Investor Relations - Timber and Real Estate Performance
Definitions of Non-GAAP Measures and Pro Forma Items
Pro Forma Sales is defined as revenue adjusted for Large Dispositions. Rayonier believes that this non-GAAP financial measure provides
investors with useful information to evaluate our core business operations because it excludes specific items that are not indicative of ongoing
operating results.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved
development, costs related to shareholder litigation, the gain on foreign currency derivatives, Large Dispositions, internal review and
restatement costs, costs related to spin-off of the Performance Fibers business, the gain related to the consolidation of the New Zealand JV
and discontinued operations. Adjusted EBITDA is a non-GAAP measure that management uses to make strategic decisions about the
business and that investors can use to evaluate the operational performance of the assets under management. It removes the impact of
specific items that management believes do not directly reflect the core business operations on an ongoing basis.
EBITDA by segment is calculated as operating income less depreciation, depletion, amortization and specific items that are not indicative of
ongoing operating results. EBITDA by segment for Rayonier is equal to Adjusted EBITDA.
Last twelve months (LTM) Adjusted EBITDA is a non-GAAP financial measure that Rayonier believes provides investors with useful
information to evaluate the Company's ability to service its debt. For purposes of this calculation LTM Adjusted EBITDA is used as an indicator
of the Company's performance over the most recent twelve months and debt net of cash is presented as an indicator of Rayonier's current
leverage.
Pro Forma Interest Expense is calculated as Rayonier's current run rate of interest on outstanding indebtedness as of December 31, 2016,
and assumes that the Company issues no additional debt. This estimate could vary widely depending upon future financing activities.
Cash Available for Distribution (CAD) is defined as cash provided by operating activities adjusted for capital spending (excluding timberland
acquisitions and spending on the Rayonier office building) and working capital and other balance sheet changes. CAD is a non-GAAP
measure that management uses to measure cash generated during a period that is available for dividend distribution, repurchase of the
Company's common shares, debt reduction and strategic acquisitions. CAD is not necessarily indicative of the CAD that may be generated in
future periods.
Costs related to shareholder litigation is defined expenses incurred as a result of the securities litigation and the shareholder derivative
demands. See Note 8 - Contingencies of Item 8 - Financial Statements and Supplementary Data in the Company's most recent Annual Report
on Form 10-K. In addition, these costs include the costs associated with the Company's response to a subpoena it received from the SEC in
November 2014. In July 2016, the Division of Enforcement of the SEC notified the Company that it had concluded its investigation into the
Company.
Gain on foreign currency derivatives is the gain resulting from the foreign exchange derivatives the Company used to mitigate the risk of
fluctuations in foreign exchange rates while awaiting the capital contribution to the New Zealand JV.
Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have any identified
HBU premium relative to timberland value.
Rayonier
Investor Relations | May 2017
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