Rayonier Inc. has a market cap of $5.78 billion; its shares were traded at around $47.8 with a P/E ratio of 23 and P/S ratio of 3.9. The dividend yield of Rayonier Inc. stocks is 3.4%. Rayonier Inc. had an annual average earning growth of 5.4% over the past 10 years. GuruFocus rated Rayonier Inc. the business predictability rank of 2-star.
Highlight of Business Operations:In the Atlantic region, sales for the three and six months ended June 30, 2012 benefited from a 15 percent and 11 percent increase in pine stumpage prices from the prior year periods, respectively, reflecting stronger pulpwood demand and the impact of fire salvage on 2011 prices. The impact to sales from the increased stumpage prices was offset by a mix shift from higher-priced log sales in 2011 to stumpage sales in 2012.
In the Gulf States region, sales increased for the three and six months ended June 30, 2012 compared to the prior year periods as volumes rose 35 and 31 percent, respectively, mainly due to the integration of 2011 timberland acquisitions. These increases were partially offset by a six percent decline in average prices due to a shift from sawlogs to pulpwood for both 2012 periods. Operating income improved in 2012 primarily due to higher volumes and increased non-timber income.
In the Northern region, second quarter and year-to-date sales and operating income were below the prior year periods due to weaker Asian demand and higher logging costs. Volumes decreased 10 percent and five percent and prices declined five percent and two percent for the second quarter and year-to-date 2012 periods, respectively, compared to the prior year periods.
The effective tax rates for the quarter and year-to-date were 16.4 percent and 20.8 percent compared to 15.4 percent and 18.7 percent in 2011, respectively, reflecting proportionately higher expected earnings from our taxable REIT subsidiaries in 2012. Also included in the three months ended June 30, 2012 and 2011 were tax benefits for the tax credit exchange as discussed above. See Note 3 — Income Taxes for additional information.
In addition to these financial covenants, the installment note, mortgage note and credit facility include customary covenants that limit the incurrence of debt, the disposition of assets, and the making of certain payments between Rayonier Forest Resources ("RFR") and Rayonier among others. An asset sales covenant in the RFR $112.5 installment note agreement requires us, subject to certain exceptions, to either reinvest cumulative timberland sales proceeds for individual sales greater than $10 million (the "excess proceeds") in timberland-related investments and activities or, once the amount of excess proceeds not reinvested exceeds $50 million, to offer the note holders prepayment of the notes ratably in the amount of the excess proceeds. During April 2012, the excess proceeds exceeded the $50 million limit and as a result, repayment of $59.9 million was offered to the note holders through May 15, 2012, at which time they declined and the excess proceeds were reset to zero. The amount of excess proceeds was $0 and $37.5 million at June 30, 2012 and December 31, 2011, respectively.
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