Rayonier Inc. Reit · NYSE:RYN
Rayonier Inc. Reit — PotlatchDeltic — Raymond James & Associates' 39th Annual Institutional Investors Conference (March 2018)
25 slides from Rayonier Inc. Reit's conference presentation, Mar 7, 2018
Slide 1: Investor Presentation
Investor Presentation March 7, 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 M
Slide 5: Resource – Segment Overview
Resource – Segment Overview $200 Potlatch & Deltic EBITDDA History (1) $180 $175 $160 EBITDDA ($ millions) Northern Resource EBITDDA strength $140 $155 Min $120 supported by significant portion of northern $100 sawlog prices being indexed to lumber prices $80 $60 $40 $20 Legacy Deltic harvest volume
Slide 6: High Quality Productive Idaho Timberlands
High Quality Productive Idaho Timberlands PotlatchDeltic Idaho timberlands are the PotlatchDeltic Idaho Hem-Fir Sawlog vs. WWPA Inland Hem-Fir Lumber Index most productive Northwest timberlands $600 east of the Cascade mountains $550 $500 $450 Timberlands support several major $400 species including
Slide 7: High Quality Southern Timberlands Opportunity on Deltic Legacy Timberlands
High Quality Southern Timberlands Opportunity on Deltic Legacy Timberlands Deltic timberlands add high quality southern Southern Timberlands - Harvest Productivity pine timber base 4.5 • Deltic standing inventory is 58% high (1) Tons per Acre (2017) 4.0 value pine sawlog • 77,000 acres of pine plant
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) Description Location Status Sawlog Pulpwood 18 $40 Lumber Production, Billion Board Feet 16 $35 Biewer - lumber
Slide 9: Wood Products - Segment Overview
Wood Products - Segment Overview Potlatch & Deltic EBITDDA History (1) 6 sawmills: greater than 1.1 billion board feet of $140 Max $130 EBITDDA ($ millions) $120 lumber capacity $100 $110 Min $80 Industrial grade plywood mill: 160 million square $60 feet of specialty grade panel capacity, most of $4
Slide 10: Lumber Capacity Utilization vs. Price
Lumber Capacity Utilization vs. Price REAL PRICE (2016 dollars) W. SPF 2x4 HISTORICAL W. SPF 2X4 PRICES (US$) $/MBF (US$) $550 $500 2018 $450 Current(2) $400 2003 $350 $300 $250 2005 $200 $150 $100 2000 2002 2005 2008 2011 2014 2017 Lumber prices are correlated with industry capacity utilization, wh
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) Rayonier 0% PotlatchDeltic is a net buyer of sawlogs in the South CatchMark 0% (1)(4) Beneficial as southern sawlog prices Weyerhaeuser 22% (1)(4) remain well below trend levels 59% direct levera
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 builders Plan Community 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 stand
Slide 14: Favorable Capital Structure
Favorable Capital Structure • New $380 million revolver PotlatchDeltic • $279 million available, Maturity: April 2023 Unaudited, $ in millions 12/31/2017 • Accordion: $420 million (1) Market captialzation $ 3,251 • Deltic debt Net debt (2) 675 • $100 million in process of being refinanced Enterpise
Slide 15: Growing Dividend
Growing Dividend Dividends ($ 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 $1.28 $1.30 $1.24 $1.20 $1.10 $1.00 2012 2013 2014 2015 2016 2017 Current Annualized Current dividend yield 3.1% (3) Pro forma dividend run rate is $101
Slide 16: Summary
Summary High quality, well managed portfolio of assets PotlatchDeltic 2018 Outlook (1)(2) Merger creates significant opportunity through Resource: Harvest: 5.5 – 5.9 million tons synergies and operational efficiencies to increase EBITDDA: $155 - $175 million Cash Available for Distribution Wood Prod
Slide 17: Appendix
Appendix PotlatchDeltic (NASDAQ: PCH) www.PotlatchDeltic.com
Slide 18: Single Family Housing - Favorable Fundamentals
Single Family Housing - Favorable Fundamentals 2,500 U.S. Housing Starts 2,000 Multifamily has led the recovery – significant Actual (1) Forecast (2) Average Starts Since 1970: supply pending in first half 2018 (Thousands) 1,500 1.5 million 1,000 Single family starts remain well below 500 historical
Slide 19: Housing Recovery and US - Canada Trade Support U.S. Lumber Demand Growth
Housing Recovery and US - Canada Trade Support U.S. Lumber Demand Growth Canada Softwood Lumber Production Canadian supply has declined 40 British Columbia Actual Forecast almost 10 billion board feet due 35 ≈10 billion to mountain pine beetle and a 30 board feet 25 reduction in allowable cut BBF 20
Slide 20: Canadian Lumber Import Trade Case
Canadian Lumber Import Trade Case The preliminary combined duty on lumber imports from Canada was 27% The final finding of injury occurred in December and the final combined rate of 20% went into effect December 28th Canada has filed a complaint against the U.S. with the World Trade Organization U.S
Slide 21: EBITDDA & Segment EBITDDA Reconciliation - Potlatch
EBITDDA & Segment EBITDDA Reconciliation - Potlatch ($ 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 $17 Depre
Slide 23: EBITDDA, Segment EBITDDA, & CAD Guidance Reconciliation - PotlatchDeltic
EBITDDA, Segment EBITDDA, & CAD Guidance Reconciliation - PotlatchDeltic ($ in millions) 2018 Projected Guidance Range Lower Upper RESOURCE Resource operating income $95 $115 Depreciation, depletion and amortization 60 60 Resource Segment Adjusted EBITDDA $155 $175 WOOD PRODUCTS Operating income $75
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-cash impairments and special items. Segment Adjusted EBITDDA is a no
Slide 25: Jerry Richards
Jerry Richards Vice President & Chief Financial Officer 509-835-1516 PotlatchDeltic (NASDAQ: PCH) www.PotlatchDeltic.com