Can management provide a finer point on pulpwood price improvement into H2, considering containerboard price hikes and higher recycled fiber costs?

Mark McHugh noted that pulpwood markets have generally stabilized after challenging years, with green shoots for positive momentum in coming quarters due to improved end-market dynamics for customers, containerboard prices, and mill operating rates. “I wouldn't say that we have seen a significant amount of positive momentum on pulpwood pricing at this stage. But what we have seen is that markets have generally stabilized... we're seeing just some green shoots for some potential positive price momentum here in the coming quarters.”

What are the expectations for the timing and level of the new Canadian lumber import duties, and will additional tariffs hit other wood products?

Mark McHugh clarified that incremental tariffs would not attach to lumber. Even with a modestly lower preliminary rate (AR7), the combined duty burden on Canadian lumber would still be ~35% (including Section 232 tariff), meaning US producers will continue to gain market share. Timing for the reset is expected later in the year. “Even at the modestly lower preliminary rate, AR7 would still be the highest -- or I'm sorry, the second highest combined rate since the softwood lumber agreement expired in 2015. And when you layer the Section 232 tariff on top of that, the all-in duty burden on Canadian lumber would still be roughly 35%.”

Why has Rayonier been downsizing its position in the Pacific Northwest, given the recent 1031 exchange and prior sales?

Mark McHugh explained it's a relative opportunity set; the US South offers more embedded option value in HBU Real Estate and land-based solutions. Past dispositions in the PNW aimed to upgrade the residual portfolio by minimizing Hemlock and improving age class balance. Rayonier still likes its PNW position and maintains sufficient scale. “I wouldn't say that there's anything about the Northwest. It makes us want to necessarily shrink there. I think it's just a relative opportunity set. Look, in the U.S. South, there was just a lot more embedded option value around HBU Real Estate as well as land-based solutions.”

RYN

Rayonier (RYN) Q2 FY26 earnings call: guidance and Q&A

Q: What are the potential HBU real estate and land-based solutions upsides for the 57,000 acres acquired in Texas and Alabama, beyond timber EBITDA?

Mark McHugh stated there's nothing particularly unique about these properties for land-based solutions, but they are in markets where Rayonier has experience in HBU real estate and land-based solutions, making them additive to the portfolio. “I wouldn't say that there's anything particularly unique about these properties as it relates to land-based solutions upside. But recognize these are markets where -- we have a lot of experience, both on the real estate HBU side as well as finding opportunities on the land-based solutions side.”

Earnings call· Jun 2026 (Q2 FY26)· Real Estate· Aug 6, 2026

Source: earnings call transcript

Executive summary

Rayonier Q2 FY26 — Strong Performance Post-Merger & Strategic Land Exchange

Rayonier delivered a strong second quarter, demonstrating effective integration of the PotlatchDeltic merger and advancing its portfolio optimization strategy through a significant land exchange. The company capitalized on improved lumber prices and robust real estate demand, while actively returning capital to shareholders via buybacks. Management remains focused on long-term value creation despite macroeconomic uncertainties and challenges in pulpwood markets.

Highlights

Adjusted EBITDA of $124 million, well above the prior year period, primarily due to PotlatchDeltic contributions and solid operational performance.
Southern Timber Adjusted EBITDA increased 85% year-over-year to $53 million, driven by more than doubled harvest volumes.
Northwest Timber Adjusted EBITDA was $26 million, significantly above the prior year quarter, with harvest volumes more than doubling.
Wood Products segment generated $25 million of Adjusted EBITDA, its strongest quarterly result since Q3 2022, with average lumber price realization of $505 per MBF.
Real Estate revenue totaled $54 million on approximately 7,500 acres sold, contributing $38 million in Adjusted EBITDA, up $20 million from the prior year.
Repurchased 3.5 million shares for $72 million in Q2, contributing to a total of 4.9 million shares repurchased for $103 million in H1 FY26.

Concerns

Pulpwood markets experienced challenging conditions with subdued demand and increased supply from dry weather and salvage harvesting, though pricing has generally stabilized.
A casualty loss of approximately $2 million was recorded in the Southern Timber segment due to wildfires affecting 9,300 acres in Georgia.
The solar option portfolio may shrink in coming quarters as developers focus on optimizing pipelines and sorting through interconnection costs and regulatory changes.

Guidance & targets

Category	Target	Timeline	Confidence
Full year harvest volumes	12.2 million to 12.5 million tons high materiality	FY26	High
Q3 harvest volumes	3.1 million to 3.3 million tons medium materiality	Q3 · FY26	High
Regional sawtimber and pulpwood prices	remain relatively stable medium materiality	Q3 · FY26	Medium
Full year average pine prices	lower than the stand-alone prices for Rayonier in the prior year medium materiality	FY26	High
Full year harvest volumes	2 million to 2.2 million tons high materiality	FY26	High
Q3 harvest volumes	approximately 600,000 tons medium materiality	Q3 · FY26	High
Overall sawtimber prices	modestly higher medium materiality	Q3 · FY26	Medium
Full year 2026 average log pricing	higher than the stand-alone pricing for Rayonier in the prior year medium materiality	FY26	High
Full year lumber shipments	approximately 1.1 billion board feet high materiality	FY26	High
Q3 lumber shipments	320 million to 330 million board feet medium materiality	Q3 · FY26	High
Adjusted EBITDA contribution	$25 million to $35 million high materiality	Q3 · FY26	High
Adjusted EBITDA contribution	$180 million to $200 million high materiality	FY26	High
Net Debt to EBITDA	inside of 3x high materiality	Ongoing	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Southern Timber Increased harvest volumes more than offset lower pricing. Sawlog demand was steady as lumber prices climbed. Pulpwood markets were challenging but pricing has generally stabilized, with green shoots for positive momentum. Adjusted EBITDA growth YoY: 85%Total harvest volumes: more than doubled YoYIncremental volume from PotlatchDeltic: 1.5M tonsCasualty loss: $2MSalvage harvesting: 50,000 tons	—	—	—	$53M Adjusted EBITDA
Northwest Timber Strong harvest activity due to drier than normal weather conditions. Improving lumber prices helped propel sawlog prices higher in Idaho, where a significant portion of sales are indexed to lumber prices. Adjusted EBITDA vs prior year: significantly aboveHarvest volumes: more than doubled YoYIncremental harvest volume from PotlatchDeltic: 360,000 tons	—	—	—	$26M Adjusted EBITDA
Wood Products Improvement driven by supply-side factors (mill curtailments, higher tariffs) and transportation challenges. Overall demand was relatively stable, and pricing remained stable into early Q3. Adjusted EBITDA: strongest quarterly result since Q3 2022Average lumber price realization: $505 per MBFShipments: 314 million board feetAverage lumber price realization increase QoQ: 18% from $427 per MBF (Q1)	—	—	—	$25M Adjusted EBITDA
Real Estate Broad-based demand in Wildlight and Heartwood development projects. Continued interest from solar developers across the Southern land portfolio, achieving strong premiums above timberland value. Acres sold: 7,500Average price per acre: $6,300Adjusted EBITDA growth YoY: up $20MImproved development sales: $6MRural sales: $41MRural acres sold: nearly 7,500Rural average price per acre: $5,400Solar developer sale: 460 acres for $4.6M ($10,000 per acre)	$54M	increased significantly	—	$38M Adjusted EBITDA

RYN operating KPIs by quarter

RYN operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Harvest volume PotlatchDeltic	~1M tons Total harvest volumes increased 76% versus the prior year quarter, primarily due to the addition of roughly 1 million tons of volume from the PotlatchDeltic timberlands. Source: earnings call transcript	~1.5M tons Total harvest volumes more than doubled versus the prior year quarter, primarily due to the addition of roughly 1.5 million tons of volume from the PotlatchDeltic timberland. Source: earnings call transcript	—
Average lumber price realization Wood Products	$437 During this period, our average lumber price realization was $437 per MBF and shipments totaled 199 million board feet. Source: earnings call transcript	$505 Our average lumber price realization was $505 per MBF and shipments totaled 314 million board feet, in line with our prior guidance. Source: earnings call transcript	+15.6%
Lumber shipments Wood Products	199M board feet During this period, our average lumber price realization was $437 per MBF and shipments totaled 199 million board feet. Source: earnings call transcript	314M board feet Our average lumber price realization was $505 per MBF and shipments totaled 314 million board feet, in line with our prior guidance. Source: earnings call transcript	+57.8%
Acres sold Real Estate	~7,700 acres In the first quarter, real estate revenue totaled $60 million on approximately 7,700 acres sold at an average price of $7,300 per acre. Source: earnings call transcript	~7,500 acres In the second quarter, real estate revenue totaled $54 million on approximately 7,500 acres sold at an average price of $6,300 per acre. Source: earnings call transcript	—
Average price per acre Real Estate	$7,300 In the first quarter, real estate revenue totaled $60 million on approximately 7,700 acres sold at an average price of $7,300 per acre. Source: earnings call transcript	$6,300 In the second quarter, real estate revenue totaled $54 million on approximately 7,500 acres sold at an average price of $6,300 per acre. Source: earnings call transcript	-13.7%
Acres sold Rural Real Estate	~7,650 acres First quarter sales totaled $49 million, consisting of roughly 7,650 acres sold at an average price of nearly $6,500 per acre. Source: earnings call transcript	<7,500 acres Second quarter sales totaled $41 million, consisting of nearly 7,500 acres sold at an average price of roughly $5,400 per acre. Source: earnings call transcript	—
Average price per acre Rural Real Estate	<$6,500 First quarter sales totaled $49 million, consisting of roughly 7,650 acres sold at an average price of nearly $6,500 per acre. Source: earnings call transcript	~$5,400 Second quarter sales totaled $41 million, consisting of nearly 7,500 acres sold at an average price of roughly $5,400 per acre. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Solar land option pipeline 77,000 acres Q2 FY26

Most options have terms of 5 to 7 years; 2027 is the first year for a large slug of option maturities, with better visibility on long-term conversion expected over the next 2-3 years.

Deals & partnerships

Resource Management Service (RMS) Tax-efficient like-kind exchange involving the sale of 36,000 acres in Southwest Washington and concurrent acquisition of 57,000 acres in Texas and Alabama. $145M (sale) / $146M (acquisition)

Structured as a tax-efficient like-kind exchange to concentrate capital in markets with stronger cash flow attributes and favorable long-term growth prospects, preserving capital allocation flexibility.

Capital programs

New Corporate Headquarters underway

Signed a lease on new corporate headquarters in Atlanta, expected to open in early 2027, as part of merger integration.

Risks & headwinds

Challenging pulpwood market conditions Q2 FY26, persistent

Subdued demand, historically dry weather across the U.S. South, coupled with salvage harvesting associated with fires.

Mitigation:Pulpwood pricing has generally stabilized; encouraged by recent gains in containerboard pricing and improved mill operating rates for customers.

Wildfires impacting timberlands Q2 FY26

Approximately 9,300 acres of timberlands in Georgia were affected, resulting in a casualty loss of approximately $2 million.

Mitigation:Salvage operations initiated quickly, harvesting approximately 50,000 tons; efforts largely complete, no material impacts to business moving forward expected.

Lengthening solar option conversion timelines Coming quarters, with a big step up in option maturities in 2027

Developers focused on optimizing their pipeline rather than expanding, sorting through interconnection costs, and facing changes in regulatory environment and financial incentives.

Mitigation:Rayonier is focused on identifying higher quality projects; the protracted regulatory process and due diligence required for solar development inherently limit early conversions.

Macroeconomic uncertainty Ongoing

Not quantified.

Mitigation:Focused on optimizing the value of the land base, disciplined capital allocation, and active portfolio management to build long-term value per share.

What to watch in Q3 FY26

Pulpwood pricing momentum

Coming quarters

Current Generally stabilized

Target Positive price momentum

Why it matters

Indicates recovery in a challenging market, impacting Southern Timber segment profitability and overall timberland value.

I'd say that we're seeing just some green shoots for some potential positive price momentum here in the coming quarters.

Find out whether RYN delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the potential HBU real estate and land-based solutions upsides for the 57,000 acres acquired in Texas and Alabama, beyond timber EBITDA?

Mark McHugh stated there's nothing particularly unique about these properties for land-based solutions, but they are in markets where Rayonier has experience in HBU real estate and land-based solutions, making them additive to the portfolio.

“I wouldn't say that there's anything particularly unique about these properties as it relates to land-based solutions upside. But recognize these are markets where -- we have a lot of experience, both on the real estate HBU side as well as finding opportunities on the land-based solutions side.”

asked by Matthew McKellar · answered by Mark McHugh

2 min read 6 chapters

Detailed narrative

Merger Integration Progress

The merger with PotlatchDeltic, which closed in late January, has seen rapid progress in optimizing organizational structure, capturing operational efficiencies, and integrating the two companies' cultures. A new corporate headquarters in Atlanta is expected to open in early 2027, symbolizing the combined entity. The company remains on track to achieve its run rate synergy targets, reflecting effective execution over the past six months.

Strategic Portfolio Optimization

Rayonier executed a tax-efficient like-kind exchange with Resource Management Service (RMS), divesting approximately 36,000 acres in Southwest Washington for $145 million and concurrently acquiring approximately 57,000 acres in Texas and Alabama for $146 million. This transaction is anticipated to be accretive to cash flow on a timber-only basis, with additional upside potential from higher and better use (HBU) real estate sales and land-based solutions opportunities.

This move concentrates capital in markets with stronger cash flow attributes and favorable long-term growth prospects, while preserving capital allocation flexibility.

Southern Timber Market Dynamics

In the Southern Timber segment, increased harvest volumes more than offset lower pricing, leading to an 85% increase in Adjusted EBITDA. Sawlog markets experienced steady demand as lumber prices climbed, supporting stronger demand within the southern footprint. However, pulpwood markets remained challenging due to subdued demand, historically dry weather, and increased supply from salvage harvesting.

Despite this, pulpwood pricing has generally stabilized, with green shoots for positive momentum from recent gains in containerboard pricing and improved mill operating rates.

Real Estate Segment Momentum

The Real Estate segment demonstrated continued momentum, with revenue totaling $54 million from the sale of approximately 7,500 acres. This included a notable 460-acre bolt-on sale to a solar developer for $4.6 million, or roughly $10,000 per acre. The company's pipeline of land under option for lease or sale to solar developers stands at approximately 77,000 acres, underscoring sustained interest in renewable energy projects and strong premiums above timberland value in the rural HBU business.

Data Center Development Opportunities

Rayonier is actively exploring opportunities in data center development, noting increased interest from developers. This interest ranges from small footprints for data centers to several thousand acres for co-located power and buffer zones. The company has formed a cross-functional internal team and engaged outside experts to identify high-potential sites within its land base and market these opportunities.

While site requirements are stringent and development timelines are longer, management is optimistic about future contributions from this use.

Capital Allocation Strategy

The company maintains a conservative leverage profile and significant capital allocation flexibility, evidenced by the repayment of a $200 million term loan using cash on hand. Share repurchases are considered a compelling use of capital, with $103 million spent in the first half of the year, and $126 million remaining on the current authorization.

Rayonier is committed to preserving its investment-grade credit rating and maintaining balance sheet flexibility for opportunistic capital allocation, while also considering high-return capital projects or M&A within its Wood Products business.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.