Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange act).

The number of shares of common stock of the registrant outstanding as of ~~October~~April 28, ~~2020~~2021 was ~~66,873,051.~~67,042,259.

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(in thousands, except per share amounts)	2020			2019			2020			2019			2021			2020
Revenues	$	313,046		$	226,302		$	703,481		$	623,599		$	354,193		$	208,880
Costs and expenses:
Cost of goods sold		182,039			182,634			503,921			512,522			169,302			172,046
Selling, general and administrative expenses		21,046			12,472			52,064			43,994			16,758			14,207
Gain on sale of facility		—			—			—			(9,176	)
		203,085			195,106			555,985			547,340			186,060			186,253
Operating income		109,961			31,196			147,496			76,259			168,133			22,627
Interest expense, net		(8,557	)		(8,475	)		(20,594	)		(21,821	)		(3,574	)		(3,698	)
Loss on extinguishment of debt		—			—			—			(5,512	)
Pension settlement charge		—			—			(42,988	)		—			—			(42,988	)
Non-operating pension and other postretirement employee benefit costs		(3,557	)		(935	)		(10,670	)		(2,804	)		(3,414	)		(3,635	)
Income before income taxes		97,847			21,786			73,244			46,122
Income (loss) before income taxes														161,145			(27,694	)
Income taxes		(16,840	)		(1,221	)		(6,431	)		(1,860	)		(30,039	)		10,862
Net income	$	81,007		$	20,565		$	66,813		$	44,262
Net income (loss)													$	131,106		$	(16,832	)

Net income per share:
Net income (loss) per share:
Basic	$	1.21		$	0.30		$	0.99		$	0.65		$	1.95		$	(0.25	)
Diluted	$	1.20		$	0.30		$	0.99		$	0.65		$	1.94		$	(0.25	)
Dividends per share	$	0.40		$	0.40		$	1.20		$	1.20		$	0.41		$	0.40
Weighted-average shares outstanding:
Basic		67,149			67,446			67,263			67,781			67,207			67,478
Diluted		67,528			67,545			67,535			67,848			67,607			67,478

The accompanying notes are an integral part of these condensed consolidated financial statements.

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2020

2019

2020

2019

Net income

$
81,007

$
20,565

$
66,813

$
44,262

Other comprehensive income (loss), net of tax:

Pension and other postretirement employee benefits:

Net loss arising during the period, net of tax benefit of $0, $0, $6,817 and $0

—

—

(19,402
)

—

Effect of pension settlement, net of tax benefit of $0, $0, $11,177 and $0

—

—

31,811

—

Amortization of prior service credit included in net income, net of tax benefit of $75, $562, $227 and $1,684

(215
)

(1,598
)

(645
)

(4,792
)
Amortization of actuarial loss included in net income, net of tax expense of $1,111, $943, $3,334 and $2,829

3,163

2,685

9,489

8,053

Cash flow hedges, net of tax expense (benefit) of $763, $(387), $(1,043) and $(1,300)

11,332

(6,978
)

(29,040
)

(25,908
)
Other comprehensive income (loss), net of tax

14,280

(5,891
)

(7,787
)

(22,647
)
Comprehensive income

$
95,287

$
14,674

$
59,026

$
21,615

	Three Months Ended March 31,
(in thousands)	2021			2020
Net income (loss)	$	131,106		$	(16,832	)
Other comprehensive income (loss), net of tax:
Pension and other postretirement employee benefits:
Net loss arising during the period, net of tax benefit of $0 and $6,817		—			(19,402	)
Effect of pension settlement, net of tax benefit of $0 and $11,177		—			31,811
Amortization of prior service credit included in net income (loss), net of tax benefit of $73 and $76		(204	)		(215	)
Amortization of actuarial loss included in net income (loss), net of tax expense of $1,109 and $1,189		3,157			3,384
Cash flow hedges, net of tax expense (benefit) of $4,031 and $(1,810)		64,107			(38,525	)
Other comprehensive income (loss), net of tax		67,060			(22,947	)
Comprehensive income (loss)	$	198,166		$	(39,779	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

(in thousands, except per share amounts)	September 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	148,919		$	83,310		$	382,032		$	252,340
Customer receivables, net		50,084			14,167			41,920			26,606
Inventories, net		58,572			65,781			62,663			62,036
Other current assets		21,090			20,183			20,959			16,136
Total current assets		278,665			183,441			507,574			357,118
Property, plant and equipment, net		289,305			286,383			291,483			288,544
Investment in real estate held for development and sale		74,216			74,233			69,057			72,355
Timber and timberlands, net		1,608,026			1,638,663			1,587,593			1,600,061
Intangible assets, net		16,465			17,049			16,075			16,270
Other long-term assets		31,236			35,290			91,847			46,717
Total assets	$	2,297,913		$	2,235,059		$	2,563,629		$	2,381,065

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	108,425		$	60,577		$	114,849		$	93,279
Current portion of long-term debt		45,995			45,974			42,985			39,981
Current portion of pension and other postretirement employee benefits		6,701			6,701			6,574			6,574
Total current liabilities		161,121			113,252			164,408			139,834
Long-term debt		711,254			710,495			714,619			717,366
Pension and other postretirement employee benefits		139,022			115,463			129,025			128,807
Deferred tax liabilities, net		12,202			20,165			24,298			17,740
Other long-term obligations		78,237			48,853			53,730			72,365
Total liabilities		1,101,836			1,008,228			1,086,080			1,076,112
Commitments and contingencies
Stockholders' equity:
Preferred stock, authorized 4,000 shares, 0 shares issued		—			—			—			—
Common stock, $1 par value, authorized 100,000 shares, issued and outstanding 66,872 and 67,221 shares		66,872			67,221
Common stock, $1 par value, authorized 100,000 shares, issued and outstanding 67,042 and 66,876 shares								67,042			66,876
Additional paid-in capital		1,672,351			1,666,299			1,676,421			1,674,576
Accumulated deficit		(388,000	)		(359,330	)		(211,985	)		(315,510	)
Accumulated other comprehensive loss		(155,146	)		(147,359	)		(53,929	)		(120,989	)
Total stockholders’ equity		1,196,077			1,226,831			1,477,549			1,304,953
Total liabilities and stockholders' equity	$	2,297,913		$	2,235,059		$	2,563,629		$	2,381,065

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Nine Months Ended September 30,						Three Months Ended March 31,
(in thousands)	2020			2019			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	66,813		$	44,262
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)							$	131,106		$	(16,832	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		57,809			52,589			18,399			19,044
Basis of real estate sold		14,440			14,211			8,823			6,498
Gain on sale of facility		—			(9,176	)
Loss on extinguishment of debt		—			5,512
Change in deferred taxes		(14,387	)		(16,943	)		1,490			(12,383	)
Pension and other postretirement employee benefits		17,750			8,907			5,627			6,068
Pension settlement charge		42,988			—			—			42,988
Equity-based compensation expense		5,928			5,362			1,930			1,885
Other, net		(544	)		(2,692	)		(387	)		237
Change in working capital and operating-related activities, net		12,706			13,745			6,713			2,557
Real estate development expenditures		(4,200	)		(5,738	)		(2,315	)		(378	)
Funding of pension and other postretirement employee benefits		(8,458	)		(4,612	)		(1,421	)		(1,546	)
Net cash provided by operating activities		190,845			105,427			169,965			48,138

CASH FLOWS FROM INVESTING ACTIVITIES
Property, plant and equipment additions		(14,666	)		(25,596	)		(7,762	)		(5,039	)
Timberlands reforestation and roads		(12,345	)		(13,269	)		(3,956	)		(4,310	)
Acquisition of timber and timberlands		(4,738	)		(278	)		—			(4,190	)
Proceeds on sale of facility		1,000			58,793			—			1,000
Proceeds on disposition of property, plant and equipment		335			2,017
Other, net		2,149			520			189			1,505
Net cash (used in) provided by investing activities		(28,265	)		22,187
Net cash used in investing activities								(11,529	)		(11,034	)

CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to common stockholders		(80,434	)		(80,834	)		(27,484	)		(26,941	)
Repurchase of common stock		(15,364	)		(25,173	)		—			(12,355	)
Proceeds from issuance of long-term debt		—			150,000
Repayment of long-term debt		—			(150,000	)
Premiums and fees on debt retirement		—			(4,865	)
Other, net		(1,032	)		(393	)		(591	)		(242	)
Net cash used in financing activities		(96,830	)		(111,265	)		(28,075	)		(39,538	)
Change in cash, cash equivalents and restricted cash		65,750			16,349			130,361			(2,434	)
Cash, cash equivalents and restricted cash at beginning of period		84,254			79,441			252,340			84,254
Cash, cash equivalents and restricted cash at end of period	$	150,004		$	95,790		$	382,701		$	81,820

NONCASH INVESTING AND FINANCING ACTIVITIES
Long-term debt assumed by buyer in sale of facility	$	—		$	29,000
Accrued property, plant and equipment additions	$	3,785		$	453		$	2,263		$	1,380
Accrued timberlands reforestation and roads	$	1,536		$	1,406		$	813		$	260

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the amounts shown in the Condensed Consolidated Statements of Cash Flows.

(in thousands)	September 30, 2020		September 30, 2019		March 31, 2021		March 31, 2020
Cash and cash equivalents	$	148,919	$	94,747	$	382,032	$	79,484
Restricted cash included in other long-term assets¹		1,085		1,043		669		2,336
Total cash, cash equivalents, and restricted cash	$	150,004	$	95,790	$	382,701	$	81,820

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Common Stock						Additional Paid-			Accumulated			Accumulated Other Comprehensive			Total Stockholders'			Common Stock				Additional Paid-			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
(in thousands, except per share amounts)	Shares			Amount			in Capital			Deficit			Loss			Equity			Shares		Amount		in Capital			Deficit			Loss			Equity
Balance, December 31, 2019		67,221		$	67,221		$	1,666,299		$	(359,330	)	$	(147,359	)	$	1,226,831
Net loss		—			—			—			(16,832	)		—			(16,832	)
Shares issued for stock compensation		131			131			(131	)		—			—			—
Equity-based compensation expense		—			—			1,885			—			—			1,885
Pension plans and OPEB obligations		—			—			—			—			15,578			15,578
Cash flow hedges		—			—			—			—			(38,525	)		(38,525	)
Common dividends, $0.40 per share		—			—			—			(26,941	)		—			(26,941	)
Repurchase of common stock		(401	)		(401	)		—			(11,954	)		—			(12,355	)
Other transactions, net		—			—			69			(96	)		—			(27	)
Balance, March 31, 2020		66,951		$	66,951		$	1,668,122		$	(415,153	)	$	(170,306	)	$	1,149,614
Balance, December 31, 2020																				66,876	$	66,876	$	1,674,576		$	(315,510	)	$	(120,989	)	$	1,304,953
Net income		—			—			—			2,638			—			2,638			—		—		—			131,106			—			131,106
Shares issued for stock compensation		9			9			(9	)		—			—			—			166		166		(166	)		—			—			—
Equity-based compensation expense		—			—			1,980			—			—			1,980			—		—		1,930			—			—			1,930
Pension plans and OPEB obligations		—			—			—			—			2,727			2,727			—		—		—			—			2,953			2,953
Cash flow hedges		—			—			—			—			(1,847	)		(1,847	)		—		—		—			—			64,107			64,107
Common dividends, $0.40 per share		—			—			—			(26,744	)		—			(26,744	)
Repurchase of common stock		(89	)		(89	)		—			(2,920	)		—			(3,009	)
Dividends on common stock, $0.41 per share																				—		—		—			(27,484	)		—			(27,484	)
Other transactions, net		—			—			91			26			—			117			—		—		81			(97	)		—			(16	)
Balance, June 30, 2020		66,871		$	66,871		$	1,670,184		$	(442,153	)	$	(169,426	)	$	1,125,476
Net income		—			—			—			81,007			—			81,007
Shares issued for stock compensation		1			1			(1	)		—			—			—
Equity-based compensation expense		—			—			2,063			—			—			2,063
Pension plans and OPEB obligations		—			—			—			—			2,948			2,948
Cash flow hedges		—			—			—			—			11,332			11,332
Common dividends, $0.40 per share		—			—			—			(26,749	)		—			(26,749	)
Other transactions, net		—			—			105			(105	)		—			—
Balance, September 30, 2020		66,872		$	66,872		$	1,672,351		$	(388,000	)	$	(155,146	)	$	1,196,077
Balance, March 31, 2021																				67,042	$	67,042	$	1,676,421		$	(211,985	)	$	(53,929	)	$	1,477,549

	Common Stock						Additional Paid-			Accumulated			Accumulated Other Comprehensive			Total Stockholders'			Common Stock						Additional Paid-			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
(in thousands, except per share amounts)	Shares			Amount			in Capital			Deficit			Loss			Equity			Shares			Amount			in Capital			Deficit			Loss			Equity
Balance, December 31, 2018		67,570		$	67,570		$	1,659,031		$	(282,391	)	$	(129,431	)	$	1,314,779
Net income		—			—			—			6,560			—			6,560
Balance, December 31, 2019																				67,221		$	67,221		$	1,666,299		$	(359,330	)	$	(147,359	)	$	1,226,831
Net loss																				—			—			—			(16,832	)		—			(16,832	)
Shares issued for stock compensation		297			297			(297	)		—			—			—			131			131			(131	)		—			—			—
Equity-based compensation expense		—			—			1,617			—			—			1,617			—			—			1,885			—			—			1,885
Pension plans and OPEB obligations		—			—			—			—			1,166			1,166			—			—			—			—			15,578			15,578
Cash flow hedges		—			—			—			—			(8,513	)		(8,513	)		—			—			—			—			(38,525	)		(38,525	)
Common dividends, $0.40 per share		—			—			—			(27,065	)		—			(27,065	)
Dividends on common stock, $0.40 per share																				—			—			—			(26,941	)		—			(26,941	)
Repurchase of common stock		(279	)		(279	)		—			(9,879	)		—			(10,158	)		(401	)		(401	)		—			(11,954	)		—			(12,355	)
Other transactions, net		—			—			99			(99	)		—			—			—			—			69			(96	)		—			(27	)
Balance, March 31, 2019		67,588		$	67,588		$	1,660,450		$	(312,874	)	$	(136,778	)	$	1,278,386
Net income		—			—			—			17,137			—			17,137
Shares issued for stock compensation		5			5			(5	)		—			—			—
Equity-based compensation expense		—			—			1,832			—			—			1,832
Pension plans and OPEB obligations		—			—			—			—			1,008			1,008
Cash flow hedges		—			—			—			—			(10,417	)		(10,417	)
Common dividends, $0.40 per share		—			—			—			(26,881	)		—			(26,881	)
Repurchase of common stock		(407	)		(407	)		—			(14,608	)		—			(15,015	)
Other transactions, net		—			—			104			(104	)		—			—
Balance, June 30, 2019		67,186		$	67,186		$	1,662,381		$	(337,330	)	$	(146,187	)	$	1,246,050
Net income		—			—			—			20,565			—			20,565
Shares issued for stock compensation		35			35			(35	)		—			—			—
Equity-based compensation expense		—			—			1,913			—			—			1,913
Pension plans and OPEB obligations		—			—			—			—			1,087			1,087
Cash flow hedges		—			—			—			—			(6,978	)		(6,978	)
Common dividends, $0.40 per share		—			—			—			(26,888	)		—			(26,888	)
Other transactions, net		—			—			74			(94	)		—			(20	)
Balance, September 30, 2019		67,221		$	67,221		$	1,664,333		$	(343,747	)	$	(152,078	)	$	1,235,729
Balance, March 31, 2020																				66,951		$	66,951		$	1,668,122		$	(415,153	)	$	(170,306	)	$	1,149,614

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~For purposes of this report, any reference to “PotlatchDeltic,” “Potlatch,” “the company,” “~~we~~,” “~~us~~” and “our” means~~ General

PotlatchDeltic Corporation and ~~all~~its subsidiaries (collectively referred to in this report as the company, us, we or our) is a leading timberland Real Estate Investment Trust (REIT) with ownership of ~~its wholly owned subsidiaries, except where the context indicates otherwise.~~

approximately~~We are primarily engaged in~~ 1.8 million acres of timberlands. Our timberland activities ~~associated with timberland management, including~~include the sale of timber, the ~~management of approximately 1.8 million acres~~purchase of timberlands and the ~~purchase and sale~~operation of ~~timberlands.~~ a rural timberland sales program. We are also engaged in the ~~manufacture~~manufacturing and sale of wood products and operate a residential and commercial real estate development business. Our timberlands, real estate development projects and all of our wood products facilities are located within the ~~development of real estate.~~continental United States.

The accompanying unaudited Condensed Consolidated Financial Statements provide an overall view of our results and financial condition and reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Except as otherwise disclosed in these Notes to Condensed Consolidated Financial Statements, such adjustments are of a normal, recurring nature. Intercompany transactions and accounts have been eliminated in consolidation. The Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements. Certain disclosures normally provided in accordance with accounting principles generally accepted in the United States (GAAP) have been omitted. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, as filed with the Securities and Exchange Commission on February ~~19, 2020.~~18, 2021. Results of operations for interim periods should not be regarded as necessarily indicative of the results that may be expected for the full year.

In March 2020 the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. Shortly thereafter the United States declared a national emergency concerning the outbreak, and all states and several municipalities subsequently declared public health emergencies. These declarations resulted in a wide-range of government directives impacting individuals and businesses beginning in late March 2020 to contain and combat the outbreak and spread of COVID-19.

The preparation of our Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America, which we refer to in this report as GAAP, requires usmanagement to make estimates and ~~assumptions that affect~~judgments affecting the amounts reported ~~amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of~~in the financial statements and the ~~reported amounts of revenues~~accompanying notes. The inputs into our judgments and expenses. The full extent to which COVID-19 will directly or indirectly impact our business, results of operations and financial condition, will depend on future developments that are highly uncertain, including new information that may emerge concerning COVID-19,estimates reflect the ~~additional actions taken to contain it or treat it, as well as the severity and duration~~consideration of the economic ~~impact~~implications of COVID-19 on ~~local, regional,~~our critical and ~~national customers, suppliers and markets.~~significant accounting estimates. The actual results that we experience may differ materially from our estimates.

At any given time, we are subject to claims and actions incidental to the operations of our business. Based on information currently available, we do not expect that any sums we may have to pay in connection with any legal proceeding would have a materially adverse effect on our consolidated financial position or net cash flow.

~~In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-15,~~ ~~Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract~~.ASU 2018-15 clarifies that implementation costs incurred by customers in cloud computing arrangements are deferred if they would be capitalized by customers in software licensing arrangements under the internal-use software guidance. Additionally, ASU 2018-15 clarifies that all capitalized costs must be presented in the same financial statement line item as the cloud computing arrangement. The standard was effective, on either a prospective or retrospective basis, for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The prospective adoption of this standard on January 1, 2020 did not have a material impact our ~~Condensed Consolidated Financial Statements~~.

~~In August 2018, the FASB issued ASU 2018-14,~~ ~~Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans~~, which modifies the disclosure requirements for defined benefit pension plans and other postretirement plans. ASU 2018-14 was effective for fiscal years ending after December 15, 2020, including interim periods within those years and requires retrospective adoption; early adoption is permitted. The adoption of this standard on January 1, 2020 did not have a material impact on our defined benefit pension plan and other postretirement plan disclosures.

~~In August 2018, the FASB issued ASU 2018-13,~~ ~~Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement~~, which modifies certain disclosure requirements related to fair value measurements including (i) requiring disclosures on changes in unrealized gains and losses in other comprehensive income for recurring Level 3 fair value measurements; and (ii) a requirement to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 was effective for fiscal years beginning after December 15, 2019, including interim periods within those years. ~~The adoption of this standard~~ ~~on January 1, 2020 did not have a material impact on our fair value measurement disclosures.~~

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients and exceptions to USU.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting impacts related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The guidance in ASU 2020-04, which companies can apply immediately, is optional and may be elected over time as reference rate reform activities occur. ~~Companies can apply the ASU immediately.~~ Unlike other topics, the provisions of this update are only available until December 31, 2022, when the reference rate replacement activity iswas expected to be completed. A number of our debt instruments and associated interest rate derivative agreements have an interest rate tied to LIBOR. We are ~~currently evaluating~~monitoring the developments regarding the alternative rates, will work with our lenders and counter-parties to identify a suitable replacement rate and may amend certain debt and interest rate derivative agreements to accommodate those rates if the contract does not already specify a replacement rate. While the notional value of our agreements indexed to LIBOR is material, we are not yet able to reasonably estimate any expected impact ~~this guidance may have on~~to our Condensed Consolidated Financial Statements and related disclosures.

~~The following table represents our revenues by major product. For additional information regarding our segments, see~~ ~~Note 5: Segment Information~~.

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)
2020

2019

2020

2019

Timberlands

Northern region

Sawlogs
$
72,815

$
53,152

$
144,860

$
116,118

Pulpwood

1,243

1,489

3,914

4,698

Stumpage

—

3

316

109

Other

855

1,085

1,450

1,649

Total Northern revenues

74,913

55,729

150,540

122,574

Southern region

Sawlogs

25,462

24,053

70,606

63,469

Pulpwood

13,413

15,754

35,486

38,847

Stumpage

770

767

2,416

1,233

Other

2,427

2,506

7,707

7,725

Total Southern revenues

42,072

43,080

116,215

111,274

Total Timberlands revenues

116,985

98,809

266,755

233,848

Wood Products

Lumber

185,558

108,364

400,290

301,923

Residuals and Panels

32,733

35,279

89,217

112,056

Total Wood Products revenues

218,291

143,643

489,507

413,979

Real Estate

Rural real estate

13,284

9,689

30,455

44,223

Development real estate

2,157

7,674

6,121

12,102

Other

2,710

1,500

5,649

5,134

Total Real Estate revenues

18,151

18,863

42,225

61,459

Total segment revenues

353,427

261,315

798,487

709,286

Intersegment Timberlands revenues¹

(40,381
)

(35,013
)

(95,006
)

(85,687
)
Total consolidated revenues
$
313,046

$
226,302

$
703,481

$
623,599

In general, a customer receivable is recorded as we deliver wood products, logs and residuals. We generally receive payment shortly after products have been received by our customers. At September 30, 2020 and December 31, 2019, we recorded deferred revenue of $10.5 million and $5.5 million, respectively, for contract liabilities. These contract liabilities predominately relate to hunting and other access rights on our timberlands and member related activities at a country club. These contract liabilities are recognized over the term of the contracts, which is typically twelve months or less, except membership initiation fees at the country club which typically are recognized up to 10 years. Other contract asset and liability balances, such as prepayments, are immaterial. For real estate sales, we typically receive the entire consideration in cash at closing.

Our ~~businesses~~operations are organized into 3 reportable ~~operating~~ segments: Timberlands, Wood Products and Real Estate. ~~The~~Management activities in the Timberlands segment ~~includes~~include planting and harvesting trees and building and maintaining roads. The Timberlands segment also generates revenues from non-timber resources such as hunting leases, recreation permits and leases, mineral rights contracts, oil and gas royalties and carbon sequestration. The Wood Products segment manufactures and markets lumber and plywood. ~~The~~Activities in the Real Estate segment ~~includes the sale of land holdings deemed non-strategic or identified as having higher and better use alternatives,~~include our rural timberland-holdings sales program, master planned community development and a country club.

OurOur Timberlands segment supplies our Wood Products segment with a portion of its wood fiber needs. These intersegment revenues are based on prevailing market prices and typically represent a sizeable portion of the Timberlands segment’s total revenues. Our other segments generally do not generate intersegment revenues. These i~~ntercompany~~intercompany transactions are eliminated in consolidation.

The reportable segments follow the same accounting policies used for our Condensed Consolidated Financial Statements, with the exception of the valuation of inventories, which are reported using the average cost method for purposes of reporting segment results.

	Three Months Ended March 31,
(in thousands)	2021			2020
Timberlands
Northern region
Sawlogs	$	76,181		$	41,407
Pulpwood		499			1,435
Stumpage		—			316
Other		300			303
Total Northern revenues		76,980			43,461

Southern region
Sawlogs		22,416			23,939
Pulpwood		9,161			11,201
Stumpage		764			829
Other		2,595			2,995
Total Southern revenues		34,936			38,964

Total Timberlands revenues		111,916			82,425

Wood Products
Lumber		229,682			111,939
Residuals and Panels		39,614			33,061
Total Wood Products revenues		269,296			145,000

Real Estate
Rural real estate		10,025			7,292
Development real estate		8,053			2,292
Other		2,235			1,385
Total Real Estate revenues		20,313			10,969

Total segment revenues		401,525			238,394
Intersegment Timberlands revenues¹		(47,332	)		(29,514	)
Total consolidated revenues	$	354,193		$	208,880

Management primarily evaluates the performance of its segments and allocates resources to them based upon Adjusted EBITDDA. EBITDDA is calculated as net income (loss) before interest expense, 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. Management uses Adjusted EBITDDA to compare the operating performance of our segments on a consistent basis and to evaluate the performance and effectiveness of each segment’s operational strategies. Our calculation of Adjusted EBITDDA may not be comparable to that reported by other companies.

The following table summarizes information for each of the company’s reportable segments and includes a reconciliation of Total Adjusted EBITDDA to income (loss) before income taxes. Corporate information is included to reconcile segment data to the Condensed Consolidated Financial Statements.

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(in thousands)	2020			2019			2020			2019			2021			2020
Revenues:
Timberlands	$	116,985		$	98,809		$	266,755		$	233,848
Wood Products		218,291			143,643			489,507			413,979
Real Estate		18,151			18,863			42,225			61,459
		353,427			261,315			798,487			709,286
Intersegment Timberlands revenues¹		(40,381	)		(35,013	)		(95,006	)		(85,687	)
Consolidated revenues	$	313,046		$	226,302		$	703,481		$	623,599

Adjusted EBITDDA:
Timberlands	$	59,649		$	42,996		$	120,290		$	95,977		$	67,858		$	34,982
Wood Products		81,644			5,903			105,780			11,058			125,555			13,229
Real Estate		13,466			14,678			30,062			48,697			16,593			7,340
Corporate		(15,361	)		(6,930	)		(34,567	)		(26,930	)		(10,710	)		(8,672	)
Eliminations and adjustments		(4,012	)		(1,635	)		(3,235	)		3,542			(4,310	)		692
Total Adjusted EBITDDA		135,386			55,012			218,330			132,344			194,986			47,571
Interest expense, net²		(8,557	)		(8,475	)		(20,594	)		(21,821	)
Interest expense, net¹														(3,574	)		(3,698	)
Depreciation, depletion and amortization		(20,187	)		(18,786	)		(56,590	)		(51,310	)		(17,996	)		(18,638	)
Basis of real estate sold		(5,249	)		(5,228	)		(14,440	)		(14,211	)		(8,823	)		(6,498	)
Loss on extinguishment of debt		—			—			—			(5,512	)
Pension settlement charge		—			—			(42,988	)		—			—			(42,988	)
Non-operating pension and other postretirement employee benefits		(3,557	)		(935	)		(10,670	)		(2,804	)		(3,414	)		(3,635	)
Gain on sale of facility		—			—			—			9,176
Gain on disposal of fixed assets		11			198			196			260
Income before income taxes	$	97,847		$	21,786		$	73,244		$	46,122
(Loss) gain on disposal of fixed assets														(34	)		192
Income (loss) before income taxes													$	161,145		$	(27,694	)

Depreciation, depletion and amortization:
Timberlands	$	13,821		$	12,627		$	37,978		$	33,361		$	11,417		$	12,591
Wood Products		5,983			5,763			17,411			16,666			6,203			5,630
Real Estate		149			152			465			508			155			160
Corporate		234			244			736			775			221			257
		20,187			18,786			56,590			51,310			17,996			18,638
Bond discounts and deferred loan fees²		407			392			1,219			1,279
Bond discounts and deferred loan fees¹														403			406
Total depreciation, depletion and amortization	$	20,594		$	19,178		$	57,809		$	52,589		$	18,399		$	19,044

Basis of real estate sold:
Real Estate	$	5,257		$	5,283		$	14,973		$	14,326		$	8,829		$	6,504
Eliminations and adjustments		(8	)		(55	)		(533	)		(115	)		(6	)		(6	)
Total basis of real estate sold	$	5,249		$	5,228		$	14,440		$	14,211		$	8,823		$	6,498

The following table reconciles the number of shares used in calculating basic and diluted earnings per share:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(in thousands, except per share amounts)	2020		2019		2020		2019
Net income	$	81,007	$	20,565	$	66,813	$	44,262

(in thousands)									2021		2020
Basic weighted-average shares outstanding		67,149		67,446		67,263		67,781		67,207		67,478
Incremental shares due to:
Performance shares		320		65		238		50		326		—
Restricted stock units		59		34		34		17		74		—
Diluted weighted-average shares outstanding		67,528		67,545		67,535		67,848		67,607		67,478

Basic net income per share	$	1.21	$	0.30	$	0.99	$	0.65
Diluted net income per share	$	1.20	$	0.30	$	0.99	$	0.65

For stock-based awards, the dilutive effect is calculated using the treasury stock method. Under this method, the dilutive effect is computed as if the awards were exercised at the beginning of the period (or at time of issuance, if later) and assumes the related proceeds were used to repurchase common stock at the average market price during the period. Related proceeds include future compensation cost associated with the stock award.

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, there were 0approximately 63,000 and ~~approximately 47,000~~317,000 stock-based awards, respectively, that were excluded from the calculation of diluted earnings per share because they were anti-dilutive. For the three and nine months ended September 30, 2019, there were approximately 25,000 and 134,000 stock-based awards, respectively, that were excluded from the calculation of diluted earnings per share because they were anti-dilutive. Anti-dilutive stock-based awards could be dilutive in future periods.

On August 30, 2018, our board of directors authorized management to repurchase up to $100.0 million of common stock with no time limit set for the repurchase (the ~~2018~~ Repurchase Program). ~~In September 2020 we entered into~~Shares under the Repurchase Program may be repurchased in open market transactions, including pursuant to a trading plan adopted in accordance with ~~the guidelines in~~ Rule 10b5-1 of the Securities Exchange Act of 1934 ~~as amended, with an independent broker for~~(the Trading Plan). The timing, manner, price and amount of repurchases will be determined according to, and subject to, the ~~purpose of repurchasing a limited number~~terms of the ~~Company’s common shares under~~Trading Plan, and, subject to the ~~2018 Repurchase Program. This trading plan became effective on October 29, 2020 and expires upon expenditure~~terms of the ~~principal specified in~~Trading Plan, the ~~plan, an early termination event (as specified in the plan),~~Repurchase Program may be suspended, terminated or ~~the close of business on October 26, 2022, whichever occurs first.~~modified at any time for any reason.

~~During the nine months ended September 30, 2020 we repurchased 489,850 shares of common stock (at a total consideration of $15.4 million), and we repurchased 0~~We did 0t repurchase any shares during the three months ended ~~September 30, 2020, under the 2018 Repurchase Program.~~March 31, 2021. During the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020, we repurchased ~~686,240~~400,917 shares of common stock ~~(at~~at a total consideration of ~~$25.2 million), and we repurchased 0 shares during the three months ended September 30, 2019~~$12.4 million under the ~~2018 Repurchase Program. All common stock purchases under the 2018~~ Repurchase Program, all of which were made in open-market transactions. At ~~September 30, 2020,~~March 31, 2021, we had remaining authorization of $59.5 million for future stock repurchases under the ~~2018~~ Repurchase Program.

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. ~~There were 0 unsettled repurchases as of September 30, 2020.~~ We retire shares upon repurchase. Any excess repurchase price over par is recorded in accumulated deficit.

(in thousands)	September 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
Logs	$	24,592		$	33,313		$	28,396		$	31,210
Lumber, panels and veneer		31,730			31,639			36,543			34,136
Materials and supplies		14,252			12,831			15,973			14,939
Total inventories		70,574			77,783			80,912			80,285
Less: LIFO reserve		(12,002	)		(12,002	)		(18,249	)		(18,249	)
Total inventories, net	$	58,572		$	65,781		$	62,663		$	62,036

(in thousands)	September 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
Property, plant and equipment	$	517,702		$	498,113		$	520,524		$	517,711
Less: accumulated depreciation		(228,397	)		(211,730	)		(229,041	)		(229,167	)
Total property, plant and equipment, net	$	289,305		$	286,383		$	291,483		$	288,544

(in thousands)	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Timber and timberlands	$	1,524,562	$	1,554,882	$	1,505,150	$	1,516,788
Logging roads		83,464		83,781		82,443		83,273
Total timber and timberlands, net	$	1,608,026	$	1,638,663	$	1,587,593	$	1,600,061

(in thousands)	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Accrued payroll and benefits	$	28,055	$	12,920	$	20,972	$	29,675
Accounts payable		24,614		12,734		15,495		9,724
Deferred revenue		10,517		5,514
Accrued taxes		23,697		6,638
Accrued interest		5,470		6,946		5,024		6,485
Deferred revenue¹						7,233		8,789
Operating lease liabilities		4,538		4,998		3,848		4,304
Income taxes payable						42,286		14,755
Other accrued taxes						7,522		6,025
Other current liabilities		11,534		10,827		12,469		13,522
Total accounts payable and accrued liabilities	$	108,425	$	60,577	$	114,849	$	93,279

At ~~September 30, 2020,~~March 31, 2021, our total outstanding long-term debt included $693.5 million of term loans under our Second Amended and Restated Term Loan Agreement (Amended Term Loan Agreement) with our primary lender, of which ~~$46.0~~$40.0 million matures in December ~~2020.~~2021. Certain borrowings under the Amended Term Loan Agreement are at variable rates of one or three-month LIBOR plus a spread between 1.85% and 2.15%. We have entered into interest rate swaps for these variable rate term loans to fix the interest rate. See Note: 96 Derivative Instruments for additional information.

At ~~September 30, 2020,~~March 31, 2021, there were no borrowings under our $380.0 million revolving line of credit and approximately $1.0 million of our revolving line of credit was utilized for outstanding letters of credit. As provided in the revolving line of credit agreement, borrowings may be increased by up to an additional $420.0 million. The revolving line of credit agreement also includes a sublimit of $75.0 million for the issuance of standby letters of credit and a sublimit of $25.0 million for

swing line loans. Usage under either or both subfacilities reduces availability under the revolving line of credit. We may utilize borrowings under the credit facility to, among other things, refinance existing indebtedness and provide funding for working capital requirements, capital projects, acquisitions and other general corporate expenditures.

We were in compliance with all debt and credit agreement covenants at ~~September 30, 2020.~~March 31, 2021.

From time to time, we enter into derivative financial instruments to manage certain cash flow and fair value risks. ~~Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset or liability to a particular risk are considered fair value hedges.~~

Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges.

At As of ~~September 30, 2020,~~March 31, 2021, we have 6 interest rate swaps associated with ~~$397.5~~$403.5 million of term loan debt. These swaps are cash flow hedges that convert variable rates ranging from three-month and one-month LIBOR plus 1.85% to 2.15%, to fixed rates ranging from ~~3.17%~~3.04% to 4.82%. 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 hedges. At March 31, 2021, the amount of net losses expected to be reclassified into earnings in the next 12 months is approximately $8.7 million. However, this expected amount to be reclassified into earnings is subject to volatility as the ultimate amount recognized in earnings is based on the LIBOR rate at the time of net swap cash payments.

~~In March 2020, we entered into $653.5~~We also hold $607.5 million of forward starting interest rate ~~swaps.~~ swaps designated as cash flow hedges. These forward starting interest rate swaps effectively hedge the variability in future benchmark interest payments attributable to changes in interest rates on $607.5 million of future debt ~~refinancing~~refinances through January 2029 by converting the benchmark interest rates to fixed ~~rates on our anticipated future refinancing of $653.5 million of term loan debt maturing December 2020 through January 2029. The fixed~~ interest rate components for these forward swaps range from 0.85% to 1.17%. The variable rate component on these forward interest rate swaps is one-month LIBOR. Accordingly, the forward rate swaps were designated as cash flow hedges.rates. In addition, ~~these cash flow~~the cashflow hedges for future debt refinances require settlement on the stated maturity ~~date for each respective term loan currently outstanding.~~ date. At March 31, 2021, we have recorded derivative assets of $64.6 million associated with these forward starting interest rate swaps.

The following table presents the gross fair values of derivative instruments on our Condensed Consolidated Balance Sheets:

			Asset Derivatives					Liability Derivatives						Asset Derivatives					Liability Derivatives
(in thousands)		Location	September 30, 2020		December 31, 2019		Location	September 30, 2020		December 31, 2019			Location	March 31, 2021		December 31, 2020		Location	March 31, 2021		December 31, 2020
Derivatives designated in cash flow hedging relationships:	Derivatives designated in cash flow hedging relationships:											Derivatives designated in cash flow hedging relationships:
Interest rate contracts		Other assets, current¹	$	—	$	—	Accounts payable and accrued liabilities¹	$	1,356	$	—		Other assets, current¹	$	3,227	$	63	Accounts payable and accrued liabilities¹	$	737	$	1,010
Interest rate contracts		Other assets, non-current		3,282		1,601	Other long-term obligations		52,805		22,398		Other assets, non-current		64,543		18,466	Other long-term obligations		26,475		45,100
			$	3,282	$	1,601		$	54,161	$	22,398			$	67,770	$	18,529		$	27,212	$	46,110

The following table details the effect of derivatives on our Condensed Consolidated Statements of Operations:

			Three Months Ended September 30,					Nine Months Ended September 30,								Three Months Ended March 31,
(in thousands)		Location	2020		2019			2020			2019				Location	2021			2020
Derivatives designated in cash flow hedging relationships:	Derivatives designated in cash flow hedging relationships:													Derivatives designated in cash flow hedging relationships:
Interest rate contracts
Income (loss) recognized in other comprehensive income (loss), net of tax			$	8,920	$	(7,384	)	$	(34,112	)	$	(26,576	)			$	61,875		$	(39,363	)
Reclassifications from AOCL to earnings¹		Interest expense	$	2,412	$	406		$	5,072		$	668
Amounts reclassified from accumulated other comprehensive loss, net of tax¹															Interest expense	$	(2,232	)	$	(838	)

Interest expense, net			$	8,557	$	8,475		$	20,594		$	21,821				$	3,574		$	3,698

At September 30, 2020, approximately $8.9 million of net losses are expected to be reclassified into earnings over the next 12 months. However, this expected amount to be reclassified into earnings is subject to volatility as the ultimate amount recognized in earnings is based on the market LIBOR rate at the time of net swap cash payments.

The following table presents the estimated fair values of our financial instruments:

	September 30, 2020						December 31, 2019						March 31, 2021						December 31, 2020
(in thousands)	Carrying Amount			Fair Value			Carrying Amount			Fair Value			Carrying Amount			Fair Value			Carrying Amount			Fair Value
Derivative assets related to interest rate swaps (Level 2)	$	3,282		$	3,282		$	1,601		$	1,601		$	67,770		$	67,770		$	18,529		$	18,529
Derivative liabilities related to interest rate swaps (Level 2)	$	(54,161	)	$	(54,161	)	$	(22,398	)	$	(22,398	)	$	(27,212	)	$	(27,212	)	$	(46,110	)	$	(46,110	)

Long-term debt, including current portion (Level 2):
Term loans	$	(690,307	)	$	(717,946	)	$	(689,820	)	$	(703,437	)	$	(690,632	)	$	(712,473	)	$	(690,469	)	$	(716,631	)
Revenue bonds		(65,735	)		(66,885	)		(65,735	)		(68,200	)		(65,735	)		(67,957	)		(65,735	)		(67,885	)
Medium-term notes		(3,000	)		(3,558	)		(3,000	)		(3,480	)		(3,000	)		(3,143	)		(3,000	)		(3,545	)
Total long-term debt¹	$	(759,042	)	$	(788,389	)	$	(758,555	)	$	(775,117	)	$	(759,367	)	$	(783,573	)	$	(759,204	)	$	(788,061	)

Company owned life insurance asset (COLI) (Level 3)	$	3,028		$	3,028		$	4,157		$	4,157		$	3,540		$	3,540		$	3,328		$	3,328

The fair value of interest rate swaps are determined using a discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity and uses observable market-based inputs, including interest rate forward curves.

The fair value of our long-term debt is estimated based upon quoted market prices for similar debt issues or estimated based on average market prices for comparable debt when there is no quoted market price.

The contract value of our company owned life insurance is based on the amount at which it could be redeemed and, accordingly, approximates fair value.

We believe that our other financial instruments, including cash and cash equivalents, receivables and payables have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to the short-term nature of these instruments.

At ~~September 30, 2020,~~March 31, 2021, approximately ~~1.2~~1.0 million shares are available for future use under our long-term incentive ~~plan.~~plans.

Share-based compensation activity during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 included the following:

(Shares in thousands)	Granted		Vested		Forfeited		Granted		Vested		Forfeited
Performance Share Awards (PSAs)		125,001		—		4,286		88,128		—		1,450
Restricted Stock Units (RSUs)		68,263		28,671		1,429		32,870		—		1,484

Approximately 0.1 million shares of common stock were issued during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 as a result of PSA and RSU vesting ~~during 2019 and~~in 2020.

The following table details equity-based compensation expense and the related income tax benefit:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(in thousands)	2020		2019		2020		2019		2021		2020
Equity-based compensation expense:
Performance share awards	$	1,315	$	1,186	$	3,716	$	3,417	$	1,224	$	1,158
Restricted stock units		729		705		2,155		1,892		665		708
Deferred compensation stock equivalent units expense		19		22		57		53		41		19
Total equity-based compensation expense	$	2,063	$	1,913	$	5,928	$	5,362	$	1,930	$	1,885

Total tax benefit recognized for equity-based expense	$	97	$	79	$	273	$	234	$	89	$	83

The weighted average grant date fair value of PSAs granted in 2021 was $69.72 per share. PSAs granted under the stock incentive plans have a three-year performance period and shares are issued at the end of the period if the performance measures are met. The performance measures are based on the percentile ranking of our total shareholder return relative to the total shareholder return performance of both a selected peer group of companies and a larger group of indexed companies over the ~~three-year~~ ~~performance period. The~~ number of shares actually issued, as a percentage of the amount subject to the PSA, could range from 0% to 200%. PSAs granted under ~~our~~the stock incentive plans do not have voting rights unless and until shares are issued upon settlement. If shares are issued at the end of the~~three-year~~ performance measurement period, the recipients will receive dividend equivalents in the form of additional shares at the time of payment equal to the dividends that would have been paid on the shares earned had the recipients owned the shares during the three-year period. Therefore, the shares are not considered participating securities. ~~The fair value of performance shares granted in 2020 was $45.04 per share.~~

The following table presents the key inputs used in the Monte Carlo simulation to calculate the fair value of the performance share awards granted in ~~2020:~~2021:

Stock price as of valuation date	$	42.16		$	53.53
Risk-free rate		1.42	%		0.18	%
Expected volatility		25.74	%		45.56	%
Expected dividend yield (assuming full reinvestment)		—
Expected dividend yield¹					—
Expected term (years)		3.00			3.00

~~RSU awards accrue dividend equivalents based on dividends paid~~The weighted average fair value of all RSUs granted during the RSU vesting period. The dividend equivalents will be converted into additional RSUs that will vest in the same manner as the underlying RSUs to which they relate. Therefore, the shares are not considered participating securities. The terms of the awards state that the RSUs will vest in a given time period of one to three ~~years and the terms of certain awards follow a vesting schedule within the given time period.~~months ended March 31, 2021 was $53.51 per share. The fair value of RSUs granted equaled our common share price on the date of grant factoring in any required post-vesting holding periods. The ~~weighted average fair value~~terms of ~~all~~the awards state that the RSUs will vest in a given time period of one to three years. The vesting provisions for RSUs granted ~~during the nine months ended September 30, 2020 was $38.77 per share.~~in 2021 were consistent with prior year grants.

As a ~~real estate investment trust (REIT),~~REIT, we generally are not subject to federal and state corporate income taxes on income ~~of the REIT~~from investments in real estate, including our timberlands, that we distribute to our shareholders. We conduct certain activities through our PotlatchDeltic taxable REIT subsidiaries (TRS), which are subject to corporate level federal and state income taxes. These ~~taxable~~ activities are principally comprised of our wood products manufacturing operations and certain real estate investments. Therefore, income tax expense or benefit is primarily due to income or loss of the TRS, as well as permanent book versus tax differences. ~~During the nine months ended September 30, 2020, we recorded income tax expense~~

We lease certain equipment, office space and land. Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

The following table presents supplemental balance sheet information related to lease assets and liabilities:

(in thousands)	Classification	September 30, 2020		December 31, 2019		Classification	March 31, 2021		December 31, 2020
Assets
Operating lease assets	Other long-term assets	$	12,159	$	15,772	Other long-term assets	$	9,922	$	11,081
Finance lease assets¹	Property, plant and equipment, net		7,086		2,360	Property, plant and equipment, net		7,419		7,206
Total lease assets		$	19,245	$	18,132		$	17,341	$	18,287

Liabilities
Current:
Operating lease liabilities	Accounts payable and accrued liabilities	$	4,538	$	4,998	Accounts payable and accrued liabilities	$	3,848	$	4,304
Finance lease liabilities	Accounts payable and accrued liabilities		2,046		644	Accounts payable and accrued liabilities		2,363		2,202
Noncurrent:
Operating lease liabilities	Other long-term obligations		7,651		10,775	Other long-term obligations		6,101		6,835
Finance lease liabilities	Other long-term obligations		4,963		1,703	Other long-term obligations		4,977		4,914
Total lease liabilities		$	19,198	$	18,120		$	17,289	$	18,255

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(in thousands)	2020		2019		2020		2019		2021		2020
Operating lease costs¹	$	1,413	$	1,576	$	4,252	$	4,497	$	1,328	$	1,425
Finance lease costs:
Amortization of leased assets		432	80			905	126			589	213
Interest on lease liabilities		44	12			103	22			51	27
Net lease costs	$	1,889	$	1,668	$	5,260	$	4,645	$	1,968	$	1,665

The following ~~tables~~table presents supplemental cash flow information related to leases:

		Nine Months Ended September 30,					Three Months Ended March 31,
(in thousands)		2020		2019			2021		2020
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	Operating cash flows for operating leases	$	4,244	$	4,503	Operating cash flows for operating leases	$	1,368	$	1,506
Operating cash flows for finance leases	Operating cash flows for finance leases	$	103	$	22	Operating cash flows for finance leases	$	51	$	27
Financing cash flows for finance leases	Financing cash flows for finance leases	$	968	$	121	Financing cash flows for finance leases	$	577	$	215
Leased assets exchanged for new lease liabilities:	Leased assets exchanged for new lease liabilities:					Leased assets exchanged for new lease liabilities:
Operating leases	Operating leases	$	255	$	6,317	Operating leases	$	124	$	38
Finance leases	Finance leases	$	5,630	$	2,067	Finance leases	$	801	$	1,517

The following table details the components of net periodic cost (benefit) of our pension plans and other postretirement employee benefits (OPEB):

During the three months ended March 31, 2021 and 2020, funding of pension and other postretirement employee benefit plans was $1.4 million and $1.5 million, respectively.

In February 2020, we purchased a group annuity contract from an insurance company to transfer $101.1 million of our outstanding pension benefit obligation related to our qualified pension plans to the insurance company. This transaction was funded with plan assets. As a result of the transaction, the insurance company assumed responsibility for annuity administration and benefit payments to select retirees, with 0 change to their monthly retirement benefit payment amounts. The settlement triggered a remeasurement of plan assets and liabilities resulting in a reduction in the funded status of our qualified pension plans of approximately $26.2 million during the first quarter of 2020. In connection with this transaction we recorded a non-cash pretax settlement charge of $43.0 million during the ~~three months ended March 31,~~first quarter of 2020 in non-operating expense, net, as a result of accelerating the recognition of actuarial losses included in ~~accumulated other comprehensive loss~~Accumulated Other Comprehensive Loss that would have been recognized in future periods.

The settlement triggered a remeasurement of plan assets and liabilities. We updated the discount rate used to measure our projected benefit obligation for the qualified pension plans as of February 29, 2020 and to calculate the related net periodic benefit cost for the remainder of 2020 to 2.95% from 3.40%. All other pension assumptions remain unchanged. The net effect of the remeasurement was a reduction in the funded status of our qualified pension plans of approximately $26.2 million, primarily driven by the decrease in the discount rate.

~~The following tables detail the components of net periodic cost (benefit) of our pension plans and other postretirement employee benefits (OPEB):~~

Three Months Ended September 30,

Pension

OPEB

(in thousands)

2020

2019

2020

2019

Service cost

$
2,233

$
1,942

$
127

$
93

Interest cost

3,066

4,618

376

397

Expected return on plan assets

(3,869
)

(5,548
)

—

—

Amortization of prior service cost (credit)

29

52

(319
)

(2,211
)
Amortization of actuarial loss

3,856

3,374

418

253

Total net periodic cost (benefit)

$
5,315

$
4,438

$
602

$
(1,468
)

Nine Months Ended September 30,

Pension

OPEB

(in thousands)

2020

2019

2020

2019

Service cost

$
6,699

$
5,825

$
381

$
278

Interest cost

9,198

13,849

1,127

1,191

Expected return on plan assets

(11,606
)

(16,643
)

—

—

Amortization of prior service cost (credit)

85

158

(957
)

(6,633
)
Amortization of actuarial loss

11,569

10,122

1,254

760

Net periodic cost (benefit) before pension settlement charge

15,945

13,311

1,805

(4,404
)
Pension settlement charge

42,988

—

—

—

Net periodic cost (benefit)

$
58,933

$
13,311

$
1,805

$
(4,404
)

~~During the nine months ended September 30, 2020 and 2019, funding of pension and other postretirement employee benefit plans was $8.5 million and $4.6 million, respectively.~~

The following table details changes in amounts included in our accumulated other comprehensive loss (AOCL) by component on our Condensed Consolidated Balance Sheets, net of tax:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(in thousands)	2020			2019			2020			2019			2021			2020
Pension Plans
Balance at beginning of period	$	98,870		$	124,181		$	117,028		$	129,253		$	79,025		$	117,028
Net loss arising during the period		—			—			19,402			—
Amounts arising during the period														—			19,402
Effect of pension settlement		—			—			(31,811	)		—			—			(31,811	)
Amounts reclassified from AOCL to earnings		(2,874	)		(2,535	)		(8,623	)		(7,607	)		(2,770	)		(3,095	)
Balance at end of period	$	95,996		$	121,646		$	95,996		$	121,646		$	76,255		$	101,524
Other Postretirement Benefit Plans
Balance at beginning of period	$	10,184		$	1,516		$	10,331		$	(1,382	)	$	14,783		$	10,331
Amounts reclassified from AOCL to earnings		(74	)		1,448			(221	)		4,346			(183	)		(74	)
Balance at end of period	$	10,110		$	2,964		$	10,110		$	2,964		$	14,600		$	10,257
Cash Flow Hedges
Balance at beginning of period	$	60,372		$	20,490		$	20,000		$	1,560		$	27,181		$	20,000
Net (income) loss arising during the period		(8,920	)		7,384			34,112			26,576
Amounts arising during the period														(61,875	)		39,363
Amounts reclassified from AOCL to earnings		(2,412	)		(406	)		(5,072	)		(668	)		(2,232	)		(838	)
Balance at end of period	$	49,040		$	27,468		$	49,040		$	27,468		$	(36,926	)	$	58,525
Accumulated other comprehensive loss, end of period	$	155,146		$	152,078		$	155,146		$	152,078		$	53,929		$	170,306

See Note ~~14:~~11: Pension and Other Postretirement Employee Benefits and Note 9:6: Derivative Instruments for additional information.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, expected impacts of COVID-19 on our ~~business and~~business; expected effectiveness of our ~~ability to continue operations during the pandemic, fair value of~~ hedging instruments and ~~swaps,~~swaps; expected return on pension ~~assets,~~assets; required contributions to pension plans; recognition of compensation costs relating to our performance share awards (PSAs) and restricted stock units (RSUs)~~, required contributions to pension plans,~~; expected amortization of unrecognized compensation cost of PSAs and ~~RSUs,~~RSUs; amount of net losses on cash flow hedges expected to be reclassified into earnings in the next 12 ~~months,~~months; expected tax payments and ~~deferrals,~~deferrals; anticipated share repurchases and dividend ~~payments,~~payments; anticipated cash balances, cash flows from operations and expected ~~liquidity,~~liquidity; potential uses of and estimated payments under our credit ~~facility,~~facility; expected debt refinancing; expectations regarding the U.S. housing market, home repair and remodeling activity, the lumber and log markets, ~~expected~~lumber shipment volumes, sawlog demand, percent of log sales by log supply agreements; timber harvest volumes, ~~expected lumber shipments, expected~~sawlog mix and pricing, rural real estate and residential and commercial real estate development sales, ~~including the closing of the sale of approximately 72,000 rural acres in the fourth quarter of 2020,~~and the average price per acre and developed ~~lot,~~lot; sufficiency of cash to meet operating ~~requirements, 2020~~requirements; expected 2021 capital ~~expenditures~~expenditures; and similar matters. ~~Words~~Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often involve use of words such as ~~“anticipate,” “expect,” “will,” “intend,” “plan,” “target,” “project,” “believe,” “seek,” “schedule,” “estimate,” “could,” “can,” “may” and~~expects, may, could, should, will, believes, anticipates, estimates, projects, intends, plans, targets or approximately, or similar ~~expressions are intended to identify such forward-looking statements.~~words or terminology. These forward-looking statements reflect our current views regarding future events based on estimates and assumptions and are therefore subject to known and unknown risks and uncertainties and are not guarantees of future performance. Our actual results of operations could differ materially from our historical results or those expressed or implied by forward-looking statements contained in this report. Important factors that could cause or contribute to such differences include, but are not limited to, the following:

For a discussion of some of the factors that may affect our business, results and prospects and a nonexclusive listing of forward-looking statements, refer to Cautionary Statement Regarding Forward-Looking Information on page 1 and Risk Factors in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2019 and~~ ~~Risk Factors~~ ~~in Part II, Item 1A in this Form 10-Q.~~2020.

Forward-looking statements contained in this report present our views only as of the date of this report. Except as required under applicable law, we do not intend to issue updates concerning any future revisions of our views to reflect events or circumstances occurring after the date of this report.

We are a leading timberland ~~real estate investment trust (REIT)~~REIT with ~~operations in seven states where we own~~ownership of approximately 1.8 million acres of ~~timberland,~~timberland. We also own six sawmills and an industrial grade plywood mill, a residential and commercial real estate development ~~projects.~~business and a rural timberland sales program.

Our ~~business is~~operations are organized into three business segments: Timberlands, Wood Products and Real Estate. The Timberlands segment includes planting and harvesting trees and building and maintaining roads. The Timberlands segment also generates revenues from non-timber resources such as hunting leases, recreation permits and leases, mineral rights contracts, oil and gas royalties and carbon sequestration. The Wood Products segment manufactures and markets lumber and plywood. The Real Estate segment includes the sale of land holdings deemed non-strategic or identified as having higher and better use alternatives, master planned community development and a country club.

Our Timberlands segment supplies our Wood Products segment with a portion of its wood fiber needs. These intersegment revenues are based on prevailing market prices and typically represent a sizeable portion of the Timberlands segment’s total revenues. Our other segments generally do not generate intersegment revenues. In the discussion of our consolidated results of operations, our revenues and expenses are reported after elimination of intersegment revenues and expenses. In the ~~business segment discussions,~~Business Segment Results discussion below, each segment’s revenues and expenses, as applicable, are presented before elimination of intersegment revenues and expenses.

The operating results of our Timberlands, Wood Products and Real Estate business segments have been and will continue to be ~~influenced~~affected by ~~a variety of factors, including~~ the cyclical nature of the forest products ~~industry,~~industry. Log and pulpwood sales volumes in our Timberlands segment are typically lower in the first half of each year as winter rains in the Southern region and spring thaw in the Northern region limit timber harvesting operations due to softened roadbeds and wet logging conditions that restrict access to logging sites. 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. 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. Development real estate sales at Chenal Valley occur throughout the year, though historically most sales take place in the second half of the year as builders prepare for the following spring and summer traditional home building and buying season.

Additionally, 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, asset dispositions or acquisitions, impact of pandemics (such as COVID-19), fires, other natural disasters and other factors.

To supplement our financial statements presented in accordance with generally accepted accounting principles in the United States (GAAP), we ~~use~~present certain non-GAAP measures on a consolidated basis, including Adjusted EBITDDA and Cash Available for Distribution (CAD), which are defined and further explained and reconciled to the nearest GAAP measure in the Liquidity and Performance Measuressection below. Our definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to and not a substitute for, financial information prepared in accordance with GAAP.

Adjusted EBITDDA is a non-GAAP measure that management uses in evaluating performance and allocating resources between segments, and that investors can use to evaluate the operational performance of the assets under management. It removes the impact of specific items that management believes do not directly reflect the core business operations on an ongoing basis. This measure should not be considered in isolation from and is not intended to represent an alternative to, our results reported in accordance with GAAP. Management believes that this non-GAAP measure, when read in conjunction with our GAAP financial statements, provides useful information to investors by facilitating the comparability of our ongoing operating results over the periods presented, the ability to identify trends in our underlying business and the comparison of our operating results against analyst financial models and operating results of other public companies that supplement their GAAP results with non-GAAP financial measures.

Our definition of EBITDDA and Adjusted EBITDDA may be different from similarly titled measures reported by other companies. We define EBITDDA as net income (loss) before interest expense, 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. See Note 5:2: Segment Informationin theNotes to the Condensed Consolidated Financial Statements for information related to the use of segment Adjusted EBITDDA.

The demand for timber is directly affected by the underlying demand for lumber and other ~~wood products,~~wood-products, as well as by the demand for pulp, paper and packaging. Our Timberlands and Wood Products segments are impacted by demand for new homes in the United States and by repair and remodeling activity.

~~The actions taken by various state and municipalities to contain and combat~~Housing fundamentals remain stronger than at any point since the outbreak and spread of the COVID-19 pandemic has introduced significant economic and business uncertainty, along with volatile financial market conditions during the first nine months of 2020 which is expected to continue into the future. Although the restrictions began to ease by the end of the second quarter, such directives are subject to change and may, depending on direction from governmental authorities and the pandemic’s effects on the public, require us, our suppliers or our customers to limit or suspend operations.

A housing construction slowdown in the spring due to social-distancing rules and delayed permits and inspections led to a massive destocking of lumber in the supply chain as well as significant curtailment of North American lumber manufacturing capacity. The atypical early spring pullback in lumber production coupled with strong demand led to an acute shortage that underpinned a historic run in lumber prices that began in the second quarter and peaked in September. While lumber prices have declined the last few weeks, we believe t~~he demand for wood products remains strong~~Great Financial Crisis driven by ~~favorable industry fundamentals including~~ the demand for new single-family homes, historically low mortgage rates, a shift from urban to suburban living, millennials entering their prime home-buying years, scarce re-sale housing inventory and ~~old age~~an aging existing housing ~~stock.~~stock supporting repair and remodel demand. In March 2021, the U.S. Census Bureau reported housing starts of 1.7 million in the U.S. on a seasonally adjusted annual basis, including single-family new home construction starts of 1.2 million, an increase of over 40% from March of 2020. While the U.S. economy continues to navigate challenges from COVID-19, we believe housing fundamentals, a key factor driving the strong lumber demand and pricing, will remain strong.

In our Wood Products segment, we shipped ~~291 million board feet during the third quarter of 2020.~~ ~~Our lumber order file extends into early November at strong prices.~~ ~~For the fourth quarter of 2020, we plan to ship 260 to 270~~258 million board feet of ~~lumber.~~lumber during the first quarter of 2021. Lumber production was lower during the quarter stemming from extended planned downtime for maintenance at one of our sawmills, and a severe winter storm that led to week-long shutdowns in our Southern mills. Lumber prices remained elevated throughout the first quarter of 2021 and established new records as we entered the spring building season. With buyers’ lumber inventories estimated to be at the low end of their historic range, combined with strong housing fundamentals, we believe lumber prices will continue to rise in the second quarter compared to first quarter levels. We plan to ship 275 to 285 million board feet of lumber during the second quarter.

In our Timberlands segment, Northern sawlog prices benefitted from Idaho sawlogs prices being indexed to lumber prices, while Southern pine sawlog prices remained stable. Our harvest ~~volumes were higher~~ volume of 1.3 million tons during the first quarter of 2021 was lower than the first quarter of 2020 primarily due to a severe winter storm impacting harvest conditions in the ~~first nine months~~Southern region. Further, several Southern pulpwood mills experienced extended downtime as a result of ~~2020 due~~the winter storm which decreased the demand for pulpwood in the region. We expect to ~~favorable~~ harvest ~~conditions compared to~~between 1.1 and 1.3 million tons during the ~~prior year. Approximately~~second quarter of 2021, with approximately 70% of the volume in the Southern region. Additionally, approximately 75% of our Idaho sawlog deliveries in the ~~fourth~~second quarter, which will be at a seasonally low level, will continue to benefit from being indexed to historically high lumber prices on an approximate ~~six-week~~four-week lag. ~~Southern pine sawlog prices remain stable. We expect total harvest volumes to be between 1.3~~

Our Real Estate segment benefitted from robust rural and ~~1.4 million tons in~~development demand during the ~~fourth~~first quarter of ~~2020.~~

On June 21, 2020, we announced an agreement to sell approximately 72,000 acres of rural timberland in Minnesota to The Conservation Fund for approximately $48.0 million in cash, subject to certain adjustments as defined in2021. For the ~~agreement. The transaction is subject to customary closing conditions and is expected to close in the fourth~~second quarter of ~~2020. For the fourth quarter of 2020,~~2021, we expect to sell ~~73,000 to 74,000~~approximately 2,500 acres of rural land ~~including the 72,000-acre Minnesota transaction. Residential~~ and ~~commercial sales in Chenal Valley mainly follow the national housing market trends but do experience microeconomic factors for the area including economic growth and the availability~~15 residential development lots.

Finally, we anticipate our current cash balances, cash flows from operations and our available sources of liquidity will be more than adequate to meet our cash requirements and allow us flexibility as we continue to focus on building shareholder value. At September 30, 2020 we had approximately $149.0 million in cash and cash equivalents and availability of $379.0 million on our revolving line of credit.

The following table sets forth changes in our Condensed Consolidated Statements of Operations. Our Business Segment Resultsprovide a more detailed discussion of our segments:

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended March 31,
(in thousands)	2020			2019			Change			2020			2019			Change			2021			2020			Change
Revenues	$	313,046		$	226,302		$	86,744		$	703,481		$	623,599		$	79,882		$	354,193		$	208,880		$	145,313
Costs and expenses:
Cost of goods sold		182,039			182,634			(595	)		503,921			512,522			(8,601	)		169,302			172,046			(2,744	)
Selling, general and administrative expenses		21,046			12,472			8,574			52,064			43,994			8,070			16,758			14,207			2,551
Gain on sale of facility		—			—			—			—			(9,176	)		9,176
		203,085			195,106			7,979			555,985			547,340			8,645			186,060			186,253			(193	)
Operating income		109,961			31,196			78,765			147,496			76,259			71,237			168,133			22,627			145,506
Interest expense, net		(8,557	)		(8,475	)		(82	)		(20,594	)		(21,821	)		1,227			(3,574	)		(3,698	)		124
Loss on extinguishment of debt		—			—			—			—			(5,512	)		5,512
Pension settlement charge		—			—			—			(42,988	)		—			(42,988	)		—			(42,988	)		42,988
Non-operating pension and other postretirement benefit costs		(3,557	)		(935	)		(2,622	)		(10,670	)		(2,804	)		(7,866	)		(3,414	)		(3,635	)		221
Income before income taxes		97,847			21,786			76,061			73,244			46,122			27,122
Income (loss) before income taxes																				161,145			(27,694	)		188,839
Income taxes		(16,840	)		(1,221	)		(15,619	)		(6,431	)		(1,860	)		(4,571	)		(30,039	)		10,862			(40,901	)
Net income	$	81,007		$	20,565		$	60,442		$	66,813		$	44,262		$	22,551
Net income (loss)																			$	131,106		$	(16,832	)	$	147,938
Total Adjusted EBITDDA¹	$	135,386		$	55,012		$	80,374		$	218,330		$	132,344		$	85,986		$	194,986		$	47,571		$	147,415

~~Third~~First Quarter ~~2020~~2021 Compared with ~~Third~~First Quarter ~~2019~~2020

Revenues were ~~$313.0~~$354.2 million, an increase of ~~$86.7~~$145.3 million compared with the ~~third~~first quarter of ~~2019. Historically~~2020 primarily due to historically high lumber prices, ~~along with~~ increased ~~Northern~~Idaho sawlog prices and increased rural and development real estate ~~acres sold~~sales. These increases more than offset ~~declines in~~lower harvest volumes and lower lumber shipments ~~and real estate development lot sales.~~ in the first quarter of 2021.

Cost of goods sold decreased ~~$0.6~~$2.7 million compared with the ~~third~~first quarter of ~~2019~~2020 primarily due ~~primarily~~ to lower harvest volumes and lower lumber ~~shipments and reduced~~shipments. These decreases were partially offset by increased repairs and maintenance ~~costs. These decreases were mostly offset by higher logging~~at our Wood Products facilities and ~~hauling costs.~~increased rural and development real estate sales.

Selling, general and administrative expenses increased ~~$8.6~~$2.6 million compared with the ~~third~~first quarter of ~~2019~~2020 primarily as a result of ~~a year-to-date adjustment to~~mark-to-market adjustments for deferred incentive compensation ~~to reflect strong company performance. In addition, the third quarter of 2019 benefitted from the reversal of a workers’ compensation reserve.~~

Non-operating pension and other postretirement benefit costs increased $2.6 million compared to the third quarter of 2019. This increase was primarily because prior service credits of $1.9 million per quarter were fully amortized at the end of 2019. Non-operating pension and other postretirement benefit costs in 2020 were also impacted by a decrease in expected return on plan assets and the discount rate used to determine the benefit obligations.

Income tax expense was $16.8 million for the third quarter of 2020 compared with $1.2 million for the third quarter of 2019. Income taxes are primarily due to income from our taxable REIT subsidiaries (TRS). For the three months ended September 30, 2020, the TRS’s pre-tax income was $65.2 million. For the same period in 2019, the TRS’s income before income tax was $4.7 million.

Total Adjusted EBITDDA for the third quarter of 2020 increased $80.4 million compared to the third quarter of 2019. The increase in Total Adjusted EBITDDA was driven primarily by historically high lumber prices. Refer to the ~~Business Segment Results~~ ~~below for further discussions on activities for each of our segments.~~

Revenues were $703.5 million, an increase of $79.9 million compared with the first nine months of 2019 primarily due to historically high lumber prices along with increased sawlog prices in the Northern region.

Cost of goods sold decreased $8.6 million compared with the same period in 2019 primarily due to the temporary curtailment and reduced operating posture at our plywood facility during the second quarter of 2020 and because 2019 included approximately 1.5 months of activity related to the Deltic Medium Density Fiberboard (MDF) Facility. These decreases were partially offset by higher harvest volume and lumber shipments.

~~Selling, general and administrative expenses increased $8.1 million compared with the first nine months of 2019 primarily as a result of~~ higher incentive compensation related to strong company performance.

~~In February 2019, we sold our Deltic MDF facility to Roseburg Forest Products Co. for $92.0 million, before certain working capital adjustments, resulting in a $9.2 million pre-tax gain on sale.~~

Net interest expense decreased $1.2 million compared with the first nine months of 2019 primarily due to the refinancing of $150.0 million of 7.5% Senior Notes (Senior Notes) during the first quarter of 2019 and higher patronage dividends received during 2020.

~~As part of the $150.0 million Senior Notes redemption during the first quarter of 2019 we incurred a redemption premium of $4.9 million and wrote off certain unamortized debt costs.~~

In February 2020, we purchased a group annuity contract from an insurance company to transfer $101.1 million of our outstanding pension benefit obligation related to our qualified pension plans. This transaction was funded with plan assets. In connection with this transaction, we recorded a non-cash pretax settlement charge of $43.0 ~~million.~~

~~Non-operating pension and other postretirement benefit costs increased $7.9~~ million ~~compared with~~in the first ~~nine months~~quarter of 2019. This increase was primarily because prior service credits of $1.9 million per quarter were fully amortized at the end of 2019. Non-operating pension and other postretirement benefit costs were also impacted by a decrease in expected return on plan assets and the discount rate used to determine the benefit obligations.2020.

Income taxes are primarily due to income from our PotlatchDeltic taxable REIT subsidiaries (TRS). For the three months ended March 31, 2021, we recorded income tax expense ~~was $6.4~~of $30.0 million ~~for the first nine months of 2020 compared with $1.9 million for the first nine months of 2019. For the nine months ended September 30, 2020, the~~as our TRS’s income before tax was $115.8 million driven primarily by historically high lumber prices. For the three months ended March 31, 2020, we recorded an income tax ~~was $23.9~~benefit of approximately $10.9 million primarily as a result of the TRS’s loss before tax of $42.8 million, which ~~included~~was mainly as a result of the $43.0 million pension settlement ~~charge recorded during the first quarter. For the same period in 2019, the TRS’s income before income tax was $5.3 million, which included the gain on sale~~charge.

Total Adjusted EBITDDA for the first ~~nine months~~quarter of ~~2020~~2021 increased ~~$86.0~~$147.4 million compared to the first ~~nine months~~quarter of ~~2019.~~2020. The increase in Total Adjusted EBITDDA was driven primarily by historically high lumber prices, ~~during the third quarter of 2020.~~increased Idaho sawlog prices and increased rural and development real estate sales. Refer to the Business Segment Results below for further discussions on activities for each of our segments. See Liquidity and Performance Measuresfor a reconciliation of Total Adjusted EBITDDA to net income (loss), the closest comparable GAAP measure, for each of the periods presented.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended March 31,
(in thousands)	2020		2019		Change			2020		2019		Change			2021		2020		Change
Revenues¹	$	116,985	$	98,809	$	18,176		$	266,755	$	233,848	$	32,907		$	111,916	$	82,425	$	29,491
Costs and expenses:
Logging and hauling		47,158		45,099		2,059			117,417		108,551		8,866			36,468		38,604		(2,136	)
Other		8,539		9,063		(524	)		24,107		24,257		(150	)		5,888		7,291		(1,403	)
Selling, general and administrative expenses		1,639		1,651		(12	)		4,941		5,063		(122	)		1,702		1,548		154
Timberlands Adjusted EBITDDA²	$	59,649	$	42,996	$	16,653		$	120,290	$	95,977	$	24,313		$	67,858	$	34,982	$	32,876

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended March 31,
Harvest Volumes (in tons)	2020		2019		Change			2020		2019		Change			2021		2020		Change
Northern region
Sawlog		554,845		529,030		25,815			1,291,632		1,227,451		64,181			427,255		433,870		(6,615	)
Pulpwood		29,910		39,371		(9,461	)		99,174		118,534		(19,360	)		13,884		37,801		(23,917	)
Stumpage		—		602		(602	)		23,178		7,978		15,200			—		23,178		(23,178	)
Total		584,755		569,003		15,752			1,413,984		1,353,963		60,021			441,139		494,849		(53,710	)

Southern region
Sawlog		577,975		496,388		81,587			1,617,196		1,358,140		259,056			508,073		548,467		(40,394	)
Pulpwood		462,571		475,313		(12,742	)		1,201,904		1,190,486		11,418			326,429		367,099		(40,670	)
Stumpage		65,085		58,659		6,426			255,553		123,815		131,738			58,413		90,237		(31,824	)
Total		1,105,631		1,030,360		75,271			3,074,653		2,672,441		402,212			892,915		1,005,803		(112,888	)

Total harvest volume		1,690,386		1,599,363		91,023			4,488,637		4,026,404		462,233			1,334,054		1,500,652		(166,598	)

Sales Price/Unit ($ per ton)¹
Northern region
Sawlog	$	131	$	100	$	31		$	112	$	95	$	17		$	178	$	95	$	83
Pulpwood	$	42	$	38	$	4		$	39	$	40	$	(1	)	$	36	$	38	$	(2	)
Stumpage	$	—	$	5	$	(5	)	$	14	$	14	$	—		$	—	$	14	$	(14	)

Southern region
Sawlog	$	44	$	48	$	(4	)	$	44	$	47	$	(3	)	$	44	$	44	$	—
Pulpwood	$	29	$	33	$	(4	)	$	30	$	33	$	(3	)	$	28	$	31	$	(3	)
Stumpage	$	12	$	13	$	(1	)	$	9	$	10	$	(1	)	$	13	$	9	$	4

The following table summarizes Timberlands Adjusted EBITDDA variances for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 compared with the three ~~and nine~~ months ended ~~September 30, 2019:~~March 31, 2020:

(in thousands)	Three Months			Nine Months			Three Months
Timberlands 2019 Adjusted EBITDDA	$	42,996		$	95,977
Timberlands 2020 Adjusted EBITDDA							$	34,982
Sales price and mix		3,182			11,238			36,723
Harvest volume		12,843			13,107			(3,725	)
Other revenue		(309	)		(217	)		(403	)
Logging and hauling costs per unit		411			(78	)		(967	)
Forest management		533			260			918
Administrative, indirect and overhead costs		(7	)		3			330
Timberlands 2020 Adjusted EBITDDA	$	59,649		$	120,290
Timberlands 2021 Adjusted EBITDDA							$	67,858

~~Third~~First Quarter 2021 Compared with First Quarter 2020 ~~Compared with Third Quarter 2019~~

Timberlands Adjusted EBITDDA for the ~~third~~first quarter of ~~2020~~2021 increased ~~$16.7~~$32.9 million compared with the same period in ~~2019,~~2020, primarily as a result of the following:

~~Timberlands Adjusted EBITDDA for the first nine months of 2020 increased $24.3 million compared with the same period in 2019, primarily as a result of the following:~~

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended March 31,
(in thousands)	2020			2019			Change			2020			2019			Change			2021			2020		Change
Revenues	$	218,291		$	143,643		$	74,648		$	489,507		$	413,979		$	75,528		$	269,296		$	145,000	$	124,296
Costs and expenses¹
Fiber costs		72,239			67,579			4,660			196,201			205,594			(9,393	)		79,469			65,012		14,457
Freight, logging and hauling		17,677			19,769			(2,092	)		48,601			53,722			(5,121	)		18,197			17,402		795
Manufacturing costs		45,893			45,224			669			132,848			137,745			(4,897	)		47,602			45,004		2,598
Finished goods inventory change		(1,595	)		3,426			(5,021	)		(1,602	)		(453	)		(1,149	)		(4,019	)		1,891		(5,910	)
Selling, general and administrative expenses		2,433			2,082			351			7,483			6,625			858			2,522			2,271		251
Other		—			(340	)		340			196			(312	)		508			(30	)		191		(221	)
Wood Products Adjusted EBITDDA²	$	81,644		$	5,903		$	75,741		$	105,780		$	11,058		$	94,722		$	125,555		$	13,229	$	112,326

	Three Months Ended September 30,							Nine Months Ended September 30,						Three Months Ended March 31,
	2020		2019		Change			2020		2019		Change		2021		2020		Change
Lumber shipments (MBF)¹		291,391		298,807		(7,416	)		823,597		809,733		13,864		258,069		282,967		(24,898	)
Lumber sales prices ($ per MBF)	$	637	$	363	$	274		$	486	$	373	$	113	$	890	$	396	$	494

The following table summarizes Wood Products Adjusted EBITDDA variances for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 compared with the three ~~and nine~~ months ended ~~September 30, 2019:~~March 31, 2020:

(in thousands)	Three Months			Nine Months			Three Months
Wood Products 2019 Adjusted EBITDDA	$	5,903		$	11,058
Wood Products 2020 Adjusted EBITDDA							$	13,229
Lumber:
Price		79,493			92,678			126,614
Volume								(507	)
Manufacturing costs per unit		(2,420	)		(2,409	)		(3,118	)
Log costs per unit		(4,486	)		3,442			(11,494	)
Inventory charge		3,479			3,479			895
Residuals, panels and other		(325	)		(2,468	)		(64	)
Wood Products 2020 Adjusted EBITDDA	$	81,644		$	105,780
Wood Products 2021 Adjusted EBITDDA							$	125,555

First Quarter 2021 Compared with First Quarter 2020 ~~Compared with Third Quarter 2019~~

Wood Products Adjusted EBITDDA for the ~~third~~first quarter of ~~2020~~2021 increased ~~$75.7~~$112.3 million compared with the same period in ~~2019~~2020, primarily as a result of the following:

~~Wood Products Adjusted EBITDDA for the first nine months of 2020 increased $94.7 million compared with the same period in 2019 primarily as a result of the following:~~

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended March 31,
(in thousands)	2020		2019		Change			2020		2019		Change			2021		2020		Change
Revenues	$	18,151	$	18,863	$	(712	)	$	42,225	$	61,459	$	(19,234	)	$	20,313	$	10,969	$	9,344
Costs and expenses
Costs of goods sold		3,554		2,902		652			8,595		8,943		(348	)		2,468		2,431		37
Selling, general and administrative expenses		1,131		1,283		(152	)		3,568		3,819		(251	)		1,252		1,198		54
Real Estate Adjusted EBITDDA¹	$	13,466	$	14,678	$	(1,212	)	$	30,062	$	48,697	$	(18,635	)	$	16,593	$	7,340	$	9,253

Rural Real Estate

Three Months Ended September 30,

2020

2019

Acres Sold

Average
Price/Acre

Acres Sold

Average
Price/Acre

Higher and better use (HBU)

1,599

$
3,103

975

$
3,225

Recreation real estate

1,201

$
1,366

5,037

$
1,261

Non-strategic timberland

8,248

$
810

213

$
906

Total

11,048

$
1,202

6,225

$
1,557

Nine Months Ended September 30,

2020

2019

Acres Sold

Average
Price/Acre

Acres Sold

Average
Price/Acre

Higher and better use (HBU)

4,486

$
2,828

4,231

$
6,363

Recreation real estate

4,297

$
1,394

7,817

$
1,281

Non-strategic timberland

12,241

$
962

8,894

$
820

Total

21,024

$
1,449

20,942

$
2,112

Rural Real Estate	Three Months Ended March 31,
	2021		2020
Acres sold		7,083		4,439
Average price per acre	$	1,415	$	1,643

The following table summarizes Real Estate Adjusted EBITDDA variances for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 compared with the three ~~and nine months~~ ended ~~September 30, 2019:~~March 31, 2020:

~~Third~~First Quarter ~~2020~~2021 Compared with ~~Third~~First Quarter ~~2019~~2020

Real Estate Adjusted EBITDDA for the ~~third~~first quarter of ~~2020 decreased $1.2~~2021 was $16.6 million, an increase of $9.3 million compared with the ~~same period in 2019 primarily~~first quarter of 2020 as a result of the following:

~~Real Estate Adjusted EBITDDA for the first nine months of 2020 decreased $18.6 million compared with the same period in 2019 primarily as a result of the following:~~

Changes in significant sources and uses of cash for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ are presented by categories as follows:

	Nine Months Ended September 30,						Three Months Ended March 31,
(in thousands)	2020			2019			2021			2020
Net cash provided by operating activities	$	190,845		$	105,427		$	169,965		$	48,138
Net cash (used in) provided by investing activities	$	(28,265	)	$	22,187
Net cash used in investing activities							$	(11,529	)	$	(11,034	)
Net cash used in financing activities	$	(96,830	)	$	(111,265	)	$	(28,075	)	$	(39,538	)

Net cash provided by operating activities increased ~~$85.4~~$121.8 million compared to the first ~~nine months~~quarter of ~~2019.~~2020. Changes in cash provided by operating activities was impacted by the following:

Changes in cash flows from investing activities were primarily a result of the following:

Changes in cash flows from financing activities were primarily a result of the following:

We invest cash in maintenance and discretionary capital expenditures at our Wood Products facilities. We also invest cash in the reforestation of timberlands and construction of roads in our Timberlands operations and to develop land in our Real Estate development operations. We evaluate discretionary capital improvements based on an expected level of return on investment. We currently expect to spend a total of approximately ~~$46.0~~$55.0 to ~~$49.0~~$60.0 million for capital expenditures during ~~2020.~~

We are deferring payments of approximately $4.0 million for our 2020 employer portion of social security payroll tax as allowed under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). These payments will be funded in 2021 and 2022 as required under the CARES Act.2021.

On August 30, 2018, the board of directors authorized the repurchase of up to $100.0 million of common stock with no time limit set for the ~~repurchase.~~repurchase (the Repurchase Program). At ~~September 30, 2020,~~March 31, 2021, we had remaining authorization of $59.5 million for future stock repurchase under the ~~2018~~ Repurchase Program. ~~Stock~~The timing, manner, price and amount of repurchases ~~in the future~~ will ~~depend on a variety of factors including our cash position, alternative investment opportunities, our desired level of liquidity, debt covenant restrictions~~be determined according to, and ~~our stock price.~~

~~On June 21, 2020, we announced an agreement to sell approximately 72,000 acres of rural timberland in Minnesota to The Conservation Fund for approximately $48.0 million in cash,~~ subject to, ~~certain adjustments as defined in~~ the ~~agreement. The transaction is~~terms of the Trading Plan, and, subject to ~~customary closing conditions and is expected to close in~~ the ~~fourth quarter~~terms of ~~2020.~~the Trading Plan, the Repurchase Program may be suspended, terminated or modified at any time for any reason.

(in thousands)	September 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
Long-term debt	$	757,249		$	756,469
Long-term debt (including current portion)							$	757,604		$	757,347
Cash and cash equivalents		(148,919	)		(83,310	)		(382,032	)		(252,340	)
Net debt		608,330			673,159			375,572			505,007
Market capitalization¹		2,815,311			2,908,653			3,547,863			3,345,138
Enterprise value	$	3,423,641		$	3,581,812		$	3,923,435		$	3,850,145

Net debt to enterprise value		17.8	%		18.8	%		9.6	%		13.1	%
Dividend yield²		3.8	%		3.7	%		3.1	%		3.3	%
Weighted-average cost of debt, after tax³		3.3	%		3.3	%		3.2	%		3.2	%

The discussion below is presented to enhance the reader’s understanding of our operating performance, ability to generate cash and satisfy rating agency and creditor requirements. This information includes two measures: Adjusted EBITDDA and Cash Available for Distribution (CAD). These measures are not defined by GAAP and the discussion of Adjusted EBITDDA and CAD is not intended to conflict with or change any of the GAAP disclosures described herein.

Adjusted EBITDDA is a non-GAAP measure that management uses in evaluating performance and to allocate resources between segments, and that investors can use to evaluate the operational performance of the assets under management. It removes the impact of specific items that management believes do not directly reflect the core business operations on an ongoing basis. This measure should not be considered in isolation from and is not intended to represent an alternative to our results reported in accordance with GAAP. Management believes that this non-GAAP measure, when read in conjunction with our GAAP financial statements, provides useful information to investors by facilitating the comparability of our ongoing operating results over the periods presented, the ability to identify trends in our underlying business and the comparison of our operating results against analyst financial models and operating results of other public companies that supplement their GAAP results with non-GAAP financial measures.

Our definition of EBITDDA may be different from similarly titled measures reported by other companies. We define EBITDDA as net income (loss) before interest expense, 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.

We reconcile Total Adjusted EBITDDA to net income (loss) for the consolidated company as it is the most comparable GAAP measure.

The following table provides a reconciliation of net income (loss) to Total Adjusted EBITDDA for the respective periods:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(in thousands)	2020			2019			2020			2019			2021		2020
Net income	$	81,007		$	20,565		$	66,813		$	44,262
Net income (loss)													$	131,106	$	(16,832	)
Interest expense, net		8,557			8,475			20,594			21,821			3,574		3,698
Income taxes		16,840			1,221			6,431			1,860			30,039		(10,862	)
Depreciation, depletion and amortization		20,187			18,786			56,590			51,310			17,996		18,638
Basis of real estate sold		5,249			5,228			14,440			14,211			8,823		6,498
Loss on extinguishment of debt		—			—			—			5,512
Pension settlement charge		—			—			42,988			—			—		42,988
Non-operating pension and other postretirement benefit costs		3,557			935			10,670			2,804			3,414		3,635
Gain on sale of facility		—			—			—			(9,176	)
Gain on disposal of fixed assets		(11	)		(198	)		(196	)		(260	)
Loss (gain) on disposal of fixed assets														34		(192	)
Total Adjusted EBITDDA	$	135,386		$	55,012		$	218,330		$	132,344		$	194,986	$	47,571

We define CAD as cash provided by operating activities adjusted for capital spending for purchases of property, plant and equipment, timberlands reforestation and roads and timberland acquisitions not classified as strategic. Management believes CAD is a useful indicator of the company’s overall liquidity, as it provides a measure of cash generated that is available for dividends to common stockholders (an important factor in maintaining our REIT status), repurchase of the company’s common shares, debt repayment, acquisitions and other discretionary and nondiscretionary activities. Our definition of CAD is limited in that it does not solely represent residual cash flows available for discretionary expenditures since the measure does not deduct the payments required for debt service and other contractual obligations. Therefore, we believe it is important to view CAD as a measure that provides supplemental information to our Condensed Consolidated Statements of Cash Flows. Our definition of CAD may be different from similarly titled measures reported by other companies, including those in our industry. CAD is not necessarily indicative of the CAD that may be generated in future periods.

The following table provides a reconciliation of cash provided by operating activities to CAD:

	Nine Months Ended September 30,						Three Months Ended March 31,						Twelve Months Ended March 31,
(in thousands)	2020			2019			2021			2020			2021			2020
Cash provided by operating activities¹	$	190,845		$	105,427
Net cash provided by operating activities¹							$	169,965		$	48,138		$	457,090		$	168,139
Capital expenditures		(31,749	)		(39,143	)		(11,718	)		(13,539	)		(43,964	)		(63,011	)
CAD	$	159,096		$	66,284		$	158,247		$	34,599		$	413,126		$	105,128
Net cash (used in) provided by investing activities²	$	(28,265	)	$	22,187
Net cash used in investing activities²							$	(11,529	)	$	(11,034	)	$	(42,688	)	$	(58,690	)
Net cash used in financing activities	$	(96,830	)	$	(111,265	)	$	(28,075	)	$	(39,538	)	$	(113,521	)	$	(136,009	)

At ~~September 30, 2020,~~March 31, 2021, our total outstanding net long-term debt was $757.0 million, of which ~~$46.0~~$40.0 million matures in December ~~2020.~~2021. We expect to refinance the ~~$46.0~~$40.0 million term loan debt at maturity. Included in total outstanding long-term debt was $693.5 million of term loan principal balances under our Second Amended and Restated Term Loan Agreement (Amended Term Loan Agreement) with our primary lender. Certain borrowings under the Amended Term Loan Agreement are at variable rates of one or three-month LIBOR plusmaturity which is covered by a ~~spread between 1.85% and 2.15%. We entered into interest rate swaps for these variable rate term loans to fix the interest rates.~~

At September 30, 2020 there were no borrowings under our $380.0 million revolving line of credit and approximately $1.0 million of the revolving line of credit was utilized for outstanding letters of credit. As provided in the revolving line of credit agreement, borrowings may be increased by up to an additional $420.0 million. We may utilize borrowings under the credit facility to, among other things, refinance existing indebtedness and provide funding for working capital requirements, capital projects, acquisitions and other general corporate expenditures.

~~As of September 30, 2020, we were in compliance with all debt and credit agreement covenants.~~ ~~The following table sets forth the financial covenants in the credit and term loan agreements and our status with respect to these covenants as of September 30, 2020:~~

~~In March 2020, we entered into $653.5 million of~~ forward starting interest rate ~~swaps. These forward starting interest rate swaps effectively hedge~~swap that hedges the variability in future benchmark interest payments attributable to changes in interest ~~rates on future debt refinancing by~~ ~~converting the benchmark interest rates to~~ ~~fixed~~rates. All interest rates on our ~~anticipated future refinancing of $653.5 million of term loan~~outstanding long-term debt ~~maturing December 2020 through January 2029. The~~are fixed rates under fixed rate loans or variable rate loans with an associated interest rate ~~components for these forward starting~~swap that fix the variable benchmark interest rate ~~swaps range from 0.85% to 1.17%. The variable rate component on these forward starting~~component.

A number of our debt instruments and associated interest rate ~~swaps~~derivative agreements have an interest rate tied to LIBOR. On March 5, 2021, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that the USD LIBOR will no longer be published after June 30, 2023. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rate Committee, a steering committee comprised of large U.S. financial institutions, is ~~one-month LIBOR. Accordingly,~~recommending replacing LIBOR with the ~~forward starting~~Secured Overnight Finance Rate (SOFR). While we expect LIBOR to be available in substantially its current form until at least the end of June 30, 2023, it is possible that LIBOR will become unavailable prior to that point. We are monitoring the developments regarding the alternative rates, will work with our lenders and counter parties to identify a suitable replacement rate ~~swaps~~and may amend certain debt and interest rate derivative agreements to accommodate those rates if the contract does not already specify a replacement rate. However, at this time, we are not able to predict whether SOFR will become a widely accepted benchmark in place of LIBOR, or what the impact of such possible transition to SOFR may be on our financial condition.

The Amended Term Loan Agreement and Amended Credit 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. 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.

At March 31, 2021, we were ~~designated as cash flow hedges. In addition, these cash flow hedges require settlement on~~in compliance with all covenants under the ~~stated maturity date~~Agreements. The following table sets forth the financial covenants for ~~each respective term loan currently outstanding.~~ the Agreements and our status with respect to these covenants at March 31, 2021:

See Note ~~9: Derivatives~~5: Debt in the Notes to the Condensed Consolidated Financial Statements for additional ~~information.~~information on our debt and credit agreements.

~~Other than these new forward starting interest rate swaps, there~~Contractual Obligations

There have been no material changes to our contractual obligations during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 outside the ordinary course of business.

Two major debt rating agencies routinely evaluate our debt and our cost of borrowing can increase or decrease depending on our credit rating. Both Moody’s and S&P rate our debt investment grade. ~~In August 2020, S&P revised their outlook on the company to stable from negative.~~

We currently are not a party to off-balance sheet arrangements that would require disclosure under this section.

There have been no significant changes during ~~2020~~2021 to our critical accounting policies presented in our ~~2019~~2020 Annual Report on Form 10-K.

Our market risk exposure on financial instruments includes interest rate risk on our bank credit facility, term loans and interest rate swap agreements and forward starting interest rate swap agreements. 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. All market risk sensitive instruments were entered into for purposes other than trading purposes.

At September 30, 2020, we have six interest rate swaps associated with $397.5 million of term loan debt. The cash flow hedges convert variable rates ranging from three-month and one-month LIBOR plus 1.85% to 2.15%, to fixed rates ranging from 3.17% to 4.82%. 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.

In March 2020, we entered into $653.5 million of forward starting interest rate swaps. These forward starting interest rate swaps effectively hedge the variability in future benchmark interest payments attributable to changes in interest rates on future debt refinancing by ~~converting the benchmark interest rates to~~ fixed interest rates on our anticipated future refinancing of $653.5 million of term loan debt maturing December 2020 through January 2029. The fixed interest rate components for these forward starting interest rate swaps range from 0.85% to 1.17%. The variable rate component on these forward starting interest rate swaps is one-month LIBOR. Accordingly, the forward starting rate swaps were designated as cash flow hedges. In addition, t~~hese cash flow hedges require settlement on the stated maturity date for each respective term loan currently outstanding.~~

~~At September 30, 2020,~~For quantitative and qualitative disclosures about market risk, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of our annual report on Form 10-K for the total outstanding principal balance on our debt agreements was $762.2 million. Interest rates on all outstanding debt is fixed, either through a fixed interest rate or corresponding interest rate swap.year ended December 31, 2020. Our exposures to market risk have not changed materially since December 31, 2020.

We conducted an evaluation (pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 (the Exchange Act)), under the supervision and with the participation of management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of ~~September 30, 2020.~~March 31, 2021. These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that this information is accumulated and communicated to management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on the evaluation, the CEO and CFO have concluded that these disclosure controls and procedures were effective as of ~~September 30, 2020.~~March 31, 2021.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

No changes occurred in our internal control over financial reporting during the three months ended ~~September 30, 2020~~March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We believe there is no pending or threatened litigation that could have a material adverse effect on our financial position, operations or liquidity.

~~Our business and results of operations are subject to numerous risks and uncertainties, many of which are beyond our control.The following discussion supplements and updates~~There have been no material changes in the risk factors previously disclosed in Risk Factors in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2019. The impacts of the COVID-19 pandemic on the economy is affecting and is expected to continue to affect our business and financial results andshould be considered carefully, in addition to the information set forth elsewhere in this Form 10-Q and the Annual Report on Form 10-K for the year-ended December 31, 2019, including under~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~. 2020.

~~Events beyond our control such as pandemics (including the COVID-19 outbreak) could negatively impact our business.~~

We face risks related to health epidemics and other outbreaks, including the global outbreak of a novel strain of coronavirus (“COVID-19”). In March 2020 the World Health Organization declared the outbreak of COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. Shortly thereafter, the United States declared a national emergency concerning the outbreak, and all states and several municipalities subsequently declared public health emergencies.These declarations have resulted in a wide-range of actions taken by international, federal, state and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19.Such actions included quarantines, “stay-at-home” orders and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. Although many of the restrictions have eased across the United States, the pandemic has not shown substantial signs of decline and some jurisdictions are re-imposing certain restrictions due to increasing rates of COVID-19 cases. As a result, the pandemic has caused, and is likely to continue to cause significant economic disruption and volatility in capital markets.

Pandemics, such as COVID-19, that bring about widespread national or global economic disruption, have had and will have impacts on pricing and demand for our timber, lumber, and real estate businesses. We have experienced and expect to continue to experience unpredictable demand for certain of our products and continue to adjust production as necessary to match demand. There have been adverse effects on the demand for our products and disruptions to our supply chain, the manufacturing and distribution of our timber and wood products and demand for our real estate properties, all of which could worsen in the future. We are actively monitoring the COVID-19 outbreak and its potential impact on our operations, workforce, supply chain and our consolidated results of operations.

Our predictions about the impact that COVID-19 will have on our business, financial condition, or results of operations may not be accurate as they depend on future developments, which are highly uncertain and cannot be predicted with confidence. Such developments include, but are not limited to, the severity of the virus’s impact on the economy, the future geographic spread or mutation of COVID-19 or the outbreak of another virulent disease, continuation of or changes in governmental responses to disease outbreak, the duration of disease outbreak, the timing and effectiveness of treatment and testing options, including availability of a vaccine, and consequential restrictions, business disruptions, the effectiveness of responsive actions taken in the United States and other countries to contain the disease and actions that may be taken by our competitors, suppliers or customers. A recession, further market correction, or depression resulting from the spread of COVID-19 could materially affect our business, financial condition, results of operations, liquidity, our stock price and access to capital markets. The impact of COVID-19 or other virulent disease may also trigger the occurrence, or exacerbate, other risks discussed in ~~Risk Factors~~ in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019, any of which could have a material adverse effect on our business, results of operation, cash flows and financial condition.

On August 30, 2018, our board of directors authorized management to repurchase up to $100.0 million of common stock with no time limit set for the repurchase (the ~~2018~~ Repurchase Program). ~~In September 2020 we entered into~~Shares under the Repurchase Program may be repurchased in open market transactions, including pursuant to a trading plan ~~with an independent broker for the purpose of repurchasing a limited number of the Company’s common shares under the 2018 Repurchase Program~~adopted in accordance with ~~the guidelines in~~ Rule 10b5-1 of the Securities Exchange Act of 1934 ~~as amended. This trading plan became effective on October 29, 2020~~(the Trading Plan). The timing, manner, price and ~~expires upon expenditure~~amount of repurchases will be determined according to, and subject to, the terms of the ~~principal specified in~~Trading Plan, and, subject to the ~~plan, an early termination event (as specified in~~terms of the ~~plan),~~Trading Plan, the Repurchase Program may be suspended, terminated or ~~the close of business on October 26, 2022, whichever occurs first.~~modified at any time for any reason.

~~During the nine months ended September 30, 2020, we repurchased 489,850 shares of common stock for $15.4 million (including transaction costs) under the 2018 Repurchase Program.~~ There were no shares repurchased during the ~~third~~first quarter of ~~2020.~~2021 under the Repurchase Program. At ~~September 30, 2020,~~March 31, 2021, we had remaining authorization of $59.5 million for future stock repurchases under the ~~2018~~ Repurchase Program. Transaction costs are not counted against authorized funds. All common stock purchases are made in open-market transactions.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

601 West First Avenue, Suite 1600
Spokane, Washington	99201
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	PCH	Nasdaq Global Select Market



		Page Number
PART I. - FINANCIAL INFORMATION
ITEM 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Index for the Notes to Condensed Consolidated Financial Statements	98
	Notes to Condensed Consolidated Financial Statements	109
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2319
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3732
ITEM 4.	Controls and Procedures	3732

PART II. - OTHER INFORMATION
ITEM 1.	Legal Proceedings	3833
ITEM 1A.	Risk Factors	3833
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3933
ITEM 6.	Exhibits	3933

SIGNATURE		4034


Note 1: Basis of Presentation	109
Note 2: ~~Recent Accounting Pronouncements~~Segment Information	1110
Note 3: ~~Sale of Deltic MDF Facility~~	11
~~Note 4: Revenue Recognition~~Earnings Per Share	12
Note 4: Certain Balance Sheet Components	13
Note 5: ~~Segment Information~~Debt	13
Note 6: ~~Earnings Per Share~~Derivative Instruments	14
Note 7: Fair Value Measurements	15
Note ~~7: Certain Balance Sheet Components~~8: Equity-Based Compensation	15
Note 9: Income Taxes	16
Note ~~8: Debt~~	16
~~Note 9: Derivative Instruments~~10: Leases	17
~~Note10: Fair Value Measurements~~	18
Note 11: ~~Equity-Based Compensation~~Pension and Other Postretirement Employee Benefits	18
Note 12: ~~Income Taxes~~	19
~~Note 13: Leases~~	20
~~Note 14: Pension and Other Postretirement Benefits~~	21
~~Note 15:~~ Components of Accumulated Other Comprehensive Loss	2218

Development Real Estate	Three Months Ended September 30,
	2020				2019
	Lots or Acres Sold		Average Price/ Lot or Acre		Lots or Acres Sold		Average Price/ Lot or Acre
Residential lots		26	$	82,573		42	$	110,504
Commercial acres		—	$	—		6	$	512,506

	Nine Months Ended September 30,
	2020				2019
	Lots or Acres Sold		Average Price/ Lot or Acre		Lots or Acres Sold		Average Price/ Lot or Acre
Residential lots		66		92,256		93	$	97,519
Commercial acres		—	$	—		6	$	512,506

Large Accelerated Filer	☒	Accelerated Filer	☐	Non-accelerated Filer	☐
Smaller Reporting Company	☐	Emerging Growth Company	☐

	Three Months Ended March 31,
	Pension						OPEB
(in thousands)	2021			2020			2021			2020
Service cost	$	2,045		$	2,290		$	168		$	143
Interest cost		2,633			3,564			317			375
Expected return on plan assets		(3,525	)		(4,586	)		—			—
Amortization of prior service cost (credit)		21			28			(298	)		(319	)
Amortization of actuarial loss		3,721			4,154			545			419
Net periodic cost before pension settlement charge		4,895			5,450			732			618
Pension settlement charge		—			42,988			—			—
Net periodic cost	$	4,895		$	48,438		$	732		$	618

(in thousands)	Three Months
Real Estate 2020 Adjusted EBITDDA	$	7,340
Rural sales		2,743
Development sales		6,601
Other, net		(91	)
Real Estate 2021 Adjusted EBITDDA	$	16,593

	Covenant Requirement		Actual at September 30, 2020
Interest coverage ratio	≥	3.00 to 1.00	8.93
Leverage ratio	≤	40%	21%

	Covenant Requirement		Actual at March 31, 2021
Interest coverage ratio	≥	3.00 to 1.00	17.84
Leverage ratio	≤	40%	20%

EXHIBIT NUMBER	DESCRIPTION
(3)(a)*	Third Restated Certificate of Incorporation of the Registrant, effective February 20, 2018, filed as Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant on February 21, 2018.
(3)(b)*	Bylaws of the Registrant, as amended through February 18, 2009, filed as Exhibit (3)(b) to the Current Report on Form 8-K filed by the Registrant on February 20, 2009.
(4)	See Exhibits (3)(a) and (3)(b). The registrant undertakes to furnish to the Commission, upon request, any instrument defining the rights of holders of long-term debt.
(10)(a)*	Group annuity contract, effective March 6, 2020, between NY Life Insurance Company and the Registrant filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on October 16, 2020.
(31)	Rule 13a-14(a)/15d-14(a) Certifications.
(32)	Furnished statements of the Chief Executive Officer and Chief Financial Officer under 18 U.S.C. Section 1350.
(101)	The following financial information from PotlatchDeltic Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended ~~September 30 2020,~~March 31, 2021, filed on ~~October~~April 30, ~~2020~~2021 formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ (iii) the Condensed Consolidated Balance Sheets at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, (iv) the Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ (v) the Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ and (vi) the Notes to Condensed Consolidated Financial ~~Statements~~.Statements.
(104)	Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101).

		PotlatchDeltic Corporation
		(Registrant)

		By	/s/ WAYNE WASECHEK
			Wayne Wasechek
			Corporate Controller (Duly Authorized; Principal Accounting Officer)


Date:	~~October~~April 30, ~~2020~~2021