- First quarter net income attributable to Rayonier of $1.4
million ($0.01 per share) on revenues of $168.1 million
- First quarter pro forma net income of $7.0 million ($0.05 per
share)
- First quarter operating income of $16.2 million and Adjusted
EBITDA of $56.2 million
- First quarter cash provided by operations of $52.3 million and
cash available for distribution (CAD) of $36.8 million
Rayonier Inc. (NYSE:RYN) today reported first quarter net income
attributable to Rayonier of $1.4 million, or $0.01 per share, on
revenues of $168.1 million. This compares to net income
attributable to Rayonier of $8.3 million, or $0.06 per share, on
revenues of $179.1 million in the prior year quarter.
The first quarter results included $1.3 million of net costs
associated with legal settlements1 and a $4.5 million pension
settlement charge, net of tax.2 Excluding these items and adjusting
for pro forma net income adjustments attributable to noncontrolling
interests,3 first quarter pro forma net income4 was $7.0 million,
or $0.05 per share. This compares to pro forma net income4 of $1.1
million, or $0.01 per share, in the prior year period.
The following table summarizes the current quarter and
comparable prior year period results:
Three Months Ended
(millions of dollars, except earnings per
share (EPS))
March 31, 2024
March 31, 2023
$
EPS
$
EPS
Revenues
$168.1
$179.1
Net income attributable to Rayonier
$1.4
$0.01
$8.3
$0.06
Net cost (recovery) on legal
settlements1
1.3
0.01
(9.1
)
(0.06
)
Pension settlement charge, net of tax2
4.5
0.03
—
—
Timber write-offs resulting from casualty
events5
—
—
2.3
0.02
Pro forma net income adjustments
attributable to noncontrolling interests3
(0.1
)
—
(0.4
)
(0.01
)
Pro forma net income4
$7.0
$0.05
$1.1
$0.01
First quarter operating income was $16.2 million versus $10.6
million in the prior year period, which included $2.3 million of
timber write-offs resulting from a casualty event. Excluding this
item, prior year first quarter pro forma operating income4 was
$12.9 million. First quarter Adjusted EBITDA4 was $56.2 million
versus $54.7 million in the prior year period.
The following table summarizes operating income (loss), pro
forma operating income (loss),4 and Adjusted EBITDA4 for the
current quarter and comparable prior year period:
Three Months Ended March
31,
Operating Income
(Loss)
Pro forma Operating Income
(Loss)4
Adjusted EBITDA4
(millions of dollars)
2024
2023
2024
2023
2024
2023
Southern Timber
$23.0
$22.2
$23.0
$22.2
$44.8
$42.8
Pacific Northwest Timber
(4.4
)
(3.5
)
(4.4
)
(3.5
)
4.7
7.1
New Zealand Timber
7.4
(0.7
)
7.4
1.6
11.4
6.1
Real Estate
(0.1
)
0.9
(0.1
)
0.9
4.6
6.6
Trading
—
0.3
—
0.3
—
0.3
Corporate and Other
(9.8
)
(8.6
)
(9.8
)
(8.6
)
(9.3
)
(8.2
)
Total
$16.2
$10.6
$16.2
$12.9
$56.2
$54.7
Cash provided by operating activities was $52.3 million versus
$64.0 million in the prior year period. Cash available for
distribution (CAD)4 was $36.8 million, which increased $6.4 million
versus the prior year period due to lower cash interest paid (net)
($4.7 million), higher Adjusted EBITDA4 ($1.5 million), and lower
cash taxes paid ($0.4 million), partially offset by higher capital
expenditures ($0.1 million).
“Overall, we delivered modestly improved first quarter results
relative to the prior year quarter, which were in-line with our
expectations at the start of the year,” said Mark McHugh, President
and CEO. “We achieved total Adjusted EBITDA of $56.2 million,
representing a 3% increase versus the prior year period, as
stronger results from our Southern Timber and New Zealand Timber
segments more than offset lower results in our Pacific Northwest
Timber and Real Estate segments.”
“In our Southern Timber segment, Adjusted EBITDA increased 5%
versus the prior year quarter, as a 6% increase in harvest volumes
was partially offset by a 4% decrease in weighted-average net
stumpage realizations. In our Pacific Northwest Timber segment,
Adjusted EBITDA declined 34% versus the prior year quarter, driven
by a 17% decrease in harvest volumes and an 11% decrease in
weighted-average delivered log prices. In our New Zealand Timber
segment, Adjusted EBITDA improved 88% versus the prior year
quarter, as higher carbon credit sales and favorable foreign
exchange impacts were partially offset by 4% lower export sawtimber
prices.”
“In our Real Estate segment, Adjusted EBITDA was $2.0 million
below the prior year quarter, as transaction activity was
relatively limited to start the year, consistent with our prior
guidance.”
Southern Timber
First quarter sales of $70.0 million decreased $1.9 million, or
3%, versus the prior year period. Harvest volumes increased 6% to
2.01 million tons versus 1.89 million tons in the prior year
period, as we benefited from weather-related constraints on
competing supply. Average pine sawtimber stumpage realizations
decreased 3% to $30.62 per ton versus $31.57 per ton in the prior
year period, primarily due to a less favorable geographic mix.
Average pine pulpwood stumpage realizations decreased 2% to $16.89
per ton versus $17.32 per ton in the prior year period, which was
also primarily driven by an unfavorable geographic mix. Overall,
weighted-average net stumpage realizations (including hardwood)
decreased 4% to $23.07 per ton versus $24.03 per ton in the prior
year period. Non-timber sales of $9.1 million decreased 3% versus
the prior year period, as lower pipeline easement revenues were
partially offset by growth in our land-based solutions business.
Operating income of $23.0 million increased $0.8 million versus the
prior year period due to favorable costs ($1.7 million) and higher
volumes ($1.5 million), partially offset by lower net stumpage
realizations ($1.9 million) and lower non-timber income ($0.5
million).
First quarter Adjusted EBITDA4 of $44.8 million was 5%, or $2.0
million, above the prior year period.
Pacific Northwest Timber
First quarter sales of $25.2 million decreased $9.2 million, or
27%, versus the prior year period. Harvest volumes decreased 17% to
317,000 tons versus 384,000 tons in the prior year period,
primarily due to the Large Disposition we completed in Oregon in
late 2023. Average delivered prices for domestic sawtimber
decreased 9% to $84.31 per ton versus $93.12 per ton in the prior
year period due to a combination of weaker demand from domestic
lumber mills, reduced export market tension, and an unfavorable
species mix, as a lower proportion of Douglas-Fir sawtimber was
harvested in the current year period. Average delivered pulpwood
prices decreased 39% to $29.31 per ton versus $48.23 per ton in the
prior year period, as supply constraints and strong end-market
demand significantly benefited the prior year period. An operating
loss of $4.4 million versus an operating loss of $3.5 million in
the prior year period was driven by lower net stumpage realizations
($0.4 million), higher depletion expense ($0.3 million), and lower
volumes ($0.2 million).
First quarter Adjusted EBITDA4 of $4.7 million was 34%, or $2.4
million, below the prior year period.
New Zealand Timber
First quarter sales of $45.7 million increased $1.6 million, or
4%, versus the prior year period. Sales volumes of 480,000 tons
were relatively flat versus the prior year period. Average
delivered prices for export sawtimber decreased 4% to $108.72 per
ton versus $112.97 per ton in the prior year period, driven by
weaker construction demand in China. Average delivered prices for
domestic sawtimber declined 5% to $68.13 per ton versus $71.58 per
ton in the prior year period. The decrease in domestic sawtimber
prices was primarily driven by weaker domestic demand and decreased
competition from export markets, coupled with the decline in the
NZ$/US$ exchange rate (US$0.62 per NZ$1.00 versus US$0.63 per
NZ$1.00). Excluding the impact of foreign exchange rates, domestic
sawtimber prices decreased 3% versus the prior year period. First
quarter non-timber / carbon credit sales totaled $3.5 million
versus $0.3 million in the prior year period. Operating income of
$7.4 million increased $8.1 million versus the prior year period
due to favorable foreign exchange impacts ($3.4 million), higher
carbon credit income ($3.3 million), the prior year write-off of
timber basis due to a tropical cyclone casualty event ($2.3
million), lower costs ($0.5 million), and lower depletion rates
($0.3 million), partially offset by lower net stumpage realizations
($1.7 million).
First quarter Adjusted EBITDA4 of $11.4 million was 88%, or $5.4
million, above the prior year period.
Real Estate
First quarter sales of $15.6 million decreased $0.7 million
versus the prior year period, while operating loss of $0.1 million
decreased $1.0 million versus the prior year period. Sales and
operating income decreased versus the prior year period due to
fewer acres sold (1,933 acres sold versus 2,087 acres sold in the
prior year period) and lower weighted-average prices ($5,774 per
acre versus $6,200 per acre in the prior year period), partially
offset by favorable deferred revenue adjustments.
Improved Development sales of $1.8 million consisted of two
transactions in the Heartwood development project south of
Savannah, Georgia, including a 3.1-acre multi-tenant retail parcel
for $1.0 million ($321,000 per acre) and 18 finished residential
lots for $0.8 million (a base price before true-up of $46,000 per
lot or $284,000 per acre). This compares to Improved Development
sales of $4.8 million in the prior year period.
Rural sales of $8.7 million consisted of 1,498 acres at an
average price of $5,828 per acre. This compares to prior year
period sales of $6.5 million, which consisted of 1,531 acres at an
average price of $4,245 per acre.
Timberland & Non-Strategic sales of $0.6 million consisted
of a 430-acre transaction for $1,421 per acre. This compares to
prior year period sales of $1.6 million, which consisted of a
528-acre transaction for $3,100 per acre.
First quarter Adjusted EBITDA4 of $4.6 million decreased $2.0
million versus the prior year period.
Trading
First quarter sales of $11.8 million decreased $0.8 million
versus the prior year period, primarily due to lower prices. Sales
volumes of 105,000 tons remained flat versus the prior year period.
The Trading segment generated breakeven results versus operating
income of $0.3 million in the prior year period.
Other Items
First quarter corporate and other operating expenses of $9.8
million increased $1.2 million versus the prior year period,
primarily due to higher compensation and benefits expenses and
professional services fees. Compensation and benefits expenses were
elevated versus the prior year quarter primarily due to the
acceleration of equity compensation expense for retirement-eligible
employees.
First quarter interest expense of $9.7 million decreased $2.0
million versus the prior year period, primarily due to lower
average outstanding debt.
First quarter net income tax benefit of $0.8 million versus
income tax expense of $1.1 million in the prior year period was
primarily due to a $1.2 million tax benefit associated with the
pension termination and settlement.
Update on Initiatives to Enhance Shareholder Value
We are continuing to make progress toward our $1 billion
disposition target, and we are actively evaluating several
large-scale transactions. Specifically, we are currently marketing
approximately 115,000 acres in Washington state, and we have
further identified approximately 100,000 acres in the U.S. South
that may be suitable for disposition. In addition, we are
evaluating strategic alternatives for our New Zealand joint venture
interest and have engaged a financial advisor to assist us with
this process. We expect to provide additional information as it
becomes available.
Outlook
“Following first quarter results that were largely in line with
our expectations, we believe we are on track to achieve our prior
full-year Adjusted EBITDA guidance,” added McHugh. “As indicated at
the beginning of the year, our full-year 2024 financial guidance
excludes the potential impact of any additional asset sales as part
of the $1 billion disposition target that we announced in November
2023.”
“In our Southern Timber segment, we are on track to achieve our
full-year volume guidance but anticipate lower quarterly harvest
volumes for the remainder of the year. We expect that pine stumpage
realizations will decrease modestly over the remainder of the year
due to a less favorable geographic mix and a relatively higher
proportion of thinning volume. Further, we continue to expect
higher non-timber income for full-year 2024 relative to full-year
2023 driven by growth in our land-based solutions business.”
“In our Pacific Northwest Timber segment, we remain on track to
achieve our full-year volume guidance as we expect harvest volumes
to increase during the second half of the year. We believe that
market conditions have generally stabilized, and we expect that
end-market demand will improve modestly over the course of the
year. We further expect weighted-average delivered log prices will
increase modestly into the second half of the year as mill
inventories continue to normalize.”
“In our New Zealand Timber segment, we are on track to achieve
our full-year volume guidance as we anticipate higher quarterly
harvest volumes for the remainder of the year. We expect
weighted-average log prices to decline modestly in the near term
before rebounding in the second half of the year due to lower
expected log supply into China. Following the recent pull back in
carbon credit pricing, we now anticipate the full-year contribution
from carbon credit sales to be comparable with the prior year.”
“In our Real Estate segment, we remain encouraged by the strong
interest in our development projects and rural properties. Overall,
there continues to be healthy demand for HBU properties and
timberland assets despite the higher interest rate environment.
Consistent with our prior guidance, we expect a significant uptick
in transaction volume and operating results in the second
quarter.”
Conference Call
A conference call and live audio webcast will be held on
Thursday, May 2, 2024 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 Saturday, June 1, 2024, by dialing
800-813-5525 (domestic) or 203-369-3346 (international), passcode:
4071.
Complimentary copies of Rayonier press releases and other
financial documents are also available by calling (904)
357-9100.
1"Net cost (recovery) on legal
settlements" reflects the net loss (gain) from litigation
regarding insurance claims.
2"Pension settlement charge, net of
tax" reflects the net loss recognized in connection with the
termination and settlement of the Company’s defined benefit
plan.
3"Pro forma net income adjustments
attributable to noncontrolling interests" are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
4"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.
5"Timber write-offs resulting from
casualty events" includes the write-off of merchantable and
pre-merchantable timber volume damaged by casualty events that
cannot be salvaged.
About Rayonier
Rayonier is a leading timberland real estate investment trust
with assets located in some of the most productive softwood timber
growing regions in the United States and New Zealand. As of March
31, 2024, Rayonier owned or leased under long-term agreements
approximately 2.7 million acres of timberlands located in the U.S.
South (1.85 million acres), U.S. Pacific Northwest (418,000 acres)
and New Zealand (422,000 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 geopolitical tensions,
including the war in Ukraine and escalating tensions between China
and Taiwan as well as in the Middle East; 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
and/or to complete dispositions; 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
March 31, 2024
(unaudited)
(millions of dollars, except per
share information)
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
SALES
$168.1
$467.4
$179.1
Costs and Expenses
Cost of sales
(133.2
)
(299.4
)
(149.2
)
Selling and general expenses
(19.0
)
(20.1
)
(16.8
)
Other operating income (expense), net
0.3
(2.7
)
(2.5
)
OPERATING INCOME
16.2
145.2
10.6
Interest expense, net
(9.7
)
(11.6
)
(11.7
)
Interest and other miscellaneous (expense)
income, net
(5.0
)
(1.0
)
9.6
INCOME BEFORE INCOME TAXES
1.5
132.6
8.5
Income tax benefit (expense)
0.8
(3.4
)
(1.1
)
NET INCOME
2.3
129.2
7.4
Less: Net income attributable to
noncontrolling interests in the operating partnership
—
(2.1
)
(0.2
)
Less: Net (income) loss attributable to
noncontrolling interests in consolidated affiliates
(0.9
)
(0.2
)
1.1
NET INCOME ATTRIBUTABLE TO RAYONIER
INC.
$1.4
$126.9
$8.3
EARNINGS PER COMMON SHARE
Basic earnings per share attributable to
Rayonier Inc.
$0.01
$0.86
$0.06
Diluted earnings per share attributable to
Rayonier Inc.
$0.01
$0.85
$0.06
Pro forma net income per share (a)
$0.05
$0.17
$0.01
Weighted Average Common Shares used for
determining
Basic EPS
148,567,375
148,296,110
147,377,448
Diluted EPS (b)
151,376,049
151,173,460
151,079,129
(a)
Pro forma net income per share is a
non-GAAP measure. See Schedule F for definition and reconciliation
to the nearest GAAP measure.
(b)
Diluted earnings per share is calculated
based on the weighted average number of shares of common stock
outstanding combined with the incremental weighted average number
of shares that would have been outstanding assuming all potentially
dilutive securities (including Redeemable Operating Partnership
Units) were converted into shares of common stock at the earliest
date possible. As of March 31, 2024, there were 148,649,321 common
shares and 2,093,522 Redeemable Operating Partnership Units
outstanding.
A
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
March 31, 2024
(unaudited)
(millions of dollars)
March 31,
December 31,
2024
2023
Assets
Cash and cash equivalents
$159.9
$207.7
Assets held for sale
10.0
9.9
Other current assets
110.0
99.3
Timber and timberlands, net of depletion
and amortization
2,959.1
3,004.3
Higher and better use timberlands and real
estate development investments
106.4
105.6
Property, plant and equipment
46.1
46.1
Less - accumulated depreciation
(19.6
)
(19.1
)
Net property, plant and equipment
26.5
27.0
Restricted cash
0.7
0.7
Right-of-use assets
90.3
95.5
Other assets
106.9
97.6
$3,569.8
$3,647.6
Liabilities, Noncontrolling Interests
in the Operating Partnership and Shareholders’ Equity
Other current liabilities
113.8
140.3
Long-term debt
1,362.0
1,365.8
Long-term lease liability
82.9
87.7
Other non-current liabilities
95.9
94.5
Noncontrolling interests in the operating
partnership
69.6
81.7
Total Rayonier Inc. shareholders’
equity
1,831.2
1,860.5
Noncontrolling interests in consolidated
affiliates
14.4
17.1
Total shareholders’ equity
1,845.6
1,877.6
$3,569.8
$3,647.6
B
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
March 31, 2024
(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, 2024
148,299,117
$1,497.7
$338.2
$24.6
$17.1
$1,877.6
Net income
—
—
1.4
—
0.9
2.3
Dividends ($0.285 per share)
—
—
(42.8
)
—
—
(42.8
)
Issuance of shares under incentive stock
plans
752
—
—
—
—
—
Stock-based compensation
—
3.2
—
—
—
3.2
Adjustment of noncontrolling interests in
the operating partnership
—
—
(0.3
)
—
—
(0.3
)
Other (a)
349,452
11.4
—
(2.2
)
(3.6
)
5.6
Balance, March 31, 2024
148,649,321
$1,512.3
$296.5
$22.4
$14.4
$1,845.6
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 (loss)
—
—
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
(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, pension and post-retirement benefit plans,
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 loss to noncontrolling interests
in the operating partnership. The three months ended March 31, 2024
and March 31, 2023 also includes the redemption of 350,376 and
729,551 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
March 31, 2024
(unaudited)
(millions of dollars)
Three Months Ended March 31,
2024
2023
Cash provided by operating
activities:
Net income
$2.3
$7.4
Depreciation, depletion and
amortization
37.1
37.6
Non-cash cost of land and improved
development
3.0
4.2
Timber write-offs resulting from casualty
events
—
2.3
Stock-based incentive compensation
expense
3.2
2.5
Deferred income taxes
(1.0
)
(1.2
)
Other items to reconcile net income to
cash provided by operating activities
7.5
0.7
Changes in working capital and other
assets and liabilities
0.2
10.5
52.3
64.0
Cash used for investing
activities:
Capital expenditures
(18.9
)
(18.7
)
Real estate development investments
(5.5
)
(7.8
)
Purchase of timberlands
—
(8.7
)
Other
0.4
3.0
(24.0
)
(32.2
)
Cash used for financing
activities:
Dividends paid (a)
(72.3
)
(42.1
)
Distributions to noncontrolling interests
in the operating partnership (b)
(1.1
)
(0.9
)
Distributions to noncontrolling interests
in consolidated affiliates
(1.7
)
—
Other
—
(0.1
)
(75.1
)
(43.1
)
Effect of exchange rate changes on cash
and restricted cash
(1.0
)
(0.4
)
Cash, cash equivalents and restricted
cash:
Change in cash, cash equivalents and
restricted cash
(47.8
)
(11.7
)
Balance, beginning of year
208.4
115.4
Balance, end of period
$160.6
$103.7
(a)
The three months ended March 31, 2024
includes an additional cash dividend of $0.20 per common share,
totaling $29.8 million. The additional dividend was paid on January
12, 2024, to shareholders of record on December 29, 2023.
(b)
The three months ended March 31, 2024
includes an additional cash distribution of $0.20 per operating
partnership unit, totaling $0.5 million. The additional
distribution was paid on January 12, 2024, to holders of record on
December 29, 2023.
D
RAYONIER INC. AND
SUBSIDIARIES
BUSINESS SEGMENT SALES, PRO
FORMA SALES, OPERATING INCOME,
PRO FORMA OPERATING INCOME AND
ADJUSTED EBITDA
March 31, 2024
(unaudited)
(millions of dollars)
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
Sales
Southern Timber
$70.0
$60.0
$71.8
Pacific Northwest Timber
25.2
28.1
34.4
New Zealand Timber
45.7
60.0
44.1
Real Estate
15.6
310.5
16.3
Trading
11.8
8.9
12.6
Intersegment Eliminations
(0.1
)
(0.1
)
(0.1
)
Sales
$168.1
$467.4
$179.1
Pro forma sales (a)
Southern Timber
$70.0
$60.0
$71.8
Pacific Northwest Timber
25.2
28.1
34.4
New Zealand Timber
45.7
60.0
44.1
Real Estate
15.6
68.3
16.3
Trading
11.8
8.9
12.6
Intersegment Eliminations
(0.1
)
(0.1
)
(0.1
)
Pro forma sales
$168.1
$225.2
$179.1
Operating income (loss)
Southern Timber
$23.0
$13.7
$22.2
Pacific Northwest Timber
(4.4
)
(2.5
)
(3.5
)
New Zealand Timber
7.4
6.8
(0.7
)
Real Estate
(0.1
)
137.9
0.9
Trading
—
0.1
0.3
Corporate and Other
(9.8
)
(10.8
)
(8.6
)
Operating income
$16.2
$145.2
$10.6
Pro forma operating income (loss)
(a)
Southern Timber
$23.0
$13.7
$22.2
Pacific Northwest Timber
(4.4
)
(2.5
)
(3.5
)
New Zealand Timber
7.4
6.8
1.6
Real Estate
(0.1
)
32.8
0.9
Trading
—
0.1
0.3
Corporate and Other
(9.8
)
(10.8
)
(8.6
)
Pro forma operating income
$16.2
$40.1
$12.9
Adjusted EBITDA (a)
Southern Timber
$44.8
$32.0
$42.8
Pacific Northwest Timber
4.7
6.2
7.1
New Zealand Timber
11.4
12.1
6.1
Real Estate
4.6
53.5
6.6
Trading
—
0.1
0.3
Corporate and Other
(9.3
)
(10.3
)
(8.2
)
Adjusted EBITDA
$56.2
$93.7
$54.7
(a)
Pro forma sales, Pro forma operating
income (loss) and Adjusted EBITDA are non-GAAP measures. See
Schedule F for definitions and reconciliations.
E
RAYONIER INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
March 31, 2024
(unaudited)
(millions of dollars, except per
share information)
LIQUIDITY MEASURES:
Three Months Ended
March 31,
March 31,
2024
2023
Cash Provided by Operating
Activities
$52.3
$64.0
Working capital and other balance sheet
changes
2.1
(5.8
)
Net cost (recovery) on legal settlements
(a)
1.3
(9.1
)
Capital expenditures (b)
(18.9
)
(18.7
)
Cash Available for Distribution
(c)
$36.8
$30.4
Net Income
$2.3
$7.4
Interest, net and miscellaneous income
7.7
11.2
Income tax (benefit) expense (d)
(0.8
)
1.1
Depreciation, depletion and
amortization
37.1
37.6
Non-cash cost of land and improved
development
3.0
4.2
Non-operating expense (income) (e)
7.0
(9.1
)
Timber write-offs resulting from casualty
events (f)
—
2.3
Adjusted EBITDA (g)
$56.2
$54.7
Cash interest received (paid), net (h)
1.3
(3.4
)
Cash taxes paid
(1.8
)
(2.2
)
Capital expenditures (b)
(18.9
)
(18.7
)
Cash Available for Distribution
(c)
$36.8
$30.4
Cash Available for Distribution
(c)
$36.8
$30.4
Real estate development investments
(5.5
)
(7.8
)
Cash Available for Distribution after
real estate development investments
$31.3
$22.7
PRO FORMA SALES (i):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Intersegment
Eliminations
Total
March 31, 2024
Sales
$70.0
$25.2
$45.7
$15.6
$11.8
($0.1
)
$168.1
Pro forma sales
$70.0
$25.2
$45.7
$15.6
$11.8
($0.1
)
$168.1
December 31, 2023
Sales
$60.0
$28.1
$60.0
$310.5
$8.9
($0.1
)
$467.4
Large Dispositions (j)
—
—
—
(242.2
)
—
—
(242.2
)
Pro forma sales
$60.0
$28.1
$60.0
$68.3
$8.9
($0.1
)
$225.2
March 31, 2023
Sales
$71.8
$34.4
$44.1
$16.3
$12.6
($0.1
)
$179.1
Pro forma sales
$71.8
$34.4
$44.1
$16.3
$12.6
($0.1
)
$179.1
PRO FORMA NET INCOME (k):
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 2023
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
Net Income Attributable to Rayonier
Inc.
$1.4
$0.01
$126.9
$0.85
$8.3
$0.06
Large Dispositions (j)
—
—
(105.1
)
(0.70
)
—
—
Net cost (recovery) on legal settlements
(a)
1.3
0.01
(0.2
)
—
(9.1
)
(0.06
)
Pension settlement charges, net of tax
(l)
4.5
0.03
2.0
0.01
—
—
Timber write-offs resulting from casualty
events (f)
—
—
—
—
2.3
0.02
Pro forma net income adjustments
attributable to noncontrolling interests (m)
(0.1
)
—
1.7
—
(0.4
)
(0.01
)
Pro Forma Net Income
$7.0
$0.05
$25.4
$0.17
$1.1
$0.01
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (n) (g):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Corporate and
Other
Total
March 31, 2024
Operating income (loss)
$23.0
($4.4
)
$7.4
($0.1
)
—
($9.8
)
$16.2
Depreciation, depletion and
amortization
21.8
9.1
4.0
1.7
—
0.4
37.1
Non-cash cost of land and improved
development
—
—
—
3.0
—
—
3.0
Adjusted EBITDA
$44.8
$4.7
$11.4
$4.6
—
($9.3
)
$56.2
December 31, 2023
Operating income (loss)
$13.7
($2.5
)
$6.8
$137.9
$0.1
($10.8
)
$145.2
Large Dispositions (j)
—
—
—
(105.1
)
—
—
(105.1
)
Pro forma operating income (loss)
$13.7
($2.5
)
$6.8
$32.8
$0.1
($10.8
)
$40.1
Depreciation, depletion and
amortization
18.3
8.7
5.3
11.1
—
0.5
44.0
Non-cash cost of land and improved
development
—
—
—
9.6
—
—
9.6
Adjusted EBITDA
$32.0
$6.2
$12.1
$53.5
$0.1
($10.3
)
$93.7
March 31, 2023
Operating income (loss)
$22.2
($3.5
)
($0.7
)
$0.9
$0.3
($8.6
)
$10.6
Timber write-offs resulting from casualty
events (f)
—
—
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
(a)
“Net cost (recovery) on legal settlements”
reflects the net loss (gain) from litigation regarding insurance
claims.
(b)
“Capital expenditures” exclude timberland
acquisitions of $8.7 million during the three months ended March
31, 2023.
(c)
“Cash Available for Distribution” (CAD) is
defined as cash provided by operating activities adjusted for
capital spending (excluding timberland acquisitions and real estate
development investments) and working capital and other balance
sheet changes. CAD is a non-GAAP measure of cash generated during a
period that is available for common stock dividends, distributions
to operating partnership unitholders, distributions to
noncontrolling interests, repurchase of the Company's common
shares, debt reduction, timberland acquisitions and real estate
development investments. CAD is not necessarily indicative of the
CAD that may be generated in future periods.
(d)
The three months ended March 31, 2024
includes a $1.2 million income tax benefit related to the pension
settlement.
(e)
The three months ended March 31, 2024
includes $5.7 million of pension settlement charges and $1.3
million of net costs associated with legal settlements. The three
months ended March 31, 2023 includes $9.1 million of net recoveries
associated with legal settlements.
(f)
“Timber write-offs resulting from casualty
events” includes the write-off of merchantable and pre-merchantable
timber volume damaged by casualty events that cannot be
salvaged.
(g)
“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.
(h)
“Cash interest received (paid), net” is
presented net of patronage refunds received of $8.1 million and
$6.1 million during the three months ended March 31, 2024 and March
31, 2023, respectively. In addition, cash interest received (paid),
net is presented net of cash interest received of $2.1 million and
$0.4 million during the three months ended March 31, 2024 and March
31, 2023, respectively.
(i)
“Pro forma revenue (sales)” is defined as
revenue (sales) adjusted for 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.
(j)
“Large Dispositions” are defined as
transactions involving the sale of productive timberland assets
that exceed $20 million in size and do not reflect a demonstrable
premium relative to timberland value.
(k)
“Pro forma net income” is defined as net
income attributable to Rayonier Inc. adjusted for its proportionate
share of the net costs (recoveries) associated with legal
settlements, timber write-offs resulting from casualty events,
pension settlement charges 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)
“Pension settlement charges, net of tax"
reflects the net loss recognized in connection with the termination
and settlement of the Company’s defined benefit plan.
(m)
“Pro forma net income adjustments
attributable to noncontrolling interests” are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
(n)
“Pro forma operating income (loss)” is
defined as operating income (loss) adjusted for 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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240430565116/en/
Investors/Media Collin Mings 904-357-9100
investorrelations@rayonier.com
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