- Second quarter net income attributable to Rayonier of $1.7
million ($0.01 per share) on revenues of $195.6 million
- Second quarter pro forma net income of $15.2 million ($0.11 per
share) on pro forma revenues of $189.8 million
- Second quarter operating income of $11.7 million, pro forma
operating income of $27.2 million and Adjusted EBITDA of $78.6
million
- Year-to-date cash provided by operations of $82.6 million and
cash available for distribution (CAD) of $79.7 million
- Closed Pope Resources acquisition on May 8, 2020
- Added new Timber Funds segment and revised definitions of pro
forma revenues, pro forma operating income and Adjusted EBITDA to
reflect “look-through” contribution from this segment
- Revised Real Estate segment sales categories to better align
with how management internally evaluates real estate sales
Rayonier Inc. (NYSE:RYN) today reported second quarter net
income attributable to Rayonier of $1.7 million, or $0.01 per
share, on revenues of $195.6 million. This compares to net income
attributable to Rayonier of $18.8 million, or $0.14 per share, on
revenues of $184.8 million in the prior year quarter. The second
quarter results included costs related to the merger with Pope
Resources1 of $13.5 million. Excluding these merger-related costs,
pro forma net income2 was $15.2 million, or $0.11 per share, versus
$18.8 million, or $0.14 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))
June 30, 2020
June 30, 2019
$
EPS
$
EPS
Revenues
$195.6
$184.8
Sales attributable to noncontrolling
interest in Timber Funds
(5.8
)
—
Pro forma revenues2
$189.8
$184.8
Net income attributable to Rayonier
$1.7
$0.01
$18.8
$0.14
Costs related to the merger with Pope
Resources1
13.5
0.10
—
—
Pro forma net income2
$15.2
$0.11
$18.8
$0.14
Second quarter operating income was $11.7 million versus $31.4
million in the prior year period. The current quarter operating
income included costs related to the merger with Pope Resources1 of
$13.5 million and operating loss attributable to noncontrolling
interest in Timber Funds of $2.0 million. Excluding these items,
current quarter pro forma operating income2 was $27.2 million.
Second quarter Adjusted EBITDA2 was $78.6 million versus $60.6
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 June
30,
Operating Income
(Loss)
Pro forma Operating Income
(Loss)2
Adjusted EBITDA2
(millions of dollars)
2020
2019
2020
2019
2020
2019
Southern Timber
$11.2
$14.7
$11.2
$14.7
$26.4
$27.6
Pacific Northwest Timber
(6.7
)
(3.8
)
(6.7
)
(3.8
)
3.9
2.2
New Zealand Timber
5.0
12.8
5.0
12.8
9.9
20.0
Timber Funds
(1.9
)
—
0.1
—
0.7
—
Real Estate
24.8
15.5
24.8
15.5
44.6
18.3
Trading
0.1
(0.2
)
0.1
(0.2
)
0.1
(0.2
)
Corporate and other
(20.9
)
(7.6
)
(7.4
)
(7.6
)
(7.0
)
(7.3
)
Total
$11.7
$31.4
$27.2
$31.4
$78.6
$60.6
Year-to-date cash provided by operating activities was $82.6
million versus $117.0 million in the prior year period. Cash
available for distribution (CAD)2 of $79.7 million decreased $15.3
million versus the prior year period primarily due to lower
Adjusted EBITDA2 ($13.9 million), higher cash interest paid ($1.7
million) and higher cash taxes paid ($0.4 million), partially
offset by lower capital expenditures ($0.7 million).
“We successfully closed the acquisition of Pope Resources on May
8th, and as such, are reporting our financial results on a combined
basis for the first time this quarter,” said David Nunes, President
and CEO. “I am extremely proud of the collaboration, focus and
dedication that our team demonstrated in successfully integrating
Pope Resources into Rayonier amid very challenging market
conditions. The vast majority of our integration efforts had to be
conducted remotely due to travel restrictions, government-mandated
stay-at-home orders and company-mandated work-from-home
arrangements resulting from the COVID-19 pandemic. Nevertheless,
our employees leaned heavily on technology to mitigate the physical
distance created by these circumstances and were able to
successfully work together towards closing the transaction and
integrating our organizations in a seamless manner. The relative
ease with which Pope Resources employees have transitioned to
Rayonier is a true testament to the similarities in culture that we
identified at the outset of the transaction.”
“The U.S. forest products industry has continued to operate as
an essential critical infrastructure industry throughout the
COVID-19 pandemic, while the New Zealand forest products industry
was shut down for approximately one month from late-March to
late-April,” continued Nunes. “We remain focused on optimizing
production while implementing enhanced safety protocols to protect
our employees, contractors and all other parties with whom they
interact. Overall, I’m very pleased with how our team navigated the
myriad of challenges associated with the pandemic to deliver strong
operating results across our segments during the second quarter.
Southern Timber Adjusted EBITDA declined 4% relative to a strong
second quarter 2019, primarily due to substantial pipeline easement
revenue in the prior year quarter. In Pacific Northwest Timber,
Adjusted EBITDA improved 76% versus the prior year quarter as the
acquisition of Pope Resources contributed an additional 55,000 tons
of harvest volume in the current quarter. New Zealand Timber
Adjusted EBITDA declined by 50% relative to the prior year quarter
as the N.Z. government instituted strict lockdown measures during
the quarter, resulting in a 23% reduction in harvest volumes. Real
Estate delivered an exceptionally strong quarter with a significant
increase in Adjusted EBITDA relative to the prior year quarter
driven by several large transactions.”
Changes to Reportable Business Segments & Non-GAAP
Measures
On May 8, 2020, Rayonier completed the previously announced
acquisition of Pope Resources, a Delaware Limited Partnership
(“Pope Resources”). As such, Pope Resources’ balance sheet and
results of operations are included in our consolidated financial
statements from and after the date of acquisition. The Pope
Resources transaction added to our portfolio: (1) approximately
124,000 acres of timberlands in Washington, which have been
integrated with our Pacific Northwest Timber segment, (2) ownership
interests in three private equity timber funds consisting of
approximately 141,000 acres as well as a fund management business
that oversees these timber funds, which collectively comprise our
new Timber Funds segment, and (3) a higher-and-better-use real
estate pipeline consisting of rural and conservation land sale
opportunities and high-potential improved development projects in
the West Puget Sound area, which will be reflected in our Real
Estate segment.
As a result of the Pope Resources acquisition, we have revised
our reportable business segments, adding one additional segment,
which we refer to as the "Timber Funds” segment. The Timber Funds
segment represents the operations of the three private equity
timber funds included in the transaction – Fund II, Fund III and
Fund IV (collectively, the “Funds”). Rayonier owns 20% of Fund II,
5% of Fund III and 15% of Fund IV, and is also the managing member
of the Funds. Despite not having a majority equity interest in the
Funds, we are required to consolidate 100% of the Funds’ operating
results, assets and liabilities into our financial statements due
to our ability to control the Funds’ economic activities as the
managing member. Accordingly, the Funds are fully consolidated into
our financial statements, and the income (loss) attributed to
third-party investors is reflected as an adjustment to income in
our Consolidated Statements of Income and Comprehensive Income
under the caption “Net loss (income) attributable to noncontrolling
interests in consolidated affiliates.”
The Timber Funds segment also includes fees paid to Rayonier for
managing the Funds, which consist of both fixed components based on
invested capital and acres under management as well as variable
components based on the harvest volumes of the Funds. These fees,
which also represent an expense of the Timber Funds segment, are
eliminated in consolidation.
In order to better reflect the proportionate economic
contribution from the Timber Funds business in our non-GAAP
measures, we have revised our definitions of pro forma revenues,
pro forma operating income and Adjusted EBITDA to incorporate the
pro rata (or "look-through") contribution from each of the timber
funds based on Rayonier's respective ownership interest, as well as
the full amount of management fees received by Rayonier for
managing the funds. Additional details on the calculation of these
non-GAAP measures can be found in our quarterly financial
supplement as well as the schedules provided herein.
Southern Timber
Second quarter sales of $46.8 million increased $0.6 million, or
1%, versus the prior year period primarily due to higher volumes,
partially offset by lower pipeline easement revenue. Harvest
volumes increased 20% to 1.54 million tons versus 1.27 million tons
in the prior year period, primarily due to strong pulpwood demand.
Average pine sawtimber stumpage prices decreased 1% to $25.48 per
ton versus $25.82 per ton in the prior year period as lower
chip-n-saw prices were partially offset by higher prices for larger
diameter sawlogs due to the resurgence in southern yellow pine
exports to China. Average pine pulpwood stumpage prices decreased
7% to $15.94 per ton versus $17.16 per ton in the prior year period
primarily due to an increase in available log supply resulting from
drier ground conditions in the current quarter versus the prior
year period. Overall, weighted-average stumpage prices (including
hardwood) decreased 7% to $18.91 per ton versus $20.29 per ton in
the prior year period, primarily driven by lower pulpwood prices
coupled with a 5% increase in the pulpwood mix. Operating income of
$11.2 million decreased $3.5 million versus the prior year period
as lower non-timber income ($3.9 million), lower net stumpage
prices ($2.1 million) and higher indirect and overhead expenses
($0.4 million) were partially offset by higher volumes ($2.6
million) and lower depletion rates ($0.3 million).
Second quarter Adjusted EBITDA2 of $26.4 million was $1.2
million below the prior year period.
Pacific Northwest Timber
Second quarter sales of $26.2 million increased $7.6 million, or
41%, versus the prior year period. Harvest volumes increased 54% to
385,000 tons versus 250,000 tons in the prior year period primarily
due to comparatively light harvest activity in the prior year
quarter coupled with 55,000 tons of incremental volume from the
acquired Pope Resources timberlands. Average delivered sawtimber
prices decreased 4% to $75.39 per ton versus $78.35 per ton in the
prior year period due to a higher mix of chip-n-saw volume in the
current quarter, partially offset by a higher percentage of
Douglas-fir sawtimber. Average delivered pulpwood prices decreased
13% to $36.92 per ton versus $42.26 per ton in the prior year
period due to the deterioration of pulp export markets, which
resulted in market related downtime at domestic pulp mills.
Operating loss of $6.7 million increased $2.9 million versus the
prior year period due to higher depletion rates ($1.4 million),
higher overhead and other costs ($1.1 million), lower net stumpage
prices ($0.1 million), lower non-timber income ($0.1 million) and
an increase in other variable costs ($0.2 million).
Second quarter Adjusted EBITDA2 of $3.9 million was $1.7 million
above the prior year period.
New Zealand Timber
Second quarter sales of $41.8 million decreased $20.3 million,
or 33%, versus the prior year period. Harvest volumes decreased 23%
to 529,000 tons versus 684,000 tons in the prior year period,
primarily due to the government-mandated shutdown of all
non-essential activity in New Zealand (including the harvesting and
transport of logs) from late-March through late-April. Average
delivered prices for export sawtimber decreased 12% to $98.75 per
ton versus $111.81 per ton in the prior year period, while average
delivered prices for domestic sawtimber decreased 19% to $66.95 per
ton versus $82.66 per ton in the prior year period. The decrease in
export sawtimber prices was driven primarily by lower demand and
the buildup of log inventories in China as a result of COVID-19
lockdowns. The decrease in domestic sawtimber prices (in U.S.
dollar terms) was driven in part by the fall in the NZ$/US$
exchange rate (US$0.62 per NZ$1.00 versus US$0.67 per NZ$1.00).
Excluding the impact of foreign exchange rates, domestic sawtimber
prices decreased 12% versus the prior year period, generally
following the negative trend in the export market. Operating income
of $5.0 million decreased $7.8 million versus the prior year period
as a result of lower volumes ($4.5 million), lower net stumpage
prices ($3.4 million) and unfavorable foreign exchange impacts
($0.6 million), partially offset by lower depletion rates ($0.3
million), lower roading costs ($0.2 million), lower overhead costs
($0.1 million) and higher non-timber income ($0.1 million).
Second quarter Adjusted EBITDA2 of $9.9 million was $10.1
million below the prior year period.
Timber Funds
The Timber Funds segment generated second quarter harvest
volumes of 90,000 tons, sales of $7.5 million and operating loss of
$1.9 million. Adjusting for the portion of the Timber Funds segment
attributable to noncontrolling interests and fee revenue to
Rayonier, pro forma sales and pro forma operating income were $1.7
million and $0.1 million, respectively.
Second quarter Adjusted EBITDA was $0.7 million.
Real Estate
Real Estate Sales Category Reclassification
Effective April 1, 2020, the Company changed the composition of
its Rural and Timberland & Non-Strategic sales categories to
better align with the way management internally evaluates real
estate sales. The Rural category now includes all real estate sales
(excluding development sales) representing a demonstrable premium
above timberland value. The Timberland & Non-Strategic category
now includes all real estate sales representing little to no
premium to timberland value. This category consists primarily of
sales of property that management views as non-strategic to our
long-term portfolio as well as sales of property for capital
allocation purposes that do not fit the definition of a Large
Disposition.3 All prior period amounts have been reclassified to
reflect the new composition of these two sales categories. The
Improved Development, Unimproved Development and Large Disposition
categories remain unchanged, and this reclassification had no
impact on overall segment results.
Second quarter sales of $50.0 million increased $27.5 million
versus the prior year period while operating income of $24.8
million increased $9.4 million versus the prior year period due to
a higher number of acres sold (20,310 acres sold versus 3,265 acres
sold in the prior year period), partially offset by a decrease in
weighted-average prices ($2,545 per acre versus $6,899 per acre in
the prior year period).
Improved Development sales of $6.4 million included a $5.4
million sale in the Belfast Commerce Park development project south
of Savannah, Georgia consisting of 119 acres at a price of $45,000
per acre in addition to $1.1 million of sales in the Wildlight
development project north of Jacksonville, Florida consisting of 17
residential lots ($63,118 per lot or $367,466 per acre). This
compares to prior year period sales of $0.2 million in the
Wildlight development project, which consisted of six residential
townhome lots ($28,750 per lot or $198,000 per acre).
Unimproved Development sales of $8.4 million consisted of a 570
acre sale in St. Johns County, Florida for $14,780 per acre. This
compares to prior year period sales of $14.4 million, which
consisted of a 784 acre sale in St. Johns County, Florida for
$18,402 per acre.
Rural sales of $27.2 million consisted of 7,710 acres at an
average price of $3,532 per acre. This compares to prior year
period sales of $7.1 million, which consisted of 1,886 acres at an
average price of $3,768 per acre.
Timberland and Non-Strategic sales of $9.6 million consisted of
11,907 acres at an average price of $807 per acre. This compares to
prior year period sales of $0.8 million, which consisted of 594
acres at an average price of $1,373 per acre. Timberland and
Non-Strategic sales in the quarter included several low-value,
geographically-isolated parcels with limited plantability and
long-term harvest potential.
Second quarter Adjusted EBITDA2 of $44.6 million was $26.3
million above the prior year period.
Trading
Second quarter sales of $24.3 million decreased $11.1 million
versus the prior year period due to lower volumes and prices
resulting from the government-mandated shutdown in New Zealand and
lower export demand as a result of the COVID-19 pandemic. Sales
volumes decreased 18% to 267,000 tons versus 325,000 tons in the
prior year period. The Trading segment generated operating income
of $0.1 million versus operating loss of $0.2 million in the prior
year period.
Other Items
Second quarter corporate and other operating expenses of $20.9
million increased $13.2 million versus the prior year period,
primarily due to costs related to the Pope Resources merger ($13.5
million), partially offset by lower overhead costs ($0.3
million).
Second quarter interest expense of $9.8 million increased $1.9
million versus the prior year period due to higher outstanding debt
following the closing of the Pope Resources merger.
Second quarter income tax expense of $2.9 million decreased $0.6
million versus the prior year period as a result of lower taxable
income. The New Zealand subsidiary is the primary driver of income
tax expense.
COVID-19 Update & Revised Outlook
“As we continue to adapt to the impacts of the COVID-19
pandemic, our highest priority remains the health and safety of our
employees and contractors, as well as their families and
communities,” stated Nunes. “Overall, I am very pleased with the
level of productivity and engagement that our employees have
sustained over the last several months as we’ve operated under a
work-from-home model for office employees and under enhanced safety
protocols for field employees. This allowed us to remain nimble and
respond to ever evolving market conditions as the economy emerged
from the shutdown. In the midst of the pandemic, we also had to
focus our efforts on the critical task of closing the Pope
Resources acquisition as well as integrating Pope Resources’ assets
and people into Rayonier. I want to commend and thank our entire
team for their tireless efforts on both operating our business and
successfully integrating Pope Resources during these
extraordinarily challenging times.”
“Overall, we have been encouraged by the resiliency of our
business and industry amid this pandemic. Housing construction and
repair and remodeling activity have rebounded sharply, driving
record highs for wood products prices throughout the U.S.
Longer-term, we expect that this will translate to improved log
prices, which tend to lag wood products pricing trends. Based on
our current outlook for the balance of the year, we now anticipate
full-year net income attributable to Rayonier of $38 to $43
million, EPS of $0.27 to $0.31, pro forma EPS of $0.17 to $0.21,
and Adjusted EBITDA of $240 to $260 million. Our revised outlook
for full-year Adjusted EBITDA reflects an anticipated partial-year
contribution of $17 to $20 million from the acquired Pope Resources
assets.”
“In our Southern Timber segment, we expect Adjusted EBITDA above
our prior guidance and higher full-year harvest volumes of 6.0 to
6.2 million tons, primarily due to anticipated increases in export
volume and strong sawtimber demand. We further expect that average
pricing in Southern Timber will be relatively flat, as improved
sawtimber demand driven by strong lumber pricing is generally
expected to offset lower pulpwood pricing due to anticipated mill
downtime, an increased supply of wood chip residuals and geographic
mix. In our Pacific Northwest Timber segment, we expect Adjusted
EBITDA above our prior guidance and higher full-year harvest
volumes of 1.6 to 1.7 million tons due to incremental volume from
the acquired Pope Resources timberlands. We further expect that
Pacific Northwest sawtimber pricing will improve due to
strengthening end markets and a higher-value species mix; however,
we anticipate pulpwood pricing will be relatively flat and
dependent on the duration of domestic mill curtailments. In our New
Zealand Timber segment, we expect Adjusted EBITDA above our prior
guidance and higher full-year harvest volumes of 2.3 to 2.5 million
tons, primarily due to the shorter-than-anticipated shutdown of
economic activity in New Zealand. We expect New Zealand pricing to
remain relatively flat with higher seasonal demand offset by
continued competition from alternative supply sources. In our Real
Estate segment, we expect Adjusted EBITDA above our prior guidance
due to continued strong demand for rural properties as well as an
improved demand outlook for development properties.”
Conference Call
A conference call and live audio webcast will be held on
Thursday, August 6, 2020 at 10:00 AM EDT 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
877-918-2512 (domestic) or 210-234-0068 (international), passcode:
Rayonier. A replay of the conference call will be available one
hour following the call until Saturday, September 5, 2020 by
dialing 800-879-4907 (domestic) or 402-220-4725 (international),
passcode: 9652.
Complimentary copies of Rayonier press releases and other
financial documents are also available by calling (904)
357-9100.
1
“Costs related to the merger with Pope
Resources” include legal, accounting and due diligence, consulting
and other costs related to the merger with Pope Resources, which
closed on May 8, 2020.
2
Pro forma net (loss) income, Pro forma
revenues (sales), Pro forma operating income (loss), Adjusted
EBITDA and CAD are non-GAAP measures defined and reconciled to GAAP
in the attached exhibits.
3
“Large Dispositions” are defined as
transactions involving the sale of timberland that exceed $20
million in size and do not have a demonstrable premium relative to
timberland value.
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 June
30, 2020, Rayonier owned or leased under long-term agreements
approximately 2.7 million acres of timberlands located in the U.S.
South (1.8 million acres), U.S. Pacific Northwest (507,000 acres)
and New Zealand (416,000 acres). The Company also acts as the
managing member in a private equity timber fund business with three
funds comprising approximately 141,000 acres. On a “look-through
basis”, the Company’s ownership in the timber fund business equates
to approximately 17,000 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, including the recent acquisition of Pope Resources,
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; entry of new competitors
into our markets; changes in global economic conditions and world
events; business disruptions arising from public health crises and
outbreaks of communicable diseases, including the recent outbreak
of the virus known as the novel coronavirus; 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 and trucking 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,
and endangered species, 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,
which can adversely affect our timberlands and the production,
distribution and availability of our products; interest rate and
currency movements; our capacity to incur additional debt; 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; 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; the cyclical nature of the real estate business
generally; a downturn in the housing market; the lengthy, uncertain
and costly process associated with the ownership, entitlement and
development of real estate, especially in Florida, which also may
be affected by changes in law, policy and political factors beyond
our control; unexpected delays in the entry into or closing of real
estate transactions; changes in environmental laws and regulations
that may restrict or adversely impact our ability to sell or
develop properties; the timing of construction and availability of
public infrastructure; and the availability of financing for real
estate development and mortgage loans.
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 sales,” “pro forma operating income
(loss),” “pro forma net (loss) 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
June 30, 2020
(unaudited)
(millions of dollars, except per
share information)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2020
2020
2019
2020
2019
SALES
$195.6
$259.1
$184.8
$454.8
$376.3
Costs and Expenses
Cost of sales
(154.9
)
(209.4
)
(140.4
)
(364.4
)
(283.7
)
Selling and general expenses
(12.5
)
(10.0
)
(11.0
)
(22.6
)
(20.8
)
Other operating expense, net
(16.5
)
(1.1
)
(2.0
)
(17.6
)
(1.9
)
OPERATING INCOME
11.7
38.6
31.4
50.2
69.9
Interest expense
(9.8
)
(8.3
)
(7.9
)
(18.0
)
(15.6
)
Interest and other miscellaneous income
(expense), net
1.5
(0.2
)
1.0
1.4
2.4
INCOME BEFORE INCOME TAXES
3.4
30.1
24.5
33.6
56.7
Income tax expense
(2.9
)
(3.7
)
(3.6
)
(6.7
)
(8.0
)
NET INCOME
0.5
26.4
20.9
26.9
48.7
Less: Net income attributable to
noncontrolling interests in the Operating Partnership
(0.2
)
—
—
(0.2
)
—
Less: Net loss (income) attributable to
noncontrolling interests in consolidated affiliates
1.4
(0.5
)
(2.1
)
0.9
(5.2
)
NET INCOME ATTRIBUTABLE TO RAYONIER
INC.
$1.7
$25.9
$18.8
$27.6
$43.5
EARNINGS PER COMMON SHARE
Basic earnings per share attributable to
Rayonier Inc.
$0.01
$0.20
$0.14
$0.21
$0.34
Diluted earnings per share attributable to
Rayonier Inc.
$0.01
$0.20
$0.14
$0.21
$0.34
Pro forma net income (loss) per share
(a)
$0.11
—
$0.14
$0.11
$0.34
Weighted Average Common Shares used for
determining
Basic EPS
133,318,209
129,137,494
129,380,282
131,227,852
129,277,490
Diluted EPS
135,957,026
129,348,050
129,643,915
132,652,538
129,697,985
(a)
Pro forma net income (loss) per share is a
non-GAAP measure. See Schedule F for definition and reconciliation
to the nearest GAAP measure.
A
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
June 30, 2020
(unaudited)
(millions of dollars)
June 30,
December 31,
2020
2019
Assets
Cash and cash equivalents (excluding
Timber Funds)
$87.8
$68.7
Cash and cash equivalents (Timber
Funds)
7.0
—
Other current assets
66.4
57.3
Timber and timberlands, net of depletion
and amortization
3,332.1
2,482.0
Higher and better use timberlands and real
estate development investments
113.9
81.8
Property, plant and equipment
39.9
31.9
Less - accumulated depreciation
(10.5
)
(9.6
)
Net property, plant and equipment
29.4
22.3
Restricted cash
0.5
1.2
Right-of-use assets
96.7
99.9
Other assets
35.5
47.8
$3,769.3
$2,861.0
Liabilities, Noncontrolling Interests
in the Operating Partnership and Shareholders’ Equity
Current maturities of long-term debt
(excluding Timber Funds)
—
82.0
Current maturities of long-term debt
(Timber Funds)
25.0
—
Other current liabilities
84.3
69.2
Long-term debt (excluding Timber
Funds)
1,310.5
973.1
Long-term debt (Timber Funds)
35.6
—
Long-term lease liability
87.8
90.5
Other non-current liabilities
201.9
108.6
Noncontrolling interests in the Operating
Partnership
110.2
—
Total Rayonier Inc. shareholders’
equity
1,457.3
1,440.0
Noncontrolling interests in consolidated
affiliates
456.7
97.6
Total shareholders’ equity
1,914.0
1,537.6
$3,769.3
$2,861.0
B
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
June 30, 2020
(unaudited)
(millions of dollars, except
share information)
Common Shares
Retained Earnings
Accumulated Other
Comprehensive (Loss) Income
Noncontrolling Interests in
consolidated affiliates
Shareholders’ Equity
Shares
Amount
Balance, January 1, 2020
129,331,069
$888.2
$583.0
($31.2
)
$97.6
$1,537.6
Net income
—
—
25.9
—
0.5
26.4
Dividends ($0.27 per share)
—
—
(34.8
)
—
—
(34.8
)
Issuance of shares under incentive stock
plans
2,407
0.1
—
—
—
0.1
Stock-based compensation
—
1.5
—
—
—
1.5
Repurchase of common shares made under
repurchase program
(152,223
)
—
(3.2
)
—
—
(3.2
)
Other (a)
(14
)
—
—
(116.1
)
(11.8
)
(127.9
)
Balance, March 31, 2020
129,181,239
$889.8
$570.9
($147.3
)
$86.3
$1,399.7
Issuance of shares in merger with Pope
Resources
7,181,071
172.4
—
—
—
172.4
Net income (loss)
—
—
1.9
—
(1.4
)
0.5
Net income attributable to noncontrolling
interest in the Operating Partnership
—
—
(0.2
)
—
—
(0.2
)
Dividends ($0.27 per share)
—
—
(37.0
)
—
—
(37.0
)
Issuance of shares under incentive stock
plans
215,970
0.2
—
—
—
0.2
Stock-based compensation
—
2.7
—
—
—
2.7
Acquisition of noncontrolling interests in
consolidated affiliates
—
—
—
—
372.3
372.3
Adjustment of noncontrolling interest in
the Operating Partnership
—
—
(3.9
)
—
—
(3.9
)
Other (a)
(66,168
)
(1.6
)
—
9.4
(0.5
)
7.3
Balance, June 30, 2020
136,512,112
$1,063.5
$531.7
($137.9
)
$456.7
$1,914.0
Common Shares
Retained Earnings
Accumulated Other
Comprehensive (Loss) Income
Noncontrolling Interests in
consolidated affiliates
Shareholders’ Equity
Shares
Amount
Balance, January 1, 2019
129,488,675
$884.3
$672.4
$0.2
$97.7
$1,654.6
Net income
—
—
24.8
—
3.0
27.8
Dividends ($0.27 per share)
—
—
(35.1
)
—
—
(35.1
)
Issuance of shares under incentive stock
plans
26,031
0.6
—
—
—
0.6
Stock-based compensation
—
1.4
—
—
—
1.4
Other (a)
(1,140
)
—
—
(6.0
)
(2.1
)
(8.1
)
Balance, March 31, 2019
129,513,566
$886.3
$662.1
($5.8
)
$98.6
$1,641.2
Net income
—
—
18.8
—
2.1
20.9
Dividends ($0.27 per share)
—
—
(35.1
)
—
—
(35.1
)
Issuance of shares under incentive stock
plans
250,344
0.2
—
—
—
0.2
Stock-based compensation
—
2.3
—
—
—
2.3
Other (a)
(134,194
)
(4.2
)
—
(23.7
)
(1.3
)
(29.2
)
Balance, June 30, 2019
129,629,716
$884.6
$645.8
($29.5
)
$99.4
$1,600.3
(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 postretirement plan liabilities, foreign currency translation
adjustments, mark-to-market adjustments of qualifying cash flow
hedges and distributions to minority shareholders.
C
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
June 30, 2020
(unaudited)
(millions of dollars)
Six Months Ended June 30,
2020
2019
Cash provided by operating
activities:
Net income
$26.9
$48.7
Depreciation, depletion and
amortization
76.2
64.1
Non-cash cost of land and improved
development
13.4
5.6
Gain on large dispositions of
timberlands
(28.7
)
—
Other items to reconcile net income to
cash provided by operating activities
3.3
12.4
Changes in working capital and other
assets and liabilities
(8.5
)
(13.8
)
82.6
117.0
Cash used for investing
activities:
Capital expenditures
(29.4
)
(29.5
)
Real estate development investments
(3.6
)
(1.0
)
Purchase of timberlands
(24.2
)
(26.4
)
Net proceeds from large dispositions of
timberlands
115.7
—
Net cash consideration for merger with
Pope Resources
(231.1
)
—
Other
1.8
(3.9
)
(170.8
)
(60.8
)
Cash provided by (used for) financing
activities:
Net increase in debt
203.0
—
Dividends paid
(72.2
)
(71.1
)
Proceeds from the issuance of common
shares under incentive stock plan
0.1
0.8
Repurchase of common shares made under
repurchase program
(3.2
)
—
Other
(12.8
)
(7.7
)
114.9
(78.0
)
Effect of exchange rate changes on cash
and restricted cash
(1.4
)
—
Cash, cash equivalents and restricted
cash:
Change in cash, cash equivalents and
restricted cash
25.3
(21.8
)
Balance, beginning of year
70.0
156.5
Balance, end of period
$95.3
$134.7
D
RAYONIER INC. AND
SUBSIDIARIES
BUSINESS SEGMENT SALES, PRO
FORMA SALES, OPERATING INCOME,
PRO FORMA OPERATING INCOME AND
ADJUSTED EBITDA
June 30, 2020
(unaudited)
(millions of dollars)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2020
2020
2019
2020
2019
Sales
Southern Timber
$46.8
$53.0
$46.2
$99.7
$107.0
Pacific Northwest Timber
26.2
31.1
18.6
57.2
39.1
New Zealand Timber
41.8
37.5
62.1
79.3
119.3
Timber Funds
7.5
—
—
7.5
—
Real Estate
50.0
118.5
22.5
168.6
43.5
Trading
24.3
19.0
35.5
43.3
67.5
Intersegment Eliminations
(1.0
)
—
(0.1
)
(0.9
)
(0.1
)
Sales
$195.6
$259.1
$184.8
$454.8
$376.3
Pro forma sales (a)
Southern Timber
$46.8
$53.0
$46.2
$99.7
$107.0
Pacific Northwest Timber
26.2
31.1
18.6
57.2
39.1
New Zealand Timber
41.8
37.5
62.1
79.3
119.3
Timber Funds
1.7
—
—
1.7
—
Real Estate
50.0
2.5
22.5
52.6
43.5
Trading
24.3
19.0
35.5
43.3
67.5
Intersegment Eliminations
(1.0
)
—
(0.1
)
(0.9
)
(0.1
)
Pro forma sales
$189.8
$143.1
$184.8
$332.9
$376.3
Operating income (loss)
Southern Timber
$11.2
$15.1
$14.7
$26.3
$36.3
Pacific Northwest Timber
(6.7
)
(0.9
)
(3.8
)
(7.6
)
(7.6
)
New Zealand Timber
5.0
5.4
12.8
10.4
28.5
Timber Funds
(1.9
)
—
—
(1.9
)
—
Real Estate
24.8
26.8
15.5
51.6
25.5
Trading
0.1
—
(0.2
)
0.1
0.3
Corporate and Other
(20.9
)
(7.8
)
(7.6
)
(28.6
)
(13.1
)
Operating income
$11.7
$38.6
$31.4
$50.2
$69.9
Pro forma operating income (loss)
(a)
Southern Timber
$11.2
$15.1
$14.7
$26.3
$36.3
Pacific Northwest Timber
(6.7
)
(0.9
)
(3.8
)
(7.6
)
(7.6
)
New Zealand Timber
5.0
5.4
12.8
10.4
28.5
Timber Funds
0.1
—
—
0.1
—
Real Estate
24.8
(1.9
)
15.5
23.0
25.5
Trading
0.1
—
(0.2
)
0.1
0.3
Corporate and Other
(7.4
)
(5.3
)
(7.6
)
(12.7
)
(13.1
)
Pro forma operating income
$27.2
$12.4
$31.4
$39.6
$69.9
Adjusted EBITDA (a)
Southern Timber
$26.4
$33.3
$27.6
$59.7
$68.9
Pacific Northwest Timber
3.9
9.8
2.2
13.7
5.3
New Zealand Timber
9.9
10.2
20.0
20.1
42.0
Timber Funds
0.7
—
—
0.7
—
Real Estate
44.6
(1.1
)
18.3
43.5
35.7
Trading
0.1
—
(0.2
)
0.1
0.3
Corporate and Other
(7.0
)
(5.0
)
(7.3
)
(12.0
)
(12.5
)
Adjusted EBITDA
$78.6
$47.1
$60.6
$125.7
$139.7
(a)
Pro forma sales, 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
June 30, 2020
(unaudited)
(millions of dollars, except per
share information)
LIQUIDITY MEASURES:
Six Months Ended
June 30,
June 30,
2020
2019
Cash Provided by Operating
Activities
$82.6
$117.0
Working capital and other balance sheet
changes
11.4
7.6
Costs related to the merger with Pope
Resources (a)
16.0
—
Cash Available for Distribution
attributable to NCI in Timber Funds
(0.9
)
—
Capital expenditures (b)
(29.4
)
(29.5
)
Cash Available for Distribution
(c)
$79.7
$95.1
Net Income
$26.9
$48.7
Interest, net and miscellaneous income
17.8
13.8
Income tax expense
6.7
8.0
Depreciation, depletion and amortization
attributable to Rayonier
72.6
64.1
Non-cash cost of land and improved
development
13.4
5.6
Operating loss attributable to NCI in
Timber Funds
2.0
—
Non-operating income
(1.1
)
(0.6
)
Costs related to the merger with Pope
Resources (a)
16.0
—
Large Dispositions (d)
(28.7
)
—
Adjusted EBITDA (e)
$125.7
$139.7
Cash interest paid (f)
(16.1
)
(14.4
)
Cash taxes paid
(1.1
)
(0.7
)
Capital expenditures attributable to
Rayonier (b)
(28.8
)
(29.5
)
Cash Available for Distribution
(c)
$79.7
$95.1
Cash Available for Distribution
(c)
$79.7
$95.1
Real estate development investments
(3.6
)
(1.0
)
Cash Available for Distribution after
real estate development investments
$76.1
$94.1
PRO FORMA SALES (g):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
Intersegment
Eliminations
Total
June 30, 2020
Sales
$46.8
$26.2
$41.8
$7.5
$50.0
$24.3
($1.0
)
$195.6
Sales attributable to noncontrolling
interest in Timber Funds
—
—
—
(5.8
)
—
—
—
(5.8
)
Large Dispositions (d)
—
—
—
—
—
—
—
—
Pro forma sales
$46.8
$26.2
$41.8
$1.7
$50.0
$24.3
($1.0
)
$189.8
March 31, 2020
Sales
$53.0
$31.1
$37.5
—
$118.5
$19.0
—
$259.1
Large Dispositions (d)
—
—
—
—
(116.0
)
—
—
(116.0
)
Pro forma sales
$53.0
$31.1
$37.5
—
$2.5
$19.0
—
$143.1
June 30, 2019
Sales
$46.2
$18.6
$62.1
—
$22.5
$35.5
($0.1
)
$184.8
Large Dispositions (d)
—
—
—
—
—
—
—
—
Pro forma sales
$46.2
$18.6
$62.1
—
$22.5
$35.5
($0.1
)
$184.8
F
PRO FORMA SALES (g):
Six Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
Intersegment
Eliminations
Total
June 30, 2020
Sales
$99.7
$57.2
$79.3
$7.5
$168.6
$43.3
($0.9
)
$454.8
Sales attributable to noncontrolling
interest in Timber Funds
—
—
—
(5.8
)
—
—
—
(5.8
)
Large Dispositions (d)
—
—
—
—
(116.0
)
—
—
(116.0
)
Pro forma sales
$99.7
$57.2
$79.3
$1.7
$52.6
$43.3
($0.9
)
$332.9
June 30, 2019
Sales
$107.0
$39.1
$119.3
—
$43.5
$67.5
($0.1
)
$376.3
Large Disposition (d)
—
—
—
—
—
—
—
—
Pro forma sales
$107.0
$39.1
$119.3
—
$43.5
$67.5
($0.1
)
$376.3
PRO FORMA NET INCOME (LOSS)
(h):
Three Months Ended
Six Months Ended
June 30, 2020
March 31, 2020
June 30, 2019
June 30, 2020
June 30, 2019
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
Net Income Attributable to Rayonier
Inc.
$1.7
$0.01
$25.9
$0.20
$18.8
$0.14
$27.6
$0.21
$43.5
$0.34
Costs related to the merger with Pope
Resources (a)
13.5
0.10
2.5
0.02
—
—
16.0
0.12
—
—
Large Dispositions (d)
—
—
(28.7
)
(0.22
)
—
—
(28.7
)
(0.22
)
—
—
Pro Forma net income (loss)
$15.2
$0.11
($0.3
)
—
$18.8
$0.14
$14.9
$0.11
$43.5
$0.34
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (e) (i):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
Corporate and
Other
Total
June 30, 2020
Operating income (loss)
$11.2
($6.7
)
$5.0
($1.9
)
$24.8
$0.1
($20.9
)
$11.7
Operating loss attributable to NCI in
Timber Funds
—
—
—
2.0
—
—
—
2.0
Costs related to the merger with Pope
Resources (a)
—
—
—
—
—
—
13.5
13.5
Pro forma operating income (loss) (i)
$11.2
($6.7
)
$5.0
$0.1
$24.8
$0.1
($7.4
)
$27.2
Depreciation, depletion and
amortization
15.2
10.6
4.9
0.5
6.7
—
0.3
38.3
Non-cash cost of land and improved
development
—
—
—
—
13.0
—
—
13.0
Adjusted EBITDA
$26.4
$3.9
$9.9
$0.7
$44.6
$0.1
($7.0
)
$78.6
March 31, 2020
Operating income (loss)
$15.1
($0.9
)
$5.4
—
$26.8
—
($7.8
)
$38.6
Costs related to merger with Pope
Resources (a)
—
—
—
—
—
—
2.5
2.5
Large Dispositions (d)
—
—
—
—
(28.7
)
—
—
(28.7
)
Pro forma operating income (loss) (i)
$15.1
($0.9
)
$5.4
—
($1.9
)
—
($5.3
)
$12.4
Depreciation, depletion and
amortization
18.2
10.7
4.8
—
0.4
—
0.3
34.3
Non-cash cost of land and improved
development
—
—
—
—
0.4
—
—
0.4
Adjusted EBITDA
$33.3
$9.8
$10.2
—
($1.1
)
—
($5.0
)
$47.1
June 30, 2019
Operating income (loss)
$14.7
($3.8
)
$12.8
—
$15.5
($0.2
)
($7.6
)
$31.4
Depreciation, depletion and
amortization
12.9
6.0
7.2
—
1.2
—
0.3
27.6
Non-cash cost of land and improved
development
—
—
—
—
1.6
—
—
1.6
Adjusted EBITDA
$27.6
$2.2
$20.0
—
$18.3
($0.2
)
($7.3
)
$60.6
F
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (e) (i):
Six Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
Corporate and
Other
Total
June 30, 2020
Operating income (loss)
$26.3
($7.6
)
$10.4
($1.9
)
$51.6
$0.1
($28.6
)
$50.2
Operating loss attributable to NCI in
Timber Funds
—
—
—
2.0
—
—
—
2.0
Costs related to the merger with Pope
Resources (a)
—
—
—
—
—
—
16.0
16.0
Large Dispositions (d)
—
—
—
—
(28.7
)
—
—
(28.7
)
Pro forma operating income (loss) (i)
$26.3
($7.6
)
$10.4
$0.1
$23.0
$0.1
($12.7
)
$39.6
Depreciation, depletion and
amortization
33.4
21.3
9.7
0.5
7.1
—
0.6
72.6
Non-cash cost of land and improved
development
—
—
—
—
13.4
—
—
13.4
Adjusted EBITDA
$59.7
$13.7
$20.1
$0.7
$43.5
$0.1
($12.0
)
$125.7
June 30, 2019
Operating income (loss)
$36.3
($7.6
)
$28.5
—
$25.5
$0.3
($13.1
)
$69.9
Depreciation, depletion and
amortization
32.6
12.9
13.5
—
4.5
—
0.6
64.1
Non-cash cost of land and improved
development
—
—
—
—
5.6
—
—
5.6
Adjusted EBITDA
$68.9
$5.3
$42.0
—
$35.7
$0.3
($12.5
)
$139.7
(a)
“Costs related to the merger with Pope
Resources” include legal, accounting, due diligence, consulting and
other costs related to the merger with Pope Resources.
(b)
Capital expenditures during the six months
ended June 30, 2020 exclude timberland acquisitions. Excluding the
Pope Resources acquisition, timberland acquisitions were $24.2
million and $26.4 million, respectively, during the six months
ended June 30, 2020 and June 30, 2019.
(c)
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), CAD attributable to noncontrolling
interest in Timber Funds 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 noncontrolling interest in the Operating Partnership,
distributions to the New Zealand minority shareholder, 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.
(d)
“Large Dispositions” are defined as
transactions involving the sale of timberland that exceed $20
million in size and do not have a demonstrable premium relative to
timberland value. In March 2020, the Company completed a
disposition of approximately 67,000 acres located in Mississippi
for a sales price and gain of approximately $116.0 million and
$28.7 million, respectively.
(e)
Adjusted EBITDA is defined as earnings
before interest, taxes, depreciation, depletion, amortization, the
non-cash cost of land and improved development, non-operating
income and expense, operating loss attributable to noncontrolling
interest in Timber Funds, costs related to the merger with Pope
Resources 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 removes the impact
of specific items that management believes do not directly reflect
the core business operations on an ongoing basis attributable to
Rayonier.
(f)
Cash interest paid is presented net of
patronage refunds received of $4.3 million and $4.0 million for the
six months ended June 30, 2020 and June 30, 2019, respectively.
(g)
Pro forma revenue (sales) is defined as
revenue (sales) adjusted for Large Dispositions and sales
attributable to the noncontrolling interest in Timber Funds.
Rayonier believes that this non-GAAP financial measure provides
investors with useful information to evaluate core business
operations because it excludes specific items that are not
indicative of ongoing operating results attributable to
Rayonier.
(h)
Pro forma net income (loss) is defined as
net income attributable to Rayonier Inc. adjusted for costs related
to the merger with Pope Resources and Large Dispositions. 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
ongoing operating results attributable to Rayonier.
(i)
Pro forma operating income (loss) is
defined as operating income (loss) adjusted for costs related to
the merger with Pope Resources, operating loss attributable to
noncontrolling interest in Timber Funds and Large Dispositions.
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 ongoing operating results attributable to
Rayonier.
F
RAYONIER INC. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
EBITDA GUIDANCE
June 30, 2020
(unaudited)
(millions of dollars)
ADJUSTED EBITDA GUIDANCE (a):
Prior Guidance
2020 Guidance
Net Income to Adjusted EBITDA
Reconciliation
Net income
$37.7
-
$51.2
$35.7
-
$41.7
Less: Net income attributable to
noncontrolling interest
(4.5
)
-
(5.0
)
(4.5
)
-
(5.5
)
Less: Net loss attributable to
noncontrolling interest in Timber Funds
—
-
—
7.0
-
7.0
Less: Net income attributable to
noncontrolling interest in Operating Partnership
—
-
—
(0.6
)
-
(0.7
)
Net income attributable to Rayonier
Inc.
$33.2
-
$46.2
$37.6
-
$42.5
Plus: Costs related to the merger with
Pope Resources (b)
2.5
-
2.5
16.0
-
16.0
Less: Large Dispositions (c)
(28.7
)
-
(28.7
)
(28.7
)
-
(28.7
)
Pro forma net income (d)
$7.0
-
$20.0
$24.9
-
$29.8
Interest, net
38.0
-
39.0
39.5
-
40.5
Income tax expense
8.0
-
9.0
9.0
-
10.0
Depreciation, depletion and
amortization
123.5
-
133.0
139.5
-
149.5
Non-cash cost of land and improved
development
19.0
-
24.0
22.0
-
24.0
Net income attributable to noncontrolling
interest
4.5
-
5.0
4.5
-
5.5
Net income attributable to noncontrolling
interest in Operating Partnership
—
-
—
0.6
-
0.7
Adjusted EBITDA
$200.0
-
$230.0
$240.0
-
$260.0
Diluted Earnings per Share
$0.26
-
$0.36
$0.27
-
$0.31
Pro forma Diluted Earnings per Share
$0.05
-
$0.15
$0.17
-
$0.21
(a)
Adjusted EBITDA is defined as earnings
before interest, taxes, depreciation, depletion, amortization, the
non-cash cost of land and improved development, non-operating
income and expense, operating loss attributable to noncontrolling
interest in Timber Funds, costs related to the merger with Pope
Resources 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 removes the impact
of specific items that management believes do not directly reflect
the core business operations on an ongoing basis attributable to
Rayonier.
(b)
“Costs related to the merger with Pope
Resources” include legal, accounting, due diligence, consulting and
other costs related to the merger with Pope Resources, which closed
on May 8, 2020.
(c)
“Large Dispositions” are defined as
transactions involving the sale of timberland that exceed $20
million in size and do not have a demonstrable premium relative to
timberland value. In March 2020, the Company completed a
disposition of approximately 67,000 acres located in Mississippi
for a sales price and gain of approximately $116.0 million and
$28.7 million, respectively.
(d)
Pro forma net income (loss) is defined as
net income attributable to Rayonier Inc. adjusted for costs related
to the merger with Pope Resources and Large Dispositions. 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
ongoing operating results attributable to Rayonier.
G
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200805006011/en/
Investors/Media Mark McHugh 904-357-9100
investorrelations@rayonier.com
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