Rayonier Announces MDF Sale Close, Other Items
31 Agosto 2005 - 4:44PM
Business Wire
Rayonier (NYSE:RYN) said today that it has closed the previously
announced sale of its medium-density-fiberboard (MDF) business in
New Zealand, and also reported on several other recent
developments. Sale of MDF Business On August 28, 2005, the company
closed the sale of its MDF business to Dongwha Hong Kong
International Limited for $40 million, subject to final working
capital adjustments. The sale proceeds are expected to approximate
net book value and therefore no material gain or loss is
anticipated. With its exit from the MDF business, Rayonier will now
focus in New Zealand on the ownership and management of timberland.
New Zealand Forests Transactions The New Zealand Overseas
Investment Commission has approved the previously announced
purchase of 235,000 acres of Carter Holt Harvey's New Zealand
forests by a consortium including Rayonier, and the consortium's
purchase of Rayonier's 118,000 acres. Both transactions are
expected to close in October. At today's exchange rates and a 49.7
percent Rayonier equity interest in the consortium, the company
expects net cash proceeds from the sale to approximate its previous
estimate of $61 million, but has revised estimates of the after-tax
gain from $28 million to $24 million. Repatriation of Foreign
Earnings On August 12, 2005, Rayonier initiated repatriation of
non-U.S. earnings under the American Jobs Creation Act of 2004 by
repatriating $36.6 million. This will result in a third quarter
income tax benefit of approximately $6.5 million, or 12 cents per
share, through the reversal of a previously recorded income tax
liability and reduction of the company's 2005 effective tax rate.
An additional $113-123 million is expected to be repatriated by
year-end, resulting in additional income tax benefits of
approximately $17-20 million, or 33-39 cents per share. These
additional benefits likely will also be recognized in the third
quarter. Receipt of Arbitration Award As previously disclosed, on
May 2, 2005, Rayonier was awarded $16.2 million in connection with
arbitration proceedings against ITT Industries, Inc. (as successor
to ITT Corp., Rayonier's former parent) involving the distribution
of environmental litigation insurance recoveries. On May 6, 2005,
ITT Industries filed a motion to vacate the award. That motion was
denied and on August 19, 2005, Rayonier received payment of the
award. An after-tax gain, including interest income, of
approximately $5.2 million, or 10 cents per share, will be
recognized in the third quarter. Rayonier has 2.2 million acres of
timberland and real estate in the U.S. and New Zealand. It recently
formed a real estate company, TerraPointe LLC, to maximize the
value of its extensive higher-and-better use properties,
particularly in the fast-growing counties along Interstate 95
between Savannah, Georgia, and Daytona Beach, Florida, where
Rayonier owns approximately 200,000 acres. The company is also the
world's leading producer of high performance specialty cellulose
fibers and has customers in more than 50 countries. Certain
statements herein relating to acquisitions and transactions to be
completed, including the repatriation of non-U.S. earnings, and the
expected impact on the company's financial results and taxes, are
forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. The following
factors, among others, could cause actual results to differ
materially from those expressed in the forward-looking statements:
the ability of the company and the New Zealand consortium to
complete the transactions described herein, changes in the terms or
timing of such transactions, and foreign currency exchange rate
fluctuations. In addition, the company's future results could be
impacted by those additional factors described in the company's
most recent Form 10-K on file with the Securities and Exchange
Commission. For further information, visit the company's web site
at http://www.rayonier.com. Complimentary copies of Rayonier press
releases and other financial documents are also available by mail
or fax by calling 1-800-RYN-7611.
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