- Second quarter net income attributable to Rayonier of $19.0
million ($0.13 per share) on revenues of $208.9 million
- Second quarter pro forma net income of $7.8 million ($0.05 per
share)
- Second quarter operating income of $20.1 million, pro forma
operating income of $20.1 million, and Adjusted EBITDA of $69.2
million
- Year-to-date cash provided by operations of $126.3 million and
cash available for distribution (CAD) of $62.7 million
Rayonier Inc. (NYSE:RYN) today reported second quarter net
income attributable to Rayonier of $19.0 million, or $0.13 per
share, on revenues of $208.9 million. This compares to net income
attributable to Rayonier of $24.1 million, or $0.16 per share, on
revenues of $246.3 million in the prior year quarter.
The second quarter results included an $11.4 million net
recovery associated with a legal settlement. Excluding this item
and adjusting for pro forma net income adjustments attributable to
noncontrolling interests,1 second quarter pro forma net income2 was
$7.8 million, or $0.05 per share.
The following table summarizes the current quarter and
comparable prior year period results:
Three Months Ended
(millions of dollars, except earnings per
share (EPS))
June 30, 2023
June 30, 2022
$
EPS
$
EPS
Revenues
$208.9
$246.3
Net income attributable to Rayonier
$19.0
$0.13
$24.1
$0.16
Net recovery on legal settlement
(11.4
)
(0.08
)
—
—
Pro forma net income adjustments
attributable to noncontrolling interests1
0.2
—
—
—
Pro forma net income2
$7.8
$0.05
$24.1
$0.16
Second quarter operating income was $20.1 million versus $35.5
million in the prior year period. Second quarter Adjusted EBITDA2
was $69.2 million versus $83.0 million in the prior year
period.
The following table summarizes operating income (loss), pro
forma operating income (loss),2 and Adjusted EBITDA2 for the
current quarter and comparable prior year period:
Three Months Ended June
30,
Operating Income
(Loss)
Pro forma Operating Income
(Loss)2
Adjusted EBITDA2
(millions of dollars)
2023
2022
2023
2022
2023
2022
Southern Timber
$21.7
$24.1
$21.7
$24.1
$43.6
$38.7
Pacific Northwest Timber
(2.4
)
2.9
(2.4
)
2.9
6.9
14.3
New Zealand Timber
2.4
8.0
2.4
8.0
8.3
14.9
Real Estate
8.6
11.0
8.6
11.0
20.3
25.4
Trading
0.1
(0.4
)
0.1
(0.4
)
0.1
(0.4
)
Corporate and Other
(10.3
)
(10.1
)
(10.3
)
(10.1
)
(9.9
)
(9.8
)
Total
$20.1
$35.5
$20.1
$35.5
$69.2
$83.0
Year-to-date cash provided by operating activities was $126.3
million versus $148.5 million in the prior year period.
Year-to-date cash available for distribution (CAD)2 was $62.7
million, which decreased $56.8 million versus the prior year period
due to lower Adjusted EBITDA2 ($57.1 million), higher capital
expenditures ($6.5 million) and higher cash interest paid ($3.8
million), partially offset by lower cash taxes paid ($10.6
million).
“While overall market sentiment has improved versus the first
quarter of this year, our second quarter results reflect ongoing
macroeconomic challenges and weaker end-market demand as compared
to the prior year,” said David Nunes, CEO. “The total Adjusted
EBITDA generated by our Timber segments collectively declined 13%
relative to the second quarter of 2022, as favorable results in our
Southern Timber segment were more than offset by lower Adjusted
EBITDA in our Pacific Northwest Timber and New Zealand Timber
segments.”
“In our Southern Timber segment, Adjusted EBITDA improved by
$4.9 million as harvest volumes increased 32% relative to the prior
year quarter, primarily due to the successful integration of the
acquisitions completed in late 2022. The higher volumes were
partially offset by a 14% decline in weighted-average net stumpage
prices due to weaker demand and drier weather conditions as
compared to the prior year period.”
“In our Pacific Northwest Timber segment, Adjusted EBITDA
declined $7.4 million from the prior year quarter as weaker
domestic markets coupled with less competition from export markets
drove a 19% decline in domestic sawtimber prices versus the prior
year period. Harvest volumes declined 11% relative to the prior
year quarter as we deferred some planned harvests in response to
weaker market conditions.”
“In our New Zealand Timber segment, Adjusted EBITDA declined
$6.6 million versus the prior year quarter due to lower carbon
credit sales, lower net stumpage realizations, unfavorable foreign
exchange impacts, and 4% lower harvest volumes as compared to the
prior year period.”
“Real Estate segment Adjusted EBITDA was $5.1 million below the
prior year quarter, as higher weighted-average per-acre prices in
the current quarter were more than offset by 20% fewer acres
sold.”
Southern Timber
Second quarter sales of $68.3 million increased $2.0 million, or
3%, versus the prior year period. Harvest volumes increased 32% to
2.01 million tons versus 1.52 million tons in the prior year
period, primarily driven by the additional volume contribution from
the U.S. South acquisitions completed at the end of 2022. Average
pine sawtimber stumpage realizations decreased 15% to $29.07 per
ton versus $34.09 per ton in the prior year period, primarily due
to drier weather conditions, weaker demand from sawmills, and
decreased competition from pulp mills for chip-n-saw volume.
Average pine pulpwood stumpage realizations decreased 26% to $15.78
per ton versus $21.46 per ton in the prior year period as weaker
end-market demand, drier weather conditions, and extended
maintenance outages at pulp mills all contributed to softer market
conditions. Overall, weighted-average stumpage realizations
(including hardwood) decreased 14% to $21.85 per ton versus $25.55
per ton in the prior year period. Operating income of $21.7 million
decreased $2.4 million versus the prior year period due to lower
net stumpage realizations ($7.4 million), higher depletion rates
($2.6 million), and higher overhead and other costs ($1.0 million),
partially offset by higher volumes ($7.6 million) and higher
non-timber income ($1.0 million).
Second quarter Adjusted EBITDA2 of $43.6 million was 13%, or
$4.9 million, above the prior year period.
Pacific Northwest Timber
Second quarter sales of $32.3 million decreased $6.8 million, or
17%, versus the prior year period. Harvest volumes decreased 11% to
332,000 tons versus 376,000 tons in the prior year period as some
planned harvests were deferred in response to soft market
conditions. Average delivered prices for domestic sawtimber
decreased 19% to $97.37 per ton versus $120.44 per ton in the prior
year period due to weaker domestic and export market demand.
Average delivered pulpwood prices decreased 20% to $36.21 per ton
versus $45.17 per ton in the prior year period as the prior year
period benefited from much more favorable end-market demand. An
operating loss of $2.4 million versus operating income of $2.9
million in the prior year period was driven by lower net stumpage
realizations ($5.9 million), lower volumes ($0.8 million) and
higher costs ($0.5 million), partially offset by higher non-timber
income ($1.1 million) and lower depletion rates ($0.8 million).
Second quarter Adjusted EBITDA2 of $6.9 million was 52%, or $7.4
million, below the prior year period.
New Zealand Timber
Second quarter sales of $60.9 million decreased $18.0 million,
or 23%, versus the prior year period. Harvest volumes decreased 4%
to 673,000 tons versus 703,000 tons in the prior year period, as
some planned harvests were deferred in response to soft market
conditions. Average delivered prices for export sawtimber decreased
26% to $103.81 per ton versus $140.44 per ton in the prior year
period, driven by increased salvage volume from Cyclone Gabrielle
and weaker demand in China; however, export sawtimber net stumpage
realizations were relatively flat due to significantly lower port
and freight costs versus the prior year period. Average delivered
prices for domestic sawtimber declined 10% to $69.29 per ton versus
$76.82 per ton in the prior year period. The decrease in domestic
sawtimber prices (in U.S. dollar terms) was primarily driven by the
decline in the NZ$/US$ exchange rate (US$0.62 per NZ$1.00 versus
US$0.66 per NZ$1.00). Excluding the impact of foreign exchange
rates, domestic sawtimber prices decreased 3% versus the prior year
period, reflecting weaker domestic demand and decreased competition
from export markets. Operating income of $2.4 million decreased
$5.6 million versus the prior year period due to lower carbon
credit sales ($2.8 million), lower net stumpage realizations ($1.5
million), unfavorable foreign exchange impacts ($1.0 million), and
lower volumes ($0.5 million), partially offset by lower depletion
rates ($0.2 million).
Second quarter Adjusted EBITDA2 of $8.3 million was 44%, or $6.6
million, below the prior year period.
Real Estate
Second quarter sales of $32.0 million decreased $2.4 million, or
7%, versus the prior year period, while operating income of $8.6
million decreased $2.4 million versus the prior year period. Sales
and operating income decreased versus the prior year period
primarily due to a lower number of acres sold (3,754 acres sold
versus 4,694 acres sold in the prior year period), partially offset
by a slight increase in weighted-average prices ($7,489 per acre
versus $7,453 per acre in the prior year period).
Improved Development sales of $12.2 million included $6.9
million from the Heartwood development project south of Savannah,
Georgia and $5.3 million from the Wildlight development project
north of Jacksonville, Florida. Sales in Heartwood consisted of a
101-acre parcel for $3.0 million ($30,000 per acre) sold to a
national homebuilder for the first phase of an active-adult
community, two residential pod sales totaling 62 acres for $1.8
million ($29,000 per acre), and 47 finished residential lots for
$2.1 million ($44,000 per lot or $258,000 per acre). Sales in
Wildlight consisted of a 97-acre parcel for $5.3 million ($55,000
per acre) sold to a national homebuilder for the second phase of an
active-adult community. This compares to Improved Development sales
of $11.6 million in the prior year period.
Rural sales of $15.6 million consisted of 3,411 acres at an
average price of $4,582 per acre. This compares to prior year
period sales of $23.4 million, which consisted of 4,633 acres at an
average price of $5,054 per acre.
Timberland & Non-Strategic sales of $0.3 million consisted
of a 76-acre transaction for $3,344 per acre. There were no
Timberland & Non-Strategic sales in the prior year period.
Second quarter Adjusted EBITDA2 of $20.3 million decreased $5.1
million, or 20%, versus the prior year period.
Trading
Second quarter sales of $15.4 million decreased $12.3 million
versus the prior year period due to lower volumes and prices. Sales
volumes decreased 35% to 135,000 tons versus 209,000 tons in the
prior year period. The Trading segment generated operating income
of $0.1 million versus an operating loss of $0.4 million in the
prior year period as improved margins more than offset reduced
trading volume.
Second quarter Adjusted EBITDA2 of $0.1 million increased $0.5
million versus the prior year period.
Other Items
Second quarter corporate and other operating expenses of $10.3
million increased $0.2 million versus the prior year period,
primarily driven by higher compensation and benefits expense ($0.8
million) and higher travel and transportation costs ($0.2 million),
partially offset by lower legal expenses ($0.8 million).
Second quarter interest expense of $12.4 million increased $3.4
million versus the prior year period, primarily due to higher
average outstanding debt and a higher weighted-average interest
rate.
Second quarter interest and other miscellaneous income included
an $11.4 million net recovery associated with a legal
settlement.
Second quarter income tax expense of $0.2 million decreased $1.1
million versus the prior year period, primarily due to lower
anticipated full-year results from our New Zealand subsidiary,
which is the primary driver of income tax expense.
Outlook
“Based on our first half results and expectations for the
remainder of the year, we now anticipate full-year net income
attributable to Rayonier of $63 to $78 million, EPS of $0.42 to
$0.52, pro forma EPS of $0.30 to $0.40, and Adjusted EBITDA of $275
to $300 million,” added Nunes.
“In our Southern Timber segment, we now expect full-year harvest
volumes of 7.2 to 7.4 million tons as dry weather conditions have
contributed to stronger-than-expected production levels. However,
we anticipate lower quarterly harvest volumes for the remainder of
2023 compared to the first half of the year. We further expect a
modest decline in weighted-average net stumpage realizations during
the second half of 2023 compared to the second quarter driven by
geographic mix and a seasonal increase in the proportion of
thinning volume. We continue to anticipate higher non-timber income
for full-year 2023 as compared to full-year 2022, driven by growth
in our Nature-Based Solutions businesses. Overall, we expect the
Southern Timber segment to generate full-year Adjusted EBITDA of
$150 to $155 million, which at the midpoint is in line with our
prior guidance.”
“In our Pacific Northwest Timber segment, we now expect
full-year harvest volumes of 1.4 to 1.5 million tons as we have
deferred some planned harvests in response to soft market
conditions. We anticipate modestly higher weighted-average
delivered log prices in the second half of 2023 compared to the
first half based on improved end-market demand and lumber prices.
Overall, we now expect the Pacific Northwest Timber segment to
generate full-year Adjusted EBITDA of $30 to $34 million, a decline
of $15 million at the midpoint versus prior guidance.”
“In our New Zealand Timber segment, we now expect full-year
harvest volumes of 2.3 to 2.5 million tons as we have deferred some
planned harvest volume in response to unfavorable market
conditions. Over the balance of the year, we anticipate that
weighted-average delivered log prices will be modestly lower as
compared to the first half of 2023, primarily due to weaker demand
in both export and domestic markets as well as increased supply
from Cyclone Gabrielle salvage operations. However, we expect that
lower port and freight costs will partially offset these headwinds.
Further, while we have tempered our full-year expectations for
carbon credit sales based on significant market volatility and
limited transaction activity in the first half of the year, we
expect to be more active in the carbon market in the second half of
the year following the recent uptick in NZU pricing in response to
governmental action to stabilize the market. Overall, we now expect
the New Zealand Timber segment to generate full-year Adjusted
EBITDA of $39 to $46 million, a decline of roughly $19 million at
the midpoint versus prior guidance.”
“In our Real Estate segment, the demand for HBU properties and
timberland assets has remained remarkably strong despite the higher
interest rate environment. We now expect full-year Adjusted EBITDA
of $90 to $100 million, an increase of roughly $23 million at the
midpoint versus prior guidance. Based on the timing of anticipated
closings, we expect that second half transaction volume and
operating results in the Real Estate segment will be heavily
weighted to the fourth quarter.”
Conference Call
A conference call and live audio webcast will be held on
Thursday, August 3, 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 Sunday, September 3, 2023, by dialing
866-361-4757 (domestic) or 203-369-0183 (international), passcode:
3084.
Complimentary copies of Rayonier press releases and other
financial documents are also available by calling (904)
357-9100.
1"Pro forma net income adjustments
attributable to noncontrolling interests" are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
2"Pro forma net income," "Pro forma
operating income (loss)," "Adjusted EBITDA" and "CAD" are non-GAAP
measures defined and reconciled to GAAP in the attached
exhibits.
About Rayonier
Rayonier is a leading timberland real estate investment trust
with assets located in some of the most productive softwood timber
growing regions in the United States and New Zealand. As of June
30, 2023, Rayonier owned or leased under long-term agreements
approximately 2.8 million acres of timberlands located in the U.S.
South (1.91 million acres), U.S. Pacific Northwest (474,000 acres)
and New Zealand (419,000 acres). More information is available at
www.rayonier.com.
___________________________________________________________________________________________________
Forward-Looking Statements - Certain statements in this
press release regarding anticipated financial outcomes including
Rayonier’s earnings guidance, if any, business and market
conditions, outlook, expected dividend rate, Rayonier’s business
strategies, expected harvest schedules, timberland acquisitions and
dispositions, the anticipated benefits of Rayonier’s business
strategies, and other similar statements relating to Rayonier’s
future events, developments or financial or operational performance
or results, are “forward-looking statements” made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and other federal securities laws. These
forward-looking statements are identified by the use of words such
as “may,” “will,” “should,” “expect,” “estimate,” “believe,”
“intend,” “project,” “anticipate” and other similar language.
However, the absence of these or similar words or expressions does
not mean that a statement is not forward-looking. While management
believes that these forward-looking statements are reasonable when
made, forward-looking statements are not guarantees of future
performance or events and undue reliance should not be placed on
these statements.
The following important factors, among others, could cause
actual results or events to differ materially from those expressed
in forward-looking statements that may have been made in this
document: the cyclical and competitive nature of the industries in
which we operate; fluctuations in demand for, or supply of, our
forest products and real estate offerings, including any downturn
in the housing market; entry of new competitors into our markets;
changes in global economic conditions and world events, including
the war in Ukraine and escalating tensions between China and
Taiwan; business disruptions arising from public health crises and
outbreaks of communicable diseases; fluctuations in demand for our
products in Asia, and especially China; the uncertainties of
potential impacts of climate-related initiatives; the cost and
availability of third party logging, trucking and ocean freight
services; the geographic concentration of a significant portion of
our timberland; our ability to identify, finance and complete
timberland acquisitions; changes in environmental laws and
regulations regarding timber harvesting, delineation of wetlands,
endangered species and development of real estate generally, that
may restrict or adversely impact our ability to conduct our
business, or increase the cost of doing so; adverse weather
conditions, natural disasters and other catastrophic events such as
hurricanes, wind storms and wildfires; the lengthy, uncertain and
costly process associated with the ownership, entitlement and
development of real estate, especially in Florida and Washington,
including changes in law, policy and political factors beyond our
control; the availability of financing for real estate development
and mortgage loans; changes in tariffs, taxes or treaties relating
to the import and export of our products or those of our
competitors; changes in key management and personnel; and our
ability to meet all necessary legal requirements to continue to
qualify as a real estate investment trust (“REIT”) and changes in
tax laws that could adversely affect beneficial tax treatment.
For additional factors that could impact future results, please
see Item 1A - Risk Factors in the Company’s most recent Annual
Report on Form 10-K and similar discussion included in other
reports that we subsequently file with the Securities and Exchange
Commission (the “SEC”). Forward-looking statements are only as of
the date they are made, and the Company undertakes no duty to
update its forward-looking statements except as required by law.
You are advised, however, to review any further disclosures we make
on related subjects in our subsequent reports filed with the
SEC.
Non-GAAP Financial Measures – To supplement Rayonier’s
financial statements presented in accordance with generally
accepted accounting principles in the United States (“GAAP”),
Rayonier uses certain non-GAAP measures, including “cash available
for distribution,” “pro forma operating income (loss),” “pro forma
net income,” and “Adjusted EBITDA,” which are defined and further
explained in this communication. Reconciliation of such measures to
the nearest GAAP measures can also be found in this communication.
Rayonier’s definitions of these non-GAAP measures may differ from
similarly titled measures used by others. These non-GAAP measures
should be considered supplemental to, and not a substitute for,
financial information prepared in accordance with GAAP.
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED STATEMENTS OF
CONSOLIDATED INCOME
June 30, 2023
(unaudited)
(millions of dollars, except per
share information)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
SALES
$208.9
$179.1
$246.3
$387.9
$468.4
Costs and Expenses
Cost of sales
(168.4
)
(149.2
)
(194.3
)
(317.6
)
(355.3
)
Selling and general expenses
(19.0
)
(16.8
)
(17.3
)
(35.7
)
(32.1
)
Other operating (expense) income, net
(1.4
)
(2.5
)
0.8
(3.9
)
(0.2
)
OPERATING INCOME
20.1
10.6
35.5
30.7
80.8
Interest expense, net
(12.4
)
(11.7
)
(9.1
)
(24.1
)
(17.4
)
Interest and other miscellaneous income
(expense), net
11.6
9.6
0.2
21.2
(0.3
)
INCOME BEFORE INCOME TAXES
19.3
8.5
26.6
27.8
63.1
Income tax expense
(0.2
)
(1.1
)
(1.3
)
(1.3
)
(6.8
)
NET INCOME
19.1
7.4
25.3
26.5
56.3
Less: Net income attributable to
noncontrolling interests in the operating partnership
(0.3
)
(0.2
)
(0.6
)
(0.5
)
(1.2
)
Less: Net loss (income) attributable to
noncontrolling interests in consolidated affiliates
0.2
1.1
(0.6
)
1.3
(1.7
)
NET INCOME ATTRIBUTABLE TO RAYONIER
INC.
$19.0
$8.3
$24.1
$27.3
$53.4
EARNINGS PER COMMON SHARE
Basic earnings per share attributable to
Rayonier Inc.
$0.13
$0.06
$0.16
$0.18
$0.37
Diluted earnings per share attributable to
Rayonier Inc.
$0.13
$0.06
$0.16
$0.18
$0.36
Pro forma net income per share (a)
$0.05
$0.01
$0.16
$0.06
$0.36
Weighted Average Common Shares used for
determining
Basic EPS
148,218,436
147,377,448
146,257,311
147,800,265
145,846,026
Diluted EPS (b)
150,965,191
151,079,129
150,244,379
151,028,340
149,898,006
(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 June 30, 2023, there were 148,268,443 common
shares and 2,469,173 Redeemable Operating Partnership Units
outstanding.
A
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
June 30, 2023
(unaudited)
(millions of dollars)
June 30,
December 31,
2023
2022
Assets
Cash and cash equivalents
$88.4
$114.3
Assets held for sale
4.2
0.7
Other current assets
104.6
87.3
Timber and timberlands, net of depletion
and amortization
3,175.0
3,230.9
Higher and better use timberlands and real
estate development investments
111.8
115.1
Property, plant and equipment
45.1
44.7
Less - accumulated depreciation
(18.6
)
(17.5
)
Net property, plant and equipment
26.5
27.2
Restricted cash
5.0
1.2
Right-of-use assets
94.6
97.2
Other assets
112.0
115.5
$3,722.1
$3,789.4
Liabilities, Noncontrolling Interests
in the Operating Partnership and Shareholders’ Equity
Other current liabilities
102.8
95.3
Long-term debt
1,512.2
1,514.7
Long-term lease liability
86.5
88.8
Other non-current liabilities
104.4
104.1
Noncontrolling interests in the operating
partnership
77.5
105.8
Total Rayonier Inc. shareholders’
equity
1,825.4
1,865.4
Noncontrolling interests in consolidated
affiliates
13.3
15.3
Total shareholders’ equity
1,838.7
1,880.7
$3,722.1
$3,789.4
B
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
June 30, 2023
(unaudited)
(millions of dollars, except
share information)
Common Shares
Retained Earnings
Accumulated
Other
Comprehensive Income
Noncontrolling Interests in
Consolidated Affiliates
Shareholders’ Equity
Shares
Amount
Balance, January 1, 2023
147,282,631
$1,463.0
$366.6
$35.8
$15.3
$1,880.7
Issuance of shares under the
“at-the-market” (ATM) equity offering program, net of commissions
and offering costs
400
—
—
—
—
—
Net income
—
—
8.5
—
(1.1
)
7.4
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.2
)
—
—
(0.2
)
Dividends ($0.285 per share)
—
—
(42.2
)
—
—
(42.2
)
Issuance of shares under incentive stock
plans
1,564
—
—
—
—
—
Stock-based compensation
—
2.5
—
—
—
2.5
Adjustment of noncontrolling interests in
the operating partnership
—
—
(2.4
)
—
—
(2.4
)
Other (a)
728,384
23.8
—
(14.8
)
—
9.0
Balance, March 31, 2023
148,012,979
$1,489.3
$330.3
$21.0
$14.2
$1,854.8
Net income
—
—
19.3
—
(0.2
)
19.1
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.3
)
—
—
(0.3
)
Dividends ($0.285 per share)
—
—
(42.2
)
—
—
(42.2
)
Issuance of shares under incentive stock
plans
372,149
—
—
—
—
—
Stock-based compensation
—
4.3
—
—
—
4.3
Adjustment of noncontrolling interests in
the operating partnership
—
—
4.3
—
—
4.3
Other (a)
(116,685
)
(3.9
)
—
3.3
(0.7
)
(1.3
)
Balance, June 30, 2023
148,268,443
$1,489.7
$311.4
$24.3
$13.3
$1,838.7
C
Common Shares
Retained Earnings
Accumulated
Other
Comprehensive (Loss)
Income
Noncontrolling Interests in
Consolidated Affiliates
Shareholders’ Equity
Shares
Amount
Balance, January 1, 2022
145,372,961
$1,389.1
$402.3
($19.6
)
$43.8
$1,815.6
Issuance of shares under the
“at-the-market” (ATM) equity offering program, net of commissions
and offering costs of $0.3 million
726,248
29.8
—
—
—
29.8
Net income
—
—
30.0
—
1.0
31.0
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.7
)
—
—
(0.7
)
Dividends ($0.27 per share)
—
—
(39.9
)
—
—
(39.9
)
Issuance of shares under incentive stock
plans
11,364
0.4
—
—
—
0.4
Stock-based compensation
—
2.8
—
—
—
2.8
Adjustment of noncontrolling interests in
the operating partnership
—
—
(2.6
)
—
—
(2.6
)
Other (a)
(2,885
)
(0.2
)
—
45.6
(0.2
)
45.2
Balance, March 31, 2022
146,107,688
$1,421.9
$389.1
$26.0
$44.6
$1,881.6
Net income
—
—
24.7
—
0.6
25.3
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.6
)
—
—
(0.6
)
Dividends ($0.285 per share)
—
—
(42.1
)
—
—
(42.1
)
Issuance of shares under incentive stock
plans
304,887
2.0
—
—
—
2.0
Stock-based compensation
—
4.4
—
—
—
4.4
Adjustment of noncontrolling interests in
the operating partnership
—
—
11.4
—
—
11.4
Other (a)
(90,843
)
(4.0
)
—
(25.4
)
(32.2
)
(61.6
)
Balance, June 30, 2022
146,321,732
$1,424.3
$382.5
$0.6
$13.0
$1,820.4
(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 six
months ended June 30, 2023 and June 30, 2022 also includes the
redemption of 739,654 and 3,512 Redeemable Operating Partnership
Units, respectively, for an equal number of Rayonier Inc. common
shares.
C
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
June 30, 2023
(unaudited)
(millions of dollars)
Six Months Ended June 30,
2023
2022
Cash provided by operating
activities:
Net income
$26.5
$56.3
Depreciation, depletion and
amortization
77.3
83.2
Non-cash cost of land and improved
development
13.6
17.1
Timber-write off resulting from a casualty
event
2.3
—
Stock-based incentive compensation
expense
6.8
7.2
Deferred income taxes
(2.4
)
(7.3
)
Other items to reconcile net income to
cash provided by operating activities
(0.4
)
(3.8
)
Changes in working capital and other
assets and liabilities
2.6
(4.2
)
126.3
148.5
Cash used for investing
activities:
Capital expenditures
(36.8
)
(30.3
)
Real estate development investments
(14.8
)
(6.0
)
Purchase of timberlands
(9.3
)
(3.2
)
Other
4.4
5.0
(56.5
)
(34.5
)
Cash used for financing
activities:
Net decrease in debt
—
(124.9
)
Dividends paid
(85.2
)
(81.8
)
Distributions to noncontrolling interests
in the operating partnership
(1.6
)
(1.8
)
Proceeds from the issuance of common
shares under incentive stock plan
—
2.6
Proceeds from the issuance of common
shares under the “at-the-market” (ATM) equity offering program, net
of commissions and offering costs
(0.1
)
31.9
Distributions to noncontrolling interests
in consolidated affiliates
—
(6.7
)
Other
(4.1
)
(4.2
)
(91.0
)
(184.9
)
Effect of exchange rate changes on cash
and restricted cash
(0.8
)
(2.1
)
Cash, cash equivalents and restricted
cash:
Change in cash, cash equivalents and
restricted cash
(22.0
)
(73.0
)
Balance, beginning of year
115.4
369.1
Balance, end of period
$93.4
$296.1
D
RAYONIER INC. AND
SUBSIDIARIES
BUSINESS SEGMENT SALES,
OPERATING INCOME,
PRO FORMA OPERATING INCOME AND
ADJUSTED EBITDA
June 30, 2023
(unaudited)
(millions of dollars)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Sales
Southern Timber
$68.3
$71.8
$66.3
$140.2
$143.0
Pacific Northwest Timber
32.3
34.4
39.2
66.7
85.4
New Zealand Timber
60.9
44.1
78.9
105.0
130.3
Real Estate
32.0
16.3
34.4
48.3
68.6
Trading
15.4
12.6
27.7
28.0
41.1
Intersegment Eliminations
(0.1
)
(0.1
)
(0.1
)
(0.2
)
(0.1
)
Sales
$208.9
$179.1
$246.3
$387.9
$468.4
Operating income (loss)
Southern Timber
$21.7
$22.2
$24.1
$43.9
$54.4
Pacific Northwest Timber
(2.4
)
(3.5
)
2.9
(5.9
)
9.5
New Zealand Timber
2.4
(0.7
)
8.0
1.7
13.4
Real Estate
8.6
0.9
11.0
9.5
21.2
Trading
0.1
0.3
(0.4
)
0.4
(0.1
)
Corporate and Other
(10.3
)
(8.6
)
(10.1
)
(18.9
)
(17.7
)
Operating income
$20.1
$10.6
$35.5
$30.7
$80.8
Pro forma operating income (loss)
(a)
Southern Timber
$21.7
$22.2
$24.1
$43.9
$54.4
Pacific Northwest Timber
(2.4
)
(3.5
)
2.9
(5.9
)
9.5
New Zealand Timber
2.4
1.6
8.0
4.0
13.4
Real Estate
8.6
0.9
11.0
9.5
21.2
Trading
0.1
0.3
(0.4
)
0.4
(0.1
)
Corporate and Other
(10.3
)
(8.6
)
(10.1
)
(18.9
)
(17.7
)
Pro forma operating income
$20.1
$12.9
$35.5
$33.0
$80.8
Adjusted EBITDA (a)
Southern Timber
$43.6
$42.8
$38.7
$86.4
$87.1
Pacific Northwest Timber
6.9
7.1
14.3
14.0
35.8
New Zealand Timber
8.3
6.1
14.9
14.4
25.3
Real Estate
20.3
6.6
25.4
26.9
50.1
Trading
0.1
0.3
(0.4
)
0.4
(0.1
)
Corporate and Other
(9.9
)
(8.2
)
(9.8
)
(18.1
)
(17.0
)
Adjusted EBITDA
$69.2
$54.7
$83.0
$124.0
$181.1
(a)
Pro forma operating income (loss) and
Adjusted EBITDA are non-GAAP measures. See Schedule F for
definitions and reconciliations.
E
RAYONIER INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
June 30, 2023
(unaudited)
(millions of dollars, except per
share information)
LIQUIDITY MEASURES:
Six Months Ended
June 30,
June 30,
2023
2022
Cash Provided by Operating
Activities
$126.3
$148.5
Working capital and other balance sheet
changes
(26.8
)
1.3
Capital expenditures (a)
(36.8
)
(30.3
)
Cash Available for Distribution
(b)
$62.7
$119.5
Net Income
$26.5
$56.3
Interest, net and miscellaneous income
23.6
17.1
Income tax expense
1.3
6.8
Depreciation, depletion and
amortization
77.3
83.2
Non-cash cost of land and improved
development
13.6
17.1
Non-operating (income) expense (c)
(20.6
)
0.6
Timber write-off resulting from a casualty
event (d)
2.3
—
Adjusted EBITDA (e)
$124.0
$181.1
Cash interest paid (f)
(20.7
)
(16.9
)
Cash taxes paid
(3.7
)
(14.3
)
Capital expenditures (a)
(36.8
)
(30.3
)
Cash Available for Distribution
(b)
$62.7
$119.5
Cash Available for Distribution
(b)
$62.7
$119.5
Real estate development investments
(14.8
)
(6.0
)
Cash Available for Distribution after
real estate development investments
$48.0
$113.5
PRO FORMA NET INCOME (g):
Three Months Ended
Six Months Ended
June 30, 2023
March 31, 2023
June 30, 2022
June 30, 2023
June 30, 2022
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
Net Income Attributable to Rayonier
Inc.
$19.0
$0.13
$8.3
$0.06
$24.1
$0.16
$27.3
$0.18
$53.4
$0.36
Net recoveries on legal settlements
(11.4
)
(0.08
)
(9.1
)
(0.06
)
—
—
(20.5
)
(0.14
)
—
—
Timber write-off resulting from a casualty
event (d)
—
—
2.3
0.02
—
—
2.3
0.02
—
—
Pro forma net income adjustments
attributable to noncontrolling interests (h)
0.2
—
(0.4
)
(0.01
)
—
—
(0.2
)
—
—
—
Pro Forma Net Income
$7.8
$0.05
$1.1
$0.01
$24.1
$0.16
$8.9
$0.06
$53.4
$0.36
F
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (i) (e):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Corporate
and
Other
Total
June 30, 2023
Operating income (loss)
$21.7
($2.4
)
$2.4
$8.6
$0.1
($10.3
)
$20.1
Depreciation, depletion and
amortization
21.9
9.2
5.9
2.2
—
0.4
39.7
Non-cash cost of land and improved
development
—
—
—
9.4
—
—
9.4
Adjusted EBITDA
$43.6
$6.9
$8.3
$20.3
$0.1
($9.9
)
$69.2
March 31, 2023
Operating income (loss)
$22.2
($3.5
)
($0.7
)
$0.9
$0.3
($8.6
)
$10.6
Timber write-off resulting from a casualty
event (d)
—
—
2.3
—
—
—
2.3
Pro forma operating income (loss)
$22.2
($3.5
)
$1.6
$0.9
$0.3
($8.6
)
$12.9
Depreciation, depletion and
amortization
20.6
10.6
4.5
1.5
—
0.4
37.6
Non-cash cost of land and improved
development
—
—
—
4.2
—
—
4.2
Adjusted EBITDA
$42.8
$7.1
$6.1
$6.6
$0.3
($8.2
)
$54.7
June 30, 2022
Operating income (loss)
$24.1
$2.9
$8.0
$11.0
($0.4
)
($10.1
)
$35.5
Depreciation, depletion and
amortization
14.7
11.3
6.9
2.6
—
0.3
35.8
Non-cash cost of land and improved
development
—
—
—
11.8
—
—
11.8
Adjusted EBITDA
$38.7
$14.3
$14.9
$25.4
($0.4
)
($9.8
)
$83.0
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (i) (e):
Six Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Corporate
and
Other
Total
June 30, 2023
Operating income (loss)
$43.9
($5.9
)
$1.7
$9.5
$0.4
($18.9
)
$30.7
Timber write-off resulting from a casualty
event (d)
—
—
2.3
—
—
—
2.3
Pro forma operating income (loss)
$43.9
($5.9
)
$4.0
$9.5
$0.4
($18.9
)
$33.0
Depreciation, depletion and
amortization
42.5
19.9
10.4
3.7
—
0.8
77.3
Non-cash cost of land and improved
development
—
—
—
13.6
—
—
13.6
Adjusted EBITDA
$86.4
$14.0
$14.4
$26.9
$0.4
($18.1
)
$124.0
June 30, 2022
Operating income (loss)
$54.4
$9.5
$13.4
$21.2
($0.1
)
($17.7
)
$80.8
Depreciation, depletion and
amortization
32.7
26.2
11.9
11.7
—
0.6
83.2
Non-cash cost of land and improved
development
—
—
—
17.1
—
—
17.1
Adjusted EBITDA
$87.1
$35.8
$25.3
$50.1
($0.1
)
($17.0
)
$181.1
(a)
“Capital expenditures” exclude timberland
acquisitions of $9.3 million and $3.2 million during the six months
ended June 30, 2023 and June 30, 2022, respectively.
(b)
“Cash Available for Distribution” (CAD) is
defined as cash provided by operating activities adjusted for
capital spending (excluding timberland acquisitions and real estate
development investments) and working capital and other balance
sheet changes. CAD is a non-GAAP measure of cash generated during a
period that is available for common stock dividends, distributions
to operating partnership unitholders, distributions to
noncontrolling interests, repurchase of the Company's common
shares, debt reduction, timberland acquisitions and real estate
development investments. CAD is not necessarily indicative of the
CAD that may be generated in future periods.
(c)
The six months ended June 30, 2023
includes $20.5 million of net recoveries associated with legal
settlements.
(d)
“Timber write-off resulting from a
casualty event” includes the write-off of merchantable and
pre-merchantable timber volume damaged by a casualty event that
cannot be salvaged.
(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) expense, 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.
(f)
“Cash interest paid” is presented net of
patronage refunds received of $6.2 million and $6.0 million during
the six months ended June 30, 2023 and June 30, 2022,
respectively.
(g)
“Pro forma net income” is defined as net
income attributable to Rayonier Inc. adjusted for its proportionate
share of the net recoveries associated with legal settlements and
timber write-offs resulting from casualty events. Rayonier believes
that this non-GAAP financial measure provides investors with useful
information to evaluate our core business operations because it
excludes specific items that are not indicative of the Company’s
ongoing operating results.
(h)
“Pro forma net income adjustments
attributable to noncontrolling interests” are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
(i)
“Pro forma operating income (loss)” is
defined as operating income (loss) adjusted for timber write-offs
resulting from casualty events. Rayonier believes that this
non-GAAP financial measure provides investors with useful
information to evaluate our core business operations because it
excludes specific items that are not indicative of the Company’s
ongoing operating results.
F
RAYONIER INC. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
EBITDA GUIDANCE
June 30, 2023
(unaudited)
(millions of dollars)
ADJUSTED EBITDA GUIDANCE (a):
Prior 2023 Guidance
Revised 2023 Guidance
Year-to-Date
Results
Low
High
Low
High
Net Income to Adjusted EBITDA
Reconciliation
Net income
$56.1
-
$78.5
$64.5
-
$80.1
$26.5
Less: Net (income) loss attributable to
noncontrolling interests
(3.2
)
-
(3.9
)
(0.5
)
(1.3
)
1.3
Less: Net income attributable to
noncontrolling interests in operating partnership
(1.1
)
-
(1.6
)
(1.1
)
-
(1.3
)
(0.5
)
Net income attributable to Rayonier
Inc.
$51.8
-
$73.0
$62.9
-
$77.5
$27.3
Add: Timber write-off resulting from a
casualty event (b)
—
-
—
2.3
-
2.3
2.3
Less: Net recoveries associated with legal
settlements
—
-
—
(20.5
)
-
(20.5
)
(20.5
)
Add: Pro forma net income adjustments
attributable to noncontrolling interests (c)
—
-
—
(0.2
)
-
(0.2
)
(0.2
)
Pro Forma Net Income (d)
$51.8
-
$73.0
$44.5
-
$59.1
$8.9
Interest expense, net
46.7
-
47.2
48.5
-
49.0
24.1
Income tax expense
8.2
-
9.3
2.2
-
3.6
1.3
Depreciation, depletion and
amortization
146.5
-
157.0
153.0
-
161.0
77.3
Non-cash cost of land and improved
development
25.0
-
31.0
26.5
-
27.5
13.6
Non-operating income
(2.5
)
-
(3.0
)
(1.5
)
-
(3.0
)
(0.6
)
Net income attributable to noncontrolling
interests
4.3
-
5.5
1.8
-
2.8
(0.6
)
Adjusted EBITDA
$280.0
-
$320.0
$275.0
-
$300.0
$124.0
Diluted Earnings per Share
$0.36
-
$0.50
$0.42
-
$0.52
$0.18
Pro forma Diluted Earnings per Share
$0.36
-
$0.50
$0.30
-
$0.40
$0.06
(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, 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.
(b)
“Timber write-off resulting from a
casualty event” includes the write-off of merchantable and
pre-merchantable timber volume damaged by a casualty event that
cannot be salvaged.
(c)
"Pro forma net income adjustments
attributable to noncontrolling interests" are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
(d)
“Pro forma net income” is defined as net
income attributable to Rayonier Inc. adjusted for its proportionate
share of the net recoveries associated with legal settlements,
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.
G
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801995710/en/
Investors/Media Collin Mings 904-357-9100
investorrelations@rayonier.com
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