- Third quarter net income attributable to Rayonier of $19.2
million ($0.13 per share) on revenues of $201.6 million
- Third quarter operating income of $35.4 million and Adjusted
EBITDA of $78.9 million
- Year-to-date cash provided by operations of $208.9 million and
cash available for distribution (CAD) of $113.5 million
- Full-year Adjusted EBITDA expected to be toward higher end of
prior guidance range
Rayonier Inc. (NYSE:RYN) today reported third quarter net income
attributable to Rayonier of $19.2 million, or $0.13 per share, on
revenues of $201.6 million. This compares to net income
attributable to Rayonier of $20.6 million, or $0.14 per share, on
revenues of $195.3 million in the prior year quarter. The prior
year quarter included a $1.1 million timber write-off resulting
from a fire casualty event in Washington.1 Excluding this item, pro
forma net income2 was $21.6 million, or $0.15 per share, in the
prior year period.
The following table summarizes the current quarter and
comparable prior year period results:
Three Months Ended
(millions of dollars, except earnings per
share (EPS))
September 30, 2023
September 30, 2022
$
EPS
$
EPS
Revenues
$201.6
$195.3
Net income attributable to Rayonier
$19.2
$0.13
$20.6
$0.14
Timber write-off resulting from a fire
casualty event1
—
—
1.1
0.01
Pro forma net income2
$19.2
$0.13
$21.6
$0.15
Third quarter operating income was $35.4 million versus $40.9
million in the prior year period, which included a $16.0 million
gain on the sale of a multi-family apartment complex in Bainbridge
Island, Washington, held in a joint venture acquired as part of the
Pope Resources transaction. Excluding $11.5 million of this gain
attributable to noncontrolling interests3 and the $1.1 million
timber write-off resulting from a casualty event,1 prior year third
quarter pro forma operating income2 was $30.5 million. Third
quarter Adjusted EBITDA2 was $78.9 million versus $64.7 million in
the prior year period.
The following table summarizes operating income (loss), pro
forma operating income (loss),2 and Adjusted EBITDA2 for the
current quarter and comparable prior year period:
Three Months Ended September
30,
Operating Income
(Loss)
Pro forma Operating Income
(Loss)2
Adjusted EBITDA2
(millions of dollars)
2023
2022
2023
2022
2023
2022
Southern Timber
$18.6
$22.5
$18.6
$22.5
$37.8
$36.6
Pacific Northwest Timber
(0.6
)
2.2
(0.6
)
3.3
7.8
12.6
New Zealand Timber
17.6
9.3
17.6
9.3
23.5
15.6
Real Estate
9.2
15.7
9.2
4.3
18.9
8.4
Trading
(0.1
)
0.2
(0.1
)
0.2
(0.1
)
0.2
Corporate and Other
(9.4
)
(9.0
)
(9.4
)
(9.0
)
(9.0
)
(8.6
)
Total
$35.4
$40.9
$35.4
$30.5
$78.9
$64.7
Year-to-date cash provided by operating activities was $208.9
million versus $209.9 million in the prior year period.
Year-to-date cash available for distribution (CAD)2 was $113.5
million, which decreased $45.3 million versus the prior year period
due to lower Adjusted EBITDA2 ($42.9 million), higher cash interest
paid ($7.4 million) and higher capital expenditures ($4.9 million),
partially offset by lower cash taxes paid ($10.0 million).
“We generated strong third quarter results, particularly in
light of the macroeconomic challenges that continue to adversely
impact our timber businesses,” said David Nunes, CEO. “Adjusted
EBITDA improved 22% versus the prior year quarter, primarily driven
by a stronger contribution from our Real Estate segment and
increased carbon credit sales in our New Zealand Timber segment.
Total Adjusted EBITDA for our collective timber segments increased
7% versus the prior year period, as favorable results in our
Southern Timber and New Zealand Timber segments more than offset
lower Adjusted EBITDA in our Pacific Northwest Timber segment.
Meanwhile, our Real Estate segment registered a significant
increase in Adjusted EBITDA versus the prior year period,
reflecting continued momentum in our improved development projects
and strong ongoing demand for rural properties, despite the higher
interest rate environment.”
“In our Southern Timber segment, Adjusted EBITDA improved by
$1.2 million as harvest volumes increased 21% relative to the prior
year quarter, primarily due to the successful integration of the
acquisitions completed in late 2022. The higher volumes were
partially offset by a 17% decline in weighted-average net stumpage
prices due to weaker demand and drier weather conditions as
compared to the prior year period.”
“In our Pacific Northwest Timber segment, Adjusted EBITDA
declined $4.8 million from the prior year quarter as weaker
domestic and export demand led to a 10% decline in domestic
sawtimber prices versus the prior year period. Further, harvest
volumes declined 6% relative to the prior year quarter as we
deferred some harvest activity due to continued market
headwinds.”
“In our New Zealand Timber segment, Adjusted EBITDA improved
$7.9 million versus the prior year quarter as significantly higher
carbon credit sales were partially offset by 3% lower harvest
volumes and 2% lower net stumpage realizations as compared to the
prior year period.”
“In our Real Estate segment, Adjusted EBITDA was up $10.5
million versus the prior year quarter, due to a significant
increase in acres sold at higher per-acre prices compared to the
prior year period.”
Southern Timber
Third quarter sales of $64.0 million decreased $0.6 million, or
1%, versus the prior year period. Harvest volumes increased 21% to
1.81 million tons versus 1.50 million tons in the prior year
period, primarily driven by additional volume from acquisitions
completed in the fourth quarter of 2022. Average pine sawtimber
stumpage realizations decreased 13% to $28.85 per ton versus $33.31
per ton in the prior year period, primarily due to drier weather
conditions, softer demand from sawmills, and decreased competition
from pulp mills for chip-n-saw volume. Average pine pulpwood
stumpage realizations decreased 27% to $16.54 per ton versus $22.77
per ton in the prior year period due to weaker end-market demand
and drier weather conditions. Overall, weighted-average stumpage
realizations (including hardwood) decreased 17% to $21.48 per ton
versus $25.80 per ton in the prior year period. Operating income of
$18.6 million decreased $3.8 million versus the prior year period
due to lower net stumpage realizations ($7.8 million), higher
depletion rates ($2.2 million), and higher overhead and other costs
($1.7 million), partially offset by higher volumes ($5.0 million)
and higher non-timber income ($2.8 million).
Third quarter Adjusted EBITDA2 of $37.8 million was 3%, or $1.2
million, above the prior year period.
Pacific Northwest Timber
Third quarter sales of $29.3 million decreased $5.1 million, or
15%, versus the prior year period. Harvest volumes decreased 6% to
290,000 tons versus 307,000 tons in the prior year period, as some
planned harvests were deferred in response to soft market
conditions. Average delivered prices for domestic sawtimber
decreased 10% to $108.20 per ton versus $120.08 per ton in the
prior year period due to weaker domestic and export market demand.
Average delivered pulpwood prices decreased 35% to $33.09 per ton
versus $50.74 per ton in the prior year period, as the prior year
period benefited from much stronger end-market demand. An operating
loss of $0.6 million versus operating income of $2.2 million in the
prior year period was driven by lower net stumpage realizations
($2.4 million), higher costs ($1.2 million), lower volumes ($0.4
million) and lower non-timber income ($0.3 million), partially
offset by lower depletion rates ($0.4 million) and the prior year
period write-off of timber basis due to a fire in Washington1 ($1.1
million).
Third quarter Adjusted EBITDA2 of $7.8 million was 38%, or $4.8
million, below the prior year period.
New Zealand Timber
Third quarter sales of $70.4 million decreased $2.0 million, or
3%, versus the prior year period. Harvest volumes decreased 3% to
690,000 tons versus 712,000 tons in the prior year period, as some
planned harvests were deferred in response to soft market
conditions. Average delivered prices for export sawtimber decreased
23% to $95.23 per ton versus $123.07 per ton in the prior year
period, primarily due to weaker demand in China and increased
supply from Cyclone Gabrielle salvage volume. Despite the
significant decline in delivered pricing, export sawtimber net
stumpage realizations were down only 4% due to significantly lower
port and freight costs versus the prior year period. Average
delivered prices for domestic sawtimber declined 9% to $63.45 per
ton versus $69.69 per ton in the prior year period. The decrease in
domestic sawtimber prices (in U.S. dollar terms) was driven in part
by the decline in the NZ$/US$ exchange rate (US$0.61 per NZ$1.00
versus US$0.62 per NZ$1.00). Excluding the impact of foreign
exchange rates, domestic sawtimber prices decreased 7% versus the
prior year period, reflecting weaker domestic demand and decreased
competition from export markets. Third quarter non-timber / carbon
credit sales totaled $15.6 million versus $6.4 million in the prior
year period, as increased volumes were sold into the market
following a significant uptick in NZU pricing. Operating income of
$17.6 million increased $8.3 million versus the prior year period
primarily due to higher carbon credit sales ($9.3 million),
partially offset by lower net stumpage realizations ($0.7 million)
and lower volumes ($0.3 million).
Third quarter Adjusted EBITDA2 of $23.5 million was 51%, or $7.9
million, above the prior year period.
Real Estate
Third quarter sales of $31.2 million increased $18.7 million
versus the prior year period, while operating income of $9.2
million decreased $6.6 million versus the prior year period. Prior
year third quarter operating income included an $11.5 million gain
attributable to noncontrolling interests3 associated with the
Bainbridge Island multi-family apartment complex sale. Excluding
this item, pro forma operating income2 was $4.3 million in the
prior year period. Sales and pro forma operating income2 increased
versus the prior year period primarily due to a higher number of
acres sold (4,281 acres sold versus 1,828 acres sold in the prior
year period) and an increase in weighted-average prices ($5,781 per
acre versus $5,064 per acre in the prior year period).
Improved Development sales of $3.1 million included $1.8 million
from the Heartwood development project south of Savannah, Georgia
and $1.4 million from the Wildlight development project north of
Jacksonville, Florida. Sales in Heartwood consisted of 24 finished
residential lots for $1.1 million ($45,000 per lot or $290,000 per
acre) and a 1.3-acre commercial parcel to be used for a
quick-service restaurant for $0.7 million ($531,000 per acre).
Sales in Wildlight consisted of a 2-acre commercial parcel to be
used for a convenience store for $1.4 million ($735,000 per acre).
This compares to Improved Development sales of $2.3 million in the
prior year period.
Unimproved Development sales of $0.1 million consisted of a
10-acre transaction for $11,250 per acre. There were no Unimproved
Development sales in the prior year period.
Rural sales of $20.5 million consisted of 3,799 acres at an
average price of $5,386 per acre. This compares to prior year
period sales of $7.0 million, which consisted of 1,809 acres at an
average price of $3,848 per acre.
Timberland & Non-Strategic sales of $1.1 million consisted
of 466 acres at an average price of $2,266 per acre. There were no
Timberland & Non-Strategic sales in the prior year period.
Third quarter Adjusted EBITDA2 of $18.9 million increased $10.5
million versus the prior year period.
Trading
Third quarter sales of $6.8 million decreased $4.8 million
versus the prior year period due to lower volumes and prices. Sales
volumes decreased 35% to 61,000 tons versus 95,000 tons in the
prior year period. The Trading segment generated an operating loss
of $0.1 million versus operating income of $0.2 million in the
prior year period.
Other Items
Third quarter corporate and other operating expenses of $9.4
million increased $0.5 million versus the prior year period,
primarily driven by higher compensation and benefits expenses.
Third quarter interest expense of $12.6 million increased $3.5
million versus the prior year period, primarily due to higher
average outstanding debt and a higher weighted-average interest
rate.
Third quarter income tax expense of $0.6 million decreased $0.7
million versus the prior year period. The New Zealand subsidiary is
the primary driver of income tax expense.
Outlook
“Based on our year-to-date results and our expectations for the
fourth quarter, we now expect that full-year Adjusted EBITDA will
be toward the higher end of our prior guidance range,” added Nunes.
“In our Southern Timber segment, we expect full-year Adjusted
EBITDA toward the higher end of our prior guidance range due to an
improved outlook for non-timber income. In our Pacific Northwest
Timber segment, we expect full-year Adjusted EBITDA toward the
lower end of our prior guidance range due to continued softness in
end-market demand and lower anticipated harvest volumes. In our New
Zealand Timber segment, we expect full-year Adjusted EBITDA toward
the higher end of our prior guidance range due to an improved
outlook for carbon credit sales. In our Real Estate segment, we
anticipate full-year Adjusted EBITDA toward the higher end of our
prior guidance range based on increased transaction volume expected
to close in the fourth quarter.”
Conference Call
A conference call and live audio webcast will be held on
Thursday, November 2, 2023 at 10:00 AM (ET) to discuss these
results.
Access to the live audio webcast will be available at
www.rayonier.com. A replay of the webcast will be archived on the
Company’s website and available shortly after the call.
Investors may listen to the conference call by dialing
888-604-9366 (domestic) or 517-308-9338 (international), passcode:
RAYONIER. A replay of the conference call will be available one
hour following the call until Saturday, December 2, 2023, by
dialing 800-813-5527 (domestic) or 203-369-3347 (international),
passcode: 3088.
Complimentary copies of Rayonier press releases and other
financial documents are also available by calling (904)
357-9100.
1"Timber write-off resulting from a
casualty event" includes the write-off of merchantable and
pre-merchantable timber volume damaged by a casualty event that
cannot be salvaged.
2"Pro forma net income," "Pro forma
operating income (loss)," "Adjusted EBITDA" and "CAD" are non-GAAP
measures defined and reconciled to GAAP in the attached
exhibits.
3"Gain associated with the multi-family
apartment complex sale attributable to noncontrolling interests”
represents the gain recognized in connection with the sale of
property by the Bainbridge Landing joint venture attributable to
noncontrolling interests.
About Rayonier
Rayonier is a leading timberland real estate investment trust
with assets located in some of the most productive softwood timber
growing regions in the United States and New Zealand. As of
September 30, 2023, Rayonier owned or leased under long-term
agreements approximately 2.8 million acres of timberlands located
in the U.S. South (1.90 million acres), U.S. Pacific Northwest
(474,000 acres) and New Zealand (419,000 acres). More information
is available at www.rayonier.com.
___________________________________________________________________________________________________
Forward-Looking Statements - Certain statements in this
press release regarding anticipated financial outcomes including
Rayonier’s earnings guidance, if any, business and market
conditions, outlook, expected dividend rate, Rayonier’s business
strategies, expected harvest schedules, timberland acquisitions and
dispositions, the anticipated benefits of Rayonier’s business
strategies, and other similar statements relating to Rayonier’s
future events, developments or financial or operational performance
or results, are “forward-looking statements” made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and other federal securities laws. These
forward-looking statements are identified by the use of words such
as “may,” “will,” “should,” “expect,” “estimate,” “believe,”
“intend,” “project,” “anticipate” and other similar language.
However, the absence of these or similar words or expressions does
not mean that a statement is not forward-looking. While management
believes that these forward-looking statements are reasonable when
made, forward-looking statements are not guarantees of future
performance or events and undue reliance should not be placed on
these statements.
The following important factors, among others, could cause
actual results or events to differ materially from those expressed
in forward-looking statements that may have been made in this
document: the cyclical and competitive nature of the industries in
which we operate; fluctuations in demand for, or supply of, our
forest products and real estate offerings, including any downturn
in the housing market; entry of new competitors into our markets;
changes in global economic conditions and world events, including
the war in Ukraine and escalating tensions between China and
Taiwan; business disruptions arising from public health crises and
outbreaks of communicable diseases; fluctuations in demand for our
products in Asia, and especially China; the uncertainties of
potential impacts of climate-related initiatives; the cost and
availability of third party logging, trucking and ocean freight
services; the geographic concentration of a significant portion of
our timberland; our ability to identify, finance and complete
timberland acquisitions; changes in environmental laws and
regulations regarding timber harvesting, delineation of wetlands,
endangered species and development of real estate generally, that
may restrict or adversely impact our ability to conduct our
business, or increase the cost of doing so; adverse weather
conditions, natural disasters and other catastrophic events such as
hurricanes, wind storms and wildfires; the lengthy, uncertain and
costly process associated with the ownership, entitlement and
development of real estate, especially in Florida and Washington,
including changes in law, policy and political factors beyond our
control; the availability of financing for real estate development
and mortgage loans; changes in tariffs, taxes or treaties relating
to the import and export of our products or those of our
competitors; changes in key management and personnel; and our
ability to meet all necessary legal requirements to continue to
qualify as a real estate investment trust (“REIT”) and changes in
tax laws that could adversely affect beneficial tax treatment.
For additional factors that could impact future results, please
see Item 1A - Risk Factors in the Company’s most recent Annual
Report on Form 10-K and similar discussion included in other
reports that we subsequently file with the Securities and Exchange
Commission (the “SEC”). Forward-looking statements are only as of
the date they are made, and the Company undertakes no duty to
update its forward-looking statements except as required by law.
You are advised, however, to review any further disclosures we make
on related subjects in our subsequent reports filed with the
SEC.
Non-GAAP Financial Measures – To supplement Rayonier’s
financial statements presented in accordance with generally
accepted accounting principles in the United States (“GAAP”),
Rayonier uses certain non-GAAP measures, including “cash available
for distribution,” “pro forma operating income (loss),” “pro forma
net income,” and “Adjusted EBITDA,” which are defined and further
explained in this communication. Reconciliation of such measures to
the nearest GAAP measures can also be found in this communication.
Rayonier’s definitions of these non-GAAP measures may differ from
similarly titled measures used by others. These non-GAAP measures
should be considered supplemental to, and not a substitute for,
financial information prepared in accordance with GAAP.
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED STATEMENTS OF
CONSOLIDATED INCOME
September 30, 2023
(unaudited)
(millions of dollars, except per
share information)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2023
2023
2022
2023
2022
SALES
$201.6
$208.9
$195.3
$589.5
$663.7
Costs and Expenses
Cost of sales
(145.6
)
(168.4
)
(152.1
)
(463.2
)
(507.4
)
Selling and general expenses
(18.9
)
(19.0
)
(16.9
)
(54.7
)
(49.0
)
Other operating (expense) income, net
(1.7
)
(1.4
)
14.6
(5.5
)
14.4
OPERATING INCOME
35.4
20.1
40.9
66.1
121.7
Interest expense, net
(12.6
)
(12.4
)
(9.1
)
(36.7
)
(26.5
)
Interest and other miscellaneous income,
net
0.5
11.6
1.3
21.7
1.0
INCOME BEFORE INCOME TAXES
23.3
19.3
33.1
51.1
96.2
Income tax expense
(0.6
)
(0.2
)
(1.2
)
(1.8
)
(8.1
)
NET INCOME
22.7
19.1
31.9
49.3
88.1
Less: Net income attributable to
noncontrolling interests in the operating partnership
(0.3
)
(0.3
)
(0.5
)
(0.8
)
(1.7
)
Less: Net (income) loss attributable to
noncontrolling interests in consolidated affiliates
(3.2
)
0.2
(10.8
)
(1.9
)
(12.4
)
NET INCOME ATTRIBUTABLE TO RAYONIER
INC.
$19.2
$19.0
$20.6
$46.6
$74.0
EARNINGS PER COMMON SHARE
Basic earnings per share attributable to
Rayonier Inc.
$0.13
$0.13
$0.14
$0.31
$0.51
Diluted earnings per share attributable to
Rayonier Inc.
$0.13
$0.13
$0.14
$0.31
$0.50
Pro forma net income per share (a)
$0.13
$0.05
$0.15
$0.19
$0.51
Weighted Average Common Shares used for
determining
Basic EPS
148,274,209
148,218,436
146,370,340
147,959,983
146,022,718
Diluted EPS (b)
151,036,253
150,965,191
150,232,889
151,031,529
150,011,281
(a)
Pro forma net income per share is a
non-GAAP measure. See Schedule F for definition and reconciliation
to the nearest GAAP measure.
(b)
Diluted earnings per share is calculated
based on the weighted average number of shares of common stock
outstanding combined with the incremental weighted average number
of shares that would have been outstanding assuming all potentially
dilutive securities (including Redeemable Operating Partnership
Units) were converted into shares of common stock at the earliest
date possible. As of September 30, 2023, there were 148,287,338
common shares and 2,453,269 Redeemable Operating Partnership Units
outstanding.
A
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
September 30, 2023
(unaudited)
(millions of dollars)
September 30,
December 31,
2023
2022
Assets
Cash and cash equivalents
$107.8
$114.3
Assets held for sale
18.3
0.7
Other current assets
96.8
87.3
Timber and timberlands, net of depletion
and amortization
3,138.1
3,230.9
Higher and better use timberlands and real
estate development investments
106.7
115.1
Property, plant and equipment
44.5
44.7
Less - accumulated depreciation
(18.5
)
(17.5
)
Net property, plant and equipment
26.0
27.2
Restricted cash
1.8
1.2
Right-of-use assets
92.7
97.2
Other assets
119.5
115.5
$3,707.7
$3,789.4
Liabilities, Noncontrolling Interests
in the Operating Partnership and Shareholders’ Equity
Other current liabilities
110.6
95.3
Long-term debt
1,511.5
1,514.7
Long-term lease liability
85.1
88.8
Other non-current liabilities
98.4
104.1
Noncontrolling interests in the operating
partnership
69.8
105.8
Total Rayonier Inc. shareholders’
equity
1,816.1
1,865.4
Noncontrolling interests in consolidated
affiliates
16.2
15.3
Total shareholders’ equity
1,832.3
1,880.7
$3,707.7
$3,789.4
B
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
September 30, 2023
(unaudited)
(millions of dollars, except
share information)
Common Shares
Retained Earnings
Accumulated Other
Comprehensive Income
Noncontrolling Interests in
Consolidated Affiliates
Shareholders’ Equity
Shares
Amount
Balance, January 1, 2023
147,282,631
$1,463.0
$366.6
$35.8
$15.3
$1,880.7
Issuance of shares under the
“at-the-market” (ATM) equity offering program, net of commissions
and offering costs
400
—
—
—
—
—
Net income
—
—
8.5
—
(1.1
)
7.4
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.2
)
—
—
(0.2
)
Dividends ($0.285 per share)
—
—
(42.2
)
—
—
(42.2
)
Issuance of shares under incentive stock
plans
1,564
—
—
—
—
—
Stock-based compensation
—
2.5
—
—
—
2.5
Adjustment of noncontrolling interests in
the operating partnership
—
—
(2.4
)
—
—
(2.4
)
Other (a)
728,384
23.8
—
(14.8
)
—
9.0
Balance, March 31, 2023
148,012,979
$1,489.3
$330.3
$21.0
$14.2
$1,854.8
Net income
—
—
19.3
—
(0.2
)
19.1
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.3
)
—
—
(0.3
)
Dividends ($0.285 per share)
—
—
(42.2
)
—
—
(42.2
)
Issuance of shares under incentive stock
plans
372,149
—
—
—
—
—
Stock-based compensation
—
4.3
—
—
—
4.3
Adjustment of noncontrolling interests in
the operating partnership
—
—
4.3
—
—
4.3
Other (a)
(116,685
)
(3.9
)
—
3.3
(0.7
)
(1.3
)
Balance, June 30, 2023
148,268,443
$1,489.7
$311.4
$24.3
$13.3
$1,838.7
Net income
—
—
19.5
—
3.2
22.7
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.3
)
—
—
(0.3
)
Dividends ($0.285 per share)
—
—
(42.5
)
—
—
(42.5
)
Issuance of shares under incentive stock
plans
3,959
—
—
—
—
—
Stock-based compensation
—
3.4
—
—
—
3.4
Adjustment of noncontrolling interests in
the operating partnership
—
—
7.0
—
—
7.0
Other (a)
14,936
0.4
—
3.2
(0.3
)
3.3
Balance, September 30, 2023
148,287,338
$1,493.5
$295.1
$27.5
$16.2
$1,832.3
C
Common Shares
Retained Earnings
Accumulated Other
Comprehensive (Loss) Income
Noncontrolling Interests in
Consolidated Affiliates
Shareholders’ Equity
Shares
Amount
Balance, January 1, 2022
145,372,961
$1,389.1
$402.3
($19.6
)
$43.8
$1,815.6
Issuance of shares under the
“at-the-market” (ATM) equity offering program, net of commissions
and offering costs of $0.3 million
726,248
29.8
—
—
—
29.8
Net income
—
—
30.0
—
1.0
31.0
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.7
)
—
—
(0.7
)
Dividends ($0.27 per share)
—
—
(39.9
)
—
—
(39.9
)
Issuance of shares under incentive stock
plans
11,364
0.4
—
—
—
0.4
Stock-based compensation
—
2.8
—
—
—
2.8
Adjustment of noncontrolling interests in
the operating partnership
—
—
(2.6
)
—
—
(2.6
)
Other (a)
(2,885
)
(0.2
)
—
45.6
(0.2
)
45.2
Balance, March 31, 2022
146,107,688
$1,421.9
$389.1
$26.0
$44.6
$1,881.6
Net income
—
—
24.7
—
0.6
25.3
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.6
)
—
—
(0.6
)
Dividends ($0.285 per share)
—
—
(42.1
)
—
—
(42.1
)
Issuance of shares under incentive stock
plans
304,887
2.0
—
—
—
2.0
Stock-based compensation
—
4.4
—
—
—
4.4
Adjustment of noncontrolling interests in
the operating partnership
—
—
11.4
—
—
11.4
Other (a)
(90,843
)
(4.0
)
—
(25.4
)
(32.2
)
(61.6
)
Balance, June 30, 2022
146,321,732
$1,424.3
$382.5
$0.6
$13.0
$1,820.4
Net income
—
—
21.1
—
10.8
31.9
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.5
)
—
—
(0.5
)
Dividends ($0.285 per share)
—
—
(42.1
)
—
—
(42.1
)
Issuance of shares under incentive stock
plans
760
—
—
—
—
—
Stock-based compensation
—
2.6
—
—
—
2.6
Adjustment of noncontrolling interests in
the operating partnership
—
—
23.4
—
—
23.4
Other (a)
100,333
3.7
—
(2.2
)
(12.5
)
(11.0
)
Balance, September 30, 2022
146,422,825
$1,430.6
$384.4
($1.6
)
$11.3
$1,824.7
(a)
Primarily includes shares purchased from
employees in non-open market transactions to pay withholding taxes
associated with the vesting of shares granted under the Company’s
Incentive Stock Plan, amortization of pension and post-retirement
plan liabilities, foreign currency translation adjustments,
mark-to-market adjustments of qualifying cash flow hedges,
distributions to noncontrolling interests in consolidated
affiliates and the allocation of other comprehensive income to
noncontrolling interests in the operating partnership. The nine
months ended September 30, 2023 and September 30, 2022 also
includes the redemption of 755,558 and 104,414 Redeemable Operating
Partnership Units, respectively, for an equal number of Rayonier
Inc. common shares.
C
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
September 30, 2023
(unaudited)
(millions of dollars)
Nine Months Ended September
30,
2023
2022
Cash provided by operating
activities:
Net income
$49.3
$88.1
Depreciation, depletion and
amortization
114.3
114.2
Non-cash cost of land and improved
development
20.2
20.3
Timber write-offs resulting from casualty
events
2.3
1.1
Stock-based incentive compensation
expense
10.2
9.8
Deferred income taxes
(2.9
)
(6.7
)
Other items to reconcile net income to
cash provided by operating activities
7.8
(2.2
)
Changes in working capital and other
assets and liabilities
7.7
(14.7
)
208.9
209.9
Cash used for investing
activities:
Capital expenditures
(53.1
)
(48.2
)
Real estate development investments
(18.8
)
(10.9
)
Purchase of timberlands
(14.0
)
(3.2
)
Other
6.2
6.4
(79.7
)
(55.9
)
Cash used for financing
activities:
Net decrease in debt
—
(125.0
)
Dividends paid
(127.6
)
(123.6
)
Distributions to noncontrolling interests
in the operating partnership
(2.3
)
(2.8
)
Proceeds from the issuance of common
shares under incentive stock plan
—
2.6
Proceeds from the issuance of common
shares under the “at-the-market” (ATM) equity offering program, net
of commissions and offering costs
(0.1
)
31.9
Distributions to noncontrolling interests
in consolidated affiliates
—
(16.5
)
Other
(4.2
)
(4.2
)
(134.2
)
(237.6
)
Effect of exchange rate changes on cash
and restricted cash
(0.8
)
(6.0
)
Cash, cash equivalents and restricted
cash:
Change in cash, cash equivalents and
restricted cash
(5.8
)
(89.6
)
Balance, beginning of year
115.4
369.1
Balance, end of period
$109.6
$279.5
D
RAYONIER INC. AND
SUBSIDIARIES
BUSINESS SEGMENT SALES,
OPERATING INCOME,
PRO FORMA OPERATING INCOME AND
ADJUSTED EBITDA
September 30, 2023
(unaudited)
(millions of dollars)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2023
2023
2022
2023
2022
Sales
Southern Timber
$64.0
$68.3
$64.5
$204.1
$207.6
Pacific Northwest Timber
29.3
32.3
34.4
96.1
119.8
New Zealand Timber
70.4
60.9
72.5
175.4
202.7
Real Estate
31.2
32.0
12.4
79.5
81.0
Trading
6.8
15.4
11.6
34.8
52.7
Intersegment Eliminations
(0.1
)
(0.1
)
(0.1
)
(0.4
)
(0.2
)
Sales
$201.6
$208.9
$195.3
$589.5
$663.7
Operating income (loss)
Southern Timber
$18.6
$21.7
$22.5
$62.6
$76.9
Pacific Northwest Timber
(0.6
)
(2.4
)
2.2
(6.5
)
11.7
New Zealand Timber
17.6
2.4
9.3
19.3
22.7
Real Estate
9.2
8.6
15.7
18.7
37.0
Trading
(0.1
)
0.1
0.2
0.4
0.1
Corporate and Other
(9.4
)
(10.3
)
(9.0
)
(28.3
)
(26.6
)
Operating income
$35.4
$20.1
$40.9
$66.1
$121.7
Pro forma operating income (loss)
(a)
Southern Timber
$18.6
$21.7
$22.5
$62.6
$76.9
Pacific Northwest Timber
(0.6
)
(2.4
)
3.3
(6.5
)
12.8
New Zealand Timber
17.6
2.4
9.3
21.6
22.7
Real Estate
9.2
8.6
4.3
18.7
25.5
Trading
(0.1
)
0.1
0.2
0.4
0.1
Corporate and Other
(9.4
)
(10.3
)
(9.0
)
(28.3
)
(26.6
)
Pro forma operating income
$35.4
$20.1
$30.5
$68.4
$111.3
Adjusted EBITDA (a)
Southern Timber
$37.8
$43.6
$36.6
$124.2
$123.7
Pacific Northwest Timber
7.8
6.9
12.6
21.7
48.4
New Zealand Timber
23.5
8.3
15.6
37.9
40.8
Real Estate
18.9
20.3
8.4
45.8
58.4
Trading
(0.1
)
0.1
0.2
0.4
0.1
Corporate and Other
(9.0
)
(9.9
)
(8.6
)
(27.1
)
(25.7
)
Adjusted EBITDA
$78.9
$69.2
$64.7
$202.9
$245.8
(a)
Pro forma operating income (loss) and
Adjusted EBITDA are non-GAAP measures. See Schedule F for
definitions and reconciliations.
E
RAYONIER INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
September 30, 2023
(unaudited)
(millions of dollars, except per
share information)
LIQUIDITY MEASURES:
Nine Months Ended
September 30,
September 30,
2023
2022
Cash Provided by Operating
Activities
$208.9
$209.9
Working capital and other balance sheet
changes
(21.8
)
(2.9
)
Net recoveries on legal settlements
(20.5
)
—
Capital expenditures (a)
(53.1
)
(48.2
)
Cash Available for Distribution
(b)
$113.5
$158.8
Net Income
$49.3
$88.1
Interest, net and miscellaneous income
35.5
25.0
Income tax expense
1.8
8.1
Depreciation, depletion and
amortization
114.3
114.2
Non-cash cost of land and improved
development
20.2
20.3
Non-operating (income) expense (c)
(20.5
)
0.5
Timber write-offs resulting from casualty
events (d)
2.3
1.1
Gain associated with the multi-family
apartment complex sale attributable to NCI (e)
—
(11.5
)
Adjusted EBITDA (f)
$202.9
$245.8
Cash interest paid (g)
(31.6
)
(24.2
)
Cash taxes paid
(4.7
)
(14.6
)
Capital expenditures (a)
(53.1
)
(48.2
)
Cash Available for Distribution
(b)
$113.5
$158.8
Cash Available for Distribution
(b)
$113.5
$158.8
Real estate development investments
(18.8
)
(10.9
)
Cash Available for Distribution after
real estate development investments
$94.8
$147.9
PRO FORMA NET INCOME (h):
Three Months Ended
Nine Months Ended
September 30, 2023
June 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
Net Income Attributable to Rayonier
Inc.
$19.2
$0.13
$19.0
$0.13
$20.6
$0.14
$46.6
$0.31
$74.0
$0.50
Net recoveries on legal settlements
—
—
(11.4
)
(0.08
)
—
—
(20.5
)
(0.14
)
—
—
Timber write-offs resulting from casualty
events (d)
—
—
—
—
1.1
0.01
2.3
0.02
1.1
0.01
Pro forma net income adjustments
attributable to noncontrolling interests (i)
—
—
0.2
—
—
—
(0.2
)
—
—
—
Pro Forma Net Income
$19.2
$0.13
$7.8
$0.05
$21.6
$0.15
$28.2
$0.19
$75.1
$0.51
PRO FORMA OPERATING INCOME AND ADJUSTED
EBITDA (j) (f):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Corporate and
Other
Total
September 30, 2023
Operating income (loss)
$18.6
($0.6
)
$17.6
$9.2
($0.1
)
($9.4
)
$35.4
Depreciation, depletion and
amortization
19.2
8.3
6.0
3.1
—
0.4
37.0
Non-cash cost of land and improved
development
—
—
—
6.6
—
—
6.6
Adjusted EBITDA
$37.8
$7.8
$23.5
$18.9
($0.1
)
($9.0
)
$78.9
June 30, 2023
Operating income (loss)
$21.7
($2.4
)
$2.4
$8.6
$0.1
($10.3
)
$20.1
Depreciation, depletion and
amortization
21.9
9.2
5.9
2.2
—
0.4
39.7
Non-cash cost of land and improved
development
—
—
—
9.4
—
—
9.4
Adjusted EBITDA
$43.6
$6.9
$8.3
$20.3
$0.1
($9.9
)
$69.2
September 30, 2022
Operating income
$22.5
$2.2
$9.3
$15.7
$0.2
($9.0
)
$40.9
Gain associated with the multi-family
apartment complex sale attributable to NCI (e)
—
—
—
(11.5
)
—
—
(11.5
)
Timber write-off resulting from a casualty
event (d)
—
1.1
—
—
—
—
1.1
Pro forma operating income
$22.5
$3.3
$9.3
$4.3
$0.2
($9.0
)
$30.5
Depreciation, depletion and
amortization
14.1
9.4
6.3
1.0
—
0.3
31.1
Non-cash cost of land and improved
development
—
—
—
3.1
—
—
3.1
Adjusted EBITDA
$36.6
$12.6
$15.6
$8.4
$0.2
($8.6
)
$64.7
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (j) (f):
Nine Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Corporate and
Other
Total
September 30, 2023
Operating income (loss)
$62.6
($6.5
)
$19.3
$18.7
$0.4
($28.3
)
$66.1
Timber write-off resulting from a casualty
event (d)
—
—
2.3
—
—
—
2.3
Pro forma operating income (loss)
$62.6
($6.5
)
$21.6
$18.7
$0.4
($28.3
)
$68.4
Depreciation, depletion and
amortization
61.6
28.2
16.3
6.8
—
1.3
114.3
Non-cash cost of land and improved
development
—
—
—
20.2
—
—
20.2
Adjusted EBITDA
$124.2
$21.7
$37.9
$45.8
$0.4
($27.1
)
$202.9
September 30, 2022
Operating income
$76.9
$11.7
$22.7
$37.0
$0.1
($26.6
)
$121.7
Gain associated with the multi-family
apartment complex sale attributable to NCI (e)
—
—
—
(11.5
)
—
—
(11.5
)
Timber write-off resulting from a casualty
event (d)
—
1.1
—
—
—
—
1.1
Pro forma operating income
$76.9
$12.8
$22.7
$25.5
$0.1
($26.6
)
$111.3
Depreciation, depletion and
amortization
46.8
35.6
18.2
12.7
—
0.9
114.2
Non-cash cost of land and improved
development
—
—
—
20.3
—
—
20.3
Adjusted EBITDA
$123.7
$48.4
$40.8
$58.4
$0.1
($25.7
)
$245.8
(a)
“Capital expenditures” exclude timberland
acquisitions of $14.0 million and $3.2 million during the nine
months ended September 30, 2023 and September 30, 2022,
respectively.
(b)
“Cash Available for Distribution” (CAD) is
defined as cash provided by operating activities adjusted for
capital spending (excluding timberland acquisitions and real estate
development investments) and working capital and other balance
sheet changes. CAD is a non-GAAP measure of cash generated during a
period that is available for common stock dividends, distributions
to operating partnership unitholders, distributions to
noncontrolling interests, repurchase of the Company's common
shares, debt reduction, timberland acquisitions and real estate
development investments. CAD is not necessarily indicative of the
CAD that may be generated in future periods.
(c)
The nine months ended September 30, 2023
includes $20.5 million of net recoveries associated with legal
settlements.
(d)
“Timber write-offs resulting from casualty
events” includes the write-off of merchantable and pre-merchantable
timber volume damaged by casualty events that cannot be
salvaged.
(e)
“Gain associated with the multi-family
apartment complex sale attributable to noncontrolling interests"
represents the gain recognized in connection with the sale of
property by the Bainbridge Landing joint venture attributable to
noncontrolling interests.
(f)
“Adjusted EBITDA” is defined as earnings
before interest, taxes, depreciation, depletion, amortization, the
non-cash cost of land and improved development, non-operating
(income) expense, timber write-offs resulting from casualty events,
the gain associated with the multi-family apartment complex sale
attributable to noncontrolling interests, and Large Dispositions.
Adjusted EBITDA is a non-GAAP measure that management uses to make
strategic decisions about the business and that investors can use
to evaluate the operational performance of the assets under
management. It excludes specific items that management believes are
not indicative of the Company’s ongoing operating results.
(g)
“Cash interest paid” is presented net of
patronage refunds received of $6.2 million and $6.0 million during
the nine months ended September 30, 2023 and September 30, 2022,
respectively.
(h)
“Pro forma net income” is defined as net
income attributable to Rayonier Inc. adjusted for its proportionate
share of the net recoveries associated with legal settlements and
timber write-offs resulting from casualty events. Rayonier believes
that this non-GAAP financial measure provides investors with useful
information to evaluate our core business operations because it
excludes specific items that are not indicative of the Company’s
ongoing operating results.
(i)
“Pro forma net income adjustments
attributable to noncontrolling interests” are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
(j)
“Pro forma operating income (loss)” is
defined as operating income (loss) adjusted for timber write-offs
resulting from casualty events and the gain associated with the
multi-family apartment complex sale attributable to noncontrolling
interests. Rayonier believes that this non-GAAP financial measure
provides investors with useful information to evaluate our core
business operations because it excludes specific items that are not
indicative of the Company’s ongoing operating results.
F
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231031216954/en/
Investors/Media Collin Mings 904-357-9100
investorrelations@rayonier.com
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