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Rayonier Reports Strong Second Quarter 2012 Results

Stocks in this article: RYN

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 current downturn in the housing market; 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 and 10-Q reports on file with the Securities and Exchange Commission. Rayonier assumes no obligation to update these statements except as is required by law.

   

RAYONIER INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

June 30, 2012 (unaudited)

(millions of dollars, except per share information)

 
Three Months Ended Six Months Ended
June 30,   March 31,   June 30, June 30,   June 30,
2012 2012 2011 2012 2011
Sales $ 371.9   $ 355.8   $ 357.4   $ 727.7   $ 715.1  
Costs and expenses
Cost of sales 262.6 253.3 262.8 515.9 520.3
Selling and general expenses 16.2 19.6 16.0 35.9 32.4
Other operating income, net (5.5 ) (1.1 ) (0.5 ) (6.7 ) (4.3 )
Operating income 98.6 84.0 79.1 182.6 166.7
Interest expense (16.1 ) (11.8 ) (12.6 ) (27.9 ) (25.9 )
Interest and other income (expense), net 0.1   (0.1 ) 0.3   0.1   0.5  
Income before taxes 82.6 72.1 66.8 154.8 141.3
Income tax expense (13.5 ) (18.7 ) (10.3 ) (32.3 ) (26.4 )
Net income $ 69.1   $ 53.4   $ 56.5   $ 122.5   $ 114.9  
Net Income per Common Share (a):
Basic
Net Income $ 0.56   $ 0.44   $ 0.46   $ 1.00   $ 0.94  
Diluted
Net Income $ 0.54   $ 0.42   $ 0.45   $ 0.96   $ 0.92  
 
Dividends per share (a) $ 0.40   $ 0.40   $ 0.36   $ 0.80   $ 0.72  
 
Weighted Average Common
Shares used for determining (a)
Basic EPS 122,455,464   122,352,435   121,692,663   122,403,388   121,557,144  
Diluted EPS 127,411,127   127,932,129   126,191,424   127,731,577   125,268,488  
 

(a) EPS, dividends per share and weighted average common shares for the three and six months ended June 30, 2011 have been adjusted to reflect the August 2011 3-for-2 stock split.

 

A

 
 

RAYONIER INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF CASH FLOWS

June 30, 2012 (unaudited)

(millions of dollars)

 
CONDENSED CONSOLIDATED BALANCE SHEETS
  June 30, December 31,
2012 2011
Assets
Cash and cash equivalents $ 189.1 $ 78.6
Other current assets 311.2 265.8
Timber and timberlands, net of depletion and amortization 1,496.4 1,503.7
Property, plant and equipment 1,721.7 1,619.2
Less - accumulated depreciation (1,158.9 ) (1,157.6 )
Net property, plant and equipment 562.8 461.6
Investment in New Zealand JV 64.5 69.2
Other assets 192.6   190.4  
$ 2,816.6   $ 2,569.3  
Liabilities and Shareholders' Equity
Current maturities of long-term debt $ $ 28.1
Other current liabilities 196.8 150.1
Long-term debt 1,018.1 819.2
Non-current liabilities for dispositions and discontinued operations 76.6 80.9
Other non-current liabilities 165.0 167.9
Shareholders' equity 1,360.1   1,323.1  
$ 2,816.6   $ 2,569.3  
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
2012 2011
Cash provided by operating activities:
Net income $ 122.5 $ 114.9
Depreciation, depletion, amortization 66.2 62.9
Non-cash basis of real estate sold 2.4 1.7
Other items to reconcile net income to cash provided by operating activities 5.5 14.8
Changes in working capital and other assets and liabilities 12.3   0.6  
208.9   194.9  
Cash used for investing activities:
Capital expenditures (76.2 ) (65.2 )
Purchase of timberlands (8.7 ) (13.0 )
Jesup mill cellulose specialties expansion (gross purchases of $72.7 and $3.6, net of purchases on account of $8.7 and $0) (64.0 ) (3.6 )
Change in restricted cash (14.5 ) 8.4
Other (0.7 ) 2.6  
(164.1 ) (70.8 )
Cash provided by (used for) financing activities:
Changes in debt, net of issuance costs 163.3 (76.7 )
Dividends paid (98.2 ) (87.9 )
Issuance of common shares 4.0 7.9
Repurchase of common shares (7.8 ) (7.8 )
Excess tax benefits on stock-based compensation 4.2   4.9  
65.5   (159.6 )
Effect of exchange rate changes on cash 0.2   0.2  
Cash and cash equivalents:
Change in cash and cash equivalents 110.5 (35.3 )
Balance, beginning of year 78.6   349.5  
Balance, end of period $ 189.1   $ 314.2  
 

B

 
   

RAYONIER INC. AND SUBSIDIARIES

BUSINESS SEGMENT SALES AND OPERATING INCOME (LOSS)

June 30, 2012 (unaudited)

(millions of dollars)

 
Three Months Ended Six Months Ended
June 30,   March 31,   June 30, June 30,   June 30,
2012 2012 2011 2012 2011
Sales
Forest Resources $ 52.7 $ 52.2 $ 57.0 $ 104.9 $ 105.2
Real Estate 11.7 12.6 12.3 24.3 25.8
Performance Fibers
Cellulose specialties 220.2 212.1 192.3 432.4 386.3
Absorbent materials 34.3   38.8   40.5   73.0   97.7  
Total Performance Fibers 254.5   250.9   232.8   505.4   484.0  
Wood Products 23.8 19.2 18.0 43.0 33.7
Other Operations 29.3 21.1 38.5 50.4 68.9
Intersegment Eliminations (0.1 ) (0.2 ) (1.2 ) (0.3 ) (2.5 )
Total sales $ 371.9   $ 355.8   $ 357.4   $ 727.7   $ 715.1  
 
Operating income/(loss)
Forest Resources $ 8.2 $ 8.0 $ 11.8 $ 16.3 $ 22.9
Real Estate 6.0 6.5 5.0 12.5 12.4
Performance Fibers 83.7 80.6 71.1 164.4 146.8
Wood Products 4.1 0.9 (1.0 ) 5.1 (0.5 )
Other Operations 1.1 (0.9 ) (1.0 ) 0.2 (0.2 )
Corporate and other (4.5 ) (11.1 ) (6.8 ) (15.9 ) (14.7 )
Operating income $ 98.6   $ 84.0   $ 79.1   $ 182.6   $ 166.7  
 

C

 
   

RAYONIER INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

June 30, 2012 (unaudited)

(millions of dollars, except per share information)

 
CASH AVAILABLE FOR DISTRIBUTION (a):
Six Months Ended
June 30, June 30,
2012 2011
Cash provided by operating activities $ 208.9 $ 194.9
Capital expenditures (b) (76.2 ) (65.2 )
Change in committed cash 3.3
Excess tax benefits on stock-based compensation 4.2 4.9
Other 0.8   (0.3 )
Cash Available for Distribution $ 141.0   $ 134.3  
 

(a) Cash Available for Distribution (CAD) is defined as cash provided by operating activities adjusted for capital spending, the change in committed cash, and other items which include cash provided by discontinued operations, proceeds from matured energy forward contracts, excess tax benefits on stock-based compensation 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 strategic acquisitions. CAD is not necessarily indicative of the CAD that may be generated in future periods.

 

(b) Capital expenditures exclude strategic capital. For the six months ended June 30, 2012, strategic capital totaled $72.7 million for the Jesup mill cellulose specialties expansion and $8.7 million for timberland acquisitions. For the six months ended June 30, 2011, strategic capital totaled $3.6 million for the Jesup mill cellulose specialties expansion and $13.0 million for timberland acquisitions.

 

D

 




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