Rayonier Inc. Reit · NYSE:RYN
Rayonier Inc. Reit — Q3 2023 Earnings Presentation
22 slides from Rayonier Inc. Reit's earnings presentation, Nov 2, 2023
Slide 1: Shareholder Value Enhancement Initiatives
SHAREHOLDER VALUE ENHANCEMENT INITIATIVES November 2023 Shareholder Value Enhancement Initiatives
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements - Certain statements in this communication regarding anticipated financial outcomes including Rayonier’s planned asset dispositions, use of proceeds, impact on debt and leverage levels and targets, impact on EBITDA and CAD trading multiples and e
Slide 3: Asset Disposition & Capital Structure Realignment Plan
Asset Disposition & Capital Structure Realignment Plan Rayonier is targeting ~$1 billion of select asset sales over the next 18 months (including the $242 million asset sale announced today) DISPOSITION PLAN Asset disposition plan intended to enhance shareholder value by capturing significant TA
Slide 4: Public vs. Private Disconnect / Arbitrage Opportunity
Public vs. Private Disconnect / Arbitrage Opportunity Key Observations Enterprise Value / EBITDA Multiple Comparison Rayonier’s public market valuation is currently well below 60.0x private market valuation benchmarks 53.2x Rayonier’s Current Trading Multiples: 50.0x Ent. Value / 2023E Adjusted
Slide 5: Enhanced Target Capital Structure & Financial Policy
Enhanced Target Capital Structure & Financial Policy Credit Highlights & Ratio Targets Pro Forma Capitalization & Maturity Profile (1) ($ in millions) 9/30/2023 OR Sale (2) Pro Forma Current Credit Ratings Total Debt (3) $1,519.0 ($150.0) $1,369.0 S&P: BBB- / Stable (–) Cash ($107.8) ($89.5) ($197
Slide 6: Oregon Disposition – Overview / Rationale
Oregon Disposition – Overview / Rationale Rayonier has entered into an agreement to sell 55,000 acres in Southwest Oregon to Manulife Investment Management on behalf of clients for a purchase price of $242 million (~$4,400 per acre) Allows Rayonier to capitalize on significant public-private disco
Slide 7: Sources & Uses / Pro Forma Transaction Consequences
Sources & Uses / Pro Forma Transaction Consequences Sources Uses Oregon Sale Proceeds $242.0 Incremental Term Loan III Paydown $150.0 Transaction Fees & Expenses 2.5 Increase in Cash Balance 89.5 Total $242.0 Total $242.0 ($ in millions, except per share amounts) Sale of Oregon Timberlands Rayonier
Slide 8: Shareholder Value Enhancement Initiatives – Next Steps
Shareholder Value Enhancement Initiatives – Next Steps The plan announced today will allow Rayonier to create value from the elevated disconnect between private market timberland values and the Company’s public market valuation Rayonier’s size, scale, and pure-play timber REIT structure provide
Slide 9: Appendix: Debt Profile & Floating Rate Exposure
Appendix: Debt Profile & Floating Rate Exposure Shareholder Value Enhancement Initiatives 8
Slide 10: Rayonier Debt Profile @ 9/30/23 & 8/1/24
Rayonier Debt Profile @ 9/30/23 & 8/1/24 Rayonier Debt Profile @ 9/30/2023 Denotes debt earmarked for near-term repayment with asset sale proceeds ($ in millions) Debt Balance Initial Term Years to Effective Annual Interest 9/30/2023 Pro Forma (Years) Maturity Maturity Rate (1) Current Pro Forma Sen
Slide 11: Rayonier Maturity Profile & Floating Rate Exposure
Rayonier Maturity Profile & Floating Rate Exposure Rayonier Debt / Interest Rate Swap Maturity Profile (1) $800 $719 Earmarked for Near- Floating Rate Exposure $700 term Repayment with $600 Through 2024: $300MM Asset Sale Proceeds ($150MM after Term Loan Paydown) $500 Through 2026: $500MM $400 Throu
Slide 12: Appendix: NCREIF U.S. South Index Statistics
Appendix: NCREIF U.S. South Index Statistics Shareholder Value Enhancement Initiatives 11
Slide 13: U.S. South Historical Valuation Snapshot (NCREIF)
U.S. South Historical Valuation Snapshot (NCREIF) U.S. South EBITDA per Acre (NCREIF) U.S. South Value per Acre (NCREIF) $60 $2,250 $2,000 $50 $1,750 $40 $1,500 $1,250 $30 $1,000 $20 $750 $500 $10 $250 – – U.S. South EBITDA Multiples (NCREIF) 60x 2000-2022 Average = 40.0x 2013-2022 Average = 39.1x 5
Slide 14: Historical Components of U.S. South Timberland Returns (NCREIF)
Historical Components of U.S. South Timberland Returns (NCREIF) NCREIF South Historical Returns 25.0% 20-Year 10-Year EBITDA Return Appreciation Return Avg. EBITDA Return 2.6% 2.6% 20.0% Avg. Appreciation Return 3.7% 2.7% 15.0% 10.0% 5.0% – (5.0%) (10.0%) 2000 2002 2004 2006 2008 2010 2012 2014 2016
Slide 15: Appendix: NCREIF Pacific Northwest Index Statistics
Appendix: NCREIF Pacific Northwest Index Statistics Shareholder Value Enhancement Initiatives 14
Slide 16: Pacific Northwest Historical Valuation Snapshot (NCREIF)
Pacific Northwest Historical Valuation Snapshot (NCREIF) U.S. PNW EBITDA per Acre (NCREIF) U.S. PNW Value per Acre (NCREIF) $200 $3,500 $175 $3,000 $150 $2,500 $125 $2,000 $100 $1,500 $75 $50 $1,000 $25 $500 – – U.S. Pacific Northwest EBITDA Multiples (NCREIF) 50.0x 88x 2013-2022 Average = 30.4x 40.
Slide 17: Historical Components of PNW Timberland Returns (NCREIF)
Historical Components of PNW Timberland Returns (NCREIF) NCREIF Northwest Historical Returns 40.0% 20-Year 10-Year EBITDA Return Appreciation Return Avg. EBITDA Return 4.5% 3.6% 30.0% Avg. Appreciation Return 5.1% 4.1% 20.0% 10.0% – (10.0%) (20.0%) 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2
Slide 18: Appendix: Definitions & Reconciliations
Appendix: Definitions & Reconciliations Shareholder Value Enhancement Initiatives 17
Slide 19: Definitions of Non-GAAP Measures and Pro Forma Items
Definitions of Non-GAAP Measures and Pro Forma Items Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, timber write-offs resulting from casualty events and Large
Slide 20: Reconciliation of Net Debt
Reconciliation of Net Debt ($ in millions) Q3 2023 Long-term debt, net of deferred financing costs and unamortized discounts $1,511.4 Plus - deferred financing costs 4.7 Plus - unamortized discounts 2.9 Total Debt, (Principal Only) $1,519.0 Cash and cash equivalents (107.8) Net Debt $1.411.2 ($ in m
Slide 21: Enterprise Value to Adjusted EBITDA Multiple Calculations
Enterprise Value to Adjusted EBITDA Multiple Calculations Appraisal Appraisal NCREIF NCREIF NCREIF NCREIF New New ($ in millions, except per share and per acre amounts) Rayonier U.S. South U.S. South U.S. PNW U.S. PNW Zealand Zealand LTM 5-Yr LTM 5-Yr LTM 5-Yr 2023 Guidance EBITDA Average EBITDA Ave
Slide 22: Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment Pacific New Southern Northwest Zealand Timber Real Corporate ($ in millions) Timber Timber Timber Funds Estate Trading and Other Total 2023E (1) Operating income $72.7 ($7.5) $19.2 — $52.8 — ($36.0) $101.2 Timber write-offs resu