Date: Thu, 20 Nov 1997 21:27:25 GMT Server: Apache/1.1.1 Content-type: text/html Set-Cookie: Apache=heart172880061245686; path=/ Content-length: 16595 Last-modified: Tue, 22 Apr 1997 20:07:50 GMT
Earnings, Distributions And Other News
Rayonier Timberlands, L.P. Announces First Quarter Results
STAMFORD, CONNECTICUT, April 14, 1997 - Rayonier Forest Resources Company (RFR), the managing general partner of Rayonier Timberlands, L.P. (NYSE:LOG), said first quarter 1997 Partnership earnings declined 14 percent from last year's first quarter primarily as a result of reduced prices caused by weak export and domestic log markets.Partnership income was $29.7 million, or $1.60 per Class A Unit, which is $4.8 million, or 18 cents per Class A Unit, below the 1996 first quarter. Operating cash flow allocable to each Class A Unit was $1.67, or 16 cents per Class A Unit lower than 1996 results. Sales were $41.8 million, $5.1 million below last year's first quarter.
In the Northwest region, realized prices for the first quarter declined 16 percent from prior year levels reflecting the effect of declining export and domestic log markets since the related stumpage contracts were initiated. Combined stumpage and delivered log volume was slightly below the prior year. As a result, first quarter sales decreased $5.3 million to $26.3 million and operating income declined $3.9 million to $22.0 million.
In the Southeast region, first quarter sales rose $0.2 million from the prior year to $15.5 million and operating income decreased $0.4 million to $11.7 million reflecting a 9 percent increase in harvest volume, driven by a strong housing market, partially offset by lower prices. Pine prices declined 6 percent from the prior year first quarter reflecting weak demand from pulp and paper producers.
Rayonier Forest Resources continues to caution unitholders that when the Initial Term of the Partnership ends on December 31, 2000, the Primary Account of the Partnership will be closed but the unitholders will not be entitled to have their Partnership Capital accounts redeemed until the Partnership formally ends in the year 2035. After December 31, 2000, the interest of Class A unitholders in the Partnership's future revenues, expenses and cash flows will decrease from 95 percent to 4 percent. On a pro forma basis, using 1996 results as an example, cash flow allocable per Class A Unit would decline from $5.69 to approximately $0.24. In addition, there will be substantial Secondary Account debt that will mature on January 1, 2001. This debt (incurred to fund long-term investment in such areas as reforestation and silvicultural activities including accrued interest) is expected to exceed $350 million, more than three times 1996's net operating cash flow. In accordance with the Partnership Agreement, all Secondary Account debt must be repaid before any distribution of Partnership cash flow resumes. As a result, it is expected that the market price of Class A Units should be decreasing substantially as December 31, 2000 approaches.
Rayonier Timberlands, L.P. grows and sells timber in the U.S. on 778,000 acres in the Southeast and on 369,000 acres in the Northwest. Rayonier Inc., the Special General Partner, owns 74.7 percent of the 20 million outstanding Class A Units of Rayonier Timberlands, L.P. The balance is publicly traded on the NYSE.
Editor's Note: Earnings for Rayonier Inc. (NYSE:RYN), the parent company of Rayonier Timberlands, were released earlier.
FINANCIAL HIGHLIGHTS
MARCH 31, 1997 (unaudited)
(thousands of dollars, except per unit information)
First Quarter | ||||
Ended March 31, | ||||
1997 | 1996 | |||
Sales | $ | 41,788 | $ | 46,842 |
Partnership income | $ | 29,724 | $ | 34,512 |
Income per Class A Unit | $ | 1.60 | $ | 1.78 |
Operating cash flow allocable to a Class A Unit | $ | 1.67 | $ | 1.83 |
BUSINESS SEGMENT INFORMATION
MARCH 31, 1997 (unaudited)
(thousands of dollars, except volumes and per unit information)
First Quarter | ||||
Ended March 31, | ||||
1997 | 1996 | |||
Timber and timberland sales | ||||
Northwest | $ | 26,326 | $ | 31,617 |
Southeast | 15,462 | 15,225 | ||
Total | $ | 41,788 | $ | 46,842 |
Operating income | ||||
Northwest | $ | 21,975 | $ | 25,868 |
Southeast | 11,664 | 12,036 | ||
Corporate and other | (689) | (491) | ||
Total | $ | 32,950 | $ | 37,413 |
Partnership income | $ | 29,724 | $ | 34,512 |
Income per Class A Unit | $ | 1.60 | $ | 1.78 |
Operating cash flow allocable to a | ||||
Class A Unit | $ | 1.67 | $ | 1.83 |
Northwest harvest volumes | ||||
Stumpage, in millions of board feet | 49.6 | 45.1 | ||
Delivered logs, in millions of board feet | 9.4 | 15.2 | ||
Total | 59.0 | 60.3 | ||
Southeast harvest volumes | ||||
Pine, in thousands of short green tons | 531.3 | 456.6 | ||
Hardwoods, in thousands of short green tons | 29.8 | 56.0 | ||
Total | 561.1 | 512.6 | ||