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Global IT Support Services Market Procurement Intelligence Report with COVID-19 Impact Analysis | Global Forecasts, 2020-2024

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The Global IT Support Services market will register an incremental spend of about $52 billion, growing at a CAGR of 5.29% during the five-year forecast period. A targeted strategic approach to Global IT Support Services sourcing can unlock several opportunities for buyers. This report also offers market impact and new opportunities created due to the COVID-19 pandemic. Request free sample pages

Key benefits to buy this report:

  • What are the market dynamics?
  • What are the key market trends?
  • What are the category growth drivers?
  • What are the constraints on category growth?
  • Who are the suppliers in this market?
  • What are the demand-supply shifts?
  • What are the major category requirements?
  • What are the procurement best practices in this market?

Information on Latest Trends and Supply Chain Market Information Knowledge centre on COVID-19 impact assessment

SpendEdge’s reports now include an in-depth complimentary analysis of the COVID-19 impact on procurement and the latest market data to help your company overcome sourcing challenges. Our Global IT Support Services market procurement intelligence report offers actionable procurement intelligence insights, sourcing strategies, and action plans to mitigate risks arising out of the current pandemic situation. The insights offered by our reports will help procurement professionals streamline supply chain operations and gain insights into the best procurement practices to mitigate losses.

Insights into buyer strategies and tactical negotiation levers:

Several strategic and tactical negotiation levers are explained in the report to help buyers achieve the best prices for Global IT Support Services market. The report also aids buyers with relevant Global IT Support Services pricing levels, pros and cons of prevalent pricing models such as volume-based pricing, spot pricing, and cost-plus pricing and category management strategies and best practices to fulfil their category objectives.

For more insights on buyer strategies and tactical negotiation levers Click Here

To access the definite purchasing guide on the Global IT Support Services that answers all your key questions on price trends and analysis:

  • Am I paying/getting the right prices? Is my Global IT Support Services TCO (total cost of ownership) favorable?
  • How is the price forecast expected to change? What is driving the current and future price changes?
  • Which pricing models offer the most rewarding opportunities?

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Some of the top Global IT Support Services suppliers listed in this report:

This Global IT Support Services procurement intelligence report has enlisted the top suppliers and their cost structures, SLA terms, best selection criteria, and negotiation strategies.

  • Microsoft Corp.
  • International Business Machines Corp.
  • Fujitsu Ltd.
  • Oracle Corp.
  • DXC Technology Co.
  • Lenovo Group Ltd.
  • Accenture Plc
  • Cisco Systems Inc.
  • HCL Technologies Ltd.
  • Infosys Ltd.

This procurement report helps buyers identify and shortlist the most suitable suppliers for their Global IT Support Services requirements by answering the following questions:

  • Am I engaging with the right suppliers?
  • Which KPIs should I use to evaluate my incumbent suppliers?
  • Which supplier selection criteria are relevant for?
  • What are the Global IT Support Services category essentials in terms of SLAs and RFx?

Get access to regular sourcing and procurement insights to our digital procurement platformContact Us.

Table of Content

  • Executive Summary
  • Market Insights
  • Category Pricing Insights
  • Cost-saving Opportunities
  • Best Practices
  • Category Ecosystem
  • Category Management Strategy
  • Category Management Enablers
  • Suppliers Selection
  • Suppliers under Coverage
  • US Market Insights
  • Category scope

Appendix

About SpendEdge:

SpendEdge shares your passion for driving sourcing and procurement excellence. We are the preferred procurement market intelligence partner for 120+ Fortune 500 firms and other leading companies across numerous industries. Our strength lies in delivering robust, real-time procurement market intelligence reports and solutions. To know more https://www.spendedge.com/request-for-demo

SpendEdge

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Marketing Manager

US: +1 630 984 7340

UK: +44 148 459 9299

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Taro Provides Results for September 30, 2020

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Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (Taro or the Company) today provided unaudited financial results for the quarter and six months ended September 30, 2020.

Quarter ended September 30, 2020 Highlights compared to September 30, 2019

  • Net sales of $142.8 million decreased $18.0 million.
  • Gross profit of $81.6 million (57.1% of net sales compared to 63.2%) decreased $20.0 million.
  • Research and development (R&D) expenses of $16.6 million increased $1.0 million.
  • Selling, marketing, general and administrative expenses (SG&A) of $24.1 million increased slightly.
  • Operating income of $41.0 million (28.7% of net sales compared to 38.9%) decreased $21.6 million.
  • Interest and other financial income of $5.7 million decreased $3.2 million, reflecting the lower global interest rate environment.
  • Tax expense of $3.6 million decreased $12.7 million; with the effective tax rate of 7.4% compared to 22.4%.
  • Net income attributable to Taro was $45.1 million compared to $56.2 million, an $11.1 million decrease, resulting in diluted earnings per share of $1.18 compared to $1.46.

Six Months ended September 30, 2020 Highlights compared to September 30, 2019

  • Net sales of $260.5 million compared to $322.1 million decreased $61.7 million.
  • Gross profit of $146.5 million (56.3% of net sales compared to 63.1%) decreased $56.8 million.
  • R&D expenses of $29.5 million increased slightly.
  • SG&A of $46.3 million increased $3.0 million.
  • Settlements and loss contingencies of $478.9 million reflect the one-time settlement charge (taken in the first quarter) which consists of $418.9 million related to the global resolution of the Department of Justice (DOJ) investigations into the U.S. generic pharmaceutical industry and an additional provision of $60.0 million related to ongoing multi-jurisdiction civil antitrust matters; however, there can be no assurance as to the ultimate outcome.
  • Operating (loss) of $(408.2) million compared to operating income of $131.1 million. Excluding the settlement and loss contingencies charges, operating income was $70.7 million, a decrease of $60.4 million, and as a percentage of net sales was 27.2% compared to 40.7%.
  • Interest and other financial income of $13.0 million decreased $5.5 million.
  • FX income of $0.8 million compared to $7.9 million in 2019 an unfavorable impact of $7.1 million.
  • Tax expense of $12.4 million decreased $24.2 million. Excluding the impact from the settlement and loss contingencies charges, the effective tax rate was 14.4% compared to 23.1%.
  • Net (loss) attributable to Taro was $(389.8) million compared to net income of $122.4 million, resulting in diluted (loss) earnings per share of $(10.19) compared to $3.17. Excluding the impact from the settlement and loss contingencies charges, net income was $74.2 million; resulting in diluted earnings per share of $1.94.

Cash Flow and Balance Sheet Highlights

  • Cash flow (used in) operations for the six months ended September 30, 2020, was $(48.1) million. Excluding the impact from the settlement and loss contingencies charges, cash flow provided by operations was $54.7 million compared to $123.4 million for the six months ended September 30, 2019.
  • As of September 30, 2020, cash and cash equivalents and marketable securities (both short and long-term), decreased $49.6 million to $1.5 billion from March 31, 2020; due to a partial payment made as a result of the DOJ settlement announced in July.

Mr. Uday Baldota, Taros CEO stated, Performance this quarter is a result of improving sales across all our business segments over first quarter, even while continuing to be negatively impacted by the pandemic. Our teams have worked tirelessly to serve our customers and patients through these tumultuous times as evidenced by regular product launches and steady market shares. With the recent surge in COVID-19 in our key geographies, and the resulting mitigation steps by respective authorities, we are cautious about the impact on our business for the rest of the year. However, our longer term commitment to enrich our product portfolio, organically or otherwise, stays as strong.

FDA Approvals and Filings

The Company recently received an approval from the U.S. Food and Drug Administration (FDA) for the Abbreviated New Drug Application (ANDA): Calcipotriene and Betamethasone Dipropionate Topical Suspension, 0.005%/0.064%. The Company currently has a total of eighteen ANDAs awaiting FDA approval, including five tentative approvals.

Launch of Specialty Generic Deferiprone Tablets, 500mg in the U.S.

On September 28, 2020, Taro announced the launch of a new specialty generic, Deferiprone Tablets, the generic version of Ferriprox. This drug product for orphan indication expands Taros capabilities to include specialty products.

Acquisition of Aquinox

On July 31, 2020, Taro Pharmaceuticals, Inc. completed the purchase of Aquinox Pharmaceuticals (Canada) Inc. (Aquinox), a wholly-owned subsidiary of Neoleukin Therapeutics, Inc., including intellectual property rights to various early stage molecules. Pursuant to the agreement, Taro acquired all issued and outstanding shares of Aquinox for $8.2 million.

Earnings Call (8:00 am EST, October 29, 2020)

As previously announced, the Company will host an earnings call at 8:00 am EST on Thursday, October 29, 2020, where senior management will discuss the Companys performance and answer questions from participants. This call will be accessible through an audio dial-in and a web-cast. Audio conference participants can dial-in on the numbers below:

  • Participant Toll-Free Dial-In Number: +1 (844) 421-0601 ID: 3484939
  • Participant International Dial-In Number: +1 (716) 247-5800 ID: 3484939
  • Audio web-cast: Details are provided on our website, www.taro.com

To participate in the audio call, please dial the numbers provided above five to ten minutes ahead of the scheduled start time. The operator will provide instructions on asking questions before the call. The transcript of the event will be available on the Companys website at www.taro.com.

The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change.

About Taro

Taro Pharmaceutical Industries Ltd. is a multinational, science-based pharmaceutical company, dedicated to meeting the needs of its customers through the discovery, development, manufacturing and marketing of the highest quality healthcare products. For further information on Taro Pharmaceutical Industries Ltd., please visit the Companys website at www.taro.com.

SAFE HARBOR STATEMENT

The unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments necessary to present fairly the financial condition and results of operations of the Company. The unaudited consolidated financial statements should be read in conjunction with the Companys audited consolidated financial statements included in the Companys Annual Report on Form 20-F, as filed with the SEC.

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements that do not describe historical facts or that refer or relate to events or circumstances the Company estimates, believes, or expects to happen or similar language, and statements with respect to the Companys financial performance, availability of financial information, and estimates of financial results and information for fiscal year 2021. Although the Company believes the expectations reflected in such forward-looking statements to be based on reasonable assumptions, it can give no assurances that its expectations will be attained. Factors that could cause actual results to differ include general domestic and international economic conditions, industry and market conditions, changes in the Company’s financial position, litigation brought by any party in any court in Israel, the United States, or any country in which Taro operates, regulatory and legislative actions in the countries in which Taro operates, and other risks detailed from time to time in the Companys SEC reports, including its Annual Reports on Form 20-F. Forward-looking statements are applicable only as of the date on which they are made. The Company undertakes no obligations to update, change or revise any forward-looking statement, whether as a result of new information, additional or subsequent developments or otherwise.

TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(U.S. dollars in thousands, except share data)
 
Quarter Ended Six Months Ended
September 30, September 30,

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Sales, net

$

142,843

 

$

160,850

 

$

260,477

 

$

322,146

 

Cost of sales

 

61,255

 

 

59,247

 

 

113,943

 

 

118,819

 

Gross profit

 

81,588

 

 

101,603

 

 

146,534

 

 

203,327

 

 
Operating Expenses:
Research and development

 

16,552

 

 

15,539

 

 

29,484

 

 

28,982

 

Selling, marketing, general and administrative

 

24,074

 

 

23,652

 

 

46,323

 

 

43,370

 

Settlements and loss contingencies

 

 

 

(150

)

 

478,924

 

 

(150

)

Operating income (loss)

 

40,962

 

 

62,562

 

 

(408,197

)

 

131,125

 

 
Financial (income) expense, net:
Interest and other financial income

 

(5,678

)

 

(8,857

)

 

(12,988

)

 

(18,481

)

Foreign exchange (income) expense

 

(632

)

 

45

 

 

(829

)

 

(7,860

)

Other gain, net

 

1,380

 

 

1,082

 

 

1,929

 

 

1,676

 

Income (loss) before income taxes

 

48,652

 

 

72,456

 

 

(392,450

)

 

159,142

 

Tax expense

 

3,590

 

 

16,246

 

 

12,444

 

 

36,691

 

Net income (loss)

 

45,062

 

 

56,210

 

 

(404,894

)

 

122,451

 

Net (loss) income attributable to non-controlling interest

 

(70

)

 

32

 

 

(15,108

)

 

90

 

Net income (loss) attributable to Taro

$

45,132

 

$

56,178

 

$

(389,786

)

$

122,361

 

 
Net income (loss) per ordinary share attributable to Taro:
Basic and Diluted

$

1.18

 

$

1.46

 

$

(10.19

)

$

3.17

 

 
Weighted-average number of shares used to compute net income per share:
Basic and Diluted

 

38,258,337

 

 

38,539,056

 

 

38,258,337

 

 

38,539,056

 

 
May not foot due to rounding.  
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
 
September 30, March 31,

 

2020

 

 

2020

ASSETS (unaudited) (audited)
CURRENT ASSETS:
Cash and cash equivalents

$

498,796

 

$

513,354

Marketable securities

 

543,204

 

 

595,383

Accounts receivable and other:
Trade, net

 

231,670

 

 

235,221

Other receivables and prepaid expenses

 

44,947

 

 

35,567

Inventories

 

167,213

 

 

153,073

TOTAL CURRENT ASSETS

 

1,485,830

 

 

1,532,598

Marketable securities

 

476,800

 

 

459,639

Property, plant and equipment, net

 

207,923

 

 

209,961

Deferred income taxes

 

143,297

 

 

106,693

Other assets

 

32,258

 

 

32,361

TOTAL ASSETS

$

2,346,108

 

$

2,341,252

 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables

$

39,967

 

$

28,858

Other current liabilities

 

547,349

 

 

193,873

TOTAL CURRENT LIABILITIES

 

587,316

 

 

222,731

Deferred taxes and other long-term liabilities

 

40,047

 

 

8,762

TOTAL LIABILITIES

 

627,363

 

 

231,493

 
Taro shareholders’ equity

 

1,727,957

 

 

2,103,864

Non-controlling interest

 

(9,212

)

 

5,895

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

2,346,108

 

$

2,341,252

TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(U.S. dollars in thousands)
 
Six Months Ended September 30,

 

2020

 

 

2019

 

Cash flows from operating activities:
Net (loss) income

$

(404,894

)

$

122,451

 

Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization

 

11,361

 

 

10,654

 

Change in derivative instruments, net

 

(942

)

 

(2,758

)

Effect of change in exchange rate on inter-company balances, marketable securities and bank deposits

 

(3,569

)

 

(6,210

)

Deferred income taxes, net

 

(39,591

)

 

302

 

Decrease (increase) in trade receivables, net

 

3,550

 

 

(9,556

)

Increase in inventories, net

 

(14,140

)

 

(360

)

(Decrease) increase in other receivables, income tax receivables, prepaid expenses and other

 

(8,451

)

 

22,184

 

Increase (decrease) in trade, income tax, accrued expenses and other payables

 

407,522

 

 

(12,139

)

Loss (income) from marketable securities, net

 

1,007

 

 

(1,210

)

Net cash (used in) provided by operating activities

 

(48,147

)

 

123,358

 

 
Cash flows from investing activities:
Purchase of plant, property & equipment, net

 

(8,953

)

 

(13,603

)

Investment in other intangible assets

 

(76

)

 

(45

)

Proceeds from (investment in) marketable securities, net

 

41,820

 

 

(116,494

)

Net cash provided by (used in) investing activities

 

32,791

 

 

(130,142

)

 
Cash flows from financing activities:
Net cash used in financing activities

 

 

 

 

 
Effect of exchange rate changes on cash and cash equivalents

 

798

 

 

 

Decrease in cash and cash equivalents

 

(14,558

)

 

(6,784

)

Cash and cash equivalents at beginning of period

 

513,354

 

 

567,451

 

Cash and cash equivalents at end of period

$

498,796

 

$

560,667

 

 
Cash Paid during the year for:
Income taxes

$

20,596

 

$

21,841

 

Cash Received during the year for:
Income taxes

$

4,093

 

$

6,964

 

Non-cash investing transactions:
Purchase of property, plant and equipment included in accounts payable

$

1,410

 

$

2,000

 

Non-cash financing transactions:
Purchase of intangible assets

$

 

$

1,000

 

Purchase (sale) of marketable securities

$

2,435

 

$

10,425

 

 

Daphne Huang

VP, Chief Financial Officer

(914) 345-9000

[email protected]

William J. Coote

AVP, Treasurer and Investor Relations

(914) 345-9000

[email protected]

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News

Rayonier Reports Third Quarter 2020 Results

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Rayonier Inc. (NYSE:RYN) today reported third quarter net loss attributable to Rayonier of ($0.8) million, or ($0.01) per share, on revenues of $198.9 million. This compares to net loss attributable to Rayonier of ($0.4) million, or $0.00 per share, on revenues of $156.4 million in the prior year quarter. The third quarter results included costs related to the merger with Pope Resources1 of $0.4 million and timber write-offs resulting from casualty events2 attributable to Rayonier of $7.9 million. Excluding these items, pro forma net income (loss)3 was $7.5 million, or $0.06 per share, versus ($0.4) million, or $0.00 per share, in the prior year period.

The following table summarizes the current quarter and comparable prior year period results:

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

(millions of dollars, except earnings per share (EPS))

September 30, 2020

 

September 30, 2019

 

 

 

$

 

EPS

 

$

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$198.9

 

 

 

 

$156.4

 

 

 

 

 

Sales attributable to noncontrolling interest in Timber Funds

(7.7

)

 

Pro forma revenues3

$191.2

 

 

 

 

$156.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to Rayonier

($0.8

)

 

($0.01

)

 

($0.4

)

 

 

 

 

Costs related to the merger with Pope Resources1

0.4

 

 

 

 

 

 

 

 

 

Timber write-offs resulting from casualty events2 attributable to Rayonier

7.9

 

 

0.07

 

 

 

 

 

 

 

Pro forma net income (loss)3

$7.5

 

 

$0.06

 

 

($0.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Third quarter operating income was $1.8 million versus $11.0 million in the prior year period. The current quarter operating income included costs related to the merger with Pope Resources1 of $0.4 million and timber write-offs resulting from casualty events2 of $15.2 million (of which $7.9 million was attributable to Rayonier). Excluding these items and adjusting for the operating loss attributable to noncontrolling interest in Timber Funds, current quarter pro forma operating income3 was $20.3 million. Third quarter Adjusted EBITDA3 was $67.2 million versus $43.2 million in the prior year period.

The following table summarizes operating income (loss), pro forma operating income (loss)3 and Adjusted EBITDA3 for the current quarter and comparable prior year period:

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Operating Income (Loss)

 

Pro forma Operating Income (Loss)3

 

Adjusted EBITDA3

(millions of dollars)

2020

 

2019

 

2020

 

2019

 

2020

2019

Southern Timber

$5.1

 

 

$9.5

 

 

$11.1

 

 

$9.5

 

 

$26.1

 

 

$22.5

 

Pacific Northwest Timber

(1.8

)

 

(3.6

)

 

(1.8

)

 

(3.6

)

 

9.1

 

 

2.7

 

New Zealand Timber

10.7

 

 

10.1

 

 

10.7

 

 

10.1

 

 

18.1

 

 

17.7

 

Timber Funds

(12.4

)

 

 

 

(0.3

)

 

 

 

0.2

 

 

 

Real Estate

9.5

 

 

0.4

 

 

9.5

 

 

0.4

 

 

22.2

 

 

5.4

 

Trading

(0.6

)

 

 

 

(0.6

)

 

 

 

(0.6

)

 

 

Corporate and other

(8.7

)

 

(5.4

)

 

(8.3

)

 

(5.4

)

 

(7.9

)

 

(5.1

)

Total

$1.8

 

 

$11.0

 

 

$20.3

 

 

$11.0

 

 

$67.2

 

 

$43.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-to-date cash provided by operating activities was $138.0 million versus $164.2 million in the prior year period. Cash available for distribution (CAD)3 of $124.2 million increased $8.6 million versus the prior year period primarily due to higher Adjusted EBITDA3 ($10.1 million), lower cash taxes paid ($0.7 million) and lower capital expenditures ($2.2 million), partially offset by higher cash interest paid ($4.4 million).

We delivered strong operating results across our segments in the third quarter despite ongoing challenges associated with the COVID-19 pandemic, said David Nunes, President and CEO. Both our U.S. and New Zealand timber operations remained fully-operational throughout the third quarter as we continued to follow enhanced safety protocols to protect our employees, contractors and customers. During the quarter, we also contended with several casualty events, including a hurricane that impacted properties in our Southern Timber segment and wildfires that impacted properties in our Timber Funds segment. Fortunately, no Rayonier employees were injured during these events. While our third quarter results were negatively impacted by inventory write-downs due to damage sustained to standing timber on these properties, Im pleased that our team was able to quickly mobilize, assess the damage to our lands and execute a plan to maximize salvage opportunities. Overall, Ive been very encouraged by the resiliency of our business as well as the dedication of our employees as weve navigated these various operational challenges.

Notably, each of our operating segments registered an increase in Adjusted EBITDA versus the prior year quarter, continued Nunes. Southern Timber Adjusted EBITDA improved 16% relative to the prior year quarter, as strong demand for sawlogs amid surging lumber prices resulted in a 16% increase in harvest volumes and an 8% increase in sawtimber stumpage prices. In Pacific Northwest Timber, Adjusted EBITDA more than tripled versus the prior year quarter, as an additional 55,000 tons of harvest volume resulting from the acquisition of Pope Resources was augmented by an 18% increase in weighted-average log prices. New Zealand Timber Adjusted EBITDA improved 2% relative to the prior year quarter, as lower log prices were offset by a 3% increase in harvest volumes and higher carbon credit sales. Real Estate also delivered another strong quarter as Adjusted EBITDA rose significantly versus the prior year quarter driven primarily by strong rural sales demand.

Hurricane & Wildfire Update

During the third quarter, properties within our Southern Timber and Timber Funds segments were impacted by hurricane and wildfire events, respectively. In our Southern Timber segment, Hurricane Laura made landfall in Louisiana on August 27th as a Category 4 hurricane with 150mph sustained winds, impacting nearly 8,000 acres of our timberland properties in the state. Initial damage assessments indicated that approximately 4,900 acres of pine plantations and 2,900 acres of natural stands sustained severe damage. Of the approximately 4,900 acres of pine plantations, we anticipate being able to salvage approximately 1,000 acres, weather permitting, based on existing mill quotas and the condition of the damaged timber. We do not expect to be able to salvage any of the natural stands. As a result of the hurricane, we wrote off timber basis in the amount of $6.0 million during the third quarter.

In our Timber Funds segment, the Beachie Creek fire in Oregon spread through approximately 9,000 acres of land owned by ORM Timber Fund II, which Rayonier manages and in which Rayonier holds a 20% economic interest, and the Slater fire in Oregon spread through approximately 1,000 acres of land owned by ORM Timber Fund IV, which Rayonier manages and in which Rayonier holds a 15% economic interest. Based on the severity of the damage sustained to these properties, as well as the widespread impact on other timberland owners throughout the Pacific Northwest, we estimate that approximately 60% of the damaged merchantable timber will be salvageable. As a result of the wildfires, we wrote off timber basis of approximately $9.2 million (including $8.8 million in ORM Timber Fund II and $0.4 million in ORM Timber Fund IV) during the third quarter, of which approximately $7.3 million was attributable to the non-controlling interest in the Timber Funds and $1.9 million was attributable to Rayonier.

Due to the nature of these casualty events and the infrequency with which they materially impact our results, we have included these charges as a pro forma item in our third quarter results.

Southern Timber

Third quarter sales of $47.7 million increased $6.4 million, or 15%, versus the prior year period primarily due to higher volumes, partially offset by lower pipeline easement revenue. Harvest volumes increased 16% to 1.48 million tons versus 1.28 million tons in the prior year period due to strong demand for sawtimber and pulpwood products. Average pine sawtimber stumpage prices increased 8% to $25.02 per ton versus $23.16 per ton in the prior year period, primarily due to improved demand for domestic and export grade timber coupled with favorable geographic mix. Average pine pulpwood stumpage prices were flat at $15.50 per ton versus $15.53 per ton in the prior year period. Overall, weighted-average stumpage prices (including hardwood) increased 5% to $18.88 per ton versus $18.05 per ton in the prior year period, primarily driven by higher sawtimber prices coupled with an 8% increase in sawtimber mix. Operating income of $5.1 million decreased $4.4 million versus the prior year period due to the write-off of timber basis as a result of Hurricane Laura ($6.0 million) and lower non-timber income ($2.9 million), partially offset by higher volumes ($1.6 million), higher net stumpage prices ($1.2 million), lower lease and other expenses ($1.6 million) and lower depletion rates ($0.1 million).

Third quarter Adjusted EBITDA3 of $26.1 million was $3.6 million above the prior year period.

Pacific Northwest Timber

Third quarter sales of $28.9 million increased $10.1 million, or 54%, versus the prior year period. Harvest volumes increased 33% to 346,000 tons versus 261,000 tons in the prior year period primarily due to improved sawtimber demand coupled with 55,000 tons of incremental volume from the acquired Pope Resources timberlands. Average delivered sawtimber prices increased 19% to $93.34 per ton versus $78.26 per ton in the prior year period, primarily due to improved domestic lumber markets coupled with a higher percentage of Douglas-fir sawtimber. Average delivered pulpwood prices decreased 15% to $32.12 per ton versus $37.87 per ton in the prior year period, as the deterioration of pulpwood export markets and higher lumber mill residuals resulted in excess domestic supply. Operating loss of $1.8 million improved $1.7 million versus the prior year period due to higher net stumpage prices ($5.0 million) and higher non-timber income ($0.8 million), partially offset by higher depletion rates ($2.6 million) and higher overhead and road maintenance costs ($1.4 million).

Third quarter Adjusted EBITDA3 of $9.1 million was $6.4 million above the prior year period.

New Zealand Timber

Third quarter sales of $62.8 million increased $0.8 million, or 1%, versus the prior year period. Harvest volumes increased 3% to 776,000 tons versus 754,000 tons in the prior year period. Average delivered prices for export sawtimber decreased 1% to $94.42 per ton versus $95.51 per ton in the prior year period, while average delivered prices for domestic sawtimber decreased 7% to $70.24 per ton versus $75.29 per ton in the prior year period. The slight decrease in export sawtimber prices was driven primarily by a buildup of China log inventories and continued competition from lower-cost European log and lumber imports into China. The decrease in domestic sawtimber prices (in U.S. dollar terms) was partially offset by the slight rise in the NZ$/US$ exchange rate (US$0.661 per NZ$1.00 versus US$0.655 per NZ$1.00). Excluding the impact of foreign exchange rates, domestic sawtimber prices decreased 8% versus the prior year period, generally lagging the prior negative trend in the export market. Operating income of $10.7 million increased $0.6 million versus the prior year period as a result of higher volumes ($0.4 million), higher carbon credit sales ($0.9 million) and lower depletion rates ($0.5 million), partially offset by lower net stumpage prices ($1.0 million) and unfavorable foreign exchange impacts ($0.2 million).

Third quarter Adjusted EBITDA3 of $18.1 million was $0.4 million above the prior year period.

Timber Funds

The Timber Funds segment generated third quarter sales of $9.9 million on harvest volumes of 110,000 tons, and operating loss of $12.4 million. Third quarter operating loss included timber write-offs of $9.2 million resulting from two fires in Oregon.2 Adjusting for the portion of the Timber Funds segment attributable to noncontrolling interests and fee revenue to Rayonier, and excluding timber write-offs resulting from the Oregon fires, pro forma sales3 and pro forma operating loss3 were $2.2 million and ($0.3) million, respectively.

Third quarter Adjusted EBITDA3 was $0.2 million.

Real Estate

Third quarter sales of $28.8 million increased $19.6 million versus the prior year period while operating income of $9.5 million increased $9.0 million versus the prior year period due to a higher number of acres sold (10,562 acres sold versus 1,345 acres sold in the prior year period), partially offset by a decrease in weighted-average prices ($2,332 per acre versus $6,513 per acre in the prior year period).

Improved Development sales of $1.3 million included $1.0 million of sales in the Wildlight development project north of Jacksonville, Florida consisting of 15 residential lots ($65,000 per lot or $377,000 per acre) in addition to a $0.3 million sale of development property in Kitsap County, Washington ($247,000 per acre). This compares to prior year period sales of $4.5 million, which consisted of 21.7 acres of commercial property ($207,000 per acre) in the Wildlight development project.

There were no Unimproved Development sales in the third quarter or the prior year period.

Rural sales of $23.2 million consisted of 10,482 acres at an average price of $2,218 per acre. This compares to prior year period sales of $4.2 million, which consisted of 1,291 acres at an average price of $3,262 per acre.

Timberland and Non-Strategic sales in the current quarter and the prior year quarter were negligible.

During the quarter, we began reporting Conservation Easement sales as a new sales category within the Real Estate segment. Since Conservation Easement sales involve the sale of certain land use rights rather than an outright sale of the land, these sales are not reflected in our average price per acre metrics for the Real Estate segment. Conservation Easement sales during the quarter were $3.1 million and covered 2,150 acres in Kitsap and Mason Counties, Washington ($1,450 per acre). There were no Conservation Easement sales in the prior year period.

Third quarter Adjusted EBITDA3 of $22.2 million was $16.8 million above the prior year period.

Trading

Third quarter sales of $22.2 million decreased $3.0 million versus the prior year period due to lower volumes and prices. Sales volumes decreased 7% to 252,000 tons versus 270,000 tons in the prior year period. The Trading segment generated operating loss of $0.6 million versus breakeven results in the prior year period, due to lower trading margins resulting from lower volumes and prices as well as higher shipping expenses.

Other Items

Third quarter corporate and other operating expenses of $8.7 million increased $3.3 million versus the prior year period, primarily due to higher employee benefit costs ($1.8 million), legal expenses ($0.7 million), costs related to the Pope Resources merger ($0.4 million) and other overheads ($0.4 million). The increase in employee benefit costs was primarily driven by an increase in the annual bonus accrual due to an improved outlook for the year as well as additional headcount from the Pope Resources merger.

Third quarter interest expense of $10.4 million increased $2.4 million versus the prior year period due to higher outstanding debt following the closing of the Pope Resources merger.

Third quarter income tax expense of $0.7 million decreased $1.5 million versus the prior year period. The New Zealand subsidiary is the primary driver of income tax expense.

ATM Equity Offering Program

In September, we established an at-the-market (ATM) equity offering program under which we may sell common shares, from time to time, having an aggregate sales price of up to $300 million. There were no shares issued under the ATM program during the three months ended September 30, 2020, and all $300 million authorized under the program remained available for issuance.

Outlook

Based on our year-to-date results and expectations for the fourth quarter, we anticipate that full-year Adjusted EBITDA will be modestly above the high end of our prior guidance while pro forma EPS will be around the high end of our prior guidance, stated Nunes. In our Southern Timber segment, we expect full-year Adjusted EBITDA toward the higher end of our prior guidance based on continued strong sawtimber demand and pricing, partially offset by lower-priced salvage volume and market impacts from Hurricane Laura. In our Pacific Northwest Timber segment, we expect full-year Adjusted EBITDA well above our prior guidance based on continued strong log demand and pricing. In our New Zealand Timber segment, we expect full-year Adjusted EBITDA near the high end of our prior guidance as our operations continue to normalize following the COVID-19 disruptions earlier this year, with modest improvements anticipated in both export and domestic pricing. In our Real Estate segment, we expect full-year Adjusted EBITDA near the high end of our prior guidance, as we continue to see strong demand and a favorable transaction pipeline across our sales categories. Overall, we remain very encouraged by the stability of our business and the strength of our end markets despite the ongoing uncertainty associated with the COVID-19 pandemic.

Conference Call

A conference call and live audio webcast will be held on Thursday, October 29, 2020 at 10:00 AM EDT to discuss these results.

Access to the live audio webcast will be available at www.rayonier.com. A replay of the webcast will be archived on the Companys website and available shortly after the call.

Investors may listen to the conference call by dialing 800-857-5752 (domestic) or 312-470-7110 (international), passcode: Rayonier. A replay of the conference call will be available one hour following the call until Saturday, November 28, 2020 by dialing 800-835-5808 (domestic) or 203-369-3353 (international), passcode: 3360.

Complimentary copies of Rayonier press releases and other financial documents are also available by calling (904) 357-9100.

1Costs related to the merger with Pope Resources include legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources.

2Timber write-offs resulting from casualty events include the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events which cannot be salvaged.

3Pro forma net income (loss), Pro forma revenues (sales), Pro forma operating income (loss), Adjusted EBITDA and CAD are non-GAAP measures defined and reconciled to GAAP in the attached exhibits.

About Rayonier

Rayonier is a leading timberland real estate investment trust with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand. As of September 30, 2020, Rayonier owned or leased under long-term agreements approximately 2.7 million acres of timberlands located in the U.S. South (1.75 million acres), U.S. Pacific Northwest (507,000 acres) and New Zealand (416,000 acres). The Company also acts as the managing member in a private equity timber fund business with three funds comprising approximately 141,000 acres. On a look-through basis, the Companys ownership in the timber fund business equates to approximately 17,000 acres. More information is available at www.rayonier.com.

_______________________________________________________________________

Forward-Looking Statements – Certain statements in this press release regarding anticipated financial outcomes including Rayoniers earnings guidance, if any, business and market conditions, outlook, expected dividend rate, Rayoniers business strategies, including the recent acquisition of Pope Resources, expected harvest schedules, timberland acquisitions and dispositions, the anticipated benefits of Rayoniers business strategies, and other similar statements relating to Rayoniers future events, developments or financial or operational performance or results, 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, intend, project, anticipate and other similar language. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking. While management believes that these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements.

The following important factors, among others, could cause actual results or events 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, including any downturn in the housing market; entry of new competitors into our markets; changes in global economic conditions and world events; business disruptions arising from public health crises and outbreaks of communicable diseases, including the current outbreak of the virus known as the novel coronavirus; fluctuations in demand for our products in Asia, and especially China; the uncertainties of potential impacts of climate-related initiatives; the cost and availability of third party logging and trucking services; the geographic concentration of a significant portion of our timberland; our ability to identify, finance and complete timberland acquisitions; changes in environmental laws and regulations regarding timber harvesting, delineation of wetlands, endangered species and development of real estate generally, 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; the lengthy, uncertain and costly process associated with the ownership, entitlement and development of real estate, especially in Florida and Washington, including changes in law, policy and political factors beyond our control; the availability of financing for real estate development and mortgage loans; changes in tariffs, taxes or treaties relating to the import and export of our products or those of our competitors; changes in key management and personnel; and our ability to meet all necessary legal requirements to continue to qualify as a real estate investment trust (REIT) and changes in tax laws that could adversely affect beneficial tax treatment.

For additional factors that could impact future results, please see Item 1A – Risk Factors in the Companys most recent Annual Report on Form 10-K and similar discussion included in other reports that we subsequently file with the Securities and Exchange Commission (the SEC). Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent reports filed with the SEC.

Non-GAAP Financial Measures “ To supplement Rayoniers financial statements presented in accordance with generally accepted accounting principles in the United States (GAAP), Rayonier uses certain non-GAAP measures, including cash available for distribution, pro forma sales, pro forma operating income (loss), pro forma net (loss) income, and Adjusted EBITDA, which are defined and further explained in this communication. Reconciliation of such measures to the nearest GAAP measures can also be found in this communication. Rayoniers definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.

 

RAYONIER INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

September 30, 2020 (unaudited)

(millions of dollars, except per share information)

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

2020

 

2020

 

2019

 

2020

 

2019

 

SALES

$198.9

 

 

$195.6

 

 

$156.4

 

 

$653.6

 

 

$532.8

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

Cost of sales

(180.9

)

 

(154.9

)

 

(134.5

)

 

(545.3

)

 

(418.2

)

Selling and general expenses

(14.5

)

 

(12.5

)

 

(10.1

)

 

(37.1

)

 

(30.9

)

Other operating expense, net

(1.7

)

 

(16.5

)

 

(0.8

)

 

(19.2

)

 

(2.8

)

OPERATING INCOME

1.8

 

 

11.7

 

 

11.0

 

 

52.0

 

 

80.9

 

Interest expense

(10.4

)

 

(9.8

)

 

(8.0

)

 

(28.4

)

 

(23.6

)

Interest and other miscellaneous (expense) income, net

(0.2

)

 

1.5

 

 

0.8

 

 

1.2

 

 

3.1

 

(LOSS) INCOME BEFORE INCOME TAXES

(8.8

)

 

3.4

 

 

3.8

 

 

24.8

 

 

60.4

 

Income tax expense

(0.7

)

 

(2.9

)

 

(2.3

)

 

(7.4

)

 

(10.2

)

NET (LOSS) INCOME

(9.5

)

 

0.5

 

 

1.5

 

 

17.4

 

 

50.2

 

Less: Net loss (income) attributable to noncontrolling interests in the Operating Partnership

 

 

(0.2

)

 

 

 

(0.2

)

 

 

Less: Net loss (income) attributable to noncontrolling interests in consolidated affiliates

8.7

 

 

1.4

 

 

(1.9

)

 

9.6

 

 

(7.1

)

NET (LOSS) INCOME ATTRIBUTABLE TO RAYONIER INC.

($0.8

)

 

$1.7

 

 

($0.4

)

 

$26.8

 

 

$43.1

 

(LOSS) EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share attributable to Rayonier Inc.

($0.01

)

 

$0.01

 

 

 

 

$0.20

 

 

$0.33

 

Diluted (loss) earnings per share attributable to Rayonier Inc.

($0.01

)

 

$0.01

 

 

 

 

$0.20

 

 

$0.33

 

 

 

 

 

 

 

 

 

 

 

Pro forma net income (loss) per share (a)

$0.06

 

 

$0.11

 

 

 

 

$0.17

 

$0.33

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares used for determining

 

 

 

 

 

 

 

 

 

Basic EPS

136,351,271

 

 

133,318,209

 

 

129,325,181

 

 

132,948,124

 

 

129,293,562

 

Diluted EPS (b)

136,351,271

 

 

135,957,026

 

 

129,325,181

 

 

135,460,456

 

 

129,652,462

 

(a)

Pro forma net income (loss) per share is a non-GAAP measure. See Schedule F for definition and reconciliation to the nearest GAAP measure.

(b)

Diluted earnings per share is calculated based on the weighted average number of shares of common stock outstanding combined with the incremental weighted average number of shares that would have been outstanding assuming all potentially dilutive securities (including redeemable operating partnership units) were converted into shares of common stock at the earliest date possible. As of September 30, 2020, there were 136,518,006 common shares and 4,445,153 redeemable operating partnership units outstanding.

A

 

RAYONIER INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2020 (unaudited)

(millions of dollars)

 

 

 

 

September 30,

 

December 31,

 

 

2020

 

2019

 

Assets

 

 

 

 

Cash and cash equivalents (excluding Timber Funds)

 

$75.2

 

 

$68.7

 

Cash and cash equivalents (Timber Funds)

 

3.0

 

 

 

Assets held for sale

 

9.7

 

 

 

Other current assets

 

80.9

 

 

57.3

 

Timber and timberlands, net of depletion and amortization

 

3,284.7

 

 

2,482.0

 

Higher and better use timberlands and real estate development investments

 

108.3

 

 

81.8

 

Property, plant and equipment

 

39.9

 

 

31.9

 

Less – accumulated depreciation

 

(11.1

)

 

(9.6

)

Net property, plant and equipment

 

28.8

 

 

22.3

 

Restricted cash

 

0.5

 

 

1.2

 

Right-of-use assets

 

100.3

 

 

99.9

 

Other assets

 

35.6

 

 

47.8

 

 

 

$3,727.0

 

 

$2,861.0

 

Liabilities, Noncontrolling Interests in the Operating Partnership and Shareholders Equity

 

 

 

 

Current maturities of long-term debt (excluding Timber Funds)

 

 

 

82.0

 

Other current liabilities

 

92.1

 

 

69.2

 

Long-term debt (excluding Timber Funds)

 

1,318.2

 

 

973.1

 

Long-term debt (Timber Funds)

 

60.4

 

 

 

Long-term lease liability

 

91.1

 

 

90.5

 

Other non-current liabilities

 

196.6

 

 

108.6

 

Noncontrolling interests in the Operating Partnership

 

117.5

 

 

 

Total Rayonier Inc. shareholders equity

 

1,429.2

 

 

1,440.0

 

Noncontrolling interests in consolidated affiliates

 

421.9

 

 

97.6

 

Total shareholders equity

 

1,851.1

 

 

1,537.6

 

 

 

$3,727.0

 

 

$2,861.0

 

 

B

 

RAYONIER INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

September 30, 2020 (unaudited)

(millions of dollars, except share information)

 

Common Shares

 

Retained Earnings

 

Accumulated Other Comprehensive (Loss) Income

 

Noncontrolling Interests in consolidated affiliates

 

Shareholders Equity

 

Shares

 

Amount

 

 

Balance, January 1, 2020

129,331,069

 

 

$888.2

 

 

$583.0

 

 

($31.2

)

 

$97.6

 

 

$1,537.6

 

Net income

 

 

 

 

25.9

 

 

 

 

0.5

 

 

26.4

 

Dividends ($0.27 per share)

 

 

 

 

(34.8

)

 

 

 

 

 

(34.8

)

Issuance of shares under incentive stock plans

2,407

 

 

0.1

 

 

 

 

 

 

 

 

0.1

 

Stock-based compensation

 

 

1.5

 

 

 

 

 

 

 

 

1.5

 

Repurchase of common shares made under repurchase program

(152,223

)

 

 

 

(3.2

)

 

 

 

 

 

(3.2

)

Other (a)

(14

)

 

 

 

 

 

(116.1

)

 

(11.8

)

 

(127.9

)

Balance, March 31, 2020

129,181,239

 

 

$889.8

 

 

$570.9

 

 

($147.3

)

 

$86.3

 

 

$1,399.7

 

Issuance of shares in merger with Pope Resources

7,181,071

 

 

172.4

 

 

 

 

 

 

 

 

172.4

 

Net income (loss)

 

 

 

 

1.9

 

 

 

 

(1.4

)

 

0.5

 

Net income attributable to noncontrolling interest in the Operating Partnership

 

 

 

 

(0.2

)

 

 

 

 

 

(0.2

)

Dividends ($0.27 per share)

 

 

 

 

(37.0

)

 

 

 

 

 

(37.0

)

Issuance of shares under incentive stock plans

215,970

 

 

0.2

 

 

 

 

 

 

 

 

0.2

 

Stock-based compensation

 

 

2.7

 

 

 

 

 

 

 

 

2.7

 

Acquisition of noncontrolling interests in consolidated affiliates

 

 

 

 

 

 

 

 

372.3

 

 

372.3

 

Adjustment of noncontrolling interest in the Operating Partnership

 

 

 

 

(3.9

)

 

 

 

 

 

(3.9

)

Other (a)

(66,168

)

 

(1.6

)

 

 

 

9.4

 

 

(0.5

)

 

7.3

 

Balance, June 30, 2020

136,512,112

 

 

$1,063.5

 

 

$531.7

 

 

($137.9

)

 

$456.7

 

 

$1,914.0

 

Net loss

 

 

 

 

(0.8

)

 

 

 

(8.7

)

 

(9.5

)

Dividends ($0.27 per share)

 

 

 

 

(37.3

)

 

 

 

 

 

(37.3

)

Issuance of shares under incentive stock plans

6,079

 

 

0.2

 

 

 

 

 

 

 

 

0.2

 

Stock-based compensation

 

 

2.0

 

 

 

 

 

 

 

 

2.0

 

Measurement period adjustment of noncontrolling interests in consolidated affiliates

 

 

 

 

 

 

 

 

(0.7

)

 

(0.7

)

Adjustment of noncontrolling interest in the Operating Partnership

 

 

 

 

(8.0

)

 

 

 

 

 

(8.0

)

Other (a)

(185

)

 

(0.5

)

 

 

 

16.3

 

 

(25.4

)

 

(9.6

)

Balance, September 30, 2020

136,518,006

 

 

$1,065.2

 

 

$485.6

 

 

($121.6

)

 

$421.9

 

 

$1,851.1

 

 

C

 

 

Common Shares

 

Retained Earnings

 

Accumulated Other Comprehensive (Loss) Income

 

Noncontrolling Interests in consolidated affiliates

 

Shareholders Equity

 

Shares

 

Amount

 

 

Balance, January 1, 2019

129,488,675

 

 

$884.3

 

 

$672.4

 

 

$0.2

 

 

$97.7

 

 

$1,654.6

 

Net income

 

 

 

 

24.8

 

 

 

 

3.0

 

 

27.8

 

Dividends ($0.27 per share)

 

 

 

 

(35.1

)

 

 

 

 

 

(35.1

)

Issuance of shares under incentive stock plans

26,031

 

 

0.6

 

 

 

 

 

 

 

 

0.6

 

Stock-based compensation

 

 

1.4

 

 

 

 

 

 

 

 

1.4

 

Other (a)

(1,140

)

 

 

 

 

 

(6.0

)

 

(2.1

)

 

(8.1

)

Balance, March 31, 2019

129,513,566

 

 

$886.3

 

 

$662.1

 

 

($5.8

)

 

$98.6

 

 

$1,641.2

 

Net income

 

 

 

 

18.8

 

 

 

 

2.1

 

 

20.9

 

Dividends ($0.27 per share)

 

 

 

 

(35.1

)

 

 

 

 

 

(35.1

)

Issuance of shares under incentive stock plans

250,344

 

 

0.2

 

 

 

 

 

 

 

 

0.2

 

Stock-based compensation

 

 

2.3

 

 

 

 

 

 

 

 

2.3

 

Other (a)

(134,194

)

 

(4.2

)

 

 

 

(23.7

)

 

(1.3

)

 

(29.2

)

Balance, June 30, 2019

129,629,716

 

 

$884.6

 

 

$645.8

 

 

($29.5

)

 

$99.4

 

 

$1,600.3

 

Net (loss) income

 

 

 

 

(0.4

)

 

 

 

1.9

 

 

1.5

 

Dividends ($0.27 per share)

 

 

 

 

(34.9

)

 

 

 

 

 

(34.9

)

Issuance of shares under incentive stock plans

2,423

 

 

0.1

 

 

 

 

 

 

 

 

0.1

 

Stock-based compensation

 

 

1.5

 

 

 

 

 

 

 

 

1.5

 

Repurchase of common shares made under repurchase program

(320,016

)

 

 

 

(8.4

)

 

 

 

 

 

(8.4

)

Other (a)

(230

)

 

 

 

 

 

(33.7

)

 

(10.8

)

 

(44.5

)

Balance, September 30, 2019

129,311,893

 

 

$886.2

 

 

$602.1

 

 

($63.2

)

 

$90.5

 

 

$1,515.6

 

(a)

Primarily includes shares purchased from employees in non-open market transactions to pay withholding taxes associated with the vesting of shares granted under the Companys Incentive Stock Plan, amortization of pension and postretirement plan liabilities, foreign currency translation adjustments, mark-to-market adjustments of qualifying cash flow hedges, and distributions to noncontrolling interests in consolidated affiliates. The three months ended September 30, 2020 also include the redemption of 1,000 common units in the Operating Partnership for an equal number of Rayonier Inc. common shares, common stock offering costs associated with the At-the-market (ATM) offering program, as well as changes related to the recapitalization of the New Zealand JV.

C

 

RAYONIER INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

September 30, 2020 (unaudited)

(millions of dollars)

 

 

Nine Months Ended September 30,

 

2020

 

2019

 

Cash provided by operating activities:

 

 

 

Net income

$17.4

 

 

$50.2

 

Depreciation, depletion and amortization

119.5

 

 

91.9

 

Non-cash cost of land and improved development

20.7

 

 

10.0

 

Timber-write offs due to casualty events

15.2

 

 

 

Gain on large dispositions of timberlands

(28.7

)

 

 

Other items to reconcile net income to cash provided by operating activities

10.1

 

 

13.2

 

Changes in working capital and other assets and liabilities

(16.2

)

 

(1.1

)

 

138.0

 

 

164.2

 

Cash used for investing activities:

 

 

 

Capital expenditures

(44.7

)

 

(45.3

)

Real estate development investments

(5.4

)

 

(3.3

)

Purchase of timberlands

(24.4

)

 

(81.9

)

Net proceeds from large dispositions of timberlands

115.7

 

 

 

Net cash consideration for merger with Pope Resources

(231.1

)

 

 

Other

5.1

 

 

(2.3

)

 

(184.8

)

 

(132.8

)

Cash provided by (used for) financing activities:

 

 

 

Net increase in debt

188.0

 

 

 

Dividends paid

(109.1

)

 

(106.1

)

Distributions to noncontrolling interests in the Operating Partnership

(2.4

)

 

 

Proceeds from the issuance of common shares under incentive stock plan

0.2

 

 

0.8

 

Repurchase of common shares made under repurchase program

(3.2

)

 

(8.4

)

Noncontrolling interests in consolidated affiliates redemption of shares

(5.1

)

 

 

Distributions to noncontrolling interest in consolidated affiliates

(8.2

)

 

(7.3

)

Other

(4.5

)

 

(4.2

)

 

55.7

 

 

(125.2

)

Effect of exchange rate changes on cash and restricted cash

(0.3

)

 

(2.8

)

Cash, cash equivalents and restricted cash:

 

 

 

Change in cash, cash equivalents and restricted cash

8.6

 

 

(96.6

)

Balance, beginning of year

70.0

 

 

156.5

 

Balance, end of period

$78.6

 

 

$59.9

 

D

 

RAYONIER INC. AND SUBSIDIARIES

BUSINESS SEGMENT SALES, PRO FORMA SALES, OPERATING INCOME,

PRO FORMA OPERATING INCOME AND ADJUSTED EBITDA

September 30, 2020 (unaudited)

(millions of dollars)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

2020

 

2020

 

2019

 

2020

 

2019

 

Sales

 

 

 

 

 

 

 

 

 

Southern Timber

$47.7

 

 

$46.8

 

 

$41.3

 

 

$147.4

 

 

$148.3

 

Pacific Northwest Timber

28.9

 

 

26.2

 

 

18.8

 

 

86.1

 

 

57.9

 

New Zealand Timber

62.8

 

 

41.8

 

 

62.0

 

 

142.1

 

 

181.3

 

Timber Funds

9.9

 

 

7.5

 

 

 

 

17.4

 

 

 

Real Estate

28.8

 

 

50.0

 

 

9.2

 

 

197.4

 

 

52.7

 

Trading

22.2

 

 

24.3

 

 

25.2

 

 

65.5

 

 

92.7

 

Intersegment Eliminations

(1.4

)

 

(1.0

)

 

(0.1

)

 

(2.3

)

 

(0.1

)

Sales

$198.9

 

 

$195.6

 

 

$156.4

 

 

$653.6

 

 

$532.8

 

 

 

 

 

 

 

 

 

 

 

Pro forma sales (a)

 

 

 

 

 

 

 

 

 

Southern Timber

$47.7

 

 

$46.8

 

 

$41.3

 

 

$147.4

 

$148.3

 

Pacific Northwest Timber

28.9

 

 

26.2

 

 

18.8

 

 

86.1

 

57.9

 

New Zealand Timber

62.8

 

 

41.8

 

 

62.0

 

 

142.1

 

181.3

 

Timber Funds

2.2

 

 

1.7

 

 

 

 

3.9

 

 

 

Real Estate

28.8

 

 

50.0

 

 

9.2

 

 

81.4

 

52.7

 

Trading

22.2

 

 

24.3

 

 

25.2

 

 

65.5

 

92.7

 

Intersegment Eliminations

(1.4

)

 

(1.0

)

 

(0.1

)

 

(2.3

)

 

(0.1

)

Pro forma sales

$191.2

 

 

$189.8

 

 

$156.4

 

 

$524.1

 

$532.8

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

Southern Timber

$5.1

 

 

$11.2

 

 

$9.5

 

 

$31.4

 

 

$45.8

 

Pacific Northwest Timber

(1.8

)

 

(6.7

)

 

(3.6

)

 

(9.5

)

 

(11.1

)

New Zealand Timber

10.7

 

 

5.0

 

 

10.1

 

 

21.1

 

 

38.6

 

Timber Funds

(12.4

)

 

(1.9

)

 

 

 

(14.3

)

 

 

Real Estate

9.5

 

 

24.8

 

 

0.4

 

 

61.1

 

 

25.9

 

Trading

(0.6

)

 

0.1

 

 

 

 

(0.5

)

 

0.3

 

Corporate and Other

(8.7

)

 

(20.9

)

 

(5.4

)

 

(37.3

)

 

(18.6

)

Operating income

$1.8

 

 

$11.7

 

 

$11.0

 

 

$52.0

 

 

$80.9

 

 

 

 

 

 

 

 

 

 

 

Pro forma operating income (loss) (a)

 

 

 

 

 

 

 

 

 

Southern Timber

$11.1

 

 

$11.2

 

 

$9.5

 

 

$37.4

 

 

$45.8

 

Pacific Northwest Timber

(1.8

)

 

(6.7

)

 

(3.6

)

 

(9.5

)

 

(11.1

)

New Zealand Timber

10.7

 

 

5.0

 

 

10.1

 

 

21.1

 

 

38.6

 

Timber Funds

(0.3

)

 

0.1

 

 

 

 

(0.1

)

 

 

Real Estate

9.5

 

 

24.8

 

 

0.4

 

 

32.4

 

 

25.9

 

Trading

(0.6

)

 

0.1

 

 

 

 

(0.5

)

 

0.3

 

Corporate and Other

(8.3

)

 

(7.4

)

 

(5.4

)

 

(20.9

)

 

(18.6

)

Pro forma operating income

$20.3

 

 

$27.2

 

 

$11.0

 

 

$59.9

 

 

$80.9

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (a)

 

 

 

 

 

 

 

 

 

Southern Timber

$26.1

 

 

$26.4

 

 

$22.5

 

 

$85.8

 

 

$91.4

 

Pacific Northwest Timber

9.1

 

 

3.9

 

 

2.7

 

 

22.8

 

 

8.0

 

New Zealand Timber

18.1

 

 

9.9

 

 

17.7

 

 

38.2

 

 

59.7

 

Timber Funds

0.2

 

 

0.7

 

 

 

 

0.8

 

 

 

Real Estate

22.2

 

 

44.6

 

 

5.4

 

 

65.7

 

 

41.1

 

Trading

(0.6

)

 

0.1

 

 

 

 

(0.5

)

 

0.3

 

Corporate and Other

(7.9

)

 

(7.0

)

 

(5.1

)

 

(19.9

)

 

(17.7

)

Adjusted EBITDA

$67.2

 

 

$78.6

 

 

$43.2

 

 

$192.9

 

 

$182.8

 

(a)

Pro forma sales, Pro forma operating income (loss) and Adjusted EBITDA are non-GAAP measures. See Schedule F for definitions and reconciliations

E

 

RAYONIER INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

September 30, 2020 (unaudited)

(millions of dollars, except per share information)

LIQUIDITY MEASURES:

 

 

 

 

Nine Months Ended

 

September 30,

 

September 30,

 

2020

 

2019

 

Cash Provided by Operating Activities

$138.0

 

 

$164.2

 

Working capital and other balance sheet changes

14.6

 

 

(3.3

)

Costs related to the merger with Pope Resources (a)

16.4

 

 

 

Cash Available for Distribution attributable to NCI in Timber Funds

(0.1

)

 

 

Capital expenditures (b)

(44.7

)

 

(45.3

)

Cash Available for Distribution (c)

$124.2

 

 

$115.6

 

 

 

 

 

Net Income

$17.4

 

 

$50.2

 

Operating loss attributable to NCI in Timber Funds

12.3

 

 

 

Interest, net attributable to NCI in Timber Funds

0.3

 

 

 

Income tax expense attributable to NCI in Timber Funds

0.2

 

 

 

Net Income (Excluding NCI in Timber Funds)

$30.2

 

 

$50.2

 

Interest, net and miscellaneous income attributable to Rayonier

27.9

 

 

21.2

 

Income tax expense attributable to Rayonier

7.3

 

 

10.2

 

Depreciation, depletion and amortization attributable to Rayonier

112.2

 

 

91.9

 

Non-cash cost of land and improved development

20.7

 

 

10.0

 

Timber write-offs resulting from casualty events attributable to Rayonier (d)

7.9

 

 

 

Non-operating income

(1.0

)

 

(0.8

)

Costs related to the merger with Pope Resources (a)

16.4

 

 

 

Large Dispositions (e)

(28.7

)

 

 

Adjusted EBITDA (f)

$192.9

 

 

$182.8

 

Cash interest paid attributable to Rayonier (g)

(25.0

)

 

(20.6

)

Cash taxes paid attributable to Rayonier

(0.6

)

 

(1.4

)

Capital expenditures attributable to Rayonier (b)

(43.1

)

 

(45.3

)

Cash Available for Distribution (c)

$124.2

 

 

$115.6

 

 

 

 

 

Cash Available for Distribution (c)

$124.2

 

 

$115.6

 

Real estate development investments

(5.4

)

 

(3.3

)

Cash Available for Distribution after real estate development investments

$118.8

 

 

$112.3

 

F

 

PRO FORMA SALES (h):

Three Months Ended

 

Southern Timber

 

Pacific Northwest Timber

 

New Zealand Timber

 

Timber Funds

 

Real Estate

 

Trading

 

Intersegment Eliminations

 

Total

 

September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$47.7

 

 

$28.9

 

 

$62.8

 

 

$9.9

 

 

$28.8

 

 

$22.2

 

 

($1.4

)

 

$198.9

 

Sales attributable to noncontrolling interest in Timber Funds

 

 

 

 

 

 

 

(7.7

)

 

 

 

 

 

 

 

(7.7

)

Pro forma sales

 

$47.7

 

 

$28.9

 

 

$62.8

 

 

$2.2

 

 

$28.8

 

 

$22.2

 

 

($1.4

)

 

$191.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$46.8

 

 

$26.2

 

 

$41.8

 

 

$7.5

 

 

$50.0

 

 

$24.3

 

 

($1.0)

 

 

$195.6

 

Sales attributable to noncontrolling interest in Timber Funds

 

 

 

 

 

 

 

(5.8

)

 

 

 

 

 

 

 

(5.8

)

Pro forma sales

 

$46.8

 

 

$26.2

 

 

$41.8

 

 

$1.7

 

 

$50.0

 

 

$24.3

 

 

($1.0

)

 

$189.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$41.3

 

 

$18.8

 

 

$62.0

 

 

 

 

$9.2

 

 

$25.2

 

 

($0.1

)

 

$156.4

 

Pro forma sales

 

$41.3

 

 

$18.8

 

 

$62.0

 

 

 

 

$9.2

 

 

$25.2

 

 

($0.1

)

 

$156.4

 

 

PRO FORMA SALES (h):

Nine Months Ended

Southern Timber

 

Pacific Northwest Timber

 

New Zealand Timber

 

Timber Funds

 

Real Estate

 

Trading

 

Intersegment Eliminations

 

Total

 

September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$147.4

 

$86.1

 

$142.1

 

$17.4

 

 

$197.4

 

 

$65.5

 

($2.3

)

 

$653.6

 

Sales attributable to noncontrolling interest in Timber Funds

 

 

 

(13.5

)

 

 

 

 

 

 

(13.5

)

Large Dispositions (e)

 

 

 

 

 

(116.0

)

 

 

 

 

(116.0

)

Pro forma sales

$147.4

 

$86.1

 

$142.1

 

$3.9

 

 

$81.4

 

 

$65.5

 

($2.3

)

 

$524.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$148.3

 

$57.9

 

$181.3

 

 

 

$52.7

 

 

$92.7

 

($0.1

)

 

$532.8

 

Pro forma sales

$148.3

 

$57.9

 

$181.3

 

 

 

$52.7

 

 

$92.7

 

($0.1

)

 

$532.8

 

 

PRO FORMA NET INCOME (LOSS) (i):

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30, 2020

 

June 30, 2020

 

September 30, 2019

 

September 30, 2020

 

September 30, 2019

 

$

 

Per Diluted Share

 

$

 

Per Diluted Share

 

$

 

Per Diluted Share

 

$

 

Per Diluted Share

 

$

 

Per Diluted Share

 

Net (Loss) Income Attributable to Rayonier Inc.

($0.8

)

 

($0.01

)

 

$1.7

 

$0.01

 

($0.4

)

 

 

$26.8

 

 

$0.20

 

 

$43.1

 

$0.33

Costs related to the merger with Pope Resources (a)

0.4

 

 

 

 

13.5

 

0.10

 

 

 

 

16.4

 

 

0.12

 

 

 

Timber write-offs resulting from casualty events attributable to Rayonier (d)

7.9

 

 

0.07

 

 

 

 

 

 

 

7.9

 

 

0.06

 

 

 

Large Dispositions (e)

 

 

 

 

 

 

 

 

 

(28.7

)

 

(0.21

)

 

 

Pro Forma net income (loss)

$7.5

 

 

$0.06

 

 

$15.2

 

$0.11

 

($0.4

)

 

 

$22.4

 

 

$0.17

 

$43.1

 

$0.33

 

F

 

PRO FORMA OPERATING INCOME (LOSS) AND ADJUSTED EBITDA (f) (j):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Southern Timber

 

Pacific Northwest Timber

 

New Zealand Timber

 

Timber Funds

 

Real Estate

 

Trading

 

Corporate and Other

 

Total

 

September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$5.1

 

($1.8

)

 

$10.7

 

($12.4

)

 

$9.5

 

($0.6

)

 

($8.7

)

 

$1.8

Operating loss attributable to NCI in Timber Funds

 

 

 

 

10.3

 

 

 

 

 

 

 

10.3

Timber write-offs resulting from casualty events attributable to Rayonier (d)

6.0

 

 

 

 

1.8

 

 

 

 

 

 

 

7.9

Costs related to the merger with Pope Resources (a)

 

 

 

 

 

 

 

 

 

0.4

 

 

0.4

Pro forma operating income (loss)

$11.1

 

($1.8

)

 

$10.7

 

($0.3

)

 

$9.5

 

($0.6

)

 

($8.3

)

 

$20.3

Depreciation, depletion and amortization

15.0

 

10.9

 

 

7.3

 

0.5

 

 

5.5

 

 

 

0.4

 

 

39.6

Non-cash cost of land and improved development

 

 

 

 

 

 

7.3

 

 

 

 

 

7.3

Adjusted EBITDA

$26.1

 

$9.1

 

 

$18.1

 

$0.2

 

 

$22.2

 

($0.6

)

 

($7.9

)

 

$67.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$11.2

 

($6.7

)

 

$5.0

 

($1.9

)

 

$24.8

 

$0.1

 

 

($20.9

)

 

$11.7

Operating loss attributable to NCI in Timber Funds

 

 

 

 

2.0

 

 

 

 

 

 

 

2.0

Costs related to merger with Pope Resources (a)

 

 

 

 

 

 

 

 

 

13.5

 

 

13.5

Pro forma operating income (loss)

$11.2

 

($6.7

)

 

$5.0

 

$0.1

 

 

$24.8

 

$0.1

 

 

($7.4

)

 

$27.2

Depreciation, depletion and amortization

15.2

 

10.6

 

 

4.9

 

0.5

 

 

6.7

 

 

 

0.3

 

 

38.3

Non-cash cost of land and improved development

 

 

 

 

 

 

13.0

 

 

 

 

 

13.0

Adjusted EBITDA

$26.4

 

$3.9

 

 

$9.9

 

$0.7

 

 

$44.6

 

$0.1

 

 

($7.0

)

 

$78.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$9.5

 

($3.6

)

 

$10.1

 

 

 

$0.4

 

 

 

($5.4

)

 

$11.0

Depreciation, depletion and amortization

13.0

 

6.3

 

 

7.6

 

 

 

0.7

 

 

 

0.3

 

 

27.8

Non-cash cost of land and improved development

 

 

 

 

 

 

4.3

 

 

 

 

 

4.3

Adjusted EBITDA

$22.5

 

$2.7

 

 

$17.7

 

 

 

$5.4

 

 

 

($5.1

)

 

$43.2

PRO FORMA OPERATING INCOME (LOSS) AND ADJUSTED EBITDA (f) (j):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

Southern Timber

 

Pacific Northwest Timber

 

New Zealand Timber

 

Timber Funds

 

Real Estate

 

Trading

 

Corporate and Other

 

Total

 

September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$31.4

 

($9.5

)

 

$21.1

 

($14.3

)

 

$61.1

 

 

($0.5

)

 

($37.3

)

 

$52.0

 

Operating loss attributable to NCI in Timber Funds

 

 

 

 

12.3

 

 

 

 

 

 

 

 

12.3

 

Timber write-offs resulting from casualty events attributable to Rayonier (d)

6.0

 

 

 

 

1.8

 

 

 

 

 

 

 

 

7.9

 

Costs related to the merger with Pope Resources (a)

 

 

 

 

 

 

 

 

 

 

16.4

 

 

16.4

 

Large Dispositions (e)

 

 

 

 

 

 

(28.7

)

 

 

 

 

 

(28.7

)

Pro forma operating income (loss)

$37.4

 

($9.5

)

 

$21.1

 

($0.1

)

 

$32.4

 

 

($0.5

)

 

($20.9

)

 

$59.9

 

Depreciation, depletion and amortization

48.4

 

32.2

 

 

17.1

 

1.0

 

 

12.6

 

 

 

 

1.0

 

 

112.2

 

Non-cash cost of land and improved development

 

 

 

 

 

 

20.7

 

 

 

 

 

 

20.7

 

Adjusted EBITDA

$85.8

 

$22.8

 

 

$38.2

 

$0.8

 

 

$65.7

 

 

($0.5

)

 

($19.9

)

 

$192.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$45.8

 

($11.1

)

 

$38.6

 

 

 

$25.9

 

 

$0.3

 

 

($18.6

)

 

$80.9

 

Depreciation, depletion and amortization

45.6

 

19.2

 

 

21.1

 

 

 

5.2

 

 

 

 

0.9

 

 

91.9

 

Non-cash cost of land and improved development

 

 

 

 

 

 

10.0

 

 

 

 

 

 

10.0

 

Adjusted EBITDA

$91.4

 

$8.0

 

 

$59.7

 

 

 

$41.1

 

 

$0.3

 

 

($17.7

)

 

$182.8

 

(a)

Costs related to the merger with Pope Resources include legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources.

(b)

Capital expenditures during the nine months ended September 30, 2020 exclude timberland acquisitions. Excluding the Pope Resources acquisition, timberland acquisitions were $24.4 million and $81.9 million, respectively, during the nine months ended September 30, 2020 and September 30, 2019.

(c)

Cash Available for Distribution (CAD) is defined as cash provided by operating activities adjusted for capital spending (excluding timberland acquisitions and real estate development investments), CAD attributable to noncontrolling interest in Timber Funds and working capital and other balance sheet changes. CAD is a non-GAAP measure of cash generated during a period that is available for common stock dividends, distributions to noncontrolling interest in the Operating Partnership, distributions to the New Zealand minority shareholder, repurchase of the Companys common shares, debt reduction, timberland acquisitions and real estate development investments. CAD is not necessarily indicative of the CAD that may be generated in future periods.

(d)

Timber write-offs resulting from casualty events include the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events which cannot be salvaged.

(e)

Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value. In March 2020, the Company completed a disposition of approximately 67,000 acres located in Mississippi for a sales price and gain of approximately $116.0 million and $28.7 million, respectively.

(f)

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, operating loss attributable to noncontrolling interest in Timber Funds, costs related to the merger with Pope Resources, timber write-offs resulting from casualty events and Large Dispositions. Adjusted EBITDA is a non-GAAP measure that management uses to make strategic decisions about the business and that investors can use to evaluate the operational performance of the assets under management. It removes the impact of specific items that management believes do not directly reflect the core business operations on an ongoing basis attributable to Rayonier.

(g)

Cash interest paid is presented net of patronage refunds received of $4.6 million and $4.0 million, respectively, excluding patronage refunds attributable to noncontrolling interest in Timber Funds during the nine months ended September 30, 2020 and September 30, 2019.

(h)

Pro forma revenue (sales) is defined as revenue (sales) adjusted for Large Dispositions and sales attributable to the noncontrolling interest in Timber Funds. Rayonier believes that this non-GAAP financial measure provides investors with useful information to evaluate core business operations because it excludes specific items that are not indicative of ongoing operating results attributable to Rayonier.

(i)

Pro forma net income (loss) is defined as net (loss) income attributable to Rayonier Inc. adjusted for costs related to the merger with Pope Resources, timber write-offs resulting from casualty events and Large Dispositions. Rayonier believes that this non-GAAP financial measure provides investors with useful information to evaluate our core business operations because it excludes specific items that are not indicative of ongoing operating results attributable to Rayonier.

(j)

Pro forma operating income (loss) is defined as operating income (loss) adjusted for operating loss attributable to noncontrolling interest in Timber Funds, costs related to the merger with Pope Resources, timber write-offs resulting from casualty events and Large Dispositions. Rayonier believes that this non-GAAP financial measure provides investors with useful information to evaluate our core business operations because it excludes specific items that are not indicative of ongoing operating results attributable to Rayonier.

F

Investors/Media

Mark McHugh

904-357-9100

[email protected]

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News

Hercules Capital Gains Additional Liquidity for New Investments with Approval of Third SBA License

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Hercules Capital, Inc. (NYSE: HTGC) (Hercules or the Company), the largest and leading specialty financing provider to innovative venture, growth and established stage companies backed by some of the leading and top-tier venture capital and select private equity firms, today announced it received agency committee approval by the U.S. Small Business Administration (SBA) for a third Small Business Investment Company (SBIC) license. The SBIC license was issued following final action by the SBA Administrator. This additional license has a 10-year term and will provide up to $175 million of fixed-rate capital for investment.

The SBIC program represents a valuable partnership between the SBA, Hercules, and the private sector economy. The new access to capital will fund needed liquidity to technology and life sciences growth companies that qualify under the SBIC program. Under the program structure, Hercules will gain access to up to $175 million of capital through the SBA debenture program, in addition to its planned regulatory capital commitment of $87.5 million to the SBIC subsidiary which will be used for investment purposes, subject to the issuance of a capital commitment by the SBA and customary procedures. Similar to its two prior SBIC licenses, Hercules’ borrowings under its third SBIC license will be exempt from the 150 percent asset coverage requirement as required by U.S. Securities and Exchange Commission (SEC), because of its existing exemptive order granted by the SEC.

We are very pleased to have been approved for our third SBIC license which will enable us to continue to fund the needs of many innovative technology and life sciences companies seeking growth capital financing which is particularly important in the current economic environment, said Scott Bluestein, chief executive officer and chief investment officer of Hercules. This third license will provide us with favorable long-term financing, further enhancing our already strong liquidity position in a cost-effective manner, added Seth Meyer, chief financial officer of Hercules.

About Hercules Capital, Inc.

Hercules Capital, Inc. (NYSE: HTGC) is the leading and largest specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative venture capital-backed companies in a broad variety of technology, life sciences and sustainable and renewable technology industries. Since inception (December 2003), Hercules has committed more than $10.5 billion to over 500 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing. Companies interested in learning more about financing opportunities should contact [email protected], or call 650.289.3060.

Hercules common stock trades on the New York Stock Exchange (NYSE) under ticker symbol HTGC. In addition, Hercules has two retail bond issuances of 5.25% Notes due 2025 (NYSE: HCXZ) and 6.25% Notes due 2033 (NYSE: HCXY).

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.

The information disclosed in this press release is made as of the date hereof and reflects Hercules most current assessment of its historical financial performance. Actual financial results filed with the SEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with the SEC. Although Hercules believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events.

Michael Hara

Investor Relations and Corporate Communications

Hercules Capital, Inc.

650-433-5578

[email protected]

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Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
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