Date: Thu, 20 Nov 1997 21:27:17 GMT Server: Apache/1.1.1 Content-type: text/html Set-Cookie: Apache=heart25632880061237126; path=/ Content-length: 3277 Last-modified: Mon, 17 Feb 1997 14:27:31 GMT
In keeping with the Board's previously announced distribution policy, this distribution, when added to the distributions previously paid in the second, third and fourth quarters of 1996, makes the total of those four quarterly distributions equal to the Partnership's previously reported cash flow per Class A Unit for 1996, or $5.69. In announcing the year-end earnings, the company indicated that Partnership results for 1997 are expected to be lower than in 1996. Accordingly, the company said it expects that distributions to be paid in the second, third and fourth quarters of 1997 and the first quarter of 1998, which will be based on cash flow per Class A Unit for 1997, will total less than $5.69.
Rayonier Forest Resources 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 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.