- First quarter net income attributable to Rayonier of $8.3
million ($0.06 per share) on revenues of $179.1 million
- First quarter pro forma net income of $1.1 million ($0.01 per
share)
- First quarter operating income of $10.6 million, pro forma
operating income of $12.9 million, and Adjusted EBITDA of $54.7
million
- First quarter cash provided by operations of $64.0 million and
cash available for distribution (CAD) of $30.0 million
Rayonier Inc. (NYSE:RYN) today reported first quarter net income
attributable to Rayonier of $8.3 million, or $0.06 per share, on
revenues of $179.1 million. This compares to net income
attributable to Rayonier of $29.3 million, or $0.20 per share, on
revenues of $222.0 million in the prior year quarter.
The first quarter results included a $9.1 million net recovery
associated with a legal settlement and a $2.3 million loss from a
timber write-off resulting from a tropical cyclone casualty event
in New Zealand.1 Excluding these items and adjusting for pro forma
net income adjustments attributable to noncontrolling interests,2
first quarter pro forma net income3 was $1.1 million, or $0.01 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))
March 31, 2023
March 31, 2022
$
EPS
$
EPS
Revenues
$179.1
$222.0
Net income attributable to Rayonier
$8.3
$0.06
$29.3
$0.20
Net recovery on legal settlement
(9.1
)
(0.06
)
—
—
Timber write-off resulting from a casualty
event1
2.3
0.02
—
—
Pro forma net income adjustments
attributable to noncontrolling interests2
(0.4
)
(0.01
)
—
—
Pro forma net income3
$1.1
$0.01
$29.3
$0.20
First quarter operating income was $10.6 million versus $45.3
million in the prior year period. First quarter operating income
included a $2.3 million loss from a timber write-off resulting from
a tropical cyclone casualty event in New Zealand.1 Excluding this
item, pro forma operating income3 was $12.9 million versus $45.3
million in the prior year period. First quarter Adjusted EBITDA3
was $54.7 million versus $98.1 million in the prior year
period.
The following table summarizes operating income (loss), pro
forma operating income (loss),3 and Adjusted EBITDA3 for the
current quarter and comparable prior year period:
Three Months Ended March
31,
Operating Income
(Loss)
Pro forma Operating Income
(Loss)3
Adjusted EBITDA3
(millions of dollars)
2023
2022
2023
2022
2023
2022
Southern Timber
$22.2
$30.3
$22.2
$30.3
$42.8
$48.4
Pacific Northwest Timber
(3.5
)
6.6
(3.5
)
6.6
7.1
21.5
New Zealand Timber
(0.7
)
5.4
1.6
5.4
6.1
10.4
Real Estate
0.9
10.2
0.9
10.2
6.6
24.7
Trading
0.3
0.4
0.3
0.4
0.3
0.4
Corporate and Other
(8.6
)
(7.6
)
(8.6
)
(7.6
)
(8.2
)
(7.2
)
Total
$10.6
$45.3
$12.9
$45.3
$54.7
$98.1
Cash provided by operating activities was $64.0 million versus
$49.7 million in the prior year period. Cash available for
distribution (CAD)3 was $30.0 million, which decreased $34.5
million versus the prior year period due to lower Adjusted EBITDA3
($43.4 million) and higher capital expenditures ($3.1 million),
partially offset by lower cash taxes paid ($11.8 million) and lower
cash interest paid ($0.1 million).
“Our team navigated numerous market challenges throughout the
first quarter,” said David Nunes, CEO. “Amid weaker end-market
demand and continued macroeconomic headwinds, the total Adjusted
EBITDA generated by our Timber segments collectively declined 30%
relative to an extraordinarily strong first quarter in 2022.
Southern Timber Adjusted EBITDA declined $5.6 million relative to
the prior year quarter, as weaker demand for pulp products and
lumber coupled with drier weather conditions drove a 14% reduction
in net stumpage prices. Pacific Northwest Timber Adjusted EBITDA
fell $14.4 million versus the prior year quarter, driven by 24%
lower harvest volumes and a 12% decline in domestic sawtimber
prices, as both domestic and export markets weakened.”
“In our New Zealand Timber segment, Adjusted EBITDA declined
$4.3 million versus the prior year quarter due to lower carbon
credit sales, unfavorable foreign exchange impacts, and 7% lower
harvest volumes resulting from the impacts of Cyclone Gabrielle,
which struck the North Island of New Zealand in February. While
delivered export sawtimber prices also declined by roughly 11%,
stumpage realizations were relatively flat as shipping costs
returned to more normalized levels.”
“Real Estate segment Adjusted EBITDA was $18.1 million below the
prior year quarter, as higher weighted average per-acre prices in
the current quarter were more than offset by 76% fewer acres
sold.”
“Overall, Adjusted EBITDA of $54.7 million declined 44% relative
to an extraordinarily strong first quarter 2022.”
Southern Timber
First quarter sales of $71.8 million decreased $4.9 million, or
6%, versus the prior year period. Harvest volumes of 1.89 million
tons were flat versus the prior year period. Average pine sawtimber
stumpage realizations decreased 11% to $31.57 per ton versus $35.46
per ton in the prior year period, primarily due to drier weather
conditions, softer demand from sawmills, and decreased competition
from pulp mills for chip-n-saw volume. Average pine pulpwood
stumpage realizations decreased 28% to $17.32 per ton versus $24.11
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 $24.03 per ton versus $27.94 per ton in the prior
year period. Operating income of $22.2 million decreased $8.1
million versus the prior year period due to lower net stumpage
realizations ($7.4 million), higher depletion rates ($2.6 million),
and higher lease expense and other costs ($1.8 million), partially
offset by higher non-timber income ($3.7 million).
First quarter Adjusted EBITDA3 of $42.8 million was 12%, or $5.6
million, below the prior year period.
Pacific Northwest Timber
First quarter sales of $34.4 million decreased $11.9 million, or
26%, versus the prior year period. Harvest volumes decreased 24% to
384,000 tons versus 505,000 tons in the prior year period as some
planned harvests were deferred in response to market conditions.
Average delivered prices for domestic sawtimber decreased 12% to
$93.12 per ton versus $105.82 per ton in the prior year period due
to softer domestic demand and less competition from export markets.
Average delivered pulpwood prices increased 28% to $48.23 per ton
versus $37.69 per ton in the prior year period due to lower sawmill
operating rates and increased competition for a limited supply of
smaller-sized logs; however, pulpwood prices in the first quarter
were well below the extraordinarily high levels realized in the
second half of 2022. An operating loss of $3.5 million versus
operating income of $6.6 million in the prior year period was
primarily due to lower net stumpage realizations ($7.0 million),
lower volumes ($2.5 million), higher costs ($1.1 million), and
lower non-timber income ($0.2 million), partially offset by lower
depletion rates ($0.7 million).
First quarter Adjusted EBITDA3 of $7.1 million was 67%, or $14.4
million, below the prior year period.
New Zealand Timber
First quarter sales of $44.1 million decreased $7.3 million, or
14%, versus the prior year period. Harvest volumes decreased 7% to
481,000 tons versus 515,000 tons in the prior year period,
primarily due to lost production days resulting from Cyclone
Gabrielle. Average delivered prices for export sawtimber decreased
11% to $112.97 per ton versus $127.59 per ton in the prior year
period, driven by weaker demand in China. Average delivered prices
for domestic sawtimber declined 6% to $71.58 per ton versus $75.99
per ton in the prior year period. The decrease in domestic
sawtimber prices (in U.S. dollar terms) was primarily driven by the
decline in the NZ$/US$ exchange rate (US$0.63 per NZ$1.00 versus
US$0.67 per NZ$1.00). Excluding the impact of foreign exchange
rates, domestic sawtimber prices remained flat versus the prior
year period. An operating loss of $0.7 million versus operating
income of $5.4 million in the prior year period was primarily due
to a timber write-off resulting from a tropical cyclone casualty
event ($2.3 million),1 lower carbon credit sales ($1.3 million),
unfavorable foreign exchange impacts ($0.9 million), higher costs
($0.8 million), and lower volumes ($0.8 million).
First quarter Adjusted EBITDA3 of $6.1 million was 41%, or $4.3
million, below the prior year period.
Real Estate
First quarter sales of $16.3 million decreased $17.9 million
versus the prior year period, while operating income of $0.9
million decreased $9.3 million versus the prior year period. Sales
and operating income decreased versus the prior year period due to
a significantly lower number of acres sold (2,087 acres sold versus
8,734 acres sold in the prior year period), partially offset by a
substantial increase in weighted-average prices ($6,200 per acre
versus $3,815 per acre in the prior year period).
Improved Development sales of $4.8 million consisted of a
27-acre multifamily apartment site for $4.5 million ($169,000 per
acre) and 6 residential lots for $0.3 million ($50,000 per lot or
$297,000 per acre) in our Heartwood development project south of
Savannah, Georgia. This compares to Improved Development sales of
$5.0 million in the prior year period.
Rural sales of $6.5 million consisted of 1,531 acres at an
average price of $4,245 per acre. This compares to prior year
period sales of $16.9 million, which consisted of 4,751 acres at an
average price of $3,567 per acre.
Timberland & Non-Strategic sales of $1.6 million consisted
of a 528-acre transaction for $3,100 per acre. This compares to
prior year period sales of $11.4 million, which consisted of 3,966
acres at an average price of $2,874 per acre.
First quarter Adjusted EBITDA3 of $6.6 million was $18.1 million
below the prior year period.
Trading
First quarter sales of $12.6 million decreased $0.9 million
versus the prior year period, due to lower volumes and prices.
Sales volumes decreased 6% to 105,000 tons versus 112,000 tons in
the prior year period. The Trading segment generated operating
income and Adjusted EBITDA3 of $0.3 million versus $0.4 million in
the prior year period.
Other Items
First quarter corporate and other operating expenses of $8.6
million increased $1.0 million versus the prior year period,
primarily due to higher compensation and benefits expense ($0.4
million) and higher IT and other expenses ($0.6 million).
First quarter interest expense of $11.7 million increased $3.4
million versus the prior year period, primarily due to higher
average outstanding debt and a higher weighted-average interest
rate.
First quarter other interest and miscellaneous income included
$9.1 million of a net recovery associated with a legal
settlement.
First quarter income tax expense of $1.1 million decreased $4.5
million versus the prior year period. The New Zealand subsidiary is
the primary driver of income tax expense.
Outlook
“Based on our first quarter results and our expectations for the
balance of the year, we now anticipate full-year Adjusted EBITDA
and pro forma EPS toward the lower end of our prior guidance
range,” added Nunes.
“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. Over the near-term, we
expect that weighted-average net stumpage realizations will remain
below first quarter levels as demand, particularly for pulpwood,
has been negatively impacted by the macroeconomic environment. We
continue to anticipate higher non-timber income for full-year 2023
as compared to full-year 2022.”
“In our Pacific Northwest Timber segment, we expect harvest
volumes toward the lower end of our prior guidance, as we have
deferred some planned harvests in response to unfavorable market
conditions. Following the pullback in pricing to start the year, we
anticipate that weighted-average delivered log prices will modestly
improve from first quarter levels over the balance of 2023 as
end-market demand and mill inventories normalize.”
“In our New Zealand Timber segment, we expect harvest volumes
toward the lower end of our prior guidance given the lost
production days resulting from Cyclone Gabrielle. We anticipate
that weighted-average delivered log prices will remain relatively
flat as compared to the first quarter over the balance of the year.
We further anticipate a higher contribution from carbon credit
sales over the balance of the year following no activity in the
first quarter.”
“In our Real Estate segment, we remain encouraged by the
interest in our development projects and rural properties. Overall,
there continues to be strong demand for HBU properties and
timberland assets despite the higher interest rate environment.
Consistent with our prior guidance, we expect significantly higher
transaction volume and operating results in the second half of the
year from this segment.”
“In summary, while the current macroeconomic backdrop and
near-term outlook are challenging, we remain optimistic about the
long-term prospects for our business. Specifically, we believe that
long-term housing fundamentals coupled with burgeoning business
opportunities around nature-based solutions should support
long-term growth in timberland cash flows and corresponding
valuations over time.”
Conference Call
A conference call and live audio webcast will be held on
Thursday, May 4, 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, June 4, 2023, by dialing
800-819-5739 (domestic) or 203-369-3350 (international), passcode:
3078.
Complimentary copies of Rayonier press releases and other
financial documents are also available by calling (904)
357-9100.
1"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.
2"Pro forma net income adjustments attributable to
noncontrolling interests" are the proportionate share of pro forma
items that are attributable to noncontrolling interests.
3"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.
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, 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, 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
March 31, 2023
(unaudited)
(millions of dollars, except per
share information)
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
SALES
$179.1
$245.4
$222.0
Costs and Expenses
Cost of sales
(149.2
)
(180.9
)
(161.0
)
Selling and general expenses
(16.8
)
(15.7
)
(14.7
)
Other operating expense, net
(2.5
)
(4.7
)
(1.0
)
OPERATING INCOME
10.6
44.1
45.3
Interest expense
(11.7
)
(9.7
)
(8.3
)
Interest and other miscellaneous income
(expense), net
9.6
1.6
(0.5
)
INCOME BEFORE INCOME TAXES
8.5
36.0
36.5
Income tax expense
(1.1
)
(1.4
)
(5.5
)
NET INCOME
7.4
34.6
31.0
Less: Net income attributable to
noncontrolling interests in the operating partnership
(0.2
)
(0.7
)
(0.7
)
Less: Net loss (income) attributable to
noncontrolling interests in consolidated affiliates
1.1
(0.8
)
(1.0
)
NET INCOME ATTRIBUTABLE TO RAYONIER
INC.
$8.3
$33.1
$29.3
EARNINGS PER COMMON SHARE
Basic earnings per share attributable to
Rayonier Inc.
$0.06
$0.23
$0.20
Diluted earnings per share attributable to
Rayonier Inc.
$0.06
$0.22
$0.20
Pro forma net income per share (a)
$0.01
$0.11
$0.20
Weighted Average Common Shares used for
determining
Basic EPS
147,377,448
146,765,131
145,430,171
Diluted EPS (b)
151,079,129
150,572,519
149,547,076
(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, 2023, there were 148,012,979 common
shares and 2,479,276 Redeemable Operating Partnership Units
outstanding.
A
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
March 31, 2023
(unaudited)
(millions of dollars)
March 31,
December 31,
2023
2022
Assets
Cash and cash equivalents
$98.7
$114.3
Assets held for sale
1.2
0.7
Other current assets
87.4
87.3
Timber and timberlands, net of depletion
and amortization
3,210.0
3,230.9
Higher and better use timberlands and real
estate development investments
119.7
115.1
Property, plant and equipment
44.7
44.7
Less - accumulated depreciation
(18.0
)
(17.5
)
Net property, plant and equipment
26.7
27.2
Restricted cash
5.0
1.2
Right-of-use assets
98.3
97.2
Other assets
100.2
115.5
$3,747.2
$3,789.4
Liabilities, Noncontrolling Interests
in the Operating Partnership and Shareholders’ Equity
Other current liabilities
96.8
95.3
Long-term debt
1,514.1
1,514.7
Long-term lease liability
89.9
88.8
Other non-current liabilities
109.1
104.1
Noncontrolling interests in the operating
partnership
82.5
105.8
Total Rayonier Inc. shareholders’
equity
1,840.6
1,865.4
Noncontrolling interests in consolidated
affiliates
14.2
15.3
Total shareholders’ equity
1,854.8
1,880.7
$3,747.2
$3,789.4
B
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
March 31, 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
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
(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 three
months ended March 31, 2023 also includes the redemption of 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, 2023
(unaudited)
(millions of dollars)
Three Months Ended March 31,
2023
2022
Cash provided by operating
activities:
Net income
$7.4
$31.0
Depreciation, depletion and
amortization
37.6
47.4
Non-cash cost of land and improved
development
4.2
5.4
Timber-write off resulting from a casualty
event
2.3
—
Stock-based incentive compensation
expense
2.5
2.8
Deferred income taxes
(1.2
)
(8.0
)
Other items to reconcile net income to
cash provided by operating activities
0.7
(2.1
)
Changes in working capital and other
assets and liabilities
10.5
(26.8
)
64.0
49.7
Cash used for investing
activities:
Capital expenditures
(18.7
)
(15.6
)
Real estate development investments
(7.8
)
(3.1
)
Purchase of timberlands
(8.7
)
(2.8
)
Other
3.0
2.6
(32.2
)
(18.9
)
Cash used for financing
activities:
Net decrease in debt
—
(122.9
)
Dividends paid
(42.1
)
(39.4
)
Distributions to noncontrolling interests
in the operating partnership
(0.9
)
(0.9
)
Proceeds from the issuance of common
shares under incentive stock plan
—
0.6
Proceeds from the issuance of common
shares under the “at-the-market” (ATM) equity offering program, net
of commissions and offering costs
—
30.9
Distributions to noncontrolling interests
in consolidated affiliates
—
(2.7
)
Other
(0.1
)
(0.3
)
(43.1
)
(134.7
)
Effect of exchange rate changes on cash
and restricted cash
(0.4
)
0.6
Cash, cash equivalents and restricted
cash:
Change in cash, cash equivalents and
restricted cash
(11.7
)
(103.3
)
Balance, beginning of year
115.4
369.1
Balance, end of period
$103.7
$265.8
D
RAYONIER INC. AND
SUBSIDIARIES
BUSINESS SEGMENT SALES, PRO
FORMA SALES, OPERATING INCOME,
PRO FORMA OPERATING INCOME AND
ADJUSTED EBITDA
March 31, 2023
(unaudited)
(millions of dollars)
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
Sales
Southern Timber
$71.8
$56.6
$76.8
Pacific Northwest Timber
34.4
42.4
46.3
New Zealand Timber
44.1
71.4
51.4
Real Estate
16.3
57.0
34.2
Trading
12.6
18.2
13.4
Intersegment Eliminations
(0.1
)
(0.2
)
(0.1
)
Sales
$179.1
$245.4
$222.0
Pro forma sales (a)
Southern Timber
$71.8
$56.6
$76.8
Pacific Northwest Timber
34.4
42.4
46.3
New Zealand Timber
44.1
71.4
51.4
Real Estate
16.3
26.5
34.2
Trading
12.6
18.2
13.4
Intersegment Eliminations
(0.1
)
(0.2
)
(0.1
)
Pro forma sales
$179.1
$214.9
$222.0
Operating income (loss)
Southern Timber
$22.2
$19.7
$30.3
Pacific Northwest Timber
(3.5
)
3.5
6.6
New Zealand Timber
(0.7
)
8.0
5.4
Real Estate
0.9
21.5
10.2
Trading
0.3
0.3
0.4
Corporate and Other
(8.6
)
(8.9
)
(7.6
)
Operating income
$10.6
$44.1
$45.3
Pro forma operating income (loss)
(a)
Southern Timber
$22.2
$19.7
$30.3
Pacific Northwest Timber
(3.5
)
3.1
6.6
New Zealand Timber
1.6
8.0
5.4
Real Estate
0.9
4.9
10.2
Trading
0.3
0.3
0.4
Corporate and Other
(8.6
)
(8.9
)
(7.6
)
Pro forma operating income
$12.9
$27.2
$45.3
Adjusted EBITDA (a)
Southern Timber
$42.8
$33.2
$48.4
Pacific Northwest Timber
7.1
15.5
21.5
New Zealand Timber
6.1
13.7
10.4
Real Estate
6.6
14.2
24.7
Trading
0.3
0.3
0.4
Corporate and Other
(8.2
)
(8.6
)
(7.2
)
Adjusted EBITDA
$54.7
$68.4
$98.1
(a)
Pro forma sales, Pro forma operating
income (loss) and Adjusted EBITDA are non-GAAP measures. See
Schedule F for definitions and reconciliations.
E
RAYONIER INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
March 31, 2023
(unaudited)
(millions of dollars, except per
share information)
LIQUIDITY MEASURES:
Three Months Ended
March 31,
March 31,
2023
2022
Cash Provided by Operating
Activities
$64.0
$49.7
Working capital and other balance sheet
changes
(15.3
)
30.4
Capital expenditures (a)
(18.7
)
(15.6
)
Cash Available for Distribution
(b)
$30.0
$64.5
Net Income
$7.4
$31.0
Interest, net and miscellaneous income
11.2
8.2
Income tax expense
1.1
5.5
Depreciation, depletion and
amortization
37.6
47.4
Non-cash cost of land and improved
development
4.2
5.4
Non-operating (income) expense (c)
(9.1
)
0.6
Timber write-off resulting from a casualty
event (d)
2.3
—
Adjusted EBITDA (e)
$54.7
$98.1
Cash interest paid (f)
(3.8
)
(3.9
)
Cash taxes paid
(2.2
)
(14.0
)
Capital expenditures (a)
(18.7
)
(15.6
)
Cash Available for Distribution
(b)
$30.0
$64.5
Cash Available for Distribution
(b)
$30.0
$64.5
Real estate development investments
(7.8
)
(3.1
)
Cash Available for Distribution after
real estate development investments
$22.2
$61.4
PRO FORMA SALES (g):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Intersegment
Eliminations
Total
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
December 31, 2022
Sales
$56.6
$42.4
$71.4
$57.0
$18.2
($0.2
)
$245.4
Large Dispositions (h)
—
—
—
(30.5
)
—
—
(30.5
)
Pro forma sales
$56.6
$42.4
$71.4
$26.5
$18.2
($0.2
)
$214.9
March 31, 2022
Sales
$76.8
$46.3
$51.4
$34.2
$13.4
($0.1
)
$222.0
Pro forma sales
$76.8
$46.3
$51.4
$34.2
$13.4
($0.1
)
$222.0
PRO FORMA NET INCOME (i):
Three Months Ended
March 31, 2023
December 31, 2022
March 31, 2022
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
Net Income Attributable to Rayonier
Inc.
$8.3
$0.06
$33.1
$0.22
$29.3
$0.20
Net recovery on legal settlement
(9.1
)
(0.06
)
—
—
—
—
Timber write-off and adjustments resulting
from casualty events (d)
2.3
0.02
(0.4
)
—
—
—
Large Dispositions (h)
—
—
(16.6
)
(0.11
)
—
—
Pro forma net income adjustments
attributable to noncontrolling interests (j)
(0.4
)
(0.01
)
0.4
—
—
—
Pro Forma Net Income
$1.1
$0.01
$16.5
$0.11
$29.3
$0.20
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (k) (e):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Corporate and
Other
Total
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
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 (d)
—
(0.4
)
—
—
—
—
(0.4
)
Large Dispositions (h)
—
—
—
(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
March 31, 2022
Operating income
$30.3
$6.6
$5.4
$10.2
$0.4
($7.6
)
$45.3
Depreciation, depletion and
amortization
18.1
14.9
5.0
9.1
—
0.3
47.4
Non-cash cost of land and improved
development
—
—
—
5.4
—
—
5.4
Adjusted EBITDA
$48.4
$21.5
$10.4
$24.7
$0.4
($7.2
)
$98.1
(a)
“Capital expenditures” exclude
timberland acquisitions of $8.7 million and $2.8 million during the
three months ended March 31, 2023 and March 31, 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 three months ended March 31,
2023 includes a $9.1 million net recovery associated with a legal
settlement.
(d)
“Timber write-offs and adjustments
resulting from casualty events” includes the write-off and
adjustments of merchantable and pre-merchantable timber volume
damaged by casualty events 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 $6.1 million and $5.5 million
during the three months ended March 31, 2023 and March 31, 2022,
respectively.
(g)
“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.
(h)
“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.
(i)
“Pro forma net income” is defined
as net income attributable to Rayonier Inc. adjusted for its
proportionate share of the net recovery associated with a legal
settlement, 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.
(j)
“Pro forma net income adjustments
attributable to noncontrolling interests” are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
(k)
“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/20230502006275/en/
Investors/Media Collin Mings 904-357-9100
investorrelations@rayonier.com
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