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Welcome and thank you for joining Rayonier's First Quarter 2025 Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I will turn the meeting over to Mr. Collin Mings, Vice President, Capital Markets and Strategic Planning.

Thank you and good morning. Welcome to Rayonier's investor teleconference covering first 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 informs 10-K and 10-Q, followed by the SEC, with some of the factors that may cause actual results to differ materially from the forward-looking statements we may make. They are also referenced on Page 2 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?

Thanks, Colin. Good morning, everyone. First, I'll make some high-level comments before turning it over to April Tice, Senior Vice President and Chief Financial Officer to review our consolidated financial results. Then Doug Long, Executive Vice President and Chief Resource Officer will comment on our Timber results. And following a review of our Timber segments, April will discuss our real estate results and our outlook for the balance of the year. Before turning to our first quarter results, I'd like to touch on the pending sale of our New

Thanks, Mark. As noted in our press release, due to the pending sale of our New

Thanks, April. Let's start on Page 8 with our Southern Timber segment. Adjusted EBITDA in the first quarter of $27 million was below the prior year quarter due to lower harvest volumes and net stumpage realizations. Total harvest volumes fell 21% versus the prior year quarter due to softer demand from both sawmills and pulp mills, the availability of salvage volume on the market in our Atlantic Region and the disposition of our Oklahoma acreage in the fourth quarter of 2024. Meanwhile, non-timber revenue was flat as compared to the prior year period as growth in our Land Based Solutions business was offset by lower pipeline easement revenue. Average sawlog stumpage pricing was $26 per ton, a 16% decrease compared to the prior year period, primarily due to reduced demand from sawmills, competing log supply from salvaged timber and an unfavorable shift in geographic mix. Pulpwood net salvage pricing was 17% lower than the prior year quarter at roughly $14 per ton, driven by a combination of competing salvage volume on the market, extended spring maintenance downtime at pulp mills and an unfavorable shift in geographic mix. Overall, weighted-average salvage prices in the first quarter decreased 19% versus the prior year quarter to roughly $19 per ton. As it relates to salvage operations from last year's hurricanes, as we have discussed previously, the direct impact for portfolio was relatively minor. However, the availability of salvage volume in our Atlantic markets has continued to be a headwind in early 2025. We anticipate that this dynamic will likely weigh on both saw timber and pulpwood pricing to the first half of the year, before tapering off into the third quarter. Moreover, in grade markets, cautious near-term outlooks from lumber producers weighed on demand and pricing during the quarter. In our Gulf markets, dry weather conditions led to ample log supply, which also weighed on pricing. While there is an elevated level of near-term economic uncertainty, we believe, the outlook for grade markets will improve over the balance of the year, as the availability of salvage volume declines and as U.S. lumber production likely ramps up in response to higher duties on Canadian lumber. To this end, we've been encouraged in recent weeks by increased demand for green logs from sawmills as supply of salvage timber has declined and some customers are growing increasingly wary of contending with operating disruptions from processing these lower quality salvage logs. Shifting to pulpwood. Ample supply from hurricane salvage operations in the Atlantic Region, continued dry ground conditions in the Gulf Region and spring maintenance shutdowns all contributed to elevated mill inventories and constrained pricing during the quarter. As pulp mills ramp back up production following extended maintenance shutdowns, we are cautiously optimistic that pricing tension for pulpwood will improve in some markets. However, we also believe, tariff-related uncertainty could serve as an overhang on some customers at least over the near-term. Moving to our Pacific Northwest Timber segment on Page 9. First quarter adjusted EBITDA of $6 million was above the prior year quarter, as higher net stumpage realizations and lower costs more than offset lower harvest volumes. Total harvest volumes decreased 18% in the first quarter, as compared to the prior year period, reflecting the impact of the Washington dispositions we completed in the fourth quarter. At $91 per ton, average delivered domestic sawlog pricing in the first quarter increased 7% from the prior year period, due to stronger demand from sawmills, as lumber pricing improved. Meanwhile, at $30 per ton, pulpit pricing was up 3% versus the prior year quarter. Demand from domestic lumber mills improved during the first quarter, as lumber prices moved higher in response to the threat of tariffs on Canadian lumber. While lumber prices have leveled out in recent weeks, we believe, lumber producers in the region are well-positioned to benefit from potential further reductions in Western SPF supply, as higher countervailing and antidumping duties on Canadian lumber are expected later this year. Meanwhile, export markets were soft in Pacific Northwest during the first quarter. We are cautiously optimistic there will continue to be competition for higher grade logs from Japan and Korea. However, with China banning log imports in The United States in early March, we expect less competition for lower grade logs, as the supply is likely to flow to domestic mills, while trade tensions with China remain elevated. Due to the pending sale of our New

Thanks, Doug. As detailed on Page 10, the contribution from our Real Estate segment during the first quarter was relatively light, consistent with our expectations entering the year. Real estate revenue totaled $10 million on roughly 1,000 acres sold at an average price of $8,300 per acre. The strong average price per acre reflects both the relatively high proportion of development sales closed, as well as the strong premiums above Timberland value that our team continues to realize on rural land sales. Real Estate segment adjusted EBITDA in the first quarter was $2 million. Drilling down, sales in the improved development category totaled $3 million with activity focused in our Heartwood development project South of Savannah, Georgia. Sales included two residential pods, totaling 78 acres for $3 million or $42,000 per acre. In addition to the upfront revenue on these sales, similar to many of our other residential land transactions, we will also benefit over time from true-up payments based on the final selling price of the homes as they are sold. Despite the increased macroeconomic uncertainty over the past few months, interest from homebuilders in both our Wildlife and Heartwood projects remain healthy, and the pace of residential sales continue to trend favorably. While we anticipate some commercial deals will take longer in the current interest rate environment, we remain pleased with the overall momentum at both projects. Turning to the rural category. First quarter sales totaled $5 million, consisting of approximately 1,000 acres at an average price of roughly $5,500 per acre. We experienced a lighter quarter for closings, following an exceptionally strong fourth quarter in 2024. However, we are optimistic that, the second half of 2025 given how our transaction pipeline has been building since the start of the year. Buyer interest remains robust, despite broader economic uncertainties, and we are pleased with the momentum in our key rural land sale markets, as well as the continued interest from conservation oriented buyers. Now turning on to our outlook for the balance of 2025. Page 12 of our supplement shows our financial guidance by segment, and Schedule G of our earnings release provides a reconciliation of our guidance from net income attributable to Rayonier to adjusted EBITDA. For full year 2025, we expect to achieve adjusted EBITDA of $215 million to $235 million; net income attributable to Rayonier of $424 million to $458 million; earnings per share of $2.71 to $2.93; and pro forma EPS of $0.34 to $0.41. Our revised guidance assumes a year end 2025 closing date for the New

Thanks, April. While the economic backdrop remains challenging and uncertain, our team continues to focus on creating long-term value for our shareholders throughout the economic cycle. To this end, I'm proud of how our team has navigated market headwinds, while advancing important strategic initiatives designed to build long-term value per share. In The U.S. South, we ratcheted back volume in response to weaker mill demand coupled with excess supply due to ongoing salvage operations. However, as we move through the balance of the year, we are optimistic that, market conditions will improve, as the impact of hurricane salvage volume subsides and as U.S. lumber production likely ramps up in response to higher duties on Canadian lumber. Meanwhile, in the Pacific Northwest, we expect timber pricing will likewise trend higher into the back half of the year in response to healthy demand from domestic sawmills and the impact of higher duties on Canadian lumber. While near-term trade policy continues to evolve, we believe that, an undersupplied U.S. housing market and an eventual recovery in repair and remodel activity will be long-term positives for our timber business. Turning to real estate. Despite a relatively quiet first quarter, we remain encouraged by our transaction pipeline and expect a very active second half of 2025. Overall, despite the current challenging and uncertain market environment, the longer-term outlook for our business remains promising. In addition, we continue to focus on optimizing our portfolio value by monetizing HBU properties, as well as transitioning select acreage to higher value land uses. To this end, we remain intently-focused on growing our Land-Based Solutions business, and we're optimistic about the role that Rayonier can play in supporting the energy transition as the need for land, power and de-carbonization solutions continues to grow. Lastly, we're looking forward to closing the New

Thank you. [Operator Instructions] Our first question comes from Matthew McKellar from RBC Capital Markets.

Hi, good morning. Thanks for taking my questions. I'd like to ask, first, how significant are labor constraints in logging and hauling today? How much of a bottleneck could labor be if higher duties and potential tariffs on Canadian lumber later this year do end up driving higher lumber production in The U.S?

Sure. Good morning. This is Doug. I'll start with that. Yes, I mean, labor is a constant concern. It's been our industry for quite a few years. But, that said, we've also seen improvements in productivity with the equipment as time moves on. So I think, we typically see that there's still enough labor out there to meet the current demand and potentially some more. But, if we were to see a major increase in demand ramp up, then I believe the companies like ourselves who have long-term relationships with the logging force will see a competitive advantage at that point in time, because having access to those loggers. And do believe that the loggers, if they saw that continued ability to have more opportunity, they can make some investments to increase their production. So I think, net, net, we're a reasonable place right now with logging capacity versus removals. But, if we were to see a larger increase in removals to come forward, I do think, the folks that have long-term relationships, like ourselves and others that have vacant long relationships, could see those loggers increase their capacity to meet that and would be a positive for us.

That's great. Thanks very much. Next for me, repurchase activity certainly picked up in the month of April. And I think April also mentioned that, you view share repurchases continue to be attractive here. Could you maybe just provide a little bit more color around the relative attractiveness of your options for the New

Yes. As noted in the remarks in the earnings release, we did buyback some stock in the last several months. Given where the stock currently sits, we think buybacks continue to represent a very compelling use of capital. So, since the start of the year, we've repurchased roughly $13 million worth of stock. But recognize as well that, our ability to be active in the buyback market has been somewhat constrained in recent quarters, just based on the status of the various M&A transactions that we've been working on. That said, as we discussed in the prepared remarks, we did recently enter into a 10b5-1 plan, which is a tool that allows for repurchases during periods that we might otherwise be restricted from trading. So we expect that, we'll continue to be active and opportunistic in our share repurchase activity, recognize that, we have over $280 million remaining on our current repurchase authorization. And we expect to have, as you noted, significant capital allocation capacity after we close the New

Great. Thanks very much. And, if I could just sneak one last one in. You're expecting lower non-timber income in the South in 2025 compared to 2024. I think you'd all stuck with that previously. You mentioned pipeline easement revenues being lower, but if we set that item aside, could you maybe just walk us through what the other moving parts look like year-on-year?

Yes. The largest component of our non-timber income tends to be our hunting and recreational licenses in our Southern business. Obviously, Land-Based Solutions has been the area that we've been most focused on growing here in recent years. Pipeline easements, we had a very strong year, last year in pipeline easements. So that's really the driver of that anticipated year-over-year decline in non-timber income is that we're not anticipating quite a strong of a year in pipeline easements following a very strong year last year.

Okay, great. Thanks very much. I'll turn it back.

[Operator Instructions] Our next question comes from Anthony Pettinari from Citigroup.

Good morning. You referenced lumber customers ramping production in response to higher Canadian import duties. And would you expect that to boost log prices in 3Q or is it having an impact now? I think, the duties go into effect maybe later in the summer. And just generally, when you talk to sawmill customers, are you seeing concrete steps to add shifts and ramp production in response to the duties? I'm just trying to get a sense of whether this is sort of a general sentiment or whether it's something, where you're seeing customers really taking concrete steps and making investments, if there's kind of any additional color you can give there?

Sure. This is Doug. I'll step in with that one, as I have more of those interactions with those customers. I would describe it as positive sentiment, to kind of your latter part of that. We have seen some increased capacity, so we have seen some mills looking to secure more volumes. So they have taken some incremental steps to actually secure more volume. They have -- I've heard of discussions around trying to work on like second shifts and things like that. But, to date, what we've seen is, really expansion of current shift work. So utilizing the current shift they have and doing more with where they were. So there's talk about that, and I've seen actually some requests out there looking for people for additional labor, but I haven't actually seen the mill say we're adding an additional shift right now. It's more getting better out of what they have with the current ones. I do think the current market uncertainty has things a bit tempered. So before somebody adds an additional shift, they want to see where things go. But we have seen real price increases in recent negotiations and recent sales just in the last couple of weeks as sawmills have looked to churn more volume.

Is that more in the Pacific Northwest or the South or both or...

Yes. Where we've seen probably the greatest change in capacity has been the South actually. So I think the State Northwest had already stepped up with some of the reductions that had happened now with Canada on the prior increase in tariffs back later last year. And so, we're seeing most of this momentum now has been in The U.S. South.

Got it. And then switching gears in Southern Timberlands, you talked about the negative impact of salvage volumes in the Atlantic region. And then, you also talked about kind of a negative mix shift within regions. And I'm sorry if I missed this, but can you just remind us what that negative mix shift was within, I guess, the sub-regions? And does that reverse itself in the second half or third quarter or what is that specifically?

Sure. I can give a little more detail on that also. So yes, as you mentioned, as we talked about before that the Land of Woodbaskets really had been suffering from that glut of salvage logs in those markets. And so for example, that Southeast Georgia market, which holds our largest concentration of acres, experienced greater than 25% kind of price decline for both pulpwood and sawlogs over the past few quarters. While not as quite as drastic, the neighboring wood baskets experienced declines roughly half of that. So, we really have seen where the hurricane came through, a significant reduction. And then around that, you get that ripple effect from there. So product price decreases made up about half of that year-over-year decline in the pricing, just kind of give you a sense of there. Then on top of that, our products mix, as you mentioned, shifted both heavier to pulpwood overall, as we chose to hold larger sawlog stands on the stump, anticipation of improved lumber markets and shifted to a heavier percentage of thinning, which yielded a product mix impact of about 15%. So of that delta, you roughly had another 15% of that. And then, finally, not wanting to flood the Atlantic markets with just more volume when we already had plenty from salvage. We did shift some of our harvest over the Gulf Region, but those dryer conditions last to make up some deferred thinning and also some clear cuts in the normally wet areas. So as a percentage of our overall Southern harvest, historically lower priced Gulf Region was up 12% for pulp and 24% for sawlog volumes. And in total, this yield an impact of approximately 30% on that net stumpage decline we had year-over-year. So you can see there were a lot of moving pieces over the quarter, as we chose to defer harvest on some of our Atlantic sawlog sales, capturing that value that we believe is going to come later half in the year with the kind of improved demand that we were talking about. And we've been encouraged by those recent sawlog sales, I mentioned before. So I do see this as something that's winding down. What was unique in this hurricane is, you typically, you have initial impact of salvaging the timber that's fallen on the ground and getting that. And that typically lasts a couple of months before it goes and you can't use that anymore. And so we anticipated that, as we've mentioned before in calls. But what's also happened with this hurricane is kind of maybe a little bit different or at least the scale has been a bit different, is there was quite a bit of stands that were partially damaged and had leaning trees. And the state of Georgia is offering a $550 per acre re-forestation tax credit, and they also suspended the harvest tax payments. So we're seeing is a lot of land owners chose to go in and clear cut partially damaged stands to take advantage of these. That hasn't happened in the past. So this was really good for private land owners and really is good for the forest industry in the long-term to get that resource back, but it created a short-term drag kind of on price recovery. Based on our field assessments and recent mill negotiations I just mentioned, we do believe that, these kind of the second salvage operations that were more than we expected, they are winding down during this quarter and do expect to see some reversal in the later half of the year.

And Anthony, I'd just add to that that we are reasonably optimistic that, coming out of this, that we could see the inverse effect where you have constrained supply in that area and that causes kind of a sharper bounce back in pricing. I mean, without a doubt, we've been pretty severely impacted by the impact of the -- I'm sorry, the salvage volume on certain market areas, as well as that shift in geographic mix that Doug talked about. When we moved to those Gulf States, for pulpwood pricing in particular, the prices there are quite a bit lower. And so that geographic and product mix has caused roughly half of that overall price decline. And so the headline price declines, I'd say that, the reality on the ground isn't quite as dire given that a good portion of that is really just due to that shift in geographic mix. Another portion of it, we think, is pretty specifically attributable to the salvage volume, which we think we're going to be working through over the course of the next several months. So we are optimistic that, going into the back half of the year, as that salvage volume gets worked through, and we potentially couple that with a nice tailwind around increase in lumber duties that the setup for the second half could be quite a bit more constructive in those particular market areas.

Okay. That's very helpful. I'll turn it over.

Our next question comes from Ketan Mamtora from BMO Capital Markets.

Good morning and thanks for taking my question. Just coming back to Southern Timber, I mean, you laid out some of the factors that could help demand and pricing in the back half of the year, and I think those are all fair points. On the other hand, we're also seeing kind of a housing demand environment, which is kind of weaker than what people were expecting at the start of the year. So how do you kind of think about that? And, are sawmill owners sort of recalibrating how they think about demand? Because clearly, at the start of the year, expectations was that, rate cuts will happen and demand will improve, but hasn't really happened. So curious kind of how you balance those two things?

Yes. A lot to unpack in there, Ketan, because recognize there are a lot of moving pieces here. Look, these last couple of quarters in particular have been pretty challenging. But recognize that, some of these headwinds that we're contending with right now, we do think will be transitory in nature. As we talked about, specifically the impact of salvage volume following Hurricane Helene, has pretty significantly weighed on pricing in some of what are our largest market areas. So as we discussed in the prepared remarks, we expect that, this overhang is going to moderate over the next several months. And again, as we just discussed, geographic mix was also a pretty significant driver, as we shifted our harvest into those Gulf States where pricing is lower. That translated to some of that price decline as well. With all that said, the longer-term pricing trends in the South, as you noted, certainly haven't materialized as most market observers would have anticipated in, call it, last 5, 10, 15 years. We did see a pretty significant uptick in timber pricing in the wake of the pandemic, but those pricing gains certainly haven't sustained here. I think part of the reason for this, and I believe we talked about this in the last call as well. In the wake of the pandemic, there's also quite a bit of market dislocation, including the mortgage lock-in effect that really translated to a dearth of resale activity, as well as the repair and remodel pull forward effect in the midst of the pandemic, where we saw a lot of that R&R activity getting pulled ahead. So all of that translated to a relatively lackluster repair and remodel market over the last couple of years, which did disproportionately impact Southern Yellow Pine pricing. It certainly felt like markets were beginning to normalize to some degree. And I think we've seen some evidence of this in the pricing gains that we've seen in Southern Yellow Pine over the last several months as well as the convergence in pricing that we've seen in Southern Yellow Pine and SPF. We recognize that, part of the effect of that pandemic dislocation was we saw a pretty wide disconnect develop between SYP and SPF lumber pricing. Of course, more recently, we've seen markets rocked by tariff uncertainty, and it's still unclear, how this might more broadly impact mortgage rates, home affordability and ultimately new construction activity. Overall, we're still very optimistic that, long-term fundamentals, including what we see as a significantly under-built and aging housing stock, those fundamentals should support growth in housing starts, lumber demand and ultimately timber pricing over the long-term. But at least for now, I think we're going to have to wait and see how trade policy and the overall economic outlook evolve in the coming months, before we have much visibility into the likely near-term trajectory of timber prices.

Yes. I would just add kind of on a local flare to one of your questions about saw millers and how they're potentially rebalancing. The uncertainty kind of on tariffs that Mark mentioned, I think we've mentioned this for all some calls. But with regards to kind of offshore lumber imports, so excluding Canada, nearly one-fourth of those imports come in the State of Florida and about half of it comes to the South Atlantic market. So we're seeing sawmill owners in this area, particularly kind of Southeast Georgia, Northeast Florida, who are anticipating that, there will be action taken against lumber coming out of Europe. And that would really benefit quite a few of our customers. Right now, that lumber comes in, as mentioned before, kind of middle part of The States and has a freight advantage going once it lands here in The States. And so, we've seen kind of a balancing, where they're to your point, they're concerned and there's that kind of tempered, as I mentioned before, about how the starts look like. But there's that same opportunity where well, if less wood does come in and just the threat of tariffs seems to have slowed down, we've seen a slowdown in that those offshore lumber imports coming in, that creates new opportunities too. So we talk about the South not being homogeneous and consistent. There's cases where that's also the case depending on where different imports and things come in and out. So it's a lot of moving parts at this point in time to understand how it looks, just a little bit of local kind of flavor to those sawmill decisions they're making.

Yes. That's a very helpful perspective. And just my follow-up, curious any kind of update you guys have for us with regard to the natural climate solution, whether that is solar or carbon capture?

Yes, sure. Typically, we'll provide updates when we have large things that have happened. I think, as we mentioned before, we're very happy we sit with 154,000 acres in CCS lease and still work on new opportunities going forward there. So, we remain optimistic about the CCS. And I guess it's not something that's directly impacted us yet, but what we've seen is, important in the industry is kind of the pulp and paper area. We're seeing this building push for incorporating carbon capture storage and mineral operations in The U.S. and this has been going on for over a year, these discussions. But we're really encouraged by Microsoft's announcement in April that, they're pre-purchasing 3.7 million tons of carbon dioxide from pulp mill in Louisiana. And the magnitude of those CDR or carbon dioxide removal credits as well as potentially for the 45 tax credit that can amount to simply an increase in the mill's EBITDA. And the reason we're able to do this is that, the carbon dioxide is biogenic that's coming from the fiber as part of that pulping process. And this technology is directly transferable to pulp and paper mills across The United States, but particularly where there's that positive geology. So we think this is really a positive development for the industry. It helps diversify the mill's revenue stream and provides us potential customers for our CCS program. So that's kind of a newer area of growth, although like I said, negotiations have been going on for a long time. But to see that first deal come through, I think, is important for the industry and is a good step. So, on balance, we feel good about the progress being made on the land that we leased and the prospect of getting additional acres under. We're moving those forward as we go. So really as we discussed before that, the lease payments are great, but that step change in economics that occurs once injection start happening and that's still several years away. On the solar front, no significant changes relative where we stood at year end, but the acres under option for lease have continued to trend in the right direction to start the year, and we've added a couple of thousand more acres in the first quarter. And we're still continuing to see momentum build across our footprint. So kind of no matter how you look at it, solar capacity continues to grow pretty significantly as to meet the projected energy demands that we've seen for the future basically. And I think most folks agree we need an all of the above approach. So we're still seeing strong interest in the pipeline in that area also.

Got it. That's very helpful. I'll turn it over. Good luck.

I'm showing no further questions at this time.

This is Collin Mings. I'd like to thank everybody for joining us. Please contact us with any follow-up questions.