Date: Thu, 20 Nov 1997 21:27:45 GMT Server: Apache/1.1.1 Content-type: text/html Set-Cookie: Apache=heart172880061265619; path=/ Content-length: 21591 Last-modified: Fri, 18 Jul 1997 19:08:16 GMT
Earnings, Distributions And Other News
Rayonier Timberlands, L.P. Announces Second Quarter Results
STAMFORD, CONNECTICUT, July 14, 1997 — Rayonier Forest Resources Company (RFR), the managing general partner of Rayonier Timberlands, L.P. (NYSE:LOG), today reported second quarter 1997 Partnership income of $21.9 million, or $1.23 per Class A Unit, $5.5 million, or 26 cents per Class A Unit, below the 1996 second quarter. Operating cash flow allocable to each Class A Unit was $1.30, 26 cents per Class A Unit lower than the prior year. Sales for the quarter were $33.4 million, $5.5 million lower than last year’s second quarter.For the six month period, Partnership income was $51.7 million, or $2.83 per Class A Unit, $10.3 million, or 44 cents per Class A Unit, below 1996 results. Operating cash flow allocable to each Class A Unit was $2.97, 42 cents per Class A Unit below last year’s second quarter. Sales for the first half of 1997 were $75.2 million, down $10.5 million from last year’s first half.
In the Northwest region, harvest prices for the second quarter declined 18 percent from prior year levels reflecting the effect of declining export and domestic log markets at the time the related stumpage contracts were initiated. Combined stumpage and delivered log volume was 6 percent below the prior year. As a result, second quarter sales decreased $5.9 million to $20.5 million and operating income declined $5.6 million to $15.3 million. Approximately 59 percent of the currently anticipated annual harvest had been cut by midyear.
In the Southeast region, second quarter sales rose $0.4 million to $13.0 million and operating income increased $0.4 million to $10.2 million, reflecting a 3 percent increase in harvest volume partially offset by slightly lower prices. Approximately 50 percent of the anticipated annual harvest had been cut by midyear.
RFR 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 24 cents. 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.
FINANCIAL HIGHLIGHTS
JUNE 30, 1997 (unaudited)
(thousands of dollars, except per unit information)
Second Quarter | Six Months | ||||||||||
Ended June 30, | Ended June 30, | ||||||||||
1997 | 1996 | 1997 | 1996 | ||||||||
Sales | $ | 33,441 | $ | 38,921 | $ | 75,229 | $ | 85,763 | |||
Partnership income | $ | 21,948 | $ | 27,419 | $ | 51,672 | $ | 61,931 | |||
Income per Class A Unit | $ | 1.23 | $ | 1.49 | $ | 2.83 | $ | 3.27 | |||
Operating cash flow allocable | |||||||||||
to a Class A Unit | $ | 1.30 | $ | 1.56 | $ | 2.97 | $ | 3.39 | |||
BUSINESS SEGMENT INFORMATION
JUNE 30, 1997 (unaudited)
(thousands of dollars, except volumes and per unit information)
Second Quarter | Six Months | ||||||||||
Ended June 30, | Ended June 30, | ||||||||||
1997 | 1996 | 1997 | 1996 | ||||||||
Timber and timberland sales | |||||||||||
Northwest | $ | 20,452 | $ | 26,367 | $ | 46,778 | $ | 57,984 | |||
Southeast | 12,989 | 12,554 | 28,451 | 27,779 | |||||||
Total | $ | 33,441 | $ | 38,921 | $ | 75,229 | $ | 85,763 | |||
Operating income | |||||||||||
Northwest | $ | 15,266 | $ | 20,910 | $ | 37,241 | $ | 46,778 | |||
Southeast | 10,232 | 9,853 | 21,896 | 21,889 | |||||||
Corporate and other | (295) | (489) | (984) | (980) | |||||||
Total | $ | 25,203 | $ | 30,274 | $ | 58,153 | $ | 67,687 | |||
Partnership income | $ | 21,948 | $ | 27,419 | $ | 51,672 | $ | 61,931 | |||
Income per Class A Unit | $ | 1.23 | $ | 1.49 | $ | 2.83 | $ | 3.27 | |||
Operating cash flow allocable | |||||||||||
to a Class A Unit | $ | 1.30 | $ | 1.56 | $ | 2.97 | $ | 3.39 | |||
Northwest harvest volumes | |||||||||||
Stumpage, in millions of board feet | 37.2 | 37.7 | 86.8 | 82.8 | |||||||
Delivered logs, in millions of board feet | 11.9 | 14.7 | 21.3 | 29.9 | |||||||
Total | 49.1 | 52.4 | 108.1 | 112.7 | |||||||
Southeast harvest volumes | |||||||||||
Pine, in thousands of short green tons | 446.4 | 436.7 | 977.7 | 893.3 | |||||||
Hardwoods, in thousands of short green tons | 50.3 | 46.3 | 80.1 | 102.3 | |||||||
Total | 496.7 | 483.0 | 1,057.8 | 995.6 | |||||||