What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-08 compared with 2024-08-08 · 183 added, 177 removed, 626 unchanged (37% of the section changed)

32 unchanged sentences

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

As of June 30, 2024, we owned or leased under long-term agreements approximately 2.7 million acres of timberlands located in the U.S.

As of September 30, 2024, we owned or leased under long-term agreements approximately 2.7 million acres of timberlands located in the U.S.

South (1.84 million acres), U.S.

34 unchanged sentences

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, pine pulpwood net stumpage realizations have improved in the first half of the year due to improved demand, while pine sawtimber net stumpage realizations have been constrained by softer demand from lumber mills.

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 Southern Timber segment, pine pulpwood net stumpage realizations have generally stabilized due to improved demand from pulp mills and weather-related constraints in select markets on competing supply, while pine sawtimber net stumpage realizations have been constrained by softer demand from lumber mills.

In our Pacific Northwest Timber segment, weighted-average delivered log prices remain under pressure due to soft 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.

12 unchanged sentences

Southern Timber, Pacific Northwest Timber and New Zealand Timber.

The following tables provide a breakdown of our timberland holdings as of June 30, 2024 and December 31, 2023:

(acres in 000s) As of June 30, 2024 As of December 31, 2023

The following tables provide a breakdown of our timberland holdings as of September 30, 2024 and December 31, 2023:

(acres in 000s) As of September 30, 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 June 30, 2024, legal acres in New Zealand consisted of 289,000 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, 2023 to June 30, 2024:

As of September 30, 2024, legal acres in New Zealand consisted of 289,000 plantable acres and 122,000 non-productive acres.

The following tables detail activity for owned and leased acres in our timberland holdings by state from December 31, 2023 to September 30, 2024:

(acres in 000s) Acres Owned

December 31, 2023

Acquisitions Sales Other June 30, 2024

Acquisitions Sales Other September 30, 2024

Alabama 250 — — — 250

15 unchanged sentences

December 31, 2023

New Leases Sold/Expired Leases (a) Other (b) June 30, 2024

New Leases Sold/Expired Leases (a) Other (b) September 30, 2024

Alabama 5 — (2) — 3

15 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Financial Information (in millions) 2024 2023 2024 2023

3 unchanged sentences

Improved Development 12.0 3.1 16.4 20.2

Unimproved Development — 0.1 — 0.1

Rural 13.8 20.5 30.0 42.6

Timberland & Non-Strategic — 1.1 16.1 2.9

Conservation Easement 1.1 — 1.1 —

Deferred Revenue/Other (a) 3.2 6.4 13.0 13.7

12 unchanged sentences

Interest expense, net (10.0) (12.6) (29.6) (36.7)

Interest and other miscellaneous income (expense), net (d) 0.9 11.6 (4.1) 21.2

Interest and other miscellaneous income, net (d) 12.8 0.5 8.8 21.7

Income tax (expense) benefit (e) — (0.6) 0.3 (1.8)

Net Income 30.4 22.7 35.8 49.3

Net (income) loss attributable to noncontrolling interests in consolidated affiliates (1.1) 0.2 (2.0) 1.3

Net income attributable to noncontrolling interests in consolidated affiliates (1.3) (3.2) (3.3) (1.9)

Net Income Attributable to Rayonier, L.P.

12 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 six months ended June 30, 2023 includes $2.3 million of timber write-offs resulting from casualty events.

(d) The three months ended June 30, 2024 includes $1.1 million of net costs associated with legal settlements.

The six months ended June 30, 2024 includes $5.7 million of pension settlement charges and $2.4 million of net costs associated with legal settlements.

The three and six months ended June 30, 2023 include $11.4 million and $20.5 million, respectively, of net recoveries associated with legal settlements.

(e) The six months ended June 30, 2024 includes a $1.2 million income tax benefit related to the pension settlement.

(b) The nine months ended September 30, 2023 includes $2.3 million of timber write-offs resulting from casualty events.

(c) The three and nine months ended September 30, 2024 includes $0.9 million and $1.6 million, respectively, of costs related to disposition initiatives.

(d) The three months ended September 30, 2024 includes $12.0 million of net recoveries associated with legal settlements, which is partially offset by $0.3 million of pension settlement charges.

The nine months ended September 30, 2024 includes $9.6 million of net recoveries associated with legal settlements, which is partially offset by $6.0 million of pension settlement charges.

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

(e) The nine months ended September 30, 2024 includes a $1.2 million income tax benefit related to the pension settlement.

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Southern Timber Overview 2024 2023 2024 2023

11 unchanged sentences

Total Volume) (a) — 1 % 1 % 1 %

Net Stumpage Pricing (dollars per ton)

Net Stumpage Pricing (dollars per ton) (b)

Pine Pulpwood $17.21 $16.54 $17.13 $16.53

8 unchanged sentences

Net Stumpage Sales $32.5 $38.8 $116.0 $128.0

Land-Based Solutions (b) 2.6 1.0 4.3 1.9

Land-Based Solutions (c) 2.8 1.0 7.1 2.9

Other Non-Timber Sales 13.9 8.8 28.1 26.2

2 unchanged sentences

(+) Depreciation, depletion and amortization 18.1 19.2 56.7 61.6

Adjusted EBITDA (c) $33.9 $43.6 $78.7 $86.4

Adjusted EBITDA (d) $37.9 $37.8 $116.6 $124.2

Period-End Acres (in thousands) 1,843 1,899 1,843 1,899

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

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

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Pacific Northwest Timber Overview 2024 2023 2024 2023

23 unchanged sentences

Total Sales $27.2 $29.3 $76.7 $96.1

Operating Loss ($1.5) ($2.4) ($5.8) ($5.9)

Operating Income (Loss) $0.8 ($0.6) ($5.0) ($6.5)

(+) Depreciation, depletion and amortization 7.8 8.3 24.3 28.2

5 unchanged sentences

(d) Consists primarily of conservation easement sales for habitat protection.

(d) Consists primarily of conservation easement sales for habitat protection in Q2 2023.

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

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

New Zealand Timber Overview 2024 2023 2024 2023

40 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Real Estate Overview 2024 2023 2024 2023

1 unchanged sentence

Improved Development (a) $12.0 $3.1 $16.4 $20.2

Unimproved Development — 0.1 — 0.1

Rural 13.8 20.5 30.0 42.6

Timberland & Non-Strategic — 1.1 16.1 2.9

Conservation Easement 1.1 — 1.1 —

Deferred Revenue/Other (b) 3.2 6.4 13.0 13.7

1 unchanged sentence

Improved Development (a) 116.0 6.9 176.9 302.2

Unimproved Development — 10 — 10

Rural 2,800 3,799 5,737 8,740

3 unchanged sentences

Improved Development (a) $103,421 $454,810 $92,701 $66,694

Unimproved Development — 11,250 — 11,250

Rural 4,916 5,386 5,223 4,872

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Trading Overview 2024 2023 2024 2023

6 unchanged sentences

Total Sales $9.0 $6.8 $26.0 $34.8

Operating Income $0.1 $0.1 $0.2 $0.4

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

Adjusted EBITDA (a) ($0.1) ($0.1) $0.1 $0.4

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

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

29 unchanged sentences

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 June 30, 2024 versus June 30, 2023 (millions of dollars):

The following tables summarize sales, operating income (loss) and Adjusted EBITDA variances for September 30, 2024 versus September 30, 2023 (millions of dollars):

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

Three Months Ended

June 30, 2023

September 30, 2023

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

1 unchanged sentence

Price (1.1) (1.1) (2.6) 8.5 0.6 — 4.3

Non-timber sales (0.5) (0.9) 4.0 — (0.1) — 2.4

Foreign exchange (a) — — (0.3) — — — (0.3)

Non-timber sales (a) 6.8 0.1 (6.6) — — — 0.3

Other (2.6) (b) (2.6) (b) 6.0 (c) (2.0) (d) — — (1.2)

Three Months Ended

June 30, 2024

September 30, 2024

$62.0 $27.2 $66.8 $30.1 $9.0 ($0.1) $195.0

(a) Net of currency hedging impact.

(a) For the Southern Timber segment, includes sales from carbon capture and storage ("CCS"), solar and wind energy contracts.

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

(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.

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

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

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2023

$204.1 $96.1 $175.4 $79.5 $34.8 ($0.4) $589.5

1 unchanged sentence

Price (1.8) 0.5 (8.1) (62.7) (1.4) — (73.5)

Non-timber sales (0.8) (0.9) 7.1 — (0.2) — 5.2

Foreign exchange (a) — — (0.6) — — — (0.6)

Other (4.1) (b) (13.2) (b) 0.7 (c) 3.4 (d) 0.1 0.1 (13.0)

Six Months Ended

June 30, 2024

Non-timber sales (a) 6.1 (0.9) 0.7 — (0.2) — 5.7

Foreign exchange (b) — — (0.9) — — — (0.9)

Other (6.8) (c) (15.7) (c) 6.6 (d) 1.4 (e) — 0.2 (14.3)

Nine Months Ended

September 30, 2024

$191.3 $76.7 $166.3 $76.6 $26.0 ($0.2) $536.7

(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.

(a) For the Southern Timber segment, includes sales from carbon capture and storage ("CCS"), solar and wind energy contracts.

For the Pacific Northwest Timber segment, includes Conservation Easement sales for habitat protection in Q2 2023.

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

(b) Net of currency hedging impact.

(d) Includes variance due to domestic versus export sales.

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

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

Three Months Ended

June 30, 2023

September 30, 2023

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

8 unchanged sentences

Three Months Ended

June 30, 2024

September 30, 2024

$19.8 $0.8 $8.9 $8.6 ($0.1) ($10.5) $27.6

4 unchanged sentences

(d) Corporate and Other includes $0.7 million of costs related to disposition initiatives.

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

Corporate and Other includes $0.9 million of costs related to disposition initiatives.

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

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2023

$62.6 ($6.5) $19.3 $18.7 $0.4 ($28.3) $66.1

7 unchanged sentences

Other (d) — — 2.3 — — (1.6) 0.8

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

$59.9 ($5.0) $19.3 $14.3 $0.1 ($32.3) $56.3

2 unchanged sentences

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

For the Pacific Northwest Timber segment, includes Conservation Easement sales for habitat protection in Q2 2023.

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

1 unchanged sentence

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

Corporate and Other includes $1.6 million of costs related to disposition initiatives.

1 unchanged sentence

Three Months Ended

June 30, 2023

September 30, 2023

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

6 unchanged sentences

Three Months Ended

June 30, 2024

September 30, 2024

$37.9 $8.7 $14.6 $19.9 ($0.1) ($9.2) $71.8

5 unchanged sentences

(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.

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

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

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2023

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

5 unchanged sentences

Other (e) — — — (0.7) — — (0.7)

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

$116.6 $19.3 $33.7 $43.4 $0.1 ($29.4) $183.7

3 unchanged sentences

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

For the Pacific Northwest Timber segment, includes Conservation Easement sales for habitat protection in Q2 2023.

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.

SOUTHERN TIMBER

Second quarter sales of $59.3 million decreased $9.0 million, or 13%, versus the prior year period.

Harvest volumes decreased 17% to 1.67 million tons versus 2.01 million tons in the prior year period, primarily driven by wet ground conditions that constrained production and softer demand from lumber mills.

Average pine sawtimber stumpage realizations increased 1% to $29.28 per ton versus $29.07 per ton in the prior year period, primarily due to improved chip-n-saw pricing in most of our markets.

Average pine pulpwood stumpage realizations increased 10% to $17.38 per ton versus $15.78 per ton in the prior year period, primarily driven by markedly improved demand from pulp mills and a favorable geographic mix.

Overall, weighted-average net stumpage realizations (including hardwood) increased 2% to $22.21 per ton versus $21.85 per ton in the prior year period.

Non-timber sales of $9.4 million decreased 5% versus the prior year period, as lower pipeline easement revenues were partially offset by growth in our land-based solutions business.

Operating income of $17.1 million decreased $4.6 million versus the prior year period due to lower volumes ($3.6 million) and higher costs ($3.1 million), partially offset by lower depletion rates ($1.5 million) and higher net stumpage realizations ($0.6 million).

Second quarter Adjusted EBITDA of $33.9 million was 22%, or $9.7 million, below the prior year period.

Third quarter sales of $62.0 million decreased $2.0 million, or 3%, versus the prior year period.

Harvest volumes decreased 13% to 1.57 million tons versus 1.81 million tons in the prior year period, primarily driven by wet ground conditions that constrained production as well as softer demand from lumber mills.

Average pine sawtimber stumpage realizations decreased 5% to $27.46 per ton versus $28.85 per ton in the prior year period, primarily due to softer demand from sawmills and an unfavorable geographic mix.

Average pine pulpwood stumpage realizations increased 4% to $17.21 per ton versus $16.54 per ton in the prior year period, primarily driven by improved demand from pulp mills and weather-related constraints on competing supply in certain markets.

Overall, weighted-average net stumpage realizations (including hardwood) decreased 3% to $20.77 per ton versus $21.48 per ton in the prior year period.

Non-timber sales of $16.7 million increased $6.8 million versus the prior year period, primarily driven by higher pipeline easement revenues and growth in our land-based solutions business.

Operating income of $19.8 million increased $1.2 million versus the prior year period as higher non-timber income ($6.2 million) and lower costs ($0.1 million) were partially offset by lower volumes ($2.6 million), higher depletion expense ($1.4 million), and lower net stumpage realizations ($1.1 million).

Third quarter Adjusted EBITDA of $37.9 million was $0.2 million above the prior year period.

Year-to-date sales of $191.3 million decreased $12.8 million, or 6%, versus the prior year period.

Harvest volumes decreased 6% to 3.68 million tons versus 3.90 million tons in the prior year period, primarily driven by wet ground conditions and weaker sawtimber demand.

Harvest volumes decreased 8% to 5.25 million tons versus 5.71 million tons in the prior year period, primarily driven by wet ground conditions that constrained production and softer demand from lumber mills.

Average pine sawtimber stumpage realizations decreased 2% to $29.38 per ton versus $29.87 per ton in the prior year period, primarily due to softer demand from lumber mills.

1 unchanged sentence

Overall, weighted-average stumpage realizations (including hardwood) decreased 2% to $22.11 per ton versus $22.46 per ton in the prior year period.

Operating income of $40.1 million decreased $3.8 million versus the prior year period due to lower volumes ($2.6 million), higher costs ($1.4 million), lower net stumpage realizations ($0.9 million), and lower non-timber income ($0.4 million), partially offset by lower depletion rates ($1.5 million).

Operating income of $59.9 million decreased $2.6 million versus the prior year period due to lower volumes ($5.4 million), lower net stumpage realizations ($1.8 million), and higher costs ($1.3 million), partially offset by higher non-timber income ($5.7 million) and lower depletion expense ($0.1 million).

Year-to-date Adjusted EBITDA of $116.6 million was 6%, or $7.6 million, below the prior year period.

PACIFIC NORTHWEST TIMBER

Second quarter sales of $24.3 million decreased $8.0 million, or 25%, versus the prior year period.

Harvest volumes decreased 12% to 293,000 tons versus 332,000 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 7% to $90.70 per ton versus $97.37 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.

Third quarter sales of $27.2 million decreased $2.1 million, or 7%, versus the prior year period.

Harvest volumes increased 10% to 319,000 tons versus 290,000 tons in the prior year period.

Average delivered prices for domestic sawtimber decreased 12% to $95.27 per ton versus $108.20 per ton in the prior year period due to a combination of weaker demand from domestic lumber mills and an unfavorable species / product mix, as a lower proportion of Douglas-fir sawtimber was harvested in the current year period.

Average delivered pulpwood prices decreased 9% to $30.14 per ton versus $33.09 per ton in the prior year period, primarily due to softer mill demand in the region.

Despite lower delivered pricing, net stumpage realizations increased 10% due to favorable pricing on stumpage sales and lower per-ton cut and haul costs on delivered volume.

An operating loss of $1.5 million

versus an operating loss of $2.4 million in the prior year period was driven by improved net stumpage realizations ($1.4 million) and lower depletion rates ($0.8 million), partially offset by lower non-timber income ($0.9 million), higher costs ($0.3 million), and lower volumes ($0.1 million).

Second quarter Adjusted EBITDA of $5.9 million was 14%, or $0.9 million, below the prior year period.

Operating income of $0.8 million versus an operating loss of $0.6 million in the prior year period was driven by lower depletion expense ($1.3 million), lower costs ($0.8 million), and higher volumes ($0.4 million), partially offset by lower net stumpage realizations ($1.1 million).

Third quarter Adjusted EBITDA of $8.7 million was 12%, or $0.9 million, above the prior year period.

Year-to-date sales of $76.7 million decreased $19.3 million, or 20%, versus the prior year period.

Harvest volumes decreased 8% to 929,000 tons versus 1,006,000 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 8% to $87.57 per ton versus $95.16 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.

Average delivered prices for domestic sawtimber decreased 9% to $90.06 per ton versus $98.89 per ton in the prior year period primarily due to softer demand from domestic lumber mills and less competition from export markets.

Average delivered pulpwood prices decreased 27% to $29.85 per ton versus $40.67 per ton in the prior year period due to softer mill demand in the region.

An operating loss of $5.8 million versus an operating loss of $5.9 million in the prior year period was driven by improved net stumpage realizations ($1.0 million) and lower depletion rates ($0.5 million), partially offset by lower non-timber income ($0.9 million), lower volumes ($0.3 million), and higher costs ($0.2 million).

An operating loss of $5.0 million versus an operating loss of $6.5 million in the prior year period was driven by lower depletion expense ($1.8 million), lower costs ($0.6 million), and improved net stumpage realizations ($0.5 million), partially offset by lower non-timber income ($0.9 million) and lower volumes ($0.5 million).

Year-to-date Adjusted EBITDA of $19.3 million was 11%, or $2.4 million, below the prior year period.

NEW ZEALAND TIMBER

Second quarter sales of $53.8 million decreased $7.1 million, or 12%, versus the prior year period.

Sales volumes decreased 12% to 592,000 tons versus 673,000 tons in the prior year period, primarily due to softer export sawtimber demand.

Average delivered prices for export sawtimber decreased 2% to $101.86 per ton versus $103.81 per ton in the prior year period, driven by weaker construction activity in China.

Average delivered prices for domestic sawtimber declined 6% to $65.23 per ton versus $69.29 per ton in the prior year period.

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$0.60 per NZ$1.00 versus US$0.62 per NZ$1.00).

Excluding the impact of foreign exchange rates, domestic sawtimber prices decreased 4% versus the prior year period.

Second quarter non-timber / carbon credit sales totaled $4.6 million versus $0.7 million in the prior year period.

Operating income of $2.9 million increased $0.5 million versus the prior year period due to higher carbon credit income ($4.0 million), favorable foreign exchange impacts ($1.2 million), lower costs ($0.5 million), and lower depletion rates ($0.3 million ), partially offset by lower net stumpage realizations ($4.2 million) and lower volumes ($1.3 million).

Second quarter Adjusted EBITDA of $7.7 million was 7%, or $0.6 million, below the prior year period.

Third quarter sales of $66.8 million decreased $3.7 million, or 5%, versus the prior year period.

Sales volumes decreased 1% to 686,000 tons versus 690,000 tons in the prior year period.

Average delivered prices for export sawtimber increased 10% to $104.48 per ton versus $95.23 per ton in the prior year period, as higher shipping costs were partially passed on to export customers through increased prices.

Average delivered prices for domestic sawtimber increased 2% to $64.89 per ton versus $63.45 per ton in the prior year period.

Despite higher delivered log prices, net stumpage realizations declined 16% versus the prior year quarter, largely due to elevated shipping and production costs.

Third quarter non-timber / carbon credit sales totaled $8.9 million versus $15.6 million in the prior year period, primarily due to a lower volume of carbon credits sold as compared to the prior year period.

Operating income of $8.9 million decreased $8.6 million versus the prior year period due to lower carbon credit income ($6.6 million), lower net stumpage realizations ($2.6 million), higher costs ($0.2 million), and lower volumes ($0.1 million), partially offset by favorable foreign exchange impacts ($0.5 million) and lower depletion rates ($0.3 million ).

Third quarter Adjusted EBITDA of $14.6 million was 38%, or $8.9 million, below the prior year period.

Year-to-date sales of $166.3 million decreased $9.2 million, or 5%, versus the prior year period.

Sales volumes decreased 7% to 1.07 million tons versus 1.15 million tons in the prior year period, primarily due to softer export sawtimber demand.

Average delivered prices for export sawtimber decreased 2% to $104.93 per ton versus $107.31 per ton in the prior year period, driven by weaker construction demand in China.

Sales volumes decreased 5% to 1.76 million tons versus 1.84 million tons in the prior year period.

Average delivered prices for export sawtimber increased 2% to $104.75 per ton versus $102.93 per ton in the prior year period, as higher shipping costs were partially passed on to export customers through increased prices.

Average delivered prices for domestic sawtimber decreased 2% to $65.85 per ton versus $67.46 per ton in the prior year period.

The decrease in domestic sawtimber prices was primarily driven by weaker domestic demand coupled with 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 1% versus the prior year period.

Year-to-date non-timber / carbon credit sales totaled $8.2 million versus $1.0 million in the prior year period.

Operating income of $10.3 million increased $8.6 million versus the prior year period due to higher carbon credit income ($7.3 million), favorable foreign exchange impacts ($4.4 million), the prior year write-off of timber basis due to a tropical cyclone casualty event ($2.3 million), lower costs ($0.9 million), and lower depletion rates ($0.7 million), partially offset by lower net stumpage realizations ($5.4 million) and lower volumes ($1.6 million).

Year-to-date Adjusted EBITDA of $19.2 million was 33%, or $4.8 million, above the prior year period.

Second quarter sales of $31.0 million decreased $1.1 million versus the prior year period, while operating income of $5.8 million decreased $2.9 million versus the prior year period.

Sales and operating income decreased versus the prior year period due to lower weighted-average prices ($1,750 per acre versus $7,489 per acre in the prior year period), partially offset by significantly higher acres sold (14,600 acres sold versus 3,754 acres sold in the prior year period) and favorable deferred revenue adjustments.

Improved Development sales of $2.6 million included $1.6 million from the Heartwood development project south of Savannah, Georgia and $1.0 million from the Wildlight development project north of Jacksonville, Florida.

Sales in Heartwood consisted of two residential pod sales totaling 47 acres for $1.6 million ($34,000 per acre).

Sales in Wildlight consisted of an 8-acre commercial parcel for $1.0 million ($125,000 per acre).

Year-to-date non-

timber / carbon credit sales totaled $17.1 million versus $16.6 million in the prior year period.

Operating income of $19.3 million was consistent with the prior year period due to favorable foreign exchange impacts ($4.7 million), the prior year write-off of timber basis due to a tropical cyclone casualty event ($2.3 million), higher carbon credit income ($1.0 million), lower depletion rates ($0.9 million), and lower costs ($0.7 million), largely offset by lower net stumpage realizations ($8.1 million) and lower volumes ($1.5 million).

Year-to-date Adjusted EBITDA of $33.7 million was 11%, or $4.2 million, below the prior year period.

Third quarter sales of $30.1 million decreased $1.1 million versus the prior year period, while operating income of $8.6 million decreased $0.6 million versus the prior year period.

Sales and operating income decreased versus the prior year period due to lower acres sold (2,916 acres sold versus 4,281 acres sold in the prior year period), partially offset by higher weighted-average prices ($8,835 per acre versus $5,781 per acre in the prior year period).

Improved Development sales of $12.0 million included $7.9 million from the Wildlight development project north of Jacksonville, Florida, $3.6 million from the Heartwood development project south of Savannah, Georgia, and $0.5 million from the sale of an industrial-use parcel in Kitsap County, Washington ($266,000 per acre).

Sales in Wildlight consisted of two residential pod sales totaling 104 acres for $7.7 million ($74,000 per acre) and two small non-residential sales totaling $0.2 million.

Sales in Heartwood consisted of an 8.8-acre commercial parcel for $3.6 million ($410,000 per acre).

This compares to Improved Development sales of $3.1 million in the prior year period.

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This compares to prior year period sales of $20.5 million, which consisted of 3,799 acres at an average price of $5,386 per acre.

Timberland & Non-Strategic sales of $15.5 million consisted of a 13,106-acre transaction in New Zealand for $1,183 per acre.

This transaction included several geographically-isolated parcels with low plantability (~50%), a relatively young age-class distribution, and above-average operating costs.

Prior year period Timberland & Non-Strategic sales were $0.3 million, which consisted of a 76-acre transaction for $3,344 per acre.

Second quarter Adjusted EBITDA of $18.9 million decreased $1.4 million versus the prior year period.

There were no Timberland & Non-Strategic sales in the third quarter.

This compares to prior year period sales of $1.1 million, which consisted of 466 acres at an average price of $2,266 per acre.

Third quarter Adjusted EBITDA of $19.9 million increased $1.1 million versus the prior year period.

Year-to-date sales of $76.6 million decreased $2.9 million versus the prior year period, while operating income of $14.3 million decreased $4.4 million versus the prior year period.

Sales and operating income decreased in the first six months primarily due to lower weighted-average prices ($2,220 per acre versus $7,028 per acre in the prior year period), partially offset by significantly higher acres sold (16,534 acres sold versus 5,841 acres sold in the prior year period) and favorable deferred revenue adjustments.

Sales and operating income decreased in the first nine months primarily due to lower weighted-average prices ($3,212 per acre versus $6,501 per acre in the prior year period), partially offset by significantly higher acres sold (19,450 acres sold versus 10,122 acres sold in the prior year period).

Year-to-date Adjusted EBITDA of $43.4 million decreased $2.4 million versus the prior year period.

Second quarter sales of $5.3 million decreased $10.1 million versus the prior year period, primarily due to lower volumes and prices.

Sales volumes of 55,000 tons decreased 59% versus the prior year period.

The Trading segment generated operating income of $0.1 million, which was consistent with the prior year period.

Third quarter sales of $9.0 million increased $2.2 million versus the prior year period, primarily due to higher volumes and prices.

Sales volumes of 76,000 tons increased 24% versus the prior year period.

The Trading segment generated an operating loss of $0.1 million, which was consistent with the prior year period.

Year-to-date sales of $26.0 million decreased $8.7 million versus the prior year period, primarily due to lower volumes and prices.

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CORPORATE AND OTHER EXPENSE / ELIMINATIONS

Second quarter corporate and other operating expenses of $12.0 million increased $1.7 million versus the prior year period, primarily due to $0.7 million of costs related to disposition initiatives, higher compensation and benefits expenses, and higher professional services fees.

Year-to-date corporate and other operating expenses of $21.8 million increased $2.9 million versus the prior year period, primarily due to $0.7 million of costs related to disposition initiatives, higher compensation and benefits expenses, and higher professional services fees.

INTEREST EXPENSE

Second quarter and year-to-date interest expense of $9.8 million and $19.6 million decreased $2.6 million and $4.6 million, respectively, versus the prior year period, primarily due to lower average outstanding debt.

INTEREST AND OTHER MISCELLANEOUS INCOME (EXPENSE), NET

Second quarter interest and other miscellaneous income of $0.9 million decreased $10.7 million versus the prior year period.

The current year period includes $1.1 million of net costs associated with legal settlements, while the prior year period included $11.4 million of net recoveries associated with legal settlements.

Year-to-date interest and other miscellaneous expense of $4.1 million includes a $5.7 million pension settlement charge and $2.4 million of net costs associated with legal settlements.

Third quarter corporate and other operating expenses of $10.5 million increased $1.1 million versus the prior year period, primarily due to $0.9 million of costs related to disposition initiatives and higher compensation and benefits expenses, partially offset by lower professional services fees.

Year-to-date corporate and other operating expenses of $32.3 million increased $4.0 million versus the prior year period, primarily due to $1.6 million of costs related to disposition initiatives, higher compensation and benefits expenses, and higher IT related expenses.

INTEREST EXPENSE, NET

Third quarter and year-to-date interest expense of $10.0 million and $29.6 million decreased $2.6 million and $7.2 million, respectively, versus the prior year period, primarily due to lower average outstanding debt.

INTEREST AND OTHER MISCELLANEOUS INCOME, NET

Third quarter interest and other miscellaneous income of $12.8 million included $12.0 million of net recoveries associated with legal settlements, partially offset by $0.3 million of pension settlement charges.

Year-to-date interest and other miscellaneous income of $8.8 million includes $9.6 million of net recoveries associated with legal settlements, partially offset by $6.0 million of pension settlement charges.

This compares to prior year period interest and other miscellaneous income of $21.7 million, which included $20.5 million of net recoveries associated with legal settlements.

INCOME TAX (EXPENSE) BENEFIT

Second quarter income tax expense of $0.5 million increased $0.3 million versus the prior year period.

Third quarter income tax expense decreased $0.5 million versus the prior year period.

Year-to-date income tax benefit of $0.3 million versus income tax expense of $1.8 million in the prior year period was primarily due to a $1.2 million tax benefit associated with the pension termination and settlement.

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

In our Southern Timber segment, we expect full-year harvest volumes toward the lower end of prior guidance as we look to opportunistically flex our volume in response to market conditions.

We expect that pine stumpage realizations will be lower in the second half of the year as compared to the first half due to a less favorable geographic mix, lower sawlog prices, 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 to achieve full-year volumes slightly below our prior guidance.

While pricing conditions have been relatively stable thus far in 2024, our ability to increase delivered log prices has been constrained by challenging domestic and export market conditions.

In our New Zealand Timber segment, we remain on track to achieve our full-year volume guidance as we expect relatively higher production during the second half of the year as compared to the first half.

Further, we continue to expect that full-year domestic and export sawtimber pricing will improve modestly relative to the full-year pricing achieved in 2023.

In our Real Estate segment, we continue to see healthy interest in our development projects and rural properties.

We expect that second half transaction closing activity will be heavily concentrated in the fourth quarter.

In our Southern Timber segment, we now expect full-year harvest volumes slightly below the lower end of our prior guidance range due to the disposition of approximately 91,000 acres in Oklahoma as well as weather-related impacts in certain markets.

In our Pacific Northwest Timber segment, we now expect full-year harvest volumes slightly below the lower end of our prior guidance range due to the disposition of approximately 109,000 acres in Washington.

In our New Zealand Timber segment, we expect full-year harvest volumes in line with our prior guidance and lower carbon credit sales, softer export markets, and elevated shipping costs.

In our Real Estate segment, we continue to expect strong fourth quarter closing activity, contingent on the timing of several large transactions.

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 pleased with the progress we have made on our previously announced $1 billion disposition plan.

Although no transactions were completed during the quarter, we have been encouraged by the interest received from prospective buyers and continue to advance a variety of options to achieve our target.

To this end, we are actively engaged on several significant transactions and expect to be in a position to provide additional information regarding such transactions concurrent with or prior to our third quarter earnings release.

SUMMARY OF LIQUIDITY AND FINANCING COMMITMENTS

June 30, December 31,

September 30, December 31,

(millions of dollars) 2024 2023

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Net debt to enterprise value (b)(c) 20 % 19 %

(a) Total debt as of June 30, 2024 and December 31, 2023 reflects principal on long-term debt, gross of deferred financing costs and unamortized discounts.

(a) Total debt as of September 30, 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 $29.09 and $33.41 as of June 30, 2024 and December 31, 2023, respectively.

“OP” units) plus net debt based on Rayonier’s share price of $32.18 and $33.41 as of September 30, 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 June 30, 2024, $269.7 million remains available for issuance under the 2022 ATM Program.

As of September 30, 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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

The following table summarizes our cash flows from operating, investing and financing activities for the six months ended June 30, 2024 and 2023:

The following table summarizes our cash flows from operating, investing and financing activities for the nine months ended September 30, 2024 and 2023:

(millions of dollars) 2024 2023

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CASH USED FOR INVESTING ACTIVITIES

Cash used for investing activities decreased $9.0 million from the prior year period, due to lower cash used for timberland acquisitions ($9.3 million) and lower real estate development investments ($4.6 million), partially offset by lower proceeds from other investing activities ($4.8 million) and higher capital expenditures ($0.1 million).

Cash used for investing activities decreased $4.8 million from the prior year period, due to lower cash used for timberland acquisitions ($10.4 million), partially offset by higher real estate development investments ($0.3 million) and lower proceeds from other investing activities ($5.2 million).

CASH USED FOR FINANCING ACTIVITIES

Cash used for financing activities increased $95.8 million from the prior year period.

This is primarily due to higher dividends paid on common shares ($30.3 million), higher distributions to noncontrolling interests in consolidated affiliates ($3.8 million), and higher distributions to noncontrolling interests in the Operating Partnership ($0.1 million), partially offset by lower costs associated with the issuance of common shares under the ATM equity offering program ($0.1 million).

This is primarily due to higher repayments of debt ($60.0 million), higher dividends paid on common shares ($30.5 million), and higher distributions to noncontrolling interests in consolidated affiliates ($5.5 million), partially offset by lower distributions to noncontrolling interests in the Operating Partnership ($0.1 million) and lower costs associated with the issuance of common shares under the ATM equity offering program ($0.1 million).

FUTURE USES OF CASH

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Long-term debt (a) $1,291.4 — $225.7 $415.7 $650.0

Current maturities of long-term debt 22.0 — 22.0 — —

Interest payments on long-term debt (b) 272.2 20.8 130.5 84.2 36.7

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Commitments — real estate projects 56.0 18.4 32.2 1.1 4.3

Commitments — derivatives (d) 0.8 0.5 0.3 — —

Commitments — environmental remediation (e) 19.1 13.5 2.4 0.9 2.3

Commitments — other (f) 4.0 2.3 1.5 0.2 —

Commitments — environmental remediation (d) 15.5 9.8 3.0 0.7 2.0

Commitments — other (e) 2.9 0.5 1.6 0.4 0.4

Total $1,861.6 $54.3 $433.0 $518.2 $856.1

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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 June 30, 2024 and excludes the impact of hedging.

(b) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of September 30, 2024 and excludes the impact of hedging.

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

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

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

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

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

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

See Note 15 - Employee Benefit Plans for additional information.

(e) Commitments — other includes other purchase obligations.

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

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We made cash contributions of $2.7 million in 2024 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.

Additionally, we settled the Excess Benefit Plan with lump sum cash payments of $1.2 million in 2024.

We have no mandatory contribution requirements remaining in 2024.

See Note 15 — Employee Benefit Plans for additional information.

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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 June 30, 2024.

See Note 11 — Guarantees for details on the letters of credit and surety bonds as of September 30, 2024.

SUMMARY OF GUARANTOR FINANCIAL INFORMATION

16 unchanged sentences

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

for the six months ended June 30, 2024 and year ended December 31, 2023 are provided in the table below:

(in millions) June 30, 2024 December 31, 2023

for the nine months ended September 30, 2024 and year ended December 31, 2023 are provided in the table below:

(in millions) September 30, 2024 December 31, 2023

Current assets $61.0 $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 six months ended June 30, 2024 and year ended December 31, 2023 are provided in the table below:

(in millions) June 30, 2024 December 31, 2023

for the nine months ended September 30, 2024 and year ended December 31, 2023 are provided in the table below:

(in millions) September 30, 2024 December 31, 2023

Cost and expenses ($27.1) ($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 expense (income), costs related to disposition initiatives, 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) expense, costs related to disposition initiatives, 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.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

5 unchanged sentences

Non-cash cost of land and improved development 9.8 6.6 19.2 20.2

Non-operating expense (income) (b) 1.2 (11.5) 8.3 (20.6)

Non-operating (income) expense (b) (11.5) 0.1 (3.3) (20.5)

Costs related to disposition initiatives (c) 0.9 — 1.6 —

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Adjusted EBITDA $71.8 $78.9 $183.7 $202.9

(a) The six months ended June 30, 2024 includes a $1.2 million income tax benefit related to the pension settlement.

(b) The three months ended June 30, 2024 includes $1.1 million of net costs associated with legal settlements.

The six months ended June 30, 2024 includes $5.7 million of pension settlement charges and $2.4 million of net costs associated with legal settlements.

The three and six months ended June 30, 2023 include $11.4 million and $20.5 million, respectively, of net recoveries associated with legal settlements.

(c) Costs related to disposition initiatives include legal, advisory, and other due diligence costs incurred in connection with the Company’s asset disposition plan, which was announced in November 2023.

(a) The nine months ended September 30, 2024 includes a $1.2 million income tax benefit related to the pension settlement.

(b) The three months ended September 30, 2024 includes $12.0 million of net recoveries associated with legal settlements, which is partially offset by $0.3 million of pension settlement charges.

The nine months ended September 30, 2024 includes $9.6 million of net recoveries associated with legal settlements, which is partially offset by $6.0 million of pension settlement charges.

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

(c) Costs related to disposition initiatives include legal, advisory, and other due diligence costs incurred in connection with our asset disposition plan, which was announced in November 2023.

(d) 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.

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

June 30, 2024

September 30, 2024

Operating income (loss) $19.8 $0.8 $8.9 $8.6 ($0.1) ($10.5) $27.6

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Adjusted EBITDA $37.9 $8.7 $14.6 $19.9 ($0.1) ($9.2) $71.8

June 30, 2023

September 30, 2023

Operating income (loss) $18.6 ($0.6) $17.6 $9.2 ($0.1) ($9.4) $35.4

2 unchanged sentences

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

(a) Costs related to disposition initiatives include legal, advisory, and other due diligence costs incurred in connection with the Company’s asset disposition plan, which was announced in November 2023.

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

June 30, 2024

(a) Costs related to disposition initiatives include legal, advisory, and other due diligence costs incurred in connection with our asset disposition plan, which was announced in November 2023.

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

September 30, 2024

Operating income (loss) $59.9 ($5.0) $19.3 $14.3 $0.1 ($32.3) $56.3

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Adjusted EBITDA $116.6 $19.3 $33.7 $43.4 $0.1 ($29.4) $183.7

June 30, 2023

September 30, 2023

Operating income (loss) $62.6 ($6.5) $19.3 $18.7 $0.4 ($28.3) $66.1

3 unchanged sentences

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

(a) Costs related to disposition initiatives include legal, advisory, and other due diligence costs incurred in connection with our asset disposition plan, which was announced in November 2023.

(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.

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

Six Months Ended June 30,

Nine Months Ended September 30,

Cash provided by operating activities $173.8 $208.9

Capital expenditures (a) (53.2) (53.1)

Net cost (recovery) on legal settlements (b) 2.4 (20.5)

Net recovery on legal settlements (b) (9.6) (20.5)

Working capital and other balance sheet changes (5.3) (20.6)

5 unchanged sentences

(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.

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

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

Six Months Ended June 30,

Nine Months Ended September 30,

Purchase of timberlands ($3.6) ($14.0)

5 unchanged sentences

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