Rayonier Reports Fourth Quarter 2024 Results

Rayonier Inc. reported fourth quarter net income attributable to Rayonier of $327.1 million, or $2.15 per share, on revenues of $726.3 million. This compares to net income attributable to Rayonier of $126.9 million, or $0.85 per share, on revenues of $467.4 million in the prior year quarter.

• Fourth quarter net income attributable to Rayonier of $327.1 million ($2.15 per share), pro forma net income of $41.1 million ($0.27 per share), and Adjusted EBITDA of $115.1 million
• Full-year net income attributable to Rayonier of $359.1 million ($2.39 per share), pro forma net income of $69.9 million ($0.47 per share), and Adjusted EBITDA of $298.8 million
• Closed $495 million of previously announced Large Dispositions during the fourth quarter
• Since November 2023 announcement of Initiatives to Enhance Shareholder Value, completed $737 million of Large Dispositions, returned over $110 million of capital to shareholders in the form of special cash dividends and share repurchases, and reduced Net Debt to 2024 Adjusted EBITDA to 2.6x (as of 12/31/2024)
• Delivered significant growth in Land-Based Solution business—year-end pipeline of ~39,000 acres under solar option and ~154,000 acres under carbon capture and storage (CCS) lease*

The fourth quarter results included $291.1 million of income from Large Dispositions,¹ a $1.6 million gain from the termination of a cash flow hedge,² $1.6 million of net costs associated with legal settlements,³ and $1.1 million of restructuring charges.⁴ Excluding these items and adjusting for pro forma net income adjustments attributable to noncontrolling interests,⁵ fourth quarter pro forma net income⁶ was $41.1 million, or $0.27 per share, on pro forma revenues⁶ of $231.3 million. This compares to pro forma net income⁶ of $25.4 million, or $0.17 per share, on pro forma revenues of $225.2 million in the prior year period.

Fourth quarter operating income was $346.2 million versus $145.2 million in the prior year period. Fourth quarter operating income included $291.1 million of income from Large Dispositions¹ and $1.1 million of restructuring charges.⁴ Excluding these items, pro forma operating income⁶ was $56.3 million. This compares to pro forma operating income⁶ of $40.1 million in the prior year period. Fourth quarter Adjusted EBITDA⁶ was $115.1 million versus $93.7 million in the prior year period.

Overview of Full-Year Results

Full-year 2024 net income attributable to Rayonier was $359.1 million, or $2.39 per share, on revenues of $1.3 billion. This compares to net income attributable to Rayonier of $173.5 million, or $1.17 per share, on revenues of $1.1 billion in the prior year.

Full-year results included $291.1 million of income from Large Dispositions,¹ $8.0 million of net recoveries on legal settlements,³ a $1.6 million gain from the termination of a cash flow hedge,² a $4.8 million pension settlement charge,⁷ $1.6 million of costs related to disposition initiatives,⁸ and $1.1 million of restructuring charges.⁴ Excluding these items and adjusting for pro forma net income adjustments attributable to noncontrolling interests,⁵ full-year pro forma net income⁶ was $69.9 million, or $0.47 per share, on pro forma revenues⁶ of $768.0 million. This compares to pro forma net income⁶ of $53.5 million, or $0.36 per share, on pro forma revenues⁶ of $814.7 million in the prior year period.

Full-year operating income was $402.5 million versus $211.3 million in the prior year. Full-year operating income included $291.1 million of income from Large Dispositions,¹ $1.6 million of costs related to disposition initiatives,⁸ and $1.1 million of restructuring charges.⁴ Excluding these items, full-year pro forma operating income⁶ was $114.1 million. This compares to pro forma operating income⁶ of $108.5 million in the prior year. Full-year Adjusted EBITDA⁶ was $298.8 million versus $296.5 million in the prior year.

Full-year cash provided by operating activities was $261.6 million versus $298.4 million in the prior year period. Full-year cash available for distribution (CAD)⁶ was $183.7 million, which increased $19.8 million versus the prior year period due to lower cash interest paid (net) ($16.9 million), higher Adjusted EBITDA⁶ ($2.3 million), and lower capital expenditures ($1.7 million), partially offset by higher cash taxes paid ($1.1 million).

“Our full-year 2024 financial performance demonstrates our resilience and nimble execution amid persistent market headwinds,” said Mark McHugh, President and CEO. “We were pleased to finish the year with strong fourth quarter financial results, which allowed us to deliver full-year Adjusted EBITDA of $298.8 million—roughly 3% above the high end of our prior guidance range. Our outperformance versus expectations in the fourth quarter was driven primarily by extraordinarily strong results in our Real Estate segment, which delivered Adjusted EBITDA for the quarter of $63.4 million on roughly 7,800 acres sold. Notably, our Real Estate segment achieved a weighted-average price per acre for the quarter of roughly $7,200 (excluding Improved Development and Large Dispositions), demonstrating our team’s ability to optimize the value of our portfolio by generating significant HBU premiums above timberland value.”

“We further advanced several important strategic initiatives throughout the year, including growing our Land-Based Solutions business, accelerating value creation in our Real Estate business, and demonstrating significant progress on our disposition and capital structure realignment plan. To date, we’ve closed on roughly $737 million of dispositions (~74% of our $1 billion target), which has allowed us to meaningfully reduce leverage and return over $110 million of capital to shareholders in the form of special cash dividends and share repurchases. In sum, I’m proud of how our team was able to navigate challenging market conditions throughout the year to deliver strong financial results while also maintaining a relentless focus on driving shareholder value creation.”

“Turning to our fourth quarter results, we achieved total Adjusted EBITDA of $115.1 million—an increase of 23% versus the prior year period. The increase in Adjusted EBITDA versus the prior year quarter was driven primarily by stronger results in our Southern Timber, New Zealand Timber, and Real Estate segments, partially offset by slightly lower results in our Pacific Northwest Timber segment.”

“In our Southern Timber segment, Adjusted EBITDA improved 8% versus the prior year quarter, as higher non-timber income was partially offset by a 15% reduction in weighted-average net stumpage realizations and 3% lower harvest volumes. In our Pacific Northwest Timber segment, Adjusted EBITDA declined 2% versus the prior year quarter, as a 9% decrease in weighted-average log prices and 3% lower harvest volumes were partially offset by favorable costs. In New Zealand Timber, Adjusted EBITDA improved 66% versus the prior year quarter, primarily driven by favorable foreign exchange impacts and a 15% increase in harvest volumes. Lastly, in our Real Estate segment, Adjusted EBITDA increased 18% relative to the prior year quarter, driven by the closing of several key rural HBU and development transactions. Notably, weighted-average per-acre prices in our Real Estate segment were more than double the prices achieved in the prior year period, reflecting the high quality of the transactions completed.”

Southern Timber

Fourth quarter sales of $59.1 million decreased $0.9 million, or 2%, versus the prior year period. Harvest volumes decreased 3% to 1.56 million tons versus 1.60 million tons in the prior year period, primarily due to the impact of the Large Disposition completed in the fourth quarter. Average pine sawtimber stumpage realizations decreased 14% to $24.74 per ton versus $28.84 per ton in the prior year period, primarily due to softer overall demand from sawmills coupled with increased log supply from salvage timber and an unfavorable shift in geographic mix. Average pine pulpwood stumpage realizations decreased 9% to $16.08 per ton versus $17.68 per ton in the prior year period, primarily driven by the impact of salvage volume and an unfavorable shift in geographic mix. Overall, weighted-average net stumpage realizations (including hardwood) decreased 15% to $19.30 per ton versus $22.63 per ton in the prior year period, reflecting lower pricing as well as a heavier mix of pulpwood. Non-timber sales of $15.8 million increased $7.4 million versus the prior year period, primarily driven by growth in our Land-Based Solutions business and higher pipeline easement revenues. Operating income of $18.0 million increased $4.3 million versus the prior year period due to higher non-timber income ($7.4 million), lower costs ($1.4 million), and lower depletion expense ($1.1 million), partially offset by lower net stumpage realizations ($5.2 million) and lower volumes ($0.4 million).

Fourth quarter Adjusted EBITDA⁶ of $34.7 million was 8%, or $2.7 million, above the prior year period.

Pacific Northwest Timber

Fourth quarter sales of $24.1 million decreased $4.0 million, or 14%, versus the prior year period. Harvest volumes decreased 3% to 290,000 tons versus 298,000 tons in the prior year period, primarily due to the impact of the Large Dispositions completed in the fourth quarter. Average delivered prices for domestic sawtimber decreased 5% to $89.04 per ton versus $93.91 per ton in the prior year period due to weaker demand from domestic lumber mills and an unfavorable product mix, as a higher proportion of chip-n-saw was harvested in the current year period. Average delivered pulpwood prices increased 4% to $29.99 per ton versus $28.91 per ton in the prior year period, primarily due to improved supply/demand dynamics resulting from reduced sawmill residuals. Operating loss of $1.3 million versus operating loss of $2.5 million in the prior year period was driven by lower costs ($1.5 million), lower depletion expense ($1.1 million), and higher non-timber income ($0.2 million), partially offset by lower net stumpage realizations ($1.6 million).

Fourth quarter Adjusted EBITDA⁶ of $6.0 million was 2%, or $0.1 million, below the prior year period.

New Zealand Timber

Fourth quarter sales of $72.4 million increased $12.3 million, or 21%, versus the prior year period. Sales volumes increased 15% to 729,000 tons versus 632,000 tons in the prior year period. Average delivered prices for export sawtimber increased 7% to $108.09 per ton versus $100.73 per ton in the prior year period, as higher shipping costs were partially passed on to export customers through increased prices. Average delivered prices for domestic sawtimber increased 6% to $66.68 per ton versus $63.03 per ton in the prior year period. The increase in domestic sawtimber prices was driven in part by an increase in the NZ$/US$ exchange rate (US$0.61 per NZ$1.00 versus US$0.60 per NZ$1.00). Excluding the impact of foreign exchange rates, domestic sawtimber prices increased 3% versus the prior year period, reflecting increased competition from export markets. Overall, net stumpage realizations improved 1% versus the prior year quarter, as elevated shipping costs largely offset higher delivered log pricing. Fourth quarter non-timber / carbon credit sales totaled $6.2 million versus $7.7 million in the prior year period, primarily due to a lower volume of carbon credits sold as compared to the prior year period. Operating income of $14.2 million increased $7.4 million versus the prior year period due to favorable foreign exchange impacts ($5.7 million), higher volumes ($1.5 million), higher net stumpage realizations ($0.5 million), lower costs ($0.4 million), and lower depletion rates ($0.3 million), partially offset by lower carbon credit income ($1.0 million).

Fourth quarter Adjusted EBITDA⁶ of $20.0 million was 66%, or $7.9 million, above the prior year period.

Real Estate

Fourth quarter sales of $567.2 million increased $256.7 million versus the prior year period, while operating income of $326.1 million increased $188.2 million versus the prior year period. Fourth quarter sales and operating income included $495.0 million and $291.1 million, respectively, from Large Dispositions.¹ Excluding Large Dispositions,¹ pro forma sales⁶ were $72.2 million and pro forma operating income⁶ was $35.0 million. Pro forma sales⁶ and pro forma operating income⁶ increased versus the prior year period as higher weighted-average prices ($8,923 per acre versus $3,320 per acre in the prior year period) were partially offset by lower acres sold (7,811 acres sold versus 20,488 acres sold in the prior year period).

Improved Development sales of $14.4 million included $13.5 million from the Heartwood development project south of Savannah, Georgia, and $0.9 million from the Wildlight development project north of Jacksonville, Florida. Sales in Heartwood included a 37.4-acre build-for-rent residential parcel for $9.1 million ($244,000 per acre), a 37.1-acre residential pod for $2.0 million ($54,000 per acre), a 7.2-acre industrial parcel for $1.7 million ($240,000 per acre), and a 7.1-acre commercial site for $0.6 million ($84,000 per acre). Sales in Wildlight consisted of a 0.9-acre commercial parcel for $0.9 million ($968,000 per acre). This compares to Improved Development sales of $10.6 million in the prior year period.

Unimproved Development sales of $12.4 million consisted of a 1,129-acre residential pod sale to a national homebuilder for $10,980 per acre. There were no Unimproved Development sales in the prior year period.

Rural sales of $42.9 million consisted of 6,592 acres at an average price of $6,515 per acre. This compares to prior year period sales of $57.1 million, which consisted of 20,215 acres at an average price of $2,824 per acre.

There were no Timberland & Non-Strategic sales in the fourth quarter. This compares to prior year period sales of $0.4 million, which consisted of a 200-acre transaction for $2,000 per acre.

Fourth quarter Adjusted EBITDA⁶ of $63.4 million increased $9.9 million versus the prior year period.

Trading

Fourth quarter sales of $3.6 million decreased $5.3 million versus the prior year period, primarily due to lower volumes. Sales volumes of 28,000 tons decreased 63% versus the prior year period. The Trading segment generated an operating loss of $0.1 million versus operating income of $0.1 million in the prior year period.

Other Items

Fourth quarter corporate and other operating expenses of $10.6 million decreased $0.2 million versus the prior year period, as lower stock compensation expense and professional services fees were partially offset by $1.1 million of restructuring charges⁴ and other increased expenses. The restructuring charges were related to a workforce optimization initiative designed to reduce overhead costs following the disposition of approximately 255,000 acres of timberlands in connection with our Initiatives to Enhance Shareholder Value.

Fourth quarter interest expense of $7.3 million decreased $4.2 million versus the prior year period, primarily due to lower average outstanding debt and a $1.6 million gain from the termination of a cash flow hedge² associated with the repayment of a $100 million term loan.

Fourth quarter income tax expense increased $4.0 million versus the prior year period, primarily due to a higher percentage of full-year income generated in the fourth quarter as compared to the prior year period.

Share Repurchases

During the fourth quarter, the Company repurchased 488,000 shares at an average price of $30.10 per share, or $14.7 million in total. In December, the Company announced a new $300 million share repurchase authorization, replacing our previous $100 million share repurchase authorization.

Outlook

In 2025, we expect to achieve net income attributable to Rayonier of $79 to $100 million, EPS of $0.51 to $0.64, and Adjusted EBITDA of $270 to $300 million. Our full-year guidance excludes the potential impact of any additional asset sales as part of the $1 billion disposition target that we announced in November 2023.

In our Southern Timber segment, we expect to achieve full-year harvest volumes of 6.9 to 7.1 million tons—a modest increase in harvest volumes versus the prior year, primarily due to the carryover of some planned 2024 volume into 2025, partially offset by reduced volume from the recent disposition in Oklahoma. Further, while we expect pine stumpage realizations to trend higher as the year progresses, we anticipate that full-year realizations will be slightly lower versus the prior year, due in part to the continued impact of salvage volume on the market. Lastly, we expect slightly lower non-timber income for full-year 2025 as compared to the prior year, which benefited from significant pipeline easement activity. Overall, we expect full-year Adjusted EBITDA of $141 to $149 million, slightly below full-year 2024 results.

In our Pacific Northwest Timber segment, we expect to achieve full-year harvest volumes of approximately 0.9 million tons, which reflects the reduction in our Pacific Northwest sustainable yield resulting from the recent dispositions in Washington. Further, we expect that full-year weighted average log pricing will increase modestly versus the prior year as a result of improving demand conditions. Overall, we expect full-year Adjusted EBITDA of $21 to $26 million, comparable to full-year 2024 results.

In our New Zealand Timber segment, we expect full-year harvest volumes of 2.5 to 2.7 million tons. We expect that full-year domestic and export sawtimber pricing will improve modestly relative to the full-year pricing achieved in 2024 as supply-demand fundamentals continue to improve. We further anticipate a modest increase in carbon credit sales in 2025, as pricing appears to have stabilized following a period of unusual market volatility. Overall, we expect full-year Adjusted EBITDA of $54 to $60 million, up modestly versus full-year 2024 results.

Turning to our Real Estate segment, we are encouraged by the continued strong demand and value realizations for our HBU properties, and we expect another solid year in both our rural land sales program as well as our improved development projects based on our current pipeline of transactions. However, similar to 2024, we anticipate very light closing activity (and a correspondingly low Adjusted EBITDA contribution of less than $10 million) in the first quarter. Overall, we expect full-year Adjusted EBITDA of $86 to $96 million, down from the exceptionally strong full-year 2024 results.

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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 December 31, 2023, Rayonier owned or leased under long-term agreements approximately 2.7 million acres of timberlands located in the U.S. South (1.85 million acres), U.S. Pacific Northwest (418,000 acres) and New Zealand (421,000 acres). More information is available at www.rayonier.com.

Contact:

Collin Mings – Vice President, Capital Markets & Strategic Planning – investorrelations@rayonier.com – (904) 357-9100

Source: Rayonier, Inc.