29 slides from Rayonier Inc. Reit's investor presentation, Mar 2, 2015
Slide 1: Investor Presentation March 2015
Investor Presentation March 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this document regarding anticipated financial, legal or other outcomes, including Rayonier’s earnings guidance, if any, business and market conditions, outlook, expected dividend rate, Rayonier’s realigned business strategy, including expected harvest sche
Slide 3: Rayonier: Best-in-Class, Pure-Play Timber REIT
Rayonier: Best-in-Class, Pure-Play Timber REIT 2 Third-largest timber REIT with 2.7 million acres of high-quality timberland Advantageous REIT structure Geographic diversity – U.S. South, Pacific Northwest, New Zealand Over $800 million invested in high-quality timberlands since 2011 Profi
Slide 4: Highly Productive, Geographically Diversified Timberlands
Highly Productive, Geographically Diversified Timberlands 3 372 158 92 18 140 90 332 703 387 451 Total Rayonier = 2.7 million acres 451,000 acres, manage and own 65% of joint venture Pacific Northwest U.S. South New Zealand Washington – 372,000 acres, access to export markets 1.9 million acres, sawl
Slide 5: Realignment of Strategic Priorities
Realignment of Strategic Priorities 4 Manage for Sustainability Acquire High-Quality Timberlands Optimize Portfolio Value Focus on Quality of Earnings Enhance Disclosure Design harvest strategy to achieve long-term, sustainable yield Balance biological growth, harvest cash flow and responsible s
Slide 6: Housing Starts Drive Sawtimber Prices
1 ,0 9 0 1 ,2 2 0 1 ,1 5 6 1 ,3 3 0 1 ,1 8 0 1 ,4 0 0 1 ,1 6 2 1 ,4 6 3 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2015 2016 Raymond James FEA Freddie Mac NAHB $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 - 500 1,000 1,500 2,000 2,500 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0
Slide 7: Return to Trendline Implies Significant Price Recovery in U.S. South
$0 $10 $20 $30 $40 $50 $60 $70 198 0 198 1 198 2 198 3 198 4 198 5 198 6 198 7 198 8 198 9 199 0 199 1 199 2 199 3 199 4 199 5 199 6 199 7 199 8 199 9 200 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0 201 1 201 2 201 3 201 4 Pine Pulpwood Pine Chip-n-Saw Pine Sawtimber Trendline (Pin
Slide 8: Favorable Supply / Demand Dynamics in Rayonier Markets
Local market supply / demand dynamics determine price Logs typically travel less than 100 miles Supply / demand conditions vary widely across the region Significant sawlog price increases anticipated as recovery in U.S. housing starts progresses 7 Favorable Supply / Demand Dynamics in Rayoni
Slide 9: Advanced Silviculture Increases Harvest Yields
Advanced Silviculture Increases Harvest Yields Site Management 0% 10% 20% 30% 40% 50% 60% 70% 2008-2009 2010-2011 2012-2013 2014-2015 Genetics Industry leader in controlled mass pollination plantings Future Southeast plantings will be approximately 70% Loblolly Percentage of Loblolly Seedlings f
Slide 10: Rayonier Continues to Upgrade Timberland Base Through Active Portfolio Management
5.7 2.3 Acquisitions Dispositions 46 29 Acquisitions Dispositions 73% 60% Acquisitions Dispositions 75 68 Acquisitions Dispositions $2,097 $1,401 Acquisitions Dispositions 62,000 32,700 Acquisitions Dispositions Rayonier Continues to Upgrade Timberland Base Through Active Portfolio Management 9 Tota
Slide 11: Overview of Real Estate Strategy
Conservation Non-Strategic Development 10 Overview of Real Estate Strategy Real Estate Strategy Rural Optimize our portfolio with a disciplined land classification system that manages every acre toward its ultimate highest and best use (HBU) Lead initiatives to bring to market land with resident
Slide 12: Significant HBU Potential in FL and GA Coastal Corridor
11 Timberland ownership base of ~200,000 acres Approximately 40 miles of water frontage Approximately 250 miles of road and highway frontage Land holdings at five interchanges on I-95 and two planned future interchanges Residential, commercial, and industrial land use entitlements in hand
Slide 13: Disciplined Approach with Focus on Risk / Reward
12 Project Belfast Commerce Centre St. Johns North East Nassau Market Street Location Bryan Co, GA St. Johns Co, FL Nassau Co, FL Market Characteristics Port of Savannah's growth driving industrial sector Strong market driving 50% of new home sales in Jacksonville MSA Emerging market Market Segment
Slide 14: Historical Real Estate Sales Summary
$1,530 $2,171 $7,151 Non-Strategic / Conservation Rural Development Non- Strategic / Conservation 128,728 60% Rural / Recreational 81,986 39% Development 2,517 1% Historical Real Estate Sales Summary 13 Real Estate Sales Breakdown (2010-2014) Average Price per Acre (2010-2014) (acres) ($ per acre) N
Slide 15: Appendix
Appendix a Rayonier
Slide 16: U.S. South – Age Class Profile
227,710 243,958 269,052 249,127 133,618 91,660 0-4 5-9 10-14 15-19 20-24 25+ U.S. South – Age Class Profile 15 Note: Totals in chart represent net plantation acres; excludes ~71k gross non-timbered acres (i.e., roads, rights of way, etc.) and ~615k acres of hardwoods and natural stands. % of Total 1
Slide 17: U.S. Pacific Northwest – Age Class Profile
43,574 51,809 31,632 19,562 27,502 43,476 28,919 17,146 7,410 2,246 7,268 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50+ % of Total 15.5% 18.5% 11.3% 7.0% 9.8% 15.5% 10.3% 6.1% 2.6% 0.8% 2.6% Avg. Acres / Year 8,715 10,362 6,326 3,912 5,500 8,695 5,784 3,429 1,482 449 NM % of Total 3.1%
Slide 18: Profitability and Capital Resources & Liquidity
($ in millions, except per share data) Profitability 4Q 2014 3Q 2014 4Q 2013 Sales $147 $150 $239 Operating income 14 32 35 Pro forma operating income (1) 17 36 35 Net income attributable to Rayonier Inc. 9 33 80 Pro forma net income (1) 11 36 32 Adjusted EBITDA (1) 51 70 76 Diluted Earnings Per Sha
Slide 19: Adjusted EBITDA and Cash Available for Distribution
($ in millions, except per share data) Twelve Months Ended December 31, 2014 2013 Operating Income $98.3 $108.7 Depreciation, depletion, amortization 120.0 116.8 Non-cash cost of land sold 13.2 10.2 Internal review and restatement costs 3.4 – Gain related to consolidation of New Zealand joint ventur
Slide 20: 2015 Financial Guidance
($ in millions) 2014 Continuing Operations 2015 Guidance Sales $604 ~ $575 - 600 Segment Pro forma Operating Income (1) Southern Timber $46 $43 - 48 Pacific Northwest Timber 31 13 - 18 New Zealand Timber 10 5 - 9 Real Estate 48 25 - 35 Trading 2 1 - 2 Corporate and Other (32) ~(20) Total $104 $67 -
Slide 21: Southern Timber Operating Data
2013 2014 Q1 Q2 Q3 Q4 FY 2013 Q1 Q2 Q3 Q4 FY 2014 Sales Volume (Tons in 000s) Pine Pulpwood 773 836 758 814 3,181 776 707 867 934 3,284 Pine Sawtimber 414 501 427 334 1,676 387 363 492 459 1,701 Total Pine Volume 1,187 1,337 1,185 1,148 4,857 1,163 1,070 1,359 1,393 4,985 Hardwood 91 81 131 132 435
Slide 22: Pacific Northwest Timber Operating Data
2013 2014 Q1 Q2 Q3 Q4 FY 2013 Q1 Q2 Q3 Q4 FY 2014 Sales Volume (Tons in 000s) Northwest Pulpwood 72 82 80 71 305 86 73 51 52 262 Northwest Sawtimber 327 412 415 384 1,538 458 375 295 274 1,402 Total Northwest Volume 399 494 495 455 1,843 544 448 346 326 1,664 Northeast (1) 57 17 21 41 136 – – – – –
Slide 23: New Zealand Timber Operating Data
2013 2014 Q1 Q2 Q3 Q4 FY 2013 Q1 Q2 Q3 Q4 FY 2014 Sales Volume (Tons in 000s) Domestic Sawtimber (Delivered) 170 195 212 163 740 144 170 179 151 644 Domestic Pulpwood (Delivered) 86 92 88 93 360 73 77 103 99 353 Export Sawtimber (Delivered) 184 188 219 207 798 142 193 230 261 826 Export Pulpwood (De
Slide 24: Timber Segments Selected Operating Information
Timber Segments Selected Operating Information 23 ($ in millions) Three Months Ended Twelve Months Ended 12/31/2014 9/30/2014 12/31/2013 12/31/2014 12/31/2013 Depreciation, Depletion, and Amortization Southern Timber $14.8 $14.8 $11.7 $52.2 $49.4 Pacific Northwest Timber 3.8 6.0 5.3 21.3 21.4 New Ze
Slide 25: Real Estate Overview
Real Estate Overview 24 2013 2014 Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2014 Sales ($ in MMs) Development (Unimproved) $1.5 $0.3 $0.9 $0.2 $2.9 $0.1 $1.4 $1.4 $1.9 $4.8 Development (Improved)(1) – – – 1.6 1.6 – – – – – Rural(2) 2.7 7.1 13.0 4.7 27.5 5.1 5.4 25.1 5.4 41.0 Non-strategic / Timberlands (2)(3) 20
Slide 26: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures Pro Forma Operating Income is defined as operating income adjusted for internal review and restatement costs, the gain related to consolidation of the New Zealand joint venture and a cumulative out-of-period adjustment for depletion expense. Pro Forma Net Income is d
Slide 27: Reconciliation of Reported to Pro Forma Earnings
Reconciliation of Reported to Pro Forma Earnings 26 ($ in millions, except per share amounts) December 31, 2014 September 30, 2014 December 31, 2013 Three Months Ended $ EPS $ EPS $ EPS Operating Income $14.2 $32.1 $34.9 Internal review and restatement costs 2.4 1.0 – Cumulative out-of-period adjust
Slide 28: Reconciliation of Operating Income to Adjusted EBITDA by Segment
Reconciliation of Operating Income to Adjusted EBITDA by Segment 27 ($ in millions) Southern Pacific Northwest New Zealand Real Corporate Three Months Ended Timber Timber Timber Estate Trading and Other Total December 31, 2014 Operating Income $13.5 $3.7 $2.9 $2.6 ($0.3) ($8.2) $14.2 Depreciation, d
Slide 29: Reconciliation of Operating Income to Adjusted EBITDA by Segment
Reconciliation of Operating Income to Adjusted EBITDA by Segment 28 ($ in millions) Southern Pacific Northwest New Zealand Real Corporate Twelve Months Ended Timber Timber Timber Estate Trading and Other Total December 31, 2014 Operating Income $45.7 $29.5 $9.5 $47.5 $1.7 ($35.6) $98.3 Depreciation,