What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-03 compared with 2023-11-03 · 172 added, 296 removed, 503 unchanged (48% of the section changed)

32 unchanged sentences

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

As of September 30, 2023, we owned or leased under long-term agreements approximately 2.8 million acres of timberlands located in the U.S.

As of March 31, 2024, we owned or leased under long-term agreements approximately 2.7 million acres of timberlands located in the U.S.

South (1.85 million acres), U.S.

1 unchanged sentence

SEGMENT INFORMATION

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

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

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

16 unchanged sentences

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

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

Our Pacific Northwest Timber segment relies primarily on domestic customers but also exports timber to China and Japan.

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

3 unchanged sentences

dollar terms.

During 2023, each of our timber segments have experienced challenging market conditions due to ongoing 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 has resulted in lower net stumpage prices.

In our Pacific Northwest Timber segment, softer domestic lumber demand and decreased competition from export markets has negatively impacted sawtimber prices.

In our New Zealand Timber segment, weaker demand in China has driven lower export and domestic sawtimber prices.

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 our Southern Timber segment, weather-related constraints on competing supply benefited first quarter harvest volumes and net stumpage realizations.

In our Pacific Northwest Timber segment, weighted-average delivered log prices remain under pressure due to weaker domestic demand and reduced export market tension.

In our New Zealand Timber segment, lower levels of construction activity in China continue to negatively impact export market demand and prices.

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

4 unchanged sentences

Our Real Estate segment is exposed to changes in interest and mortgage rates as higher rates could negatively impact buyer demand for the properties we sell.

However, current demand for our rural and development real estate properties has not yet been significantly impacted by the higher interest rate environment.

However, 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.

For additional information on market conditions impacting our business, see Results of Operations .

4 unchanged sentences

For a full description of our critical accounting policies, see Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K.

REVENUE RECOGNITION

See Note 1 – Basis of Presentation .

ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

See Note 1 — Basis of Presentation for a summary of recently issued accounting standards.

DISCUSSION OF TIMBER INVENTORY AND SUSTAINABLE YIELD

3 unchanged sentences

Southern Timber, Pacific Northwest Timber and New Zealand Timber.

The following tables provide a breakdown of our timberland holdings as of September 30, 2023 and December 31, 2022:

(acres in 000s) As of September 30, 2023 As of December 31, 2022

The following tables provide a breakdown of our timberland holdings as of March 31, 2024 and December 31, 2023:

(acres in 000s) As of March 31, 2024 As of December 31, 2023

Owned Leased Total Owned Leased Total

15 unchanged sentences

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

As of September 30, 2023, legal acres in New Zealand consisted of 298,000 plantable acres and 121,000 non-productive acres.

The following tables detail activity for owned and leased acres in our timberland holdings by state from December 31, 2022 to September 30, 2023:

As of March 31, 2024, legal acres in New Zealand consisted of 297,000 plantable acres and 125,000 non-productive acres.

The following tables detail activity for owned and leased acres in our timberland holdings by state from December 31, 2023 to March 31, 2024:

(acres in 000s) Acres Owned

December 31, 2023

Acquisitions Sales Other (a) September 30, 2023

Acquisitions Sales Other March 31, 2024

Alabama 250 — — — 250

10 unchanged sentences

414 — — — 414

New Zealand (b) 188 — — — 188

New Zealand (a) 188 — — — 188

Total 2,361 — (3) — 2,358

(a) Includes adjustments for land mapping reviews.

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

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

(acres in 000s) Acres Leased

December 31, 2023

New Leases Sold/Expired Leases (a) Other (b) September 30, 2023

New Leases Sold/Expired Leases Other (a) March 31, 2024

Alabama 5 — — — 5

2 unchanged sentences

Georgia 50 — — — 50

127 — (9) 4 122

Pacific Northwest

Washington (c) 3 — — — 3

New Zealand (d) 229 — — 2 231

Washington (b) 4 — — — 4

New Zealand (c) 233 — — 1 234

Total 330 — — 1 331

(a) Includes acres previously under lease that have been harvested and activity for the relinquishment of leased acres.

(b) Includes adjustments for land mapping reviews.

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

(a) Includes adjustments for land mapping reviews.

(b) Primarily timber reservations acquired in the merger with Pope Resources.

RESULTS OF OPERATIONS

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

Financial Information (in millions) 2024 2023

3 unchanged sentences

Improved Development 1.8 4.8

Unimproved Development 0.1 — 0.1 —

Rural 8.7 6.5

7 unchanged sentences

Southern Timber $23.0 $22.2

Pacific Northwest Timber (b) (0.6) 2.2 (6.5) 11.7

New Zealand Timber (c) 17.6 9.3 19.3 22.7

Real Estate (a)(d) 9.2 15.7 18.7 37.0

Pacific Northwest Timber (4.4) (3.5)

New Zealand Timber (b) 7.4 (0.7)

Real Estate (0.1) 0.9

Trading — 0.3

1 unchanged sentence

Operating Income 16.2 10.6

Interest expense, interest income and other (e) (12.1) (7.8) (15.0) (25.5)

Income tax expense (0.6) (1.2) (1.8) (8.1)

Interest expense, net (9.7) (11.7)

Interest and other miscellaneous (expense) income, net (c) (5.0) 9.6

Income tax benefit (expense) (d) 0.8 (1.1)

Net Income 2.3 7.4

Net income attributable to noncontrolling interests in consolidated affiliates (3.2) (10.8) (1.9) (12.4)

Net (income) loss attributable to noncontrolling interests in consolidated affiliates (0.9) 1.1

Net Income Attributable to Rayonier, L.P.

$19.5 $21.1 $47.4 $75.7

Net income attributable to noncontrolling interests in the operating partnership — (0.2)

Net Income Attributable to Rayonier Inc.

$19.2 $20.6 $46.6 $74.0

Adjusted EBITDA (f)

Adjusted EBITDA (e)

Southern Timber $44.8 $42.8

6 unchanged sentences

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

(b) The three and nine months ended September 30, 2022 includes a $1.1 million timber write-off resulting from a casualty event.

(d) The three and nine months ended September 30, 2022 includes $16.0 million of equity income related to the multi-family apartment complex sale in Bainbridge Island, Washington.

(e) The nine months ended September 30, 2023 includes $20.5 million of net recoveries associated with legal settlements.

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

(b) The three months ended March 31, 2023 includes $2.3 million of timber write-offs resulting from casualty events.

(c) The three months ended March 31, 2024 includes $5.7 million of pension settlement charges and $1.3 million of net costs associated with legal settlements.

The three months ended March 31, 2023 includes $9.1 million of net recoveries associated with legal settlements.

(d) The three months ended March 31, 2024 includes a $1.2 million income tax benefit related to the pension settlement.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

Southern Timber Overview 2024 2023

22 unchanged sentences

Net Stumpage Sales $46.3 $45.3

Non-Timber Sales 9.8 6.8 29.1 20.7

Land-Based Solutions (b) 1.7 0.8

Other Non-Timber Sales 7.4 8.6

Total Sales $70.0 $71.8

1 unchanged sentence

(+) Depreciation, depletion and amortization 21.8 20.6

Adjusted EBITDA (b) $37.8 $36.6 $124.2 $123.7

Adjusted EBITDA (c) $44.8 $42.8

Period-End Acres (in thousands) 1,849 1,910

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

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

(b) Consists of sales from carbon capture and storage (“CCS”), solar and wind energy contracts.

Three Months Ended

September 30, Nine Months Ended

September 30,

Pacific Northwest Timber Overview 2024 2023

22 unchanged sentences

Total Sales $25.2 $34.4

Operating (Loss) Income ($0.6) $2.2 ($6.5) $11.7

(+) Timber write-offs resulting from a casualty event (d) — 1.1 — 1.1

Operating Loss ($4.4) ($3.5)

(+) Depreciation, depletion and amortization 9.1 10.6

Adjusted EBITDA (e) $7.8 $12.6 $21.7 $48.4

Adjusted EBITDA (d) $4.7 $7.1

Period-End Acres (in thousands) 418 474

Sawtimber (in dollars per MBF) (f) $726 $860 $722 $866

Sawtimber (in dollars per MBF) (e) $650 $730

(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.

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 a casualty event include the write-off of merchantable and pre-merchantable timber volume damaged by casualty events which cannot be salvaged.

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

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

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

New Zealand Timber Overview 2024 2023

18 unchanged sentences

Timber Sales $42.2 $43.8

Cut and Haul (22.8) (25.8) (64.5) (71.6)

Port and Freight (15.9) (23.1) (47.5) (69.8)

Cut and Haul (b) (16.6) (17.2)

Port and Freight (b) (12.1) (11.8)

Net Stumpage Sales $13.5 $14.8

Non-Timber Sales / Carbon Credits 15.6 6.4 16.6 11.9

Carbon Credit Sales 3.4 —

Other Non-Timber Sales 0.1 0.3

Total Sales $45.7 $44.1

Operating Income $17.6 $9.3 $19.3 $22.7

(+) Timber write-off resulting from a casualty event (b) — — 2.3 —

Operating Income (Loss) $7.4 ($0.7)

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

(+) Depreciation, depletion and amortization 4.0 4.5

Adjusted EBITDA (c) $23.5 $15.6 $37.9 $40.8

Adjusted EBITDA (d) $11.4 $6.1

New Zealand Dollar to U.S.

Dollar Exchange Rate (d) 0.6084 0.6223 0.6166 0.6479

Dollar Exchange Rate (e) 0.6165 0.6300

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

3 unchanged sentences

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

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

(d) Represents the period-average rate.

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

(c) Timber write-offs resulting from casualty events includes the write-off 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 Performance and Liquidity Indicators .

(e) Represents the period-average rate.

Three Months Ended

September 30, Nine Months Ended

September 30,

Real Estate Overview 2024 2023

1 unchanged sentence

Improved Development (a) $1.8 $4.8

Unimproved Development 0.1 — 0.1 —

Rural 8.7 6.5

3 unchanged sentences

Improved Development (a) 6.0 27.9

Unimproved Development 10 — 10 —

Rural 1,498 1,531

3 unchanged sentences

Improved Development (a) $303,156 $172,420

Unimproved Development 11,250 — 11,250 —

Rural 5,828 4,245

2 unchanged sentences

Weighted Average (Adjusted) (c) $4,845 $3,952

Operating Income $9.2 $15.7 $18.7 $37.0

Operating (Loss) Income ($0.1) $0.9

(+) Depreciation, depletion and amortization 1.7 1.5

(+) Non-cash cost of land and improved development 3.0 4.2

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

Adjusted EBITDA (e) $18.9 $8.4 $45.8 $58.4

Adjusted EBITDA (d) $4.6 $6.6

(a) Reflects land with capital invested in infrastructure improvements.

1 unchanged sentence

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

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

Trading Overview 2024 2023

Sales Volume (in thousands of tons)

NZ 42 84 252 361

Total Volume 105 105

3 unchanged sentences

Total Sales $11.8 $12.6

Operating (Loss) Income ($0.1) $0.2 $0.4 $0.1

Operating Income — $0.3

Adjusted EBITDA (a) — $0.3

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

Capital Expenditures By Segment (in millions of dollars) 2024 2023

26 unchanged sentences

Real Estate Development Investments (a)

$4.0 $4.9 $18.8 $10.9

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

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

The following tables summarize sales, operating income (loss) and Adjusted EBITDA variances for September 30, 2023 versus September 30, 2022 (millions of dollars):

The following tables summarize sales, operating income (loss) and Adjusted EBITDA variances for March 31, 2024 versus March 31, 2023 (millions of dollars):

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

Three Months Ended

September 30, 2022

March 31, 2023

$71.8 $34.4 $44.1 $16.3 $12.6 ($0.1) $179.1

5 unchanged sentences

Three Months Ended

September 30, 2023

$64.0 $29.3 $70.4 $31.2 $6.8 ($0.1) $201.6

(a) Net of currency hedging impact.

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

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

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

Nine Months Ended

September 30, 2022

$207.6 $119.8 $202.7 $81.0 $52.7 ($0.2) $663.7

Volume 21.1 (10.4) (8.3) (25.0) (14.2) — (36.8)

Price (23.4) (15.3) (2.2) 14.0 (3.9) — (30.8)

Non-timber sales 8.5 0.5 5.4 — 0.1 — 14.5

Foreign exchange (a) — — (3.2) — — — (3.2)

Other (9.7) (b) 1.5 (b) (19.0) (c) 9.5 (d) 0.1 (0.2) (17.8)

Nine Months Ended

September 30, 2023

March 31, 2024

$70.0 $25.2 $45.7 $15.6 $11.8 ($0.1) $168.1

3 unchanged sentences

(d) Includes 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

Three Months Ended

September 30, 2022

$22.5 $2.2 $9.3 $15.7 $0.2 ($9.0) $40.9

Volume 5.0 (0.4) (0.3) 6.7 — — 11.0

Price (a) (7.8) (2.4) (0.7) 3.1 — — (7.8)

Cost (1.7) (1.2) — (2.6) (0.3) (0.4) (6.2)

Non-timber income (b) 2.8 (0.3) 9.3 — — — 11.8

Depreciation, depletion & amortization (2.2) 0.4 — (1.0) — — (2.8)

Non-cash cost of land and improved development — — — 2.5 — — 2.5

Other (c) — 1.1 — (15.2) — — (14.1)

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

Three Months Ended

September 30, 2023

$18.6 ($0.6) $17.6 $9.2 ($0.1) ($9.4) $35.4

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

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

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

Real Estate includes a gain associated with the multi-family apartment complex sale attributable to NCI in Q3 2022, 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

Nine Months Ended

September 30, 2022

March 31, 2023

$22.2 ($3.5) ($0.7) $0.9 $0.3 ($8.6) $10.6

7 unchanged sentences

Other (d) — — 2.3 0.4 — — 2.8

Nine Months Ended

September 30, 2023

Three Months Ended

March 31, 2024

$23.0 ($4.4) $7.4 ($0.1) — ($9.8) $16.2

1 unchanged sentence

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

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

(b) For the Southern Timber segment, includes income from carbon capture and storage (“CCS”), solar and wind energy contracts.

For the New Zealand Timber segment, includes income from carbon credit sales.

(d) Pacific Northwest Timber includes a $1.1 million timber write-off resulting from a casualty event in Q3 2022.

New Zealand Timber includes a $2.3 million timber write-off resulting from a casualty event in Q1 2023.

(d) New Zealand Timber includes $2.3 million of timber write-offs resulting from casualty events in Q1 2023.

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.

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

Three Months Ended

September 30, 2022

March 31, 2023

$42.8 $7.1 $6.1 $6.6 $0.3 ($8.2) $54.7

6 unchanged sentences

Three Months Ended

September 30, 2023

$37.8 $7.8 $23.5 $18.9 ($0.1) ($9.0) $78.9

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

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

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

(d) Net of currency hedging impact.

(e) 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.

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

Nine Months Ended

September 30, 2022

$123.7 $48.4 $40.8 $58.4 $0.1 ($25.7) $245.8

Volume 20.8 (9.1) (2.3) (25.0) — — (15.6)

Price (b) (23.4) (15.3) (2.2) 14.0 — — (26.9)

Cost (4.4) (2.8) (0.9) (5.7) 0.3 (1.4) (14.9)

Non-timber income (c) 7.5 0.5 5.3 — — — 13.3

Foreign exchange (d) — — (2.8) — — — (2.8)

Other (e) — — — 4.1 — — 4.1

Nine Months Ended

September 30, 2023

March 31, 2024

$44.8 $4.7 $11.4 $4.6 — ($9.3) $56.2

2 unchanged sentences

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

(c) For the Southern Timber segment, includes income from carbon capture and storage (“CCS”), solar and wind energy contracts.

For the New Zealand Timber segment, includes income from carbon credit sales.

(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

Third quarter sales of $64.0 million decreased $0.6 million, or 1%, versus the prior year period .

Harvest volumes increased 21% to 1.81 million tons versus 1.50 million tons in the prior year period , primarily driven by additional volume from acquisitions completed in the fourth quarter of 2022.

Average pine sawtimber stumpage realizations decreased 13% to $28.85 per ton versus $33.31 per ton in the prior year period , primarily due to drier weather conditions, softer demand from sawmills, and decreased competition from pulp mills for chip-n-saw volume.

Average pine pulpwood stumpage realizations decreased 27% to $16.54 per ton versus $22.77 per ton in the prior year period due to weaker end-market demand and drier weather conditions.

Overall, weighted-average stumpage realizations (including hardwood) decreased 17% to $21.48 per ton versus $25.80 per ton in the prior year period .

Operating income of $18.6 million decreased $3.8 million versus the prior year period due to lower net stumpage realizations ($7.8 million), higher depletion rates ($2.2 million), and higher overhead and other costs ($1.7 million), partially offset by higher volumes ($5.0 million) and higher non-timber income ($2.8 million).

Third quarter Adjusted EBITDA of $37.8 million was 3%, or $1.2 million, above the prior year period .

Year-to-date sales of $204.1 million decreased $3.5 million, or 2%, versus the prior year period .

Harvest volumes increased 16% to 5.71 million tons versus 4.92 million tons in the prior year period , primarily driven by the additional volume contributions from acquisitions completed in the fourth quarter of 2022.

Average pine sawtimber stumpage realizations decreased 13% to $29.87 per ton versus $34.40 per ton in the prior year period , primarily due to drier weather conditions, softer demand from sawmills, and decreased competition from pulp mills for chip-n-saw volume.

Average pine pulpwood stumpage realizations decreased 28% to $16.53 per ton versus $22.88 per ton in the prior year period as weaker end-market demand, drier weather conditions, extended maintenance outages at pulp mills, and unfavorable geographical mix all contributed to softer market conditions.

Overall, weighted-average stumpage realizations (including hardwood) decreased 15% to $22.46 per ton versus $26.55 per ton in the prior year period .

Operating income of $62.6 million decreased $14.3 million versus the prior year period due to lower net stumpage realizations ($23.4 million), higher depletion rates ($7.3 million), and higher overhead and other costs ($4.4 million), partially offset by higher volumes ($13.3 million) and higher non-timber income ($7.5 million).

Year-to-date Adjusted EBITDA of $124.2 million was $0.5 million above the prior year period .

First quarter sales of $70.0 million decreased $1.9 million, or 3%, versus the prior year period.

Harvest volumes increased 6% to 2.01 million tons versus 1.89 million tons in the prior year period, as we benefited from weather-related constraints on competing supply.

Average pine sawtimber stumpage realizations decreased 3% to $30.62 per ton versus $31.57 per ton in the prior year period, primarily due to a less favorable geographic mix.

Average pine pulpwood stumpage realizations decreased 2% to $16.89 per ton versus $17.32 per ton in the prior year period, which was also primarily driven by an unfavorable geographic mix.

Overall, weighted-average net stumpage realizations (including hardwood) decreased 4% to $23.07 per ton versus $24.03 per ton in the prior year period.

Non-timber sales of $9.1 million decreased 3% versus the prior year period, as lower pipeline easement revenues were partially offset by growth in our land-based solutions business.

Operating income of $23.0 million increased $0.8 million versus the prior year period due to favorable costs ($1.7 million) and higher volumes ($1.5 million), partially offset by lower net stumpage realizations ($1.9 million) and lower non-timber income ($0.5 million).

First quarter Adjusted EBITDA of $44.8 million was 5%, or $2.0 million, above the prior year period.

PACIFIC NORTHWEST TIMBER

Third quarter sales of $29.3 million decreased $5.1 million, or 15%, versus the prior year period .

Harvest volumes decreased 6% to 290,000 tons versus 307,000 tons in the prior year period, as some planned harvests were deferred in response to soft market conditions.

Average delivered prices for domestic sawtimber decreased 10% to $108.20 per ton versus $120.08 per ton in the prior year period due to weaker domestic and export market demand.

Average delivered pulpwood prices decreased 35% to $33.09 per ton versus $50.74 per ton in the prior year period, as the prior year period benefited from much stronger end-market demand.

An operating loss of $0.6 million versus operating income of $2.2 million in the prior year period was driven by lower net stumpage

realizations ($2.4 million), higher costs ($1.2 million), lower volumes ($0.4 million) and lower non-timber income ($0.3 million), partially offset by lower depletion rates ($0.4 million) and the prior year period write-off of timber basis due to a fire in Washington ($1.1 million).

Third quarter Adjusted EBITDA of $7.8 million was 38%, or $4.8 million, below the prior year period.

Year-to-date sales of $96.1 million decreased $23.8 million, or 20%, versus the prior year period .

Harvest volumes decreased 15% to 1.01 million tons versus 1.19 million tons in the prior year period as some planned harvests have been deferred in response to soft market conditions.

Average delivered prices for domestic sawtimber decreased 13% to $98.89 per ton versus $114.20 per ton in the prior year period due to weaker domestic and export market demand, as well as less competition from export markets.

Average delivered pulpwood prices decreased 8% to $40.67 per ton versus $44.44 per ton in the prior year period as the prior year period benefited from stronger end-market demand.

Operating loss of $6.5 million decreased $18.2 million versus the prior year period due to lower net stumpage realizations ($15.3 million), lower volumes ($3.8 million), and higher costs ($2.8 million), partially offset by lower depletion rates ($2.1 million), the prior year period write-off of timber basis due to a fire in Washington ($1.1 million), and higher non-timber income ($0.5 million).

Year-to-date Adjusted EBITDA of $21.7 million was 55%, or $26.7 million, below the prior year period.

First quarter sales of $25.2 million decreased $9.2 million, or 27%, versus the prior year period.

Harvest volumes decreased 17% to 317,000 tons versus 384,000 tons in the prior year period, primarily due to the Large Disposition we completed in Oregon in late 2023.

Average delivered prices for domestic sawtimber decreased 9% to $84.31 per ton versus $93.12 per ton in the prior year period due to a combination of weaker demand from domestic lumber mills, reduced export market tension, and an unfavorable species mix, as a lower proportion of Douglas-Fir sawtimber was harvested in the current year period.

Average delivered pulpwood prices decreased 39% to $29.31 per ton versus $48.23 per ton in the prior year period , as supply constraints and strong end-market demand significantly benefited the prior year period.

An operating loss of $4.4 million versus an operating loss of $3.5 million in the prior year period was driven by lower net stumpage realizations ($0.4 million), higher depletion expense ($0.3 million), and lower volumes ($0.2 million).

First quarter Adjusted EBITDA of $4.7 million was 34%, or $2.4 million, below the prior year period.

NEW ZEALAND TIMBER

Third quarter sales of $70.4 million decreased $2.0 million, or 3%, versus the prior year period .

Harvest volumes decreased 3% to 690,000 tons versus 712,000 tons in the prior year period , as some planned harvests were deferred in response to soft market conditions.

Average delivered prices for export sawtimber decreased 23% to $95.23 per ton versus $123.07 per ton in the prior year period , primarily due to weaker demand in China and increased supply from Cyclone Gabrielle salvage volume.

Despite the significant decline in delivered pricing, export sawtimber net stumpage realizations were down only 4% due to significantly lower port and freight costs versus the prior year period.

First quarter sales of $45.7 million increased $1.6 million, or 4%, versus the prior year period.

Sales volumes of 480,000 tons were relatively flat versus the prior year period.

Average delivered prices for export sawtimber decreased 4% to $108.72 per ton versus $112.97 per ton in the prior year period, driven by weaker construction demand in China.

Average delivered prices for domestic sawtimber declined 5% to $68.13 per ton versus $71.58 per ton in the prior year period.

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

dollar terms) was driven in part by the decline in the NZ$/US$ exchange rate (US$0.61 per NZ$1.00 versus US$0.62 per NZ$1.00).

Excluding the impact of foreign exchange rates, domestic sawtimber prices decreased 7% versus the prior year period , reflecting weaker domestic demand and decreased competition from export markets.

Third quarter non-timber / carbon credit sales totaled $15.6 million versus $6.4 million in the prior year period, as increased volumes were sold into the market following a significant uptick in NZU pricing.

Operating income of $17.6 million increased $8.3 million versus the prior year period primarily due to higher carbon credit sales ($9.3 million), partially offset by lower net stumpage realizations ($0.7 million) and lower volumes ($0.3 million).

Third quarter Adjusted EBITDA of $23.5 million was 51%, or $7.9 million, above the prior year period .

Year-to-date sales of $175.4 million decreased $27.3 million, or 13%, versus the prior year period .

Harvest volumes decreased 4% to 1.84 million tons versus 1.93 million tons in the prior year period , 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 21% to $102.93 per ton versus $130.71 per ton in the prior year period , driven by increased salvage volume from Cyclone Gabrielle and weaker demand in China.

Average delivered prices for domestic sawtimber decreased 8% to $67.46 per ton versus $73.72 per ton in the prior year period .

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

dollar terms) was partially driven by the decline in the NZ$/US$ exchange rate (US$0.62 per NZ$1.00 versus US$0.65 per NZ$1.00).

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

Operating income of $19.3 million decreased $3.4 million versus the prior year period due to a timber write-off resulting from a tropical cyclone casualty event ($2.3 million), lower net stumpage realizations ($2.2 million), unfavorable foreign exchange impacts ($2.0 million), lower volumes ($1.5 million), and higher costs ($0.9 million), partially offset by higher carbon credit sales ($5.3 million) and lower depletion rates ($0.2 million).

Year-to-date Adjusted EBITDA of $37.9 million was 7% or $2.9 million, below the prior year period .

Third quarter sales of $31.2 million increased $18.7 million versus the prior year period , while operating income of $9.2 million decreased $6.6 million versus the prior year period .

Prior year third quarter operating income included an $11.5 million gain attributable to noncontrolling interests associated with the Bainbridge Island multi-family apartment complex sale.

Sales increased versus the prior year period primarily due to a higher number of acres sold (4,281 acres sold versus 1,828 acres sold in the prior year period) and an increase in weighted-average prices ($5,781 per acre versus $5,064 per acre in the prior year period ).

Improved Development sales of $3.1 million included $1.8 million from the Heartwood development project south of Savannah, Georgia and $1.4 million from the Wildlight development project north of Jacksonville, Florida.

Sales in Heartwood consisted of 24 finished residential lots for $1.1 million ($45,000 per lot or $290,000 per acre) and a 1.3-acre commercial parcel to be used for a quick-service restaurant for $0.7 million ($531,000 per acre).

Sales in Wildlight consisted of a 2-acre commercial parcel to be used for a convenience store for $1.4 million ($735,000 per acre).

The decrease in domestic sawtimber prices was primarily driven by weaker domestic demand and decreased competition from export markets, coupled with the decline in the NZ$/US$ exchange rate (US$0.62 per NZ$1.00 versus US$0.63 per NZ$1.00).

Excluding the impact of foreign exchange rates, domestic sawtimber prices decreased 3% versus the prior year period.

First quarter non-timber / carbon

credit sales totaled $3.5 million versus $0.3 million in the prior year period.

Operating income of $7.4 million increased $8.1 million versus the prior year period due to favorable foreign exchange impacts ($3.4 million), higher carbon credit income ($3.3 million), the prior year write-off of timber basis due to a tropical cyclone casualty event ($2.3 million), lower costs ($0.5 million), and lower depletion rates ($0.3 million ), partially offset by lower net stumpage realizations ($1.7 million).

First quarter Adjusted EBITDA of $11.4 million was 88%, or $5.4 million, above the prior year period.

First quarter sales of $15.6 million decreased $0.7 million versus the prior year period, while operating loss of $0.1 million decreased $1.0 million versus the prior year period.

Sales and operating income decreased versus the prior year period due to fewer acres sold (1,933 acres sold versus 2,087 acres sold in the prior year period) and lower weighted-average prices ($5,774 per acre versus $6,200 per acre in the prior year period), partially offset by favorable deferred revenue adjustments.

Improved Development sales of $1.8 million consisted of two transactions in the Heartwood development project south of Savannah, Georgia, including a 3.1-acre multi-tenant retail parcel for $1.0 million ($321,000 per acre) and 18 finished residential lots for $0.8 million (a base price before true-up of $46,000 per lot or $284,000 per acre).

This compares to Improved Development sales of $4.8 million in the prior year period.

Unimproved Development sales of $0.1 million consisted of a 10-acre transaction for $11,250 per acre.

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

Rural sales of $8.7 million consisted of 1,498 acres at an average price of $5,828 per acre.

This compares to prior year period sales of $6.5 million, which consisted of 1,531 acres at an average price of $4,245 per acre.

Timberland & Non-Strategic sales of $1.1 million consisted of 466 acres at an average price of $2,266 per acre.

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

Third quarter Adjusted EBITDA of $18.9 million increased $10.5 million versus the prior year period .

Year-to-date sales of $79.5 million decreased $1.5 million versus the prior year period , while operating income of $18.7 million decreased $18.2 million versus the prior year period .

Prior year period operating income included an $11.5 million gain attributable to noncontrolling interests associated with the Bainbridge Island multi-family apartment complex sale.

Sales and operating income decreased in the first nine months primarily due to lower volumes (10,122 acres sold versus 15,256 acres sold in the prior year period), partially offset by higher weighted-average prices ($6,501 per acre versus $5,084 per acre in the prior year period).

Year-to-date Adjusted EBITDA of $45.8 million decreased $12.7 million versus the prior year period.

Third quarter sales of $6.8 million decreased $4.8 million versus the prior year period due to lower volumes and prices.

Sales volumes decreased 35% to 61,000 tons versus 95,000 tons in the prior year period .

The Trading segment generated an operating loss of $0.1 million versus operating income of $0.2 million in the prior year period.

Year-to-date sales of $34.8 million decreased $18.0 million versus the prior year period due to lower volumes and prices.

Sales volumes decreased 28% to 301,000 tons versus 415,000 tons in the prior year period.

Year-to-date operating income and Adjusted EBITDA of $0.4 million increased $0.3 million versus the prior year period as improved margins more than offset reduced trading volume.

Timberland & Non-Strategic sales of $0.6 million consisted of a 430-acre transaction for $1,421 per acre.

This compares to prior year period sales of $1.6 million, which consisted of a 528-acre transaction for $3,100 per acre.

First quarter Adjusted EBITDA of $4.6 million decreased $2.0 million versus the prior year period.

First quarter sales of $11.8 million decreased $0.8 million versus the prior year period, primarily due to lower prices.

Sales volumes of 105,000 tons remained flat versus the prior year period.

The Trading segment generated breakeven results versus operating income of $0.3 million in the prior year period .

CORPORATE AND OTHER EXPENSE / ELIMINATIONS

Third quarter corporate and other operating expenses of $9.4 million increased $0.5 million versus the prior year period , primarily driven by higher compensation and benefits expenses.

Year-to-date corporate and other operating expenses of $28.3 million increased $1.7 million versus the prior year period , primarily due to higher compensation and benefits expenses.

First quarter corporate and other operating expenses of $9.8 million increased $1.2 million versus the prior year period, primarily due to higher compensation and benefits expenses and professional services fees.

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

INTEREST EXPENSE

Third quarter and year-to-date interest expense of $12.6 million and $36.7 million increased $3.5 million and $10.3 million, respectively, versus the prior year period, primarily due to higher average outstanding debt and a higher weighted-average interest rate.

INTEREST AND OTHER MISCELLANEOUS INCOME, NET

Year-to-date interest and other miscellaneous income includes $20.5 million of net recoveries associated with legal settlements .

INCOME TAX EXPENSE

Third quarter and year-to-date income tax expense of $0.6 million and $1.8 million decreased $0.7 million and $6.3 million, respectively, versus the prior year period.

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

In our Southern Timber segment, we continue to expect higher non-timber income for full-year 2023 as compared to full-year 2022, driven by growth in our Land-Based Solutions businesses.

In our Pacific Northwest Timber segment, we expect continued softness in end-market demand for the balance of the year.

In our New Zealand Timber segment, we expect to remain active in the carbon market following the uptick in NZU pricing during the third quarter;

however, we anticipate a lower contribution from carbon sales relative to the third quarter.

In our Real Estate segment, the demand for HBU properties and timberland assets has remained strong despite the higher interest rate environment.

We expect a significant contribution from our Real Estate segment in the fourth quarter based on transaction volume expected to close.

First quarter interest expense of $9.7 million decreased $2.0 million versus the prior year period, primarily due to lower average outstanding debt.

INTEREST AND OTHER MISCELLANEOUS (EXPENSE) INCOME, NET

First quarter interest and other miscellaneous (expense) income includes a $5.7 million pension settlement charge and $1.3 million of net costs associated with legal settlements.

The prior year period includes $9.1 million of net recoveries associated with legal settlements.

INCOME TAX BENEFIT (EXPENSE)

First quarter net income tax benefit of $0.8 million versus income tax expense of $1.1 million in the prior year period was primarily due to a $1.2 million tax benefit associated with the pension termination and settlement.

In our Southern Timber segment, we anticipate lower quarterly harvest volumes for the remainder of the year.

We expect that pine stumpage realizations will decrease modestly over the remainder of the year due to a less favorable geographic mix and a relatively higher proportion of thinning volume.

Further, we continue to expect higher non-timber income for full-year 2024 relative to full-year 2023 driven by growth in our land-based solutions business.

In our Pacific Northwest Timber segment, we expect harvest volumes to increase during the second half of the year.

We believe that market conditions have generally stabilized, and we expect that end-market demand will improve modestly over the course of the year.

We further expect weighted-average delivered log prices will increase modestly into the second half of the year as mill inventories continue to normalize.

In our New Zealand Timber segment, we anticipate higher quarterly harvest volumes for the remainder of the year.

We expect weighted-average log prices to decline modestly in the near term before rebounding in the second half of the year due to lower expected log supply into China.

Following the recent pull back in carbon credit pricing, we now anticipate the full-year contribution from carbon credit sales to be comparable with the prior year.

In our Real Estate segment, we expect higher transaction volume and operating results in the second quarter.

LIQUIDITY AND CAPITAL RESOURCES

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

UPDATE ON INITIATIVES TO ENHANCE SHAREHOLDER VALUE

We are continuing to make progress toward our $1 billion disposition target, and we are actively evaluating several large-scale transactions.

Specifically, we are currently marketing approximately 115,000 acres in Washington state, and we have further identified approximately 100,000 acres in the U.S.

South that may be suitable for disposition.

In addition, we are evaluating strategic alternatives for our New Zealand joint venture interest and have engaged a financial advisor to assist us with this process.

We expect to provide additional information as it becomes available.

SUMMARY OF LIQUIDITY AND FINANCING COMMITMENTS

September 30, December 31,

March 31, December 31,

(millions of dollars) 2024 2023

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Net debt to enterprise value (b)(c) 19 % 19 %

(a) Total debt as of September 30, 2023 and December 31, 2022 reflects principal on long-term debt, gross of deferred financing costs and unamortized discounts.

(a) Total debt as of March 31, 2024 and December 31, 2023 reflects principal on long-term debt, gross of deferred financing costs and unamortized discounts.

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

“OP” units) plus net debt based on Rayonier’s share price of $28.46 and $32.96 as of September 30, 2023 and December 31, 2022, respectively.

“OP” units) plus net debt based on Rayonier’s share price of $33.24 and $33.41 as of March 31, 2024 and December 31, 2023, respectively.

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 September 30, 2023, $269.7 million remains available for issuance under the program.

As of March 31, 2024, $269.7 million remains available for issuance under the 2022 ATM Program.

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

Three Months Ended

September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Shares of common stock issued under the ATM program — — 400 726,248

Average price per share sold under the ATM program — — $34.03 $41.46

Three Months Ended March 31,

Common shares issued under the ATM program — 400

Average price of common shares issued under the ATM program — $34.03

Gross proceeds from common shares issued under the ATM program — —

The following table summarizes our cash flows from operating, investing and financing activities for the nine months ended September 30, 2023 and 2022:

Commissions — —

The following table summarizes our cash flows from operating, investing and financing activities for the three months ended March 31, 2024 and 2023:

(millions of dollars) 2024 2023

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CASH PROVIDED BY OPERATING ACTIVITIES

Cash provided by operating activities decreased $1.0 million from the prior year period primarily due to lower operating results and changes in working capital.

Cash provided by operating activities decreased $11.7 million from the prior year period primarily due to changes in working capital.

CASH USED FOR INVESTING ACTIVITIES

Cash used for investing activities increased $23.8 million from the prior year period due to higher timberland acquisitions ($10.7 million), higher real estate development investments ($7.8 million), higher capital expenditures ($4.9 million), and lower proceeds from other investing activities ($0.3 million).

Cash used for investing activities decreased $8.2 million from the prior year period due to lower cash used for timberland acquisitions ($8.7 million) and lower real estate development investments ($2.3 million), partially offset by lower proceeds from other investing activities ($2.7 million) and higher capital expenditures ($0.1 million).

CASH USED FOR FINANCING ACTIVITIES

Cash used for financing activities decreased $103.5 million from the prior year period.

This is primarily due to lower net repayments ($125.0 million), lower distributions to consolidated affiliates ($16.5 million), and lower distributions to noncontrolling interests in the operating partnership ($0.5 million), partially offset by lower net proceeds from the issuance of common shares under the ATM equity offering program ($32.0 million), higher dividends paid on common shares ($4.0 million), and lower proceeds from the issuance of common shares under the Company’s incentive stock plan ($2.6 million).

Cash used for financing activities increased $32.0 million from the prior year period.

This is primarily due to higher dividends paid on common shares ($30.1 million), higher distributions to noncontrolling interests in consolidated affiliates ($1.7 million), and higher distributions to noncontrolling interests in the operating partnership ($0.3 million).

FUTURE USES OF CASH

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See Note 6 - Debt for additional information.

(b) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of September 30, 2023.

(b) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of March 31, 2024 and excludes the impact of hedging.

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See Note 10 - Environmental and Natural Resource Damage Liabilities for additional information.

(f) Commitments — other includes $8.9 million related to pension plan termination.

(f) Commitments — other includes $1.2 million related to the pension plan termination.

See Note 15 - Employee Benefit Plans for additional information.

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common shares and distributions to Rayonier, L.P.

unitholders are expected to be approximately $170 million and $3 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 shares or partnership units outstanding.

unitholders, excluding the additional dividend and distribution paid on January 12, 2024 to shareholders of record on December 29, 2023, are expected to be approximately $171 million and $2 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 shares or partnership units outstanding.

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

We made cash contributions in 2024 of $2.7 million in order to fund the Defined Benefit Plan on a plan termination basis.

Additionally, we anticipate settling the Excess Benefit Plan with lump sum payments upon termination of the Defined Benefit Plan with cash contributions of approximately $1.2 million.

See Note 15 — Employee Benefit Plans for additional information.

Full-year 2024 cash tax payments are expected to be bet ween $5.0 million and $8.0 million, primarily related to the New Zealand subsidiary.

See Note 1 – Basis of Presentation for information regarding subsequent events that are expected to impact our future sources and uses of cash.

OFF-BALANCE SHEET ARRANGEMENTS

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

See Note 11 — Guarantees for details on the letters of credit and surety bonds as of September 30, 2023.

See Note 11 — Guarantees for details on the letters of credit and surety bonds as of March 31, 2024.

SUMMARY OF GUARANTOR FINANCIAL INFORMATION

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

for the nine months ended September 30, 2023 and year ended December 31, 2022 are provided in the table below:

(in millions) September 30, 2023 December 31, 2022

for the three months ended March 31, 2024 and year ended December 31, 2023 are provided in the table below:

(in millions) March 31, 2024 December 31, 2023

Current assets $151.3 $197.5

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

for the nine months ended September 30, 2023 and year ended December 31, 2022 are provided in the table below:

(in millions) September 30, 2023 December 31, 2022

for the three months ended March 31, 2024 and year ended December 31, 2023 are provided in the table below:

(in millions) March 31, 2024 December 31, 2023

Cost and expenses ($8.2) ($32.3)

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

We define Adjusted EBITDA as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, the gain associated with the multi-family apartment complex sale attributable to noncontrolling interests, timber write-offs resulting from casualty events and Large Dispositions.

We define Adjusted EBITDA as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, timber write-offs resulting from casualty events and Large Dispositions.

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

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net Income to Adjusted EBITDA Reconciliation

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Interest, net and miscellaneous income 7.7 11.2

Income tax expense 0.6 1.2 1.8 8.1

Income tax (benefit) expense (a) (0.8) 1.1

Depreciation, depletion and amortization 37.1 37.6

Non-cash cost of land and improved development 3.0 4.2

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

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

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Adjusted EBITDA $56.2 $54.7

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

(a) The three months ended March 31, 2024 includes a $1.2 million income tax benefit related to the pension settlement.

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

(c) The three months ended March 31, 2024 includes $5.7 million of pension settlement charges and $1.3 million of net costs associated with legal settlements.

The three months ended March 31, 2023 includes $9.1 million of net recoveries associated with legal settlements.

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

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

September 30, 2023

March 31, 2024

Operating income (loss) $23.0 ($4.4) $7.4 ($0.1) — ($9.8) $16.2

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Adjusted EBITDA $44.8 $4.7 $11.4 $4.6 — ($9.3) $56.2

September 30, 2022

Operating income $22.5 $2.2 $9.3 $15.7 $0.2 ($9.0) $40.9

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

Timber write-off resulting from a casualty event (b) — 1.1 — — — — 1.1

Depreciation, depletion and amortization 14.1 9.4 6.3 1.0 — 0.3 31.1

Non-cash cost of land and improved development — — — 3.1 — — 3.1

Adjusted EBITDA $36.6 $12.6 $15.6 $8.4 $0.2 ($8.6) $64.7

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

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

September 30, 2023

March 31, 2023

Operating income (loss) $22.2 ($3.5) ($0.7) $0.9 $0.3 ($8.6) $10.6

Timber write-off resulting from a casualty event (a) — — 2.3 — — — 2.3

Depreciation, depletion and amortization 61.6 28.2 16.3 6.8 — 1.3 114.3

Non-cash cost of land and improved development — — — 20.2 — — 20.2

Adjusted EBITDA $124.2 $21.7 $37.9 $45.8 $0.4 ($27.1) $202.9

September 30, 2022

Operating income $76.9 $11.7 $22.7 $37.0 $0.1 ($26.6) $121.7

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

Timber write-off resulting from casualty event (a) — 1.1 — — — — 1.1

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

Depreciation, depletion and amortization 20.6 10.6 4.5 1.5 — 0.4 37.6

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Adjusted EBITDA $42.8 $7.1 $6.1 $6.6 $0.3 ($8.2) $54.7

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

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

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

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

Nine Months Ended September 30,

Three Months Ended March 31,

Cash provided by operating activities $52.3 $64.0

Capital expenditures (a) (18.9) (18.7)

Net recoveries on legal settlements (20.5) —

Net cost (recovery) on legal settlements (b) 1.3 (9.1)

Working capital and other balance sheet changes 2.1 (5.8)

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Cash used for financing activities ($75.1) ($43.1)

(a) Capital expenditures exclude timberland acquisitions of $14.0 million and $3.2 million during the nine months ended September 30, 2023 and September 30, 2022, respectively.

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

(b) Net cost (recovery) on legal settlements reflects the net loss (gain) from litigation regarding insurance claims.

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

Nine Months Ended September 30,

Three Months Ended March 31,

Purchase of timberlands — ($8.7)

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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-Q

Item 2. Management’s Discussion and Analysis