What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-06 compared with 2021-11-05 · 253 added, 552 removed, 402 unchanged (67% of the section changed)

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FORWARD-LOOKING STATEMENTS

Certain statements in this document regarding anticipated financial outcomes, including our earnings guidance, if any, business and market conditions, outlook, expected dividend rate, our business strategies, including the potential effects of the ongoing global novel coronavirus (“COVID-19”) pandemic, the recent acquisition of Pope Resources, expected harvest schedules, timberland acquisitions and dispositions, the anticipated benefits of our business strategies, and other similar statements relating to our future events, developments, or financial or operational performance or results, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws.

Certain statements in this document regarding anticipated financial outcomes, including our earnings guidance, if any, business and market conditions, outlook, expected dividend rate, our business strategies, including the potential effects of the ongoing global novel coronavirus (“COVID-19”) pandemic, expected harvest schedules, timberland acquisitions and dispositions, the anticipated benefits of our business strategies, and other similar statements relating to our future events, developments, or financial or operational performance or results, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws.

These forward-looking statements are identified by the use of words such as “may,” “will,” “should,” “expect,” “estimate,” “believe,” “intend,” “project,” “anticipate” and other similar language.

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While management believes that these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements.

The risk factors contained in Item 1A — Risk Factors in our 2020 Form 10-K and similar discussions included in other reports that we subsequently file with the SEC, among others, could cause actual results or events to differ materially from our historical experience and those expressed in forward-looking statements made in this document.

The risk factors contained in Item 1A — Risk Factors in our 2021 Form 10-K, Part II, Item 1A — Risk Factors in this report and similar discussions included in other reports that we subsequently file with the SEC, among others, could cause actual results or events to differ materially from our historical experience and those expressed in forward-looking statements made in this document.

Forward-looking statements are only as of the date they are made, and we undertake no duty to update our forward-looking statements except as required by law.

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Our revenues, operating income and cash flows are primarily derived from the following core business segments:

Southern Timber, Pacific Northwest Timber, New Zealand Timber, Timber Funds, Real Estate, and Trading.

As of September 30, 2021, we owned or leased under long-term agreem ents approximat ely 2.6 million acres of timberlands located in the U.S.

Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate, and Trading.

As of March 31, 2022, we owned or leased under long-term agreem ents approximat ely 2.7 million acres of timberlands located in the U.S.

South (1.80 million acres), U.S.

Pacific Northwest (486,000 acres) and New Zealand (419,000 gross acres or 297,000 net plantable acres).

We also act as the managing member in a private equity timber fund business with one fund comprising approximately 18,000 acres.

On a “look-through basis,” our ownership in the timber fund business equates to approximately 4,000 acres.

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.

SEGMENT INFORMATION

The Southern Timber, Pacific Northwest Timber, New Zealand Timber, and Timber Funds segments include all activities related to the harvesting of timber and other non-timber income activities, such as the licensing of properties for hunting, the leasing of properties for mineral extraction and cell towers, and carbon credit sales.

The Southern Timber, Pacific Northwest Timber and New Zealand Timber segments include all activities related to the harvesting of timber and other non-timber income activities, such as the licensing of properties for hunting, the leasing of properties for mineral extraction and cell towers, and carbon credit sales.

Our New Zealand operations are conducted by Matariki Forestry Group, a joint venture (the “New Zealand subsidiary”), in which we maintain a 77% ownership interest.

The Timber Funds segment operations are managed by ORM LLC, a subsidiary acquired in the merger with Pope Resources.

On July 21, 2021, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds.

As of September 30, 2021, we own approximately 20% of Fund II, but had commenced a process to liquidate Fund II assets.

When referring to our proportionate ownership share of the Timber Funds segment, we will refer to the sums as “look-through” totals.

See Note 6 - Noncontrolling Interests for additional information regarding our noncontrolling interests in the New Zealand Timber and Timber Funds segments.

See Note 4 - Noncontrolling Interests for additional information regarding our noncontrolling interests in the New Zealand Timber segment.

The Real Estate segment includes all U.S.

and New Zealand land or leasehold sales disaggregated into six sales categories:

Improved Development, Unimproved Development, Rural, Timberland & Non-Strategic, Conservation Easement and Large Dispositions.

Improved Development, Unimproved Development, Rural, Timberland & Non-Strategic, Conservation Easements and Large Dispositions.

It also includes residential and commercial lease activity, primarily in the town of Port Gamble, Washington.

The Trading segment primarily reflects log trading activities in New Zealand and Australia conducted by our New Zealand subsidiary.

It also includes log trading activities conducted from the U.S.

South and Pacific Northwest.

Our Trading segment activities include an export services joint venture with a third-party forest manager in which Matariki Forests Trading Ltd maintains a 50% ownership interest.

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With a higher proportion of pulpwood, our Southern Timber segment relies heavily on downstream markets for pulp and paper, and to a lesser extent wood pellet markets.

Our Pacific Northwest Timber and Timber Funds segments rely primarily on domestic customers but also export a significant volume of timber, particularly to China.

The Southern Timber, Pacific Northwest Timber and Timber Funds segments rely on the strength of U.S.

Our Pacific Northwest Timber segment relies primarily on domestic customers but also exports a significant volume of timber, particularly to China.

The Southern Timber and Pacific Northwest Timber segments rely on the strength of U.S.

lumber markets as well as underlying housing starts.

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dollar terms.

Global log and lumber markets were volatile during the first quarter as sanctions were placed on Russia in response to their invasion of Ukraine.

While we do not expect our operations to be directly impacted by the conflict at this time, changes in global wood and commodity flows could impact the markets in which we operate.

As the current COVID-19 pandemic continues to evolve, the expected duration and the extent of economic disruption it may ultimately cause remain uncertain.

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Government-mandated shutdowns or shelter-in-place orders in markets in which we operate could negatively impact our results.

Further, prolonged periods of lower overall business activity as a result of COVID-19 could cause significant damage to the underlying economy, which would likely impact U.S.

timber markets.

Further, prolonged periods of lower overall business activity as a result of COVID-19 could cause significant damage to the underlying economy, which would likely impact timber markets.

We are also subject to the risk of price fluctuations in certain of our cost components, primarily logging and transportation (cut and haul), ocean freight and demurrage costs.

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OUR TIMBERLANDS

Our timber operations are comprised of our core timberland holdings, which are disaggregated into three geographically distinct reporting segments:

Southern Timber, Pacific Northwest Timber and New Zealand Timber in addition to our timber fund holdings, which represents our ownership in Timber Fund II.

The following tables provide a breakdown of our timberland holdings as of September 30, 2021 and December 31, 2020:

Core Timberland Holdings

(acres in 000s) As of September 30, 2021

Our timber operations are disaggregated into three geographically distinct segments:

Southern Timber, Pacific Northwest Timber and New Zealand Timber.

The following tables provide a breakdown of our timberland holdings as of March 31, 2022 and December 31, 2021:

(acres in 000s) As of March 31, 2022

As of December 31, 2021

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(a) Represents legal acres owned and leased by the New Zealand subsidiary, in which we own a 77% interest.

As of September 30, 2021, legal acres in New Zealand consisted of 297,000 plantable acres and 121,000 non-productive acres.

Timber Fund Holdings (a)

(acres in 000s) As of September 30, 2021

As of December 31, 2020

Total Look-through Total Look-through

Oregon (b) 18 4 51 7

Washington — — 71 9

California — — 19 1

Total 18 4 141 17

(a) 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 of $35.9 million, and 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.

See Note 1 - Basis of Presentation and Note 6 - Noncontrolling Interests for additional information.

(b) 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.

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

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

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

Total Timberland under Management

(acres in 000s) As of September 30, 2021

As of December 31, 2020

Southern 1,739 1,733

Pacific Northwest 490 507

New Zealand 418 417

Timber Funds (a)(b) 18 141

Total 2,665 2,798

See Note 1 - Basis of Presentation and Note 6 - Noncontrolling Interests for additional information.

(b) 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.

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

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

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

The following tables detail activity for owned and leased acres in our core timberland holdings by state from December 31, 2020 to September 30, 2021:

As of March 31, 2022, legal acres in New Zealand consisted of 297,000 plantable acres and 122,000 non-productive acres.

The following tables detail activity for owned and leased acres in our timberland holdings by state from December 31, 2021 to March 31, 2022:

(acres in 000s) Acres Owned

December 31, 2021

Acquisitions Sales Other September 30, 2021

Acquisitions Sales Other March 31, 2022

Alabama 223 1 — — 224

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December 31, 2021

New Leases Sold/Expired Leases (a) Other (b) September 30, 2021

New Leases Sold/Expired Leases (a) Other (b) March 31, 2022

Alabama 14 — — — 14

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(d) Represents legal acres leased by the New Zealand subsidiary, in which we have a 77% interest.

The following table details activity in our timber fund holdings by state from December 31, 2020 to September 30, 2021:

(acres in 000s) Acres Owned

December 31, 2020

Acquisitions Sales Other September 30, 2021

Fund II (a)(b)

Oregon 18 — — — 18

Washington 13 — (13) — —

Total Fund II 31 — (13) — 18

Look-through share of Fund II 6 — (2) — 4

Oregon 13 — (13) — —

Washington 25 — (25) — —

California 19 — (19) — —

Total Fund III 57 — (57) — —

Look-through share of Fund III 3 — (3) — —

Oregon 20 — (20) — —

Washington 33 — (33) — —

Total Fund IV 53 — (53) — —

Look-through share of Fund IV 8 — (8) — —

Total Timber Funds 141 — (123) — 18

Look-through share of Funds 17 — (13) — 4

See Note 1 - Basis of Presentation and Note 6 - Noncontrolling Interests for additional information.

(b) 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.

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

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

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

RESULTS OF OPERATIONS

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Three Months Ended

September 30, Nine Months Ended

September 30,

Financial Information (in millions) 2022 2021

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New Zealand Timber 51.4 57.6

Timber Funds (a) 94.5 9.9 128.1 17.4

Timber Funds — 14.9

Improved Development 5.0 0.3

Unimproved Development 37.5 — 37.5 8.4

Rural 16.9 9.8

Timberland & Non-Strategic 11.4 —

Conservation Easement — 3.1 3.9 3.1

Deferred Revenue/Other (b) 1.1 1.1 (3.4) (0.5)

Large Dispositions 20.0 — 56.0 116.0

Deferred Revenue/Other (a) 0.9 0.5

Total Real Estate 34.2 10.5

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Total Sales $222.0 $191.4

Operating Income (Loss)

Operating Income

Southern Timber $30.3 $17.3

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New Zealand Timber 5.4 14.0

Timber Funds (a) 41.3 (12.4) 44.8 (14.3)

Real Estate (b)(c) 60.6 9.5 112.8 61.1

Timber Funds — 1.5

Real Estate 10.2 1.7

Trading 0.4 0.2

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Income tax expense (5.5) (3.5)

Net Income (Loss) 110.5 (9.5) 189.0 17.4

Net (income) loss attributable to noncontrolling interests in consolidated affiliates (d) (32.5) 8.7 (40.8) 9.6

Net Income (Loss) Attributable to Rayonier, L.P.

$78.0 ($0.8) $148.2 $27.0

Net Income 31.0 15.0

Net income attributable to noncontrolling interests in consolidated affiliates (1.0) (3.8)

Net Income Attributable to Rayonier, L.P.

Net income attributable to noncontrolling interests in the operating partnership (0.7) (0.4)

Net Income (Loss) Attributable to Rayonier Inc.

$75.8 ($0.8) $143.9 $26.8

Adjusted EBITDA (e)

Net Income Attributable to Rayonier Inc.

Adjusted EBITDA (b)

Southern Timber $48.4 $31.7

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Total Adjusted EBITDA $98.1 $69.5

(a) The three and nine months ended September 30, 2021 includes sales and operating income of $87.1 million and $36.0 million, respectively, from Fund II Timberland Dispositions.

(b) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

(c) The three and nine months ended September 30, 2021 includes $14.5 million and $44.8 million, respectively, 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, 2021 includes a $28.8 million gain from Fund II Timberland Dispositions.

(e) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators .

(a) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators .

Three Months Ended

September 30, Nine Months Ended

September 30,

Southern Timber Overview 2022 2021

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Total Volume 1,896 1,512

Percentage Delivered Sales 47 % 46 % 40 % 39 %

Percentage Stumpage Sales 53 % 54 % 60 % 61 %

% Delivered Volume (vs.

Total Volume) 35 % 36 %

% Pine Sawtimber Volume (vs.

Total Pine Volume) 35 % 43 %

% Export Volume (vs.

Total Volume) (a) 1 % 5 %

Net Stumpage Pricing (dollars per ton)

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Timber Sales $71.0 $44.2

Cut, Haul & Freight (13.4) (14.2) (37.2) (37.5)

Cut and Haul (15.6) (9.9)

Port and Freight (2.4) (2.0)

Net Stumpage Sales $53.0 $32.3

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Operating Income $30.3 $17.3

(+) Timber write-offs resulting from casualty events (a) — 6.0 — 6.0

(+) Depreciation, depletion and amortization 18.1 14.4

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Period-End Acres (in thousands) 1,795 1,751

(a) Timber write-offs resulting from casualty events include the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events that cannot be salvaged.

(a) Estimated percentage of export volume, which includes volumes sold to third-party exporters in addition to direct exports through our log export program.

(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators .

Three Months Ended

September 30, Nine Months Ended

September 30,

Pacific Northwest Timber Overview 2022 2021

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Total Volume 505 536

Sales Volume (converted to MBF)

Pulpwood 6,281 5,912 20,409 21,853

Sawtimber 37,239 38,892 138,155 129,144

% Delivered Volume (vs.

Total Volume) 82 % 78 %

Percentage Delivered Sales 89 % 95 % 86 % 89 %

Percentage Sawtimber Sales 81 % 82 % 83 % 81 %

% Sawtimber Volume (vs.

Total Volume) 85 % 85 %

% Export Volume (vs.

Total Volume) (a) 5 % 10 %

Delivered Log Pricing (in dollars per ton)

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Cut and Haul (16.2) (16.0)

Port and Freight (0.1) —

Net Stumpage Sales $28.8 $24.3

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Total Sales $46.3 $41.5

Operating Income (Loss) $2.1 ($1.8) $5.3 ($9.5)

Operating Income $6.6 $1.3

(+) Depreciation, depletion and amortization 14.9 16.3

Adjusted EBITDA (a) $12.5 $9.1 $44.1 $22.8

Adjusted EBITDA (b) $21.5 $17.6

Period-End Acres (in thousands) 486 507

Sawtimber (in dollars per MBF) $803 $677 $758 $621

Estimated Percentage of Export Volume 20 % 9 % 16 % 10 %

(a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators .

Sawtimber (in dollars per MBF) (c) $849 $730

(a) Estimated percentage of export volume, which includes volumes sold to third-party exporters in addition to direct exports through our log export program.

(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators .

Three Months Ended

September 30, Nine Months Ended

September 30,

New Zealand Timber Overview 2022 2021

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Total Volume 515 599

% Delivered Volume (vs.

Total Volume) 100 % 100 %

% Sawtimber Volume (vs.

Total Volume) 75 % 74 %

% Export Volume (vs.

Total Volume) (a) 56 % 56 %

Delivered Log Pricing (in dollars per ton)

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Cut and Haul (19.1) (20.9)

Port and Freight Costs (26.6) (13.3) (61.7) (29.8)

Port and Freight (15.3) (12.0)

Net Stumpage Sales $15.3 $24.4

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(+) Depreciation, depletion and amortization 5.0 7.2

Adjusted EBITDA (a) $19.9 $18.1 $68.7 $38.2

Adjusted EBITDA (b) $10.4 $21.2

New Zealand Dollar to U.S.

Dollar Exchange Rate (b) 0.7017 0.6614 0.7125 0.6459

Dollar Exchange Rate (c) 0.6680 0.7217

Net Plantable Period-End Acres (in thousands) 297 296

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Domestic Sawtimber (in $NZD per tonne) $125.13 $123.39

(a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators .

(b) Represents the period-average rate.

(a) Percentage of export volume includes direct exports through our log export program.

(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators .

Three Months Ended

September 30, Nine Months Ended

September 30,

Real Estate Overview 2022 2021

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Improved Development $5.0 $0.3

Unimproved Development 37.5 — 37.5 8.4

Rural 16.9 9.8

Timberland & Non-Strategic 11.4 —

Conservation Easement — 3.1 3.9 3.1

Deferred Revenue/Other (a) 0.9 0.5

Large Dispositions (b) 20.0 — 56.0 116.0

Total Sales $34.2 $10.5

Improved Development 16.1 0.6

Unimproved Development 359 — 359 570

Rural 4,751 2,394

Timberland & Non-Strategic 3,966 —

Large Dispositions (b) 8,088 — 16,622 66,946

Total Acres Sold 8,734 2,395

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Improved Development $308,065 $406,452

Unimproved Development 104,579 — 104,579 14,780

Rural 3,567 4,079

Timberland & Non-Strategic 2,874 —

Large Dispositions (b) 2,479 — 3,372 1,733

Weighted Average (Total) (c) $17,490 $2,332 $8,384 $2,499

Weighted Average (Adjusted) (d) $12,179 $2,206 $5,413 $2,262

Sales (Excluding Large Dispositions) $73.4 $28.8 $122.4 $81.4

Weighted Average (Total) $3,815 $4,183

Weighted Average (Adjusted) (b) $3,252 $4,079

Operating Income $10.2 $1.7

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(+) Non-cash cost of land and improved development 5.4 1.8

(–) Large Dispositions (b) (14.5) — (44.8) (28.7)

Adjusted EBITDA (e) $63.8 $22.2 $97.9 $65.7

Adjusted EBITDA (c) $24.7 $5.1

(a) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

(b) 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.

As of September 30, 2021, we have completed two dispositions of approximately 17,000 acres in total.

In June 2021, we completed a disposition of approximately 9,000 acres in Washington for a sales price and gain of approximately $36.0 million and $30.3 million, respectively.

In July 2021, we completed a second disposition of approximately 8,000 acres in Washington, for a sales price and gain of $20.0 million and $14.5 million, respectively.

In March 2020, we completed a disposition of approximately 67,000 acres located in Mississippi for a sales price and gain of approximate ly $116.0 million and $28.7 million, respectively.

(d) Excludes Improved Development and Large Dispositions.

(e) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators .

Three Months Ended

September 30, Nine Months Ended

September 30,

Timber Funds Overview 2021 2020 2021 2020

Sales Volume (in thousands of tons)

Pulpwood 4 9 27 19

Sawtimber 57 101 354 181

Total Volume 61 110 380 200

Summary Financial Data (in millions of dollars)

Timber Sales $6.8 $8.6 $37.2 $15.3

Cut and Haul (3.0) (3.4) (15.9) (6.4)

Net Stumpage Sales $3.9 $5.2 $21.3 $8.9

Fund II Timberland Dispositions (a) 87.1 — 87.1 —

Non-Timber Sales — — 0.5 —

Timberland Management Fees 0.5 1.3 3.3 2.2

Total Sales $94.5 $9.9 $128.1 $17.4

Operating Income (Loss) $41.3 ($12.4) $44.8 ($14.3)

Operating (income) loss attributable to NCI in Timber Funds (30.5) 10.3 (33.3) 12.3

(-) Gain on investment in Timber Funds (b) (3.7) — (3.7) —

(-) Fund II Timberland Dispositions (a) (7.2) — (7.2) —

(+) Timber write-offs resulting from casualty events attributable to Rayonier (c) — 1.8 — 1.8

(+) Depreciation, depletion and amortization (“Look-through”) 0.7 0.5 2.2 1.0

Adjusted EBITDA (d) $0.5 $0.2 $2.8 $0.8

Period-End Acres (in thousands) 18 141 18 141

“Look-through” Period-End Acres (in thousands) 4 17 4 17

(a) Fund II Timberland Dispositions represents the disposition of Timber Fund II timberland assets, which we manage and own a co-investment stake in.

Proceeds from Fund II Timberland Dispositions will ultimately be distributed to owners of ORM Timber Fund II and not reinvested.

(b) Gain on investment in Timber Funds represents the gain recognized on the sale of rights to manage two timber funds (Funds III and IV) previously managed by our Olympic Resource Management (ORM) subsidiary, as well as our co-investment stake in both funds.

(c) Timber write-offs resulting from casualty events includes the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events that cannot be salvaged.

(d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators .

(b) Excludes Improved Development.

Three Months Ended

September 30, Nine Months Ended

September 30,

Trading Overview 2022 2021

Sales Volume (in thousands of tons)

South 1 — 1 —

Pacific Northwest — 1 — 1

NZ Trading - Domestic 10 6 38 21

NZ Trading - Export 166 245 522 704

Total Volume 112 141

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Total Sales $13.4 $16.7

Operating Income (Loss) — ($0.6) $0.6 ($0.5)

Operating Income $0.4 $0.2

Adjusted EBITDA (a) $0.4 $0.2

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Three Months Ended

September 30, Nine Months Ended

September 30,

Capital Expenditures By Segment (in millions of dollars) 2022 2021

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Southern Timber $2.8 $29.9

Pacific Northwest Timber — — — —

New Zealand Timber — 0.1 10.9 0.1

Timberland Acquisitions $2.8 $29.9

Real Estate Development Investments (b)

$2.9 $1.9 $9.2 $5.4

(a) The three and nine months ended September 30, 2021 exclude $0.3 million and $2.8 million, respectively, of capital expenditures attributable to noncontrolling interests in Timber Funds, and the three and nine months ended September 30, 2020 exclude $0.9 million and $1.6 million, respectively, of capital expenditures attributable to noncontrolling interests in Timber Funds.

(a) The three months ended March 31, 2021 excludes $1.3 million of capital expenditures attributable to noncontrolling interests in Timber Funds.

(b) Represents investments in master infrastructure or entitlements in our real estate development projects.

Real Estate Development Investments are amortized as the underlying properties are sold and included in Non-Cash Cost of Land and Improved Development.

The following tables summarize sales, operating income (loss) and Adjusted EBITDA variances for September 30, 2021 versus September 30, 2020 (millions of dollars):

The following tables summarize sales, operating income (loss) and Adjusted EBITDA variances for March 31, 2022 versus March 31, 2021 (millions of dollars):

Sales Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Intersegment Eliminations Total

Three Months Ended

September 30, 2020

March 31, 2021

$51.7 $41.5 $57.6 $14.9 $10.5 $16.7 ($1.5) $191.4

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Three Months Ended

September 30, 2021

$44.8 $31.5 $75.6 $94.5 $93.4 $25.6 ($0.7) $364.7

(a) Net of currency hedging impact.

(b) Includes variance due to stumpage versus delivered sales.

(d) Timber Funds includes an increase in sales attributable to noncontrolling interest of $67.7 million, $17.5 million of Fund II Timberland Dispositions attributable to Rayonier, lower sales related to timberland investment management fees paid to us by the timber funds, and a variance due to stumpage versus delivered sales.

(e) Includes $20.0 million of sales from a Large Disposition in the three months ended September 30, 2021 in addition to marketing fees related to Improved Development sales and r esidential and commercial lease revenue, partially offset by lower Conservation Easement sales and deferred revenue adjustments.

(f) Includes a $0.8 million decrease in Intersegment eliminations related to timberland management fees paid to us by the timber funds and reported as sales within the Timber Funds segment.

Sales Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Intersegment Eliminations Total

Nine Months Ended

September 30, 2020

$147.4 $86.1 $142.1 $17.4 $197.4 $65.5 ($2.3) $653.6

Volume (13.4) 2.6 13.7 1.3 (41.2) (14.7) — (51.7)

Price 9.6 16.8 27.8 0.6 81.7 25.2 — 161.7

Non-timber sales 2.4 1.4 (6.3) — — 0.8 — (1.7)

Foreign exchange (a) — — 5.4 — — — — 5.4

Other (0.2) (b) 1.5 (b) 31.0 (c) 108.8 (d) (59.5) (e) — (1.3) (f) 80.3

Nine Months Ended

September 30, 2021

March 31, 2022

$76.8 $46.3 $51.4 — $34.2 $13.4 ($0.1) $222.0

2 unchanged sentences

(d) Timber Funds includes an increase in sales attributable to noncontrolling interests of $88.6 million, $17.5 million related to disposition of Timber Fund II, sales related to timberland investment management fees paid to us by the timber funds, and a variance due to stumpage versus delivered sales.

(e) Includes $116.0 million of sales from a Large Disposition in the nine months ended September 30, 2020, as well as Conservation Easement sales, r esidential and commercial lease revenue, marketing fees related to Improved Development sales and deferred revenue adjustments, partially offset by $56.0 million of sales from Large Dispositions in the nine months ended September 30, 2021.

(f) Includes a $1.1 million increase in Intersegment eliminations related to timberland management fees paid to us by the timber funds and reported as sales within the Timber Funds segment.

(d) Timber Funds segment was liquidated in 2021.

(e) Includes marketing fees related to Improved Development sales and r esidential and commercial lease revenue .

(f) Includes a decrease in Intersegment eliminations related to timberland management fees paid to us by the timber funds and reported as sales within the Timber Funds segment.

Operating Income (Loss) Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Corporate and Other Total

Three Months Ended

September 30, 2020

March 31, 2021

$17.3 $1.3 $14.0 $1.5 $1.7 $0.2 ($7.6) $28.5

Volume 4.5 (0.3) (2.6) — 17.4 — — 19.0

Price 3.6 3.2 6.7 0.1 59.7 — — 73.3

Price (a) 12.5 5.8 (6.2) — (2.9) — — 9.2

Cost (2.1) (0.5) (0.6) — (2.8) 0.2 — (5.8)

Non-timber income — (0.2) (3.3) — — — — (3.5)

Foreign exchange (a) — — 1.2 — — — — 1.2

Non-timber income (b) (1.8) (0.1) 1.5 — — — — (0.4)

Foreign exchange (c) — — (1.5) — — — — (1.5)

Depreciation, depletion & amortization (0.1) 0.4 0.8 — (4.2) — — (3.1)

Non-cash cost of land and improved development — — — — 1.0 — — 1.0

Other (b) 6.0 — — 52.8 14.9 — 0.4 74.1

Other (d) — — — (1.5) — — — (1.5)

Three Months Ended

September 30, 2021

$12.8 $2.1 $13.3 $41.3 $60.6 — ($6.7) $123.3

(a) Net of currency hedging impact.

(b) Southern Timber includes $6.0 million in timber write-offs resulting from casualty events in the three months ended September 30, 2020.

Timber Funds includes an increase in operating income attributable to noncontrolling interests of $40.8 million, $7.2 million related to the disposition of Timber Fund II, $3.7 million related to the gain on investment in Timber Funds, $1.8 million of timber write-offs from casualty events attributable to Rayonier in the prior year quarter and timberland investment management fees paid to us by the timber fund.

Real Estate includes $14.5 million of operating income from Large Dispositions in addition to residential and commercial lease income, revenue true-ups, marketing fees related to Improved Development sales, and deferred revenue adjustments.

Corporate and Other includes $0.4 million in costs related to the merger with Pope Resources in the three months ended September 30, 2020.

Operating Income (Loss) Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Corporate and Other Total

Nine Months Ended

September 30, 2020

$31.4 ($9.5) $21.1 ($14.3) $61.1 ($0.5) ($37.3) $52.0

Volume (6.4) 0.2 3.1 (0.1) (24.5) — — (27.7)

Price 9.6 16.8 27.8 0.6 81.7 — — 136.5

Cost 1.9 1.0 (0.8) (0.9) (6.7) 1.4 (1.5) (5.6)

Non-timber income 2.6 1.4 (6.1) — — (0.3) — (2.4)

Foreign exchange (a) — — 3.1 — — — — 3.1

Depreciation, depletion & amortization 2.0 (4.6) (0.2) — (1.1) — 0.1 (3.8)

Non-cash cost of land and improved development — — — — (14.2) — — (14.2)

Other (b) 6.0 — — 59.5 16.5 — 16.4 98.3

Nine Months Ended

September 30, 2021

March 31, 2022

$30.3 $6.6 $5.4 — $10.2 $0.4 ($7.6) $45.3

(a) Net of currency hedging impact.

(b) Southern Timber includes $6.0 million in timber write-offs resulting from casualty events in the nine months ended September 30, 2020.

Timber Funds includes an increase in operating income attributable to noncontrolling interests of $45.6 million, $7.2 million related to the disposition of Timber Fund II, $3.7 million related to the gain on investment in Timber Funds, $1.8 million of timber write-offs from casualty events attributable to Rayonier in the prior year period, and timberland investment management fees paid to us by the timber fund.

Real Estate includes $44.8 million of operating income from Large Dispositions in the nine months ended September 30, 2021 in addition to Conservation Easement sales, residential and commercial lease income, marketing fees related to Improved Development sales and equity income from joint venture entities, partially offset by $28.7 million of operating income from a Large Disposition in the nine months ended September 30, 2020 and deferred revenue adjustments.

Corporate and Other includes $16.4 million in costs related to the merger with Pope Resources in the nine months ended September 30, 2020.

(a) For Timber segments, price reflects net stumpage realizations (i.e., net of cut and haul and shipping costs).

For Real Estate, price is presented net of cash closing costs.

(b) For the New Zealand Timber segment, includes carbon credit sales.

(d) Timber Funds segment was liquidated in 2021.

Adjusted EBITDA (a) Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Corporate and Other Total

Three Months Ended

September 30, 2020

March 31, 2021

$31.7 $17.6 $21.2 $1.0 $5.1 $0.2 ($7.3) $69.5

Volume 8.1 (1.3) (3.5) — 25.3 — — 28.6

Price 3.6 3.2 6.7 0.1 59.7 — — 73.3

Price (b) 12.5 5.8 (6.2) — (2.9) — — 9.2

Cost (2.1) (0.5) (0.6) — (2.8) 0.2 0.1 (5.7)

Non-timber income — (0.2) (3.3) — — — — (3.5)

Foreign exchange (b) — — 1.6 — — — — 1.6

Other (c) — — — (0.8) (2.5) — — (3.4)

Non-timber income (c) (1.8) (0.1) 1.5 — — — — (0.4)

Foreign exchange (d) — — (2.0) — — — — (2.0)

Other (e) — — — (1.0) — — — (1.1)

Three Months Ended

September 30, 2021

$24.4 $12.5 $19.9 $0.5 $63.8 — ($6.4) $114.6

(a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators below.

(b) Net of currency hedging impact.

Real Estate includes deferred revenue adjustments and marketing fees related to Improved Development sales, as well as residential and commercial lease revenue.

Adjusted EBITDA (a) Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Corporate and Other Total

Nine Months Ended

September 30, 2020

$85.8 $22.8 $38.2 $0.8 $65.7 ($0.5) ($19.9) $192.9

Volume (13.3) 2.1 4.8 1.2 (41.2) — — (46.4)

Price 9.6 16.8 27.8 0.6 81.7 — — 136.5

Cost 1.9 1.0 (0.8) (0.9) (6.7) 1.4 (1.5) (5.6)

Non-timber income 2.6 1.4 (6.1) — — (0.3) — (2.4)

Foreign exchange (b) — — 4.8 — — — — 4.8

Other (c) — — — 1.1 (1.6) — — (0.5)

Nine Months Ended

September 30, 2021

March 31, 2022

$48.4 $21.5 $10.4 — $24.7 $0.4 ($7.2) $98.1

(a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators below.

(b) Net of currency hedging impact.

Real Estate includes deferred revenue adjustments and marketing fees related to Improved Development sales, as well as residential and commercial lease revenue.

(b) For Timber segments, price reflects net stumpage realizations (i.e., net of cut and haul and shipping costs).

For Real Estate, price is presented net of cash closing costs.

(d) Net of currency hedging impact.

(e) Timber Funds segment was liquidated in 2021.

SOUTHERN TIMBER

Third quarter sales of $44.8 million decreased $2.8 million, or 6%, versus the prior year period.

Harvest volumes decreased 20% to 1.19 million tons versus 1.48 million tons in the prior year period , as wet weather conditions and constrained trucking availability impacted production across the region.

Average pine sawtimber stumpage prices increased 12% to $28.06 per ton versus $25.02 per ton in the prior year period.

The increase in average pine sawtimber stumpage prices was driven by strong domestic lumber demand, as well as upward pressure on chip-n-saw pricing due to increased competition from pulp mills.

Average pine pulpwood stumpage prices climbed 23% to $19.14 per ton versus $15.50 per ton in the prior year period.

The significant increase in pulpwood pricing relative to the prior year period reflects strong domestic demand, constrained supply due to wet weather conditions and an increase in pulpwood exports to China.

Overall, weighted-average stumpage prices (including hardwood) increased 16% to $21.88 per ton versus $18.88 per ton in the prior year period.

Operating income of $12.8 million increased $7.7 million versus the prior year period due to the prior year period write-off of timber basis as a result of Hurricane Laura ($6.0 million), higher net stumpage prices ($3.6 million), lower depletion rates ($0.4 million) and lower costs ($0.3 million), partially offset by lower volumes ($2.6 million).

Third quarter Adjusted EBITDA of $24.4 million was 7%, or $1.7 million, below the prior year period.

Year-to-date sales of $145.8 million decreased $1.6 million, or 1%, versus the prior year period.

Harvest volumes decreased 14% to 4.17 million tons versus 4.86 million in the prior year period, primarily due to operational disruptions attributable to wet ground conditions and winter snowstorms.

Average pine sawtimber stumpage prices increased 7% to $27.62 per ton versus $25.79 per ton in the prior year period, primarily due to strong domestic lumber demand, upward pressure on chip-n-saw pricing due to increased competition from pulp mills and a strengthening export market along the east coast.

Average pine pulpwood stumpage prices increased 15% to $18.25 per ton versus $15.86 per ton in the prior year period, driven by strong domestic demand,

constrained supply due to wet weather conditions and an increase in pulpwood exports to China.

First quarter sales of $76.8 million increased $25.1 million, or 49%, versus the prior year period.

Harvest volumes increased 25% to 1.90 million tons versus 1.51 million tons in the prior year period , as drier ground conditions enabled stumpage customers to ramp up production to meet strong demand.

Average pine sawtimber stumpage prices increased 29% to $35.46 per ton versus $27.51 per ton in the prior year period, driven by strong domestic lumber demand coupled with elevated chip-n-saw pricing due to increased competition from pulp mills.

Average pine pulpwood stumpage prices increased 41% to $24.11 per ton versus $17.10 per ton in the prior year period, reflecting strong competition across our wood baskets as customers looked to secure supply and replenish low mill inventories.

Overall, weighted-average stumpage prices (including hardwood) increased 31% to $27.94 per ton versus $21.35 per ton in the prior year period.

Operating income of $47.1 million increased $15.7 million versus the prior year period due to higher net stumpage prices ($9.6 million), the prior year period write-off of timber basis as a result of Hurricane Laura ($6.0 million), higher non-timber income ($2.6 million), lower lease, overhead and other expenses ($1.9 million) and lower depletion rates ($2.0 million), partially offset by lower volumes ($6.4 million).

Year-to-date Adjusted EBITDA of $86.6 million was $0.9 million above the prior year period.

Operating income of $30.3 million increased $13.0 million versus the prior year period due to higher net stumpage realizations ($12.5 million) and higher volumes ($4.5 million), partially offset by higher costs ($2.1 million), lower non-timber income ($1.8 million) and higher depletion rates ($0.1 million).

First quarter Adjusted EBITDA of $48.4 million was 53%, or $16.7 million, above the prior year period.

PACIFIC NORTHWEST TIMBER

Third quarter sales of $31.5 million increased $2.6 million, or 9%, versus the prior year period, while harvest volumes of 346,000 tons remained flat versus the prior year period.

Average delivered sawtimber prices increased 15% to $107.56 per ton versus $93.34 per ton in the prior year period, driven by favorable domestic lumber markets coupled with increased export demand.

Average delivered pulpwood prices decreased 2% to $31.34 per ton versus $32.12 per ton in the prior year period, as increased lumber production resulted in an increased supply of competing sawmill residuals .

Operating income of $2.1 million improved $3.9 million versus the prior year period due to higher net stumpage prices ($3.2 million), lower costs ($0.5 million) and lower depletion rates ($0.4 million), partially offset by lower non-timber income ($0.2 million).

Third quarter Adjusted EBITDA of $12.5 million was 38%, or $3.5 million, above the prior year period.

Year-to-date sales of $108.4 million increased $22.2 million, or 26%, versus the prior year period.

Harvest volumes increased 6% to 1,282,000 tons versus 1,207,000 tons in the prior year period, primarily due to incremental volume from the Pope Resources acquisition.

Average delivered sawtimber prices increased 21% to $97.79 per ton versus $81.01 per ton in the prior year period, as favorable domestic lumber markets coupled with increased export demand drove higher log prices.

Average delivered pulpwood prices decreased 17% to $29.86 per ton versus $36.01 per ton in the prior year period, as increased lumber production resulted in an increased supply of competing sawmill residuals.

Operating income of $5.3 million improved $14.7 million versus the prior year period due to higher net stumpage prices ($16.8 million), higher non-timber income ($1.4 million) lower costs ($1.0 million) and higher volumes ($0.2 million), partially offset by higher depletion rates ($4.6 million).

Year-to-date Adjusted EBITDA of $44.1 million was $21.3 million above the prior year period.

First quarter sales of $46.3 million increased $4.8 million, or 11%, versus the prior year period, notwithstanding a decline in harvest volumes of 6% to 505,000 tons versus 536,000 tons in the prior year period.

Average delivered sawtimber prices increased 16% to $105.69 per ton versus $90.98 per ton in the prior year period, driven by strong domestic lumber demand.

Average delivered pulpwood prices increased 28% to $37.69 per ton versus $29.36 per ton in the prior year period, primarily driven by improved demand due to the restart of idled pulp mill capacity in the region .

Operating income of $6.6 million improved $5.3 million versus the prior year period due to higher net stumpage realizations ($5.8 million) and lower depletion rates ($0.4 million), partially offset by higher costs ($0.5 million), lower volumes ($0.3 million) and lower non-timber income ($0.1 million).

First quarter Adjusted EBITDA of $21.5 million was 22%, or $3.9 million, above the prior year period.

NEW ZEALAND TIMBER

Third quarter sales of $75.6 million increased $12.8 million, or 20%, versus the prior year period , as higher log prices were partially offset by lower volumes.

Harvest volumes decreased 14% to 668,000 tons versus 776,000 tons in the prior year period , primarily due to the government-mandated shutdown of all non-essential activity in New Zealand (including the harvesting and transport of logs) from August 18 th through August 31 st due to an outbreak of COVID-19.

Average delivered prices for export sawtimber increased 59% to $149.68 per ton versus $94.42 per ton in the prior year period, while average delivered prices for domestic sawtimber increased 21% to $85.00 per ton versus $70.24 per ton in the prior year period.

The increase in export sawtimber prices versus the prior year period reflects the restriction on competing log imports into China from Australia in the current year quarter, as well as the ability of log exporters to pass higher costs along to customers in the current environment.

While net stumpage realizations on export volume were above prior year period levels, favorable export pricing was largely offset by significantly higher shipping costs, as supply chain issues drove increased freight and demurrage costs.

The increase in domestic sawtimber prices (in U.S.

dollar terms) was driven in part by the rise in the NZ$/US$ exchange rate (US$0.70 per NZ$1.00 versus US$0.66 per NZ$1.00).

Excluding the impact of foreign exchange rates, domestic sawtimber prices improved 14% versus the prior year period , following the upward trend in the export market .

Operating income of $13.3 million increased $2.6 million versus the prior year period as a result of higher net stumpage prices ($6.7 million), favorable foreign exchange impacts ($1.2 million) and lower depletion rates ($0.2 million), partially offset by lower carbon credit sales ($3.3 million), lower volumes ($1.9 million) and higher costs ($0.3 million).

Third quarter Adjusted EBITDA of $19.9 million was 10%, or $1.8 million, above the prior year period.

Year-to-date sales of $213.7 million increased $71.6 million, or 50%, versus the prior year period.

Harvest volumes increased 10% to 1.96 million tons versus 1.79 million tons in the prior year period, driven by strong export and domestic demand versus the prior year period that was negatively impacted by COVID-19 related headwinds.

Average delivered prices for export sawtimber increased 47% to $140.89 per ton versus $95.86 per ton in the prior year period, while average delivered prices for domestic sawtimber increased 21% to $83.79 per ton versus $69.30 per ton in the prior year period.

The increase in export sawtimber prices was driven primarily by the restriction on competing log imports into China from Australia in the current year, as well as the ability of log

exporters to pass higher costs along to customers.

The increase in export sawtimber prices versus the prior year period was also driven in part by significant COVID-19 disruptions in the prior year period.

The increase in domestic sawtimber prices (in U.S.

dollars terms) was driven primarily by the rise in the NZ$/US$ exchange rate (US$0.71 per NZ$1.00 versus US$0.65 per NZ$1.00).

Excluding the impact of foreign exchange rates, domestic sawtimber prices improved 10% versus the prior year period, following the upward trend in the export market.

Operating Income of $48.0 million increased $26.8 million versus the prior year period as a result of higher net stumpage prices ($27.8 million), higher volumes ($3.1 million) and favorable foreign exchange impacts ($3.1 million), partially offset by lower carbon credit sales ($6.1 million), higher costs ($0.8 million) and higher depletion rates ($0.2 million).

Year-to-date Adjusted EBITDA of $68.7 million was $30.5 million above the prior year period.

Third quarter sales of $94.5 million increased $84.7 million, versus the prior year period , while operating income of $41.3 million increased $53.7 million versus the prior year period .

Third quarter sales and operating income included $87.1 million and $36.0 million, respectively, from the Fund II Timberland Dispositions.

Third quarter operating income also included a $3.7 million gain on investment in Timber Funds, which reflects the gain recognized on the sale of our investment in Timber Funds III and IV.

The prior year quarter included timber write-offs of $9.2 million resulting from two fires in Oregon.

Harvest volumes decreased 44% to 61,000 tons versus 110,000 tons in the prior year period, as Timber Funds III and IV were sold during the quarter and therefore contributed volume only through the July 21st closing date.

Third quarter Adjusted EBITDA of $0.5 million was $0.3 million above the prior year period.

Year-to-date sales of $128.1 million increased $110.6 million, versus the prior year period, while operating income of $44.8 million increased $59.0 million versus the prior year period.

Year-to-date sales and operating income included $87.1 million and $36.0 million, respectively, from the Fund II Timberland Dispositions.

Year-to-date operating income also included a $3.7 million gain on investment in Timber Funds, which reflects the gain recognized on the sale of our investment in Timber Funds III and IV.

The prior year period included timber write-offs of $9.2 million resulting from two fires in Oregon.

Harvest volumes increased 91% to 380,000 tons versus 200,000 tons in the prior year period.

The prior year period reflected results for only a portion of the year following the closing of the Pope Resources acquisition on May 8, 2020, while the current year reflects activity through July 21 for Timber Funds III and IV.

Year-to-date Adjusted EBITDA of $2.8 million was $2.0 million above the prior year period.

Third quarter sales of $93.4 million increased $64.6 million versus the prior year period, while operating income of $60.6 million increased $51.2 million versus the prior year period.

Third quarter sales and operating income included $20.0 million and $14.5 million , respectively, from Large Dispositions .

Sales and operating income increased versus the prior year period due to a significant increase in weighted-average prices ($7,554 per acre versus $2,332 per acre in the prior year period) coupled with higher acres sold (12,219 acres sold versus 10,562 acres sold in the prior year period).

Improved Development sales of $27.8 million included $25.0 million from the Belfast Commerce Park development project south of Savannah, Georgia and $2.8 million from the Wildlight development project north of Jacksonville, Florida.

Sales in the Belfast Commerce Park consisted of a 471-acre parcel for $25.0 million ($53,000 per acre).

Sales in Wildlight consisted of 42 residential lots for $2.8 million (an average of $66,000 per lot or $354,000 per acre).

First quarter sales of $51.4 million decreased $6.2 million, or 11%, versus the prior year period.

Harvest volumes decreased 14% to 515,000 tons versus 599,000 tons in the prior year period , as production at the beginning of the year was deferred in response to port congestion and elevated log inventories in China.

Average delivered prices for export sawtimber increased 5% to $127.59 per ton versus $121.65 per ton in the prior year period.

The increase in export sawtimber prices versus the prior year period reflected the ability of log exporters to partially pass on higher costs to customers, as well as the newly implemented restriction on competing log imports into China from Russia.

However, favorable export pricing was more than offset by higher shipping and demurrage costs due to ongoing supply chain and port congestion issues.

Average delivered prices for domestic sawtimber decreased 6% to $75.99 per ton versus $80.95 per ton in the prior year period.

The decrease in

domestic sawtimber prices (in U.S.

dollar terms) was driven by the decline in the NZ$/US$ exchange rate (US$0.67 per NZ$1.00 versus US$0.72 per NZ$1.00).

Excluding the impact of foreign exchange rates, domestic sawtimber prices improved 1% versus the prior year period .

Operating income of $5.4 million decreased $8.6 million versus the prior year period due to lower net stumpage realizations ($6.2 million), lower volumes ($2.6 million), higher costs ($0.6 million) and unfavorable foreign exchange impacts ($1.5 million), partially offset by higher carbon credit sales ($1.5 million) and lower depletion rates ($0.8 million).

First quarter Adjusted EBITDA of $10.4 million was 51%, or $10.8 million, below the prior year period.

During 2021, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds, and we completed the liquidation of Fund II timberland assets.

As such, we had no sales, operating income or Adjusted EBITDA in the current quarter in the Timber Funds segment, as will be the case going forward.

In the prior year period the Timber Funds segment generated first quarter sales of $14.9 million on harvest volumes of 145,000 tons, resulting in operating income of $1.5 million .

Adjusting for the portion of the Timber Funds segment attributable to noncontrolling interests, pro forma sales and pro forma operating income were $3.0 million and $0.4 million , respectively.

First quarter Adjusted EBITDA was $1.0 million in the prior year period.

First quarter sales of $34.2 million increased $23.7 million versus the prior year period, while operating income of $10.2 million increased $8.5 million versus the prior year period.

Higher segment results in the current year period were driven by a significant increase in the number of acres sold (8,734 acres sold versus 2,395 acres sold in the prior year period), partially offset by a decrease in weighted-average prices ($3,815 per acre versus $4,183 per acre in the prior year period).

Improved Development sales of $5.0 million included $3.6 million from the Wildlight development project north of Jacksonville, Florida and $1.4 million from the Richmond Hill development project (which has now been branded as Heartwood) south of Savannah, Georgia.

Sales in Wildlight consisted of 52 residential lots, reflecting an average price of $70,000 per lot or $339,000 per acre.

Sales in Richmond Hill (Heartwood) included ten residential lots for $0.4 million (an average price of $44,000 per lot or $251,000 per acre) and a 4-acre commercial property for $0.9 million ($246,000 per acre).

This compares to prior year period Improved Development sales of $0.3 million.

Unimproved Development sales of $37.5 million consisted of a 359-acre sale in Kingston, Washington for $105,000 per acre.

This property was one of the Higher and Better Use assets acquired in our 2020 acquisition of Pope Resources.

There were no Unimproved Development sales in the prior year period.

There were no Unimproved Development sales in the first quarter or the prior year period.

Rural sales of $16.9 million consisted of 4,751 acres at an average price of $3,567 per acre.

This compares to prior year period sales of $9.8 million, which consisted of 2,394 acres at an average price of $4,079 per acre.

Timberland & Non-Strategic sales in the current quarter and the prior year quarter were negligible.

Large Dispositions in the quarter totaled $20.0 million and consisted of 8,088 acres in Washington at an average price of $2,479 per acre.

There were no Large Dispositions in the prior year period.

There were no Conservation Easement sales in the third quarter.

This compares to prior year period sales of $3.1 million.

Because these transactions involve the conveyance of certain land use rights rather than an outright sale of the land, they are not reflected in our average per-acre metrics for the segment.

Third quarter Adjusted EBITDA of $63.8 million was $41.5 million above the prior year period.

Year-to-date sales of $178.4 million decreased $19.0 million versus the prior year period, while operating income of $112.8 million increased $51.7 million versus the prior year period.

Year-to-date sales and operating income include $56.0 million and $44.8 million, respectively, from Large Dispositions, compared with year-to-date sales and operating income of $116.0 million and $28.7 million from a Large Disposition in the prior year period.

Sales decreased in the first nine months primarily due to lower volumes ( 31,162 acres sold versus 98,441 acres sold in the prior year period), partially offset by higher weighted-average prices ($5,711 per acre versus $1,978 per acre in the prior year period).

Year-to-date Adjusted EBITDA of $97.9 million increased $32.2 million versus the prior year period.

Third quarter sales of $25.6 million increased $3.4 million versus the prior year period primarily due to higher prices, partially offset by lower volumes.

Sales volumes decreased 30% to 177,000 tons versus 252,000 tons in the prior year period.

The Trading segment generated breakeven results versus an operating loss of $0.6 million in the prior year period.

Year-to-date sales of $76.8 million increased $11.3 million versus the prior year period primarily due to higher prices, partially offset by lower volumes.

Sales volumes decreased 23% to 561,000 tons versus 726,000 tons in the prior year period.

Year-to-date operating income of $0.6 million increased $1.1 million versus the prior year period.

Timberland & Non-Strategic sales of $11.4 million consisted of 3,966 acres at an average price of $2,874 per acre.

There were no Timberland & Non-Strategic sales in the prior year period.

First quarter Adjusted EBITDA of $24.7 million was $19.6 million above the prior year period.

First quarter sales of $13.4 million decreased $3.2 million versus the prior year period primarily due to lower volumes, partially offset by higher prices.

Sales volumes decreased 21% to 112,000 tons versus 141,000 tons in the prior year period, reflecting elevated log inventories in China and constrained export market demand.

The Trading segment generated operating income of $0.4 million versus $0.2 million in the prior year period.

CORPORATE AND OTHER EXPENSE / ELIMINATIONS

Third quarter corporate and other operating expenses of $6.7 million decreased $2.0 million versus the prior year period, primarily due to lower employee benefits costs ($0.6 million), lower legal costs ($0.5 million) and lower other overhead costs ($0.5 million), coupled with $0.4 million of costs related to the Pope Resources merger in the prior year period.

Year-to-date corporate and other operating expenses of $22.3 million decreased $15.0 million versus the prior year period, which included $16.4 million of costs related to the Pope Resources merger.

This positive variance was partially offset by higher overhead expenses.

First quarter corporate and other operating expenses of $7.6 million were flat versus the prior year period.

INTEREST EXPENSE

Third quarter and year-to-date interest expense of $11.3 million and $34.3 million, respectively, increased $0.8 million and $5.8 million versus the prior year period due to higher average outstanding debt and a $2.2 million loss from the second quarter termination of a cash flow hedge related to the voluntary repayment of $100 million of term loans.

INTEREST AND OTHER MISCELLANEOUS INCOME (EXPENSE), NET

Third quarter interest and other miscellaneous income (expense), net of $1.3 million versus ($0.1) million in the prior year period was primarily due to a $0.9 million gain on debt extinguishment related to the voluntary repayment of our $45 million credit facility with Northwest Farm Credit Services (NWFCS), which was assumed in connection with the Pope Resources acquisition.

Year-to-date interest and other miscellaneous income, net of $0.1 million versus $1.2 million in the prior year period, includes favorable mark to market adjustments on marketable equity securities and carbon options in the prior year, partially offset by costs related to debt extinguishments and modifications.

First quarter interest expense of $8.3 million decreased $1.7 million versus the prior year period due to lower average outstanding debt and lower borrowing costs.

INCOME TAX EXPENSE

Third quarter and year-to-date income tax expense of $2.8 million and $13.1 million, respectively, increased $2.1 million and $5.7 million versus the prior year period.

The New Zealand subsidiary is the primary driver of income tax expense.

In our Southern Timber segment, we now expect full-year harvest volumes of 5.7 to 5.8 million tons, as production has been constrained by regional weather conditions and trucking availability.

We expect that improved pricing will largely offset the decline in volumes.

In our Pacific Northwest Timber segment, we continue to expect full-year harvest volumes of 1.7 to 1.8 million tons.

We expect that weighted average log pricing in the region will be lower in the fourth quarter as compared to the third quarter, but will be fairly consistent with the pricing achieved during the first half of the year.

In our New Zealand Timber segment, we now expect full-year harvest volumes of 2.5 to 2.6 million tons, as we do not expect to fully recover production lost during the third quarter due to the COVID-19 shutdown.

We further expect lower export pricing during the fourth quarter as log inventories in China remain elevated.

In our Real Estate segment, the successful completion of a $37.5 million Unimproved Development sale during the third quarter is the primary driver for a favorable revision to our full-year expectations, as we were able to execute on this sale sooner than previously anticipated.

Following an extraordinarily strong third quarter, we expect real estate closings for the balance of the year to be relatively light.

First quarter income tax expense of $5.5 million increased $2.1 million versus the prior year period.

The New Zealand subsidiary is generally the primary driver of income tax expense, although the increase in the first quarter was attributable to the retirement of an installment note in the taxable REIT subsidiary.

In our Southern Timber segment, we anticipate lower quarterly harvest volumes for the remainder of the year as compared to the first quarter, as we experienced above-average stumpage removals to start the year.

Also, while we expect net stumpage realizations to remain above prior year levels, we anticipate modestly lower weighted-average prices for the remainder of the year as compared to the first quarter due to higher mill inventories, a higher proportion of thinning volume, and a less favorable geographic mix.

In our Pacific Northwest Timber segment, we expect lower quarterly harvest volumes for the balance of the year following strong removals in the first quarter.

We further expect that weighted-average log prices will remain near first quarter levels for the balance of the year, driven by continued strong sawtimber demand and improving pulpwood markets.

In our New Zealand Timber segment, we expect increased quarterly harvest volumes for the balance of the year.

While a significant level of uncertainty remains around the ongoing COVID-19 related disruptions in China, we expect that once demand stabilizes, constrained log supplies will drive export sawtimber prices higher.

We further expect that domestic sawtimber and pulpwood pricing will remain relatively flat for the remainder of the year.

In our Real Estate segment, we anticipate lower quarterly results for the remainder of the year following a strong first quarter.

LIQUIDITY AND CAPITAL RESOURCES

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Short-term borrowings have helped fund working capital needs while acquisitions of timberlands generally require funding from external sources or Large Dispositions.

AT-THE-MARKET (“ATM”) EQUITY OFFERING PROGRAM

On September 10, 2020, we entered into a distribution agreement with a group of sales agents through which we may sell common shares, from time to time, having an aggregate sales price of up to $300 million.

As of September 30, 2021, $97.0 million remains available for issuance under the program.

The following table outlines common stock issuances pursuant to our ATM program (dollars in millions):

Three Months Ended

September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Shares of common stock issued under the ATM program 1,390,968 — 4,698,241 —

Average price per share sold under the ATM program $37.26 — $36.11 —

Gross proceeds from common stock issued under the ATM program $51.8 — $169.6 —

SUMMARY OF LIQUIDITY AND FINANCING COMMITMENTS

September 30, December 31,

March 31, December 31,

(millions of dollars) 2022 2021

Cash and cash equivalents (excluding Timber Funds) $256.5 $358.7

Total debt (excluding Timber Funds) (a) 1,376.4 1,294.9

Total debt (a) 1,254.1 1,376.1

Noncontrolling interests in the operating partnership

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Net debt to enterprise value (b)(c) 14 % 14 %

(a) Total debt as of September 30, 2021 and December 31, 2020 reflects principal on long-term debt, net of fair value adjustments and gross of deferred financing costs and unamortized discounts.

(a) Total debt as of March 31, 2022 and December 31, 2021 reflects principal on long-term debt, gross of deferred financing costs and unamortized discounts.

(b) Net debt is calculated as total debt less cash and cash equivalents.

“OP” units) plus net debt based on Rayonier’s share price of $35.68 and $29.38 as of September 30, 2021 and December 31, 2020, respectively.

“OP” units) plus net debt based on Rayonier’s share price of $41.12 and $40.36 as of March 31, 2022 and December 31, 2021, respectively.

AT-THE-MARKET (“ATM”) EQUITY OFFERING PROGRAM

As of March 31, 2022, $1.0 million remains available for issuance under the program.

The following table outlines common share issuances pursuant to our ATM program (dollars in millions):

Three Months Ended

Shares of common stock issued under the ATM program 726,248 1,107,814

Average price per share sold under the ATM program $41.46 $33.31

Gross proceeds from common shares issued under the ATM program $30.1 $36.9

The following table summarizes our cash flows from operating, investing and financing activities for the three months ended March 31, 2022 and 2021:

(millions of dollars) 2022 2021

Cash provided by (used for):

Operating activities $49.7 $53.9

Investing activities (18.9) (44.4)

Financing activities (134.7) (13.8)

CASH PROVIDED BY OPERATING ACTIVITIES

Cash provided by operating activities decreased $4.2 million from the prior year period primarily due to changes in working capital, partially offset by higher operating results.

CASH USED FOR INVESTING ACTIVITIES

Cash used for investing activities decreased $25.5 million from the prior year period primarily due to lower timberland acquisitions ($27.1 million) and lower capital expenditures ($0.2 million), partially offset by other investing activities ($1.7 million) and higher real estate development investments ($0.1 million).

CASH USED FOR FINANCING ACTIVITIES

Cash used for financing activities increased $120.9 million from the prior year period primarily due to lower net borrowings ($122.9 million), lower net proceeds from the issuance of common shares under the ATM equity offering program ($1.6 million), higher dividends paid on common shares ($2.0 million), lower proceeds from the issuance of common shares under the Company’s incentive stock plan ($0.6 million) and higher share repurchases ($0.1 million), partially offset by lower distributions to consolidated affiliates ($6.0 million), and lower distributions to noncontrolling interests in the operating partnership ($0.3 million).

FUTURE USES OF CASH

We expect future uses of cash to include working capital requirements, principal and interest payments on long-term debt, lease payments, capital expenditures, real estate development investments, timberland acquisitions, dividends on Rayonier Inc.

common shares and distributions on Rayonier, L.P.

units, distributions to noncontrolling interests, repurchases of the Company’s common shares and to satisfy other commitments.

Significant long-term uses of cash include the following (in millions):

Future uses of cash (in millions) Total Payments Due by Period

2022 2023-2024 2025-2026 Thereafter

Long-term debt (a) $1,252.0 — — $252.0 $1,000.0

Current maturities of long-term debt (b) 2.1 2.1 — — —

Interest payments on long-term debt (b) 207.1 24.5 57.1 52.9 72.6

Operating leases — timberland (c) 188.6 7.3 15.0 14.4 151.9

Operating leases — PP&E, offices (c) 9.0 1.4 2.3 1.3 4.0

Commitments — development projects (d) 25.8 17.8 3.5 0.6 3.9

Commitments — derivatives (e) 37.6 8.5 18.9 6.9 3.3

Commitments — environmental remediation (f) 11.3 0.7 7.7 1.5 1.4

Commitments — other (g) 1.2 0.6 0.5 0.1 —

Total $1,734.7 $62.9 $105.0 $329.7 $1,237.1

(a) The book value of long-term debt, net of deferred financing costs and unamortized discounts, is currently recorded at $1,243.7 million on our Consolidated Balance Sheets, but upon maturity the liability will be $1,252.0 million.

See Note 6 - Debt for additional information.

(b) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of March 31, 2022.

(d) Commitments — developmental projects primarily consists of payments expected to be made on our Wildlight and Heartwood projects.

(e) Commitments — derivatives represent payments expected to be made on derivative financial instruments (interest rate swaps and forward-starting interest rate swaps).

See Note 7 — Derivative Financial Instruments and Hedging Activities for additional information.

(f) Commitments — environmental remediation represents our estimate of potential liability associated with environmental contamination and Natural Resource Damages in Port Gamble, Washington.

See Note 11 - Environmental and Natural Resource Damage Liabilities for additional information.

(g) Commitments — other includes other purchase obligations.

We expect to fund future uses of cash with a combination of existing cash balances, cash generated by operating activities, the remaining issuances available under the Company’s ATM Program, Large Dispositions and the use of our revolving credit facilities.

EXPECTED 2022 EXPENDITURES

Capital expenditures in 2022 are expected to be between $81 million and $84 million, excluding any strategic timberland acquisitions we may make.

Capital expenditures are expected to primarily consist of seedling planting, fertilization and other silvicultural activities, property taxes, lease payments, allocated overhead and other capitalized costs.

Aside from capital expenditures, we may also acquire timberland as we actively evaluate acquisition opportunities.

We anticipate real estate development investments in 2022 to be between $23 million and $25 million, net of reimbursements from community development bonds.

Expected real estate development investments are primarily related to Wildlight, our mixed-use community development project located north of Jacksonville, Florida;

Heartwood, our mixed-use development project located in Richmond Hill just south of Savannah, Georgia;

development properties in the town of Port Gamble, Washington;

and development projects in Gig Harbor, Kingston and Bremerton, Washington.

Our 2022 dividend payments on Rayonier Inc.

common shares and distributions to Rayonier, L.P.

unitholders are expected to be approximately $158 million and $3.6 million, respectively, assuming no change in the quarterly

dividend rate of $0.27 per share or partnership unit, or material changes in the number of shares or partnership units outstanding.

Future share repurchases, if any, will depend on the Company’s liquidity and cash flow, as well as general market conditions and other considerations including capital allocation priorities.

We have no mandatory pension contribution requirements in the current year.

First quarter cash tax payments were elevated due to the required timing of tax payments for our New Zealand subsidiary following the full utilization of its NOLs.

Full-year 2022 cash tax payments are expected to be approximatel y $17.0 million, primarily related to the New Zealand subsidiary.

OFF-BALANCE SHEET ARRANGEMENTS

We utilize off-balance sheet arrangements to provide credit support for certain suppliers and vendors in case of their default on critical obligations, and collateral for outstanding claims under our previous workers’ compensation self-insurance programs.

These arrangements consist of standby letters of credit and surety bonds.

As part of our ongoing operations, we also periodically issue guarantees to third parties.

Off-balance sheet arrangements are not considered a source of liquidity or capital resources and do not expose us to material risks or material unfavorable financial impacts.

See Note 12 — Guarantees for details on the letters of credit and surety bonds as of March 31, 2022.

SUMMARY OF GUARANTOR FINANCIAL INFORMATION

In March 2012, Rayonier Inc.

issued $325 million of 3.75% Senior Notes due 2022 (the “Senior Notes due 2022”).

On May 7, 2020, Rayonier Inc.

contributed its 100% ownership interest in Rayonier Operating Company LLC (the “Contribution”) to Rayonier, L.P.

As a result of the Contribution, Rayonier, L.P.

expressly assumed all the obligations of Rayonier Inc.

with respect to the outstanding Senior Notes due 20222 and Rayonier Inc.

agreed to irrevocably, fully and unconditionally guarantee jointly and severally, the obligations of Rayonier, L.P.

under the Indenture, including the Senior Notes due 2022.

Rayonier L.P.

is the current issuer of the Senior Notes due 2022.

In May 2021, Rayonier, L.P.

issued $450 million of 2.75% Senior Notes due 2031 (the “Senior Notes due 2031”).

Rayonier TRS Holdings Inc., together with Rayonier Inc.

and Rayonier Operating Company LLC agreed to irrevocably, fully and unconditionally guarantee jointly and severally, the obligations of Rayonier, L.P.

Rayonier TRS Holdings Inc., and Rayonier Inc.

agreed to irrevocably, fully and unconditionally guarantee jointly and severally, the obligations of Rayonier, L.P.

in regards to the Senior Notes due 2031.

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The summarized balance sheet information for the consolidated obligor group of debt issued by Rayonier, L.P.

for the nine months ended September 30, 2021 and year ended December 31, 2020 are provided in the table below:

(in millions) September 30, 2021 December 31, 2020

for the three months ended March 31, 2022 and year ended December 31, 2021 are provided in the table below:

(in millions) March 31, 2022 December 31, 2021

Current assets $257.6 $335.8

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The summarized results of operations information for the consolidated obligor group of debt issued by Rayonier, L.P.

for the nine months ended September 30, 2021 and year ended December 31, 2020 are provided in the table below:

(in millions) September 30, 2021 December 31, 2020

for the three months ended March 31, 2022 and year ended December 31, 2021 are provided in the table below:

(in millions) March 31, 2022 December 31, 2021

Cost and expenses ($6.5) ($27.5)

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Revenue from non-guarantors 222.0 1,109.4

The following table summarizes our cash flows from operating, investing and financing activities for the nine months ended September 30, 2021 and 2020:

(millions of dollars) 2021 2020

Cash provided by (used for):

Operating activities $277.4 $138.0

Investing activities 69.3 (184.8)

Financing activities 47.7 55.7

CASH PROVIDED BY OPERATING ACTIVITIES

Cash provided by operating activities increased $139.5 million primarily due to higher operating results.

CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES

Cash provided by investing activities of $69.3 million compares to cash used for investing activities of $184.8 million in the prior year period.

This variance is primarily due to net cash consideration transferred in our merger with Pope Resources in the prior year period ($231.1 million), net proceeds from Fund II Timberland Dispositions ($85.2 million) and net proceeds from the sale of Timber Funds III and IV ($31.1 million) in the current year period and other investing activities ($1.8 million), partially offset by lower proceeds from Large Dispositions ($61.0 million), higher timberland acquisitions ($27.5 million), higher real estate development investments ($3.7 million) and higher capital expenditures ($2.9 million).

CASH PROVIDED BY FINANCING ACTIVITIES

Cash provided by financing activities decreased $8.0 million from the prior year period primarily due to lower net borrowings ($161.6 million), higher distributions to consolidated affiliates ($11.3 million), make-whole fees on the prepayment of NWFCS debt ($6.2 million), higher dividends paid on common stock ($5.1 million), higher debt issuance costs ($2.4 million) and higher distributions to noncontrolling interests in the Operating Partnership ($1.0 million), partially offset by net proceeds from the issuance of common shares under the ATM equity offering program ($167.0 million), noncontrolling interests in consolidated affiliates redemption of shares in the prior year period ($5.1 million), higher proceeds from the issuance of common shares under the Company’s incentive stock plan ($4.4 million) and lower share repurchases ($3.1 million).

EXPECTED 2021 EXPENDITURES

Capital expenditures in 2021 are expected to be between $72 million and $75 million, excluding capital expenditures attributable to the Timber Funds and any strategic timberland acquisitions we may make.

Aside from capital expenditures, we may also acquire timberland as we actively evaluate acquisition opportunities.

We anticipate real estate development investments in 2021 to be between $13 million and $15 million, net of reimbursements from community development bonds.

Expected real estate development investments are primarily related to Wildlight, our mixed-use community development project located north of Jacksonville, Florida;

Richmond Hill, our mixed-use development project located south of Savannah, Georgia;

development properties in the town of Port Gamble, Washington;

and development projects in Gig Harbor, Kingston and Bremerton, Washington.

Our 2021 dividend payments on Rayonier Inc.

common shares and distributions to Rayonier, L.P.

unitholders are expected to be approximately $153.0 million and $4.4 million, respectively, assuming no change in the quarterly dividend rate of $0.27 per share or partnership unit, or material changes in the number of shares or partnership units outstanding.

Future share repurchases, if any, will depend on the Company’s liquidity and cash flow, as well as general market conditions and other considerations including capital allocation priorities.

We have no mandatory pension contribution requirements in the current year.

Cash tax payments in 2021 are expected to be approximatel y $8.0 million, primarily related to the New Zealand subsidiary.

PERFORMANCE AND LIQUIDITY INDICATORS

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Management uses CAD as a liquidity measure.

CAD is a non-GAAP measure of cash generated during a period that is available for common stock dividends, distributions to Operating Partnership unitholders, distributions to noncontrolling interests, repurchase of the Company’s common shares, debt reduction, timberland acquisitions and real estate development investments.

CAD is a non-GAAP measure of cash generated during a period that is available for common share dividends, distributions to operating partnership unitholders, distributions to noncontrolling interests, repurchase of the Company’s common shares, debt reduction, timberland acquisitions and real estate development investments.

CAD is defined as cash provided by operating activities adjusted for capital spending (excluding timberland acquisitions and real estate development investments), CAD attributable to noncontrolling interests in Timber Funds, working capital and other balance sheet changes.

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Adjusted EBITDA is a non-GAAP measure that management uses to make strategic decisions about the business and that investors can use to evaluate the operational performance of the assets under management.

It removes the impact of specific items that management believes do not directly reflect the core business operations on an ongoing basis attributable to Rayonier.

We define Adjusted EBITDA as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, operating income (loss) attributable to noncontrolling interests in Timber Funds, costs related to the merger with Pope Resources, timber write-offs resulting from casualty events, the gain on investment in Timber Funds, Fund II Timberland Dispositions and Large Dispositions.

We reconcile Adjusted EBITDA to Net Income for the consolidated Company and to Operating Income (Loss) for the segments, as those are the most comparable GAAP measures for each.

It excludes specific items that management believes are not indicative of the Company’s ongoing operating results.

We reconcile Adjusted EBITDA to Net Income for the consolidated Company and to Operating Income for the segments, as those are the most comparable GAAP measures for each.

The following table provides a reconciliation of Net Income to Adjusted EBITDA for the respective periods (in millions of dollars):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net Income to Adjusted EBITDA Reconciliation

Net Income (Loss) $110.5 ($9.5) $189.0 $17.4

Operating (income) loss attributable to NCI in Timber Funds (30.5) 10.3 (33.3) 12.3

Net Income $31.0 $15.0

Operating income attributable to NCI in Timber Funds — (1.1)

Interest, net attributable to NCI in Timber Funds — 0.1

Income tax expense attributable to NCI in Timber Funds — 0.1 — 0.2

Net Income (Excluding NCI in Timber Funds) 31.0 14.0

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Non-cash cost of land and improved development 5.4 1.8

Timber write-offs resulting from casualty events attributable to Rayonier (a) — 7.9 — 7.9

Non-operating (income) expense (1.2) 0.2 — (1.0)

Costs related to the merger with Pope Resources (b) — 0.4 — 16.4

Gain on investment in Timber Funds (c) (3.7) — (3.7) —

Fund II Timberland Dispositions attributable to Rayonier (d) (7.2) — (7.2) —

Large Dispositions (e) (14.5) — (44.8) (28.7)

Non-operating expense 0.6 —

Adjusted EBITDA $98.1 $69.5

(a) Timber write-offs resulting from casualty events include the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events that cannot be salvaged.

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

(c) Gain on investment in Timber Funds represents the gain recognized on the sale of rights to manage two timber funds (Funds III and IV) previously managed by the Company’s Olympic Resource Management (ORM) subsidiary, as well as its co-investment stake in both funds.

(d) Fund II Timberland Dispositions represents the disposition of Timber Fund II timberland assets, which we manage and own a co-investment stake in.

Proceeds from Fund II Timberland Dispositions will ultimately be distributed to owners of ORM Timber Fund II and not reinvested.

(e) 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.

As of September 30, 2021, we have completed two dispositions of approximately 17,000 acres in total.

In June 2021, we completed a disposition of approximately 9,000 acres in Washington for a sales price and gain of approximately $36.0 million and $30.3 million, respectively.

In July 2021, we completed a second disposition of approximately 8,000 acres in Washington, for a sales price and gain of $20.0 million and $14.5 million, respectively.

In March 2020, we completed a disposition of approximately 67,000 acres located in Mississippi for a sales price and gain of approximate ly $116.0 million and $28.7 million, respectively.

The following tables provide a reconciliation of Operating Income (Loss) by segment to Adjusted EBITDA by segment for the respective periods (in millions of dollars):

The following tables provide a reconciliation of Operating Income by segment to Adjusted EBITDA by segment for the respective periods (in millions of dollars):

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

September 30, 2021

Operating income (loss) $12.8 $2.1 $13.3 $41.3 $60.6 — ($6.7) $123.3

Gain on investment in Timber Funds (a) — — — (3.7) — — — (3.7)

Fund II Timberland Dispositions attributable to Rayonier (b) — — — (7.2) — — — (7.2)

Operating income attributable to NCI in Timber Funds — — — (30.5) — — — (30.5)

Depreciation, depletion and amortization 11.6 10.5 6.6 0.7 1.8 — 0.3 31.5

Non-cash cost of land and improved development — — — — 15.8 — — 15.8

Large Dispositions (c) — — — — (14.5) — — (14.5)

Adjusted EBITDA $24.4 $12.5 $19.9 $0.5 $63.8 — ($6.4) $114.6

September 30, 2020

Operating income (loss) $5.1 ($1.8) $10.7 ($12.4) $9.5 ($0.6) ($8.7) $1.8

Operating loss attributable to NCI in Timber Funds — — — 10.3 — — — 10.3

Timber write-offs resulting from casualty events attributable to Rayonier (d) 6.0 — — 1.8 — — — 7.9

March 31, 2022

Operating income $30.3 $6.6 $5.4 — $10.2 $0.4 ($7.6) $45.3

Depreciation, depletion and amortization 18.1 14.9 5.0 — 9.1 — 0.3 47.4

Non-cash cost of land and improved development — — — — 5.4 — — 5.4

Costs related to the merger with Pope Resources (e) — — — — — — 0.4 0.4

Adjusted EBITDA $48.4 $21.5 $10.4 — $24.7 $0.4 ($7.2) $98.1

(a) Gain on investment in Timber Funds represents the gain recognized on the sale of rights to manage two timber funds (Funds III and IV) previously managed by the Company’s Olympic Resource Management (ORM) subsidiary, as well as its co-investment stake in both funds.

(b) Fund II Timberland Dispositions attributable to Rayonier reflects the proportionate share of operating income attributable to Rayonier related to the disposition of timberland assets in Timber Fund II.

(c) 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.

In July 2021, we completed the disposition of approximately 8,000 acres in Washington for a sales price and gain of $20.0 million and $14.5 million, respectively.

(d) Timber write-offs resulting from casualty events include the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events that cannot be salvaged.

(e) Costs related to the merger with Pope Resources include legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources.

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

September 30, 2021

Operating income (loss) $47.1 $5.3 $48.0 $44.8 $112.8 $0.6 ($22.3) $236.2

Gain on investment in Timber Funds (a) — — — (3.7) — — — (3.7)

Fund II Timberland Dispositions attributable to Rayonier (b) — — — (7.2) — — — (7.2)

March 31, 2021

Operating income $17.3 $1.3 $14.0 $1.5 $1.7 $0.2 ($7.6) $28.5

Operating income attributable to NCI in Timber Funds — — — (1.1) — — — (1.1)

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Non-cash cost of land and improved development — — — — 1.8 — — 1.8

Large Dispositions (c) — — — — (44.8) — — (44.8)

Adjusted EBITDA $31.7 $17.6 $21.2 $1.0 $5.1 $0.2 ($7.3) $69.5

September 30, 2020

Operating income (loss) $31.4 ($9.5) $21.1 ($14.3) $61.1 ($0.5) ($37.3) $52.0

Operating loss attributable to NCI in Timber Funds — — — 12.3 — — — 12.3

Timber write-offs resulting from casualty events attributable to Rayonier (d) 6.0 — — 1.8 — — — 7.9

Depreciation, depletion and amortization 48.4 32.2 17.1 1.0 12.6 — 1.0 112.2

Non-cash cost of land and improved development — — — — 20.7 — — 20.7

Costs related to merger with Pope Resources (e) — — — — — — 16.4 16.4

Large Dispositions (c) — — — — (28.7) — — (28.7)

Adjusted EBITDA $85.8 $22.8 $38.2 $0.8 $65.7 ($0.5) ($19.9) $192.9

(c) 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.

As of September 30, 2021, we have completed two dispositions of approximately 17,000 acres in total.

In June 2021, we completed a disposition of approximately 9,000 acres in Washington for a sales price and gain of approximately $36.0 million and $30.3 million, respectively.

In July 2021, we completed a second disposition of approximately 8,000 acres in Washington, for a sales price and gain of $20.0 million and $14.5 million, respectively.

In March 2020, we completed a disposition of approximately 67,000 acres located in Mississippi for a sales price and gain of approximate ly $116.0 million and $28.7 million, respectively.

(d) Timber write-offs resulting from casualty events include the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events that cannot be salvaged.

(e) Costs related to the merger with Pope Resources include legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources.

The following table provides a reconciliation of Cash Provided by Operating Activities to Adjusted CAD (in millions of dollars):

Nine Months Ended September 30,

Three Months Ended March 31,

Cash provided by operating activities $49.7 $53.9

Capital expenditures (a) (15.6) (15.8)

Costs related to the merger with Pope Resources (b) — 16.4

CAD attributable to NCI in Timber Funds — (4.6)

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CAD after mandatory debt repayments $62.4 $47.3

Cash provided by (used for) investing activities $69.3 ($184.8)

Cash provided by financing activities $47.7 $55.7

(a) Capital expenditures exclude timberland acquisitions of $51.9 million and $24.4 million during the nine months ended September 30, 2021 and September 30, 2020, respectively.

The nine months ended September 30, 2020 also exclude the Pope Resources acquisition.

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

Cash used for investing activities ($18.9) ($44.4)

Cash used for financing activities ($134.7) ($13.8)

(a) Capital expenditures exclude timberland acquisitions of $2.8 million and $29.9 million during the three months ended March 31, 2022 and March 31, 2021, respectively.

The following table provides supplemental cash flow data (in millions):

Nine Months Ended September 30,

Purchase of timberlands (a) ($51.9) ($24.4)

Three Months Ended March 31,

Purchase of timberlands ($2.8) ($29.9)

Real Estate Development Investments (3.1) (3.0)

Distributions to noncontrolling interests in consolidated affiliates (2.7) (8.7)

(a) The nine months ended September 30, 2020 excludes timberlands acquired in the merger with Pope Resources.

LIQUIDITY FACILITIES

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See Note 6 — Debt for additional information.

OFF-BALANCE SHEET ARRANGEMENTS

These arrangements consist of standby letters of credit and surety bonds.

As part of our ongoing operations, we also periodically issue guarantees to third parties.

Off-balance sheet arrangements are not considered a source of liquidity or capital resources and do not expose us to material risks or material unfavorable financial impacts.

See Note 15 — Guarantees for details on the letters of credit and surety bonds as of September 30, 2021.

CONTRACTUAL FINANCIAL OBLIGATIONS

In addition to using cash flow from operations and proceeds from Large Dispositions, we finance our operations through the issuance of debt and by entering into leases.

These financial obligations are recorded in accordance with accounting rules applicable to the underlying transaction, with the result that some are recorded as liabilities on the Consolidated Balance Sheets, while others are required to be disclosed in the Notes to Consolidated Financial Statements and Management’s Discussion and Analysis.

The following table aggregates our contractual financial obligations as of September 30, 2021 and anticipated cash spending by period:

Contractual Financial Obligations (in millions) Total Payments Due by Period

Remaining 2021 2022-2023 2024-2025 Thereafter

Long-term debt, excluding Timber Funds (a) $1,176.4 — $125.0 $23.7 $1,027.7

Current maturities of long-term debt, excluding Timber Funds (b) 200.0 — 200.0 — —

Interest payments on long-term debt, excluding Timber Funds (c) 200.4 15.3 54.2 47.7 83.2

Operating leases — timberland (d) 184.2 4.2 15.4 14.3 150.3

Operating leases — PP&E, offices (d) 6.3 0.4 2.5 1.8 1.6

Commitments — development projects (e) 29.5 11.1 14.0 0.5 3.9

Commitments — environmental remediation (f) 10.9 0.2 4.7 3.7 2.3

Commitments — other (g) 53.2 3.3 26.7 14.9 8.3

Total contractual cash obligations $1,860.9 $34.5 $442.5 $106.6 $1,277.3

(a) The book value of long-term debt, excluding Timber Funds, net of deferred financing costs and unamortized discounts, is currently recorded at $1,168.0 million on our Consolidated Balance Sheets, but upon maturity the liability will be $1,176.4 million.

See Note 9 — Debt for additional information.

(b) The book value of current maturities of long-term debt, excluding Timber Funds, net of deferred financing costs is currently recorded at $199.9 million on our Consolidated Balance Sheets, but upon maturity the liability will be $200.0 million.

See Note 9 - Debt for additional information.

(c) Projected interest payments for variable rate debt were calculated based on outstanding principal amounts and interest rates as of September 30, 2021.

(d) Excludes anticipated renewal options.

(e) Commitments — developmental projects primarily consists of payments expected to be made on our Wildlight and Richmond Hill developmental projects.

(f) Commitments — environmental remediation represents our estimate of potential liability associated with environmental contamination at Port Gamble.

See Note 14 - Environmental Liabilities .

(g) Commitments — other includes payments expected to be made on financial instruments (foreign exchange contracts, interest rate swaps and forward-starting interest rate swaps) and other purchase obligations.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis