Rayonier - Best-in-Class, Pure-Play Timber REIT
Improving Supply / Demand Dynamics on Horizon
U.S. Housing
Market Recovery
Softwood Lumber
Agreement
Resolution
Supply Reductions
from Mountain Pine
Beetle
Sustained Demand
from China
☐
U.S. housing starts
☐
■
continue modest
recovery following
recession
Recovery led by multi-
family starts, which use
one-third the lumber of
single-family starts
Shortage of labor and
finished lots slowing the
rate of recovery in
single-family starts
Housing starts expected
to continue to grow at
modest pace, reaching
1.5 million starts by end
of decade
One-year litigation
moratorium expired in
October 2016
Preliminary combined
duties on Canadian
lumber were announced
averaging ~27% (~20%
countervailing duties;
~6.9% antidumping
duties)
Two sides continue to
work toward negotiated
resolution
Combination of higher
lumber prices and lower
Canadian market share
in U.S. expected to drive
higher sawlog prices
over time
Mountain Pine Beetle
epidemic has resulted in
mortality of over 50% of
lodgepole pine in interior
British Columbia
Timber generally has an
economic shelf life of
~10 years once it has
been killed by beetle
Expected decline in
economically viable pine
inventory will be more
pronounced over next
five years
U.S. log exports to
China were not present
at the last peak in
housing starts in 2005
U.S. log exports to
China resumed in late
2009 after many years
of little to no volume
Current levels of U.S.
log exports to China are
at lower levels than the
peak in 2011, but still
represent a substantial
component of demand
Rayonier
Investor Relations | August 2017
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