What changed in this filing

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Item 1A. Risk Factors

2022-02-25 compared with 2021-02-22 · 47 added, 57 removed, 172 unchanged (38% of the section changed)

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ECONOMIC RISK FACTORS

An increase in the rate of inflation and monetary policy responses to such increases could negatively affect our stock price, results of operations and financial condition.

The recent acceleration of generalized inflation in the United States and global economies, should it persist, could adversely affect us.

In particular, increases in the cost and availability of labor for us and our contractors could increase our costs, compress our margins and impact harvest levels.

In addition, increases in energy and fuel costs could affect our results of operations.

Energy costs are a significant operating expense for logging and hauling contractors who support us and the customers of our standing timber.

The continued rapid rise in energy costs could have a negative effect on the cost and availability of such contractors.

Additionally, such rapidly rising energy costs may have a negative impact on the cost of ocean freight for our exported products.

Moreover, our selling, general and administrative costs could increase.

More generally, an increase in inflation and interest rates could have an adverse impact on our cost of capital, which could impact the value of our long-lived assets, our ability to economically acquire additional assets, the cost of debt and the value of our equity.

One of the factors that may influence the price of our common shares is our annual dividend yield as compared to the yields on other financial instruments.

An increase in market interest rates could cause increases in discount rates and, accordingly, a decline in property values and total returns for timberland assets.

Thus, an increase in market interest rates could result in higher yields on other financial instruments and could adversely affect the relative attractiveness of an investment in our equity and, accordingly, the trading price of our common shares.

These macroeconomic factors impacting us are beyond our control and could have a material adverse effect on our business, financial condition, results of operations and the value of our equity.

We are exposed to the cyclicality of the markets in which we operate and other factors beyond our control, which could adversely affect our results of operations.

Some of the industries in which our end-use customers participate, such as the construction and home building industries, the global pulp, packaging and paper industries and the real estate industry, are cyclical in nature, exposing us to risks beyond our control, including general macroeconomic conditions, both in the U.S.

and globally, as well as local economic conditions.

In our Timber segments, the level of residential construction activity, including home repair and remodeling activity, is the primary driver of sawtimber demand.

In addition, demand for logs can be affected by the demand for wood chips in the pulp and paper and engineered wood products markets, as well as the bio-energy production markets.

The ongoing level of activity in these markets is subject to fluctuation due to future changes in economic conditions, interest rates, credit availability, population growth, weather conditions, the ongoing COVID-19 pandemic and other factors.

The ongoing level of activity in these markets is subject to fluctuation due to future changes in economic conditions, inflation, interest rates, credit availability, population growth, weather conditions, the ongoing COVID-19 pandemic and other factors.

Changes in global economic conditions, such as new timber supply sources and changes in currency exchange rates, foreign interest rates and foreign and domestic trade policies, can also negatively impact demand for our timber and logs.

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These macroeconomic and cyclical factors impacting our operations are beyond our control and, if such conditions deteriorate, could have an adverse effect on our business.

Changes in energy and fuel costs could affect our results of operations and financial condition.

Energy costs are a significant operating expense for our logging and hauling contractors and for the contractors who support the customers of our standing timber.

Energy costs can be volatile and are susceptible to rapid and substantial increases or decreases due to factors beyond our control, such as changing economic conditions, changing environmental regulations, political unrest, instability in energy-producing nations, and supply and demand considerations.

Increases in the price of oil could adversely affect our business, financial condition and results of operations.

In addition, an increase in fuel costs, and its impact on the cost and availability of transportation for our products, both domestically and internationally, and the cost and availability of third-party logging and hauling contractors, could have a material adverse effect on the operating costs of our contractors and our standing timber customers, as well as in defining economically accessible timber stands.

Such factors could in turn have a material adverse effect on our business, financial condition and results of operations, particularly in our Timber segments and Trading segment.

The industries in which we operate are highly competitive.

The markets in which we operate are highly competitive, and we compete with companies that have substantially greater financial resources than we do in each of these businesses.

The competitive pressures relating to our Timber and Timber Fund segments are primarily driven by quantity of product supply and quality of the timber

offered by competitors in the domestic and export markets, each of which may impact pricing.

The competitive pressures relating to our Timber segments are primarily driven by quantity of product supply and quality of the timber offered by competitors in the domestic and export markets, each of which may impact pricing.

With respect to our Real Estate segment, we compete with other owners of entitled and unentitled properties.

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The markets in which our Trading segment operates are very competitive with numerous entities competing for export log supply at different ports across New Zealand.

We are subject to risks associated with an increase in market interest rates.

One of the factors that may influence the price of our common shares is our annual dividend yield as compared to yields on other financial instruments.

Thus, an increase in market interest rates could result in higher yields on other financial instruments and could adversely affect the relative attractiveness of an investment in the Company and, accordingly, the trading price of our common shares.

An increase in market interest rates could cause increases in discount rates and, accordingly, a decline in property values and total returns for timberland assets.

An increase in market interest rates would also negatively impact financing costs on our floating rate debt as well as any additional debt we may raise.

OPERATIONAL RISK FACTORS

Weather and other natural conditions may limit our timber harvest and sales.

Weather, climate change and other natural conditions may limit our timber harvest and sales.

Weather conditions, changes in timber growth cycles, limitations on access (for example, due to prolonged wet conditions) and other factors, including damage by fire, insect infestation, disease, prolonged drought and natural disasters such as wind storms and hurricanes, may limit harvesting of our timberlands.

Changes in the diversity of plants and trees due to fluctuations in temperature and rainfall patterns, could adversely impact the long-term growing conditions in our forests.

The volume and value of timber that can be harvested from our timberlands may be reduced by any such occurrence and other causes beyond our control.

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federal, state and local governing and regulatory bodies.

For example, in Florida, real estate projects must generally comply with the provisions of the Community Planning Act and local land use, zoning and development regulations.

In addition, development projects in Florida that exceed certain specified regulatory thresholds (and are not located in a jurisdiction classified as a dense urban land area or otherwise statutorily exempt) may require approval pursuant to the Comprehensive Plan process standards.

In Washington, land use and environmental laws including the State Environmental Policy Act of 1971, Shoreline Management Act of 1971, Growth Management Act of 1990, and Land Use Petition Act of 1995, together with consumer protection laws like the Land Development Act of 1973 and Uniform Common Interest Ownership Act of 2018, and other state laws and corresponding local plans and regulations, have tended over time to increase the costs, risks, and potential liabilities of land development projects in that state and to give opponents of land development projects the increased ability to delay, prevent, and appeal governmental approvals of those projects in some cases and to trigger in other cases the imposition by government agencies of increased mitigation measures and other conditions of project approval.

Compliance with these and other regulations and standards is more time intensive and costly and may require additional long range infrastructure review and approvals, which can add to project cost.

In addition, development of properties containing delineated wetlands may be affected by revisions to the definition of wetlands subject to state and/or federal regulation and may require one or more permits from the U.S.

federal government and/or state and local governmental agencies.

Any of these issues can materially affect the cost, timing and economic viability of our real estate projects.

The real estate entitlement process is frequently a political one, which involves uncertainty and often extensive negotiation and concessions in order to secure and maintain the necessary approvals and permits.

In the U.S., a significant amount of our development property is located in jurisdictions in which local governments face challenging issues relating to growth and development, including zoning and future land use, public services, water availability, transportation and other infrastructure, concurrency requirements, affordable housing, land conservation efforts, and funding for same, and the requirements of state law, especially in the case of Florida under the Community Planning Act process standards and in Washington under growth management.

In addition, anti-

development groups are active, especially in Florida and Washington, in filing litigation to oppose particular entitlement activities and development projects, and in seeking legislation and other anti-development limitations on real estate development activities.

Moreover, the real estate entitlement process is frequently a political one, which involves uncertainty and often extensive negotiation and concessions in order to secure and maintain the necessary approvals and permits.

In addition, anti-development groups are active, especially in Florida and Washington, in filing litigation to oppose particular entitlement activities and development projects, and in seeking legislation and other anti-development limitations on real estate development activities.

We expect this type of anti-development activity to continue in the future.

Entitlement and development of real estate are also subject to lengthy, uncertain and costly implementation processes.

Real estate development requires adequate soil and land conditions, water resources, access and utility infrastructure, labor force, and weather conditions.

Requirements for these items may vary depending upon the contemplated development of the land for residential, commercial or industrial users, and may change from time to time, including from the period of entitlement to the delivery of a developed property.

Large-scale developments may involve commitments from government agencies or third parties related to the delivery of infrastructure improvements (such as roads, bridges, sidewalks, water, sewer and other utilities), the certainty and timing of which are outside of our control.

An adverse change in any of these items – including unexpected changes caused by the COVID-19 pandemic, which are continuing – could materially affect the cost, timing and economic viability of our real estate projects.

Changes in the laws, or interpretation or enforcement thereof, regarding the use and development of real estate, changes in the political composition of state and local governmental bodies, impacts from the pandemic, and the identification of new facts regarding our properties could lead to new or greater costs, delays and liabilities that could materially adversely affect our business, profitability or financial condition.

Changes in the laws, or interpretation or enforcement thereof, regarding the use and development of real estate, changes in the political composition of state and local governmental bodies, impacts from the ongoing COVID-19 pandemic, and the identification of new facts regarding our properties could lead to new or greater costs, delays and liabilities that could materially adversely affect our business, profitability or financial condition.

Coronavirus (COVID-19) Pandemic.

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Epidemics, pandemics or other such crises or public health concerns in regions of the world where we have operations or sell products, could result in the disruption of our business.

Specifically, the ongoing COVID-19 outbreak has resulted in increased travel restrictions and extended shutdowns of certain businesses around the world, as well as a deterioration of general economic conditions.

Specifically, the ongoing COVID-19 outbreak has resulted in increased travel restrictions and extended shutdowns of certain businesses around the world, as well as continued volatility in economic conditions.

These or any governmental or other regulatory developments or health concerns in countries in which we operate or export to could result in operational restrictions or social and economic instability, or labor shortages.

At this point in time, there is substantial uncertainty relating to the potential impact of COVID-19 on our business.

Infections may continue to spread, which could limit our ability to timely harvest, sell and transport our timber, restrict our operations or cause supply chain disruptions for us and our customers.

At this point in time, there is continued uncertainty relating to the potential impact of COVID-19 on our business.

Infections may continue to spread, which could limit our ability to timely harvest, sell and transport our timber, increase our costs, restrict our operations or cause supply chain disruptions for us and our customers.

In addition, we also face risks and costs associated with implementation of business continuity plans and modified work conditions, including making required resources available to our workforce to enable them to continue essential work.

Any of these developments could have a negative impact on our business, financial condition and operating results.

In addition, the COVID-19 pandemic could continue to adversely affect the economies and markets of many countries, resulting in a further economic downturn that could impact the pricing or demand for timber, real estate, and especially housing, which could have an adverse effect on our business, operating results and financial condition, as well as market value of our securities.

Further, our customers may be negatively impacted due to the general decline in business and operating conditions and constraints on their own liquidity and access to capital relating to COVID-19, which could increase our counterparty credit exposure.

In addition, the COVID-19 pandemic could continue to adversely affect the economies and markets of many countries, resulting in further economic volatility that could impact the pricing or demand for timber, real estate, and especially housing, which could have an adverse effect on our business, operating results and financial condition, as well as market value of our securities.

Further, our customers may be negatively impacted due to disruptions in business and operating conditions and constraints on their own liquidity and access to capital relating to COVID-19, which could increase our counterparty credit exposure.

The continued spread of COVID-19 has also led to disruption and volatility in the global capital markets.

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We depend on third parties for logging and transportation services and increases in the costs or decreases in the availability of quality service providers could adversely affect our business.

Our Timber segments depend on logging and transportation services provided by third parties, both domestically and internationally, including by railroad, trucks, or ships.

Our Timber segments depend on logging and transportation services provided by third parties, both domestically and internationally, including by railroad, trucks and/or ships.

If any of our transportation providers were to fail to deliver timber supply or logs to our customers in a timely manner, or were to damage timber supply or logs during transport, we may be unable to sell it at full value, or at all.

During the global financial crisis and subsequent downturn in U.S.

housing starts, timber harvest volumes declined significantly.

As a result, many logging contractors, particularly cable logging operators in the western U.S., permanently shut down their operations.

As harvest levels have returned to higher levels with the recovery in U.S.

housing starts, this shortage of logging contractors has resulted in sharp increases in logging costs and more limited availability of logging contractors.

It is expected that the supply of qualified logging contractors will be impacted by the availability of debt financing for equipment purchases as well as the availability of adequately trained loggers.

During the global COVID-19 pandemic, we have experienced disruptions in the supply, and rapid inflation in the cost, of transportation and labor in connection with timber harvesting and delivery.

Tight job markets have increased the difficulty and cost of attracting and retaining sufficient skilled labor for logging and transportation.

Accordingly, our timber harvesting volumes and realized margins have been negatively impacted in certain markets.

As demand for timber has accelerated with the recovery in U.S.

and New Zealand housing starts, the lack of adequate supply of logging contractors has resulted in sharp increases in logging costs and at times slowed deliveries.

It is expected that the supply of qualified logging contractors will be impacted by the availability and cost of debt financing for equipment purchases as well as the limited availability of adequately trained loggers.

As housing starts continue to recover, harvest levels are expected to increase, placing more pressure on the existing supply of logging contractors.

significant failure or unavailability of third-party logging or transportation providers, or increases in transportation rates or fuel costs, may result in higher logging costs or the inability to capitalize on stronger log prices to the extent logging contractors cannot be secured at a competitive cost.

Any significant failure or unavailability of third-party logging or transportation providers, or further increases in transportation rates, labor rates and/or fuel costs, may result in higher logging costs or the inability to capitalize on stronger log prices to the extent logging contractors cannot be secured at a competitive cost.

Such events could harm our reputation, negatively affect our customer relationships and adversely affect our business.

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• trade protection laws, policies and measures and other regulatory requirements affecting trade and investment, including loss or modification of exemptions for taxes and tariffs, imposition of new tariffs and duties and import and export licensing requirements;

• continuing negative impacts from the imposition and/or threatened imposition of substantial tariffs on forest products imports into China in connection with current trade tensions between China and the U.S.;

• business disruptions arising from public health crises and outbreaks of communicable diseases, especially in China, including the outbreak of the virus known as the coronavirus;

• continuing negative impacts from the imposition and/or threatened imposition of substantial tariffs on forest products imports into China in connection with trade tensions between China and the U.S.;

• business disruptions arising from public health crises and outbreaks of communicable diseases, especially in China, including the outbreak of the virus known as the novel coronavirus;

• difficulty in establishing, staffing and managing non-U.S.

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These laws and regulations may relate to, among other things, the protection of timberlands and endangered species, recreation and aesthetics, protection and restoration of natural resources, surface water quality, timber harvesting practices, and remedial standards for contaminated property and groundwater.

Over time, the complexity and stringency of these laws and

regulations have increased and the enforcement of these laws and regulations has intensified.

Over time, the complexity and stringency of these laws and regulations have increased and the enforcement of these laws and regulations has intensified.

For example, the U.S.

Environmental Protection Agency (“EPA”) has pursued a number of initiatives that, if implemented, could impose additional operational and pollution control obligations on industrial facilities like those of Rayonier’s customers, especially in the area of air emissions and wastewater and stormwater control.

Similarly, legislation currently under consideration in Oregon seeks to add significant buffers and riparian management zones adjacent

to streams, the effect of which would be to reduce the areas within which we may harvest.

In addition, as a result of certain judicial rulings and state and federal initiatives, including some that would require timberland operators to obtain permits to conduct certain ordinary course forestry activities, silvicultural practices on our timberlands could be impacted in the future.

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Any of these agencies could delay review of, or reject, any of our filings.

In our Southern Timber, Pacific Northwest Timber, New Zealand Timber and Timber Fund segments, any delay associated with a filing could result in a delay or restriction in replanting, thinning, insect control, fire control or harvesting, any of which could have an adverse effect on our operating results.

In our Southern Timber, Pacific Northwest Timber and New Zealand Timber segments, any delay associated with a filing could result in a delay or restriction in replanting, thinning, insect control, fire control or harvesting, any of which could have an adverse effect on our operating results.

For example, in Washington State, we are required to file a Forest Practice Application for each unit of timberland to be harvested.

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A significant number of other species, such as the southeastern gopher tortoise are currently under review for possible protection under the ESA.

As we gain additional information regarding the presence of threatened or endangered species on our timberlands, or if other regulations, such as those that require buffers to

protect water bodies, become more restrictive, the amount of our timberlands subject to harvest restrictions could increase.

As we gain additional information regarding the presence of threatened or endangered species on our timberlands, or if other regulations, such as those that require buffers to protect water bodies, become more restrictive, the amount of our timberlands subject to harvest restrictions could increase.

We formerly owned or operated or may own or acquire timberlands or properties that may require environmental remediation or otherwise be subject to environmental and other liabilities.

We owned or operated manufacturing facilities and discontinued operations that we do not currently own, and we may currently own or may acquire timberlands and other properties in the future that are subject to environmental liabilities, such as remediation of soil, sediment and groundwater contamination and other existing or potential liabilities.

In connection with the spin-off of our Performance Fibers business, and pursuant to the related Separation and Distribution Agreement between us and Rayonier Advanced Materials, Rayonier Advanced Materials has assumed any environmental liability of ours in connection with the manufacturing facilities and discontinued operations related to the Performance Fibers business and has agreed to indemnify and hold us harmless in connection with such environmental liabilities.

In connection with the spin-off of our Performance Fibers business in 2014, and pursuant to the related Separation and Distribution Agreement between us and Rayonier Advanced Materials, Rayonier Advanced Materials has assumed any environmental liability of ours in connection with the manufacturing facilities and discontinued operations related to the Performance Fibers business and has agreed to indemnify and hold us harmless in connection with such environmental liabilities.

However, in the event we seek indemnification from Rayonier Advanced Materials, we cannot provide any assurance that a court will enforce our indemnification right if challenged by Rayonier Advanced Materials or that Rayonier Advanced Materials will be able to fund any amounts for indemnification owed to us.

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We are subject to risks associated with the discontinuation of LIBOR.

Financial Conduct Authority announced in 2017 that it intends to phase out the London Interbank Offered Rate (“LIBOR”) by the end of 2021.

While the original deadline may be extended, changes in the method of calculating LIBOR, or the replacement of LIBOR with an alternative rate or benchmark, may adversely affect interest rates and could result in higher borrowing costs.

In addition, if changes are made to the method of calculating LIBOR or LIBOR ceases to exist, we may need to amend certain contracts, including our credit facility and swap arrangements, and we cannot predict what alternative rate or benchmark would be negotiated.

This may also result in an increase in our interest rate expense.

Financial Conduct Authority announced in 2017 that it intended to phase out the London Interbank Offered Rate (“LIBOR”) by the end of 2021.

While the original deadline has been extended with respect to certain of our swap agreements, changes in the method of calculating LIBOR, or the replacement of LIBOR with an alternative rate or benchmark, may adversely affect the effective interest rates with respect to our outstanding debt and could result in higher borrowing costs.

In addition, if changes are made to the method of calculating LIBOR or LIBOR ceases to exist, we may need to amend certain swap arrangements, and we cannot predict what alternative rate or benchmark would be negotiated.

The impacts of climate-related initiatives, at the international, U.S.

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Within the U.S., most of these proposals would regulate and/or tax the production of carbon dioxide and other “greenhouse gases” to facilitate the reduction of carbon compound emissions into the atmosphere, and provide tax and other incentives to produce and use “cleaner” energy.

Additionally, our investors and other stakeholders are increasingly focused on the impacts of climate change on their investments and our business prospects.

In late 2009, the EPA issued an “endangerment finding” under the Clean Air Act with respect to certain greenhouse gases, leading to the regulation of carbon dioxide as a pollutant under the Clean Air Act and having significant ramifications for Rayonier and the industry in general.

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Overall, it is reasonably likely that legislative and regulatory activity in this area will in some way affect Rayonier and the U.S.

customers of our Southern Timber, Pacific Northwest Timber and Timber Fund segments, but it is unclear at this time what the nature of the impact will be.

customers of our Southern Timber and Pacific Northwest Timber segments, but it is unclear at this time what the nature of the impact will be.

We continue to monitor political and regulatory developments in this area, but their overall impact on Rayonier, from a cost, benefit and financial performance standpoint, remains uncertain at this time.

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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-K

Item 1A. Risk Factors