RAYONIER INC 10-Q

Item 1. Financial Statements RAYONIER INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 SALES ( NOTE 3 ) $ 194,993 $ 201,579 $ 536,700 $ 589,526 Costs and Expenses Cost of sales ( 147,202 ) ( 145,622 ) ( 419,053 ) ( 463,197 ) Selling and general expenses ( 18,271 ) ( 18,947 ) ( 57,852 ) ( 54,677 ) Other operating expense, net ( Note 14 ) ( 1,914 ) ( 1,654 ) ( 3,538 ) ( 5,571 ) ( 167,387 ) ( 166,223 ) ( 480,443 ) ( 523,445 ) OPERATING INCOME 27,606 35,356 56,257 66,081 Interest expense, net ( 10,021 ) ( 12,598 ) ( 29,576 ) ( 36,755 ) Interest and other miscellaneous income, net 12,892 529 8,805 21,725 INCOME BEFORE INCOME TAXES 30,477 23,287 35,486 51,051 Income tax (expense) benefit ( Note 16 ) ( 35 ) ( 547 ) 297 ( 1,777 ) NET INCOME 30,442 22,740 35,783 49,274 Less: Net income attributable to noncontrolling interests in the Operating Partnership ( 391 ) ( 320 ) ( 437 ) ( 811 ) Less: Net income attributable to noncontrolling interests in consolidated affiliates ( 1,293 ) ( 3,183 ) ( 3,328 ) ( 1,902 ) NET INCOME ATTRIBUTABLE TO RAYONIER INC. 28,758 19,237 32,018 46,561 OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustment, net of income tax effect of $ 0 , $ 0 , $ 0 and $ 0 13,338 ( 4,413 ) 2,402 ( 17,350 ) Cash flow hedges, net of income tax effect of $ 2,312 , $ 75 , $ 1,339 and $ 322 ( 15,827 ) 7,379 ( 12,664 ) 7,002 Pension and postretirement benefit plans, net of income tax effect of $ 0 , $ 0 , $ 1,222 and $ 0 139 2 9,701 4 Total other comprehensive (loss) income ( 2,350 ) 2,968 ( 561 ) ( 10,344 ) COMPREHENSIVE INCOME 28,092 25,708 35,222 38,930 Less: Comprehensive income attributable to noncontrolling interests in the Operating Partnership ( 334 ) ( 373 ) ( 417 ) ( 592 ) Less: Comprehensive income attributable to noncontrolling interests in consolidated affiliates ( 3,195 ) ( 2,906 ) ( 4,168 ) ( 884 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC. $ 24,563 $ 22,429 $ 30,637 $ 37,454 EARNINGS PER COMMON SHARE ( NOTE 5 ) Basic earnings per share attributable to Rayonier Inc. $ 0.19 $ 0.13 $ 0.22 $ 0.31 Diluted earnings per share attributable to Rayonier Inc. $ 0.19 $ 0.13 $ 0.21 $ 0.31 See Notes to Consolidated Financial Statements. 1 Table of Contents RAYONIER INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) September 30, 2024 December 31, 2023 ASSETS CURRENT ASSETS Cash and cash equivalents $ 74,225 $ 207,696 Trade receivables, less allowance for doubtful accounts of $ 504 and $ 210 37,155 28,652 Other receivables 12,253 11,517 Inventory ( Note 13 ) 18,656 31,017 Prepaid expenses 20,918 19,070 Assets held for sale ( Note 19 ) 106,165 9,932 Other current assets 7,701 9,074 Total current assets 277,073 316,958 TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION 2,848,323 3,004,316 HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS ( NOTE 12 ) 138,977 105,595 PROPERTY, PLANT AND EQUIPMENT Land 6,453 6,453 Buildings 31,579 31,251 Machinery and equipment 5,070 6,523 Construction in progress 1,433 1,841 Total property, plant and equipment, gross 44,535 46,068 Less — accumulated depreciation ( 20,146 ) ( 19,059 ) Total property, plant and equipment, net 24,389 27,009 RESTRICTED CASH ( NOTE 18 ) 3,021 678 RIGHT-OF-USE ASSETS 93,988 95,474 OTHER ASSETS 93,463 97,555 TOTAL ASSETS $ 3,479,234 $ 3,647,585 LIABILITIES, NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 29,335 $ 26,561 Current maturities of long-term debt, net ( Note 6 ) 22,010 — Accrued taxes 8,307 4,394 Accrued payroll and benefits 11,145 14,215 Accrued interest 9,050 7,094 Pension and other postretirement benefits ( Note 15 ) 52 8,444 Dividend and distribution payable — 30,148 Deferred revenue 29,570 19,012 Other current liabilities 29,993 30,409 Total current liabilities 139,462 140,277 LONG-TERM DEBT, NET ( NOTE 6 ) 1,285,239 1,365,773 PENSION AND OTHER POSTRETIREMENT BENEFITS, NON-CURRENT ( NOTE 15 ) 1,483 1,441 LONG-TERM LEASE LIABILITY 86,980 87,684 LONG-TERM DEFERRED REVENUE 14,070 11,294 OTHER NON-CURRENT LIABILITIES 84,569 81,863 CONTINGENCIES ( NOTE 9 ) NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP ( NOTE 4 ) 64,666 81,651 SHAREHOLDERS’ EQUITY Common Shares, 480,000,000 shares authorized, 149,000,336 and 148,299,117 shares issued and outstanding 1,519,570 1,497,641 Retained earnings 243,861 338,244 Accumulated other comprehensive income ( Note 17 ) 23,574 24,651 TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY 1,787,005 1,860,536 Noncontrolling interests in consolidated affiliates ( Note 4 ) 15,760 17,066 TOTAL SHAREHOLDERS’ EQUITY 1,802,765 1,877,602 TOTAL LIABILITIES, NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP AND SHAREHOLDERS’ EQUITY $ 3,479,234 $ 3,647,585 See Notes to Consolidated Financial Statements. 2 Table of Contents RAYONIER INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (Dollars in thousands, except share data) Common Shares Retained Earnings Accumulated Other Comprehensive Income Noncontrolling Interests in Consolidated Affiliates Shareholders’ Equity Shares Amount Balance, January 1, 2024 148,299,117 $ 1,497,641 $ 338,244 $ 24,651 $ 17,066 $ 1,877,602 Net income — — 1,377 — 929 2,306 Net income attributable to noncontrolling interests in the Operating Partnership — — ( 20 ) — — ( 20 ) Dividends ($ 0.285 per share) (a) — — ( 42,777 ) — — ( 42,777 ) Issuance of shares under incentive stock plans 752 — — — — — Stock-based incentive compensation — 3,218 — — — 3,218 Repurchase of common shares ( 924 ) ( 31 ) — — — ( 31 ) Adjustment of noncontrolling interests in the Operating Partnership — — ( 291 ) — — ( 291 ) Conversion of units into common shares 350,376 11,511 — — — 11,511 Pension and postretirement benefit plans — — — 9,562 — 9,562 Foreign currency translation adjustment — — — ( 16,178 ) ( 773 ) ( 16,951 ) Cash flow hedges — — — 4,070 ( 1,104 ) 2,966 Allocation of other comprehensive loss to noncontrolling interests in the Operating Partnership — — — 265 — 265 Distributions to noncontrolling interests in consolidated affiliates — — — — ( 1,713 ) ( 1,713 ) Balance, March 31, 2024 148,649,321 $ 1,512,339 $ 296,533 $ 22,370 $ 14,405 $ 1,845,647 Net income — — 1,929 — 1,106 3,035 Net income attributable to noncontrolling interests in the Operating Partnership — — ( 26 ) — — ( 26 ) Dividends ($ 0.285 per share) (a) — — ( 42,517 ) — — ( 42,517 ) Issuance of shares under incentive stock plans 396,849 — — — — — Stock-based incentive compensation — 4,904 — — — 4,904 Repurchase of common shares ( 130,460 ) ( 4,132 ) — — — ( 4,132 ) Adjustment of noncontrolling interests in the Operating Partnership — — 8,093 — — 8,093 Conversion of units into common shares 63,708 1,915 — — — 1,915 Foreign currency translation adjustment — — — 5,728 286 6,014 Cash flow hedges — — — ( 330 ) 528 198 Allocation of other comprehensive income to noncontrolling interests in the Operating Partnership — — — ( 19 ) — ( 19 ) Distributions to noncontrolling interests in consolidated affiliates — — — — ( 2,047 ) ( 2,047 ) Balance, June 30, 2024 148,979,418 $ 1,515,026 $ 264,012 $ 27,749 $ 14,278 $ 1,821,065 3 Table of Contents RAYONIER INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (CONTINUED) (Unaudited) (Dollars in thousands, except share data) Common Shares Retained Earnings Accumulated Other Comprehensive Income Noncontrolling Interests in Consolidated Affiliates Shareholders’ Equity Shares Amount Balance, June 30, 2024 148,979,418 $ 1,515,026 $ 264,012 $ 27,749 $ 14,278 $ 1,821,065 Net income — — 29,149 — 1,293 30,442 Net income attributable to noncontrolling interests in the Operating Partnership — — ( 391 ) — — ( 391 ) Dividends ($ 0.285 per share) (a) — — ( 42,433 ) — — ( 42,433 ) Issuance of shares under incentive stock plans 848 — — — — — Stock-based incentive compensation — 3,906 — — — 3,906 Repurchase of common shares ( 222 ) ( 5 ) — — — ( 5 ) Adjustment of noncontrolling interests in the Operating Partnership — — ( 6,476 ) — — ( 6,476 ) Conversion of units into common shares 20,292 643 — — — 643 Pension and postretirement benefit plans — — — 139 — 139 Foreign currency translation adjustment — — — 12,804 534 13,338 Cash flow hedges — — — ( 17,195 ) 1,368 ( 15,827 ) Allocation of other comprehensive loss to noncontrolling interests in the Operating Partnership — — — 77 — 77 Distributions to noncontrolling interests in consolidated affiliates — — — — ( 1,713 ) ( 1,713 ) Balance, September 30, 2024 149,000,336 $ 1,519,570 $ 243,861 $ 23,574 $ 15,760 $ 1,802,765 (a) For information regarding distributions to noncontrolling interests in the Operating Partnership, see the Rayonier Inc. Consolidated Statements of Cash Flows and Note 4 — Noncontrolling Interests . 4 Table of Contents RAYONIER INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (CONTINUED) (Unaudited) (Dollars in thousands, except share data) Common Shares Retained Earnings Accumulated Other Comprehensive Income Noncontrolling Interests in Consolidated Affiliates Shareholders’ Equity Shares Amount Balance, January 1, 2023 147,282,631 $ 1,462,945 $ 366,637 $ 35,813 $ 15,317 $ 1,880,712 Net income (loss) — — 8,474 — ( 1,037 ) 7,437 Net income attributable to noncontrolling interests in the Operating Partnership — — ( 174 ) — — ( 174 ) Dividends ($ 0.285 per share) (a) — — ( 42,172 ) — — ( 42,172 ) Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $ 24 400 ( 10 ) — — — ( 10 ) Issuance of shares under incentive stock plans 1,564 — — — — — Stock-based incentive compensation — 2,499 — — — 2,499 Repurchase of common shares ( 1,167 ) ( 41 ) — — — ( 41 ) Adjustment of noncontrolling interests in the Operating Partnership — — ( 2,376 ) — — ( 2,376 ) Conversion of units into common shares 729,551 23,881 — — — 23,881 Pension and postretirement benefit plans — — — 1 — 1 Foreign currency translation adjustment — — — ( 3,552 ) ( 181 ) ( 3,733 ) Cash flow hedges — — — ( 12,504 ) 185 ( 12,319 ) Allocation of other comprehensive loss to noncontrolling interests in the Operating Partnership — — — 1,110 — 1,110 Balance, March 31, 2023 148,012,979 $ 1,489,274 $ 330,389 $ 20,868 $ 14,284 $ 1,854,815 Net income (loss) — — 19,341 — ( 245 ) 19,096 Net income attributable to noncontrolling interests in the Operating Partnership — — ( 318 ) — — ( 318 ) Dividends ($ 0.285 per share) (a) — — ( 42,279 ) — — ( 42,279 ) Costs associated with the “at-the-market” (ATM) equity offering program — ( 71 ) — — — ( 71 ) Issuance of shares under incentive stock plans 372,149 — — — — — Stock-based incentive compensation — 4,336 — — — 4,336 Repurchase of common shares ( 126,788 ) ( 4,147 ) — — — ( 4,147 ) Adjustment of noncontrolling interests in the Operating Partnership — — 4,296 — — 4,296 Conversion of units into common shares 10,103 304 — — — 304 Pension and postretirement benefit plans — — — 2 — 2 Foreign currency translation adjustment — — — ( 8,790 ) ( 413 ) ( 9,203 ) Cash flow hedges — — — 12,273 ( 331 ) 11,942 Allocation of other comprehensive income to noncontrolling interests in the Operating Partnership — — — ( 58 ) — ( 58 ) Balance, June 30, 2023 148,268,443 $ 1,489,696 $ 311,429 $ 24,295 $ 13,295 $ 1,838,715 5 Table of Contents RAYONIER INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (CONTINUED) (Unaudited) (Dollars in thousands, except share data) Common Shares Retained Earnings Accumulated Other Comprehensive Income Noncontrolling Interests in Consolidated Affiliates Shareholders’ Equity Shares Amount Balance, June 30, 2023 148,268,443 $ 1,489,696 $ 311,429 $ 24,295 $ 13,295 $ 1,838,715 Net income — — 19,557 — 3,183 22,740 Net income attributable to noncontrolling interests in the Operating Partnership — — ( 320 ) — — ( 320 ) Dividends ($ 0.285 per share) (a) — — ( 42,460 ) — — ( 42,460 ) Issuance of shares under incentive stock plans 3,959 — — — — — Stock-based incentive compensation — 3,365 — — — 3,365 Repurchase of common shares ( 968 ) ( 29 ) — — — ( 29 ) Adjustment of noncontrolling interests in the Operating Partnership — — 6,890 — — 6,890 Conversion of units into common shares 15,904 479 — — — 479 Pension and postretirement benefit plans — — — 2 — 2 Foreign currency translation adjustment — — — ( 4,180 ) ( 233 ) ( 4,413 ) Cash flow hedges — — — 7,423 ( 44 ) 7,379 Allocation of other comprehensive income to noncontrolling interests in the Operating Partnership — — — ( 36 ) — ( 36 ) Balance, September 30, 2023 148,287,338 $ 1,493,511 $ 295,096 $ 27,504 $ 16,201 $ 1,832,312 (a) For information regarding distributions to noncontrolling interests in the Operating Partnership, see the Rayonier Inc. Consolidated Statements of Cash Flows and Note 4 — Noncontrolling Interests . See Notes to Consolidated Financial Statements. 6 Table of Contents RAYONIER INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Nine Months Ended September 30, 2024 2023 OPERATING ACTIVITIES Net income $ 35,783 $ 49,274 Adjustments to reconcile net income to cash provided by operating activities: Depreciation, depletion and amortization 106,663 114,281 Non-cash cost of land and improved development 19,217 20,189 Stock-based incentive compensation expense 12,027 10,201 Deferred income taxes ( 4,154 ) ( 2,855 ) Pension settlement charge 5,979 — Timber write-offs resulting from casualty events — 2,302 Other 51 7,826 Changes in operating assets and liabilities: Receivables ( 12,469 ) 251 Inventories 721 ( 1,190 ) Accounts payable 5,000 3,630 All other operating activities 4,960 5,027 CASH PROVIDED BY OPERATING ACTIVITIES 173,778 208,936 INVESTING ACTIVITIES Capital expenditures ( 53,166 ) ( 53,128 ) Real estate development investments ( 19,073 ) ( 18,757 ) Purchase of timberlands ( 3,637 ) ( 13,988 ) Other 1,031 6,197 CASH USED FOR INVESTING ACTIVITIES ( 74,845 ) ( 79,676 ) FINANCING ACTIVITIES Repayment of debt ( 60,000 ) — Dividends paid on common shares (a) ( 158,094 ) ( 127,587 ) Distributions to noncontrolling interests in the Operating Partnership (b) ( 2,192 ) ( 2,265 ) Proceeds from the issuance of common shares under the “at-the-market” (ATM) equity offering program, net of commissions and offering costs — ( 82 ) Repurchase of common shares to pay withholding taxes on vested incentive stock awards ( 4,167 ) ( 4,217 ) Distributions to noncontrolling interests in consolidated affiliates ( 5,473 ) — CASH USED FOR FINANCING ACTIVITIES ( 229,926 ) ( 134,151 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH ( 135 ) ( 928 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH Change in cash, cash equivalents and restricted cash ( 131,128 ) ( 5,819 ) Balance, beginning of year 208,374 115,407 Balance, end of period $ 77,246 $ 109,588 (a) The nine months ended September 30, 2024 includes an additional cash dividend of $ 0.20 per common share, totaling $ 29.8 million. The additional dividend was paid on January 12, 2024, to shareholders of record on December 29, 2023. (b) The nine months ended September 30, 2024 includes an additional cash distribution of $ 0.20 per Redeemable Operating Partnership Unit, totaling $ 0.5 million. The additional distribution was paid on January 12, 2024, to holders of record on December 29, 2023. Nine Months Ended September 30, 2024 2023 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period: Interest (a) $ 24,900 $ 31,556 Income taxes 5,493 4,651 Non-cash investing activity: Capital assets purchased on account 5,091 5,161 (a) Interest paid is presented net of patronage paymen ts receive d of $ 8.3 million a n d $ 6.2 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. For additional information on patronage payments, see Note 7 — Debt in the 2023 Form 10-K. See Notes to Consolidated Financial Statements. 7 Table of Contents RAYONIER, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in thousands, except per unit amounts) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 SALES ( NOTE 3 ) $ 194,993 $ 201,579 $ 536,700 $ 589,526 Costs and Expenses Cost of sales ( 147,202 ) ( 145,622 ) ( 419,053 ) ( 463,197 ) Selling and general expenses ( 18,271 ) ( 18,947 ) ( 57,852 ) ( 54,677 ) Other operating expense, net ( Note 14 ) ( 1,914 ) ( 1,654 ) ( 3,538 ) ( 5,571 ) ( 167,387 ) ( 166,223 ) ( 480,443 ) ( 523,445 ) OPERATING INCOME 27,606 35,356 56,257 66,081 Interest expense, net ( 10,021 ) ( 12,598 ) ( 29,576 ) ( 36,755 ) Interest and other miscellaneous income, net 12,892 529 8,805 21,725 INCOME BEFORE INCOME TAXES 30,477 23,287 35,486 51,051 Income tax (expense) benefit ( Note 16 ) ( 35 ) ( 547 ) 297 ( 1,777 ) NET INCOME 30,442 22,740 35,783 49,274 Less: Net income attributable to noncontrolling interests in consolidated affiliates ( 1,293 ) ( 3,183 ) ( 3,328 ) ( 1,902 ) NET INCOME ATTRIBUTABLE TO RAYONIER, L.P. UNITHOLDERS 29,149 19,557 32,455 47,372 NET INCOME ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO: Limited Partners 28,858 19,361 32,131 46,898 General Partners 291 196 324 474 Net income attributable to unitholders 29,149 19,557 32,455 47,372 OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustment, net of income tax effect of $ 0 , $ 0 , $ 0 and $ 0 13,338 ( 4,413 ) 2,402 ( 17,350 ) Cash flow hedges, net of income tax effect of $ 2,312 , $ 75 , $ 1,339 and $ 322 ( 15,827 ) 7,379 ( 12,664 ) 7,002 Pension and postretirement benefit plans, net of income tax expense of $ 0 , $ 0 , $ 1,222 and $ 0 139 2 9,701 4 Total other comprehensive (loss) income ( 2,350 ) 2,968 ( 561 ) ( 10,344 ) COMPREHENSIVE INCOME 28,092 25,708 35,222 38,930 Less: Comprehensive income attributable to noncontrolling interests in consolidated affiliates ( 3,195 ) ( 2,906 ) ( 4,168 ) ( 884 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER, L.P. UNITHOLDERS $ 24,897 $ 22,802 $ 31,054 $ 38,046 EARNINGS PER UNIT ( NOTE 5 ) Basic earnings per unit attributable to Rayonier, L.P. $ 0.19 $ 0.13 $ 0.22 $ 0.31 Diluted earnings per unit attributable to Rayonier, L.P. $ 0.19 $ 0.13 $ 0.21 $ 0.31 See Notes to Consolidated Financial Statements. 8 Table of Contents RAYONIER, L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) September 30, 2024 December 31, 2023 ASSETS CURRENT ASSETS Cash and cash equivalents $ 74,225 $ 207,696 Trade receivables, less allowance for doubtful accounts of $ 504 and $ 210 37,155 28,652 Other receivables 12,253 11,517 Inventory ( Note 13 ) 18,656 31,017 Prepaid expenses 20,918 19,070 Assets held for sale ( Note 19 ) 106,165 9,932 Other current assets 7,701 9,074 Total current assets 277,073 316,958 TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION 2,848,323 3,004,316 HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS ( NOTE 12 ) 138,977 105,595 PROPERTY, PLANT AND EQUIPMENT Land 6,453 6,453 Buildings 31,579 31,251 Machinery and equipment 5,070 6,523 Construction in progress 1,433 1,841 Total property, plant and equipment, gross 44,535 46,068 Less — accumulated depreciation ( 20,146 ) ( 19,059 ) Total property, plant and equipment, net 24,389 27,009 RESTRICTED CASH ( NOTE 18 ) 3,021 678 RIGHT-OF-USE ASSETS 93,988 95,474 OTHER ASSETS 93,463 97,555 TOTAL ASSETS $ 3,479,234 $ 3,647,585 LIABILITIES, REDEEMABLE OPERATING PARTNERSHIP UNITS AND CAPITAL CURRENT LIABILITIES Accounts payable $ 29,335 $ 26,561 Current maturities of long-term debt, net ( Note 6 ) 22,010 — Accrued taxes 8,307 4,394 Accrued payroll and benefits 11,145 14,215 Accrued interest 9,050 7,094 Pension and other postretirement benefits ( Note 15 ) 52 8,444 Distribution payable — 30,148 Deferred revenue 29,570 19,012 Other current liabilities 29,993 30,409 Total current liabilities 139,462 140,277 LONG-TERM DEBT, NET ( NOTE 6 ) 1,285,239 1,365,773 PENSION AND OTHER POSTRETIREMENT BENEFITS, NON-CURRENT ( NOTE 15 ) 1,483 1,441 LONG-TERM LEASE LIABILITY 86,980 87,684 LONG-TERM DEFERRED REVENUE 14,070 11,294 OTHER NON-CURRENT LIABILITIES 84,569 81,863 CONTINGENCIES ( NOTE 9 ) REDEEMABLE OPERATING PARTNERSHIP UNITS ( NOTE 4 ) 2,009,522 and 2,443,898 Units outstanding, respectively 64,666 81,651 CAPITAL General partners’ capital 17,603 18,325 Limited partners’ capital 1,742,784 1,814,193 Accumulated other comprehensive income ( Note 17 ) 26,618 28,018 TOTAL CONTROLLING INTEREST CAPITAL 1,787,005 1,860,536 Noncontrolling interests in consolidated affiliates ( Note 4 ) 15,760 17,066 TOTAL CAPITAL 1,802,765 1,877,602 TOTAL LIABILITIES, REDEEMABLE OPERATING PARTNERSHIP UNITS AND CAPITAL $ 3,479,234 $ 3,647,585 See Notes to Consolidated Financial Statements. 9 Table of Contents RAYONIER, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Unaudited) (Dollars in thousands, except share data) Units Accumulated Other Comprehensive Income Noncontrolling Interests in Consolidated Affiliates Total Capital General Partners’ Capital Limited Partners’ Capital Balance, January 1, 2024 $ 18,325 $ 1,814,193 $ 28,018 $ 17,066 $ 1,877,602 Net income 14 1,363 — 929 2,306 Distributions on units ($ 0.285 per unit) ( 434 ) ( 42,940 ) — — ( 43,374 ) Stock-based incentive compensation 32 3,186 — — 3,218 Repurchase of units ( 1 ) ( 30 ) — — ( 31 ) Adjustment of Redeemable Operating Partnership Units 6 545 — — 551 Conversion of units into common shares 115 11,396 — — 11,511 Pension and postretirement benefit plans — — 9,562 — 9,562 Foreign currency translation adjustment — — ( 16,178 ) ( 773 ) ( 16,951 ) Cash flow hedges — — 4,070 ( 1,104 ) 2,966 Distributions to noncontrolling interests in consolidated affiliates — — — ( 1,713 ) ( 1,713 ) Balance, March 31, 2024 $ 18,057 $ 1,787,713 $ 25,472 $ 14,405 $ 1,845,647 Net income 19 1,910 — 1,106 3,035 Distributions on units ($ 0.285 per unit) ( 430 ) ( 42,665 ) — — ( 43,095 ) Stock-based incentive compensation 49 4,855 — — 4,904 Repurchase of units ( 41 ) ( 4,091 ) — — ( 4,132 ) Adjustment of Redeemable Operating Partnership Units 86 8,540 — — 8,626 Conversion of units into common shares 19 1,896 — — 1,915 Foreign currency translation adjustment — — 5,728 286 6,014 Cash flow hedges — — ( 330 ) 528 198 Distributions to noncontrolling interests in consolidated affiliates — — — ( 2,047 ) ( 2,047 ) Balance, June 30, 2024 $ 17,759 $ 1,758,158 $ 30,870 $ 14,278 $ 1,821,065 Net income 291 28,858 — 1,293 30,442 Distributions on units ($ 0.285 per unit) ( 430 ) ( 42,531 ) — — ( 42,961 ) Stock-based incentive compensation 39 3,867 — — 3,906 Repurchase of units — ( 5 ) — — ( 5 ) Adjustment of Redeemable Operating Partnership Units ( 62 ) ( 6,200 ) — — ( 6,262 ) Conversion of units into common shares 6 637 — — 643 Pension and postretirement benefit plans — — 139 — 139 Foreign currency translation adjustment — — 12,804 534 13,338 Cash flow hedges — — ( 17,195 ) 1,368 ( 15,827 ) Distributions to noncontrolling interests in consolidated affiliates — — — ( 1,713 ) ( 1,713 ) Balance, September 30, 2024 $ 17,603 $ 1,742,784 $ 26,618 $ 15,760 $ 1,802,765 10 Table of Contents Units Accumulated Other Comprehensive Income Noncontrolling Interests in Consolidated Affiliates Total Capital General Partners’ Capital Limited Partners’ Capital Balance, January 1, 2023 $ 18,251 $ 1,806,895 $ 40,249 $ 15,317 $ 1,880,712 Net income (loss) 85 8,389 — ( 1,037 ) 7,437 Distributions on units ($ 0.285 per unit) ( 431 ) ( 42,602 ) — — ( 43,033 ) Issuance of units under the “at-the-market” equity offering, net of commissions and offering costs of $ 24 — ( 10 ) — — ( 10 ) Stock-based incentive compensation 25 2,474 — — 2,499 Repurchase of units — ( 41 ) — — ( 41 ) Adjustment of Redeemable Operating Partnership Units ( 6 ) ( 573 ) — — ( 579 ) Conversion of units into common shares 239 23,642 — — 23,881 Pension and postretirement benefit plans — — 1 — 1 Foreign currency translation adjustment — — ( 3,552 ) ( 181 ) ( 3,733 ) Cash flow hedges — — ( 12,504 ) 185 ( 12,319 ) Balance, March 31, 2023 $ 18,163 $ 1,798,174 $ 24,194 $ 14,284 $ 1,854,815 Net income (loss) 193 19,148 — ( 245 ) 19,096 Distributions on units ($ 0.285 per unit) ( 429 ) ( 42,555 ) — — ( 42,984 ) Costs associated with the “at-the-market” (ATM) equity offering program ( 1 ) ( 70 ) — — ( 71 ) Stock-based incentive compensation 43 4,293 — — 4,336 Repurchase of units ( 41 ) ( 4,106 ) — — ( 4,147 ) Adjustment of Redeemable Operating Partnership Units 46 4,579 — — 4,625 Conversion of units into common shares 3 301 — — 304 Pension and postretirement benefit plans — — 2 — 2 Foreign currency translation adjustment — — ( 8,790 ) ( 413 ) ( 9,203 ) Cash flow hedges — — 12,273 ( 331 ) 11,942 Balance, June 30, 2023 $ 17,977 $ 1,779,764 $ 27,679 $ 13,295 $ 1,838,715 Net income 196 19,361 — 3,183 22,740 Distributions on units ($ 0.285 per unit) ( 432 ) ( 42,727 ) — — ( 43,159 ) Stock-based incentive compensation 34 3,331 — — 3,365 Repurchase of units — ( 29 ) — — ( 29 ) Adjustment of Redeemable Operating Partnership Units 72 7,161 — — 7,233 Conversion of units into common shares 5 474 — — 479 Pension and postretirement benefit plans — — 2 — 2 Foreign currency translation adjustment — — ( 4,180 ) ( 233 ) ( 4,413 ) Cash flow hedges — — 7,423 ( 44 ) 7,379 Balance, September 30, 2023 $ 17,852 $ 1,767,335 $ 30,924 $ 16,201 $ 1,832,312 See Notes to Consolidated Financial Statements. 11 Table of Contents RAYONIER, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Nine Months Ended September 30, 2024 2023 OPERATING ACTIVITIES Net income $ 35,783 $ 49,274 Adjustments to reconcile net income to cash provided by operating activities: Depreciation, depletion and amortization 106,663 114,281 Non-cash cost of land and improved development 19,217 20,189 Stock-based incentive compensation expense 12,027 10,201 Deferred income taxes ( 4,154 ) ( 2,855 ) Pension settlement charge 5,979 — Timber write-offs resulting from casualty events — 2,302 Other 51 7,826 Changes in operating assets and liabilities: Receivables ( 12,469 ) 251 Inventories 721 ( 1,190 ) Accounts payable 5,000 3,630 All other operating activities 4,960 5,027 CASH PROVIDED BY OPERATING ACTIVITIES 173,778 208,936 INVESTING ACTIVITIES Capital expenditures ( 53,166 ) ( 53,128 ) Real estate development investments ( 19,073 ) ( 18,757 ) Purchase of timberlands ( 3,637 ) ( 13,988 ) Other 1,031 6,197 CASH USED FOR INVESTING ACTIVITIES ( 74,845 ) ( 79,676 ) FINANCING ACTIVITIES Repayment of debt ( 60,000 ) — Distributions on units (a) ( 160,286 ) ( 129,852 ) Proceeds from the issuance of units under the “at-the-market” (ATM) equity offering program, net of commissions and offering costs — ( 82 ) Repurchase of units to pay withholding taxes on vested incentive stock awards ( 4,167 ) ( 4,217 ) Distributions to noncontrolling interests in consolidated affiliates ( 5,473 ) — CASH USED FOR FINANCING ACTIVITIES ( 229,926 ) ( 134,151 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH ( 135 ) ( 928 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH Change in cash, cash equivalents and restricted cash ( 131,128 ) ( 5,819 ) Balance, beginning of year 208,374 115,407 Balance, end of period $ 77,246 $ 109,588 (a) The nine months ended September 30, 2024 includes an additional cash distribution of $ 0.20 per Redeemable Operating Partnership Unit, totaling $ 30.2 million. The additional distribution was paid on January 12, 2024, to holders of record on December 29, 2023. Nine Months Ended September 30, 2024 2023 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period: Interest (a) $ 24,900 $ 31,556 Income taxes 5,493 4,651 Non-cash investing activity: Capital assets purchased on account 5,091 5,161 (a) Interest paid is presented net of patronage paymen ts received of $ 8.3 million an d $ 6.2 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. For additional information on patronage payments, see Note 7 — Debt in the 2023 Form 10-K. See Notes to Consolidated Financial Statements. 12 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 1. BASIS OF PRESENTATION The unaudited consolidated financial statements and notes thereto of Rayonier Inc. and its subsidiaries and Rayonier, L.P. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Rayonier Inc. and Rayonier, L.P. year-end balance sheet information was derived from audited financial statements not included herein. In the opinion of management, these financial statements and notes reflect any adjustments (all of which are normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. These statements and notes should be read in conjunction with the financial statements and supplementary data included in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC (the “2023 Form 10-K”). As of September 30, 2024, the Company owned a 98.7 % interest in the Operating Partnership, with the remaining 1.3 % interest owned by limited partners of the Operating Partnership. As the sole general partner of the Operating Partnership, Rayonier Inc. has exclusive control of the day-to-day management of the Operating Partnership. SUMMARY OF UPDATES TO SIGNIFICANT ACCOUNTING POLICIES For a full description of our other significant accounting policies, see Note 1 — Summary of Significant Accounting Policies in our 2023 Form 10-K. ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and a description of other segment items (the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment, as well as disclosure of the title and position of the entity’s CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The pronouncement is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and for interim periods in fiscal years beginning after December 15, 2024. We do not expect the adoption of this pronouncement to impact our consolidated financial statements as this is a disclosure only ASU. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced annual income tax disclosures, primarily through changes to the rate reconciliation and income taxes paid reconciliation. The pronouncement is effective for annual reporting periods in fiscal years beginning after December 15, 2024. Early adoption and retrospective application are permitted. We do not expect the adoption of this pronouncement to impact our consolidated financial statements as this is a disclosure only ASU. In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure about certain costs and expenses in the notes to financial statements. The pronouncement is effective for annual reporting periods in fiscal years beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The requirements in this ASU may be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact of adopting this new guidance on the consolidated financial statements and disclosures. Recent accounting pronouncements adopted or pending adoption not discussed above are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows. 13 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) SUBSEQUENT EVENTS Completed Timberland Dispositions In November 2024, we announced completed and pending timberland dispositions totaling approximately 200,000 acres for an aggregate purchase price of $ 495 million (~$ 2,475 /acre). The dispositions consist of approximately 91,000 acres in Southeast Oklahoma and 109,000 acres on the Olympic Peninsula in Northwest Washington. Three of these transactions totaling $ 378 million have already closed during the fourth quarter, and the remaining transaction is expected to close before the end of the year. As of September 30, 2024, two of these properties met all of the criteria in ASC 360-10-45-9 and were classified as held for sale. See Note 19 — Assets Held for Sale for additional information. Debt Repayment On October 11, 2024, we repaid the $ 90 million unhedged portion of our 2015 Term Loan Agreement. Following the repayment, 100 % of our debt is fixed through maturity. See Note 6 — Debt for additional information. 2. SEGMENT AND GEOGRAPHICAL INFORMATION Sales between operating segments are made based on estimated fair market value, and intercompany sales, purchases and profits (losses) are eliminated in consolidation. We evaluate financial performance based on segment operating income and Adjusted Earnings Before Interest, Taxes, Depreciation, Depletion and Amortization (“Adjusted EBITDA”). Asset information is not reported by segment, as we do not produce asset information by segment internally. Operating income as presented in the Consolidated Statements of Income and Comprehensive Income (Loss) is equal to segment income. Certain income (loss) items in the Consolidated Statements of Income and Comprehensive Income (Loss) are not allocated to segments. These items, which include interest expense, interest and miscellaneous income and income tax (expense) benefit, are not considered by management to be part of segment operations and are included under “unallocated interest expense and other.” The following tables summarize the segment information for the three and nine months ended September 30, 2024 and 2023: Three Months Ended September 30, Nine Months Ended September 30, SALES 2024 2023 2024 2023 Southern Timber $ 62,019 $ 63,973 $ 191,322 $ 204,125 Pacific Northwest Timber 27,248 29,325 76,723 96,061 New Zealand Timber 66,774 70,435 166,256 175,438 Real Estate 30,061 31,175 76,596 79,492 Trading 8,979 6,782 26,035 34,767 Intersegment Eliminations (a) ( 88 ) ( 111 ) ( 232 ) ( 357 ) Total $ 194,993 $ 201,579 $ 536,700 $ 589,526 (a) Primarily consists of log marketing fees paid to our Trading segment from our Southern Timber and Pacific Northwest Timber segments for marketing log export sales. 14 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) Three Months Ended September 30, Nine Months Ended September 30, OPERATING INCOME (LOSS) 2024 2023 2024 2023 Southern Timber $ 19,821 $ 18,634 $ 59,919 $ 62,565 Pacific Northwest Timber 847 ( 557 ) ( 4,980 ) ( 6,475 ) New Zealand Timber (a) 8,936 17,555 19,284 19,265 Real Estate 8,632 9,187 14,284 18,720 Trading ( 117 ) ( 52 ) 60 356 Corporate and Other (b) ( 10,513 ) ( 9,411 ) ( 32,310 ) ( 28,350 ) Total Operating Income 27,606 35,356 56,257 66,081 Unallocated interest expense and other (c) 2,871 ( 12,069 ) ( 20,771 ) ( 15,030 ) Total Income before Income Taxes $ 30,477 $ 23,287 $ 35,486 $ 51,051 (a) The nine months ended September 30, 2023 includes $ 2.3 million of timber write-offs resulting from casualty events. Timber write-offs resulting from casualty events are recorded within the Consolidated Statements of Income and Comprehensive Income (Loss) under the caption “Cost of sales.” (b) The three and nine months ended September 30, 2024 includes $ 0.9 million and $ 1.6 million, respectively, of costs related to disposition initiatives. Costs related to disposition initiatives are recorded within the Consolidated Statements of Income and Comprehensive Income (Loss) under the caption “Other operating expense, net.” (c) 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. Net recoveries associated with legal settlements and pension settlement charges are recorded within the Consolidated Statements of Income and Comprehensive Income (Loss) under the caption “Interest and other miscellaneous income, net.” Three Months Ended September 30, Nine Months Ended September 30, DEPRECIATION, DEPLETION AND AMORTIZATION 2024 2023 2024 2023 Southern Timber $ 18,118 $ 19,153 $ 56,672 $ 61,631 Pacific Northwest Timber 7,841 8,330 24,306 28,221 New Zealand Timber 5,632 5,952 14,454 16,335 Real Estate 1,451 3,088 9,900 6,826 Corporate and Other 444 444 1,331 1,268 Total $ 33,486 $ 36,967 $ 106,663 $ 114,281 Three Months Ended September 30, Nine Months Ended September 30, NON-CASH COST OF LAND AND IMPROVED DEVELOPMENT 2024 2023 2024 2023 Real Estate $ 9,845 $ 6,586 $ 19,217 $ 20,189 Total $ 9,845 $ 6,586 $ 19,217 $ 20,189 15 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 3. REVENUE PERFORMANCE OBLIGATIONS We recognize revenue when control of promised goods or services (“performance obligations”) is transferred to customers, in an amount that reflects the consideration expected in exchange for those goods or services (“transaction price”). Unsatisfied performance obligations as of September 30, 2024 are primarily due to advances on stumpage contracts, unearned license revenue, unearned carbon capture and storage revenue and post-closing obligations on real estate sales. Of these performance obligations, $ 29.6 million is expected to be recognized within the next twelve months , with the remaining $ 14.1 million expected to be recognized thereafter as we satisfy our performance obligations. We generally collect payment within a year of satisfying performance obligations and therefore have elected not to adjust revenues for a financing component. CONTRACT BALANCES The timing of revenue recognition, invoicing and cash collections results in trade receivables and deferred revenue (contract liabilities) on the Consolidated Balance Sheets. Trade receivables are recorded when we have an unconditional right to consideration for completed performance under the contract. Contract liabilities relate to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as (or when) we perform under the contract. The following table contains contract balances recorded in the Consolidated Balance Sheets at September 30, 2024 and December 31, 2023: September 30, 2024 December 31, 2023 Balance Sheet Location Contract assets Trade receivables, net (a) $ 37,155 $ 28,652 Trade receivables Contract liabilities Deferred revenue, current (b) 29,570 19,012 Deferred revenue Deferred revenue, non-current (c) 14,070 11,294 Long-term deferred revenue (a) The increase in trade receivables was primarily driven by timing of sales in our timber segments. (b) The increase in deferred revenue, current is driven by the timing of renewals of hunting contracts and the current portion of carbon capture and storage contracts entered into during 2024, partially offset by the satisfaction of post-closing obligations on real estate sales. (c) The increase in deferred revenue, non-current is primarily driven by carbon capture and storage contracts entered into during 2024. The following table summarizes revenue recognized during the three and nine months ended September 30, 2024 and 2023 that was included in the contract liability balance at the beginning of each year: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenue recognized from contract liability balance at the beginning of the year (a) $ 2,122 $ 2,216 $ 20,377 $ 19,950 (a) Revenue recognized was primarily from hunting licenses, carbon capture and storage (“CCS”), the use of advances on pay-as-cut timber sales, and the satisfaction of post closing obligations on real estate sales. 16 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) The following tables present our revenue from contracts with customers disaggregated by product type for the three and nine months ended September 30, 2024 and 2023: Three Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Real Estate Trading Elim. Total September 30, 2024 Pulpwood $ 23,182 $ 1,318 $ 8,307 — $ 358 — $ 33,165 Sawtimber 21,034 24,378 49,571 — 8,253 — 103,236 Hardwood 1,136 — — — — — 1,136 Total Timber Sales 45,352 25,696 57,878 — 8,611 — 137,537 License Revenue, Primarily from Hunting 5,348 290 96 — — — 5,734 Land-Based Solutions (a) 2,767 10 — — — — 2,777 Other Non-Timber/Carbon Credit Revenue 8,552 1,252 8,800 — — — 18,604 Agency Fee Income — — — — 280 — 280 Total Non-Timber Sales 16,667 1,552 8,896 — 280 — 27,395 Improved Development — — — 11,999 — — 11,999 Rural — — — 13,766 — — 13,766 Conservation Easement — — — 1,101 — — 1,101 Deferred Revenue/Other (b) — — — 2,740 — — 2,740 Total Real Estate Sales — — — 29,606 — — 29,606 Revenue from Contracts with Customers 62,019 27,248 66,774 29,606 8,891 — 194,538 Lease Revenue — — — 455 — — 455 Intersegment — — — — 88 ( 88 ) — Total Revenue $ 62,019 $ 27,248 $ 66,774 $ 30,061 $ 8,979 ($ 88 ) $ 194,993 Three Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Real Estate Trading Elim. Total September 30, 2023 Pulpwood $ 25,514 $ 1,440 $ 6,507 — $ 447 — $ 33,908 Sawtimber 27,274 26,401 48,356 — 5,954 — 107,985 Hardwood 1,343 — — — — — 1,343 Total Timber Sales 54,131 27,841 54,863 — 6,401 — 143,236 License Revenue, Primarily from Hunting 7,133 439 90 — — — 7,662 Land-Based Solutions (a) 1,041 8 — — — — 1,049 Other Non-Timber/Carbon Credit Revenue 1,668 1,037 15,482 — — — 18,187 Agency Fee Income — — — — 270 — 270 Total Non-Timber Sales 9,842 1,484 15,572 — 270 — 27,168 Improved Development — — — 3,120 — — 3,120 Unimproved Development — — — 114 — — 114 Rural — — — 20,461 — — 20,461 Timberland & Non-Strategic — — — 1,055 — — 1,055 Deferred Revenue/Other (b) — — — 5,981 — — 5,981 Total Real Estate Sales — — — 30,731 — — 30,731 Revenue from Contracts with Customers 63,973 29,325 70,435 30,731 6,671 — 201,135 Lease Revenue — — — 444 — — 444 Intersegment — — — — 111 ( 111 ) — Total Revenue $ 63,973 $ 29,325 $ 70,435 $ 31,175 $ 6,782 ($ 111 ) $ 201,579 (a) Consists primarily of sales from carbon capture and storage (“CCS”), solar and wind energy contracts. (b) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales. 17 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) Nine Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Real Estate Trading Elim. Total September 30, 2024 Pulpwood $ 73,141 $ 4,329 $ 25,113 — $ 2,075 — $ 104,658 Sawtimber 79,973 68,495 124,087 — 22,822 — 295,377 Hardwood 3,003 — — — — — 3,003 Total Timber Sales 156,117 72,824 149,200 — 24,897 — 403,038 License Revenue, Primarily From Hunting 15,907 515 221 — — — 16,643 Land-Based Solutions (a) 7,062 30 — — — — 7,092 Other Non-Timber/Carbon Credit Revenue 12,236 3,354 16,835 — — — 32,425 Agency Fee Income — — — — 906 — 906 Total Non-Timber Sales 35,205 3,899 17,056 — 906 — 57,066 Improved Development — — — 16,399 — — 16,399 Rural — — — 29,964 — — 29,964 Timberland & Non-Strategic — — — 16,111 — — 16,111 Conservation Easement — — — 1,101 — — 1,101 Deferred Revenue/Other (b) — — — 11,902 — — 11,902 Total Real Estate Sales — — — 75,477 — — 75,477 Revenue from Contracts with Customers 191,322 76,723 166,256 75,477 25,803 — 535,581 Lease Revenue — — — 1,119 — — 1,119 Intersegment — — — — 232 ( 232 ) — Total Revenue $ 191,322 $ 76,723 $ 166,256 $ 76,596 $ 26,035 ($ 232 ) $ 536,700 Nine Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Real Estate Trading Elim. Total September 30, 2023 Pulpwood $ 76,152 $ 7,358 $ 20,953 — $ 3,328 — $ 107,791 Sawtimber 95,663 83,963 137,868 — 30,130 — 347,624 Hardwood 3,169 — — — — — 3,169 Total Timber Sales 174,984 91,321 158,821 — 33,458 — 458,584 License Revenue, Primarily from Hunting 17,475 780 212 — — — 18,467 Land-Based Solutions (a) 2,909 1,345 — — — — 4,254 Other Non-Timber/Carbon Credit Revenue 8,757 2,615 16,405 — — — 27,777 Agency Fee Income — — — — 952 — 952 Total Non-Timber Sales 29,141 4,740 16,617 — 952 — 51,450 Improved Development — — — 20,155 — — 20,155 Unimproved Development — — — 114 — — 114 Rural — — — 42,587 — — 42,587 Timberland & Non-Strategic — — — 2,947 — — 2,947 Deferred Revenue/Other (b) — — — 12,642 — — 12,642 Total Real Estate Sales — — — 78,445 — — 78,445 Revenue from Contracts with Customers 204,125 96,061 175,438 78,445 34,410 — 588,479 Lease Revenue — — — 1,047 — — 1,047 Intersegment — — — — 357 ( 357 ) — Total Revenue $ 204,125 $ 96,061 $ 175,438 $ 79,492 $ 34,767 ($ 357 ) $ 589,526 (a) Consists primarily of sales from carbon capture and storage (“CCS”), solar and wind energy contracts and conservation easements for habitat protection. (b) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales. 18 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) The following tables present our timber sales disaggregated by contract type for the three and nine months ended September 30, 2024 and 2023: Three Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Trading Total September 30, 2024 Stumpage Pay-as-Cut $ 20,907 — — — $ 20,907 Stumpage Lump Sum — 3,846 — — 3,846 Total Stumpage 20,907 3,846 — — 24,753 Delivered Wood (Domestic) 23,733 20,612 15,872 477 60,694 Delivered Wood (Export) 712 1,238 42,006 8,134 52,090 Total Delivered 24,445 21,850 57,878 8,611 112,784 Total Timber Sales $ 45,352 $ 25,696 $ 57,878 $ 8,611 $ 137,537 September 30, 2023 Stumpage Pay-as-Cut $ 25,454 — — — $ 25,454 Stumpage Lump Sum — 969 — — 969 Total Stumpage 25,454 969 — — 26,423 Delivered Wood (Domestic) 26,907 24,085 15,265 10 66,267 Delivered Wood (Export) 1,770 2,787 39,598 6,391 50,546 Total Delivered 28,677 26,872 54,863 6,401 116,813 Total Timber Sales $ 54,131 $ 27,841 $ 54,863 $ 6,401 $ 143,236 19 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) Nine Months Ended Southern Timber Pacific Northwest Timber New Zealand Timber Trading Total September 30, 2024 Stumpage Pay-as-Cut $ 80,531 $ 8 — — $ 80,539 Stumpage Lump Sum — 7,381 — — 7,381 Total Stumpage 80,531 7,389 — — 87,920 Delivered Wood (Domestic) 70,851 61,513 39,368 1,945 173,677 Delivered Wood (Export) 4,735 3,922 109,832 22,952 141,441 Total Delivered 75,586 65,435 149,200 24,897 315,118 Total Timber Sales $ 156,117 $ 72,824 $ 149,200 $ 24,897 $ 403,038 September 30, 2023 Stumpage Pay-as-Cut $ 86,424 — — — $ 86,424 Stumpage Lump Sum 387 1,592 — — 1,979 Total Stumpage 86,811 1,592 — — 88,403 Delivered Wood (Domestic) 81,757 80,249 39,419 501 201,926 Delivered Wood (Export) 6,416 9,480 119,402 32,957 168,255 Total Delivered 88,173 89,729 158,821 33,458 370,181 Total Timber Sales $ 174,984 $ 91,321 $ 158,821 $ 33,458 $ 458,584 20 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 4. NONCONTROLLING INTERESTS NONCONTROLLING INTERESTS IN CONSOLIDATED AFFILIATES Matariki Forestry Group We maintain a 77 % controlling financial interest in Matariki Forestry Group (the “New Zealand subsidiary”), a joint venture that owns or leases approximately 411,000 legal acres of New Zealand timberland. Accordingly, we consolidate the New Zealand subsidiary’s balance sheet and results of operations. Income attributable to the New Zealand subsidiary’s 23 % noncontrolling interests is reflected as an adjustment to income in our Consolidated Statements of Income and Comprehensive Income (Loss) under the caption “Net income attributable to noncontrolling interests in consolidated affiliates.” Rayonier New Zealand Limited (“RNZ”), a wholly-owned subsidiary, serves as the manager of the New Zealand subsidiary. NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP Noncontrolling interests in the Operating Partnership relate to the third-party ownership of Redeemable Operating Partnership Units. Net income attributable to the noncontrolling interests in the Operating Partnership is computed by applying the weighted average Redeemable Operating Partnership Units outstanding during the period as a percentage of the weighted average total units outstanding to the Operating Partnership’s net income for the period. If a noncontrolling unitholder redeems a unit for a registered common share of Rayonier or cash, the noncontrolling interests in the Operating Partnership will be reduced and the Company’s share in the Operating Partnership will be increased by the fair value of each security at the time of redemption. The following table sets forth the Company’s noncontrolling interests in the Operating Partnership: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Beginning noncontrolling interests in the Operating Partnership $ 59,047 $ 77,532 $ 81,651 $ 105,763 Adjustment of noncontrolling interests in the Operating Partnership 6,476 ( 6,890 ) ( 1,325 ) ( 8,810 ) Conversions of Redeemable Operating Partnership Units to common shares ( 643 ) ( 479 ) ( 14,070 ) ( 24,663 ) Net income attributable to noncontrolling interests in the Operating Partnership 391 320 437 811 Other comprehensive (loss) income attributable to noncontrolling interests in the Operating Partnership ( 77 ) 36 ( 323 ) ( 1,016 ) Distributions to noncontrolling interests in the Operating Partnership ( 528 ) ( 699 ) ( 1,704 ) ( 2,265 ) Total noncontrolling interests in the Operating Partnership $ 64,666 $ 69,820 $ 64,666 $ 69,820 21 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 5. EARNINGS PER SHARE AND PER UNIT Basic earnings per common share (“EPS”) is calculated by dividing net income attributable to Rayonier Inc. by the weighted average number of common shares outstanding. Diluted EPS is calculated by dividing net income attributable to Rayonier Inc., before net income attributable to noncontrolling interests in the Operating Partnership by the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of outstanding stock options, performance shares, restricted shares, restricted stock units and noncontrolling interests in Operating Partnership units. The following table provides details of the calculations of basic and diluted earnings per common share of the Company: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Earnings per common share - basic Numerator: Net Income $ 30,442 $ 22,740 $ 35,783 $ 49,274 Less: Net income attributable to noncontrolling interests in the Operating Partnership ( 391 ) ( 320 ) ( 437 ) ( 811 ) Less: Net income attributable to noncontrolling interests in consolidated affiliates ( 1,293 ) ( 3,183 ) ( 3,328 ) ( 1,902 ) Net income attributable to Rayonier Inc. $ 28,758 $ 19,237 $ 32,018 $ 46,561 Denominator: Denominator for basic earnings per common share - weighted average shares 148,984,534 148,274,209 148,821,306 147,959,983 Basic earnings per common share attributable to Rayonier Inc.: $ 0.19 $ 0.13 $ 0.22 $ 0.31 Earnings per common share - diluted Numerator: Net Income $ 30,442 $ 22,740 $ 35,783 $ 49,274 Less: Net income attributable to noncontrolling interests in consolidated affiliates ( 1,293 ) ( 3,183 ) ( 3,328 ) ( 1,902 ) Net income attributable to Rayonier Inc., before net income attributable to noncontrolling interests in the Operating Partnership $ 29,149 $ 19,557 $ 32,455 $ 47,372 Denominator: Denominator for basic earnings per common share - weighted average shares 148,984,534 148,274,209 148,821,306 147,959,983 Add: Dilutive effect of: Stock options — — 55 629 Performance shares, restricted shares and restricted stock units 281,407 299,613 403,444 394,006 Noncontrolling interests in Operating Partnership units 2,027,053 2,462,431 2,088,013 2,676,911 Denominator for diluted earnings per common share - adjusted weighted average shares 151,292,994 151,036,253 151,312,818 151,031,529 Diluted earnings per common share attributable to Rayonier Inc.: $ 0.19 $ 0.13 $ 0.21 $ 0.31 Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Anti-dilutive shares excluded from the computations of diluted earnings per common share: Stock options, performance shares, restricted shares and restricted stock units 149,609 164,521 149,446 156,835 22 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) Basic earnings per unit (“EPU”) is calculated by dividing net income available to unitholders of Rayonier, L.P. by the weighted average number of units outstanding. Diluted EPU is calculated by dividing net income available to unitholders of Rayonier, L.P. by the weighted average number of units outstanding adjusted to include the potentially dilutive effect of outstanding unit equivalents, including stock options, performance shares, restricted shares and restricted stock units. The following table provides details of the calculations of basic and diluted earnings per unit of the Operating Partnership: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Earnings per unit - basic Numerator: Net Income $ 30,442 $ 22,740 $ 35,783 $ 49,274 Less: Net income attributable to noncontrolling interests in consolidated affiliates ( 1,293 ) ( 3,183 ) ( 3,328 ) ( 1,902 ) Net income available to unitholders $ 29,149 $ 19,557 $ 32,455 $ 47,372 Denominator: Denominator for basic earnings per unit - weighted average units 151,011,587 150,736,640 150,909,319 150,636,894 Basic earnings per unit attributable to Rayonier, L.P.: $ 0.19 $ 0.13 $ 0.22 $ 0.31 Earnings per unit - diluted Numerator: Net Income $ 30,442 $ 22,740 $ 35,783 $ 49,274 Less: Net income attributable to noncontrolling interests in consolidated affiliates ( 1,293 ) ( 3,183 ) ( 3,328 ) ( 1,902 ) Net income available to unitholders $ 29,149 $ 19,557 $ 32,455 $ 47,372 Denominator: Denominator for basic earnings per unit - weighted average units 151,011,587 150,736,640 150,909,319 150,636,894 Add: Dilutive effect of unit equivalents: Stock options — — 55 629 Performance shares, restricted shares and restricted stock units 281,407 299,613 403,444 394,006 Denominator for diluted earnings per unit - adjusted weighted average units 151,292,994 151,036,253 151,312,818 151,031,529 Diluted earnings per unit attributable to Rayonier, L.P.: $ 0.19 $ 0.13 $ 0.21 $ 0.31 Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Anti-dilutive unit equivalents excluded from the computations of diluted earnings per unit: Stock options, performance shares, restricted shares and restricted stock units 149,609 164,521 149,446 156,835 23 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 6. DEBT Our debt consisted of the following at September 30, 2024: September 30, 2024 Debt Senior Notes due 2031 at a fixed interest rate of 2.75 % $ 450,000 2015 Term Loan borrowings due 2028 at a variable interest rate of 6.85 % 290,000 2021 Incremental Term Loan borrowings due 2029 at a variable interest rate of 6.90 % 200,000 2016 Incremental Term Loan borrowings due 2026 at a variable interest rate of 7.00 % 200,000 2022 Incremental Term Loan borrowings due 2027 at a variable interest rate of 6.95 % 100,000 New Zealand subsidiary noncontrolling interests shareholder loan due 2026 at a fixed interest rate of 3.64 % (a) 25,679 New Zealand subsidiary noncontrolling interests shareholder loan due 2027 at a fixed interest rate of 6.48 % (a) 25,679 New Zealand subsidiary noncontrolling interests shareholder loan due 2025 at a fixed interest rate of 2.95 % (a) 22,010 Total principal debt 1,313,368 Less: Current maturities of long-term debt ( 22,010 ) Less: Unamortized discounts ( 2,517 ) Less: Deferred financing costs ( 3,602 ) Total long-term debt $ 1,285,239 (a) Except for changes in the New Zealand foreign exchange rate, there have been no adjustments to the carrying value of the shareholder loans since inception. The following table contains information on the outstanding variable rate debt as of September 30, 2024: Debt Periodic Interest Rate (a) Effective Fixed Interest Rate (b) 2015 Term Loan Daily Simple SOFR + 1.60 % 3.31 % 2022 Incremental Term Loan Daily Simple SOFR + 1.70 % 4.55 % 2016 Incremental Term Loan Daily Simple SOFR + 1.75 % 2.38 % 2021 Incremental Term Loan Daily Simple SOFR + 1.65 % 1.45 % (a) Includes credit spread adjustment of 0.1 %. (b) Effective interest rate is after consideration of interest rate swaps and estimated patronage. Principal payments due during the next five years and thereafter are as follows: Total 2024 — 2025 22,010 2026 225,679 2027 125,679 2028 290,000 Thereafter 650,000 Total Debt $ 1,313,368 24 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 2024 DEBT ACTIVITY U.S. Debt During the third quarter of 2024, we repaid $ 60 million of the principal balance on the 2015 Term Loan. Additionally, on August 1, 2024, three forward-starting interest rate swaps with a total notional amount of $ 200 million matured into active interest rate swaps. These interest rate swaps fixed $ 200 million of the 2015 Term Loan until the debt matures on April 1, 2028. We estimate the effective interest rate on the 2015 Term Loan to be approximately 3.3 % after consideration of interest rate swaps and estimated patronage refunds. During the nine months ended September 30, 2024, we made no borrowings or repayments on our Revolving Credit Facility. At September 30, 2024, we had available borrowings of $ 293.0 million under the Revolving Credit Facility, net of $ 7.0 million to secure our outstanding letters of credit. New Zealand Debt During the nine months ended September 30, 2024, the New Zealand subsidiary made no borrowings or repayments on its working capital facility (the “New Zealand Working Capital Facility”). At September 30, 2024, the New Zealand subsidiary had NZ$ 20.0 million of available borrowings under its working capital facility. DEBT COVENANTS In connection with our 2015 Term Loan Agreement, 2016 Incremental Term Loan Agreement, 2021 Incremental Term Loan Agreement, 2022 Incremental Term Loan Agreement and Revolving Credit Facility, customary covenants must be met, the most significant of which include interest coverage and leverage ratios. The covenants listed below, which are the most significant financial covenants in effect as of September 30, 2024, are calculated on a trailing 12-month basis: Covenant Requirement Actual Ratio Favorable Covenant EBITDA to consolidated interest expense should not be less than 2.5 to 1 12.7 to 1 10.2 Covenant debt to covenant net worth plus covenant debt shall not exceed 65 % 43 % 22 % In addition to the financial covenants listed above, the Senior Notes due 2031, 2015 Term Loan Agreement, 2016 Incremental Term Loan Agreement, 2021 Incremental Term Loan Agreement, 2022 Incremental Term Loan Agreement, and Revolving Credit Facility include customary covenants that limit the incurrence of debt and the disposition of assets, among others. At September 30, 2024, we were in compliance with all applicable covenants. 7. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES We are exposed to market risk related to potential fluctuations in foreign currency exchange rates and interest rates. We use derivative financial instruments to mitigate the financial impact of exposure to these risks. Accounting for derivative financial instruments is governed by ASC Topic 815, Derivatives and Hedging , (“ASC 815”). In accordance with ASC 815, we record our derivative instruments at fair value as either assets or liabilities in the Consolidated Balance Sheets. Changes in the instruments’ fair value are accounted for based on their intended use. Gains and losses on derivatives that are designated and qualify for cash flow hedge accounting are recorded as a component of accumulated other comprehensive income (“AOCI”) and reclassified into earnings when the hedged transaction materializes. Gains and losses on derivatives that are designated and qualify for net investment hedge accounting are recorded as a component of AOCI and will not be reclassified into earnings until the investment is partially or completely liquidated. The changes in the fair value of derivatives not designated as hedging instruments and those which are no longer effective as hedging instruments, are recognized immediately in earnings. 25 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) FOREIGN CURRENCY EXCHANGE AND OPTION CONTRACTS Our New Zealand subsidiary’s domestic sales and operating expenses are predominately denominated in New Zealand dollars, while its export sales, shareholder distributions and ocean freight payments are predominately denominated in U.S. dollars. To the extent New Zealand dollar costs exceed New Zealand dollar revenues (the “foreign exchange exposure”), the New Zealand subsidiary manages the foreign exchange exposure through the use of derivative financial instruments. It typically hedges a portion of export sales receipts to cover 50 % to 90 % of the projected foreign exchange exposure for the following 12 months, up to 75 % for the forward 12 to 18 months and up to 50 % for the forward 18 to 24 months. Additionally, it will occasionally hedge export sales receipts to cover up to 50 % of the foreign exchange exposure for the forward 24 to 36 months and up to 25 % of the foreign exchange exposure for the forward 36 to 48 months when the the New Zealand dollar is at a cyclical low versus the U.S. dollar. The New Zealand subsidiary’s trading operations typically hedge a portion of export sales receipts to cover the projected foreign exchange exposure for the following three months. As of September 30, 2024, foreign currency exchange contracts and foreign currency option contracts had maturity dates through July 2027. Foreign currency exchange and option contracts hedging foreign currency risk qualify for cash flow hedge accounting. We may de-designate these cash flow hedge relationships in advance or at the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously in AOCI for de-designated hedges remains in AOCI until the forecasted transaction affects earnings. Changes in the value of derivative instruments after de-designation are recorded in earnings. INTEREST RATE PRODUCTS We are exposed to cash flow interest rate risk on our variable-rate debt and on anticipated debt issuances. We use variable-to-fixed interest rate swaps and forward-starting interest rate swap agreements to hedge this exposure. For these derivative instruments, we report the gains/losses from the fluctuations in the fair market value of the hedges in AOCI and reclassify them to earnings as interest expense in the same period in which the hedged interest payments affect earnings. To the extent we de-designate or terminate a cash flow hedging relationship and the associated hedged item continues to exist, any unrealized gain or loss of the cash flow hedge at the time of de-designation remains in AOCI and is amortized using the straight-line method through interest expense over the remaining life of the hedged item. To the extent the associated hedged item is no longer effective, the gain or loss is reclassified out of AOCI to earnings immediately. INTEREST RATE SWAPS The following table contains information on the outstanding interest rate swaps as of September 30, 2024: Outstanding Interest Rate Swaps (a) Date Entered Into Term Notional Amount Related Debt Facility Fixed Rate of Swap Bank Margin on Debt (b) Total Effective Interest Rate (c) April 2016 10 years 100,000 2016 Incremental Term Loan 1.50 % 1.75 % 3.25 % April 2016 10 years 100,000 2016 Incremental Term Loan 1.51 % 1.75 % 3.26 % May 2021 (d) 7 years 200,000 2021 Incremental Term Loan 0.67 % 1.65 % 2.32 % December 2022 5 years 100,000 2022 Incremental Term Loan 3.72 % 1.70 % 5.42 % April 2020 (e) 4 years 100,000 2015 Term Loan 0.78 % 1.60 % 2.38 % May 2020 (e) 4 years 50,000 2015 Term Loan 0.64 % 1.60 % 2.24 % May 2023 (e) 4 years 50,000 2015 Term Loan 3.29 % 1.60 % 4.89 % (a) All interest rate swaps have been designated as interest rate cash flow hedges and qualify for hedge accounting. (b) Includes the SOFR Credit Spread Adjustment component of 0.1 %. (c) Rate is before estimated patronage payments. (d) Matured into an active interest rate swap on February 1, 2022. (e) On August 1, 2024, our three forward-starting interest rate swaps with a total notional amount of $ 200 million matured into active interest rate swaps. See Note 6 — Debt for additional information. 26 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) The following tables demonstrate the impact, gross of tax, of our derivatives on the Consolidated Statements of Income and Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and 2023: Three Months Ended September 30, Income Statement Location 2024 2023 Derivatives designated as cash flow hedges: Foreign currency exchange contracts Other comprehensive income (loss) $ 5,758 $ 1,752 Other operating expense, net 349 ( 1,796 ) Foreign currency option contracts Other comprehensive income (loss) 2,143 ( 26 ) Other operating expense, net 5 ( 196 ) Interest rate products Other comprehensive income (loss) ( 14,949 ) 12,381 Interest expense, net ( 6,822 ) ( 4,810 ) Nine Months Ended September 30, Income Statement Location 2024 2023 Derivatives designated as cash flow hedges: Foreign currency exchange contracts Other comprehensive income (loss) $ 1,903 $ 5,753 Other operating expense, net 1,742 ( 5,801 ) Foreign currency option contracts Other comprehensive income (loss) 1,123 ( 858 ) Other operating expense, net 13 ( 244 ) Interest rate products Other comprehensive income (loss) 5,273 20,416 Interest expense, net ( 21,379 ) ( 12,587 ) During the next 12 months, the amount of the September 30, 2024 AOCI balance, net of tax, expected to be reclassified into earnings is a gain of approxim ately $ 17.9 million. The following table contains details of the expected reclassified amounts into earnings: Amount expected to be reclassified into earnings in next 12 months Derivatives designated as cash flow hedges: Foreign currency exchange contracts $ 2,169 Foreign currency option contracts 781 Interest rate products (a) 14,998 Total estimated net gain on derivatives contracts $ 17,948 (a) These reclassified amounts are expected to fully offset variable interest rate payments made to debt holders, resulting in no net impact on our earnings or cash flows. 27 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) The following table contains the notional amounts of the derivative financial instruments recorded in the Consolidated Balance Sheets: Notional Amount September 30, 2024 December 31, 2023 Derivatives designated as cash flow hedges: Foreign currency exchange contracts $ 122,900 $ 122,700 Foreign currency option contracts 126,000 98,000 Interest rate swaps 700,000 850,000 Forward-starting interest rate swaps — 200,000 The following table contains the fair values of the derivative financial instruments recorded in the Consolidated Balance Sheets at September 30, 2024 and December 31, 2023. Changes in balances of derivative financial instruments are recorded as operating activities in the Consolidated Statements of Cash Flows: Location on Balance Sheet Fair Value Assets / (Liabilities) (a) September 30, 2024 December 31, 2023 Derivatives designated as cash flow hedges: Foreign currency exchange contracts Other current assets $ 3,012 $ 1,175 Other assets 3,549 2,405 Other current liabilities — ( 664 ) Foreign currency option contracts Other current assets 1,193 342 Other assets 2,472 2,158 Other current liabilities ( 108 ) ( 139 ) Other non-current liabilities ( 850 ) ( 789 ) Interest rate swaps Other current assets — 5,742 Other assets 40,737 37,983 Other non-current liabilities ( 1,423 ) ( 546 ) Forward-starting interest rate swaps Other assets — 12,790 Other non-current liabilities — ( 8 ) Total derivative contracts: Other current assets $ 4,205 $ 7,259 Other assets 46,758 55,336 Total derivative assets $ 50,963 $ 62,595 Other current liabilities ( 108 ) ( 803 ) Other non-current liabilities ( 2,273 ) ( 1,343 ) Total derivative liabilities ($ 2,381 ) ($ 2,146 ) (a) See Note 8 — Fair Value Measurements for further information on the fair value of our derivatives including their classification within the fair value hierarchy. OFFSETTING DERIVATIVES Derivative financial instruments are presented at their gross fair values in the Consolidated Balance Sheets. Our derivative financial instruments are not subject to master netting arrangements, which would allow the right of offset. 28 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 8. FAIR VALUE MEASUREMENTS FAIR VALUE OF FINANCIAL INSTRUMENTS A three-level hierarchy that prioritizes the inputs used to measure fair value was established in the Accounting Standards Codification as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table presents the carrying amount and estimated fair values of our financial instruments as of September 30, 2024 and December 31, 2023, using market information and what we believe to be appropriate valuation methodologies under GAAP: September 30, 2024 December 31, 2023 Asset (Liability) (a) Carrying Amount Fair Value Carrying Amount Fair Value Level 1 Level 2 Level 1 Level 2 Cash and cash equivalents $ 74,225 $ 74,225 — $ 207,696 $ 207,696 — Restricted cash (b) 3,021 3,021 — 678 678 — Current maturities of long-term debt (c) ( 22,010 ) — ( 22,522 ) — — — Long-term debt (c) ( 1,285,239 ) — ( 1,236,015 ) ( 1,365,773 ) — ( 1,299,951 ) Interest rate swaps (d) 39,314 — 39,314 43,179 — 43,179 Forward-starting interest rate swaps (d) — — — 12,782 — 12,782 Foreign currency exchange contracts (d) 6,561 — 6,561 2,916 — 2,916 Foreign currency option contracts (d) 2,707 — 2,707 1,572 — 1,572 Noncontrolling interests in the Operating Partnership (e) 64,666 — 64,666 81,651 — 81,651 (a) We did not have Level 3 assets or liabilities at September 30, 2024 or December 31, 2023. (b) Restricted cash represents proceeds from like-kind exchange sales deposited with a third-party intermediary and cash held in escrow. See Note 18 — Restricted Cash for additional information. (c) The carrying amount of long-term debt is presented net of deferred financing costs and unamortized discounts on non-revolving debt. See Note 6 — Debt for additional information. (d) See Note 7 — Derivative Financial Instruments and Hedging Activities for information regarding the Consolidated Balance Sheets classification of our derivative financial instruments. (e) Noncontrolling interests in the Operating Partnership is neither an asset nor liability and is classified as temporary equity in the Company’s Consolidated Balance Sheets. This relates to the ownership of Rayonier, L.P. units by various individuals and entities other than the Company. See Note 4 — Noncontrolling Interests for additional information. We use the following methods and assumptions in estimating the fair value of our financial instruments: Cash and cash equivalents and Restricted cash — The carrying amount is equal to fair market value. Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities. The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value. Interest rate swap agreements — The fair value of interest rate contracts is determined by discounting the expected future cash flows, for each instrument, at prevailing interest rates. Foreign currency exchange contracts — The fair value of foreign currency exchange contracts is determined by a mark-to-market valuation, which estimates fair value by discounting the difference between the contracted forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate. Foreign currency option contracts — The fair value of foreign currency option contracts is based on a mark-to-market calculation using the Black-Scholes option pricing model. Noncontrolling interests in the Operating Partnership — The fair value of noncontrolling interests in the Operating Partnership is determined based on the period-end closing price of Rayonier Inc. common shares. 29 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 9. CONTINGENCIES We have been named as a defendant in various lawsuits and claims arising in the normal course of business. While we have procured reasonable and customary insurance covering risks normally occurring in connection with our businesses, we have in certain cases retained some risk through the operation of large deductible insurance plans, primarily in the areas of executive risk, property, automobile and general liability. These pending lawsuits and claims, either individually or in the aggregate, are not expected to have a material adverse effect on our financial position, results of operations, or cash flow. 10. ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIES Various federal and state environmental laws in the states in which we operate place cleanup or restoration liability on the current and former owners of affected real estate. These laws are often a source of “strict liability,” meaning that an owner or operator need not necessarily have caused, or even been aware of, the release of contaminated materials. Similarly, there are certain environmental laws that allow state, federal, and tribal trustees (collectively, the “Trustees”) to bring suit against property owners to recover damage for injuries to natural resources. Like the liability that attaches to current property owners in the cleanup context, liability for natural resource damages (“NRD”) can attach to a property simply because an injury to natural resources resulted from releases of contaminated materials on or from the owner’s property, regardless of culpability for the release. Changes in environmental and NRD liabilities from December 31, 2023 to September 30, 2024 are shown below: Port Gamble, WA Non-current portion at December 31, 2023 $ 4,785 Plus: Current portion 11,793 Total Balance at December 31, 2023 16,578 Expenditures charged to liabilities ( 2,991 ) Increase to liabilities (a) 1,938 Total Balance at September 30, 2024 15,525 Less: Current portion ( 11,973 ) Non-current portion at September 30, 2024 $ 3,552 (a) The increase in liabilities reflects revised environmental and NRD cost estimates recorded during the nine months ended September 30, 2024. It is expected that the upland mill site cleanup and NRD restoration will occur over the next one to two years , while the monitoring of Port Gamble Bay, mill site, and landfills will continue for an additional 15 to 20 years. NRD costs are subject to change as the restoration projects progress. It is reasonably possible that these components of the liability may increase as construction continues. Management continues to monitor the Port Gamble cleanup process and will make adjustments as needed. Should any future circumstances result in a change to the estimated cost of the project, we will record an appropriate adjustment to the liability in the period it becomes known and when we can reasonably estimate the amount. We do not currently anticipate any material loss in excess of the amounts accrued; however, we are not able to estimate a possible loss or range of loss, if any, in excess of the established liabilities. Our future remediation expenses may be affected by a number of uncertainties including, but not limited to, the difficulty in estimating the extent and method of remediation, the evolving nature of environmental regulations, and the availability and application of technology. We do not expect the resolution of such uncertainties to have a material adverse effect on our consolidated financial position or liquidity. 30 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 11. GUARANTEES We provide financial guarantees as required by creditors, insurance programs, and various governmental agencies. As of September 30, 2024, the following financial guarantees were outstanding: Financial Commitments (a) Maximum Potential Payment Standby letters of credit (b) $ 6,996 Surety bonds (c) 32,591 Total financial commitments $ 39,587 (a) We have not recorded any liabilities for these financial commitments in our Consolidated Balance Sheets. The guarantees are not subject to measurement as the guarantees are dependent on our own performance. (b) Approximately $ 6.3 million of the standby letters of credit serve as credit support for real estate construction in our Wildlight development project. The remaining letters of credit support various insurance related agreements. These letters of credit will expire at various dates during 2024 and will be renewed as required. (c) Surety bonds are issued primarily to secure performance obligations related to various operational activities and to provide collateral for our Wildlight development project in Nassau County, Florida and our Heartwood development project in Richmond Hill, Georgia. These surety bonds expire at various dates during 2024, 2025, 2026, and 2027 and are expected to be renewed as required. 31 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 12. HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS We routinely assess potential alternative uses of our timberlands, as some properties may become more valuable for development, residential, recreation or other purposes. We periodically transfer, via a sale or contribution from the real estate investment trust (“REIT”) entities to taxable REIT subsidiaries (“TRS”), higher and better use (“HBU”) timberlands to enable land-use entitlement, development or marketing activities. We also acquire HBU properties in connection with timberland acquisitions. These properties are managed as timberlands until sold or developed. While the majority of HBU sales involve rural and recreational land, we also selectively pursue various land-use entitlements on certain properties for residential, commercial and industrial development in order to enhance the long-term value of such properties. For selected development properties, we also invest in targeted infrastructure improvements, such as roadways and utilities, to accelerate the marketability and improve the value of such properties. Changes in higher and better use timberlands and real estate development investments from December 31, 2023 to September 30, 2024 are shown below: Higher and Better Use Timberlands and Real Estate Development Investments Land and Timber Development Investments Total Non-current portion at December 31, 2023 $ 86,986 $ 18,609 $ 105,595 Plus: Current portion (a) 1,699 24,639 26,338 Total Balance at December 31, 2023 88,685 43,248 131,933 Non-cash cost of land and improved development ( 1,120 ) ( 12,835 ) ( 13,955 ) Amortization of parcel real estate development investments — ( 5,264 ) ( 5,264 ) Timber depletion from harvesting activities and basis of timber sold in real estate sales ( 1,115 ) — ( 1,115 ) Capitalized real estate development investments (b) — 26,878 26,878 Capital expenditures (silviculture) 233 — 233 Intersegment transfers 14,319 — 14,319 Total Balance at September 30, 2024 101,002 52,027 153,029 Less: Current portion (a) ( 12,942 ) ( 1,110 ) ( 14,052 ) Non-current portion at September 30, 2024 $ 88,060 $ 50,917 $ 138,977 (a) The current portion of Higher and Better Use Timberlands and Real Estate Development Investments is recorded in Inventory. See Note 13 — Inventory for additional information. (b) Capitalized real estate development investments include $ 1.0 million of capitalized interest and $ 7.8 million of parcel real estate development investments. Parcel real estate development investments represent investments made for specific lots and/or commercial parcels that are currently under contract or expected to be ready for market within one year. 13. INVENTORY As of September 30, 2024 and December 31, 2023, our inventory consisted entirely of finished goods, as follows: September 30, 2024 December 31, 2023 Finished goods inventory Real estate inventory (a) $ 14,052 $ 26,338 Log inventory 4,413 4,490 Carbon unit inventory (b) 191 189 Total inventory $ 18,656 $ 31,017 (a) Represents the cost of HBU real estate (including capitalized development investments) expected to be sold as well as the cost of HBU real estate deferred until post-closing obligations are satisfied. See Note 12 — Higher And Better Use Timberlands and Real Estate Development Investments for additional information. (b) Represents the basis in New Zealand carbon units intended to be sold in the next 12 months. 32 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 14. OTHER OPERATING EXPENSE, NET Other operating expense, net consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Loss on foreign currency remeasurement, net of cash flow hedges ($ 1,038 ) ($ 1,555 ) ($ 1,966 ) ($ 5,713 ) Gain on sale or disposal of property and equipment — — 13 37 Costs related to disposition initiatives (a) ( 857 ) — ( 1,553 ) — Miscellaneous (expense) income, net ( 19 ) ( 99 ) ( 32 ) 105 Total ($ 1,914 ) ($ 1,654 ) ($ 3,538 ) ($ 5,571 ) (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. 33 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 15. EMPLOYEE BENEFIT PLANS We had one qualified non-contributory defined benefit pension plan covering a portion of our employees and an unfunded plan that provides benefits in excess of amounts allowable under current tax law in the qualified plans. We closed enrollment in the pension plans to salaried employees hired after December 31, 2005. Effective December 31, 2016, we froze benefits for all employees participating in the pension plan. In lieu of the pension plan, we provide those employees with an enhanced 401(k) plan match similar to what is currently provided to employees hired after December 31, 2005. Employee benefit plan liabilities are calculated using actuarial estimates and management assumptions. These estimates are based on historical information, along with certain assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause the estimates to change. DEFINED BENEFIT PLAN In December 2022, the Rayonier Board of Directors authorized the termination of its Defined Benefit Plan. Affected participants were notified of the termination and provided with alternative distribution options. The Defined Benefit Plan was terminated on February 28, 2023. During the fourth quarter of 2023, lump sum distributions were made to participants who elected that option. The remaining plan liabilities were settled in March 2024 through the purchase of annuity contracts from a third-party insurance provider. In connection with the plan’s termination, we made a cash contribution of $ 2.7 million to fully fund the plan. Additionally, a pre-tax non-cash pension settlement charge of $ 5.7 million was recognized as a component of AOCI due to actuarial losses. UNFUNDED PLAN In July 2023, the Rayonier Board of Directors authorized the termination of the unfunded plan and distribution of all benefits in accordance with Section 409A of the Internal Revenue Code. The unfunded plan was terminated on July 31, 2023, and settled in the third quarter of 2024 with lump sum cash payments of $ 1.2 million. A pre-tax non-cash pension settlement charge related to the actuarial losses was recognized as a component of AOCI. See Note 17 — Accumulated Other Comprehensive Income for additional information. The net pension and postretirement benefit costs (credits) that have been recorded are shown in the following tables: Components of Net Periodic Benefit Cost (Credit) Income Statement Location Pension Postretirement Three Months Ended September 30, Three Months Ended September 30, 2024 2023 2024 2023 Service cost Selling and general expenses — — $ 1 $ 1 Interest cost Interest and other miscellaneous income, net 5 844 18 17 Expected return on plan assets (a) Interest and other miscellaneous income, net — ( 887 ) — — Amortization of losses Interest and other miscellaneous income, net — 1 — — Pension settlement loss Interest and other miscellaneous income, net 306 — — — Net periodic benefit cost (credit) $ 311 ($ 42 ) $ 19 $ 18 Components of Net Periodic Benefit Cost (Credit) Income Statement Location Pension Postretirement Nine Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Service cost Selling and general expenses — — $ 3 $ 3 Interest cost Interest and other miscellaneous income, net 535 2,533 53 52 Expected return on plan assets (a) Interest and other miscellaneous income, net ( 542 ) ( 2,663 ) — — Amortization of losses Interest and other miscellaneous income, net 1 4 — — Pension settlement loss Interest and other miscellaneous income, net 5,979 — — — Net periodic benefit cost (credit) $ 5,973 ($ 126 ) $ 56 $ 55 (a) Prior to remeasurement of the Defined Benefit Plan due to the pension settlement, the weighted-average expected long-term rate of return on plan assets used in computing 2024 net periodic benefit cost for benefits was 5.0 %. 34 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 16. INCOME TAXES Rayonier is a REIT under the Internal Revenue Code and therefore generally does not pay U.S. federal or state income tax. As of September 30, 2024, Rayonier owns a 98.7 % inter est in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership. The taxable income or loss generated by the Operating Partnership is passed through and reported to its unit holders (including the Company) on a Schedule K-1 for inclusion in each unitholder’s income tax return. Certain operations, including log trading and certain real estate activities, such as the entitlement, development and sale of HBU properties, are conducted through our TRS. The TRS subsidiaries are subject to United States federal and state corporate income tax. The New Zealand timber operations are conducted by the New Zealand subsidiary, which is subject to corporate-level tax at 28% in New Zealand and is treated as a partnership for U.S. income tax purposes. PROVISION FOR INCOME TAXES The Company’s tax expense is principally related to corporate-level tax in New Zealand and non-resident withholding tax on repatriation of earnings from New Zealand. The following table contains the income tax (expense) benefit recognized on the Consolidated Statements of Income and Comprehensive Income (Loss): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Income tax (expense) benefit (a) ($ 35 ) ($ 547 ) $ 297 ($ 1,777 ) (a) The nine months ended September 30, 2024 includes a $ 1.2 million income tax benefit related to the pension settlement. ANNUAL EFFECTIVE TAX RATE The Company’s effective tax rate after discrete items is below the 21.0 % U.S. statutory rate due to tax benefits associated with being a REIT. The following table contains the Company’s annualized effective tax rate after discrete items: Nine Months Ended September 30, 2024 2023 Annualized effective tax rate after discrete items 1.6 % 3.1 % 35 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 17. ACCUMULATED OTHER COMPREHENSIVE INCOME The following table summarizes the changes in AOCI by component for the nine months ended September 30, 2024 and the year ended December 31, 2023. All amounts are presented net of tax and exclude portions attributable to noncontrolling interests. Foreign currency translation (losses) gains Net investment hedges of New Zealand subsidiary Cash flow hedges Employee benefit plans Total Rayonier, L.P. Allocation of Operating Partnership Total Rayonier Inc. Balance as of December 31, 2022 ($ 18,067 ) $ 1,321 $ 67,204 ($ 10,209 ) $ 40,249 ($ 4,436 ) $ 35,813 Other comprehensive (loss) income before reclassifications ( 1,466 ) — 10,537 (a) ( 1,449 ) 7,622 ( 75 ) 7,547 Amounts reclassified from accumulated other comprehensive income — — ( 21,895 ) 2,042 (b) ( 19,853 ) 1,144 ( 18,709 ) Net other comprehensive (loss) income ( 1,466 ) — ( 11,358 ) 593 ( 12,231 ) 1,069 ( 11,162 ) Balance as of December 31, 2023 ($ 19,533 ) $ 1,321 $ 55,846 ($ 9,616 ) $ 28,018 ($ 3,367 ) $ 24,651 Other comprehensive income (loss) before reclassifications 2,354 — 6,951 (a) 5,106 14,411 ( 196 ) 14,215 Amounts reclassified from accumulated other comprehensive income — — ( 20,406 ) 4,595 (b) ( 15,811 ) 519 ( 15,292 ) Net other comprehensive income (loss) 2,354 — ( 13,455 ) 9,701 ( 1,400 ) 323 ( 1,077 ) Balance as of September 30, 2024 ($ 17,179 ) $ 1,321 $ 42,391 $ 85 $ 26,618 ($ 3,044 ) $ 23,574 (a) The nine months ended September 30, 2024 includes $ 5.3 million o f other comprehensive income related to interest rate products. The year ended December 31, 2023 included $ 10.3 million of other comprehensive income re lated to interest rate products. See Note 7 — Derivative Financial Instruments and Hedging Activities for additional information. (b) This component of other comprehensive income is included in the computation of net periodic pension and post-retirement costs. The nine months ended September 30, 2024 includes a pension settlement charge of $ 4.6 million, net of tax of $ 1.2 million. The year ended December 31, 2023 includes a $ 2.0 million pension settlement charge. See Note 15 — Employee Benefit Plans for additional information. The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the nine months ended September 30, 2024 and September 30, 2023: Details about accumulated other comprehensive income components Amount reclassified from accumulated other comprehensive income Affected line item in the Income Statement September 30, 2024 September 30, 2023 Realized loss (gain) on foreign currency exchange contracts $ 1,742 ($ 5,801 ) Other operating expense, net Realized loss (gain) on foreign currency option contracts 13 ( 244 ) Other operating expense, net Noncontrolling interests ( 404 ) 1,391 Comprehensive income attributable to noncontrolling interests Realized gain on interest rate contracts ( 21,379 ) ( 12,587 ) Interest expense, net Income tax effect from net (loss) gain on foreign currency contracts ( 378 ) 1,303 Income tax (expense) benefit Net gain on cash flow hedges reclassified from accumulated other comprehensive income ($ 20,406 ) ($ 15,938 ) 36 Table of Contents RAYONIER INC. AND SUBSIDIARIES RAYONIER, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollar amounts in thousands unless otherwise stated) 18. RESTRICTED CASH Restricted cash includes cash deposited with a like-kind exchange (“LKE”) intermediary. In order to qualify for LKE treatment, the proceeds from real estate sales must be deposited with a third-party intermediary. These proceeds are accounted for as restricted cash until a suitable replacement property is acquired. In the event LKE purchases are not completed, the proceeds are returned to the Company after 180 days and reclassified as available cash. Additionally, restricted cash includes cash balances held in escrow as collateral for certain contractual obligations related to our Heartwood development project as well as cash held in escrow for real estate sales. The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Consolidated Balance Sheets that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023: Nine Months Ended September 30, 2024 2023 Restricted cash: Restricted cash deposited with LKE intermediary $ 2,345 $ 2 Restricted cash held in escrow 676 1,802 Total restricted cash 3,021 1,804 Cash and cash equivalents 74,225 107,784 Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 77,246 $ 109,588 19. ASSETS HELD FOR SALE Assets held for sale is composed of properties not included in inventory which are expected to be sold within 12 months that also meet the other relevant held-for-sale criteria in accordance with ASC 360-10-45-9. As of September 30, 2024 and December 31, 2023, the basis in properties meeting this classification was $ 106.2 million and $ 9.9 million, respectively. Since the basis in these properties was less than the fair value, including costs to sell, no impairment was recognized. See Note 1 — Basis of Presentation for additional information regarding our assets held for sale balance as of September 30, 2024 and related subsequent events. 37 Table of Contents