U.S. South Historical Valuation Snapshot
Illustrative HBU Economics
Example: 1 Million Acre U.S. South Portfolio
($ in 000s, excepts per acre values)
Sales Pace / Premium
Illustrative Asset Profile
U.S. South Portfolio Acres (000s)
Timberland Value per Acre
Implied Total Asset Value
(1)
HBU Incremental Return Sensitivity Analysis
(% incremental return)
Premium to Timberland Value
1.0% / 50.0% 1.5% / 75.0%
25%
50%
75%
100%
0.50%
(0.1%) 0.1%
0.2%
0.3%
0.4%
1,000
$2,009
$2,009,000
1,000
$2,009
$2,009,000
% of
Acreage
Sold
0.75%
(0.1%)
0.1%
0.3%
0.4%
0.6%
1.00% (0.1%) 0.1%
0.4%
0.6%
0.8%
1.25% (0.1%) 0.2%
0.4%
0.7%
1.0%
1.50% (0.2%) 0.2%
0.5%
0.9%
1.2%
Implied HBU Inputs
# of Acres Sold Annually
10,000
15,000
Implied HBU Price per Acre
$3,014
$3,516
Peer Group Real Estate Prices (2021 – 2022) (4)
HBU Premium per Acre
$1,005
$1,507
$5,000
$4,723
HBU Contribution to Return
$4,500
HBU Sales Revenue
$30,135
$52,736
$4,000
$3,719
$3,500
(2)
(-) Real Estate Overhead Costs
(3,014)
(5,274)
$3,000
$2,247
Implied Adjusted EBITDA
$27,122
$47,463
$2,500
$2,000
(-) Acquire Replacement Timberlands
(3)
(20,090)
(30,135)
$1,500
Residual Cash Flow
$7,032
$17,328
$1,000
$500
Residual Cash Flow / Total Asset Value
0.4%
0.9%
Rayonier
Weyerhaeuser
Potlatch
A well-designed HBU program should be able to generate roughly 0.5% to 1.0% of incremental
return relative to underlying timberland returns (depending on the quality of HBU product).
Rayonier
(2)
(1) Based on NCREIF U.S. South Timberland index average value per acre as of Q4 2022. (3)
Assumes overhead costs of 10% of sales.
(4)
Assumes additional timberlands acquired to replace acreage sold as HBU.
Represents average Real Estate segment sales price per acre for 2021 - 2022.
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Investor Presentation | May 2023View entire presentation