PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Rayonier Inc. and Rayonier, L.P., highlighting the significant gain from the sale of New Zealand operations and its impact on financial position [Rayonier Inc. Financial Statements](index=5&type=section&id=Rayonier%20Inc.%20Financial%20Statements) Rayonier Inc.'s Q2 2025 performance was significantly boosted by a **$404.5 million** gain from the New Zealand operations sale, leading to strong net income and a strengthened balance sheet Rayonier Inc. Consolidated Statement of Income Highlights (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Sales | $106,538 | $99,639 | +6.9% | | Operating Income | $14,545 | $4,547 | +219.9% | | Gain on sale of discontinued operations | $404,463 | $0 | N/A | | Net Income Attributable to Rayonier Inc. | $408,708 | $1,903 | +21,377.0% | | Diluted EPS | $2.63 | $0.01 | +26,200.0% | Rayonier Inc. Consolidated Balance Sheet Highlights (as of June 30, 2025) | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $892,256 | $303,065 | +194.4% | | Total Assets | $3,514,250 | $3,474,419 | +1.1% | | Total Long-Term Debt, Net | $844,905 | $1,044,410 | -19.1% | | Total Shareholders' Equity | $2,302,217 | $1,780,533 | +29.3% | Rayonier Inc. Consolidated Statement of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $88,687 | $107,627 | -17.6% | | Net cash provided by (used for) investing activities | $658,265 | ($47,445) | N/A | | Net cash used for financing activities | ($198,609) | ($125,078) | +58.8% | - The significant increase in cash from investing activities was driven by **$687.6 million** in net proceeds from the sale of discontinued operations (the New Zealand joint venture)[27](index=27&type=chunk) [Rayonier, L.P. Financial Statements](index=12&type=section&id=Rayonier%2C%20L.P.%20Financial%20Statements) Rayonier, L.P.'s financial statements largely mirror Rayonier Inc.'s due to consolidation, reflecting the same operational results and the significant gain from the New Zealand divestiture, with differences primarily in capital structure - The Operating Partnership's Consolidated Statements of Income and Cash Flows are substantively identical to Rayonier Inc.'s, as Rayonier Inc. operates as an UPREIT and consolidates Rayonier, L.P. for financial reporting[10](index=10&type=chunk)[35](index=35&type=chunk)[45](index=45&type=chunk) Rayonier, L.P. Net Income Highlights (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | Sales | $106,538 | $99,639 | | Operating Income | $14,545 | $4,547 | | Net Income | $413,607 | $3,035 | | Net Income Attributable to Rayonier, L.P. Unitholders | $414,184 | $1,929 | Rayonier, L.P. Capital Structure (as of June 30, 2025) | Capital Component | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | Redeemable Operating Partnership Units | $53,353 | $51,843 | | General partners' capital | $22,690 | $17,772 | | Limited partners' capital | $2,246,297 | $1,759,405 | | Total Capital | $2,302,217 | $1,780,533 | [Notes to Consolidated Financial Statements](index=19&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the **$698.6 million** New Zealand operations sale, segment performance with strong Real Estate offsetting Southern Timber weakness, debt compliance, and interest rate swap usage - On June 30, 2025, the company completed the sale of its 77% interest in its New Zealand operations for a purchase price of **$710 million**, receiving net proceeds of **$698.6 million** and recognizing a gain of **$404.5 million**. These operations are now reported as discontinued[56](index=56&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) Segment Adjusted EBITDA (Six Months Ended June 30) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Southern Timber | $55,433 | $78,652 | -29.5% | | Pacific Northwest Timber | $13,304 | $10,637 | +25.1% | | Real Estate | $20,576 | $9,090 | +126.3% | | Trading | ($560) | $28 | N/A | | **Total Adjusted EBITDA** | **$71,946** | **$77,971** | **-7.7%** | Total Principal Debt Outstanding (as of June 30, 2025) | Debt Instrument | Principal Amount (in thousands) | | :--- | :--- | | Senior Notes due 2031 (2.75%) | $450,000 | | 2015 Term Loan (Variable) | $200,000 | | 2016 Incremental Term Loan (Variable) | $200,000 | | 2021 Incremental Term Loan (Variable) | $200,000 | | **Total Principal Debt** | **$1,050,000** | - The company uses interest rate swaps with a notional amount of **$600 million** to hedge its exposure on its variable-rate term loans, effectively converting them to fixed-rate obligations[132](index=132&type=chunk)[137](index=137&type=chunk) - The company repurchased approximately **1.5 million** common shares for **$34.9 million** during the second quarter of 2025[258](index=258&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=56&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights the **$404.4 million** gain from the New Zealand sale, improved liquidity, strong Real Estate performance offsetting Southern Timber weakness, and an optimistic outlook for timber and real estate markets [Consolidated Results and Segment Performance](index=61&type=section&id=Consolidated%20Results%20and%20Segment%20Performance) Consolidated net income surged due to the **$404.4 million** New Zealand sale gain, with Real Estate driving Adjusted EBITDA growth from continuing operations, offsetting Southern Timber's decline - Southern Timber performance declined in Q2 2025, with a **5% decrease** in harvest volume and a **14% drop** in weighted-average net stumpage realizations, driven by softer mill demand and competing supply from salvage timber[238](index=238&type=chunk) - Pacific Northwest Timber operating income improved to **$1.6 million** from a loss of **$1.5 million** in the prior year, benefiting from a **6% increase** in domestic sawtimber prices and better cost management, despite a **15% volume decrease**[240](index=240&type=chunk) - The Real Estate segment had a strong quarter, with sales increasing to **$29.4 million** from **$15.5 million** YoY. This was driven by significant Improved Development sales in the Heartwood and Wildlight projects and a large Unimproved Development sale in Florida[242](index=242&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) - The company recognized a **$404.4 million** gain on the sale of its New Zealand joint venture, which is reported under discontinued operations[256](index=256&type=chunk) [Liquidity and Capital Resources](index=73&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity significantly strengthened to **$892.3 million** cash due to the New Zealand asset sale, improving the debt-to-capital ratio to **31%**, with sufficient funding for the next 12 months Key Liquidity Metrics | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $892.3 million | $303.1 million | | Total debt (principal) | $1,050.0 million | $1,050.0 million | | Debt to capital ratio | 31% | 36% | | Net debt to enterprise value | 4% | 16% | - Cash provided by investing activities for the first six months of 2025 was **$658.3 million**, mainly due to **$687.6 million** in net proceeds from the sale of the New Zealand joint venture[268](index=268&type=chunk) - During Q2 2025, the company repurchased **1.5 million** shares for **$34.9 million**. Year-to-date, repurchases totaled **1.6 million** shares for **$37.6 million**[258](index=258&type=chunk)[259](index=259&type=chunk) - The company expects 2025 capital expenditures to be between **$52 million** and **$56 million**, and real estate development investments to be between **$23 million** and **$27 million**[275](index=275&type=chunk)[276](index=276&type=chunk) [Outlook](index=72&type=section&id=Outlook) Management anticipates improved second-half 2025 performance, with modestly higher harvest volumes and prices in Southern and Pacific Northwest Timber, and significant Real Estate closing activity - Southern Timber: Expects materially higher volumes and modestly higher pine net stumpage realizations in the second half of 2025 compared to the first half[260](index=260&type=chunk) - Pacific Northwest Timber: Expects weighted-average log pricing to be modestly higher in the second half of the year[261](index=261&type=chunk) - Real Estate: Remains encouraged by the transaction pipeline and expects significant closing activity over the balance of the year[261](index=261&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=80&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages interest rate risk on its **$600 million** variable-rate debt via swaps, effectively converting it to fixed-rate, and discloses fair value sensitivity of its **$450 million** fixed-rate debt - The company has **$600 million** of variable-rate debt, which is fully hedged by an equal notional amount of interest rate swaps, mitigating exposure to interest rate fluctuations[298](index=298&type=chunk)[299](index=299&type=chunk) - A hypothetical one-percentage point increase or decrease in interest rates would result in no change to interest payments on the company's variable-rate debt over a 12-month period due to the hedges in place[299](index=299&type=chunk) - The fair value of the company's **$450 million** of fixed-rate debt was estimated at **$398.3 million** as of June 30, 2025. A hypothetical **1% increase** in interest rates would decrease its fair value by approximately **$20 million**[300](index=300&type=chunk) [Controls and Procedures](index=81&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures for both Rayonier Inc. and Rayonier, L.P. were effective as of June 30, 2025, with no material changes in internal control - For both Rayonier Inc. and Rayonier, L.P., management concluded that disclosure controls and procedures were effective as of June 30, 2025[306](index=306&type=chunk)[310](index=310&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[307](index=307&type=chunk)[311](index=311&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=81&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits and claims arising in the normal course of business, none of which are expected to have a material adverse effect on its financial position - The company is a defendant in various lawsuits and claims arising in the normal course of business, which are not expected to have a material adverse effect on its financial position, results of operations, or cash flow[149](index=149&type=chunk)[312](index=312&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Rayonier repurchased **1.5 million** common shares for **$34.9 million** in Q2 2025, with **$262.4 million** remaining under its share repurchase program, and issued shares for Operating Partnership units Q2 2025 Share Repurchases | Metric | Value | | :--- | :--- | | Total Shares Purchased (Public Program) | 1,472,928 | | Average Price Paid per Share | ~$23.71 | | Total Cost | ~$34.9 million | | Remaining Authorization (as of June 30, 2025) | $262.4 million | - The company issued **9,519** common shares in exchange for an equal number of Operating Partnership units during the quarter[313](index=313&type=chunk) [Other Information](index=83&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025[319](index=319&type=chunk) [Exhibits](index=84&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications for both entities and financial statements in iXBRL format - The report includes required certifications from the Chief Executive Officer and Chief Financial Officer for both Rayonier Inc. and Rayonier, L.P. (Exhibits 31.1, 31.2, 31.3, 31.4, 32.1, 32.2)[320](index=320&type=chunk) - Financial statements and notes are filed in Inline Extensible Business Reporting Language (iXBRL) format (Exhibit 101)[320](index=320&type=chunk)

Financial Data and Key Metrics Changes - The company generated adjusted EBITDA of $45 million in Q2, a 35% increase compared to the prior year quarter, driven by improved results in the Pacific Northwest Timber and Real Estate segments [7][11] - Pro forma net income was $10 million or $0.06 per share, reflecting a $4 million gain from the sale of the New Zealand joint venture [10][11] - Cash available for distribution (CAD) for the first half of the year was $47 million, up from $38 million in the prior year [11][12] Business Line Data and Key Metrics Changes - Southern Timber segment adjusted EBITDA was $28 million, down 16% year-over-year due to a 5% decrease in harvest volumes and a 14% decline in weighted average net stumpage realizations [15][16] - Pacific Northwest Timber segment adjusted EBITDA increased 17% to $7 million, despite a 15% decline in harvest volumes, due to lower costs and higher log prices [20][21] - Real Estate segment adjusted EBITDA was $19 million, significantly above expectations, driven by strong demand and accelerated transaction timing [23][24] Market Data and Key Metrics Changes - Average sawlog stumpage pricing in the Southern Timber segment decreased by 9% to $27 per ton, while pulpwood pricing fell 25% to approximately $13 per ton [16] - In the Pacific Northwest, average delivered domestic sawlog pricing increased 6% to $96 per ton, with pulpwood pricing up 4% to $32 per ton [20][21] - The company anticipates improved market conditions for pulpwood due to increased mill operating rates and reduced salvage volume [19] Company Strategy and Development Direction - The company completed the sale of its New Zealand joint venture for $710 million, exceeding its original target of $1 billion in asset dispositions [4][5] - Plans to use at least 50% of the sale proceeds to reduce leverage and return capital to shareholders through share repurchases and a special dividend [5][6] - The company remains focused on opportunistic capital allocation, including share buybacks and potential reinvestment into synergistic acquisitions [53][54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of 2025, expecting improved timber market conditions due to reduced Canadian lumber supply and normalization of demand for green logs [30][31] - The company anticipates a stronger contribution from the Real Estate segment in the second half, with full-year adjusted EBITDA expected to be at or above the high end of prior guidance [28][33] - Management highlighted ongoing efforts in land-based solutions, including solar and carbon capture projects, as areas for future growth [34][35] Other Important Information - The company closed the second quarter with $892 million in cash and approximately $1.1 billion in debt, with a weighted average cost of debt around 2.4% [12][13] - The company's credit rating was upgraded from BBB- to BBB following the New Zealand transaction [14] Q&A Session Summary Question: Are you seeing increasing tension in timber prices due to upcoming Canadian duties? - Management noted improved pricing during the quarter, with steady conditions expected as mills increase demand [43][44] Question: What are the next steps for the company after completing the transformation? - The company plans to focus on share buybacks and opportunistic capital allocation while maintaining a leverage target below 3x net debt to EBITDA [49][53] Question: How does the upcoming hurricane season impact timber assets? - Management indicated that they have adapted their practices to reduce vulnerability to storm damage, but the impact of future storms remains uncertain [57][60] Question: What is the outlook for real estate demand? - Demand remains strong across various categories, with significant transactions anticipated in the second half of the year [62] Question: What is the impact of the One Big Beautiful Bill on solar projects? - The company continues to see robust activity in solar development despite uncertainties, with a strong pipeline of projects [68][69]

Financial Data and Key Metrics Changes - The company generated adjusted EBITDA of $45 million in Q2 2025, a 35% increase compared to the prior year quarter, driven by improved results in the Pacific Northwest Timber and Real Estate segments [6][11] - Pro forma net income was $10 million or $0.06 per share, with total sales of $107 million and operating income of $15 million [10][11] - Cash available for distribution (CAD) for the first half of the year was $47 million, up from $38 million in the prior year period [11] Business Line Data and Key Metrics Changes - Southern Timber segment adjusted EBITDA was $28 million, down 16% from the prior year due to a 5% decrease in harvest volumes and a 14% decline in weighted average net stumpage realizations [14][15] - Pacific Northwest Timber segment adjusted EBITDA increased 17% to $7 million, despite a 15% decline in harvest volumes, due to lower costs and higher log prices [19][20] - Real Estate segment adjusted EBITDA was $19 million, significantly above expectations, driven by strong demand and accelerated transaction timing [23][26] Market Data and Key Metrics Changes - Average sawlog stumpage pricing in the Southern Timber segment decreased by 9% to $27 per ton, while pulpwood pricing fell 25% to approximately $13 per ton [15] - In the Pacific Northwest, average delivered domestic sawlog pricing increased 6% to $96 per ton, with pulpwood pricing up 4% to $32 per ton [19][20] - The company anticipates improved market conditions for pulpwood due to increased mill operating rates and reduced salvage volume [18] Company Strategy and Development Direction - The company plans to use at least 50% of the sale proceeds from the New Zealand transaction to reduce leverage and return capital to shareholders through share repurchases and a special dividend [5] - The company remains focused on opportunistic capital allocation, including share buybacks and potential reinvestment into synergistic acquisitions [5][51] - The company is optimistic about the long-term growth potential in its land-based solutions business, particularly in solar and carbon capture projects [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for improved timber market conditions in the second half of 2025, driven by reduced salvage operations and increased lumber production in the U.S. [30][32] - The company expects a stronger contribution from the Real Estate segment in the second half of the year, with significant closing activity anticipated [26][28] - Management highlighted the importance of adapting to climate change and improving resilience against potential hurricane impacts on timber assets [60] Other Important Information - The company completed the sale of its New Zealand joint venture interest for $710 million, exceeding its original target of $1 billion in asset dispositions [4] - The company’s credit rating was upgraded from BBB- to BBB following the New Zealand transaction [13] Q&A Session Summary Question: Are you seeing increasing tension in timber prices due to upcoming Canadian duties? - Management noted improved pricing during the quarter, with steady conditions expected as the market anticipates the impact of duties [42][44] Question: What is the company's growth strategy post-transformation? - Management emphasized a nimble and opportunistic approach to capital allocation, focusing on share buybacks and maintaining a leverage target below 3x net debt to EBITDA [50][53] Question: How does the upcoming hurricane season affect timber assets? - Management indicated that while predictions suggest an above-average hurricane season, they have adapted their practices to reduce vulnerability to storm damage [58][60] Question: What is the outlook for real estate demand? - Management reported strong demand across various real estate categories, with significant transactions expected in the second half of the year [62] Question: What impact does the One Big Beautiful Bill have on solar projects? - Management remains optimistic about solar development activity, with ongoing negotiations for new projects despite uncertainties from the legislation [68][70]

Financial Performance - Sales for Q2 2025 were $106.5 million, compared to $99.6 million in Q2 2024[10] - Net income attributable to Rayonier Inc was $408.7 million in Q2 2025, compared to $1.9 million in Q2 2024[10] - Adjusted EBITDA for Q2 2025 was $44.9 million, compared to $33.3 million in Q2 2024[10] - Cash Available for Distribution (CAD) for the six months ended June 30, 2025, was $46.7 million, compared to $38.4 million for the same period in 2024[10] Segment Performance - Southern Timber operating income for Q2 2025 was $12.6 million, compared to $17.1 million in Q2 2024[12] - Pacific Northwest Timber operating income for Q2 2025 was $1.6 million, compared to a loss of $1.5 million in Q2 2024[12] - Real Estate operating income for Q2 2025 was $9.8 million, compared to $0.5 million in Q2 2024[12] - Southern Timber YTD Adjusted EBITDA was $55.4 million, compared to $78.7 million in the same period of 2024[15] - Pacific Northwest Timber YTD Adjusted EBITDA was $13.3 million, compared to $10.6 million in the same period of 2024[15] - Real Estate YTD Adjusted EBITDA was $20.6 million, compared to $9.1 million in the same period of 2024[15] Discontinued Operations - The company sold its 77% New Zealand joint venture interest on June 30, 2025, which is reflected as discontinued operations[10] - Total sales from discontinued operations for the six months ended June 30, 2025, were $109.3 million[40] - Income from discontinued operations for the six months ended June 30, 2025, was $406.3 million, including a gain on sale of $404.4 million[40]

Company Performance - Rayonier reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of $0.03 per share, and up from $0.02 per share a year ago, representing an earnings surprise of +100.00% [1] - The company posted revenues of $106.5 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 14.81%, but down from year-ago revenues of $173.6 million [2] - Over the last four quarters, Rayonier has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Future Outlook - The sustainability of Rayonier's stock price movement will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the coming quarter is $0.17 on revenues of $141.93 million, and for the current fiscal year, it is $0.40 on revenues of $469.03 million [7] - The estimate revisions trend for Rayonier was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Building Products - Wood industry, to which Rayonier belongs, is currently in the bottom 9% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Rayonier's stock performance [5]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Overall Performance](index=1&type=section&id=Overall%20Performance) Rayonier's Q2 net income surged to $408.7 million, primarily from a New Zealand joint venture sale, with Adjusted EBITDA up 35% to $44.9 million Q2 2025 vs. Q2 2024 Financial Results (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $106.5 | $99.6 | | Net Income attributable to Rayonier | $408.7 | $1.9 | | Diluted EPS | $2.63 | $0.01 | | Pro Forma Net Income (Loss) | $9.6 | ($2.6) | | Pro Forma EPS | $0.06 | ($0.02) | | Adjusted EBITDA | $44.9 | $33.3 | - The substantial increase in net income was primarily due to a **$404.4 million gain** on the sale of the company's New Zealand joint venture interest[4](index=4&type=chunk) - Year-to-date cash available for distribution (CAD) increased by **$8.3 million** to **$46.7 million**, mainly due to lower net cash interest paid and reduced capital expenditures[6](index=6&type=chunk) [Key Achievements & Capital Allocation](index=1&type=section&id=Key%20Achievements%20%26%20Capital%20Allocation) The company completed its New Zealand asset disposition, repurchased $34.9 million in shares, and ended Q2 with $892.3 million cash - Completed the sale of the New Zealand joint venture interest, bringing total disposition activity to **$1.45 billion** since November 2023[5](index=5&type=chunk)[7](index=7&type=chunk) - Repurchased approximately **1.5 million shares** at an average price of $23.71 per share, totaling **$34.9 million**[16](index=16&type=chunk) - Ended the quarter with a cash balance of **$892.3 million**, providing significant capital allocation flexibility[5](index=5&type=chunk) [Segment Performance Analysis](index=2&type=section&id=Segment%20Performance%20Analysis) [Southern Timber](index=2&type=section&id=Southern%20Timber) Southern Timber's Adjusted EBITDA fell 16% to $28.4 million due to lower sales, harvest volumes, and stumpage realizations Southern Timber Q2 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Sales | $53.3 | $59.3 | | Operating Income | $12.6 | $17.1 | | Adjusted EBITDA | $28.4 | $33.9 | - Harvest volumes decreased **5%** to **1.60 million tons** due to softer mill demand and the impact of a large disposition in 2024[8](index=8&type=chunk) - Weighted-average net stumpage realizations fell **14%** to **$19.18 per ton**, with pine sawtimber prices down **9%** and pine pulpwood prices down **25%**[8](index=8&type=chunk) [Pacific Northwest Timber](index=3&type=section&id=Pacific%20Northwest%20Timber) Pacific Northwest Timber's Adjusted EBITDA rose 17% to $7.0 million, driven by higher prices and lower costs despite reduced volumes Pacific Northwest Timber Q2 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Sales | $22.4 | $24.3 | | Operating Income (Loss) | $1.6 | ($1.5) | | Adjusted EBITDA | $7.0 | $5.9 | - Average delivered prices for domestic sawtimber increased **6%** to **$96.17 per ton** due to strong domestic demand and favorable geographic mix[9](index=9&type=chunk) - Harvest volumes decreased **15%** to **248,000 tons**, primarily due to the impact of Large Dispositions completed in Q4 2024[9](index=9&type=chunk) [Real Estate](index=3&type=section&id=Real%20Estate) Real Estate's Adjusted EBITDA surged to $18.6 million, driven by higher sales of $29.4 million, increased acreage, and higher prices Real Estate Q2 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Sales | $29.4 | $15.5 | | Operating Income | $9.8 | $0.5 | | Adjusted EBITDA | $18.6 | $4.5 | - Improved Development sales included a **23-acre** commercial parcel in the Heartwood project for **$5.2 million** (**$225,000 per acre**)[11](index=11&type=chunk) - Rural sales increased to **$15.7 million** (**2,926 acres**) from **$7.5 million** (**1,439 acres**) in the prior year period[12](index=12&type=chunk) [Trading and Other Items](index=3&type=section&id=Trading%20and%20Other%20Items) Trading segment sales increased to $1.4 million with a slight operating loss, while corporate and net interest expenses decreased - Trading segment sales volumes increased to **18,000 tons** from **5,000 tons** in the prior year period, resulting in an operating loss of **$0.1 million**[13](index=13&type=chunk) - Corporate and other operating expenses decreased by **$2.3 million** year-over-year, mainly from lower compensation and benefits[14](index=14&type=chunk) - Interest expense decreased by **$2.5 million** due to lower average outstanding debt, while interest income rose by **$0.6 million** due to higher cash on hand[14](index=14&type=chunk)[15](index=15&type=chunk) [Financial Outlook](index=4&type=section&id=Financial%20Outlook) [Full-Year Outlook](index=4&type=section&id=Full-Year%20Outlook) Rayonier reaffirmed full-year Adjusted EBITDA and pro forma EPS guidance, with Southern Timber near the low end and Real Estate at or above the high end - The company is on track to achieve **full-year Adjusted EBITDA** and **pro forma EPS** consistent with its prior guidance range[17](index=17&type=chunk) - Southern Timber: Full-year Adjusted EBITDA is expected near the **lower end** of the prior guidance range, with materially higher volumes and modestly higher stumpage prices anticipated in the second half of the year[18](index=18&type=chunk) - Real Estate: Full-year Adjusted EBITDA is now expected to be **at or modestly above the high end** of the prior guidance range[18](index=18&type=chunk) [Third Quarter 2025 Guidance](index=4&type=section&id=Third%20Quarter%202025%20Guidance) For Q3 2025, Rayonier projects net income between $29 million and $44 million, with Adjusted EBITDA of $80 million to $100 million Q3 2025 Guidance | Metric | Low End | High End | | :--- | :--- | :--- | | Net Income attributable to Rayonier | $29 million | $44 million | | EPS | $0.18 | $0.28 | | Adjusted EBITDA | $80 million | $100 million | - The Real Estate segment is expected to contribute **$50 to $65 million** in Adjusted EBITDA in Q3, though some closings could shift to Q4[18](index=18&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) [Condensed Statements of Consolidated Income](index=6&type=section&id=Condensed%20Statements%20of%20Consolidated%20Income) For H1 2025, sales decreased to $189.5 million, but net income surged to $405.3 million due to a $404.4 million gain from discontinued operations Six Months Ended June 30 (in millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Sales | $189.5 | $213.3 | | Operating Income | $14.6 | $13.2 | | Income from Discontinued Operations | $406.3 | $13.7 | | Net Income Attributable to Rayonier | $405.3 | $3.3 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the balance sheet shows stronger liquidity with cash at $892.3 million, long-term debt reduced to $844.9 million, and equity at $2.30 billion Balance Sheet Highlights (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $892.3 | $303.1 | | Total Assets | $3,514.3 | $3,474.4 | | Long-term debt | $844.9 | $1,044.4 | | Total Rayonier Inc. shareholders' equity | $2,302.2 | $1,769.3 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, operating activities provided $88.7 million cash, investing activities provided $658.3 million (mainly from asset sales), resulting in a $549.7 million net cash increase Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $88.7 | $107.6 | | Net Cash from Investing Activities | $658.3 | ($47.4) | | Net Cash from Financing Activities | ($198.6) | ($125.1) | | **Change in Cash** | **$549.7** | **($65.8)** | [Non-GAAP Financial Measures Reconciliation](index=12&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) [Reconciliation of Key Performance Indicators](index=12&type=section&id=Reconciliation%20of%20Key%20Performance%20Indicators) This section reconciles non-GAAP measures, showing H1 2025 Net Income of $410.5 million adjusted to Adjusted EBITDA of $71.9 million and Pro Forma Net Income of $6.9 million Reconciliation of Net Income to Adjusted EBITDA - Six Months Ended June 30, 2025 (in millions) | Line Item | Amount | | :--- | :--- | | Net Income | $410.5 | | Gain on sale of discontinued operations | ($404.4) | | Depreciation, depletion and amortization | $46.9 | | Other Adjustments | $18.9 | | **Adjusted EBITDA** | **$71.9** | - Cash Available for Distribution (CAD) for the six months ended June 30, 2025 was **$46.7 million**, up from **$38.4 million** in the prior year period[47](index=47&type=chunk) [Reconciliation of Adjusted EBITDA Guidance](index=15&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20Guidance) The company provides a Q3 2025 Adjusted EBITDA guidance reconciliation, starting with forecasted net income of $29.0-$45.0 million to reach $80.0-$100.0 million Q3 2025 Guidance Reconciliation (in millions) | Metric | Low | High | | :--- | :--- | :--- | | Net income | $29.0 | $45.0 | | Adjustments (Interest, D&A, etc.) | $51.0 | $55.0 | | **Adjusted EBITDA** | **$80.0** | **$100.0** |

Company Overview - Rayonier is the second-largest REIT specialized in timber, managing approximately 2.5 million acres of timberland in the United States and New Zealand [1] - 68% of Rayonier's Adjusted EBITDA is derived from timber operations, indicating a strong reliance on this segment for revenue generation [1] Analyst Background - The analyst has over 10 years of experience researching companies across various sectors, including commodities and technology, which enhances the quality of insights provided [1] - The analyst has researched over 1000 companies, showcasing extensive industry knowledge and expertise [1] Investment Focus - The analyst has transitioned from writing a blog to creating a value investing-focused YouTube channel, where they have researched hundreds of companies [1] - The preferred sectors for analysis include metals and mining, but the analyst is also comfortable covering consumer discretionary/staples, REITs, and utilities [1]

Core Insights - Moretus Research provides high-quality equity research focused on U.S. public markets, aiming to deliver clarity, conviction, and alpha for serious investors [1] - The research methodology emphasizes a structured, repeatable framework to identify companies with durable business models and mispriced cash flow potential [1] - Valuation practices are based on sector-relevant multiples tailored to each company's business model and capital structure, prioritizing comparability and simplicity [1] Research Focus - Moretus Research targets underappreciated companies that are undergoing structural changes or temporary dislocations, where disciplined analysis can yield asymmetric returns [1] - The research combines rigorous fundamental analysis with a judgment-driven process, avoiding noise and overly complex forecasting [1] - The firm aims to elevate the standard for independent investment research by providing actionable insights and a strong filter for relevant information in equity analysis [1]

Company Overview - Rayonier's FY24 sales were $1,263.0 million[8] - Rayonier's FY24 Adjusted EBITDA was $298.8 million[8] - Rayonier manages approximately 2.5 million total acres of timberland[8] - Timber segments accounted for 68% of Rayonier's business[8] Real Estate Strategy - From 2021-2024, Rayonier's average HBU price per acre was $4,468, representing a 117% premium to NCREIF[35] - Rayonier has a high-value real estate development pipeline with development potential on approximately 120,000 acres[37] Land-Based Solutions - Rayonier reached approximately 39,000 acres under solar option by year-end 2024[58] - Rayonier reached approximately 154,000 acres under CCS lease by year-end 2024[74] - Utility solar installations are projected to require approximately 1.5 million acres through 2030[48] Financial Performance and Capital Allocation - Rayonier completed or announced $1.45 billion in dispositions[88] - Rayonier targets a net debt to Adjusted EBITDA ratio of ≤3.0x[88, 97] - Rayonier's pro forma net debt to 2025E Adjusted EBITDA is 0.6x[88, 95]

Rayonier (RYN) 2025 Conference Summary Company Overview - Rayonier is one of three publicly traded timber REITs, positioning itself as a pure play timber REIT without exposure to downstream wood products manufacturing [4][3] - The company owns or leases approximately 2,500,000 acres of timberland, generating a sustainable yield of about 10,000,000 tons annually [4][5] - A recent agreement to sell its New Zealand business will reduce acreage by about 400,000 acres and sustainable yield by approximately 2,500,000 tons [5][4] Financial Performance - In 2024, approximately 70% of adjusted EBITDA came from timber segments, with the remaining 30% from real estate [5][6] - The company has seen significant pricing dislocations in timber REITs, with Rayonier trading at over a 30% discount to estimated net asset value [2][2] Market Trends and Opportunities - The energy transition and the need for renewable power are expected to drive increased demand for land and timber [6][7] - The U.S. housing market is significantly underbuilt, with estimates of 3,000,000 to 6,000,000 units of underbuilt supply, suggesting a constructive long-term outlook for housing starts [8][7] - Rayonier is evolving into a land resources company, focusing on maximizing the value of its portfolio through alternative land uses and real estate development [9][10] Land Use Optimization - Transitioning land use can significantly increase value; for example, converting timberland into carbon capture and storage leases could increase value by up to 5x, while solar leases could increase it by up to 10x, and improved development use could increase it by up to 15x [9][10] - Rayonier aims to execute the highest value end use for every acre, whether for timber production, land-based solutions, or real estate [10][11] Competitive Advantages - Rayonier has a best-in-class timberland portfolio located in attractive markets, particularly in the U.S. South [11][12] - The company has a differentiated real estate platform with a strong track record of optimizing high and better use (HBU) values [11][12] Real Estate Development - The company has seen significant growth in HBU values, with average prices per acre increasing from about $2,800 to $4,500 from 2015-2017 to 2021-2024 [20][19] - Rayonier's development pipeline includes 120,000 acres in Northeast Florida and Southeast Georgia, focusing on areas with strong market demand [21][21] Land-Based Solutions - The demand for carbon capture and storage (CCS) is projected to grow significantly, with U.S. demand expected to increase from 25 million tons to over 300 million tons in the next decade [30][29] - Rayonier has expanded its solar development options from 7,000 acres in 2021 to 39,000 acres by the end of 2024, indicating strong growth potential in this area [28][27] Asset Disposition Strategy - Rayonier announced a $1,000,000,000 asset disposition target, with total announced divestitures reaching $1,450,000,000, exceeding the original target [34][42] - The company plans to use proceeds from the New Zealand sale for share buybacks, which are seen as a compelling opportunity given the stock's discount to private market value [44][43] Environmental and Risk Management - Rayonier manages risks associated with natural disasters through geographic dispersion of its assets, which minimizes the impact of events like hurricanes and forest fires [55][54] - The company has experienced minor impacts from past hurricanes, with salvage activities expected to normalize markets in the long term [57][58] Tariffs and Market Dynamics - Anticipated increases in duties on Canadian lumber production are expected to shift production to the U.S. South, potentially improving pricing power for sawtimber and pulp [60][61]