Rayonier Inc. (RYN) Cash Flow Statement

In 2026Q2, AFFO of $102.9M fell short of dividends paid of $159.1M, resulting in a payout ratio of 1.09. This marks a deterioration from the prior quarter's 1.85, though it improved from the 3.25 in 2025Q4. The persistent inability to fully cover dividends with AFFO suggests reliance on external sources or cash reserves, which may not be sustainable if timber prices remain weak.

The $42.8M capex in 2026Q2 represents a significant increase from the $20.4M in the prior quarter and the $15.0M in 2025Q4. This may indicate a strategic push to acquire or develop timberlands, but it also reduces distributable cash flow. Given the volatile FFO, which spiked to $432.1M in 2025Q2 due to a large timber sale, investors should monitor whether this capex is maintenance or growth-oriented, as it directly impacts AFFO sustainability.

The dramatic quarter-over-quarter swing in OCF, from $34.6M to $145.2M, aligns with the volatile revenue and net income patterns seen in the income statement. This suggests that working capital changes, particularly receivables and inventory, are heavily influenced by the timing of large timber sales. Investors should expect continued volatility in OCF, which complicates the assessment of underlying cash generation.

The dividend payout ratio of 1.09 in 2026Q2 indicates that AFFO did not fully cover the dividend, requiring a draw on cash reserves or external financing. This pattern is consistent with several quarters, such as 2025Q1 (5.50) and 2024Q1 (1.88), where AFFO was insufficient. While the company has generated positive FCF in most quarters, the reliance on external funding to maintain dividends could strain the balance sheet if timber markets weaken further.

The FFO/NI ratio of 7.60 in 2026Q2 indicates that net income is significantly lower than FFO, primarily due to depreciation and amortization. In contrast, the negative ratio in 2026Q1 reflects a net loss despite positive FFO. This distortion is typical for REITs, but the magnitude varies widely, suggesting that GAAP earnings are not a reliable indicator of cash-generating ability. Investors should focus on FFO and AFFO for valuation.