Rayonier Inc. Q4 2025 Earnings Call - Merger with PotlatchDeltic closes, 4M-acre platform and real estate drives EBITDA

Conference Operator: Hello, everyone. Thank you for joining us, and welcome to the Q4 2025 Rayonier Inc. Earnings Conference Call. After today’s prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Collin Mings, Vice President of Capital Markets and Strategic Planning. Please go ahead.

Collin Mings, Vice President of Capital Markets and Strategic Planning, Rayonier Inc.: Thank you, and good morning. Welcome to Rayonier’s Investor Teleconference, covering fourth quarter earnings. Our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rayonier.com. I would like to remind you that in these presentations, we include forward-looking statements made pursuant to the safe harbor provisions of federal securities laws. Our earnings release in Forms 10-K and 10-Q, filed with the SEC, list some of the factors that may cause actual results to differ materially from the forward-looking statements we may make. They’re also referenced on page two of our financial supplement. Throughout these presentations, we will also discuss non-GAAP financial measures, which are defined and reconciled to the nearest GAAP measures in our earnings release and supplemental materials. With that, let’s start our teleconference with opening comments from Mark McHugh, our President and CEO. Mark?

Mark McHugh, President and CEO, Rayonier Inc.: Thanks, Collin. Good morning, everyone. Before turning to our fourth quarter results, I’d like to provide an update on our transformative merger of equals with PotlatchDeltic, which successfully closed ahead of schedule on January thirtieth. Achieving this milestone required an incredible amount of work and collaboration. Since announcing the proposed merger in October, teams across both organizations have worked tirelessly to complete the transaction and begin the process of integrating our operations. I want to personally thank everyone involved for their dedication and commitment throughout this process. The combination of Rayonier and PotlatchDeltic has created a premier land resources company with a high-quality, well-diversified timberland portfolio spanning over 4 million acres, a dynamic real estate platform, and a well-positioned wood products manufacturing business.

As our integration efforts continue, we remain confident that this transaction will deliver significant strategic and financial benefits beyond what either company could have achieved independently. While we have initially retained the Rayonier name, we plan to announce a new name and ticker symbol for the company later in the first quarter. Our leadership team is working diligently to execute key integration initiatives, including optimizing our organizational structure and implementing best practices from both companies. Despite challenging market conditions to start 2026, we are energized by the opportunities ahead of us, and I continue to be encouraged by the strong cultural alignment across the combined organization. As we continue to work through the integration process, we remain focused on creating long-term value for our shareholders through synergies, operational efficiencies, and a relentless focus on disciplined capital allocation.

Moving to our fourth quarter financial results, I’ll start with some high-level comments before turning it over to April Tice, Senior Vice President and Chief Accounting Officer, to review our consolidated and segment-level financial results. Following April’s review of the fourth quarter, Wayne Waischeck, our newly appointed Executive Vice President and Chief Financial Officer, will discuss our 2026 outlook for the combined company. We are pleased to finish 2025 with better-than-expected fourth-quarter financial results, which allowed us to deliver full-year Adjusted EBITDA of $248 million, representing an 8% increase over 2024 and exceeding the high end of our prior guidance range.

This outperformance was primarily driven by the record contribution from our real estate segment, which delivered full-year Adjusted EBITDA of $127 million, amid continued strength in our rural HBU markets and further growth in our real estate development business. Full-year pro forma net income was $89 million or $0.57 per share. In the fourth quarter, we generated Adjusted EBITDA of $62 million and pro forma net income of $32 million, or $0.20 per share. Adjusted EBITDA exceeded the high end of our previous guidance range but was down compared to the prior year period, as real estate closing activity in 2024 was heavily concentrated in the fourth quarter.

In our Southern Timber segment, we generated fourth quarter adjusted EBITDA of $32 million, which was down 8% from the prior year period, as a decline in weighted average net frontage realizations and lower revenue from land-based solutions was partially offset by higher harvest volumes. The increase in harvest volumes versus the prior year quarter reflects drier weather conditions, as well as the normalization of green lock demand as salvage activity in the Atlantic region subsided. Turning to the Pacific Northwest Timber segment, fourth quarter adjusted EBITDA of $5 million was roughly $2 million below the prior year quarter, primarily due to a 26% decline in harvest volumes resulting from the Washington dispositions that we completed at the end of 2024.

In our real estate segment, we generated Adjusted EBITDA of $33 million in the fourth quarter, down $31 million from an exceptionally active fourth quarter of the prior year. With that, let me turn it over to April for more details on our fourth quarter financial results.

Conference Operator: Thanks, Mark. As we highlighted last quarter, please note that all periods presented have been retrospectively adjusted to recast the historical results of the former trading segment into the Southern Timber and Pacific Northwest Timber segments, as we eliminated the trading segment following the sale of our New Zealand business last year. Moving to the financial highlights on page 5 of the supplement. For the fourth quarter, sales totaled $117 million, while operating income was $27 million, and net income attributable to Rayonier was $26 million or 16 cents per share. On a pro forma basis, net income was $32 million, or 20 cents per share. Pro forma items in the quarter included $6 million of costs related to the merger with PotlatchDeltic.

Our Adjusted EBITDA was $62 million in the fourth quarter, down from $95 million in the prior year period. Moving to our capital resources and liquidity at the bottom of page five. Our cash available for distribution, or CAD, was $199 million in 2025, versus $141 million in the prior year. The significant increase was driven by a combination of higher Adjusted EBITDA, lower cash interest expense, higher interest income, and lower capital expenditures. A reconciliation of CAD to cash provided by operating activities and other GAAP measures is provided on page eight of the financial supplement.

During the fourth quarter, prior to the announcement of our merger with PotlatchDeltic, we repurchased approximately 110,000 shares at an average price of $26.31 per share, or $2.9 million in total. Following the announcement of the merger in mid-October, our ability to repurchase shares was generally restricted through the close of the transaction. As of year-end 2025, we had roughly $230 million remaining on our current share repurchase authorization. During the fourth quarter, we also paid a $1.40 per share special dividend, and a combination of cash and shares as a result of the taxable gains arising from the sale of our New Zealand joint venture interest earlier in the year.

By issuing shares to satisfy a portion of our REIT taxable income distribution requirements, we retain significant flexibility around future capital allocation priorities. We finished the fourth quarter with $843 million of cash and roughly $1.1 billion of debt. Our net debt to enterprise value, based on our closing stock price at the end of the quarter, was 6%, and our net debt was less than 1x of our 2025 adjusted EBITDA. Now, moving on to our segment results. Let’s start on page 9 with our Southern Timber segment. Adjusted EBITDA in the fourth quarter of $32 million was 8% below the prior year quarter, as lower net stumpage realizations more than offset higher harvest volumes.

Total harvest volumes increased 10% versus the prior year quarter due to drier weather conditions and increased demand for green logs as salvage operations subsided. Average sawlog net stumpage pricing was $25 per ton, a 2% increase compared to the prior year quarter, which was negatively impacted by salvage operations. Pulpwood net stumpage pricing of roughly $12 per ton was 27% lower than the prior year quarter, driven by weaker demand following recent mill closures in the Atlantic region, an unfavorable shift in geographic mix, and dry weather conditions across much of the U.S. South. Overall, weighted average net stumpage realizations decreased 9%, as lower pulpwood pricing was partially offset by a higher proportion of sawtimber volume. In grade markets, sawmills contended with tepid demand throughout the fourth quarter.

As we move through early 2026, we are optimistic that some local markets will see improvement in demand and pricing as sawmills ramp up production in response to improved lumber pricing. In pulpwood markets, conditions were challenging throughout Q4. Dry weather across the U.S. South allowed for the harvesting of typically inaccessible sites, which contributed to elevated supply. In our Atlantic markets, while salvage operations from the 2024 hurricanes have now fully concluded, recent mill closures resulted in weaker overall demand. This combination of increased supply and weaker demand resulted in significant pricing pressures, especially in our Atlantic markets. On a positive note, we are starting to see improved operating rates at some pulp and packaging mills, as production levels are being recalibrated following recent mill closures. However, we expect that dry weather conditions and upcoming maintenance shutdowns will continue to create near-term headwinds to pulpwood pricing.

Looking further ahead, we remain confident that the supply side will tighten meaningfully over the coming years. As we’ve noted previously, the Georgia Forestry Association estimates that approximately 26 million tons of pine and 30 million tons of hardwood were impacted by Hurricane Helene in 2024. This should translate to a significant reduction in regional supply, which we expect will support improved market conditions over time. Moving to our Pacific Northwest Timber segment on page 10, fourth quarter adjusted EBITDA of $5 million was 24% below the prior year quarter due to lower harvest volumes and log prices. Total harvest volumes decreased 26% in the fourth quarter as compared to the prior year period, reflecting the impact of the Washington dispositions we completed in late 2024.

At $87 per ton, average delivered domestic sawlog pricing in the fourth quarter decreased 3% from the prior year period due to softness in mill demand, given market conditions. Meanwhile, at $38 per ton, pulpwood pricing was up 26% versus the prior year quarter due to the reduced availability of sawmill residuals. After a relatively lackluster fourth quarter, lumber pricing has been on an encouraging trajectory in recent weeks in response to constraints on Canadian supply. Moving forward, we expect some producers in the region to ramp up production in response to higher lumber prices, which should translate to positive log price momentum as well.

All things considered, we are optimistic that log markets in the Pacific Northwest will tighten as we move through 2026, with improving demand from sawmills, the lifting of China’s log export ban, and Canadian mill curtailments all contributing to increased market tension. Further, we remain confident in the region’s positioning for the structural changes ahead, as lumber produced in the Pacific Northwest competes more directly with Canadian production, making mills in the region well-positioned to capture market share as import duties and mill shutdowns constrain the supply entering from Canada. Now, moving on to our real estate segment. As detailed on page 11, real estate Adjusted EBITDA totaled $127 million in 2025, which was well above our original guidance range of $86 million-$96 million and represents a record contribution from the segment.

The strong results in our real estate segment were fueled by successful closing of a large conservation sale during the third quarter, as well as continued strong demand for our rural and development properties throughout the year. In the fourth quarter, real estate revenue totaled $42 million on roughly 3,800 acres sold at an average price of $9,700 per acre. Sales decreased significantly from the prior year quarter, which included $495 million in large dispositions. Excluding the large dispositions, pro forma sales in the prior year quarter were $72 million. On a pro forma basis, revenue decreased $30 million due to fewer acres sold, partially offset by a higher average price per acre. Real estate segment Adjusted EBITDA in the fourth quarter was $33 million.

Drilling down, sales in our improved development category totaled $15 million, with our Wildlight development project contributing $9 million and our Heartwood development project contributing $6 million. Sales in Wildlight consisted of a residential pod totaling 112 acres at an average price of $80,000 per acre, generating roughly $9 million in base land sales revenue, with additional upside from builder participation and other fees over time. The next phase of Wildlight, known as the Garden District, is now well underway, with home builders planning to complete construction of models and begin sales this summer. In Heartwood, sales consisted of two residential pods totaling 143 acres at $33,000 per acre, along with a 7.1-acre commercial parcel at $140,000 per acre.

Overall, activity at both Wildlight and Heartwood remains on a favorable trajectory. The investments we’ve made over the past several years in entitlements, infrastructure, and market development are translating into sustained interest from top home builders and prominent commercial end users. Unimproved development sales of $2.1 million consisted of 3 transactions, averaging $28,000 per acre. In the rural category, fourth quarter sales totaled $20 million, consisting of approximately 3,500 acres at an average price of roughly $5,800 per acre. We continue to see healthy demand for HBU properties across our land base. Overall, market sentiment remains positive, and we’re seeing consistent demand for properties at significant premiums to timberland value. I’ll now turn it over to Wayne to discuss our 2026 outlook.

Wayne Waischeck, Executive Vice President and CFO, Rayonier Inc.: Thanks, April. Turning to our outlook for 2026, given the merger closed less than two weeks ago, we are initially providing limited segment guidance for the combined company for 2026, as our team continues to advance through the integration process. This guidance reflects the anticipated pro rata contribution from PotlatchDeltic’s operations starting on January 31st, 2026. With respect to our individual segments, starting with our southern timber segment, we expect to achieve full-year harvest volumes of 12.1-12.6 million tons, reflecting the increase in our sustainable yield as a result of the merger with PotlatchDeltic. We further expect that regional pine frontage realizations will trend modestly higher from fourth quarter levels during the year as supply-demand conditions normalize.

However, we expect that full-year 2026 average pine sawtimber realizations for the combined company’s southern timber segment will be lower than the standalone realizations for Rayonier in the prior year, based on pro forma geographic mix of the combined company. In our Northwest Timber segment, we expect to achieve full-year harvest volumes of 2-2.3 million tons, likewise, reflecting the increase in our sustainable yield due to the merger. We further expect that full-year 2026 average log pricing for the combined company’s Northwest Timber segment will be higher than the standalone pricing for Rayonier in the prior year, based on improving demand conditions, a higher mix of saw timber, and the pro forma geographic mix of the combined company.

However, we anticipate that the combined company’s pricing in the Northwest will also have increased sensitivity to lumber pricing compared to legacy Rayonier, as a significant portion of our sawlog sales in Idaho are indexed to lumber prices. In our wood product segment, we’ve been encouraged by the positive momentum in lumber prices to start the year. For the 11 months of contribution from this segment in 2026 following the merger, we expect lumber shipments to total approximately 1.1 billion board feet. Based on quarter-to-date price realizations and current lumber pricing, we would expect the wood product segment to have a slightly positive contribution to overall Adjusted EBITDA in the first quarter. In our real estate segment, we are seeing continued momentum to start 2026, supported by a strong pipeline of rural land sales and improved development transactions.

Based on our current transaction pipeline and sales closed to date, we expect an Adjusted EBITDA contribution in the first quarter of $30-$35 million. For the full year, we expect an Adjusted EBITDA contribution from our real estate segment of $180-$200 million. We expect to provide additional updates on guidance, as well as our progress on synergy targets as the year progresses. Turning to our balance sheet, we remain well-positioned following the closing of the merger with a conservative leverage profile and significant capital allocation flexibility. As April noted earlier, we were generally restricted from repurchasing shares during the pendency of the merger. However, we continue to believe that our stock price is trading at significant discount to net asset value. In addition, the dividend yield is over 4.5% at the current stock price.

As such, we believe that share buybacks represent a compelling use of capital and one of the most attractive ways to create value for our shareholders in the near term. I’ll now turn the call back to Mark for closing comments.

Mark McHugh, President and CEO, Rayonier Inc.: Thanks, Wayne. As we wrap up our prepared remarks, I’d like to commend our team for their extraordinary focus and dedication during this transitional period for the company. Throughout 2025, our team navigated difficult market conditions while identifying and executing on opportunities to enhance long-term value. In particular, we had an exceptional year in our real estate business, which allowed us to deliver full-year Adjusted EBITDA ahead of our original guidance. Following our merger with PotlatchDeltic, we now have an enhanced platform to unlock HBU value in our real estate business, and we’re excited about the opportunities we see ahead for the combined portfolio. While timber and lumber market conditions were certainly challenging throughout 2025, I’m proud of how both companies stayed focused on near-term execution.

With the merger now complete, we believe that our shareholders will benefit from a more diversified timberland portfolio, along with an integrated wood products manufacturing business that is well-positioned to benefit from positive long-term fundamentals. To this end, we’ve been encouraged by the recent improvement in lumber prices, and we expect further upside as end market demand continues to improve, especially given the supply constraints in Canada. On the land-based solutions front, our combined team continues to advance solar, carbon capture and storage, and carbon offset project opportunities with high-quality counterparties. We remain very optimistic about the long-term value creation potential from this business, as substantial capital continues to flow into AI and data center infrastructure, thereby driving increased demand for clean energy solutions.

As I discussed at the beginning of the call, merger integration activities continue to advance, and our leaders are already starting to implement best practices as we cross-pollinate our teams. I’m excited to see how these efforts progress as we look to grow our future revenue opportunities and improve our operational efficiency. On the cost side, we continue to estimate run rate synergies of $40 million by the end of year two, which will be driven primarily by corporate and operational cost optimization. While many of these decisions are extremely difficult, especially when they involve personnel reductions, we believe they are necessary to maintain an efficient overhead structure and to maximize the long-term value creation potential of this merger. In sum, while timber and lumber markets continue to face some headwinds, our recent results underscore the resilience of our portfolio and our business model.

As we move forward as a combined company, I’m confident that our well-diversified portfolio, our exceptionally talented team, our strong balance sheet, and our disciplined approach to capital allocation leave us well-positioned to navigate the current market environment with a view towards building long-term value per share. Lastly, I want to take a moment to recognize the significant contributions of our outgoing Executive Vice President and Chief Resource Officer, Doug Long, who’s retiring from Rayonier after 30 years of dedicated service. Doug has been an exemplary leader of our timber business, as well as a valuable contributor on our earnings calls for the last 12 years. On behalf of the board and the entire company, I want to thank Doug for his invaluable contributions and wish him well in his future endeavors. That concludes our prepared remarks, and I’ll now turn the call back to the operator for questions.

Conference Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Thank you for your patience. Your first question comes from Mark Weintraub of Seaport Research Partners. Your line is open. Please go ahead.

Mark Weintraub, Analyst, Seaport Research Partners: Thanks. Great. Can you hear me?

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, Mark, can you hear us?

Mark Weintraub, Analyst, Seaport Research Partners: Great. Okay. Yes, I can. Thanks.

Mark McHugh, President and CEO, Rayonier Inc.: Okay, great.

Mark Weintraub, Analyst, Seaport Research Partners: Congratulations, obviously, all the hard work, et cetera. So first, just on real estate, 2025 was a very strong year, actually, for both companies. And, you know, you’re looking for another strong year in 2026, perhaps not quite as much as on 2025 on a pro forma basis. Just curious if you could give a little bit more color on puts and takes and what you see as drivers on the rural side, the development side, improved, unimproved. Anything you can provide to help us kind of assess changes and potential trajectories?

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, sure, Mark, I’ll take that. You know, as we’ve discussed in the past, real estate sales are invariably going to be lumpy quarter to quarter, year to year. Results tend to be pretty significantly impacted by a handful of larger transactions, and we had a number of those in 2025. You know, that said, it’s been a number of years now here where we’ve had a pretty good run on HBU, and we’ve been able to continue to monetize you know, properties within the portfolio at very strong premiums to underlying timberland value. I’d say we used to think of that rural HBU premium as being around 50%, give or take, relative to timberland value on average.

You know, but look, underlying land values have just continued to appreciate, and over the last few years, I’d say our rural HBU premiums have been more like 100%+. So, you know, this is a part of our business that we actually think is a bit underappreciated. Every time we sell an acre of land at that kind of premium to underlying timberland value, we believe we’re generating NAV accretion, especially when you look at that public-private arbitrage that continues to exist in the stock price. You’ve often heard us say that HBU business is really all about premium, and so that’s what we’re really focused on in terms of measuring our success in the business.

Notably, it’s really been premium more so than volume that’s been driving our outperformance in real estate over the last several years. We really haven’t had much in the way of elevated volume. It’s really been, you know, stronger pricing, particularly in our rural business, as well as the, you know, folding in the development business in a more meaningful way in the last few years. So, you know, look, we’re gonna continue to try to take advantage of those types of opportunities within the portfolio, and that may ultimately translate to a higher long-term trend line in terms of the contribution of that real estate business relative to what we’ve seen historically.

Mark Weintraub, Analyst, Seaport Research Partners: Great. And certainly, it has been very visible, this much higher accretion. And just curious, so do you think that sort of it’s the overall market as opposed to the mix that you’ve chosen to be selling in the last little bit?

Mark McHugh, President and CEO, Rayonier Inc.: I’d say it’s more the overall market, but certainly a big factor within that is just where-

Mark Weintraub, Analyst, Seaport Research Partners: Right

Mark McHugh, President and CEO, Rayonier Inc.: ... we own lands. Again, Texas and Florida, in particular, have been very strong HBU markets for us. And, you know, standalone Rayonier historically owned a lot of acreage in that region. But, you know, across the board, we’re seeing strong HBU premiums, very strong land values. You know, certainly despite the challenging timber market conditions that we’re seeing, land values have held up very well and have just continued to appreciate. So, you know, again, we’re gonna continue to take advantage of those types of opportunities.

Mark Weintraub, Analyst, Seaport Research Partners: Super. And then just one second, if I could. So you talked about. You know, you gave us kind of where your net debt was Rayonier, end of the year, and you talked about the attractiveness of continued share repurchase. I think you said you had $230 million left on the authorization. So just, I guess, when we think about gating factors for how much share repurchase you’re inclined, obviously, one is gonna be where the stock price is and the relative discount to your view of value.

But what can you share with us perhaps about, you know, your capital structure and any other factors that would sort of be an important determinant of how much share repurchase under different circumstances you might be willing to think about in the year ahead?

Mark McHugh, President and CEO, Rayonier Inc.: ... Yeah, no, it’s a great question. You know, as we discussed in the prepared remarks, closed the merger less than two weeks ago, so still some moving pieces there as it relates to, you know, balance sheet, transaction, and integration expenses. I’d say the initial wave of kind of, you know, big-ticket deal expenses are largely out the door in terms of advisory fees, you know, the dividend, special dividend to Rayonier shareholders, the cash consideration to legacy Potlatch shareholders, as a result of that, as well as some other transaction costs. So those have all been paid. But recognize there are still some costs like, you know, organizational restructuring that will phase in over time.

As we sit now, kind of immediately post-close, you know, we expect pro forma net debt to be in the range of probably $1.3-$1.4 billion. That would put us comfortably inside of our, you know, 3x net debt to mid-cycle EBITDA leverage target that we’ve laid out in the past and laid out in connection with the merger announcement. So, you know, again, while timber and lumber markets remain challenging, we think the balance sheet is in really good shape, and we still have a lot of financial flexibility around cap allocation. And again, just in terms of what that appetite might be going forward, we certainly think we have some balance sheet capacity currently.

You know, certainly as we see synergies phase in, you know, that should improve leverage as well. And so we think we have the opportunity to be opportunistic on that front here moving forward.

Mark Weintraub, Analyst, Seaport Research Partners: I don’t know if you’re willing to hazard, but is there kind of a type of mid-cycle number we should be thinking about, in terms of EBITDA?

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, you know, again, with the merger having just closed a couple of weeks ago, we’re not in a position to put that out there quite yet. But look, if you look at the different components of the portfolio, you know, the timber business has obviously been much more stable historically than the wood products manufacturing business. And the real estate business, again, as we’ve talked about, it tends to be lumpy. And so, you know, historically, the peers with lumber manufacturing assets, you know, haven’t generally put out kind of annual guidance around that business, just given the variability and unpredictability of lumber prices. But I would continue to expect that our timber business would be relatively stable.

So, you know, we can certainly kind of talk through some historical benchmarks and kind of how we think that might look on a go-forward basis. But two weeks removed from the merger closing, I don’t think we’re quite ready to put out a view of mid-cycle EBITDA.

Mark Weintraub, Analyst, Seaport Research Partners: Understood, and look forward to those conversations. Thanks.

Conference Operator: A kind reminder that if you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question, and if you are muted locally, please remember to unmute your device. Your next question comes from Buck Horne of Raymond James. Your line is open. Please, go ahead.

Buck Horne, Analyst, Raymond James: Thanks, everybody. I appreciate it, and congrats again on completing the merger ahead of schedule. A lot of hard work went into that, so great job. Wanted to touch on the initial harvest guidance for the combined companies. Just thinking through the numbers a little bit, just, you know, based on Potlatch’s old, you know, projections and kind of where you guys are shaking out. Just kind of wondering kind of what went into those assumptions. It looked like it’s a little lighter than we would have put together combined, but wondering if that’s just baking in a little extra conservatism or if this is just kind of the new sustainable run rate going forward?

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, I guess first and foremost, recognize that we’re only getting a partial year granted, 11 out of 12 months, but a partial year contribution from the PotlatchDeltic Timberland portfolio, and so it won’t necessarily be a full pro forma run rate that’s reflected in that forward guide. But, you know, I think if you look at kind of, you know, what Rayonier’s disclosed sustainable yield has been in the different regions, recognizing that we have some... We’ve had some portfolio moves as well during the course of the last year or so, we think it’s kind of generally in line with how we’ve got it in the past.

Buck Horne, Analyst, Raymond James: Okay. I appreciate that. And then just wanted to talk a little bit about the pulpwood markets and the pricing that you’re seeing there, and just, you know, the kind of the continued deterioration of demand, at least in the U.S. South, for, you know, container board and other, you know, mill products. Just, you know, is there any signs that we’re reaching a bottom in terms of that demand, or is there still more pressure to absorb in terms of just working through the excess log volume that’s out there? How do you kind of weigh the puts and takes in the pulpwood and kind of what can stabilize that market?

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, certainly these past several quarters have been pretty challenging in the southern timber segment. We’ve had this perfect storm of weaker demand driven by mill closures, you know, coupled with elevated volume, first due to the hurricane salvage, you know, last year, and then kind of drier weather conditions as the year progressed. But as we discussed in the prepared remarks, we think that salvage volume is largely behind us at this point, and longer term, we think the amount of standing inventory that was destroyed by the hurricane is ultimately going to translate to a tightening of supply in those market areas that were impacted. So overall, we’re still optimistic that market fundamentals, you know, should support, you know, growth in housing starts and timber demand over the long term.

You know, we still have a significantly underbuilt and aging housing stock, and that’s got to be addressed at some point. And we also expect that even if overall construction demand remains flat, we’re going to see U.S. mills gain market share, which bodes well for timber demand and pricing. You know, again, as we’ve talked about in the past, timber supply-demand dynamics are highly localized. So we think that’s another reason that the merger with PotlatchDeltic makes a lot of sense from a shareholder perspective, as we’re going to benefit from a more diversified portfolio that’s less reliant on one particular market area. But as it relates to pulpwood, in particular, I’d say most of that downward pressure has been in those Atlantic markets.

You know, again, we just had a lot of elevated supply in the last year with the hurricanes and the dry weather. We’d obviously like to see higher pricing, but we believe that some of these pressures, again, are going to be transitory in nature. It’s also worth noting that even with those recent price declines that we’ve seen, these Atlantic markets are still among the strongest in the U.S. South, and just in terms of that relative pulpwood pricing. So we still think that these markets are desirable from a long-term perspective. Recall that during COVID, we saw those markets, you know, really shoot up significantly from a pricing standpoint when we saw elevated demand.

So, you know, again, still think that those markets are highly attractive, and we think as those pressures subside, particularly on the supply side, we should see some improvement in pricing there. But like you said, it’s certainly been a challenging dynamic in the last, you know, 12-18 months.

Buck Horne, Analyst, Raymond James: Got it. Got it. Appreciate it. Congrats, guys.

Mark McHugh, President and CEO, Rayonier Inc.: Thanks, Buck.

Conference Operator: Your final question comes from Ketan Mamtora of BMO Capital Markets. Your line is open. Please go ahead.

Ketan Mamtora, Analyst, BMO Capital Markets: Good morning, and I want to extend my congratulations as well. Perhaps to start with, you know, you talked about sort of share repurchases. I’m curious also on the, on the M and A side, are you seeing kind of, opportunities at this point, whether it is on the timberland side or on downstream wood products, given how depressed lumber prices have been for the last couple of years? Or do you think that at this point, share repurchases present kind of the best, best opportunity for you guys?

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, I mean, I’d certainly just to comment maybe broadly on the, on the timberland M and A market, I’d say that it remains, you know, quite competitive, especially for higher-quality assets. And we’re continuing to see very strong values being paid for assets in both the U.S. South and the Northwest. There’s still a lot of private capital that’s looking to invest in timberland. By our estimate, I think there’s about $10 billion of dry powder or capital available for timberland acquisitions, and I’d say a significant portion of that is really targeting carbon or climate-focused investments. And so, you know, again, that timberland M and A market we expect is going to remain active.

You know, as it relates to our appetite for acquisitions on the timberland side, you know, given our overall cost of capital right now and again, a very competitive timberland market, it’s tough, candidly, for us to make the math pencil on most transactions. That said, we’re going to continue to evaluate acquisition opportunities as they become available, especially in regions where we already have an established presence. You know, we’ve had some success historically in finding opportunities around bolt-on deals that we think add value to the portfolio, so we’ll continue to look for those types of opportunities. But again, overall, we think the best place for us to buy timberland assets right now is in the public market by buying back our own stock.

Of course, as we fold in the wood products manufacturing business into the portfolio, we’ll also look at opportunities on that front in terms of investing in, you know, debottlenecking, capacity expansion projects, and the like. But, you know, again, we’re going to look at those through the same lens as we look at any other capital allocation alternative. It’s really going to be with a view towards building a long-term value per share and comparing that to the other alternatives that we have available. So again, we see that as another tool in the capital allocation toolkit, but we’re. We haven’t, we’re not going to be prescriptive about how we go about that going forward.

Ketan Mamtora, Analyst, BMO Capital Markets: No, that’s, that’s fair, and, and that’s, that’s quite helpful context. And then, Mark, and I know you don’t want to sort of, you know, this is not like a quarterly update, but curious, any update you have, around, you know, any of the, other opportunities around carbon or anything else that you’d like to highlight, how, how that opportunity is evolving, and how should we think about, sort of ramp up as we move through, you know, 2026 and into 2027?

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, I mean, broadly, on our Land-Based Solutions business, I’d say we continue to be very focused on growth opportunities in that business. We’re allocating resources to building out those platforms and really trying to approach these opportunities with a long-term mindset. With the recent closing of the merger, we’re also really excited about what we see as an enhanced platform to tackle those opportunities as a combined company. You know, both Rayonier and PotlatchDeltic, we both already made some pretty significant strides in the solar arena, and we’re each gaining exposure to some new markets and revenue streams through the merger on the land-based solutions front. You know, Rayonier had more exposure to carbon capture and storage.

You know, we, PotlatchDeltic has had the lithium and the brine opportunity. So again, we’re each gaining exposure to some new opportunities there. And on the carbon market front, you know, again, I think that’s an area where we continue to see a lot of opportunity long term, and we think that this larger platform and the larger portfolio really positions us well to be a supplier of choice into that carbon offset market. So, you know, again, overall, still see a lot of upside in that LBS business.

With all that said, there have obviously been a lot of moving pieces on the public policy front, and I think the market is still digesting the current regulatory environment and, you know, kind of long-term impact on project underwriting of the One Big Beautiful Bill Act, et cetera. So you know, definitely seeing the timetables on both solar and CCS projects getting pushed out due to various factors, but again, still very optimistic about the long-term trajectory of that business, and I think we’re going to see some progress on that front in 2026.

Mark Weintraub, Analyst, Seaport Research Partners: ... Got it. That’s very helpful. Good luck, as you integrate, you know, as a combined company.

Mark McHugh, President and CEO, Rayonier Inc.: Thanks, Ketan.

Conference Operator: Your next question comes from Anthony Pettinari of Citi. Your mic is open. Please go ahead.

Anthony Pettinari, Analyst, Citi: Good morning, Mark, Wayne, April. Congratulations on the combination.

Mark McHugh, President and CEO, Rayonier Inc.: Thanks.

Anthony Pettinari, Analyst, Citi: I just had a quick follow-up. Hey, I just had a quick follow-up on Buck’s question on pulpwood pricing, and, you know, understand there’s a few things going on there, and you listed some reasons why that market might tighten. You know, it seemed like for a long time, pulpwood prices were maybe averaging, I don’t know, $15-$17 a ton. You know, obviously went higher during the pandemic. From your comments, Mark, I mean, is the expectation that you could get back to kind of more of a normalized range in the next couple quarters or more in, like, 2027?

Or, you know, I know you’re not giving, you know, kind of precise guidance around this, but I’m just trying to understand whether this is more of, like, really a transitory thing or whether you have to see maybe some things that would play out maybe more into next year.

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, I think it’s tough to say. I certainly wouldn’t anticipate kind of a near-term bounce back to the type of pulpwood pricing levels that we, you know, saw 2 or 3 years ago. And as it relates to the different factors that are impacting pulpwood pricing, I would say some of them are transitory, and some of them are more sustained in nature. We think some of the weather impacts, in particular, the pickup and salvage volume more recently, the dry weather, which has led to accessibility of a lot of sites that were in more normal weather conditions are not accessible, so that translated to a pickup in volume, and that again came on the heels of that hurricane salvage volume.

And so those supply-side effects, we certainly think are transitory in nature. And if anything, again, just given the magnitude of the devastation from Hurricane Helene, we think the longer-term impact in those markets is that we’re gonna see a fair amount of inventory come out of the system, which should be a long-term positive for pulpwood supply-demand dynamics and pricing in that region. But look, some of the mill shutdowns on the other side, I’d say, are more perpetual in nature.

So kind of hard to say where that ultimately settles out, but it certainly feels as though we’ve, you know, we’ve kind of bottomed here recently, and we do expect some positive momentum through the year, but certainly not a bounce back to the levels that we saw a couple of years ago.

Anthony Pettinari, Analyst, Citi: Got it. Got it. No, that’s very helpful. And then just maybe last one. You know, you were asked about sort of relative attractiveness of, you know, timberland investments versus wood products, and, you know, obviously, whatever has the highest return wins, and that makes a lot of sense. But I’m just wondering if there’s anything you can add in terms of maybe philosophically, how you think, like, a wood products business could fit within the timberlands portfolio.

I mean, is it something where, you know, your investors are saying, "We kind of want maybe a little bit more cyclical exposure," or maybe you’re more positive or less positive on U.S. lumber long term, or, you know, other than just, you know, return maximization, which is obviously the most important thing, is there any sort of way that you think about wood products within, you know, the broader timberlands portfolio?

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, no, it’s a great- it’s a great question. You know, as we said in our prepared remarks, I’d say we’re very encouraged by some of the recent pricing gains that we’ve seen in the lumber market. And we’re optimistic that we’re gonna continue to see some momentum there, you know, particularly given the supply constraints on Canadian lumber. You know, PotlatchDeltic team, I’d say, did a great job in investing in their facilities over time to really keep them well-positioned on the cost curve. We think that that bodes well for the future opportunities in that business. And look, we ultimately think our shareholders are going to benefit from having that integrated model over time.

And so, you know, on the capital allocation front, you know, given some of the headwinds that we’re seeing in, in, you know, wood products and timber business currently, you know, again, not anticipating any large-scale near-term investments there, but we certainly see those facilities as being part of the combined company over the long term. And we’ll certainly, you know, continue to evaluate incremental investment opportunities in the mills over time, you know? But like I said, we’re going to evaluate those opportunities through the same lens. It’s where can we get the highest return? You know, how do those alternatives compare to other capital allocation alternatives that we have available?

You know, like I said, the bar is pretty high right now for any external growth or any kind of capital investment projects, kind of relative to the opportunity that we see in buybacks.

Anthony Pettinari, Analyst, Citi: Okay. That, that’s very helpful. I’ll turn it over.

Conference Operator: Your next question comes from Mark Weintraub of Seaport Research Partners. Your mic is open. Please go ahead.

Mark Weintraub, Analyst, Seaport Research Partners: Sure. Thank you. Some real quick follow-ups, if I could. Just one, I assume the indexes in Idaho are unchanged related to the transaction?

Wayne Waischeck, Executive Vice President and CFO, Rayonier Inc.: Mark, yeah, this is Wayne. You’re correct. Yeah, no change in the indexing in Idaho. We’re still... That, that volume in Idaho for sawtimber is still approximately 75% is indexed.

Mark Weintraub, Analyst, Seaport Research Partners: Okay, super. And then second, is it fair to say that in wood products, it’s really just sawmills and lumber that you would look to grow in? Or, you know, given need to find homes for pulpwood, would you consider some other products as well? Is that possibly within your bandwidth?

Mark McHugh, President and CEO, Rayonier Inc.: Yeah, again, Mark, two weeks removed from the merger closing, I don’t wanna get kind of too far out there in terms of speculating on investments outside of our core business areas. But again, like I said earlier, we see that platform as just another kind of tool in the toolkit, and we’ll evaluate those opportunities as they become available.

Mark Weintraub, Analyst, Seaport Research Partners: ... Fair. And then just since I got you, just kind of synergies. I think you said $40 million run rate by the end of year two. Have you provided kind of a number for how much you expect to run through to show up this year? And then, and lastly, any—obviously, we had some, you know, pretty harsh wintry type storms down in the south. Did that impact your business at all?

Wayne Waischeck, Executive Vice President and CFO, Rayonier Inc.: Yeah, Mark, this is Wayne. I’ll take those. As it relates to synergies, yeah, we laid out the $40 million target. We expect to achieve on a run rate basis, half of that in the first year, so $20 million on a run rate basis here in year one. You know, moving forward, we’ll give updated updates on where we’re at with those synergies and how we’re achieving those. But as you would expect, you know, the initial ones on consolidation of executive teams and boards, you know, we’re already hitting those synergies, so things are moving forward as planned. As it relates to your second question, yeah, the storms certainly fairly severe for the South, but all in all, not a significant impact to production or the results for the year.

You know, we laid out in guidance 1.1 million board feet of shipments and, you know, that’s on an eleventh-month basis, so really no significant impact to the business.

Mark Weintraub, Analyst, Seaport Research Partners: Super. Thanks so much.

Conference Operator: There are no further questions at this time. I will now turn the call over to Collin Mings for closing remarks.

Collin Mings, Vice President of Capital Markets and Strategic Planning, Rayonier Inc.: This is Collin Mings. I’d like to thank everybody for joining us. Please contact us with any follow-up questions.

Conference Operator: This concludes today’s call. Thank you for attending. You may now disconnect.