Investor Presentation
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%
0.75%
1,000
$1,810
1,000
$1,810
% of
Acreage
(0.1%)
0.1%
0.3%
0.4%
0.6%
1.00%
(0.1%) 0.1%
0.4%
0.6%
0.8%
$1,810,000
$1,810,000
Sold
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
$2,715
$3,168
Peer Group Real Estate Prices (2018 – 2019) (4)
HBU Premium per Acre
$905
$1,358
$4,500
$3,921
HBU Contribution to Return
$4,000
HBU Sales Revenue
$27,150
$47,513
$3,500
(2)
$3,000
(-) Real Estate Overhead Costs
(2,715)
(4,751)
$2,500
Implied Adjusted EBITDA
$24,435
$42,761
$2,000
$1,986
$1,769
$1,811
(-) Acquire Replacement Timberlands
(18,100)
(27,150)
$1,500
Residual Cash Flow
$6,335
$15,611
$1,000
$500
Residual Cash Flow / Total Asset Value
0.4%
0.9%
Rayonier Weyerhaeuser Potlatch
CatchMark
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
(1)
(2)
Based on NCREIF U.S. South Timberland index average value per acre as of Q4 2019.
Assumes overhead costs of 10% of sales.
(3) Assumes additional timberlands acquired to replace acreage sold as HBU.
Represents average Real Estate segment sales price per acre for 2018 - 2019.
Investor Presentation | May 2020
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