레이오니어(RYN) 2026년 3분기 실적 콘퍼런스콜: 부동산 부문 강세 속 자사주 매입 확대

핵심 요약

• 레이오니어는 2026년 3분기 GAAP 기준 순이익이 1억 2,300만 달러(주당 0.41달러)를 기록했다고 발표했다. 프로포마 항목을 제외한 순이익은 4,000만 달러(주당 0.13달러)였다.
• 조정 EBITDA는 포틀래치델틱(PotlatchDeltic) 사업 부문과 각 사업부의 견조한 실적에 힘입어 1억 4,500만 달러에 달했다. 회사는 합병 시너지 목표액 4,000만 달러 중 2,000만 달러 이상의 런레이트(연간 환산) 시너지를 달성했다.
• 부동산 부문 조정 EBITDA는 거래 마감이 앞당겨지면서 경영진의 기존 가이던스 범위인 2,500만~3,500만 달러를 웃도는 4,900만 달러를 기록했다.
• 레이오니어는 2026년 첫 9개월 동안 1억 6,300만 달러 규모의 자사주를 매입했다. 이후 이사회는 자사주 매입 한도를 3억 달러 증액했다.
• 경영진은 4분기 부동산 조정 EBITDA를 6,000만~7,000만 달러로 예상하며, 이에 따라 연간 실적은 기존 가이던스 범위인 1억 8,000만~2억 달러의 상단에 근접할 것으로 내다봤다.
• 목재 가격은 7월 이후 약세를 보였다. 10월 분기 누적 기준 실현 가격은 3분기 평균보다 약 6% 낮았으며, 현재 랜덤 렝스(Random Lengths) 종합 가격은 3분기 평균보다 12% 낮았다.

주요 재무 데이터

사업 및 영업 실적

남부 산림지 부문

조정 EBITDA는 전년 동기 대비 23% 증가한 5,200만 달러를 기록했다. 벌채량은 주로 포틀래치델틱 산림지에서 추가된 약 140만 톤에 힘입어 56% 증가했다.

도착도 기준 제재목 가격은 톤당 평균 45달러로 합병 전 레이오니어의 전년 동기 대비 5% 하락했으나 전 분기 대비로는 2% 상승했다. 도착도 기준 펄프목 가격은 톤당 31달러로 전년 동기 대비 15% 하락했고 2분기 대비로는 3% 상승했다. 경영진은 회사의 주요 시장에서 펄프목 가격이 전반적으로 안정세를 보였다고 밝혔다.

북서부 산림지 부문

조정 EBITDA는 전년 동기의 600만 달러에서 3,200만 달러로 증가했다. 포틀래치델틱의 아이다호 산림지에서 공급된 약 37만 톤을 포함해 벌채량은 두 배 이상 증가했다.

도착도 기준 제재목 가격은 목재 시장에 연동된 아이다호 지역의 가격 강세에 주로 힘입어 전년 동기 대비 29%, 전 분기 대비 8% 상승한 톤당 129달러에 달했다.

목재 제품 부문

조정 EBITDA는 2,700만 달러로 2분기 대비 소폭 증가했으며, 포틀래치델틱의 2022년 3분기 이후 해당 부문 분기 최고 실적을 기록했다.

평균 목재 실현 가격은 MBF당 528달러, 출하량은 3억 2,700만 보드피트였다. 실현 가격은 전 분기 대비 약 5% 상승하며 단위당 제조원가 상승분을 상쇄했다. 경영진은 3분기 목재 시장 개선의 주요 원인으로 제재소 감산, 운송 차질, 캐나다산 수입 목재에 대한 관세 등 공급 제약을 꼽았다.

이후 계절적 수요가 둔화되고 특히 주택 부문을 중심으로 거시경제적 불확실성이 커지면서 가격은 하락했다.

부동산 부문

매출은 워싱턴주 매각을 포함해 약 4만 3,000에이커 매각으로 총 2억 800만 달러를 기록했다. 해당 거래를 제외한 매출은 약 7,000에이커 매각을 통해 에이커당 평균 8,000달러인 6,300만 달러였다.

조정 EBITDA는 4,900만 달러였다. 개량 개발지 매출은 슈날 밸리(Chenal Valley)의 600만 달러 이상을 포함해 총 1,200만 달러를 기록했다. 레이오니어는 플로리다주에서 1,700에이커 규모의 미개량 개발지 매각도 에이커당 약 1만 1,000달러인 1,900만 달러에 완료했다.

농촌 토지 매출은 약 5,100에이커에 걸쳐 에이커당 평균 약 5,000달러인 총 2,600만 달러를 기록했다. 경영진은 농촌 토지 수요가 견조하게 유지되었으며 산림지 가치 대비 계속해서 프리미엄을 인정받고 있다고 밝혔다.

경영진 가이던스

연간 가이던스에는 2026년 1월 31일부터 포틀래치델틱의 기여분이 일할 계산되어 반영된다.

경영진은 3분기 실적에 총 감모상각 및 감가상각비(DD&A)를 800만 달러 증가시킨 일회성 매수회계 조정이 포함되었다고 밝혔다. 향후 DD&A 런레이트를 추정할 때는 이러한 조정을 제외해야 한다.

리스크 및 주요 관전 포인트

• 목재 가격은 계절적 수요 둔화와 주택 시장 불확실성 확대로 7월 고점을 기록한 이후 지속적인 약세를 보였다.
• 펄프목 가격은 최근의 안정세에도 불구하고 수년 전 수준을 여전히 크게 밑돌고 있다. 경영진은 제재소 폐쇄, 공급 과잉, 재해 사고 등을 지속적인 하방 압력으로 언급했다.
• 최근의 제재소 감산으로 인해 국지적인 목재 시장의 역풍이 발생할 수 있으나, 경영진은 레이오니어의 다각화된 토지 기반 덕분에 전사 차원의 중대한 영향은 없을 것으로 내다봤다.
• 경영진은 현재 대차대조표 상태에 만족하면서도 금리 환경을 고려해 레버리지를 더욱 면밀히 모니터링하고 있다.
• 개발업체들이 보다 선별적으로 접근하고 기존 파이프라인에 집중하면서 에너지 개발 옵션 대상 면적은 소폭 감소했다. 경영진은 향후 2~3년에 걸쳐 전환율에 대한 가시성이 개선될 것으로 예상했다.

애널리스트 Q&A 주요 내용

경영진은 향후 12~18개월 동안 추가적인 산림지 매각을 추진할 계획이지만 목표 금액을 제시하지는 않았다. 지역별 영업 규모를 유지하는 동시에 민간 산림지 가치와 레이오니어 주가에 내포된 밸류에이션 간의 격차를 활용하는 것이 목표다.

레이오니어는 분기별 자사주 매입 속도를 정하지 않았다. 경영진은 이번 3억 달러의 매입 한도 증액이 자신감을 반영한 것이지만, 시장 변동성, 레버리지 고려사항, 투자적격 신용등급 유지 우선순위 등으로 인해 집행은 신중하게 이루어질 것이라고 밝혔다.

회사는 기존 제재소에 투자하거나 목재 제품 부문의 외부 성장을 모색하는 방안에 여전히 열려 있다. 다만 경영진은 자사주 매입을 통해 얻을 수 있는 기대 가치와 비교할 때 인수합병의 기준선이 높다고 설명했다.

에너지 솔루션과 관련해 경영진은 태양광, 재생에너지, 전력 공급 부지(powered-land), 데이터센터 사업 기회에 대해 긍정적인 전망을 유지하고 있다. 또한 2027년이 옵션 만기가 크게 늘어나는 첫해가 될 것으로 예상했다.

레이오니어는 바이오에너지, 바이오연료, 바이오차(biochar) 기회를 포함해 펄프목과 잔재물에 대한 새로운 수요처도 평가하고 있다. 다만 경영진은 이러한 시장이 자리 잡기까지는 시간이 걸릴 것이라고 덧붙였다.

실적 발표 콘퍼런스콜 녹취록 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

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.

질의응답

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.