- First quarter net income attributable to Rayonier of $10.8
million ($0.08 per share) on revenues of $191.4 million and pro
forma revenues of $179.5 million
- First quarter operating income of $28.5 million, pro forma
operating income of $27.4 million and Adjusted EBITDA of $69.5
million
- First quarter cash provided by operations of $53.9 million and
cash available for distribution (CAD) of $47.3 million
Rayonier Inc. (NYSE:RYN) today reported first quarter net income
attributable to Rayonier of $10.8 million, or $0.08 per share, on
revenues of $191.4 million. This compares to net income
attributable to Rayonier of $25.9 million, or $0.20 per share, on
revenues of $259.1 million in the prior year quarter. The prior
year first quarter results included $28.7 million of income from a
Large Disposition,1 partially offset by costs related to the merger
with Pope Resources2 of $2.5 million. Excluding these items, pro
forma net loss3 was $0.3 million, or $0.00 per share, in the prior
year quarter.
The following table summarizes the current quarter and
comparable prior year period results:
Three Months Ended
(millions of dollars, except earnings per
share (EPS))
March 31, 2021
March 31, 2020
$
EPS
$
EPS
Revenues
$
191.4
$
259.1
Sales attributable to noncontrolling
interest in Timber Funds
(11.9
)
—
Large Dispositions1
—
(116.0
)
Pro forma revenues3
$
179.5
$
143.1
Net income attributable to Rayonier
$
10.8
$
0.08
$
25.9
$
0.20
Costs related to the merger with Pope
Resources2
—
—
2.5
0.02
Large Dispositions1
—
—
(28.7
)
(0.22
)
Pro forma net income (loss)3
$
10.8
$
0.08
($
0.3
)
—
First quarter operating income was $28.5 million versus $38.6
million in the prior year period. Adjusting for $1.1 million of
operating income attributable to noncontrolling interest in the
Timber Funds segment, current quarter pro forma operating income3
was $27.4 million. Prior year first quarter operating income
included $28.7 million of income from a Large Disposition1 and $2.5
million of costs related to the merger with Pope Resources.2
Excluding these items, pro forma operating income3 was $12.4
million in the prior year period. First quarter Adjusted EBITDA3
was $69.5 million versus $47.1 million in the prior year
period.
The following table summarizes operating income (loss), pro
forma operating income (loss)3 and Adjusted EBITDA3 for the current
quarter and comparable prior year period:
Three Months Ended March
31,
Operating Income
(Loss)
Pro forma Operating Income
(Loss)3
Adjusted EBITDA3
(millions of dollars)
2021
2020
2021
2020
2021
2020
Southern Timber
$
17.3
$
15.1
$
17.3
$
15.1
$
31.7
$
33.3
Pacific Northwest Timber
1.3
(0.9
)
1.3
(0.9
)
17.6
9.8
New Zealand Timber
14.0
5.4
14.0
5.4
21.2
10.2
Timber Funds
1.5
—
0.4
—
1.0
—
Real Estate
1.7
26.8
1.7
(1.9
)
5.1
(1.1
)
Trading
0.2
—
0.2
—
0.2
—
Corporate and Other
(7.6
)
(7.8
)
(7.6
)
(5.3
)
(7.3
)
(5.0
)
Total
$
28.5
$
38.6
$
27.4
$
12.4
$
69.5
$
47.1
Cash provided by operating activities was $53.9 million versus
$29.2 million in the prior year period. Cash available for
distribution (CAD)3 of $47.3 million increased $20.1 million versus
the prior year period primarily due to higher Adjusted EBITDA3
($22.3 million) and lower capital expenditures ($2.6 million),
partially offset by higher cash taxes paid ($4.7 million) and
higher cash interest paid ($0.2 million).
“We are very encouraged by the momentum across all of our
businesses to start 2021,” said David Nunes, President and CEO.
“Adjusted EBITDA of $69.5 million was 47% higher than the prior
year quarter, as favorable results in the New Zealand Timber,
Pacific Northwest Timber and Real Estate segments more than offset
slightly lower Adjusted EBITDA in the Southern Timber segment.”
“New Zealand Timber Adjusted EBITDA more than doubled versus the
prior year quarter due to significantly higher harvest volumes and
sawtimber prices, as the prior year quarter was severely impacted
by COVID-19 related headwinds. In Pacific Northwest Timber,
Adjusted EBITDA improved 81% versus the prior year quarter due to a
significant increase in sawtimber prices, as well as higher volumes
from the acquisition of Pope Resources.”
“Southern Timber Adjusted EBITDA declined 5% versus the prior
year quarter, as a 7% increase in net stumpage prices and stronger
non-timber income were more than offset by 18% lower harvest
volumes due to the front-loaded timing of 2020 harvest activity as
well as weather-related disruptions during the first quarter.
Lastly, Real Estate segment Adjusted EBITDA improved versus the
prior year quarter but was still relatively light compared to our
full-year expectations due to the timing of closings, which we had
anticipated coming into the year.”
Southern Timber
First quarter sales of $51.7 million decreased $1.3 million, or
2%, versus the prior year period primarily due to lower harvest
volumes, partially offset by higher average net stumpage prices and
higher pipeline easement revenue. Harvest volumes decreased 18% to
1.51 million tons versus 1.84 million tons in the prior year
period. The decline in volume was largely due to the timing of
harvest operations as compared to the prior year, as well as
operational disruptions attributable to wet ground conditions in
Georgia and winter snowstorms in the Gulf region. Average pine
sawtimber stumpage prices increased 3% to $27.51 per ton versus
$26.67 per ton in the prior year period. Robust demand from
sawmills and growing demand from the export market coupled with
constricted supply due to weather conditions translated into
favorable sawtimber pricing across our markets. Average pine
pulpwood stumpage prices increased 7% to $17.10 per ton versus
$16.05 per ton in the prior year period due to favorable geographic
mix as well as tighter supply due to adverse weather conditions.
Overall, weighted-average stumpage prices (including hardwood)
increased 7% to $21.35 per ton versus $19.91 per ton in the prior
year period. Operating income of $17.3 million increased $2.3
million versus the prior year period due to higher net stumpage
prices ($2.2 million), higher non-timber income ($2.2 million),
lower costs ($0.6 million) and lower depletion rates ($0.6
million), partially offset by lower volumes ($3.4 million).
First quarter Adjusted EBITDA3 of $31.7 million was 5%, or $1.6
million, below the prior year period.
Pacific Northwest Timber
First quarter sales of $41.5 million increased $10.4 million, or
34%, versus the prior year period. Harvest volumes increased 13% to
536,000 tons versus 476,000 tons in the prior year period,
primarily due to incremental volume from the Pope Resources
acquisition. Average delivered sawtimber prices increased 21% to
$90.98 per ton versus $75.40 per ton in the prior year period, as
exceptionally strong domestic lumber markets drove improved demand
and pricing. Average delivered pulpwood prices decreased 23% to
$29.36 per ton versus $38.11 per ton in the prior year period, as
higher lumber mill residuals resulted in an increased supply of
competing wood chip residuals. Operating income of $1.3 million
improved $2.3 million versus the prior year period due to higher
net stumpage prices ($5.8 million), higher non-timber income ($0.8
million) and volume/mix changes ($0.3 million), partially offset by
higher depletion rates ($4.3 million) and higher overhead and other
costs ($0.4 million).
First quarter Adjusted EBITDA3 of $17.6 million was 81%, or $7.9
million, above the prior year period.
New Zealand Timber
First quarter sales of $57.6 million increased $20.1 million, or
53%, versus the prior year period, as higher harvest volumes and
log prices were partially offset by deferred carbon credit sales.
Harvest volumes increased 25% to 599,000 tons versus 481,000 tons
in the prior year period. The increase in harvest volumes was
driven primarily by a normalized level of activity in the first
quarter versus a prior year period constrained by COVID-19
disruptions. Average delivered prices for export sawtimber
increased 28% to $121.65 per ton versus $94.86 per ton in the prior
year period, while average delivered prices for domestic sawtimber
increased 16% to $80.95 per ton versus $69.97 per ton in the prior
year period. The increase in export sawtimber prices was driven
primarily by stronger demand from China, as the prior year period
was significantly impacted by the COVID-19 outbreak. Improved
export pricing in the current year quarter was also due in part to
the restriction on competing log imports to China from Australia.
The increase in domestic sawtimber prices (in U.S. dollar terms)
was driven primarily by the rise in the NZ$/US$ exchange rate
(US$0.72 per NZ$1.00 versus US$0.65 per NZ$1.00). Excluding the
impact of foreign exchange rates, domestic sawtimber prices
improved by a more modest 4% versus the prior year period due to
improved demand. Operating income of $14.0 million increased $8.5
million versus the prior year period as a result of higher net
stumpage prices ($9.5 million), higher volumes ($1.8 million) and
lower costs ($0.2 million), partially offset by deferred carbon
credit sales ($1.8 million), higher depletion rates ($0.7 million)
and unfavorable foreign exchange impacts ($0.4 million).
First quarter Adjusted EBITDA3 of $21.2 million was 107%, or
$11.0 million, above the prior year period.
Timber Funds
The Timber Funds segment generated first quarter sales of $14.9
million on harvest volumes of 145,000 tons, resulting in operating
income of $1.5 million. Adjusting for the portion of the Timber
Funds segment attributable to noncontrolling interests, pro forma
sales3 and pro forma operating income3 were $3.0 million and $0.4
million, respectively.
First quarter Adjusted EBITDA3 was $1.0 million.
Real Estate
First quarter sales of $10.5 million decreased $108.0 million
versus the prior year period, while operating income of $1.7
million decreased $25.1 million versus the prior year period. The
prior year first quarter sales and operating income included $116.0
million and $28.7 million, respectively, from a Large Disposition.1
Excluding this item, pro forma sales3 were $2.5 million, while pro
forma operating loss3 was $1.9 million in the prior year period.
Pro forma sales3 and pro forma operating income3 improved versus
the prior year period due to a higher number of acres sold (2,395
acres sold versus 624 acres sold in the prior year period) and a 9%
increase in weighted-average prices ($4,183 per acre versus $3,842
per acre in the prior year period).
Improved Development sales of $0.3 million included three
residential lots in the Wildlight development project north of
Jacksonville, Florida (an average of $84,000 per lot or $406,000
per acre). There were no Improved Development sales in the prior
year period.
There were no Unimproved Development sales in the first quarter
or the prior year period.
Rural sales of $9.8 million consisted of 2,394 acres at an
average price of $4,079 per acre. This compares to prior year
period sales of $2.4 million, which consisted of 624 acres at an
average price of $3,842 per acre.
There were no Timberland & Non-Strategic sales in the first
quarter or the prior year period.
First quarter Adjusted EBITDA3 of $5.1 million was $6.2 million
above the prior year period.
Trading
First quarter sales of $16.7 million decreased $2.3 million
versus the prior year period primarily due to lower volumes,
partially offset by higher prices. Sales volumes decreased 32% to
141,000 tons versus 207,000 tons in the prior year period. The
Trading segment generated operating income of $0.2 million versus
breakeven results in the prior year period due to improved trading
margins resulting from higher prices.
Other Items
First quarter corporate and other operating expenses of $7.6
million decreased $0.2 million versus the prior year period, which
included $2.5 million of costs related to the Pope Resources
merger.2 This positive variance was largely offset by higher
overhead expenses.
First quarter interest expense of $10.0 million increased $1.8
million versus the prior year period due to higher outstanding debt
following the closing of the Pope Resources acquisition.
First quarter income tax expense of $3.5 million decreased $0.3
million versus the prior year period. The New Zealand subsidiary is
the primary driver of income tax expense.
In September 2020, we established an at-the-market (ATM) equity
offering program under which we may sell common shares, from time
to time, having an aggregate sales price of up to $300 million.
There were 1.1 million shares issued under the ATM program during
the three months ended March 31, 2021 at an average price of $33.31
per share.
Outlook
“Based on our solid start to 2021 and our expectation of a
significant pickup in real estate activity as the year progresses,
we believe we are on track to achieve full-year Adjusted EBITDA
towards the upper end of our prior guidance,” added Nunes. “In our
Southern Timber segment, we expect to achieve our full-year volume
guidance, as we anticipate that demand from lumber mills will
remain strong and that select U.S. South markets will continue to
benefit from improving export demand. Further, we continue to
expect a modest improvement in weighted average pricing relative to
the prior year, with quarterly fluctuations largely driven by
geographic mix.”
“In our Pacific Northwest Timber segment, we expect to achieve
our full-year volume guidance, although we anticipate lower
quarterly harvest volumes for the remainder of the year, as we
pulled forward some volume in the first quarter to capture
favorable demand and pricing. We further expect that strong lumber
demand will continue to hold pricing at or above first quarter
average prices for the balance of the year.”
“In our New Zealand Timber segment, we expect to achieve our
full-year volume guidance with increased quarterly harvest volumes
for the balance of the year. We expect continued strong export and
domestic demand, and we further expect that the restriction on
Australian log imports into China will constrain log supplies. We
anticipate that this positive operating momentum will translate
into log prices remaining near or above levels realized in the
first quarter, which will be partially offset by elevated shipping
costs.”
“In our Real Estate segment, we expect a significant pickup in
transaction activity for the balance of the year based on our
current pipeline of opportunities. In particular, we are
increasingly optimistic about our sales outlook for residential and
commercial properties within our real estate development projects.
While first quarter closings were relatively light, as expected, we
remain confident that we will achieve or exceed our prior full-year
Adjusted EBITDA guidance.”
Conference Call
A conference call and live audio webcast will be held on
Thursday, May 6, 2021 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
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, June 5, 2021 by dialing
866-465-2114 (domestic) or 203-369-1431 (international), passcode:
3358.
Complimentary copies of Rayonier press releases and other
financial documents are also available by calling (904)
357-9100.
1“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.
2“Costs related to the merger with Pope Resources” include
legal, accounting, due diligence, consulting and other costs
related to the merger with Pope Resources.
3Pro forma net income (loss), 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.
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 March
31, 2021, Rayonier owned or leased under long-term agreements
approximately 2.7 million acres of timberlands located in the U.S.
South (1.75 million acres), U.S. Pacific Northwest (507,000 acres)
and New Zealand (417,000 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, including any downturn
in the housing market; 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 current 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,
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 sales,” “pro forma operating income
(loss),” “pro forma net income (loss),” 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
March 31, 2021
(unaudited)
(millions of dollars, except per
share information)
Three Months Ended
March 31,
December 31,
March 31,
2021
2020
2020
SALES
$191.4
$205.5
$259.1
Costs and Expenses
Cost of sales
(151.3
)
(167.1
)
(209.4
)
Selling and general expenses
(14.0
)
(13.6
)
(10.0
)
Other operating income (expense), net
2.4
(2.4
)
(1.1
)
OPERATING INCOME
28.5
22.4
38.6
Interest expense
(10.0
)
(10.3
)
(8.3
)
Interest and other miscellaneous expense,
net
—
(0.1
)
(0.2
)
INCOME BEFORE INCOME TAXES
18.5
12.0
30.1
Income tax (expense) benefit
(3.5
)
0.4
(3.7
)
NET INCOME
15.0
12.4
26.4
Less: Net income attributable to
noncontrolling interests in the Operating Partnership
(0.4
)
(0.3
)
—
Less: Net income attributable to
noncontrolling interests in consolidated affiliates
(3.8
)
(1.8
)
(0.5
)
NET INCOME ATTRIBUTABLE TO RAYONIER
INC.
$10.8
$10.3
$25.9
EARNINGS PER COMMON SHARE
Basic earnings per share attributable to
Rayonier Inc.
$0.08
$0.08
$0.20
Diluted earnings per share attributable to
Rayonier Inc.
$0.08
$0.07
$0.20
Pro forma net income per share (a)
$0.08
$0.08
—
Weighted Average Common Shares used for
determining
Basic EPS
137,870,821
136,599,146
129,137,494
Diluted EPS (b)
142,558,797
141,358,886
129,348,050
(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 March 31, 2021, there were 138,970,890 common
shares and 4,278,766 Redeemable Operating Partnership Units
outstanding.
A
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
March 31, 2021
(unaudited)
(millions of dollars)
March 31,
December 31,
2021
2020
Assets
Cash and cash equivalents (excluding
Timber Funds)
$77.9
$80.5
Cash and cash equivalents (Timber
Funds)
4.7
4.1
Assets held for sale
7.9
3.4
Other current assets
99.6
82.5
Timber and timberlands, net of depletion
and amortization
3,245.1
3,262.1
Higher and better use timberlands and real
estate development investments
111.3
108.5
Property, plant and equipment
42.4
42.6
Less - accumulated depreciation
(12.7
)
(12.2
)
Net property, plant and equipment
29.7
30.4
Restricted cash
0.5
3.0
Right-of-use assets
105.1
109.0
Other assets
67.8
45.2
$3,749.6
$3,728.7
Liabilities, Noncontrolling Interests
in the Operating Partnership and Shareholders’ Equity
Other current liabilities
100.8
98.2
Long-term debt (excluding Timber
Funds)
1,299.4
1,300.3
Long-term debt (Timber Funds)
60.0
60.2
Long-term lease liability
96.9
100.3
Other non-current liabilities
144.6
177.0
Noncontrolling interests in the Operating
Partnership
138.0
130.1
Total Rayonier Inc. shareholders’
equity
1,528.8
1,474.1
Noncontrolling interests in consolidated
affiliates
381.1
388.5
Total shareholders’ equity
1,909.9
1,862.6
$3,749.6
$3,728.7
B
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
March 31, 2021
(unaudited)
(millions of dollars, except
share information)
Common Shares
Retained Earnings
Accumulated Other
Comprehensive
Noncontrolling
Interests in Consolidated
Shareholders’ Equity
Shares
Amount
(Loss) Income
Affiliates
Balance, January 1, 2021
137,678,822
$1,101.7
$446.3
($73.9
)
$388.5
$1,862.6
Issuance of shares under the
“at-the-market” (ATM) equity offering program, net of commissions
and offering costs of $0.2 million
1,107,814
36.7
—
—
—
36.7
Net income
—
—
11.2
—
3.8
15.0
Net income attributable to noncontrolling
interest in the Operating Partnership
—
—
(0.4
)
—
—
(0.4
)
Dividends ($0.27 per share)
—
—
(37.5
)
—
—
(37.5
)
Issuance of shares under incentive stock
plans
39,140
1.2
—
—
—
1.2
Stock-based compensation
—
2.1
—
—
—
2.1
Measurement period adjustment of
noncontrolling
interests in consolidated affiliates
—
—
—
—
0.7
0.7
Adjustment of noncontrolling interest in
the Operating Partnership
—
—
(11.9
)
—
—
(11.9
)
Other (a)
145,114
4.5
—
48.8
(11.9
)
41.4
Balance, March 31, 2021
138,970,890
$1,146.2
$407.7
($25.1
)
$381.1
$1,909.9
Common Shares
Retained
Accumulated Other
Comprehensive
Noncontrolling
Interests in Consolidated
Shareholders’ Equity
Shares
Amount
Earnings
(Loss) Income
Affiliates
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
(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 noncontrolling interests in consolidated
affiliates. The three months ended March 31, 2021 also includes the
redemption of 150,134 Redeemable Operating Partnership Units for an
equal number of Rayonier Inc. common shares as well as the
allocation of other comprehensive income to noncontrolling
interests in the Operating Partnership.
C
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
March 31, 2021
(unaudited)
(millions of dollars)
Three Months Ended March 31,
2021
2020
Cash provided by operating
activities:
Net income
$15.0
$26.4
Depreciation, depletion and
amortization
45.2
34.3
Non-cash cost of land and improved
development
1.8
0.4
Gain on large dispositions of
timberlands
—
(28.7
)
Other items to reconcile net income to
cash provided by operating activities
(2.3
)
5.8
Changes in working capital and other
assets and liabilities
(5.8
)
(9.0
)
53.9
29.2
Cash (used for) provided by investing
activities:
Capital expenditures
(15.8
)
(17.2
)
Real estate development investments
(3.0
)
(1.7
)
Purchase of timberlands
(29.9
)
(24.1
)
Net proceeds from large dispositions of
timberlands
—
115.7
Other
4.3
2.0
(44.4
)
74.7
Cash used for financing
activities:
Dividends paid
(37.5
)
(34.9
)
Distributions to noncontrolling interests
in the Operating Partnership
(1.2
)
—
Proceeds from the issuance of common
shares under incentive stock plan
1.2
0.1
Proceeds from the issuance of common
shares under the “at-the-market” (ATM) equity offering program, net
of commissions and offering costs
32.5
—
Repurchase of common shares made under
repurchase program
—
(3.2
)
Distributions to noncontrolling interest
in consolidated affiliates
(8.8
)
(0.7
)
(13.8
)
(38.7
)
Effect of exchange rate changes on cash
and restricted cash
(0.1
)
(2.4
)
Cash, cash equivalents and restricted
cash:
Change in cash, cash equivalents and
restricted cash
(4.4
)
62.8
Balance, beginning of year
87.5
70.0
Balance, end of period
$83.1
$132.8
D
RAYONIER INC. AND
SUBSIDIARIES
BUSINESS SEGMENT SALES, PRO
FORMA SALES, OPERATING INCOME,
PRO FORMA OPERATING INCOME AND
ADJUSTED EBITDA
March 31, 2021
(unaudited)
(millions of dollars)
Three Months Ended
March 31,
December 31,
March 31,
2021
2020
2020
Sales
Southern Timber
$51.7
$44.4
$53.0
Pacific Northwest Timber
41.5
34.7
31.1
New Zealand Timber
57.6
60.2
37.5
Timber Funds
14.9
12.1
—
Real Estate
10.5
32.0
118.5
Trading
16.7
23.5
19.0
Intersegment Eliminations
(1.5
)
(1.4
)
—
Sales
$191.4
$205.5
$259.1
Pro forma sales (a)
Southern Timber
$51.7
$44.4
$53.0
Pacific Northwest Timber
41.5
34.7
31.1
New Zealand Timber
57.6
60.2
37.5
Timber Funds
3.0
2.9
—
Real Estate
10.5
32.0
2.5
Trading
16.7
23.5
19.0
Intersegment Eliminations
(1.5
)
(1.4
)
—
Pro forma sales
$179.5
$196.3
$143.1
Operating income (loss)
Southern Timber
$17.3
$9.9
$15.1
Pacific Northwest Timber
1.3
(0.5
)
(0.9
)
New Zealand Timber
14.0
8.8
5.4
Timber Funds
1.5
1.1
—
Real Estate
1.7
10.9
26.8
Trading
0.2
—
—
Corporate and Other
(7.6
)
(7.8
)
(7.8
)
Operating income
$28.5
$22.4
$38.6
Pro forma operating income (loss)
(a)
Southern Timber
$17.3
$9.9
$15.1
Pacific Northwest Timber
1.3
(0.5
)
(0.9
)
New Zealand Timber
14.0
8.8
5.4
Timber Funds
0.4
0.3
—
Real Estate
1.7
10.9
(1.9
)
Trading
0.2
—
—
Corporate and Other
(7.6
)
(7.0
)
(5.3
)
Pro forma operating income
$27.4
$22.4
$12.4
Adjusted EBITDA (a)
Southern Timber
$31.7
$23.3
$33.3
Pacific Northwest Timber
17.6
14.4
9.8
New Zealand Timber
21.2
16.8
10.2
Timber Funds
1.0
0.9
—
Real Estate
5.1
25.7
(1.1
)
Trading
0.2
—
—
Corporate and Other
(7.3
)
(6.6
)
(5.0
)
Adjusted EBITDA
$69.5
$74.5
$47.1
(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
March 31, 2021
(unaudited)
(millions of dollars, except per
share information)
LIQUIDITY MEASURES:
Three Months Ended
March 31,
March 31,
2021
2020
Cash Provided by Operating
Activities
$53.9
$29.2
Working capital and other balance sheet
changes
13.8
15.2
Cash Available for Distribution
attributable to NCI in Timber Funds
(4.6
)
—
Capital expenditures (b)
(15.8
)
(17.2
)
Cash Available for Distribution
(c)
$47.3
$27.2
Net Income
$15.0
$26.4
Operating income attributable to NCI in
Timber Funds
(1.1
)
—
Interest, net attributable to NCI in
Timber Funds
0.1
—
Net Income (Excluding NCI in Timber
Funds)
$14.0
$26.4
Interest, net and miscellaneous income
attributable to Rayonier
9.9
8.1
Income tax expense attributable to
Rayonier
3.5
3.7
Depreciation, depletion and amortization
attributable to Rayonier
40.3
34.3
Non-cash cost of land and improved
development
1.8
0.4
Non-operating expense
—
0.3
Costs related to the merger with Pope
Resources (a)
—
2.5
Large Dispositions (d)
—
(28.7
)
Adjusted EBITDA (e)
$69.5
$47.1
Cash interest paid attributable to
Rayonier (f)
(2.8
)
(2.6
)
Cash taxes paid attributable to
Rayonier
(4.8
)
(0.2
)
Capital expenditures attributable to
Rayonier (b)
(14.5
)
(17.2
)
Cash Available for Distribution
(c)
$47.3
$27.2
Cash Available for Distribution
(c)
$47.3
$27.2
Real estate development investments
(3.0
)
(1.7
)
Cash Available for Distribution after
real estate development investments
$44.3
$25.4
PRO FORMA SALES (g):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
Intersegment
Eliminations
Total
March 31, 2021
Sales
$51.7
$41.5
$57.6
$14.9
$10.5
$16.7
($1.5
)
$191.4
Sales attributable to noncontrolling
interest in Timber Funds
—
—
—
(11.9
)
—
—
—
(11.9
)
Pro forma sales
$51.7
$41.5
$57.6
$3.0
$10.5
$16.7
($1.5
)
$179.5
December 31, 2020
Sales
$44.4
$34.7
$60.2
$12.1
$32.0
$23.5
($1.4
)
$205.5
Sales attributable to noncontrolling
interest in Timber Funds
—
—
—
(9.2
)
—
—
—
(9.2
)
Pro forma sales
$44.4
$34.7
$60.2
$2.9
$32.0
$23.5
($1.4
)
$196.3
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
PRO FORMA NET INCOME (LOSS)
(h):
Three Months Ended
March 31, 2021
December 31, 2020
March 31, 2020
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
Net Income Attributable to Rayonier
Inc.
$10.8
$0.08
$10.3
$0.07
$25.9
$0.20
Costs related to the merger with Pope
Resources (a)
—
—
0.7
0.01
2.5
0.02
Large Dispositions (d)
—
—
—
—
(28.7
)
(0.22)
Pro Forma Net Income (Loss)
$10.8
$0.08
$11.0
$0.08
($0.3
)
—
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
March 31, 2021
Operating income (loss)
$17.3
$1.3
$14.0
$1.5
$1.7
$0.2
($7.6
)
$28.5
Operating income attributable to NCI in
Timber Funds
—
—
—
(1.1
)
—
—
—
(1.1
)
Pro forma operating income (loss)
$17.3
$1.3
$14.0
$0.4
$1.7
$0.2
($7.6
)
$27.4
Depreciation, depletion and
amortization
14.4
16.3
7.2
0.6
1.6
—
0.3
40.3
Non-cash cost of land and improved
development
—
—
—
—
1.8
—
—
1.8
Adjusted EBITDA
$31.7
$17.6
$21.2
$1.0
$5.1
$0.2
($7.3
)
$69.5
December 31, 2020
Operating income (loss)
$9.9
($0.5
)
$8.8
$1.1
$10.9
—
($7.8
)
$22.4
Operating loss attributable to NCI in
Timber Funds
—
—
—
(0.7
)
—
—
—
(0.7
)
Costs related to merger with Pope
Resources (a)
—
—
—
—
—
—
0.7
0.7
Pro forma operating income (loss)
$9.9
($0.5
)
$8.8
$0.3
$10.9
—
($7.0
)
$22.4
Depreciation, depletion and
amortization
13.5
14.9
8.0
0.6
5.1
—
0.4
42.4
Non-cash cost of land and improved
development
—
—
—
—
9.7
—
—
9.7
Adjusted EBITDA
$23.3
$14.4
$16.8
$0.9
$25.7
—
($6.6
)
$74.5
March 31, 2020
Operating income (loss)
$15.1
($0.9
)
$5.4
—
$26.8
—
($7.8
)
$38.6
Costs related to the merger with Pope
Resources (a)
—
—
—
—
—
—
2.5
2.5
Large Dispositions (d)
—
—
—
—
(28.7
)
—
—
(28.7
)
Pro forma operating income (loss)
$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
(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 exclude
timberland acquisitions of $29.9 million and $24.1 million during
the three months ended March 31, 2021 and March 31, 2020,
respectively.
(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
interests 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 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.
(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 income (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 $5.9 million and $4.3 million
during the three months ended March 31, 2021 and March 31, 2020,
respectively, excluding patronage refunds attributable to
noncontrolling interest in Timber Funds.
(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 (loss) 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 operating income
(loss) attributable to noncontrolling interest in Timber Funds,
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.
F
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210505006070/en/
Investors/Media Collin Mings 904-357-9100
investorrelations@rayonier.com
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