Rayonier Inc. Reit · NYSE:RYN
Rayonier Inc. Reit — Rayonier — Nareit's REITweek: 2024 Investor Conference
42 slides from Rayonier Inc. Reit's conference presentation, Jun 4, 2024
Slide 1: Investor Conference Presentation
Investor Conference Presentation June 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements – Certain statements in this presentation 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 s
Slide 3: Rayonier Today (NYSE: RYN)
Rayonier Today (NYSE: RYN) Key Stats Business Segments Adj. EBITDA2 Mix by Segment 1926 ~440 Founded Employees 70% Timber Segments ~2.7M ~11M Tons 30% Total Acres1 Sustainable Yield $296.5M 47% 2023 Southern Timber $296.5M $1,056.9M $163.9M Pacific Northwest (PNW) Timber FY23 Adj. EBITDA2 FY23 Sales
Slide 4: Key Trends Driving Increased Demand for Land and Timber
Key Trends Driving Increased Demand for Land and Timber GLOBAL MEGATREND Growing Need for Land-Based Solutions Decarbonization Solutions Low-Carbon Economy Transition Growing Use of Renewable Wood-Based Products Growing Demand for U.S.-CENTRIC TREND Land and Undersupplied U.S. Housing Market Timber
Slide 5: Evolution from a Timber Company to a Land Resources Company
Evolution from a Timber Company to a Land Resources Company Core Business Growth Business Timber Timber Non-Timber Land-Based Segments Harvesting Revenue1 Solutions Real Estate / Real Estate Non-Strategic Rural HBU HBU Segment Development High-Value Growth Opportunities Emerging from Our Timberland
Slide 6: Value per Acre Potential
Significant Value Creation Potential from Optimizing Land-Use Up to 15x Value Up to $30,000 Up to ~5-10x $25,000 10x Timber Value Creation Value per Acre Potential Value Potential from Land-Based $20,000 Solutions $15,000 Up to 5x Value $10,000 Up to $5,000 ~10-15x $0 – Timber Value Creation Core Ti
Slide 7: Our Portfolio Advantages
Our Portfolio Advantages Best-in-Class Differentiated Transformative Timberland Portfolio Real Estate Platform Growth in Land- Based Solutions • 100% of timberlands • Real estate platform with • Burgeoning opportunities located in core softwood proven track record of to provide land-based producing
Slide 8: Geographically Diversified Portfolio
Geographically Diversified Portfolio 412 PACIFIC NORTHWEST 6 Acreage: 418K Acres Sustainable Yield: 1.25-1.45M Tons U.S. SOUTH Acreage: 1.85M Acres Sustainable Yield: 6.8-7.2M Tons 91 2 16 255 662 147 282 397 NEW ZEALAND Acreage: 421K Acres Sustainable Yield: 2.4-2.7M Tons Generating Industry-Leadin
Slide 9: Concentrated in Attractive U.S. South Markets
Concentrated in Attractive U.S. South Markets Rayonier Acreage Mix U.S. South Acreage Superior EBITDA2 in Top Quartile Markets per Acre Generation 71% $84 $83 31% $66 $68 $61 $61 $54 $55 25% $51 $45 69% Rayonier Public Peer Average 1 2019 2020 2021 2022 2023 U.S. South PNW/NZ Rayonier NCREIF South 3
Slide 10: U.S. South: Favorable Pricing Dynamics in Top Markets
U.S. South: Favorable Pricing Dynamics in Top Markets 2023 Composite Price 2023 Composite Price by Region Quartile Rankings 71% ($/ton) Key Takeaways Top Quartile $25 Markets • Supply / demand dynamics highly localized as logs generally travel less than $20 100 miles • Timber consumption vs. $15 inv
Slide 11: Proven Real Estate Platform with Development Capabilities
Proven Real Estate Platform with Development Capabilities Core Business Growth Business Unimproved Improved Non-Strategic Rural Development Development Sale of non-strategic Creating value Creating value through Creating value timberland assets through rural places properties with through developed
Slide 12: Executing Real Estate Strategy to Optimize HBU Value
Executing Real Estate Strategy to Optimize HBU Value Average HBU1 Price per Acre / Real Estate Segment Sales Mix3 Premium to NCREIF2 Rural / Other Development $4,084 104% $2,763 15% 55% 44% 2015-2017 2021-2023 56% 2015-2017 2021-2023 85% Rayonier Price per Acre Premium to NCREIF HBU Premiums Have In
Slide 13: High-Value Real Estate Development Pipeline
High-Value Real Estate Development Pipeline Total 2% Acres 30% Florida ~121K Development Potential Georgia Washington 68% Entitled / In-Planning ~50K Longer-Term Pipeline ~71K Continued focus Areas with large Strong local Community- on high-growth contiguous community centric population landholdings
Slide 14: Net Zero Transition Driving Demand for Land-Based Solutions
Net Zero Transition Driving Demand for Land-Based Solutions Global CO2 Emissions – Path to Net Zero Global Net Zero Commitments Cover4 (GtCO2 per Year) >75% >50% ~88% 50 Business-as-Usual Emissions1 40 of All of ~2,000 Largest of Global Countries Companies CO2 Emissions 30 20 Driving Investment in D
Slide 15: Rayonier's Land-Based Solutions Focus Areas
Rayonier’s Land-Based Solutions Focus Areas Alternative / Additional Carbon Fiber for Land Use Markets Bioenergy / Biofuel Solar CCS Wind Voluntary (U.S.) Compliance (NZ) BECCS Sustainable Farms Aviation Fuel (SAF) Highest potential near-term opportunities Significant value generated from NZUs1, Lon
Slide 16: Demand for Utility Solar Increasing Significantly
Demand for Utility Solar Increasing Significantly Key Drivers Impact of Inflation Reduction Act1,2 (Projected GW of U.S. Utility Solar Capacity) • Solar levelized cost of 500 electricity (LCOE) has 22% declined more than 80% CAGR since 2008 342 • Over 40% of U.S. electric capacity additions driven b
Slide 17: Utility Solar Growth Implies Significant Land Need
Utility Solar Growth Implies Significant Land Need Projected Utility Solar Installations / Implied Land Need 60 3.5 Utility Solar Land Use 3.0 50 Capacity Additions (GW) 2.5 Land Need (M Acres) 40 2.0 30 1.5 20 1.0 ~7 Acres per MW ~75-200 MW ~180 GW 10 0.5 of Generation Capacity Per Installation U.S
Slide 18: Significant Solar Growth in U.S. South
Significant Solar Growth in U.S. South Projected Regional Share of Projected U.S. South Rayonier Utility Solar Capacity Additions Solar Installations by State U.S. Positioning1 (% Share of Capacity Additions: 2023-2028) (% of U.S. South Utility Solar Installations: 2023-2028) (% of Owned Acres vs. P
Slide 19: Demand for CCS Increasing Significantly
Demand for CCS Increasing Significantly Decarbonization Driving Increased …But Structural Factors Constrain Supply Demand for Pore Space Capacity… • Permitting is often a 4+ year process Projected U.S. CCUS Demand (Million Tons)1 • Smaller tract sizes can limit storage potential 297 • Existing CO2 p
Slide 20: Well-Positioned to Address Key CCS Requirements
Well-Positioned to Address Key CCS Requirements High-Purity Emissions Sources Geologic Storage Capacity Access to Pipelines Near-term demand likely driven by high- Large tracts of land with geologic capacity Existing pipelines and rights-of-way in purity emissions sources (e.g., natural gas and limi
Slide 21: Demand for Carbon Offsets Expected to Grow
Demand for Carbon Offsets Expected to Grow Key Growth Drivers Projected Issuance of Carbon Credits by Year, MtCO2e/year 1 (Billions) Growing number of corporate net-zero pledges ~16x and carbon-neutral products Growth 3.2 Shift from carbon avoidance to carbon removal ~12x Growth 2.9 2.4 Quest for hi
Slide 22: Favorable Bioenergy Market Drivers
Favorable Bioenergy Market Drivers Bioenergy Project Activity VA Across Our Footprint1 Bioenergy Plays a Significant Role TN NC in All Net-Zero Scenarios and is OK AR SC Likely to be Incentivized MS AL GA • Provides an avenue to reduce or TX eliminate emissions in difficult areas LA (e.g., aviation)
Slide 23: Our Organizational Advantages
Our Organizational Advantages Pure-Play Nimble Capital Organization Aligned Timber REIT Allocation Approach with Strategy • Pure-play timber REIT • Nimble capital allocation • Strong ESG profile and structure provides strategy to build long-term commitment to sustainability enhanced optionality valu
Slide 24: Rayonier is the Only "Pure Play" Timber REIT
Rayonier is the Only “Pure Play” Timber REIT Benefits of Pure-Play Structure 100% 38% Land-Based Land-Based Lower Cash Flow Volatility 26% 27% Rayonier Peer Group 5-Year 5-Year Greater Optionality and Avg. EBITDA1 Avg. EBITDA Composition 62% Composition 2 Operational Flexibility 11% 74% Greater Upsi
Slide 25: Inherent Stability in Our Core Timber Business
Inherent Stability in Our Core Timber Business Where Rayonier Forest Products Supply Chain Primarily Plays SAW LOGS WOOD PRODUCTS MANUFACTURING LUMBER / WOOD PRODUCTS DISTRIBUTORS / RETAILERS TIMBER PULPWOOD PULP & PAPER MANUFACTURING PAPER PRODUCTS Lower MARKET VOLATILITY Higher Historical Industry
Slide 26: Nimble Capital Allocation and Prudent Financial Management
Nimble Capital Allocation and Prudent Financial Management NAV-Accretive Share Opportunistic Prudent Balance Executing Initiatives to Repurchases Capital Raising Sheet Management Enhance Shareholder Value $23.84 ~$36.43 2.8% Responded to Unprecedented Disconnect Between Public and Average Buyback Pr
Slide 27: Conservative Capitalization and Balance Sheet Management
Conservative Capitalization and Balance Sheet Management Capitalization Maturity Profile2 3/31/24 Hedged for Term Hedged Until August 2024 - = $500 $1,369M $160M $1,209M $450 $150M of remaining floating rate Total Debt Cash Net Debt exposure through 2025 $400 $350 $150M Credit / Valuation Data paid
Slide 28: Committed to Maintaining Investment Grade Credit Profile
Committed to Maintaining Investment Grade Credit Profile Current Credit Enhanced Credit Credit Ratings Highlights Ratio Targets Investment Grade Credit Ratings • Ongoing access to Farm Net Debt / Adj. EBITDA1 Target Credit System Old New BBB- / Stable • Strong Adj. EBITDA1 margins ≤4.5x ≤3.0x S&P •
Slide 29: Asset Disposition Plan: Leveraging Public vs. Private Arbitrage Opportunity
Asset Disposition Plan: Leveraging Public vs. Private Arbitrage Opportunity EV / EBITDA Multiple Comparison $1B Disposition Initiative • Rayonier’s public market valuation is currently below private market Oregon Disposition valuation benchmarks • Sold 55,000 acres in Southwest Oregon to Manulife •
Slide 30: Update on Our Disposition Plan
Update on Our Disposition Plan Key Objectives Key Disposition Criteria • Reduce leverage for higher rate environment Concentrate capital in markets with • Capitalize on public-private valuation gap • Strongest cash flow attributes • Most favorable long-term growth prospects Update on Approach by Reg
Slide 31: Sustainability is Ingrained in Everything We Do
Sustainability is Ingrained in Everything We Do ENVIRONMENTAL SOCIAL GOVERNANCE Carbon Footprint1 50% YOY Reduction 67% Board Diversity Carbon 14.2M MT in Contractor Recordable Gender, Race, and Sequestered Injury Count in U.S. National Origin Carbon 290K MT Emitted Comprehensive 89% Board Signed Ne
Slide 32: Executing a Clear Strategy to Build Long-Term Value per Share
Executing a Clear Strategy to Build Long-Term Value per Share Compounding Shareholder Optimize Expand Leverage Value Core Land-Based Real Estate Timber Solutions Development Operations Offerings Platform • Market-Driven Precision • Solar • Creating Inspirational Places $ Forestry • Carbon Capture &
Slide 33: Long-Term LBS & RED Adj. EBITDA Financial Targets
Long-Term LBS & RED Adj. EBITDA Financial Targets Land-Based Solutions (U.S. Only) Real Estate Development Target Annual Adj. EBITDA1 Contribution ($M) Target Average Annual Adj. EBITDA1,2 Contribution ($M) $75 ~$40 ~$28 $30 ~$10 $10 NM 2024 2027 2030 Pre-2016 2016-2020 2021-2025 2026-2030 1 Non-GAA
Slide 34: Three Strong Businesses Well-Positioned for Future Growth
Three Strong Businesses Well-Positioned for Future Growth High Quality Timberlands in Superior Markets Timber Favorable Long-Term Demand Outlook for Wood Fiber Focused on Responsible Stewardship Well-Positioned Entitled to Capture Land-based Landholdings Growing Market Provide Demand Solutions Low-C
Slide 35: Appendix: Definitions & Reconciliations
Appendix: Definitions & Reconciliations INVESTOR PRESENTATION | 35
Slide 36: Definitions of Non-GAAP Measures and Pro Forma Items
Definitions of Non-GAAP Measures and Pro Forma Items Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, costs related to shareholder litigation, the gain on foreig
Slide 37: Reconciliation of Net Debt
Reconciliation of Net Debt ($ in millions) Q1 2024 Current maturities of long-term debt — Long-term debt, net of deferred financing costs and unamortized discounts 1,362.0 Plus - deferred financing costs 4.0 Plus - unamortized discounts 2.7 Total Debt (Principal Only) $1,368.7 Cash and cash equivale
Slide 38: Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment Southern Pacific Northwest New Zealand Timber Corporate ($ in millions) Timber Timber Timber Funds Real Estate Trading and Other Total TTM (ending Q1 2024) Operating income (loss) $77.0 ($9.8) $34.1 — $155.6 $0.2 ($40.3) $216.9
Slide 39: Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment Southern Pacific Northwest New Zealand Timber Corporate ($ in millions) Timber Timber Timber Funds Real Estate Trading and Other Total 2023 Operating income (loss) $76.3 ($9.0) $26.0 — $156.6 $0.5 ($39.1) $211.3 Timber write-off
Slide 40: Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment (Cont'd)
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment (Cont’d) Pacific Southern Northwest New Zealand Timber Corporate ($ in millions) Timber Timber Timber Funds Real Estate Trading and Other Total 2020 Operating income (loss) $41.3 ($10.0) $30.0 ($13.2) $72.0 ($0.5) ($45.2) $74.4
Slide 41: Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment (Cont'd)
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Segment (Cont’d) Pacific Southern Northwest New Zealand Timber Corporate ($ in millions) Timber Timber Timber Funds Real Estate Trading and Other Total 2016 Operating income (loss) $43.1 ($4.0) $33.0 — $202.4 $2.0 ($20.8) $255.8 Depreci
Slide 42: Enterprise Value to Adjusted EBITDA Multiple Calculations
Enterprise Value to Adjusted EBITDA Multiple Calculations NCREIF NCREIF NCREIF NCREIF Appraisal Appraisal ($ in millions, except per share and per acre amounts) Rayonier U.S. South U.S. South U.S. PNW U.S. PNW New Zealand New Zealand 2023 2023 2023 Actual EBITDA 5-Yr Average EBITDA 5-Yr Average 2023
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