- Third quarter net income attributable to Rayonier of $28.8
million ($0.19 per share) on revenues of $195.0 million
- Third quarter pro forma net income of $18.1 million ($0.12 per
share)
- Third quarter operating income of $27.6 million, pro forma
operating income of $28.5 million, and Adjusted EBITDA of $71.8
million
- Year-to-date cash provided by operations of $173.8 million and
cash available for distribution (CAD) of $105.7 million
- Updating full-year Adjusted EBITDA guidance to reflect current
outlook and disposition activity announced concurrent with this
release
Rayonier Inc. (NYSE:RYN) today reported third quarter net income
attributable to Rayonier of $28.8 million, or $0.19 per share, on
revenues of $195.0 million. This compares to net income
attributable to Rayonier of $19.2 million, or $0.13 per share, on
revenues of $201.6 million in the prior year quarter.
The third quarter results included $12.0 million of net
recoveries associated with legal settlements,1 $0.9 million of
costs related to disposition initiatives,2 and a $0.3 million
pension settlement charge.3 Excluding these items and adjusting for
pro forma net income adjustments attributable to noncontrolling
interests,4 third quarter pro forma net income5 was $18.1 million,
or $0.12 per share. This compares to pro forma net income5 of $19.2
million, or $0.13 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))
September 30, 2024
September 30, 2023
$
EPS
$
EPS
Revenues
$195.0
$201.6
Net income attributable to Rayonier
$28.8
$0.19
$19.2
$0.13
Net recovery on legal settlements1
(12.0
)
(0.08
)
—
—
Costs related to disposition
initiatives2
0.9
0.01
—
—
Pension settlement charge3
0.3
—
—
—
Pro forma net income adjustments
attributable to noncontrolling interests4
0.1
—
—
—
Pro forma net income5
$18.1
$0.12
$19.2
$0.13
Third quarter operating income was $27.6 million versus $35.4
million in the prior year period. Third quarter operating income
included $0.9 million of costs related to disposition initiatives.2
Excluding this item, pro forma operating income5 was $28.5 million.
This compares to pro forma operating income5 of $35.4 million in
the prior year period. Third quarter Adjusted EBITDA5 was $71.8
million versus $78.9 million in the prior year period.
The following table summarizes operating income (loss), pro
forma operating income (loss),5 and Adjusted EBITDA5 for the
current quarter and comparable prior year period:
Three Months Ended September
30,
Operating Income
(Loss)
Pro forma Operating Income
(Loss)5
Adjusted EBITDA5
(millions of dollars)
2024
2023
2024
2023
2024
2023
Southern Timber
$19.8
$18.6
$19.8
$18.6
$37.9
$37.8
Pacific Northwest Timber
0.8
(0.6
)
0.8
(0.6
)
8.7
7.8
New Zealand Timber
8.9
17.6
8.9
17.6
14.6
23.5
Real Estate
8.6
9.2
8.6
9.2
19.9
18.9
Trading
(0.1
)
(0.1
)
(0.1
)
(0.1
)
(0.1
)
(0.1
)
Corporate and Other
(10.5
)
(9.4
)
(9.6
)
(9.4
)
(9.2
)
(9.0
)
Total
$27.6
$35.4
$28.5
$35.4
$71.8
$78.9
Year-to-date cash provided by operating activities was $173.8
million versus $208.9 million in the prior year period.
Year-to-date cash available for distribution (CAD)5 was $105.7
million, which decreased $9.1 million versus the prior year period
due to lower Adjusted EBITDA5 ($19.2 million) and higher cash taxes
paid ($0.8 million), partially offset by lower cash interest paid
(net) ($11.0 million).
“We delivered solid operational results in the third quarter,
despite macroeconomic challenges that continue to adversely impact
our timber businesses,” said Mark McHugh, President and CEO. “We
achieved total Adjusted EBITDA of $71.8 million, representing a 9%
decrease versus the prior year quarter, primarily driven by a lower
contribution from our New Zealand Timber segment.”
“In our Southern Timber segment, Adjusted EBITDA was comparable
to the prior year quarter, as significantly higher non-timber
income was largely offset by a 13% decline in harvest volumes and
3% lower weighted-average net stumpage realizations. In our Pacific
Northwest Timber segment, Adjusted EBITDA improved 12% versus the
prior year quarter, as a 10% increase in harvest volumes and
favorable costs were partially offset by a 7% decrease in
weighted-average net stumpage realizations. In our New Zealand
Timber segment, Adjusted EBITDA declined 38% relative to the prior
year quarter, primarily driven by lower carbon credit sales and a
16% decrease in weighted-average net stumpage realizations due to
elevated shipping costs.”
“In our Real Estate segment, Adjusted EBITDA improved 5% versus
the prior year quarter, as higher per-acre prices were partially
offset by lower acres sold.”
“During the third quarter, we also significantly advanced our $1
billion disposition initiative, which led to the closing of several
large transactions following the end of the quarter. Additional
details regarding our recent disposition activity have been
provided in a separate press release issued concurrent with this
release.”
Southern Timber
Third quarter sales of $62.0 million decreased $2.0 million, or
3%, versus the prior year period. Harvest volumes decreased 13% to
1.57 million tons versus 1.81 million tons in the prior year
period, primarily driven by wet ground conditions that constrained
production as well as softer demand from lumber mills. Average pine
sawtimber stumpage realizations decreased 5% to $27.46 per ton
versus $28.85 per ton in the prior year period, primarily due to
softer demand from sawmills and an unfavorable geographic mix.
Average pine pulpwood stumpage realizations increased 4% to $17.21
per ton versus $16.54 per ton in the prior year period, primarily
driven by improved demand from pulp mills and weather-related
constraints on competing supply in certain markets. Overall,
weighted-average net stumpage realizations (including hardwood)
decreased 3% to $20.77 per ton versus $21.48 per ton in the prior
year period. Non-timber sales of $16.7 million increased $6.8
million versus the prior year period, primarily driven by higher
pipeline easement revenues and growth in our land-based solutions
business. Operating income of $19.8 million increased $1.2 million
versus the prior year period as higher non-timber income ($6.2
million) and lower costs ($0.1 million) were partially offset by
lower volumes ($2.6 million), higher depletion expense ($1.4
million), and lower net stumpage realizations ($1.1 million).
Third quarter Adjusted EBITDA5 of $37.9 million was $0.2 million
above the prior year period.
Pacific Northwest Timber
Third quarter sales of $27.2 million decreased $2.1 million, or
7%, versus the prior year period. Harvest volumes increased 10% to
319,000 tons versus 290,000 tons in the prior year period. Average
delivered prices for domestic sawtimber decreased 12% to $95.27 per
ton versus $108.20 per ton in the prior year period due to a
combination of weaker demand from domestic lumber mills and an
unfavorable species / product mix, as a lower proportion of
Douglas-fir sawtimber was harvested in the current year period.
Average delivered pulpwood prices decreased 9% to $30.14 per ton
versus $33.09 per ton in the prior year period, primarily due to
softer mill demand in the region. Operating income of $0.8 million
versus an operating loss of $0.6 million in the prior year period
was driven by lower depletion expense ($1.3 million), lower costs
($0.8 million), and higher volumes ($0.4 million), partially offset
by lower net stumpage realizations ($1.1 million).
Third quarter Adjusted EBITDA5 of $8.7 million was 12%, or $0.9
million, above the prior year period.
New Zealand Timber
Third quarter sales of $66.8 million decreased $3.7 million, or
5%, versus the prior year period. Sales volumes decreased 1% to
686,000 tons versus 690,000 tons in the prior year period. Average
delivered prices for export sawtimber increased 10% to $104.48 per
ton versus $95.23 per ton in the prior year period, as higher
shipping costs were partially passed on to export customers through
increased prices. Average delivered prices for domestic sawtimber
increased 2% to $64.89 per ton versus $63.45 per ton in the prior
year period. Despite higher delivered log prices, net stumpage
realizations declined 16% versus the prior year quarter, largely
due to elevated shipping and production costs. Third quarter
non-timber / carbon credit sales totaled $8.9 million versus $15.6
million in the prior year period, primarily due to a lower volume
of carbon credits sold as compared to the prior year period.
Operating income of $8.9 million decreased $8.6 million versus the
prior year period due to lower carbon credit income ($6.6 million),
lower net stumpage realizations ($2.6 million), higher costs ($0.2
million), and lower volumes ($0.1 million), partially offset by
favorable foreign exchange impacts ($0.5 million) and lower
depletion rates ($0.3 million).
Third quarter Adjusted EBITDA5 of $14.6 million was 38%, or $8.9
million, below the prior year period.
Real Estate
Third quarter sales of $30.1 million decreased $1.1 million
versus the prior year period, while operating income of $8.6
million decreased $0.6 million versus the prior year period. Sales
and operating income decreased versus the prior year period due to
lower acres sold (2,916 acres sold versus 4,281 acres sold in the
prior year period), partially offset by higher weighted-average
prices ($8,835 per acre versus $5,781 per acre in the prior year
period).
Improved Development sales of $12.0 million included $7.9
million from the Wildlight development project north of
Jacksonville, Florida, $3.6 million from the Heartwood development
project south of Savannah, Georgia, and $0.5 million from the sale
of an industrial-use parcel in Kitsap County, Washington ($266,000
per acre). Sales in Wildlight consisted of two residential pod
sales totaling 104 acres for $7.7 million ($74,000 per acre) and
two small non-residential sales totaling $0.2 million. Sales in
Heartwood consisted of an 8.8-acre commercial parcel for $3.6
million ($410,000 per acre). This compares to Improved Development
sales of $3.1 million in the prior year period.
Rural sales of $13.8 million consisted of 2,800 acres at an
average price of $4,916 per acre. This compares to prior year
period sales of $20.5 million, which consisted of 3,799 acres at an
average price of $5,386 per acre.
There were no Timberland & Non-Strategic sales in the third
quarter. This compares to prior year period sales of $1.1 million,
which consisted of 466 acres at an average price of $2,266 per
acre.
Third quarter Adjusted EBITDA5 of $19.9 million increased $1.1
million versus the prior year period.
Trading
Third quarter sales of $9.0 million increased $2.2 million
versus the prior year period, primarily due to higher volumes and
prices. Sales volumes of 76,000 tons increased 24% versus the prior
year period. The Trading segment generated an operating loss of
$0.1 million, which was consistent with the prior year period.
Other Items
Third quarter corporate and other operating expenses of $10.5
million increased $1.1 million versus the prior year period,
primarily due to $0.9 million of costs related to disposition
initiatives2 and higher compensation and benefits expenses,
partially offset by lower professional services fees.
Third quarter interest expense of $10.0 million decreased $2.6
million versus the prior year period, primarily due to lower
average outstanding debt.
Third quarter income tax expense decreased $0.5 million versus
the prior year period. The New Zealand subsidiary is the primary
driver of income tax expense.
Outlook
“Based on our year-to-date results and our expectations for the
fourth quarter, we now expect full-year net income attributable to
Rayonier of $343 to $359 million, EPS of $2.30 to $2.40, pro forma
EPS of $0.36 to $0.40, and Adjusted EBITDA of $275 to $290
million,” added McHugh. “Our revised expectations for the year
reflect slightly lower harvest volumes due to our recently
announced timberland dispositions. As communicated previously, our
prior financial guidance excluded the potential impact of 2024
asset sales as part of the $1 billion disposition target that we
announced in November 2023. Our revised guidance reflects the
impact of removing forecasted harvest volume from the disposition
properties, as harvesting activities generally ceased on these
properties around mid-year in preparation for the sale
process.”
“In our Southern Timber segment, we now expect full-year harvest
volumes of approximately 7.0 million tons and Adjusted EBITDA
slightly below the lower end of our prior guidance range due to the
disposition of approximately 91,000 acres in Oklahoma as well as
weather-related impacts in certain markets. In our Pacific
Northwest Timber segment, we now expect full-year harvest volumes
of approximately 1.2 million tons and Adjusted EBITDA slightly
below the lower end of our prior guidance range due to the
disposition of approximately 109,000 acres in Washington. In our
New Zealand Timber segment, we expect full-year harvest volumes in
line with our prior guidance of 2.4 to 2.5 million tons, while we
expect Adjusted EBITDA modestly below our prior guidance range due
to lower carbon credit sales, softer export markets, and elevated
shipping costs. In our Real Estate segment, we continue to expect
strong fourth quarter closing activity and full-year Adjusted
EBITDA within our prior guidance range, contingent on the timing of
several large transactions.”
Conference Call
A conference call and live audio webcast will be held on
Thursday, November 7, 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 Friday, December 6, 2024, by dialing
800-395-6236 (domestic) or 203-369-3270 (international), passcode:
4077.
Complimentary copies of Rayonier press releases and other
financial documents are also available by calling (904)
357-9100.
1"Net recovery on legal
settlements" reflects the net gain from litigation regarding
insurance claims.
2"Costs related to disposition
initiatives" include legal, advisory, and other due diligence
costs incurred in connection with the Company’s asset disposition
plan, which was announced in November 2023.
3"Pension settlement charge"
reflects the net loss recognized in connection with the termination
and settlement of the Company’s pension plans.
4"Pro forma net income adjustments
attributable to noncontrolling interests" are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
5"Pro forma net income," "Pro forma
operating income (loss)," "Adjusted EBITDA" and "CAD" are
non-GAAP measures defined and reconciled to GAAP in the attached
exhibits.
About Rayonier
Rayonier is a leading timberland real estate investment trust
with assets located in some of the most productive softwood timber
growing regions in the United States and New Zealand. As of
September 30, 2024, Rayonier owned or leased under long-term
agreements approximately 2.7 million acres of timberlands located
in the U.S. South (1.84 million acres), U.S. Pacific Northwest
(417,000 acres) and New Zealand (411,000 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 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
September 30, 2024
(unaudited)
(millions of dollars, except per
share information)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
SALES
$195.0
$173.6
$201.6
$536.7
$589.5
Costs and Expenses
Cost of sales
(147.2
)
(138.7
)
(145.6
)
(419.1
)
(463.2
)
Selling and general expenses
(18.3
)
(20.6
)
(18.9
)
(57.9
)
(54.7
)
Other operating expense, net
(1.9
)
(1.9
)
(1.7
)
(3.4
)
(5.5
)
OPERATING INCOME
27.6
12.4
35.4
56.3
66.1
Interest expense, net
(10.0
)
(9.8
)
(12.6
)
(29.6
)
(36.7
)
Interest and other miscellaneous income,
net
12.8
0.9
0.5
8.8
21.7
INCOME BEFORE INCOME TAXES
30.4
3.5
23.3
35.5
51.1
Income tax (expense) benefit
—
(0.5
)
(0.6
)
0.3
(1.8
)
NET INCOME
30.4
3.0
22.7
35.8
49.3
Less: Net income attributable to
noncontrolling interests in the operating partnership
(0.3
)
—
(0.3
)
(0.5
)
(0.8
)
Less: Net income attributable to
noncontrolling interests in consolidated affiliates
(1.3
)
(1.1
)
(3.2
)
(3.3
)
(1.9
)
NET INCOME ATTRIBUTABLE TO RAYONIER
INC.
$28.8
$1.9
$19.2
$32.0
$46.6
EARNINGS PER COMMON SHARE
Basic earnings per share attributable to
Rayonier Inc.
$0.19
$0.01
$0.13
$0.22
$0.31
Diluted earnings per share attributable to
Rayonier Inc.
$0.19
$0.01
$0.13
$0.21
$0.31
Pro forma net income per share (a)
$0.12
$0.02
$0.13
$0.19
$0.19
Weighted Average Common Shares used for
determining
Basic EPS
148,984,534
148,910,214
148,274,209
148,821,306
147,959,983
Diluted EPS (b)
151,292,994
151,268,289
151,036,253
151,312,818
151,031,529
(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 September 30, 2024, there were 149,000,336
common shares and 2,009,522 Redeemable Operating Partnership Units
outstanding.
A
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
September 30, 2024
(unaudited)
(millions of dollars)
September 30,
December 31,
2024
2023
Assets
Cash and cash equivalents
$74.2
$207.7
Assets held for sale
106.2
9.9
Other current assets
96.7
99.3
Timber and timberlands, net of depletion
and amortization
2,848.3
3,004.3
Higher and better use timberlands and real
estate development investments
139.0
105.6
Property, plant and equipment
44.5
46.1
Less - accumulated depreciation
(20.1
)
(19.1
)
Net property, plant and equipment
24.4
27.0
Restricted cash
3.0
0.7
Right-of-use assets
94.0
95.5
Other assets
93.4
97.6
$3,479.2
$3,647.6
Liabilities, Noncontrolling Interests
in the Operating Partnership and Shareholders’ Equity
Current maturities of long-term debt
22.0
—
Other current liabilities
117.5
140.3
Long-term debt
1,285.2
1,365.8
Long-term lease liability
87.0
87.7
Other non-current liabilities
100.0
94.5
Noncontrolling interests in the operating
partnership
64.7
81.7
Total Rayonier Inc. shareholders’
equity
1,787.0
1,860.5
Noncontrolling interests in consolidated
affiliates
15.8
17.1
Total shareholders’ equity
1,802.8
1,877.6
$3,479.2
$3,647.6
B
RAYONIER INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
September 30, 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
Net income
—
—
1.9
—
1.1
3.0
Dividends ($0.285 per share)
—
—
(42.5
)
—
—
(42.5
)
Issuance of shares under incentive stock
plans
396,849
—
—
—
—
—
Stock-based compensation
—
4.9
—
—
—
4.9
Adjustment of noncontrolling interests in
the operating partnership
—
—
8.1
—
—
8.1
Other (a)
(66,752
)
(2.2
)
—
5.4
(1.2
)
2.0
Balance, June 30, 2024
148,979,418
$1,515.0
$264.0
$27.8
$14.3
$1,821.1
Net income
—
—
29.1
—
1.3
30.4
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.3
)
—
—
(0.3
)
Dividends ($0.285 per share)
—
—
(42.4
)
—
—
(42.4
)
Issuance of shares under incentive stock
plans
848
—
—
—
—
—
Stock-based compensation
—
3.9
—
—
—
3.9
Adjustment of noncontrolling interests in
the operating partnership
—
—
(6.5
)
—
—
(6.5
)
Other (a)
20,070
0.6
—
(4.2
)
0.2
(3.4
)
Balance, September 30, 2024
149,000,336
$1,519.5
$243.9
$23.6
$15.8
$1,802.8
C
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
Net income (loss)
—
—
19.3
—
(0.2
)
19.1
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.3
)
—
—
(0.3
)
Dividends ($0.285 per share)
—
—
(42.2
)
—
—
(42.2
)
Issuance of shares under incentive stock
plans
372,149
—
—
—
—
—
Stock-based compensation
—
4.3
—
—
—
4.3
Adjustment of noncontrolling interests in
the operating partnership
—
—
4.3
—
—
4.3
Other (a)
(116,685
)
(3.9
)
—
3.3
(0.7
)
(1.3
)
Balance, June 30, 2023
148,268,443
$1,489.7
$311.4
$24.3
$13.3
$1,838.7
Net income
—
—
19.5
—
3.2
22.7
Net income attributable to noncontrolling
interests in the operating partnership
—
—
(0.3
)
—
—
(0.3
)
Dividends ($0.285 per share)
—
—
(42.5
)
—
—
(42.5
)
Issuance of shares under incentive stock
plans
3,959
—
—
—
—
—
Stock-based compensation
—
3.4
—
—
—
3.4
Adjustment of noncontrolling interests in
the operating partnership
—
—
7.0
—
—
7.0
Other (a)
14,936
0.4
—
3.2
(0.3
)
3.3
Balance, September 30, 2023
148,287,338
$1,493.5
$295.1
$27.5
$16.2
$1,832.3
(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 income to noncontrolling
interests in the operating partnership. The nine months ended
September 30, 2024 and September 30, 2023 also includes the
redemption of 434,376 and 755,558 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
September 30, 2024
(unaudited)
(millions of dollars)
Nine Months Ended September
30,
2024
2023
Cash provided by operating
activities:
Net income
$35.8
$49.3
Depreciation, depletion and
amortization
106.7
114.3
Non-cash cost of land and improved
development
19.2
20.2
Timber write-offs resulting from casualty
events
—
2.3
Stock-based incentive compensation
expense
12.0
10.2
Deferred income taxes
(4.2
)
(2.9
)
Other items to reconcile net income to
cash provided by operating activities
6.1
7.8
Changes in working capital and other
assets and liabilities
(1.8
)
7.7
173.8
208.9
Cash used for investing
activities:
Capital expenditures
(53.2
)
(53.1
)
Real estate development investments
(19.1
)
(18.8
)
Purchase of timberlands
(3.6
)
(14.0
)
Other
1.1
6.2
(74.8
)
(79.7
)
Cash used for financing
activities:
Net decrease in debt
(60.0
)
—
Dividends paid (a)
(158.1
)
(127.6
)
Distributions to noncontrolling interests
in the operating partnership (b)
(2.2
)
(2.3
)
Proceeds from the issuance of common
shares under the “at-the-market” (ATM) equity offering program, net
of commissions and offering costs
—
(0.1
)
Distributions to noncontrolling interests
in consolidated affiliates
(5.5
)
—
Other
(4.1
)
(4.2
)
(229.9
)
(134.2
)
Effect of exchange rate changes on cash
and restricted cash
(0.3
)
(0.8
)
Cash, cash equivalents and restricted
cash:
Change in cash, cash equivalents and
restricted cash
(131.2
)
(5.8
)
Balance, beginning of year
208.4
115.4
Balance, end of period
$77.2
$109.6
(a)
The nine months ended September 30, 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 nine months ended September 30, 2024
includes an additional cash distribution of $0.20 per Redeemable
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,
OPERATING INCOME,
PRO FORMA OPERATING INCOME AND
ADJUSTED EBITDA
September 30, 2024
(unaudited)
(millions of dollars)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Sales
Southern Timber
$62.0
$59.3
$64.0
$191.3
$204.1
Pacific Northwest Timber
27.2
24.3
29.3
76.7
96.1
New Zealand Timber
66.8
53.8
70.4
166.3
175.4
Real Estate
30.1
31.0
31.2
76.6
79.5
Trading
9.0
5.3
6.8
26.0
34.8
Intersegment Eliminations
(0.1
)
—
(0.1
)
(0.2
)
(0.4
)
Sales
$195.0
$173.6
$201.6
$536.7
$589.5
Operating income (loss)
Southern Timber
$19.8
$17.1
$18.6
$59.9
$62.6
Pacific Northwest Timber
0.8
(1.5
)
(0.6
)
(5.0
)
(6.5
)
New Zealand Timber
8.9
2.9
17.6
19.3
19.3
Real Estate
8.6
5.8
9.2
14.3
18.7
Trading
(0.1
)
0.1
(0.1
)
0.1
0.4
Corporate and Other
(10.5
)
(12.0
)
(9.4
)
(32.3
)
(28.3
)
Operating income
$27.6
$12.4
$35.4
$56.3
$66.1
Pro forma operating income (loss)
(a)
Southern Timber
$19.8
$17.1
$18.6
$59.9
$62.6
Pacific Northwest Timber
0.8
(1.5
)
(0.6
)
(5.0
)
(6.5
)
New Zealand Timber
8.9
2.9
17.6
19.3
21.6
Real Estate
8.6
5.8
9.2
14.3
18.7
Trading
(0.1
)
0.1
(0.1
)
0.1
0.4
Corporate and Other
(9.6
)
(11.3
)
(9.4
)
(30.8
)
(28.3
)
Pro forma operating income
$28.5
$13.1
$35.4
$57.8
$68.4
Adjusted EBITDA (a)
Southern Timber
$37.9
$33.9
$37.8
$116.6
$124.2
Pacific Northwest Timber
8.7
5.9
7.8
19.3
21.7
New Zealand Timber
14.6
7.7
23.5
33.7
37.9
Real Estate
19.9
18.9
18.9
43.4
45.8
Trading
(0.1
)
0.1
(0.1
)
0.1
0.4
Corporate and Other
(9.2
)
(10.9
)
(9.0
)
(29.4
)
(27.1
)
Adjusted EBITDA
$71.8
$55.7
$78.9
$183.7
$202.9
(a)
Pro forma operating income (loss) and
Adjusted EBITDA are non-GAAP measures. See Schedule F for
definitions and reconciliations.
E
RAYONIER INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
September 30, 2024
(unaudited)
(millions of dollars, except per
share information)
LIQUIDITY MEASURES:
Nine Months Ended
September 30,
September 30,
2024
2023
Cash Provided by Operating
Activities
$173.8
$208.9
Working capital and other balance sheet
changes
(5.3
)
(20.6
)
Net recovery on legal settlements (a)
(9.6
)
(20.5
)
Capital expenditures (b)
(53.2
)
(53.1
)
Cash Available for Distribution
(c)
$105.7
$114.7
Net Income
$35.8
$49.3
Interest, net and miscellaneous income
24.0
35.5
Income tax (benefit) expense (d)
(0.3
)
1.8
Depreciation, depletion and
amortization
106.7
114.3
Non-cash cost of land and improved
development
19.2
20.2
Non-operating income (e)
(3.3
)
(20.5
)
Costs related to disposition initiatives
(f)
1.6
—
Timber write-offs resulting from casualty
events (g)
—
2.3
Adjusted EBITDA (h)
$183.7
$202.9
Cash interest paid, net (i)
(19.4
)
(30.4
)
Cash taxes paid
(5.5
)
(4.7
)
Capital expenditures (b)
(53.2
)
(53.1
)
Cash Available for Distribution
(c)
$105.7
$114.7
Cash Available for Distribution
(c)
$105.7
$114.7
Real estate development investments
(19.1
)
(18.8
)
Cash Available for Distribution after
real estate development investments
$86.6
$96.0
PRO FORMA NET INCOME (j):
Three Months Ended
Nine Months Ended
September 30, 2024
June 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
Net Income Attributable to Rayonier
Inc.
$28.8
$0.19
$1.9
$0.01
$19.2
$0.13
$32.0
$0.21
$46.6
$0.31
Net (recovery) cost on legal settlements
(a)
(12.0
)
(0.08
)
1.1
0.01
—
—
(9.6
)
(0.06
)
(20.5
)
(0.14
)
Costs related to disposition initiatives
(f)
0.9
0.01
0.7
—
—
—
1.6
0.01
—
—
Pension settlement charges, net of tax
(k)
0.3
—
—
—
—
—
4.8
0.03
—
—
Timber write-offs resulting from casualty
events (g)
—
—
—
—
—
—
—
—
2.3
0.02
Pro forma net income adjustments
attributable to noncontrolling interests (l)
0.1
—
—
—
—
—
—
—
(0.2
)
—
Pro Forma Net Income
$18.1
$0.12
$3.7
$0.02
$19.2
$0.13
$28.8
$0.19
$28.2
$0.19
F
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (m) (h):
Three Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Corporate and
Other
Total
September 30, 2024
Operating income (loss)
$19.8
$0.8
$8.9
$8.6
($0.1
)
($10.5
)
$27.6
Costs related to disposition initiatives
(f)
—
—
—
—
—
0.9
0.9
Pro forma operating income (loss)
$19.8
$0.8
$8.9
$8.6
($0.1
)
($9.6
)
$28.5
Depreciation, depletion and
amortization
18.1
7.8
5.6
1.5
—
0.4
33.5
Non-cash cost of land and improved
development
—
—
—
9.8
—
—
9.8
Adjusted EBITDA
$37.9
$8.7
$14.6
$19.9
($0.1
)
($9.2
)
$71.8
June 30, 2024
Operating income (loss)
$17.1
($1.5
)
$2.9
$5.8
$0.1
($12.0
)
$12.4
Costs related to disposition initiatives
(f)
—
—
—
—
—
0.7
0.7
Pro forma operating income (loss)
$17.1
($1.5
)
$2.9
$5.8
$0.1
($11.3
)
$13.1
Depreciation, depletion and
amortization
16.8
7.4
4.8
6.7
—
0.4
36.1
Non-cash cost of land and improved
development
—
—
—
6.4
—
—
6.4
Adjusted EBITDA
$33.9
$5.9
$7.7
$18.9
$0.1
($10.9
)
$55.7
September 30, 2023
Operating income (loss)
$18.6
($0.6
)
$17.6
$9.2
($0.1
)
($9.4
)
$35.4
Depreciation, depletion and
amortization
19.2
8.3
6.0
3.1
—
0.4
37.0
Non-cash cost of land and improved
development
—
—
—
6.6
—
—
6.6
Adjusted EBITDA
$37.8
$7.8
$23.5
$18.9
($0.1
)
($9.0
)
$78.9
PRO FORMA OPERATING INCOME (LOSS) AND
ADJUSTED EBITDA (m) (h):
Nine Months Ended
Southern Timber
Pacific Northwest
Timber
New Zealand Timber
Real Estate
Trading
Corporate and
Other
Total
September 30, 2024
Operating income (loss)
$59.9
($5.0
)
$19.3
$14.3
$0.1
($32.3
)
$56.3
Costs related to disposition initiatives
(f)
—
—
—
—
—
1.6
1.6
Pro forma operating income (loss)
$59.9
($5.0
)
$19.3
$14.3
$0.1
($30.8
)
$57.8
Depreciation, depletion and
amortization
56.7
24.3
14.5
9.9
—
1.3
106.7
Non-cash cost of land and improved
development
—
—
—
19.2
—
—
19.2
Adjusted EBITDA
$116.6
$19.3
$33.7
$43.4
$0.1
($29.4
)
$183.7
September 30, 2023
Operating income (loss)
$62.6
($6.5
)
$19.3
$18.7
$0.4
($28.3
)
$66.1
Timber write-offs resulting from casualty
events (g)
—
—
2.3
—
—
—
2.3
Pro forma operating income (loss)
$62.6
($6.5
)
$21.6
$18.7
$0.4
($28.3
)
$68.4
Depreciation, depletion and
amortization
61.6
28.2
16.3
6.8
—
1.3
114.3
Non-cash cost of land and improved
development
—
—
—
20.2
—
—
20.2
Adjusted EBITDA
$124.2
$21.7
$37.9
$45.8
$0.4
($27.1
)
$202.9
(a)
“Net (recovery) cost on legal settlements”
reflects the net (gain) loss from litigation regarding insurance
claims.
(b)
“Capital expenditures” exclude timberland
acquisitions of $3.6 million and $14.0 million during the nine
months ended September 30, 2024 and September 30, 2023,
respectively.
(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 nine months ended September 30, 2024
includes a $1.2 million income tax benefit related to the pension
settlement.
(e)
The nine months ended September 30, 2024
includes $9.6 million of net recoveries associated with legal
settlements, which is partially offset by $6.0 million of pension
settlement charges. The nine months ended September 30, 2023
includes $20.5 million of net recoveries associated with legal
settlements.
(f)
“Costs related to disposition initiatives”
include legal, advisory, and other due diligence costs incurred in
connection with the Company’s asset disposition plan, which was
announced in November 2023.
(g)
“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.
(h)
“Adjusted EBITDA” is defined as earnings
before interest, taxes, depreciation, depletion, amortization, the
non-cash cost of land and improved development, non-operating
income, costs related to disposition initiatives, timber write-offs
resulting from casualty events and Large Dispositions. Adjusted
EBITDA is a non-GAAP measure that management uses to make strategic
decisions about the business and that investors can use to evaluate
the operational performance of the assets under management. It
excludes specific items that management believes are not indicative
of the Company’s ongoing operating results.
(i)
“Cash interest paid, net” is presented net
of patronage refunds received of $8.3 million and $6.2 million
during the nine months ended September 30, 2024 and September 30,
2023, respectively. In addition, cash interest paid, net is
presented net of cash interest received of $5.5 million and $1.2
million during the nine months ended September 30, 2024 and
September 30, 2023, respectively.
(j)
“Pro forma net income” is defined as net
income attributable to Rayonier Inc. adjusted for its proportionate
share of the net (recoveries) costs associated with legal
settlements, costs related to disposition initiatives, pension
settlement charges, 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.
(k)
“Pension settlement charges, net of tax"
reflects the net loss recognized in connection with the termination
and settlement of the Company’s pension plans.
(l)
“Pro forma net income adjustments
attributable to noncontrolling interests” are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
(m)
“Pro forma operating income (loss)” is
defined as operating income (loss) adjusted for costs related to
disposition initiatives, timber write-offs resulting from casualty
events and Large Dispositions. Rayonier believes that this non-GAAP
financial measure provides investors with useful information to
evaluate our core business operations because it excludes specific
items that are not indicative of the Company’s ongoing operating
results.
F
RAYONIER INC. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
EBITDA GUIDANCE
September 30, 2024
(unaudited)
ADJUSTED EBITDA GUIDANCE (a):
Prior 2024 Guidance
Revised 2024 Guidance
Year-to-Date
Results
Low
High
Low
High
Net Income to Adjusted EBITDA
Reconciliation
Net income
$66.1
-
$87.4
$351.7
-
$367.6
$35.8
Less: Net income attributable to
noncontrolling interests
(5.3
)
-
(6.3
)
(3.9
)
-
(4.0
)
(3.3
)
Less: Net income attributable to
noncontrolling interests in the operating partnership
(0.9
)
-
(1.3
)
(4.6
)
-
(4.8
)
(0.5
)
Net income attributable to Rayonier
Inc.
$59.9
-
$79.8
$343.2
-
$358.8
$32.0
Add: Pension settlement charges, net of
tax (b)
—
-
—
4.8
-
4.8
4.8
Add: Costs related to disposition
initiatives (c)
—
-
—
1.6
-
1.6
1.6
Less: Net recovery on legal settlements
(d)
—
-
—
(9.6
)
-
(9.6
)
(9.6
)
Less: Large Dispositions (e)
—
-
—
(290.0
)
-
(300.0
)
—
Add: Pro forma net income adjustments
attributable to noncontrolling interests (f)
—
-
—
3.9
-
4.0
—
Pro Forma Net Income (g)
$59.9
-
$79.8
$53.9
-
$59.6
$28.8
Interest expense, net
37.7
-
38.2
37.8
-
38.3
29.6
Interest and other miscellaneous income,
net
(5.5
)
-
(6.0
)
(8.2
)
-
(8.9
)
(5.2
)
Income tax expense
7.7
-
9.4
6.9
-
7.2
(0.9
)
Depreciation, depletion and
amortization
150.0
-
159.0
140.0
-
144.0
106.7
Non-cash cost of land and improved
development
34.0
-
37.0
40.0
-
45.0
19.2
Net income attributable to noncontrolling
interests
6.2
-
7.6
4.6
-
4.8
3.8
Adjusted EBITDA
$290.0
-
$325.0
$275.0
-
$290.0
$183.7
Diluted Earnings per Share
$0.40
-
$0.54
$2.30
-
$2.40
$0.21
Pro forma Diluted Earnings per Share
$0.40
-
$0.54
$0.36
-
$0.40
$0.19
(a)
“Adjusted EBITDA” is defined as earnings
before interest, taxes, depreciation, depletion, amortization, the
non-cash cost of land and improved development, non-operating
income and Large Dispositions. Adjusted EBITDA is a non-GAAP
measure that management uses to make strategic decisions about the
business and that investors can use to evaluate the operational
performance of the assets under management. It excludes specific
items that management believes are not indicative of the Company's
ongoing operating results.
(b)
“Pension settlement charges, net of tax"
reflects the net loss recognized in connection with the termination
and settlement of the Company’s pension plans.
(c)
“Costs related to disposition initiatives”
include legal, advisory, and other due diligence costs incurred in
connection with the Company’s asset disposition plan, which was
announced in November 2023.
(d)
“Net recovery on legal settlements”
reflects the net gain from litigation regarding insurance
claims.
(e)
“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.
(f)
“Pro forma net income adjustments
attributable to noncontrolling interests” are the proportionate
share of pro forma items that are attributable to noncontrolling
interests.
(g)
“Pro forma net income” is defined as net
income attributable to Rayonier Inc. adjusted for its proportionate
share of the net recoveries associated with legal settlements,
costs related to disposition initiatives, 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.
G
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241105598601/en/
Investors/Media Collin Mings 904-357-9100
investorrelations@rayonier.com
Rayonier (NYSE:RYN)
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