Rayonier Inc. Reit · NYSE:RYN
Rayonier Inc. Reit — Potlatch — Raymond James Institutional Investor Conference 2015
23 slides from Rayonier Inc. Reit's conference presentation, March 2015
Slide 1: March 2015 Investor Presentation
Michael J. Covey Chairman & Chief Executive Officer Potlatch Corporation Jerald W. Richards Vice President & Chief Financial Officer March 2015 Investor Presentation
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 future company performance, the company’s
Slide 3: Company Structure & Overview
Company Structure & Overview Converted to tax efficient REIT in 2006 Single level of taxation Potlatch Corporation Lower cost of capital North Resource Fourth largest U.S. Timber REIT (Timberlands) 1.6 million acres of owned timberland South (REIT) High margin, low risk real estate busin
Slide 4: Potlatch Overview
Potlatch Overview Potlatch owns ≈ 1.6 million acres of certified timberland and produces about 650 million board feet of lumber and 160 million square feet of plywood each year. St. Maries Bemidji Gwinn Timberlands(1) Idaho 791,000 Arkansas 410,000 Warren Alabama 101,000 Mississippi 100,000 Minnesot
Slide 5: Key Drivers Are Favorable
Key Drivers Are Favorable U.S. housing starts are recovering which drives higher lumber demand Canada’s ability to participate in U.S. recovery is limited by effect of the pine beetle and reduction in allowable cut Incremental lumber production will come from the U.S. South North American ex
Slide 6: Total U.S. Housing Starts
Total U.S. Housing Starts (in thousands) U.S. housing starts are slowly recovering back to a long-term trend level. The recent pick up in job growth and easing of lending standards are encouraging. We are 2,500 planning against 1.1 million U.S. housing starts in 2015. Actual(1) Forecast(2) Average S
Slide 7: Inventory of Available Live and Dead Lodgepole Pine in BC
Inventory of Available Live and Dead Lodgepole Pine in BC By Years Since Attack, 1999-2020 Approximately half of the lodgepole pine forest in British Columbia was affected and the inventory is declining over time. The long-term process of curtailing production capacity is underway. Million M3 Source
Slide 8: U.S. Lumber Supply
U.S. Lumber Supply (billion board feet) Incremental volume needed to satisfy increasing lumber demand will largely come from the U.S. South. Canada’s share of the U.S. market is declining and the ability of other U.S. regions to increase supply is constrained. 45 U.S. Lumber Supply (1995 - 2020) - R
Slide 9: China's Slowing Economy
China’s Slowing Economy Exports to China will continue to tension the U.S. market, despite softening in China’s construction sector and the effect of a strong U.S. dollar and weak Russian ruble. Source: RISI Source: RISI March 2015 - Investor Presentation Slides 9
Slide 10: Resource: Segment Overview
Resource: Segment Overview Stable and significant source of cash since REIT conversion $103 $97 $95 Increased EBITDDA driven by $92 $91 $88 $85 recovery of Northern sawlog prices $80 $83 $77 $75 Southern sawlog prices have not yet $67 recovered $73 $66 $59 The South is poised to supply wood
Slide 11: Resource: Southern Timberland Acquisition
Resource: Southern Timberland Acquisition Acquired 201,000 acres of high quality timberlands in Alabama & Mississippi Purchase price: $384 million Closed transaction December 2014 Strategic benefits: Diversify ownership Increase leverage to housing recovery Springboard for bolt-on acqu
Slide 12: Resource: Long-Term Harvest Profile
Resource: Long-Term Harvest Profile The acquisition increases our planned harvest to 4.5 million tons in 2015. Our strategy is to flex the harvest for short periods to maximize net present value, while managing the timberlands on a sustainable basis over the long-term. Annual Harvest Projected Avera
Slide 13: Wood Products: Segment Overview
Wood Products: Segment Overview We operate four top-quartile $80 $392 $402 sawmills $400 $70 $65 We sell lumber to wholesalers $342 $350 for use in homebuilding and $319 $59 $60 $297 $297 construction $292 $52 $300 $50 $255 Our industrial grade plywood $250 mill sells higher grade panels at $4
Slide 14: Wood Products: Real Price vs. Capacity Utilization
Wood Products: Real Price vs. Capacity Utilization Lumber prices are correlated with manufacturing capacity utilization, which is increasing. Source: RBC Capital Markets from Random Lengths, RISI, and RBC Capital Markets estimates, February 2015. March 2015 - Investor Presentation Slides 14
Slide 15: Real Estate: Segment Overview
Real Estate: Segment Overview Part of our ownership is worth more for uses other than timberlands. Parcels are segmented by product, then competitively marketed for sale at the highest overall price. Sales activity is lumpy with a base of about 20,000 acres annually. 2015 Land Base Value Optimizatio
Slide 16: Financial Highlights
FINANCIAL HIGHLIGHTS Funds Available for Distribution(3) (millions) $150 Amounts as of December 31, 2014: $ in millions $100 $98 Cash & short-term investments $ 31 $77 Debt $ 629 $53 $50 $52 $58 $50 Pension & other postretirement liability $ 116 Revolver availability $ 249 $0 (1) Net debt to enterpr
Slide 17: Conclusion: Investment Takeaways
Conclusion: Investment Takeaways High quality timberland portfolio Largest private landowner in Idaho Southern ownership poised to take advantage of sawlog price recovery Solid base provides ability to grow timberland ownership in attractive wood baskets Attractive dividend yield currently
Slide 18: Appendix
Appendix Sth ei ie Rc,
Slide 19: Southern Sawlog Demand by State
Southern Sawlog Demand by State The chart below compares historical sawlog demand across 11 southern states. Several states (Georgia, North Carolina, Texas, South Carolina) now have sawlog demand approaching pre- recession levels. Demand is still relatively sluggish in our wood baskets in Arkansas,
Slide 20: Southern Sawlog Price Trends by State
Southern Sawlog Price Trends by State The chart below compares historical sawlog pricing across 10 southern states. Note that pricing appears to have bottomed in most markets in 2012, and that there is great disparity across the region (e.g. Texas @ $31/ton and Arkansas at $23/ton). Pre-recession pr
Slide 21: EBITDDA and Segment EBITDDA Reconciliation
EBITDDA and Segment EBITDDA Reconciliation ($ in millions) Fiscal Year 2007 2008 2009(3) 2010 2011 2012 2013 2014 (1) Consolidated Net income $ 75 $ 73 $ 81 $ 40 $ 40 $ 43 $ 71 $ 90 Adjustments: Income tax (benefit) provision (18) (25) (16) 5 4 17 14 20 Interest expense(2) 15 20 22 28 28 26 23 23 De
Slide 22: Potlatch Net Debt & FAD Reconciliations
Potlatch Net Debt & FAD Reconciliations ($ in millions) Net Debt At December 31, 2007 2008 2009 2010 2011 2012 2013 2014 Long-term debt $ 321 $ 221 $ 368 $ 363 $ 345 $ 349 $ 320 $ 629 Current installments on long-term debt - 101 - 5 22 8 - - Current notes payable 110 129 - - - - - - Cash (9) (1) (2)
Slide 23: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDDA is a non-GAAP measure that management uses to evaluate the cash generating capacity of the company. EBITDDA, as we define it, is net income (loss) adjusted for net cash interest expense, provision (benefit) for income taxes, depreciation, depletion and amorti
Potlatch — Raymond James Institutional Investor Conference 2015 on 6ix