-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NJmuKqVwyAC1p/cDpq6tBIUIyK+kcT8Ejbpv7USQ1dG+eqGZSItaDo6EZCzDl+EA 3esqd7xEoSAHJA1vJECxyQ== 0001193125-03-065248.txt : 20031022 0001193125-03-065248.hdr.sgml : 20031022 20031022121855 ACCESSION NUMBER: 0001193125-03-065248 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031022 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031022 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAYONIER INC CENTRAL INDEX KEY: 0000052827 STANDARD INDUSTRIAL CLASSIFICATION: LUMBER & WOOD PRODUCTS (NO FURNITURE) [2400] IRS NUMBER: 132607329 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06780 FILM NUMBER: 03951326 BUSINESS ADDRESS: STREET 1: 50 NORTH LAURA ST CITY: JACKSONVILLE STATE: FL ZIP: 32202 BUSINESS PHONE: 9043579100 MAIL ADDRESS: STREET 1: 50 NORTH LAURA ST CITY: JACKSONVILLE STATE: FL ZIP: 32202 FORMER COMPANY: FORMER CONFORMED NAME: ITT RAYONIER INC /CT/ DATE OF NAME CHANGE: 19940422 FORMER COMPANY: FORMER CONFORMED NAME: ITT RAYONIER INC DATE OF NAME CHANGE: 19920703 8-K 1 d8k.htm CURRENT REPORT Current Report
Table of Contents

 

UNITED STATES SECURITIES AND

EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

DATE OF REPORT — October 22, 2003

 

COMMISSION FILE NUMBER 1-6780

 

RAYONIER INC.

 


 

Incorporated in the State of North Carolina

I.R.S. Employer Identification Number l3-2607329

 

50 North Laura Street, Jacksonville, Florida 32202

(Principal Executive Office)

 

Telephone Number: (904) 357-9100

 



Table of Contents

RAYONIER INC.

 

TABLE OF CONTENTS

 

         PAGE

Item 7.   Financial Statements and Exhibits    1
Item 12.   Disclosure of Results of Operations and Financial Condition    1
    Signature    2
    Exhibit Index    3

 

i


Table of Contents

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

 

(c) Exhibits:

 

99   

Rayonier Reports Third Quarter 2003 Earnings, dated October 21, 2003

 

ITEM 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

The following information is being furnished pursuant to Item 12, “Disclosure of Results of Operations and Financial Condition”.

 

On October 21, 2003, a press release was issued announcing third quarter 2003 consolidated earnings for Rayonier. A copy of Rayonier’s press release is attached hereto as Exhibit 99.

 

1


Table of Contents

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of l934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

RAYONIER INC. (Registrant)

By:   /s/    HANS E. VANDEN NOORT        
 
   

Hans E. Vanden Noort

Vice President and Corporate Controller

 

October 22, 2003

 

2


Table of Contents

EXHIBIT INDEX

 

EXHIBIT NO.

  

DESCRIPTION


  

LOCATION


99

  

Rayonier Reports Third Quarter 2003 Earnings, dated October 21, 2003

   Furnished herewith

 

3

EX-99 3 dex99.htm PRESS RELEASE Press Release

EXHIBIT 99

 

Rayonier Reports Third Quarter 2003 Earnings

 

JACKSONVILLE, Fla., OCTOBER 21, 2003—Rayonier (NYSE:RYN) today reported third quarter 2003 net income of $8.1 million, or 19 cents per share, compared to $31.7 million, or 74 cents per share, in second quarter 2003 and $15.6 million, or 37 cents per share, in third quarter 2002. Third quarter 2003 results included 8 cents per share for REIT conversion costs and second quarter 2003 results included 59 cents per share from the Matanzas Marsh land sale.

 

Lee Nutter, Chairman, President and CEO said: “While we experienced solid results from our land sales business, improved lumber markets and steady U.S. timber prices, third quarter results reflected expenses associated with our planned REIT conversion and an extremely challenging cost environment for our performance fibers business. Nonetheless, we again demonstrated Rayonier’s strong cash generating capability through the business cycle, increasing cash by nearly $40 million to $86 million at quarter-end. In addition, we remain on schedule for our January 1, 2004, conversion to a REIT and the payment of a special dividend of undistributed earnings and profits this December.”

 

Sales of $268 million were $28 million below second quarter primarily due to the Matanzas sale and lower Northwest timber volume. Compared to third quarter 2002, sales declined $26 million, principally due to lower trading activity, performance fibers volume and timber prices.

 

Cash provided by operating activities of $64 million and free cash flow of $26 million were $6 million and $18 million, respectively, below second quarter primarily due to lower operating income. Cash provided by operating activities and free cash flow were $10 million and $14 million, respectively, below third quarter 2002 also due to lower operating income. Adjusted

 


EBITDA was $62 million, a decrease of $33 million and $20 million from second quarter 2003 and third quarter 2002, respectively, mainly due to lower operating results. (Adjusted EBITDA and free cash flow are non-GAAP measures defined in Exhibit A.)

 

Debt at quarter-end of $620 million was $2 million and $33 million below second quarter and year-end 2002, respectively. The continuing improvement in our debt-to-capital ratio to 44.9 percent reflected a decline of 0.9 and 3.0 percentage points from second quarter and year-end 2002, respectively.

 

Performance Fibers

 

Sales of $132 million were comparable to second quarter with higher cellulose specialties volume offset by lower absorbent materials volume. Operating income of $2 million was $1 million below the second quarter primarily due to record high weather-related hardwood chip costs and slightly weaker cellulose specialties prices, partly offset by increased cellulose specialties volume and absorbent materials prices. Compared to third quarter 2002, sales and operating income declined $7 and $10 million, respectively, due to lower volume and higher hardwood chip, chemical and maintenance costs, partially offset by increased prices in both cellulose specialties and absorbent materials.

 

Timber and Land

 

Sales of $59 million and operating income of $32 million were below the second quarter by $32 million and $27 million, respectively, mainly due to the Matanzas sale as well as seasonally lower third quarter Northwest timber volume. Compared to third quarter 2002, sales decreased $5 million and operating income declined $1 million due to lower Northwest timber volume and prices, partly offset by improved land sales margins.

 

Wood Products

 

Sales of $36 million were $4 million above second quarter and the operating loss of $1 million reflected an improvement of $1 million principally due to higher lumber prices and volumes. Compared to third quarter 2002, sales were higher and the operating loss improved by $3 million due to increased lumber prices and lower lumber manufacturing costs.

 

Other Operations

 

Sales of $42 million were in line with second quarter, while the operating loss of $0.2 million reflected an improvement of $0.7 million. Compared to third quarter 2002, sales

 


declined $15 million due to lower trading activity while the operating loss improved $0.3 million.

 

Other Items

 

Corporate expenses of $11.0 million were $3.1 million and $7.7 million above prior quarter and third quarter 2002, respectively, primarily due to REIT conversion costs of $4.2 million. The variance to third quarter 2002 also reflected an increase of $2.4 million in stock price-based incentive compensation accruals.

 

Intersegment eliminations and other included $0.5 million in balance sheet-related foreign exchange gains, compared to a $2.8 million benefit in the second quarter and a $1.1 million loss in third quarter 2002. Interest expense of $12.1 million was comparable to second quarter and $2.4 million below third quarter 2002 primarily due to lower debt.

 

The effective tax rate of 22.2 percent compared to 24.6 percent for the second quarter and 29.1 percent in third quarter 2002. The lower rate compared to prior year was primarily due to increased foreign and other tax credits.

 

Outlook

 

Although demand continues to be strong for cellulose specialties and Northwest timber earnings are forecasted to improve from the seasonally low third quarter, fourth quarter net income is likely to be near break-even. Earnings are expected to be adversely impacted by REIT project expenses (approximately 5 cents per share), delays in realizing Northwest timber earnings (approximately 6 cents per share) as contract terms of sale are revised to take advantage of REIT status in first quarter 2004, and continued exceptionally high hardwood chip costs at performance fibers. For 2003, REIT conversion costs and timber contract-related earnings deferrals are anticipated to reduce income by approximately 20 cents per share.

 

“We are very pleased with market reaction to our REIT plans and believe the tax-efficient structure will provide additional opportunities for growth and further increases in shareholder value,” Nutter said. “In early November we will announce the schedule and election process for the special dividend of earnings and profits to be paid in December.”

 

Rayonier has more than 2 million acres of timber and land in the U.S. and New Zealand and is the world’s premier supplier of high performance specialty cellulose fibers. Approximately 40 percent of Rayonier’s sales are outside the U.S. to customers in more than 50 countries.

 


Reported results are preliminary and not final until filing of the third quarter Form 10-Q with the Securities and Exchange Commission. Comments about anticipated demand, sales, expenses and earnings, and the Company’s expected REIT conversion, are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The following important factors, among others, could cause actual results to differ materially from those expressed in the forward-looking statements: changes in global market trends and world events; interest rate and currency movements; fluctuations in demand for cellulose specialties, absorbent materials, timber or wood products; adverse weather conditions; changes in production costs for wood products or performance fibers, particularly for raw materials such as wood, energy and chemicals; unexpected delays in the closing of land sale transactions; the timing of the Company’s election to be taxed as a REIT and its ability to satisfy complex rules in order to qualify as a REIT; and implementation or revision of governmental policies and regulations affecting the environment, import and export controls or taxes, including changes in tax laws that could reduce the benefits associated with REIT status. For additional factors that could impact future results, please see the company’s most recent Form 10-K/A on file with the Securities and Exchange Commission.

 

See Exhibit A for definitions of the non-GAAP financial measures “Adjusted EBITDA” and “free cash flow,” and Exhibits G and H for reconciliations of each to cash provided by operating activities.

 

A conference call will be held on Wednesday, October 22 at 4:15 p.m. EDT to discuss these results. Interested parties are invited to listen to the live webcast by logging on to www.rayonier.com and following the link. Supplemental materials will be available at the website. A replay will be available on the site shortly after the call where it will be archived for one month. Also, investors may access the “listen only” conference call by dialing 719-457-2649.

 

For more information, visit the company’s web site at www.rayonier.com. Complimentary copies of Rayonier press releases and other financial documents are also available by mail or fax by calling 1-800-RYN-7611.

 


RAYONIER

FINANCIAL HIGHLIGHTS *

SEPTEMBER 30, 2003 (unaudited)

 

(millions of dollars, except per share information)

 

     Three Months Ended

    Nine Months Ended

 
     September 30,
2003


    June 30,
2003


   

September 30,

2002


    September 30,
2003


   

September 30,

2002


 

Profitability

                                        

Sales

   $ 267.6     $ 295.9     $ 293.1     $ 829.4     $ 831.1  

Operating income

   $ 21.7     $ 54.0     $ 35.5     $ 94.9     $ 102.9  

Income from continuing operations

   $ 8.1     $ 31.7     $ 15.5     $ 48.0     $ 42.1  

Discontinued operations

   $ —       $ —       $ 0.1     $ —       $ (0.8 )

Net income (after disc. ops)

   $ 8.1     $ 31.7     $ 15.6     $ 48.0     $ 41.3  

Diluted earnings per share:

                                        

Continuing operations

   $ 0.19     $ 0.74     $ 0.37     $ 1.13     $ 0.99  

Net income (after disc. ops)

   $ 0.19     $ 0.74     $ 0.37     $ 1.13     $ 0.97  

Operating income

                                        

as a percent of sales

     8.1 %     18.2 %     12.1 %     11.4 %     12.4 %

ROE (annualized) (a)

     0.6 %     6.2 %     6.6 %     6.8 %     7.1 %

Capital Resources and Liquidity

                                        

Cash provided by operating activities

   $ 64.0     $ 69.5     $ 73.5     $ 172.8     $ 204.0  

Cash used for investing activities

   $ (26.0 )   $ (14.5 )   $ (23.5 )   $ (58.7 )   $ (57.1 )

Cash from (used for) financing activities

   $ 1.5     $ (12.3 )   $ (52.5 )   $ (46.5 )   $ (143.7 )

Adjusted EBITDA (b)

   $ 62.0     $ 95.4     $ 82.3     $ 222.2     $ 235.1  

Free cash flow (c)

   $ 26.4     $ 44.7     $ 40.8     $ 83.6     $ 117.2  

Repayment of debt, net

   $ 1.2     $ 5.7     $ 41.2     $ 32.7     $ 124.9  

Debt

   $ 620.4     $ 622.2     $ 741.7     $ 620.4     $ 741.7  

Debt / capital

     44.9 %     45.8 %     50.2 %     44.9 %     50.2 %

 

(a) From continuing operations; major land sales and REIT conversion costs are not annualized.

 

(b) Adjusted EBITDA is defined as earnings from continuing operations before interest expense, income taxes, depreciation, depletion, amortization and the non-cash cost basis of land sold. Adjusted EBITDA is a non-GAAP measure of operating cash generating capacity of the Company. See reconciliation on Schedule G.

 

(c) Free cash flow is defined as cash provided by operating activities less net custodial capital spending, dividends at prior year level, required debt repayments and the tax benefit on the exercise of stock options. Free cash flow is a non-GAAP measure of cash generated during a period that was available for discretionary capital expenditures, increasing dividends above the prior year level, repurchasing the Company’s common shares and/or reducing debt within the period. Free cash flow is not necessarily indicative of the free cash flow that may be generated in future periods. See reconciliation on Schedule H.

 

* Prior year earnings per share data have been restated to reflect the June 12, 2003 three-for-two stock split.

 

-A-


RAYONIER

CONDENSED STATEMENTS OF CONSOLIDATED INCOME*

SEPTEMBER 30, 2003 (unaudited)

 

(millions of dollars, except per share information)

 

     Three Months Ended

    Nine Months Ended

 
     September 30,
2003


   

June 30,

2003


    September 30,
2002


    September 30,
2003


    September 30,
2002


 

Sales

   $ 267.6     $ 295.9     $ 293.1     $ 829.4     $ 831.1  
    


 


 


 


 


Costs and expenses

                                        

Cost of sales

     231.8       231.3       247.8       701.4       697.4  

Selling and general expenses

     16.1       13.0       8.4       39.1       30.2  

Other operating expense (income)

     (2.0 )     (2.4 )     1.4       (6.0 )     0.6  
    


 


 


 


 


Operating income

     21.7       54.0       35.5       94.9       102.9  

Interest expense

     (12.1 )     (12.4 )     (14.5 )     (36.9 )     (45.3 )

Interest and miscellaneous income (expense), net

     0.8       0.4       0.9       2.3       1.2  
    


 


 


 


 


Income from continuing operations before income taxes

     10.4       42.0       21.9       60.3       58.8  

Income tax (expense) benefit

     (2.3 )     (10.3 )     (6.4 )     (12.3 )     (16.7 )
    


 


 


 


 


Income from continuing operations

   $ 8.1     $ 31.7     $ 15.5     $ 48.0     $ 42.1  

Discontinued operations, net

     —         —         0.1       —         (0.8 )
    


 


 


 


 


Net income

   $ 8.1     $ 31.7     $ 15.6     $ 48.0     $ 41.3  
    


 


 


 


 


Net income per Common Share

                                        

Basic EPS

                                        

From continuing operations

   $ 0.19     $ 0.76     $ 0.37     $ 1.15     $ 1.01  
    


 


 


 


 


Net income (after disc. ops)

   $ 0.19     $ 0.76     $ 0.37     $ 1.15     $ 0.99  
    


 


 


 


 


Diluted EPS

                                        

From continuing operations

   $ 0.19     $ 0.74     $ 0.37     $ 1.13     $ 0.99  
    


 


 


 


 


Net income (after disc. ops)

   $ 0.19     $ 0.74     $ 0.37     $ 1.13     $ 0.97  
    


 


 


 


 


Weighted average Common

                                        

Shares used for determining

                                        

Basic EPS

     42,133,413       41,796,776       41,630,142       41,867,879       41,504,580  
    


 


 


 


 


Diluted EPS

     42,963,352       42,516,508       42,301,929       42,557,905       42,304,847  
    


 


 


 


 


 

* Prior year earnings per share and share data have been restated to reflect the June 12, 2003 three-for-two stock split.

 

 

-B-


RAYONIER

BUSINESS SEGMENT SALES AND OPERATING INCOME

SEPTEMBER 30, 2003 (unaudited)

 

(millions of dollars)

 

     Three Months Ended

    Nine Months Ended

 
     September 30,
2003


    June 30,
2003


    September 30,
2002


    September 30,
2003


    September 30,
2002


 

Sales

                                        

Performance Fibers

                                        

Cellulose specialties

   $ 94.3     $ 91.7     $ 97.4     $ 273.1     $ 274.6  

Absorbent materials

     37.6       40.4       41.7       119.4       117.9  
    


 


 


 


 


Total Performance Fibers

     131.9       132.1       139.1       392.5       392.5  
    


 


 


 


 


Timber and Land

                                        

Timber

     32.5       38.5       35.8       114.6       123.5  

Land

     26.8       53.1       28.2       97.5       59.9  
    


 


 


 


 


Total Timber and Land

     59.3       91.6       64.0       212.1       183.4  
    


 


 


 


 


Wood Products

     35.6       31.4       34.7       97.0       107.0  

Other Operations

     41.6       41.2       56.2       129.3       156.8  

Intersegment eliminations

     (0.8 )     (0.4 )     (0.9 )     (1.5 )     (8.6 )
    


 


 


 


 


Total sales

   $ 267.6     $ 295.9     $ 293.1     $ 829.4     $ 831.1  
    


 


 


 


 


Operating income (loss)

                                        

Performance Fibers

   $ 1.5     $ 2.8     $ 11.1     $ 3.1     $ 28.9  

Timber and Land

                                        

Timber

     8.4       11.6       14.2       36.7       55.8  

Land

     23.7       47.6       18.5       80.4       37.9  
    


 


 


 


 


Total Timber and Land

     32.1       59.2       32.7       117.1       93.7  

Wood Products

     (1.2 )     (2.4 )     (4.4 )     (6.8 )     (5.7 )

Other Operations

     (0.2 )     (0.9 )     (0.5 )     (1.1 )     (1.7 )

Corporate

     (11.0 )     (7.9 )     (3.3 )     (23.9 )     (15.0 )

Intersegment eliminations and other (Including Corporate FX)

     0.5       3.2       (0.1 )     6.5       2.7  
    


 


 


 


 


Total operating income

   $ 21.7     $ 54.0     $ 35.5     $ 94.9     $ 102.9  
    


 


 


 


 


 

-C-


RAYONIER

CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF CASH FLOWS

SEPTEMBER 30, 2003 (unaudited)

 

(millions of dollars)

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

     September 30,
2003


   December 31,
2002


Assets

             

Current assets

   $ 300.6    $ 228.8

Timber, timberlands and logging roads, net of depletion and amortization

     999.1      1,023.2

Property, plant and equipment

     1,416.4      1,387.4

Less accumulated depreciation

     906.4      846.3
    

  

       510.0      541.1
    

  

Other assets

     90.2      94.1
    

  

     $ 1,899.9    $ 1,887.2
    

  

Liabilities and Shareholders’ Equity

             

Current liabilities

   $ 160.4    $ 171.8

Deferred income taxes

     123.8      110.2

Long-term debt

     616.8      649.6

Non-current reserves for dispositions and discontinued operations

     139.4      146.3

Other non-current liabilities

     98.8      99.6

Shareholders’ equity

     760.7      709.7
    

  

     $ 1,899.9    $ 1,887.2
    

  

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

     Nine Months Ended

 
     2003

    2002

 

Cash provided by operating activities:

                

Income from continuing operations

   $ 48.0     $ 42.1  

Depreciation, depletion, amortization and non-cash cost basis of land sold

     125.1       131.0  

Other non-cash items included in income

     6.8       9.9  

Changes in working capital and other assets and liabilities

     (7.1 )     21.0  
    


 


       172.8       204.0  
    


 


Cash used for investing activities:

                

Capital expenditures, net of sales and retirements

     (53.3 )     (57.1 )

Purchase of assets previously leased

     (5.4 )     —    
    


 


       (58.7 )     (57.1 )
    


 


Cash used for financing activities:

                

Repayment of debt, net

     (32.7 )     (124.9 )

Dividends paid, shares issued, net

     (13.8 )     (18.8 )
    


 


       (46.5 )     (143.7 )
    


 


Cash provided by discontinued operations

     —         24.0  
    


 


Effect of exchange rate changes on cash

     (0.1 )     —    
    


 


Cash and cash equivalents:

                

Increase in cash and cash equivalents

     67.5       27.2  

Balance, beginning of year

     18.9       14.1  
    


 


Balance, end of period

   $ 86.4     $ 41.3  
    


 


 

 

-D-


RAYONIER

SELECTED SUPPLEMENTAL FINANCIAL DATA

SEPTEMBER 30, 2003 (unaudited)

 

(millions of dollars)

 

     Three Months Ended

    Nine Months Ended

 
    

September 30,

2003


    June 30,
2003


    September 30,
2002


    September 30,
2003


    September 30,
2002


 

Geographical Data (Non-U.S.)

                                        

Sales

                                        

New Zealand

   $ 23.0     $ 22.0     $ 20.2     $ 63.5     $ 57.5  

Other

     1.7       2.9       8.5       9.2       33.3  
    


 


 


 


 


Total

   $ 24.7     $ 24.9     $ 28.7     $ 72.7     $ 90.8  
    


 


 


 


 


Operating income (loss)

                                        

New Zealand

   $ 0.6     $ 1.7     $ 2.0     $ 3.8     $ 3.9  

Other

     (0.6 )     (0.5 )     0.1       (1.5 )     (0.9 )
    


 


 


 


 


Total

   $ —       $ 1.2     $ 2.1     $ 2.3     $ 3.0  
    


 


 


 


 


Timber

                                        

Sales

                                        

Northwest U.S.

   $ 8.9     $ 15.0     $ 9.3     $ 44.2     $ 46.9  

Southeast U.S.

     18.3       18.3       20.2       56.0       64.3  

New Zealand

     5.3       5.2       6.3       14.4       12.3  
    


 


 


 


 


Total

   $ 32.5     $ 38.5     $ 35.8     $ 114.6     $ 123.5  
    


 


 


 


 


Operating income (loss)

                                        

Northwest U.S.

   $ 1.6     $ 7.3     $ 4.5     $ 21.5     $ 32.3  

Southeast U.S.

     4.0       3.9       5.3       12.1       19.2  

New Zealand

     2.8       0.4       4.4       3.1       4.3  
    


 


 


 


 


Total

   $ 8.4     $ 11.6     $ 14.2     $ 36.7     $ 55.8  
    


 


 


 


 


Adjusted EBITDA by Segment

                                        

Performance Fibers

   $ 21.9     $ 22.3     $ 29.7     $ 61.7     $ 85.4  

Timber and Land

     48.1       77.6       56.8       174.2       157.9  

Wood Products

     2.3       0.8       (1.1 )     2.8       4.2  

Other Operations

     (0.1 )     (0.7 )     0.1       (0.6 )     (0.1 )

Corporate and other

     (10.2 )     (4.6 )     (3.2 )     (15.9 )     (12.3 )
    


 


 


 


 


Total

   $ 62.0     $ 95.4     $ 82.3     $ 222.2     $ 235.1  
    


 


 


 


 


 

 

-E-


RAYONIER

SELECTED OPERATING INFORMATION

SEPTEMBER 30, 2003 (unaudited)

 

     Three Months Ended

    Nine Months Ended

 
    

September 30,

2003


    June 30,
2003


    September 30,
2002


    September 30,
2003


    September 30,
2002


 

Performance Fibers

                              

Sales Volume

                              

Cellulose specialties, in thousands of metric tons

   109     106     114     314     319  

Absorbent materials, in thousands of metric tons

   62     69     74     209     208  

Production as a percent of capacity

   97.6 %   95.9 %   98.3 %   97.2 %   98.2 %

Timber and Land

                              

Sales volume—Timber

                              

Northwest U.S., in millions of board feet

   34     67     36     178     186  

Southeast U.S., in thousands of short green tons

   1,150     1,144     1,165     3,488     3,597  

New Zealand, in thousands of metric tons

   187     148     243     446     532  

Timber sales volume—Intercompany

                              

Northwest U.S., in millions of board feet

   —       —       2     —       36  

Southeast U.S., in thousands of short green tons

   19     2     13     24     21  

New Zealand, in thousands of metric tons

   40     26     16     85     39  

Acres sold

   5,744     12,415     14,657     37,867     37,552  

Wood Products

                              

Lumber sales volume, in millions of board feet

   78     73     87     222     252  

Medium-density fiberboard sales volume, in thousands of cubic meters

   49     41     40     131     117  

 

 

-F-


RAYONIER

RECONCILIATION OF NON-GAAP MEASURES *

SEPTEMBER 30, 2003 (unaudited)

 

(millions of dollars)

 

     Performance
Fibers


    Timber and
Land


    Wood
Products


    Other
Operations


    Corporate
and other


    Total

 

Adjusted EBITDA

                                                

Three Months Ended

                                                

September 30, 2003

                                                

Cash provided by operating activities

   $ 14.4     $ 63.7     $ 2.6     $ (0.5 )   $ (16.2 )   $ 64.0  

Income tax expense

     —         —         —         —         2.3       2.3  

Interest expense

     —         —         —         —         12.1       12.1  

Working capital increases (decreases)

     7.9       (11.0 )     (0.2 )     0.4       (14.8 )     (17.7 )

Other balance sheet changes

     (0.4 )     (4.6 )     (0.1 )     —         6.4       1.3  
    


 


 


 


 


 


Adjusted EBITDA

   $ 21.9     $ 48.1     $ 2.3     $ (0.1 )   $ (10.2 )   $ 62.0  
    


 


 


 


 


 


June 30, 2003

                                                

Cash provided by operating activities

   $ 25.7     $ 80.4     $ (0.8 )   $ 0.8     $ (36.6 )   $ 69.5  

Income tax expense

     —         —         —         —         10.3       10.3  

Interest expense

     —         —         —         —         12.4       12.4  

Working capital increases (decreases)

     (2.9 )     (0.7 )     1.6       (2.1 )     21.5       17.4  

Other balance sheet changes

     (0.5 )     (2.1 )     —         0.6       (12.2 )     (14.2 )
    


 


 


 


 


 


Adjusted EBITDA

   $ 22.3     $ 77.6     $ 0.8     $ (0.7 )   $ (4.6 )   $ 95.4  
    


 


 


 


 


 


September 30, 2002

                                                

Cash provided by operating activities

   $ 39.7     $ 61.2     $ 0.2     $ (2.2 )   $ (25.4 )   $ 73.5  

Income tax expense

     —         —         —         —         6.4       6.4  

Interest expense

     —         —         —         —         14.5       14.5  

Working capital increases (decreases)

     (9.5 )     (0.4 )     (1.1 )     3.1       15.4       7.5  

Other balance sheet changes

     (0.5 )     (4.0 )     (0.2 )     (0.8 )     (14.1 )     (19.6 )
    


 


 


 


 


 


Adjusted EBITDA

   $ 29.7     $ 56.8     $ (1.1 )   $ 0.1     $ (3.2 )   $ 82.3  
    


 


 


 


 


 


Nine Months Ended

                                                

September 30, 2003

                                                

Cash provided by operating activities

   $ 51.5     $ 193.5     $ (0.4 )   $ 5.7     $ (77.5 )   $ 172.8  

Income tax expense

     —         —         —         —         12.3       12.3  

Interest expense

     —         —         —         —         36.9       36.9  

Working capital increases (decreases)

     10.8       (12.4 )     3.4       (6.7 )     10.2       5.3  

Other balance sheet changes

     (0.6 )     (6.9 )     (0.2 )     0.4       2.2       (5.1 )
    


 


 


 


 


 


Adjusted EBITDA

   $ 61.7     $ 174.2     $ 2.8     $ (0.6 )   $ (15.9 )   $ 222.2  
    


 


 


 


 


 


September 30, 2002

                                                

Cash provided by operating activities

   $ 91.4     $ 164.5     $ (0.1 )   $ 6.3     $ (58.1 )   $ 204.0  

Income tax expense

     —         —         —         —         16.7       16.7  

Interest expense

     —         —         —         —         45.3       45.3  

Working capital increases (decreases)

     (14.9 )     (1.2 )     4.9       (4.0 )     8.5       (6.7 )

Other balance sheet changes

     8.9       (5.4 )     (0.6 )     (2.4 )     (24.7 )     (24.2 )
    


 


 


 


 


 


Adjusted EBITDA

   $ 85.4     $ 157.9     $ 4.2     $ (0.1 )   $ (12.3 )   $ 235.1  
    


 


 


 


 


 


 

* Unusual, non-trade intercompany items between the segments have been eliminated.

 

-G-


RAYONIER

RECONCILIATION OF NON-GAAP MEASURES

SEPTEMBER 30, 2003 (unaudited)

 

(millions of dollars)

 

     Three Months Ended

    Nine Months Ended

 
     September 30,
2003


    June 30,
2003


    September 30,
2002


    September 30,
2003


    September 30,
2002


 

Free cash flow

                                        

Cash provided by operating activities

   $ 64.0     $ 69.5     $ 73.5     $ 172.8     $ 204.0  

Custodial capital spending, net

     (18.1 )     (13.2 )     (21.4 )     (47.3 )     (49.5 )

Purchase of assets previously leased

     (5.4 )     —         —         (5.4 )     —    

Dividends at prior year level

     (10.1 )     (10.1 )     (10.0 )     (30.2 )     (29.9 )

Required debt repayments *

     (1.2 )     (0.7 )     (1.2 )     (2.7 )     (4.9 )

Tax benefit on exercise of stock options

     (2.8 )     (0.8 )     (0.1 )     (3.6 )     (2.5 )
    


 


 


 


 


Free cash flow

   $ 26.4     $ 44.7     $ 40.8     $ 83.6     $ 117.2  
    


 


 


 


 


 

*       The required repayments represent debt that matured and was paid during the period. In addition to the required payments, the Company made discretionary debt repayments as indicated below:

 

Discretionary debt repayments

   $ —       $ 5.0     $ 40.0     $ 30.0     $ 120.0  
    


 


 


 


 


Custodial capital spending, net

                                        

Capital expenditures, net of sales and retirements

   $ 20.6     $ 14.5     $ 23.5     $ 53.3     $ 57.1  

Discretionary capital expenditures

     (2.5 )     (1.3 )     (2.1 )     (6.0 )     (7.6 )
    


 


 


 


 


Custodial capital spending, net *

   $ 18.1     $ 13.2     $ 21.4     $ 47.3     $ 49.5  
    


 


 


 


 


 

* Custodial Capital Spending, net, a non-GAAP measure, is defined as capital expenditures, net of retirements, required to maintain the Company’s current earnings level over the cycle and to keep facilities and equipment in safe and reliable condition as well as in compliance with regulatory requirements.

 

-H-

-----END PRIVACY-ENHANCED MESSAGE-----