- Fourth quarter net income attributable to Rayonier of $33.1
million ($0.22 per share) on revenues of $245.4 million
- Fourth quarter pro forma net income of $16.5 million ($0.11 per
share) on pro forma revenues of $214.9 million
- Fourth quarter operating income of $44.1 million, pro forma
operating income of $27.2 million, and Adjusted EBITDA of $68.4
million
- Full-year net income attributable to Rayonier of $107.1 million
($0.73 per share) on revenues of $909.1 million
- Full-year pro forma net income of $91.5 million ($0.62 per
share) on pro forma revenues of $878.6 million
- Full-year operating income of $165.8 million, pro forma
operating income of $138.5 million and Adjusted EBITDA of $314.2
million
- Full-year cash provided by operations of $269.2 million and
cash available for distribution (CAD) of $188.5 million
Rayonier Inc. (NYSE:RYN) today reported fourth quarter net
income attributable to Rayonier of $33.1 million, or $0.22 per
share, on revenues of $245.4 million. This compares to net income
attributable to Rayonier of $8.7 million, or $0.06 per share, on
revenues of $262.0 million in the prior year quarter.
The fourth quarter results included $16.6 million of income from
Large Dispositions1 and a $0.4 million favorable adjustment to a
timber write-off taken in the third quarter.2 Prior year fourth
quarter results included a $3.8 million gain on investment in
Timber Funds3 and a $3.1 million gain on Fund II Timberland
Dispositions attributable to Rayonier.4 Excluding these items and
adjusting for pro forma net income adjustments attributable to
noncontrolling interests in the operating partnership,5 fourth
quarter pro forma net income6 was $16.5 million, or $0.11 per
share, on pro forma revenues6 of $214.9 million versus pro forma
net income6 of $2.0 million, or $0.01 per share, on pro forma
revenues6 of $191.0 million 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))
December 31, 2022
December 31, 2021
$
EPS
$
EPS
Revenues
$245.4
$262.0
Large Dispositions1
(30.5
)
—
Fund II Timberland Dispositions
attributable to Rayonier4
—
(14.0
)
Sales attributable to noncontrolling
interests in Timber Funds
—
(57.0
)
Pro forma revenues6
$214.9
$191.0
Net income attributable to Rayonier
$33.1
$0.22
$8.7
$0.06
Adjustment to prior period timber
write-off2
(0.4
)
—
—
—
Large Dispositions1
(16.6
)
(0.11
)
—
—
Fund II Timberland Dispositions
attributable to Rayonier4
—
—
(3.1
)
(0.02
)
Gain on investment in Timber Funds3
—
—
(3.8
)
(0.03
)
Pro forma net income adjustments
attributable to noncontrolling interests in the operating
partnership5
0.4
—
0.2
—
Pro forma net income6
$16.5
$0.11
$2.0
$0.01
Fourth quarter operating income was $44.1 million versus $33.5
million in the prior year period. Fourth quarter operating income
included $16.6 million of income from Large Dispositions1 and a
$0.4 million favorable adjustment to a timber write-off.2 Prior
year fourth quarter operating income included $12.3 million of
operating income attributable to noncontrolling interests in the
Timber Funds segment, a $3.8 million gain on investment in Timber
Funds,3 and a $3.1 million gain on Fund II Timberland Dispositions
attributable to Rayonier.4 Excluding these items, pro forma
operating income6 was $27.2 million versus $14.4 million in the
prior year period. Fourth quarter Adjusted EBITDA6 was $68.4
million versus $50.4 million in the prior year period.
The following table summarizes operating income (loss), pro
forma operating income (loss),6 and Adjusted EBITDA6 for the
current quarter and comparable prior year period:
Three Months Ended December
31,
Operating Income
(Loss)
Pro forma Operating Income
(Loss)6
Adjusted EBITDA6
(millions of dollars)
2022
2021
2022
2021
2022
2021
Southern Timber
$19.7
$19.0
$19.7
$19.0
$33.2
$33.6
Pacific Northwest Timber
3.5
1.5
3.1
1.5
15.5
13.2
New Zealand Timber
8.0
3.6
8.0
3.6
13.7
9.8
Timber Funds
—
18.4
—
(0.7
)
—
(0.6
)
Real Estate
21.5
(0.3
)
4.9
(0.3
)
14.2
2.8
Trading
0.3
(0.5
)
0.3
(0.5
)
0.3
(0.5
)
Corporate and Other
(8.9
)
(8.2
)
(8.9
)
(8.2
)
(8.6
)
(7.9
)
Total
$44.1
$33.5
$27.2
$14.4
$68.4
$50.4
Overview of Full-Year Results: Full-year 2022 net income
attributable to Rayonier was $107.1 million, or $0.73 per share, on
revenues of $909.1 million. This compares to net income
attributable to Rayonier of $152.6 million, or $1.08 per share, on
revenues of $1.1 billion in the prior year. Full-year results
included $16.6 million of income from Large Dispositions1 and a
$0.7 million timber write-off (net) resulting from a fire casualty
event.2 The prior year results included $44.8 million of income
from Large Dispositions,1 a $10.3 million gain on Fund II
Timberland Dispositions attributable to Rayonier,4 a $7.5 million
gain on investment in Timber Funds,3 a $2.2 million loss from the
termination of a cash flow hedge,7 and a $0.2 million loss related
to debt extinguishments and modifications.8 Excluding these items
and adjusting for pro forma net income adjustments attributable to
noncontrolling interests in the operating partnership,5 full-year
pro forma net income6 was $91.5 million, or $0.62 per share, on pro
forma revenues6 of $878.6 million versus pro forma net income6 of
$94.1 million, or $0.67 per share, on pro forma revenues6 of $863.1
million in the prior year.
The following table summarizes the full-year and comparable
prior year results:
Year Ended
(millions of dollars, except earnings per
share (EPS))
December 31, 2022
December 31, 2021
$
EPS
$
EPS
Revenues
$909.1
$1,109.6
Large Dispositions1
(30.5
)
(56.0
)
Fund II Timberland Dispositions
attributable to Rayonier4
—
(31.4
)
Sales attributable to noncontrolling
interests in Timber Funds
—
(159.1
)
Pro forma revenues6
$878.6
$863.1
Net income attributable to Rayonier
$107.1
$0.73
$152.6
$1.08
Timber write-off resulting from a fire
casualty event2
0.7
—
—
—
Large Dispositions1
(16.6
)
(0.11
)
(44.8
)
(0.31
)
Fund II Timberland Dispositions
attributable to Rayonier4
—
—
(10.3
)
(0.07
)
Gain on investment in Timber Funds3
—
—
(7.5
)
(0.05
)
Loss from terminated cash flow hedge7
—
—
2.2
0.02
Loss related to debt extinguishments and
modifications8
—
—
0.2
—
Pro forma net income adjustments
attributable to noncontrolling interests in the operating
partnership5
0.3
—
1.7
—
Pro forma net income6
$91.5
$0.62
$94.1
$0.67
Full-year operating income was $165.8 million versus $269.8
million in the prior year. Full-year operating income included
$16.6 million of income from Large Dispositions,1 an $11.5 million
gain attributable to noncontrolling interests on the sale of a
multi-family apartment complex,9 and a $0.7 million timber
write-off resulting from a fire casualty event.2 Prior year
operating income included $44.8 million of income from Large
Dispositions,1 a $10.3 million gain on Fund II Timberland
Dispositions attributable to Rayonier,4 a $7.5 million gain on
investment in Timber Funds,3 and $45.6 million of operating income
attributable to noncontrolling interests in the Timber Funds
segment. Excluding these items, full-year pro forma operating
income6 was $138.5 million versus $161.6 million in the prior year.
Full-year Adjusted EBITDA6 was $314.2 million versus $329.8 million
in the prior year.
The following table summarizes operating income, pro forma
operating income (loss)6 and Adjusted EBITDA6 for the current
full-year and comparable prior year:
Year Ended December
31,
Operating Income
Pro forma Operating Income
(Loss)6
Adjusted EBITDA6
(millions of dollars)
2022
2021
2022
2021
2022
2021
Southern Timber
$96.6
$66.1
$96.6
$66.1
$156.9
$120.2
Pacific Northwest Timber
15.2
6.8
15.9
6.8
63.9
57.3
New Zealand Timber
30.6
51.5
30.6
51.5
54.5
78.5
Timber Funds
—
63.3
—
(0.1
)
—
2.3
Real Estate
58.5
112.5
30.4
67.8
72.7
100.7
Trading
0.4
0.1
0.4
0.1
0.4
0.1
Corporate and Other
(35.5
)
(30.6
)
(35.5
)
(30.6
)
(34.2
)
(29.4
)
Total
$165.8
$269.8
$138.5
$161.6
$314.2
$329.8
Full-year cash provided by operating activities was $269.2
million versus $325.1 million in the prior year period. Full-year
cash available for distribution (CAD)6 was $188.5 million, which
decreased $19.2 million versus the prior year due to lower Adjusted
EBITDA6 ($15.6 million), higher cash taxes paid ($7.7 million), and
higher capital expenditures ($1.7 million), partially offset by
lower cash interest paid ($5.9 million).
“We are pleased with our overall financial performance for the
full-year 2022,” said David Nunes, CEO. “The total Adjusted EBITDA
generated by our three Timber segments of $275.4 million
represented the highest-ever result for the company—roughly 8%
above the previous record achieved in 2021. Notwithstanding
deteriorating market conditions toward the end of 2022 in response
to growing macroeconomic uncertainty and a slowing housing market,
we still achieved record full-year Adjusted EBITDA results in both
our Southern Timber and Pacific Northwest Timber segments,
underscoring the relative strength of our timber markets and the
ability of our team to navigate an ever-evolving operating
environment. The strong results in our U.S. timber operations were
partially offset by lower Adjusted EBITDA versus the prior year in
our New Zealand Timber segment, which throughout 2022 contended
with slower economic activity in China, as well as higher costs.
Finally, in our Real Estate segment, we achieved solid results
generally in line with our expectations entering the year,
reflecting our continued focus on optimizing the value of our
portfolio through the sale of rural and recreational properties,
land entitled for development, and non-strategic holdings. Entering
2023, we believe the operational flexibility afforded by our
pure-play timber REIT model, the ongoing improvements to our
portfolio, and the resiliency of our team will enable us to stay
focused on long-term value creation amid more challenging economic
conditions.”
“During the fourth quarter, we achieved total Adjusted EBITDA of
$68.4 million. In our Southern Timber segment, Adjusted EBITDA
declined 1% versus the prior year quarter, as an 11% decrease in
harvest volumes was largely offset by a 7% increase in
weighted-average log prices. In our Pacific Northwest Timber
segment, Adjusted EBITDA improved 18% versus the prior year
quarter, driven by a 17% increase in weighted-average log prices
and a 3% increase in harvest volumes.”
“In New Zealand, while the operating environment remained very
challenging throughout the fourth quarter, Adjusted EBITDA improved
$3.9 million versus the prior year quarter due to increased carbon
credit sales and harvest volumes, which more than offset lower log
pricing.”
“Real Estate segment Adjusted EBITDA was $11.5 million above the
prior year quarter, as the current year period benefited from
increased sales in the Wildlight development project north of
Jacksonville, Florida as well as increased acres sold and average
per-acre prices in the Rural category as compared to the prior year
period. Large Dispositions consisted of a 10,977-acre timberland
sale in western Washington to a conservation-oriented buyer.”
“As previously disclosed, during the fourth quarter we completed
our acquisition of 137,800 acres of high-quality commercial
timberlands located in Texas, Georgia, Alabama, and Louisiana from
Manulife Investment Management for approximately $454 million.
Rayonier financed the acquisition with cash on hand and proceeds
from a new five-year, $250 million term loan through the Farm
Credit System. The company also entered into an interest rate swap
agreement during the quarter to fix $100 million of the new term
loan at an all-in effective cost of approximately 4.6%, net of
estimated patronage refunds.”
Southern Timber
Fourth quarter sales of $56.6 million decreased $2.0 million, or
3%, versus the prior year period. Harvest volumes decreased 11% to
1.37 million tons versus 1.53 million tons in the prior year
period, as macroeconomic headwinds led to softer demand in certain
markets, particularly for pulpwood. Average pine sawtimber stumpage
realizations increased 11% to $34.00 per ton versus $30.74 per ton
in the prior year period, as sawtimber demand remained relatively
strong versus the prior year quarter. Average pine pulpwood
stumpage realizations decreased 1% to $20.95 per ton versus $21.08
per ton in the prior year period due to weaker end-market demand
coupled with drier weather conditions leading up to the fourth
quarter as compared to the prior year. Overall, weighted-average
stumpage realizations (including hardwood) increased 7% to $25.74
per ton versus $24.14 per ton in the prior year period. Operating
income of $19.7 million rose $0.7 million versus the prior year
period due to higher net stumpage realizations ($2.2 million),
lower leased land reforestation and other costs ($0.8 million), and
higher non-timber income ($0.5 million), partially offset by lower
volumes ($2.4 million) and higher depletion rates ($0.4
million).
Fourth quarter Adjusted EBITDA6 of $33.2 million was 1%, or $0.4
million, below the prior year period.
Pacific Northwest Timber
Fourth quarter sales of $42.4 million increased $7.7 million, or
22%, versus the prior year period. Harvest volumes increased 3% to
397,000 tons versus 387,000 tons in the prior year period. Average
delivered sawtimber prices increased 14% to $111.78 per ton versus
$98.09 per ton in the prior year period, reflecting relatively
strong customer demand and a favorable species mix, as a higher
proportion of Douglas-fir sawtimber was harvested in the current
year period. Average delivered pulpwood prices increased 80% to
$66.26 per ton versus $36.82 per ton in the prior year period, as
supply constraints amid strong end-market demand continued to put
upward pressure on pulpwood prices for much of the fourth quarter.
Operating income of $3.5 million improved $1.9 million versus the
prior year period due to the sale of a timber reservation to a
conservation group ($1.4 million), higher net stumpage realizations
($0.7 million), lower indirect costs ($0.1 million), a favorable
adjustment to a timber write-off taken in the third quarter ($0.4
million), and higher volumes ($0.3 million), partially offset by
lower non-timber income ($0.5 million) and higher depletion rates
($0.4 million).
Fourth quarter Adjusted EBITDA6 of $15.5 million was 18%, or
$2.3 million, above the prior year period.
New Zealand Timber
Fourth quarter sales of $71.4 million increased $3.9 million, or
6%, versus the prior year period. Harvest volumes increased 7% to
686,000 tons versus 642,000 tons in the prior year period,
primarily due to the timing of export shipments. Average delivered
prices for export sawtimber decreased 16% to $111.30 per ton versus
$132.87 per ton in the prior year period, as COVID lockdowns and
construction market headwinds in China continued to constrain
export market demand. Average delivered prices for domestic
sawtimber declined 20% to $64.79 per ton versus $81.16 per ton in
the prior year period. The decrease in domestic sawtimber prices
(in U.S. dollar terms) was primarily driven by the decline in the
NZ$/US$ exchange rate (US$0.58 per NZ$1.00 versus US$0.70 per
NZ$1.00). Excluding the impact of foreign exchange rates, domestic
sawtimber prices decreased 5% versus the prior year period,
reflecting slowing domestic market demand as well as increased
supply due to continued export market headwinds. Operating income
of $8.0 million increased $4.4 million versus the prior year period
due to higher carbon credit sales ($8.7 million) and higher volumes
($0.9 million), partially offset by lower net stumpage realizations
($3.3 million), unfavorable foreign exchange impacts ($1.8
million), and higher costs ($0.1 million).
Fourth quarter Adjusted EBITDA6 of $13.7 million was 39%, or
$3.9 million, above the prior year period.
Real Estate
Fourth quarter sales of $57.0 million increased $45.5 million
versus the prior year period, while operating income of $21.5
million increased $21.8 million versus the prior year period.
Fourth quarter sales and operating income included $30.5 million
and $16.6 million, respectively, from Large Dispositions.1
Excluding Large Dispositions, pro forma sales6 were $26.5 million
and pro forma operating income6 was $4.9 million. Pro forma sales6
and pro forma operating income6 increased versus the prior year
period due to a higher number of acres sold (2,090 acres sold
versus 1,209 acres sold in the prior year period) and an increase
in weighted-average prices ($13,747 per acre versus $8,635 per acre
in the prior year period), driven by a heavier mix of Improved
Development activity.
Improved Development sales of $16.6 million included $15.4
million from the Wildlight development project north of
Jacksonville, Florida, $0.4 million from the Heartwood development
project south of Savannah, Georgia, and a $0.7 million sale of an
industrial-use parcel in Kitsap County, Washington ($273,000 per
acre). Sales in Wildlight consisted of an 87-acre industrial-use
parcel for $7.3 million ($84,000 per acre), a 16-acre parcel for a
senior living community for $3.0 million ($190,000 per acre), a
20-acre residential pod sale to a national homebuilder for $4.3
million ($216,000 per acre), and 13 residential lots for $0.8
million (an average of $65,000 per lot or $386,000 per acre). Sales
in Heartwood consisted of 10 residential lots for $0.4 million
($43,000 per lot or 276,000 per acre). This compares to Improved
Development sales of $4.3 million in the prior year period.
There were no Unimproved Development sales in the fourth quarter
or the prior year period.
Rural sales of $12.2 million consisted of 1,961 acres at an
average price of $6,196 per acre, including 615 acres in Nassau
County, Florida for $3.8 million ($6,250 per acre) and 290 acres in
Jefferson County, Washington for $4.1 million ($14,200 per acre).
This compares to prior year period sales of $6.1 million, which
consisted of 1,186 acres at an average price of $5,132 per
acre.
Fourth quarter Adjusted EBITDA6 of $14.2 million was $11.5
million above the prior year period.
Trading
Fourth quarter sales of $18.2 million decreased $0.3 million
versus the prior year period, due to lower volumes and prices.
Sales volumes decreased 1% to 143,000 tons versus 145,000 tons in
the prior year period. The Trading segment generated operating
income of $0.3 million versus an operating loss of $0.5 million in
the prior year period as improved margins more than offset reduced
trading volume.
Fourth quarter Adjusted EBITDA6 of $0.3 million increased $0.8
million versus the prior year period.
Other Items
Fourth quarter corporate and other operating expenses of $8.9
million increased $0.6 million versus the prior year period,
primarily due to higher compensation and other overhead expenses
($1.2 million), partially offset by lower benefit costs ($0.6
million).
Fourth quarter interest expense of $9.7 million decreased $0.9
million versus the prior year period, primarily due to a lower
weighted-average interest rate.
Fourth quarter income tax expense of $1.4 million decreased $0.2
million versus the prior year period. The New Zealand subsidiary is
the primary driver of income tax expense.
In November, Rayonier replaced its prior at-the-market (ATM)
equity offering program with a new ATM program, through which we
may sell common shares, from time to time, having an aggregate
sales price of up to $300 million. During the fourth quarter, we
sold approximately 853,000 shares under the program at a weighted
average price of $35.51 per share, generating gross proceeds of
$30.3 million.
Outlook
In 2023, we expect to achieve net income attributable to
Rayonier of $52 to $73 million, EPS of $0.36 to $0.50 and Adjusted
EBITDA of $280 to $320 million. We generally expect that results in
the first half of the year will be meaningfully lower than results
in the second half of the year, as end market demand continues to
normalize following the rapid rise in interest rates and associated
market volatility. We further expect that year-over-year net income
attributable to Rayonier and EPS will be impacted by increased
depletion rates in our Southern Timber segment following the
completion of our previously announced acquisition of 137,800 acres
in the U.S. South for $454 million.
In our Southern Timber segment, we expect to achieve full-year
harvest volumes of 6.7 to 7.0 million tons. The anticipated
increase relative to the prior year reflects the additional volume
associated with our previously announced acquisitions. We also
anticipate higher non-timber income for full-year 2023 as compared
to full-year 2022. However, we expect that the increase in harvest
volumes and non-timber income will be largely offset by lower
weighted average stumpage realizations due to softer demand as well
as higher harvest and transportation costs. Overall, we expect
full-year Adjusted EBITDA of $145 to $160 million, generally in
line with full-year 2022 results.
In our Pacific Northwest Timber segment, we expect to achieve
full-year harvest volumes of approximately 1.5 to 1.6 million tons.
The anticipated decrease relative to the prior year reflects recent
land sales activity, a more muted domestic demand outlook, and an
ongoing mix shift toward Douglas-fir, which has a lower MBF-to-ton
conversion ratio. We further expect weighted average pricing to
decline relative to full-year 2022 due to weaker macroeconomic
conditions and lower lumber prices. Overall, we expect full-year
Adjusted EBITDA of $42 to $52 million, a decrease from full-year
2022 results.
In our New Zealand Timber segment, we expect full-year harvest
volumes of 2.5 to 2.7 million tons. We anticipate that stumpage
margins will remain under pressure to start the year but are
optimistic that export market conditions will gradually improve as
the operating environment in China normalizes following the
COVID-related disruptions that persisted throughout 2022. We
further expect that favorable carbon credit pricing and volumes
will contribute to improved results in 2023. Overall, we expect
full-year Adjusted EBITDA of $58 to $64 million, an increase from
full-year 2022 results.
Turning to our Real Estate segment, we are encouraged by the
continued interest in both our development projects and rural
properties despite the higher interest rate environment. However,
we anticipate that real estate activity will be significantly
weighted to the second half of the year, with relatively limited
activity in the first quarter in particular. Overall, we expect
full-year Adjusted EBITDA of $68 to $77 million, generally in line
with full-year 2022 results.
Conference Call
A conference call and live audio webcast will be held on
Thursday, February 2, 2023 at 10:00 AM (ET) to discuss these
results.
Access to the live audio webcast will be available at
www.rayonier.com. A replay of the webcast will be archived on the
Company’s website and available shortly after the call.
Investors may listen to the conference call by dialing
888-604-9366 (domestic) or 517-308-9338 (international), passcode:
RAYONIER. A replay of the conference call will be available one
hour following the call until Friday, March 3, 2023, by dialing
866-430-8797 (domestic) or 203-369-0943 (international), passcode:
2323.
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"Timber write-off and adjustments
resulting from a casualty event" includes the write-off of
merchantable and pre-merchantable timber volume related to a
casualty event and a favorable adjustment to the original write-off
estimate of $1.1 million.
3"Gain on investment in Timber Funds"
represents the gain recognized on the sale of rights to manage two
Timber funds (Funds III and IV) previously managed by the Company’s
Olympic Resources Management (ORM) subsidiary, as well as its
co-investment stake in both funds.
4"Fund II Timberland Dispositions
attributable to Rayonier" represent the proportionate share of Fund
II Timberland Dispositions that are attributable to Rayonier.
5"Pro forma net income adjustments
attributable to noncontrolling interests in the operating
partnership" are the proportionate share of pro forma items that
are attributable to noncontrolling interests in the operating
partnership.
6"Pro forma net 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.
7"Loss from terminated cash flow hedge" is
the mark to market loss recognized in earnings due to the early
termination of an interest rate swap, as the hedged cash flows will
no longer occur.
8"Loss related to debt extinguishments and
modifications" includes prepayment penalties, unamortized
capitalized loan costs associated with repaid debt and legal
arrangement fees associated with refinancing, partially offset by
the gain on fair value of extinguished debt.
9"Gain associated with the multi-family
apartment complex sale attributable to noncontrolling interests"
represents the gain recognized in connection with the sale of
property by the Bainbridge Landing joint venture attributable to
noncontrolling interests.
About Rayonier
Rayonier is a leading timberland real estate investment trust
with assets located in some of the most productive softwood timber
growing regions in the United States and New Zealand. As of
December 31, 2022, Rayonier owned or leased under long-term
agreements approximately 2.8 million acres of timberlands located
in the U.S. South (1.92 million acres), U.S. Pacific Northwest
(474,000 acres) and New Zealand (417,000 acres). More information
is available at www.rayonier.com.
___________________________________________________________________________________________________
Forward-Looking Statements - Certain statements in this
press release regarding anticipated financial outcomes including
Rayonier’s earnings guidance, if any, business and market
conditions, outlook, expected dividend rate, Rayonier’s business
strategies, expected harvest schedules, timberland acquisitions and
dispositions, the anticipated benefits of Rayonier’s business
strategies, and other similar statements relating to Rayonier’s
future events, developments or financial or operational performance
or results, are “forward-looking statements” made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and other federal securities laws. These
forward-looking statements are identified by the use of words such
as “may,” “will,” “should,” “expect,” “estimate,” “believe,”
“intend,” “project,” “anticipate” and other similar language.
However, the absence of these or similar words or expressions does
not mean that a statement is not forward-looking. While management
believes that these forward-looking statements are reasonable when
made, forward-looking statements are not guarantees of future
performance or events and undue reliance should not be placed on
these statements.
The following important factors, among others, could cause
actual results or events to differ materially from those expressed
in forward-looking statements that may have been made in this
document: the cyclical and competitive nature of the industries in
which we operate; fluctuations in demand for, or supply of, our
forest products and real estate offerings, including any downturn
in the housing market; entry of new competitors into our markets;
changes in global economic conditions and world events, including
the war in Ukraine; 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,
trucking and ocean freight services; the geographic concentration
of a significant portion of our timberland; our ability to
identify, finance and complete timberland acquisitions; changes in
environmental laws and regulations regarding timber harvesting,
delineation of wetlands, endangered species and development of real
estate generally, that may restrict or adversely impact our ability
to conduct our business, or increase the cost of doing so; adverse
weather conditions, natural disasters and other catastrophic events
such as hurricanes, wind storms and wildfires; the lengthy,
uncertain and costly process associated with the ownership,
entitlement and development of real estate, especially in Florida
and Washington, including changes in law, policy and political
factors beyond our control; the availability of financing for real
estate development and mortgage loans; changes in tariffs, taxes or
treaties relating to the import and export of our products or those
of our competitors; changes in key management and personnel; and
our ability to meet all necessary legal requirements to continue to
qualify as a real estate investment trust (“REIT”) and changes in
tax laws that could adversely affect beneficial tax treatment.
For additional factors that could impact future results, please
see Item 1A - Risk Factors in the Company’s most recent Annual
Report on Form 10-K and similar discussion included in other
reports that we subsequently file with the Securities and Exchange
Commission (the “SEC”). Forward-looking statements are only as of
the date they are made, and the Company undertakes no duty to
update its forward-looking statements except as required by law.
You are advised, however, to review any further disclosures we make
on related subjects in our subsequent reports filed with the
SEC.
Non-GAAP Financial Measures – To supplement Rayonier’s
financial statements presented in accordance with generally
accepted accounting principles in the United States (“GAAP”),
Rayonier uses certain non-GAAP measures, including “cash available
for distribution,” “pro forma sales,” “pro forma operating income
(loss),” “pro forma net income,” and “Adjusted EBITDA,” which are
defined and further explained in this communication. Reconciliation
of such measures to the nearest GAAP measures can also be found in
this communication. Rayonier’s definitions of these non-GAAP
measures may differ from similarly titled measures used by others.
These non-GAAP measures should be considered supplemental to, and
not a substitute for, financial information prepared in accordance
with GAAP.
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED STATEMENTS OF
CONSOLIDATED INCOME
December 31, 2022
(unaudited)
(millions of dollars, except per
share information)
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2022
2022
2021
2022
2021
SALES
$245.4
$195.3
$262.0
$909.1
$1,109.6
Costs and Expenses
Cost of sales
(180.9
)
(152.1
)
(217.2
)
(688.3
)
(796.1
)
Selling and general expenses
(15.7
)
(16.9
)
(15.9
)
(64.7
)
(57.8
)
Other operating (expense) income, net
(4.7
)
14.6
4.6
9.7
14.1
OPERATING INCOME
44.1
40.9
33.5
165.8
269.8
Interest expense
(9.7
)
(9.1
)
(10.6
)
(36.2
)
(44.9
)
Interest and other miscellaneous income,
net
1.6
1.3
0.2
2.6
0.2
INCOME BEFORE INCOME TAXES
36.0
33.1
23.1
132.2
225.1
Income tax expense
(1.4
)
(1.2
)
(1.6
)
(9.4
)
(14.6
)
NET INCOME
34.6
31.9
21.5
122.8
210.5
Less: Net income attributable to
noncontrolling interests in the operating partnership
(0.7
)
(0.5
)
(0.2
)
(2.4
)
(4.5
)
Less: Net income attributable to
noncontrolling interests in consolidated affiliates
(0.8
)
(10.8
)
(12.6
)
(13.3
)
(53.4
)
NET INCOME ATTRIBUTABLE TO RAYONIER
INC.
$33.1
$20.6
$8.7
$107.1
$152.6
EARNINGS PER COMMON SHARE
Basic earnings per share attributable to
Rayonier Inc.
$0.23
$0.14
$0.06
$0.73
$1.08
Diluted earnings per share attributable to
Rayonier Inc.
$0.22
$0.14
$0.06
$0.73
$1.08
Pro forma net income per share (a)
$0.11
$0.15
$0.01
$0.62
$0.67
Weighted Average Common Shares used for
determining
Basic EPS
146,765,131
146,370,340
143,968,773
146,209,847
140,812,882
Diluted EPS (b)
150,572,519
150,232,889
148,079,383
150,152,953
145,300,861
(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 December 31, 2022, there were 147,282,631
common shares and 3,208,827 Redeemable Operating Partnership Units
outstanding.
A
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
December 31, 2022
(unaudited)
(millions of dollars)
December 31,
December 31,
2022
2021
Assets
Cash and cash equivalents (excluding
Timber Funds)
$114.3
$358.7
Cash and cash equivalents (Timber
Funds)
—
3.5
Restricted cash (Timber Funds)
—
6.3
Assets held for sale
0.7
5.1
Other current assets
87.3
77.9
Timber and timberlands, net of depletion
and amortization
3,230.9
2,895.0
Higher and better use timberlands and real
estate development investments
115.1
106.9
Property, plant and equipment
44.7
44.5
Less - accumulated depreciation
(17.5
)
(14.9
)
Net property, plant and equipment
27.2
29.6
Restricted cash (excluding Timber
Funds)
1.2
0.6
Right-of-use assets
97.2
101.8
Other assets
115.5
51.0
$3,789.4
$3,636.4
Liabilities, Noncontrolling Interests
in the Operating Partnership and Shareholders’ Equity
Current maturities of long-term debt
—
125.0
Distribution payable (Timber Funds)
—
6.3
Other current liabilities
95.3
100.4
Long-term debt
1,514.7
1,242.8
Long-term lease liability
88.8
93.4
Other non-current liabilities
104.1
119.1
Noncontrolling interests in the operating
partnership
105.8
133.8
Total Rayonier Inc. shareholders’
equity
1,865.4
1,771.8
Noncontrolling interests in consolidated
affiliates
15.3
43.8
Total shareholders’ equity
1,880.7
1,815.6
$3,789.4
$3,636.4
B
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
December 31, 2022
(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, December 31, 2020
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 $2.5 million
6,357,972
233.0
—
—
—
233.0
Net income
—
—
157.1
—
53.4
210.5
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(4.5
)
—
—
(4.5
)
Dividends ($1.08 per share)
—
—
(154.1
)
—
—
(154.1
)
Issuance of shares under incentive stock
plans
270,713
6.0
—
—
—
6.0
Stock-based compensation
—
9.3
—
—
—
9.3
Fund II carried interest incentive fee
—
—
—
—
(3.8
)
(3.8
)
Disposition of noncontrolling interests in
consolidated affiliates
—
—
—
—
(255.5
)
(255.5
)
Measurement period adjustment of
noncontrolling interests in consolidated affiliates
—
—
—
—
9.7
9.7
Adjustment of noncontrolling interests in
the operating partnership
—
—
(42.5
)
—
—
(42.5
)
Other (a)
1,065,454
39.1
—
54.3
(148.5
)
(55.1
)
Balance, December 31, 2021
145,372,961
$1,389.1
$402.3
($19.6
)
$43.8
$1,815.6
Issuance of shares under the
“at-the-market” (ATM) equity offering program, net of commissions
and offering costs of $1.1 million
1,579,228
59.3
—
—
—
59.3
Net income
—
—
109.5
—
13.3
122.8
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(2.4
)
—
—
(2.4
)
Dividends ($1.125 per share)
—
—
(166.0
)
—
—
(166.0
)
Issuance of shares under incentive stock
plans
321,337
2.5
—
—
—
2.5
Stock-based compensation
—
12.4
—
—
—
12.4
Adjustment of noncontrolling interests in
the operating partnership
—
—
23.2
—
—
23.2
Other (a)
9,105
(0.3
)
—
55.4
(41.8
)
13.3
Balance, December 31, 2022
147,282,631
$1,463.0
$366.6
$35.8
$15.3
$1,880.7
(a)
Primarily includes shares purchased from
employees in non-open market transactions to pay withholding taxes
associated with the vesting of shares granted under the Company’s
Incentive Stock Plan, amortization of pension and post-retirement
plan liabilities, foreign currency translation adjustments,
mark-to-market adjustments of qualifying cash flow hedges,
distributions to noncontrolling interests in consolidated
affiliates and the allocation of other comprehensive income to
noncontrolling interests in the operating partnership. The year
ended December 31, 2022 also includes the redemption of 106,914
Redeemable Operating Partnership Units, respectively, for an equal
number of Rayonier Inc. common shares, common stock offering costs
associated with the “at-the-market” (ATM) equity offering
program.
C
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
December 31, 2022
(unaudited)
(millions of dollars)
Year Ended December 31,
2022
2021
Cash provided by operating
activities:
Net income
$122.8
$210.5
Depreciation, depletion and
amortization
147.3
155.7
Non-cash cost of land and improved
development
28.4
25.0
Gain on large dispositions of
timberlands
(16.6
)
(44.8
)
Gain on sale of Timber Funds III &
IV
—
(3.7
)
Gain on Fund II timberland
dispositions
—
(51.5
)
Fund II carried interest incentive fee
—
(3.8
)
Stock-based incentive compensation
expense
12.4
9.3
Deferred income taxes
(5.4
)
8.5
Other items to reconcile net income to
cash provided by operating activities
2.5
10.6
Changes in working capital and other
assets and liabilities
(22.2
)
9.3
269.2
325.1
Cash used for investing
activities:
Capital expenditures
(74.8
)
(76.0
)
Real estate development investments
(13.7
)
(12.5
)
Purchase of timberlands
(458.5
)
(179.1
)
Net proceeds from large dispositions of
timberlands
29.5
54.7
Net proceeds from sale of Timber Funds III
& IV
—
31.0
Net proceeds from Fund II timberland
dispositions
—
154.7
Other
1.1
0.9
(516.4
)
(26.3
)
Cash used for financing
activities:
Net increase in debt
125.0
26.4
Dividends paid
(165.7
)
(153.5
)
Distributions to noncontrolling interests
in the operating partnership
(3.7
)
(4.3
)
Proceeds from the issuance of common
shares under incentive stock plan
2.6
5.9
Proceeds from the issuance of common
shares under the “at-the-market” (ATM) equity offering program, net
of commissions and offering costs
61.6
230.8
Distributions to noncontrolling interests
in consolidated affiliates
(19.4
)
(109.0
)
Make-whole fee on NWFCS debt
prepayment
—
(6.2
)
Other
(5.0
)
(6.4
)
(4.6
)
(16.3
)
Effect of exchange rate changes on cash
and restricted cash
(1.9
)
(0.9
)
Cash, cash equivalents and restricted
cash:
Change in cash, cash equivalents and
restricted cash
(253.7
)
281.6
Balance, beginning of year
369.1
87.5
Balance, end of period
$115.4
$369.1
D
RAYONIER INC. AND
SUBSIDIARIES
BUSINESS SEGMENT SALES, PRO
FORMA SALES, OPERATING INCOME,
PRO FORMA OPERATING INCOME AND
ADJUSTED EBITDA
December 31, 2022
(unaudited)
(millions of dollars)
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2022
2022
2021
2022
2021
Sales
Southern Timber
$56.6
$64.5
$58.7
$264.2
$204.4
Pacific Northwest Timber
42.4
34.4
34.7
162.2
143.0
New Zealand Timber
71.4
72.5
67.5
274.1
281.2
Timber Funds
—
—
71.3
—
199.4
Real Estate
57.0
12.4
11.5
138.0
189.9
Trading
18.2
11.6
18.6
71.0
95.4
Intersegment Eliminations
(0.2
)
(0.1
)
(0.3
)
(0.4
)
(3.7
)
Sales
$245.4
$195.3
$262.0
$909.1
$1,109.6
Pro forma sales (a)
Southern Timber
$56.6
$64.5
$58.7
$264.2
$204.4
Pacific Northwest Timber
42.4
34.4
34.7
162.2
143.0
New Zealand Timber
71.4
72.5
67.5
274.1
281.2
Timber Funds
—
—
0.3
—
8.9
Real Estate
26.5
12.4
11.5
107.5
133.9
Trading
18.2
11.6
18.6
71.0
95.4
Intersegment Eliminations
(0.2
)
(0.1
)
(0.3
)
(0.4
)
(3.7
)
Pro forma sales
$214.9
$195.3
$191.0
$878.6
$863.1
Operating income (loss)
Southern Timber
$19.7
$22.5
$19.0
$96.6
$66.1
Pacific Northwest Timber
3.5
2.2
1.5
15.2
6.8
New Zealand Timber
8.0
9.3
3.6
30.6
51.5
Timber Funds
—
—
18.4
—
63.3
Real Estate
21.5
15.7
(0.3
)
58.5
112.5
Trading
0.3
0.2
(0.5
)
0.4
0.1
Corporate and Other
(8.9
)
(9.0
)
(8.2
)
(35.5
)
(30.6
)
Operating income
$44.1
$40.9
$33.5
$165.8
$269.8
Pro forma operating income (loss)
(a)
Southern Timber
$19.7
$22.5
$19.0
$96.6
$66.1
Pacific Northwest Timber
3.1
3.3
1.5
15.9
6.8
New Zealand Timber
8.0
9.3
3.6
30.6
51.5
Timber Funds
—
—
(0.7
)
—
(0.1
)
Real Estate
4.9
4.3
(0.3
)
30.4
67.8
Trading
0.3
0.2
(0.5
)
0.4
0.1
Corporate and Other
(8.9
)
(9.0
)
(8.2
)
(35.5
)
(30.6
)
Pro forma operating income
$27.2
$30.5
$14.4
$138.5
$161.6
Adjusted EBITDA (a)
Southern Timber
$33.2
$36.6
$33.6
$156.9
$120.2
Pacific Northwest Timber
15.5
12.6
13.2
63.9
57.3
New Zealand Timber
13.7
15.6
9.8
54.5
78.5
Timber Funds
—
—
(0.6
)
—
2.3
Real Estate
14.2
8.4
2.8
72.7
100.7
Trading
0.3
0.2
(0.5
)
0.4
0.1
Corporate and Other
(8.6
)
(8.6
)
(7.9
)
(34.2
)
(29.4
)
Adjusted EBITDA
$68.4
$64.7
$50.4
$314.2
$329.8
(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
December 31, 2022
(unaudited)
(millions of dollars, except per
share information)
LIQUIDITY MEASURES:
Year Ended
December 31,
December 31,
2022
2021
Cash Provided by Operating
Activities
$269.2
$325.1
Working capital and other balance sheet
changes
(5.9
)
(28.4
)
Cash Available for Distribution
attributable to NCI in Timber Funds
—
(12.9
)
Capital expenditures (a)
(74.8
)
(76.0
)
Cash Available for Distribution
(b)
$188.5
$207.8
Net Income
$122.8
$210.5
Operating income attributable to NCI in
Timber Funds
—
(45.6
)
Interest, net attributable to NCI in
Timber Funds
—
0.3
Income tax expense attributable to NCI in
Timber Funds
—
0.1
Net Income (Excluding NCI in Timber
Funds)
$122.8
$165.3
Interest, net and miscellaneous income
attributable to Rayonier
33.2
44.3
Income tax expense attributable to
Rayonier
9.4
14.6
Depreciation, depletion and amortization
attributable to Rayonier
147.3
143.2
Non-cash cost of land and improved
development
28.4
25.0
Non-operating expense
0.4
—
Timber write-offs and adjustments
resulting from casualty event attributable to Rayonier (c)
0.7
—
Gain associated with the multi-family
apartment complex sale attributable to NCI (d)
(11.5
)
—
Gain on investment in Timber Funds (e)
—
(7.5
)
Fund II Timberland Dispositions
attributable to Rayonier (f)
—
(10.3
)
Large Dispositions (g)
(16.6
)
(44.8
)
Adjusted EBITDA (h)
$314.2
$329.8
Cash interest paid attributable to
Rayonier (i)
(35.7
)
(41.5
)
Cash taxes paid attributable to
Rayonier
(15.1
)
(7.4
)
Capital expenditures attributable to
Rayonier (a)
(74.8
)
(73.2
)
Cash Available for Distribution
(b)
$188.5
$207.8
Cash Available for Distribution
(b)
$188.5
$207.8
Real estate development investments
(13.7
)
(12.5
)
Cash Available for Distribution after
real estate development investments
$174.8
$195.2
F
PRO FORMA SALES (j):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
Intersegment
Eliminations
Total
December 31, 2022
Sales
$56.6
$42.4
$71.4
—
$57.0
$18.2
($0.2
)
$245.4
Large Dispositions (g)
—
—
—
—
(30.5
)
—
—
(30.5
)
Pro forma sales
$56.6
$42.4
$71.4
—
$26.5
$18.2
($0.2
)
$214.9
September 30, 2022
Sales
$64.5
$34.4
$72.5
—
$12.4
$11.6
($0.1
)
$195.3
Pro forma sales
$64.5
$34.4
$72.5
—
$12.4
$11.6
($0.1
)
$195.3
December 31, 2021
Sales
$58.7
$34.7
$67.5
$71.3
$11.5
$18.6
($0.3
)
$262.0
Sales attributable to noncontrolling
interests in Timber Funds
—
—
—
(57.0
)
—
—
—
(57.0
)
Fund II Timberland Dispositions
attributable to Rayonier (f)
—
—
—
(14.0
)
—
—
—
(14.0
)
Pro forma sales
$58.7
$34.7
$67.5
$0.3
$11.5
$18.6
($0.3
)
$191.0
PRO FORMA SALES (j):
Year Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
Intersegment
Eliminations
Total
December 31, 2022
Sales
$264.2
$162.2
$274.1
—
$138.0
$71.0
($0.4
)
$909.1
Large Dispositions (g)
—
—
—
—
(30.5
)
—
—
(30.5
)
Pro forma sales
$264.2
$162.2
$274.1
—
$107.5
$71.0
($0.4
)
$878.6
December 31, 2021
Sales
$204.4
$143.0
$281.2
$199.4
$189.9
$95.4
($3.7
)
$1,109.6
Sales attributable to noncontrolling
interests in Timber Funds
—
—
—
(159.1
)
—
—
—
(159.1
)
Fund II Timberland Dispositions
attributable to Rayonier (f)
—
—
—
(31.4
)
—
—
—
(31.4
)
Large Disposition (g)
—
—
—
—
(56.0
)
—
—
(56.0
)
Pro forma sales
$204.4
$143.0
$281.2
$8.9
$133.9
$95.4
($3.7
)
$863.1
PRO FORMA NET INCOME (k):
Three Months Ended
Year Ended
December 31, 2022
September 30, 2022
December 31, 2021
December 31, 2022
December 31, 2021
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
Net Income Attributable to Rayonier
Inc.
$33.1
$0.22
$20.6
$0.14
$8.7
$0.06
$107.1
$0.73
$152.6
$1.08
Gain on investment in Timber Funds (e)
—
—
—
—
(3.8
)
(0.03
)
—
—
(7.5
)
(0.05
)
Fund II Timberland Dispositions
attributable to Rayonier (f)
—
—
—
—
(3.1
)
(0.02
)
—
—
(10.3
)
(0.07
)
Loss from terminated cash flow hedge
(l)
—
—
—
—
—
—
—
—
2.2
0.02
Loss related to debt extinguishments and
modifications (m)
—
—
—
—
—
—
—
—
0.2
—
Timber write-off and adjustments resulting
from casualty event (c)
(0.4
)
—
1.1
0.01
—
—
0.7
—
—
—
Large Dispositions (g)
(16.6
)
(0.11
)
—
—
—
—
(16.6
)
(0.11
)
(44.8
)
(0.31
)
Pro forma net income adjustments
attributable to noncontrolling interests in the operating
partnership (n)
0.4
—
—
—
0.2
—
0.3
—
1.7
—
Pro Forma Net Income
$16.5
$0.11
$21.6
$0.15
$2.0
$0.01
$91.5
$0.62
$94.1
$0.67
F
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (o) (h):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
Corporate and
Other
Total
December 31, 2022
Operating income
$19.7
$3.5
$8.0
—
$21.5
$0.3
($8.9
)
$44.1
Adjustment to prior period timber
write-off (c)
—
(0.4
)
—
—
—
—
—
(0.4
)
Large Dispositions (g)
—
—
—
—
(16.6
)
—
—
(16.6
)
Pro forma operating income
$19.7
$3.1
$8.0
—
$4.9
$0.3
($8.9
)
$27.2
Depreciation, depletion and
amortization
13.5
12.4
5.7
—
1.2
—
0.3
33.1
Non-cash cost of land and improved
development
—
—
—
—
8.1
—
—
8.1
Adjusted EBITDA
$33.2
$15.5
$13.7
—
$14.2
$0.3
($8.6
)
$68.4
September 30, 2022
Operating income
$22.5
$2.2
$9.3
—
$15.7
$0.2
($9.0
)
$40.9
Gain associated with the multi-family
apartment complex sale attributable to NCI (d)
—
—
—
—
(11.5
)
—
—
(11.5
)
Timber write-off resulting from a fire
casualty event (c)
—
1.1
—
—
—
—
—
1.1
Pro forma operating income
$22.5
$3.3
$9.3
—
$4.3
$0.2
($9.0
)
$30.5
Depreciation, depletion and
amortization
14.1
9.4
6.3
—
1.0
—
0.3
31.1
Non-cash cost of land and improved
development
—
—
—
—
3.1
—
—
3.1
Adjusted EBITDA
$36.6
$12.6
$15.6
—
$8.4
$0.2
($8.6
)
$64.7
December 31, 2021
Operating income (loss)
$19.0
$1.5
$3.6
$18.4
($0.3
)
($0.5
)
($8.2
)
$33.5
Gain on investment in Timber Funds (e)
—
—
—
(3.8
)
—
—
—
(3.8
)
Fund II Timberland Dispositions
attributable to Rayonier (f)
—
—
—
(3.1
)
—
—
—
(3.1
)
Operating income attributable to NCI in
Timber Funds
—
—
—
(12.3
)
—
—
—
(12.3
)
Pro forma operating income (loss)
$19.0
$1.5
$3.6
($0.7
)
($0.3
)
($0.5
)
($8.2
)
$14.4
Depreciation, depletion and
amortization
14.6
11.7
6.2
0.2
0.9
—
0.3
33.9
Non-cash cost of land and improved
development
—
—
—
—
2.2
—
—
2.2
Adjusted EBITDA
$33.6
$13.2
$9.8
($0.6
)
$2.8
($0.5
)
($7.9
)
$50.4
F
PRO FORMA OPERATING INCOME AND ADJUSTED
EBITDA (o) (h):
Year Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
Corporate and
Other
Total
December 31, 2022
Operating income
$96.6
$15.2
$30.6
—
$58.5
$0.4
($35.5
)
$165.8
Gain associated with the multi-family
apartment complex sale attributable to NCI (d)
—
—
—
—
(11.5
)
—
—
(11.5
)
Timber write-off resulting from casualty
event (c)
—
0.7
—
—
—
—
—
0.7
Large Dispositions (g)
—
—
—
—
(16.6
)
—
—
(16.6
)
Pro forma operating income
$96.6
$15.9
$30.6
—
$30.4
$0.4
($35.5
)
$138.5
Depreciation, depletion and
amortization
60.3
48.0
23.9
—
13.9
—
1.3
147.3
Non-cash cost of land and improved
development
—
—
—
—
28.4
—
—
28.4
Adjusted EBITDA
$156.9
$63.9
$54.5
—
$72.7
$0.4
($34.2
)
$314.2
December 31, 2021
Operating income
$66.1
$6.8
$51.5
$63.3
$112.5
$0.1
($30.6
)
$269.8
Gain on investment in Timber Funds (e)
—
—
—
(7.5
)
—
—
—
(7.5
)
Fund II Timberland Dispositions
attributable to Rayonier (f)
—
—
—
(10.3
)
—
—
—
(10.3
)
Operating income attributable to NCI in
Timber Funds
—
—
—
(45.6
)
—
—
—
(45.6
)
Large Dispositions (g)
—
—
—
—
(44.8
)
—
—
(44.8
)
Pro forma operating income (loss)
$66.1
$6.8
$51.5
($0.1
)
$67.8
$0.1
($30.6
)
$161.6
Depreciation, depletion and
amortization
54.1
50.5
27.0
2.4
7.9
—
1.2
143.2
Non-cash cost of land and improved
development
—
—
—
—
25.0
—
—
25.0
Adjusted EBITDA
$120.2
$57.3
$78.5
$2.3
$100.7
$0.1
($29.4
)
$329.8
(a)
“Capital expenditures” exclude timberland
acquisitions of $458.5 million and $179.1 million during the twelve
months ended December 31, 2022 and December 31, 2021,
respectively.
(b)
“Cash Available for Distribution” (CAD) is
defined as cash provided by operating activities adjusted for
capital spending (excluding timberland acquisitions and real estate
development investments), 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.
(c)
“Timber write-off and adjustments
resulting from a casualty event” includes the write-off of
merchantable and pre-merchantable timber volume related to a
casualty event and a favorable adjustment to the original write-off
estimate of $1.1 million.
(d)
“Gain associated with the multi-family
apartment complex sale attributable to noncontrolling interests"
represents the gain recognized in connection with the sale of
property by the Bainbridge Landing joint venture attributable to
noncontrolling interests.
(e)
“Gain on investment in Timber Funds”
represents the gain recognized on the sale of rights to manage two
timber funds (Funds III and IV) previously managed by the Company’s
Olympic Resources Management (ORM) subsidiary, as well as its
co-investment stake in both funds.
(f)
“Fund II Timberland Dispositions”
represent the disposition of Fund II Timberland assets, which we
managed and owned a co-investment stake in.
(g)
“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.
(h)
“Adjusted EBITDA” is defined as earnings
before interest, taxes, depreciation, depletion, amortization, the
non-cash cost of land and improved development, non-operating
expense, operating income attributable to noncontrolling interests
in Timber Funds, gain associated with the multi-family apartment
complex sale attributable to noncontrolling interests, the gain on
investment in Timber Funds, Fund II timberland dispositions, timber
write-offs resulting from casualty events and Large Dispositions.
Adjusted EBITDA is a non-GAAP measure that management uses to make
strategic decisions about the business and that investors can use
to evaluate the operational performance of the assets under
management. It excludes specific items that management believes are
not indicative of the Company’s ongoing operating results.
(i)
“Cash interest paid” is presented net of
patronage refunds received of $6.0 million and $6.5 million during
the twelve months ended December 31, 2022 and December 31, 2021,
respectively, excluding patronage refunds attributable to
noncontrolling interests in Timber Funds.
(j)
“Pro forma revenue (sales)” is defined as
revenue (sales) adjusted for Large Dispositions, Fund II timberland
dispositions and sales attributable to noncontrolling interests in
Timber Funds. Rayonier believes that this non-GAAP financial
measure provides investors with useful information to evaluate our
core business operations because it excludes specific items that
are not indicative of the Company’s ongoing operating results.
(k)
“Pro forma net income” is defined as net
income attributable to Rayonier Inc. adjusted for its proportionate
share of losses from a terminated cash flow hedge, losses related
to debt extinguishments and modifications, gain on investment in
Timber Funds, Fund II timberland dispositions, timber write-offs
resulting from casualty events 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 the
Company’s ongoing operating results.
(l)
“Loss from terminated cash flow hedge” is
the mark to market loss recognized in earnings due to the early
termination of an interest rate swap, as the hedged cash flows will
no longer occur.
(m)
“Loss related to debt extinguishments and
modifications” includes prepayment penalties and unamortized
capitalized loan costs associated with repaid debt in addition to
legal and arrangement fees associated with refinancing, partially
offset by the write-off of fair market value adjustments.
(n)
“Pro forma net income adjustments
attributable to noncontrolling interests in the operating
partnership” are the proportionate share of pro forma items that
are attributable to noncontrolling interests in the operating
partnership.
(o)
“Pro forma operating income (loss)” is
defined as operating income (loss) adjusted for operating income
attributable to noncontrolling interests in Timber Funds, the gain
associated with the multi-family apartment complex sale
attributable to noncontrolling interests, the gain on investment in
Timber Funds, Fund II timberland dispositions, timber write-offs
resulting from casualty events 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 the
Company’s ongoing operating results.
F
RAYONIER INC. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
EBITDA GUIDANCE
December 31, 2022
(unaudited)
(millions of dollars)
ADJUSTED EBITDA GUIDANCE (a):
2023 Guidance
Low
High
Net Income to Adjusted EBITDA
Reconciliation
Net income
$56.1
-
$78.5
Less: Net income attributable to
noncontrolling interests
(3.2
)
-
(3.9
)
Less: Net income attributable to
noncontrolling interests in operating partnership
(1.1
)
-
(1.6
)
Net income attributable to Rayonier
Inc.
$51.8
-
$73.0
Interest, net
46.7
-
47.2
Income tax expense
8.2
-
9.3
Depreciation, depletion and
amortization
146.5
-
157.0
Non-cash cost of land and improved
development
25.0
-
31.0
Non-operating expense
(2.5
)
-
(3.0
)
Net income attributable to noncontrolling
interests
3.2
-
3.9
Net income attributable to noncontrolling
interests in operating partnership
1.1
-
1.6
Adjusted EBITDA
$280.0
-
$320.0
Diluted Earnings per Share
$0.36
-
$0.50
(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 and Large Dispositions. Adjusted EBITDA is a
non-GAAP measure that management uses to make strategic decisions
about the business and that investors can use to evaluate the
operational performance of the assets under management. It excludes
specific items that management believes are not indicative of the
Company's ongoing operating results.
G
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230131006161/en/
Investors/Media Collin Mings 904-357-9100
investorrelations@rayonier.com
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