What changed in this filing

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Item 1. Financial Statements

2021-11-05 compared with 2021-08-06 · 484 added, 359 removed, 1351 unchanged (38% of the section changed)

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

9 unchanged sentences

Interest expense ( 11,265 ) ( 10,421 ) ( 34,292 ) ( 28,457 )

Interest and other miscellaneous (expense) income, net ( 1,144 ) 1,579 ( 1,148 ) 1,370

INCOME BEFORE INCOME TAXES 70,300 3,445 88,754 33,572

Interest and other miscellaneous income (expense), net 1,274 ( 137 ) 127 1,232

INCOME (LOSS) BEFORE INCOME TAXES 113,323 ( 8,778 ) 202,077 24,794

Income tax expense ( Note 20 )

( 2,811 ) ( 720 ) ( 13,114 ) ( 7,416 )

NET INCOME 63,420 455 78,452 26,876

Net income attributable to noncontrolling interests in the Operating Partnership ( 1,753 ) ( 219 ) ( 2,094 ) ( 219 )

NET INCOME (LOSS) 110,512 ( 9,498 ) 188,963 17,378

Net (income) loss attributable to noncontrolling interests in the Operating Partnership ( 2,210 ) 25 ( 4,303 ) ( 195 )

Net (income) loss attributable to noncontrolling interests in consolidated affiliates ( 32,471 ) 8,715 ( 40,775 ) 9,647

NET INCOME ATTRIBUTABLE TO RAYONIER INC.

NET INCOME (LOSS) ATTRIBUTABLE TO RAYONIER INC.

75,831 ( 758 ) 143,885 26,830

13 unchanged sentences

EARNINGS PER COMMON SHARE ( NOTE 8 )

Basic earnings per share attributable to Rayonier Inc.

Basic earnings (loss) per share attributable to Rayonier Inc.

$ 0.53 ($ 0.01 ) $ 1.03 $ 0.20

Diluted earnings per share attributable to Rayonier Inc.

Diluted earnings (loss) per share attributable to Rayonier Inc.

$ 0.53 ($ 0.01 ) $ 1.03 $ 0.20

4 unchanged sentences

(Dollars in thousands)

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

CURRENT ASSETS

2 unchanged sentences

Total cash and cash equivalents 431,806 84,507

Restricted cash, Timber Funds ( No te 22 )

Accounts receivable, less allowance for doubtful accounts of $ 81 and $ 25

4 unchanged sentences

Assets held for sale ( Note 23 )

111,282 3,449

Other current assets 2,212 6,765

12 unchanged sentences

Total property, plant and equipment, net 28,532 30,401

RESTRICTED CASH ( NOTE 22 )

RESTRICTED CASH, EXCLUDING TIMBER FUNDS ( NOTE 22 )

RIGHT-OF-USE ASSETS 107,631 108,992

9 unchanged sentences

Deferred revenue 19,899 11,112

Distribution payable, Timber Funds 49,209 —

Other current liabilities 28,983 29,234

3 unchanged sentences

LONG-TERM DEBT, NET, TIMBER FUNDS ( NOTE 9 )

59,755 60,179

PENSION AND OTHER POSTRETIREMENT BENEFITS ( NOTE 19 )

60 unchanged sentences

Cash flow hedges — — — ( 9,833 ) ( 186 ) ( 10,019 )

Allocation of other comprehensive income to noncontrolling interests in the Operating Partnership — — — 253 — 253

Allocation of other comprehensive loss to noncontrolling interests in the Operating Partnership — — — 253 — 253

Distributions to noncontrolling interests in consolidated affiliates — — — — ( 6,474 ) ( 6,474 )

Balance, June 30, 2021 141,319,907 $ 1,231,224 $ 411,531 ($ 33,407 ) $ 388,135 $ 1,997,483

Net income — — 78,041 — 32,471 110,512

Net income attributable to noncontrolling interests in the Operating Partnership — — ( 2,210 ) — — ( 2,210 )

Dividends ($ 0.27 per share) (a)

— — ( 39,032 ) — — ( 39,032 )

Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $ 691

1,390,968 51,132 — — — 51,132

Issuance of shares under incentive stock plans 5,740 183 — — — 183

Stock-based compensation — 2,086 — — — 2,086

Repurchase of common shares ( 175 ) ( 6 ) — — — ( 6 )

Disposition of noncontrolling interests in consolidated affiliates — — — — ( 255,486 ) ( 255,486 )

Adjustment of noncontrolling interests in the Operating Partnership — — 1,746 — — 1,746

Conversion of common units to common shares 333,018 12,258 — — — 12,258

Amortization of pension and postretirement plan liabilities — — — 294 — 294

Foreign currency translation adjustment — — — ( 5,743 ) ( 879 ) ( 6,622 )

Cash flow hedges — — — 2,204 ( 493 ) 1,711

Allocation of other comprehensive loss to noncontrolling interests in the Operating Partnership — — — 92 — 92

Distributions to noncontrolling interests in consolidated affiliates — — — — ( 53,562 ) ( 53,562 )

Noncontrolling interests in consolidated affiliates redemption of shares — — — — ( 28,119 ) ( 28,119 )

Balance, September 30, 2021 143,049,458 $ 1,296,877 $ 450,076 ($ 36,560 ) $ 82,067 $ 1,792,460

Common Shares Retained

31 unchanged sentences

Balance, June 30, 2020 136,512,112 $ 1,063,489 $ 531,681 ($ 137,929 ) $ 456,717 $ 1,913,958

Net loss — — ( 783 ) — ( 8,715 ) ( 9,498 )

Net loss attributable to noncontrolling interests in the Operating Partnership — — 25 — — 25

Dividends ($ 0.27 per share) (a)

— — ( 37,257 ) — — ( 37,257 )

Costs associated with the “At-the-Market” (ATM) offering program — ( 456 ) — — — ( 456 )

Issuance of shares under incentive stock plans 6,079 167 — — — 167

Stock-based compensation — 1,965 — — — 1,965

Repurchase of common shares ( 1,185 ) ( 4 ) — — — ( 4 )

Measurement period adjustment of noncontrolling interests in consolidated affiliates — — — — ( 701 ) ( 701 )

Adjustment of noncontrolling interests in the Operating Partnership — — ( 8,030 ) — — ( 8,030 )

Conversion of common units to common shares 1,000 27 — — — 27

Amortization of pension and postretirement plan liabilities — — — 217 — 217

Foreign currency translation adjustment — — — 9,160 3,316 12,476

Cash flow hedges — — — 7,479 382 7,861

Allocation of other comprehensive income to noncontrolling interests in the Operating Partnership — — — ( 532 ) — ( 532 )

Distributions to noncontrolling interests in consolidated affiliates — — — — ( 667 ) ( 667 )

Noncontrolling interests in consolidated affiliates redemption of shares — — — — ( 28,403 ) ( 28,403 )

Balance, September 30, 2020 136,518,006 $ 1,065,188 $ 485,636 ($ 121,605 ) $ 421,929 $ 1,851,148

(a) For information regarding distributions to noncontrolling interests in the Operating Partnership, see the Rayonier Inc.

5 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

OPERATING ACTIVITIES

6 unchanged sentences

Amortization of losses from pension and postretirement plans 881 652

Timber write-offs due to casualty events — 15,203

Gain on sale of large disposition of timberlands ( 44,800 ) ( 28,655 )

Gain on sale of Timber Funds III & IV ( 3,729 ) —

Gain on Fund II timberland dispositions ( 35,951 ) —

Other 12,161 ( 6,986 )

10 unchanged sentences

Net proceeds from large disposition of timberlands 54,698 115,666

Net proceeds from sale of Timber Funds III & IV 31,068 —

Net proceeds from Fund II timberland dispositions 85,199 —

Net cash consideration for merger with Pope Resources — ( 231,068 )

Other 6,952 5,127

CASH USED FOR INVESTING ACTIVITIES ( 49,133 ) ( 170,787 )

CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 69,334 ( 184,781 )

FINANCING ACTIVITIES

8 unchanged sentences

Repurchase of common shares made under repurchase program — ( 3,152 )

Noncontrolling interests in consolidated affiliates redemption of shares — ( 5,113 )

Distributions to noncontrolling interests in consolidated affiliates ( 19,564 ) ( 8,247 )

Make-whole fee on NWFCS debt prepayment ( 6,234 ) —

CASH PROVIDED BY FINANCING ACTIVITIES 47,726 55,668

13 unchanged sentences

Redeemable Operating Partnership Unit consideration for merger with Pope Resources — 106,752

(a) Interest paid is presented net of patronage paymen ts received of $ 6.8 million a n d $ 4.3 million for the six months ended June 30, 2021 and June 30, 2020, respectively.

(a) Interest paid is presented net of patronage paymen ts received of $ 6.8 million a n d $ 4.7 million for the nine months ended September 30, 2021 and September 30, 2020, respectively.

For additional information on patronage payments, see Note 8 — Debt in the 2020 Form 10-K.

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

9 unchanged sentences

Interest expense ( 11,265 ) ( 10,421 ) ( 34,292 ) ( 28,457 )

Interest and other miscellaneous (expense) income, net ( 1,144 ) 1,579 ( 1,148 ) 1,370

INCOME BEFORE INCOME TAXES 70,300 3,445 88,754 33,572

Interest and other miscellaneous income (expense), net 1,274 ( 137 ) 127 1,232

INCOME (LOSS) BEFORE INCOME TAXES 113,323 ( 8,778 ) 202,077 24,794

Income tax expense ( Note 20 )

( 2,811 ) ( 720 ) ( 13,114 ) ( 7,416 )

NET INCOME 63,420 455 78,452 26,876

NET INCOME (LOSS) 110,512 ( 9,498 ) 188,963 17,378

Net (income) loss attributable to noncontrolling interests in consolidated affiliates ( 32,471 ) 8,715 ( 40,775 ) 9,647

NET INCOME ATTRIBUTABLE TO RAYONIER, L.P.

NET INCOME (LOSS) ATTRIBUTABLE TO RAYONIER, L.P.

UNITHOLDERS 78,041 ( 783 ) 148,188 27,025

12 unchanged sentences

EARNINGS PER UNIT ( NOTE 8 )

Basic earnings per unit attributable to Rayonier, L.P.

Basic earnings (loss) per unit attributable to Rayonier, L.P.

$ 0.53 ($ 0.01 ) $ 1.03 $ 0.20

Diluted earnings per unit attributable to Rayonier, L.P.

Diluted earnings (loss) per unit attributable to Rayonier, L.P.

$ 0.53 ($ 0.01 ) $ 1.03 $ 0.20

4 unchanged sentences

(Dollars in thousands)

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

CURRENT ASSETS

2 unchanged sentences

Total cash and cash equivalents 431,806 84,507

Restricted cash, Timber Funds ( Note 22 )

Accounts receivable, less allowance for doubtful accounts of $ 81 and $ 25

4 unchanged sentences

Assets held for sale ( Note 23 )

111,282 3,449

Other current assets 2,212 6,765

12 unchanged sentences

Total property, plant and equipment, net 28,532 30,401

RESTRICTED CASH ( NOTE 22 )

RESTRICTED CASH, EXCLUDING TIMBER FUNDS ( NOTE 22 )

RIGHT-OF-USE ASSETS 107,631 108,992

9 unchanged sentences

Deferred revenue 19,899 11,112

Distribution payable, Timber Funds 49,209 —

Other current liabilities 28,983 29,234

3 unchanged sentences

LONG-TERM DEBT, NET, TIMBER FUNDS ( NOTE 9 )

59,755 60,179

PENSION AND OTHER POSTRETIREMENT BENEFITS ( NOTE 19 )

55 unchanged sentences

Balance, June 30, 2021 $ 16,389 $ 1,622,548 ($ 29,589 ) $ 388,135 $ 1,997,483

Net income 780 77,261 — 32,471 110,512

Distributions on units ($ 0.27 per unit)

( 401 ) ( 39,695 ) — — ( 40,096 )

Issuance of units under the “at-the-market” equity offering, net of commissions and offering costs of $ 691

511 50,621 — — 51,132

Issuance of units under incentive stock plans 2 181 — — 183

Stock-based compensation 21 2,065 — — 2,086

Repurchase of units — ( 6 ) — — ( 6 )

Adjustment of Redeemable Operating Partnership Units 7 685 — — 692

Conversion of units into common shares 123 12,135 — — 12,258

Disposition of noncontrolling interests in consolidated affiliates — — — ( 255,486 ) ( 255,486 )

Amortization of pension and postretirement plan liabilities — — 294 — 294

Foreign currency translation adjustment — — ( 5,743 ) ( 879 ) ( 6,622 )

Cash flow hedges — — 2,204 ( 493 ) 1,711

Distributions to noncontrolling interests in consolidated affiliates — — — ( 53,562 ) ( 53,562 )

Noncontrolling interests in consolidated affiliates redemption of unit equivalents — — — ( 28,119 ) ( 28,119 )

Balance, September 30, 2021 $ 17,432 $ 1,725,795 ($ 32,834 ) $ 82,067 $ 1,792,460

Units Accumulated

28 unchanged sentences

Balance, June 30, 2020 $ 15,947 $ 1,578,766 ($ 137,472 ) $ 456,717 $ 1,913,958

Net loss ( 8 ) ( 775 ) — ( 8,715 ) ( 9,498 )

Distributions on units ($ 0.27 per unit)

( 385 ) ( 38,072 ) — — ( 38,457 )

Costs associated with the “At-the-Market” (ATM) program ( 5 ) ( 451 ) — — ( 456 )

Issuance of units under incentive stock plans 2 165 — — 167

Stock-based compensation 20 1,945 — — 1,965

Repurchase of units — ( 4 ) — — ( 4 )

Adjustment of Redeemable Operating Partnership Units ( 73 ) ( 7,264 ) — — ( 7,337 )

Conversion of units into common shares — 27 — — 27

Measurement period adjustment of noncontrolling interests in consolidated affiliates — — — ( 701 ) ( 701 )

Amortization of pension and postretirement plan liabilities — — 217 — 217

Foreign currency translation adjustment — — 9,160 3,316 12,476

Cash flow hedges — — 7,479 382 7,861

Distributions to noncontrolling interests in consolidated affiliates — — — ( 667 ) ( 667 )

Noncontrolling interests in consolidated affiliates redemption of unit equivalents — — — ( 28,403 ) ( 28,403 )

Balance, September 30, 2020 $ 15,498 $ 1,534,337 ($ 120,616 ) $ 421,929 $ 1,851,148

See Notes to Consolidated Financial Statements.

3 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

OPERATING ACTIVITIES

6 unchanged sentences

Amortization of losses from pension and postretirement plans 881 652

Timber write-offs due to casualty events — 15,203

Gain on sale of large disposition of timberlands ( 44,800 ) ( 28,655 )

Gain on sale of Timber Funds III & IV ( 3,729 ) —

Gain on Fund II timberland dispositions ( 35,951 ) —

Other 12,161 ( 6,986 )

10 unchanged sentences

Net proceeds from large disposition of timberlands 54,698 115,666

Net proceeds from sale of Timber Funds III & IV 31,068 —

Net proceeds from Fund II timberland dispositions 85,199 —

Cash consideration for merger with Pope Resources, net of cash acquired — ( 231,068 )

Other 6,952 5,127

CASH USED FOR INVESTING ACTIVITIES ( 49,133 ) ( 170,787 )

CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 69,334 ( 184,781 )

FINANCING ACTIVITIES

7 unchanged sentences

Repurchase of units made under repurchase program — ( 3,152 )

Noncontrolling interests in consolidated affiliates redemption of shares — ( 5,113 )

Distributions to noncontrolling interests in consolidated affiliates ( 19,564 ) ( 8,247 )

Make-whole fee on NWFCS debt prepayment ( 6,234 ) —

CASH PROVIDED BY FINANCING ACTIVITIES 47,726 55,668

13 unchanged sentences

Redeemable Operating Partnership Unit consideration for merger with Pope Resources — 106,752

(a) Interest paid is presented net of patronage paymen ts received of $ 6.8 million an d $ 4.3 million for the six months ended June 30, 2021 and June 30, 2020, respectively.

(a) Interest paid is presented net of patronage paymen ts received of $ 6.8 million an d $ 4.7 million for the nine months ended September 30, 2021 and September 30, 2020, respectively.

For additional information on patronage payments, see Note 8 — Debt in the 2020 Form 10-K.

17 unchanged sentences

acquired Pope Resources and became the general partner of Pope Resources.

As of June 30, 2021, the Company owned a 97.1 % interest in the Operating Partnership, with the remaining 2.9 % interest owned by limited partners of the Operating Partnership.

As of September 30, 2021, the Company owned a 97.3 % interest in the Operating Partnership, with the remaining 2.7 % interest owned by limited partners of the Operating Partnership.

As the sole general partner of the Operating Partnership, Rayonier Inc.

3 unchanged sentences

For a full description of our other significant accounting policies, see Note 1 — Summary of Significant Accounting Policies in our 2020 Form 10-K.

DISPOSITION OF TIMBER FUNDS

Upon completion of the Pope Resources merger, we became the manager of three private equity timber funds, Fund II, Fund III, and Fund IV, consisting of 141,000 acres in the Pacific Northwest, and obtained ownership interests in the Funds of 20 %, 5 %, and 15 %, respectively.

On September 30, 2021, we sold approximately 13,000 acres of timberlands in Washington held by Fund II for $ 87.1 million.

We classified the remaining portion of Fund II’s timber and timberland as assets held for sale in our Consolidated Balance Sheets as of September 30, 2021, as a process to liquidate Fund II had commenced.

See Note 6 — Noncontrolling Interests , Note 23 — Assets Held for Sale and the subsequent events section of this note below for additional information.

NEW ACCOUNTING STANDARDS

8 unchanged sentences

Accounting for Convertible Instruments and Contracts in an Entity's Own Equity , which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity.

This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt:

Debt with Conversion and Other Options , that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock;

(2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification;

and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method.

In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted.

We are currently in the process of evaluating the effects of the provisions of ASU 2020-06 on our financial statements.

This ASU (1) simplifies the accounting for convertible debt

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt:

and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method.

In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted.

We are currently in the process of evaluating the effects of the provisions of ASU 2020-06 on our financial statements.

SUBSEQUENT EVENTS

New Zealand Subsidiary Shareholder Loan

On July 1, 2021, the New Zealand subsidiary made a capital distribution to its partners on a pro rata basis to redeem certain equity interests.

The capital contribution was reinvested by the partners in shareholder loans to the New Zealand subsidiary.

Our capital contribution and portion of the shareholder loan are eliminated in consolidation.

The capital contribution to the minority shareholder and its reinvestment in the shareholder loan resulted in the New Zealand subsidiary recording a noncontrolling interest share redemption and loan payable in the amount of $ 28.2 million.

The shareholder loan is due in 2026 at a fixed rate of 3.64 %.

Sale of Timber Fund III and IV

The sale will not have a material effect on our consolidated financial statements.

Following the sale, we continue to manage and own a 20 % co-investment stake in Fund II, consisting of 31,000 acres of timberland in the Pacific Northwest.

We have classified Fund II’s timber and timberland as assets held for sale in our Consolidated Balance Sheets, as a process to liquidate Fund II has commenced.

See Note 6 — Noncontrolling Interests and Note 23 — Assets Held for Sale for additional information.

On October 5, 2021, we sold approximately 5,000 acres of Fund II timberland assets in Oregon for an aggregate purchase price of approximately $ 37.2 million.

This sale will not have a material effect on our consolidated financial statements.

On November 1, 2021, we sold the remaining 13,000 acres of Fund II timberland assets in Oregon for an aggregate purchase price of approximately $ 32.5 million.

This sale will not have a material effect on our consolidated financial statements.

This transaction completes the liquidation of Fund II assets, with capital expected to be distributed to investors during the fourth quarter.

MERGER WITH POPE RESOURCES

6 unchanged sentences

For additional information about the merger, see Note 2 - Merger with Pope Resources in the 2020 Form 10-K.

The total purchase price was as follows (in millions):

The total purchase price was as follows:

Cash consideration $ 247,318

4 unchanged sentences

(a) Based on the closing price of Pope Resources units on the NASDAQ on May 7, 2020.

We recognized approximately $ 2.5 million and $ 13.5 million of merger-related costs that were expensed during first and second quarters of 2020, respectively.

See Note 24 — Charges for Integration and Restructuring for descriptions of the components of merger-related costs.The acquisition of Pope Resources was accounted for as a business combination under ASC 805, Business Combinations , (“ASC 805”).

We recognized approximately $ 2.5 million, $ 13.5 million, and $ 0.4 million of merger-related costs that were expensed during the first, second and third quarters of 2020, respectively.

See Note 24 — Charges for Integration and Restructuring for descriptions of the components of merger-related costs.

The acquisition of Pope Resources was accounted for as a business combination under ASC 805, Business Combinations , (“ASC 805”).

Pursuant to ASC 805, we recorded an allocation of the assets acquired and liabilities assumed in the merger with Pope Resources based on their fair values as of May 8, 2020.

7 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

As a result of refinements to timberlands preliminarily recorded values, we recognized the following decreases in depletion expense in the second quarter of 2021:

Three months ended June 30, 2021

As a result of refinements to the purchase price allocation, higher and better use timberlands increased by approximately $ 8.2 million.

This includes development properties in the town of Port Gamble, Washington, development projects in Gig Harbor, Kingston, and Bremerton, Washington and various other assets.

Additionally, refinements to the purchase price allocation resulted in an overall increase of $ 1.1 million to timber and timberlands, with the valuation of core timberlands decreasing by $ 15.5 million and Timber Funds timber and timberlands increasing by $ 16.6 million from the preliminary purchase price allocation reported in Note 2 - Merger with Pope Resources in the 2020 Form 10-K.

As a result of refinements to timberlands preliminarily recorded values, we recognized the following decreases in depletion expense during the nine months ended September 30, 2021:

Nine months ended September 30, 2021

Pacific Northwest Timber Timber Funds Total

1 unchanged sentence

Total ($ 182 ) ($ 1,202 ) ($ 1,384 )

As a result of refinements to the purchase price allocation, higher and better use timberlands increased by approximately $ 8.2 million.

This includes development properties in the town of Port Gamble, Washington, development projects in Gig Harbor, Kingston, and Bremerton, Washington and various other assets.

Additionally, refinements to the the purchase price allocation resulted in an overall increase of $ 1.1 million to timber and timberlands, with the valuation of core timberlands decreasing by $ 15.5 million and Timber Funds timber and timberlands increasing by $ 16.6 million from the preliminary purchase price allocation reported in Note 2 - Merger with Pope Resources in the 2020 Form 10-K.

The fair values of the assets acquired and liabilities assumed were determined using the income, cost or market approaches.

7 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The final allocation of purchase price to the identifiable assets acquired and liabilities assumed is as follows (in thousands):

The final allocation of purchase price to the identifiable assets acquired and liabilities assumed is as follows:

Core Timberlands Timber Funds Total

27 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Pursuant to ASC 805, unaudited supplemental pro forma results of operations for the three and six months ended June 30, 2020, assuming the acquisition had occurred as of January 1, 2020, are presented below (in thousands, except per share and unit amounts):

Three Months Ended Six Months Ended

June 30, 2020

Pursuant to ASC 805, unaudited supplemental pro forma results of operations for the three and nine months ended September 30, 2020, assuming the acquisition had occurred as of January 1, 2020, are presented below (in thousands, except per share and unit amounts):

Three Months Ended Nine Months Ended

September 30, 2020

Sales $ 198,975 $ 684,900

14 unchanged sentences

• adjustment to interest expense to reflect the removal of Pope Resources debt and the additional borrowings we incurred in conjunction with the acquisition;

• a reduction in expenses for the three and six months ended June 30, 2020 of $ 23.5 million and $ 31.2 million for acquisition-related transaction costs.

• a reduction in expenses for the three and nine months ended September 30, 2020 of $ 0.4 million and $ 31.6 million for acquisition-related transaction costs.

Pro forma data may not be indicative of the results that would have been obtained had these events occurred at the beginning of the periods presented, nor is it intended to be a projection of future results.

12 unchanged sentences

These items, which include interest income (expense), miscellaneous income (expense) and income tax expense, are not considered by management to be part of segment operations and are included under “unallocated interest expense and other.”

The following tables summarize the segment information for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30, Six Months Ended June 30,

The following tables summarize the segment information for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended September 30, Nine Months Ended September 30,

SALES 2021 2020 2021 2020

7 unchanged sentences

Total $ 364,726 $ 198,875 $ 847,604 $ 653,635

(a) The three and six months ended June 30, 2021 includes $ 14.7 million and $ 26.7 million, respectively, of sales attributable to noncontrolling interests in Timber Funds.

The three and six months ended June 30, 2020 includes $ 5.8 million of sales attributable to noncontrolling interests in Timber Funds.

(b) The three and six months ended June 30, 2021 includes $ 36.0 million from a Large Disposition.

The six months ended June 30, 2020 includes $ 116.0 million from a Large Disposition.

(a) The three and nine months ended September 30, 2021 include $ 75.4 million and $ 102.1 million, respectively, of sales attributable to noncontrolling interests in Timber Funds.

Included in sales attributable to noncontrolling interests in Timber Funds for the three and nine months ended September 30, 2021 is $ 69.7 million from Fund II Timberland Dispositions attributable to noncontrolling interests in Timber Funds.

The three and nine months ended September 30, 2021 also include $ 17.4 million from Fund II Timberland Dispositions attributable to Rayonier.

The three and nine months ended September 30, 2020 include $ 7.7 million and $ 13.5 million of sales attributable to noncontrolling interests in Timber Funds.

(b) The three and nine months ended September 30, 2021 include $ 20.0 million and $ 56.0 million, respectively, from Large Dispositions.

The nine months ended September 30, 2020 includes $ 116.0 million from a Large Disposition.

Large Dispositions are defined as transactions involving the sale of timberland that exceed $ 20 million in size and do not have a demonstrable premium relative to timberland value.

6 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

OPERATING INCOME (LOSS) 2021 2020 2021 2020

Southern Timber $ 16,980 $ 11,208 $ 34,327 $ 26,278

Southern Timber (a) $ 12,778 $ 5,090 $ 47,105 $ 31,368

Pacific Northwest Timber 2,071 ( 1,825 ) 5,293 ( 9,453 )

New Zealand Timber 13,302 10,720 47,959 21,142

Timber Funds (a) 1,991 ( 1,892 ) 3,492 ( 1,892 )

Real Estate (b) 50,511 24,848 52,199 51,622

Timber Funds (b) 41,285 ( 12,370 ) 44,778 ( 14,262 )

Real Estate (c) 60,617 9,459 112,816 61,081

Trading ( 33 ) ( 557 ) 628 ( 474 )

Corporate and Other (c) ( 8,042 ) ( 20,872 ) ( 15,631 ) ( 28,646 )

Corporate and Other (d) ( 6,706 ) ( 8,737 ) ( 22,337 ) ( 37,383 )

Total Operating Income 123,314 1,780 236,242 52,019

1 unchanged sentence

Total Income before Income Taxes $ 113,323 ($ 8,778 ) $ 202,077 $ 24,794

(a) The three and six months ended June 30, 2021 includes $ 1.6 million and $ 2.7 million, respectively, of operating income attributable to noncontrolling interests in Timber Funds.

The three and six months ended June 30, 2020 includes $ 2.0 million of operating loss attributable to noncontrolling interests in Timber Funds.

(b) The three and six months ended June 30, 2021 includes $ 30.3 million from a Large Disposition.

The six months ended June 30, 2020 includes $ 28.7 million from a Large Disposition.

(c) The three and six months ended June 30, 2020 include $ 13.5 million and $ 16.0 million, respectively, of integration and restructuring costs related to the merger with Pope Resources.

(a) The three and nine months ended September 30, 2020 includes $ 6.0 million of timber write-offs resulting from casualty events.

Timber write-offs resulting from casualty events are recorded within the Consolidated Statements of Income and Comprehensive Income under the caption “Cost of sales”.

(b) The three and nine months ended September 30, 2021 include $ 30.5 million and $ 33.3 million, respectively, of operating income attributable to noncontrolling interests in Timber Funds.

Included in operating income attributable to noncontrolling interests in Timber Funds for the three and nine months ended September 30, 2021 is a $ 28.8 million gain on Fund II Timberland Dispositions attributable to noncontrolling interests in Timber Funds.

The three and nine months ended September 30, 2021 also include a $ 7.2 million gain on Fund II Timberland Dispositions attributable to Rayonier and a $ 3.7 million gain on investment in Timber Funds.

The three and nine months ended September 30, 2020 include $ 10.3 million and $ 12.3 million, respectively, of operating loss attributable to noncontrolling interests in Timber Funds.

Included in operating loss attributable to noncontrolling interests in Timber Funds for the three and nine months ended September 30, 2020 is $ 7.3 million related to timber write-offs resulting from casualty events attributable to noncontrolling interests in Timber Funds.

The three and nine months ended September 30, 2020 also include $ 1.8 million of timber write-offs resulting from casualty events attributable to Rayonier.

Timber write-offs resulting from casualty events are recorded within the Consolidated Statements of Income and Comprehensive Income under the caption “Cost of sales”.

(c) The three and nine months ended September 30, 2021 include $ 14.5 million and $ 44.8 million from Large Dispositions.

The nine months ended September 30, 2020 includes $ 28.7 million from a Large Disposition.

(d) The three and nine months ended September 30, 2020 include $ 0.4 million and $ 16.4 million, respectively, of integration and restructuring costs related to the merger with Pope Resources.

See Note 24 — Charges for Integration and Restructuring for additional details.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

DEPRECIATION, DEPLETION AND AMORTIZATION 2021 2020 2021 2020

6 unchanged sentences

Total $ 78,909 $ 43,283 $ 171,652 $ 154,851

(a) The three and six months ended June 30, 2021 include $ 5.1 million and $ 10.1 million, respectively, of depreciation, depletion and amortization attributable to noncontrolling interests in Timber Funds.

The three and six months ended June 30, 2020 includes $ 3.5 million of depreciation, depletion and amortization attributable to noncontrolling interests in Timber Funds.

(b) The three and six months ended June 30, 2021 includes $ 4.8 million from a Large Disposition.

The six months ended June 30, 2020 includes $ 35.4 million from a Large Disposition.

Three Months Ended June 30, Six Months Ended June 30,

NON-CASH COST OF LAND AND IMPROVED DEVELOPMENT 2021 2020 2021 2020

Real Estate (a) $ 5,254 $ 13,030 $ 7,067 $ 65,081

Total $ 5,254 $ 13,030 $ 7,067 $ 65,081

(a) The three and six months ended June 30, 2021 includes $ 0.1 million from a Large Disposition.

The six months ended June 30, 2020 includes $ 51.6 million from a Large Disposition.

(a) The three and nine months ended September 30, 2021 include $ 34.4 million and $ 44.4 million, respectively, of depreciation, depletion and amortization attributable to noncontrolling interests in Timber Funds.

Included in depreciation, depletion, and amortization attributable to noncontrolling interests in Timber Funds for the three and nine months ended September 30, 2021 is $ 32.5 million related to Fund II Timberland Dispositions attributable to noncontrolling interests in Timber Funds.

The three and nine months ended September 30, 2021 also include $ 8.1 million related to Fund II Timberland Dispositions attributable to Rayonier.

The three and nine months ended September 30, 2020 include $ 3.7 million and $ 7.2 million, respectively, of depreciation, depletion and amortization attributable to noncontrolling interests in Timber Funds.

(b) The three and nine months ended September 30, 2021 includes $ 5.0 million and $ 9.8 million, respectively, from Large Dispositions.

The nine months ended September 30, 2020 includes $ 35.4 million from a Large Disposition.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Three Months Ended September 30, Nine Months Ended September 30,

NON-CASH COST OF LAND AND IMPROVED DEVELOPMENT 2021 2020 2021 2020

Timber Funds (a) $ 8,635 — $ 8,635 —

Real Estate (b) 15,845 7,259 22,913 72,340

Total $ 24,480 $ 7,259 $ 31,548 $ 72,340

(a) The three and nine months ended September 30, 2021 includes $ 8.6 million of non-cash cost of land and improved development from Fund II Timberland Dispositions, of which $ 6.9 million was attributable to noncontrolling interests in Timber Funds and $ 1.7 million was attributable to Rayonier.

(b) The nine months ended September 30, 2021 includes $ 0.1 million from Large Dispositions.

The nine months ended September 30, 2020 includes $ 51.6 million from a Large Disposition.

PERFORMANCE OBLIGATIONS

1 unchanged sentence

We generally satisfy performance obligations within a year of entering into a contract and therefore have applied the disclosure exemption found under ASC 606-10-50-14.

Unsatisfied performance obligations as of June 30, 2021 are primarily due to advances on stumpage contracts, unearned license revenue and post-closing obligations on real estate sales.

Unsatisfied performance obligations as of September 30, 2021 are primarily due to advances on stumpage contracts, unearned license revenue and post-closing obligations on real estate sales.

These performance obligations are expected to be satisfied within the next twelve months .

5 unchanged sentences

Contract liabilities are recognized as revenue as (or when) we perform under the contract.

The following table summarizes revenue recognized during the three and six months ended June 30, 2021 and 2020 that was included in the contract liability balance at the beginning of each year:

Three Months Ended June 30, Six Months Ended June 30,

The following table summarizes revenue recognized during the three and nine months ended September 30, 2021 and 2020 that was included in the contract liability balance at the beginning of each year:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

7 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The following tables present our revenue from contracts with customers disaggregated by product type for the three and six months ended June 30, 2021 and 2020:

The following tables present our revenue from contracts with customers disaggregated by product type for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Elim.

June 30, 2021

September 30, 2021

Pulpwood $ 21,358 $ 2,116 $ 10,746 $ 127 — $ 3,861 — $ 38,208

5 unchanged sentences

Agency Fee Income — — — — — 350 — 350

Fund II Timberland Dispositions — — — 87,100 — — — 87,100

Total Non-Timber Sales 5,533 1,263 250 87,136 — 350 — 94,532

Improved Development — — — — 27,774 — — 27,774

Unimproved Development — — — — 37,500 — — 37,500

Rural — — — — 6,937 — — 6,937

Conservation Easement — — — — 3,855 — — 3,855

Timberland & Non-Strategic — — — — 44 — — 44

Deferred Revenue/Other (a) — — — — 728 — — 728

6 unchanged sentences

Three Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Elim.

June 30, 2020

September 30, 2020

Pulpwood $ 22,061 $ 1,963 $ 7,943 $ 227 — $ 2,534 — $ 34,728

4 unchanged sentences

Other Non-Timber/Carbon Revenue 1,015 1,157 3,401 15 — — — 5,588

Agency Fee Income — — — — — ( 1 ) — ( 1 )

Total Non-Timber Sales 5,476 1,409 3,461 9 — — — 10,355

3 unchanged sentences

Timberland & Non-Strategic — — — — 42 — — 42

Conservation Easement — — — — 3,099 — — 3,099

Deferred Revenue/Other (a) — — — — 737 — — 737

11 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Six Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Elim.

June 30, 2021

Nine Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Elim.

September 30, 2021

Pulpwood $ 66,941 $ 6,689 $ 32,555 $ 783 — $ 9,372 — $ 116,340

5 unchanged sentences

Agency Fee Income — — — — — 1,040 — 1,040

Fund II Timberland Dispositions — — — 87,100 — — — 87,100

Total Non-Timber Sales 18,593 4,021 802 87,579 — 1,040 — 112,035

Improved Development — — — — 47,366 — — 47,366

Unimproved Development — — — — 37,500 — — 37,500

Rural — — — — 36,999 — — 36,999

Timberland & Non-Strategic — — — — 44 — — 44

Conservation Easement — — — — 3,855 — — 3,855

6 unchanged sentences

Total Revenue $ 145,789 $ 108,357 $ 213,696 $ 128,054 $ 178,409 $ 76,795 ($ 3,496 ) $ 847,604

Six Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Elim.

June 30, 2020

Nine Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Elim.

September 30, 2020

Pulpwood $ 74,239 $ 8,253 $ 18,545 $ 555 — $ 7,527 — $ 109,119

10 unchanged sentences

Timberland & Non-Strategic — — — — 9,647 — — 9,647

Conservation Easement — — — — 3,099 — — 3,099

Deferred Revenue/Other (a) — — — — ( 879 ) — — ( 879 )

12 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The following tables present our timber sales disaggregated by contract type for the three and six months ended June 30, 2021 and 2020:

The following tables present our timber sales disaggregated by contract type for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Trading Total

June 30, 2021

September 30, 2021

Stumpage Pay-as-Cut $ 12,335 — — $ 131 — $ 12,466

5 unchanged sentences

Total Timber Sales $ 39,285 $ 30,250 $ 75,308 $ 6,834 $ 25,142 $ 176,819

June 30, 2020

September 30, 2020

Stumpage Pay-as-Cut $ 14,518 — — $ 754 — $ 15,272

11 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Six Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Trading Total

June 30, 2021

Nine Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Trading Total

September 30, 2021

Stumpage Pay-as-Cut $ 48,775 — — $ 328 — $ 49,103

5 unchanged sentences

Total Timber Sales $ 127,196 $ 104,336 $ 212,894 $ 37,216 $ 75,518 $ 557,160

June 30, 2020

September 30, 2020

Stumpage Pay-as-Cut $ 56,141 — — $ 1,285 — $ 57,426

10 unchanged sentences

We lease commercial and residential properties primarily located in Port Gamble, Washington.

Our leases are operating leases and mostly range between one and five years , and may be extended on a case by case basis.

Our leases are operating leases and primarily range between one and five years , and may be extended on a case by case basis.

Income associated with commercial and residential property leases generally includes scheduled rent increases, but do not include variable payments based on indexes.

The following table details our lease income for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30, Six Months Ended June 30,

The following table details our lease income for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended September 30, Nine Months Ended September 30,

Lease Income Components 2021 2020 2021 2020

12 unchanged sentences

Accordingly, we consolidate the New Zealand subsidiary’s balance sheet and results of operations.

The portions of the consolidated financial position and results of operations attributable to the New Zealand subsidiary’s 23 % noncontrolling interests are reflected as an adjustment to income in our Consolidated Statements of Income and Comprehensive Income under the caption “Net income attributable to noncontrolling interests in consolidated affiliates.” Rayonier New Zealand Limited (“RNZ”), a wholly-owned subsidiary, serves as the manager of the New Zealand subsidiary.

Income attributable to the New Zealand subsidiary’s 23 % noncontrolling interests is reflected as an adjustment to income in our Consolidated Statements of Income and Comprehensive Income under the caption “Net income attributable to noncontrolling interests in consolidated affiliates.” Rayonier New Zealand Limited (“RNZ”), a wholly-owned subsidiary, serves as the manager of the New Zealand subsidiary.

The following table sets forth the income attributable to the New Zealand subsidiary’s noncontrolling interests:

Three Months Ended June 30, Six Months Ended

Three Months Ended September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

3 unchanged sentences

(Fund IV) (Collectively, the “Funds”)

We are the manager of three private equity timber funds, Fund II, Fund III, and Fund IV, and maintain ownership interests in the Funds of 20 %, 5 %, and 15 %, respectively.

Based upon an analysis under the variable interest entity guidance, we have the power to direct the activities that most significantly impact the Funds’ economic success.

Therefore, we are considered the primary beneficiary and are required under ASC 810 — Consolidation to consolidate the Funds.

Income attributed to third-party investors is reflected as an adjustment to income in our Consolidated Statements of Income and Comprehensive Income under the caption “Net income attributable to noncontrolling interests in consolidated affiliates.”

The following table sets forth the income attributable to the Funds’ noncontrolling interests:

Three Months Ended June 30, Six Months Ended

2021 2020 2021 2020

Net income (loss) attributable to noncontrolling interests in the Funds $ 1,388 ($ 2,146 ) $ 2,464 ($ 2,146 )

Prior to the merger with Pope Resources, the Funds were formed by ORM LLC for the purpose of generating a return on investment through the acquisition, management, value enhancement and sale of timberland properties.

Each Fund is organized to operate for a specified term from the end of its respective investment period:

10 years for each of Fund II and Fund III, and 15 years for Fund IV.

Fund II is scheduled to terminate in March 2023, Fund III is scheduled to terminate in December 2025 and Fund IV is scheduled to terminate in January 2035.

The obligations of each of the Funds do not have any recourse to the Company or the Operating Partnership.

On July 21, 2021, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds for an aggregate purchase price prior to closing costs of approximately $ 35.9 million.

See Note 1 - Bas is of Presentation for additional information on the subsequent event.

Ferncliff Investors

We maintain an ownership interest in Ferncliff Investors, a real estate joint venture entity.

In 2017, Ferncliff Management and Ferncliff Investors were formed for the purpose of raising capital from third parties to invest in an unconsolidated real estate joint venture entity, Bainbridge Landing LLC, which is developing a five -acre parcel on Bainbridge Island, Washington into a multi-family community containing apartments and townhomes.

Ferncliff Management is the manager and 33.33 % owner of Ferncliff Investors, with the remaining ownership interest in

Based upon an analysis under the variable interest entity guidance, we determined that we had the power to direct the activities that most significantly impacted the Funds’ economic success.

Therefore, we were considered the primary beneficiary and were required under ASC 810 — Consolidation to consolidate the Funds.

On July 21, 2021, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds to BTG Pactual’s Timberland Investment Group (TIG) for an aggregate purchase price of $ 35.9 million and recognized in our Consolidated Statements of Income and Comprehensive Income a gain on the sale of $ 3.7 million under the caption of other operating income (expense), net.

Due to the sale of our rights to manage Fund III and Fund IV, we determined that we no longer have the power to direct the activities that most significantly impact the success of Fund III and Fund IV.

As a result, Timber Fund III and IV balance sheets and results of operations are only included in our consolidated financial statements through the date of the sale.

As of September 30, 2021, we continue to manage and maintain a 20 % ownership interest in Fund II, which is scheduled to terminate in March 2023.

We continue to have the power to direct the activities that most significantly impact Fund II’s economic success.

Therefore, we are considered the primary beneficiary and consolidate Fund II under ASC 810 — Consolidation .

The obligations of Fund II do not have any recourse to the Company or the Operating Partnership and the assets of Fund II are not available to satisfy the Company or the Operating Partnership’s liabilities.

On September 30, 2021, we sold approximately 13,000 acres of Fund II timberland assets in Washington for an aggregate purchase price of $ 87.1 million and recognized a gain of $ 36.0 million, of which $ 7.2 million was attributable to Rayonier.

Due to Timber Fund II distribution requirements, we classified the portion of proceeds from Fund II Timberland Dispositions attributable to noncontrolling interests as a current asset under the caption “Restricted Cash, Timber Funds” on our Consolidated Balance Sheets.

Additionally, we recognized a current liability under the caption “Distribution payable, Timber Funds” and a corresponding decrease in “Noncontrolling Interests in Consolidated Affiliates” on our Consolidated Balance Sheets.

We classified the remaining portion of Fund II’s timber

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Ferncliff Investors held by third-party investors.

and timberland as “Assets Held for Sale in our Consolidated Balance Sheets as of September 30, 2021, as a process to liquidate Fund II had commenced.

See Note 1 — Basis of Presentation , Note 2 2 — Restricted Cash and Note 23 — Assets Held for Sale for additional information.

Following the end of the third quarter, we completed the liquidation of Fund II assets through two additional timberland dispositions.

See Note 1 - Basis of Presentation for additional information on the subsequent events.

The following table sets forth the income attributable to the Funds’ noncontrolling interests:

Three Months Ended September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net income (loss) attributable to noncontrolling interests in the Funds $ 30,465 ($ 10,627 ) $ 32,929 ($ 12,773 )

Ferncliff Investors

We maintain an ownership interest in Ferncliff Investors, a real estate joint venture entity.

Ferncliff Management is the manager and 33.33 % owner of Ferncliff Investors, with the remaining ownership interest in Ferncliff Investors held by third-party investors.

Ferncliff Investors holds a 50 % interest in Bainbridge Landing LLC, the joint venture entity that owns and is developing the property.

Based upon an analysis under the variable interest entity guidance, we have the power to direct the activities that most significantly impact the joint venture’s economic success.

Based upon an analysis under the variable interest entity guidance, we have the power to direct the activities that most significantly impact the Ferncliff Investor’s economic success.

Therefore, we are considered the primary beneficiary and are required under ASC 810 — Consolidation to consolidate Ferncliff Investors.

2 unchanged sentences

Ferncliff Investors accounts for its interest in the joint venture entity under the equity method because neither it nor the other member can exercise control over Bainbridge Landing LLC.

The Ferncliff Investors joint venture agreement provides for liquidation rights and distribution priorities that are disproportionate to member’s ownership interest.

The Ferncliff Investors joint venture agreement provides for liquidation rights and distribution priorities that are disproportionate to each member’s ownership interest.

Due to the complex nature of cash distributions to members, net income of the joint venture is allocated to members, including us, using the Hypothetical Liquidation at Book Value (HLBV) method.

1 unchanged sentence

The following table sets forth the income attributable to Ferncliff Investors’ noncontrolling interests:

Three Months Ended June 30, Six Months Ended

Three Months Ended September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

4 unchanged sentences

If a noncontrolling unitholder redeems a unit for a registered common share of Rayonier or cash, the noncontrolling interests in the Operating Partnership will be reduced and the Company’s share in the Operating Partnership will be increased by the fair value of each security at the time of redemption.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

The following table sets forth the Company’s noncontrolling interests in the Operating Partnership:

Three Months Ended June 30, Six Months Ended

Three Months Ended September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

( 12,258 ) ( 27 ) ( 17,214 ) ( 27 )

Net Income attributable to noncontrolling interests in the Operating Partnership 1,753 219 2,094 219

Net Income (Loss) attributable to noncontrolling interests in the Operating Partnership 2,210 ( 25 ) 4,303 195

Other Comprehensive (Loss) Income attributable to noncontrolling interests in the Operating Partnership ( 92 ) 532 1,187 989

11 unchanged sentences

(Fund IV) (Collectively, the “Funds”)

We are the manager of three private equity timber funds, Fund II, Fund III, and Fund IV, and maintain ownership interests in the Funds of 20 %, 5 %, and 15 %, respectively.

We determined, based upon an analysis under the variable interest entity guidance, that we have the power to direct the activities that most significantly impact the Funds’ economic success.

Therefore, we are considered the primary beneficiary and are required under ASC 810 — Consolidation to consolidate the Funds.

As mentioned in Note 1 - Basis of Presentation and Note 6 — Noncontrolling Interests , we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds in July 2021.

As a result, Timber Fund III and IV balance sheets and results of operations are only included in our consolidated financial statements through the date of the sale.

As of September 30, 2021, we continue to maintain a 20 % ownership interest in Fund II.

Based on an analysis of the variable interest entity guidance, we have the power to direct the activities that most significantly impact Fund II’s economic success.

Therefore, we are considered the primary beneficiary and are required under ASC 810 — Consolidation to consolidate Fund II.

For further information on the Funds, see Note 6 — Noncontrolling Interests .

The assets, liabilities and equity of the Funds as of June 30, 2021, were as follows:

Timber Funds June 30, 2021

The assets, liabilities and equity of Fund II as of September 30, 2021, were as follows:

Timber Funds September 30, 2021

Cash and cash equivalents $ 12,202

Restricted Cash, Timber Funds ( Note 22 )

Accounts receivable 513

Assets held for sale ( Note 23 )

Assets held for sale ( Note 23 ) (a)

Other current assets 79

Total current assets 116,929

Timber and timberlands, net of depletion and amortization 316,249

Other assets 23

2 unchanged sentences

Accounts payable $ 547

Intercompany payable (a) 880

Intercompany payable (b) 160

Accrued taxes 71

Accrued interest 508

Deferred revenue 164

Distribution payable, Timber Funds (c) 49,209

Other current liabilities 36

Total current liabilities 50,187

Long-term debt, net of deferred financing costs 59,755

Funds’ equity 66,765

Total liabilities and equity $ 116,952

(a) Includes management fees and other expenses payable to the Operating Partnership.

(a) Included in assets held for sale are timber and timberland assets.

(b) Includes management fees and other expenses payable to the Operating Partnership.

These amounts are eliminated in the Consolidated Balance Sheets.

(c) Represents the portion of proceeds from Fund II Timberland Dispositions required to be distributed to noncontrolling interests.

RAYONIER INC.

9 unchanged sentences

For further information on Ferncliff Investors, see Note 6 — Noncontrolling Interests .

The assets, liabilities and equity of Ferncliff Investors as of June 30, 2021, were as follows:

Ferncliff Investors June 30, 2021

The assets, liabilities and equity of Ferncliff Investors as of September 30, 2021, were as follows:

Ferncliff Investors September 30, 2021

Cash and cash equivalents $ 391

12 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

EARNINGS PER SHARE AND PER UNIT

The following table provides details of the calculations of basic and diluted earnings per common share of the Company:

Three Months Ended June 30, Six Months Ended June 30,

EARNINGS (LOSS) PER SHARE AND PER UNIT

The following table provides details of the calculations of basic and diluted earnings (loss) per common share of the Company:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Earnings per common share - basic

Net Income $ 63,420 $ 455 $ 78,452 $ 26,876

Net income attributable to noncontrolling interests in the Operating Partnership ( 1,753 ) ( 219 ) ( 2,094 ) ( 219 )

Earnings (Loss) per common share - basic

Net Income (Loss) $ 110,512 ($ 9,498 ) $ 188,963 $ 17,378

Net (income) loss attributable to noncontrolling interests in the Operating Partnership ( 2,210 ) 25 ( 4,303 ) ( 195 )

Net (income) loss attributable to noncontrolling interests in consolidated affiliates ( 32,471 ) 8,715 ( 40,775 ) 9,647

Net income attributable to Rayonier Inc.

Net income (loss) attributable to Rayonier Inc.

$ 75,831 ($ 758 ) $ 143,885 $ 26,830

Denominator for basic earnings per common share - weighted average shares 139,556,748 133,318,209 138,718,442 131,227,852

Basic earnings per common share attributable to Rayonier Inc.:

Denominator for basic earnings (loss) per common share - weighted average shares 141,777,574 136,351,271 139,749,358 132,948,124

Basic earnings (loss) per common share attributable to Rayonier Inc.:

$ 0.53 ($ 0.01 ) $ 1.03 $ 0.20

Earnings per common share - diluted

Net Income $ 63,420 $ 455 $ 78,452 $ 26,876

Earnings (Loss) per common share - diluted

Net Income (loss) $ 110,512 ($ 9,498 ) $ 188,963 $ 17,378

Net (income) loss attributable to noncontrolling interests in consolidated affiliates ( 32,471 ) 8,715 ( 40,775 ) 9,647

Net income attributable to Rayonier Inc., before net income attributable to noncontrolling interests in the Operating Partnership $ 58,959 $ 1,954 $ 70,148 $ 27,807

Denominator for basic earnings per common share - weighted average shares 139,556,748 133,318,209 138,718,442 131,227,852

Net loss attributable to noncontrolling interests in the Operating Partnership — (a) 25 (a) — —

Net income (loss) attributable to Rayonier Inc., before net income attributable to noncontrolling interests in the Operating Partnership $ 78,041 ($ 758 ) $ 148,188 $ 27,025

Denominator for basic earnings (loss) per common share - weighted average shares 141,777,574 136,351,271 139,749,358 132,948,124

Dilutive effect of:

1 unchanged sentence

Performance shares, restricted shares and restricted stock units 520,737 — 361,596 159,018

Noncontrolling interests in Redeemable Operating Partnership units 4,275,912 2,589,518 4,303,201 1,294,759

Noncontrolling interests in Redeemable Operating Partnership Units 4,131,454 — (a) 4,245,323 2,352,822

Denominator for diluted earnings per common share - adjusted weighted average shares 146,439,568 136,351,271 144,365,110 135,460,456

Diluted earnings per common share attributable to Rayonier Inc.:

Diluted earnings (loss) per common share attributable to Rayonier Inc.:

$ 0.53 ($ 0.01 ) $ 1.03 $ 0.20

Three Months Ended June 30, Six Months Ended June 30,

(a) For the three months ended September 30, 2020, net loss attributable to noncontrolling interests in the Operating Partnership was included in the numerator for diluted earnings (loss) per share as the Company generated a net loss attributable to Rayonier Inc.

during the quarter.

Also, as a result of the net loss attributable to Rayonier Inc.

during the three months ended September 30, 2020, the incremental shares related to noncontrolling interests in Redeemable Operating Partnership Units were excluded from the denominator of diluted loss per share.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Anti-dilutive shares excluded from the computations of diluted earnings per common share:

Stock options, performance shares, restricted shares and restricted stock units 208,614 635,779 201,435 521,053

Anti-dilutive shares excluded from the computations of diluted earnings (loss) per common share:

Stock options, performance shares, restricted shares, restricted stock units and noncontrolling interests in Redeemable Operating Partnership Units (a) 100,135 5,038,514 167,668 471,999

Total 100,135 5,038,514 167,668 471,999

(a) For the three months ended September 30, 2020, the incremental shares related to stock options, performance shares, restricted shares, restricted stock units and noncontrolling interests in Redeemable Operating Partnership Units were not included in the computation of diluted loss per share as their inclusion would have had an anti-dilutive effect.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The following table provides details of the calculations of basic and diluted earnings per unit of the Operating Partnership:

Three Months Ended June 30, Six Months Ended June 30,

The following table provides details of the calculations of basic and diluted earnings (loss) per unit of the Operating Partnership:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Earnings per unit - basic

Net Income $ 63,420 $ 455 $ 78,452 $ 26,876

Earnings (loss) per unit - basic

Net Income (Loss) $ 110,512 ($ 9,498 ) $ 188,963 $ 17,378

Net (income) loss attributable to noncontrolling interests in consolidated affiliates ( 32,471 ) 8,715 ( 40,775 ) 9,647

Net income available to unitholders $ 58,959 $ 1,954 $ 70,148 $ 27,807

Denominator for basic earnings per unit - weighted average units 143,832,660 135,907,727 143,021,643 132,522,611

Basic earnings per unit attributable to Rayonier, L.P.:

Net income (loss) available to unitholders $ 78,041 ($ 783 ) $ 148,188 $ 27,025

Denominator for basic earnings (loss) per unit - weighted average units 145,909,028 140,797,217 143,994,681 135,300,946

Basic earnings (loss) per unit attributable to Rayonier, L.P.:

$ 0.53 ($ 0.01 ) $ 1.03 $ 0.20

Earnings per unit - diluted

Net Income $ 63,420 $ 455 $ 78,452 $ 26,876

Earnings (Loss) per unit - diluted

Net Income (Loss) $ 110,512 ($ 9,498 ) $ 188,963 $ 17,378

Net (income) loss attributable to noncontrolling interests in consolidated affiliates ( 32,471 ) 8,715 ( 40,775 ) 9,647

Net income available to unitholders $ 58,959 $ 1,954 $ 70,148 $ 27,807

Denominator for basic earnings per unit - weighted average units 143,832,660 135,907,727 143,021,643 132,522,611

Net income (loss) available to unitholders $ 78,041 ($ 783 ) $ 148,188 $ 27,025

Denominator for basic earnings (loss) per unit - weighted average units 145,909,028 140,797,217 143,994,681 135,300,946

Dilutive effect of unit equivalents:

1 unchanged sentence

Performance shares, restricted shares and restricted stock units 520,737 — 361,596 159,018

Denominator for diluted earnings per unit - adjusted weighted average units 144,056,229 135,957,026 143,312,018 132,652,538

Diluted earnings per unit attributable to Rayonier, L.P.:

Denominator for diluted earnings (loss) per unit - adjusted weighted average units 146,439,568 140,797,217 144,365,110 135,460,456

Diluted earnings (loss) per unit attributable to Rayonier, L.P.:

$ 0.53 ($ 0.01 ) $ 1.03 $ 0.20

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Anti-dilutive unit equivalents excluded from the computations of diluted earnings per unit:

Stock options, performance shares, restricted shares and restricted stock units 208,614 635,779 201,435 521,053

Anti-dilutive unit equivalents excluded from the computations of diluted earnings (loss) per unit:

Stock options, performance shares, restricted shares and restricted stock units (a) 100,135 592,568 167,668 471,999

Total 100,135 592,568 167,668 471,999

(a) For the three months ended September 30, 2020, the incremental unit equivalents related to stock options, performance shares, restricted shares and restricted stock units were not included in the computation of diluted loss per unit as their inclusion would have had an anti-dilutive effect.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Our debt consisted of the following at June 30, 2021:

June 30, 2021

Our debt consisted of the following at September 30, 2021:

September 30, 2021

Debt, excluding Timber Funds:

Term Credit Agreement borrowings due 2028 at a variable interest rate of 1.7 % at June 30, 2021 (a)

Term Credit Agreement borrowings due 2028 at a variable interest rate of 1.7 % at September 30, 2021 (a)

Senior Notes due 2022 at a fixed interest rate of 3.75 %

Senior Notes due 2031 at a fixed interest rate of 2.75 %

Incremental Term Loan Agreement borrowings due 2026 at a variable interest rate of 1.7 % at June 30, 2021 (b)

Incremental Term Loan Agreement borrowings due 2026 at a variable interest rate of 1.7 % at September 30, 2021 (b)

New Zealand subsidiary noncontrolling interests shareholder loan due 2025 at a fixed interest rate of 2.95 %

Northwest Farm Credit Services Credit Facility with quarterly interest-only payments, with the following tranches

Due 2025 at a fixed interest rate of 6.1 %

Due 2028 at a fixed interest rate of 4.1 %

Due 2029 at a fixed interest rate of 5.3 %

Due 2029 at a fixed interest rate of 5.4 %

New Zealand subsidiary noncontrolling interests shareholder loan due 2026 at a fixed interest rate of 3.64 %

Total principal debt, excluding Timber Funds 1,376,435

Fair value adjustments, excluding Timber Funds 7,478

Unamortized discounts, excluding Timber Funds ( 3,505 )

2 unchanged sentences

Total long-term debt, excluding Timber Funds 1,167,967

Debt, Timber Funds:

Fund II Mortgages Payable, collateralized by Fund II timberlands with quarterly interest

payments, as follows:

Due 2022 at a variable interest rate of 2.0 % at June 30, 2021

Fund III Mortgages Payable, collateralized by Fund III timberlands with quarterly interest

payments, as follows:

Due 2023 at a fixed interest rate of 5.1 %

Due 2024 at a fixed interest rate of 4.5 %

Total principal debt, Timber Funds 57,380

Fair value adjustments, Timber Funds 2,382

Deferred financing costs, Timber Funds ( 7 )

Total long-term debt, Timber Funds —

Total long-term debt $ 1,167,967

(a) As of June 30, 2021, the periodic interest rate on the term credit agreement (the “Term Credit Agreement”) was LIBOR plus 1.600 %.

(a) As of September 30, 2021, the periodic interest rate on the term credit agreement (the “Term Credit Agreement”) was LIBOR plus 1.600 %.

We estimate the effective fixed interest rate on the term loan facility to be approximately 3.1 % after consideration of interest rate swaps and estimated patronage refunds.

(b) As of June 30, 2021, the periodic interest rate on the incremental term loan (the “Incremental Term Loan Agreement”) was LIBOR plus 1.650 %.

(b) As of September 30, 2021, the periodic interest rate on the incremental term loan (the “Incremental Term Loan Agreement”) was LIBOR plus 1.650 %.

We estimate the effective fixed interest rate on the incremental term loan facility to be approximately 2.4 % after consideration of interest rate swaps and estimated patronage refunds.

(d) As of June 30, 2021, we estimate the effective fixed interest rate on the Fund III Mortgages Payable due 2023 and 2024 to be approximately 3.9 % and 3.2 %, respectively, after consideration of estimated patronage refunds.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

Principal payments due during the next five years and thereafter are as follows:

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2025 23,739 — 23,739

2024 — 14,400 14,400

2025 34,171 — 34,171

Thereafter 1,027,696 — 1,027,696

Total Debt $ 1,376,435 — $ 1,376,435

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

2021 DEBT ACTIVITY

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We recognized a loss on early extinguishment of debt of $ 0.6 million, representing the write-off of unamortized deferred financing costs.

The loss on early extinguishment of debt has been recognized in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous (expense) income, net.”

In June 2021, we entered into a Fourth Amendment and Incremental Term Loan Agreement, to amend certain terms of the Credit Agreement and to provide a senior unsecured delayed draw incremental term loan facility (the “2021 Incremental Term Loan Facility”) in an aggregate amount of $ 200 million.

3 unchanged sentences

The Fourth Amendment to the Credit Agreement also provides for modifications to adjust the pricing grid under the credit agreement to decrease the applicable margin for our $ 300 million 2016 Incremental Term Loan Facility from LIBOR plus 1.900 % to LIBOR plus 1.6500 %.

As a result of the debt modification, approximately $ 0.3 million in third-party expenses have been recognized in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous (expense) income, net.”

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

The 2021 Incremental Term Loan Facility provides us the ability to make an advance of $ 200 million on or before June 1, 2022.

As of June 30, 2021, no advance has been made under this facility.

As of September 30, 2021, no advance has been made under this facility.

We expect to use a future advance of $ 125 million under the 2021 Incremental Term Loan Facility to refinance a portion of the 3.750 % Senior Notes due 2022 on a long-term basis, and as such, have excluded $ 125 million of principal from current maturities of long-term debt, net, in our Consolidated Balance Sheets.

2 unchanged sentences

Additionally, we deferred $ 0.2 million in debt issuance costs, which will be amortized to interest expense over the term of the facility, once any future advance is made.

In June 2021, we refinanced our $ 45 million credit facility with Northwest Farm Credit Services (NWFCS).

In the refinancing, maturity dates on tranches 6 and 7 were amended from November 1, 2033 to June 1, 2029 and the maturity date on tranche 8 was amended from October 1, 2036 to June 1, 2029.

In addition to shortening the maturity terms, collateral was removed from each tranche outstanding with NWFCS.

As a result of the debt modification, approximately $ 0.1 million in lender fees have been capitalized and will be amortized to interest expense over the terms of the tranches.

In June 2021, we prepaid $ 100 million on the $ 300 million Incremental Term Loan Agreement.

In connection with the partial prepayment, we recognized a loss on early extinguishment of debt of $ 0.1 million, representing the write-off of one-third of the unamortized deferred financing costs.

The loss on early extinguishment of debt has been recorded in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous (expense) income, net.”

During the six months ended June 30, 2021, we made no borrowings or repayments on our Revolving Credit Facility .

At June 30, 2021, we had available borrowings of $ 299.1 million under the Revolving Credit Facility, net of $ 0.9 million to secure our outstanding letters of credit.

In September 2021, we repaid the $ 45 million outstanding under our credit facility with Northwest Farm Credit Services (NWFCS).

We recognized a gain on early extinguishment of debt of $ 7.2 million, representing the net write-off of unamortized deferred financing costs and fair market value adjustments, partially offset by a $ 6.2 million loss related to a make-whole fee due to debt prepayment.

The net gain on early extinguishment of debt of approximately $ 0.9 million has been recognized in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous income (expense), net.”

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

During the nine months ended September 30, 2021, we made no borrowings or repayments on our Revolving Credit Facility .

At September 30, 2021, we had available borrowings of $ 299.1 million under the Revolving Credit Facility, net of $ 0.9 million to secure our outstanding letters of credit.

Debt — Timber Funds

In July 2021, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds for an aggregate purchase price of approximately $ 35.9 million and recognized a gain of $ 3.7 million, which was recorded in Other operating income (expense), net.

Following the sale, the Fund III Mortgages Payable are no longer recognized in our Consolidated Balance Sheets as of September 30, 2021.

See Note 6 — Noncontrolling Interests for more information regarding the Timber Funds.

In September 2021, we repaid the $ 25 million outstanding under our Fund II Mortgages Payable.

We recognized a loss on early extinguishment of debt of $ 6 thousand, representing the write-off of unamortized deferred financing costs.

New Zealand Debt

In June 2021, the New Zealand subsidiary renewed its NZ$ 20 million working capital facility for an additional 12 -month term.

During the six months ended June 30, 2021, the New Zealand subsidiary made no borrowings or repayments on its working capital facility.

At June 30, 2021, the New Zealand subsidiary had NZ$ 20.0 million of available borrowings under its working capital facility.

As of June 30, 2021, the outstanding balance on the shareholder loan is $ 24.2 million.

During the nine months ended September 30, 2021, the New Zealand subsidiary made no borrowings or repayments on its working capital facility.

At September 30, 2021, the New Zealand subsidiary had NZ$ 20.0 million of available borrowings under its working capital facility.

In July 2021, the New Zealand subsidiary made a capital distribution to its partners on a pro rata basis in order to redeem certain equity interests, which was reinvested by the partners in shareholder loans to the New Zealand subsidiary.

Our capital distribution and portion of the shareholder loan are eliminated in consolidation.

The capital distribution to the minority shareholder and its reinvestment in the shareholder loan resulted in the recording of a loan payable by the New Zealand subsidiary in the amount of $ 28.1 million due in 2026 at a fixed interest rate of 3.64 %.

As of September 30, 2021, the outstanding balance on the shareholder loan due 2026 is $ 27.7 million.

Except for changes in the New Zealand foreign exchange rate, there have been no adjustments to the carrying value of the shareholder loan since its inception.

See Note 6 — Noncontrolling Interests for more information regarding the New Zealand subsidiary.

In July 2021, the New Zealand subsidiary recorded a noncontrolling interest share redemption and loan payable in the amount of $ 28.2 million.

The shareholder loan is due in 2026 at a fixed rate of 3.64 %.

See Note 1 — Basis of Presentation for more information regarding subsequent events related to the New Zealand subsidiary.

DEBT COVENANTS — EXCLUDING TIMBER FUNDS

In connection with our $ 350 million Term Credit Agreement, $ 200 million Incremental Term Loan Agreement, $ 200 million 2021 Incremental Term Loan Agreement and $ 300 million Revolving Credit Facility, customary covenants must be met, the most significant of which include interest coverage and leverage ratios.

The covenants listed below, which are the most significant financial covenants in effect as of June 30, 2021, are calculated on a trailing 12-month basis:

Covenant Requirement Actual Ratio Favorable

Covenant EBITDA to consolidated interest expense should not be less than 2.5 to 1

Covenant debt to covenant net worth plus covenant debt shall not exceed 65 % 46 % 19 %

As of September 30, 2021, the outstanding balance on the shareholder loan due 2025 is $ 23.7 million.

Except for changes in the New Zealand foreign exchange rate, there have been no adjustments to the carrying value of the shareholder loan since its inception.

See Note 6 — Noncontrolling Interests for more information regarding the New Zealand subsidiary.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

In connection with our $ 45 million NWFCS Credit Facility, customary covenants must be met, the most significant of which include interest coverage and debt-to-capitalization ratios.

The covenants listed below, which are the most significant financial covenants in effect as of June 30, 2021, are calculated on a trailing 12-month basis:

DEBT COVENANTS — EXCLUDING TIMBER FUNDS

In connection with our $ 350 million Term Credit Agreement, $ 200 million Incremental Term Loan Agreement, $ 200 million 2021 Incremental Term Loan Facility and $ 300 million Revolving Credit Facility, customary covenants must be met, the most significant of which include interest coverage and leverage ratios.

The covenants listed below, which are the most significant financial covenants in effect as of September 30, 2021, are calculated on a trailing 12-month basis:

Covenant Requirement Actual Ratio Favorable

1 unchanged sentence

Covenant debt to covenant net worth plus covenant debt shall not exceed 65 % 44 % 21 %

In addition to these financial covenants listed above, the 2022 Notes, 2031 Notes, Term Credit Agreement, Incremental Term Loan Agreement, 2021 Incremental Term Loan Facility, Revolving Credit Facility, and NWFCS Credit Facility include customary covenants that limit the incurrence of debt and the disposition of assets, among others.

At June 30, 2021, we were in compliance with all applicable covenants.

DEBT COVENANTS — TIMBER FUNDS

The Fund II Mortgages Payable to MetLife contain a requirement to maintain a loan-to-value ratio of less than 50 %, with the denominator defined as fair market value of the timberland pledged as collateral.

The Fund III Mortgages Payable to NWFCS contain a requirement to maintain a minimum interest coverage ratio of 1.5 :1, minimum working capital of $ 500,000 , and a loan-to-value ratio of less than 50 %, with the denominator defined as fair market value.

Both Timber Funds are in compliance with their respective debt covenants as of June 30, 2021.

In addition to these financial covenants listed above, the Senior Notes due 2022, the Senior Notes due 2031, Term Credit Agreement, Incremental Term Loan Agreement, 2021 Incremental Term Loan Facility, and Revolving Credit Facility include customary covenants that limit the incurrence of debt and the disposition of assets, among others.

At September 30, 2021, we were in compliance with all applicable covenants.

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

14 unchanged sentences

Additionally, the New Zealand subsidiary will occasionally hedge up to 50 % of its estimated foreign currency exposure with respect to the following 18 to 48 months forecasted sales and purchases, less distributions, when the New Zealand dollar is at a cyclical low versus the U.S.

Foreign currency exposure from the New Zealand subsidiary’s trading operations is typically hedged based on the following

Foreign currency exposure from the New Zealand subsidiary’s trading operations is typically hedged based on the following three months forecasted sales and purchases.

As of September 30, 2021, foreign currency exchange contracts had maturity dates through March 2023 and all previously existing foreign currency option contracts have expired.

Foreign currency exchange and option contracts hedging foreign currency risk on export sales and ocean freight payments qualify for cash flow hedge accounting.

We may de-designate these cash flow hedge relationships in advance or at the occurrence of the forecasted transaction.

The portion of gains or losses on the derivative instrument previously accumulated in other comprehensive income for de-designated hedges remains in accumulated other comprehensive income until the forecasted transaction affects earnings.

Changes in the value of derivative instruments after de-designation are recorded in earnings.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

three months forecasted sales and purchases.

As of June 30, 2021, foreign currency exchange contracts and foreign currency option contracts had maturity dates through December 2022 and August 2021, respectively.

Foreign currency exchange and option contracts hedging foreign currency risk on export sales and ocean freight payments qualify for cash flow hedge accounting.

We may de-designate these cash flow hedge relationships in advance or at the occurrence of the forecasted transaction.

Changes in the value of derivative instruments after de-designation are recorded in earnings.

INTEREST RATE PRODUCTS

7 unchanged sentences

Upon termination of the swap, we received $ 6.8 million from our counterparty.

As of June 30, 2021, there was $ 16.7 million recorded in accumulated other comprehensive income in connection with the terminated interest rate swap, which will be reclassified to earnings through interest expense over the remaining life of the hedged items, as the originally hedged cash flows remain probable.

As of September 30, 2021, there was $ 16.3 million gain recorded in accumulated other comprehensive loss in connection with the terminated interest rate swap, which will be reclassified to earnings through interest expense over the remaining life of the hedged items, as the originally hedged cash flows remain probable.

During the second quarter of 2021, we terminated and cash settled $ 100 million in notional value of our interest rate swaps, maturing in 2026, in connection with the prepayment of $ 100 million on the 2026 Incremental Term Loan.

1 unchanged sentence

See Note 9 — Debt for additional information.

The following table contains information on the outstanding interest rate swaps as of June 30, 2021:

The following table contains information on the outstanding interest rate swaps as of September 30, 2021:

Outstanding Interest Rate Swaps (a)

9 unchanged sentences

Prior to expiration, we de-designated and settled the treasury locks by converting them into interest rate swap lock agreements (discussed below).

As of September 30, 2021, there was $ 17.8 million loss recorded in accumulated other comprehensive loss in connection with the settled treasury locks, which will be reclassified to earnings as interest expense over the life of the hedged item.

For additional information regarding the expired treasury lock agreements, see Note 16 - Derivative Instruments and Hedging Activities in our 2020 Form 10-K.

INTEREST RATE SWAP LOCKS

Upon de-designation, we converted the above treasury lock agreements to interest rate swap lock agreements, which were designated and qualified as cash flow hedges.

During the second quarter of 2020, we de-designated and partially cash settled $ 11.1 million of the interest rate swap locks and converted them into an interest rate swap agreement.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

As of June 30, 2021, there was $ 18.3 million recorded in accumulated other comprehensive loss in connection with the settled treasury locks, which will be reclassified to earnings as interest expense over the life of the hedged item.

For additional information regarding the expired treasury lock agreements, see Note 16 - Derivative Instruments and Hedging Activities in our 2020 Form 10-K.

INTEREST RATE SWAP LOCKS

Upon de-designation, we converted the above treasury lock agreements to interest rate swap lock agreements, which were designated and qualified as cash flow hedges.

Prior to expiration, we de-designated and partially cash settled $ 11.1 million of the interest rate swap locks and converted them into an interest rate swap agreement.

As of June 30, 2021, there was $ 1.2 million recorded in accumulated other comprehensive loss in connection with settled interest rate swap locks, which will be reclassified to earnings as interest expense over the life of the hedged item.

As of September 30, 2021, there was $ 1.2 million loss recorded in accumulated other comprehensive loss in connection with settled interest rate swap locks, which will be reclassified to earnings as interest expense over the life of the hedged item.

For additional information regarding the expired interest rate swap lock agreements, see Note 16 - Derivative Instruments and Hedging Activities in our 2020 Form 10-K.

1 unchanged sentence

During the second quarter of 2021, we de-designated and settled $ 325 million in notional value of our forward-starting interest rate swap, maturing in 2032, by converting it into a new forward-starting interest rate swap agreement.

As of June 30, 2021, there was $ 10.0 million recorded in accumulated other comprehensive income in connection with the converted forward-starting interest rate swap, which will be reclassified to earnings through interest expense over the remaining life of the hedged item.

The following table contains information on the outstanding forward-starting interest rate swaps as of June 30, 2021:

As of September 30, 2021, there was $ 9.9 million gain recorded in accumulated other comprehensive loss in connection with the converted forward-starting interest rate swap, which will be reclassified to earnings through interest expense over the remaining life of the hedged item.

The following table contains information on the outstanding forward-starting interest rate swaps as of September 30, 2021:

Outstanding Forward-Starting Interest Rate Swaps (a)

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The New Zealand subsidiary enters into carbon options from time to time to sell carbon assets.

Changes in fair value of the carbon option contracts are recorded in “Interest and other miscellaneous (expense) income, net” as the contracts do not qualify for hedge accounting treatment.

As of June 30, 2021, all existing carbon option contracts have expired.

Changes in fair value of the carbon option contracts are recorded in “Interest and other miscellaneous income (expense), net” as the contracts do not qualify for hedge accounting treatment.

As of September 30, 2021, all previously existing carbon option contracts have expired.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The following tables demonstrate the impact, gross of tax, of our derivatives on the Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2021 and 2020:

The following tables demonstrate the impact, gross of tax, of our derivatives on the Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended

September 30,

Income Statement Location 2021 2020

Derivatives designated as cash flow hedges:

Foreign currency exchange contracts Other comprehensive income (loss) ($ 896 ) $ 5,340

Foreign currency option contracts Other comprehensive income (loss) ( 230 ) 877

Interest rate products Other comprehensive income (loss) ( 14,587 ) ( 14,469 )

Foreign currency exchange contracts Other comprehensive (loss) income ($ 2,618 ) $ 1,946

Foreign currency option contracts Other comprehensive (loss) income ( 356 ) 358

Interest rate products Other comprehensive (loss) income 1,288 2,417

Interest expense 2,564 3,783

Derivatives not designated as hedging instruments:

Carbon option contracts Interest and other miscellaneous income, net — 14

Six Months Ended

Nine Months Ended

September 30,

Income Statement Location 2021 2020

1 unchanged sentence

Foreign currency exchange contracts

Other comprehensive income (loss) ($ 3,747 ) ($ 140 )

Other comprehensive (loss) income ($ 6,366 ) $ 1,806

Foreign currency option contracts

Other comprehensive income (loss) ( 1,158 ) ( 273 )

Interest rate products Other comprehensive income (loss) 45,144 ( 93,621 )

Other comprehensive (loss) income ( 1,514 ) 85

Interest rate products Other comprehensive (loss) income 46,433 ( 91,203 )

Interest expense 11,935 6,951

Derivatives not designated as hedging instruments:

Carbon option contracts Interest and other miscellaneous income, net — 563

During the next 12 months, the amount of the June 30, 2021 AOCI balance, net of tax, expected to be reclassified into earnings as a result of the maturation of our derivative instruments is a gain of approximately $ 2.4 million.

Carbon option contracts Interest and other miscellaneous income (expense), net — 563

During the next 12 months, the amount of the September 30, 2021 AOCI balance, net of tax, expected to be reclassified into earnings is a loss of approximately $ 11.7 million.

The following table contains details of the expected reclassified amounts into earnings:

2 unchanged sentences

Foreign currency exchange contracts $ 139

Foreign currency option contracts 256

Interest rate products ( 11,842 )

Total estimated gain on derivatives contracts $ 2,368

Total estimated loss on derivatives contracts ($ 11,703 )

RAYONIER INC.

6 unchanged sentences

Notional Amount

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Derivatives designated as cash flow hedges:

5 unchanged sentences

Location on Balance Sheet Fair Value Assets / (Liabilities) (a)

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Derivatives designated as cash flow hedges:

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Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents the carrying amount and estimated fair values of our financial instruments as of June 30, 2021 and December 31, 2020, using market information and what we believe to be appropriate valuation methodologies under GAAP:

June 30, 2021 December 31, 2020

The following table presents the carrying amount and estimated fair values of our financial instruments as of September 30, 2021 and December 31, 2020, using market information and what we believe to be appropriate valuation methodologies under GAAP:

September 30, 2021 December 31, 2020

Asset (Liability) (a) Carrying

4 unchanged sentences

Cash and cash equivalents, Timber Funds 12,202 12,202 — 4,053 4,053 —

Restricted cash (b) 702 702 — 2,975 2,975 —

Current maturities of long-term debt, excluding Timber Funds (c) ( 199,830 ) — ( 203,940 ) — — —

Long-term debt, excluding Timber Funds (c) ( 1,192,888 ) — ( 1,207,100 ) ( 1,300,336 ) — ( 1,313,631 )

Long-term debt, Timber Funds (c) ( 59,755 ) — ( 59,976 ) ( 60,179 ) — ( 60,474 )

Interest rate swaps (d) ( 26,892 ) — ( 26,892 ) ( 51,580 ) — ( 51,580 )

Forward-starting interest rate swaps (d) 10,000 — 10,000 ( 12,529 ) — ( 12,529 )

Foreign currency exchange contracts (d) 2,270 — 2,270 6,018 — 6,018

Foreign currency option contracts (d) 356 — 356 1,515 — 1,515

Noncontrolling Interests in the Operating Partnership (e) 153,505 153,505 — 130,121 130,121 —

(a) We did not have Level 3 assets or liabilities at June 30, 2021 and December 31, 2020.

(b) Restricted cash represents cash held in escrow.

Restricted cash, Timber Funds (b) 49,209 49,209 — — — —

Restricted cash, excluding Timber Funds (c) 625 625 — 2,975 2,975 —

Current maturities of long-term debt, excluding Timber Funds (d) ( 199,887 ) — ( 201,440 ) — — —

Long-term debt, excluding Timber Funds (d) ( 1,167,967 ) — ( 1,173,657 ) ( 1,300,336 ) — ( 1,313,631 )

Long-term debt, Timber Funds (d) — — — ( 60,179 ) — ( 60,474 )

Interest rate swaps (e) ( 24,178 ) — ( 24,178 ) ( 51,580 ) — ( 51,580 )

Forward-starting interest rate swaps (e) 11,206 — 11,206 ( 12,529 ) — ( 12,529 )

Foreign currency exchange contracts (e) ( 349 ) — ( 349 ) 6,018 — 6,018

Foreign currency option contracts (e) — — — 1,515 — 1,515

Noncontrolling Interests in the Operating Partnership (f) 140,555 140,555 — 130,121 130,121 —

(a) We did not have Level 3 assets or liabilities at September 30, 2021 and December 31, 2020.

(b) Restricted cash, Timber Funds represents the portion of proceeds from Fund II Timberland Dispositions required to be distributed to noncontrolling interests.

See Note 22 — Restricted Cash for additional information.

(c) The carrying amount of long-term debt is presented net of deferred financing costs, unamortized discounts and fair value adjustments on non-revolving debt.

See Note 22 — Restricted Cash for additional information.

(d) The carrying amount of long-term debt is presented net of deferred financing costs, unamortized discounts and fair value adjustments on non-revolving debt.

See Note 9 — Debt for additional information.

(d) See Note 10 — Derivative Financial Instruments and Hedging Activities for information regarding the Consolidated Balance Sheets classification of our derivative financial instruments.

(e) Noncontrolling Interests in the Operating Partnership is neither an asset or liability and is classified as temporary equity in the Company’s Consolidated Balance Sheets.

(e) See Note 10 — Derivative Financial Instruments and Hedging Activities for information regarding the Consolidated Balance Sheets classification of our derivative financial instruments.

(f) Noncontrolling Interests in the Operating Partnership is neither an asset or liability and is classified as temporary equity in the Company’s Consolidated Balance Sheets.

This relates to the ownership of Rayonier, L.P.

5 unchanged sentences

Interest rate swap agreements — The fair value of interest rate contracts is determined by discounting the expected future cash flows, for each instrument, at prevailing interest rates.

Foreign currency exchange contracts — The fair value of foreign currency exchange contracts is determined by a mark-to-market valuation, which estimates fair value by discounting the difference between the contracted forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Foreign currency option contracts — The fair value of foreign currency option contracts is based on a mark-to-market calculation using the Black-Scholes option pricing model.

1 unchanged sentence

common shares.

At June 30, 2021, the future minimum payments under non-cancellable commitments were as follows:

At September 30, 2021, the future minimum payments under non-cancellable commitments were as follows:

Environmental Remediation (a) Development Projects (b) Commitments (c) Total

26 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Changes in environmental and NRD liabilities from December 31, 2020 to June 30, 2021 are shown below:

Changes in environmental and NRD liabilities from December 31, 2020 to September 30, 2021 are shown below:

Port Gamble, WA

4 unchanged sentences

Increase to liabilities 71

Total Balance at June 30, 2021

Total Balance at September 30, 2021

Current portion ( 1,095 )

Non-current portion at June 30, 2021

Non-current portion at September 30, 2021

These estimates were based on assumptions that we believe to be reasonable;

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We provide financial guarantees as required by creditors, insurance programs, and various governmental agencies.

As of June 30, 2021, the following financial guarantees were outstanding:

As of September 30, 2021, the following financial guarantees were outstanding:

Financial Commitments (a) Maximum Potential

19 unchanged sentences

For selected development properties, we also invest in targeted infrastructure improvements, such as roadways and utilities, to accelerate the marketability and improve the value of such properties.

Changes in higher and better use timberlands and real estate development investments from December 31, 2020 to June 30, 2021 are shown below:

Changes in higher and better use timberlands and real estate development investments from December 31, 2020 to September 30, 2021 are shown below:

Higher and Better Use Timberlands and Real Estate Development Investments

12 unchanged sentences

Purchase price allocation adjustment (c) 8,238 — 8,238

Total Balance at June 30, 2021

Total Balance at September 30, 2021

84,092 40,558 124,650

Current portion (a) ( 601 ) ( 13,457 ) ( 14,058 )

Non-current portion at June 30, 2021

Non-current portion at September 30, 2021

$ 83,491 $ 27,101 $ 110,592

7 unchanged sentences

See Note 2 - Merger with Pope Resources for additional information .

As of June 30, 2021 and December 31, 2020, our inventory consisted entirely of finished goods, as follows:

June 30, 2021 December 31, 2020

As of September 30, 2021 and December 31, 2020, our inventory consisted entirely of finished goods, as follows:

September 30, 2021 December 31, 2020

Finished goods inventory

12 unchanged sentences

Other operating income (expense), net consisted of the following:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

1 unchanged sentence

Gain on sale or disposal of property and equipment — 19 93 26

Gain on investment in Timber Funds (a) 3,729 — 3,729 —

Log trading marketing fees — — 6 50

Costs related to the merger with Pope Resources (a) — ( 13,498 ) — ( 15,985 )

Equity income (loss) related to Bainbridge Landing LLC joint venture (b) 186 ( 59 ) 206 ( 59 )

Costs related to the merger with Pope Resources (b) — ( 430 ) — ( 16,415 )

Equity income (loss) related to Bainbridge Landing LLC joint venture (c) 36 ( 214 ) 241 ( 273 )

Miscellaneous expense, net ( 74 ) ( 52 ) ( 325 ) ( 372 )

Total $ 5,070 ($ 1,653 ) $ 9,474 ($ 19,247 )

(a) Includes legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources.

(a) See Note 6 - Noncontrolling Interests and Note 7 - Variable Interest Entities for additional information on Timber Funds.

(b) Includes legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources.

See Note 2 - Merger with Pope Resources and Note 24 - Charges for Integration and Restructuring for additional information.

(b) See Note 6 - Noncontrolling Interests and Note 7 - Variable Interest Entities for additional information on Ferncliff Investors.

(c) See Note 6 - Noncontrolling Interests and Note 7 - Variable Interest Entities for additional information on Ferncliff Investors.

RAYONIER INC.

12 unchanged sentences

Changes in assumptions, as well as changes in actual experience, could cause the estimates to change.

We are not required to make mandatory 2021 pension contributions due to our plan’s improved funding status and have made no pension contribution payments during the three and six months ended June 30, 2021.

We are not required to make mandatory 2021 pension contributions due to our plan’s improved funding status and have made no pension contribution payments during the three and nine months ended September 30, 2021.

The net pension and postretirement benefit (credits) costs that have been recorded are shown in the following table:

1 unchanged sentence

Three Months Ended

June 30, Three Months Ended

September 30, Three Months Ended

September 30,

2021 2020 2021 2020

Service cost Selling and general expenses — — $ 2 $ 2

Interest cost Interest and other miscellaneous (expense) income, net 557 677 11 13

Expected return on plan assets (a) Interest and other miscellaneous (expense) income, net ( 936 ) ( 876 ) — —

Amortization of losses Interest and other miscellaneous (expense) income, net 288 215 5 2

Interest cost Interest and other miscellaneous income (expense), net 557 677 11 13

Expected return on plan assets (a) Interest and other miscellaneous income (expense), net ( 936 ) ( 876 ) — —

Amortization of losses Interest and other miscellaneous income (expense), net 288 215 5 2

Net periodic benefit (credit) cost ($ 91 ) $ 16 $ 18 $ 17

Components of Net Periodic Benefit (Credit) Cost Income Statement Location Pension Postretirement

Six Months Ended

June 30, Six Months Ended

Nine Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Service cost Selling and general expenses — — $ 6 $ 5

Interest cost Interest and other miscellaneous (expense) income, net 1,114 1,353 23 26

Expected return on plan assets (a) Interest and other miscellaneous (expense) income, net ( 1,873 ) ( 1,752 ) — —

Amortization of losses Interest and other miscellaneous (expense) income, net 577 431 10 4

Interest cost Interest and other miscellaneous income (expense), net 1,671 2,029 34 38

Expected return on plan assets (a) Interest and other miscellaneous income (expense), net ( 2,809 ) ( 2,628 ) — —

Amortization of losses Interest and other miscellaneous income (expense), net 865 646 15 6

Net periodic benefit (credit) cost ($ 273 ) $ 47 $ 55 $ 49

8 unchanged sentences

federal or state income tax.

As of June 30, 2021, Rayonier owns a 97.1 % interest in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership.

As of September 30, 2021, Rayonier owns a 97.3 % interest in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership.

The taxable income or loss generated by the Operating Partnership is passed through and reported to its unit holders (including the Company) on a Schedule K-1 for inclusion in each unitholder’s income tax return.

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

4 unchanged sentences

The following table contains the Company’s annualized effective tax rate after discrete items:

Six Months Ended

Nine Months Ended

September 30,

Annualized effective tax rate after discrete items 6.4 % 29.9 %

6 unchanged sentences

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table summarizes the changes in AOCI by component for the six months ended June 30, 2021 and the year ended December 31, 2020.

The following table summarizes the changes in AOCI by component for the nine months ended September 30, 2021 and the year ended December 31, 2020.

All amounts are presented net of tax and exclude portions attributable to noncontrolling interests.

10 unchanged sentences

Balance as of

June 30, 2021 $ 12,075 $ 1,321 ($ 19,260 ) ($ 23,725 ) ($ 29,589 ) ($ 3,818 ) ($ 33,407 )

September 30, 2021 $ 6,333 $ 1,321 ($ 17,057 ) ($ 23,431 ) ($ 32,834 ) ($ 3,726 ) ($ 36,560 )

(a) Includes $ 46.4 million of other comprehensive income related to interest rate swaps and forward-starting interest rate swaps.

2 unchanged sentences

See Note 19 — Employee Benefit Plans for additional information.

The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the six months ended June 30, 2021 and June 30, 2020:

The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the nine months ended September 30, 2021 and September 30, 2020:

Details about accumulated other comprehensive income (loss) components Amount reclassified from accumulated other comprehensive income (loss) Affected line item in the income statement

June 30, 2021 June 30, 2020

Realized loss (gain) on foreign currency exchange contracts $ 1,725 ($ 1,892 ) Other operating expense, net

Realized loss on foreign currency option contracts 827 8 Other operating expense, net

September 30, 2021 September 30, 2020

Realized loss (gain) on foreign currency exchange contracts $ 2,322 ($ 2,568 ) Other operating income (expense), net

Realized loss on foreign currency option contracts 1,177 ( 15 ) Other operating income (expense), net

Noncontrolling interests ( 805 ) 594 Comprehensive (loss) income attributable to noncontrolling interests

9 unchanged sentences

RESTRICTED CASH

Restricted cash includes cash balances held in escrow as collateral for certain contractual obligations related to our Richmond Hill development project as well as cash held in escrow for real estate sales.

As of June 30, 2021 and December 31, 2020, we had $ 0.7 million and $ 3.0 million, respectively, of restricted cash held in escrow.

In addition, in order to qualify for like-kind exchange (“LKE”) treatment, the proceeds from real estate sales must be deposited with a third-party intermediary.

These proceeds are accounted for as restricted cash until a suitable replacement property is acquired.

In the event LKE purchases are not completed, the proceeds are returned to us after 180 days and reclassified as available cash.

As of June 30, 2021 and December 31, 2020, we had no proceeds from real estate sales classified as restricted cash which were deposited with an LKE intermediary.

The following table contains the amounts of restricted cash recorded in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows for the six months ended June 30, 2021:

June 30, 2021

Restricted cash held in escrow $ 702

Total restricted cash shown in the Consolidated Balance Sheets 702

Restricted cash, Timber Funds includes the portion of proceeds from Fund II Timberland Dispositions required to be distributed to noncontrolling interests.

Restricted cash, excluding Timber Funds, includes cash balances held in escrow as collateral for certain contractual obligations related to our Richmond Hill development project as well as cash held in escrow for real estate sales.

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Consolidated Balance Sheets that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,

Cash and cash equivalents $ 431,806 $ 78,151

Restricted cash, Timber Funds 49,209 —

Restricted cash, excluding Timber Funds (Held in escrow) 625 475

Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 481,640 $ 78,626

1 unchanged sentence

Assets held for sale is composed of properties under contract and expected to be sold within 12 months that also meet the other relevant held-for-sale criteria in accordance with ASC 360-10-45-9.

As of June 30, 2021 and December 31, 2020, the basis in properties meeting this classification was $ 111.3 million and $ 3.4 million, respectively.

As of September 30, 2021 and December 31, 2020, the basis in properties meeting this classification was $ 56.4 million and $ 3.4 million, respectively.

Since the basis in these properties was less than the fair value, including costs to sell, no impairment was recognized.

Included in assets held for sale as of June 30, 2021 are $ 104.3 million of timber and timberland assets owned by ORM Timber Fund II, Inc., of which we maintain a 20 % ownership interest.

Included in assets held for sale as of September 30, 2021 are $ 54.9 million of timber and timberland assets owned by ORM Timber Fund II, Inc., in which we maintain a 20 % ownership interest.

RAYONIER INC.

8 unchanged sentences

A summary of the charges for integration and restructuring related to the merger with Pope Resources is presented below:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

4 unchanged sentences

Total integration and restructuring charges related to the merger with Pope Resources — $ 430 — $ 16,415

During the three and six months ended June 30, 2020, we incurred a total of $ 0.6 million in severance benefits related to restructuring associated with the Pope Resources merger.

During the three and nine months ended September 30, 2020, we incurred $ 0.1 million and $ 0.7 million, respectively, in severance benefits related to restructuring associated with the Pope Resources merger.

As of December 31, 2020, there was $ 0.1 million of accrued severance recorded within “Accrued Payroll and Benefits” in our Consolidated Balance Sheets.

As of June 30, 2021, all severance associated with the merger with Pope Resources has been paid.

As of September 30, 2021, all severance associated with the merger with Pope Resources has been paid.

RELATED PARTY

In January 2020, we entered into an agreement to sell developed lots to Mattamy Jacksonville LLC, a wholly owned subsidiary of Mattamy Homes, for an aggregate base purchase price of $ 4.45 million (subject to multiple takedowns over a 2 year period), plus additional consideration as to each lot to the extent the ultimate sales price of each finished home exceeds agreed price thresholds (the “Mattamy Contract”).

The Mattamy contract also includes marketing fee revenue based on 1.25 % of the sales price of each finished home.

In May 2021, we entered into an amendment to the original agreement, which sells additional lots to Mattamy for an aggregate base purchase price of $ 1.0 million.

The Mattamy contract also includes marketing fee revenue based on a percentage of the sales price of each finished home.

In September 2020, Keith Bass, a member of our Board of Directors, was named the Chief Executive Officer of Mattamy Homes US.

Following this development, the Mattamy Contract and the ongoing obligations therein, were reviewed by the Nominating and Corporate Governance Committee in accordance with established policies and procedures regarding the authorization and approval of transactions with related parties.

The following table demonstrates the impact, gross of tax, of our related party transactions on the Consolidated Statements of Income and Comprehensive Income for the three and six months ended:

Three Months Ended June 30, Six Months Ended June 30,

The following table demonstrates the impact, gross of tax, of our related party transactions on the Consolidated Statements of Income and Comprehensive Income for the three and nine months ended:

Three Months Ended September 30, Nine Months Ended September 30,

Related Party Transaction Location on Statement of Income and Comprehensive Income 2021 2020 2021 2020

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements