Rayonier Inc. Reit · NYSE:RYN
Rayonier Inc. Reit — PotlatchDeltic — REITWeek Conference 2018
25 slides from Rayonier Inc. Reit's conference presentation, June 2018
Slide 1: Investor Presentation
Investor Presentation June 2018
Slide 2: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures FORWARD-LOOKING STATEMENTS This presentation contains certain forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended, including without limitation, statements about long-term economic fundamentals, lumber m
Slide 3: Why PotlatchDeltic?
Why PotlatchDeltic? Best play on housing recovery – highest leverage to lumber among Timber REITs Nearly 2 million acres of geographically diverse, high quality, productive timberlands Timberlands uniquely positioned to leverage favorable lumber market conditions through indexed northern log prices;
Slide 4: Overview of PotlatchDeltic Assets
Overview of PotlatchDeltic Assets Timberland Holdings Wood Products Manufacturing Northern Region 773,000 Acres Lumber 1,170 MMBF Southern Region 1,131,000 Acres Plywood 160 MMSF 3/8" Total 1,904,000 Acres MDF 150 MMSF 3/4" Nearly 2 Million Acres of Timberland Top Ten US. Lumber Producer Legend: 4 J
Slide 5: Resource – Segment Overview
Resource – Segment Overview Potlatch & Deltic EBITDDA History (1) Northern Resource EBITDDA strength $200 $180 $180 supported by significant portion of northern $160 $160 EBITDDA ($ millions) sawlog prices being indexed to lumber $140 Min $120 prices $100 $80 Legacy Deltic harvest volumes have been
Slide 6: High Quality Productive Idaho Timberlands
High Quality Productive Idaho Timberlands PotlatchDeltic Idaho Hem-Fir Sawlog vs. PotlatchDeltic Idaho timberlands are the WWPA Inland Hem-Fir Lumber Index $600 most productive Northwest timberlands $550 east of the Cascade mountains $500 Timberlands support several major species $450 including Hem-
Slide 7: High Quality Southern Timberlands
High Quality Southern Timberlands Opportunity on Deltic Legacy Timberlands Deltic timberlands add high quality Southern Timberlands - Harvest Productivity southern pine timber base 4.5 Deltic standing inventory is 58% high Tons per Acre (2017) (1) value pine sawlog 4.0 77,000 acres of pine plantatio
Slide 8: Southern Pine Sawlogs - Growing Demand and Capacity Expansion
Southern Pine Sawlogs - Growing Demand and Capacity Expansion Southern Pine Sawtimber Stumpage Price Selected Capacity Expansions 20 $45 Pine Sawtimber Stumpage, $/ton (nominal) Demand (1) 18 Description Location Status Sawlog Pulpwood $40 Lumber Production, Billion Board Feet 16 $35 Biewer - lumber
Slide 9: Wood Products - Segment Overview
Wood Products - Segment Overview $140 Potlatch & Deltic EBITDDA History (1) Max 6 sawmills: greater than 1.1 billion board feet of $120 $150 $130 lumber capacity EBITDDA ($ millions) $100 Min $80 Industrial grade plywood mill: 160 million square $60 feet of specialty grade panel capacity, most of $4
Slide 10: Lumber Capacity Utilization vs. Price
Lumber Capacity Utilization vs. Price REAL PRICE (2016 dollars) W. SPF 2x4 HISTORICAL W. SPF 2X4 PRICES (US$) $/MBF (US$) 2018 $700 Current(2) $600 $500 2003 $400 $300 2005 $200 $100 2000 2002 2005 2008 2011 2014 2017 Lumber prices are correlated with industry capacity utilization, which is increasi
Slide 11: Best Timber Play on Housing Recovery
Best Timber Play on Housing Recovery Direct Leverage to Lumber Prices Natural Hedge in U.S. South (1)(4) PotlatchDeltic is a net southern sawlog buyer Rayonier 0% (consume 2.4 million tons vs. sell 2.1 million tons) CatchMark 0% (1)(4) This leads to high lumber margins as southern sawlog prices rema
Slide 12: Land Stratification Values
Land Stratification Chenal Valley Real Estate Development Land Stratification Premiere master plan community in Little Rock (2) Recent Sales History Pipeline Luxury amenities, including two golf courses Chenal Master- Residential lots sold to private / regional Plan Community builders Land Stratific
Slide 13: Pro Forma 2017 CAD Bridge
Pro Forma 2017 CAD Bridge $186 M $136 M ~15% ~30% ~35% ~20% Combined 2017 Harvest Increase Expand Lumber REIT Tax Savings SG&A Synergies 2017 with Run Rate Production Synergies Asset Description Timberlands Increase harvest levels on Deltic timberlands to sustainable levels Convert natural stands co
Slide 14: Favorable Capital Structure
Favorable Capital Structure New $380 million revolver PotlatchDeltic $379 million available, Maturity: April 2023 Unaudited, $ in millions 3/31/2018 Accordion: $420 million Market capitalization(1) $ 3,141 Deltic debt Net debt (2) 681 $100 million was refinanced Enterprise value $ 3,822 Assumed rema
Slide 15: Growing Dividend
Growing Dividend Dividends ($ Per Share) (1) $1.80 $1.70 29% $1.60 $1.60 $1.53 (2) dividend $1.50 $1.50 $1.50 $1.43 (2) growth $1.40 (2) since 2012 $1.30 $1.28 $1.24 $1.20 $1.10 $1.00 2012 2013 2014 2015 2016 2017 Current Annualized Current dividend yield 3.2%(3) Pro forma dividend run rate is $101
Slide 16: Summary
Summary High quality, well managed portfolio of assets PotlatchDeltic 2018 Outlook (1)(2)(3) Resource: Merger creates significant opportunity through Harvest: 5.5 – 5.9 million tons synergies and operational efficiencies to EBITDDA: $160 - $180 million increase Cash Available for Distribution Wood P
Slide 17: Appendix
Appendix PotlatchDeltic (NASDAQ: PCH) www.PotlatchDeltic.com
Slide 18: Single Family Housing - Favorable Fundamentals
Single Family Housing - Favorable Fundamentals 2,500 U.S. Housing Starts 2,000 Multifamily has led the recovery – Actual (1) Forecast (2) Average Starts Since 1970: significant supply pending in first half (Thousands) 1,500 1.5 million 2018 1,000 Single family starts remain well 500 below historical
Slide 19: Housing Recovery and US - Canada Trade Support U.S. Lumber Demand Growth
Housing Recovery and US - Canada Trade Support U.S. Lumber Demand Growth (1) Canada Softwood Lumber Production Canadian supply has declined 40 British Columbia Actual Forecast almost 10 billion board feet due 35 ≈10 billion 30 to mountain pine beetle and a board feet 25 reduction in allowable cut BB
Slide 20: Canadian Lumber Import Trade Case
Canadian Lumber Import Trade Case The preliminary combined duty on lumber imports from Canada was 27% The final finding of injury occurred in December and the final combined rate of 20% went into effect December 28th Canada has filed a complaint against the U.S. with the World Trade Organization (1)
Slide 21: EBITDDA & Segment EBITDDA Reconciliation - Potlatch
EBITDDA & Segment EBITDDA Reconciliation - Potlatch ($ in millions) Fiscal Year 2014 2015 2016 2017 RESOURCE Northern Resource operating income $65 $59 $65 $94 Depreciation, depletion and amortization 15 15 10 8 Northern Resource EBITDDA $80 $74 $75 $102 Southern Resource operating income $20 $17 $1
Slide 22: EBITDDA & Segment EBITDDA Reconciliation - Deltic
EBITDDA & Segment EBITDDA Reconciliation - Deltic ($ in millions) Fiscal Year 2014 2015 2016 2017 WOODLANDS Operating income $19 $20 $18 $25 Depreciation, depletion and amortization 6 7 8 10 Woodlands Segment Adjusted EBITDDA $25 $27 $26 $35 MANUFACTURING Operating income (loss) $31 $8 $19 $17 Depre
Slide 23: 2018 Outlook
2018 Outlook 2018 Projected Guidance Range Lower Upper RESOURCE Resource Segment Adjusted EBITDDA $160 $180 WOOD PRODUCTS Wood Products Segment Adjusted EBITDDA $130 $150 REAL ESTATE Real Estate Segment Adjusted EBITDDA $35 $45 CORPORATE Corporate expense ($77) ($70) Non-operating pension and other
Slide 24: Definitions
Definitions Adjusted EBITDDA is a non-GAAP measure and is calculated as net income (loss) adjusted for interest expense, provision (benefit) for income taxes, depletion, depreciation and amortization, basis of real estate sold, non-operating pension and other post-retirement benefit costs, gains and
Slide 25: Jerry Richards
Jerry Richards Vice President & Chief Financial Officer 509-835-1521 PotlatchDeltic (NASDAQ: PCH) www.PotlatchDeltic.com