Click here for PDF versionJACKSONVILLE, Fla.--(BUSINESS WIRE)--Jan. 24, 2008--Rayonier (NYSE:RYN) today reported full year 2007 income from continuing operations of $174.3 million, or $2.21 per share, compared to $171.2 million, or $2.19 per share, in 2006. Excluding special items(1), earnings were $2.35 per share, or 18 percent, above 2006 earnings of $1.99 per share. In 2007, cash provided by operating activities of $324 million was $17 million above 2006. Cash available for distribution(2) of $241 million was $63 million, or 35 percent, above 2006.
"Each of our three core businesses contributed to strong 2007 performance, despite a challenging environment in timber and real estate markets," said Lee M. Thomas, chairman, president and CEO. "In Timber, we lessened the effect of a weak housing market by rebalancing our sales mix to meet heavy demand in the pulpwood market. Continued interest in our rural properties and the entitlements we received on 3,300 acres along the I-95 corridor near Savannah, Georgia contributed to a successful year in Real Estate. Our Performance Fibers business capitalized on strong global markets to achieve record results. The resulting cash flow enabled us to increase our dividend to an annualized $2.00 per share, the fourth increase since our conversion to a REIT in 2004."
Fourth quarter income from continuing operations was $34.4 million, or 44 cents per share, compared to $50 million, or 64 cents per share, in 2006. Fourth quarter 2007 included a special item expense of $0.8 million, or 1 cent per share, for the final assessment of losses sustained from the second quarter wildfires in Florida and Georgia. Fourth quarter 2006 included a special item gain of $3.7 million, or 5 cents per share, for a deferred tax adjustment. Excluding special items, fourth quarter income from continuing operations was 45 cents per share compared to 59 cents per share in 2006.(3)
Full year 2007 net income was $174.3 million, or $2.21 per share, compared to $176.5 million, or $2.26 per share, in 2006. Net income in the fourth quarter was $34.4 million, or 44 cents per share, compared to $55.3 million, or 71 cents per share, in fourth quarter 2006. Fourth quarter 2006 included income from discontinued operations of $5.3 million, or 7 cents per share, reflecting a reduction in environmental reserves.
Timber
For the fourth quarter and full year, sales increased $2 million and $14 million from the prior year periods, while operating income declined by $7 million and $19 million, respectively, due to increased sales of lower margin pulpwood and reduced demand for sawlogs in a weak housing market. Full year operating income also was negatively impacted by approximately $10 million from lower prices realized on the sale of fire damaged timber.
Real Estate
Compared to fourth quarter 2006, sales and operating income decreased $25 million and $24 million, respectively, due to the timing of transactions which occurred earlier in 2007 than 2006. For the full year, sales and operating income each improved $4 million primarily due to increased rural land prices, driven by a third quarter sale of 3,100 acres in west central Florida.
Performance Fibers
For the fourth quarter, sales and operating income improved $3 million and $7 million, respectively, from the prior year period as increased prices more than offset lower volume primarily resulting from unplanned downtime. Sales and operating income for the year increased $51 million and $61 million, respectively, largely due to higher prices driven by favorable market dynamics and improved mix.
Effective Tax Rate
The full year effective tax rate before discrete items was 13.5 percent compared to 16.3 percent in 2006. The comparable fourth quarter effective tax rate was 8.0 percent compared to 20.7 percent in 2006.(4) The lower rates were due to higher REIT income. Including discrete items of $4 million, the fourth quarter effective tax rate was a benefit of 4.0 percent.
Outlook
"Even with the soft housing market negatively affecting timber prices and volumes, we expect full year 2008 earnings to be only slightly below 2007, and first quarter earnings to be comparable to first quarter of 2007, due to the diversity and balance of our three core businesses," said Thomas. "We are well positioned to generate favorable results despite a challenging economic environment. Cash available for distribution is expected to remain strong, although somewhat below 2007."
Thomas continued, "In Timber, as part of our strategy to upgrade our portfolio, we will initiate sales of non-strategic timberlands while pursuing acquisitions that meet our investment criteria. We have the flexibility to adjust our sales mix in difficult sawlog markets, preserving our higher-value timber assets until markets improve. In Real Estate, we will continue to pursue entitlements on development lands that drive long-term shareholder value. We anticipate that interest in our rural properties will continue to be high among buyers with industrial, conservation or recreational land uses. We expect even better results from our Performance Fibers business in 2008, and we will increase capital investment to improve reliability and operational excellence."
Further Information
A conference call will be held on Thursday, January 24, at 2:00 p.m. EST to discuss these results. Interested parties are invited to listen to the live Webcast by logging on to www.rayonier.com and following the link. Investors may also choose to access the "listen only" conference call by dialing 913-981-5584. Supplemental materials will be available at the website. A replay will be available on the site shortly after the call, and it will be archived for one month.
For further information, visit the company's web site at www.rayonier.com. Complimentary copies of Rayonier press releases and other financial documents are also available by mail or fax by calling 1-800-RYN-7611.
(1) Earnings excluding special items is a non-GAAP measure detailed and reconciled to GAAP in the attached exhibits. The 2007 special item of $10.9 million is a charge to write down fire damaged timber. In 2006, special item gains totaled $15.5 million.
(2) Cash available for distribution (CAD) is a non-GAAP measure defined and reconciled to GAAP in the attached exhibits.
(3) See Schedule H for details.
(4) See Schedule J for details.
Rayonier is a leading international forest products company with three core businesses: Timber, Real Estate and Performance Fibers. The company owns, leases or manages 2.6 million acres of timber and land in the United States and New Zealand. The company's holdings include approximately 200,000 acres with residential and commercial development potential along the fast-growing Interstate 95 corridor between Savannah, Georgia, and Daytona Beach, Florida. Its Performance Fibers business is the world's leading producer of high-value specialty cellulose fibers. Approximately 40 percent of the company's sales are outside the U.S. to customers in more than 50 countries. Rayonier is structured as a real estate investment trust.
Certain statements in this document regarding anticipated financial outcomes (including earnings guidance, if any), business and market conditions, outlook and other similar statements relating to Rayonier's future financial and operational performance, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as "may," "will," "should," "expect," "estimate," "believe," "anticipate" and other similar language. Forward-looking statements are not guarantees of future performance and undue reliance should not be placed on these statements.
The following important factors, among others, could cause actual results to differ materially from those expressed in forward-looking statements that may have been made in this document: the cyclical and competitive nature of the industries in which we operate; fluctuations in demand for, or supply of, our forest products and real estate offerings; entry of new competitors into our markets; changes in global economic conditions and world events, including political changes in particular regions or countries; changes in energy and raw material prices, particularly for our performance fibers and wood products businesses; unanticipated equipment maintenance and repair requirements at our manufacturing facilities; the geographic concentration of a significant portion of our timberland; our ability to identify and complete timberland acquisitions; changes in environmental laws and regulations, including laws regarding air emissions and water discharges, remediation of contaminated sites, timber harvesting, delineation of wetlands, and endangered species, that may restrict or adversely impact our ability to conduct our business, or increase the cost of doing so; adverse weather conditions, natural disasters and other catastrophic events such as hurricanes, wind storms and wildfires, which can adversely affect our timberlands and the production, distribution and availability of our products and raw materials such as wood, energy and chemicals; interest rate and currency movements; the availability of credit generally, including its impact on the cost and terms of obtaining financing; our capacity to incur additional debt, and any decision we may make to do so; changes in tariffs, taxes or treaties relating to the import and export of our products or those of our competitors; the ability to complete like-kind-exchanges of timberlands and real estate; changes in key management and personnel; our ability to continue to qualify as a REIT and to fund distributions using cash generated through our taxable REIT subsidiaries; and changes in tax laws that could reduce the benefits associated with REIT status.
In addition, specifically with respect to our Real Estate business, the following important factors, among others, could cause actual results to differ materially from those expressed in forward-looking statements that may have been made in this document: the cyclical nature of the real estate business generally, including fluctuations in demand for both entitled and unentitled property; the lengthy, uncertain and costly process associated with the ownership, entitlement and development of real estate, especially in Florida, which also may be affected by changes in law, policy and political factors beyond our control; the potential for legal challenges to entitlements and permits in connection with our properties; unexpected delays in the entry into or closing of real estate transactions; the existence of competing developers and communities in the markets in which we own property; the pace of development and the rate and timing of absorption of existing entitled property in the markets in which we own property; changes in the demographics affecting projected population growth and migration to the Southeastern U.S.; changes in environmental laws and regulations, including laws regarding water withdrawal and management and delineation of wetlands, that may restrict or adversely impact our ability to sell or develop properties; the cost of the development of property generally, including the cost of property taxes, labor and construction materials; the timing of construction and availability of public infrastructure; and the availability of financing for real estate development and mortgage loans.
Additional factors are described in the company's most recent Form 10-K on file with the Securities and Exchange Commission. Rayonier assumes no obligation to update these statements except as is required by law.
RAYONIER
FINANCIAL HIGHLIGHTS
DECEMBER 31, 2007 (unaudited)
(millions of dollars, except per share information)
Three Months Ended Year Ended
------------------------------ -------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
-------- ---------- ---------- --------- ---------
Profitability
Sales $ 290.4 $ 334.2 $ 328.5 $1,224.7 $1,229.8
Operating income $ 43.1 $ 92.7 $ 67.8 $ 246.6 $ 229.7
Pro forma
operating income
(a) $ 43.9 $ 92.7 $ 67.8 $ 257.5 $ 221.9
Income from
continuing
operations $ 34.4 $ 71.5 $ 50.0 $ 174.3 $ 171.2
Discontinued
operations $ - $ - $ 5.3 $ - $ 5.3
Net income $ 34.4 $ 71.5 $ 55.3 $ 174.3 $ 176.5
Income per diluted
common share
Continuing
operations $ 0.44 $ 0.90 $ 0.64 $ 2.21 $ 2.19
Net income $ 0.44 $ 0.90 $ 0.71 $ 2.21 $ 2.26
Pro forma
income from
continuing
operations (a) $ 0.45 $ 0.90 $ 0.59 $ 2.35 $ 1.99
Pro forma
operating income
as a percent of
sales (a) 15.1% 27.7% 20.6% 21.0% 18.0%
Adjusted ROE (a) N/M N/M N/M 19.4% 17.2%
Average diluted
shares
outstanding
(millions) 79.3 79.1 78.3 78.9 78.2
Year Ended
December 31,
---------------------
2007 2006
---------- ----------
Capital Resources and
Liquidity
Cash provided by
operating
activities $ 324.0 $ 306.9
Cash used for
investing
activities $ (126.0) $ (385.2)
Cash used for
financing
activities $ (57.8) $ (29.8)
Adjusted EBITDA (b) (d) $ 418.5 $ 370.2
Cash Available for
Distribution (CAD) (c) (d) $ 240.8 $ 177.8
12/31/07 12/31/06
---------- ----------
Debt (1) $ 749.8 $ 659.0
Debt / capital 43.1% 41.8%
Cash $ 181.1 $ 40.2
(a), (b), (c) and (d), see Schedule B.
N/M: Not meaningful.
(1) In October, Rayonier TRS Holdings Inc. issued $300 million of
3.75% Senior Exchangeable Notes due 2012.
- A -
RAYONIER
FOOTNOTES FOR SCHEDULE A
DECEMBER 31, 2007 (unaudited)
(a) Pro forma operating income and income from continuing operations,
and Adjusted ROE are non-GAAP measures. See Schedule H for
reconciliation to the nearest GAAP measure.
(b) Adjusted EBITDA is defined as earnings from operations before
interest, taxes, depreciation, depletion, amortization and the non-
cash cost basis of real estate sold. Adjusted EBITDA is a non-GAAP
measure of operating cash generating capacity of the Company. See
reconciliation on Schedule I.
(c) Cash Available for Distribution (CAD) is defined as cash provided
by operating activities less capital spending, adjusted for the tax
benefits associated with certain strategic acquisitions, the change
in committed cash and other items which include the proceeds from
matured energy forward contracts and the change in capital
expenditures purchased on account. CAD is a non-GAAP measure of cash
generated during a period that is available for dividend
distribution, repurchase of the Company's common shares, debt
reduction and for strategic acquisitions net of associated financing.
See reconciliation on Schedule H.
(d) Management considers these measures to be important to estimate
the enterprise and shareholder values of the Company as a whole and
of its core segments, and for allocating capital resources. In
addition, analysts, investors and creditors use these measures when
analyzing the financial condition and cash generating ability of the
Company.
- B -
RAYONIER
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
DECEMBER 31, 2007 (unaudited)
(millions of dollars, except per share information)
Three Months Ended
--------------------------------------
Dec. 31, Sept. 30, Dec. 31,
2007 2007 2006
------------ ------------ ------------
Sales $ 290.4 $ 334.2 $ 328.5
------------ ------------ ------------
Costs and expenses
Cost of sales (a) 231.9 227.3 249.6
Selling and general expenses 18.1 16.9 18.4
Other operating income, net (2.7) (2.7) (7.3)
------------ ------------ ------------
Operating income before gain on
sale of New Zealand timber
assets 43.1 92.7 67.8
Gain on sale of New Zealand
timber assets - - -
------------ ------------ ------------
Operating income (a) 43.1 92.7 67.8
Interest expense (14.1) (15.0) (13.8)
Interest and other income, net 4.1 1.4 2.5
------------ ------------ ------------
Income before taxes 33.1 79.1 56.5
Income tax benefit / (expense) 1.3 (7.6) (6.5)
------------ ------------ ------------
Income from continuing
operations 34.4 71.5 50.0
Discontinued operations - - 5.3
------------ ------------ ------------
Net income $ 34.4 $ 71.5 $ 55.3
============ ============ ============
Income per Common Share:
Basic
From continuing operations $ 0.45 $ 0.92 $ 0.65
============ ============ ============
Net income $ 0.45 $ 0.92 $ 0.72
============ ============ ============
Diluted
From continuing operations $ 0.44 $ 0.90 $ 0.64
============ ============ ============
Net income $ 0.44 $ 0.90 $ 0.71
============ ============ ============
Pro forma income from
continuing operations (b) $ 0.45 $ 0.90 $ 0.59
============ ============ ============
Weighted average Common Shares
used for determining
Basic EPS 77,969,013 77,760,290 76,679,126
============ ============ ============
Diluted EPS 79,264,982 79,059,474 78,331,461
============ ============ ============
Year Ended
-------------------------
Dec. 31, Dec. 31,
2007 2006
------------ ------------
Sales $ 1,224.7 $ 1,229.8
------------ ------------
Costs and expenses
Cost of sales (a) 922.1 952.6
Selling and general expenses 67.0 63.5
Other operating income, net (11.0) (8.2)
------------ ------------
Operating income before gain on
sale of New Zealand timber
assets 246.6 221.9
Gain on sale of New Zealand
timber assets - 7.8
------------ ------------
Operating income (a) 246.6 229.7
Interest expense (56.3) (48.9)
Interest and other income, net 7.7 9.5
------------ ------------
Income before taxes 198.0 190.3
Income tax benefit / (expense) (23.7) (19.1)
------------ ------------
Income from continuing
operations 174.3 171.2
Discontinued operations - 5.3
------------ ------------
Net income $ 174.3 $ 176.5
============ ============
Income per Common Share:
Basic
From continuing operations $ 2.25 $ 2.24
============ ============
Net income $ 2.25 $ 2.31
============ ============
Diluted
From continuing operations $ 2.21 $ 2.19
============ ============
Net income $ 2.21 $ 2.26
============ ============
Pro forma income from
continuing operations (b) $ 2.35 $ 1.99
============ ============
Weighted average Common Shares
used for determining
Basic EPS 77,571,684 76,486,690
============ ============
Diluted EPS 78,920,284 78,158,691
============ ============
(a) Cost of sales and operating income for the three months and year
ended December 31, 2007 include a $0.8 million and $10.9 million
charge, respectively, for timber destroyed by forest fires. Excluding
this amount, cost of sales and operating income for the three months
and year ended December 31, 2007, were $231.1 million and $43.9
million, and $911.2 million and $257.5 million, respectively.
(b) Non-GAAP measure, see Schedule H for a reconciliation to the
nearest GAAP measure.
- C -
RAYONIER
BUSINESS SEGMENT SALES AND OPERATING INCOME (LOSS)
DECEMBER 31, 2007 (unaudited)
(millions of dollars)
Three Months Ended Year Ended
--------------------------- -------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
-------- --------- -------- --------- ---------
Sales
Timber $ 49.4 $ 50.3 $ 47.2 $ 221.4 $ 207.0
Real Estate 10.2 55.9 34.9 116.3 112.0
Performance Fibers
Cellulose
specialties 143.3 137.6 146.1 539.4 499.4
Absorbent materials 56.0 51.2 50.0 182.9 172.0
-------- --------- -------- --------- ---------
Total Performance
Fibers 199.3 188.8 196.1 722.3 671.4
-------- --------- -------- --------- ---------
Wood Products 20.3 24.3 21.3 88.1 111.4
Other Operations 11.2 14.9 29.1 76.6 128.3
Intersegment
eliminations - - (0.1) - (0.3)
-------- --------- -------- --------- ---------
Total sales $ 290.4 $ 334.2 $328.5 $1,224.7 $1,229.8
======== ========= ======== ========= =========
Pro forma operating
income/(loss) (a)
Timber $ 11.8 $ 12.0 $ 18.9 $ 71.1 $ 89.6
Real Estate 6.0 47.6 29.9 92.8 88.6
Performance Fibers 39.9 43.1 32.7 141.0 80.0
Wood Products (2.9) (1.5) (4.1) (8.4) (2.8)
Other Operations (1.3) 0.4 1.2 (3.2) 1.3
Corporate and other (9.6) (8.9) (10.8) (35.8) (34.8)
-------- --------- -------- --------- ---------
Pro forma operating
income (a) $ 43.9 $ 92.7 $ 67.8 $ 257.5 $ 221.9
======== ========= ======== ========= =========
(a) Timber segment operating income excludes the $0.8 million and
$10.9 million fire loss for the three months and year ended December
31, 2007, respectively, and the $7.8 million gain on sale of New
Zealand timber assets for the year ended December 31, 2006. Pro forma
operating income is a non-GAAP measure, see Schedule H for a
reconciliation to the nearest GAAP measure.
- D -
RAYONIER
CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF CASH FLOWS
DECEMBER 31, 2007 (unaudited)
(millions of dollars)
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2007 2006
------------ ------------
Assets
Current assets $ 396.2 $ 300.3
Timber, timberlands and logging roads, net
of depletion and amortization 1,117.2 1,127.5
Property, plant and equipment 1,340.2 1,365.0
Less - accumulated depreciation (994.4) (1,011.2)
------------ ------------
345.8 353.8
------------ ------------
Investment in New Zealand JV 62.8 61.2
Other assets 164.5 121.8
------------ ------------
$ 2,086.5 $ 1,964.6
============ ============
Liabilities and Shareholders' Equity
Current liabilities $ 218.5 $ 193.3
Long-term debt 694.3 655.4
Non-current liabilities for dispositions
and discontinued operations 103.6 111.8
Other non-current liabilities 79.7 86.1
Shareholders' equity 990.4 918.0
------------ ------------
$ 2,086.5 $ 1,964.6
============ ============
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
Year Ended
-------------------------
December 31, December 31,
2007 2006
------------ ------------
Cash provided by operating activities:
Net Income $ 174.3 $ 176.5
Income from discontinued operations - (5.3)
Depreciation, depletion, amortization and
non-cash basis of real estate sold 163.3 148.9
Non-cash charge for forest fire losses 10.4 -
Other non-cash items included in income 12.1 (13.2)
Changes in working capital and other
assets and liabilities (36.1) -
------------ ------------
324.0 306.9
------------ ------------
Cash used for investing activities:
Capital expenditures (97.0) (105.5)
Purchase of timberlands, real estate and
wood chipping facilities (27.2) (298.9)
Proceeds from sale of portion of New
Zealand timber assets - 21.8
(Increase) / decrease in restricted cash (8.8) 1.3
Other 7.0 (3.9)
------------ ------------
(126.0) (385.2)
------------ ------------
Cash used for financing activities:
Issuance of debt, net of repayments and
issuance costs 69.2 99.7
Dividends paid (150.6) (143.9)
Issuance of common shares 18.9 10.8
Repurchase of common shares (3.2) (0.5)
Excess tax benefits from equity-based
compensation 7.9 4.1
------------ ------------
(57.8) (29.8)
------------ ------------
Effect of exchange rate changes on cash 0.7 2.1
------------ ------------
Cash and cash equivalents:
Increase / (decrease) in cash and cash
equivalents 140.9 (106.0)
Balance, beginning of year 40.2 146.2
------------ ------------
Balance, end of year $ 181.1 $ 40.2
============ ============
- E -
RAYONIER
SELECTED SUPPLEMENTAL FINANCIAL DATA
DECEMBER 31, 2007 (unaudited)
(millions of dollars)
Three Months Ended Year Ended
----------------------------- -------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
--------- --------- --------- --------- ---------
Geographical Data
(Non-U.S.)
Sales
New Zealand $ 8.8 $ 10.1 $ 10.3 $ 42.9 $ 32.5
Other 2.8 2.5 3.7 9.7 15.4
--------- --------- --------- --------- ---------
Total $ 11.6 $ 12.6 $ 14.0 $ 52.6 $ 47.9
========= ========= ========= ========= =========
Operating income
(loss)
New Zealand $ (1.0) $ 0.8 $ 0.2 $ 1.7 $ (1.2)
Other 1.3 (0.6) 1.0 (0.3) (0.2)
--------- --------- --------- --------- ---------
Total $ 0.3 $ 0.2 $ 1.2 $ 1.4 $ (1.4)
========= ========= ========= ========= =========
Timber
Sales
Western U.S. $ 20.1 $ 24.3 $ 21.9 $ 104.4 $ 108.6
Eastern U.S. 25.7 23.2 22.2 104.5 87.9
New Zealand 3.6 2.8 3.1 12.5 10.5
--------- --------- --------- --------- ---------
Total $ 49.4 $ 50.3 $ 47.2 $ 221.4 $ 207.0
========= ========= ========= ========= =========
Pro forma
operating income
(loss) (a)
Western U.S. $ 5.7 $ 9.9 $ 9.6 $ 49.5 $ 59.6
Eastern U.S. (a) 5.9 2.3 8.6 19.6 30.6
New Zealand (a) 0.2 (0.2) 0.7 2.0 (0.6)
--------- --------- --------- --------- ---------
Total $ 11.8 $ 12.0 $ 18.9 $ 71.1 $ 89.6
========= ========= ========= ========= =========
Adjusted EBITDA by
Segment (b)
Timber $ 30.6 $ 28.1 $ 33.4 $ 143.9 $ 142.8
Real Estate 7.7 53.1 32.0 106.2 102.9
Performance
Fibers 58.5 59.7 53.2 209.4 152.8
Wood Products (1.5) - (2.6) (2.3) 4.1
Other Operations (1.6) 0.3 1.4 (3.0) 2.0
Corporate and
other (9.4) (8.9) (10.9) (35.7) (34.4)
--------- --------- --------- --------- ---------
Total $ 84.3 $ 132.3 $ 106.5 $ 418.5 $ 370.2
========= ========= ========= ========= =========
(a) Timber segment operating income excludes the $0.8 million and
$10.9 million fire loss for the three months and year ended December
31, 2007, respectively, and the $7.8 million gain on sale of New
Zealand timber assets for the year ended December 31, 2006. Pro forma
operating income is a non-GAAP measure, see Schedule H for a
reconciliation to the nearest GAAP measure.
(b) Adjusted EBITDA is a non-GAAP measure, see Schedule I for
reconciliation to nearest GAAP measure.
- F -
RAYONIER
SELECTED OPERATING INFORMATION
DECEMBER 31, 2007 (unaudited)
Three Months Ended Year Ended
--------------------------- -----------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
-------- --------- -------- -------- --------
Timber
Sales Volume
Western U.S. in
millions of board
feet 47 56 51 254 274
Eastern U.S. in
thousands of short
green tons 1,615 1,556 1,363 6,168 4,740
Real Estate
Acres sold
Southeast U.S.
Development 351 - 4,020 4,356 9,377
Southeast U.S. Rural 509 5,190 2,400 11,722 16,099
Northwest U.S. 351 386 713 1,095 775
-------- --------- -------- -------- --------
Total 1,211 5,576 7,133 17,173 26,251
Performance Fibers
Sales Volume
Cellulose
specialties, in
thousands of metric
tons 123 119 137 467 474
Absorbent materials,
in thousands of
metric tons 75 72 76 259 272
Production as a percent
of capacity 99.4% 97.2% 103.9% 99.1% 101.2%
Lumber
Sales volume, in
millions of board feet 81 88 83 329 350
- G -
RAYONIER
RECONCILIATION OF NON-GAAP MEASURES
DECEMBER 31, 2007 (unaudited)
(millions of dollars, except per share information)
CASH AVAILABLE FOR DISTRIBUTION:
Year Ended
---------------------------
December 31, December 31,
2007 2006
------------ ------------
Cash provided by operating
activities $ 324.0 $ 306.9
Capital spending (a) (97.0) (105.5)
Decrease (increase) in committed
cash 16.9 (b) (19.1)
Like-kind exchange tax benefits on
third party real estate sales (c) (3.9) (4.8)
Other 0.8 0.3
------------ ------------
Cash Available for Distribution $ 240.8 $ 177.8
============ ============
(a) Capital spending excludes strategic acquisitions and dispositions.
(b) Primarily 2006 interest paid in 2007 and previously reflected as a
reduction in 2006 CAD.
(c) Represents taxes that would have been paid if the Company had not
completed LKE transactions.
PRO FORMA OPERATING INCOME, INCOME FROM CONTINUING OPERATIONS AND
ADJUSTED RETURN ON EQUITY:
Three Months Ended
------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
2007 2007 2006
--------------- -------------- ----------------
Per Per Per
Diluted Diluted Diluted
$ Share $ Share $ Share
--------------- --------------- ------ --------
Operating Income $43.1 $92.7 $67.8
Forest fire loss 0.8 - -
------ ------ ------
Pro Forma Operating
Income $43.9 $92.7 $67.8
====== ====== ======
Income from
Continuing
Operations $34.4 $ 0.44 $71.5 $ 0.90 $50.0 $ 0.64
Deferred tax
adjustment - - - - (3.7) (0.05)
Forest fire loss 0.8 0.01 - - - -
------ -------- -------------- ------ --------
Pro Forma Income from
Continuing
Operations $35.2 $ 0.45 $71.5 $ 0.90 $46.3 $ 0.59
====== ======== ============== ====== ========
Year Ended
---------------------------------
December 31, December 31,
2007 2006
---------------- ---------------
Per Per
Diluted Diluted
$ Share $ Share
------- -------- ---------------
Operating Income $246.6 $229.7
Sale of New Zealand timber
assets - (7.8)
Forest fire loss 10.9 -
------- -------
Pro Forma Operating Income $257.5 $221.9
======= =======
Income from Continuing
Operations $174.3 $2.21 $171.2 $ 2.19
Sale of New Zealand timber
assets - - (6.5) (0.08)
Tax reserves and associated
interest - - (5.3) (0.07)
Deferred tax adjustment - - (3.7) (0.05)
Forest fire loss 10.9 0.14 - -
------- -------- ---------------
Pro Forma Income from Continuing
Operations $185.2 $2.35 $155.7 $ 1.99
======== ========
Divided by: average equity $954.3 $905.8
------- -------
Adjusted ROE 19.4% 17.2%
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RAYONIER
RECONCILIATION OF NON-GAAP MEASURES
DECEMBER 31, 2007 (unaudited)
(millions of dollars)
ADJUSTED EBITDA:
Real Performance Wood
Timber Estate Fibers Products
-------- --------- ----------- --------
Three Months Ended
December 31, 2007
Cash provided by
operating activities $ 20.0 $ 6.5 $ 81.9 $ 0.3
Income tax benefit - - - -
Interest, net - - - -
Working capital and other 10.6 1.2 (23.4) (1.8)
-------- --------- ----------- --------
Adjusted EBITDA $ 30.6 $ 7.7 $ 58.5 $(1.5)
======== ========= =========== ========
September 30, 2007
Cash provided by
operating activities $ 30.2 $ 48.7 $ 57.5 $ 1.7
Income tax expense - - - -
Interest, net - - - -
Working capital and other (2.1) 4.4 2.2 (1.7)
-------- --------- ----------- --------
Adjusted EBITDA $ 28.1 $ 53.1 $ 59.7 $ -
======== ========= =========== ========
December 31, 2006
Cash provided by
operating activities $ 28.2 $ 37.4 $ 45.1 $(2.2)
Income tax expense - - - -
Interest, net - - - -
Working capital and other 5.2 (5.4) 8.1 (0.4)
-------- --------- ----------- --------
Adjusted EBITDA $ 33.4 $ 32.0 $ 53.2 $(2.6)
======== ========= =========== ========
Year Ended
December 31, 2007
Cash provided by
operating activities $ 136.7 $ 101.2 $228.2 $(0.1)
Income tax expense - - - -
Interest, net - - - -
Working capital and other 7.2 5.0 (18.8) (2.2)
-------- --------- ----------- --------
Adjusted EBITDA $ 143.9 $ 106.2 $209.4 $(2.3)
======== ========= =========== ========
December 31, 2006
Cash provided by
operating activities $ 149.8 $ 103.0 $127.3 $ 5.6
Income tax expense - - - -
Interest, net - - - -
Working capital and other (7.0) (0.1) 25.5 (1.5)
-------- --------- ----------- --------
Adjusted EBITDA $ 142.8 $ 102.9 $152.8 $ 4.1
======== ========= =========== ========
- I -
ADJUSTED EBITDA:
Other Corporate
Operations and other Total
----------- --------- -------
Three Months Ended
December 31, 2007
Cash provided by operating activities $ (4.3) $ (44.1) $ 60.3
Income tax benefit - (1.3) (1.3)
Interest, net - 10.2 10.2
Working capital and other 2.7 25.8 15.1
----------- --------- -------
Adjusted EBITDA $ (1.6) $ (9.4) $ 84.3
=========== ========= =======
September 30, 2007
Cash provided by operating activities $ 3.7 $ (9.6) $132.2
Income tax expense - 7.6 7.6
Interest, net - 13.4 13.4
Working capital and other (3.4) (20.3) (20.9)
----------- --------- -------
Adjusted EBITDA $ 0.3 $ (8.9) $132.3
=========== ========= =======
December 31, 2006
Cash provided by operating activities $ 8.0 $ (31.9) $ 84.6
Income tax expense - 6.5 6.5
Interest, net - 11.1 11.1
Working capital and other (6.6) 3.4 4.3
----------- --------- -------
Adjusted EBITDA $ 1.4 $ (10.9) $106.5
=========== ========= =======
Year Ended
December 31, 2007
Cash provided by operating activities $ (9.1) $ (132.9) $324.0
Income tax expense - 23.7 23.7
Interest, net - 48.6 48.6
Working capital and other 6.1 24.9 22.2
----------- --------- -------
Adjusted EBITDA $ (3.0) $ (35.7) $418.5
=========== ========= =======
December 31, 2006
Cash provided by operating activities $ 13.6 $ (92.4) $306.9
Income tax expense - 19.1 19.1
Interest, net - 39.1 39.1
Working capital and other (11.6) (0.2) 5.1
----------- --------- -------
Adjusted EBITDA $ 2.0 $ (34.4) $370.2
=========== ========= =======
- I -
RAYONIER
RECONCILIATION OF STATUTORY INCOME TAX TO REPORTED INCOME TAX
DECEMBER 31, 2007 (unaudited)
(millions of dollars, except percentages)
Three Months Ended
--------------------------------------------
December 31, September 30, December 31,
2007 2007 2006
-------------- -------------- --------------
$ % $ % $ %
------- ------ ------- ------ ------- ------
Income tax provision at
the U.S. statutory rate $(11.6) (35.0) $(27.7) (35.0) $(19.7) (35.0)
REIT income not subject to
federal tax 11.5 34.8 23.9 30.2 12.5 22.2
Lost deduction on REIT
interest expense and
overhead expenses
associated with REIT
activities (3.0) (9.1) (3.8) (4.9) (4.0) (7.1)
Foreign, state and local
income taxes, foreign
exchange rate changes and
permanent differences 0.4 1.3 (0.1) - (0.5) (0.8)
------- ------ ------- ------ ------- ------
Income tax expense before
discrete items $ (2.7) (8.0) $ (7.7) (9.7) $(11.7) (20.7)
Return to accrual
adjustment 0.1 0.3 2.0 2.5 - -
Taxing authority
settlements and FIN 48
adjustments 1.1 3.3 (5.5) (7.0) - -
Change in valuation
allowance - - 3.6 4.6 - -
Deferred tax adjustments/
other 2.8 8.4 - - 5.2 9.3
------- ------ ------- ------ ------- ------
Income tax benefit/
(expense) $ 1.3 4.0 $ (7.6) (9.6) $ (6.5) (11.4)
======= ====== ======= ====== ======= ======
Year Ended
-----------------------------
December 31, December 31,
2007 2006
-------------- --------------
$ % $ %
------- ------ ------- ------
Income tax provision at
the U.S. statutory rate $(69.3) (35.0) $(66.5) (35.0)
REIT income not subject to
federal tax 55.1 27.8 46.3 24.4
Lost deduction on REIT
interest expense and
overhead expenses
associated with REIT
activities (12.8) (6.5) (12.7) (6.7)
Foreign, state and local
income taxes, foreign
exchange rate changes and
permanent differences 0.3 0.2 1.8 1.0
------- ------ ------- ------
Income tax expense before
discrete items $(26.7) (13.5) $(31.1) (16.3)
Return to accrual
adjustment 2.1 1.1 (0.3) (0.2)
Taxing authority
settlements and FIN 48
adjustments (4.4) (2.2) 5.3 2.8
Change in valuation
allowance 3.6 1.8 - -
Deferred tax adjustments/
other 1.7 0.8 7.0 3.7
------- ------ ------- ------
Income tax benefit/
(expense) $(23.7) (12.0) $(19.1) (10.0)
======= ====== ======= ======
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CONTACT: Rayonier, Jacksonville
Investors: Carl Kraus, 904-357-9158
Media Relations: Shannon Thuren, 904-357-9181
SOURCE: Rayonier
