What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-05-06 · 366 added, 169 removed, 1005 unchanged (35% of the section changed)

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

SALES ( NOTE 3 )

3 unchanged sentences

Selling and general expenses ( 17,356 ) ( 14,693 ) ( 32,116 ) ( 28,725 )

Other operating (expense) income, net ( Note 15 )

Other operating income (expense), net ( Note 15 )

801 1,956 ( 182 ) 4,404

2 unchanged sentences

Interest expense ( 9,083 ) ( 13,000 ) ( 17,420 ) ( 23,027 )

Interest and other miscellaneous expense, net ( 468 ) ( 4 )

Interest and other miscellaneous income (expense), net 206 ( 1,144 ) ( 262 ) ( 1,148 )

INCOME BEFORE INCOME TAXES 26,591 70,300 63,104 88,754

6 unchanged sentences

24,104 57,206 53,422 68,054

OTHER COMPREHENSIVE INCOME

OTHER COMPREHENSIVE (LOSS) INCOME

Foreign currency translation adjustment, net of income tax effect of $ 0 , $ 0 , $ 0 and $ 0

3 unchanged sentences

Amortization of pension and postretirement plans, net of income tax expense of $ 0 , $ 0 , $ 0 and $ 0

Total other comprehensive income 47,073 47,007

COMPREHENSIVE INCOME 78,071 62,039

Comprehensive income attributable to noncontrolling interests in the operating partnership ( 1,686 ) ( 1,872 )

Comprehensive income attributable to noncontrolling interests in consolidated affiliates ( 2,408 ) ( 580 )

COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.

188 294 376 587

Total other comprehensive (loss) income ( 30,342 ) ( 8,486 ) 16,731 38,521

COMPREHENSIVE (LOSS) INCOME ( 5,055 ) 54,934 73,017 116,973

Comprehensive loss (income) attributable to noncontrolling interests in the operating partnership 29 ( 1,499 ) ( 1,657 ) ( 3,371 )

Comprehensive loss (income) attributable to noncontrolling interests in consolidated affiliates 3,767 ( 4,490 ) 1,358 ( 5,070 )

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO RAYONIER INC.

($ 1,259 ) $ 48,945 $ 72,718 $ 108,532

EARNINGS PER COMMON SHARE ( NOTE 5 )

8 unchanged sentences

(Dollars in thousands)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

CURRENT ASSETS

31 unchanged sentences

Current maturities of long-term debt, net ( Note 6 )

2,087 124,965

Accrued taxes 6,287 12,446

8 unchanged sentences

PENSION AND OTHER POSTRETIREMENT BENEFITS ( NOTE 16 )

10,201 10,478

LONG-TERM LEASE LIABILITY 93,748 93,416

42 unchanged sentences

Balance, March 31, 2022 146,107,688 $ 1,421,946 $ 389,077 $ 25,973 $ 44,643 $ 1,881,639

Net income — — 24,650 — 637 25,287

Net income attributable to noncontrolling interests in the operating partnership — — ( 546 ) — — ( 546 )

Dividends ($ 0.285 per share) (a)

— — ( 42,098 ) — — ( 42,098 )

Costs associated with the “at-the-market” (ATM) equity offering program — ( 63 ) — — — ( 63 )

Issuance of shares under incentive stock plans 304,887 1,983 — — — 1,983

Stock-based compensation — 4,412 — — — 4,412

Repurchase of common shares ( 91,820 ) ( 3,991 ) — — — ( 3,991 )

Adjustment of noncontrolling interests in the operating partnership — — 11,412 — — 11,412

Conversion of units into common shares 977 42 — — — 42

Amortization of pension and postretirement plan liabilities — — — 188 — 188

Foreign currency translation adjustment — — — ( 34,373 ) ( 1,912 ) ( 36,285 )

Cash flow hedges — — — 8,247 ( 2,492 ) 5,755

Allocation of other comprehensive loss to noncontrolling interests in the operating partnership — — — 575 — 575

Noncontrolling interests in consolidated affiliates redemption of shares — — — — ( 27,860 ) ( 27,860 )

Balance, June 30, 2022 146,321,732 $ 1,424,329 $ 382,495 $ 610 $ 13,016 $ 1,820,450

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

6 unchanged sentences

Earnings Accumulated

Comprehensive Income (Loss) Noncontrolling Interests in Consolidated Affiliates Shareholders’

Comprehensive Loss Noncontrolling Interests in Consolidated Affiliates Shareholders’

Shares Amount

18 unchanged sentences

Balance, March 31, 2021 138,970,890 $ 1,146,265 $ 407,716 ($ 25,146 ) $ 381,086 $ 1,909,921

Net income — — 58,959 — 4,461 63,420

Net income attributable to noncontrolling interests in the operating partnership — — ( 1,753 ) — — ( 1,753 )

Dividends ($ 0.27 per share) (a)

— — ( 37,981 ) — — ( 37,981 )

Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $ 927

2,199,459 79,994 — — — 79,994

Issuance of shares under incentive stock plans 185,544 3,325 — — — 3,325

Stock-based compensation — 2,852 — — — 2,852

Repurchase of common shares ( 42,425 ) ( 1,453 ) — — — ( 1,453 )

Measurement period adjustment of noncontrolling interests in consolidated affiliates — — — — 9,034 9,034

Adjustment of noncontrolling interests in the operating partnership — — ( 15,410 ) — — ( 15,410 )

Conversion of units into common shares 6,439 241 — — — 241

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

Foreign currency translation adjustment — — — 1,025 214 1,239

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

Allocation of other comprehensive income to noncontrolling interests in the operating partnership — — — 253 — 253

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

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

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

5 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES

6 unchanged sentences

Amortization of losses from pension and postretirement plans 376 587

Gain on sale of large disposition of timberlands — ( 30,324 )

Other ( 4,206 ) 7,233

9 unchanged sentences

Purchase of timberlands ( 3,237 ) ( 51,882 )

Net proceeds from large disposition of timberlands — 35,219

Other 5,112 5,998

8 unchanged sentences

Repurchase of common shares to pay withholding taxes on vested incentive stock awards ( 4,204 ) ( 1,608 )

Debt issuance costs — ( 4,812 )

Distributions to noncontrolling interests in consolidated affiliates ( 6,684 ) ( 15,212 )

CASH USED FOR FINANCING ACTIVITIES ( 134,670 ) ( 13,826 )

CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES ( 184,877 ) 111,953

EFFECT OF EXCHANGE RATE CHANGES ON CASH ( 2,246 ) 126

9 unchanged sentences

Capital assets purchased on account 4,882 4,155

(a) Interest paid is presented net of patronage paymen ts received of $ 5.5 million a n d $ 6.2 million for the three months ended March 31, 2022 and March 31, 2021, respectively.

Non-cash financing activity:

Noncontrolling interests in consolidated affiliates redemption of shares (b) 27,860 —

(a) Interest paid is presented net of patronage paymen ts receive d of $ 6.0 million a n d $ 6.8 million for the six months ended June 30, 2022 and June 30, 2021, respectively.

For additional information on patronage payments, see Note 10 — Debt in the 2021 Form 10-K.

(b) In the second quarter of 2022, the New Zealand subsidiary made a capital distribution in order to redeem certain equity interests, resulting in the recording of a loan payable by the New Zealand subsidiary in the amount of $ 27.9 million.

See Note 6 - De bt for further information.

See Notes to Consolidated Financial Statements.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

SALES ( NOTE 3 )

3 unchanged sentences

Selling and general expenses ( 17,356 ) ( 14,693 ) ( 32,116 ) ( 28,725 )

Other operating (expense) income, net ( Note 15 )

Other operating income (expense), net ( Note 15 )

801 1,956 ( 182 ) 4,404

2 unchanged sentences

Interest expense ( 9,083 ) ( 13,000 ) ( 17,420 ) ( 23,027 )

Interest and other miscellaneous expense, net ( 468 ) ( 4 )

Interest and other miscellaneous income (expense), net 206 ( 1,144 ) ( 262 ) ( 1,148 )

INCOME BEFORE INCOME TAXES 26,591 70,300 63,104 88,754

5 unchanged sentences

UNITHOLDERS 24,650 58,959 54,636 70,148

OTHER COMPREHENSIVE INCOME

OTHER COMPREHENSIVE (LOSS) INCOME

Foreign currency translation adjustment, net of income tax effect of $ 0 , $ 0 , $ 0 and $ 0

3 unchanged sentences

Amortization of pension and postretirement plans, net of income tax expense of $ 0 , $ 0 , $ 0 and $ 0

Total other comprehensive income 47,073 47,007

COMPREHENSIVE INCOME 78,071 62,039

Comprehensive income attributable to noncontrolling interests in consolidated affiliates ( 2,408 ) ( 580 )

COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER, L.P.

188 294 376 587

Total other comprehensive (loss) income ( 30,342 ) ( 8,486 ) 16,731 38,521

COMPREHENSIVE (LOSS) INCOME ( 5,055 ) 54,934 73,017 116,973

Comprehensive loss (income) attributable to noncontrolling interests in consolidated affiliates 3,767 ( 4,490 ) 1,358 ( 5,070 )

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

UNITHOLDERS ($ 1,288 ) $ 50,444 $ 74,375 $ 111,903

9 unchanged sentences

(Dollars in thousands)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

CURRENT ASSETS

31 unchanged sentences

Current maturities of long-term debt, net ( Note 6 )

2,087 124,965

Accrued taxes 6,287 12,446

8 unchanged sentences

PENSION AND OTHER POSTRETIREMENT BENEFITS ( NOTE 16 )

10,201 10,478

LONG-TERM LEASE LIABILITY 93,748 93,416

36 unchanged sentences

Balance, March 31, 2022 $ 18,068 $ 1,788,713 $ 30,215 $ 44,643 $ 1,881,639

Net income 246 24,404 — 637 25,287

Distributions on units ($ 0.285 per unit)

( 430 ) ( 42,612 ) — — ( 43,042 )

Costs associated with the “at-the-market” (ATM) equity offering program ( 1 ) ( 62 ) — — ( 63 )

Issuance of units under incentive stock plans 20 1,963 — — 1,983

Stock-based compensation 44 4,368 — — 4,412

Repurchase of units ( 40 ) ( 3,951 ) — — ( 3,991 )

Adjustment of Redeemable Operating Partnership Units 124 12,261 — — 12,385

Conversion of units into common shares — 42 — — 42

Amortization of pension and postretirement plan liabilities — — 188 — 188

Foreign currency translation adjustment — — ( 34,373 ) ( 1,912 ) ( 36,285 )

Cash flow hedges — — 8,247 ( 2,492 ) 5,755

Noncontrolling interests in consolidated affiliates redemption of shares — — — ( 27,860 ) ( 27,860 )

Balance, June 30, 2022 $ 18,031 $ 1,785,126 $ 4,277 $ 13,016 $ 1,820,450

Units Accumulated

Comprehensive

Income (Loss) Noncontrolling Interests in Consolidated Affiliates Total Capital

Loss Noncontrolling Interests in Consolidated Affiliates Total Capital

General Partners’ Capital Limited Partners’ Capital

3 unchanged sentences

( 387 ) ( 38,300 ) — — ( 38,687 )

Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $ 197

Issuance of units under the “at-the-market” equity offering, net of commissions and offering costs of $ 197

367 36,341 — — 36,708

10 unchanged sentences

Balance, March 31, 2021 $ 15,499 $ 1,534,411 ($ 21,075 ) $ 381,086 $ 1,909,921

Net income 590 58,369 — 4,461 63,420

Distributions on units ($ 0.27 per unit)

( 391 ) ( 38,744 ) — — ( 39,135 )

Issuance of units under the “at-the-market” equity offering, net of commissions and offering costs of $ 927

800 79,194 — — 79,994

Issuance of units under incentive stock plans 33 3,292 — — 3,325

Stock-based compensation 29 2,823 — — 2,852

Repurchase of units ( 15 ) ( 1,438 ) — — ( 1,453 )

Adjustment of Redeemable Operating Partnership Units ( 158 ) ( 15,598 ) — — ( 15,756 )

Conversion of units into common shares 2 239 — — 241

Measurement period adjustment of noncontrolling interests in consolidated affiliates — — — 9,034 9,034

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

Foreign currency translation adjustment — — 1,025 214 1,239

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

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

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

See Notes to Consolidated Financial Statements.

3 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES

6 unchanged sentences

Amortization of losses from pension and postretirement plans 376 587

Gain on sale of large disposition of timberlands — ( 30,324 )

Other ( 4,206 ) 7,233

9 unchanged sentences

Purchase of timberlands ( 3,237 ) ( 51,882 )

Net proceeds from large disposition of timberlands — 35,219

Other 5,112 5,998

7 unchanged sentences

Repurchase of units to pay withholding taxes on vested incentive stock awards ( 4,204 ) ( 1,608 )

Debt issuance costs — ( 4,812 )

Distributions to noncontrolling interests in consolidated affiliates ( 6,684 ) ( 15,212 )

CASH USED FOR FINANCING ACTIVITIES ( 134,670 ) ( 13,826 )

CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES ( 184,877 ) 111,953

EFFECT OF EXCHANGE RATE CHANGES ON CASH ( 2,246 ) 126

9 unchanged sentences

Capital assets purchased on account 4,882 4,155

(a) Interest paid is presented net of patronage paymen ts received of $ 5.5 million an d $ 6.2 million for the three months ended March 31, 2022 and March 31, 2021, respectively.

Non-cash financing activity:

Noncontrolling interests in consolidated affiliates redemption of shares (b) 27,860 —

(a) Interest paid is presented net of patronage paymen ts received of $ 6.0 million an d $ 6.8 million for the six months ended June 30, 2022 and June 30, 2021, respectively.

For additional information on patronage payments, see Note 10 — Debt in the 2021 Form 10-K.

See Note 6 - Debt for further information.

See Notes to Consolidated Financial Statements.

14 unchanged sentences

These statements and notes should be read in conjunction with the financial statements and supplementary data included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC (the “2021 Form 10-K”).

As of March 31, 2022, the Company owned a 97.8 % interest in the Operating Partnership, with the remaining 2.2 % interest owned by limited partners of the Operating Partnership.

As of June 30, 2022, the Company owned a 97.8 % interest in the Operating Partnership, with the remaining 2.2 % interest owned by limited partners of the Operating Partnership.

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

19 unchanged sentences

SUBSEQUENT EVENTS

On April 1, 2022, the New Zealand subsidiary made a capital distribution to its partners on a pro rata basis in order to redeem certain equity interests, which was reinvested by the partners in shareholder loans to the New Zealand subsidiary.

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

We have evaluated events occurring from June 30, 2022 to the date of issuance of these Consolidated Financial Statements for potential recognition or disclosure in the consolidated financial statements.

No events were identified that warranted recognition or disclosure.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

capital distribution to the minority shareholder and its reinvestment in the shareholder loan resulted in the recording of a loan payable by the New Zealand subsidiary in the amount of $ 27.9 million due in 2027 at a fixed rate of 6.48 %.

SEGMENT AND GEOGRAPHICAL INFORMATION

5 unchanged sentences

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

The following tables summarize the segment information for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

The following tables summarize the segment information for the three and six months ended June 30, 2022 and 2021:

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

SALES 2022 2021 2022 2021

3 unchanged sentences

Timber Funds (a) — 18,646 — 33,585

Real Estate 34,195 10,504

Real Estate (b) 34,402 74,531 68,597 85,035

Trading 27,683 34,546 41,145 51,212

Intersegment Eliminations (b) ( 48 ) ( 1,439 )

Intersegment Eliminations (c) ( 49 ) ( 1,468 ) ( 98 ) ( 2,907 )

Total $ 246,346 $ 291,431 $ 468,387 $ 482,878

(a) The three months ended March 31, 2021 includes $ 11.9 million of sales attributable to noncontrolling interests in Timber Funds.

(b) Primarily consists of the elimination of timberland investment management fees paid to us by the timber funds, which were initially recognized as sales and cost of sales within the Timber Funds segment, as well as log marketing fees paid to our Trading segment from our Southern Timber and Pacific Northwest Timber segments for marketing log export sales.

Three Months Ended March 31,

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

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

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.

(c) Primarily consists of the elimination of timberland investment management fees paid to us by the timber funds, which were initially recognized as sales and cost of sales within the Timber Funds segment, as well as log marketing fees paid to our Trading segment from our Southern Timber and Pacific Northwest Timber segments for marketing log export sales.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

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

OPERATING INCOME 2022 2021 2022 2021

3 unchanged sentences

Timber Funds (a) — 1,991 — 3,492

Real Estate 10,181 1,687

Real Estate (b) 11,023 50,511 21,204 52,199

Trading ( 444 ) 418 ( 93 ) 662

3 unchanged sentences

Total Income before Income Taxes $ 26,591 $ 70,300 $ 63,104 $ 88,754

(a) The three months ended March 31, 2021 includes $ 1.1 million of operating income attributable to noncontrolling interests in Timber Funds.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

Three Months Ended March 31,

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

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

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

DEPRECIATION, DEPLETION AND AMORTIZATION 2022 2021 2022 2021

3 unchanged sentences

Timber Funds (a) — 6,121 — 11,621

Real Estate 9,145 1,557

Real Estate (b) 2,564 8,535 11,709 10,092

Corporate and Other 313 313 621 576

Total $ 35,751 $ 47,528 $ 83,169 $ 92,741

(a) The three months ended March 31, 2021 includes $ 4.9 million of depreciation, depletion and amortization attributable to noncontrolling interests in Timber Funds.

Three Months Ended March 31,

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

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

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

NON-CASH COST OF LAND AND IMPROVED DEVELOPMENT 2022 2021 2022 2021

Real Estate $ 5,359 $ 1,813

Real Estate (a) $ 11,780 $ 5,254 $ 17,139 $ 7,067

Total $ 11,780 $ 5,254 $ 17,139 $ 7,067

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

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

PERFORMANCE OBLIGATIONS

1 unchanged sentence

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

Unsatisfied performance obligations as of March 31, 2022 are primarily due to advances on stumpage contracts, unearned license revenue and post-closing obligations on real estate sales.

Unsatisfied performance obligations as of June 30, 2022 are primarily due to advances on stumpage contracts, unearned license revenue and post-closing obligations on real estate sales.

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

5 unchanged sentences

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

The following table summarizes revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the contract liability balance at the beginning of each year:

Three Months Ended March 31,

The following table summarizes revenue recognized during the three and six months ended June 30, 2022 and 2021 that was included in the contract liability balance at the beginning of each year:

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

2022 2021 2022 2021

Revenue recognized from contract liability balance at the beginning of the year (a) $ 4,968 $ 4,049 $ 12,501 $ 9,969

6 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The following tables present our revenue from contracts with customers disaggregated by product type for the three months ended March 31, 2022 and 2021:

The following tables present our revenue from contracts with customers disaggregated by product type for the three and six months ended June 30, 2022 and 2021:

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

March 31, 2022

June 30, 2022

Pulpwood $ 30,770 $ 3,572 $ 10,851 — — $ 2,999 — $ 48,192

8 unchanged sentences

Rural — — — — 23,420 — — 23,420

Timberland & Non-Strategic — — — — 11,400 — — 11,400

Deferred Revenue/Other (a) — — — — ( 907 ) — — ( 907 )

5 unchanged sentences

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

March 31, 2021

June 30, 2021

Pulpwood $ 23,728 $ 2,078 $ 12,266 $ 395 — $ 3,676 — $ 42,143

8 unchanged sentences

Rural — — — — 20,297 — — 20,297

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

Deferred Revenue/Other (a) — — — — ( 5,242 ) — — ( 5,242 )

Large Dispositions — — — — 36,000 — — 36,000

Total Real Estate Sales — — — — 74,250 — — 74,250

3 unchanged sentences

Total Revenue $ 49,294 $ 35,323 $ 80,559 $ 18,646 $ 74,531 $ 34,546 ($ 1,468 ) $ 291,431

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

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

June 30, 2022

Pulpwood $ 68,381 $ 6,491 $ 18,446 — — $ 4,523 — $ 97,841

Sawtimber 49,260 76,524 106,347 — — 35,857 — 267,988

Hardwood 11,555 — — — — — — 11,555

Total Timber Sales 129,196 83,015 124,793 — — 40,380 — 377,384

License Revenue, Primarily From Hunting 11,182 245 148 — — — — 11,575

Other Non-Timber/Carbon Revenue 2,657 2,177 5,330 — — — — 10,164

Agency Fee Income — — — — — 667 — 667

Total Non-Timber Sales 13,839 2,422 5,478 — — 667 — 22,406

Improved Development — — — — 16,532 — — 16,532

Rural — — — — 40,369 — — 40,369

Timberland & Non-Strategic — — — — 11,400 — — 11,400

Deferred Revenue/Other (a) — — — — ( 271 ) — — ( 271 )

Total Real Estate Sales — — — — 68,030 — — 68,030

Revenue from Contracts with Customers 143,035 85,437 130,271 — 68,030 41,047 — 467,820

Lease Revenue — — — — 567 — — 567

Intersegment — — — — — 98 ( 98 ) —

Total Revenue $ 143,035 $ 85,437 $ 130,271 — $ 68,597 $ 41,145 ($ 98 ) $ 468,387

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

June 30, 2021

Pulpwood $ 45,584 $ 4,573 $ 21,809 $ 655 — $ 5,510 — $ 78,131

Sawtimber 40,655 69,513 115,777 29,727 — 44,865 — 300,537

Hardwood 1,673 — — — — — — 1,673

Total Timber Sales 87,912 74,086 137,586 30,382 — 50,375 — 380,341

License Revenue, Primarily from Hunting 8,913 207 139 29 — — — 9,288

Other Non-Timber/Carbon Revenue 4,146 2,551 413 413 — — — 7,523

Agency Fee Income — — — — — 691 — 691

Total Non-Timber Sales 13,059 2,758 552 442 — 691 — 17,502

Improved Development — — — — 19,592 — — 19,592

Rural — — — — 30,062 — — 30,062

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

Deferred Revenue/Other (a) — — — — ( 4,987 ) — — ( 4,987 )

Large Dispositions — — — — 36,000 — — 36,000

Total Real Estate Sales — — — — 84,522 — — 84,522

Revenue from Contracts with Customers 100,971 76,844 138,138 30,824 84,522 51,066 — 482,365

Lease Revenue — — — — 513 — — 513

Intersegment — — — 2,761 — 146 ( 2,907 ) —

Total Revenue $ 100,971 $ 76,844 $ 138,138 $ 33,585 $ 85,035 $ 51,212 ($ 2,907 ) $ 482,878

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

5 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The following tables present our timber sales disaggregated by contract type for the three months ended March 31, 2022 and 2021:

The following tables present our timber sales disaggregated by contract type for the three and six months ended June 30, 2022 and 2021:

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

March 31, 2022

June 30, 2022

Stumpage Pay-as-Cut $ 21,326 — — — — $ 21,326

5 unchanged sentences

Total Timber Sales $ 58,220 $ 37,882 $ 75,098 — $ 27,318 $ 198,518

March 31, 2021

June 30, 2021

Stumpage Pay-as-Cut $ 15,183 — — $ 197 — $ 15,380

Stumpage Lump Sum 4,645 932 — — — 5,577

Total Stumpage 19,828 932 — 197 — 20,957

Delivered Wood (Domestic) 19,955 32,901 19,250 16,617 1,236 89,959

Delivered Wood (Export) 3,905 — 61,002 — 32,915 97,822

Total Delivered 23,860 32,901 80,252 16,617 34,151 187,781

Total Timber Sales $ 43,688 $ 33,833 $ 80,252 $ 16,814 $ 34,151 $ 208,738

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

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

June 30, 2022

Stumpage Pay-as-Cut $ 57,532 — — — — $ 57,532

Stumpage Lump Sum 90 5,473 — — — 5,563

Total Stumpage 57,622 5,473 — — — 63,095

Delivered Wood (Domestic) 65,376 73,402 31,532 — 1,729 172,039

Delivered Wood (Export) 6,198 4,140 93,261 — 38,651 142,250

Total Delivered 71,574 77,542 124,793 — 40,380 314,289

Total Timber Sales $ 129,196 $ 83,015 $ 124,793 — $ 40,380 $ 377,384

June 30, 2021

Stumpage Pay-as-Cut $ 36,440 — — $ 197 — $ 36,637

Stumpage Lump Sum

4,647 7,063 — — — 11,710

24 unchanged sentences

The following table sets forth the Company’s noncontrolling interests in the operating partnership:

Three Months Ended

Three Months Ended June 30, Six Months Ended

2022 2021 2022 2021

Beginning noncontrolling interests in the operating partnership

1 unchanged sentence

Adjustment of noncontrolling interests in the operating partnership

( 11,412 ) 15,410 ( 8,767 ) 27,277

Conversions of Redeemable Operating Partnership Units to Common Shares

1 unchanged sentence

Net Income attributable to noncontrolling interests in the operating partnership

Other Comprehensive Income attributable to noncontrolling interests in the operating partnership

546 1,753 1,214 2,094

Other Comprehensive (Loss) Income attributable to noncontrolling interests in the operating partnership

( 575 ) ( 253 ) ( 474 ) 1,278

Distributions to noncontrolling interests in the operating partnership

10 unchanged sentences

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

Three Months Ended March 31,

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

2022 2021 2022 2021

Earnings per common share - basic

19 unchanged sentences

$ 0.16 $ 0.41 $ 0.36 $ 0.49

Three Months Ended March 31,

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

2022 2021 2022 2021

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

8 unchanged sentences

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

Three Months Ended March 31,

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

2022 2021 2022 2021

Earnings per unit - basic

16 unchanged sentences

$ 0.16 $ 0.41 $ 0.36 $ 0.49

Three Months Ended March 31,

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

2022 2021 2022 2021

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

7 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

Our debt consisted of the following at March 31, 2022:

March 31, 2022

Term Credit Agreement borrowings due 2028 at a variable interest rate of 1.9 % at March 31, 2022 (a)

Our debt consisted of the following at June 30, 2022:

June 30, 2022

Term Credit Agreement borrowings due 2028 at a variable interest rate of 2.7 % at June 30, 2022 (a)

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

Incremental Term Loan Agreement borrowings due 2026 at a variable interest rate of 2.7 % at

March 31, 2022 (b)

2021 Incremental Term Loan Facility Borrowings due 2029 at a variable interest rate of 1.8 % at March 31, 2022 (c)

June 30, 2022 (b)

2021 Incremental Term Loan Facility Borrowings due 2029 at a variable interest rate of 2.6 % at June 30, 2022 (c)

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

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

New Zealand Working Capital Facility due 2022 at a variable interest rate of 2.1 % at March 31, 2022

New Zealand subsidiary noncontrolling interests shareholder loan due 2027 at a fixed interest rate of 6.48 % (d)

New Zealand Working Capital Facility due 2023 at a variable interest rate of 3.1 % at June 30, 2022

Total principal debt 1,272,125

3 unchanged sentences

Total long-term debt $ 1,263,394

(a) As of March 31, 2022, the periodic interest rate on the term credit agreement (the “Term Credit Agreement”) was LIBOR plus 1.600 %.

(a) As of June 30, 2022, the periodic interest rate on the term credit agreement (the “Term Credit Agreement”) was LIBOR plus 1.600 %.

We estimate the effective fixed interest rate on the term loan facility to be approximately 3.0 % after consideration of interest rate swaps and estimated patronage refunds.

(b) As of March 31, 2022, the periodic interest rate on the incremental term loan (the “Incremental Term Loan Agreement”) was LIBOR plus 1.650 %.

(b) As of June 30, 2022, the periodic interest rate on the incremental term loan (the “Incremental Term Loan Agreement”) was LIBOR plus 1.650 %.

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

(c) As of March 31, 2022, the periodic interest rate on the 2021 incremental term loan (the “2021 Incremental Term Loan Facility”) was LIBOR plus 1.550 %.

(c) As of June 30, 2022, the periodic interest rate on the 2021 incremental term loan (the “2021 Incremental Term Loan Facility”) was LIBOR plus 1.550 %.

We estimate the effective fixed interest rate on the incremental term loan facility to be approximately 1.5 % after consideration of interest rate swaps and estimated patronage refunds.

14 unchanged sentences

The periodic interest rate on the 2021 Incremental Term Loan agreement is subject to a pricing grid based on our leverage ratio, as defined in the credit agreement.

As of March 31, 2022, the periodic interest rate on the 2021 Incremental Term Loan is LIBOR plus 1.55 %.

As of June 30, 2022, the periodic interest rate on the 2021 Incremental Term Loan is LIBOR plus 1.55 %.

Monthly payments of interest only are due on this loan through maturity.

2 unchanged sentences

We estimate the effective interest rate on the 2021 Incremental Term Loan Facility to be approximately 1.5 % after consideration of interest rate swaps and estimated patronage refunds.

At March 31, 2022, we had available borrowings of $ 299.1 million under the Revolving Credit Facility, net of $ 0.9 million to secure our outstanding letters of credit.

At June 30, 2022, we had available borrowings of $ 299.1 million under the Revolving Credit Facility, net of $ 0.9 million to secure our outstanding letters of credit.

New Zealand Debt

During the three months ended March 31, 2022, the New Zealand subsidiary made $ 2.1 million of borrowings, net of repayments and changes in exchange rates, on its working capital facility (the “New Zealand Working Capital Facility”).

At March 31, 2022, the New Zealand subsidiary had NZ$ 17.0 million of available borrowings under its working capital facility.

Subsequent Event

In April 2022, the New Zealand subsidiary recorded a noncontrolling interest share redemption and loan payable in the amount of $ 27.9 million.

The shareholder loan is due in 2027 at a fixed rate of 6.48 %.

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

In June 2022, the New Zealand subsidiary renewed its NZ$ 20 million working capital facility for an additional 12 -month term.

During the six months ended June 30, 2022, the New Zealand subsidiary made US$ 0.6 million of borrowings, net of repayments and changes in exchange rates, on its working capital facility (the “New Zealand Working Capital Facility”).

At June 30, 2022, the New Zealand subsidiary had NZ$ 19.0 million of available borrowings under its working capital facility.

In April 2022, the New Zealand subsidiary made a capital distribution to its partners on a pro rata basis in order to redeem certain equity interests, which was reinvested by the partners in shareholder loans to the New Zealand subsidiary.

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

The capital distribution to the minority shareholder and its reinvestment in the shareholder loan resulted in the recording of a loan payable by the New Zealand subsidiary in the amount of $ 27.9 million due in 2027 at a fixed interest rate of 6.48 %.

As of June 30, 2022, the outstanding balance on the shareholder loan due 2027 is $ 25.0 million.

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

See Note 4 — Noncontrolling Interests for more information regarding the New Zealand subsidiary.

DEBT COVENANTS

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

The covenants listed below, which are the most significant financial covenants in effect as of March 31, 2022, are calculated on a trailing 12-month basis:

The covenants listed below, which are the most significant financial covenants in effect as of June 30, 2022, are calculated on a trailing 12-month basis:

Covenant Requirement Actual Ratio Favorable

2 unchanged sentences

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

At March 31, 2022, we were in compliance with all applicable covenants.

At June 30, 2022, we were in compliance with all applicable covenants.

RAYONIER INC.

14 unchanged sentences

FOREIGN CURRENCY EXCHANGE AND OPTION CONTRACTS

The New Zealand subsidiary’s export sales are predominately denominated in U.S.

dollars, and therefore its cash flows are affected by fluctuations in the exchange rate between the New Zealand dollar and the U.S.

This exposure is partially managed by a natural currency hedge, as ocean freight payments and shareholder distributions are also paid in U.S.

We manage any excess foreign exchange exposure through the use of derivative financial instruments.

The New Zealand subsidiary typically hedges 50 % to 90 % of its estimated foreign currency exposure with respect to the following twelve months forecasted sales and purchases, less distributions, and up to 75 % of the forward 12 to 18 months.

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

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

As of March 31, 2022, foreign currency exchange contracts and foreign currency option contracts had maturity dates through February 2024 and December 2023, respectively.

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

Our New Zealand subsidiary is exposed to foreign currency risk, as its functional currency is the New Zealand dollar, but has certain cash flows denominated U.S.

Domestic sales and operating expenses are predominately denominated in New Zealand dollars, while its export sales, shareholder distributions and ocean freight payments are predominately denominated in U.S.

To the extent New Zealand dollar costs exceed New Zealand dollar revenues (the “foreign exchange exposure”), the New Zealand subsidiary manages it through the use of derivative financial instruments.

It typically hedges a portion of export sales receipts to cover 50 % to 90 % of the projected foreign exchange exposure for the following 12 months, up to 75 % for the forward 12 to 18 months and up to 50 % for the forward 18 to 24 months.

Additionally, it will occasionally hedge export sales receipts to cover up to 50 % of the foreign exchange exposure for the forward 24 to 48 months when the New Zealand dollar is at a cyclical low versus the U.S.

The New Zealand subsidiary’s trading operations typically hedges a portion of export sales receipts to cover the projected foreign exchange exposure for the following three months.

As of June 30, 2022, foreign currency exchange contracts and foreign currency option contracts had maturity dates through August 2024 and December 2024, respectively.

Foreign currency exchange and option contracts hedging foreign currency risk qualify for cash flow hedge accounting.

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

14 unchanged sentences

INTEREST RATE SWAPS

The following table contains information on the outstanding interest rate swaps as of March 31, 2022:

The following table contains information on the outstanding interest rate swaps as of June 30, 2022:

Outstanding Interest Rate Swaps (a)

4 unchanged sentences

April 2016 10 years 100,000 Incremental Term Loan 1.60 % 1.65 % 3.25 %

May 2021 (c)(d) 7 years 200,000 2021 Incremental Term Loan Facility

May 2021 (c) 7 years 200,000 2021 Incremental Term Loan Facility

0.77 % 1.55 % 2.32 %

2 unchanged sentences

(c) On February 1, 2022, our $ 200.0 million notional forward-starting interest rate swap matured into an active interest rate swap.

See Note 6 - De bt for additional information.

(d) The $ 200.0 million notional interest rate swap contained an embedded mark-to-market gain, which we recovered through a reduced charge in the fixed rate over what would have been charged for an at-market swap.

See Note 6 - Debt for additional information.

FORWARD-STARTING INTEREST RATE SWAPS

The following table contains information on the outstanding forward-starting interest rate swaps as of March 31, 2022:

The following table contains information on the outstanding forward-starting interest rate swaps as of June 30, 2022:

Outstanding Forward-Starting Interest Rate Swaps (a)

9 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The following tables demonstrate the impact, gross of tax, of our derivatives on the Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2022 and 2021:

The following tables demonstrate the impact, gross of tax, of our derivatives on the Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

5 unchanged sentences

Interest expense 1,948 5,377

Three Months Ended

During the next 12 months, the amount of the March 31, 2022 AOCI balance, net of tax, expected to be reclassified into earnings is a gain of approximately $ 0.3 million.

Six Months Ended

Income Statement Location 2022 2021

Derivatives designated as cash flow hedges:

Foreign currency exchange contracts Other comprehensive (loss) income ($ 10,839 ) ($ 3,747 )

Foreign currency option contracts Other comprehensive (loss) income ( 550 ) ( 1,158 )

Interest rate products Other comprehensive (loss) income 49,765 45,144

Interest expense 4,618 9,371

During the next 12 months, the amount of the June 30, 2022 AOCI balance, net of tax, expected to be reclassified into earnings is a gain of approximately $ 3.1 million.

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

2 unchanged sentences

Foreign currency exchange contracts ($ 6,784 )

Foreign currency option contracts ( 51 )

Interest rate products 9,908

2 unchanged sentences

Notional Amount

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Derivatives designated as cash flow hedges:

9 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The following table contains the fair values of the derivative financial instruments recorded in the Consolidated Balance Sheets at March 31, 2022 and December 31, 2021.

The following table contains the fair values of the derivative financial instruments recorded in the Consolidated Balance Sheets at June 30, 2022 and December 31, 2021.

Changes in balances of derivative financial instruments are recorded as operating activities in the Consolidated Statements of Cash Flows:

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Derivatives designated as cash flow hedges:

3 unchanged sentences

Other non-current liabilities ( 3,364 ) ( 694 )

Foreign currency option contracts Other assets 318 228

Foreign currency option contracts Other current assets 7 —

Other assets 446 228

Other current liabilities ( 78 ) —

Other non-current liabilities ( 967 ) ( 270 )

Interest rate swaps Other assets 40,909 —

Interest rate swaps Other non-current liabilities — ( 15,582 )

Other non-current liabilities — ( 15,582 )

Forward-starting interest rate swaps Other assets 9,106 11,482

22 unchanged sentences

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

The following table presents the carrying amount and estimated fair values of our financial instruments as of March 31, 2022 and December 31, 2021, using market information and what we believe to be appropriate valuation methodologies under GAAP:

March 31, 2022 December 31, 2021

The following table presents the carrying amount and estimated fair values of our financial instruments as of June 30, 2022 and December 31, 2021, using market information and what we believe to be appropriate valuation methodologies under GAAP:

June 30, 2022 December 31, 2021

Asset (Liability) (a) Carrying

13 unchanged sentences

Noncontrolling interests in the operating partnership (f) 123,811 123,811 — 133,823 133,823 —

(a) We did not have Level 3 assets or liabilities at March 31, 2022 and December 31, 2021.

(a) We did not have Level 3 assets or liabilities at June 30, 2022 and December 31, 2021.

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

See Note 19 — Restricted Cash for additional information.

(c) Restricted cash, excluding Timber Funds represents proceeds from like-kind exchange sales deposited with a third-party intermediary and cash held in escrow.

See Note 19 — Restricted Cash for additional information.

21 unchanged sentences

common shares.

At March 31, 2022, the future minimum payments under non-cancellable commitments were as follows:

At June 30, 2022, the future minimum payments under non-cancellable commitments were as follows:

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

9 unchanged sentences

(b) Primarily consisting of payments expected to be made on our Wildlight and Heartwood development projects.

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

(c) Commitments include payments expected to be made on financial instruments (foreign exchange contracts and interest rate swaps) and other purchase obligations.

CONTINGENCIES

13 unchanged sentences

Like the liability that attaches to current property owners in the cleanup context, liability for natural resource damages (“NRD”) can attach to a property simply because an injury to natural resources resulted from releases of contaminated materials on or from the owner’s property, regardless of culpability for the release.

Changes in environmental and NRD liabilities from December 31, 2021 to March 31, 2022 are shown below:

Changes in environmental and NRD liabilities from December 31, 2021 to June 30, 2022 are shown below:

Port Gamble, WA

4 unchanged sentences

Increase to liabilities 698

Total Balance at March 31, 2022

Total Balance at June 30, 2022

Current portion ( 766 )

Non-current portion at March 31, 2022

It is expected that the upland mill site cleanup and NRD restoration will occur over the next two to three years , while the monitoring of Port Gamble Bay, mill site and landfills will continue for an additional 10 to 15 years.

Non-current portion at June 30, 2022

It is expected that the upland mill site cleanup and NRD restoration will occur over the next one to two years , while the monitoring of Port Gamble Bay, mill site and landfills will continue for an additional 10 to 15 years.

NRD costs are subject to change as the scope of the restoration projects become more clearly defined.

4 unchanged sentences

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

As of March 31, 2022, the following financial guarantees were outstanding:

As of June 30, 2022, the following financial guarantees were outstanding:

Financial Commitments (a) Maximum Potential

19 unchanged sentences

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

Changes in higher and better use timberlands and real estate development investments from December 31, 2021 to March 31, 2022 are shown below:

Changes in higher and better use timberlands and real estate development investments from December 31, 2021 to June 30, 2022 are shown below:

Higher and Better Use Timberlands and Real Estate Development Investments

11 unchanged sentences

Intersegment transfers 4,345 — 4,345

Total Balance at March 31, 2022

Total Balance at June 30, 2022

91,877 39,118 130,995

Current portion (a) ( 1,058 ) ( 17,440 ) ( 18,498 )

Non-current portion at March 31, 2022

Non-current portion at June 30, 2022

$ 90,819 $ 21,678 $ 112,497

3 unchanged sentences

Parcel real estate development investments represent investments made for specific lots and/or commercial parcels that are currently under contract or expected to be ready for market within a year.

As of March 31, 2022 and December 31, 2021, our inventory consisted entirely of finished goods, as follows:

March 31, 2022 December 31, 2021

As of June 30, 2022 and December 31, 2021, our inventory consisted entirely of finished goods, as follows:

June 30, 2022 December 31, 2021

Finished goods inventory

2 unchanged sentences

Total inventory $ 25,330 $ 28,523

(a) Represents the cost of HBU real estate (including capitalized development investments) under contract to be sold.

(a) Represents the cost of HBU real estate (including capitalized development investments) under contract to be sold as well as the cost of HBU real estate deferred until post-closing obligations are satisfied.

See Note 13 — Higher And Better Use Timberlands and Real Estate Development Investments for additional information.

5 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

OTHER OPERATING (EXPENSE) INCOME, NET

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

Three Months Ended March 31,

(Loss) gain on foreign currency remeasurement, net of cash flow hedges ($ 571 ) $ 2,429

OTHER OPERATING INCOME (EXPENSE), NET

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

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

2022 2021 2022 2021

Gain on foreign currency remeasurement, net of cash flow hedges $ 1,249 $ 1,922 $ 677 $ 4,351

Gain on sale or disposal of property and equipment 6 3 31 93

11 unchanged sentences

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

We are not required to make mandatory 2022 pension contributions due to our plan’s improved funding status and have made no pension contribution payments during the three months ended March 31, 2022.

We are not required to make mandatory 2022 pension contributions due to our plan’s improved funded status and have made no pension contribution payments during the six months ended June 30, 2022.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

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

1 unchanged sentence

Three Months Ended

March 31, Three Months Ended

June 30, Three Months Ended

2022 2021 2022 2021

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

Interest cost Interest and other miscellaneous expense, net 609 557 13 11

Expected return on plan assets (a) Interest and other miscellaneous expense, net ( 872 ) ( 936 ) — —

Amortization of losses Interest and other miscellaneous expense, net 184 288 4 5

Interest cost Interest and other miscellaneous income (expense), net 609 557 13 11

Expected return on plan assets (a) Interest and other miscellaneous income (expense), net ( 872 ) ( 936 ) — —

Amortization of losses Interest and other miscellaneous income (expense), net 184 288 4 5

Net periodic benefit (credit) cost ($ 79 ) ($ 91 ) $ 19 $ 18

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

Six Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Service cost Selling and general expenses — — $ 3 $ 4

Interest cost Interest and other miscellaneous income (expense), net 1,217 1,114 26 23

Expected return on plan assets (a) Interest and other miscellaneous income (expense), net ( 1,743 ) ( 1,873 ) — —

Amortization of losses Interest and other miscellaneous income (expense), net 369 577 7 10

Net periodic benefit (credit) cost ($ 157 ) ($ 182 ) $ 36 $ 37

(a) The weighted-average expected long-term rate of return on plan assets used in computing 2022 net periodic benefit cost for pension benefit s i s 5.0 %.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

Rayonier is a REIT under the Internal Revenue Code and therefore generally does not pay U.S.

federal or state income tax.

As of March 31, 2022, Rayonier owns a 97.8 % interest in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership.

As of June 30, 2022, Rayonier owns a 97.8 % interest in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership.

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

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Income tax expense ($ 1,304 ) ($ 6,880 ) ($ 6,818 ) ($ 10,302 )

ANNUAL EFFECTIVE TAX RATE

The Company’s 2022 effective tax rate after discrete items is below the 21.0% U.S.

statutory rate due to tax benefits associated with being a REIT.

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

Three Months Ended

Annualized effective tax rate after discrete items 10.5 % 11.6 %

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

ANNUAL EFFECTIVE TAX RATE

The Company’s effective tax rate after discrete items is below the 21.0% U.S.

statutory rate due to tax benefits associated with being a REIT.

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

Six Months Ended

Annualized effective tax rate after discrete items 9.2 % 11.0 %

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes in AOCI by component for the three months ended March 31, 2022 and the year ended December 31, 2021.

The following table summarizes the changes in AOCI by component for the six months ended June 30, 2022 and the year ended December 31, 2021.

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

9 unchanged sentences

Other comprehensive (loss) income before reclassifications ( 28,706 ) — 43,413 (a) — 14,707 ( 330 ) 14,377

Amounts reclassified from accumulated other comprehensive income (loss) — — 2,675 188 (b) 2,863 853 3,716

Amounts reclassified from accumulated other comprehensive income — — 4,657 376 (b) 5,033 804 5,837

Net other comprehensive income (loss) ( 28,706 ) — 48,070 376 19,740 474 20,214

Balance as of

March 31, 2022

June 30, 2022

($ 24,491 ) $ 1,321 $ 38,907 ($ 11,460 ) $ 4,277 ($ 3,667 ) $ 610

(a) The year ended December 31, 2021 and the three months ended March 31, 2022 include $ 52.5 million and $ 35.1 million, respectively, of other comprehensive income related to interest rate products.

(a) The six months ended June 30, 2022 and the year ended December 31, 2021 include $ 49.8 million and $ 52.5 million, respectively, of other comprehensive income related to interest rate products.

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

7 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the three months ended March 31, 2022 and March 31, 2021:

The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the six months ended June 30, 2022 and June 30, 2021:

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

March 31, 2022 March 31, 2021

June 30, 2022 June 30, 2021

Realized loss on foreign currency exchange contracts $ 71 $ 1,725 Other operating (expense) income, net

4 unchanged sentences

Net loss on cash flow hedges reclassified from accumulated other comprehensive income $ 4,657 $ 10,955

RESTRICTED CASH

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

Restricted cash, excluding Timber Funds includes cash deposited with a like-kind exchange (“LKE”) intermediary.

In order to qualify for LKE treatment, the proceeds from real estate sales must be deposited with a third-party intermediary.

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

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

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

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Consolidated Balance Sheets that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

Restricted cash, excluding Timber Funds:

Restricted cash deposited with LKE intermediary $ 13,704 —

Restricted cash held in escrow 625 702

Total restricted cash shown in the Consolidated Balance Sheets, excluding Timber Funds 14,329 702

Restricted cash shown in the Consolidated Balance Sheets, Timber Funds 1,464 —

Cash and cash equivalents 280,280 314,308

Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 296,073 $ 315,010

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

RESTRICTED CASH

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

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

Three Months Ended March 31,

Cash and cash equivalents $ 259,722 $ 82,620

Restricted cash, Timber Funds 5,464 —

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

Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 265,811 $ 83,095

ASSETS HELD FOR SALE

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

As of March 31, 2022 and December 31, 2021, the basis in properties meeting this classification was $ 2.5 million and $ 5.1 million, respectively.

As of June 30, 2022 and December 31, 2021, the basis in properties meeting this classification was $ 2.2 million and $ 5.1 million, respectively.

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

5 unchanged sentences

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

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

Three Months Ended March 31,

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

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

Related Party Transaction Location on Statement of Income and Comprehensive Income 2022 2021 2022 2021

Mattamy Contract Sales (a) $ 339 1,446 $ 513 1,488

(a) The three months ended March 31, 2021 exclude approximately $ 0.1 million of cash received from Mattamy Jacksonville LLC under this agreement for the reimbursement of local impact fees.

(a) The three and six months ended June 30, 2021 exclude approximately $ 0.1 million and $ 0.2 million, respectively, of cash received from Mattamy Jacksonville LLC under this agreement for the reimbursement of local impact fees.

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

What changed 10-Q

Item 1. Financial Statements