products		165,108			167,669			193,431			485,572			755,806
Real Estate		19,152			17,064			19,008			60,079			79,809
		294,068			273,350			347,015			859,314			1,199,334
Intersegment Timberlands revenues		(28,559	)		(27,243	)		(40,322	)		(89,736	)		(121,694	)
Other intersegment revenues		—			(6	)		—			(6	)		—
Consolidated revenues	$	265,509		$	246,101		$	306,693		$	769,572		$	1,077,640

Adjusted EBITDDA¹
Timberlands	$	42,062		$	29,316		$	64,482		$	118,017		$	198,806
Wood Products		15,039			11,967			31,258			26,975			288,465
Real Estate		14,165			12,237			14,140			45,867			66,080
Corporate		(11,696	)		(10,521	)		(12,629	)		(32,958	)		(36,125	)
Eliminations and adjustments		(3,292	)		2,446			3,839			1,599			4,596
Total Adjusted EBITDDA		56,278			45,445			101,090			159,500			521,822
Interest expense, net²		(7,971	)		(7,613	)		(8,280	)		(15,783	)		(18,593	)
Depreciation, depletion and amortization		(30,248	)		(27,087	)		(27,329	)		(89,099	)		(66,838	)
Basis of real estate sold		(6,109	)		(4,884	)		(6,845	)		(21,624	)		(25,024	)
CatchMark merger-related expenses		—			(244	)		(26,007	)		(2,453	)		(26,007	)
Gain on fire damage		16,326			23,110			24,913			39,436			34,505
Pension settlement charge		—			—			—			—			(14,165	)
Non-operating pension and other postretirement employee benefits		(228	)		(229	)		(1,808	)		(685	)		(5,546	)
(Loss) gain on disposal of fixed assets		(18	)		(21	)		23			(39	)		39
Other		370			258			(1	)		638			(1	)
Income before income taxes	$	28,400		$	28,735		$	55,756		$	69,891		$	400,192

Depreciation, depletion and amortization
Timberlands	$	19,267		$	15,895		$	16,963		$	55,623		$	40,687
Wood Products		10,740			10,948			10,069			32,723			25,226
Real Estate		120			121			175			397			518
Corporate		121			123			122			356			407
		30,248			27,087			27,329			89,099			66,838
Bond discounts and deferred loan fees²		410			409			378			1,228			1,122
Total depreciation, depletion and amortization	$	30,658		$	27,496		$	27,707		$	90,327		$	67,960

Basis of real estate sold
Real Estate	$	6,111		$	4,887		$	6,845		$	21,629		$	25,033
Eliminations and adjustments		(2	)		(3	)		—			(5	)		(9	)
Total basis of real estate sold	$	6,109		$	4,884		$	6,845		$	21,624		$	25,024

¹ Management uses Adjusted EBITDDA to evaluate company and segment performance. See the reconciliation of Total Adjusted EBITDDA below.
² Bond discounts and deferred loan fees are included in interest expense, net in the Condensed Consolidated Statements of Operations.

PotlatchDeltic Corporation Non-GAAP Reconciliations Unaudited

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(in thousands, except per share amount)	2023			2023			2022			2023			2022
Total Adjusted EBITDDA¹
Net income (GAAP)	$	23,675		$	22,306		$	45,955		$	62,241		$	330,057
Interest expense, net		7,971			7,613			8,280			15,783			18,593
Income taxes		4,725			6,429			9,801			7,650			70,135
Depreciation, depletion and amortization		30,248			27,087			27,329			89,099			66,838
Basis of real estate sold		6,109			4,884			6,845			21,624			25,024
CatchMark merger-related expenses		—			244			26,007			2,453			26,007
Gain on fire damage		(16,326	)		(23,110	)		(24,913	)		(39,436	)		(34,505	)
Pension settlement charge		—			—			—			—			14,165
Non-operating pension and other postretirement benefit costs		228			229			1,808			685			5,546
Loss (gain) on disposal of fixed assets		18			21			(23	)		39			(39	)
Other		(370	)		(258	)		1			(638	)		1
Total Adjusted EBITDDA	$	56,278		$	45,445		$	101,090		$	159,500		$	521,822

Adjusted Net Income¹
Net income (GAAP)	$	23,675		$	22,306		$	45,955		$	62,241		$	330,057
Special items after tax:
CatchMark merger-related expenses		—			244			25,823			2,453			25,823
Gain on fire damage		(12,244	)		(17,333	)		(18,559	)		(29,577	)		(25,706	)
Pension settlement charge		—			—			—			—			10,553
Adjusted Net Income	$	11,431		$	5,217		$	53,219		$	35,117		$	340,727

Adjusted Net Income Per Diluted Share¹
Net income per diluted share (GAAP)	$	0.29		$	0.28		$	0.64		$	0.78		$	4.69
Special items after tax:
CatchMark merger-related expenses		—			—			0.36			0.03			0.37
Gain on fire damage		(0.15	)		(0.22	)		(0.26	)		(0.37	)		(0.37	)
Pension settlement charge		—			—			—			—			0.15
Adjusted Net Income Per Diluted Share	$	0.14		$	0.06		$	0.74		$	0.44		$	4.84

¹ See "Non-GAAP Measures" above for further details on management's use of these measures.

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PotlatchDeltic Corporation Reports Third Quarter 2023 Results