レイオニア (RYN) 2026年第3四半期決算説明会：不動産事業好調で自社株買い拡大

要点

• レイオニアが発表した2026年第3四半期のGAAPベース純利益は1億2300万ドル（1株当たり0.41ドル）となった。プロフォーマ項目を除く純利益は4000万ドル（1株当たり0.13ドル）だった。
• 調整後EBITDAは、ポトラッチデルティック事業と各セグメントの堅調な業績に支えられ、1億4500万ドルに達した。同社は4000万ドルの目標に対し、年換算で2000万ドル超の統合シナジーを実現している。
• 取引完了（クロージング）の前倒しを受け、不動産セグメントの調整後EBITDAは4900万ドルとなり、経営陣が以前示していたガイダンス予想レンジである2500万〜3500万ドルを上回った。
• レイオニアは2026年の最初の9カ月間に1億6300万ドルの自社株買いを実施した。その後、取締役会は自社株買い授権枠を3億ドル増額した。
• 経営陣は第4四半期の不動産セグメント調整後EBITDAを6000万〜7000万ドルと見込んでおり、これにより通期実績はガイダンス予想レンジである1億8000万〜2億ドルの上限付近に達する見通しだ。
• 木材価格は7月以降軟化した。10月の四半期累計（QTD）実現価格は第3四半期平均を約6%下回り、足元のランダム・レングス総合価格指数は第3四半期平均を12%下回っている。

主要財務データ

事業および営業業績

南部森林事業

調整後EBITDAは前年同期比23%増の5200万ドルとなった。ポトラッチデルティックの保有林から約140万トンが加わったことが主因となり、伐採量は56%増加した。

工場着製材用丸太価格は平均で1トン当たり45ドルとなり、単独レイオニアの前年同期実績から5%低下したものの、前期比では2%上昇した。工場着パルプ材価格は1トン当たり31ドルで、前年同期比15%下落、第2四半期比で3%上昇した。経営陣は、同社の主要市場においてパルプ材価格は概ね安定したと述べている。

北西部森林事業

調整後EBITDAは前年同期の600万ドルから3200万ドルに増加した。ポトラッチデルティックのアイダホ州保有林からの約37万トンを含め、伐採量は2倍超となった。

工場着製材用丸太価格は1トン当たり129ドルに達し、前年同期比29%上昇、前期比8%上昇となった。これは主に木材市況に連動するアイダホ州での価格が堅調だったことによる。

木材製品事業

調整後EBITDAは2700万ドルとなり、第2四半期をわずかに上回るとともに、ポトラッチデルティックの2022年第3四半期以来で同セグメント最高の実績となった。

製材の平均実現価格は1,000ボードフィート（MBF）当たり528ドル、出荷量は3億2700万ボードフィートとなった。実現価格は前期比で約5%上昇し、製造原価の上昇を相殺した。経営陣は第3四半期の木材市況の改善について、製材所の減産、輸送上の課題、カナダ産輸入品に対する関税などの供給制約が主因であるとしている。

その後は、季節的な需要軟化や、特に住宅市場を中心とするマクロ経済の不透明感の高まりにより、価格は下落した。

不動産事業

ワシントン州での資産売却を含め、約4万3000エーカーの売却により売上高は計2億800万ドルとなった。同取引を除くと、売却面積は約7000エーカー、平均価格は1エーカー当たり8000ドルで、売上高は6300万ドルだった。

調整後EBITDAは4900万ドルとなった。造成済み開発用地の売却額は計1200万ドルとなり、そのうちシュナール・バレー（Chenal Valley）が600万ドル超を占めた。また、レイオニアはフロリダ州にある1700エーカーの未造成開発用地を1900万ドル（1エーカー当たり約1万1000ドル）で売却完了した。

地方部土地の売却額は5100エーカー弱で計2600万ドルとなり、1エーカー当たり平均約5000ドルとなった。経営陣によると、地方部土地の需要は引き続き堅調で、林地価値に対するプレミアムでの取引が続いている。

経営陣のガイダンス

通期ガイダンスには、2026年1月31日以降のポトラッチデルティックによる寄与が按分ベースで含まれている。

経営陣によると、第3四半期業績には減耗償却・減価償却・無形固定資産償却費（DD&A）の合計を800万ドル押し上げた一時的な買収会計調整が含まれている。今後のDD&Aランレートを試算する際には、これらの調整を除外する必要がある。

リスクおよび注視すべき点

• 季節的な需要軟化と住宅市場の不透明感の高まりを受け、木材価格は7月のピーク以降も軟化が続いた。
• パルプ材価格は足元で安定しているものの、数年前の水準を依然として大幅に下回っている。経営陣は工場閉鎖、高水準の供給量、被災事象が継続的な圧力要因になっていると指摘した。
• 最近の製材所の減産は局所的な木材市場の逆風となる可能性があるが、経営陣はレイオニアの保有林が分散していることから、会社全体への重大な影響は見込んでいない。
• 経営陣は現在のバランスシートの状況には安心感を持っているものの、金利環境を踏まえレバレッジをより注視している。
• 開発事業者が選別姿勢を強め、既存の開発案件に注力するなか、エネルギー開発オプション契約下の面積は小幅に減少した。経営陣は、今後2〜3年で開発への移行率（コンバージョン率）の見通しがより明確になると予想している。

アナリスト質疑応答の要点

経営陣は今後12〜18カ月間にわたり追加の森林資産売却を推し進める計画だが、目標金額は示さなかった。地域的な事業規模を維持しつつ、私募市場における林地価値とレイオニアの株価に織り込まれた企業価値とのギャップを活用することが目的である。

レイオニアは四半期ごとの自社株買いペースを設定しなかった。経営陣は、3億ドルの枠増額は確信の表れであるとしつつも、市場のボラティリティ、レバレッジへの配慮、投資適格格付けの維持を最優先する方針から、資金投入は引き続き慎重に行うと述べた。

同社は既存工場への投資や、木材製品事業における外部成長の検討に引き続き前向きである。ただし、自社株買いを通じて得られると見込まれる価値と比較すると、買収のハードルは高いと経営陣は述べた。

エネルギーソリューションについて、経営陣は太陽光発電、再生可能エネルギー、送電インフラ対応地（パワードランド）、データセンター向けの機会に対して引き続き楽観的である。2027年がオプション満期の大幅な増加を迎える最初の年になると見込んでいる。

レイオニアはバイオエネルギー、バイオ燃料、バイオ炭の機会を含め、パルプ材および残材の新たな需要先も模索している。経営陣は、これらの市場の立ち上がりには時間がかかると慎重な見方を示した。

決算説明会 文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, everyone. Thank you for joining us, and welcome to the Q3 2026 Rayonier Inc. Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Collin Mings, Vice President of Capital Markets and Strategic Planning. Collin, please go ahead.

Collin Mings

Thank you, and good morning. Welcome to Rayonier's investor teleconference covering third 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 and 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 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?

Mark McHugh

Thanks, Collin. Good morning, everyone. Before turning to our third quarter results, I'd like to provide a brief update on our merger of equals with PotlatchDeltic. We continue to make strong progress on the merger integration. We have optimized our organizational structure, captured operational efficiencies and continue to advance the integration of systems and processes across the combined organization.

We have now achieved more than $20 million of run rate synergies, and we remain on track to achieve our $40 million synergy target by the second anniversary of the merger closing. At the same time, our team has made good progress bringing our organizations together around a shared culture, and we're looking forward to opening our new corporate headquarters in Atlanta early next year.

I'm very pleased with what we've accomplished so far, and I remain confident that the combination will create significant long-term value for our shareholders. I want to commend our team for their focus and dedication in advancing our integration efforts while also delivering strong operational results in a challenging market environment.

Moving on to our third quarter results. I'll start with a review of our overall results as well as our segment level performance, after which Wayne will review key liquidity and balance sheet metrics as well as our outlook for the balance of the year.

For the third quarter, Rayonier reported GAAP earnings of $123 million or $0.41 per share. Results included $91 million of income related to the large disposition in Washington, which is part of the like-kind exchange transaction with RMS that we announced in August. As a reminder, the exchange consisted of the sale of approximately 36,000 acres in Southwest Washington for $145 million and the concurrent acquisition of approximately 57,000 acres in Texas and Alabama for $146 million.

Excluding pro forma items, which included the large disposition as well as $7 million of merger-related costs, net income was $40 million or $0.13 per share. Adjusted EBITDA in the third quarter was $145 million, which was well above the prior year period, primarily due to the contributions from the PotlatchDeltic operations, along with solid operational performance across our segments.

Moving on to our segment results. Let's start on Page 9 with our Southern Timber segment. Adjusted EBITDA in the third quarter of $52 million was 23% above the prior year quarter as increased harvest volumes more than offset lower pricing. Total harvest volumes increased 56% versus the prior year quarter, primarily due to the addition of roughly 1.4 million tons of volume from the PotlatchDeltic timberlands.

Turning to pricing in the Southern Timber segment. As a reminder, starting this year, our Southern Timber pricing reflects delivered log prices rather than net stumpage as it is now the predominant method of sale following the merger. In sawlog markets, demand was steady during the quarter, supported by healthy lumber prices and production in the U.S. South. Average delivered sawlog prices of $45 per ton were 5% lower than stand-alone Rayonier prices in the prior year quarter, but up 2% sequentially from the second quarter. While lumber prices have moderated recently, Southern sawmills continue to gain market share from Canadian producers, and we expect that this trend will continue to drive higher mill operating rates and stronger sawlog demand across our U.S. South footprint over time.

Turning to pulpwood. Delivered pulpwood prices of $31 per ton were 15% lower than stand-alone Rayonier prices in the prior year quarter, but were up 3% sequentially from the second quarter. While pulpwood markets remained challenging, we continue to believe that prices have generally stabilized in our primary market areas.

Moving on to our Northwest Timber segment on Page 10. Third quarter adjusted EBITDA of $32 million was significantly above the $6 million reported in the prior year quarter. Harvest volumes more than doubled in the third quarter as compared to the prior year period, primarily due to the contribution of nearly 370,000 tons of incremental harvest volume from the PotlatchDeltic, Idaho timberlands. Healthy lumber prices also helped propel sawlog prices higher in Idaho in the quarter as a significant portion of our sawlog sales in the state are indexed to lumber prices.

Delivered sawlog prices of $129 per ton were up 29% from the prior year quarter and 8% from the second quarter, primarily due to higher pricing on Idaho sawlogs. Turning to Wood Products on Page 11. This segment generated $27 million of adjusted EBITDA in the third quarter, a slight improvement from the prior quarter and the strongest quarterly adjusted EBITDA result that this segment has registered since PotlatchDeltic's third quarter of 2022.

Our average lumber price realization was $528 per MBF and shipments totaled 327 million board feet, in line with our prior guidance. Our average lumber price realization increased by roughly 5% versus the second quarter, which more than offset higher per unit manufacturing costs. The improvement in lumber markets during the third quarter was largely driven by supply side factors as mill curtailments, industry-wide transportation challenges and tariffs on Canadian imports limited supply.

As we discussed last quarter, our team was proactive in navigating transportation challenges by leveraging rail transportation alongside our established trucking network. Lumber prices have generally trended lower since peaking in July, a decline that continued through October as demand softened due to both seasonality and growing macroeconomic uncertainty, particularly around housing markets. We are generally maintaining a steady order file, albeit at lower prices relative to our Q3 average.

Moving to our Real Estate segment on Page 12. In the third quarter, real estate revenue totaled $208 million on approximately 43,000 acres sold, which included the large disposition in Washington. Excluding this transaction, pro forma third quarter sales totaled $63 million on roughly 7,000 acres sold at an average price of $8,000 per acre. Pro forma sales fell from the prior year quarter due to a lower number of acres sold, which was partially offset by a significantly higher average price per acre.

Real Estate segment adjusted EBITDA in the third quarter was $49 million, which was well above our prior guidance range of $25 million to $35 million due to some accelerated closing activity. In improved development, sales totaled $12 million. Our Chenal Valley project in Little Rock contributed over $6 million of sales during the quarter and remains well positioned to provide a steady stream of cash flow moving forward. Activity also continues to trend favorably at our Wildlight and Heartwood development projects, reflecting the investments we've made over the past several years in entitlements, infrastructure and market development.

In addition, we completed a 1,700-acre unimproved development sale in Florida for $19 million or roughly $11,000 per acre. Moving to the rural category. Third quarter sales totaled $26 million, consisting of nearly 5,100 acres sold at an average price of roughly $5,000 per acre. Overall sentiment in the rural land market remains positive, and we continue to achieve strong premiums above timberland value in our rural HBU business.

I'll now turn the call over to Wayne to cover key liquidity and balance sheet metrics as well as our outlook for the balance of the year.

Wayne Wasechek

Thanks, Mark. Moving to our capital resources and liquidity. Our cash available for distribution, or CAD, was $287 million through the first 9 months of 2026 versus $154 million in the prior year period. The significant increase in CAD was primarily driven by the contribution from the PotlatchDeltic businesses, coupled with significantly improved real estate results.

As a reminder, our CAD excludes the large disposition of $145 million that Mark discussed earlier. A reconciliation of CAD to cash provided by operating activities and other GAAP measures is provided on Page 8 of the supplement. During the third quarter, we repurchased approximately 2.8 million shares at an average price of $21 per share or $60 million in total. We have been very active on this front during 2026, repurchasing 7.8 million shares through the first 9 months of the year for a total of $163 million.

At the end of the third quarter, we had $66 million remaining on our prior share repurchase authorization. We continue to believe that our stock is trading at a significant discount to net asset value. Accordingly, our Board approved a $300 million increase to our share repurchase authorization this week. We remain active under the program as we view buybacks as a compelling use of capital and one of the most attractive opportunities to create value for our shareholders in the near term.

Turning to our balance sheet. We continue to maintain a conservative leverage profile and significant capital allocation flexibility. We finished the third quarter with $361 million of cash and roughly $1.9 billion of debt. Our net debt to enterprise value based on our closing stock price at the end of the quarter was 22%.

Moving to our outlook. As a reminder, full year metrics reflect a pro rata contribution from the PotlatchDeltic operations starting on January 31. With respect to our individual segments, starting with our Southern Timber segment, we expect to achieve full year harvest volumes of 12.2 million to 12.4 million tons with anticipated harvest volumes of 3 million to 3.2 million tons in the fourth quarter. We expect regional sawtimber and pulpwood prices to remain relatively stable for the fourth quarter compared to the third quarter.

However, as previously discussed, full year and quarterly average pine prices for the combined company's Southern Timber segment are expected to be lower than legacy Rayonier prices based on geographic mix of the combined portfolio.

In our Northwest Timber segment, we expect to achieve full year harvest volumes of 2 million to 2.1 million tons with anticipated harvest volumes of approximately 500,000 to 550,000 tons in the fourth quarter. We expect overall sawtimber prices to be lower in the fourth quarter compared to the third quarter, primarily due to lower index sawlog prices in Idaho. We continue to expect that full year 2026 average log pricing for the combined company's Northwest Timber segment will be higher than the stand-alone pricing for Rayonier in the prior year.

In our Wood Products segment, we continue to expect lumber shipments to total approximately 1.1 billion board feet for the 11 months of contribution in 2026, including approximately 295 million to 305 million board feet in the fourth quarter. We expect fourth quarter lumber realizations to be lower than the third quarter, reflecting softer market conditions and typical seasonal demand patterns.

As of October month end, our average quarter-to-date lumber price realization was roughly 6% lower than our average price realization in the third quarter. Lumber prices have continued to soften recently with the current random lengths composite pricing 12% lower than the third quarter average composite.

In our Real Estate segment, we see continued momentum and maintain a healthy pipeline of rural and improved development land sale opportunities. Based on our current transaction pipeline and sales closed quarter-to-date, we expect an adjusted EBITDA contribution in the fourth quarter of $60 million to $70 million, which would result in full year real estate adjusted EBITDA toward the upper end of our prior guidance range of $180 million to $200 million.

To assist with modeling, we note that the third quarter results include purchase accounting adjustments related to prior quarters. In aggregate, these adjustments increased depletion, depreciation and amortization, or DD&A, by $8 million for the quarter. By segment, they increased DD&A by $8.3 million in Northwest Timber, $3.3 million in Wood Products and $0.5 million in real estate. and reduced DD&A by $4.1 million in Southern Timber. These nonrecurring adjustments should be excluded when estimating future DD&A run rates.

I'll now turn the call back to Mark for closing comments.

Mark McHugh

Thanks, Wayne. As we wrap up today's call, I'd like to reiterate our current capital allocation priorities given the significant disconnect between private market timberland values and the valuation currently implied by our share price. Over the last several years, we've demonstrated our commitment to creating shareholder value through nimble capital allocation, active portfolio management and a disciplined approach to our balance sheet.

We remained focused on executing this strategy in 2026. Through the end of September, we've repurchased $163 million of shares, repaid over $220 million of debt and closed a strategic like-kind exchange transaction that we expect will be accretive to cash flow. As we noted when we announced the merger, one of the key benefits of combining our 2 organizations was the opportunity to further optimize our asset base through value-enhancing dispositions while retaining the advantages of scale.

At today's share price, repurchasing our stock effectively allows us to acquire our own high-quality timberland portfolio at a meaningful discount to private market values. Given this ongoing dynamic, we intend to pursue additional timberland dispositions over the next 12 to 18 months to further enhance our flexibility to lean into share repurchases, incrementally reduce leverage and fund other capital allocation priorities.

While creating value through asset sales and buybacks is a high priority in the current environment, our team also continues to advance initiatives that will position the company for long-term growth. We remain encouraged by the growing opportunity set for land-based solutions as well as structural shifts in North American lumber supply that should position our assets more favorably over time. A successful integration, combined with a capital allocation approach that adapts to evolving market conditions will be central to capitalizing on these opportunities over the long term. In sum, I remain optimistic that Rayonier is well positioned to build value per share throughout the economic cycle.

That concludes our prepared remarks, and I'll now turn the call back to the operator for questions.

Operator

[Operator Instructions] Your first question comes from the line of Mike Roxland with Truist Securities.

質疑応答

Michael Roxland

Mark, you just mentioned that you intend to pursue additional timberland dispositions over the next 12 to 18 months. Any sense of the dollar value of the timberland that you're looking to sell and maybe where some of those dispositions would come from?

Mark McHugh

Yes. Thanks, Michael. I mean, at this point, we're not going to be overly prescriptive on how much we'll look to sell. It's really going to be driven by the buyer response to packages we bring to market as well as just how overall market dynamics continue to evolve. Keep in mind, when we announced the disposition plan back in late 2023, we were looking to significantly lower our leverage. That's less of a factor now just given our current cash position and leverage profile.

We still want to maintain some flexibility around debt reduction, but additional sales at this point are really motivated by capitalizing on that disconnect between public and private timberland values. And as I noted in the prepared remarks, we now have a much larger portfolio from which to evaluate disposition opportunities without compromising the benefits of scale. That was one of the benefits that we highlighted when we announced the merger. So we feel we're well positioned to continue being nimble and opportunistic on that front.

Michael Roxland

Got it. Makes sense. And just on that front, in terms of the capitalizing on the disconnect between valuations, can you -- public market versus private market timberland valuations. How should we think about the dollar amounts of repos you could pursue each quarter? You have about $350 million, $360 million authorized right now. Should we think maybe $40 million, $45 million of share repos per quarter would be the right amount? And then just quickly, on the lumber business, given the housing backdrop, given weakening pricing more recently, how do you think about opportunities to add additional scale in lumber, maybe acquire some assets for -- maybe buy some assets from producers who may be distressed?

Mark McHugh

As it relates to the volume of buybacks, again, we continue to see buybacks as a compelling use of capital, but we're not going to be prescriptive as to exactly how much we buyback in any quarter. I think the fact that we just approved -- our Board just approved $300 million of incremental repurchase activity, that really underscores our conviction around buybacks.

With that said, we're going to continue to be measured as to how much we deploy at any one point in time, particularly just given how volatile market conditions have been here recently.

We're very focused on growing value per share. We believe that buybacks at these levels certainly achieve that end. We're also focused on maintaining balance sheet flexibility and also our investment-grade credit rating. Fortunately, our balance sheet is in great shape right now. But as we've executed on our buyback program here in the last, call it, 18 months, our leverage has ticked up a bit towards that 3x target that we've laid out.

So as we discussed in prepared remarks, that's why we're really looking at additional disposition opportunities in order to build incremental capacity and really extend our runway for buybacks.

Just to address your next question around Wood Products and growth in that business, we're going to evaluate those types of opportunities as we would any other capital allocation alternative, really with a view towards building long-term value per share. We're certainly open to exploring growth in Wood Products, including both investing in our existing mills as well as considering potential external growth opportunities. But as we've discussed in the past, the bar for external growth right now is pretty high given the opportunity that we see in buybacks.

Operator

Your next question comes from the line of Anthony Pettinari with Citi.

Anthony Pettinari

With the challenged housing demand this year, a lot of homebuilders have talked about activity kind of pulling back from August to September to October. It sounds like from your comments, you're kind of seeing that in lumber prices, but it doesn't sound like you're seeing it so much in rural land sales and real estate sales. I just wanted -- I'm wondering if you can kind of comment more on the demand you're seeing for land and lots. And if you've seen any kind of softening there or just like what those discussions have been like recently?

Mark McHugh

I mean land values have really held up quite well. I think we've commented on this a number of times in recent quarters. And I'd say that really highlights what we think is the recurring nature of what we see as a longer-term trend in this business. I've been really impressed with how our team continues to find opportunities to monetize land at very significant premiums to timberland value. So while timber market conditions continue to be pretty difficult, underlying land values have just continued to appreciate. And we've been able to capture that appreciation through our real estate business.

I've said this before, but this is a part of our business that we think is really underappreciated. Every time we sell an acre of land at a significant premium to timberland value, we're generating NAV accretion. Or to put another way, we've been selling land at very big premiums to timberland value. We've been buying back our stock at what we think are very big discounts to timberland value. That's really part of our ongoing capital allocation strategy. And again, we think we're building long-term value per share by doing this. We're going to continue to take advantage of those opportunities. And I think that could ultimately translate to a higher long-term trend line in terms of that contribution from the real estate business.

Anthony Pettinari

Okay. That's very helpful. And then just on the election, I'm just curious if there's 2 or 3 policy issues that you're really maybe focused on in the next few years and renewables and wind, maybe -- maybe that's a good guy, data center restrictions, maybe I don't know if that's something that's really meaningful for you. But just curious like what policies are on your radar?

Mark McHugh

Yes. I mean we're just about, I guess, 1.5 days removed here from the midterm. So it's a little early to gauge the impact. I think it will take some time to see how a leadership role shake out and what priorities gain momentum as this new Congress takes shape early next year. We generally believe that the biggest issues impacting our industry are or should be bipartisan issues that garner support from both sides of the aisle. And that really includes housing affordability, policies that improve the health of the rural economy.

But to your point, as it relates to land-based solutions, of course, federal policies around data centers and renewable energy have been hot button topics here recently. So we'll have to see how the election ultimately impacts those opportunities for us. Again, hard to say right now what issues might gain traction. But in the near term, we're not necessarily expecting any significant changes to the overall regulatory environment as it relates to our business.

Operator

Your next question comes from the line of Buck Horne with Raymond James.

Buck Horne

I just wanted to maybe follow up on that line of question right there in terms of the land solutions business and really maybe focusing in on like solar options and what kind of progress you're seeing or any uptick in additional interest from the solar community or converting some of those options to working sites? Any other progress on other discussions you're having, whether it's kind of mineral rights or exploration deals, or discussions with hyperscalers on those data center sites you might have?

Mark McHugh

Yes, Buck. I mean, I'd say our long-term optimism around what I think we broadened out to refer to as our Energy Solutions business, hasn't really changed. We continue to see a long runway ahead there, especially given the growing demand for power and the relatively low cost of solar and other forms of renewable energy.

Right now, I'd say some developers are probably more focused on optimizing their existing pipeline rather than expanding as they're continuing to navigate changes in the regulatory environment. So we've definitely seen some puts and takes in our option portfolio in recent quarters. And our overall acreage under option is actually down modestly.

That said, we think the options that remain in the portfolio should have a higher probability of conversion. Developers are generally taking a more disciplined approach to site selection today, and that should translate to fewer agreements, but a higher quality option portfolio in the aggregate. As I mentioned last quarter, 2027 is really the first year that we expect to see a big step-up in those option maturities. And so we think over the next 2 to 3 years, we should start to get better visibility just in terms of what that long-term conversion rate might look like on those energy options.

But overall, again, still very optimistic about the long-term opportunity for Rayonier. Again, finding suitable land remains a key constraint for data center development, for powered land development. And we feel that we're really well positioned to be a solutions provider on that front, just given the scale of our land base and specifically where our land is located.

Buck Horne

That's perfect. Really appreciate that color. And then also just looking -- there's been some announcements, some mill closures from other wood products competitors out there in the U.S. South recently or some curtailments out there. Would you expect any potential impact on your harvest volumes, either sawlog or pulpwood pricing just due to some of the recent mill closures that are out there?

Mark McHugh

Yes. None of the mills that recently announced curtailments were major customers of ours, but we did supply some volume into those facilities. But in general, look, whether a mill is a customer or not or a major customer or not, any type of mill shutdown within a particular fiber basket or sourcing radius is going to create some headwinds in that market area as the timber that was going into those mills now has to find a new home.

So our team is working to reassess supply-demand dynamics in those market areas and shift around volume as needed. Fortunately, our land base is very diverse. So we're not overly exposed to any particular market area. And that's especially true following the merger. Recall that we had highlighted that it's one of the benefits of the merger was really just the diversification of the land base. So we're not anticipating any material impacts to our business, but it is something that we're monitoring.

Operator

Your next question comes from the line of Ketan Mamtora with BMO Capital Markets.

Ketan Mamtora

Maybe just coming back on the repurchase authorization. I'm just curious, as you think about sort of progressing with this, how much of this sort of really depends on kind of potential asset dispositions at some point later this year? Or put it differently, like how much could you do share repurchases without any asset disposition?

Mark McHugh

Yes. Again, Ketan, we're not going to be overly prescriptive on that. We do continue to have the ability to repurchase shares. We're comfortable with where leverage sits currently. But like I said, it has ticked up modestly with repurchases that we've done to date. And so we certainly have the ability to press leverage a bit higher than that target rate. We do tend to look at that as sort of an over-the-cycle leverage target.

We still think that Wood Products is contributing below mid-cycle EBITDA. We still anticipate some incremental merger synergies to come into play here in the coming 12 months. And so we do have some flexibility in terms of how we've articulated that target. But we are more mindful of leverage, just given the interest rate environment. So that's why we're really focused on looking at additional disposition opportunities really to extend that runway.

Ketan Mamtora

Understood. That's helpful. And then relatedly on the asset dispositions, Mark, I'm just curious, how do you sort of think about maintaining sort of scale and size in whether it is some regional markets or just broadly southern versus the West versus kind of just the perceived disconnect between public, private market valuations as you consider these in potential dispositions?

Mark McHugh

Yes. I mean that's certainly a key consideration as we evaluate where we may look at additional dispositions. We want to make sure we maintain sufficient scale in the different market areas in which we operate. But again, recall that, that was one of the benefits we laid out at the time of the merger with PotlatchDeltic was to the extent that this disconnect persisted, we now had a bigger sandbox to play in, so to speak. And we think we have the ability to continue to lean in on disposition opportunities really without compromising those benefits of scale.

Ketan Mamtora

Got it. And then just final question. I'm just curious with pulpwood prices, and it seems like it's stabilizing, but it's come under a lot of pressure here in the last 18 to 24 months. Are you seeing any signs or are you all changing either silvicultural practices or thinning regimes? Any changes there given how depressed prices have been here recently?

Mark McHugh

Yes. Look, we've talked about this quite a bit in the past. Pulpwood markets have been very challenging these past few years. We faced this perfect storm of mill closures, coupled with pretty elevated supply in certain areas due to dry weather and some large-scale casualty events. With that said, we do think pulpwood markets have generally stabilized over the last several months or several quarters, really as mill operating rates have generally improved following some capacity rationalization that occurred. So conditions have improved somewhat, but pulpwood prices are still well below where they were a few years ago, which has really been a pretty big headwind for our industry here recently.

We're investing a lot of time right now in new market development to try to bolster demand for pulpwood and residuals as well. And that's specifically around bioenergy, biofuel, biocharge type opportunities. But again, this is going to take some time to play out. So it's been a tough backdrop here for pulpwood recently. But we are cautiously optimistic that we could see some of these new sources of demand start to scale up and hopefully replace some of that demand that was lost from the traditional pulp and paper industry. And certainly, silvicultural practices, I think, are under review across the industry today to, again, just lessen the volume of pulpwood that's in the market or that's being targeted on final harvest.

Operator

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

Collin Mings

Thank you. I'd like to thank everybody for joining us. Please contact us with any follow-up questions.

Operator

This concludes today's call. Thank you all for attending. You may now disconnect.