What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-05 compared with 2022-11-04 · 291 added, 653 removed, 844 unchanged (53% of the section changed)

6 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

SALES ( NOTE 3 )

3 unchanged sentences

Selling and general expenses ( 16,778 ) ( 14,760 )

Other operating income, net ( Note 15 )

Other operating expense, net ( Note 14 )

( 2,516 ) ( 984 )

2 unchanged sentences

Interest expense ( 11,700 ) ( 8,337 )

Interest and other miscellaneous income, net 1,252 1,274 990 127

Interest and other miscellaneous income (expense), net 9,554 ( 468 )

INCOME BEFORE INCOME TAXES 8,476 36,513

3 unchanged sentences

Net income attributable to noncontrolling interests in the operating partnership ( 174 ) ( 669 )

Net income attributable to noncontrolling interests in consolidated affiliates ( 10,828 ) ( 32,471 ) ( 12,478 ) ( 40,775 )

Net loss (income) attributable to noncontrolling interests in consolidated affiliates 1,037 ( 1,012 )

NET INCOME ATTRIBUTABLE TO RAYONIER INC.

20,578 75,831 73,999 143,885

OTHER COMPREHENSIVE (LOSS) INCOME

4 unchanged sentences

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

188 294 564 881

Total other comprehensive (loss) income ( 16,051 ) 47,073

COMPREHENSIVE INCOME 26,804 105,895 99,820 222,867

Comprehensive income attributable to noncontrolling interests in the operating partnership ( 490 ) ( 2,118 ) ( 2,147 ) ( 5,490 )

Comprehensive income attributable to noncontrolling interests in consolidated affiliates ( 8,029 ) ( 31,099 ) ( 6,670 ) ( 36,168 )

COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.

COMPREHENSIVE (LOSS) INCOME ( 8,614 ) 78,071

Comprehensive loss (income) attributable to noncontrolling interests in the operating partnership 156 ( 1,686 )

Comprehensive loss (income) attributable to noncontrolling interests in consolidated affiliates 1,032 ( 2,408 )

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO RAYONIER INC.

($ 7,426 ) $ 73,977

9 unchanged sentences

(Dollars in thousands)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

CURRENT ASSETS

Cash and cash equivalents, excluding Timber Funds $ 260,931 $ 358,680

Cash and cash equivalents, Timber Funds 873 3,493

Total cash and cash equivalents 261,804 362,173

Restricted cash, Timber Funds ( Note 19 )

Cash and cash equivalents $ 98,774 $ 114,255

Accounts receivable, less allowance for doubtful accounts of $ 73 and $ 74

18 unchanged sentences

Total property, plant and equipment, net 26,723 27,189

RESTRICTED CASH, EXCLUDING TIMBER FUNDS ( NOTE 19 )

RESTRICTED CASH ( NOTE 18 )

RIGHT-OF-USE ASSETS 98,301 97,167

4 unchanged sentences

Accounts payable $ 32,172 $ 22,100

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

Accrued taxes 4,899 3,734

2 unchanged sentences

Deferred revenue 19,095 22,762

Distribution payable, Timber Funds 1,576 6,341

Other current liabilities 23,988 28,247

4 unchanged sentences

LONG-TERM LEASE LIABILITY 89,911 88,756

LONG-TERM DEFERRED REVENUE 11,337 6,895

OTHER NON-CURRENT LIABILITIES 89,303 88,687

COMMITMENTS AND CONTINGENCIES ( NOTES 9 and 10 )

CONTINGENCIES ( NOTE 9 )

NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP ( NOTE 4 )

4 unchanged sentences

Retained earnings 330,389 366,637

Accumulated other comprehensive loss ( Note 18 )

Accumulated other comprehensive income ( Note 17 )

20,868 35,813

12 unchanged sentences

Earnings Accumulated

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

Comprehensive Income Noncontrolling Interests in Consolidated Affiliates Shareholders’

Shares Amount

Balance, January 1, 2023 147,282,631 $ 1,462,945 $ 366,637 $ 35,813 $ 15,317 $ 1,880,712

Net income — — 29,986 — 1,012 30,998

Net income (loss) — — 8,474 — ( 1,037 ) 7,437

Net income attributable to noncontrolling interests in the operating partnership — — ( 174 ) — — ( 174 )

12 unchanged sentences

Allocation of other comprehensive income to noncontrolling interests in the operating partnership — — — 1,110 — 1,110

Distributions to noncontrolling interests in consolidated affiliates — — — — ( 1,566 ) ( 1,566 )

Balance, March 31, 2023 148,012,979 $ 1,489,274 $ 330,389 $ 20,868 $ 14,284 $ 1,854,815

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

Net income — — 21,033 — 10,828 31,861

Net income attributable to noncontrolling interests in the operating partnership — — ( 455 ) — — ( 455 )

Dividends ($ 0.285 per share) (a)

— — ( 42,052 ) — — ( 42,052 )

Costs associated with the “at-the-market” (ATM) equity offering program — ( 38 ) — — — ( 38 )

Issuance of shares under incentive stock plans 760 19 — — — 19

Stock-based compensation — 2,636 — — — 2,636

Repurchase of common shares ( 569 ) ( 20 ) — — — ( 20 )

Adjustment of noncontrolling interests in the operating partnership — — 23,363 — — 23,363

Conversion of common units to common shares 100,902 3,696 — — — 3,696

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

Foreign currency translation adjustment — — — ( 24,065 ) ( 1,327 ) ( 25,392 )

Cash flow hedges — — — 21,619 ( 1,472 ) 20,147

Allocation of other comprehensive loss to noncontrolling interests in the operating partnership — — — 49 — 49

Distributions to noncontrolling interests in consolidated affiliates — — — — ( 9,789 ) ( 9,789 )

Balance, September 30, 2022 146,422,825 $ 1,430,622 $ 384,384 ($ 1,599 ) $ 11,256 $ 1,824,663

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

6 unchanged sentences

Earnings Accumulated

Comprehensive Loss Noncontrolling Interests in Consolidated Affiliates Shareholders’

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

Shares Amount

9 unchanged sentences

Repurchase of common shares ( 5,420 ) ( 214 ) — — — ( 214 )

Measurement period adjustment of noncontrolling interests in consolidated affiliates — — — — 655 655

Adjustment of noncontrolling interests in the operating partnership — — ( 2,645 ) — — ( 2,645 )

6 unchanged sentences

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

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 loss to noncontrolling interests in the operating partnership — — — 253 — 253

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

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

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

Net income attributable to noncontrolling interests in the operating partnership — — ( 2,210 ) — — ( 2,210 )

Dividends ($ 0.27 per share) (a)

— — ( 39,032 ) — — ( 39,032 )

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

1,390,968 51,132 — — — 51,132

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

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

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

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

Adjustment of noncontrolling interests in the operating partnership — — 1,746 — — 1,746

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

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

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

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

Allocation of other comprehensive loss to noncontrolling interests in the operating partnership — — — 92 — 92

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

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

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

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

5 unchanged sentences

(Dollars in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES

6 unchanged sentences

Amortization of losses from pension and postretirement plans 1 188

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

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

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

Timber write-offs due to casualty event 2,302 —

Other 578 ( 2,244 )

9 unchanged sentences

Purchase of timberlands ( 8,729 ) ( 2,830 )

Net proceeds from large disposition of timberlands — 54,698

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

Net proceeds from Fund II timberland dispositions — 85,199

Other 3,029 2,619

CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES ( 55,857 ) 69,334

CASH USED FOR INVESTING ACTIVITIES ( 32,199 ) ( 18,945 )

FINANCING ACTIVITIES

6 unchanged sentences

Repurchase of common shares to pay withholding taxes on vested incentive stock awards ( 41 ) ( 214 )

Debt issuance costs — ( 4,829 )

Distributions to noncontrolling interests in consolidated affiliates — ( 2,684 )

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

CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES ( 237,613 ) 47,726

CASH USED FOR FINANCING ACTIVITIES ( 43,061 ) ( 134,670 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH ( 362 ) 620

3 unchanged sentences

Balance, end of period $ 103,736 $ 265,811

Nine Months Ended September 30,

Three Months Ended March 31,

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

1 unchanged sentence

Interest (a) $ 3,802 $ 3,935

Income taxes 14,627 7,306

Income taxes (b) 2,203 14,042

Non-cash investing activity:

Capital assets purchased on account 5,689 4,511

Non-cash financing activity:

Distributions to noncontrolling interests in consolidated affiliates 645 —

Non-cash financing activity:

Noncontrolling interests in consolidated affiliates redemption of shares (b) 27,860 28,119

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

(a) Interest paid is presented net of patronage paymen ts receive d of $ 6.1 million a n d $ 5.5 million for the three months ended March 31, 2023 and March 31, 2022, respectively.

For additional information on patronage payments, see Note 7 — Debt in the 2022 Form 10-K.

(b) T he 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 and $ 28.1 million for the nine months ended September 30, 2022 and September 30, 2021, respectively.

See Note 6 - Debt for further information.

(b) Income taxes paid in 2022 were elevated due to timing of required tax payments for the New Zealand subsidiary following a full utilization of its net operating losses.

See Notes to Consolidated Financial Statements.

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

SALES ( NOTE 3 )

3 unchanged sentences

Selling and general expenses ( 16,778 ) ( 14,760 )

Other operating income, net ( Note 15 )

Other operating expense, net ( Note 14 )

( 2,516 ) ( 984 )

2 unchanged sentences

Interest expense ( 11,700 ) ( 8,337 )

Interest and other miscellaneous income, net 1,252 1,274 990 127

Interest and other miscellaneous income (expense), net 9,554 ( 468 )

INCOME BEFORE INCOME TAXES 8,476 36,513

2 unchanged sentences

NET INCOME 7,437 30,998

Net income attributable to noncontrolling interests in consolidated affiliates ( 10,828 ) ( 32,471 ) ( 12,478 ) ( 40,775 )

Net loss (income) attributable to noncontrolling interests in consolidated affiliates 1,037 ( 1,012 )

NET INCOME ATTRIBUTABLE TO RAYONIER, L.P.

UNITHOLDERS 8,474 29,986

NET INCOME ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO:

Limited Partners 8,389 29,686

General Partners 85 300

Net income attributable to unitholders 8,474 29,986

OTHER COMPREHENSIVE (LOSS) INCOME

4 unchanged sentences

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

188 294 564 881

Total other comprehensive (loss) income ( 16,051 ) 47,073

COMPREHENSIVE INCOME 26,804 105,895 99,820 222,867

Comprehensive income attributable to noncontrolling interests in consolidated affiliates ( 8,029 ) ( 31,099 ) ( 6,670 ) ( 36,168 )

COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER, L.P.

COMPREHENSIVE (LOSS) INCOME ( 8,614 ) 78,071

Comprehensive loss (income) attributable to noncontrolling interests in consolidated affiliates 1,032 ( 2,408 )

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

UNITHOLDERS ($ 7,582 ) $ 75,663

9 unchanged sentences

(Dollars in thousands)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

CURRENT ASSETS

Cash and cash equivalents, excluding Timber Funds $ 260,931 $ 358,680

Cash and cash equivalents, Timber Funds 873 3,493

Total cash and cash equivalents 261,804 362,173

Restricted cash, Timber Funds ( Note 19 )

Cash and cash equivalents $ 98,774 $ 114,255

Accounts receivable, less allowance for doubtful accounts of $ 73 and $ 74

18 unchanged sentences

Total property, plant and equipment, net 26,723 27,189

RESTRICTED CASH, EXCLUDING TIMBER FUNDS ( NOTE 19 )

RESTRICTED CASH ( NOTE 18 )

RIGHT-OF-USE ASSETS 98,301 97,167

4 unchanged sentences

Accounts payable $ 32,172 $ 22,100

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

Accrued taxes 4,899 3,734

2 unchanged sentences

Deferred revenue 19,095 22,762

Distribution payable, Timber Funds 1,576 6,341

Other current liabilities 23,988 28,247

4 unchanged sentences

LONG-TERM LEASE LIABILITY 89,911 88,756

LONG-TERM DEFERRED REVENUE 11,337 6,895

OTHER NON-CURRENT LIABILITIES 89,303 88,687

COMMITMENTS AND CONTINGENCIES ( NOTES 9 and 10 )

CONTINGENCIES ( NOTE 9 )

REDEEMABLE OPERATING PARTNERSHIP UNITS ( NOTE 4 ) 2,479,276 and 3,208,827 Units outstanding, respectively

2 unchanged sentences

Limited partners’ capital 1,798,174 1,806,895

Accumulated other comprehensive income (loss) ( Note 18 )

Accumulated other comprehensive income ( Note 17 )

24,194 40,249

10 unchanged sentences

Units Accumulated

Comprehensive Income (Loss) Noncontrolling Interests in Consolidated Affiliates Total Capital

Comprehensive Income Noncontrolling Interests in Consolidated Affiliates Total Capital

General Partners’ Capital Limited Partners’ Capital

Balance, January 1, 2023 $ 18,251 $ 1,806,895 $ 40,249 $ 15,317 $ 1,880,712

Net income 300 29,686 — 1,012 30,998

Net income (loss) 85 8,389 — ( 1,037 ) 7,437

Distributions on units ($ 0.285 per unit)

2 unchanged sentences

— ( 10 ) — — ( 10 )

Issuance of units under incentive stock plans 4 411 — — 415

Stock-based compensation 25 2,474 — — 2,499

5 unchanged sentences

Cash flow hedges — — ( 12,504 ) 185 ( 12,319 )

Distributions to noncontrolling interests in consolidated affiliates — — — ( 1,566 ) ( 1,566 )

Balance, March 31, 2023 $ 18,163 $ 1,798,174 $ 24,194 $ 14,284 $ 1,854,815

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

Net income 210 20,823 — 10,828 31,861

Distributions on units ($ 0.285 per unit)

( 430 ) ( 42,537 ) — — ( 42,967 )

Costs associated with the “at-the-market” (ATM) equity offering program ( 1 ) ( 37 ) — — ( 38 )

Issuance of units under incentive stock plans — 19 — — 19

Stock-based compensation 27 2,609 — — 2,636

Repurchase of units — ( 20 ) — — ( 20 )

Adjustment of Redeemable Operating Partnership Units 239 23,633 — — 23,872

Conversion of units into common shares 37 3,659 — — 3,696

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

Foreign currency translation adjustment — — ( 24,065 ) ( 1,327 ) ( 25,392 )

Cash flow hedges — — 21,619 ( 1,472 ) 20,147

Distributions to noncontrolling interests in consolidated affiliates — — — ( 9,789 ) ( 9,789 )

Balance, September 30, 2022 $ 18,113 $ 1,793,275 $ 2,019 $ 11,256 $ 1,824,663

Units Accumulated

Comprehensive

Loss Noncontrolling Interests in Consolidated Affiliates Total Capital

Income (Loss) Noncontrolling Interests in Consolidated Affiliates Total Capital

General Partners’ Capital Limited Partners’ Capital

10 unchanged sentences

Conversion of units into common shares 1 103 — — 104

Measurement period adjustment of noncontrolling interests in consolidated affiliates — — — 655 655

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

3 unchanged sentences

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

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

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

Distributions on units ($ 0.27 per unit)

( 401 ) ( 39,695 ) — — ( 40,096 )

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

511 50,621 — — 51,132

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

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

Repurchase of units — ( 6 ) — — ( 6 )

Adjustment of Redeemable Operating Partnership Units 7 685 — — 692

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

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

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

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

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

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

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

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

See Notes to Consolidated Financial Statements.

3 unchanged sentences

(Dollars in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES

6 unchanged sentences

Amortization of losses from pension and postretirement plans 1 188

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

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

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

Timber write-offs due to casualty events 2,302 —

Other 578 ( 2,244 )

9 unchanged sentences

Purchase of timberlands ( 8,729 ) ( 2,830 )

Net proceeds from large disposition of timberlands — 54,698

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

Net proceeds from Fund II timberland dispositions — 85,199

Other 3,029 2,619

CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES ( 55,857 ) 69,334

CASH USED FOR INVESTING ACTIVITIES ( 32,199 ) ( 18,945 )

FINANCING ACTIVITIES

5 unchanged sentences

Repurchase of units to pay withholding taxes on vested incentive stock awards ( 41 ) ( 214 )

Debt issuance costs — ( 4,829 )

Distributions to noncontrolling interests in consolidated affiliates — ( 2,684 )

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

CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES ( 237,613 ) 47,726

CASH USED FOR FINANCING ACTIVITIES ( 43,061 ) ( 134,670 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH ( 362 ) 620

3 unchanged sentences

Balance, end of period $ 103,736 $ 265,811

Nine Months Ended September 30,

Three Months Ended March 31,

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

1 unchanged sentence

Interest (a) $ 3,802 $ 3,935

Income taxes 14,627 7,306

Income taxes (b) 2,203 14,042

Non-cash investing activity:

Capital assets purchased on account 5,689 4,511

Non-cash financing activity:

Noncontrolling interests in consolidated affiliates redemption of shares (b) 27,860 28,119

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

(a) Interest paid is presented net of patronage paymen ts received of $ 6.1 million an d $ 5.5 million for the three months ended March 31, 2023 and March 31, 2022, respectively.

For additional information on patronage payments, see Note 7 — Debt in the 2022 Form 10-K.

See Note 6 - Debt for further information.

(b) Income taxes paid in 2022 were elevated due to timing of required tax payments for the New Zealand subsidiary following a full utilization of its net operating losses.

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, 2022, as filed with the SEC (the “2022 Form 10-K”).

As of September 30, 2022, the Company owned a 97.9 % interest in the Operating Partnership, with the remaining 2.1 % interest owned by limited partners of the Operating Partnership.

As of March 31, 2023, the Company owned a 98.4 % interest in the Operating Partnership, with the remaining 1.6 % interest owned by limited partners of the Operating Partnership.

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

2 unchanged sentences

For a full description of our other significant accounting policies, see Note 1 — Summary of Significant Accounting Policies in our 2022 Form 10-K.

REVENUE RECOGNITION

NON-TIMBER SALES

Carbon Capture and Storage Sales

Carbon capture and storage (CCS) sales are primarily comprised of revenue generated from granting land access and the right to inject, sequester and permanently store carbon dioxide in a subsurface area.

CCS contracts contain variable consideration arrangements, which may include variable durations, rates, access acres and carbon volumes.

The determination of the transaction price and the allocation of the transaction price to the performance obligations may require significant judgment and is based on management’s estimate of the mostly likely amount of consideration we expect to receive as of the reporting date.

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

The estimation of variable consideration requires us to make certain judgments and assumptions regarding the amount and timing of future payments, which may be impacted by factors such as changes in market conditions, competition or other factors beyond our control.

As a result, actual amounts of variable consideration could differ from our estimates.

We regularly review our estimates of variable consideration and, if necessary, adjust the transaction price and related revenue recognition accordingly.

Any such adjustments are recorded in the period in which the estimate is revised.

NEW ACCOUNTING STANDARDS

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2020-04, Reference Rate Reform (Topic 848) , which provides optional guidance to ease the potential burden in accounting due to reference rate reform.

ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

We have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, Debt–Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging–Contracts in Entity's Own Equity (Subtopic 815-40):

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

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

The pronouncement eliminates the requirement that contracts legally permitting settlement in registered shares be classified as temporary equity.

As a result, Redeemable Operating Partnership Units may be classified as permanent partners’ capital in the Operating Partnership’s accompanying balance sheets and the related noncontrolling interests as permanent equity in the accompanying balance sheets of Rayonier, Inc.

However, the corresponding SEC guidance on equity classification has remained unchanged.

We will continue to monitor any developments in this area and may reclassify the temporary partners’ capital and noncontrolling interests to permanent upon agreement in guidance.

Recent accounting pronouncements adopted or pending adoption not discussed above are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows.

There have been no recently adopted or pending accounting pronouncements which are applicable or are expected to have a material impact on our consolidated financial condition, results of operations, or cash flows.

SUBSEQUENT EVENTS

We have evaluated events occurring from March 31, 2023 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)

SUBSEQUENT EVENTS

Agreement to acquire 172,400 acres in the U.S.

On November 2, 2022, Rayonier Inc., entered into agreements to acquire approximately 172,400 acres of timberlands in Texas, Georgia, Alabama, and Louisiana.

The final aggregate purchase price of these transactions is approximately $ 474 million.

The acquisitions are subject to customary title and other closing conditions and expected to close in the fourth quarter of 2022.

We expect to finance the acquisitions with cash on hand and the proceeds from incremental borrowings through the Farm Credit System.

SEGMENT AND GEOGRAPHICAL INFORMATION

4 unchanged sentences

Certain income (loss) items in the Consolidated Statements of Income and Comprehensive Income are not allocated to segments.

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

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

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

These items, which include interest 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, 2023 and 2022:

Three Months Ended March 31,

SALES 2023 2022

2 unchanged sentences

New Zealand Timber 44,105 51,389

Timber Funds (a) — 94,469 — 128,054

Real Estate (b) 12,435 93,375 81,032 178,409

Real Estate 16,276 34,195

Trading 12,569 13,461

Intersegment Eliminations (c) ( 128 ) ( 590 ) ( 226 ) ( 3,496 )

Intersegment Eliminations (a) ( 129 ) ( 48 )

Total $ 179,082 $ 222,041

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

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

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

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

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) The three and nine months ended September 30, 2022 and 2021 includes log marketing fees paid to our Trading segment from our Southern Timber and Pacific Northwest Timber segments for marketing log export sales.The three and nine months ended September 30, 2021, 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.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

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

(a) Primarily consists of 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,

OPERATING INCOME 2023 2022

Southern Timber $ 22,223 $ 30,342

Pacific Northwest Timber (a) 2,179 2,071 11,729 5,293

New Zealand Timber 9,280 13,302 22,653 47,959

Timber Funds (b) — 41,285 — 44,778

Real Estate (c) 15,749 60,617 36,953 112,816

Pacific Northwest Timber ( 3,543 ) 6,606

New Zealand Timber (a) ( 663 ) 5,392

Real Estate 883 10,181

Trading 341 351

1 unchanged sentence

Total Operating Income 10,622 45,318

Unallocated interest expense and other ( 7,804 ) ( 9,991 ) ( 25,486 ) ( 34,165 )

Unallocated interest expense and other (b) ( 2,146 ) ( 8,805 )

Total Income before Income Taxes $ 8,476 $ 36,513

(a) The three and nine months ended September 30, 2022 include $ 1.1 million of timber write-offs resulting from casualty events.Timber write-offs resulting from casualty events are recorded within the Consolidated Statements of Income and Comprehensive Income under the caption “Cost of sales”.

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

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

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

(c) The three and nine months ended September 30, 2022 include a $ 11.5 million gain associated with the multi-family apartment complex sale attributable to noncontrolling interests.

The gain associated with the multi-family apartment complex sale attributable to noncontrolling interests are recorded within the Consolidated Statements of Income and Comprehensive Income under the caption “Other operating income, net”.

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

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

DEPRECIATION, DEPLETION AND AMORTIZATION 2022 2021 2022 2021

Southern Timber $ 14,116 $ 11,604 $ 46,832 $ 39,539

Pacific Northwest Timber 9,356 10,479 35,587 38,795

New Zealand Timber 6,302 6,555 18,192 20,757

Timber Funds (a) — 43,158 — 54,780

Real Estate (b) 961 6,797 12,671 16,889

Corporate and Other 316 316 939 892

Total $ 31,051 $ 78,909 $ 114,221 $ 171,652

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

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

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

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

(a) The three months ended March 31, 2023 includes a $ 2.3 million timber write-off resulting from a casualty event.

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

(b) The three months ended March 31, 2023 includes a $ 9.1 million net recovery associated with a legal settlement.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

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

Three Months Ended March 31,

DEPRECIATION, DEPLETION AND AMORTIZATION 2023 2022

Southern Timber $ 20,610 $ 18,059

Pacific Northwest Timber 10,650 14,916

New Zealand Timber 4,455 4,989

Real Estate 1,503 9,145

Corporate and Other 381 310

Total $ 37,599 $ 47,419

Three Months Ended March 31,

NON-CASH COST OF LAND AND IMPROVED DEVELOPMENT 2023 2022

Timber Funds (a) — $ 8,635 — $ 8,635

Real Estate (b) 3,149 15,845 20,289 22,913

Real Estate $ 4,208 $ 5,359

Total $ 4,208 $ 5,359

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

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

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 September 30, 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 March 31, 2023 are primarily due to advances on stumpage contracts, unearned license revenue, unearned carbon capture and storage revenue and post-closing obligations on real estate sales.

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

5 unchanged sentences

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

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

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

2022 2021 2022 2021

The following table summarizes revenue recognized during the three months ended March 31, 2023 and 2022 that was included in the contract liability balance at the beginning of each year:

Three Months Ended March 31,

Revenue recognized from contract liability balance at the beginning of the year (a) $ 11,400 $ 7,533

(a) Revenue recognized was from hunting licenses and the use of advances on pay-as-cut timber sales.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

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

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

September 30, 2022

Pulpwood $ 32,564 $ 2,989 $ 7,645 — — $ 1,112 — $ 44,310

Sawtimber 20,943 29,630 58,412 — — 10,053 — 119,038

Hardwood 4,221 — — — — — — 4,221

Total Timber Sales 57,728 32,619 66,057 — — 11,165 — 167,569

License Revenue, Primarily from Hunting 5,141 326 118 — — — — 5,585

Other Non-Timber/Carbon Revenue 1,680 1,452 6,277 — — — — 9,409

Agency Fee Income — — — — — 289 — 289

Total Non-Timber Sales 6,821 1,778 6,395 — — 289 — 15,283

Improved Development — — — — 2,296 — — 2,296

Rural — — — — 6,964 — — 6,964

Deferred Revenue/Other (a) — — — — 2,769 — — 2,769

Total Real Estate Sales — — — — 12,029 — — 12,029

Revenue from Contracts with Customers 64,549 34,397 72,452 — 12,029 11,454 — 194,881

Lease Revenue — — — — 406 — — 406

Intersegment — — — — — 128 ( 128 ) —

Total Revenue $ 64,549 $ 34,397 $ 72,452 — $ 12,435 $ 11,582 ($ 128 ) $ 195,287

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

September 30, 2021

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

Sawtimber 17,680 28,134 64,562 6,707 — 21,281 — 138,364

Hardwood 247 — — — — — — 247

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

License Revenue, Primarily from Hunting 4,588 298 161 11 — — — 5,058

Other Non-Timber/Carbon Revenue 945 965 89 25 — — — 2,024

Agency Fee Income — — — — — 350 — 350

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

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

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

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

Rural — — — — 6,937 — — 6,937

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

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

Large Dispositions — — — — 20,048 — — 20,048

Total Real Estate Sales — — — — 93,031 — — 93,031

Revenue from Contracts with Customers 44,818 31,513 75,558 93,970 93,031 25,492 — 364,382

Lease Revenue — — — — 344 — — 344

Intersegment — — — 499 — 91 ( 590 ) —

Total Revenue $ 44,818 $ 31,513 $ 75,558 $ 94,469 $ 93,375 $ 25,583 ($ 590 ) $ 364,726

(a) Revenue recognized was primarily from hunting licenses, the use of advances on pay-as-cut timber sales and the satisfaction of post-closing obligations on real estate sales.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

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

September 30, 2022

The following tables present our revenue from contracts with customers disaggregated by product type for the three months ended March 31, 2023 and 2022:

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

March 31, 2023

Pulpwood $ 26,783 $ 3,715 $ 6,081 — $ 1,439 — $ 38,018

3 unchanged sentences

License Revenue, Primarily from Hunting 5,268 136 55 — — — 5,459

Other Non-Timber/Carbon Revenue 4,338 3,630 11,607 — — — — 19,575

Other Non-Timber/Carbon Revenue (a) 4,128 787 286 — — — 5,201

Agency Fee Income — — — — 334 — 334

3 unchanged sentences

Timberland & Non-Strategic — — — 1,637 — — 1,637

Deferred Revenue/Other (a) — — — — 2,498 — — 2,498

Deferred Revenue/Other (b) — — — 3,093 — — 3,093

Total Real Estate Sales — — — 16,031 — — 16,031

3 unchanged sentences

Total Revenue $ 71,842 $ 34,419 $ 44,105 $ 16,276 $ 12,569 ($ 129 ) $ 179,082

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

September 30, 2021

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

March 31, 2022

Pulpwood $ 37,611 $ 2,918 $ 7,595 — $ 1,525 — $ 49,649

5 unchanged sentences

Agency Fee Income — — — — 350 — 350

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

Total Non-Timber Sales 5,787 1,148 1,694 — 350 — 8,979

Improved Development — — — 4,966 — — 4,966

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

Rural — — — 16,950 — — 16,950

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

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

Deferred Revenue/Other (a) — — — — ( 4,260 ) — — ( 4,260 )

Large Dispositions — — — — 56,048 — — 56,048

Deferred Revenue/Other (b) — — — 636 — — 636

Total Real Estate Sales — — — 33,952 — — 33,952

3 unchanged sentences

Total Revenue $ 76,763 $ 46,281 $ 51,389 $ 34,195 $ 13,461 ($ 48 ) $ 222,041

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

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

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

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

September 30, 2022

Stumpage Pay-as-Cut $ 21,111 — — — — $ 21,111

Stumpage Lump Sum 288 121 — — — 409

Total Stumpage 21,399 121 — — — 21,520

Delivered Wood (Domestic) 33,010 30,837 18,825 — 260 82,932

Delivered Wood (Export) 3,319 1,661 47,232 — 10,905 63,117

Total Delivered 36,329 32,498 66,057 — 11,165 146,049

Total Timber Sales $ 57,728 $ 32,619 $ 66,057 — $ 11,165 $ 167,569

September 30, 2021

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

Stumpage Lump Sum 392 1,846 — — — 2,238

Total Stumpage 12,727 1,846 — 131 — 14,704

Delivered Wood (Domestic) 19,515 28,404 20,614 6,703 817 76,053

Delivered Wood (Export) 7,043 — 54,694 — 24,325 86,062

Total Delivered 26,558 28,404 75,308 6,703 25,142 162,115

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

(a) Includes $ 0.6 million of CCS revenue.

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

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

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

September 30, 2022

The following tables present our timber sales disaggregated by contract type for the three months ended March 31, 2023 and 2022:

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

March 31, 2023

Stumpage Pay-as-Cut $ 30,477 — — — $ 30,477

5 unchanged sentences

Total Timber Sales $ 62,446 $ 33,496 $ 43,764 $ 12,106 $ 151,812

September 30, 2021

March 31, 2022

Stumpage Pay-as-Cut $ 36,206 — — — $ 36,206

21 unchanged sentences

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

Ferncliff Investors

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

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

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

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

In the third quarter of 2022 Bainbridge Landing, LLC completed the planned sale of its multi-family apartment complex in Bainbridge Island, Washington for a purchase price of $ 65.5 million.

The equity income related to the apartment complex sale was $ 16.0 million, of which $ 4.5 million was attributable to Rayonier.

We recognized the gain on the sale in our Consolidated Statements of Income and Comprehensive Income under the caption “Other operating income, net”.

NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP

3 unchanged sentences

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

Three Months Ended September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Three Months Ended

Beginning noncontrolling interests in the operating partnership

1 unchanged sentence

Adjustment of noncontrolling interests in the operating partnership

( 23,363 ) ( 1,746 ) ( 32,131 ) 25,531

Conversions of Redeemable Operating Partnership Units to Common Shares

1 unchanged sentence

Net Income attributable to noncontrolling interests in the operating partnership

455 2,210 1,670 4,303

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

12 unchanged sentences

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

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

2022 2021 2022 2021

Three Months Ended March 31,

Earnings per common share - basic

1 unchanged sentence

Net income attributable to noncontrolling interests in the operating partnership ( 174 ) ( 669 )

Net income attributable to noncontrolling interests in consolidated affiliates ( 10,828 ) ( 32,471 ) ( 12,478 ) ( 40,775 )

Net loss (income) attributable to noncontrolling interests in consolidated affiliates 1,037 ( 1,012 )

Net income attributable to Rayonier Inc.

5 unchanged sentences

Net Income $ 7,437 $ 30,998

Net income attributable to noncontrolling interests in consolidated affiliates ( 10,828 ) ( 32,471 ) ( 12,478 ) ( 40,775 )

Net loss (income) attributable to noncontrolling interests in consolidated affiliates 1,037 ( 1,012 )

Net income attributable to Rayonier Inc., before net income attributable to noncontrolling interests in the operating partnership $ 8,474 $ 29,986

7 unchanged sentences

$ 0.06 $ 0.20

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

2022 2021 2022 2021

Three Months Ended March 31,

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 September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Earnings per unit - basic

Net Income $ 7,437 $ 30,998

Net income attributable to noncontrolling interests in consolidated affiliates ( 10,828 ) ( 32,471 ) ( 12,478 ) ( 40,775 )

Net loss (income) attributable to noncontrolling interests in consolidated affiliates 1,037 ( 1,012 )

Net income available to unitholders $ 8,474 $ 29,986

4 unchanged sentences

Net Income $ 7,437 $ 30,998

Net income attributable to noncontrolling interests in consolidated affiliates ( 10,828 ) ( 32,471 ) ( 12,478 ) ( 40,775 )

Net loss (income) attributable to noncontrolling interests in consolidated affiliates 1,037 ( 1,012 )

Net income available to unitholders $ 8,474 $ 29,986

6 unchanged sentences

$ 0.06 $ 0.20

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

2022 2021 2022 2021

Three Months Ended March 31,

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 September 30, 2022:

September 30, 2022

Term Credit Agreement borrowings due 2028 at a variable interest rate of 4.2 % at September 30, 2022 (a)

Our debt consisted of the following at March 31, 2023:

March 31, 2023

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 4.2 % at

September 30, 2022 (b)

2021 Incremental Term Loan Facility Borrowings due 2029 at a variable interest rate of 4.1 % at September 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 subsidiary noncontrolling interests shareholder loan due 2027 at a fixed interest rate of 6.48 % (d)

2015 Term Loan borrowings due 2028 at a variable interest rate of 6.34 % at March 31, 2023

2022 Incremental Term Loan borrowings due 2027 at a variable interest rate of 6.34 % at March 31, 2023

2016 Incremental Term Loan borrowings due 2026 at a variable interest rate of 6.39 % at March 31, 2023

2021 Incremental Term Loan borrowings due 2029 at a variable interest rate of 6.29 % at March 31, 2023

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

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

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

Total principal debt 1,522,229

2 unchanged sentences

Total long-term debt $ 1,514,127

(a) As of September 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 September 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 September 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.

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

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

The following table contains information on the outstanding variable rate debt as of March 31, 2023:

Debt Periodic Interest Rate (a) Effective Fixed Interest Rate (b)

2015 Term Loan Daily Simple SOFR + 1.70 %

2022 Incremental Term Loan Daily Simple SOFR + 1.70 %

2016 Incremental Term Loan Daily Simple SOFR + 1.75 %

2021 Incremental Term Loan Daily Simple SOFR + 1.65 %

(a) Includes credit spread adjustment of 0.1 %.

(b) Effective interest rate is after consideration of interest rate swaps and estimated patronage refunds.

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

8 unchanged sentences

2023 DEBT ACTIVITY

On January 3, 2022, we drew $ 200.0 million on our Revolving Credit Facility.

On January 4, 2022, we repaid the $ 325.0 million Senior Notes due 2022 with $ 125.0 million of cash and the $ 200.0 million previously drawn on the Revolving Credit Facility.

We then made a $ 200.0 million draw on our 2021 Incremental Term Loan Facility and simultaneously repaid the outstanding principal on our Revolving Credit Facility.

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 September 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.

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

This interest rate swap will fix the cost of the 2021 Incremental Term Loan Facility over its seven-year term.

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 September 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.

During the three months ended March 31, 2023, we made no borrowings or repayments on our Revolving Credit Facility.

At March 31, 2023, we had available borrowings of $ 296.2 million under the Revolving Credit Facility, net of $ 3.8 million to secure our outstanding letters of credit.

New Zealand Debt

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

During the nine months ended September 30, 2022, the New Zealand subsidiary made borrowings and repayments of $ 7.1 million, net of changes in exchange rates, on its working capital facility (the “New Zealand Working Capital Facility”).

At September 30, 2022, the New Zealand subsidiary had NZ$ 20.0 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 September 30, 2022, the outstanding balance on the shareholder loan due 2027 is $ 23.0 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.

During the three months ended March 31, 2023, the New Zealand subsidiary made no borrowings and repayments on its working capital facility (the “New Zealand Working Capital Facility”).

At March 31, 2023, the New Zealand subsidiary had NZ$ 20.0 million of available borrowings under its working capital facility.

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 September 30, 2022, are calculated on a trailing 12-month basis:

In connection with our 2015 Term Loan Facility, 2016 Incremental Term Loan Facility, 2021 Incremental Term Loan Agreement, 2022 Incremental Term Loan Agreement and 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, 2023, are calculated on a trailing 12-month basis:

Covenant Requirement Actual Ratio Favorable

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Covenant debt to covenant net worth plus covenant debt shall not exceed 65 % 45 % 20 %

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

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

In addition to these financial covenants listed above, the Senior Notes due 2031, 2015 Term Loan Facility, 2016 Incremental Term Loan Facility, 2021 Incremental Term Loan Facility, 2022 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, 2023, we were in compliance with all applicable covenants.

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

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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 hedge a portion of export sales receipts to cover the projected foreign exchange exposure for the following three months.

As of September 30, 2022, foreign currency exchange contracts and foreign currency option contracts had maturity dates through October 2024 and July 2025, 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.

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

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

Additionally, it will occasionally hedge export sales receipts to cover

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

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 hedge a portion of export sales receipts to cover the projected foreign exchange exposure for the following three months.

As of March 31, 2023, foreign currency exchange contracts and foreign currency option contracts had maturity dates through February 2026 and October 2025, 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.

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

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

INTEREST RATE PRODUCTS

5 unchanged sentences

INTEREST RATE SWAPS

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

The following table contains information on the outstanding interest rate swaps as of March 31, 2023:

Outstanding Interest Rate Swaps (a)

Date Entered Into Term Notional Amount Related Debt Facility Fixed Rate of Swap Bank Margin on Debt Total Effective Interest Rate (b)

Date Entered Into Term Notional Amount Related Debt Facility Fixed Rate of Swap Bank Margin on Debt (b) Total Effective Interest Rate (c)

August 2015 9 years $ 170,000 Term Credit Agreement 2.10 % 1.70 % 3.80 %

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April 2016 10 years 100,000 Incremental Term Loan 1.51 % 1.75 % 3.26 %

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

May 2021 7 years 200,000 2021 Incremental Term Loan Facility

0.67 % 1.65 % 2.32 %

December 2022 5 years 100,000 2022 Incremental Term Loan Facility

3.72 % 1.70 % 5.42 %

(a) All interest rate swaps have been designated as interest rate cash flow hedges and qualify for hedge accounting.

(b) Rate is before estimated patronage payments.

(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 - Debt for additional information.

FORWARD-STARTING INTEREST RATE SWAPS

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

Outstanding Forward-Starting Interest Rate Swaps (a)

Date Entered Into Term Notional Amount Fixed Rate of Swap Related Debt Facility Forward Date Maximum Period Ending for Forecasted Issuance Date

April 2020 4 years $ 100,000 0.88 % Term Credit Agreement August 2024 N/A

May 2020 4 years 50,000 0.74 % Term Credit Agreement August 2024 N/A

(a) All forward-starting interest rate swaps have been designated as interest rate cash flow hedges and qualify for hedge accounting.

(b) Includes the SOFR Credit Spread Adjustment component of 0.1 %.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

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

FORWARD-STARTING INTEREST RATE SWAPS

In March 2023, we modified our benchmark rates from LIBOR to Daily Simple SOFR for our forward-starting interest rates swaps, resulting in slightly favorable fixed rates.

The following table contains information on the outstanding forward-starting interest rate swaps as of March 31, 2023:

Outstanding Forward-Starting Interest Rate Swaps (a)

Date Entered Into Term Notional Amount Fixed Rate of Swap Related Debt Facility Forward Date Maximum Period Ending for Forecasted Issuance Date

April 2020 4 years $ 100,000 0.78 % Term Credit Agreement August 2024 N/A

May 2020 4 years 50,000 0.64 % Term Credit Agreement August 2024 N/A

(a) All forward-starting interest rate swaps have been designated as interest rate cash flow hedges and qualify for hedge accounting.

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, 2023 and 2022:

Three Months Ended

September 30,

Income Statement Location 2023 2022

Derivatives designated as cash flow hedges:

Foreign currency exchange contracts Other comprehensive loss ($ 4,464 ) ($ 3,215 )

Other operating income, net ( 2,669 ) 597

Foreign currency option contracts Other comprehensive loss ( 1,754 ) ( 705 )

Other operating income, net — 349

Interest rate products Other comprehensive income 26,607 1,288

Foreign currency exchange contracts Other comprehensive (loss) income $ 3,813 $ 3,417

Other operating expense, net ( 2,429 ) 97

Foreign currency option contracts Other comprehensive (loss) income ( 270 ) 136

Interest rate products Other comprehensive (loss) income ( 9,660 ) 35,129

Interest expense, net ( 3,463 ) 2,670

Nine Months Ended

September 30,

Income Statement Location 2022 2021

Derivatives designated as cash flow hedges:

Foreign currency exchange contracts Other comprehensive loss ($ 15,373 ) ($ 8,688 )

Other operating income, net ( 2,598 ) 2,322

Foreign currency option contracts Other comprehensive loss ( 2,304 ) ( 2,691 )

Other operating income, net — 1,177

Interest rate products Other comprehensive income 76,372 46,433

Interest expense 4,555 11,935

During the next 12 months, the amount of the September 30, 2022 AOCI balance, net of tax, expected to be reclassified into earnings is a gain of approximately $ 7.7 million.

During the next 12 months, the amount of the March 31, 2023 AOCI balance, net of tax, expected to be reclassified into earnings is a gain of approximately $ 19.3 million.

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

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Foreign currency option contracts ( 257 )

Interest rate products 18,860

Interest rate products (a) 22,498

Total estimated gain on derivatives contracts $ 19,311

(a) These reclassified amounts are expected to fully offset variable interest rate payments made to debt holders, resulting in no net impact on our earnings or cash flows.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

The following table contains the notional amounts of the derivative financial instruments recorded in the Consolidated Balance Sheets:

Notional Amount

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Derivatives designated as cash flow hedges:

3 unchanged sentences

Forward-starting interest rate swaps 150,000 150,000

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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 September 30, 2022 and December 31, 2021.

The following table contains the fair values of the derivative financial instruments recorded in the Consolidated Balance Sheets at March 31, 2023 and December 31, 2022.

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)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Derivatives designated as cash flow hedges:

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

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

September 30, 2022 December 31, 2021

The following table presents the carrying amount and estimated fair values of our financial instruments as of March 31, 2023 and December 31, 2022, using market information and what we believe to be appropriate valuation methodologies under GAAP:

March 31, 2023 December 31, 2022

Asset (Liability) (a) Carrying

2 unchanged sentences

Level 1 Level 2 Level 1 Level 2

Cash and cash equivalents, excluding Timber Funds $ 260,931 $ 260,931 — $ 358,680 $ 358,680 —

Cash and cash equivalents, Timber Funds 873 873 — 3,493 3,493 —

Restricted cash, Timber Funds (b) 1,464 1,464 — 6,341 6,341 —

Restricted cash, excluding Timber Funds (c) 16,252 16,252 — 625 625 —

Current maturities of long-term debt (d) — — — ( 124,965 ) — ( 125,288 )

Long-term debt (d) ( 1,257,756 ) — ( 1,177,851 ) ( 1,242,819 ) — ( 1,245,148 )

Interest rate swaps (e) 63,538 — 63,538 ( 15,582 ) — ( 15,582 )

Forward-starting interest rate swaps (e) 12,839 — 12,839 11,482 — 11,482

Foreign currency exchange contracts (e) ( 19,921 ) — ( 19,921 ) ( 1,948 ) — ( 1,948 )

Foreign currency option contracts (e) ( 2,346 ) — ( 2,346 ) ( 42 ) — ( 42 )

Noncontrolling interests in the operating partnership (f) 96,243 96,243 — 133,823 133,823 —

(a) We did not have Level 3 assets or liabilities at September 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.

Cash and cash equivalents $ 98,774 $ 98,774 — $ 114,255 $ 114,255 —

Restricted cash (b) 4,962 4,962 — 1,152 1,152 —

Long-term debt (c) ( 1,514,127 ) — ( 1,441,247 ) ( 1,514,721 ) — ( 1,438,736 )

Interest rate swaps (d) 48,976 — 48,976 60,792 — 60,792

Forward-starting interest rate swaps (d) 10,456 — 10,456 11,939 — 11,939

Foreign currency exchange contracts (d) ( 3,153 ) — ( 3,153 ) ( 4,539 ) — ( 4,539 )

Foreign currency option contracts (d) 298 — 298 569 — 569

Noncontrolling interests in the operating partnership (e) 82,461 — 82,461 105,763 — 105,763

(a) We did not have Level 3 assets or liabilities at March 31, 2023 and December 31, 2022.

(b) Restricted cash represents proceeds from like-kind exchange sales deposited with a third-party intermediary and cash held in escrow.

See Note 18 — Restricted Cash for additional information.

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

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

See Note 6 — Debt for additional information.

(e) See Note 7 — Derivative Financial Instruments and Hedging Activities for information regarding the Consolidated Balance Sheets classification of our derivative financial instruments.

(f) Noncontrolling interests in the operating partnership is neither an asset nor liability and is classified as temporary equity in the Company’s Consolidated Balance Sheets.

(d) See Note 7 — Derivative Financial Instruments and Hedging Activities for information regarding the Consolidated Balance Sheets classification of our derivative financial instruments.

(e) Noncontrolling interests in the operating partnership is neither an asset nor liability and is classified as temporary equity in the Company’s Consolidated Balance Sheets.

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

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

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

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

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common shares.

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

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

Remaining 2022 $ 517 $ 18,275 $ 4,748 $ 23,540

2023 3,844 6,397 13,358 23,599

2024 3,771 554 3,392 7,717

2025 1,008 267 111 1,386

2026 450 267 — 717

Thereafter 1,356 4,062 — 5,418

$ 10,946 $ 29,822 $ 21,609 $ 62,377

(a) Environmental remediation represents our estimate of potential liability associated with environmental contamination and Natural Resource Damages (NRD) in Port Gamble, Washington.

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

(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) and other purchase obligations.

CONTINGENCIES

We have been named as a defendant in various lawsuits and claims arising in the normal course of business.

While we have procured reasonable and customary insurance covering risks normally occurring in connection with our businesses, we have in certain cases retained some risk through the operation of large deductible insurance plans, primarily in the areas of executive risk, property, automobile and general liability.

These pending lawsuits and claims, either individually or in the aggregate, are not expected to have a material adverse effect on our financial position, results of operations, or cash flow.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

CONTINGENCIES

We have been named as a defendant in various lawsuits and claims arising in the normal course of business.

These pending lawsuits and claims, either individually or in the aggregate, are not expected to have a material adverse effect on our financial position, results of operations, or cash flow.

ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIES

3 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 September 30, 2022 are shown below:

Changes in environmental and NRD liabilities from December 31, 2022 to March 31, 2023 are shown below:

Port Gamble, WA

3 unchanged sentences

Expenditures charged to liabilities ( 110 )

Increase to liabilities 698

Total Balance at September 30, 2022

Total Balance at March 31, 2023

Current portion ( 1,175 )

Non-current portion at September 30, 2022

Non-current portion at March 31, 2023

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 15 to 20 years.

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Should any future circumstances result in a change to the estimated cost of the project, we will record an appropriate adjustment to the liability in the period it becomes known and when we can reasonably estimate the amount.

For further information on the timing and amount of future payments related to our environmental remediation liabilities, see Note 9 - Commitments .

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

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

Financial Commitments (a) Maximum Potential

Standby letters of credit $ 885

Surety bonds (b) 19,121

Total financial commitments $ 20,006

(a) We have not recorded any liabilities for these financial commitments in our Consolidated Balance Sheets.

The guarantees are not subject to measurement, as the guarantees are dependent on our own performance.

(b) Surety bonds are issued primarily to secure performance obligations related to various operational activities, to provide collateral for our Wildlight development project in Nassau County, Florida and in connection with completed sales from the Harbor Hill project in Gig Harbor, Washington.

These surety bonds expire at various dates during 2022, 2023, 2024 and 2025 and are expected to be renewed as required.

For further information on the timing and amount of future payments related to our environmental remediation liabilities, see Note 10 - Commitments in our 2022 Form 10-K.

We do not currently anticipate any material loss in excess of the amounts accrued;

however we are not able to estimate a possible loss or range of loss, if any, in excess of the established liabilities.

Our future remediation expenses may be affected by a number of uncertainties including, but not limited to, the difficulty in estimating the extent and method of remediation, the evolving nature of environmental regulations, and the availability and application of technology.

We do not expect the resolution of such uncertainties to have a material adverse effect on our consolidated financial position or liquidity.

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

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

As of March 31, 2023, the following financial guarantees were outstanding:

Financial Commitments (a) Maximum Potential

Standby letters of credit (b) $ 3,779

Surety bonds (c) 23,204

Total financial commitments $ 26,983

(a) We have not recorded any liabilities for these financial commitments in our Consolidated Balance Sheets.

The guarantees are not subject to measurement, as the guarantees are dependent on our own performance.

(b) Approximately $ 2.9 million of the standby letters of credit serve as credit support for real estate construction in our Wildlight development project.

The remaining letters of credit support various insurance related agreements, primarily workers’ compensation.

These letters of credit will expire at various dates during 2023 and will be renewed as required.

(c) Surety bonds are issued primarily to secure performance obligations related to various operational activities, to provide collateral for our Wildlight development project in Nassau County, Florida and our Heartwood development project in Richmond Hill, Georgia.

These surety bonds expire at various dates during 2023, 2024 and 2025 and are expected to be renewed as required.

HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS

5 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 September 30, 2022 are shown below:

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

Changes in higher and better use timberlands and real estate development investments from December 31, 2022 to March 31, 2023 are shown below:

Higher and Better Use Timberlands and Real Estate Development Investments

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Capital expenditures (silviculture) 89 — 89

Intersegment transfers 5,717 — 5,717

Total Balance at September 30, 2022

Total Balance at March 31, 2023

91,069 47,067 138,136

Current portion (a) ( 579 ) ( 17,856 ) ( 18,435 )

Non-current portion at September 30, 2022

Non-current portion at March 31, 2023

$ 90,490 $ 29,211 $ 119,701

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

September 30, 2022 December 31, 2021

As of March 31, 2023 and December 31, 2022, our inventory consisted entirely of finished goods, as follows:

March 31, 2023 December 31, 2022

Finished goods inventory

1 unchanged sentence

Log inventory 11,394 5,347

Carbon unit inventory (b) 468 473

Total inventory $ 30,297 $ 23,729

1 unchanged sentence

See Note 12 — Higher And Better Use Timberlands and Real Estate Development Investments for additional information.

(b) Represents the basis in New Zealand carbon units intended to be sold in the next 12 months.

OTHER OPERATING EXPENSE, NET

Other operating expense, net consisted of the following:

Three Months Ended March 31,

Loss on foreign currency remeasurement, net of cash flow hedges ($ 2,484 ) ($ 571 )

Gain on sale or disposal of property and equipment 2 25

Equity loss related to Bainbridge Landing LLC joint venture — ( 227 )

Miscellaneous expense, net ( 34 ) ( 211 )

Total ($ 2,516 ) ($ 984 )

RAYONIER INC.

4 unchanged sentences

(Dollar amounts in thousands unless otherwise stated)

OTHER OPERATING INCOME, NET

Other operating income, net consisted of the following:

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

2022 2021 2022 2021

(Loss) gain on foreign currency remeasurement, net of cash flow hedges ($ 1,158 ) $ 1,379 ($ 481 ) $ 5,730

Gain on sale or disposal of property and equipment 9 — 40 93

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

Log trading marketing fees — — — 6

Equity income related to Bainbridge Landing LLC joint venture (b) 15,848 36 15,477 241

Miscellaneous expense, net ( 118 ) ( 74 ) ( 638 ) ( 325 )

Total $ 14,581 $ 5,070 $ 14,398 $ 9,474

(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 Resources Management (ORM) subsidiary, as well as its co-investment stake in both funds.

(b) The three and nine months ended September 30, 2022 include $ 16.0 million equity income from the sale of a multi-family apartment complex in Bainbridge Island, Washington.

As the equity investment was co-owned with outside investors, $ 4.5 million of the equity income was attributable to Rayonier.

See N ote 4 - Noncont rolling Inte re sts for additional information.

EMPLOYEE BENEFIT PLANS

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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 funded status and have made no pension contribution payments during the nine months ended September 30, 2022.

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

In December 2022, the Rayonier Board of Directors approved the resolution to terminate the Defined Benefit Plan and notified impacted parties of the termination and alternative distribution options.

The Defined Benefit Plan was terminated on February 28, 2023.

In conjunction with the termination of the Defined Benefit Plan, we also plan to terminate the unfunded plan and distribute all benefits in accordance with Section 409A of the Internal Revenue Code.

We expect to recognize pre-tax non-cash pension settlement charges related to the actuarial losses currently in AOCI upon settlement of the obligations of the Defined Benefit and Excess Benefit Plans.

These charges are currently expected to occur in 2023 and 2024, with the specific timing and final amounts dependent upon several factors.

We expect to make cash contributions of approximately $ 7.6 million during the settlement process in order to fund the Defined Benefit Plan on a plan termination basis.

The Defined Benefit Plan will be settled upon completion of lump sum distributions and purchase of annuity contracts.

The settlement is expected to be completed by the end of Q1 2024.

The Excess Benefit Plan will be settled entirely with lump sum payments upon termination with expected cash contributions in 2024 of approximately $ 1.3 million.

Projected cash contributions are an estimate, as actual amounts will be dependent upon the nature and timing of participant settlements and interest rates, as well as prevailing market conditions.

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

1 unchanged sentence

Three Months Ended

September 30, Three Months Ended

September 30,

2022 2021 2022 2021

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

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

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

Amortization of losses Interest and other miscellaneous income, 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

Nine Months Ended

September 30, Nine Months Ended

September 30,

March 31, Three Months Ended

2023 2022 2023 2022

Service cost Selling and general expenses — — $ 1 $ 2

Interest cost Interest and other miscellaneous income, net 1,826 1,671 39 34

Expected return on plan assets (a) Interest and other miscellaneous income, net ( 2,615 ) ( 2,809 ) — —

Amortization of losses Interest and other miscellaneous income, net 553 865 11 15

Interest cost Interest and other miscellaneous income (expense), net 844 609 17 13

Expected return on plan assets (a) Interest and other miscellaneous income (expense), net ( 887 ) ( 872 ) — —

Amortization of losses Interest and other miscellaneous income (expense), net 1 184 — 4

Net periodic benefit (credit) cost ($ 42 ) ($ 79 ) $ 18 $ 19

(a) The weighted-average expected long-term rate of return on plan assets used in computing 2023 net periodic benefit cost for pension benefit s is 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 September 30, 2022, Rayonier owns a 97.9 % inter est in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership.

As of March 31, 2023, Rayonier owns a 98.4 % inter est 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.

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Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Income tax expense ($ 1,039 ) ($ 5,515 )

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:

Three Months Ended

Annualized effective tax rate after discrete items 7.9 % 10.5 %

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:

Nine Months Ended

September 30,

Annualized effective tax rate after discrete items 7.9 % 6.4 %

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

The following table summarizes the changes in AOCI by component for the three months ended March 31, 2023 and the year ended December 31, 2022.

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

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Balance as of

September 30, 2022

March 31, 2023

($ 21,619 ) $ 1,321 $ 54,700 ($ 10,208 ) $ 24,194 ($ 3,326 ) $ 20,868

(a) The nine months ended September 30, 2022 and the year ended December 31, 2021 include $ 76.4 million and $ 52.5 million, respectively, of other comprehensive income related to interest rate products.

(a) The three months ended March 31, 2023 includes $ 9.6 million of other comprehensive loss related to interest rate products.

The three months ended December 31, 2022 included $ 75.0 million of other comprehensive income related to interest rate products.

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

(b) This component of other comprehensive income (loss) is included in the computation of net periodic pension and post-retirement costs.

(b) This component of other comprehensive income is included in the computation of net periodic pension and post-retirement costs.

See Note 15 — Employee Benefit Plans for additional information.

The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the three months ended March 31, 2023 and March 31, 2022:

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, 2023 March 31, 2022

Realized (gain) loss on foreign currency exchange contracts ($ 2,429 ) $ 9 Other operating expense, net

Noncontrolling interests 559 ( 2 ) Comprehensive loss (income) attributable to noncontrolling interests

Realized (gain) loss on interest rate contracts ( 3,463 ) 2,670 Interest expense

Income tax effect from net gain (loss) on foreign currency contracts 525 ( 2 ) Income tax expense

Net (gain) loss on cash flow hedges reclassified from accumulated other comprehensive income ($ 4,808 ) $ 2,675

RAYONIER INC.

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(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 nine months ended September 30, 2022 and September 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

September 30, 2022 September 30, 2021

Realized (gain) loss on foreign currency exchange contracts ($ 2,598 ) $ 2,322 Other operating income, net

Realized loss on foreign currency option contracts — 1,177 Other operating income, net

Noncontrolling interests 598 ( 805 ) Comprehensive income attributable to noncontrolling interests

Realized loss on interest rate contracts 4,555 11,935 Interest expense

Income tax effect from net gain (loss) on foreign currency contracts 560 ( 755 ) Income tax expense

Net loss on cash flow hedges reclassified from accumulated other comprehensive income $ 3,115 $ 13,874

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.

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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 nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

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

Three Months Ended March 31,

Restricted cash, excluding Timber Funds:

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Restricted cash held in escrow 3,316 625

Total restricted cash shown in the Consolidated Balance Sheets, excluding Timber Funds 16,252 625

Restricted cash shown in the Consolidated Balance Sheets, Timber Funds 1,464 49,209

Total restricted cash, excluding Timber Funds 4,962 625

Restricted cash, Timber Funds — 5,464

Cash and cash equivalents 98,774 259,722

Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 103,736 $ 265,811

RAYONIER INC.

AND SUBSIDIARIES

RAYONIER, L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands unless otherwise stated)

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 September 30, 2022 and December 31, 2021, the basis in properties meeting this classification was $ 2.4 million and $ 5.1 million, respectively.

As of March 31, 2023 and December 31, 2022, the basis in properties meeting this classification was $ 1.2 million and $ 0.7 million, respectively.

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

RELATED PARTY

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

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

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

As of September 30, 2022, all lots under contract have been sold to Mattamy, with only marketing fees remaining to be collected from third party homebuyers.

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

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

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

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

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

Mattamy Contract Sales (a) $ 281 1,022 $ 794 2,510

(a) The three and nine months ended September 30, 2021 exclude approximately $ 0.2 million and $ 0.4 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