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Rayonier Reports Fourth Quarter And Full Year 2012 Results

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

December 31, 2012 (unaudited)

(millions of dollars, except per share information)

   
Three Months Ended Year Ended
December 31,   September 30,   December 31, December 31,   December 31,
2012 2012 2011 2012 2011
Sales $ 434.3   $ 409.0   $ 388.4   $ 1,571.0   $ 1,488.6  
Costs and expenses
Cost of sales 310.3 278.7 287.3 1,104.8 1,073.7
Selling and general expenses 16.7 15.8 18.4 68.4 66.5
Other operating (income) expense, net (a) (8.4 ) 1.3   1.4   (13.7 ) (7.9 )
Operating income (a) 115.7 113.2 81.3 411.5 356.3
Interest expense (8.8 ) (8.3 ) (12.5 ) (45.0 ) (50.8 )
Interest and other income (expense), net 0.2   0.3   (0.1 ) 0.6   0.9  
Income before taxes 107.1 105.2 68.7 367.1 306.4
Income tax expense (b) (31.5 ) (24.6 ) (12.5 ) (88.4 ) (30.4 )
Net income $ 75.6   $ 80.6   $ 56.2   $ 278.7   $ 276.0  
Net Income per Common Share:
Basic
Net Income $ 0.61   $ 0.66   $ 0.46   $ 2.27   $ 2.27  
Diluted
Net Income $ 0.59   $ 0.62   $ 0.45   $ 2.17   $ 2.20  
Pro forma Net Income (c) $ 0.59   $ 0.62   $ 0.48   $ 2.17   $ 2.11  
 
Dividends Per Share $ 0.44   $ 0.44   $ 0.40   $ 1.68   $ 1.52  
 
Weighted Average Common
Shares used for determining
Basic EPS 123,185,024   122,848,705   121,783,843   122,711,802   121,662,985  
Diluted EPS (d) 128,965,733   129,959,666   125,474,349   128,702,423   125,394,291  
 

(a) The quarter and year ended December 31, 2011 included a $6.5 million increase in a disposition reserve.

 

(b) The year ended December 31, 2011 included a tax benefit of $16.0 million from the reversal of a reserve related to the taxability of the alternative fuel mixture credit (AFMC).

 

(c) Pro forma net income is a non-GAAP measure. See Schedule D for a description of items and a reconciliation to the nearest GAAP measure.

 

(d) The increase in dilutive shares in 2012 is primarily due to the potential dilutive impact of the Senior Exchangeable Notes due in 2012 and 2015 and the warrants related to those Notes.

 

A

RAYONIER INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF CASH FLOWS

December 31, 2012 (unaudited)

(millions of dollars)

   
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2012 2011
Assets
Cash and cash equivalents $ 280.6 $ 78.6
Other current assets 285.7 265.8
Timber and timberlands, net of depletion and amortization 1,573.3 1,503.7
Property, plant and equipment 1,889.6 1,619.2
Less - accumulated depreciation (1,180.3 ) (1,157.6 )
Net property, plant and equipment 709.3 461.6
Investment in New Zealand JV 72.4 69.2
Other assets 202.6   190.4  
Total Assets $ 3,123.9   $ 2,569.3  
Liabilities and Shareholders' Equity
Current maturities of long-term debt $ 150.0 $ 28.1
Current liabilities 157.7 150.1
Long-term debt 1,120.1 819.2
Non-current liabilities for dispositions and discontinued operations 73.6 80.9
Other non-current liabilities 187.7 167.9
Shareholders' equity 1,434.8   1,323.1  
Total Liabilities and Shareholders' Equity $ 3,123.9   $ 2,569.3  
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2012 2011
Cash provided by operating activities:
Net income $ 278.7 $ 276.0
Depreciation, depletion, amortization 148.7 135.7
Non-cash basis of real estate sold 4.7 4.3
Other items to reconcile net income to cash provided by operating activities 41.6 29.0
Changes in working capital and other assets and liabilities (27.8 ) (12.7 )
445.9   432.3  
Cash used for investing activities:
Capital expenditures (157.6 ) (144.5 )
Purchase of timberlands (a) (106.5 ) (320.9 )
Jesup mill cellulose specialties expansion (b) (201.4 ) (42.9 )
Change in restricted cash (10.6 ) 8.3
Other 3.2   11.4  
(472.9 ) (488.6 )
Cash provided by (used for) financing activities:
Changes in debt, net of issuance costs 410.3 (41.1 )
Dividends paid (206.6 ) (185.3 )
Issuance of common shares 25.5 13.5
Repurchase of common shares (7.8 ) (7.9 )
Excess tax benefits from equity-based compensation 7.6   5.7  
229.0   (215.1 )
Effect of exchange rate changes on cash   0.5  
Cash and cash equivalents:
Change in cash and cash equivalents 202.0 (270.9 )
Balance, beginning of year 78.6   349.5  
Balance, end of year $ 280.6   $ 78.6  
 

(a) Total timberland acquisitions for 2011 of $425.9 million included $105.0 million of notes assumed.

(b) Includes purchases on account of $3.0 million and $9.3 million for 2012 and 2011, respectively.

 

B

RAYONIER INC. AND SUBSIDIARIES

BUSINESS SEGMENT SALES AND OPERATING INCOME (LOSS)

December 31, 2012 (unaudited)

(millions of dollars)

   
Three Months Ended Year Ended
December 31,   September 30,   December 31, December 31,   December 31,
2012 2012 2011 2012 2011
Sales
Forest Resources $ 65.3 $ 59.9 $ 52.5 $ 230.1 $ 215.0
Real Estate 19.5 13.0 12.6 56.9 70.5
Performance Fibers
Cellulose specialties 255.1 247.2 230.3 934.6 824.1
Absorbent materials 44.6   41.0   50.5   158.7   196.2  
Total Performance Fibers 299.7   288.2   280.8   1,093.3   1,020.3  
Wood Products 21.6 22.8 17.4 87.5 67.7
Other Operations 28.7 26.3 26.7 105.4 121.5
Intersegment Eliminations (0.5 ) (1.2 ) (1.6 ) (2.2 ) (6.4 )
Total sales $ 434.3   $ 409.0   $ 388.4   $ 1,571.0   $ 1,488.6  
 
Pro forma operating income/(loss) (a)
Forest Resources $ 18.5 $ 11.2 $ 13.5 $ 46.0 $ 47.2
Real Estate 11.1 8.4 6.9 32.0 47.3
Performance Fibers 93.5 101.5 76.5 359.3 298.2
Wood Products 2.9 1.6 (1.1 ) 9.6 (2.3 )
Other Operations 0.1 (0.4 ) 0.5 (0.1 ) 1.5
Corporate and other (a) (10.4 ) (9.1 ) (8.5 ) (35.3 ) (29.1 )
Pro forma operating income (a) $ 115.7   $ 113.2   $ 87.8   $ 411.5   $ 362.8  
 

(a) For the quarter and year ended December 31, 2011, Corporate and other excluded a $6.5 million increase in a disposition reserve. Pro forma operating income is a non-GAAP measure. See Schedule D for a reconciliation.

 

C





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