RAYONIER INC 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”) When we refer to “Rayonier” or “the Company” we mean Rayonier Inc. and its consolidated subsidiaries. References to the “Operating Partnership” mean Rayonier, L.P. and its consolidated subsidiaries. References to “we,” “us,” or “our,” mean collectively Rayonier Inc., the Operating Partnership and entities/subsidiaries owned or controlled by Rayonier Inc. and/or the Operating Partnership. References herein to “Notes to Financial Statements” refer to the Notes to Consolidated Financial Statements of Rayonier Inc. and Rayonier, L.P. included in Item 1 of this report. This MD&A is intended to provide a reader of our financial statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity, and certain other factors which may affect future results. Our MD&A should be read in conjunction with our Consolidated Financial Statements included in Item 1 of this report, our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”) and information contained in our subsequent reports filed with the Securities and Exchange Commission (the “SEC”). In March 2025, we entered into a purchase and sale agreement to divest our entire 77% interest in the New Zealand joint venture. Accordingly, the New Zealand joint venture’s financial results are reported as discontinued operations in our Consolidated Statements of Income and Comprehensive Income (Loss) for all periods presented. Unless otherwise noted, amounts and disclosures throughout this MD&A relate to our continuing operations. See Note 2 — Discontinued Operations for additional information regarding the sale of the New Zealand joint venture. FORWARD-LOOKING STATEMENTS Certain statements in this document regarding anticipated financial outcomes, including our earnings guidance, if any, business and market conditions, outlook, expected dividend rate, our business strategies, expected harvest schedules, timberland acquisitions and dispositions, the anticipated benefits of our business strategies, including the proposed sale of the entities holding our interest in the New Zealand joint venture, the expected timing of completing such proposed sale, and the anticipated use of proceeds from such proposed sale, and other similar statements relating to our future events, developments, or financial or operational performance or results, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as “may,” “will,” “should,” “expect,” “estimate,” “believe,” “intend,” “project,” “anticipate” and other similar language. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking. While management believes that these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. The risk factors contained in Item 1A — Risk Factors in our 2024 Form 10-K, and similar discussions included in other reports that we subsequently file with the SEC, among others, could cause actual results or events to differ materially from our historical experience and those expressed in forward-looking statements made in this document. Forward-looking statements are only as of the date they are made, and we undertake no duty to update our forward-looking statements except as required by law. You are advised, however, to review any subsequent disclosures we make on related subjects in subsequent reports filed with the SEC. NON-GAAP MEASURES To supplement our financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP measures, including “Cash Available for Distribution,” and “Adjusted EBITDA,” which are defined and further explained in Performance and Liquidity Indicators below. Reconciliation of such measures to the nearest GAAP measures can also be found in Performance and Liquidity Indicators below. Our definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. 36 Table of Contents OBJECTIVE The objective of the Management’s Discussion and Analysis is to detail material information, events, uncertainties and other factors impacting the Company and the Operating Partnership and to provide investors an understanding of “Management’s perspective.” Item 2, Management’s Discussion and Analysis highlights the critical areas for evaluating our performance which includes a discussion on the reportable segments, liquidity and capital, and critical accounting estimates. The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and notes. OUR COMPANY We are a leading timberland real estate investment trust (“REIT”) with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand. We invest in timberlands and actively manage them to provide current income and attractive long-term returns to our shareholders. We conduct our business through an umbrella partnership real estate investment trust (“UPREIT”) structure in which our assets are owned by our Operating Partnership and its subsidiaries. Rayonier manages the Operating Partnership as its sole general partner. Our revenues, operating income and cash flows are primarily derived from the following core business segments: Southern Timber, Pacific Northwest Timber, Real Estate, and Trading. Due to the pending sale of our entire 77% interest in the New Zealand joint venture, the results of our New Zealand operations have been reflected as discontinued operations. See Note 2 — Discontinued Operations for additional information regarding the sale of the New Zealand joint venture. As of March 31, 2025, we owned or leased under long-term agreements approximately 2.5 million acres of timberlands located in the U.S. South (1.75 million acres), U.S. Pacific Northwest (308,000 acres), and New Zealand (412,000 gross acres or 287,000 net plantable acres). Our New Zealand timberlands are classified as assets held for sale on our Consolidated Balance Sheets. SEGMENT INFORMATION The Southern Timber and Pacific Northwest Timber segments include all activities related to the harvesting of timber and other value-added activities such as the licensing of properties for hunting, the leasing of properties for mineral extraction and cell towers, and revenue from land-based solutions such as carbon capture and storage and solar energy. The Real Estate segment includes all land sales disaggregated into six sales categories: Improved Development, Unimproved Development, Rural, Timberland & Non-Strategic, Conservation Easements and Large Dispositions. It also includes residential and commercial lease activity, primarily in the town of Port Gamble, Washington. The Trading segment reflects log trading activities conducted from the U.S. South and Pacific Northwest. ENVIRONMENTAL MATTERS For a full description of our environmental matters, see Item 1 - “Business” in our Annual Report on Form 10-K for the year ended December 31, 2024 and our sustainability report located at our Responsible Stewardship webpage. CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements requires us to make estimates, assumptions and judgments that affect our assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. We base these estimates and assumptions on historical data and trends, current fact patterns, expectations and other sources of information we believe are reasonable. Actual results may differ from these estimates. For a full description of our critical accounting policies, see Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K. ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED See Note 1 — Basis of Presentation for a summary of recently issued accounting standards. 37 INDUSTRY AND MARKET CONDITIONS The demand for timber is directly related to the underlying demand for pulp, paper, packaging, lumber and other wood products. The significant majority of timber sold in our Southern Timber segment is consumed domestically. With a higher proportion of pulpwood, our Southern Timber segment relies heavily on downstream markets for pulp and paper, and to a lesser extent wood pellet markets. Our Pacific Northwest Timber segment relies primarily on domestic customers but also exports timber to China and Japan. The Southern Timber and Pacific Northwest Timber segments are sensitive to the strength of U.S. lumber markets, which are closely tied to housing starts. The strength of U.S. lumber markets could also be affected by potential tariffs on Canadian or European lumber arising from Executive Order 14223 Addressing the Threat to National Security from Imports of Timber, Lumber, and Their Derivative Products (March 1, 2025). Additional tariffs could increase lumber prices and/or increase U.S. domestic production of wood products to meet domestic demand, which could likewise increase domestic log demand and pricing. However, this could potentially be partially offset by softer end-market demand due to increased construction costs and/or weaker overall market conditions stemming from changes in trade policy and/or broader economic uncertainty. Pricing within our timber segments is subject to broad macroeconomic influences and local market conditions. Residential construction activity is a key macroeconomic factor. Locally, prices can fluctuate based on weather patterns, available log inventories, mill demand, and access to export markets. Currently, in our Southern Timber segment, pine stumpage realizations continue to be constrained by competing log supply from salvage timber and weaker overall demand for pulpwood and sawtimber. Meanwhile, the Pacific Northwest Timber segment has seen generally stable weighted-average delivered log prices due to balanced supply and demand. While Executive Order 14225, Immediate Expansion of American Timber Production (March 1, 2025) could increase the supply of available timber from federal lands, any potential impacts would likely be most prevalent in the Pacific Northwest. Further, despite the potential long-term increase in the supply of available timber, significant logistical and infrastructure-related challenges will likely limit near-term market impacts. We are also subject to the risk of price fluctuations in key operational costs, which primarily include logging and transportation (cut and haul). Additionally, our cost of sales is significantly influenced by the cost basis of timber sold (depletion) and real estate sold. Depletion represents the amortization of capitalized site preparation, planting and fertilization, real estate taxes, timberland lease payments and certain payroll costs. The cost basis of real estate sold includes land costs and direct development and construction expenses for specific projects, including infrastructure, roadways, utilities, amenities and other improvements. While our timber and real estate sales are not directly subject to tariffs, to the extent that goods and/or services that we purchase in our operations are impacted by tariffs, this could lead to higher costs in our operations if vendors look to pass-through any such increased costs resulting from tariffs. Other costs include amortization of capitalized road and bridge construction and software, depreciation of fixed assets and equipment, road maintenance, severance and excise taxes, fire prevention and real estate commissions and closing costs. Our Real Estate segment is exposed to changes in interest and mortgage rates, which could negatively impact buyer demand. However, our improved development projects, Wildlight, north of Jacksonville, Florida, and Heartwood, south of Savannah, Georgia, continue to benefit from favorable migration and demographic trends, which have so far outweighed the impacts of higher interest rates. For additional information on market conditions impacting our business, see Results of Operations . 38 DISCUSSION OF TIMBER INVENTORY AND SUSTAINABLE YIELD See Item 1 — Business — Discussion of Timber Inventory and Sustainable Yield in our 2024 Form 10-K. OUR TIMBERLANDS Our timber operations are disaggregated into two geographically distinct segments: Southern Timber and Pacific Northwest Timber. The following tables provide a breakdown of our timberland holdings as of March 31, 2025 and December 31, 2024, including timberlands owned and leased by our 77% New Zealand joint venture interest, which are classified as assets held for sale on our Consolidated Balance Sheets. (acres in 000s) As of March 31, 2025 As of December 31, 2024 Owned Leased Total Owned Leased Total Southern Alabama 250 3 253 250 3 253 Arkansas — 1 1 — 2 2 Florida 360 35 395 360 35 395 Georgia 611 49 660 611 49 660 Louisiana 146 — 146 146 — 146 South Carolina 15 — 15 15 — 15 Texas 278 — 278 279 — 279 1,660 88 1,748 1,661 89 1,750 Pacific Northwest Oregon 6 — 6 6 — 6 Washington 299 3 302 299 3 302 305 3 308 305 3 308 New Zealand (a) 178 234 412 178 234 412 Total 2,143 325 2,468 2,144 326 2,470 (a) Represents legal acres owned and leased by our 77% New Zealand joint venture interest, which are now reflected as discontinued operations in our Consolidated Financial Statements. As of March 31, 2025, legal acres in New Zealand were comprised of 287,000 plantable acres and 125,000 non-productive acres. See Note 2 — Discontinued Operations for additional information. 39 The following tables detail activity for owned and leased acres in our timberland holdings by state from December 31, 2024 to March 31, 2025: (acres in 000s) Acres Owned December 31, 2024 Acquisitions Sales Other March 31, 2025 Southern Alabama 250 — — — 250 Florida 360 — — — 360 Georgia 611 — — — 611 Louisiana 146 — — — 146 South Carolina 15 — — — 15 Texas 279 — (1) — 278 1,661 — (1) — 1,660 Pacific Northwest Oregon 6 — — — 6 Washington 299 — — — 299 305 — — — 305 New Zealand (a) 178 — — — 178 Total 2,144 — (1) — 2,143 (a) Represents legal acres owned by our 77% New Zealand joint venture interest, which are now reflected as discontinued operations in our Consolidated Financial Statements. See Note 2 — Discontinued Operations for additional information. (acres in 000s) Acres Leased December 31, 2024 New Leases Sold/Expired Leases (a) Other March 31, 2025 Southern Alabama 3 — — — 3 Arkansas 2 — (1) — 1 Florida 35 — — — 35 Georgia 49 — — — 49 89 — (1) — 88 Pacific Northwest Washington (b) 3 — — — 3 New Zealand (c) 234 — — — 234 Total 326 — (1) — 325 (a) Includes acres previously under lease that have been harvested and activity for the relinquishment of leased acres. (b) Primarily timber reservations acquired in the merger with Pope Resources. (c) Represents legal acres leased by our 77% New Zealand joint venture interest, which are now reflected as discontinued operations in our Consolidated Financial Statements. See Note 2 — Discontinued Operations for additional information. 40 RESULTS OF OPERATIONS CONSOLIDATED RESULTS* The following table provides key financial information by segment and on a consolidated basis: Three Months Ended March 31, Financial Information (in millions) 2025 2024 Sales Southern Timber $50.9 $70.0 Pacific Northwest Timber 21.4 25.2 Real Estate Improved Development 3.3 1.8 Rural 5.3 8.7 Timberland & Non-Strategic — 0.6 Deferred Revenue/Other (a) 1.6 4.4 Total Real Estate 10.2 15.6 Trading 0.4 3.0 Total Sales $82.9 $113.7 Operating Income (Loss) Southern Timber $10.1 $23.0 Pacific Northwest Timber 0.7 (4.4) Real Estate (1.0) (0.1) Trading (0.5) — Corporate and Other (b) (9.3) (9.9) Operating Income 0.1 8.6 Interest expense, net (6.4) (8.9) Interest income 2.9 1.9 Other miscellaneous expense, net (c) (1.9) (7.1) Income tax (expense) benefit (d) (0.3) 1.0 Loss from continuing operations (5.6) (4.5) Income from discontinued operations, net of tax 2.5 6.8 Net (Loss) Income (3.1) 2.3 Less: Net income attributable to noncontrolling interests in consolidated affiliates (0.4) (0.9) Net (Loss) Income Attributable to Rayonier, L.P. ($3.5) $1.4 Less: Net loss attributable to noncontrolling interests in the Operating Partnership 0.1 — Net (Loss) Income Attributable to Rayonier Inc. ($3.4) $1.4 Adjusted EBITDA (e) Southern Timber $27.0 $44.8 Pacific Northwest Timber 6.4 4.7 Real Estate 2.0 4.6 Trading (0.5) — Corporate and Other (7.9) (9.4) Total Adjusted EBITDA $27.1 $44.6 * All periods presented exclude results from our 77% New Zealand joint venture interest, which are now reflected as Discontinued Operations in the Consolidated Financial Statements. See Note 2 — Discontinued Operations for additional information. (a) Includes deferred revenue adjustments, builder price participation and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue. (b) The three months ended March 31, 2025 includes $1.1 million of restructuring charges. (c) The three months ended March 31, 2025 includes $1.7 million of net costs associated with legal settlements. The three months ended March 31, 2024 includes $5.7 million of pension settlement charges and $1.3 million of net costs associated with legal settlements. (d) The three months ended March 31, 2024 includes a $1.2 million income tax benefit related to the pension settlement. (e) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators . 41 Three Months Ended March 31, Southern Timber Overview 2025 2024 Sales Volume (in thousands of tons) Pine Pulpwood 839 1,016 Pine Sawtimber 628 922 Total Pine Volume 1,468 1,938 Hardwood 113 69 Total Volume 1,581 2,007 % Delivered Volume (vs. Total Volume) 35 % 30 % % Pine Sawtimber Volume (vs. Total Pine Volume) 43 % 48 % % Export Volume (vs. Total Volume) (a) — 1 % Net Stumpage Pricing (dollars per ton) (b) Pine Pulpwood $14.10 $16.89 Pine Sawtimber 25.86 30.62 Weighted Average Pine $19.13 $23.42 Hardwood 12.34 13.35 Weighted Average Total $18.64 $23.07 Summary Financial Data (in millions of dollars) Timber Sales $41.9 $60.9 Less: Cut and Haul (12.5) (13.4) Less: Port and Freight — (1.2) Net Stumpage Sales $29.4 $46.3 Land-Based Solutions (c) 2.8 1.7 Other Non-Timber Sales 6.3 7.4 Total Sales $50.9 $70.0 Operating Income $10.1 $23.0 (+) Depreciation, depletion and amortization 16.9 21.8 Adjusted EBITDA (d) $27.0 $44.8 Other Data Period-End Acres (in thousands) 1,748 1,849 (a) Estimated percentage of export volume, which includes volumes sold to third-party exporters in addition to direct exports through our log export program. (b) Pulpwood and sawtimber product pricing for composite stumpage sales is estimated based on market data. (c) Consists primarily of sales from carbon capture and storage (“CCS”) and solar energy contracts. (d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators . 42 Three Months Ended March 31, Pacific Northwest Timber Overview 2025 2024 Sales Volume (in thousands of tons) Pulpwood 41 53 Domestic Sawtimber (a) 219 245 Export Sawtimber 1 19 Total Volume 261 317 % Delivered Volume (vs. Total Volume) 91 % 88 % % Sawtimber Volume (vs. Total Volume) 84 % 83 % % Export Volume (vs. Total Volume) (b) 1 % 8 % Delivered Log Pricing (in dollars per ton) Pulpwood $30.05 $29.31 Domestic Sawtimber 90.58 84.31 Export Sawtimber (c) 84.07 137.76 Weighted Average Log Price $81.13 $78.54 Summary Financial Data (in millions of dollars) Timber Sales $20.4 $24.2 Less: Cut and Haul (9.3) (10.8) Less: Port and Freight — (1.2) Net Stumpage Sales $11.0 $12.2 Non-Timber Sales 1.0 1.0 Total Sales $21.4 $25.2 Operating Income (Loss) $0.7 ($4.4) (+) Depreciation, depletion and amortization 5.6 9.1 Adjusted EBITDA (d) $6.4 $4.7 Other Data Period-End Acres (in thousands) 308 418 Sawtimber (in dollars per MBF) (e) $692 $650 (a) Includes volumes sold to third-party exporters. (b) Estimated percentage of export volume, which includes volumes sold to third-party exporters in addition to direct exports through our log export program. (c) Pricing is reported on a CFR basis (i.e., inclusive of export costs and freight). (d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators . (e) Delivered Sawtimber excluding chip-n-saw. 43 Three Months Ended March 31, Real Estate Overview 2025 2024 Sales (in millions of dollars) Improved Development (a) $3.3 $1.8 Rural 5.3 8.7 Timberland & Non-Strategic — 0.6 Deferred Revenue/Other (b) 1.6 4.4 Total Sales $10.2 $15.6 Acres Sold Improved Development (a) 78.2 6.0 Rural 953 1,498 Timberland & Non-Strategic — 430 Total Acres Sold 1,031 1,933 Gross Price per Acre (dollars per acre) Improved Development (a) $42,101 $303,156 Rural 5,534 5,828 Timberland & Non-Strategic — 1,421 Weighted Average (Total) $8,308 $5,774 Weighted Average (Adjusted) (c) $5,534 $4,845 Operating Loss ($1.0) ($0.1) (+) Depreciation, depletion and amortization 0.6 1.7 (+) Non-cash cost of land and improved development 2.4 3.0 Adjusted EBITDA (d) $2.0 $4.6 (a) Reflects land with capital invested in infrastructure improvements. (b) Includes deferred revenue adjustments, builder price participation and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue. (c) Excludes Improved Development. (d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators . 44 Three Months Ended March 31, Trading Overview * 2025 2024 Sales Volume (in thousands of tons) U.S. 1 23 Total Volume 1 23 Summary Financial Data (in millions of dollars) Trading Sales $0.4 $3.0 Total Sales $0.4 $3.0 Operating Loss ($0.5) — Adjusted EBITDA (a) ($0.5) — * All periods presented exclude results from our 77% New Zealand joint venture interest, which are now reflected as Discontinued Operations in the Consolidated Financial Statements. See Note 2 — Discontinued Operations for additional information. (a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators . 45 Three Months Ended March 31, Capital Expenditures By Segment (in millions of dollars) * 2025 2024 Timber Capital Expenditures Southern Timber Reforestation, silviculture and other capital expenditures $6.2 $7.0 Property taxes 1.8 2.0 Lease payments 0.1 0.4 Allocated overhead 1.5 1.6 Subtotal Southern Timber $9.6 $11.0 Pacific Northwest Timber Reforestation, silviculture and other capital expenditures 1.5 2.7 Property taxes 0.1 0.2 Allocated overhead 0.7 1.3 Subtotal Pacific Northwest Timber $2.4 $4.1 Total Timber Segments Capital Expenditures $12.0 $15.1 Real Estate — 0.1 Corporate — 0.1 Total Capital Expenditures $12.0 $15.3 Real Estate Development Investments (a) $4.1 $5.5 * All periods presented exclude results from our 77% New Zealand joint venture interest, which are now reflected as Discontinued Operations in the Consolidated Financial Statements. See Note 2 — Discontinued Operations for additional information. (a) Represents investments in master infrastructure or entitlements in our real estate development projects. Real Estate Development Investments are amortized as the underlying properties are sold and included in Non-Cash Cost of Land and Improved Development. 46 Three Months Ended March 31, Discontinued Operations * 2025 2024 Summary Financial Data by Historical Segment (in millions of dollars) New Zealand Timber Timber Sales $52.5 $42.2 Less: Cut and Haul (20.4) (16.6) Less: Port and Freight (15.4) (12.1) Net Stumpage Sales $16.7 $13.5 Carbon Credit Sales — 3.4 Other Non-Timber Sales 0.2 0.1 Total New Zealand Timber Sales $52.7 $45.7 Trading Trading Sales 3.9 8.4 Non-Timber Sales 0.2 0.4 Total Trading Sales $4.1 $8.8 Corporate / Intersegment Eliminations Non-Timber Sales — (0.1) Total Corporate / Intersegment Eliminations — ($0.1) Total Sales from discontinued operations $56.8 $54.4 Income from discontinued operations, net of tax $2.5 $6.8 * Due to the Company’s agreement to sell the entities that hold its entire 77% New Zealand joint venture interest, the New Zealand operating results are classified as Discontinued Operations in our Consolidated Financial Statements for all periods presented. 47 The following tables summarize sales, operating income (loss) and Adjusted EBITDA variances for March 31, 2025 versus March 31, 2024 (millions of dollars): Sales Southern Timber Pacific Northwest Timber Real Estate Trading Total Three Months Ended March 31, 2024 $70.0 $25.2 $15.6 $3.0 $113.7 Volume (9.8) (2.1) (4.9) (2.8) (19.6) Price (7.0) 1.3 2.7 0.2 (2.8) Non-timber sales (a) (0.1) 0.1 — — — Other (2.2) (b) (3.1) (b) (3.2) (c) — (8.5) Three Months Ended March 31, 2025 $50.9 $21.4 $10.2 $0.4 $82.9 (a) For the Southern Timber segment, includes sales from carbon capture and storage ("CCS") and solar energy contracts. (b) Includes variance due to stumpage versus delivered sales. (c) Includes deferred revenue adjustments, builder price participation and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue. Operating Income (Loss) Southern Timber Pacific Northwest Timber Real Estate Trading Corporate and Other Total Three Months Ended March 31, 2024 $23.0 ($4.4) ($0.1) — ($9.9) $8.6 Volume (5.3) 0.1 (2.8) — — (8.0) Price (a) (7.0) 1.3 2.7 — — (3.0) Cost (1.0) 1.8 1.0 (0.5) 1.5 2.8 Non-timber income (b) (0.1) 0.1 — — — — Depreciation, depletion & amortization 0.5 1.8 0.4 — 0.2 2.9 Non-cash cost of land and improved development — — (1.0) — — (1.0) Other (c) — — (1.2) — (1.1) (2.3) Three Months Ended March 31, 2025 $10.1 $0.7 ($1.0) ($0.5) ($9.3) $0.1 (a) For Timber segments, price reflects net stumpage realizations (i.e., net of cut and haul and shipping costs). For Real Estate, price is presented net of cash closing costs. (b) For the Southern Timber segment, includes income from carbon capture and storage (“CCS”) and solar energy contracts. (c) Real Estate includes deferred revenue adjustments, builder price participation and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue. Corporate and Other includes $1.1 million of restructuring charges. Adjusted EBITDA (a) Southern Timber Pacific Northwest Timber Real Estate Trading Corporate and Other Total Three Months Ended March 31, 2024 $44.8 $4.7 $4.6 — ($9.4) $44.6 Volume (9.7) (1.5) (4.9) — — (16.0) Price (b) (7.0) 1.3 2.7 — — (3.0) Cost (1.0) 1.8 1.0 (0.5) 1.5 2.8 Non-timber income (c) (0.1) 0.1 — — — — Other (d) — — (1.4) — — (1.4) Three Months Ended March 31, 2025 $27.0 $6.4 $2.0 ($0.5) ($7.9) $27.1 (a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators below. (b) For Timber segments, price reflects net stumpage realizations (i.e., net of cut and haul and shipping costs). For Real Estate, price is presented net of cash closing costs. (c) For the Southern Timber segment, includes income from carbon capture and storage (“CCS”) and solar energy contracts. (d) Real Estate includes deferred revenue adjustments, builder price participation and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue. 48 SOUTHERN TIMBER First quarter sales of $50.9 million decreased $19.0 million, or 27%, versus the prior year period. Harvest volumes decreased 21% to 1.58 million tons versus 2.01 million tons in the prior year period, primarily due to softer mill demand coupled with the impact of the Large Disposition we completed in Oklahoma in late 2024. Average pine sawtimber stumpage realizations decreased 16% to $25.86 per ton versus $30.62 per ton in the prior year period, due to a combination of softer demand from Southern sawmills, competing log supply from salvage timber, and an unfavorable shift in geographic mix. Average pine pulpwood stumpage realizations decreased 17% to $14.10 per ton versus $16.89 per ton in the prior year period, driven by the continued impact of salvage volume on the market, softer demand from pulp mills taking extended downtime, and an unfavorable shift in geographic mix. Overall, weighted-average net stumpage realizations (including hardwood) decreased 19% to $18.64 per ton versus $23.07 per ton in the prior year period. Non-timber sales of $9.1 million decreased $0.1 million versus the prior year period, as lower pipeline easement revenues were largely offset by growth in our Land-Based Solutions business. Operating income of $10.1 million decreased $12.9 million versus the prior year period due to lower net stumpage realizations ($7.0 million), lower volumes ($5.3 million), higher costs ($1.0 million), and lower non-timber income ($0.1 million), partially offset by lower depletion expense ($0.5 million). First quarter Adjusted EBITDA of $27.0 million was 40%, or $17.8 million, below the prior year period. PACIFIC NORTHWEST TIMBER First quarter sales of $21.4 million decreased $3.8 million, or 15%, versus the prior year period. Harvest volumes decreased 18% to 261,000 tons versus 317,000 tons in the prior year period, primarily due to the impact of the Large Dispositions completed in the fourth quarter of 2024. Average delivered prices for domestic sawtimber increased 7% to $90.58 per ton versus $84.31 per ton in the prior year period, primarily due to improved demand from domestic lumber mills in response to higher lumber prices and a favorable geographic mix. Average delivered pulpwood prices increased 3% to $30.05 per ton versus $29.31 per ton in the prior year period due to modestly improved supply/demand dynamics. Operating income of $0.7 million versus an operating loss of ($4.4) million in the prior year period was driven by lower costs ($1.8 million), lower depletion expense ($1.8 million), higher net stumpage realizations ($1.3 million), lower variable costs ($0.1 million), and higher non-timber income ($0.1 million). First quarter Adjusted EBITDA of $6.4 million was 35%, or $1.6 million, above the prior year period. REAL ESTATE First quarter sales of $10.2 million decreased $5.4 million versus the prior year period, while operating loss of ($1.0) million increased $0.8 million versus the prior year period. Sales decreased and operating loss increased versus the prior year period due to fewer acres sold (1,031 acres sold versus 1,933 acres sold in the prior year period) and unfavorable deferred revenue adjustments, which were partially offset by higher weighted-average prices ($8,308 per acre versus $5,774 per acre in the prior year period). Improved Development sales of $3.3 million included two residential pod sales totaling 78.2 acres ($42,000 per acre) in the Heartwood development project south of Savannah, Georgia. This compares to Improved Development sales of $1.8 million in the prior year period. Rural sales of $5.3 million consisted of 953 acres at an average price of $5,534 per acre. This compares to prior year period sales of $8.7 million, which consisted of 1,498 acres at an average price of $5,828 per acre. There were no Timberland & Non-Strategic sales in the first quarter. This compares to prior year period sales of $0.6 million, which consisted of a 430-acre transaction for $1,421 per acre. First quarter Adjusted EBITDA of $2.0 million decreased $2.6 million versus the prior year period. 49 TRADING The Trading segment has been adjusted to exclude results associated with the Company’s New Zealand operations, which have been reclassified to discontinued operations. First quarter sales of $0.4 million decreased $2.6 million versus the prior year period, primarily due to lower volumes. Sales volumes were 1,000 tons in the first quarter, compared to 23,000 tons in the prior year period. The Trading segment generated an operating loss of $0.5 million versus breakeven results in the prior year period. OTHER ITEMS CORPORATE AND OTHER EXPENSE / ELIMINATIONS First quarter corporate and other operating expenses of $9.3 million decreased $0.6 million versus the prior year period, as lower compensation and benefits expenses and lower professional services fees were partially offset by $1.1 million of restructuring charges. The restructuring charges were related to our previously announced workforce optimization initiative, which was effectuated during the first quarter. INTEREST EXPENSE, NET First quarter interest expense of $6.4 million decreased $2.6 million versus the prior year period, primarily due to lower average outstanding debt. INTEREST INCOME First quarter interest income of $2.9 million increased $1.0 million versus the prior year period, primarily due to higher cash on hand following the Large Dispositions completed in late 2024. OTHER MISCELLANEOUS EXPENSE, NET First quarter other miscellaneous expense of $1.9 million included $1.7 million of net costs associated with legal settlements. This compares to prior year period other miscellaneous expense of 7.1 million, which included a $5.7 million pension settlement charge and $1.3 million of net costs associated with legal settlements. INCOME TAX (EXPENSE) BENEFIT First quarter income tax expense of $0.3 million versus income tax benefit of $1.0 million in the prior year period was primarily due to a $1.2 million tax benefit associated with the Company’s pension plan termination and settlement in the prior year period. INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX Discontinued operations consists of the operations of our New Zealand joint venture. First quarter income from discontinued operations, net of tax was $2.5 million versus $6.8 million in the prior year period. See Note 2 — Discontinued Operations for additional information. SHARE REPURCHASES During the first quarter, the Company repurchased 95,000 shares at an average price of $27.61 per share, or $2.6 million in total. As of March 31, 2025, the Company had approximately 156.0 million common shares and 2.1 million Redeemable Operating Partnership Units outstanding. See the subsequent events section of Note 1 — Basis of Presentation for information regarding shares repurchased subsequent to March 31, 2025. 50 OUTLOOK In our Southern Timber segment, we now expect to achieve full-year harvest volumes of 6.9 to 7.0 million tons—toward the lower end of our prior guidance range—as we continue to opportunistically flex volume in response to market conditions. The impact of salvage volume entering the market following Hurricane Helene in 2024 continues to negatively impact some of our operating areas. However, we expect pine stumpage realizations to trend higher from first quarter levels as salvage efforts moderate and operating conditions normalize in the coming quarters. In addition, we continue to expect lower non-timber income for full-year 2025 as compared to the prior year. In our Pacific Northwest Timber segment, we remain on track to achieve full-year harvest volumes of approximately 0.9 million tons. Further, we continue to expect that full-year weighted-average log pricing will trend higher versus the prior year due to higher lumber prices, healthy demand from domestic sawmills, and the anticipated impact of increased duties on Canadian lumber in the second half of the year. Turning to our Real Estate segment, we are encouraged by our transaction pipeline for the balance of the year, but expect closing activity will be heavily concentrated in the third and fourth quarters. LIQUIDITY AND CAPITAL RESOURCES Our principal source of cash is cash flow from operations, primarily the harvesting of timber and sales of real estate. As an UPREIT, our main use of cash is dividends and unitholder distributions. We also use cash to maintain the productivity of our timberlands through replanting and silviculture. Our operations have generally produced consistent cash flow and required limited capital resources. Short-term borrowings have helped fund working capital needs, while acquisitions of timberlands generally require funding from external sources or Large Dispositions. SUMMARY OF LIQUIDITY AND FINANCING COMMITMENTS March 31, December 31, (millions of dollars) 2025 2024 Cash and cash equivalents $216.2 $303.1 Total debt (a) 1,050.0 1,050.0 Noncontrolling interests in the Operating Partnership 58.2 51.8 Shareholders’ equity 1,925.3 1,780.5 Total capitalization (total debt plus permanent and temporary equity) 3,033.5 2,882.3 Debt to capital ratio 35 % 36 % Net debt to enterprise value (b)(c) 16 % 16 % (a) Total debt as of March 31, 2025 and December 31, 2024 reflects principal on long-term debt, gross of deferred financing costs and unamortized discounts. (b) Net debt is calculated as total debt less cash and cash equivalents. (c) Enterprise value based on market capitalization (including Rayonier, L.P. “OP” units) plus net debt based on Rayonier’s share price of $27.88 and $26.10 as of March 31, 2025 and December 31, 2024, respectively. AT-THE-MARKET (“ATM”) EQUITY OFFERING PROGRAM On November 4, 2022 we entered into a new distribution agreement with a group of sales agents through which we may sell common shares, from time to time, having an aggregate sales price of up to $300 million (the “2022 ATM Program”). As of March 31, 2025, $269.7 million remains available for issuance under the 2022 ATM Program. There were no shares issued under the ATM program during the three months ended March 31, 2025 and 2024. 51 CASH FLOWS The following table summarizes our cash flows from operating, investing and financing activities for the three months ended March 31, 2025 and 2024: (millions of dollars) 2025 2024 Cash provided by (used for): Operating activities $27.7 $52.3 Investing activities (21.4) (24.0) Financing activities (116.5) (75.1) CASH PROVIDED BY OPERATING ACTIVITIES Cash provided by operating activities decreased $24.6 million from the prior year period, primarily due to lower operating results and changes in working capital. CASH USED FOR INVESTING ACTIVITIES Cash used for investing activities decreased $2.6 million from the prior year period, due to lower capital expenditures ($3.2 million), lower real estate development investments ($1.4 million), and lower capital expenditures from discontinued operations ($1.0 million), partially offset by higher cash used for other investing activities ($3.0 million). CASH USED FOR FINANCING ACTIVITIES Cash used for financing activities increased $41.4 million from the prior year period. This is primarily due to higher dividends paid on common shares ($38.2 million), increases in share repurchases ($2.6 million), higher distributions to noncontrolling interests in the Operating Partnership ($0.4 million) and higher distributions to noncontrolling interests in consolidated affiliates ($0.2 million). FUTURE USES OF CASH We expect future uses of cash to include working capital requirements, principal and interest payments on long-term debt, lease payments, capital expenditures, real estate development investments, timberland acquisitions, dividends on Rayonier Inc. common shares and distributions on Rayonier, L.P. units, and repurchases of the Company’s common shares to satisfy other commitments. Significant long-term uses of cash include the following (in millions): Future uses of cash (in millions) Total Payments Due by Period 2025 2026-2027 2028-2029 Thereafter Long-term debt (a) $1,050.0 — $200.0 $400.0 $450.0 Interest payments on long-term debt (b) 179.5 39.7 76.6 44.6 18.6 Operating leases — timberland (c) 23.5 2.6 5.5 4.3 11.1 Operating leases — PP&E, offices (c) 0.6 0.3 0.2 0.1 — Commitments — real estate projects 79.3 20.3 34.4 16.0 8.6 Commitments — environmental remediation (d) 6.6 1.4 1.8 0.5 2.9 Commitments — other (e) 2.2 0.6 1.0 0.2 0.4 Total $1,341.7 $64.9 $319.5 $465.7 $491.6 (a) The book value of long-term debt, net of deferred financing costs and unamortized discounts, is currently recorded at $1,044.6 million on our Consolidated Balance Sheets, but upon maturity the liability will be $1,050.0 million. See Note 7 - Debt for additional information. (b) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of March 31, 2025 and excludes the impact of hedging. (c) Excludes anticipated renewal options. (d) Commitments — environmental remediation represents our estimate of potential liability associated with environmental contamination and Natural Resource Damages in Port Gamble, Washington. See Note 11 - Environmental and Natural Resource Damage Liabilities for additional information. (e) Commitments — other includes other purchase obligations. 52 We expect to fund future uses of cash with a combination of existing cash balances, cash generated by operating activities, the remaining issuances available under the Company’s ATM Program, Large Dispositions and the use of our revolving credit facility. We believe we have sufficient sources of funding to meet our business requirements for the next 12 months and in the longer term. EXPECTED 2025 EXPENDITURES Capital expenditures in 2025 are expected to be between $52 million and $56 million, excluding any strategic timberland acquisitions we may make. Capital expenditures are expected to primarily consist of seedling planting, fertilization and other silvicultural activities, property taxes, lease payments, allocated overhead and other capitalized costs. Aside from capital expenditures, we may also acquire timberland as we actively evaluate acquisition opportunities. We anticipate real estate development investments in 2025 to be between $23 million and $27 million, net of reimbursements from community development bonds. Expected real estate development investments are primarily related to Wildlight, our mixed-use community development project located north of Jacksonville, Florida and Heartwood, our mixed-use development project located in Richmond Hill just south of Savannah, Georgia. Our 2025 dividend payments on Rayonier Inc. common shares and distributions to Rayonier, L.P. unitholders, excluding the additional dividend and distribution paid on January 30, 2025 to shareholders of record on December 12, 2024, are expected to be approximately $171 million and $2 million, respectively, assuming no change in the quarterly dividend rate of $0.2725 per share or partnership unit, or material changes in the number of shares or partnership units outstanding. Future share repurchases, if any, will depend on the Company’s liquidity and cash flow, as well as general market conditions and other considerations including capital allocation priorities. OFF-BALANCE SHEET ARRANGEMENTS We utilize off-balance sheet arrangements to provide credit support for certain suppliers and vendors in case of their default on critical obligations, and collateral for outstanding claims under our previous workers’ compensation self-insurance programs. These arrangements consist of standby letters of credit and surety bonds. As part of our ongoing operations, we also periodically issue guarantees to third parties. Off-balance sheet arrangements are not considered a source of liquidity or capital resources and do not expose us to material risks or material unfavorable financial impacts. See Note 12 — Guarantees for details on the letters of credit and surety bonds as of March 31, 2025. SUMMARY OF GUARANTOR FINANCIAL INFORMATION In May 2021, Rayonier, L.P. issued $450 million of 2.75% Senior Notes due 2031 (the “Senior Notes due 2031”). Rayonier TRS Holdings Inc., Rayonier Inc., and Rayonier Operating Company, LLC agreed to irrevocably, fully and unconditionally guarantee jointly and severally, the obligations of Rayonier, L.P. in regards to the Senior Notes due 2031. As a general partner of Rayonier, L.P., Rayonier Inc. consolidates Rayonier, L.P. and has no material assets or liabilities other than its interest in Rayonier, L.P. These notes are unsecured and unsubordinated and will rank equally with all other unsecured and unsubordinated indebtedness from time to time outstanding. Rayonier, L.P. is a limited partnership, in which Rayonier Inc. is the general partner. The operating subsidiaries of Rayonier, L.P. conduct all of our operations. Rayonier, L.P.’s most significant assets are its interest in operating subsidiaries, which have been excluded in the table below to eliminate intercompany transactions between the issuer and guarantors and to exclude investments in non-guarantors. As a result, our ability to make required payments on the notes depends on the performance of our operating subsidiaries and their ability to distribute funds to us. There are no material restrictions on dividends from the operating subsidiaries. 53 The summarized balance sheet information for the consolidated obligor group of debt issued by Rayonier, L.P. for the three months ended March 31, 2025 and year ended December 31, 2024 are provided in the table below: (in millions) March 31, 2025 December 31, 2024 Current assets $219.9 $311.9 Non-current assets 82.3 93.1 Current liabilities 19.0 293.8 Non-current liabilities 2,409.4 2,341.5 Due to non-guarantors 1,341.6 1,273.3 The summarized results of operations information for the consolidated obligor group of debt issued by Rayonier, L.P. for the three months ended March 31, 2025 and year ended December 31, 2024 are provided in the table below: (in millions) March 31, 2025 December 31, 2024 Cost and expenses ($7.3) ($35.4) Operating loss (7.3) (35.4) Net loss (9.8) (60.2) Revenue from non-guarantors 139.7 1,263.0 54 PERFORMANCE AND LIQUIDITY INDICATORS The discussion below is presented to enhance the reader’s understanding of our operating performance, liquidity, and ability to generate cash and satisfy rating agency and creditor requirements. This information includes two measures of financial results: Adjusted Earnings before Interest, Taxes, Depreciation, Depletion and Amortization (“Adjusted EBITDA”) and Cash Available for Distribution (“CAD”). These measures are not defined by Generally Accepted Accounting Principles (“GAAP”), and the discussion of Adjusted EBITDA and CAD is not intended to conflict with or change any of the GAAP disclosures described above. Management uses Adjusted EBITDA as a performance measure. Adjusted EBITDA is a non-GAAP measure that management uses to make strategic decisions about the business and that investors can use to evaluate the operational performance of the assets under management. It excludes specific items that management believes are not indicative of the Company’s ongoing operating results. We define Adjusted EBITDA as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating expense, income from discontinued operations, restructuring charges and Large Dispositions. Management uses CAD as a liquidity measure. CAD is a non-GAAP measure of cash generated during a period that is available for common share dividends, distributions to Operating Partnership unitholders, repurchase of the Company’s common shares, debt reduction, timberland acquisitions and real estate development investments. CAD is defined as cash provided by operating activities adjusted for capital spending (excluding timberland acquisitions and real estate development investments) and working capital and other balance sheet changes. CAD is not necessarily indicative of the CAD that may be generated in future periods. We reconcile Adjusted EBITDA to Net (Loss) Income for the consolidated Company and to Operating Income (Loss) for the segments, as those are the most comparable GAAP measures for each. The following table provides a reconciliation of Net (Loss) Income to Adjusted EBITDA for the respective periods (in millions of dollars): Three Months Ended March 31, 2025 2024 Net (Loss) Income to Adjusted EBITDA Reconciliation Net (Loss) Income ($3.1) $2.3 Income from discontinued operations, net of tax (a) (2.5) (6.8) Interest, net and miscellaneous income 3.5 7.1 Income tax expense (benefit) (b) 0.3 (1.0) Depreciation, depletion and amortization 23.5 33.1 Non-cash cost of land and improved development 2.4 3.0 Non-operating expense (c) 1.8 7.0 Restructuring charges (d) 1.1 — Adjusted EBITDA $27.1 $44.6 (a) Income from discontinued operations, net of tax includes income generated by the Company's New Zealand joint venture interest, which is now reflected as discontinued operations due to its pending disposition. (b) The three months ended March 31, 2024 includes a $1.2 million income tax benefit related to the pension settlement. (c) The three months ended March 31, 2025 includes $1.7 million of net costs associated with legal settlements. The three months ended March 31, 2024 includes $5.7 million of pension settlement charges and $1.3 million of net costs associated with legal settlements. (d) Restructuring charges include severance costs related to workforce optimization initiatives. 55 The following tables provide a reconciliation of Operating Income (Loss) by segment to Adjusted EBITDA by segment for the respective periods (in millions of dollars): Three Months Ended Southern Timber Pacific Northwest Timber Real Estate Trading Corporate and Other Total March 31, 2025 Operating income (loss) $10.1 $0.7 ($1.0) ($0.5) ($9.3) $0.1 Depreciation, depletion and amortization 16.9 5.6 0.6 — 0.4 23.5 Non-cash cost of land and improved development — — 2.4 — — 2.4 Restructuring charges (a) — — — — 1.1 1.1 Adjusted EBITDA $27.0 $6.4 $2.0 ($0.5) ($7.9) $27.1 March 31, 2024 Operating income (loss) $23.0 ($4.4) ($0.1) — ($9.9) $8.6 Depreciation, depletion and amortization 21.8 9.1 1.7 — 0.4 33.1 Non-cash cost of land and improved development — — 3.0 — — 3.0 Adjusted EBITDA $44.8 $4.7 $4.6 — ($9.4) $44.6 (a) Restructuring charges include severance costs related to workforce optimization initiatives. The following table provides a reconciliation of Cash Provided by Operating Activities to Adjusted CAD (in millions of dollars): Three Months Ended March 31, 2025 2024 Cash provided by operating activities $27.7 $52.3 Cash provided by operating activities from discontinued operations (9.0) (5.2) Capital expenditures (a) (12.0) (15.3) Working capital and other balance sheet changes 13.6 (0.7) CAD $20.3 $31.1 Mandatory debt repayments — — CAD after mandatory debt repayments $20.3 $31.1 Cash used for investing activities ($21.4) ($24.0) Cash used for financing activities ($116.5) ($75.1) (a) Capital expenditures exclude real estate development investments. The following table provides supplemental cash flow data (in millions of dollars): Three Months Ended March 31, 2025 2024 Real Estate Development Investments ($4.1) ($5.5) Distributions to noncontrolling interests in consolidated affiliates (1.9) (1.7) LIQUIDITY FACILITIES 2025 DEBT ACTIVITY See Note 7 — Debt for additional information. 56