19 slides from Rayonier Inc. Reit's earnings presentation, Oct 23, 2017
Slide 1: Q3 2017 Earnings Release
Q3 2017 Earnings Release October 23, 2017 Michael J. Covey Chairman and Chief Executive Officer Eric J. Cremers President and Chief Operating Officer Jerald W. Richards Vice President and Chief Financial Officer
Slide 2: Additional Information, Forward-Looking Statements & Non-GAAP Measures
Additional Information, Forward-Looking Statements & Non-GAAP Measures ADDITIONAL INFORMATION This communication is being made in respect of the proposed merger transaction involving Potlatch Corporation (“Potlatch”) and Deltic Timber Corporation (“Deltic”). This communication does not constitute an
Slide 3: Additional Information, Forward-Looking Statements & Non-GAAP Measures
Additional Information, 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 our expectations
Slide 4: Q3 2017: Total Company Summary
Q3 2017: Total Company Summary (unaudited, $ in millions, except per share amounts) 2017 2017 2016 2017 2017 2017 2016 2017 Q2 Q3 YTD YTD Q2 Q3 YTD YTD Operating Income Adjusted EBITDDA (2) Resource $ 19.5 $ 41.8 $ 59.2 $ 76.2 Wood Products 24.7 19.3 16.3 52.7 Northern region $ 19.5 $ 39.0 $ 55.3 $
Slide 5: Adjusted Net Income (excluding special items)
Adjusted Net Income (excluding special items) (unaudited, $ in millions, except per share amounts) 2017 Q2 2017 Q3 Income Income Diluted Income Income Diluted Before Taxes After Taxes EPS Before Taxes After Taxes EPS Net income (GAAP) $ 33.5 $ 24.3 $ 0.59 $ 36.4 $ 33.7 $ 0.82 Special items: Environm
Slide 6: Resource: Segment Summary
RESOURCE: Segment Summary • Northern sawlog prices increased 7% due largely to seasonally lighter logs • Southern sawlog prices increased 17%, primarily the result of a seasonal increase in hardwoods logs in the mix • Harvest volumes were seasonally higher in the North and the South $50 50% Operatin
Slide 7: Northern Region – Volume, Pricing and Adjusted EBITDDA
RESOURCE: Northern Region – Volume, Pricing and Adjusted EBITDDA Sawlog Pulpwood 900 $130 140 $50 800 $120 120 Tons (thousands) 700 $45 $110 100 Tons (thousands) 600 $100 $40 500 80 $/Ton $/Ton $90 400 60 $80 $35 300 $70 40 200 $30 100 $60 20 0 $50 0 $25 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4
Slide 8: Southern Region – Volume, Pricing and Adjusted EBITDDA
RESOURCE: Southern Region – Volume, Pricing and Adjusted EBITDDA Sawlog Pulpwood 400 $60 400 $50 350 350 $50 $45 Tons (thousands) 300 Tons (thousands) 300 $40 250 250 $40 $/Ton $/Ton 200 $30 200 150 150 $35 $20 100 100 $10 $30 50 50 0 $0 0 $25 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 20
Slide 9: Wood Products: Segment Summary
WOOD PRODUCTS: Segment Summary • The segment set a quarterly record for lumber shipments • Average lumber prices were $431 per MBF, the same as Q2 $30 30% Adjusted Operating Income(1) (millions) 19% 18% $20 $21.4 $21.4 20% Margin (%) 11% 9% 9% $10 10% $10.6 5% $8.3 $8.7 $1.0 $4.7 $(1.3) $0 0% 1% $(5
Slide 10: Lumber Sales Prices, Shipments and Adjusted EBITDDA
WOOD PRODUCTS: Lumber Sales Prices, Shipments and Adjusted EBITDDA 190 195 $500 200 175 180 165 171 168 Shipment Volumes 162 (thousand board ft) 155 $431 $431 (millions of board ft) 150 $387 $425 $ / MBF $369 $363 $351 100 $335 $324 $350 $316 50 $275 0 $200 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2017
Slide 11: Real Estate: Segment Summary
REAL ESTATE: Segment Summary • Operating income was down in Q3 due to the sale of fewer acres than Q2 • Q3 margin declined primarily due to fixed costs being absorbed by lower sale activity $12 100% Operating Income(1) (millions) 90% 80% $9 70% 69% $8.6 70% 70% 60% Margin (%) 54% 60% 51% $5.9 $6.0 $
Slide 12: Acres Sold, Average Price and Adjusted EBITDDA
REAL ESTATE: Acres Sold, Average Price and Adjusted EBITDDA 14,000 $3,000 AVG Weighted Price $2,209 10,500 $2,250 $1,800 Acres Sold $1,726 $1,620 $1,602 $1,603 $1,195 $1,504 7,000 $1,339 6,565 $1,500 5,530 4,535 4,560 6,292 3,473 7,248 5,409 3,500 $750 2,026 0 $0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS Amounts as of September 30, 2017: DEBT MATURITIES (in millions) Unaudited, $ in millions $190 Cash and cash equivalents $ 116.8 Debt $ 579.3 Pension & postretirement liability $ 118.5 (1) Net debt to enterprise value 18.1% (2) $46 $40 Dividend yield 2.9% $6 $14 2017 2018 2019 20
Slide 14: Q4 Outlook
Q4 OUTLOOK • Harvest 1.0 – 1.2 million tons Q4 • Slightly more than half of the total volume in the South • Sawlogs ≈45% of Southern volume and ≈95% of Northern volume RESOURCE • Estimated Q4 sawlog prices: • ≈10% lower in the North • ≈5% lower in the South • Estimate of operating earnings slightly
Slide 15: Appendix
4\ Potlatch. | Appendix www.potlatchcorp.com
Slide 16: Statistics: Resource
STATISTICS: Resource (unaudited) 2015 2016 2017 Fee Volumes (tons) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Northern Region Sawlog 762,813 490,625 366,852 388,575 579,837 474,024 354,104 333,926 559,580 Pulpwood 69,329 46,449 52,361 44,497 62,138 35,418 47,785 40,054 33,742 Stumpage 2,604 790 16,207 1,061 1,261 6
Slide 17: Statistics: Wood Products & Real Estate
STATISTICS: Wood Products & Real Estate (unaudited) 2015 2016 2017 Wood Products Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Lumber Shipments (MBF) 155,388 164,965 161,992 170,829 175,358 180,050 167,559 189,781 195,296 Lumber Sales Prices ($ per MBF) $ 335 $ 316 $ 324 $ 351 $ 369 $ 363 $ 387 $ 431 $ 431 Real Estate
Slide 18: Total Company Earnings Summary
Total Company Earnings Summary (unaudited, $ in millions, except per share amounts) 2015 2016 2017 2016 2017 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 YTD YTD Operating income: Resource $ 36.4 $ 16.1 $ 10.2 $ 15.7 $ 33.3 $ 22.7 $ 14.9 $ 19.5 $ 41.8 $ 59.2 $ 76.2 (1) Wood Products (5.4) (1.3) 1.0 4.7 10.6 8.3 8.7 2
Slide 19: Non-GAAP Reconciliation: Operating Segment Adjusted EBITDDA
NON-GAAP RECONCILIATION: Operating Segment Adjusted EBITDDA (unaudited, $ in millions) 2015 2016 2017 2016 2017 YTD YTD Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Northern Resource Operating Income $ 28.6 $ 11.7 $ 8.6 $ 12.3 $ 26.9 $ 17.0 $ 13.4 $ 17.8 $ 36.8 $ 47.8 $ 68.0 Depreciation, depletion and amortization 5