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Item 7. Management’s Discussion and Analysis

2024-02-23 compared with 2023-02-24 · 195 added, 174 removed, 507 unchanged (42% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The objective of the Management’s Discussion and Analysis is to detail material information, events, uncertainties and other factors impacting the Company and the Operating Partnership and to provide investors an understanding of “Management’s perspective.” Item 7, Management’s Discussion and Analysis (MD&A) highlights the critical areas for evaluating the Company’s performance which includes a discussion on the reportable segments, liquidity and capital, and critical accounting estimates.

The objective of the Management’s Discussion and Analysis is to detail material information, events, uncertainties and other factors impacting the Company and the Operating Partnership and to provide investors an understanding of “Management’s perspective.” Item 7, Management’s Discussion and Analysis (MD&A) highlights the critical areas for evaluating our performance which includes a discussion on the reportable segments, liquidity and capital, and critical accounting estimates.

The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and notes.

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Across our timberland management segments, we sell standing timber (primarily at auction to third parties) and delivered logs.

Sales from our timber segments include all activities related to the harvesting of timber and other value-added activities such as the licensing of properties for hunting, the leasing of properties for mineral extraction and cell towers, as well as nature based solutions such as carbon credit sales.

We believe we are the second largest publicly-traded timberland REIT and the fourth largest private timberland owner in the United States.

Sales from our timber segments include all activities related to the harvesting of timber and other value-added activities such as the licensing of properties for hunting, the leasing of properties for mineral extraction and cell towers, and revenue from land-based solutions such as carbon capture and storage, solar and wind energy, and carbon credits.

We believe we are the second largest publicly-traded timberland REIT and the third largest private timberland owner in the United States.

Our Real Estate business manages all property sales and seeks to maximize the value of our properties that are more valuable for development, recreational or residential uses than for growing timber, and opportunistically sells non-strategic timberlands.

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CURRENT YEAR DEVELOPMENTS

During 2022, we acquired approximately 141,000 acres of timberlands for $458.5 million.

For additional information on acquisitions, see Note 4 - Timberland Acquisitions .

During 2023, we acquired approximately 5,000 acres of timberland for $14.1 million.

For further information on acquisitions, see Note 4 — Timberland Acquisitions .

In addition, we closed on a 55,000-acre Large Disposition in Oregon for $242.2 million.

See Item 7 — Results of Operations and Note 2 — Segment and Geographical Information for additional information regarding the Large Disposition.

INDUSTRY AND MARKET CONDITIONS

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dollar terms.

During 2022, global log and lumber markets experienced increased volatility due in part to Russia’s invasion of Ukraine and subsequent sanctions placed on Russia.

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

In 2022, pricing in the U.S.

South improved versus the prior year, with increases in both pulpwood and sawtimber prices in response to favorable local market supply and demand dynamics.

While pricing can be influenced by macroeconomic factors, including residential construction activity, prices can vary considerably on a local level based on weather, the available inventory of logs, mill demand, and export market access.

In the Pacific Northwest, average log prices for 2022 were higher when compared to the prior year, driven by a combination of improved sawtimber pricing resulting from strong domestic demand from lumber mills, as well as higher pulpwood pricing resulting from strong end-market demand and supply constraints.

In New Zealand, average log prices for 2022 were lower than the prior year, which reflected the decline in the NZ$/US$ exchange rate, as well as the COVID lockdowns and construction market headwinds in China which constrained export market demand.

Pricing in our timber segments is influenced by macroeconomic factors, including residential construction activity, and can also vary considerably on a local level based on weather, the available inventory of logs, mill demand, and export market access.

In 2023, each of our timber segments experienced challenging conditions due to market headwinds and weaker end-market demand relative to the prior year.

In our Southern Timber segment,

weaker demand for pulp and lumber coupled with drier weather conditions led to lower net stumpage prices versus the prior year.

In our Pacific Northwest Timber segment, average log prices for 2023 were below the prior year, primarily due to weaker domestic and export market demand.

In New Zealand, average log prices for 2023 were lower than the prior year, as construction market headwinds in China continue to impact export market demand.

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

In 2022, each of our timber segments experienced upward pressure on these cost components, with the most significant increase experienced in logging and transportation costs in our Southern Timber segment.

Following a sharp increase in 2022, our New Zealand Timber segment experienced significantly lower ocean freight costs in 2023.

Other major components of our cost of sales are the cost basis of timber sold (depletion) and the cost basis of real estate sold.

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Other costs include amortization of capitalized costs related to road and bridge construction and software, depreciation of fixed assets and equipment, road maintenance, severance and excise taxes, fire prevention and real estate commissions and closing costs.

In Real Estate, overall demand and pricing for HBU properties remained strong in 2022.

While higher interest rates caused demand for certain rural properties to moderate during the second half of 2022, favorable migration and demographic trends continue to benefit our improved development properties, specifically Wildlight, our development project north of Jacksonville, Florida, and Heartwood, our development project south of Savannah, Georgia.

In Real Estate, overall demand for rural HBU properties and our improved development projects remained strong in 2023.

Our improved development projects, specifically Wildlight, our development project north of Jacksonville, Florida, and Heartwood, our development project south of Savannah, Georgia, continue to benefit from favorable migration and demographic trends, which have thus far outweighed the impacts of higher interest rates.

CRITICAL ACCOUNTING ESTIMATES

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The determination is based on the geographic location of the new timber, the customers/markets that will be served and species mix.

During 2022, we acquired 141,000 acres of timberlands in Alabama, Florida, Georgia, Louisiana, Texas, Washington and New Zealand.

During 2023, we acquired 5,000 acres of timberlands in Florida, Georgia, Texas, Washington and New Zealand.

These acquisitions did not have a material impact on 2023 depletion rates.

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Effective December 31, 2016, we froze benefits for all employees participating in the pension plans.

In 2022, we recognized $0.2 million of pension and postretirement benefit credit due to the expected return on plan assets offsetting interest costs and amortization of losses.

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.

On July 20, 2023, the Rayonier Board of Directors approved the resolution to terminate the unfunded plan and will distribute all benefits in accordance with Section 409A of the Internal Revenue Code.

The unfunded plan was terminated on July 31, 2023.

Numerous estimates and assumptions are required to determine the proper amount of pension and postretirement liabilities and annual expense to record in our financial statements.

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An impairment loss is recognized if the carrying amount of an asset is not recoverable and exceeds its fair value.

See Note 1 — Summa ry of Significant Accounting Policies for additional information.

See Note 1 — Summary of Significant Accounting Policies for additional information.

DEFERRED TAX ITEMS

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Inherent uncertainties exist in such evaluations primarily due to unknown environmental conditions, changing governmental regulations and legal standards regarding liability and emerging remediation technologies.

At December 31, 2022, the total amount of liabilities recorded on our Consolidated Balance Sheets related to environmental contamination and Natural Resource Damages was $15.6 million, which reflected an increase in liabilities related to revised environmental and natural resources damage cost estimates recorded in the fourth quarter of 2022.

At December 31, 2023, the total amount of liabilities recorded on our Consolidated Balance Sheets related to environmental contamination and Natural Resource Damages was $16.6 million.

This is management’s best estimate of the costs for remediation and restoration, however, management will continue to monitor the cleanup process and make adjustments to the liability as needed.

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Southern Timber $76.3 $96.6 $66.1

Pacific Northwest Timber 15.2 6.8 (10.0)

New Zealand Timber 30.6 51.5 30.0

Pacific Northwest Timber (c) (9.0) 15.2 6.8

New Zealand Timber (d) 26.0 30.6 51.5

Timber Funds (a) — — 63.3

Real Estate (b)(c) 58.5 112.5 72.0

Real Estate (e) 156.6 58.5 112.5

Trading 0.5 0.4 0.1

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Interest expense (48.3) (36.2) (44.9)

Interest and other miscellaneous income, net 2.6 0.2 1.2

Interest and other miscellaneous income, net (f) 20.6 2.6 0.2

Income tax expense (5.1) (9.4) (14.6)

Net Income 178.5 122.8 210.5

Net (income) loss attributable to noncontrolling interests in consolidated affiliates (d) (13.3) (53.4) 7.8

Net income attributable to noncontrolling interests in consolidated affiliates (g) (2.1) (13.3) (53.4)

Net Income Attributable to Rayonier, L.P.

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$173.5 $107.1 $152.6

Adjusted EBITDA (e)

Adjusted EBITDA (h)

Southern Timber $156.2 $156.9 $120.2

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Corporate and other (37.4) (34.2) (29.4)

Total Adjusted EBITDA (e) $314.2 $329.8 $267.4

Total Adjusted EBITDA (h) $296.5 $314.2 $329.8

(a) The year ended December 31, 2021 includes sales and operating income of $156.8 million and $51.5 million, respectively, from Fund II Timberland Dispositions.

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

(c) The year ended December 31, 2022 includes $16.0 million of equity income from the sale of a multi-family apartment complex in Bainbridge Island, Washington and $16.6 million from Large Dispositions.

The years ended December 31, 2021 and December 31, 2020 include income of $44.8 million and $28.7 million, respectively, from Large Dispositions.

(d) The year ended December 31, 2021 includes a $41.2 million gain from Fund II Timberland Dispositions.

The year ended December 31, 2020 includes a $7.3 million loss related to timber write-offs resulting from casualty events.

(e) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators .

(d) The year ended December 31, 2023 includes $2.3 million of timber write-offs resulting from casualty events.

(e) The years ended December 31, 2023, December 31, 2022 and December 31, 2021 include income of $105.1 million, $16.6 million and $44.8 million, respectively, from Large Dispositions.

The year ended December 31, 2022 includes $16.0 million of equity income from the sale of a multi-family apartment complex in Bainbridge Island, Washington.

(f) The year ended December 31, 2023 includes $20.7 million of net recoveries associated with legal settlements, which is partially offset by a $2.0 million pension settlement charge.

(g) The year ended December 31, 2021 includes a $41.2 million gain from Fund II Timberland Dispositions.

(h) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators .

Southern Timber Overview 2023 2022 2021

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Total Volume) (a) 1 % 2 % 5 %

Net Stumpage Prices (dollars per ton) (b)

Net Stumpage Prices (dollars per ton)

Pine Pulpwood $16.78 $22.45 $19.09

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Operating Income $76.3 $96.6 $66.1

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

(+) Depreciation, depletion and amortization 80.0 60.3 54.1

Adjusted EBITDA (d) $156.9 $120.2 $109.1

Adjusted EBITDA (b) $156.2 $156.9 $120.2

Year-End Acres (in thousands) 1,852 1,919 1,798

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

(b) Pulpwood and sawtimber product pricing for composite stumpage sales is estimated based on market data.

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

(d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators .

(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators .

Pacific Northwest Timber Overview 2023 2022 2021

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Pulpwood 216 300 287

Sawtimber 1,285 1,382 1,306

Domestic Sawtimber (a) 999 1,188 1,382

Export Sawtimber 89 97 —

Total Volume 1,305 1,585 1,669

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% Export Volume (vs.

Total Volume) (a) 11 % 16 % 10 %

Total Volume) (b) 12 % 11 % 16 %

Delivered Log Pricing (in dollars per ton)

Pulpwood $38.78 $50.83 $31.65

Sawtimber 112.44 97.87 84.93

Domestic Sawtimber 97.71 111.96 97.87

Export Sawtimber (c) 142.63 117.85 —

Weighted Average Log Price $90.97 $100.50 $86.23

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Operating Income (Loss) ($9.0) $15.2 $6.8

(+) Timber write-off resulting from casualty events (b) 0.7 — —

(+) Timber write-offs resulting from casualty events (d) — 0.7 —

(+) Depreciation, depletion and amortization 36.9 48.0 50.5

Adjusted EBITDA (c) $63.9 $57.3 $37.1

Adjusted EBITDA (e) $27.9 $63.9 $57.3

Year-End Acres (in thousands) 418 474 490

Northwest Sawtimber (in dollars per MBF) (d) $849 $748 $666

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

(b) Timber write-off resulting from casualty events includes the write-off of merchantable and pre-merchantable timber volume related to a fire casualty event.

(d) Delivered Sawtimber excluding chip-n-saw.

Northwest Sawtimber (in dollars per MBF) (f) $711 $849 $748

(a) Includes volumes sold to third-party exporters.

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

Prior to Q4 2022, pricing reflects the transfer of logs on an FOB basis.

Beginning in Q4 2022, pricing is reported on a CFR basis (i.e., inclusive of export costs and freight).

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

(e) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators .

(f) Delivered Sawtimber excluding chip-n-saw.

New Zealand Timber Overview 2023 2022 2021

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Timber Sales $211.1 $253.1 $280.1

Cut and Haul (95.8) (93.4) (77.6)

Port and Freight Costs (92.5) (89.6) (42.9)

Cut and Haul (b) (84.5) (94.3) (91.9)

Port and Freight (b) (64.8) (94.1) (91.1)

Net Stumpage Sales $61.8 $64.8 $97.1

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Operating Income $26.0 $30.6 $51.5

(+) Timber write-offs resulting from casualty events (c) 2.3 — —

(+) Depreciation, depletion and amortization 21.7 23.9 27.0

Adjusted EBITDA (b) $54.5 $78.5 $55.0

Adjusted EBITDA (d) $50.0 $54.5 $78.5

New Zealand Dollar to U.S.

Dollar Exchange Rate (c) 0.6350 0.7090 0.6522

Dollar Exchange Rate (e) 0.6117 0.6350 0.7090

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

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Domestic Sawtimber (in $NZD per tonne) $119.25 $124.50 $129.07

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

(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators .

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

(b) Prior periods have been restated to reclassify certain export related costs from cut and haul to port and freight.

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

(d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators .

(e) Represents the period-average rate.

Real Estate Overview 2023 2022 2021

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Operating Income $156.6 $58.5 $112.5

(+) Depreciation, depletion and amortization 13.9 7.9 17.7

(+) Non-cash cost of land and improved development 28.4 25.0 30.4

(–) Gain associated with the multi-family apartment complex sale attributable to NCI (f) — (11.5) —

(–) Large Dispositions (c) (105.1) (16.6) (44.8)

(+) Depreciation, depletion and amortization 18.0 13.9 7.9

(+) Non-cash cost of land and improved development 29.8 28.4 25.0

Adjusted EBITDA (g) $99.3 $72.7 $100.7

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

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

(d) Excludes Large Dispositions.

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Total Sales $43.7 $71.0 $95.4

Operating Income (Loss) $0.4 $0.1 ($0.5)

Operating Income $0.5 $0.4 $0.1

Adjusted EBITDA (a) $0.5 $0.4 $0.1

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Southern Timber

Reforestation, silvicultural and other capital expenditures $24.1 $21.5 $20.7

Reforestation, silviculture and other capital expenditures $30.6 $24.1 $21.5

Property taxes 7.3 7.1 6.8

Lease and timber deed payments 3.1 3.1 3.5

Lease payments 2.8 3.1 3.1

Allocated overhead 5.9 4.9 4.4

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Pacific Northwest Timber

Reforestation, silvicultural and other capital expenditures 10.5 10.8 6.5

Reforestation, silviculture and other capital expenditures 10.9 10.5 10.8

Property taxes 0.9 1.1 1.1

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New Zealand Timber

Reforestation, silvicultural and other capital expenditures 10.9 11.2 8.9

Reforestation, silviculture and other capital expenditures 8.6 10.9 11.2

Property taxes 0.8 0.8 0.8

Lease and timber deed payments 4.4 5.2 4.3

Lease payments 4.5 4.4 5.2

Allocated overhead 2.8 2.4 3.0

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Real Estate 0.3 0.3 0.2

Corporate 0.6 — —

Total Capital Expenditures $81.4 $74.8 $73.2

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Southern Timber $10.5 $457.8 $168.2

Pacific Northwest Timber 3.6 — —

New Zealand Timber — 0.7 10.9

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Real Estate Development Investments (b) $23.1 $13.7 $12.5

(a) The years ended December 31, 2021 and December 31, 2020 exclude $2.8 million and $2.3 million, respectively, of capital expenditures attributable to noncontrolling interests in Timber Funds.

(a) The year ended December 31, 2021 excludes $2.8 million of capital expenditures attributable to noncontrolling interests in Timber Funds.

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

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The following tables summarize sales, operating income and Adjusted EBITDA variances for 2023 versus 2022:

Sales Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Elim.

Sales Southern Timber Pacific Northwest Timber New Zealand Timber Real Estate Trading Elim.

2022 $264.2 $162.2 $274.1 $138.0 $71.0 ($0.4) $909.1

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Foreign exchange (a) — — (3.0) — — — (3.0)

Other 18.0 (b) 12.3 (b) 16.5 (c) (199.4) (24.9) (d) (0.2) 3.3 (e) (174.4)

Other (8.8) (b) (5.5) (b) (24.9) (c) 221.5 (d) — (0.1) 182.2

2023 $264.1 $124.1 $235.5 $390.0 $43.7 ($0.5) $1,056.9

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(d) Includes a $25.6 million decrease in Large Dispositions in addition to Conservation Easements sales in 2021.

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

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

(d) Includes a $211.7 million increase in Large Dispositions as well as deferred revenue adjustments, revenue true-ups, and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

Operating Income Southern Timber Pacific Northwest Timber New Zealand Timber Real Estate Trading Corporate and Other Total

2022 $96.6 $15.2 $30.6 $58.5 $0.4 ($35.5) $165.8

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Cost (8.1) (5.2) (2.1) (8.5) 0.1 (3.2) (27.0)

Non-timber income 2.5 (0.3) 19.7 — — 0.1 — 22.0

Foreign exchange (b) — — (2.1) — — — — (2.1)

Non-timber income (b) 9.0 0.6 3.7 — — — 13.3

Foreign exchange (c) — — (0.1) — — — (0.1)

Depreciation, depletion & amortization (9.9) 2.8 0.2 6.0 — (0.4) (1.3)

Non-cash cost of land and improved development — — — 24.1 — — 24.1

Other (c) — 0.7 — (63.3) (8.5) — — (71.1)

Other — 0.7 (d) (2.3) (e) 78.7 (f) — — 77.1

2023 $76.3 ($9.0) $26.0 $156.6 $0.5 ($39.1) $211.3

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

(b) Net of currency hedging impact.

(c) Real Estate primarily includes Large Dispositions and equity income from joint venture entities, including the gain from the sale of the multi-family apartment complex in Bainbridge Island, Washington.

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

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

(d) Includes $0.7 million of timber write-offs resulting from casualty events in the prior year.

(e) Includes $2.3 million of timber write-offs resulting from casualty events in the current year.

(f) Includes an $88.5 million increase in operating income from Large Dispositions in the current year, which is partially offset by $16.0 million of equity income from the sale of a multi-family apartment complex in Bainbridge Island, Washington in the prior year.

Real estate also includes deferred revenue adjustments, revenue true-ups, and marketing fees related Improved Development sales in addition to residential and commercial lease revenue.

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

2022 $156.9 $63.9 $54.5 $72.7 $0.4 ($34.2) $314.2

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Cost (8.1) (5.2) (2.1) (8.5) 0.1 (3.2) (27.0)

Non-timber income 2.5 (0.3) 19.7 — — 0.1 — 22.0

Foreign exchange (c) — — (4.8) — — — — (4.8)

Other (d) — 1.4 — (2.3) 6.6 — — 5.7

Non-timber income (c) 9.0 0.6 3.7 — — — 13.3

Foreign exchange (d) — — (0.9) — — — (0.9)

Other (e) — — — 4.6 — — 4.6

2023 $156.2 $27.9 $50.0 $99.3 $0.5 ($37.4) $296.5

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

(d) Pacific Northwest Timber includes a $1.4 million timber reservation sale to a conservation group.

(d) Net of currency hedging impact.

(e) Real Estate includes deferred revenue adjustments, revenue true-ups, and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

The prior year period included a $4.5 million gain associated with a multi-family apartment complex sale attributable to Rayonier.

SOUTHERN TIMBER

Full-year sales of $264.2 million increased $59.8 million, or 29%, versus the prior year, including an increase in non-timber sales of $3.0 million versus the prior year.

Harvest volumes increased 10% to 6.28 million tons versus 5.69 million tons in the prior year.

Average pine sawtimber stumpage prices increased 22% to $34.36 per ton versus $28.27 per ton in the prior year, while average pine pulpwood stumpage prices increased 18% to $22.45 per ton versus $19.09 in the prior year.

The increase in average pine pulpwood prices was primarily due to strong domestic demand.

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

Operating income of $96.6 million increased $30.5 million versus the prior year due to higher net stumpage realizations ($25.7 million), higher volumes ($7.5 million), and higher non-timber income ( $2.5 million ), partially offset by higher costs ( $4.5 million ) and higher depletion rates ( $0.7 million) .

Full-year Adjusted EBITDA of $156.9 million was $36.7 million above the prior year.

Full-year sales of $264.1 million decreased marginally versus the prior year.

Harvest volumes increased 16% to 7.31 million tons versus 6.28 million tons in the prior year, primarily driven by additional volume from acquisitions completed in the fourth quarter of 2022.

Average pine sawtimber stumpage realizations decreased 14% to $29.64 per ton versus $34.36 per ton in the prior year, while average pine pulpwood stumpage realizations decreased 25% to $16.78 per ton versus $22.45 per ton in the prior year.

The decrease in average pine sawtimber prices was primarily due to softer demand from sawmills, relatively drier weather conditions, and decreased competition from pulp mills for chip-n-saw volume.

The decrease in average pine pulpwood prices was primarily due to weaker end-market demand and relatively drier weather conditions.

Overall, weighted-average stumpage realizations (including hardwood) decreased 15% to $22.49 per ton versus $26.37 per ton in the prior year.

Operating income of $76.3 million decreased $20.4 million versus the prior year due to lower net stumpage realizations ($28.4 million), higher depletion rates ( $9.9 million), higher overhead and other costs ( $4.2 million ), and costs associated with long-term timber lease expirations ($3.9 million), partially offset by higher volumes ($17.1 million) and higher non-timber income ( $9.0 million ).

Full-year Adjusted EBITDA of $156.2 million was $0.7 million below the prior year.

PACIFIC NORTHWEST TIMBER

Full-year sales of $162.2 million increased $19.2 million, or 13%, versus the prior year.

Harvest volumes decreased 5% to 1.59 million tons versus 1.67 million tons in the prior year.

Average delivered sawtimber prices increased 15% to $112.44 per ton versus $97.87 per ton in the prior year, reflecting relatively strong customer demand and a favorable species mix, as a higher proportion of Douglas-fir sawtimber was harvested.

Average delivered pulpwood prices increased 61% to $50.83 per ton versus $31.65 per ton in the prior year, primarily driven by supply constraints amid strong end-market demand.

Operating income of $15.2 million improved $8.4 million versus the prior year, primarily due to higher net stumpage realizations ($11.3 million) and a timber reservation sale to a conservation group ($1.4 million), partially offset by higher costs ($2.2 million), lower volumes ($1.1 million), a timber write-off resulting from casualty events ($0.7 million), and lower non-timber income ($0.3 million).

Full-year Adjusted EBITDA of $63.9 million was $6.6 million above the prior year.

Full-year sales of $124.1 million decreased $38.1 million, or 23%, versus the prior year.

Harvest volumes decreased 18% to 1.31 million tons versus 1.59 million tons in the prior year, as some planned harvests were deferred in response to soft market conditions.

Average delivered prices for domestic sawtimber decreased 13% to $97.71 per ton versus $111.96 per ton in the prior year, reflecting weaker domestic and export market demand.

Average delivered pulpwood prices decreased 24% to $38.78 per ton versus $50.83 per ton in the prior year as the prior year benefited from stronger end-market demand.

An operating loss of $9.0 million versus operating income of $15.2 million in the prior year was driven by lower net stumpage realizations ($17.6 million), lower volumes ($5.5 million) and higher costs ($5.2 million), partially offset by lower depletion rates ($2.8 million), timber write-offs resulting from casualty events in the prior year ($0.7 million), and higher non-timber income ($0.6 million).

Full-year Adjusted EBITDA of $27.9 million was $36.0 million below the prior year.

NEW ZEALAND TIMBER

Full-year sales of $235.5 million decreased $38.6 million, or 14%, versus the prior year.

Harvest volumes increased 1% to 2.62 million tons versus 2.60 million tons in the prior year driven by slightly higher export demand versus the prior year period that was negatively impacted by COVID-19 related headwinds.

Average delivered prices for export sawtimber decreased 10% to $124.91 per ton versus $138.84 per ton in the prior year, while average delivered prices for domestic sawtimber decreased 14% to $71.87 per ton versus $83.19 per ton in the prior year.

The decrease in export sawtimber prices primarily reflected constrained export market demand due to COVID lockdowns and construction market headwinds in China.

Harvest volumes decreased 5% to 2.48 million tons versus 2.62 million tons in the prior year, primarily due to lost production days resulting from Cyclone Gabrielle in the first quarter and the deferral of planned harvests in response to soft market conditions.

Average delivered prices for export sawtimber decreased 18% to $102.39 per ton versus $124.91 per ton in the prior year, while average delivered prices for domestic sawtimber decreased 8% to $66.31 per ton versus

$71.87 per ton in the prior year.

The decrease in export sawtimber prices was primarily driven by weaker construction demand in China and increased salvage volume from Cyclone Gabrielle.

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

dollar terms) was primarily driven by the NZ$/US$ exchange rate (US$0.64 per NZ$1.00 versus US$0.71 per NZ$1.00).

Excluding the impact of foreign exchange rates, domestic sawtimber prices decreased 4% from the prior year, reflecting slowing domestic market demand and additional supply due to export market headwinds.

Operating income of $30.6 million decreased $20.9 million versus the prior year due to lower net stumpage realizations ($37.5 million), unfavorable foreign exchange impacts ($2.1 million), and higher forest management costs ($1.9 million), partially offset by lower depletion rates ($0.5 million), higher volumes ($0.4 million), and higher non-timber income ($19.7 million).

dollar terms) was partially driven by the decrease in the NZ$/US$ exchange rate (US$0.61 per NZ$1.00 versus US$0.64 per NZ$1.00).

Excluding the impact of foreign exchange rates, domestic sawtimber prices decreased 4% from the prior year, reflecting weaker domestic demand and decreased competition from export markets.

Operating income of $26.0 million decreased $4.6 million versus the prior year due to lower volumes ($2.5 million), timber write-offs resulting from casualty events in the current year ($2.3 million), higher costs ($2.1 million), lower net stumpage realizations ($1.5 million), and unfavorable foreign exchange impacts ($0.1 million), partially offset by higher non-timber / carbon credit income ($3.7 million) and lower depletion rates ($0.2 million).

Full-year Adjusted EBITDA of $50.0 million was $4.5 million below the prior year.

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

As such, we had no sales, operating income or Adjusted EBITDA in 2022 in the Timber Funds segment.

Full-year sales of $138.0 million decreased $51.9 million versus the prior year, while operating income of $58.5 million decreased $54.0 million versus the prior year.

Full-year sales of $390.0 million increased $252.0 million versus the prior year, while operating income of $156.6 million increased $98.1 million versus the prior year.

Sales and operating income in the current year included $242.2 million and $105.1 million, respectively, from Large Dispositions.

Current year operating income also included an $11.5 million gain attributable to noncontrolling interests from the sale of a multi-family apartment complex in Bainbridge Island, Washington.

Prior year sales and operating income included $30.5 million and $16.6 million, respectively, from Large Dispositions.

Sales decreased primarily due to lower volumes (28,323 acres sold versus 32,371 acres sold in the prior year) and lower weighted average prices ($4,829 per acre versus $5,820 per acre in the prior year).

Full-year Adjusted EBITDA of $72.7 million was $28.0 million below the prior year.

Prior year period operating income also included an $11.5 million gain attributable to noncontrolling interests from the sale of a multi-family apartment complex in Bainbridge Island, Washington.

Sales increased primarily due to significantly higher volumes (85,618 acres sold versus 28,323 acres sold in the prior year), partially offset by lower weighted average prices ($4,392 per acre versus $4,829 per acre in the prior year).

Full-year Adjusted EBITDA of $99.3 million was $26.6 million above the prior year.

Full-year sales of $43.7 million decreased $27.3 million versus the prior year due to lower volumes and prices.

Sales volumes decreased 32% to 378,000 tons versus 559,000 tons in the prior year.

Operating income and Adjusted EBITDA increased $0.2 million versus the prior year.

Operating income and Adjusted EBITDA increased $0.1 million versus the prior year as improved margins more than offset reduced trading volume.

CORPORATE AND OTHER EXPENSE / ELIMINATIONS

Full-year corporate and other operating expense of $35.5 million increased $4.9 million versus the prior year, primarily due to higher compensation expenses ($3.9 million), higher legal costs ($0.7 million), higher meals and travel expenses ($0.6 million), and higher other overhead costs ($0.4 million), partially offset by lower benefit costs ($0.7 million).

Full-year corporate and other operating expense of $39.1 million increased $3.6 million versus the prior year, primarily due to higher compensation and benefit expenses and professional services fees.

Compensation and benefits expenses were elevated versus the prior year primarily due to the acceleration of equity compensation expense for retirement-eligible employees.

INTEREST EXPENSE

Full-year interest expense of $36.2 million decreased $8.7 million versus the prior year period, as the prior year period included a $2.2 million loss from the termination of a cash flow hedge.

Additionally, full-year interest expense benefited from lower average outstanding debt and a lower weighted-average interest rate as compared to the prior year period.

Full-year interest expense of $48.3 million increased $12.1 million versus the prior year primarily due to higher average outstanding debt and a higher weighted-average interest rate.

INTEREST AND OTHER MISCELLANEOUS INCOME, NET

Other non-operating income of $2.6 million increased $2.4 million versus the prior year primarily due to increased interest income and prior year costs related to debt extinguishments and modifications, partially offset by increased environmental and natural resource damage remediation costs.

Full-year interest and other miscellaneous income of $20.6 million increased $18.0 million versus the prior year, as the current year included $20.7 million of net recoveries associated with legal settlements, partially offset by a $2.0 million pension settlement charge.

INCOME TAX EXPENSE

Full-year income tax expense of $9.4 million decreased $5.3 million versus the prior year period as a result of lower taxable income.

Full-year income tax expense of $5.1 million decreased $4.3 million versus the prior year period.

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

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In 2024, we expect to achieve full-year harvest volumes in our Southern Timber segment of 7.1 to 7.3 m illion tons.

T he anticipated increase relative to 2022 reflects the additional volume associated with our previously announced acquisitions.

We also anticipate higher non-timber income for full-year 2023 as compared to full-year 2022.

However, we expect that the increase in harvest volumes and non-timber income will be largely offset by lower weighted average stumpage realizations due to softer demand as well as higher harvest and transportation costs.

In our Pacific Northwest Timber segment, we expect to achieve full-year harvest volumes of approximately 1.5 to 1.6 million tons.

The anticipated decrease relative to 2022 reflects recent land sales activity, a more muted domestic demand outlook, and an ongoing mix shift toward Douglas-fir, which has a lower MBF-to-ton conversion ratio.

We further expect weighted average pricing to decline relative to full-year 2022 due to weaker macroeconomic conditions and lower lumber prices.

In our New Zealand Timber segment, we expect to achieve full-year harvest volumes of 2.5 to 2.7 mi llion tons.

We anticipate that stumpage margins will remain under pressure to start the year but are optimistic that export market conditions will gradually improve as the operating environment in China normalizes following the COVID-related disruptions that persisted throughout 2022.

We further expect that favorable carbon credit pricing and volumes will contribute to improved results in 2023.

In our Real Estate segment, we are encouraged by the continued interest in both our development projects and rural properties despite the higher interest rate environment.

However, we anticipate that real estate activity will be significantly weighted to the second half of the year, with relatively limited activity in the first quarter in particular.

We anticipate a modest decrease in harvest volumes versus the prior year as logging conditions normalize following a period of relatively dry weather.

Further, we expect that regional pine stumpage realizations will improve modestly versus the prior year based on improving end market demand coupled with an anticipated increase in rainfall from the El Niño weather pattern.

However, we expect these pricing gains will be largely offset by a less favorable geographic mix.

Lastly, we expect higher non-timber income for full-year 2024 as compared to full-year 2023, primarily driven by additional income from land-based solutions.

In our Pacific Northwest Timber segment, we expect to achieve full-year harvest volumes of approximately 1.4 million tons.

The anticipated increase relative to the prior year assumes a return to a more normalized level of demand and harvest activity, partially offset by a reduction in our Pacific Northwest sustainable yield resulting from the recent Oregon disposition.

Further, while we anticipate some demand improvement as the year progresses, we expect that full-year weighted average log pricing will remain modestly below the pricing achieved in 2023 due in part to a less favorable species mix.

In our New Zealand Timber segment, we expect full-year harvest volumes of 2.4 to 2.5 mi llion tons.

We expect that full-year domestic and export sawtimber pricing will improve modestly relative to the full-year pricing achieved in 2023 as end-markets continue to recover.

We further anticipate a modest increase in carbon credit sales in 2024 as pricing has remained strong following the significant market volatility experienced in the first half of 2023.

In our Real Estate segment, we are encouraged by both the continued strong demand for our rural properties as well as the continued momentum across our improved development projects as we enter 2024 .

We expect another strong year in both our rural land sales program as well as our improved development projects based on our current pipeline of transactions.

However, similar to 2023, we anticipate very light closing activity in the first quarter, followed by a significant pickup in activity in the second quarter.

Our 2024 outlook is subject to a number of variables and uncertainties, including those discussed at Item 1A — Risk Factors .

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Our operations have generally produced consistent cash flow and required limited capital resources;

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

however, acquisitions of timberlands generally require funding from external sources or Large Dispositions.

We continuously evaluate our capital structure.

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Overall, we believe we have adequate liquidity and sources of capital to run our businesses efficiently and effectively and to maximize the value of our timberland and real estate assets under management.

On November 1, 2023 we announced an asset disposition and capital structure realignment plan (the “Plan”) targeting $1 billion of select asset sales over the following 18 months.

We expect to use the proceeds of the asset sales to reduce our leverage to ≤3.0x Net Debt / Adjusted EBITDA and return capital to share and unit holders.

Following the announcement of this Plan, we closed on the disposition of approximately 55,000 acres of timberland in Oregon for $242.2 million, and we believe we are on-track to meet the $1 billion disposition target as planned.

While we currently anticipate to execute the Plan as announced, facts and circumstances could change in the future, which may change our strategy or preclude us from executing the Plan as intended.

See Item 1A — Risk Factors in this Annual Report on Form 10-K for additional information.

CREDIT RATINGS

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(a) Total debt as of December 31, 2023, 2022 and 2021 reflects the principal on long-term debt, net of fair market value adjustments and gross of deferred financing costs and unamortized discounts of $6.9 million, $8.4 million and $8.3 million, respectively.

(b) For a reconciliation of Adjusted EBITDA to net income see Management’s Discussion and Analysis of Financial Condition and Results of Operations—Performance and Liquidity Indicators .

(b) For a reconciliation of Adjusted EBITDA to net income see Item 7 — Performance and Liquidity Indicators .

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“OP” units) plus net debt based on Rayonier’s share price of $33.41, $32.96, and $40.36 as of December 31, 2023, 2022 and 2021, respectively.

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

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

On November 4, 2022 we entered into a new distribution agreement with a group of sales agents through which we may sell common shares, from time to time, having an aggregate sales price of up to $300 million (the “2022 ATM Program”).

As of December 31, 2023, $269.7 million remains available for issuance under the 2022 ATM Program.

The following table outlines the common stock issuance pursuant to our ATM Programs (dollars in millions):

The following table outlines the common shares issuance pursuant to our ATM Program (dollars in millions):

Year Ended December 31,

Shares of common stock issued under the ATM Programs 1,579,228 6,357,972

Average price of common stock issued under the ATM Programs $38.05 $37.05

Common shares issued under the ATM Program 400 1,579,228

Average price of common shares issued under the ATM Program $34.03 $38.05

Gross proceeds — $60.4

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CASH PROVIDED BY OPERATING ACTIVITIES

Cash provided by operating activities decreased $55.9 million versus the prior year primarily due to lower operating results and higher cash taxes paid.

CASH USED FOR INVESTING ACTIVITIES

Cash used for investing activities increased $490.1 million versus the prior year primarily due to higher cash used for timberland acquisitions ($279.4 million), prior year net proceeds from the sale of Timber Fund II timberlands ($154.7 million) and Timber Funds III and IV ($31.0 million), lower proceeds from Large Dispositions ($25.2 million) and higher real estate development investments ($1.2 million), partially offset by lower capital expenditures ($1.2 million) and other investing activities ($0.2 million).

Cash provided by operating activities increased $29.2 million versus the prior year primarily due to changes in working capital.

CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES

Cash provided by investing activities increased $640.5 million versus the prior year primarily due to lower cash used for timberland acquisitions ($444.5 million), higher proceeds from Large Dispositions ($210.4 million) and other investing activities ($1.6 million), partially offset by higher real estate development investments ($9.4 million) and higher capital expenditures ($6.6 million).

CASH USED FOR FINANCING ACTIVITIES

Cash used for financing activities decreased $11.7 million from the prior year due to an increase in net borrowings ($98.6 million), lower distributions to noncontrolling interests in consolidated affiliates ($89.5 million), make-whole fees on debt prepayments in the prior year ($6.2 million), lower debt issuance costs ($4.1 million) and lower distributions to noncontrolling interests in the operating partnership ($0.6 million), partially offset by lower proceeds from the issuance of common shares under the ATM Program ($169.3 million), higher dividends paid on common stock ($12.2 million), lower proceeds from the issuance of common shares under the incentive stock plan ($3.3 million) and increases in share repurchases for tax withholding on vested incentive stock awards ($2.6 million).

Cash used for financing activities increased $324.3 million from the prior year due to a decrease in net borrowings ($275.0 million), lower proceeds from the issuance of common shares under the ATM Program ($61.6 million), higher dividends paid on common shares ($4.3 million), and lower proceeds from the issuance of common shares under the incentive stock plan ($2.6 million), partially offset by lower distributions to noncontrolling interests in consolidated affiliates ($17.7 million), lower debt issuance costs ($0.7 million) and lower distributions to noncontrolling interests in the operating partnership ($0.7 million).

FUTURE USES OF CASH

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Operating leases — PP&E, offices (c) 6.0 1.2 1.5 0.9 2.4

Commitments — development projects (d) 32.2 27.0 1.2 0.5 3.5

Commitments — derivatives (e) 5.9 5.5 0.4 — —

Commitments — environmental remediation (f) 15.6 1.2 10.2 1.4 2.8

Commitments — other (g) 1.5 0.8 0.7 — —

Commitments — real estate projects 45.0 33.4 2.3 2.3 7.0

Commitments — derivatives (d) 0.7 0.7 — — —

Commitments — environmental remediation (e) 16.6 11.8 1.2 0.9 2.7

Commitments — other (f) 9.7 9.3 0.4 — —

Total $1,985.3 $141.1 $409.3 $584.8 $850.1

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See Note 7 — Debt for additional information.

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

(b) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of December 31, 2023 and excludes the impact of hedging.

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

(e) Commitments — derivatives represent payments expected to be made on derivative financial instruments (foreign exchange contracts).

(d) Commitments — derivatives represent payments expected to be made on derivative financial instruments (foreign exchange contracts).

See Note 8 — Derivative Financial Instruments and Hedging Activities for additional information.

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

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

See Note 12 — Environmental and Natural Resource Damage Liabilities for additional information.

(g) Commitments — other includes other purchase obligations.

(f) Commitments — other includes $8.4 million related to pension plan termination.

See Note 18 — Employee Benefit Plans for additional information.

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

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common shares and distributions to Rayonier, L.P.

unitholders are expected to be approximately $167.9 million and $3.7 million, respectively, assuming no change in the quarterly dividend rate of $0.285 per share or material changes in the number of common shares or partnership units outstanding.

unitholders, excluding the additional dividend and distribution payable January 12, 2024 to shareholders of record on December 29, 2023, are expected to be approximately $170.4 million and $2.8 million, respectively, assuming no change in the quarterly dividend rate of $0.285 per share or partnership unit, or material changes in the number of common shares or partnership units outstanding.

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

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These measures are not defined by GAAP and the discussion of Adjusted EBITDA and CAD is not intended to conflict with or change any of the GAAP disclosures described above.

Management considers these measures to be important to estimate the enterprise and shareholder values and of our core segments, and for allocating capital resources.

Management considers these measures to be important to estimate the enterprise and shareholder values of the Company as a whole and of its core segments, and for allocating capital resources.

In addition, analysts, investors and creditors use these measures when analyzing our operating performance, financial condition and cash generating ability.

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These measures should not be considered in isolation from, and are not intended to represent an alternative to, our results reported in accordance with GAAP.

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

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, operating (income) loss attributable to noncontrolling interests in Timber Funds, timber write-offs resulting from casualty events, gain associated with the multi-family apartment complex sale attributable to noncontrolling interests, the gain on investment in Timber Funds, Fund II Timberland Dispositions and Large Dispositions.

Below is a reconciliation of Net Income to Adjusted EBITDA for the three years ended December 31 (in millions of dollars):

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Non-cash cost of land and improved development 29.8 28.4 25.0

Non-operating expense (income) 0.4 — (0.9)

Timber write-offs resulting from a casualty event attributable to Rayonier (a) 0.7 — 7.9

Gain associated with the multi-family apartment complex sale attributable to NCI (b) (11.5) — —

Costs related to the merger with Pope Resources (c) — — 17.2

Non-operating (income) expense (a) (18.3) 0.4 —

Timber write-offs resulting from casualty events attributable to Rayonier (b) 2.3 0.7 —

Gain associated with the multi-family apartment complex sale attributable to NCI (c) — (11.5) —

Gain on investment in Timber Funds (d) — — (7.5)

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Adjusted EBITDA $296.5 $314.2 $329.8

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

(b) Gain associated with the multi-family apartment complex sale attributable to noncontrolling interests represents the gain recognized in connection with the sale of property by the Bainbridge Landing joint venture attributable to noncontrolling interests.

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

(a) The year ended December 31, 2023 includes $20.7 million of net recoveries associated with legal settlements, partially offset by a $2.0 million pension settlement charge.

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

(c) Gain associated with the multi-family apartment complex sale attributable to noncontrolling interests represents the gain recognized in connection with the sale of property by the Bainbridge Landing joint venture attributable to noncontrolling interests.

(d) 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.

(e) Fund II Timberland Dispositions represent the disposition of Fund II Timberland assets, which we managed and owned a co-investment stake in.

(f) 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.

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

The following tables provide a reconciliation of Operating Income (Loss) by segment to Adjusted EBITDA by segment for the three years ended December 31 (in millions of dollars):

Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Corporate

Operating income (loss) $76.3 ($9.0) $26.0 — $156.6 $0.5 ($39.1) $211.3

Depreciation, depletion and amortization 80.0 36.9 21.7 — 18.0 — 1.7 158.2

Non-cash cost of land and improved development — — — — 29.8 — — 29.8

Timber write-offs resulting from casualty events (a) — — 2.3 — — — — 2.3

Large Dispositions (b) — — — — (105.1) — — (105.1)

Adjusted EBITDA $156.2 $27.9 $50.0 — $99.3 $0.5 ($37.4) $296.5

Operating income $96.6 $15.2 $30.6 — $58.5 $0.4 ($35.5) $165.8

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Non-cash cost of land and improved development — — — — 28.4 — — 28.4

Timber write-offs resulting from a casualty event (a) — 0.7 — — — — — 0.7

Gain associated with the multi-family apartment complex sale attributable to NCI (b) — — — — (11.5) — — (11.5)

Large Dispositions (c) — — — — (16.6) — — (16.6)

Timber write-offs resulting from casualty events (a) — 0.7 — — — — — 0.7

Gain associated with the multi-family apartment complex sale attributable to NCI (c) — — — — (11.5) — — (11.5)

Large Dispositions (b) — — — — (16.6) — — (16.6)

Adjusted EBITDA $156.9 $63.9 $54.5 — $72.7 $0.4 ($34.2) $314.2

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Fund II Timberland Dispositions attributable to Rayonier (f) — — — (10.3) — — — (10.3)

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

Adjusted EBITDA $120.2 $57.3 $78.5 $2.3 $100.7 $0.1 ($29.4) $329.8

Operating income (loss) $41.3 ($10.0) $30.0 ($13.2) $72.0 ($0.5) ($45.2) $74.4

Operating loss attributable to NCI in Timber Funds (d) — — — 11.6 — — — 11.6

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

Costs related to the merger with Pope Resources (g) — — — — — — 17.2 17.2

Depreciation, depletion and amortization 61.8 47.1 25.0 1.6 17.7 — 1.4 154.7

Non-cash cost of land and improved development — — — — 30.4 — — 30.4

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

Large Dispositions (b) — — — — (44.8) — — (44.8)

Adjusted EBITDA $120.2 $57.3 $78.5 $2.3 $100.7 $0.1 ($29.4) $329.8

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

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

(d) The year ended December 31, 2021 includes $41.2 million of income from Fund II Timberland Dispositions.

The year ended December 31, 2020 includes a $7.3 million loss related to timber write-offs resulting from casualty events.

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

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

(d) Includes $41.2 million of income from Fund II Timberland Dispositions.

(e) 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.

(f) Fund II Timberland Dispositions represent the disposition of Fund II Timberland assets, which we managed and owned a co-investment stake in.

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

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

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Capital expenditures from continuing operations (a) (81.4) (74.8) (76.0)

Costs related to the merger with Pope Resources (b) — — 17.2

CAD attributable to NCI in Timber Funds — — (12.9)

Net recovery on legal settlements (b) (20.7) — —

Working capital and other balance sheet changes (32.4) (2.9) (28.2)

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Adjusted CAD $163.9 $191.5 ($117.0)

Cash used for investing activities ($516.4) ($26.3) ($213.6)

Cash (used for) provided by financing activities ($4.6) ($16.3) $27.0

Cash provided by (used for) investing activities $124.1 ($516.4) ($26.3)

Cash used for financing activities ($328.9) ($4.6) ($16.3)

(a) Capital expenditures exclude timberland acquisitions and real estate development investments.

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

(b) Reflects net proceeds received from litigation regarding insurance claims.

The following table provides supplemental cash flow data for the three years ended December 31 (in millions):

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

What changed 10-K

Item 7. Management’s Discussion and Analysis