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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
May 1, 2024
COMMISSION FILE NUMBER
1-6780
(Rayonier Inc.)
COMMISSION FILE NUMBER:
333-237246
(Rayonier, L.P.)
RAYONIER INC
.
Incorporated in the State of
North Carolina
I.R.S. Employer Identification Number
13-2607329
RAYONIER, L.P.
Incorporated in the State of
Delaware
I.R.S. Employer Identification Number
91-1313292
1 Rayonier Way
Wildlight
,
Florida
32097
(Principal Executive Office)
Telephone Number: (
904
)
357-9100
Check the appropriate box below if the form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Securities Exchange Act
of 1934:
Title of each class Trading Symbol Exchange
Common Shares, no par value, of Rayonier Inc. RYN New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities
Act of 1933 ((s)230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 ((s)240.12b-2 of this chapter).
Rayonier Inc.: Emerging growth company
Rayonier, L.P.: Emerging growth company
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Table of Contents
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act.
Rayonier Inc.:
Rayonier, L.P.:
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Table of Contents
TABLE OF CONTENTS
PAGE
Item 2.02 Results of Operations and Financial Condition 1
Item 9.01 Financial Statements and Exhibits. 1
Signature 2
ITEM 2.02. Results of Operations and Financial Condition.
On May 1, 2024, Rayonier Inc. issued a press release announcing financial
results for the quarter ended March 31, 2024. A copy of the press release is
furnished herewith as Exhibit 99.1 and is incorporated by reference herein.
The information in this Item 2.02, including the accompanying exhibit, is
being furnished and shall not be deemed "filed" for the purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that Section. The information in this
Item 2.02 shall not be incorporated by reference into any registration
statement or other document filed pursuant to the Securities Act of 1933, as
amended, or the Exchange Act, regardless of any general incorporation language
in such filing.
ITEM 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Exhibit Description
99.1 Press release dated May 1, 2024.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
1
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Table of Contents
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of l934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
RAYONIER INC.
BY: /s/ APRIL TICE
April Tice
Senior Vice President and Chief Financial Officer
RAYONIER, L.P.
By: RAYONIER INC., its sole general partner
BY: /s/ APRIL TICE
April Tice
Senior Vice President and Chief Financial Officer
May 1, 2024
2
Exhibit 99.1
News Release
RAYONIER REPORTS FIRST QUARTER 2024 RESULTS
.
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
WILDLIGHT, FL - May 1, 2024 - 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 settlements
1
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 income
4
was $7.0 million, or $0.05 per share. This compares to pro forma net income
4
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 March March
dollars, except 31, 31,
earnings per 2024 2023
share (EPS))
$ EPS $ EPS
Revenues $168.1 $179.1
Net income $1.4 $0.01 $8.3 $0.06
attributable
to
Rayonier
Net cost 1.3 0.01 (9.1) (0.06)
(recovery)
on legal
settlements
1
Pension 4.5 0.03 - -
settlement
charge, net
of tax
2
Timber write-offs - - 2.3 0.02
resulting
from casualty
events
5
Pro forma net (0.1) - (0.4) (0.01)
income adjustments
attributable to
noncontrolling interests
3
Pro $7.0 $0.05 $1.1 $0.01
forma
net
income
4
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 income
4
was $12.9 million. First quarter Adjusted EBITDA
4
was $56.2 million versus $54.7 million in the prior year period.
1 Rayonier Way, Wildlight, FL 32097 904-357-9100
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The following table summarizes operating income (loss), pro forma operating
income (loss),
4
and Adjusted EBITDA
4
for the current quarter and comparable prior year period:
Three Months Ended March 31,
Operating Pro forma Operating Adjusted EBITDA
Income (Loss) Income (Loss) 4
4
(millions 2024 2023 2024 2023 2024 2023
of dollars)
Southern $23.0 $22.2 $23.0 $22.2 $44.8 $42.8
Timber
Pacific Northwest (4.4) (3.5) (4.4) (3.5) 4.7 7.1
Timber
New Zealand 7.4 (0.7) 7.4 1.6 11.4 6.1
Timber
Real (0.1) 0.9 (0.1) 0.9 4.6 6.6
Estate
Trading - 0.3 - 0.3 - 0.3
Corporate (9.8) (8.6) (9.8) (8.6) (9.3) (8.2)
and Other
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 EBITDA
4
($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 EBITDA
4
of $44.8 million was 5%, or $2.0 million, above the prior year period.
1 Rayonier Way, Wildlight, FL 32097 904-357-9100
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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 EBITDA
4
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 EBITDA
4
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 EBITDA
4
of $4.6 million decreased $2.0 million versus the prior year period.
1 Rayonier Way, Wildlight, FL 32097 904-357-9100
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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."
1 Rayonier Way, Wildlight, FL 32097 904-357-9100
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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.
1 Rayonier Way, Wildlight, FL 32097 904-357-9100
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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.
Contacts:
Investors/Media
Collin Mings
904-357-9100
investorrelations@rayonier.com
# # #
1 Rayonier Way, Wildlight, FL 32097 904-357-9100
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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 (133.2) (299.4) (149.2)
sales
Selling and (19.0) (20.1) (16.8)
general expenses
Other operating 0.3 (2.7) (2.5)
income (expense), net
OPERATING 16.2 145.2 10.6
INCOME
Interest (9.7) (11.6) (11.7)
expense, net
Interest and other miscellaneous (5.0) (1.0) 9.6
(expense) income, net
INCOME BEFORE 1.5 132.6 8.5
INCOME TAXES
Income tax benefit 0.8 (3.4) (1.1)
(expense)
NET INCOME 2.3 129.2 7.4
Less: Net income attributable to noncontrolling - (2.1) (0.2)
interests in the operating partnership
Less: Net (income) loss attributable to (0.9) (0.2) 1.1
noncontrolling interests in consolidated affiliates
NET INCOME ATTRIBUTABLE $1.4 $126.9 $8.3
TO RAYONIER INC.
EARNINGS PER
COMMON SHARE
Basic earnings per share $0.01 $0.86 $0.06
attributable to Rayonier Inc.
Diluted earnings per share $0.01 $0.85 $0.06
attributable to Rayonier Inc.
Pro forma net income $0.05 $0.17 $0.01
per share (a)
Weighted Average Common
Shares used for determining
Basic EPS 148,567,375 148,296,110 147,377,448
Diluted 151,376,049 151,173,460 151,079,129
EPS (b)
(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
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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
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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 Accumulated Noncontrolling Shareholders'
Earnings Other Interests Equity
Comprehensive in Consolidated
Income Affiliates
Shares Amount
Balance, 148,299,117 $1,497.7 $338.2 $24.6 $17.1 $1,877.6
January
1, 2024
Net - - 1.4 - 0.9 2.3
income
Dividends - - (42.8) - - (42.8)
($0.285
per
share)
Issuance of 752 - - - - -
shares under
incentive
stock plans
Stock-based - 3.2 - - - 3.2
compensation
Adjustment of - - (0.3) - - (0.3)
noncontrolling interests
in the operating
partnership
Other 349,452 11.4 - (2.2) (3.6) 5.6
(a)
Balance, 148,649,321 $1,512.3 $296.5 $22.4 $14.4 $1,845.6
March
31,
2024
Common Shares Retained Accumulated Noncontrolling Shareholders'
Earnings Other Interests Equity
Comprehensive in
Income Consolidated
Affiliates
Shares Amount
Balance, 147,282,631 $1,463.0 $366.6 $35.8 $15.3 $1,880.7
January
1, 2023
Issuance of 400 - - - - -
shares under the
"at-the-market"
(ATM) equity
offering
program, net of
commissions and
offering costs
Net - - 8.5 - (1.1) 7.4
income
(loss)
Net income - - (0.2) - - (0.2)
attributable
to
noncontrolling
interests
in the
operating
partnership
Dividends - - (42.2) - - (42.2)
($0.285
per
share)
Issuance 1,564 - - - - -
of
shares
under
incentive
stock
plans
Stock-based - 2.5 - - - 2.5
compensation
Adjustment - - (2.4) - - (2.4)
of
noncontrolling
interests
in the
operating
partnership
Other 728,384 23.8 - (14.8) - 9.0
(a)
Balance, 148,012,979 $1,489.3 $330.3 $21.0 $14.2 $1,854.8
March
31,
2023
(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
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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
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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
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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 Southern Pacific New Real Trading Intersegment Total
Months Timber Northwest Zealand Estate Eliminations
Ended Timber Timber
March
31,
2024
Sales $70.0 $25.2 $45.7 $15.6 $11.8 ($0.1) $168.1
Pro $70.0 $25.2 $45.7 $15.6 $11.8 ($0.1) $168.1
forma
sales
December
31,
2023
Sales $60.0 $28.1 $60.0 $310.5 $8.9 ($0.1) $467.4
Large - - - (242.2) - - (242.2)
Dispositions
(j)
Pro $60.0 $28.1 $60.0 $68.3 $8.9 ($0.1) $225.2
forma
sales
March
31,
2023
Sales $71.8 $34.4 $44.1 $16.3 $12.6 ($0.1) $179.1
Pro $71.8 $34.4 $44.1 $16.3 $12.6 ($0.1) $179.1
forma
sales
F
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PRO FORMA NET
INCOME (k):
Three Months Ended
March 31, December March 31,
2024 31, 2023 2023
$ Per $ Per $ Per
Diluted Diluted Diluted
Share Share Share
Net Income $1.4 $0.01 $126.9 $0.85 $8.3 $0.06
Attributable
to Rayonier
Inc.
Large - - (105.1) (0.70) - -
Dispositions
(j)
Net cost 1.3 0.01 (0.2) - (9.1) (0.06)
(recovery) on
legal
settlements (a)
Pension 4.5 0.03 2.0 0.01 - -
settlement
charges, net
of tax (l)
Timber write-offs - - - - 2.3 0.02
resulting
from casualty
events (f)
Pro forma net (0.1) - 1.7 - (0.4) (0.01)
income adjustments
attributable to
noncontrolling interests (m)
Pro $7.0 $0.05 $25.4 $0.17 $1.1 $0.01
Forma
Net
Income
PRO FORMA OPERATING
INCOME (LOSS)
AND ADJUSTED
EBITDA (n) (g):
Three Southern Pacific New Real Trading Corporate Total
Months Timber Northwest Zealand Estate and
Ended Timber Timber Other
March
31,
2024
Operating $23.0 ($4.4) $7.4 ($0.1) - ($9.8) $16.2
income
(loss)
Depreciation, 21.8 9.1 4.0 1.7 - 0.4 37.1
depletion
and
amortization
Non-cash cost - - - 3.0 - - 3.0
of land and
improved
development
Adjusted $44.8 $4.7 $11.4 $4.6 - ($9.3) $56.2
EBITDA
December
31,
2023
Operating $13.7 ($2.5) $6.8 $137.9 $0.1 ($10.8) $145.2
income
(loss)
Large - - - (105.1) - - (105.1)
Dispositions
(j)
Pro forma $13.7 ($2.5) $6.8 $32.8 $0.1 ($10.8) $40.1
operating
income
(loss)
Depreciation, 18.3 8.7 5.3 11.1 - 0.5 44.0
depletion
and
amortization
Non-cash cost - - - 9.6 - - 9.6
of land and
improved
development
Adjusted $32.0 $6.2 $12.1 $53.5 $0.1 ($10.3) $93.7
EBITDA
March
31,
2023
Operating $22.2 ($3.5) ($0.7) $0.9 $0.3 ($8.6) $10.6
income
(loss)
Timber write-offs - - 2.3 - - - 2.3
resulting
from casualty
events (f)
Pro forma $22.2 ($3.5) $1.6 $0.9 $0.3 ($8.6) $12.9
operating
income
(loss)
Depreciation, 20.6 10.6 4.5 1.5 - 0.4 37.6
depletion
and
amortization
Non-cash cost - - - 4.2 - - 4.2
of land and
improved
development
Adjusted $42.8 $7.1 $6.1 $6.6 $0.3 ($8.2) $54.7
EBITDA
(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.
F
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(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
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