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2021 Annual Report
FINANCIAL
HIGHLIGHTS:
(Dollars in millions)
Sales & Earnings
Sales
Pro Forma Revenue (Sales)(a)
Operating Income
Pro Forma Operating Income(a)
Net Income attributable to Rayonier, L.P.
Net Income attributable to Rayonier Inc.
Pro Forma Net Income(a)
Adjusted EBITDA By Segment (b)
Southern Timber
Pacific Northwest Timber
New Zealand Timber
Timber Funds
Real Estate
Trading
(–) Corporate/Other
Total Adjusted EBITDA
Cash Flow
Cash provided by Operating Activities
Cash Available for Distribution(b)
Debt & Debt Ratios
Debt (excluding Timber Funds)(c)
Cash (excluding Timber Funds)
Net Debt
Net Debt to Enterprise Value(d)
2021
2020
2019
$ 1,109.6
863.1
269.8
161.6
157.1
152.6
94.1
$ 120.2
57.3
78.5
2.3
100.7
0.1
(29.4)
$ 329.8
$ 859.2
720.4
74.4
82.3
37.6
37.1
33.1
$ 109.1
37.1
55.0
1.8
91.4
(0.5)
(26.6)
$ 711.6
711.6
107.0
107.0
59.1
59.1
59.1
$ 119.7
16.7
75.8
—
59.5
—
(23.9)
$ 267.4
$ 247.8
$ 325.1
207.8
$ 204.2
162.4
$ 214.3
149.4
$ 1,376.1
358.7
1,017.4
$1,294.9
80.5
1,214.4
$ 1,057.0
68.7
988.3
14%
23%
19%
(a) These non-GAAP measures are defined and reconciled on page 9.
(b) Adjusted EBITDA and Cash Available for Distribution (CAD) are non-GAAP measures defined and reconciled on pages 55, 56 and 57 within this Annual Report on Form 10-K.
(c) Total debt as of December 31, 2021, 2020 and 2019 reflects the principal on long-term debt, net of fair market value adjustments and gross of deferred financing costs and unamortized
discounts of $8.3, $2.5 and $1.9 million, respectively.
(d) Enterprise value based on equity market capitalization (including Rayonier, L.P. units) plus net debt based on Rayonier Inc.’s share price at year-end.
(e) Excludes Timber Funds.
ADJUSTED EBITDA(b)
(Dollars in millions)
TOTAL HARVEST(e)
(Tons in millions)
CAD(b)
(Dollars in millions)
$360
270
180
90
–
12
9
6
3
–
$240
180
120
60
–
2019
2020
2021
2019
2020
2021
2019
2020
2021
01
2021 Annual Report
for 2021 were strong across all four of our primary oper-
ating segments, including record Adjusted EBITDA in our
Southern Timber and Pacific Northwest Timber segments.
Full-year Cash Available for Distribution (CAD) was $208
million in 2021, representing a 28% increase from the $162
million of CAD we generated in 2020.
Our strong results were particularly encouraging given that
harvest volumes were down across the board relative to
our expectations, driven by a combination of inclement
weather, trucking shortages, COVID-19 disruptions, and
a market-related shutdown in New Zealand at year end.
However, stronger pricing more than offset lower harvest
volumes, as we were able to capitalize on favorable
supply-demand fundamentals across our log markets. In
our Southern Timber segment, full-year weighted average
stumpage prices were up 15% in 2021 versus 2020, while
fourth quarter prices were up 25% relative to the prior
year quarter, signaling encouraging momentum into
2022. Similarly, in our Pacific Northwest Timber segment,
full-year weighted average delivered log prices were up
14% in 2021. In our New Zealand Timber segment, full-year
average delivered prices for export sawtimber were up an
impressive 41% in 2021, although these pricing gains were
partially offset by significantly higher ocean freight and port
costs, which more than doubled versus the prior year. Lastly, our
Real Estate segment results were exceptionally strong in 2021,
bolstered by record Improved Development sales and our
highest weighted average price per acre (excluding Improved
DEAR FELLOW
SHAREHOLDERS:
As we prepare to reopen our offices after two years of
COVID-19 closures, I reflect on what a surreal journey
it has been. We entered 2021 with the expectation that
COVID-19 vaccines would begin to return a sense of nor-
malcy to our daily lives. However, two new strains of the
virus and a slow ramp-up of vaccinations made for another
very challenging year. In addition to the tragic loss of life
and the emotional toll the virus had on our communities,
we all experienced the cumulative effects of the market
volatility, supply chain disruptions, and inflationary pressures
brought about by the pandemic.
In order to continue operating during these conditions,
we developed enhanced safety protocols to protect our
employees, contractors and customers. Despite a myriad
of challenges, our team did a remarkable job navigating
the pandemic-fueled market volatility to keep our business
running and deliver outstanding results for our shareholders.
Our performance this past year exemplified the power
of our culture, which stresses an ownership mindset and
pushes decision-making down within the organization. It
also reflects the quality of our land base and the diversity
of our markets, which allowed us to capitalize on various
domestic and export market opportunities as well as robust
real estate demand during the year.
2021 IN REVIEW
Full-year 2021 net income attributable to Rayonier was $153
million, or $1.08 per share, which included the impact from
Large Dispositions, gains attributable to our exit from the
Timber Funds business, and costs associated with both debt
extinguishment and the termination of a cash flow hedge.
Excluding these items and adjusting for pro forma net income
adjustments attributable to noncontrolling interests in the
operating partnership, pro forma net income was $94 mil-
lion, or $0.67 per share, which compares to pro forma net
income of $33 million, or $0.25 per share, in 2020.
Our total Adjusted EBITDA in 2021 was $330 million—23%
higher than the prior year total of $267 million. Results
Export log yard in Port Angeles, Washington
02
Development and Large Dispositions) since our separation
into a pure-play timber REIT in 2014. This strong pricing,
driven by our well-located land base coupled with our focus
on maximizing Higher and Better Use (HBU) premiums,
allowed us to generate 10% higher Adjusted EBITDA in
2021 relative to 2020, despite selling roughly two-thirds
fewer acres.
INTEGRATION OF POPE
RESOURCES ACQUISITION
After completing the merger with Pope Resources (Pope)
in May 2020, we made considerable progress this year
on incorporating Pope’s timber and real estate portfolios
into our broader Pacific Northwest ownership, as well as
integrating Pope’s personnel into the Rayonier team.
The Pope acquisition added 124,000 acres of high-quality
western Washington timberlands to our portfolio, which
increased our Pacific Northwest sustainable yield by 32%.
It also improved the overall quality of our timberland
portfolio, with a greater percentage of higher-value
Douglas-fir merchantable timber, a higher proportion of
lower-cost ground-based logging, and improved market
diversification. We expect these factors to contribute to
both improved cash flow metrics and greater operational
flexibility going forward.
With the addition of the Pope timberlands, we decided to
acquire a pre-existing log export business in Port Angeles,
Washington, which is roughly equidistant between our
legacy Rayonier timberlands to the west and the newly
acquired Pope timberlands to the east. This log export
business, which we began operating in early 2022, will
provide for greater export optionality and will allow us to
better optimize our sort mix between the two ownership
blocks. We expect to augment our internal log supply with
outside purchased logs to improve the economies of scale
in this operation.
The Pope acquisition also included a private equity timber
fund business—Olympic Resource Management, which
controlled three funds comprising 141,000 acres of tim-
berlands under management in Washington, Oregon and
California. Shortly after closing the Pope transaction,
we began to explore alternatives for this business, as
we believed it was not a good long-term strategic fit for
Rayonier. During 2021, through a series of transactions
involving multiple buyers, we sold the assets of Fund II
as well as our co-investment stake and management
rights with respect to Funds III and IV. Through these
transactions, we generated net proceeds to Rayonier of
$73 million, which exceeded our acquisition underwriting
of these assets.
Within Pope’s HBU real estate portfolio, we completed a
major milestone this year with the sale of the 359-acre
03
2021 Annual Report Arborwood development project for $38 million. While
we had initially intended to construct finished lots on the
first phase of this 750-lot development project, we ulti-
mately elected to sell the entire project as an Unimproved
Development transaction due to strong market interest in
the property. In addition to representing an exceptional
value, this sale returned capital well ahead of the absorption
assumptions in our original underwriting and further
de-risked the project by eliminating the need for additional
development capital and management attention. With the
completion of this transaction, our team will be able to
focus more on the nearby Port Gamble development project,
which received development agreement approval from
Kitsap County in late 2021.
In addition to the sale of the Arborwood project and the
exit from the Timber Funds business, we’ve closed on two
conservation easement sales and several smaller real
estate transactions from the Pope portfolio since the clos-
ing of the merger in May 2020. In sum, these transactions
returned $119 million of cash to Rayonier, representing 70%
of the original cash consideration in the Pope acquisition.
We are pleased to have completed these portfolio rational-
ization moves in the first year and a half of ownership and
look forward to realizing additional value from the remainder
of the Pope timberland and real estate portfolio.
GENERATING INCREMENTAL
BALANCE SHEET CAPACITY
sheet capacity for future growth. We addressed this chal-
lenge in 2021 with several key initiatives. First, we
looked for opportunities to divest less strategic assets. In
addition to the rationalization of the Pope portfolio dis-
cussed above, we also elected to sell two Large
Dispositions totaling nearly 17,000 acres from the legacy
Rayonier portfolio in Washington for $56 million.
Second, we launched a $300 million At-The-Market (ATM)
equity offering program in September 2020, designed
to opportunistically raise incremental equity capital
during open trading windows. In 2021, we issued nearly
6.4 million shares under our ATM program at an average
price of $37.05 per share, generating $236 million of
gross proceeds. To date, we have raised $269 million
through the issuance of 7.5 million shares at an average
price of $36.04 per share. We are pleased with the
progress of the ATM program and view it as an efficient,
low-cost vehicle to raise equity capital and match-fund
bolt-on acquisitions and other capital allocation priorities.
Lastly, we executed several financing and debt restruc-
turing transactions designed to lower our cost of debt
and extend our maturity profile, including the issuance of
$450 million of senior notes bearing a coupon of 2.75%.
Collectively, the financing transactions completed during
2021 extended the weighted average maturity of our
debt portfolio from 4.5 years to 7.1 years and lowered our
weighted average cost of debt from 3.1% to 2.7%, thereby
reducing our annual interest expense, on a debt-neutral
basis, by over $5 million.
Following the Pope transaction in 2020, with net debt to
trailing Adjusted EBITDA of 4.9x, we had limited balance
These efforts allowed us to significantly strengthen our
balance sheet and build additional acquisition capacity,
04
Pine harvest operation in Georgia
Pine and hardwood age-class mosaic in Florida
which we took advantage of late in the year. In December,
we closed on a $124 million acquisition consisting of
67,000 acres in Texas and Georgia. Following the comple-
tion of this transaction, we finished the year with net debt
to 2021 Adjusted EBITDA of 3.1x, which leaves us well
positioned with ample balance sheet flexibility to consider
future growth initiatives.
DISCIPLINED CAPITAL
ALLOCATION
We continually stress the importance of nimble capital
allocation and believe that this mantra has served Rayonier
well. We’ve been very active in the timberland acquisition
market and have pivoted our focus to different geographic
regions as needed to execute on the best-available
opportunities. We’ve also been active in selling timberland
assets through Large Dispositions when desirable to fund
higher-value capital allocation priorities. We’ve further
captured value for our shareholders by both buying
back stock and issuing stock at different points in time,
with a view towards building NAV per share. We’ve also
allocated capital to real estate development projects to
help catalyze future demand and enhance the value of
our surrounding landholdings.
While we’ve worked hard to grow and improve our portfolio,
it’s important to note that we don’t believe in growth for
growth’s sake. In addition to being nimble and opportunistic,
we believe that it’s equally important to remain disciplined.
To this end, we remain intensely focused on active portfolio
management with the objective of continuously improving
our land base and long-term financial profile through both
addition and subtraction. We believe active portfolio man-
agement, if done well, can create alpha for our investors as
we work to optimize our portfolio and facilitate future growth.
With extraordinarily strong lumber markets, we’ve seen
some lumber manufacturers flush with cash bidding
aggressively on timberland properties. We’ve also seen
speculation on potential carbon value push up pricing on
certain timberland properties. Against this backdrop, it
has certainly been more difficult to place capital, but also
even more important to remain disciplined. Our acquisition
underwriting relies on four key tenets. First, we focus on
markets with attractive long-term supply-demand tension,
particularly given the differential build in merchantable
timber inventory that has occurred across the U.S. South
since the Global Financial Crisis. Second, we look for a
complementary fit with our existing timber age-class
structure, which can create synergies when optimizing
long-term sustainable harvest levels. Third, we focus on
the quality and accuracy of the seller’s inventory data by
05
2021 Annual Report comparing it against our own operating experience and
proprietary growth and yield models. Finally, we are care-
ful not to incorporate overly aggressive log price forecasts
or land appreciation assumptions attributable to future
HBU values. Overall, we believe this disciplined approach
helps us to avoid mistakes and contributes towards our
vision of generating industry-leading financial returns.
While we evaluate almost every major acquisition opportunity
that comes to market, we are very selective in the trans-
actions that we decide to pursue. We tend to place more
emphasis on negotiated transactions relative to auctions,
and are happy with hitting a lot of singles versus swinging
for the fences, as we tend to see more competition—and
more aggressive underwriting—on larger deals. This past
year was no exception, as seven of the nine properties we
acquired consisted of smaller bolt-on transactions sourced
through direct negotiations with the respective sellers.
In 2021, we acquired a total of 103,000 acres for $179
million, with properties located in Florida, Georgia, Texas
and New Zealand. After netting off the Large Dispositions
referenced earlier as well as our Real Estate HBU sales
and lease expirations, we grew our overall timberland
portfolio by 50,000 acres in 2021. We are entering 2022
with what we believe is a stronger, more valuable and
better-positioned portfolio that will both generate more
cash flow and provide enhanced optionality going forward.
IMPROVED ESG DISCLOSURE
AND ENGAGEMENT
A central tenet of Rayonier’s strategy revolves around best-
in-class transparency, as evidenced by our disclosures on
sustainable harvest levels, timber inventory and age-class
profiles, as well as our detailed financial reporting and
investor communications. As such, we welcome both the
added scrutiny of Environmental, Social and Governance
(ESG) practices and the additional reporting and disclosure
expected by various stakeholders. We have long recog-
nized the important role we play as a responsible steward
of the environment, the lands we own and operate, and the
communities we call home. As a natural resource company
that has operated some of its lands for nearly a century,
we think we’ve learned a few things about managing
sustainably to protect the interests of all our stakeholders.
With timber rotation ages ranging from 20 to 40 years, and
06
strategic planning efforts that look out over multiple future
rotations, we are accustomed to thinking very long term.
Just as we bring this long-term mindset to managing our
forests, we likewise bring it to looking after the long-term
interests of all our stakeholders.
While perhaps not as obvious, culture plays a big role in
furthering our ESG efforts. A key cornerstone of our culture
is collaboration, which we believe is critical to our teams
performing at their best and contributing to the overall
success of our company. Effective collaboration, in turn,
depends on our ability to incorporate diverse points of view
within an inclusive workplace, as we work to solve problems
that will ultimately help us to perform more efficiently
and effectively. To this end, our Diversity, Equity and
Inclusion (DEI) task force unveiled a strategy this year for
Rayonier to ExCEL by Expanding diversity, Cultivating
inclusion, Eliminating barriers, and Leading by example.
This DEI strategy reinforces other elements of our culture
and also highlights the value of unleashing empowerment,
which we feel has been a key to our success.
Furthering our commitment to best-in-class disclosure,
in 2021 we issued our inaugural Sustainability Report
and accompanying Carbon Report, which detailed both
our carbon footprint and greenhouse gas (GHG) emissions
for 2020. Key highlights of our Carbon Report include:
(1) 757 million metric tons of CO2 equivalents were stored
across our land base at the end of 2020, (2) our timberlands
sequestered 14.5 million metric tons of CO2 equivalents in
2020—comparable to removing 3.1 million cars from the
road, (3) 9.2 million metric tons of CO2 equivalents were
transferred to our customers in log form, much of which
will remain sequestered in finished wood products for
many decades, and (4) our operations were responsible
for 380,000 metric tons of GHG emissions in 2020.
While Rayonier enjoys a significant negative carbon footprint,
we also recognize that we need to do our part by working
to reduce GHG emissions. However, we do not want to
announce aspirational GHG emissions reduction targets
until we know we can back them up. We are currently
studying various means of reducing our GHG emissions
consistent with Science Based Targets, as well as evaluating
opportunities to offset residual emissions through projects
involving afforestation, conservation, improved forest man-
agement, solar and wind energy, and carbon capture and
Seedling nursery in Elberta, Alabama
storage. We are devoting significant resources to this effort
and hope to announce GHG emissions reduction targets
within the next year.
We find ourselves at a crossroads, with both a heightened
awareness of the potential impacts of climate change and
a greater recognition of the role trees play in combatting
the effects of GHG emissions through photosynthesis and
the sequestration of atmospheric carbon in forest ecosys-
tems as well as downstream wood products. We believe
private working forests play an important role as a natural
climate solution. Ultimately, by using more wood products,
and by substituting them for other more energy intensive
building products such as concrete and steel, we have
the potential to sequester more carbon and reduce net
GHG emissions. As we transition to a greener economy in
the future, we also see a role for forestry in the voluntary
carbon offset markets, particularly to help bridge the gap
to a point in time where new carbon capture technologies
can be efficiently and cost-effectively deployed. However,
we are also sensitive to potential claims of greenwashing
if the methodology behind such carbon offset markets is
not transparent and credible. We are currently exploring
the full spectrum of existing carbon registries and offset
programs to identify the right path forward for Rayonier
to participate in voluntary carbon markets as a provider
of credible natural climate solutions.
We are also continuing to work to improve our ESG disclo-
sures as well as advance efforts to better understand and
ultimately deploy ESG strategies that create value for our
shareholders. We believe our portfolio is well positioned
to capture additional value as a provider of natural climate
solutions, but in keeping with our overall disclosure philos-
ophy, we will be careful not to hype such opportunities,
and will instead roll them out when we feel confident in
our ability to deliver results.
UNIQUELY POSITIONED
FOR THE FUTURE
We remain steadfastly committed to achieving our vision of
having best-in-class assets, operations, disclosure and
transparency, while being the preferred employer for
forestry and land management professionals and the
preferred timberland investment vehicle for institutional
investors. The volatility and uncertainty of today’s global
markets highlight the importance of having a well-diversified
portfolio. They also reinforce the value of having a culture
that can nimbly navigate changing market conditions while
at the same time holding steadfast to maintaining a long-term
focus. I believe that our organization embraces these critical
components of success.
In a long-term asset class like timberlands, there is no perfect
line of sight to future market conditions. We address this
uncertainty by looking for properties that give us the most
future optionality, with a bias towards higher productivity
properties located in more tensioned log markets. We also
manage this investment uncertainty by having an active
07
2021 Annual Report activities provide a meaningful lift to our core timberland
returns and thereby help us achieve our vision of having
industry-leading financial returns.
As we embark on another year full of challenges and
opportunities, I am excited about the future of Rayonier.
In addition to a uniquely positioned portfolio, we have an
extraordinarily talented and dedicated group of employees
who are committed to our mission and vision. On behalf of
our senior leadership team and Board of Directors, I would
like to thank our entire team for their hard work and their
unwavering commitment to excellence. I would also like
to thank our shareholders for your continued trust in our
stewardship of your investment in Rayonier. As always,
we welcome your input and feedback.
David L. Nunes
President and Chief Executive Officer
portfolio management approach, where we continuously
look to improve our portfolio through both addition and
subtraction. We believe this approach has served us well,
as we have built a well-balanced portfolio of highly produc-
tive timberland properties in some of the strongest global
softwood markets.
Our portfolio management strategy is augmented by a
culture that empowers our teams as well as a measurement
system that reinforces the importance of long-term perfor-
mance. We practice market-driven precision silviculture,
where field foresters make decisions to dial in the right
silvicultural treatments tailored to site-specific conditions
within each unique market. Finally, we combine this
approach with log marketing strategies that vary between
stumpage and delivered log sales by region, all designed
to optimize our net stumpage realizations and corresponding
timber returns. We further enhance our timber returns with
a robust non-timber income business, which generates
revenue from sources such as hunting and recreational
licenses, fill dirt operations, pine straw raking, aggregates,
cell towers, beekeeping licenses, billboards, and other
minor forest products. All told, these revenue sources
help to pay the holding costs for our timberlands while
they are growing the next crop of trees.
Finally, for lands that we deem to have HBU potential, our
real estate team deploys various strategies designed to
unlock incremental value and improve the financial returns
from our land base. Our real estate business sells a mix
of non-strategic timberlands, conservation parcels, and
rural residential and recreational lots to an array of buyers.
While many of these sales involve no capital outlay, there
are some cases where we will transfer lands to a taxable
REIT subsidiary in order to invest modest sums to improve
properties with a view towards extracting larger premiums.
On selective portions of our ownership where we believe
more intensive real estate development potential exists,
we will invest in securing land entitlements to enable
Unimproved Development sales. Finally, in even more
selective cases, particularly where we have a large
contiguous ownership, such as with our Wildlight project
north of Jacksonville, Florida and our Richmond Hill
project south of Savannah, Georgia, where we believe
horizontal infrastructure investment is needed to catalyze
downstream real estate development demand, we will
make more substantial investments in order to sell
finished residential and commercial lots in our Improved
Development business. Collectively, these real estate
08
RECONCILIATION OF NON-GAAP MEASURES
(Dollars in millions, except per-share amounts)
2021
2020
2019
PRO FORMA REVENUE (SALES) (a)
Sales
Sales attributable to noncontrolling interests in Timber Funds
Fund II Timberland Dispositions attributable to Rayonier(b)
Large Dispositions(c)
Pro Forma Revenue (Sales)
$ 1,109.6
(159.1)
(31.4)
(56.0)
$
863.1
PRO FORMA OPERATING INCOME (d)
Operating Income
Gain on investment in Timber Funds(e)
Fund II Timberland Dispositions attributable to Rayonier(b)
Operating (income) loss attributable to NCI in Timber Funds
Timber write-offs resulting from casualty events attributable to Rayonier(f)
Costs related to the merger with Pope Resources(g)
Large Dispositions(c)
$
269.8
(7.5)
(10.3)
(45.6)
—
—
(44.8)
Pro Forma Operating Income
$
161.6
PRO FORMA NET INCOME (h)
Net Income attributable to Rayonier Inc.
Gain on investment in Timber Funds(e)
Fund II Timberland Dispositions attributable to Rayonier(b)
Loss from terminated cash flow hedge(i)
(Gain) Loss related to debt extinguishments and modifications(j)
Costs related to the merger with Pope Resources(g)
Timber write-offs resulting from casualty events attributable to Rayonier(f)
Large Dispositions(c)
Pro forma net income adjustments attributable to
noncontrolling interests in the operating partnership(k)
Pro Forma Net Income
Per
diluted
share
1.08
(0.05)
(0.07)
0.02
—
—
—
(0.31)
$
$
152.6
(7.5)
(10.3)
2.2
0.2
—
—
(44.8)
$ 859.2
(22.8)
—
(116.0)
$ 720.4
$ 74.4
—
—
11.6
7.9
17.2
(28.7)
$ 82.3
$
37.1
—
—
—
—
17.2
7.9
(28.7)
$ 711.6
—
—
—
$ 711.6
$ 107.0
—
—
—
—
—
—
$ 107.0
$ 59.1
—
—
—
—
—
—
—
Per
diluted
share
$ 0.46
—
—
—
—
—
—
—
$
Per
diluted
share
0.27
—
—
—
—
0.13
0.06
(0.21)
1.7
94.1
$
—
$0.67
(0.4)
—
—
—
$
33.1
$
0.25
$ 59.1
$ 0.46
(a) Pro forma revenue (sales) is defined as revenue (sales) adjusted for Large Dispositions, Fund II timberland dispositions and sales attributable to the noncontrolling interests in Tim-
ber Funds. Rayonier believes that this non-GAAP financial measure provides investors with useful information to evaluate core business operations because it excludes specific
items that are not indicative of ongoing operating results attributable to Rayonier.
(b) “Fund II Timberland Dispositions” represent the disposition of Fund II Timberland assets, which we managed and owned a co-investment stake in. “Fund II Timberland Dispositions
attributable to Rayonier” represents the proportionate share of Fund II Timberland Dispositions that are attributable to Rayonier.
(c) “Large Dispositions” are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value.
(d) Pro forma operating income is defined as operating income adjusted for operating income (loss) attributable to noncontrolling interests in Timber Funds, costs related to the merg-
er with Pope Resources, timber write-offs resulting from casualty events, the gain on investment in timber funds, Fund II timberland dispositions and Large Dispositions. Rayonier
believes that this non-GAAP financial measure provides investors with useful information to evaluate our core business operations because it excludes specific items that are not
indicative of ongoing operating results attributable to Rayonier.
(e) “Gain on investment in Timber Funds” reflects the gain recognized on Fund II carried interest incentive fees as well as the gain recognized on the sale of Timber Funds III & IV.
(f) “Timber write-offs resulting from casualty events” include the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events that cannot be salvaged.
(g) “Costs related to the merger with Pope Resources” include legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources.
(h) Pro forma net income is defined as net income attributable to Rayonier Inc. adjusted for its proportionate share of costs related to the merger with Pope Resources, losses from
a terminated cash flow hedge, gains (losses) related to debt extinguishments and modifications, the gain on investment in timber funds, Fund II timberland dispositions, timber
write-offs resulting from casualty events and Large Dispositions. Rayonier believes that this non-GAAP financial measure provides investors with useful information to evaluate
our core business operations because it excludes specific items that are not indicative of ongoing operating results attributable to Rayonier.
(i) “Loss from terminated cash flow hedge” is the mark to market loss recognized in earnings due to the early termination of an interest rate swap, as the hedged cash flows will no longer occur.
(j) “(Gain) loss related to debt extinguishments and modifications” includes prepayment penalties, unamortized capitalized loan costs associated with repaid debt and legal and
arrangement fees associated with refinancing, partially offset by the gain on fair value of extinguished debt.
(k) “Pro Forma net income adjustments attributable to noncontrolling interests in the operating partnership” are the proportionate share of pro forma items that are attributable to
noncontrolling interests in the operating partnership.
09
2021 Annual Report
U.S. SOUTH
HARVEST VOLUME
(Tons in thousands)
ADJUSTED EBITDA
(Dollars in millions)
ADJ. EBITDA/TON
(Dollars per ton)
» Acreage: 1.80mm acres
» Sustainable Yield:
6.1–6.5mm tons
» Planted/Plantable: 67%
» Average Site Index (1): 72 feet
7,000
5,600
4,200
2,800
1,400
–
$130
104
78
52
26
–
$25
20
15
10
5
–
2019
2020
2021
2019
2020
2021
2019
2020
2021
Rayonier Timberland Acreage*
Total: 2.7 Million Acres
* Acreage as of 12/31/2021.
U.S. PACIFIC
NORTHWEST
HARVEST VOLUME
(Tons in thousands)
ADJUSTED EBITDA
(Dollars in millions)
ADJ. EBITDA/TON
(Dollars per ton)
1,750
1,400
1,050
700
350
–
» Acreage: 490,000 acres
» Sustainable Yield:
» 1.75–1.85mm tons
» Planted/Plantable: 78%
» Average Site Index (2): 108 feet
10
$60
48
36
24
12
–
$40
32
24
16
8
–
2019
2020
2021
2019
2020
2021
2019
2020
2021
(1) Site index reflects the average height of the dominant and codominant trees at a base age of 25.
(2) Site index reflects the average height of the dominant and codominant trees at a base age of 50.
NEW ZEALAND
HARVEST VOLUME
(Tons in thousands)
ADJUSTED EBITDA
(Dollars in millions)
ADJ. EBITDA/TON
(Dollars per ton)
» Acreage: 419,000 acres
» Sustainable Yield:
» 2.4–2.7mm tons
» Planted/Plantable: 71%
» Average Site Index (3): 94 feet
3,000
2,400
1,800
1,200
600
–
$100
80
60
40
20
–
$40
32
24
16
8
–
2019
2020
2021
2019
2020
2021
2019
2020
2021
1.80MM Acres
490,000 Acres
419,000 Acres
U.S. South
U.S. Pacific Northwest
New Zealand
REAL ESTATE
ACRES SOLD(4)
(Acres in thousands)
ADJUSTED EBITDA
(Dollars in millions)
PRICE/ACRE(5)
(Dollars per acre)
» Focused on Monetizing Higher-
and-Better-Use Timberlands
» Active Development Projects:
Wildlight, FL, Richmond Hill, GA
and West Puget Sound area of WA
» Land Use Entitlements
for Future Growth
» Conservation Easement
Opportunities
50
40
30
20
10
–
$110
88
66
44
22
–
$6,000
4,800
3,600
2,400
1,200
–
2019
2020
2021
2019
2020
2021
2019
2020
2021
(3) Site index reflects the average height of the dominant and codominant trees at a base age of 20.
(4) Excludes Large Dispositions.
(5) Excludes Large Dispositions, Improved Development and Conservation Easements.
11
2021 Annual Report Pine harvest operation in Georgia
COMMITTED TO CURRENT
AND FUTURE GENERATIONS
Our long-term success as a company depends on the
environmental and economic sustainability of our
working forests. We recognize the importance of
investing in our people and the local communities in
which we operate across the U.S. and New Zealand.
We strive to be the employer of choice in the forestry
sector, as well as an active and engaged member of
our local communities.
12
Download a copy of our Sustainability
Report at www.rayonier.com/sustainability
Form 10-K Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
RAYONIER INC.
(Exact name of registrant as specified in its charter)
North Carolina
(State or other Jurisdiction of incorporation or organization)
1-6780
(Commission File Number)
13-2607329
(I.R.S. Employer Identification Number)
(State or other Jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification Number)
Delaware
333-237246
91-1313292
Rayonier, L.P.
(Exact name of registrant as specified in its charter)
1 RAYONIER WAY
WILDLIGHT, FL 32097
(Principal Executive Office)
Telephone Number: (904) 357-9100
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class
Common Shares, no par value, of Rayonier Inc.
Trading Symbol
RYN
Exchange
New York Stock Exchange
Rayonier, L.P.
Rayonier, L.P.
Yes o No ☒
Yes ☒ No o
Yes ☒ No o
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Rayonier Inc.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Rayonier Inc.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Rayonier Inc.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Rayonier Inc.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.
Yes ☒ No o
Yes ☒ No o
Yes ☒ No o
Yes ☒ No o
Yes o No ☒
Rayonier, L.P.
Rayonier, L.P.
Rayonier Inc.
Large Accelerated Filer
☒ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company
☐ Emerging Growth Company
☐
Rayonier, L.P.
Large Accelerated Filer
☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller Reporting Company
☐ Emerging Growth Company
☐
Rayonier, L.P.
Rayonier, L.P. ☐
Yes ☐ No ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Rayonier Inc. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Rayonier Inc.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its
audit report.
Rayonier Inc.
The aggregate market value of the Common Shares of the registrant held by non-affiliates at the close of business on June 30, 2021 was $5,049,676,168
based on the closing sale price as reported on the New York Stock Exchange.
As of February 18, 2022, Rayonier Inc. had 145,369,424 Common Shares outstanding. As of February 18, 2022, Rayonier, L.P. had 3,315,254 Units
outstanding.
Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with the 2022 annual meeting of
the shareholders of the registrant scheduled to be held May 19, 2022, are incorporated by reference in Part III hereof.
Yes ☒ No o
Yes ☐ No ☒
Yes ☐ No ☒
Rayonier, L.P.
Table of Contents
EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the year ended December 31, 2021 of Rayonier Inc.,
a North Carolina corporation, and Rayonier, L.P., a Delaware limited partnership. Unless stated otherwise or the
context otherwise requires, references to “Rayonier” or “the Company” mean Rayonier Inc. and references to the
“Operating Partnership” mean Rayonier, L.P. References to “we,” “us,” and “our” mean collectively Rayonier Inc.,
the Operating Partnership and entities/subsidiaries owned or controlled by Rayonier Inc. and/or the Operating
Partnership.
Rayonier Inc. has elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue
Code of 1986, as amended, commencing with its taxable year ended December 31, 2004. The Company is
structured as an umbrella partnership REIT (“UPREIT”) under which substantially all of its business is conducted
through the Operating Partnership. Rayonier Inc. is the sole general partner of the Operating Partnership. On May
8, 2020, Rayonier, L.P. acquired Pope Resources, a Delaware Limited Partnership (“Pope Resources”) and issued
approximately 4.45 million operating partnership units (“OP Units” or “Redeemable Operating Partnership Units”) of
Rayonier, L.P. as partial merger consideration. These OP Units are generally considered to be economic
equivalents to Rayonier common shares and receive distributions equal to the dividends paid on Rayonier common
shares. See Note 2 - Merger with Pope Resources for additional information pertaining to the merger.
As of December 31, 2021, the Company owned a 97.8% interest in the Operating Partnership, with the
remaining 2.2% 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.
Rayonier Inc. and the Operating Partnership are operated as one business. The management of the Operating
Partnership consists of the same members as the management of Rayonier Inc. As general partner with control of
the Operating Partnership, Rayonier Inc. consolidates Rayonier, L.P. for financial reporting purposes, and has no
material assets or liabilities other than its investment in the Operating Partnership.
We believe combining the annual reports of Rayonier Inc. and Rayonier, L.P. into this single report results in the
following benefits:
•
•
Strengthens investors’ understanding of Rayonier Inc. and the Operating Partnership by enabling them to
view the business as a single operating unit in the same manner as management views and operates the
business;
Creates efficiencies for investors by reducing duplicative disclosures and providing a single comprehensive
document; and
• Generates time and cost savings associated with the preparation of the reports when compared to
preparing separate reports for each entity.
There are a few important differences between Rayonier Inc. and the Operating Partnership in the context of
how Rayonier Inc. operates as a consolidated company. The Company itself does not conduct business, other than
through acting as the general partner of the Operating Partnership and issuing equity or equity-related instruments
from time-to-time. The Operating Partnership holds, directly or indirectly, substantially all of the Company’s assets.
Likewise, all debt is incurred by the Operating Partnership or entities/subsidiaries owned or controlled by the
Operating Partnership. The Operating Partnership conducts substantially all of the Company’s business and is
structured as a partnership with no publicly traded equity.
To help investors understand the significant differences between the Company and the Operating Partnership,
this report includes:
•
•
•
Separate Consolidated Financial Statements for Rayonier Inc. and Rayonier, L.P.;
A combined set of Notes to the Consolidated Financial Statements with separate discussions of per share
and per unit information, noncontrolling interests and shareholders’ equity and partners’ capital, as
applicable;
A combined Management’s Discussion and Analysis of Financial Condition and Results of Operations,
which includes specific information related to each reporting entity;
Table of Contents
•
•
•
A separate Part II, Item 9A. Controls and Procedures related to each reporting entity;
A separate Part II, Item 5. Market for the Registrant’s Common Equity; related Stockholder Matters and
Issuer Purchases of Equity Securities section related to each reporting entity; and
Separate Exhibit 31 and 32 certifications for each reporting entity within Part IV.
Table of Contents
Item
TABLE OF CONTENTS
PART I
Business ...............................................................................................................................................................
Risk Factors .........................................................................................................................................................
Unresolved Staff Comments .............................................................................................................................
Properties .............................................................................................................................................................
Legal Proceedings ..............................................................................................................................................
Mine Safety Disclosures ....................................................................................................................................
PART II
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities ..................................................................................................................................................
Selected Financial Data .....................................................................................................................................
Management’s Discussion and Analysis of Financial Condition and Results of Operations ..................
Quantitative and Qualitative Disclosures about Market Risk .......................................................................
Financial Statements and Supplementary Data .............................................................................................
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .................
Controls and Procedures ...................................................................................................................................
Other Information ................................................................................................................................................
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .......................................................
PART III
Directors, Executive Officers and Corporate Governance ...........................................................................
Executive Compensation ...................................................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters ..................................................................................................................................................................
Certain Relationships and Related Transactions, and Director Independence ........................................
Principal Accounting Fees and Services .........................................................................................................
PART IV
Exhibits, Financial Statement Schedules ........................................................................................................
Form 10-K Summary ..........................................................................................................................................
1.
1A.
1B.
2.
3.
4.
5.
6.
7.
7A.
8.
9.
9A.
9B.
9C.
10.
11.
12.
13.
14.
15.
16.
Page
1
18
25
26
29
30
31
34
34
58
60
138
138
138
139
140
140
140
140
140
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141
i
Table of Contents
PART I
Unless stated otherwise or the context otherwise requires, references to “Rayonier” or “the Company” mean
Rayonier Inc. and references to the “Operating Partnership” mean Rayonier, L.P. References to “we,” “us,” and “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” or “Note”
refer to the combined Notes to the Consolidated Financial Statements of Rayonier Inc. and Rayonier, L.P. included
in Item 8 of this Report.
NOTE ABOUT 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, including the
acquisition of Pope Resources, expected harvest schedules, timberland acquisitions and dispositions, the
anticipated benefits of our business strategies, 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 this Annual Report on Form 10-K and similar discussions included in other
reports that we subsequently file with the Securities and Exchange Commission (“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.
Item 1.
BUSINESS
GENERAL
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 U.S. 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, New Zealand Timber, Real Estate, and Trading. As
of December 31, 2021, we owned, leased or managed approximately 2.7 million acres of timberland and real estate
located in the U.S. South (1.80 million acres), U.S. Pacific Northwest (490,000 acres) and New Zealand (419,000
gross acres, or 296,000 net plantable acres). In addition, we engage in the trading of logs to Pacific Rim markets,
predominantly from New Zealand and Australia to support our New Zealand export operations; however, we also
engage in log trading activities to these markets from the U.S. South and U.S. Pacific Northwest. We have an added
focus to maximize the value of our land portfolio by pursuing higher and better use (“HBU”) land sale opportunities.
We originated as the Rainier Pulp & Paper Company founded in Shelton, Washington in 1926. On June 27,
2014, Rayonier completed the tax-free spin-off of its Performance Fibers manufacturing business from its
timberland and real estate operations, thereby becoming a “pure-play” timberland REIT. On May 8, 2020, Rayonier,
L.P. acquired Pope Resources, a Delaware Limited Partnership (“Pope Resources”).
1
Table of Contents
Under our REIT structure, we are generally not required to pay U.S. federal income taxes on our earnings from
timber harvest operations and other REIT-qualifying activities contingent upon meeting applicable distribution,
income, asset, shareholder and other tests. As of December 31, 2021, Rayonier owns a 97.8% interest in the
Operating Partnership and a corresponding portion of taxable income or loss. Certain operations are conducted
through our taxable REIT subsidiaries (“TRS”) and subject to U.S. federal and state corporate income tax. As of
December 31, 2021 and as of the date of the filing of this Annual Report on Form 10-K, we believe the Company is
in compliance with all REIT tests. See Note 22 — Income Taxes for further discussion of REIT and non-REIT
qualifying operations.
The Company’s shares are publicly traded on the NYSE under the symbol RYN. We are a North Carolina
corporation with executive offices located at 1 Rayonier Way, Wildlight, Florida 32097. Our telephone number is
(904) 357-9100.
OUR COMPETITIVE STRENGTHS
We believe that we distinguish ourselves from other timberland owners and other alternative asset investments
through the following competitive strengths:
•
Leading Pure-Play Timberland REIT. We are differentiated from other publicly-traded timberland REITs in
that we are invested exclusively in timberlands and real estate and do not own any pulp, paper or wood
products manufacturing assets. We are the largest publicly-traded “pure-play” timberland REIT, which
provides our investors with a focused, large-scale timberland investment alternative without taking on the
risks and volatility inherent in direct ownership of forest products manufacturing assets.
• Well-Positioned for a Sustainable, Low-Carbon Economy. Our forests mitigate climate change through
carbon sequestration and further support clean air and water and wildlife habitats – all while being
sustainably managed through continuous cycles of growth and harvest. Our trees not only remove carbon
from the atmosphere through photosynthesis while growing, but even after harvesting, a significant portion
of the carbon removed from our forests can remain stored for an extended period of time within the wood
products produced from our timber. Life cycle assessment studies have demonstrated that wood-based
building products generate fewer greenhouse gas emissions as compared to other building materials, such
as concrete and steel. We intend to be an industry leader in the rigor by which we measure our carbon
footprint, the transparency of our disclosure, and in capitalizing on our ability to offer low-carbon solutions.
•
•
•
Located in Premier Softwood Growing Regions with Access to Strong Markets. Our geographically diverse
timberland holdings are strategically located in core softwood producing regions, including the U.S. South,
U.S. Pacific Northwest and New Zealand. Our most significant timberland holdings are located in the U.S.
South, in close proximity to a variety of established pulp, paper and wood products manufacturing facilities
and export facilities, which provide a steady source of competitive demand for both pulpwood and higher-
value sawtimber products. Our Pacific Northwest and New Zealand timberlands benefit from strong
domestic sawmilling markets and are located near ports to capitalize on export markets serving the Pacific
Rim.
Attractive Pipeline of HBU Opportunities. We have a dedicated HBU platform with an established track
record of selling rural and development HBU properties across our portfolio at strong premiums to
timberland values. We continuously evaluate the highest and best use of our lands and seek to capitalize
on identified HBU opportunities through strategies uniquely tailored to maximize value, including selectively
pursuing land-use entitlements and infrastructure improvements through one of our taxable REIT
subsidiaries. Much of our HBU activity is concentrated in the U.S. South, where we own approximately
200,000 acres of timberlands located in the vicinity of Interstate 95 primarily north of Daytona Beach, FL
and south of Savannah, GA.
Sophisticated Log Marketing Capabilities Serving Various Pacific Rim Markets. We conduct a log trading
operation based in New Zealand, which serves timberland owners in New Zealand and Australia and
provides access to key export markets in China, South Korea and India. This operation provides us with
superior market intelligence and economies of scale, both of which add value to our timber export
operations and contribute to our earnings and cash flows, with minimal investment.
2
Table of Contents
•
Advantageous Structure and Capitalization. Under our REIT structure, we are generally not required to pay
federal income taxes on our earnings from timber harvest operations and other REIT-qualifying activities,
which allows us to optimize the value of our portfolio in a tax efficient manner. We also maintain a strong
credit profile and have investment grade debt ratings. As of December 31, 2021, our net debt to enterprise
value was 14%. We believe that our advantageous REIT structure and conservative capitalization provide
us with a competitive cost of capital and significant financial flexibility to pursue growth initiatives.
OUR STRATEGY
Our business strategy consists of the following key elements:
• Manage our Timberlands on a Sustainable Yield Basis for Long-term Results. We generate recurring
income and cash flow from the harvest and sale of timber and intend to actively manage our timberlands to
maximize net present value over the long term by achieving an optimal balance among biological timber
growth, generation of cash flow from harvesting activities, and responsible environmental stewardship. Our
harvesting strategy is designed to produce a long-term, sustainable yield, although we may adjust harvest
levels periodically in response to then-current market conditions.
•
•
•
Capitalize on Advantageous Net Carbon Position. We estimate that our timberlands absorb more carbon
than we emit in our operations. As such, we are positioning ourselves to take advantage of increasing
demands for carbon solutions by companies, governments and investors. We rigorously analyze our carbon
footprint and have developed a framework for collecting and reporting our carbon footprint to our investors
and other stakeholders. We expect that the unique environmental attributes of our forestry assets will play
an increasingly important role in our efforts to create value over time.
Apply Advanced Silviculture to Increase the Productivity of our Timberlands. We use our forestry expertise
and disciplined financial approach to determine the appropriate silviculture programs and investments to
maximize returns. This includes re-planting a significant portion of our harvested acres with improved
seedlings we have developed through decades of research and cultivation. Over time, we expect these
improved seedlings will result in higher volumes per acre and a higher value product mix.
Increase the Size and Quality of our Timberland Holdings through Acquisitions. We intend to selectively
pursue timberland acquisition opportunities that improve the average productivity of our timberland
holdings, support cash flow generation from harvesting, and enhance our net carbon position. Our
acquisition strategy employs a disciplined approach with rigorous adherence to strategic and financial
metrics. Generally, we expect to focus our acquisition efforts on our existing operating areas. We may also
consider acquisition opportunities outside of our existing operating areas where we anticipate favorable
long-term market dynamics and financial returns. In 2021, we acquired approximately 102,000 acres of fee
timberland and 1,000 leased acres. We acquired an additional 132,000 acres of fee timberland in 2020
(including 120,000 acres in the merger with Pope Resources) and 69,000 acres in 2019. Additionally, we
acquired leases or long-term forestry rights covering approximately 7,000 acres in 2020 (including 4,000
acres in the merger with Pope Resources) and 2,000 acres in 2019.
• Optimize our Portfolio Value. We continuously assess potential alternative uses of our timberlands, as some
of our properties may become more valuable for development, residential, recreation, conservation, carbon
sequestration or other purposes. We intend to capitalize on such higher-valued uses by opportunistically
monetizing HBU properties and/or land-use rights in our portfolio. We generally expect that sales of HBU
property will comprise approximately 1% to 2% of our Southern timberland holdings on an annual basis.
Our HBU sales involve rural and recreational land as well as properties where we selectively pursue various
land-use entitlements and improvements for residential, commercial and industrial development in order to
fully realize the enhanced long-term value potential of such properties. We further have an added strategic
focus to evaluate and advance ecosystem monetization alternatives, including the long-term development
of forest carbon markets.
3
Table of Contents
•
•
Focus on Timberland Operations to Support Cash Flow Generation. As described above, we rely primarily
on annual harvesting activities and ongoing sales of HBU properties to generate cash flow from our
timberland holdings. However, we also periodically generate income and cash flow from the sale of non-
strategic and/or non-HBU timberlands, in particular as we seek to optimize our portfolio by disposing of less
desirable properties or to fund capital allocation priorities, including share repurchases, debt repayment or
acquisitions. Our strategy is to limit reliance on planned sales of non-HBU timberlands to augment cash
flow generation and instead rely primarily on supporting cash flow from the operation, rather than sale, of
our timberlands. We believe this strategy will support the sustainability of our harvesting activities over the
long term.
Promote Responsible Stewardship and Best-in-Class Disclosure. We are committed to responsible
stewardship, environmentally and economically sustainable forestry, and positive climate change solutions.
As such, we are focused on continuing to develop and integrate robust environmental, social and
governance (“ESG”) policies and best practices within our business. We further intend to be an industry
leader in transparent disclosure, particularly relating to our timberland holdings, harvest schedules,
inventory, age-class profiles, carbon footprint and other meaningful data regarding our long-term
sustainability. We believe our continued commitment to transparency and the stewardship of our assets and
capital will allow us to maintain our timberlands’ productivity, more effectively attract and deploy capital and
enhance our reputation as a preferred timber industry supplier and employer.
SEGMENT INFORMATION
Rayonier operates in six reportable business segments: Southern Timber, Pacific Northwest Timber, New
Zealand Timber, Timber Funds, Real Estate and Trading. See Item 7 — Management’s Discussion and Analysis of
Financial Condition and Results of Operations and Note 3 — Segment and Geographical Information for information
on sales and operating income by reportable segment and geographic region.
As discussed in Note 7 - Noncontrolling Interests, we sold the rights to manage Fund III and Fund IV, as well as
our ownership interests in both funds in July 2021. As a result, Timber Fund III and IV balance sheets and results of
operations are only included in our consolidated financial statements through the date of the sale. In addition, we
completed the liquidation of Fund II timberland assets through three separate transactions during the third and
fourth quarters of 2021. As of December 31, 2021, we continue to maintain a 20% ownership interest in Fund II,
which is scheduled to terminate in March 2023. Prior to the termination of Fund II, the remaining capital will be
distributed to Fund II investors. See Note 7 - Noncontrolling Interests and Note 8 - Variable Interest Entities for
additional information.
TIMBER
Our timber businesses are disaggregated into Southern Timber, Pacific Northwest Timber, New Zealand Timber
and Timber Funds segments. Sales in the Timber segments include all activities related to the harvesting of timber
as well as lease and license activities, other non-timber activities and carbon credit sales. Sales in the Timber Funds
segment also include the disposition of Fund II timberland assets.
DISCUSSION OF TIMBER INVENTORY AND SUSTAINABLE YIELD
We define gross timber inventory as an estimate of all standing timber volume beyond the specified age at
which we commence calculating our timber inventory for inclusion in our inventory tracking systems. The age at
which we commence calculating our timber inventory is 10 years for our Southern timberlands, 20 years for our
Pacific Northwest timberlands, and 20 years for our New Zealand timberlands. Our estimate of gross timber
inventory is based on an inventory system that involves periodic statistical sampling and growth modeling. Periodic
adjustments are made on the basis of growth estimates, harvest information, and environmental and operational
restrictions. Gross timber inventory includes certain timber that we do not deem to be of a merchantable age as well
as certain timber located in restricted, environmentally sensitive or economically inaccessible areas.
We define merchantable timber inventory as an estimate of timber volume beyond a specified age that
approximates such timber’s earliest economically harvestable age. Our estimate includes certain timber located in
restricted or environmentally sensitive areas based on an estimate of lawfully recoverable volumes from such areas.
The estimate does not include volumes in restricted or environmentally sensitive areas that may not be lawfully
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harvested or volumes located in economically inaccessible areas. The merchantable age (i.e., the age at which
timber moves from pre-merchantable to merchantable) is 15 years for our Southern timberlands, with the exception
of Oklahoma which is 17 years, 35 years for our Pacific Northwest timberlands, and 20 years for radiata pine and 30
years for Douglas-fir in our New Zealand timberlands.
Our estimated merchantable timber inventory changes over time as timber is harvested, as pre-merchantable
timber transitions to merchantable timber, as existing merchantable timber inventory grows, as we acquire and sell
timberland and as we periodically update our statistical sampling and growth and yield models. We estimate our
merchantable timber inventory annually for purposes of calculating per unit depletion rates.
Timber inventory is generally measured and expressed in short green tons (SGT) in our Southern timberlands,
in thousand board feet (MBF) or million board feet (MMBF) in our Pacific Northwest timberlands, and in cubic
meters (m3) in our New Zealand timberlands. For conversion purposes, one MBF and one m3 is equal to
approximately 7.99 and 1.12 short green tons, respectively. For comparison purposes, we provide inventory
estimates for our Pacific Northwest and New Zealand timberlands in MBF and cubic meters, respectively, as well as
in short green tons.
The following table sets forth the estimated volumes of merchantable timber inventory by location in short green
tons as of September 30, 2021 for the South and Pacific Northwest and as of December 31, 2021 for New Zealand:
(volumes in thousands of SGT)
Location
South ...........................................................................................................................
Pacific Northwest ......................................................................................................
New Zealand ..............................................................................................................
Merchantable Inventory (a)
63,986
10,719
16,879
91,584
%
70
12
18
100
(a) For all regions, depletion rate calculations for the upcoming year are based on estimated volumes of merchantable inventory at
December 31, 2021.
We define sustainable yield as the average harvest level that can be sustained into perpetuity based on our
estimates of biological growth and the expected productivity resulting from our reforestation and silvicultural efforts.
Our estimated sustainable yield may change over time based on changes in silvicultural techniques and resulting
timber yields, changes in environmental laws and restrictions, changes in the statistical sampling and estimates of
our merchantable timber inventory, acquisitions and dispositions of timberlands, the expiration or renewal of
timberland leases, casualty losses, and other factors. Moreover, our harvest level in any given year may deviate
from our estimated sustainable yield due to variations in the age class of our timberlands, the product mix of our
harvest (i.e., pulpwood versus sawtimber), our deliberate acceleration or deferral of harvest in response to market
conditions, our thinning activity (in which we periodically remove some smaller trees from a stand to enhance long-
term sawtimber potential of the remaining timber), or other factors. We estimate sustainable yield for each of our
core Timber segments as of December 31, 2021.
We manage our U.S. timberlands in accordance with the requirements of the Sustainable Forestry Initiative®
(“SFI”) program. The timberland holdings of the New Zealand subsidiary are certified under the Forest Stewardship
Council® (“FSC”). The majority of our New Zealand timberland holdings are also certified under the Programme for
the Endorsement of Forest Certification (“PEFC”). All programs are comprehensive systems of environmental
principles, objectives and performance measures that combine the perpetual growing and harvesting of trees with
the protection of wildlife, plants, soil and water quality. Through application of our site-specific silvicultural expertise
and financial discipline, we manage timber in a way that is designed to optimize site preparation, tree species
selection, competition control, fertilization, timing of thinning and final harvest. We also have a genetic seedling
improvement program to enhance the productivity and quality of our timberlands and overall forest health. In
addition, non-timber income opportunities associated with our timberlands such as recreational licenses, as well as
considerations for the future HBU of the land, are integral parts of our site-specific management philosophy. All of
these activities are designed to maximize value while complying with SFI, or FSC and PEFC requirements.
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SOUTHERN TIMBER
As of December 31, 2021, our Southern timberlands acreage consisted of approximately 1.80 million acres
(including approximately 133,000 acres of leased lands) located in Alabama, Arkansas, Florida, Georgia, Louisiana,
Oklahoma, South Carolina and Texas. Approximately two-thirds of this land supports intensively managed
plantations of predominantly loblolly and slash pine. The other one-third of this land is too wet to support pine
plantations, but supports productive natural stands primarily consisting of natural pine and a variety of hardwood
species. Rotation ages typically range from 21 to 28 years for pine plantations and from 35 to 60 years for natural
stands. Key consumers of our timber include pulp, paper, wood products and biomass facilities.
We estimate that the gross timber inventory and merchantable timber inventory of our Southern timberlands
were 80 million tons and 64 million tons, respectively, as of September 30, 2021. We estimate that the sustainable
yield of our Southern timberlands, including both pine and hardwoods, is approximately 6.1 to 6.5 million tons
annually. We expect that the average annual harvest volume of our Southern timberlands over the next five years
(2022 to 2026) will be generally in line with our sustainable yield. For additional information, see Item 1 — Business
— Discussion of Timber Inventory and Sustainable Yield and Item 1A — Risk Factors.
In 2021, we acquired approximately 100,000 acres of timberland in the Southern region. For additional
information, see Note 5 — Timberland Acquisitions.
The following table provides a breakdown of our Southern timberlands acreage and timber inventory by product
and age class as of September 30, 2021 (inventory volumes are estimated at December 31 to calculate a depletion
rate for the upcoming year):
(volumes in thousands of SGT)
Age Class
Pine Plantation
Acres
(000’s)
Pine
Pulpwood
Pine
Sawtimber
Hardwood
Pulpwood
Hardwood
Sawtimber
Total
0 to 4 years (a) ............................................
5 to 9 years ..................................................
10 to 14 years..............................................
15 to 19 years..............................................
20 to 24 years..............................................
25 to 29 years..............................................
30 + years ....................................................
239
197
201
210
183
55
38
—
—
8,230
11,753
6,870
1,949
1,064
—
—
1,558
4,633
6,487
2,951
2,575
Total Pine Plantation .....................................
1,123
29,866
18,204
Natural Pine (Plantable) (b) ......................
Natural Mixed Pine/Hardwood (c) ...........
33
517
328
4,565
699
7,326
Forested Acres and Gross Inventory ....
1,673
34,759
26,229
—
—
55
118
149
89
129
540
752
13,869
15,161
—
—
—
2
3
3
2
—
—
9,843
16,506
13,509
4,992
3,770
10
48,620
231
2,010
4,056
29,816
4,297
80,446
Plus: Non-Forested Acres (d) ......................
66
Gross Acres ..................................................
1,739
Less: Pre-Merchantable Age Class
Inventory (e) ........................................................................................................................................................................................
(10,099)
Less: Volume in Environmentally
Sensitive/Legally Restricted Areas ..................................................................................................................................................
(6,361)
Merchantable Timber Inventory ...................................................................................................................................................
63,986
(a) 0 to 4 years includes clearcut acres not yet replanted.
(b) Consists of natural stands that are convertible into pine plantations once harvested.
(c) Consists of all non-plantable natural stands, including those that are in environmentally sensitive or economically inaccessible areas.
(d)
(e)
Includes roads, rights of way and all other non-forested areas.
Includes inventory that is less than 15 years old or less than 17 years old in Oklahoma.
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PACIFIC NORTHWEST TIMBER
As of December 31, 2021, our Pacific Northwest timberlands consisted of approximately 490,000 acres located
in Oregon and Washington, of which approximately 382,000 acres were designated as productive acres, meaning
land that is capable of growing merchantable timber and where the harvesting of timber is not constrained by
physical, environmental or regulatory restrictions. These timberlands primarily comprise second and third rotation
western hemlock and Douglas-fir, as well as a small amount of other softwood species, such as western red cedar.
A small percentage also consists of natural hardwood stands of predominantly red alder. In the Pacific Northwest,
rotation ages typically range from 35 to 50 years. Our product mix in the Pacific Northwest is heavily weighted to
sawtimber, which is sold to domestic wood products facilities as well as exported primarily to Pacific Rim markets.
We estimate that the gross timber inventory and merchantable timber inventory of our Pacific Northwest
timberlands were 3,463 MMBF and 1,342 MMBF, respectively, as of September 30, 2021. We estimate that the
sustainable yield of our Pacific Northwest timberlands is approximately 220 to 230 MMBF (or 1.75 to 1.85 million
tons) annually. We expect that the average annual harvest volume of our Pacific Northwest timberlands over the
next five years (2022 to 2026) will be generally in line with our sustainable yield. For additional information, see
Item 1 — Business — Discussion of Timber Inventory and Sustainable Yield and Item 1A — Risk Factors.
In 2021, we did not acquire any additional acres of timberlands in the Pacific Northwest region. For additional
information, see Note 5 - Timberland Acquisitions.
The following table provides a breakdown of our Pacific Northwest timberlands acreage and timber inventory by
product and age class as of September 30, 2021 (inventory volumes are estimated at December 31 to calculate a
depletion rate for the upcoming year):
(volumes in MBF, except as noted)
Acres
(000’s)
Softwood
Pulpwood (e)
Softwood
Sawtimber (e)
Age Class
Commercial Forest
0 to 4 years (a) ...................................................................................
5 to 9 years .........................................................................................
10 to 14 years ....................................................................................
15 to 19 years ....................................................................................
20 to 24 years ....................................................................................
25 to 29 years ....................................................................................
30 to 34 years ....................................................................................
35 to 39 years ....................................................................................
40 to 44 years ....................................................................................
45 to 49 years ....................................................................................
50+ years ............................................................................................
Total Commercial Forest ....................................................................
Non-Commercial Forest (b) ............................................................
Productive Forested Acres ................................................................
Restricted Forest (c) ........................................................................
Total Forested Acres and Gross Inventory ...............................
Plus: Non-Forested Acres (d) ............................................................
Gross Acres .......................................................................................
Less: Pre-Merchantable Age Class Inventory .......................................................................................................................
Less: Restricted Forest Inventory ............................................................................................................................................
Total Merchantable Timber ....................................................................................................................................................
Conversion factor for MBF to SGT ..........................................................................................................................................
Total Merchantable Timber (thousands of SGT) .............................................................................................................
—
—
—
—
103,956
251,375
708,527
709,207
259,664
72,085
146,991
2,251,805
23,124
—
—
—
—
43,818
47,815
104,077
77,422
24,849
8,218
16,798
322,997
3,774
47
49
45
46
36
31
54
43
15
5
7
378
4
382
88
470
20
490
758,437
3,033,366
102,942
429,713
Total (e)
—
—
—
—
147,774
299,190
812,604
786,629
284,513
80,303
163,789
2,574,802
26,898
861,379
3,463,079
(1,260,153)
(861,379)
1,341,547
7.99
10,719
(a) 0 to 4 years includes clearcut acres not yet replanted.
(b)
(c)
(d)
(e)
Includes non-commercial forests with limited productivity.
Includes significant portions of riparian management zones, legally restricted forests, and environmentally sensitive areas.
Includes roads, rights of way, and all other non-forested areas.
Includes a minor component of hardwood in red alder and other species.
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NEW ZEALAND TIMBER
As of December 31, 2021, our New Zealand timberlands consisted of approximately 419,000 acres (including
approximately 232,000 acres of leased lands), of which approximately 296,000 acres were designated as
productive or plantation acres, meaning land that is capable of growing merchantable timber and where the
harvesting of timber is not constrained by physical, environmental or regulatory restrictions. The leased acres are
generally leased through long-term arrangements including Crown Forest Licenses (“CFLs”), forestry rights and
other leases. Rotation ages typically range from 24 to 34 years for pine plantations. Our New Zealand timberlands
serve a domestic sawmilling market and also provide export logs to Pacific Rim markets.
Our New Zealand timber operations are conducted by Matariki Forestry Group, a joint venture with Stafford
Capital Partners Limited (the “New Zealand subsidiary”). We maintain a controlling financial interest of 77% in the
New Zealand subsidiary and, accordingly, consolidate the New Zealand subsidiary’s balance sheet and results of
operations. The minority owner’s interest in the New Zealand subsidiary and its earnings are reported as
noncontrolling interest in our financial statements. Rayonier’s wholly-owned subsidiary, Rayonier New Zealand
Limited (“RNZ”), serves as the manager of the New Zealand subsidiary. For additional information, see Note 7 —
Noncontrolling Interests.
We estimate that the gross timber inventory and merchantable timber inventory of our New Zealand timberlands
were both 15.1 million cubic meters as of December 31, 2021. We estimate that the sustainable yield of our New
Zealand timberlands is approximately 2.1 to 2.4 million cubic meters (or 2.4 to 2.7 million tons) annually. We expect
that the average annual harvest volume of our New Zealand timberlands over the next five years (2022 to 2026) will
be at the higher end of our sustainable yield range. For additional information, see Item 1 — Business — Discussion
of Timber Inventory and Sustainable Yield and Item 1A — Risk Factors.
In 2021, we acquired approximately 3,000 acres of timberland in New Zealand, including approximately 1,000
acres of leased lands. For additional information, see Note 5 — Timberland Acquisitions.
The following table provides a breakdown of our New Zealand timberlands acreage and timber inventory by
product and age class as of December 31, 2021 (inventory volumes at December 31 are used to calculate a
depletion rate for the upcoming year):
(volumes in thousands of m3, except as noted)
Age Class
Radiata Pine
0 to 4 years (a) ..........................................................................
5 to 9 years ................................................................................
10 to 14 years ............................................................................
15 to 19 years ............................................................................
20 to 24 years ............................................................................
25 to 29 years ............................................................................
30 + years ..................................................................................
Total Radiata Pine .....................................................................
Other (b) ......................................................................................
Forested Acres and Merchantable Timber Inventory .....
Conversion factor for m3 to SGT ..............................................
Total Merchantable Timber (thousands of SGT) ..............
Plus: Non-Productive Acres (c) ................................................
Gross Acres ...............................................................................
(a) 0 to 4 years includes clearcut acres not yet replanted.
Includes primarily Douglas-fir age 30 and over.
(b)
Includes natural forest and other non-planted acres.
(c)
Includes timber located in environmentally sensitive areas.
(d)
Acres (000’s)
Pulpwood (d)
Sawtimber (d)
Total (d)
—
—
—
—
1,779
718
104
2,601
989
3,590
—
—
—
—
6,371
3,623
344
10,338
1,179
11,517
—
—
—
—
8,150
4,341
448
12,939
2,168
15,107
1.12
16,879
64
39
45
49
47
18
2
264
32
296
123
419
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CARBON CREDITS
The New Zealand subsidiary participates in the New Zealand Emissions Trading Scheme (“ETS”), which was
designed to reduce emissions in New Zealand. The ETS helps to reduce emissions by requiring businesses to
measure and report on their greenhouse gas emissions and surrender one emissions unit (“NZU” or “carbon credit”)
to the government for each metric tonne of emissions. The New Zealand Government sets and reduces the number
of units supplied into the scheme over time, which will limit the overall quantity of emissions to meet New Zealand’s
emissions reduction targets.
Businesses who participate in the New Zealand ETS can buy and sell units from each other, with pricing driven
by supply and demand in the scheme. As of December 31, 2021, the New Zealand subsidiary held 1,967,510 NZUs
with respect to timberlands designated as post-1989 forests. These units were received for net carbon sequestered
between 2008 and 2013 and from subsequent units acquired during 2019 and 2021. We estimate that 375,848 of
these NZUs will be required to be surrendered upon harvest with the remainder available to be freely monetized.
See Note 25 - Other Assets for information about our cost basis in carbon credits. See Note 4 — Revenue for
information about the sale of carbon units.
TIMBER FUNDS
Due to the sale of Fund III and IV, as well as the liquidation of Fund II timberland assets, we have discontinued
our disclosure of Timber Fund inventory data. As of December 31, 2021, we no longer own any Timber Fund
timberland assets. See Note 7 - Noncontrolling Interests and Note 8 - Variable Interest Entities for additional
information.
REAL ESTATE
All of our U.S. and New Zealand land or leasehold sales, including HBU and non-HBU, are reported in our Real
Estate segment. We report our Real Estate sales in six categories:
•
•
•
•
•
•
Improved Development,
Unimproved Development,
Rural,
Timberland & Non-Strategic,
Large Dispositions, and
Conservation Easements
The Improved Development category comprises properties sold for development for which we, through a
taxable REIT subsidiary, have invested in site improvements such as infrastructure, roadways, utilities, amenities
and/or other improvements designed to enhance marketability and create parcels, pads and/or lots for sale.
The Unimproved Development category comprises properties sold for development for which we have not
invested in site improvements.
The Rural category comprises all real estate sales (excluding development sales) representing a demonstrable
premium above timberland value.
The Timberland & Non-Strategic category includes all U.S. and New Zealand real estate sales representing little
to no premium to timberland value. This category consists primarily of sales of property that management views as
non-strategic to our long-term portfolio as well as sales of property for capital allocation purposes that do not fit the
definition of a Large Disposition.
The Large Dispositions category includes sales of timberland that exceed $20 million in size and do not have a
demonstrable premium relative to timberland value. Proceeds from Large Dispositions are generally used to fund
capital allocation priorities, such as share repurchases, debt repayment or acquisitions. Sales designated as Large
Dispositions are excluded from cash flow from operations and the calculation of Adjusted EBITDA and Cash
Available for Distribution (“CAD”). See Item 7 — Performance and Liquidity Indicators for the definition of Adjusted
EBITDA and CAD.
We maintain a detailed land classification analysis for all of our timberland and HBU acres. The vast majority of
our HBU properties are managed as timberland and generate cash flow from timber operations prior to their sale or,
in the case of Improved Development properties, prior to improvement.
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Conservation Easements are the sale of development rights, which preclude future development on the
underlying land but reserve our rights to continue to grow and harvest timber.
TRADING
Our Trading segment primarily reflects log trading activities in New Zealand and Australia conducted by our New
Zealand subsidiary. Our Trading segment complements the New Zealand Timber segment by providing added
market intelligence, increasing the scale of export operations and achieving cost savings that directly benefit the
New Zealand Timber segment. This additional market intelligence also benefits our Southern and Pacific Northwest
export log marketing efforts.
Our New Zealand subsidiary conducts export sales through a joint venture, which arranges sales shipping and
export documentation services for an agency fee. The New Zealand subsidiary, in turn, provides support services on
a cost recovery basis to the joint venture. Through the use of the joint venture, we are able to increase scale
efficiencies, market presence and cost savings in both the Timber and Trading segments.
In addition to our direct export business, we also engage in log trading activities, which generally involve the
procurement of third-party logs in order to gain scale efficiencies in our export operations. For procured logs, the
New Zealand subsidiary buys logs directly from other forest owners at New Zealand ports and exports them through
an agency agreement with the export service joint venture. Income from this business is generated by achieving a
sales margin over the purchase price of the procured logs. Revenue generated from procured log sales reflects the
full sales price of the logs and is recorded as timber sales within the Trading segment. The New Zealand subsidiary,
through the Trading segment, also purchases standing timber from time to time, whereby it manages the harvest
and sale of the logs for approximately one to three years. In these instances, the cost of standing timber is
capitalized as a current asset on the Consolidated Balance Sheets and recognized as non-depletion cost of sales
when sold.
In 2021, Trading volume was approximately 706,000 tons. Of this volume, approximately 511,000 tons were
purchased directly from third parties in New Zealand, 70,000 tons were sourced from outside New Zealand,
(primarily Australia), and the remaining 125,000 tons were harvested from stumpage purchases and managed
harvest arrangements. Approximately 86% of third-party purchases in New Zealand were purchased at spot prices,
with the New Zealand subsidiary thereby assuming some price risk on subsequent resale. The remaining 14% were
purchased on a fixed margin basis, with the New Zealand subsidiary earning either a fixed percentage of the net
export revenue or a spread on the resale price irrespective of subsequent price fluctuations. The New Zealand
subsidiary generally seeks to mitigate its risk of loss on procured logs by securing export orders prior to or
concurrent with its spot purchases of logs.
FOREIGN SALES AND OPERATIONS
Sales from non-U.S. operations occur in our Real Estate, New Zealand Timber and Trading segments and
comprised approximately 34% of consolidated 2021 sales. See Note 3 — Segment and Geographical Information
for additional information.
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COMPETITION
TIMBER
Timber markets in our Southern and Pacific Northwest regions are relatively fragmented with price being the
principal method of competition. In New Zealand, there are five other major private timberland owners accounting
for approximately 36% of New Zealand planted forests.
The following table provides an overview of certain major competitors in each of our Timber segments:
Segment
Southern Timber (a)
Pacific Northwest Timber (a)
Competitors
Weyerhaeuser Company
CatchMark Timber Trust
Hancock Timber Resource Group
Resource Management Service
Forest Investment Associates
Campbell Global
Weyerhaeuser Company
Hancock Timber Resource Group
Green Diamond Resource Company
Campbell Global
Port Blakely Tree Farms
State of Washington Department of Natural Resources
Bureau of Indian Affairs
New Zealand (b)
Manulife Investment Management Timberland and Agriculture Inc.
Kaingaroa Timberlands
Ernslaw One
OneFortyOne Plantations
New Forests
In addition to the competitors listed, we also compete with numerous other large and small privately held timber companies.
(a)
(b) The New Zealand subsidiary competes with these and other smaller New Zealand timber companies for supply into New Zealand domestic
and export markets, predominantly China, South Korea and India. Logs supplied into Asian markets also compete with export supply from
other regions, including Europe, North America and Australia.
REAL ESTATE
In our Real Estate business, we compete with other owners of entitled and unentitled properties. Each property
has unique attributes, but overall quantity of supply and price for residential, commercial, industrial and rural
properties in the geographic areas in which we operate are the most significant competitive drivers.
TRADING
Our log trading operations are primarily based out of New Zealand and performed by our New Zealand
subsidiary. The New Zealand market remains very competitive with over 15 entities competing for export log supply
at different ports across the country. We are one of the larger log trading companies in the region with access to
multiple export ports and a range of different export markets.
CUSTOMERS
In 2021, no individual customer (or group of customers under common control) represented 10% or more of
2021 consolidated sales.
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SEASONALITY
Across all our segments, results are normally not impacted significantly by seasonal changes. However,
significant wet weather in areas of our Southern Timber operations can hinder access for harvesting, thereby
temporarily reducing supply in the affected areas and generally strengthening prices. Conversely, extended dry
weather in an area tends to suppress prices as timber is more accessible for harvesting.
GOVERNMENTAL REGULATION AND ENVIRONMENTAL MATTERS
We are subject to federal, state and local laws and regulations in the United States and New Zealand that
could affect our business, including those promulgated under the Foreign Corrupt Practices Act, Occupational
Safety and Health Act, Clean Water Act, Endangered Species Act, Washington Forest Practices Act, New Zealand
Resource Management Act, New Zealand Health and Safety At Work Act and various other environmental and
safety laws and regulations. Our operations also are subject to various international trade agreements, tariffs, taxes
and regulations. While we believe that we are in compliance in all material respects with all applicable governmental
regulations, current governmental regulations may change or become more stringent or unforeseen events may
occur, any of which could have a material adverse effect on our financial position or results of operations.
We are aware of hazardous substances at a former sawmill site located in Port Gamble, Washington, which we
acquired as part of our acquisition of Pope Resources. We have been identified as a “potentially liable party” at the
Port Gamble site and are presently working on cleanup and remediation under the Washington Model Toxics
Control Act, as well as the federal Comprehensive Environmental Response, Compensation and Liability Act
programs. We have determined that a liability has been incurred and that the amount of the loss can reasonably be
estimated. Accordingly, we have accrued amounts on our balance sheet for losses related to this site. Compliance
with environmental laws and regulations and our remedial environmental obligations historically have not had a
material impact on our operations, and we are not aware of any proposed regulations or remedial obligations that
could trigger significant costs or capital expenditures in connection with such compliance.
We have elected to be taxed as a REIT for U.S. federal tax purposes pursuant to the Internal Revenue Code of
1986 and related U.S. Treasury regulations and administrative guidance (“REIT Requirements”). We monitor and
test our compliance with all REIT Requirements and believe that we are in compliance in all material respects with
all such current requirements. In the event we are not in compliance, or in the event current REIT Requirements
change in such a way as to preclude our continuing qualification as a REIT, such events could have a material
adverse effect on our financial position or results of operations.
Compliance with government regulations, including environmental regulations, has not had, and based on
current information and the applicable laws and regulations currently in effect, is not expected to have a material
effect on our capital expenditures, earnings or competitive position. However, laws and regulations may be
changed, accelerated or adopted that impose significant operational restrictions and compliance requirements upon
our company and which could negatively impact our operating results. See Item 1A - Risk Factors.
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PORT GAMBLE ENVIRONMENTAL REMEDIATION
In the merger with Pope Resources, we acquired the town of Port Gamble, Washington. Portions of this
property require environmental remediation under federal and state environmental laws, and remediation activities
are currently ongoing. As such, we have recognized environmental liabilities associated with Port Gamble. See Note
2 - Merger with Pope Resources for additional information on the allocation of purchase price. For additional
information on our environmental liabilities see Note 13 - Commitments and Note 15 - Environmental and Natural
Resource Damage Liabilities.
The sections below provide a history of the environmental matters in Port Gamble, Washington:
Discovery and Initial Actions
In Port Gamble, Washington, hazardous substances were previously discovered requiring environmental
remediation under federal and state environmental laws. The real estate subject to environmental remediation
requirements was the location of a sawmill operated by Pope & Talbot, Inc. (“P&T”) from 1853 to 1995. P&T
continued to lease various portions of the site for its operations until 2002. During the time P&T operated in Port
Gamble, it also conducted shipping, log storage, and log transfer operations in the tidal and subtidal waters of Port
Gamble Bay, some of which were under a lease from the Washington State Department of Natural Resources
(“DNR”) that lasted from 1974 to 2004. P&T’s operations resulted in the release of hazardous substances that
impacted the upland and submerged portions of the site. These substances include various hydrocarbons,
cadmium, and toxins associated with wood waste and the production of wood products.
Following the mill closure, the Washington State Department of Ecology (the “DOE”) began to examine the
environmental conditions at Port Gamble. Under Washington law, both Pope Resources and P&T were considered
by the DOE to be “potentially liable persons” (“PLPs”); Pope Resources because of its ownership of certain portions
of the site, and P&T because of its historical ownership and operation of the site. P&T and Pope Resources entered
into a settlement agreement in 2002 that allocated responsibility for environmental contamination at the townsite,
millsite, a solid waste landfill, and adjacent water to Pope Resources, with P&T assuming responsibility for funding
cleanup in the Port Gamble Bay and the other areas of the site that were impacted by its historical operations.
In 2005, both Pope Resources and P&T received Environmental Excellence Awards from DOE for their work in
remediating the contamination that had existed at the Port Gamble townsite and landfill. DOE also issued letters to
both parties in 2006 indicating that the agency expected to take no further action regarding conditions at those
portions of the site. Pope Resources continued cleaning up the remaining contamination at the millsite. By late
2005, the millsite portion of the site had largely been cleaned and the remaining aspects of that project consisted of
test well monitoring and modest additional remediation. The Port Gamble Bay area and related tidelands, for which
P&T was responsible under the parties’ settlement agreement, had not yet been remediated. In 2007, P&T filed for
bankruptcy protection and was eventually liquidated, leaving Pope Resources as the only remaining PLP. Because
environmental liabilities are joint and several as between PLPs, the result of P&T’s bankruptcy was to leave the
liability with Pope Resources as the only remaining solvent PLP.
In-water Cleanup
Beginning in 2010, DOE began to reconsider its expectations regarding the level of cleanup that would be
required for Port Gamble Bay, largely because of input from interested citizens and groups, one of the most
prominent being the Port Gamble S’Klallam Tribe. In response to input from these groups, DOE adopted
remediation levels that were far more stringent than either DOE or Pope Resources had contemplated previously. In
December 2013, Pope Resources and DOE entered into a consent decree that included a cleanup action plan
(“CAP”) requiring the removal of docks and pilings, excavation and backfilling of intertidal areas, subtidal dredging
and monitoring, and other specific remediation steps. The construction phase of the cleanup of the Port Gamble
Bay area and related tidelands began in September 2015 and the in-water portion of the cleanup was completed in
January 2017.
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Millsite Cleanup
With the in-water portion of the cleanup completed, there is expected to be relatively modest cleanup activity on
the millsite and a monitoring period. In February 2018, Pope Resources and DOE entered into an agreed order with
respect to the millsite under which Pope Resources performed a remedial investigation and feasibility study (“RI/
FS”), which it submitted to DOE for review in January 2019. Following the finalization of the RI/FS, Pope Resources
worked with DOE to develop a CAP. As with the in-water portion of the project, the CAP will define the scope of the
remediation activity for the millsite. The consent decree, which includes the CAP, was entered in Kitsap County
Superior Court on November 25, 2020.
Natural Resources Damages
In addition to the cleanup costs discussed previously, certain environmental laws allow state, federal, and tribal
trustees (collectively, the “Trustees”) to bring suit against property owners to recover natural resource damages
(“NRD”). Similar to cleanup responsibility, liability for NRD can attach to a property owner simply because an injury
to natural resources resulted from releases of hazardous substances on the owner’s property, regardless of
culpability for the release. Trustees have alleged that Pope Resources had NRD liability because of releases that
occurred on its property. Prior to the merger with Rayonier, Pope Resources began negotiations with the Trustees
for the purpose of identifying NRD restoration projects. Those negotiations are ongoing and may ultimately result in
agreement as to requested mitigation activities.
For additional information see Item 1A — Risk Factors.
RESEARCH AND DEVELOPMENT
The research and development activities of our timber operations include genetics and tree improvement, soils
and seedling production, biometrics and growth/yield, environmental sustainability (including protection of water,
biodiversity, and threatened and endangered (T&E) species), and carbon and climate impact. We also contribute to
research cooperatives that undertake forestry research and development.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
David L. Nunes, 60, Mr. Nunes joined the Company in June 2014 as Chief Operating Officer, and shortly thereafter
assumed the role of President and CEO following the Company’s spin-off of its Performance Fibers business. Prior
to joining the Company, Mr. Nunes served as President and CEO of Pope Resources/Olympic Resource
Management from 2002 to 2014. He joined Pope in 1997 as director of portfolio management. The following year,
he was named Vice President of portfolio development, and then served two years as Senior Vice President of
acquisitions and portfolio development before being named President and COO in 2000. Previously, Mr. Nunes
spent nine years with the Weyerhaeuser Company, joining the organization in 1988 as a business analyst and
advancing through a number of leadership roles to become director of corporate strategic planning. Mr. Nunes
holds a Bachelors of Arts and Economics from Pomona College and an MBA from the Tepper School of Business at
Carnegie Mellon University.
Mark D. McHugh, 46, Mr. McHugh was appointed Senior Vice President and Chief Financial Officer in December
2014. He was previously Managing Director in the Real Estate Investment Banking group at Raymond James,
where he worked since 2008. Prior to joining Raymond James, Mr. McHugh was a Director in the Paper & Forest
Products Group within the Investment Banking Division at Credit Suisse, where he worked from 2000 to 2008. Mr.
McHugh received his B.S.B.A. in Finance from the University of Central Florida and his JD from Harvard Law
School.
Douglas M. Long, 51, Mr. Long currently serves as Senior Vice President, Forest Resources. Previously, he served
as Vice President, U.S. Operations from November 2014 to December 2015 and as Director, Atlantic Region, U.S.
Forest Resources from March 2014 to November 2014. He joined the Company in 1995 as a GIS Forestry Analyst
and has held multiple positions of increasing responsibility within the forestry division. Mr. Long holds bachelor’s and
master’s degrees in Forest Resources and Conservation from the University of Florida.
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Christopher T. Corr, 58, Mr. Corr joined the Company in July 2013 and currently serves as Senior Vice President,
Real Estate Development and President, Raydient LLC. Prior to joining Rayonier, he served as Executive Vice
President, Buildings and Places for AECOM from 2008 to 2013. Prior to that, Mr. Corr held various positions with
The St. Joe Company between 1998 and 2008, most recently as Executive Vice President. From 1992 to 1998,
Mr. Corr was a senior manager with The Walt Disney Company, where he was a key member of the team that
developed the visionary town of Celebration near Orlando, Florida. From 1990 to 1992, Mr. Corr served as an
elected member of the Florida House of Representatives. He holds a Bachelor of Arts degree from the University of
Florida and has completed programs with the Harvard Real Estate Institute and the Wharton School of Business at
University of Pennsylvania.
Mark R. Bridwell, 59, Mr. Bridwell was promoted to Vice President and General Counsel in June 2014 and
assumed the role of Corporate Secretary in March 2015. He joined the Company in 2006 as Associate General
Counsel for Performance Fibers. In 2009, he became Associate General Counsel for Timber and Real Estate and in
2012 was promoted to Assistant General Counsel for Land Resources. Prior to joining Rayonier, Mr. Bridwell served
as counsel for six years at Siemens Corporation. Previously, he was an attorney for five years with the international
law firms of Jones, Day, Reavis & Pogue and Seyfarth, Shaw, Fairweather & Geraldson. Mr. Bridwell has a B.S.B.A.
in Finance from the University of Central Florida, and an MBA and JD from Emory University.
Shelby L. Pyatt, 51, Ms. Pyatt was named Vice President, Human Resources and Information Technology in July
2014. Ms. Pyatt joined Rayonier in 2003 as Manager, Compensation and became Director, Compensation and
Employee Services in 2006. She was named Director, Compensation, Benefits and Employee Services in 2009
before being promoted to her current position. Prior to joining Rayonier, Ms. Pyatt held human resources positions
with CSX Corporation and Barnett Bank. Ms. Pyatt holds a bachelor’s degree in Business Management.
W. Rhett Rogers, 45, Mr. Rogers was appointed to Vice President, Portfolio Management in February 2017. Mr.
Rogers oversees the Company’s acquisition and disposition activities, including HBU and non-strategic land sales,
as well as its land information systems function. He joined Rayonier in 2001 as a District Technical Forester, and
has held numerous roles of increasing responsibility, most recently as Director, Land Asset Management before
being promoted to his current position. Mr. Rogers holds a BS in Forestry from Louisiana Tech University, and both
an MBA and MS in Forest Resources from Mississippi State University.
April J. Tice, 48, Ms. Tice was promoted to Vice President and Chief Accounting Officer in April 2021. In this
position, she acts as the Company’s principal accounting officer. She joined Rayonier in 2010 and has worked in
various roles within the finance and financial reporting departments since that time. She previously served as Vice
President, Financial Services and Corporate Controller before being promoted to her current position. Prior to
joining Rayonier, Ms. Tice served in various accounting and/or audit roles at Deloitte & Touche, the State of Florida
and two private companies located in Florida. Ms. Tice holds a Bachelor of Fine Arts from Florida State University
and a Master of Accountancy with a tax concentration from the University of North Florida. Ms. Tice is a Certified
Public Accountant in the State of Florida.
HUMAN CAPITAL
Rayonier is committed to creating an engaging and rewarding employee experience, as well as making safety a
priority in everything we do.
Our Culture and Employee Retention
We view our culture as an asset and believe that fostering a healthy culture is critical to achieving our goals of
being the preferred employer in the forestry industry and retaining key talent. We use various means to encourage
communication and information sharing across the organization.
Every two years we conduct a formal company-wide employee survey to provide anonymous feedback to
management. Survey results are benchmarked against our third-party provider’s global database, shared with
employees and also reviewed with our Board of Directors to help set non-financial goals for management.
The recruitment, retention and development of employees is essential to our success. We aim to provide
employees with opportunities to build skills and grow professionally, while also offering competitive compensation
commensurate with an individual’s experience, knowledge and performance. Our compensation packages consist
of a base salary and an annual bonus. We also use targeted equity-based grants with a multiyear vesting schedule
to help promote the retention of personnel and an ownership mentality across our organization. Our comprehensive
benefits package includes medical, dental, vision, life, accident and disability. We also offer a health savings
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account, a dependent care spending account and an employee assistance plan. Our 401(k) retirement savings plan
includes company matching contributions as well as enhanced retirement contributions.
Employee Development
We offer a comprehensive approach to training and development which includes micro and on-demand
learning, classroom programs, coaching and mentoring, cross-functional assignments and conferences. We also
provide a tuition reimbursement program, which reimburses 80% of the costs of approved degree programs.
Workplace Safety
Safety is a way of life and a cornerstone of Rayonier’s culture — our key guiding principle is that all of our
employees and contractors should return home safely each day. To that end:
• We employ a systematic, four-pronged approach to developing and assimilating our safety principles: set
goals, communicate effectively, identify preventive measures and provide proper tools and training.
• We conduct meetings throughout our organization addressing key safety issues.
• We offer a variety of mandatory and optional safety courses each year in areas such as: defensive driving,
proper chainsaw use, ATV safety, CPR certifications and first aid, emergency evacuation, slips, trips and
falls, overhead hazards, fire prevention, internal reporting of safety incidents, general forestry requirements
and various other safety topics.
We generally engage contractors to perform a number of critical functions, such as the planting of trees and the
harvesting and hauling of logs. Our safety management programs are designed to use a collaborative approach to
focus on both employee and contractor safety. For our employees, driving is generally deemed to be the most
hazardous activity associated with our business given the geographic dispersion of our assets. However, for our
contracted workforce, activities associated with tree felling, extraction of logs and log transportation are the most
critical risk areas.
In New Zealand, we have a comprehensive safety management program that includes both employees and
contractors pursuant to local laws and the Health & Safety at Work Act 2015. Similar industry practices and
regulations do not exist in the United States for contractors. Nonetheless, in addition to our employee safety
programs in the U.S., we have initiated programs with our U.S. contractors to better educate them on safe work
practices. In 2021, 216 safety near miss reports were submitted and 531 contractor safety meetings were
conducted.
Throughout the COVID-19 pandemic, we have remained focused on protecting the health and safety of our
employees and contractors, as well as their families and communities. Shortly after the outset of COVID-19, we
implemented a work-from-home model for office employees and instituted enhanced safety and social distancing
guidelines for field employees. This has enabled our company and industry to continue to supply essential forest
products while optimizing workplace safety.
Employee Wellness
Our employee wellness program, Stay Strong, is designed to promote the overall health and well-being of our
employees by providing education, resources, and a financial investment in our employees’ wellness. Stay Strong
employs a comprehensive approach centered on four key areas: Health and Well-Being, Financial Wellness, Work-
Life Balance and Emotional Health. This includes a comprehensive benefits package, flexible work arrangements
and generous paid time off as well as specific workshops and programs tailored to locations.
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Inclusion and Diversity
Rayonier is focused on promoting an inclusive and diverse workforce as we believe this plays an integral role in
maintaining an engaging employee experience. As of December 31, 2021, we had 406 employees, 309 in the U.S.
and 97 in New Zealand.
The following charts provide details on diversity at Rayonier as of December 31, 2021:
We are seeking to improve our gender and racial diversity and have initiated actions to increase the diversity of
qualified candidates. To this end, alongside other initiatives, we have assembled an internal team to further enhance
and improve our efforts around promoting a diverse and inclusive culture where all employees are supported,
empowered and valued. This team will guide policy objectives within our organization and identify initiatives to help
increase diversity within the broader forestry industry.
AVAILABILITY OF REPORTS AND OTHER INFORMATION
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy
statements and amendments to those reports filed or furnished pursuant to Sections 13(a) or 14 of the Securities
Exchange Act of 1934 are made available to the public free of charge in the Investor Relations section of our
website, www.rayonier.com, shortly after we electronically file such material with, or furnish them to, the Securities
and Exchange Commission (“SEC”). Our corporate governance guidelines and charters of all committees of our
board of directors are also available on our website. The information on our website is not incorporated by reference
into this Annual Report on Form 10-K.
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Item 1A. RISK FACTORS
Our operations are subject to a number of risks. When considering an investment in our securities, you should
carefully read and consider these risks, together with all other information in this Annual Report on Form 10-K. If any
of the events described in the following risk factors actually occur, our business, financial condition or operating
results, as well as the market price of our securities, could be materially adversely affected.
ECONOMIC RISK FACTORS
An increase in the rate of inflation and monetary policy responses to such increases could negatively affect
our stock price, results of operations and financial condition.
The recent acceleration of generalized inflation in the United States and global economies, should it persist,
could adversely affect us. In particular, increases in the cost and availability of labor for us and our contractors could
increase our costs, compress our margins and impact harvest levels. In addition, increases in energy and fuel costs
could affect our results of operations. Energy costs are a significant operating expense for logging and hauling
contractors who support us and the customers of our standing timber. The continued rapid rise in energy costs
could have a negative effect on the cost and availability of such contractors. Additionally, such rapidly rising energy
costs may have a negative impact on the cost of ocean freight for our exported products. Moreover, our selling,
general and administrative costs could increase. More generally, an increase in inflation and interest rates could
have an adverse impact on our cost of capital, which could impact the value of our long-lived assets, our ability to
economically acquire additional assets, the cost of debt and the value of our equity. One of the factors that may
influence the price of our common shares is our annual dividend yield as compared to the yields on other financial
instruments. An increase in market interest rates could cause increases in discount rates and, accordingly, a decline
in property values and total returns for timberland assets. Thus, an increase in market interest rates could result in
higher yields on other financial instruments and could adversely affect the relative attractiveness of an investment in
our equity and, accordingly, the trading price of our common shares. These macroeconomic factors impacting us
are beyond our control and could have a material adverse effect on our business, financial condition, results of
operations and the value of our equity.
We are exposed to the cyclicality of the markets in which we operate and other factors beyond our control,
which could adversely affect our results of operations.
In our Timber segments, the level of residential construction activity, including home repair and remodeling
activity, is the primary driver of sawtimber demand. In addition, demand for logs can be affected by the demand for
wood chips in the pulp and paper and engineered wood products markets, as well as the bio-energy production
markets. The ongoing level of activity in these markets is subject to fluctuation due to future changes in economic
conditions, inflation, interest rates, credit availability, population growth, weather conditions, the ongoing COVID-19
pandemic and other factors. Changes in global economic conditions, such as new timber supply sources and
changes in currency exchange rates, foreign interest rates and foreign and domestic trade policies, can also
negatively impact demand for our timber and logs. In addition, the industries in which our customers participate are
highly competitive and may experience overcapacity or reductions in demand, all of which may affect demand for
and pricing of our products.
In our Real Estate segment, our inability to sell our HBU properties at attractive prices could have a significant
effect on our results of operations. Demand for real estate can be affected by the availability of capital, changes in
interest rates, availability and terms of financing, changes in governmental agencies, changes in developer
confidence, actions by conservation organizations, actions by anti-development organizations, our ability to obtain
land use entitlements and other permits necessary for our development activities, local real estate market economic
conditions, competition from other sellers of land and real estate developers, the relative illiquidity of real estate
investments, employment rates, new housing starts, the ongoing COVID-19 pandemic, population growth,
demographics and federal, state and local land use, zoning and environmental protection laws or regulations
(including any changes in laws or regulations). In addition, changes in investor interest in purchasing timberlands
could reduce our ability to execute sales of non-strategic timberlands.
These macroeconomic and cyclical factors impacting our operations are beyond our control and, if such
conditions deteriorate, could have an adverse effect on our business.
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The industries in which we operate are highly competitive.
The markets in which we operate are highly competitive, and we compete with companies that have
substantially greater financial resources than we do in each of these businesses. The competitive pressures relating
to our Timber segments are primarily driven by quantity of product supply and quality of the timber offered by
competitors in the domestic and export markets, each of which may impact pricing. With respect to our Real Estate
segment, we compete with other owners of entitled and unentitled properties. Each property has unique attributes,
but overall quantity of supply and price for residential, commercial, industrial and rural properties in the geographic
areas in which we operate are the most significant competitive drivers. The markets in which our Trading segment
operates are very competitive with numerous entities competing for export log supply at different ports across New
Zealand.
OPERATIONAL RISK FACTORS
Weather, climate change and other natural conditions may limit our timber harvest and sales.
Weather conditions, changes in timber growth cycles, limitations on access (for example, due to prolonged wet
conditions) and other factors, including damage by fire, insect infestation, disease, prolonged drought and natural
disasters such as wind storms and hurricanes, may limit harvesting of our timberlands. Changes in the diversity of
plants and trees due to fluctuations in temperature and rainfall patterns, could adversely impact the long-term
growing conditions in our forests. The volume and value of timber that can be harvested from our timberlands may
be reduced by any such occurrence and other causes beyond our control. As is typical in the forestry industry, we
do not maintain insurance for any loss to our timber, including losses due to fire and these other causes. These and
other factors beyond our control could reduce our timber inventory and our sustainable yield, thereby adversely
affecting our financial results and cash flows.
Entitlement and development of real estate entail a lengthy, uncertain and costly governmental approval
process, which could adversely affect our ability to grow the businesses in our Real Estate segment.
Entitlement and development of real estate entail extensive approval processes involving multiple regulatory
jurisdictions. It is common for a project to require multiple approvals, permits and consents from U.S. federal, state
and local governing and regulatory bodies. Any of these issues can materially affect the cost, timing and economic
viability of our real estate projects. Moreover, the real estate entitlement process is frequently a political one, which
involves uncertainty and often extensive negotiation and concessions in order to secure and maintain the necessary
approvals and permits. In the U.S., a significant amount of our development property is located in jurisdictions in
which local governments face challenging issues relating to growth and development, including zoning and future
land use, public services, water availability, transportation and other infrastructure, concurrency requirements,
affordable housing, land conservation efforts, and funding for same, and the requirements of state law. In addition,
anti-development groups are active, especially in Florida and Washington, in filing litigation to oppose particular
entitlement activities and development projects, and in seeking legislation and other anti-development limitations on
real estate development activities. We expect this type of anti-development activity to continue in the future.
Entitlement and development of real estate are also subject to lengthy, uncertain and costly implementation
processes. Large-scale developments may involve commitments from government agencies or third parties related
to the delivery of infrastructure improvements (such as roads, bridges, sidewalks, water, sewer and other utilities),
the certainty and timing of which are outside of our control.
Changes in the laws, or interpretation or enforcement thereof, regarding the use and development of real
estate, changes in the political composition of state and local governmental bodies, impacts from the ongoing
COVID-19 pandemic, and the identification of new facts regarding our properties could lead to new or greater costs,
delays and liabilities that could materially adversely affect our business, profitability or financial condition.
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Coronavirus (COVID-19) Pandemic.
The novel coronavirus (COVID-19) outbreak could materially adversely affect our financial condition and results
of operations.
Epidemics, pandemics or other such crises or public health concerns in regions of the world where we have
operations or sell products, could result in the disruption of our business. Specifically, the ongoing COVID-19
outbreak has resulted in increased travel restrictions and extended shutdowns of certain businesses around the
world, as well as continued volatility in economic conditions. These or any governmental or other regulatory
developments or health concerns in countries in which we operate or export to could result in operational
restrictions or social and economic instability, or labor shortages. At this point in time, there is continued uncertainty
relating to the potential impact of COVID-19 on our business. Infections may continue to spread, which could limit
our ability to timely harvest, sell and transport our timber, increase our costs, restrict our operations or cause supply
chain disruptions for us and our customers. In addition, we also face risks and costs associated with implementation
of business continuity plans and modified work conditions, including making required resources available to our
workforce to enable them to continue essential work. Any of these developments could have a negative impact on
our business, financial condition and operating results. In addition, the COVID-19 pandemic could continue to
adversely affect the economies and markets of many countries, resulting in further economic volatility that could
impact the pricing or demand for timber, real estate, and especially housing, which could have an adverse effect on
our business, operating results and financial condition, as well as market value of our securities. Further, our
customers may be negatively impacted due to disruptions in business and operating conditions and constraints on
their own liquidity and access to capital relating to COVID-19, which could increase our counterparty credit
exposure. The continued spread of COVID-19 has also led to disruption and volatility in the global capital markets.
This could lead to further volatility in interest and exchange rates, increase our cost of capital, and adversely impact
our access to capital, credit ratings or overall liquidity.
We depend on third parties for logging and transportation services and increases in the costs or decreases
in the availability of quality service providers could adversely affect our business.
Our Timber segments depend on logging and transportation services provided by third parties, both
domestically and internationally, including by railroad, trucks and/or ships. If any of our transportation providers were
to fail to deliver timber supply or logs to our customers in a timely manner, or were to damage timber supply or logs
during transport, we may be unable to sell it at full value, or at all. During the global COVID-19 pandemic, we have
experienced disruptions in the supply, and rapid inflation in the cost, of transportation and labor in connection with
timber harvesting and delivery. Tight job markets have increased the difficulty and cost of attracting and retaining
sufficient skilled labor for logging and transportation. Accordingly, our timber harvesting volumes and realized
margins have been negatively impacted in certain markets. As demand for timber has accelerated with the recovery
in U.S. and New Zealand housing starts, the lack of adequate supply of logging contractors has resulted in sharp
increases in logging costs and at times slowed deliveries. It is expected that the supply of qualified logging
contractors will be impacted by the availability and cost of debt financing for equipment purchases as well as the
limited availability of adequately trained loggers. As housing starts continue to recover, harvest levels are expected
to increase, placing more pressure on the existing supply of logging contractors. Any significant failure or
unavailability of third-party logging or transportation providers, or further increases in transportation rates, labor
rates and/or fuel costs, may result in higher logging costs or the inability to capitalize on stronger log prices to the
extent logging contractors cannot be secured at a competitive cost. Such events could harm our reputation,
negatively affect our customer relationships and adversely affect our business.
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We are subject to risks associated with doing business outside of the U.S.
Although the majority of our customers are in the U.S., a significant portion of our sales are to end markets
outside of the U.S., including China, South Korea, Japan, India, and New Zealand. The export of our products into
international markets results in risks inherent in conducting business pursuant to international laws, regulations and
customs. We expect that international sales will continue to contribute to future growth. The risks associated with
our business outside the U.S. include:
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changes in and reinterpretations of the laws, regulations and enforcement priorities of the countries in which
our products are sold;
responsibility to comply with anti-bribery laws such as the U.S. Foreign Corrupt Practices Act and similar
anti-bribery laws in other jurisdictions;
trade protection laws, policies and measures and other regulatory requirements affecting trade and
investment, including loss or modification of exemptions for taxes and tariffs, imposition of new tariffs and
duties and import and export licensing requirements;
continuing negative impacts from the imposition and/or threatened imposition of substantial tariffs on forest
products imports into China in connection with trade tensions between China and the U.S.;
business disruptions arising from public health crises and outbreaks of communicable diseases, especially
in China, including the outbreak of the virus known as the novel coronavirus;
difficulty in establishing, staffing and managing non-U.S. operations;
product damage or losses incurred during shipping;
potentially negative consequences from changes in or interpretations of tax laws;
economic or political instability, inflation, recessions and interest rate and exchange rate fluctuations; and
uncertainties regarding non-U.S. judicial systems, rules and procedures;
These risks could adversely affect our business, financial condition and results of operations.
Our estimates of timber inventories and growth rates may be inaccurate, which could impair our ability to
realize expected revenues.
We rely upon estimates of merchantable timber inventories (which include judgments regarding inventories that
may be lawfully and economically harvested), timber growth rates and end-product yields when acquiring and
managing working forests. These estimates, which are inherently inexact and uncertain in nature, are central to
forecasting our anticipated timber revenues and expected cash flows. Growth rates and end-product yield estimates
are developed using statistical sampling, harvest results and growth and yield modeling, in conjunction with industry
research cooperatives and by in-house forest biometricians, using measurements of trees in research plots spread
across our timberland holdings. The growth equations predict the rate of height and diameter growth of trees so that
foresters can estimate the volume of timber that may be present in a tree stand at a given age. Tree growth varies
by species, soil type, geographic area, and climate. Errors in or inappropriate application of growth equations in
forest management planning may lead to inaccurate estimates of future volumes. If the assumptions we rely upon
change or these estimates are inaccurate, our ability to manage our timberlands in a sustainable or profitable
manner may be diminished, which may cause our results of operations and our stock price to be adversely affected.
Our businesses are subject to extensive environmental laws and regulations that may restrict or adversely
affect our ability to conduct our business.
Environmental laws and regulations are constantly changing and are generally becoming more restrictive. Laws,
regulations and related judicial decisions and administrative interpretations affecting our business are subject to
change, and new laws and regulations are frequently enacted. These changes may adversely affect our ability to
harvest and sell timber, remediate contaminated properties and/or entitle real estate. These laws and regulations
may relate to, among other things, the protection of timberlands and endangered species, recreation and aesthetics,
protection and restoration of natural resources, surface water quality, timber harvesting practices, and remedial
standards for contaminated property and groundwater. Over time, the complexity and stringency of these laws and
regulations have increased and the enforcement of these laws and regulations has intensified. For example, the
U.S. Environmental Protection Agency (“EPA”) has pursued a number of initiatives that, if implemented, could
impose additional operational and pollution control obligations on industrial facilities like those of Rayonier’s
customers, especially in the area of air emissions and wastewater and stormwater control. Similarly, legislation
currently under consideration in Oregon seeks to add significant buffers and riparian management zones adjacent
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to streams, the effect of which would be to reduce the areas within which we may harvest. In addition, as a result of
certain judicial rulings and state and federal initiatives, including some that would require timberland operators to
obtain permits to conduct certain ordinary course forestry activities, silvicultural practices on our timberlands could
be impacted in the future. Environmental laws and regulations will likely continue to become more restrictive and
over time could adversely affect our business, financial condition and results of operations.
If regulatory and environmental permits are delayed, restricted or rejected, a variety of our operations could be
adversely affected. We are required to seek permission from government agencies in the states and countries in
which we operate to perform certain activities related to our properties. Any of these agencies could delay review of,
or reject, any of our filings. In our Southern Timber, Pacific Northwest Timber and New Zealand Timber segments,
any delay associated with a filing could result in a delay or restriction in replanting, thinning, insect control, fire
control or harvesting, any of which could have an adverse effect on our operating results. For example, in
Washington State, we are required to file a Forest Practice Application for each unit of timberland to be harvested.
These applications may be denied, conditioned or restricted by the regulatory agency. Actions by the regulatory
agencies could delay or restrict timber harvest activities pursuant to these permits. Delays or harvest restrictions on
a significant number of applications could have an adverse effect on our operating results.
Environmental groups and interested individuals may seek to delay or prevent a variety of operations. We
expect that environmental groups and interested individuals will intervene with increasing frequency in the
regulatory processes in the states and countries where we own, lease or manage timberlands. For example, in
Washington State, environmental groups and interested individuals may appeal individual forest practice
applications or file petitions with the Forest Practices Board to challenge the regulations under which forest
practices are approved. These and other challenges could materially delay or prevent operations on our properties.
For example, interveners at times may bring legal action in Florida in opposition to entitlement and change of use of
timberlands to commercial, industrial or residential use. Delays or restrictions due to the intervention of
environmental groups or interested individuals could adversely affect our operating results. In addition to
intervention in regulatory proceedings, interested groups and individuals may file or threaten to file lawsuits that
seek to prevent us from obtaining permits, implementing capital improvements or pursuing operating plans. Any
threatened or actual lawsuit could delay harvesting on our timberlands, affect how we operate or limit our ability to
modify or invest in our real estate. Among the remedies that could be enforced in a lawsuit is a judgment preventing
or restricting harvesting on a portion of our timberlands.
Third-party operators may create environmental liabilities. We lease and/or grant easements across some of our
properties to third-party operators for the purpose of operating communications towers, generating renewable
energy (wind and solar), operating pipelines for the transport of gases and liquids, and exploring, extracting,
developing and producing oil, gas, rock and other minerals. These activities are subject to federal, state and local
laws and regulations. These operations may also create risk of environmental liabilities for an unlawful discharge of
oil, gas, chemicals or other materials into the air, soil or water. Generally, these third-party operators indemnify us
against any such liability, and we require that they maintain liability insurance to the extent practical to do so.
However, if for any reason our third-party operators are not able to honor their obligations to us, or if insurance is
not in effect, then it is possible that we could be responsible for costs associated with environmental liabilities
caused by such third-party operators.
The impact of existing regulatory restrictions on future harvesting activities may be significant. U.S. federal,
state and local laws and regulations, as well as those of other countries, which are intended to protect threatened
and endangered species, as well as waterways and wetlands, limit and may prevent timber harvesting, road
building and other activities on our timberlands. Restrictions relating to threatened and endangered species apply to
activities that would adversely impact a protected species or significantly degrade its habitat. The size of the
restricted area varies depending on the protected species, the time of year and other factors, but can range from
less than one acre to several thousand acres. A number of species that naturally live on or near our timberlands,
including, among others, the northern spotted owl, marbled murrelet, several species of salmon and trout in the
Pacific Northwest, and the red cockaded woodpecker, red hills salamander, Louisiana pine snake and eastern
indigo snake in the Southeast, are protected under the Federal Endangered Species Act (the “ESA”) or similar U.S.
federal and state laws. A significant number of other species, such as the southeastern gopher tortoise are currently
under review for possible protection under the ESA. As we gain additional information regarding the presence of
threatened or endangered species on our timberlands, or if other regulations, such as those that require buffers to
protect water bodies, become more restrictive, the amount of our timberlands subject to harvest restrictions could
increase.
22
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We formerly owned or operated or may own or acquire timberlands or properties that may require
environmental remediation or otherwise be subject to environmental and other liabilities. We owned or operated
manufacturing facilities and discontinued operations that we do not currently own, and we may currently own or may
acquire timberlands and other properties in the future that are subject to environmental liabilities, such as
remediation of soil, sediment and groundwater contamination and other existing or potential liabilities. In connection
with the spin-off of our Performance Fibers business in 2014, and pursuant to the related Separation and
Distribution Agreement between us and Rayonier Advanced Materials, Rayonier Advanced Materials has assumed
any environmental liability of ours in connection with the manufacturing facilities and discontinued operations related
to the Performance Fibers business and has agreed to indemnify and hold us harmless in connection with such
environmental liabilities. However, in the event we seek indemnification from Rayonier Advanced Materials, we
cannot provide any assurance that a court will enforce our indemnification right if challenged by Rayonier Advanced
Materials or that Rayonier Advanced Materials will be able to fund any amounts for indemnification owed to us. In
addition, the cost of investigation and remediation of contaminated timberlands and properties that we currently own
or acquire in the future could increase operating costs and adversely affect financial results. We could also incur
substantial costs, such as civil or criminal fines, sanctions and enforcement actions (including orders limiting our
operations or requiring corrective measures, installation of pollution control equipment or other remedial actions),
clean-up and closure costs, and third-party claims for property damage and personal injury as a result of violations
of, or liabilities under, environmental laws and regulations related to such timberlands or properties.
REIT AND TAX-RELATED RISK FACTORS
Loss of our REIT status would adversely affect our cash flow and stock price.
We intend to continue to operate in accordance with REIT requirements pursuant to the Internal Revenue Code
of 1986, as amended (the “Code”), and related U.S. Treasury regulations and administrative guidance. Qualification
as a REIT involves the application of highly technical and complex provisions of the Code, which are subject to
change, perhaps retroactively, and which are not within our control. We cannot assure that we will remain qualified
as a REIT or that new legislation, U.S. Treasury regulations, administrative interpretations or court decisions will not
significantly affect our ability to remain qualified as a REIT or the U.S. federal income tax consequences of such
qualification.
We continually monitor and test our compliance with all REIT requirements. In particular, we regularly test our
compliance with the REIT “asset tests,” which require generally that, at the close of each calendar quarter: (1) at
least 75% of the market value of our total assets must consist of REIT-qualifying interests in real property (such as
timberlands), including leaseholds and options to acquire real property and leaseholds, as well as cash and cash
items and certain other specified assets, (2) no more than 25% of the market value of our total assets may consist
of other assets that are not qualifying assets for purposes of the 75% test in clause (1) above, and (3) no more than
20% (25% for calendar years prior to 2018) of the market value of our total assets may consist of the securities of
one or more “taxable REIT subsidiaries.” As of December 31, 2021, Rayonier is in compliance with these asset
tests.
If in any taxable year we fail to qualify as a REIT and are not entitled to relief under the Code, we will not be
allowed a deduction for dividends paid to shareholders in computing our taxable income and we will be subject to
U.S. federal income tax on our REIT taxable income. In addition, we will be disqualified from qualification as a REIT
for the four taxable years following the year during which the qualification was lost, unless we are entitled to relief
under certain provisions of the Code. As a result, our net income and the cash available for distribution to our
shareholders could be reduced for up to five years or longer, which could have a material adverse effect on our
financial condition.
If we fail to remain qualified as a REIT, we may also need to borrow funds or liquidate some investments or
assets to pay any resulting additional tax liability. Accordingly, cash available for distribution to our shareholders
would be reduced.
23
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Certain of our business activities are potentially subject to prohibited transactions tax.
As a REIT, we will be subject to a 100% tax on any net income from “prohibited transactions.” In general,
prohibited transactions are sales or other dispositions of property to customers in the ordinary course of business.
Sales of logs, and dealer sales of timberlands or other real estate, constitute prohibited transactions unless the sale
satisfies certain safe harbor provisions in the Code.
We intend to avoid the 100% prohibited transactions tax by complying with the prohibited transaction safe
harbor provisions and conducting activities that would otherwise be prohibited transactions through one or more
taxable REIT subsidiaries. We may not, however, always be able to identify timberland properties that become part
of our “dealer” real estate sales business. Therefore, if we sell timberlands which we incorrectly identify as property
not held for sale to customers in the ordinary course of business, we may be subject to the 100% prohibited
transactions tax.
Failure of Operating Partnership to maintain status as a partnership for U.S. federal income tax purposes.
We believe our Operating Partnership qualifies as a partnership for U.S. federal income tax purposes. As a
partnership, our Operating Partnership is not subject to U.S. federal income tax on its income. Instead, each of the
partners is allocated its share of our Operating Partnership’s income. We cannot assure you, however, that the IRS
will not challenge the status of our Operating Partnership as a partnership for U.S. federal income tax purposes. If
the IRS were to successfully challenge the status of our Operating Partnership as a partnership, it would be taxable
as a corporation. In such event, this would reduce the amount of distributions that our Operating Partnership could
make, which could have further implications as to our ability to maintain our status as a REIT. This would
substantially reduce our cash available to pay distributions and the return on a unitholder and/or shareholder’s
investment.
Our cash dividends and Operating Partnership distributions are not guaranteed and may fluctuate.
Generally, REITs are required to distribute 90% of their ordinary taxable income, but not their net capital gains
income. Accordingly, we do not generally believe that we are required to distribute material amounts of cash since
substantially all of our taxable income is generally treated as capital gains income. However, a REIT must pay
corporate level tax on its undistributed taxable income and capital gains.
Our Board of Directors, in its sole discretion, determines the amount of quarterly dividends to be paid to our
shareholders based on consideration of a number of factors. These factors include, but are not limited to, our results
of operations, cash flow and capital requirements, economic conditions, tax considerations, borrowing capacity and
other factors, including debt covenant restrictions that may impose limitations on cash payments, future acquisitions
and divestitures, harvest levels, changes in the price and demand for our products and general market demand for
timberlands, including those timberland properties that have higher and better uses. Consequently, our dividend
levels may fluctuate. Because our Operating Partnership distributions are aligned with the dividend, such
distributions may also fluctuate.
Lack of shareholder ownership and transfer restrictions in our articles of incorporation may affect our
ability to qualify as a REIT.
In order to qualify as a REIT, an entity cannot have five or fewer individuals who own, directly or indirectly after
applying attribution of ownership rules, 50% or more of the value of its outstanding shares during the last six months
in each calendar year. Although it is not required by law or the REIT provisions of the Code, almost all REITs have
adopted ownership and transfer restrictions in their articles of incorporation or organizational documents which seek
to assure compliance with that rule. While we are not in violation of the ownership rules, we do not have, nor do we
have any current plans to adopt, share ownership and transfer restrictions. As such, the possibility exists that five or
fewer individuals could acquire 50% or more of the value of our outstanding shares, which could result in our
disqualification as a REIT.
24
Table of Contents
GENERAL RISK FACTORS
We are subject to risks associated with the discontinuation of LIBOR.
The U.K. Financial Conduct Authority announced in 2017 that it intended to phase out the London Interbank
Offered Rate (“LIBOR”) by the end of 2021. While the original deadline has been extended with respect to certain of
our swap agreements, changes in the method of calculating LIBOR, or the replacement of LIBOR with an alternative
rate or benchmark, may adversely affect the effective interest rates with respect to our outstanding debt and could
result in higher borrowing costs. In addition, if changes are made to the method of calculating LIBOR or LIBOR
ceases to exist, we may need to amend certain swap arrangements, and we cannot predict what alternative rate or
benchmark would be negotiated.
The impacts of climate-related initiatives, at the international, U.S. federal and state levels, remain uncertain
at this time.
There continue to be numerous international, U.S. federal and state-level initiatives and proposals to address
domestic and global climate issues. Within the U.S., most of these proposals would regulate and/or tax the
production of carbon dioxide and other “greenhouse gases” to facilitate the reduction of carbon compound
emissions into the atmosphere, and provide tax and other incentives to produce and use “cleaner” energy.
Additionally, our investors and other stakeholders are increasingly focused on the impacts of climate change on
their investments and our business prospects.
In late 2009, the EPA issued an “endangerment finding” under the Clean Air Act with respect to certain
greenhouse gases, leading to the regulation of carbon dioxide as a pollutant under the Clean Air Act and having
significant ramifications for Rayonier and the industry in general. In this regard, the EPA has published various
regulations, affecting the operation of existing and new industrial facilities that emit carbon dioxide. As a result of the
EPA’s decision to regulate greenhouse gases under the Clean Air Act, states will now have to consider them in
permitting new or modified facilities.
Overall, it is reasonably likely that legislative and regulatory activity in this area will in some way affect Rayonier
and the U.S. customers of our Southern Timber and Pacific Northwest Timber segments, but it is unclear at this time
what the nature of the impact will be. We continue to monitor political and regulatory developments in this area, but
their overall impact on Rayonier, from a cost, benefit and financial performance standpoint, remains uncertain at this
time. In addition, the EPA has yet to finalize the treatment of biomass under greenhouse gas regulatory schemes,
leaving Rayonier’s biomass customers in a position of uncertainty.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
25
Table of Contents
Item 2. PROPERTIES
Our timber operations are comprised of our core timberland holdings, which are disaggregated into three
geographically distinct reporting segments: Southern Timber, Pacific Northwest Timber and New Zealand Timber. As
of December 31, 2021, we have fully disposed of our timber fund holdings, which represented our ownership in
Timber Funds II, III and IV. For additional information on the disposition of our timber fund holdings, see Note 7 —
Noncontrolling Interests. The following table provides a breakdown of our timberland holdings as of September 30,
2021 and December 31, 2021:
(acres in 000s)
As of September 30, 2021
As of December 31, 2021
Owned
Leased
Total
Owned
Leased
Total
Core Timberland Holdings
Southern
Alabama
Arkansas
Florida
Georgia
Louisiana
Oklahoma
South Carolina
Texas
Pacific Northwest
Oregon
Washington
New Zealand (a)
Total
223
—
349
603
140
92
16
176
1,599
61
425
486
187
2,272
14
6
56
64
—
—
—
—
140
—
4
4
231
375
237
6
405
667
140
92
16
176
1,739
61
429
490
418
2,647
223
—
350
619
140
92
16
225
1,665
61
425
486
187
2,338
14
4
51
64
—
—
—
—
133
—
4
4
232
369
237
4
401
683
140
92
16
225
1,798
61
429
490
419
2,707
(a)
Represents legal acres owned and leased by the New Zealand subsidiary, in which Rayonier owns a 77% interest. As of December 31,
2021, legal acres in New Zealand were comprised of 296,000 plantable acres and 123,000 non-productive acres.
(acres in 000s)
As of September 30, 2021
As of December 31, 2021
Total
Look-through
Total
Look-through
Timber Fund Holdings (a)
Timber Funds
Oregon .................................................
Total ....................................................
18
18
4
4
—
—
—
—
(a)
As of December 31, 2021, we have fully disposed of our timber fund holdings, which represented our ownership in Timber Funds II, III
and IV. For additional information on the disposition of our timber fund holdings, see Note 7 — Noncontrolling Interests.
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Total Timberland Under Management
(acres in 000s)
Southern ..........................................................................
Pacific Northwest ............................................................
New Zealand ...................................................................
Timber Funds (a) ............................................................
Total .................................................................................
As of September 30, 2021
As of December 31, 2021
1,739
490
418
18
2,665
1,798
490
419
—
2,707
(a) As of December 31, 2021, we have fully disposed of our timber fund holdings, which represented our ownership in Timber Funds II, III and
IV. For additional information on the disposition of our timber fund holdings, see Note 7 — Noncontrolling Interests.
The following tables detail changes in our portfolio of owned and leased timberlands by state from
December 31, 2020 to December 31, 2021:
(acres in 000s)
Southern
Alabama
Florida
Georgia
Louisiana
Oklahoma
South Carolina
Texas
Pacific Northwest
Oregon
Washington
New Zealand (a)
Total
December 31,
2020
Acquisitions
Sales
Other
December 31,
2021
Acres Owned
223
327
602
140
92
16
181
1,581
61
442
503
185
2,269
—
24
25
—
—
—
51
100
—
—
—
2
102
—
(1)
(8)
—
—
—
(7)
(16)
—
(17)
(17)
—
(33)
—
—
—
—
—
—
—
—
—
—
—
—
—
223
350
619
140
92
16
225
1,665
61
425
486
187
2,338
(a)
Represents legal acres owned by the New Zealand subsidiary, in which Rayonier has a 77% interest.
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Table of Contents
(acres in 000s)
Southern
Alabama
Arkansas
Florida
Georgia
Pacific Northwest
Washington (c)
New Zealand (d)
Total
December 31,
2020
New Leases
Acres Leased
Sold/Expired
Leases (a)
Other (b)
December 31,
2021
14
6
61
71
152
4
232
388
—
—
—
—
—
—
1
1
—
(2)
(6)
(1)
(9)
—
(1)
(10)
—
—
(4)
(6)
(10)
—
—
(10)
14
4
51
64
133
4
232
369
Includes acres previously under lease that have been harvested and activity for the relinquishment of leased acres.
Includes acres previously under lease that we have acquired as fee ownership.
(a)
(b)
(c) Primarily timber reservations acquired in the merger with Pope Resources.
(d) Represents legal acres leased by the New Zealand subsidiary, in which Rayonier has a 77% interest.
The following table details activity in our timber fund holdings by state from December 31, 2020 to
December 31, 2021:
(acres in 000s)
December 31,
2020
Acquisitions
Sales
Other
December 31,
2021
Acres Owned (a)
Fund II
Oregon ..............................................
Washington ......................................
Total Fund II
Look-through share of Fund II
Fund III
Oregon ..............................................
Washington ......................................
California ..........................................
Total Fund III
Look-through share of Fund III
Fund IV ...................................................
Oregon ..............................................
Washington ......................................
Total Fund IV
Look-through share of Fund IV
18
13
31
6
13
25
19
57
3
20
33
53
8
Total Timber Funds .............................
Look-through share of Funds ..........
141
17
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(18)
(13)
(31)
(6)
(13)
(25)
(19)
(57)
(3)
(20)
(33)
(53)
(8)
(141)
(17)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(a) As of December 31, 2021, we have fully disposed of our timber fund holdings, which represented our ownership in Timber Funds II, III and
IV. For additional information on the disposition of our timber fund holdings, see Note 7 — Noncontrolling Interests.
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TIMBERLAND LEASES & DEEDS
See Note 6 - Leases for more information on U.S. and New Zealand timberland leases including lease terms
and renewal provisions.
The following table details our acres under lease as of December 31, 2021 by type of lease and estimated lease
expiration:
(acres in 000s)
Location
Southern ............... Fixed Term
Type of Lease
Fixed Term with Renewal Option (a)
Pacific Northwest . Fixed Term (b)
New Zealand ........ CFL - Perpetual (c)
CFL - Fixed Term (c)
CFL - Terminating (c)
Forestry Right (c)
Fixed Term Land Leases
Total Acres under Long-term Leases ..............................
Lease Expiration
Total
2022-2031
2032-2041
2042-2051
Thereafter
121
12
4
75
3
11
127
16
369
74
5
—
—
—
1
41
—
121
41
7
2
—
—
—
1
—
51
—
—
2
—
—
8
9
2
21
6
—
—
75
3
2
76
14
176
Includes approximately 4,000 acres of timber deeds.
(a)
(b) Primarily timber reservations acquired in the merger with Pope Resources.
(c) Estimated lease expiration / termination based on the earlier of: (1) the scheduled expiration / termination date, or (2) the estimated year of
final harvest before such expiration / termination date.
The following table details our estimated leased acres, lease expirations and lease costs over the next five years:
(acres and dollars in 000s, except per acre amounts)
Location
Southern ....................
2022
2023
2024
2025
2026
Pacific Northwest ....
New Zealand ............
Leased Acres Expiring (a)
Year-end Leased Acres (a)
Estimated Annual Lease Cost (a)(b)
Average Lease Cost per Acre (a)
4
129
$3,900
$30.59
36
93
2
91
24
67
1
66
$3,677
$32.12
$3,055
$35.74
$2,998
$35.27
$2,772
$40.86
Leased Acres Expiring
Year-End Leased Acres (c)
—
4
—
4
—
4
—
4
—
4
Leased Acres Expiring
Year-end Leased Acres
Estimated Annual Lease Cost (b)(e)
Average Lease Cost per Acre (d)(e)
3
229
$4,438
$24.00
—
229
$4,438
$24.00
—
229
$4,438
$24.00
1
228
$4,438
$24.00
11
217
$4,422
$23.98
Includes timber deeds.
(a)
(b) Represents capitalized and expensed lease payments.
(c) Primarily timber reservations acquired in the merger with Pope Resources for which no lease payments are made.
(d) Excludes lump sum payments.
(e) Based on the year-end foreign exchange rate.
OTHER NON-TIMBERLAND LEASES
See Note 6 - Leases for information on other non-timberland leases.
Item 3.
LEGAL PROCEEDINGS
The information set forth under Note 14 — Contingencies is incorporated herein by reference.
29
Table of Contents
Item 4.
MINE SAFETY DISCLOSURES
Not applicable.
30
Table of Contents
PART II
Item 5.
MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Rayonier Inc.
MARKET FOR THE REGISTRANT’S COMMON EQUITY
Rayonier Inc.’s common shares are publicly traded on the NYSE, the only exchange on which our shares are
listed, under the trading symbol RYN. Shares of the Company have no par value.
DIVIDENDS
Common stock cash dividends during the years ended December 31, 2021, 2020 and 2019 aggregated to
$1.08, $1.08 and $1.08, respectively.
HOLDERS
Including institutional holders, there were approximately 4,910 shareholders of record of our common shares on
February 18, 2022.
UNREGISTERED SALES OF EQUITY SECURITIES
From time to time, the Company may issue shares of common stock in exchange for units in the Operating
Partnership. Such shares are issued based on an exchange ratio of one common share for each unit in the
Operating Partnership. During the quarter ended December 31, 2021, the Company issued 623,568 common
shares in exchange for an equal number of units in the Operating Partnership pursuant to the Operating Partnership
agreement.
ISSUER REPURCHASES
In February 2016, the Board of Directors approved the repurchase of up to $100 million of Rayonier’s common
shares (the “share repurchase program”) to be made at management’s and the Board of Directors’ discretion. The
program has no time limit and may be suspended or discontinued at any time. There were no shares repurchased
under this program in the fourth quarter of 2021. As of December 31, 2021, there was $87.7 million, or
approximately 2,173,648 shares based on the period-end closing stock price of $40.36, remaining under this
program.
The following table provides information regarding our purchases of Rayonier common shares during the
quarter ended December 31, 2021:
Period
October 1 to October 31 ....................................
November 1 to November 30 ...........................
December 1 to December 31 ...........................
Total .....................................
Total
Number of
Shares
Purchased
(a)
—
29
56
85
Average
Price
Paid per
Share
—
$38.45
40.06
Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs (b)
Maximum Number
of Shares that
May Yet Be
Purchased Under
the Plans or
Programs (c)
—
—
—
—
2,350,079
2,322,702
2,173,648
(a)
Includes the Company’s common shares purchased from employees in non-open market transactions. The shares were sold by employees
of the Company in exchange for cash that was used to pay withholding taxes associated with the vesting of share-based awards under the
Company’s Incentive Stock Plan. The price per share surrendered is based on the closing price of the Company’s common shares on the
respective vesting dates of the awards.
(b) Purchases made in open-market transactions under the $100 million share repurchase program announced on February 10, 2016.
(c) Maximum number of shares authorized to be purchased at the end of October, November and December are based on month-end closing
stock prices of $37.33, $37.77 and $40.36, respectively.
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Rayonier, L.P.
MARKET FOR UNITS OF THE OPERATING PARTNERSHIP
There is no public trading market for Operating Partnership units.
HOLDERS
Including institutional holders, there were approximately 15 holders of record of our Operating Partnership units
(other than the Company) on February 18, 2022.
DISTRIBUTIONS
The distribution rate on the Operating Partnership’s units is equal to the dividend rate on Rayonier Inc.’s
common shares.
UNREGISTERED SALES OF EQUITY SECURITIES
There were no unregistered sales of equity securities made by the Operating Partnership during the quarter
ended December 31, 2021.
ISSUER PURCHASES OF EQUITY SECURITIES
Pursuant to the Operating Partnership’s limited partnership agreement, limited partners have the right to
redeem their Operating Partnership units for cash, or at our election, shares of Rayonier Common Stock on a one-
for-one basis. During the quarter ended December 31, 2021, 623,568 Operating Partnership units held by limited
partners were redeemed in exchange for shares of Rayonier Common Stock.
32
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Table of Contents
Table of Contents
STOCK PERFORMANCE GRAPH
STOCK PERFORMANCE GRAPH
STOCK PERFORMANCE GRAPH
The following graph compares the performance of Rayonier’s common shares (assuming reinvestment of
The following graph compares the performance of Rayonier’s common shares (assuming reinvestment of
The following graph compares the performance of Rayonier’s common shares (assuming reinvestment of
dividends) with a broad-based market index (Standard & Poor’s (“S&P”) 500), and three industry-specific indices –
dividends) with a broad-based market index (Standard & Poor’s (“S&P”) 500), and three industry-specific indices –
dividends) with a broad-based market index (Standard & Poor’s (“S&P”) 500), and three industry-specific indices –
the S&P Global Timber and Forestry Index, the FTSE NAREIT All Equity REIT Index (the “New Peer Group Index”)
the S&P Global Timber and Forestry Index, the FTSE NAREIT All Equity REIT Index (the “New Peer Group Index”)
the S&P Global Timber and Forestry Index, the FTSE NAREIT All Equity REIT Index (the “New Peer Group Index”)
and the S&P 1500 Real Estate Index1 (the “Old Peer Group Index”). The New Peer Group Index has been selected
and the S&P 1500 Real Estate Index1 (the “Old Peer Group Index”). The New Peer Group Index has been selected
and the S&P 1500 Real Estate Index1 (the “Old Peer Group Index”). The New Peer Group Index has been selected
to replace the Old Peer Group Index in the stock performance graph going forward, as we believe the composition
to replace the Old Peer Group Index in the stock performance graph going forward, as we believe the composition
to replace the Old Peer Group Index in the stock performance graph going forward, as we believe the composition
of the FTSE NAREIT All Equity REIT Index better aligns with the Company’s businesses and provides a more useful
of the FTSE NAREIT All Equity REIT Index better aligns with the Company’s businesses and provides a more useful
of the FTSE NAREIT All Equity REIT Index better aligns with the Company’s businesses and provides a more useful
benchmark for investors.
benchmark for investors.
benchmark for investors.
The table and related information below shall not be deemed to be “filed” with the SEC, nor shall such
The table and related information below shall not be deemed to be “filed” with the SEC, nor shall such
The table and related information below shall not be deemed to be “filed” with the SEC, nor shall such
information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities
information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities
information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities
Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by
Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by
Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by
reference into such filing.
reference into such filing.
reference into such filing.
The data in the following table was used to create the above graph as of December 31:
The data in the following table was used to create the above graph as of December 31:
The data in the following table was used to create the above graph as of December 31:
2016
2016
2016
Rayonier Inc. .............................................................................................. $100
Rayonier Inc. .............................................................................................. $100
Rayonier Inc. .............................................................................................. $100
S&P 500® Index .........................................................................................
S&P 500® Index .........................................................................................
S&P 500® Index .........................................................................................
100
100
100
S&P® Global Timber and Forestry Index ...............................................
S&P® Global Timber and Forestry Index ...............................................
S&P® Global Timber and Forestry Index ...............................................
100
100
100
FTSE NAREIT All Equity REIT Index (New Peer Group Index).........
FTSE NAREIT All Equity REIT Index (New Peer Group Index).........
FTSE NAREIT All Equity REIT Index (New Peer Group Index).........
100
100
100
S&P® 1500 Real Estate Sector Index1 (Old Peer Group Index) ........
S&P® 1500 Real Estate Sector Index1 (Old Peer Group Index) ........
S&P® 1500 Real Estate Sector Index1 (Old Peer Group Index) ........
100
100
100
2017
2017
2017
$123
$123
$123
122
122
122
132
132
132
105
105
105
112
112
112
2018
2018
2018
$111
$111
$111
116
116
116
106
106
106
96
96
96
111
111
111
2019
2019
2019
$136
$136
$136
153
153
153
123
123
123
118
118
118
150
150
150
2020
2020
2020
$127
$127
$127
181
181
181
146
146
146
109
109
109
163
163
163
2021
2021
2021
$180
$180
$180
233
233
233
167
167
167
151
151
151
238
238
238
1 Based on constituents as of December 31, 2021 and excludes entities that were not publicly traded for the entire comparative period.
1 Based on constituents as of December 31, 2021 and excludes entities that were not publicly traded for the entire comparative period.
1 Based on constituents as of December 31, 2021 and excludes entities that were not publicly traded for the entire comparative period.
33
33
33
Table of Contents
Item 6.
SELECTED FINANCIAL DATA
Not applicable.
Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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 7, Management’s Discussion and Analysis (MD&A) highlights
the critical areas for evaluating the Company’s performance which includes a discussion on the reportable
segments, liquidity and capital, and critical accounting estimates. The MD&A is provided as a supplement to, and
should be read in conjunction with, our financial statements and notes.
EXECUTIVE SUMMARY
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 U.S. and New Zealand. Our revenues, operating income and
cash flows are primarily derived from the following core business segments: Southern Timber, Pacific Northwest
Timber, New Zealand Timber, Timber Funds, Real Estate and Trading. We own or lease under long-term
agreements approximately 2.7 million acres of timberland and real estate in Alabama, Arkansas, Florida, Georgia,
Louisiana, Oklahoma, Oregon, South Carolina, Texas and Washington. We also have a 77% ownership interest in
Matariki Forestry Group, a joint venture (“New Zealand subsidiary”), that owns or leases approximately 419,000
gross acres (296,000 net plantable acres) of timberlands in New Zealand.
Across our timberland management segments, we sell standing timber (primarily at auction to third parties) and
delivered logs. Sales from our timber segments include all activities related to the harvesting of timber and other
value-added activities such as the licensing of properties for hunting and the leasing of properties for mineral
extraction and cell towers. We believe we are the second largest publicly-traded timberland REIT and the fourth
largest private timberland owner in the United States. Our Real Estate business manages all property sales and
seeks to maximize the value of our properties that are more valuable for development, recreational or residential
uses than for growing timber, and opportunistically sells non-strategic timberlands. Our Trading segment, primarily
consisting of activity by the New Zealand subsidiary, markets and sells timber owned or acquired from third parties
in New Zealand and Australia. We also engage in log trading activities from the U.S. South and U.S. Pacific
Northwest.
CURRENT YEAR DEVELOPMENTS
During 2021, we acquired approximately 103,000 acres of timberlands for $179.1 million. For additional
information on acquisitions, see Note 5 - Timberland Acquisitions. Additionally, as discussed in Note 7 -
Noncontrolling Interests, we sold the rights to manage Timber Fund III & IV, as well as our ownership interests in
both funds. We also completed the liquidation of Fund II timberland assets. As a result, Timber Fund III and IV
balance sheets and results of operations are only included in our consolidated financial statements through the date
of the sale. As of December 31, 2021, we continue to manage and maintain a 20% ownership interest in Fund II,
which is scheduled to terminate in March 2023. Prior to the termination of Fund II, the remaining capital will be
distributed to Fund II investors. See Note 7 - Noncontrolling Interests and Note 8 - Variable Interest Entities for
additional information.
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
34
Table of Contents
domestic customers but also exports a significant volume of timber, particularly to China. The Southern Timber and
Pacific Northwest Timber segments rely on the strength of U.S. lumber markets as well as underlying housing
starts. Our New Zealand Timber segment sells timber to domestic New Zealand wood products mills and also
exports a significant portion of its volume to markets in China, South Korea and India. In addition to market
dynamics in the Pacific Rim, the New Zealand Timber segment is subject to foreign exchange fluctuations, which
can impact the operating results of the segment in U.S. dollar terms.
As the current COVID-19 pandemic continues to evolve, the expected duration and the extent of economic
disruption it may ultimately cause remain uncertain. Local, state and national governments continue to evaluate
policies and restrictions in order to mitigate the spread of COVID-19. Government-mandated shutdowns or shelter-
in-place orders in markets in which we operate could negatively impact our results. Further, prolonged periods of
lower overall business activity as a result of COVID-19 could cause significant damage to the underlying economy,
which would likely impact timber markets.
In 2021, pricing in the U.S. South improved versus the prior year, with increases in both pulpwood and
sawtimber prices. Both pulpwood and sawtimber pricing tend to be driven by local market supply and demand
dynamics, which vary considerably based on the available inventory of logs, local market mill demand, and access
to export markets. In the Pacific Northwest, average log prices for 2021 were higher when compared to the prior
year, primarily driven by improved sawtimber pricing resulting from strong domestic demand and increased market
tension due to higher levels of export activity to China. In New Zealand, average log prices for 2021 were higher
than the prior year, which reflected strong domestic demand, the ability of log exporters to pass higher costs on to
customers as well as the restriction on competing log imports into China from Australia.
We are subject to the risk of price fluctuations in certain of our cost components, primarily logging and
transportation (cut and haul), ocean freight and demurrage costs. In 2021, each of our timber segments
experienced upward pressure on these cost components, with the most significant increase experienced in ocean
freight and demurrage costs in our New Zealand Timber segment. Other major components of our cost of sales are
the cost basis of timber sold (depletion) and the cost basis of real estate sold. Depletion includes 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 the cost basis in land and costs directly associated with the
development and construction of identified real estate projects, such as infrastructure, roadways, utilities, amenities
and/or other improvements. Other costs include amortization of capitalized costs related to road and bridge
construction and software, depreciation of fixed assets and equipment, road maintenance, severance and excise
taxes, fire prevention and real estate commissions and closing costs.
In Real Estate, overall demand and pricing for HBU properties remained exceptionally strong in 2021. This was
driven in part by historically low mortgage rates coupled with higher demand for rural land since the outset of the
pandemic. In addition, we saw increased interest in our improved development properties, specifically Wildlight, our
development project north of Jacksonville, Florida, and Richmond Hill, our development project south of Savannah,
Georgia.
CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES
The preparation of financial statements requires us to establish accounting policies and make estimates,
assumptions and judgments that affect our assets, liabilities, revenues and expenses, and to disclose contingent
assets and liabilities in our Annual Report on Form 10-K. 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.
CAPITALIZED COSTS INCLUDED IN TIMBER BASIS
Timber is stated at the lower of cost or market value. Costs relating to acquiring, planting and growing timber,
including real estate taxes, site preparation and direct support costs relating to facilities, vehicles and supplies, are
capitalized. A portion of timberland lease payments are capitalized based on the proportion of acres with
merchantable timber volume remaining to be harvested under the lease term, and the residual portion of the lease
payments are expensed as incurred. Payroll costs are capitalized for time spent on timber growing activities, while
interest or any other intangible costs are not capitalized.
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Table of Contents
MERCHANTABLE INVENTORY AND DEPLETION COSTS AS DETERMINED BY TIMBER HARVEST MODELS
An annual depletion rate is established for each particular region by dividing the cost of merchantable inventory
(including costs described above) by standing merchantable inventory volume. Pre-merchantable records are
maintained for each planted year age class, including acres planted, stems per acre and costs of planting and
tending.
Significant assumptions and estimates are used in the recording of timber inventory and depletion costs.
Factors that can impact timber volume include weather changes, losses due to natural causes, differences in actual
versus estimated growth rates and changes in the age when timber is considered merchantable. A 3% company-
wide change in estimated standing merchantable inventory would have caused an estimated change of
approximately $3.9 million to 2021 depletion expense.
Merchantable standing timber inventory is estimated by our land information services group annually, using
industry-standard computer software. The inventory calculation takes into account growth, in-growth (annual
transfer of oldest pre-merchantable age class into merchantable inventory), timberland sales and the annual harvest
specific to each business unit. The age at which timber is considered merchantable is reviewed periodically and
updated for changing harvest practices, future harvest age profiles and biological growth factors.
Acquisitions of timberland can also affect the depletion rate. Upon the acquisition of timberland, we make a
determination whether to combine the newly-acquired merchantable timber with an existing depletion pool or to
create a new pool. The determination is based on the geographic location of the new timber, the customers/markets
that will be served and species mix. During 2021, we acquired 103,000 acres of timberlands in Florida, Georgia,
Texas and New Zealand. These acquisitions did not have a material impact on 2021 depletion rates.
REVENUE RECOGNITION
See Note 1 - Summary of Significant Accounting Policies.
DETERMINING THE ADEQUACY OF PENSION AND OTHER POSTRETIREMENT BENEFIT ASSETS AND
LIABILITIES
We have 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 plan.
The qualified and unfunded plans are closed to new participants. Effective December 31, 2016, we froze benefits for
all employees participating in the pension plans.
In 2021, we recognized $0.3 million of pension and postretirement benefit credit due to the expected return on
plan assets offsetting interest costs and amortization of losses. Numerous estimates and assumptions are required
to determine the proper amount of pension and postretirement liabilities and annual expense to record in our
financial statements. The key assumptions include discount rate, return on assets, health care cost trends, mortality
rates and longevity of employees. Although there is authoritative guidance on how to select most of the
assumptions, some degree of judgment is exercised in selecting these assumptions. Different assumptions, as well
as actual versus expected results, would change the periodic benefit cost and funded status of the benefit plans
recognized in the financial statements. The changes in our discount rate and expected return on plan assets have
an inverse relationship with our projected benefit obligation and pension expense, respectively. A hypothetical 25
basis point increase/decrease in our pension plan’s discount rate would result in a decrease/increase in the
projected benefit obligation of approximately $3.1 million and $3.3 million, respectively. A hypothetical 25 basis point
increase/decrease in our pension plan’s expected return on plan assets assumption would result in a decrease/
increase in pension expense of approximately $0.2 million. See Note 20 — Employee Benefit Plans for additional
information.
DEFERRED TAX ITEMS
The Timber and Real Estate operations conducted within our REIT are generally not subject to U.S. income
taxation. We expect any variability in our effective tax rate and the amount of cash taxes to be paid to be driven
primarily by our New Zealand Timber and Trading segments, as our other business operations are conducted within
our U.S. REIT subsidiaries. However, the assessment of the ability to realize certain deferred tax assets, or estimate
deferred tax liabilities, remains subjective. See Note 22 — Income Taxes for additional information about our
unrecognized tax benefits.
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Table of Contents
ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIES
We determine the costs of environmental remediation for areas we have been named potentially liable parties
based on evaluations of current law and existing technologies. Inherent uncertainties exist in such evaluations
primarily due to unknown environmental conditions, changing governmental regulations and legal standards
regarding liability and emerging remediation technologies. At December 31, 2021, the total amount of liabilities
recorded on our Consolidated Balance Sheets related to environmental contamination and Natural Resource
Damages was $10.8 million. This is management’s best estimate of the costs for remediation and restoration,
however, management will continue to monitor the cleanup process and make adjustments to the liability as
needed. For more information, see Governmental Regulations and Environmental Matters in Item 1 - Business.
BUSINESS COMBINATIONS
We account for business combinations using the acquisition method of accounting, under which all assets
acquired and liabilities assumed, including amounts attributable to noncontrolling interests, are recorded at their
respective fair values as of the acquisition date. The excess of the purchase price over fair values of identifiable
assets and liabilities is recorded as goodwill. The preliminary allocation of purchase price in a business combination
uses significant assumptions and estimates. Critical estimates include, but are not limited to, future expected cash
flows, including revenues and expenses, and applicable discount rates. While we believe our estimates and
assumptions to be reasonable, they are subject to change as we obtain additional information related to those
estimates during the applicable measurement periods (up to one year from the acquisition date). Pursuant to ASC
805, our financial statements are not retrospectively adjusted for any changes to the recorded values that occur in
subsequent periods. Rather, we recognize any change in recorded values during the reporting period in which the
adjustments are determined. We also record, in the same period’s financial statements, the effect on earnings of
changes in depletion, depreciation, amortization, or other income effects, if any, as a result of any change to the
recorded values, calculated as if the accounting had been completed at the acquisition date. See Note 2 — Merger
with Pope Resources for additional information.
37
Table of Contents
RESULTS OF OPERATIONS
Summary of our results of operations for the three years ended December 31:
Financial Information (in millions of dollars)
2021
2020
2019
Sales
Southern Timber ..........................................................................................................................................
Pacific Northwest Timber ............................................................................................................................
New Zealand Timber ...................................................................................................................................
Timber Funds (a)
Real Estate
Improved Development ....................................................................................................................
Unimproved Development ...............................................................................................................
Rural ...................................................................................................................................................
Timberlands & Non-Strategic - U.S. ..............................................................................................
Conservation Easements ................................................................................................................
Deferred Revenue/Other (b) ...........................................................................................................
Large Dispositions ............................................................................................................................
Total Real Estate ...............................................................................................................................
Trading ..........................................................................................................................................................
Intersegment Eliminations ..........................................................................................................................
Total Sales ...................................................................................................................................................
Operating Income (Loss)
Southern Timber ..........................................................................................................................................
Pacific Northwest Timber ............................................................................................................................
New Zealand Timber ...................................................................................................................................
Timber Funds (a) .........................................................................................................................................
Real Estate (b)(c) .........................................................................................................................................
Trading ..........................................................................................................................................................
Corporate and other ....................................................................................................................................
Operating Income ......................................................................................................................................
Interest expense ..........................................................................................................................................
Interest and other miscellaneous income, net ........................................................................................
Income tax expense ....................................................................................................................................
Net Income ..................................................................................................................................................
Less: Net (income) loss attributable to noncontrolling interests in consolidated affiliates (d) ..
Net Income Attributable to Rayonier, L.P. ..........................................................................................
Less: Net income attributable to noncontrolling interests in the operating partnership .............
Net Income Attributable to Rayonier Inc. ............................................................................................
Adjusted EBITDA (e)
Southern Timber ..........................................................................................................................................
Pacific Northwest Timber ............................................................................................................................
New Zealand Timber ...................................................................................................................................
Timber Funds ...............................................................................................................................................
Real Estate ...................................................................................................................................................
Trading ..........................................................................................................................................................
Corporate and other ....................................................................................................................................
Total Adjusted EBITDA (e) ......................................................................................................................
$204.4
143.0
281.2
199.4
$191.8
120.8
202.3
29.6
$194.1
85.4
241.9
—
51.7
37.5
43.1
—
3.9
(2.4)
56.0
189.9
95.4
(3.7)
14.5
8.4
67.2
19.3
3.1
0.9
116.0
229.3
89.0
(3.6)
$1,109.6
$859.2
5.9
19.5
47.7
1.3
—
0.5
—
74.9
115.4
(0.1)
$711.6
$66.1
6.8
51.5
63.3
112.5
0.1
(30.6)
269.8
(44.9)
0.2
(14.6)
210.5
(53.4)
$157.1
$41.3
(10.0)
30.0
(13.2)
72.0
(0.5)
(45.2)
74.4
(38.8)
1.2
(7.0)
29.8
7.8
$37.6
(4.5)
(0.5)
$152.6
$37.1
$57.8
(12.4)
48.0
—
38.7
—
(25.1)
107.0
(31.7)
5.3
(12.9)
67.7
(8.6)
$59.1
—
$59.1
$120.2
57.3
78.5
2.3
100.7
0.1
(29.4)
$109.1
37.1
55.0
1.8
91.4
(0.5)
(26.6)
$329.8
$267.4
$119.7
16.7
75.8
—
59.5
—
(23.9)
$247.8
(a)
(b)
(c)
(d)
(e)
The year ended December 31, 2021 includes sales and operating income of $156.8 million and $51.5 million, respectively, from Fund II
Timberland Dispositions.
Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to
residential and commercial lease revenue.
The years ended December 31, 2021 and December 31, 2020 include income of $44.8 million and $28.7 million, respectively, related to
Large Dispositions.
The year ended December 31, 2021 includes a $41.2 million gain from Fund II Timberland Dispositions. The year ended December 31,
2020 includes a $7.3 million loss related to timber write-offs resulting from casualty events.
Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators.
38
Table of Contents
Southern Timber Overview
2021
2020
2019
Sales Volume (in thousands of tons)
Pine Pulpwood ..............................................................................
Pine Sawtimber .............................................................................
Total Pine Volume ......................................................................
Hardwood .......................................................................................
Total Volume ................................................................................
% Delivered Volume (vs. Total Volume) ....................................
% Pine Sawtimber Volume (vs. Total Pine Volume) ................
% Export Volume (vs. Total Volume) (a) ....................................
Net Stumpage Prices (dollars per ton)
Pine Pulpwood ..............................................................................
Pine Sawtimber .............................................................................
Weighted Average Pine .............................................................
Hardwood .......................................................................................
Weighted Average Total ............................................................
Summary Financial Data (in millions of dollars)
Timber Sales ..................................................................................
Less: Cut and Haul .......................................................................
Less: Port and Freight ..................................................................
Net Stumpage Sales ...................................................................
Non-Timber Sales .........................................................................
Total Sales ....................................................................................
Operating Income .........................................................................
(+) Timber write-offs resulting from casualty events (b) ..........
(+) Depreciation, depletion and amortization ...........................
Adjusted EBITDA (c) ....................................................................
3,516
2,001
5,517
177
5,694
40%
36%
5%
$19.09
28.27
$22.42
17.96
$22.28
$179.8
(43.6)
(9.4)
$126.9
24.6
$204.4
$66.1
—
54.1
$120.2
3,804
2,243
6,047
152
6,199
41%
37%
3%
$15.83
25.72
$19.50
11.52
$19.30
$170.2
(45.4)
(5.2)
$119.6
21.6
$191.8
$41.3
6.0
61.8
$109.1
3,640
2,191
5,831
235
6,066
33%
38%
3%
$16.42
24.86
$19.59
16.93
$19.49
$159.2
(36.4)
(4.6)
$118.2
35.0
$194.1
$57.8
—
61.9
$119.7
Other Data
Year-End Acres (in thousands) ...................................................
1,798
1,733
1,835
(a) Estimated percentage of export volume which includes volumes sold to third-party exporters in addition to direct exports through our log
export program.
(b) Timber write-offs resulting from casualty events include the write-off of merchantable and pre-merchantable timber volume destroyed by
casualty events which cannot be salvaged.
(c) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators.
39
Table of Contents
Pacific Northwest Timber Overview
2021
2020
2019
Sales Volume (in thousands of tons)
Pulpwood ........................................................................................
Sawtimber ......................................................................................
Total Volume ................................................................................
Total Volume (converted to MBF)
287
1,382
1,669
297
1,306
1,603
207,114
197,899
254
956
1,211
150,826
% Delivered Volume (vs. Total Volume) ....................................
% Sawtimber Volume (vs. Total Volume) ..................................
% Export Volume (vs. Total Volume) (a)
88%
83%
16%
90%
82%
10%
94%
79%
17%
Delivered Log Pricing (in dollars per ton)
Pulpwood ........................................................................................
Sawtimber ......................................................................................
Weighted Average Log Price .......................................................
Summary Financial Data (in millions of dollars)
Timber Sales ..................................................................................
Less: Cut and Haul .......................................................................
Net Stumpage Sales ...................................................................
$31.65
97.87
$86.23
$137.1
(55.3)
$81.8
Non-Timber Sales .........................................................................
Total Sales ....................................................................................
5.9
$143.0
Operating Income (Loss) .............................................................
(+) Depreciation, depletion and amortization ...........................
Adjusted EBITDA (b) ....................................................................
Other Data
Year-End Acres (in thousands) ...................................................
Sawtimber (in dollars per MBF) (c) ............................................
$6.8
50.5
$57.3
490
$748
$35.51
84.93
$75.44
$116.6
(54.6)
$62.0
4.2
$120.8
($10.0)
47.1
$37.1
507
$666
$41.09
78.41
$70.34
$82.7
(45.9)
$36.8
2.7
$85.4
($12.4)
29.2
$16.7
379
$587
(a) Estimated percentage of export volume which includes volumes sold to third-party exporters in addition to direct exports through our log
export program.
(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators.
(c) Delivered Sawtimber excluding chip-n-saw.
40
Table of Contents
New Zealand Timber Overview
2021
2020
2019
Sales Volume (in thousands of tons)
Domestic Pulpwood (Delivered) ...............................................
Domestic Sawtimber (Delivered) ..............................................
Export Pulpwood (Delivered) ....................................................
Export Sawtimber (Delivered) ...................................................
Total Volume ..............................................................................
% Delivered Volume (vs. Total Volume)
% Sawtimber Volume (vs. Total Volume)
% Export Volume (vs. Total Volume) (a)
Delivered Log Pricing (in dollars per ton)
Domestic Pulpwood ....................................................................
Domestic Sawtimber ...................................................................
Export Sawtimber ........................................................................
Weighted Average Log Price .....................................................
Summary Financial Data (in millions of dollars)
Timber Sales ................................................................................
Less: Cut and Haul .....................................................................
Less: Port and Freight Costs .....................................................
Net Stumpage Sales .................................................................
425
671
198
1,308
2,602
100%
76%
58%
$41.97
83.19
138.84
$107.65
$280.1
(93.4)
(89.6)
$97.1
Non-Timber Sales / Carbon Credits .........................................
Total Sales ..................................................................................
1.1
$281.2
Operating Income ........................................................................
(+) Depreciation, depletion and amortization ..........................
Adjusted EBITDA (b) ..................................................................
$51.5
27.0
$78.5
470
665
133
1,221
2,488
100%
76%
54%
$33.79
70.37
98.47
$78.17
$194.5
(77.6)
(42.9)
$74.0
7.8
$202.3
$30.0
25.0
$55.0
490
803
148
1,290
2,731
100%
77%
53%
$37.93
77.85
105.65
$84.75
$231.4
(88.1)
(51.0)
$92.3
10.5
$241.9
$48.0
27.8
$75.8
Other Data
New Zealand Dollar to U.S. Dollar Exchange Rate (c) .........
Net Plantable Year-End Acres (in thousands) ........................
Export Sawtimber (in dollars per JAS m3) ...............................
Domestic Sawtimber (in $NZD per tonne) ..............................
0.7090
296
$161.42
$129.07
0.6522
296
$114.50
$118.69
0.6615
295
$122.84
$129.46
(a) Estimated percentage of export volume which includes volumes sold to third-party exporters in addition to direct exports through our log
export program.
(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators.
(c) Represents the period average rates for each year.
41
2021
2020
2019
Table of Contents
Timber Funds Overview
Sales Volume (in thousands of tons)
Pulpwood .................................................................................................
Sawtimber ................................................................................................
Total Volume ..........................................................................................
Summary Financial Data (in millions of dollars)
Timber Sales ...........................................................................................
Less: Cut and Haul .................................................................................
Net Stumpage Sales ............................................................................
Fund II Timberland Dispositions (a)
Non-Timber Sales
Timberland Management Fees .............................................................
28
374
402
$38.8
(16.5)
$22.4
$156.8
0.5
3.3
Total Sales ..............................................................................................
$199.4
Operating Income (Loss) .......................................................................
Operating (income) loss attributable to NCI in Timber Funds .........
(-) Fund II Timberland Dispositions attributable to Rayonier (a) .....
(-) Gain on investment in Timber Funds (b) ........................................
(+) Timber write-offs resulting from casualty events attributable to
Rayonier (c) .............................................................................................
(+) Depreciation, depletion and amortization (“Look-through”) .......
Adjusted EBITDA (d) ............................................................................
Other Data
Year-End Acres (in thousands) .............................................................
“Look-through” Year-End Acres (in thousands) ..................................
$63.3
(45.6)
(10.3)
(7.5)
—
2.4
$2.3
—
—
27
288
315
$26.0
(10.2)
$15.8
—
0.1
3.4
$29.6
($13.2)
11.6
—
—
1.8
1.6
$1.8
141
17
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(a) Fund II Timberland Dispositions represents the disposition of Timber Fund II timberland assets, which we managed and owned a co-
investment stake in. Fund II Timberland Dispositions attributable to Rayonier represents the proportionate share of Fund II Timberland
Dispositions that are attributable to Rayonier.
(b) Gain on investment in Timber Funds reflects the gain recognized on Fund II carried interest incentive fees in the fourth quarter of 2021 as
well as the gain recognized on the sale of Timber Funds III & IV in the third quarter of 2021.
(c) Timber write-offs resulting from casualty events attributable to Rayonier include the write-off of merchantable and pre-merchantable timber
volume destroyed by casualty events which cannot be salvaged.
(d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators.
42
Table of Contents
Trading Overview
Sales Volume (in thousands of tons)
U.S. ..................................................................................................................
NZ .....................................................................................................................
Total Volume .................................................................................................
Summary Financial Data (in millions of dollars)
Trading Sales ..................................................................................................
Non-Timber Sales ..........................................................................................
Total Sales .....................................................................................................
Operating Income (Loss) ..............................................................................
Adjusted EBITDA (a) ...................................................................................
2021
2020
2019
1
705
706
$93.6
1.7
$95.4
$0.1
$0.1
1
959
960
$87.6
1.4
$89.0
($0.5)
($0.5)
1
1,106
1,107
$114.6
0.8
$115.4
—
—
(a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators.
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Table of Contents
Real Estate Overview
2021
2020
2019
Sales (in millions of dollars)
Improved Development (a) ..........................................................
Unimproved Development ...........................................................
Rural ................................................................................................
Timberland & Non-Strategic .........................................................
Conservation Easements .............................................................
Deferred Revenue/Other (b) ........................................................
Large Dispositions (c) ...................................................................
Total Sales .....................................................................................
Acres Sold
Improved Development (a) ..........................................................
Unimproved Development ..........................................................
Rural ................................................................................................
Timberland & Non-Strategic .........................................................
Large Dispositions (c) ...................................................................
Total Acres Sold ..........................................................................
Price per Acre (dollars per acre)
Improved Development (a) ..........................................................
Unimproved Development ...........................................................
Rural ................................................................................................
Timberland & Non-Strategic .........................................................
Large Dispositions (c) ...................................................................
Weighted Average (Total) (d) .......................................................
Weighted Average (Adjusted) (e) ................................................
$51.7
37.5
43.1
—
3.9
(2.4)
56.0
$189.9
791
359
14,565
34
16,622
32,371
$65,375
104,579
2,958
1,297
3,372
$8,403
$5,391
Total Sales (Excluding Large Dispositions) .........................
$133.9
Operating Income ..........................................................................
(+) Depreciation, depletion and amortization ............................
(+) Non-cash cost of land and improved development ............
(–) Large Dispositions (c) .............................................................
Adjusted EBITDA (f) ....................................................................
$112.5
7.9
25.0
(44.8)
$100.7
$14.5
8.4
67.2
19.3
3.1
0.9
116.0
$229.3
330
570
22,437
20,701
66,946
110,984
$43,957
14,780
2,993
930
1,733
$2,483
$2,170
$113.3
$72.0
17.7
30.4
(28.7)
$91.4
$5.9
19.5
47.7
1.3
—
0.5
—
$74.9
44
1,196
15,089
821
—
17,151
$132,412
16,290
3,158
1,629
—
$4,335
$4,002
$74.9
$38.7
8.2
12.6
—
$59.5
(a) Reflects land with capital invested in infrastructure improvements.
(b)
Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to
residential and commercial lease revenue.
(c) Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a
demonstrable premium relative to timberland value. In 2021, we completed two dispositions of approximately 17,000 acres in total. In June
2021, we completed a disposition of approximately 9,000 acres in Washington for a sales price and gain of approximately $36.0 million and
$30.3 million, respectively. In July 2021, we completed a second disposition of approximately 8,000 acres in Washington, for a sales price
and gain of approximately $20.0 million and $14.5 million, respectively. In 2020, we completed the disposition of approximately 67,000 acres
located in Mississippi for a sales price and a gain of approximately $116.0 million and $28.7 million, respectively.
(d) Excludes Large Dispositions.
(e) Excludes Improved Development and Large Dispositions.
(f) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators.
44
Table of Contents
Capital Expenditures By Segment
2021
2020
2019
Timber Capital Expenditures (in millions of dollars)
Southern Timber
Reforestation, silvicultural and other capital expenditures .........
Property taxes ....................................................................................
Lease and timber deed payments ..................................................
Allocated overhead ...........................................................................
Subtotal Southern Timber .................................................................
Pacific Northwest Timber
Reforestation, silvicultural and other capital expenditures .........
Property taxes ....................................................................................
Allocated overhead ...........................................................................
Subtotal Pacific Northwest Timber .................................................
New Zealand Timber
Reforestation, silvicultural and other capital expenditures .........
Property taxes ....................................................................................
Lease and timber deed payments ..................................................
Allocated overhead ...........................................................................
Subtotal New Zealand Timber ..........................................................
Total Timber Segments Capital Expenditures ............................
Timber Funds (“Look-through”) (a) ......................................................
Real Estate .............................................................................................
Corporate ................................................................................................
Total Capital Expenditures ...........................................................
Timberland Acquisitions
Southern Timber .....................................................................................
Pacific Northwest Timber (b) ................................................................
New Zealand Timber .............................................................................
Total Timberland Acquisitions ....................................................
$21.5
$20.7
$18.8
6.8
3.1
4.4
6.8
3.5
4.4
7.1
4.4
4.3
$35.8
$35.5
$34.6
10.8
1.1
4.7
$16.6
11.2
0.8
5.2
3.0
$20.1
$72.5
0.5
0.2
—
$73.2
$168.2
—
10.9
$179.1
6.5
0.8
4.1
7.4
0.7
3.1
$11.4
$11.2
8.9
0.7
4.3
2.7
$16.6
$63.5
0.3
0.4
—
$64.2
$24.2
—
0.5
$24.7
9.4
0.6
4.7
2.6
$17.4
$63.2
—
0.2
0.6
$64.0
$98.9
7.3
36.0
$142.3
Real Estate Development Investments (c) ....................................
$12.5
$6.5
$6.8
(a) The years ended December 31, 2021 and December 31, 2020 exclude $2.8 million and $2.3 million, respectively, of capital expenditures
attributable to noncontrolling interests in Timber Funds.
(b) The year ended December 31, 2020 excludes the Pope Resources acquisition. See Note 2 - Merger with Pope Resources for additional
information.
(c) 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.
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Table of Contents
RESULTS OF OPERATIONS, 2021 VERSUS 2020
(millions of dollars)
The following tables summarize sales, operating income and Adjusted EBITDA variances for 2021 versus 2020:
Sales
2020 ..................
Volume..............
Price ..................
Non-timber
sales..................
Foreign
exchange (a) ....
Southern
Timber
$191.8
(9.7)
17.0
3.0
—
Pacific
Northwest
Timber
New
Zealand
Timber
Timber
Funds
Real
Estate
Trading
Elim.
Total
$120.8
$202.3
$29.6
$229.3
$89.0
($3.6)
$859.2
2.5
17.3
1.7
—
9.2
22.7
(7.5)
6.4
0.9
0.1
—
—
(68.2)
88.9
(23.2)
29.2
—
—
0.4
—
—
—
—
—
—
(88.5)
175.2
(2.4)
6.4
(0.1) (f)
159.7
Other .................
2.3 (b)
0.7 (b)
48.1 (c) 168.8 (d)
(60.1) (e)
2021 ..................
$204.4
$143.0
$281.2
$199.4
$189.9
$95.4
($3.7)
$1,109.6
Includes variance due to stumpage versus delivered sales.
Includes variance due to domestic versus export sales.
(a) Net of currency hedging impact.
(b)
(c)
(d) Timber Funds includes an increase in sales attributable to noncontrolling interests of $136.3 million, $31.4 million related to Fund II
Timberland Dispositions attributable to Rayonier, sales related to timberland investment management fees paid to us by the timber funds,
and a variance due to stumpage versus delivered sales.
Includes a $60.0 million decrease in Large Dispositions in addition to Conservation Easements sales, residential and commercial lease
income, marketing fees related to Improved Development sales, equity income from joint venture entities and deferred adjustments.
Includes a $0.1 million decrease in Intersegment eliminations related to timberland management fees paid by the timber funds and reported
as sales within the Timber Funds segment.
(e)
(f)
Operating Income
2020 .....................................
Volume ................................
Price (a) ..............................
Cost .....................................
Non-timber income ............
Foreign exchange (b) ........
Depreciation, depletion &
amortization ........................
Non-cash cost of land
and improved
development .......................
Other (c) ..............................
Southern
Timber
Pacific
Northwest
Timber
New
Zealand
Timber
Timber
Funds
Real
Estate
Trading
Corporate
and Other
Total
$41.3
($10.0)
$30.0
($13.2)
$72.0
($0.5)
($45.2)
$74.4
(4.7)
17.0
0.6
3.2
—
2.7
—
6.0
0.1
17.3
(0.9)
1.7
—
(1.4)
—
—
2.1
22.7
(1.2)
(7.3)
3.7
1.5
—
—
0.2
0.1
(39.6)
88.9
(0.3)
(9.6)
—
—
—
—
(0.2)
(1.1)
—
76.7
(14.9)
16.8
—
—
0.8
(0.2)
—
—
—
—
—
—
(41.9)
146.0
(2.8)
(13.4)
—
—
(2.6)
3.7
0.2
1.7
—
17.2
(14.9)
116.7
2021 .....................................
$66.1
$6.8
$51.5
$63.3
$112.5
$0.1
($30.6) $269.8
(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) Net of currency hedging impact.
(c) Southern Timber includes $6.0 million in timber write-offs resulting from casualty events in the prior year. Timber Funds includes an increase
in operating income attributable to noncontrolling interests of $57.1 million, a $10.3 million gain related to Fund II Timberland Dispositions,
$3.7 million related to the gain on sales of Funds III and IV, a $3.8 million gain on Fund II carried interest incentive fees, $1.8 million of
timber write-offs from casualty events attributable to Rayonier in the prior year and timberland investment management fees paid to us by
the timber funds. Real Estate includes a $16.1 million increase in operating income from Large Dispositions in addition to Conservation
Easements sales, residential and commercial lease income, marketing fees related to Improved Development sales, equity income from
joint venture entities and deferred adjustments. Corporate and Other includes $17.2 million in costs related to the merger with Pope
Resources in 2020.
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Table of Contents
Adjusted EBITDA (a)
2020 ..................................
Volume..............................
Price (b) ............................
Cost ...................................
Non-timber income .........
Foreign exchange (c) .....
Other (d) ...........................
Southern
Timber
Pacific
Northwest
Timber
New
Zealand
Timber
Timber
Funds
Real
Estate
Trading
Corporate
and Other
Total
$109.1
$37.1
$55.0
$1.8
$91.4
($0.5)
($26.6)
$267.4
(9.7)
17.0
0.6
3.2
—
—
2.1
17.3
(0.9)
1.7
—
—
3.3
22.7
(1.2)
(7.3)
6.0
—
0.8
0.1
(68.2)
88.9
(0.3)
(9.6)
—
—
—
—
(0.1)
(1.8)
—
—
0.8
(0.2)
—
—
—
—
(71.7)
146.0
(2.8)
(13.4)
—
—
—
(2.6)
6.0
(1.9)
2021 ..................................
$120.2
$57.3
$78.5
$2.3
$100.7
$0.1
($29.4)
$329.8
(a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators.
(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) Net of currency hedging impact.
(d) Timber Funds includes timberland investment management fees paid to us by the timber fund. Real Estate includes Conservation
Easements sales, residential and commercial lease income, marketing fees related to Improved Development sales, equity income from
joint venture entities and deferred adjustments.
SOUTHERN TIMBER
Full-year sales of $204.4 million increased $12.6 million, or 7%, versus the prior year, including an increase in
non-timber sales of $3.0 million versus the prior year. Harvest volumes decreased 8% to 5.69 million tons versus
6.20 million tons in the prior year. Average pine sawtimber stumpage prices increased 10% to $28.27 per ton versus
$25.72 per ton in the prior year, while average pine pulpwood stumpage prices increased 21% to $19.09 per ton
versus $15.83 in the prior year. The increase in average pine pulpwood prices was primarily due to strong domestic
demand, constrained supply due to wet weather conditions and an increase in pulpwood exports to China. The
increase in average pine sawtimber prices was primarily due to strong domestic lumber demand, upward pressure
on chip-n-saw pricing due to increased competition from pulp mills and a strengthening export market along the east
coast.
Operating income of $66.1 million increased $24.9 million versus the prior year due to higher net stumpage
realizations ($17.0 million), the prior year write-off of timber basis as a result of Hurricane Laura ($6.0 million),
higher non-timber income ($3.2 million), lower depletion rates ($2.7 million) and lower costs ($0.6 million), partially
offset by lower volumes ($4.7 million). Full-year Adjusted EBITDA of $120.2 million was $11.1 million above the prior
year.
PACIFIC NORTHWEST TIMBER
Full-year sales of $143.0 million increased $22.2 million, or 18%, versus the prior year. Harvest volumes
increased 4% to 1.67 million tons versus 1.60 million tons in the prior year, primarily due to incremental volume from
the Pope Resources acquisition. Average delivered sawtimber prices increased 15% to $97.87 per ton versus
$84.93 per ton in the prior year, as favorable domestic lumber markets coupled with increased export demand drove
higher log prices. Average delivered pulpwood prices decreased 11% to $31.65 per ton versus $35.51 per ton in the
prior year, as increased lumber production resulted in an increased supply of competing sawmill residuals.
Operating income of $6.8 million improved $16.8 million versus the prior year, primarily due to higher net
stumpage realizations ($17.3 million), higher non-timber income ($1.7 million) and higher volumes ($0.1 million),
partially offset by higher depletion rates ($1.4 million) and higher costs ($0.9 million). Full-year Adjusted EBITDA of
$57.3 million was $20.2 million above the prior year.
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Table of Contents
NEW ZEALAND TIMBER
Full-year sales of $281.2 million increased $78.8 million, or 39%, versus the prior year. Harvest volumes
increased 5% to 2.60 million tons versus 2.49 million tons in the prior year driven by strong export and domestic
demand versus the prior year period that was negatively impacted by COVID-19 related headwinds. Average
delivered prices for export sawtimber increased 41% to $138.84 per ton versus $98.47 per ton in the prior year,
while average delivered prices for domestic sawtimber increased 18% to $83.19 per ton versus $70.37 per ton in
the prior year. The increase in export sawtimber prices was driven primarily by the restriction on competing log
imports into China from Australia in the current year, as well as the ability of log exporters to pass higher costs along
to customers. The increase in domestic sawtimber prices (in U.S. dollar terms) was driven in part by the NZ$/US$
exchange rate (US$0.71 per NZ$1.00 versus US$0.65 per NZ$1.00). Excluding the impact of foreign exchange
rates, domestic sawtimber prices increased 9% from the prior year, following the upward trend in the export market.
Operating income of $51.5 million increased $21.5 million versus the prior year due to higher net stumpage
realizations ($22.7 million), favorable foreign exchange impacts ($3.7 million), higher volumes ($2.1 million) and
lower depletion rates ($1.5 million), which were partially offset by lower non-timber income ($7.3 million) and higher
forest management costs ($1.2 million). Full-year Adjusted EBITDA of $78.5 million was $23.5 million above the
prior year.
TIMBER FUNDS
Full-year sales of $199.4 million increased $169.8 million versus the prior year, while operating income of $63.3
million increased $76.5 million versus the prior year. Full-year sales and operating income included $156.8 million
and $51.5 million, respectively, from the Fund II Timberland Dispositions. Full-year operating income also included a
$3.7 million gain on the sale of Timber Funds III and IV and a $3.8 million gain on Fund II carried interest incentive
fees. The prior year period included timber write-offs of $9.2 million resulting from two fires in Oregon. Harvest
volumes increased 28% to 402,000 tons versus 315,000 tons in the prior year period. The prior year period reflected
results for only a portion of the year following the closing of the Pope Resources acquisition on May 8, 2020, while
the current year reflects activity through July 21 for Timber Funds III and IV and limited activity in Fund II during the
fourth quarter due to the liquidation of it’s timberland assets. Full-year Adjusted EBITDA of $2.3 million was $0.5
million above the prior year period.
REAL ESTATE
Full-year sales of $189.9 million decreased $39.5 million versus the prior year, while operating income of $112.5
million increased $40.6 million versus the prior year. Sales and operating income in the current year included $56.0
million and $44.8 million, respectively, from Large Dispositions. Prior year sales and operating income included
$116.0 million and $28.7 million, respectively, from Large Dispositions. Sales decreased primarily due to lower
volumes (32,371 acres sold versus 110,984 acres sold in the prior year), partially offset by higher weighted average
prices ($5,820 per acre versus $2,031 per acre in the prior year). Full-year Adjusted EBITDA of $100.7 million was
$9.3 million above the prior year.
TRADING
Full-year sales of $95.4 million increased $6.4 million versus the prior year due to higher prices, partially offset
by lower volumes. Sales volumes decreased 26% to 706,000 tons versus 960,000 tons in the prior year. Operating
income and Adjusted EBITDA increased $0.6 million versus the prior year.
CORPORATE AND OTHER EXPENSE/ELIMINATIONS
Full-year corporate and other operating expense of $30.6 million decreased $14.6 million versus the prior year,
which included $17.2 million of costs related to the Pope Resources merger. This positive variance was partially
offset by higher overhead expenses.
INTEREST EXPENSE
Full-year interest expense of $44.9 million increased $6.1 million versus the prior year due to higher average
outstanding debt and a $2.2 million loss from the second quarter termination of a cash flow hedge related to the
voluntary repayment of $100 million of term loans.
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Table of Contents
INTEREST AND OTHER MISCELLANEOUS INCOME, NET
Other non-operating income of $0.2 million decreased $0.9 million versus the prior year primarily due to
favorable mark to market adjustments on marketable equity securities and carbon options in the prior year, and
costs related to debt extinguishments and modifications in the current year, partially offset by favorable periodic
pension costs.
INCOME TAX EXPENSE
Full-year income tax expense of $14.7 million increased $7.7 million versus the prior year. The New Zealand
subsidiary is the primary driver of income tax expense.
RESULTS OF OPERATIONS, 2020 VERSUS 2019
Refer to Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
section contained in our Annual Report on Form 10-K for the year ended December 31, 2020 for the results of
operations discussion for the fiscal year ended December 31, 2020 compared to the fiscal year ended
December 31, 2019.
OUTLOOK FOR 2022
In 2022, we expect to achieve full-year harvest volumes in our Southern Timber segment of 6.3 to 6.6 million
tons. The anticipated increase relative to 2021 reflects a rebound in harvest activity following the wet weather
conditions and supply chain constraints that negatively impacted full-year 2021 volumes, as well as the expected
contribution from recent acquisitions. We also anticipate an improvement in weighted average stumpage
realizations relative to full-year 2021 driven by strong sawtimber and pulpwood demand, partially offset by higher
harvest and transportation costs.
In our Pacific Northwest Timber segment, we expect to achieve harvest volumes of 1.7 to 1.8 million tons. We
anticipate weighted average pricing to increase modestly relative to full-year 2021 driven by continued strong
demand. However, we expect that higher prices will be largely offset by increased harvest and transportation costs.
In our New Zealand Timber segment, we expect to achieve harvest volumes of 2.6 to 2.8 million tons. For the
full-year, we anticipate modestly lower export pricing relative to the full-year pricing achieved in 2021. However, as
log inventories in China normalize and demand picks up following the Lunar New Year, we anticipate export pricing
to increase from current levels. Seasonally lower volumes, supply chain disruptions and lower pricing are generally
expected to produce lower operating results from this segment in the first half versus the second half of the year.
In the Real Estate segment, we remain focused on opportunistically unlocking the long-term value of our HBU
development and rural property portfolio. Following exceptionally strong Real Estate results in 2021, we currently
anticipate more normalized transaction activity in 2022.
Our 2022 outlook is subject to a number of variables and uncertainties, including those discussed at Item 1A —
Risk Factors.
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Table of Contents
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 a REIT, our main use of cash is dividends on Rayonier Inc. common shares and distributions on
Rayonier, L.P. units. 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.
STRATEGY
We continuously evaluate our capital structure. Our strategy is to maintain a weighted-average cost of capital
competitive with other timberland REITs and TIMOs, while maintaining an investment grade debt rating as well as
retaining the flexibility to actively pursue capital allocation opportunities as they become available. Overall, we
believe we have adequate liquidity and sources of capital to run our businesses efficiently and effectively and to
maximize the value of our timberland and real estate assets under management.
CREDIT RATINGS
Both our ability to obtain financing and the related costs of borrowing are affected by our credit ratings, which
are periodically reviewed by the rating agencies. As of December 31, 2021, our credit ratings from S&P and
Moody’s were “BBB-” and “Baa3,” respectively, with both agencies listing our outlook as “Stable.”
SUMMARY OF LIQUIDITY AND FINANCING COMMITMENTS
2021
(in millions of dollars)
Cash and cash equivalents (excluding Timber Funds) .............................................. $358.7
Total debt (excluding Timber Funds) (a) ....................................................................... 1,376.1
Noncontrolling interests in the operating partnership ................................................. 133.8
Shareholders’ equity ........................................................................................................ 1,815.6
Net Income Attributable to Rayonier Inc. ...................................................................... 152.6
Adjusted EBITDA (b) ....................................................................................................... 329.8
Total capitalization (total debt plus permanent and temporary equity) .................... 3,325.5
Debt to capital ratio ..........................................................................................................
Debt to Adjusted EBITDA (b) ..........................................................................................
Net debt to Adjusted EBITDA (b)(c) ..............................................................................
Net debt to enterprise value (c)(d) ................................................................................
41%
4.2
3.1
14%
As of December 31,
2020
$80.5
1,294.9
130.1
1,862.6
37.1
267.4
3,287.6
2019
$68.7
1,057.0
—
1,537.6
59.1
247.8
2,594.6
39%
4.8
4.5
23%
41%
4.3
4.0
19%
(a)
(b)
(c)
(d)
Total debt as of December 31, 2021, 2020 and 2019 reflects the principal on long-term debt, net of fair market value adjustments and
gross of deferred financing costs and unamortized discounts of $8.3 million, $2.5 million and $1.9 million, respectively.
For a reconciliation of Adjusted EBITDA to net income see Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Performance and Liquidity Indicators.
Net debt is calculated as total debt less cash and cash equivalents.
Enterprise value based on market capitalization (including Rayonier, L.P. “OP” units) plus net debt based on Rayonier’s share price of
$40.36, $29.38, and $32.76 as of December 31, 2021, 2020 and 2019, respectively.
AT-THE-MARKET EQUITY OFFERING PROGRAM (“ATM Program”)
On September 10, 2020, we entered into a 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. During the
year ended December 31, 2021, the Company sold 6.4 million shares under the ATM Program at an average price
of $37.05 per share, generating aggregate gross proceeds of $235.5 million, excluding $2.4 million of commissions.
During the year ended December 31, 2020, the Company sold 1.1 million shares under the ATM Program at an
average price of $30.26 per share, generating aggregate gross proceeds of $33.4 million, excluding $0.3 million of
commissions. As of December 31, 2021, $31.1 million remains available for issuance under the program.
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The following table outlines the common stock issuance pursuant to our ATM program (dollars in millions):
Shares of common stock issued under the ATM program
Gross proceeds
CASH FLOWS
Year Ended December 31,
2021
2020
6,357,972
$235.5
1,103,012
$33.4
The following table summarizes our cash flows from operating, investing and financing activities for each of the
three years ended December 31 (in millions of dollars):
Total cash provided by (used for):
2021
2020
2019
Operating activities .............................................................................................................. $325.1
Investing activities ................................................................................................................
Financing activities ...............................................................................................................
Effect of exchange rate changes on cash ........................................................................
(16.3)
(0.9)
$204.2
$214.3
(26.3) (213.6) (219.4)
Change in cash, cash equivalents and restricted cash .................................................... $281.7
$17.5
27.0
(0.1)
(79.6)
(1.8)
($86.5)
CASH PROVIDED BY OPERATING ACTIVITIES
Cash provided by operating activities increased $120.9 million versus the prior year primarily due to higher
operating results and $17.2 million of merger-related costs in the prior year.
CASH USED FOR INVESTING ACTIVITIES
Cash used for investing activities decreased $187.4 million versus the prior year primarily due to the net cash
consideration transferred in our merger with Pope Resources in the prior year ($231.1 million), net proceeds from
the sale of Fund II timberlands ($154.7 million), net proceeds from the sale of Timber Funds III and IV ($31.0 million)
and other investing activities ($1.5 million), partially offset by an increase in timberland acquisitions ($154.4 million),
lower proceeds from Large Dispositions ($61.0 million), higher capital expenditures ($9.5 million) and higher real
estate development investments ($6.0 million).
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES
Cash used for financing activities of $16.3 million compares to cash provided by financing activities of $27.0
million in the prior year. This is primarily due to a decrease in net borrowings ($141.6 million), higher distributions to
consolidated affiliates ($96.3 million), higher dividends paid on common stock ($7.2 million), make-whole fees on
debt prepayments in the current year ($6.2 million), higher debt issuance costs ($2.4 million) and higher
distributions to noncontrolling interests in the operating partnership ($0.7 million), partially offset by higher proceeds
from the issuance of common shares under the ATM equity offering program ($198.3 million), noncontrolling
interests in consolidated affiliates redemption of shares in the prior year ($5.1 million), higher proceeds from the
issuance of common shares under the incentive stock plan ($4.6 million) and decreases in share repurchases ($3.1
million).
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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, distributions to noncontrolling
interests, repurchases of the Company’s common shares and to satisfy other commitments.
Significant long-term uses of cash include the following (in millions):
Total
Future uses of cash (in millions)
Long-term debt (a) .............................................................. $1,251.1
Current maturities of long-term debt (b) ..........................
125.0
Interest payments on long-term debt (c) ..........................
185.6
Operating leases — timberland (d) ..................................
182.1
Operating leases — PP&E, offices (d) .............................
6.0
Commitments — development projects (e) .....................
19.3
Commitments — derivatives (f) .........................................
49.2
Commitments - environmental remediation (g) ..............
10.8
Commitments — other (h) ..................................................
1.4
Total ............................................................................ $1,830.5
2022
$200.0
125.0
30.4
8.0
1.4
14.3
13.9
0.7
0.8
$394.5
Payments Due by Period
2023-2024
—
2025-2026
$251.1
—
48.1
15.0
2.2
0.5
21.9
7.7
0.5
$95.9
—
44.0
13.4
1.4
0.5
8.8
1.4
0.1
$320.7
Thereafter
$800.0
—
63.1
145.7
1.0
4.0
4.6
1.0
—
$1,019.4
(a) The book value of long-term debt, net of deferred financing costs and unamortized discounts, is currently recorded at $1,242.8 million on
our Consolidated Balance Sheets, but upon maturity the liability will be $1,251.1 million. See Note 10 - Debt for additional information.
(b) The book value of current maturities of long-term debt, net of deferred financing costs is currently recorded at $125.0 million on our
Consolidated Balance Sheets, and upon maturity the liability will be $125.0 million. See Note 10 - Debt for additional information.
(c) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of
December 31, 2021.
(d) Excludes anticipated renewal options.
(e) Commitments — developmental projects primarily consists of payments expected to be made on our Wildlight and Richmond Hill projects.
(f) Commitments — derivatives represent payments expected to be made on derivative financial instruments (interest rate swaps and forward-
starting interest rate swaps). See Note 11 — Derivative Financial Instruments and Hedging Activities for additional information.
(g) Commitments — environmental remediation represents our estimate of potential liability associated with environmental contamination and
Natural Resource Damages in Port Gamble, Washington. See Note 15 - Environmental and Natural Resource Damage Liabilities for
additional information.
(h) Commitments — other includes other purchase obligations.
We expect to fund future uses of cash with a combination of existing cash balances, cash generated by
operating activities, the remaining issuances available under the Company’s ATM Program, Large Dispositions and
the use of our revolving credit facilities.
EXPECTED 2022 EXPENDITURES
Capital expenditures in 2022 are forecasted to be between $80 million and $85 million, excluding any strategic
timberland acquisitions we may make. Capital expenditures are expected to be primarily comprised 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.
Real estate development investments in 2022 are expected to be between $22 million and $25 million, net of
anticipated 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; Richmond Hill, our mixed-use development project located south of Savannah, Georgia; development
properties in the town of Port Gamble, Washington; and development projects in Gig Harbor, Kingston and
Bremerton, Washington.
Our 2022 dividend payments on Rayonier Inc. common shares and distributions to Rayonier, L.P. unitholders
are expected to be approximately $157.5 million and $3.6 million, respectively, assuming no change in the quarterly
dividend rate of $0.27 per share or material changes in the number of common shares or partnership units
outstanding.
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Future share repurchases, if any, will depend on the Company’s liquidity and cash flow, as well as general
market conditions and other considerations including capital allocation priorities.
We made no discretionary pension contributions in 2021. We have no pension contribution requirements in
2022 but may make discretionary contributions in the future.
Cash income tax payments in 2022 are expected to be between $18 million and $22 million, primarily due to the
New Zealand subsidiary.
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 16 — Guarantees for further discussion.
SUMMARY OF GUARANTOR FINANCIAL INFORMATION
In March 2012, Rayonier Inc. issued $325 million of 3.75% Senior Notes due 2022 (the “Senior Notes due
2022”). On May 7, 2020, Rayonier Inc. contributed its 100% ownership interest in Rayonier Operating Company
LLC (the “Contribution”) to Rayonier, L.P. As a result of the Contribution, Rayonier, L.P. expressly assumed all the
obligations of Rayonier Inc. with respect to the outstanding Senior Notes due 2022 and Rayonier Inc. agreed to
irrevocably, fully and unconditionally guarantee jointly and severally, the obligations of Rayonier, L.P. under the
Indenture, including the Senior Notes due 2022. Rayonier L.P. is the current issuer of the Senior Notes due 2022.
See the subsequent events section of Note 1 - Summary of Significant Accounting Policies for information about the
repayment of our Senior Notes due 2022.
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., together with 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 eliminated 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.
The following table contains the summarized balance sheet information for the consolidated obligor group of
debt issued by Rayonier, L.P. for the two years ended December 31:
(in millions)
Current assets ...........................................................................................
Non-current assets ...................................................................................
Current liabilities .......................................................................................
Non-current liabilities ...............................................................................
Due to non-guarantors .............................................................................
December 31, 2021 December 31, 2020
$69.7
$335.8
54.6
146.0
1,821.7
570.4
48.3
21.0
1,942.4
596.7
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The following table contains the summarized results of operations information for the consolidated obligor group
of debt issued by Rayonier, L.P. for the two years ended December 31:
(in millions)
December 31, 2021
December 31, 2020
Cost and expenses .................................................................................
Operating loss ..........................................................................................
Net loss .....................................................................................................
Revenue from non-guarantors ..............................................................
($27.5)
(27.3)
(69.7)
1,109.4
($43.4)
(43.4)
(81.3)
859.2
LIQUIDITY FACILITIES
See Note 10 — Debt for information on liquidity facilities and other outstanding debt, as well as for information
on covenants that must be met in connection with our Senior Notes due 2022, Senior Notes due 2031, Term Credit
Agreement, Incremental Term Loan Agreement, 2021 Incremental Term Loan Agreement and Revolving Credit
Facility.
RESTRICTED CASH
See Note 24 — Restricted Cash for further information regarding the portion of proceeds from Fund II
Timberland Dispositions required to be distributed to noncontrolling interests and cash held in escrow.
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Table of Contents
PERFORMANCE AND LIQUIDITY INDICATORS
The discussion below is presented to enhance the reader’s understanding of our operating performance,
liquidity, 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 GAAP and
the discussion of Adjusted EBITDA and CAD is not intended to conflict with or change any of the GAAP disclosures
described above. Management considers these measures to be important to estimate the enterprise and
shareholder values and of our core segments, and for allocating capital resources. In addition, analysts, investors
and creditors use these measures when analyzing our operating performance, financial condition and cash
generating ability. Management uses Adjusted EBITDA as a performance measure and CAD as a liquidity measure.
Adjusted EBITDA and CAD as defined may not be comparable to similarly titled measures reported by other
companies. These measures should not be considered in isolation from, and are not intended to represent an
alternative to, our results reported in accordance with GAAP.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-
cash cost of land and improved development, non-operating income and expense, operating income (loss)
attributable to noncontrolling interests in Timber Funds, costs related to the merger with Pope Resources, timber
write-offs resulting from casualty events, the gain on investment in Timber Funds, Fund II Timberland Dispositions
and Large Dispositions.
Below is a reconciliation of Net Income to Adjusted EBITDA for the three years ended December 31 (in millions
of dollars):
2021
2020
2019
Net Income to Adjusted EBITDA Reconciliation
Net Income ................................................................................................................................... $210.5
Operating (income) loss attributable to NCI in Timber Funds ....................................
Interest, net attributable to NCI in Timber Funds .........................................................
0.3
Income tax expense attributable to NCI in Timber Funds ...........................................
0.1
Net income (Excluding NCI in Timber Funds) ........................................................................ $165.3
Interest, net and miscellaneous income attributable to Rayonier .............................. 44.3
Income tax expense attributable to Rayonier ............................................................... 14.6
Depreciation, depletion and amortization attributable to Rayonier ........................... 143.2
Non-cash cost of land and improved development ..................................................... 25.0
Timber write-offs resulting from casualty events attributable to Rayonier (a) .........
—
—
Non-operating income ......................................................................................................
—
Costs related to the merger with Pope Resources (b) ................................................
(7.5)
Gain on investment in Timber Funds (c) .......................................................................
(10.3)
Fund II Timberland Dispositions attributable to Rayonier (d) .....................................
Large Dispositions (e) .......................................................................................................
(44.8)
Adjusted EBITDA ........................................................................................................................ $329.8
$29.8
(45.6) 11.6
0.5
0.2
$42.1
38.0
6.8
154.7
30.4
7.9
(0.9)
17.2
—
—
(28.7)
$267.4
—
(2.7)
—
—
—
—
$247.8
$67.7
—
—
—
$67.7
29.1
12.9
128.2
12.6
(a) Timber write-offs resulting from casualty events include the write-off of merchantable and pre-merchantable timber volume destroyed by
casualty events which cannot be salvaged.
(b) Costs related to the merger with Pope Resources include legal, accounting, due diligence, consulting and other costs related to the merger
with Pope Resources.
(c) Gain on investment in Timber Funds reflects the gain recognized on Fund II carried interest incentive fees in the fourth quarter of 2021 as
well as the gain recognized on the sale of Timber Funds III & IV in the third quarter of 2021.
(d) Fund II Timberland Dispositions represent the disposition of Fund II Timberland assets, which we managed and owned a co-investment
stake in. Fund II Timberland Dispositions attributable to Rayonier represents the proportionate share of Fund II Timberland Dispositions that
are attributable to Rayonier.
(e) Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a
demonstrable premium relative to timberland value.
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The following tables provide a reconciliation of Operating Income (Loss) by segment to Adjusted EBITDA by
segment for the three years ended December 31 (in millions of dollars):
Southern
Timber
Pacific
Northwest
Timber
New
Zealand
Timber
Timber
Funds
Real
Estate
Trading
Corporate
and
Other
Total
2021
Operating income (loss) ............................................
Add:
Add:
Depreciation, depletion and amortization
Non-cash cost of land and improved
development .................................................
Less: Operating income attributable to NCI in
Timber Funds (a) .........................................
Less: Gain on investment in Timber Funds (b) .
Less:
Fund II Timberland Dispositions
attributable to Rayonier (c) ........................
Less:
Large Dispositions (d) .................................
$66.1
54.1
$6.8
50.5
—
—
—
—
—
—
—
—
—
—
$51.5
$63.3
$112.5
$0.1
($30.6)
$269.8
27.0
2.4
7.9
—
—
—
—
—
—
25.0
(45.6)
(7.5)
(10.3)
—
—
—
—
(44.8)
—
—
—
—
—
—
1.2
143.2
—
—
—
—
—
25.0
(45.6)
(7.5)
(10.3)
(44.8)
Adjusted EBITDA .......................................................
$120.2
$57.3
$78.5
$2.3
$100.7
$0.1
($29.4)
$329.8
2020
Operating income (loss) ............................................
Add:
Add:
Add:
Add:
Add:
Operating loss attributable to NCI in
Timber Funds (a) .........................................
Timber write-offs resulting from casualty
events attributable to Rayonier (e) ...........
Costs related to the merger with Pope
Resources (f) ................................................
Depreciation, depletion and amortization
Non-cash cost of land and improved
development .................................................
Less:
Large Dispositions (d) .................................
$41.3
($10.0)
$30.0
($13.2) $72.0
($0.5)
($45.2)
$74.4
—
6.0
—
61.8
—
—
—
—
—
—
—
—
47.1
25.0
—
—
—
—
11.6
1.8
—
1.6
—
—
—
—
—
17.7
30.4
(28.7)
—
—
—
—
—
—
—
—
11.6
7.9
17.2
17.2
1.4
154.7
—
—
30.4
(28.7)
Adjusted EBITDA .......................................................
$109.1
$37.1
$55.0
$1.8
$91.4
($0.5)
($26.6)
$267.4
2019
Operating income (loss) ............................................
Add:
Add:
Depreciation, depletion and amortization
Non-cash cost of land and improved
development .................................................
$57.8
61.9
($12.4)
29.2
$48.0
27.8
—
—
—
—
—
—
$38.7
8.2
12.6
Adjusted EBITDA .......................................................
$119.7
$16.7
$75.8
—
$59.5
—
—
—
—
($25.1)
$107.0
1.2
128.2
—
12.6
($23.9)
$247.8
(a) The year ended December 31, 2021 includes $41.2 million of income from Fund II Timberland Dispositions. The year ended December 31, 2020
includes a $7.3 million loss related to timber write-offs resulting from casualty events.
(b) Gain on investment in Timber Funds reflects the gain recognized on Fund II carried interest incentive fees in the fourth quarter of 2021 as well as the
(c)
(d)
gain recognized on the sale of Timber Funds III & IV in the third quarter of 2021.
Fund II Timberland Dispositions represent the disposition of Fund II Timberland assets, which we managed and owned a co-investment stake in.
Fund II Timberland Dispositions attributable to Rayonier represents the proportionate share of Fund II Timberland Dispositions that are attributable to
Rayonier.
Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a demonstrable
premium relative to timberland value.
(e) Timber write-offs resulting from casualty events includes the write-off of merchantable and pre-merchantable timber volume destroyed by casualty
(f)
events which cannot be salvaged.
Costs related to the merger with Pope Resources include legal, accounting, due diligence, consulting and other costs related to the merger with Pope
Resources.
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Cash Available for Distribution (CAD) is defined as cash provided by operating activities adjusted for capital
spending (excluding timberland acquisitions and real estate development investments), CAD attributable to
noncontrolling interests in Timber Funds, and working capital and other balance sheet changes. CAD is a non-
GAAP measure of cash generated during a period that is available for common stock dividends, distributions to
operating partnership unitholders, distributions to noncontrolling interests, repurchase of the Company's common
shares, debt reduction, timberland acquisitions and real estate development investments. In compliance with SEC
requirements for non-GAAP measures, we reduce CAD by mandatory debt repayments, which results in the
measure entitled “Adjusted CAD.” CAD and Adjusted CAD generated in any period are not necessarily indicative of
the CAD that may be generated in future periods.
Below is a reconciliation of Cash Provided by Operating Activities to Adjusted CAD for the three years ended
December 31 (in millions):
Cash provided by operating activities
Capital expenditures from continuing operations (a)
Costs related to the merger with Pope Resources (b)
CAD attributable to NCI in Timber Funds
Working capital and other balance sheet changes
CAD
Mandatory debt repayments
Adjusted CAD
2021
$325.1
2020
$204.2
(76.0)
—
(12.9)
(28.4)
(66.5)
17.2
(2.8)
10.3
$162.4
—
($117.2) $162.4
(325.0)
$207.8
2019
$214.3
(64.0)
—
—
(0.9)
$149.4
(82.0)
$67.4
Cash used for investing activities
Cash (used for) provided by financing activities
($26.3) ($213.6) ($219.4)
($16.3) $27.0
($79.6)
(a) Capital expenditures exclude timberland acquisitions and real estate development investments.
(b) Costs related to the merger with Pope Resources include legal, accounting, due diligence, consulting and other costs related to the merger
with Pope Resources.
The following table provides supplemental cash flow data for the three years ended December 31 (in millions):
Purchase of timberlands (a)
Real Estate Development Investments
Distributions to noncontrolling interests in consolidated affiliates
2021
2020
2019
($179.1)
($24.7) ($142.3)
(12.5)
(6.5)
(109.0)
(12.6)
(6.8)
(9.2)
(a) The year ended December 31, 2020 excludes the Pope Resources acquisition. See Note 2 - Merger with Pope Resources for additional
information.
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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to various market risks, including changes in interest rates, commodity prices and foreign
exchange rates. Our objective is to minimize the economic impact of these market risks. We use derivatives in
accordance with policies and procedures approved by the Audit Committee of the Board of Directors. Derivatives
are managed by a senior executive committee, whose responsibilities include initiating, managing and monitoring
resulting exposures. We do not enter into financial instruments for trading or speculative purposes.
Interest Rate Risk
We are exposed to interest rate risk through our variable rate debt, primarily due to changes in LIBOR.
However, we use interest rate swaps to manage our exposure to interest rate movements on our term credit
agreements by swapping existing and anticipated future borrowings from floating rates to fixed rates. As of
December 31, 2021, we had $550 million of U.S. long-term variable rate debt outstanding on our term credit
agreements.
The notional amount of outstanding interest rate swap contracts with respect to our term credit agreements at
December 31, 2021 was also $550 million. The Term Credit Agreement matures in April 2028, with the associated
interest rate swaps maturing in August 2024. We have entered into forward starting interest rate swaps to cover
$150 million of the Term Credit Agreement through the extended maturity date. The Incremental Term Loan
Agreement and associated interest rate swaps mature in May 2026. At this borrowing level, a hypothetical one-
percentage point increase/decrease in interest rates would result in no corresponding increase/decrease in interest
payments and expense over a 12-month period.
The fair market value of our fixed interest rate debt is also subject to interest rate risk. The estimated fair value
of our fixed rate debt at December 31, 2021 was $820.4 million compared to the $826.1 million principal amount.
We use interest rates of debt with similar terms and maturities to estimate the fair value of our debt. Generally, the
fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise. A
hypothetical one-percentage point increase/decrease in prevailing interest rates at December 31, 2021 would result
in a corresponding decrease/increase in the fair value of our fixed rate debt of approximately $38 million and $41
million, respectively.
We estimate the periodic effective interest rate on our U.S. long-term fixed and variable rate debt to be
approximately 3.0% after consideration of interest rate swaps and estimated patronage refunds and excluding
unused commitment fees on the revolving credit facility.
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The following table summarizes our outstanding debt, interest rate swaps and average interest rates, by year of
expected maturity and their fair values at December 31, 2021:
(Dollars in thousands)
2022
2023
2024
2025
2026
Thereafter
Total
Fair Value
Variable rate debt:
Principal amounts
Average interest rate (a)(b)
Fixed rate debt:
—
—
Principal amounts
$325,000
Average interest rate (b)
3.75%
Interest rate swaps:
Notional amount
Average pay rate (b)
Average receive rate (b)
Forward-starting interest
rate swaps
Notional amount
Average pay rate (b)
Average receive rate (b)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(a) Excludes estimated patronage refunds.
(b) Interest rates as of December 31, 2021.
Foreign Currency Exchange Rate Risk
—
—
—
—
—
—
$200,000
$350,000
$550,000
$550,000
1.75%
1.70%
1.72%
$23,588
$27,519
$450,000
$826,107
$820,435
2.95%
3.64%
2.75%
3.18%
$350,000
2.28%
0.10%
—
—
—
—
—
—
—
—
—
$200,000
1.60%
0.10%
—
—
—
$550,000
($15,582)
2.03%
0.10%
—
—
—
$350,000
$350,000
$11,482
0.80%
0.10%
0.80%
0.10%
The New Zealand subsidiary’s export sales are predominantly denominated in U.S. dollars, and therefore its
cash flows are affected by fluctuations in the exchange rate between the New Zealand dollar and the U.S. dollar.
This exposure is partially managed by a natural currency hedge, as ocean freight payments and shareholder
distributions are also paid in U.S. dollars. We manage any excess foreign exchange exposure through the use of
derivative financial instruments.
Sales and Expense Exposure
At December 31, 2021, the New Zealand subsidiary had foreign currency exchange contracts with a notional
amount of $149 million and foreign currency option contracts with a notional amount of $14 million outstanding
related to foreign export sales and ocean freight payments. The amount hedged represents a portion of forecasted
U.S. dollar denominated export timber and log trading sales proceeds over the next 24 months and next 2 months,
respectively.
The following table summarizes our outstanding foreign currency exchange rate risk contracts at December 31,
2021:
(Dollars in thousands)
0-1
months
1-2
months
2-3
months
3-6
months
6-12
months
12-18
months
18-24
months
Total
Fair
Value
Foreign exchange contracts to sell U.S. dollar for New Zealand dollar
Notional amount .................... $12,000
$8,250
$8,000
$24,000
$45,000
$39,000 $13,000
$149,250
($1,948)
Average contract rate ........... 1.4738
1.4527
1.4598
1.4470
1.4422
1.4648
1.4829
1.4565
Foreign currency option contracts to sell U.S. dollar for New Zealand dollar
Notional amount ....................
Average strike price ..............
—
—
—
—
—
—
—
—
—
—
$2,000
$12,000
$14,000
($42)
1.4744
1.4941
1.4913
59
Table of Contents
Item 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
Management’s Reports on Internal Control over Financial Reporting .....................................................................................................
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42) .......................................................................................
Rayonier Inc.: ....................................................................................................................................................................................................
Consolidated Statements of Income and Comprehensive Income for the Three Years Ended December 31, 2021 .................
Consolidated Balance Sheets as of December 31, 2021 and 2020 ...................................................................................................
Consolidated Statements of Shareholders’ Equity for the Three Years Ended December 31, 2021 ............................................
Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2021 ............................................................
Rayonier, L.P.: ...................................................................................................................................................................................................
Consolidated Statements of Income and Comprehensive Income for the Three Years Ended December 31, 2021 .................
Consolidated Balance Sheets as of December 31, 2021 and 2020 ...................................................................................................
Consolidated Statements of Changes in Capital for the Three Years Ended December 31, 2021 ...............................................
Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2021 ............................................................
Notes to Consolidated Financial Statements ...............................................................................................................................................
Note 1 - Summary of Significant Accounting Policies ........................................................................................................................
Note 2 - Merger with Pope Resources .................................................................................................................................................
Note 3 - Segment and Geographical Information ...............................................................................................................................
Note 4 - Revenue .....................................................................................................................................................................................
Note 5 - Timberland Acquisitions ...........................................................................................................................................................
Note 6 - Leases ........................................................................................................................................................................................
Note 7 - Noncontrolling Interests ...........................................................................................................................................................
Note 8 - Variable Interest Entities ..........................................................................................................................................................
Note 9 - Earnings Per Share and Per Unit ...........................................................................................................................................
Note 10 - Debt ..........................................................................................................................................................................................
Note 11 - Derivative Financial Instruments and Hedging Activities ..................................................................................................
Note 12 - Fair Value Measurements .....................................................................................................................................................
Note 13 - Commitments ..........................................................................................................................................................................
Note 14 - Contingencies ..........................................................................................................................................................................
Note 15 - Environmental and Natural Resource Damage Liabilities ...............................................................................................
Note 16 - Guarantees ..............................................................................................................................................................................
Note 17 - Higher and Better Use Timberlands and Real Estate Development Investments .......................................................
Note 18 - Inventory ..................................................................................................................................................................................
Note 19 - Other Operating Income (Expense), Net ............................................................................................................................
Note 20 - Employee Benefit Plans ........................................................................................................................................................
Note 21 - Incentive Stock Plans .............................................................................................................................................................
Note 22 - Income Taxes ..........................................................................................................................................................................
Note 23 - Accumulated Other Comprehensive Loss ..........................................................................................................................
Note 24 - Restricted Cash ......................................................................................................................................................................
Note 25 - Other Assets ............................................................................................................................................................................
Note 26 - Assets Held for Sale ...............................................................................................................................................................
Note 27 - Charges for Integration and Restructuring .........................................................................................................................
Note 28 - Related Party ...........................................................................................................................................................................
Page
61
63
68
69
70
72
74
75
76
78
80
80
89
92
95
97
98
100
103
105
107
112
116
117
117
117
118
119
120
120
121
126
130
133
134
135
136
136
137
60
Table of Contents
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Rayonier Inc.
To Our Shareholders:
The management of Rayonier Inc. and its subsidiaries is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as
amended). Our system of internal controls over financial reporting is designed to provide reasonable assurance to
the Company’s management and Board of Directors regarding the preparation and fair presentation of the financial
statements for external purposes in accordance with accounting principles generally accepted in the United States
of America.
Because of the inherent limitations of internal control over financial reporting, misstatements due to error or
fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Rayonier Inc.’s management, under the supervision of the Chief Executive Officer and Chief Financial Officer,
assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this
assessment, we used the framework included in Internal Control — Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on our evaluation under the
criteria set forth in Internal Control — Integrated Framework, management concluded that our internal control over
financial reporting was effective as of December 31, 2021.
Ernst & Young LLP, the independent registered public accounting firm that audited the Company’s consolidated
financial statements, has issued an audit report on the Company’s internal control over financial reporting as of
December 31, 2021. The report on the Company’s internal control over financial reporting as of December 31, 2021,
is on page 63.
RAYONIER INC.
By:
/s/ DAVID L. NUNES
David L. Nunes
President and Chief Executive Officer
(Principal Executive Officer)
February 25, 2022
By:
/s/ MARK MCHUGH
Mark McHugh
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
February 25, 2022
By:
/s/ APRIL TICE
April Tice
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
February 25, 2022
61
Table of Contents
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Rayonier, L.P.
To Our Unitholders:
The management of Rayonier, L.P. and its subsidiaries is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as
amended). Our system of internal controls over financial reporting is designed to provide reasonable assurance to
the Operating Partnership’s management and the Rayonier Inc. Board of Directors regarding the preparation and
fair presentation of the financial statements for external purposes in accordance with accounting principles generally
accepted in the United States of America.
Because of the inherent limitations of internal control over financial reporting, misstatements due to error or
fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Rayonier, L.P.’s management, under the supervision of the Chief Executive Officer and Chief Financial Officer,
assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this
assessment, we used the framework included in Internal Control — Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on our evaluation under the
criteria set forth in Internal Control — Integrated Framework, management concluded that our internal control over
financial reporting was effective as of December 31, 2021.
RAYONIER, L.P.
By: RAYONIER, INC., its sole general partner
By:
/s/ DAVID L. NUNES
David L. Nunes
President and Chief Executive Officer
(Principal Executive Officer)
February 25, 2022
By:
/s/ MARK MCHUGH
Mark McHugh
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
February 25, 2022
By:
/s/ APRIL TICE
April Tice
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
February 25, 2022
62
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Rayonier Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Rayonier Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2021,
based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Rayonier Inc. and
subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as
of December 31, 2021, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related
consolidated statements of income and comprehensive income, shareholders’ equity and cash flows for each of the
three years in the period ended December 31, 2021, and the related notes and schedule and our report dated
February 25, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/ Ernst & Young LLP
Jacksonville, Florida
February 25, 2022
63
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Rayonier Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Rayonier Inc. and subsidiaries (the Company)
as of December 31, 2021 and 2020, the related consolidated statements of income and comprehensive income,
shareholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the
related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the
“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with
U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework), and our report dated February 25, 2022 expressed an unqualified
opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) related to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
64
Table of Contents
Description of the
Matter
How We
Addressed the
Matter in Our
Audit
Depletion of Timber
For the year ended December 31, 2021, the Company recognized $242 million in depletion
expense and the Timber and Timberlands balance, net of depletion and amortization, was
$2,895 million at December 31, 2021. As described in Note 1 to the financial statements, the
Company establishes an annual depletion rate for each particular region. Depletion rates are
determined by region by dividing merchantable inventory cost by standing merchantable
inventory volume, which is estimated annually. The Company charges accumulated costs
attributed to merchantable timber to depletion expense (cost of sales) at the time the timber is
harvested or when the underlying timberland is sold.
Auditing management’s annual depletion rate was complex and subjective due to the estimation
uncertainty in determining the standing merchantable inventory volume utilized in the calculation
of the depletion rate for each region. In particular, estimating the standing merchantable
inventory volume involves statistical sampling and growth modeling using inputs such as growth
estimates, harvest information and environmental and operational restrictions.
We obtained an understanding, evaluated the design and tested the operating effectiveness of
controls over the Company’s process for establishing the annual depletion rate for each
geographic region. For example, we tested controls over management’s review of the standing
merchantable inventory volume that was determined for each geographic region.
To test the annual depletion rates (including standing merchantable inventory volume), our audit
procedures included, among others, evaluating the methodology used and testing the
completeness and accuracy of the underlying data used by the Company. We inspected satellite
images to test timber existence and assessed the timberland for features that would impact the
Company’s ability to harvest its timber. In addition, we evaluated current year changes to
harvestability, analyzed the change in depletion as a percentage of sales, utilized published
industry growth rates to assess the increase in timber volume growth and compared actual
volume harvested to the volume estimated by the Company.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2012.
Jacksonville, Florida
February 25, 2022
65
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Rayonier Inc., the general partner of Rayonier, L.P.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Rayonier, L.P. and subsidiaries (the Operating
Partnership) as of December 31, 2021 and 2020, the related consolidated statements of income and
comprehensive income, capital and cash flows for each of the three years in the period ended December 31, 2021,
and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as
the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Operating Partnership at December 31, 2021 and 2020, and the
results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in
conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is
to express an opinion on the Operating Partnership’s financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. The Operating Partnership is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Operating Partnership’s internal control over financial reporting. Accordingly, we express
no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable
basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) related to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
66
Table of Contents
Description of the
Matter
Depletion of Timber
For the year ended December 31, 2021, the Operating Partnership recognized $242 million in depletion
expense and the Timber and Timberlands balance, net of depletion and amortization, was $2,895
million at December 31, 2021. As described in Note 1 to the financial statements, the Operating
Partnership establishes an annual depletion rate for each particular region. Depletion rates are
determined by region by dividing merchantable inventory cost by standing merchantable inventory
volume, which is estimated annually. The Operating Partnership charges accumulated costs attributed
to merchantable timber to depletion expense (cost of sales) at the time the timber is harvested or when
the underlying timberland is sold.
Auditing management’s annual depletion rate was complex and subjective due to the estimation
uncertainty in determining the standing merchantable inventory volume utilized in the calculation of the
depletion rate for each region. In particular, estimating the standing merchantable inventory volume
involves statistical sampling and growth modeling using inputs such as growth estimates, harvest
information and environmental and operational restrictions.
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls
over the Operating Partnership’s process for establishing the annual depletion rate for each geographic
region. For example, we tested controls over management’s review of the standing merchantable
inventory volume that was determined for each geographic region.
How We
Addressed the
Matter in Our
Audit
To test the annual depletion rates (including standing merchantable inventory volume), our audit
procedures included, among others, evaluating the methodology used and testing the completeness
and accuracy of the underlying data used by the Operating Partnership. We inspected satellite images
to test timber existence and assessed the timberland for features that would impact the Operating
Partnership’s ability to harvest its timber. In addition, we evaluated current year changes to
harvestability, analyzed the change in depletion as a percentage of sales, utilized published industry
growth rates to assess the increase in timber volume growth and compared actual volume harvested to
the volume estimated by the Operating Partnership.
We have served as the Operating Partnership’s auditor since 2019.
/s/ Ernst & Young LLP
Jacksonville, Florida
February 25, 2022
67
RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Years Ended December 31,
(Thousands of dollars, except per share data)
SALES (NOTE 4) ............................................................................................................. $1,109,597
Costs and Expenses
2021
2020
$859,154
2019
$711,556
Other operating income (expense), net (Note 19)
Cost of sales .................................................................................................................. (796,115) (712,436) (558,350)
(41,646)
Selling and general expenses .....................................................................................
(4,533)
(839,822) (784,766) (604,529)
107,027
(31,716)
5,307
OPERATING INCOME ................................................................................................... 269,775
(44,907)
Interest expense ...............................................................................................................
280
Interest and other miscellaneous income, net .............................................................
INCOME BEFORE INCOME TAXES ........................................................................... 225,148
Income tax expense (Note 22) .......................................................................................
NET INCOME ................................................................................................................... 210,487
36,793
(7,009)
29,784
80,618
(12,940)
67,678
74,388
(38,768)
1,173
(50,645)
(21,685)
(57,791)
14,084
(14,661)
Less: Net income attributable to noncontrolling interests in the operating
partnership .....................................................................................................................
Less: Net (income) loss attributable to noncontrolling interests in consolidated
affiliates ...........................................................................................................................
NET INCOME ATTRIBUTABLE TO RAYONIER INC. ............................................. 152,550
OTHER COMPREHENSIVE INCOME (LOSS)
(4,516)
(528)
—
(53,421)
7,828
37,084
(8,573)
59,105
Foreign currency translation adjustment, net of income tax effect of $0, $0
and $0 .........................................................................................................................
Cash flow hedges, net of income tax effect of $2,667, $1,845 and $664 ............
Actuarial change and amortization of pension and postretirement plan
(22,096)
28,272
963
60,315
(61,055)
(30,482)
liabilities, net of income tax effect of $0, $0 and $0 ..............................................
Total other comprehensive income (loss) .............................................................
12,476
50,695
COMPREHENSIVE INCOME (LOSS) ......................................................................... 261,182
(925)
(33,708)
(3,924)
(1,350)
(30,869)
36,809
Less: Comprehensive income attributable to noncontrolling interests in the
operating partnership ....................................................................................................
Less: Comprehensive (income) loss attributable to noncontrolling interests in
consolidated affiliates ....................................................................................................
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO RAYONIER INC. ... $206,832
EARNINGS PER COMMON SHARE (NOTE 9)
(6,116)
(3,068)
—
(48,234)
1,393
(9,146)
($5,599) $27,663
Basic earnings per share attributable to Rayonier Inc.
Diluted earnings per share attributable to Rayonier Inc.
$1.08
$1.08
$0.28
$0.27
$0.46
$0.46
See Notes to Consolidated Financial Statements.
68
RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31,
(Thousands of dollars, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents, excluding Timber Funds .........................................................................................
Cash and cash equivalents, Timber Funds ...........................................................................................................
Total cash and cash equivalents ........................................................................................................................
Restricted cash, Timber Funds (Note 24) .............................................................................................................
Accounts receivable, less allowance for doubtful accounts of $59 and $25 ...................................................
Inventory (Note 18) ...................................................................................................................................................
Prepaid logging roads ...............................................................................................................................................
Prepaid expenses ......................................................................................................................................................
Assets held for sale (Note 26) .................................................................................................................................
Other current assets ..................................................................................................................................................
Total current assets ...............................................................................................................................................
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION ...............................................
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT
INVESTMENTS (NOTE 17)
PROPERTY, PLANT AND EQUIPMENT
2021
2020
$358,680
3,493
362,173
6,341
30,018
28,523
14,286
4,242
5,099
749
451,431
2,894,996
$80,454
4,053
84,507
—
49,082
10,594
12,073
4,095
3,449
6,765
170,565
3,262,126
106,878
108,518
Land .............................................................................................................................................................................
Buildings ......................................................................................................................................................................
Machinery and equipment ........................................................................................................................................
Construction in progress ...........................................................................................................................................
Total property, plant and equipment, gross .......................................................................................................
Less—accumulated depreciation ............................................................................................................................
Total property, plant and equipment, net ...........................................................................................................
6,401
31,168
6,494
460
44,523
(14,900)
29,623
625
101,837
50,966
TOTAL ASSETS ................................................................................................................................................... $3,636,356
RESTRICTED CASH, EXCLUDING TIMBER FUNDS (NOTE 24) .....................................................................
RIGHT-OF-USE ASSETS (NOTE 6) ........................................................................................................................
OTHER ASSETS (NOTE 25) .....................................................................................................................................
6,548
31,024
4,615
452
42,639
(12,238)
30,401
2,975
108,992
45,156
$3,728,733
LIABILITIES, NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable .......................................................................................................................................................
Current maturities of long-term debt, excluding Timber Funds (Note 10) ........................................................
Accrued taxes .............................................................................................................................................................
Accrued payroll and benefits ....................................................................................................................................
Accrued interest .........................................................................................................................................................
Deferred revenue .......................................................................................................................................................
Distributions payable, Timber Funds ......................................................................................................................
Other current liabilities ..............................................................................................................................................
Total current liabilities ...........................................................................................................................................
LONG-TERM DEBT, NET, EXCLUDING TIMBER FUNDS (NOTE 10) ............................................................
LONG-TERM DEBT, NET, TIMBER FUNDS (NOTE 10) .....................................................................................
PENSION AND OTHER POSTRETIREMENT BENEFITS (NOTE 20) ..............................................................
LONG-TERM LEASE LIABILITY (NOTE 6) ...........................................................................................................
OTHER NON-CURRENT LIABILITIES ....................................................................................................................
COMMITMENTS AND CONTINGENCIES (NOTES 13 and 14)
NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP (NOTE 7)
SHAREHOLDERS’ EQUITY
$23,447
124,965
12,446
14,514
6,343
17,802
6,341
25,863
231,721
1,242,819
—
10,478
93,416
108,521
$24,790
—
7,347
12,327
6,325
11,112
—
29,234
91,135
1,300,336
60,179
23,344
100,251
160,722
133,823
130,121
Common Shares, 480,000,000 shares authorized, 145,372,961 and 137,678,822 shares issued and
outstanding .................................................................................................................................................................
Retained earnings ......................................................................................................................................................
Accumulated other comprehensive loss (Note 23) ..............................................................................................
1,389,073
402,307
(19,604)
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY .................................................................................
Noncontrolling interests in consolidated affiliates (Note 7) ................................................................................
1,101,675
446,267
(73,885)
1,474,057
388,588
1,862,645
1,771,776
43,802
1,815,578
TOTAL SHAREHOLDERS’ EQUITY ................................................................................................................
TOTAL LIABILITIES, NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP
AND SHAREHOLDERS’ EQUITY ..................................................................................................................... $3,636,356
$3,728,733
See Notes to Consolidated Financial Statements.
69
RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Thousands of dollars, except share data)
Common Shares
Shares
Amount
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interests in
Consolidated
Affiliates
Retained
Earnings
Shareholders’
Equity
Balance, December 31, 2018 ..................................
Net income ....................................................................
Dividends ($1.08 per share) .......................................
Issuance of shares under incentive stock plans .....
Stock-based compensation ........................................
Repurchase of common shares ................................
Actuarial change and amortization of pension and
postretirement plan liabilities ......................................
Foreign currency translation adjustment ..................
Cash flow hedges ........................................................
Distributions to noncontrolling interests in
consolidated affiliates ..................................................
Balance, December 31, 2019 ..................................
Issuances of shares associated with the merger
with Pope Resources ..................................................
Net income (loss) .........................................................
Net income attributable to noncontrolling interests
in the operating partnership .......................................
Dividends ($1.08 per share) (a) .................................
Issuance of shares under the “at-the-market”
equity offering, net of commissions and offering
costs of $799 ................................................................
Issuance of shares under incentive stock plans .....
Stock-based compensation ........................................
Repurchase of common shares ................................
Acquisition of noncontrolling interests in
consolidated affiliates ..................................................
Adjustment of noncontrolling interests in the
operating partnership ..................................................
Actuarial change and amortization of pension and
postretirement plan liabilities ......................................
Foreign currency translation adjustment ..................
Cash flow hedges ........................................................
Allocation of other comprehensive income to
noncontrolling interests in the operating
partnership ....................................................................
Distributions to noncontrolling interests in
consolidated affiliates ..................................................
Noncontrolling interests in consolidated affiliates
redemption of shares ..................................................
Balance, December 31, 2020 ..................................
129,488,675
—
$884,263
—
$672,371
59,105
—
298,003
—
(455,609)
—
1,260
6,904
(4,250)
(140,040)
—
—
(8,430)
—
—
—
—
—
—
—
—
—
—
129,331,069
—
$888,177
—
$583,006
7,181,071
—
172,418
—
—
37,612
—
—
—
—
(528)
(146,278)
1,103,012
32,574
266,036
—
1,589
8,026
—
—
—
(219,619)
(1,605)
(3,152)
—
—
—
—
—
—
—
—
—
496
—
—
—
—
—
—
(24,393)
—
—
—
—
—
—
Conversion of units into common shares .................
17,253
$239
—
—
—
—
—
(1,350)
784
(30,875)
—
($31,202)
—
—
—
—
—
—
—
—
—
—
—
(925)
22,928
(62,146)
$97,677
8,573
$1,654,550
67,678
—
—
—
—
—
179
393
(140,040)
1,260
6,904
(12,680)
(1,350)
963
(30,482)
(9,161)
$97,661
(9,161)
$1,537,642
—
(7,828)
172,418
29,784
—
—
—
—
—
—
(528)
(146,278)
32,574
1,589
8,026
(4,757)
333,366
333,366
—
—
—
5,344
1,091
(24,393)
496
(925)
28,272
(61,055)
(2,540)
—
(2,540)
—
(12,643)
(12,643)
—
137,678,822
—
$1,101,675
—
$446,267
—
($73,885)
(28,403)
$388,588
(28,403)
$1,862,645
70
RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CONTINUED)
(Thousands of dollars, except share data)
Balance, December 31, 2020 ..................................
Net income ....................................................................
Net income attributable to noncontrolling interests
in the operating partnership .......................................
Dividends ($1.08 per share) (a) .................................
Issuance of shares under the “at-the-market”
equity offering, net of commissions and offering
costs of $2.5 million .....................................................
Issuance of shares under incentive stock plans .....
Stock-based compensation ........................................
Repurchase of common shares ................................
Fund II carried interest incentive fee .........................
Disposition of noncontrolling interests in
consolidated affiliates ..................................................
Measurement period adjustment of noncontrolling
interests in consolidated affiliates .............................
Adjustment of noncontrolling interests in the
operating partnership ..................................................
Conversion of units into common shares .................
Actuarial change and amortization of pension and
postretirement plan liabilities ......................................
Foreign currency translation adjustment ..................
Cash flow hedges ........................................................
Allocation of other comprehensive income to
noncontrolling interests in the operating
partnership ...................................................................
Distributions to noncontrolling interests in
consolidated affiliates ..................................................
Noncontrolling interests in consolidated affiliates
redemption of shares .................................................
Balance, December 31, 2021 ..................................
Common Shares
Shares
137,678,822
—
Amount
$1,101,675
—
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interests in
Consolidated
Affiliates
($73,885)
—
$388,588
53,421
Retained
Earnings
$446,267
157,066
Shareholders’
Equity
$1,862,645
210,487
—
—
—
—
(4,516)
(153,980)
6,357,972
270,713
—
(47,705)
—
233,033
6,029
9,277
(1,617)
—
—
—
—
—
—
—
—
—
—
—
—
—
1,113,159
—
40,676
(42,530)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,476
(18,487)
61,893
—
—
(4,516)
(153,980)
—
—
—
—
(3,807)
233,033
6,029
9,277
(1,617)
(3,807)
(255,486)
(255,486)
9,690
9,690
—
—
—
(3,609)
(1,578)
(42,530)
40,676
12,476
(22,096)
60,315
(1,601)
—
(1,601)
—
—
(115,298)
(115,298)
(28,119)
(28,119)
145,372,961
$1,389,073
$402,307
($19,604)
$43,802
$1,815,578
(a) For information regarding distributions to noncontrolling interests in the operating partnership, see the Rayonier Inc. Consolidated
Statements of Cash Flows and Note 7 — Noncontrolling Interests.
See Notes to Consolidated Financial Statements.
71
RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
(Thousands of dollars)
OPERATING ACTIVITIES
Net income ...............................................................................................................................................................
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization ........................................................................................................
Non-cash cost of land and improved development .......................................................................................
Stock-based incentive compensation expense ..............................................................................................
Deferred income taxes .......................................................................................................................................
Amortization of losses from pension and postretirement plans ...................................................................
Timber write-offs due to casualty events .........................................................................................................
Gain on sale of large disposition of timberlands ............................................................................................
Gain on Fund II timberland dispositions ..........................................................................................................
Gain on sale of Timber Funds III & IV ..............................................................................................................
Fund II carried interest incentive fee ................................................................................................................
Other .....................................................................................................................................................................
Changes in operating assets and liabilities, net of effects of merger with Pope Resources:
Receivables ..........................................................................................................................................................
Inventories ............................................................................................................................................................
Accounts payable ................................................................................................................................................
All other operating activities ...............................................................................................................................
CASH PROVIDED BY OPERATING ACTIVITIES .........................................................................................
INVESTING ACTIVITIES
Capital expenditures ..............................................................................................................................................
Real estate development investments ................................................................................................................
Purchase of timberlands ........................................................................................................................................
Net proceeds from large disposition of timberlands ..........................................................................................
Net proceeds from sale of Timber Funds III & IV ..............................................................................................
Net proceeds from Fund II timberland dispositions ...........................................................................................
Cash consideration for merger with Pope Resources, net of cash acquired ................................................
Other .........................................................................................................................................................................
CASH USED FOR INVESTING ACTIVITIES .................................................................................................
FINANCING ACTIVITIES
Issuance of debt .....................................................................................................................................................
Repayment of debt .................................................................................................................................................
Dividends paid on common stock ........................................................................................................................
Distributions to noncontrolling interests in the operating partnership ............................................................
Proceeds from the issuance of common shares under incentive stock plan ................................................
Proceeds from the issuance of common shares under the “at-the-market” (ATM) equity offering
program, net of commissions and offering costs ...............................................................................................
Repurchase of common shares to pay withholding taxes on vested incentive stock awards ....................
Repurchase of common shares made under repurchase program ................................................................
Debt issuance costs ...............................................................................................................................................
Proceeds from shareholder distribution hedge ..................................................................................................
Noncontrolling interests in consolidated affiliates redemption of shares .......................................................
Distributions to noncontrolling interests in consolidated affiliates ...................................................................
Make-whole fee on NWFCS debt prepayment ..................................................................................................
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES ..................................................................
EFFECT OF EXCHANGE RATE CHANGES ON CASH ................................................................................
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Change in cash, cash equivalents and restricted cash ....................................................................................
Balance, beginning of year ...................................................................................................................................
Balance, end of year ..............................................................................................................................................
2021
2020
2019
$210,487
$29,784
$67,678
155,722
24,976
9,277
8,509
1,174
—
(44,784)
(51,522)
(3,675)
(3,807)
9,456
17,239
(503)
(1,593)
(5,846)
164,996
30,368
8,026
7,541
869
15,203
(28,655)
—
—
—
(11,100)
(15,378)
(1,448)
5,668
(1,700)
128,235
12,565
6,904
11,314
449
—
—
—
—
—
(4,999)
(849)
1,224
(1,554)
(6,714)
325,110
204,174
214,253
(75,965)
(12,521)
(179,115)
54,682
31,014
154,740
—
912
(66,500)
(6,462)
(24,695)
115,666
—
—
(231,068)
(584)
(63,996)
(6,803)
(142,287)
—
—
—
—
(6,304)
(26,253)
(213,643)
(219,390)
446,378
(420,000)
(153,515)
(4,269)
5,922
230,826
(1,617)
—
(4,846)
—
—
(108,956)
(6,234)
(16,311)
(889)
320,000
(152,000)
(146,348)
(3,596)
1,368
32,574
(1,605)
(3,152)
(2,483)
—
(5,113)
(12,643)
—
27,002
(19)
82,000
—
(141,071)
—
1,260
—
(4,250)
(8,430)
(132)
135
—
(9,161)
—
(79,649)
(1,700)
281,657
87,482
17,514
69,968
$369,139
$87,482
(86,486)
156,454
$69,968
See Notes to Consolidated Financial Statements.
72
RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the Years Ended December 31,
(Thousands of dollars)
2021
2020
2019
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year:
Interest (a) .....................................................................................................................................................
Income taxes ................................................................................................................................................
$42,672
7,392
$40,895
816
$32,782
1,691
Non-cash investing activity:
Capital assets purchased on account ......................................................................................................
$5,272
$3,205
$3,568
Non-cash financing activity:
Equity consideration for merger with Pope Resources ..........................................................................
Redeemable Operating Partnership Unit consideration for merger with Pope Resources ..............
Noncontrolling interests in consolidated affiliates redemption of shares (b) ......................................
—
—
28,119
$172,640
106,752
23,290
—
—
—
(a)
(b)
Interest paid is presented net of patronage payments received of $6.8 million, $4.7 million and $4.0 million for the years ended December 31,
2021, 2020 and 2019, respectively. For additional information on patronage payments, see Note 10 - Debt.
In 2021, the New Zealand subsidiary made a capital distribution in order to redeem certain equity interests, resulting in the recording of a loan
payable by the New Zealand subsidiary in the amount of $28.1 million. In 2020, the New Zealand subsidiary made a capital distribution in
order to redeem certain equity interests, resulting in the recording of a noncontrolling interest share redemption of $5.1 million and a loan
payable by the New Zealand subsidiary in the amount of $23.3 million. See Note 7 - Noncontrolling Interests and Note 10 - Debt for further
information.
See Notes to Consolidated Financial Statements.
73
RAYONIER, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Years Ended December 31,
(Thousands of dollars, except per unit data)
SALES (NOTE 4) ............................................................................................................. $1,109,597
Costs and Expenses
2021
2020
$859,154
2019
$711,556
Other operating income (expense), net (Note 19)
Cost of sales .................................................................................................................. (796,115) (712,436) (558,350)
(41,646)
Selling and general expenses .....................................................................................
(4,533)
(839,822) (784,766) (604,529)
107,027
(31,716)
5,307
OPERATING INCOME ................................................................................................... 269,775
(44,907)
Interest expense ...............................................................................................................
Interest and other miscellaneous income, net .............................................................
280
INCOME BEFORE INCOME TAXES ........................................................................... 225,148
Income tax expense (Note 22) .......................................................................................
NET INCOME ................................................................................................................... 210,487
36,793
(7,009)
29,784
80,618
(12,940)
67,678
74,388
(38,768)
1,173
(50,645)
(21,685)
(57,791)
14,084
(14,661)
Less: Net (income) loss attributable to noncontrolling interests in consolidated
affiliates ...........................................................................................................................
(53,421)
7,828
NET INCOME ATTRIBUTABLE TO RAYONIER, L.P. UNITHOLDERS ............... 157,066
OTHER COMPREHENSIVE INCOME (LOSS)
37,612
(8,573)
59,105
Foreign currency translation adjustment, net of income tax effect of $0, $0
and $0 .........................................................................................................................
Cash flow hedges, net of income tax effect of $2,667, $1,845 and $664 ............
Actuarial change and amortization of pension and postretirement plan
(22,096)
28,272
963
60,315
(61,055)
(30,482)
liabilities, net of income tax effect of $0, $0 and $0 ..............................................
Total other comprehensive income (loss) .............................................................
12,476
50,695
COMPREHENSIVE INCOME (LOSS) ........................................................................ 261,182
(925)
(33,708)
(3,924)
(1,350)
(30,869)
36,809
Less: Comprehensive (income) loss attributable to noncontrolling interests in
consolidated affiliates ....................................................................................................
(48,234)
1,393
(9,146)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO RAYONIER, L.P.
UNITHOLDERS ............................................................................................................... $212,948
EARNINGS PER UNIT (NOTE 9)
($2,531) $27,663
Basic earnings per unit attributable to Rayonier, L.P.
Diluted earnings per unit attributable to Rayonier, L.P.
$1.08
$1.08
$0.28
$0.27
$0.46
$0.46
See Notes to Consolidated Financial Statements.
74
RAYONIER, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31,
(Thousands of dollars, except unit data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents, excluding Timber Funds .......................................................................................
Cash and cash equivalents, Timber Funds .........................................................................................................
Total cash and cash equivalents .........................................................................................................................
Restricted cash, Timber Funds (Note 24).............................................................................................................
Accounts receivable, less allowance for doubtful accounts of $59 and $25
Inventory (Note 18) ..................................................................................................................................................
Prepaid logging roads .............................................................................................................................................
Prepaid expenses ....................................................................................................................................................
Assets held for sale (Note 26) ................................................................................................................................
Other current assets ................................................................................................................................................
Total current assets .............................................................................................................................................
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION .............................................
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT
INVESTMENTS (NOTE 17) .................................................................................................................................
PROPERTY, PLANT AND EQUIPMENT
2021
2020
$358,680
3,493
362,173
6,341
30,018
28,523
14,286
4,242
5,099
749
451,431
2,894,996
$80,454
4,053
84,507
—
49,082
10,594
12,073
4,095
3,449
6,765
170,565
3,262,126
106,878
108,518
Land ...........................................................................................................................................................................
Buildings ....................................................................................................................................................................
Machinery and equipment ......................................................................................................................................
Construction in progress .........................................................................................................................................
Total property, plant and equipment, gross ........................................................................................................
Less — accumulated depreciation ........................................................................................................................
Total property, plant and equipment, net .........................................................................................................
RESTRICTED CASH, EXCLUDING TIMBER FUNDS (NOTE 24) ....................................................................
RIGHT-OF-USE ASSETS (NOTE 6) .......................................................................................................................
OTHER ASSETS (NOTE 25) ....................................................................................................................................
6,401
31,168
6,494
460
44,523
(14,900)
29,623
625
101,837
50,966
TOTAL ASSETS ................................................................................................................................................ $3,636,356
6,548
31,024
4,615
452
42,639
(12,238)
30,401
2,975
108,992
45,156
$3,728,733
LIABILITIES, REDEEMABLE OPERATING PARTNERSHIP UNITS AND CAPITAL
CURRENT LIABILITIES
Accounts payable .....................................................................................................................................................
Current maturities of long-term debt, excluding Timber Funds (Note 10) .......................................................
Accrued taxes ...........................................................................................................................................................
Accrued payroll and benefits ..................................................................................................................................
Accrued interest .......................................................................................................................................................
Deferred revenue .....................................................................................................................................................
Distributions payable, Timber Funds ....................................................................................................................
Other current liabilities ............................................................................................................................................
Total current liabilities .........................................................................................................................................
$23,447
124,965
12,446
14,514
6,343
17,802
6,341
25,863
231,721
$24,790
—
7,347
12,327
6,325
11,112
—
29,234
91,135
LONG-TERM DEBT, NET, EXCLUDING TIMBER FUNDS (NOTE 10) ...........................................................
1,242,819
1,300,336
LONG-TERM DEBT, NET, TIMBER FUNDS (NOTE 10) ....................................................................................
PENSION AND OTHER POSTRETIREMENT BENEFITS (NOTE 20) .............................................................
LONG-TERM LEASE LIABILITY (NOTE 6) ..........................................................................................................
OTHER NON-CURRENT LIABILITIES ..................................................................................................................
COMMITMENTS AND CONTINGENCIES (NOTES 13 and 14) ........................................................................
REDEEMABLE OPERATING PARTNERSHIP UNITS (NOTE 7) 3,315,741 and 4,428,900 Units
outstanding, respectively .......................................................................................................................................
CAPITAL ......................................................................................................................................................................
—
10,478
93,416
108,521
60,179
23,344
100,251
160,722
133,823
130,121
General partners’ capital .........................................................................................................................................
Limited partners’ capital ..........................................................................................................................................
Accumulated other comprehensive loss (Note 23) .............................................................................................
TOTAL CONTROLLING INTEREST CAPITAL ...............................................................................................
Noncontrolling interests in consolidated affiliates (Note 7) ................................................................................
TOTAL CAPITAL ..................................................................................................................................................
TOTAL LIABILITIES, REDEEMABLE OPERATING PARTNERSHIP UNITS AND CAPITAL ..............
17,872
1,769,367
(15,463)
1,771,776
43,802
1,815,578
$3,636,356
15,454
1,529,948
(71,345)
1,474,057
388,588
1,862,645
$3,728,733
See Notes to Consolidated Financial Statements.
75
RAYONIER, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(Thousands of dollars, except unit data)
Units
General
Partners’
Capital
$15,566
Limited
Partners’
Capital
$1,541,068
Accumulated
Other
Comprehensive
Income (Loss)
$239
Noncontrolling
Interests in
Consolidated
Affiliates
$97,677
Total Capital
$1,654,550
—
—
—
—
—
(1,350)
784
(30,875)
—
8,573
67,678
—
—
—
—
—
179
393
(140,040)
1,260
6,904
(12,680)
(1,350)
963
(30,482)
($31,202)
$97,661
(9,161)
(9,161)
$1,537,642
—
—
—
—
—
—
—
—
—
—
172,418
(7,828)
29,784
—
—
—
—
—
(149,875)
32,574
1,589
8,026
(4,757)
(23,864)
333,366
333,366
—
496
(925)
22,928
(62,146)
—
5,344
1,091
(925)
28,272
(61,055)
—
—
($71,345)
(12,643)
(12,643)
($28,403)
$388,588
(28,403)
$1,862,645
Balance, December 31, 2018 .......................................................
Net income .........................................................................................
Distributions on units ($1.08 per unit) ............................................
Issuance of units under incentive stock plans ..............................
Stock-based compensation .............................................................
591
58,514
(1,400)
(138,640)
13
69
1,247
6,835
Repurchase of units .........................................................................
(127)
(12,553)
Actuarial change and amortization of pension and
postretirement plan liabilities ...........................................................
Foreign currency translation adjustment .......................................
Cash flow hedges .............................................................................
Distributions to noncontrolling interests in consolidated
affiliates ..............................................................................................
Balance, December 31, 2019 .......................................................
Issuance of units associated with the merger with Pope
Resources ..........................................................................................
Net income (loss) ..............................................................................
—
—
—
—
—
—
—
$14,712
—
$1,456,471
1,724
376
170,694
37,236
Distributions on units ($1.08 per unit) ............................................
(1,500)
(148,375)
Issuance of units under the “at-the-market” equity offering, net
of commissions and offering costs of $799 ..................................
Issuance of units under incentive stock plans ..............................
Stock-based compensation .............................................................
Repurchase of units .........................................................................
Adjustment of Redeemable Operating Partnership Units ..........
Acquisition of noncontrolling interests in consolidated affiliates
Conversion of units to common shares .........................................
Actuarial change and amortization of pension and
postretirement plan liabilities ...........................................................
Foreign currency translation adjustment .......................................
Cash flow hedges .............................................................................
Distributions to noncontrolling interests in consolidated
affiliates ..............................................................................................
Noncontrolling interests in consolidated affiliates redemption
of unit equivalents .............................................................................
Balance, December 31, 2020 .......................................................
326
32,248
16
81
(47)
1,573
7,945
(4,710)
(239)
(23,625)
—
5
—
—
—
—
—
491
—
—
—
—
—
$15,454
—
$1,529,948
76
RAYONIER, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (CONTINUED)
(Thousands of dollars, except unit data)
Balance, December 31, 2020 .......................................................
Net income .........................................................................................
Distributions on units ($1.08 per unit) ............................................
Issuance of units under the “at-the-market” equity offering, net
of commissions and offering costs of $2.5 million .......................
Issuance of units under incentive stock plans ..............................
Stock-based compensation .............................................................
Repurchase of units .........................................................................
Adjustment of Redeemable Operating Partnership Units ..........
Conversion of units to common shares .........................................
Measurement period adjustment of noncontrolling interests in
consolidated affiliates .......................................................................
Fund II carried interest incentive fee ..............................................
Disposition of noncontrolling interests in consolidated
affiliates ..............................................................................................
Actuarial change and amortization of pension and
postretirement plan liabilities ...........................................................
Foreign currency translation adjustment .......................................
Cash flow hedges .............................................................................
Distributions to noncontrolling interests in consolidated
affiliates ..............................................................................................
Noncontrolling interests in consolidated affiliates redemption
of unit equivalents .............................................................................
Units
General
Partners’
Capital
$15,454
1,571
Limited
Partners’
Capital
$1,529,948
155,495
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interests in
Consolidated
Affiliates
(1,583)
(156,666)
2,330
230,703
60
93
(16)
(444)
5,969
9,184
(1,601)
(43,934)
407
40,269
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
($71,345)
—
—
—
—
—
—
—
—
—
—
—
$388,588
53,421
—
—
—
—
—
—
—
Total Capital
$1,862,645
210,487
(158,249)
233,033
6,029
9,277
(1,617)
(44,378)
40,676
9,690
9,690
(3,807)
(3,807)
(255,486)
(255,486)
12,476
(18,487)
61,893
—
(3,609)
(1,578)
12,476
(22,096)
60,315
—
—
(115,298)
(115,298)
(28,119)
(28,119)
Balance, December 31, 2021 .......................................................
$17,872
$1,769,367
($15,463)
$43,802
$1,815,578
See Notes to Consolidated Financial Statements.
77
RAYONIER, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
(Thousands of dollars)
OPERATING ACTIVITIES
Net income ...........................................................................................................................................
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization ....................................................................................
Non-cash cost of land and improved development ....................................................................
Stock-based incentive compensation expense ..........................................................................
Deferred income taxes ...................................................................................................................
Amortization of losses from pension and postretirement plans ...............................................
Timber write-offs due to casualty events .....................................................................................
Gain on sale of large disposition of timberlands ........................................................................
Gain on Fund II timberland dispositions ......................................................................................
Gain on sale of Timber Funds III & IV ..........................................................................................
Fund II carried interest incentive fee ............................................................................................
Other ..................................................................................................................................................
Changes in operating assets and liabilities, net of effects of merger with Pope Resources:
Receivables ......................................................................................................................................
Inventories ........................................................................................................................................
Accounts payable ............................................................................................................................
All other operating activities ...........................................................................................................
CASH PROVIDED BY OPERATING ACTIVITIES .....................................................................
INVESTING ACTIVITIES
Capital expenditures ..........................................................................................................................
Real estate development investments ............................................................................................
Purchase of timberlands ....................................................................................................................
Net proceeds from large disposition of timberlands ......................................................................
Net proceeds from sale of Timber Funds III & IV ...........................................................................
Net proceeds from Fund II timberland dispositions .......................................................................
Cash consideration for merger with Pope Resources, net of cash acquired ............................
Other .....................................................................................................................................................
CASH USED FOR INVESTING ACTIVITIES .............................................................................
FINANCING ACTIVITIES
Issuance of debt ..................................................................................................................................
Repayment of debt .............................................................................................................................
Distributions on units ..........................................................................................................................
Proceeds from the issuance of units under incentive stock plan ................................................
Proceeds from the issuance of units under the “at-the-market” (ATM) equity offering
program, net of commissions and offering costs ...........................................................................
Repurchase of units to pay withholding taxes on vested incentive stock awards ....................
Debt issuance costs ...........................................................................................................................
Repurchase of units made under repurchase program ................................................................
Proceeds from shareholder distribution hedge ..............................................................................
Noncontrolling interests in consolidated affiliates redemption of shares ...................................
Distributions to noncontrolling interests in consolidated affiliates ...............................................
Make-whole fee on NWFCS debt prepayment ..............................................................................
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES ..............................................
EFFECT OF EXCHANGE RATE CHANGES ON CASH ............................................................
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Change in cash, cash equivalents and restricted cash ................................................................
Balance, beginning of year ................................................................................................................
Balance, end of year ..........................................................................................................................
2021
2020
2019
$210,487
$29,784
$67,678
155,722
24,976
9,277
8,509
1,174
—
(44,784)
(51,522)
(3,675)
(3,807)
9,456
17,239
(503)
(1,593)
(5,846)
164,996
30,368
8,026
7,541
869
15,203
(28,655)
—
—
—
(11,100)
(15,378)
(1,448)
5,668
(1,700)
128,235
12,565
6,904
11,314
449
—
—
—
—
—
(4,999)
(849)
1,224
(1,554)
(6,714)
325,110
204,174
214,253
(75,965)
(12,521)
(179,115)
54,682
31,014
154,740
—
912
(66,500)
(6,462)
(24,695)
115,666
—
—
(231,068)
(584)
(63,996)
(6,803)
(142,287)
—
—
—
—
(6,304)
(26,253)
(213,643)
(219,390)
446,378
(420,000)
(157,784)
320,000
(152,000)
(149,944)
5,922
1,368
230,826
(1,617)
(4,846)
—
—
—
(108,956)
(6,234)
(16,311)
(889)
32,574
(1,605)
(2,483)
(3,152)
—
(5,113)
(12,643)
—
27,002
(19)
281,657
87,482
$369,139
17,514
69,968
$87,482
82,000
—
(141,071)
1,260
—
(4,250)
(132)
(8,430)
135
—
(9,161)
—
(79,649)
(1,700)
(86,486)
156,454
$69,968
See Notes to Consolidated Financial Statements.
78
RAYONIER, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the Years Ended December 31,
(Thousands of dollars)
2021
2020
2019
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period:
Interest (a) ........................................................................................................................................
Income taxes ....................................................................................................................................
$42,672
7,392
$40,895
816
$32,782
1,691
Non-cash investing activity:
Capital assets purchased on account ..........................................................................................
$5,272
$3,205
$3,568
Non-cash financing activity:
Unit consideration for merger with Pope Resources .................................................................
Redeemable Operating Partnership Unit consideration for merger with Pope Resources .
—
—
Noncontrolling interests in consolidated affiliates redemption of shares (b) ..........................
28,119
$172,640
106,752
23,290
—
—
—
(a) Interest paid is presented net of patronage payments received of $6.8 million, $4.7 million and $4.0 million for the years ended
December 31, 2021, 2020 and 2019, respectively. For additional information on patronage payments, see Note 10 — Debt.
(b) In 2021, the New Zealand subsidiary made a capital distribution in order to redeem certain equity interests, resulting in the recording of a
loan payable by the New Zealand subsidiary in the amount of $28.1 million. In 2020, the New Zealand subsidiary made a capital distribution
in order to redeem certain equity interests, resulting in the recording of a noncontrolling interest share redemption of $5.1 million and a loan
payable by the New Zealand subsidiary in the amount of $23.3 million. See Note 7 - Noncontrolling Interests and Note 10 - Debt for further
information.
See Notes to Consolidated Financial Statements.
79
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands unless otherwise stated)
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
Our consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”). Rayonier Inc.'s Consolidated Financial Statements include
the Operating Partnership, wholly-owned subsidiaries and entities in which the Company has a controlling interest.
Rayonier, L.P.'s Consolidated Financial Statements include wholly-owned subsidiaries and entities in which the
Operating Partnership has a controlling interest. For additional information regarding our consolidated entities with a
noncontrolling interest component, see Note 7 - Noncontrolling Interests. All intercompany balances and
transactions are eliminated.
As of December 31, 2021, the Company owned a 97.8% interest in the Operating Partnership, with the
remaining 2.2% 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.
DISPOSITION OF TIMBER FUNDS
Upon completion of the Pope Resources merger in May 2020, we became the manager of three private equity
timber funds, Fund II, Fund III, and Fund IV, consisting of 141,000 acres in the Pacific Northwest, and obtained
ownership interests in the Funds of 20%, 5%, and 15%, respectively.
On July 21, 2021, we sold the rights to manage Fund III and IV, as well as our ownership interests in both funds
to BTG Pactual’s Timberland Investment Group (TIG) for an aggregate sales price of $35.9 million. Due to the sale
of our rights to manage Fund III and Fund IV, we determined that we no longer have the power to direct the
activities that most significantly impact the success of Fund III and Fund IV. As a result, Timber Fund III and IV
balance sheets and results of operations are only included in our consolidated financial statements through the date
of the sale. For additional information on Fund III and IV, see Note 7 - Noncontrolling Interests.
In addition, we completed the liquidation of Fund II timberland assets through three separate transactions during
the third and fourth quarters of 2021 for an aggregate sales price of $156.8 million. As of December 31, 2021, we
continue to manage and maintain a 20% ownership interest in Fund II, which is scheduled to terminate in March
2023. Prior to the termination of Fund II, the remaining capital will be distributed to Fund II investors. For additional
information regarding Fund II, see Note 7 - Noncontrolling Interests, Note 8 - Variable Interest Entities and Note 24 -
Restricted Cash.
RECLASSIFICATIONS
Effective for year ended December 31, 2021, we have updated our presentation for the employee benefit
pension plan to include a separate line item “Expenses paid,” which was previously reported as part of “Actuarial
loss (gain).” “Actuarial loss (gain)” now solely represents changes resulting from adjustments to actuarial
assumptions and estimates. The other categories of the pension plan remain unchanged, and this reclassification
had no impact on the total projected benefit obligation. See Note 20 - Employee Benefit Plans.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. There are risks inherent in estimating and therefore actual results could differ from those
estimates.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and other highly liquid investments with original maturities
of three months or less.
80
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
ACCOUNTS RECEIVABLE
Accounts receivable are primarily amounts due to us for the sale of timber and are presented net of an
allowance for doubtful accounts.
INVENTORY
Higher and better use (“HBU”) real estate properties that are expected to be sold within one year are included in
inventory at the lower of cost or net realizable value. HBU properties that are expected to be sold after one year are
included in a separate balance sheet line entitled “Higher and Better Use Timberlands and Real Estate
Development Investments.” See below for additional information.
Inventory also includes logs available to be sold by the Trading segment. Log inventory is recorded at the lower
of cost or net realizable value and expensed to cost of sales when sold to third-party buyers. See Note 18 —
Inventory for additional information.
PREPAID LOGGING ROADS
Costs for roads built in the Pacific Northwest and New Zealand to access particular tracts to be harvested in the
upcoming 24 months to 60 months are recorded as prepaid logging roads. We charge such costs to expense as
timber is harvested using an amortization rate determined annually as the total cost of prepaid roads divided by the
estimated tons of timber to be accessed by those roads. The prepaid balance is classified as short-term or long-
term based on the upcoming harvest schedule. See Note 25 — Other Assets for additional information.
PATRONAGE DIVIDENDS
As a requirement of the Farm Credit Act, borrowers in the Farm Credit System are required to purchase equity
in Farm Credit lenders. The equity balance primarily represents shares of Class A common stock in CoBank valued
at $100 par value. CoBank equity purchases continue annually until a balance equal to 8% of our 10-year historical
average loan balance at CoBank is obtained. Initially, a minimal equity purchase was made in cash upon receiving
the loan proceeds. Subsequently, equity purchases are made annually through patronage dividends, of which
approximately 88% is cash and 12% is equity. The stock has no cash value until retired. As our loans are paid in full,
the stock is generally retired over a 10-year loan base period beginning in the year following loan payoff.
Estimated cash and equity dividends are recognized as an offset to interest expense in the period earned.
These estimates are calculated by applying the weighted average debt balance with each participating lender to a
historical dividend rate. Changes in assumptions, as well as changes in actual experience, could cause the
estimates to change. See Note 10 — Debt and Note 25 — Other Assets for additional information.
DEFERRED FINANCING COSTS
Deferred financing costs related to revolving debt are capitalized and amortized to interest expense over the
term of the revolving debt using a method that approximates the effective interest method. See Note 25 — Other
Assets for additional information on deferred financing costs related to revolving debt. See Note 10 — Debt for
additional information on deferred financing costs related to term debt.
CAPITALIZED SOFTWARE COSTS
Software costs are capitalized and amortized over a period not exceeding five years using the straight-line
method.
81
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
TIMBER AND TIMBERLANDS
Timber is stated at the lower of cost or net realizable value. Costs relating to acquiring, planting and growing
timber including real estate taxes, site preparation and direct support costs relating to facilities, vehicles and
supplies, are capitalized. A portion of timberland lease payments are capitalized based on the proportion of acres
with merchantable timber volume remaining to be harvested under the lease term and the residual portion of the
lease payments are expensed as incurred. Payroll costs are capitalized for time spent on timber growing activities,
while interest or any other intangible costs are not capitalized. An annual depletion rate is established for each
particular region by dividing merchantable inventory cost by standing merchantable inventory volume, which is
estimated annually. We charge accumulated costs attributed to merchantable timber to depletion expense (cost of
sales) at the time the timber is harvested or when the underlying timberland is sold.
Upon the acquisition of timberland, we make a determination on whether to combine the newly acquired
merchantable timber with an existing depletion pool or to create a new, separate pool. This determination is based
on the geographic location of the new timber, the customers/markets that will be served and the species mix. If the
acquisition is similar, the cost of the acquired timber is combined into an existing depletion pool and a new depletion
rate is calculated for the pool. This determination and depletion rate adjustment normally occurs in the quarter
following the acquisition.
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS
HBU timberland is recorded at the lower of cost or net realizable value. These properties are managed as
timberlands until sold or developed, with sales and depletion expense related to the harvesting of timber accounted
for within the respective timber segment. At the time of sale, the cost basis of any unharvested timber is recorded as
depletion expense, a component of cost of sales, within the Real Estate segment.
HBU timberland and real estate development investments expected to be sold within twelve months are
recorded as inventory. See Note 17 — Higher and Better Use Timberlands and Real Estate Development
Investments for additional information.
REAL ESTATE DEVELOPMENT INVESTMENTS
Real estate development investments include capitalized costs for targeted infrastructure improvements, such
as roadways and utilities. The capitalization period relating to real estate development investments is the period in
which activities necessary to ready a property for its intended use are in progress. The period begins when such
activities commence, typically when we begin the site work for land already owned, and ends when the
improvement is substantially complete and ready for its intended use. Determination of when construction of a
project is substantially complete and ready for its intended use is subjective and requires business judgement. As
such, we determine when the capitalization period begins and ends through communication with project and other
managers responsible for the tracking and oversight of individual projects.
We capitalize costs directly associated with development and construction of identified real estate projects, such
as infrastructure, roadways, utilities, amenities and/or other improvements designed to enhance marketability and
create parcels, pads and/or lots for sale. We capitalize interest based on the amount of underlying expenditures on
real estate projects under development.
IMPAIRMENT OF HBU TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS
We review our higher and better use timberlands and real estate development investments for potential
impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable.
Impairment indicators for each development project are assessed separately and include, but are not limited to,
significant decreases in sales pace or average selling prices, significant increases in expected land development
and construction costs, and projected losses on expected future sales. Development projects have extended life
cycles that may last 20 to 40 years, or longer, and have few long-term contractual cash flows. Development periods
often occur through several economic cycles. Subjective factors such as the expected timing of property
development and sales, optimal development density and sales strategy impact the timing and amount of expected
future cash flows and fair value.
82
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
An impairment loss is recognized if the carrying amount of an asset is not recoverable and exceeds its fair
value. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding
future economic conditions, such as construction costs and sales values that could differ materially from actual
results in future periods. If impairment indicators exist and it is expected that undiscounted cash flows generated by
the asset are less than its carrying amount less costs to sell, an impairment provision is recorded to write-down the
carrying amount of the asset to its fair value.
PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION
Property, plant and equipment additions are recorded at cost, including applicable freight, interest, construction
and installation costs. We generally depreciate our assets, including office and transportation equipment, using the
straight-line depreciation method over 3 to 25 years. Buildings and land improvements are depreciated using the
straight-line method over 15 to 35 years and 5 to 30 years, respectively.
Gains and losses on the sale or retirement of assets are included in operating income. Long-lived assets are
reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset
may not be recoverable. Recoverability of assets that are held and used is measured by net undiscounted cash
flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be
recognized is the amount the carrying value exceeds the fair value of the assets, which is based on a discounted
cash flow model. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to
sell.
LEASES
At inception, we determine if an arrangement is a lease and whether that lease meets the classification criteria
of a finance or operating lease. Operating leases are included in right-of-use (“ROU”) assets, other current liabilities,
and long-term lease liability in the Consolidated Balance Sheets. The income generated from our commercial and
residential leases in Port Gamble are accounted for in accordance with Topic 842. We recognize the total minimum
lease payments provided for under the leases on a straight-line basis over the lease term.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent the
obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are
recognized at the lease commencement date based on the estimated present value of lease payments over the
lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate
based on the estimated rate of interest for collateralized borrowing over a similar term. Lease terms may include
options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease
expense for lease payments is recognized on a straight-line basis over the lease term.
RIGHT-OF-USE ASSETS IMPAIRMENT
Operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset group to which the operating lease is assigned may not be
recoverable. Recoverability of the asset group is evaluated based on forecasted undiscounted cash flows. If the
carrying amount of the asset group is not recoverable, the fair value of the asset group is compared to its carrying
amount and an impairment charge is recognized for the amount by which the carrying amount exceeds the fair
value. A discounted cash flow approach using market participant assumptions of the expected cash flows and
discount rate are used to estimate the fair value of the asset group.
83
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
FAIR VALUE MEASUREMENTS
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an
exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants at the measurement date. A three-level hierarchy that prioritizes the inputs used to measure fair
value was established 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, such as quoted prices for similar
assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, or other inputs that are observable or can be corroborated by observable market data.
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. This includes certain pricing models, discounted cash flow
methodologies and similar techniques that use significant unobservable inputs.
ENVIRONMENTAL REMEDIATION LIABILITIES
Environmental remediation liabilities have been evaluated using a combination of methods. The liability is
estimated based on amounts included in construction contracts and estimates for construction contingencies,
project management, and other professional fees. See Note 15 - Environmental and Natural Resource Damages
Liabilities for more information.
GOODWILL
Goodwill represents the excess of the acquisition cost of the New Zealand Timber segment over the fair value of
the net assets acquired. Goodwill is not amortized, but is periodically reviewed for impairment. An impairment test
for this reporting unit’s goodwill is performed annually and whenever events or circumstances indicate that the value
of goodwill may be impaired. We compare the fair value of the New Zealand Timber segment, using an independent
valuation for the New Zealand forest assets, to its carrying value including goodwill. The independent valuation of
the New Zealand forest assets is based on discounted cash flow models where the fair value is calculated using
cash flows from sustainable forest management plans. The fair value of the forest assets is measured as the
present value of cash flows from one growth cycle based on the productive forest land, taking into consideration
environmental, operational, and market restrictions. These cash flow valuations involve a number of estimates that
require broad assumptions and significant judgment regarding future performance. The annual impairment test was
performed as of October 1, 2021; the estimated fair value of the New Zealand Timber segment exceeded its
carrying value and no impairment was recorded. Except for changes in the New Zealand foreign exchange rate,
there have been no adjustments to the carrying value of goodwill since the initial recognition. See Note 25 — Other
Assets for additional information.
FOREIGN CURRENCY TRANSLATION AND REMEASUREMENT
The functional currency of our New Zealand-based operations is the New Zealand dollar. All assets and
liabilities are translated into U.S. dollars at the exchange rate in effect at the respective balance sheet dates.
Translation gains and losses are recorded as a separate component of Accumulated Other Comprehensive Income
(“AOCI”), within Shareholders’ Equity.
U.S. denominated transactions of the New Zealand subsidiary are remeasured into New Zealand dollars at the
exchange rate in effect on the date of the transaction and recognized in earnings, net of related cash flow hedges.
All income statement items of the New Zealand subsidiary are translated into U.S. dollars for reporting purposes
using monthly average exchange rates with translation gains and losses being recorded as a separate component
of AOCI, within Shareholders’ Equity.
REDEEMABLE OPERATING PARTNERSHIP UNITS
Limited partners holding Redeemable Operating Partnership Units have the right to put any and all of the units
to the Operating Partnership in exchange for Rayonier registered common shares, on a one-for-one basis, or cash,
at Rayonier’s option. Consequently, these Redeemable Operating Partnership Units are classified outside of
permanent partners’ capital in the Operating Partnership's accompanying balance sheets and the related
84
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
noncontrolling interest is classified outside of permanent equity in the accompanying balance sheets of Rayonier.
The recorded value of the Redeemable Operating Partnership Units is based on the higher of 1) initial carrying
amount, increased or decreased for its share of net income or loss, other comprehensive income or loss, and
dividend or 2) redemption value as measured by the closing price of Rayonier common stock on the balance sheet
date multiplied by the total number of Redeemable Operating Partnership Units outstanding.
RELATED PARTY
We follow ASC 850, Related Party Disclosure, for the identification of related parties and disclosure of related party
transactions. A party is considered to be related to us if the party, directly or indirectly or through one or more
intermediaries, controls, is controlled by, or is under common control with us. Related parties also include principal
owners, management and directors, as well as members of their immediate families or any other parties with which
we may deal if one party to a transaction controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own
separate interests.
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the
requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with
related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to
those that prevail in arm’s-length transactions unless such representations can be substantiated. See Note 28 –
Related Party.
BUSINESS COMBINATION
We account for business combinations using the acquisition method of accounting, under which all assets
acquired and liabilities assumed, including amounts attributable to noncontrolling interest, are recorded at their
respective fair values as of the acquisition date. The excess of the purchase price over the fair value of identifiable
assets and liabilities is recorded as goodwill. The allocation of purchase price in a business combination uses
significant assumptions and estimates. Critical estimates include, but are not limited to, future expected cash flows,
including revenues and expenses, and applicable discount rates. While we believe our estimates and assumptions
to be reasonable, they are subject to change as we obtain additional information related to those estimates during
the applicable measurement periods (up to one year from the acquisition date).
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, we are required to record preliminary values in the financial statements for the items for which
the accounting is incomplete. Adjustments to the preliminary recorded values, which are identified during the
measurement period, are recognized in the reporting period in which the adjustments are determined. This includes
any effect on earnings of changes in depletion, depreciation or amortization, or other income effects as a result of
the change to the recorded values, calculated as if the accounting had been completed at the acquisition date.
During the measurement period, we are also required to recognize additional assets or liabilities if new information
is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted
in the recognition of those assets and liabilities as of that date. The measurement period ends the sooner of one
year from the acquisition date or when we receive the information we were seeking about facts and circumstances
that existed as of the acquisition date or learn that more information is not obtainable. In 2021, we finalized the
purchase price allocation related to the Pope Resources merger. See Note 2 – Merger with Pope Resources for
more information.
REVENUE RECOGNITION
We recognize revenues 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”). We generally satisfy performance obligations within a year of entering into a contract and
therefore have applied the disclosure exemption found under ASC 606-10-50-14. Unsatisfied performance
obligations as of December 31, 2021 are primarily due to advances on stumpage contracts, unearned license
revenue and post-closing obligations on real estate sales. These performance obligations are expected to be
satisfied within the next twelve months. We generally collect payment within a year of satisfying performance
obligations and therefore have elected not to adjust revenues for a financing component.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
TIMBER SALES
Revenue from the sale of timber is recognized when control passes to the buyer. We utilize two primary
methods or sales channels for the sale of timber – a stumpage/standing timber model and a delivered log model.
The sales method we employ depends upon local market conditions and which method management believes will
provide the best overall margins.
Under the stumpage model, standing timber is sold primarily under pay-as-cut contracts, with a specified
duration (typically one year or less) and fixed prices, whereby revenue is recognized as timber is severed and the
sales volume is determined. We also sell stumpage under lump-sum contracts for specified parcels where we
receive cash for the full agreed value of the timber prior to harvest and control passes to the buyer upon signing the
contract. We retain interest in the land, slash products and the use of the land for recreational and other purposes.
Any uncut timber remaining at the end of the contract period reverts to us. Revenue is recognized for lump-sum
timber sales when payment is received, the contract is signed and control passes to the buyer. A third type of
stumpage sale we utilize is an agreed-volume sale, whereby revenue is recognized using the output method, as
periodic physical observations are made of the percentage of acreage harvested.
Under the delivered log model, we hire third-party loggers and haulers to harvest timber and deliver it to a
buyer. Sales of domestic logs generally do not require an initial payment and are made to third-party customers on
open credit terms. Sales of export logs generally require a letter of credit from an approved bank. Revenue is
recognized when the logs are delivered and control has passed to the buyer. For domestic log sales, control is
considered passed to the buyer as the logs are delivered to the customer’s facility. For export log sales (primarily in
New Zealand), control is considered passed to the buyer upon delivery onto the export vessel.
The following table summarizes revenue recognition and general payment terms for timber sales:
Contract Type
Performance
Obligation
Timing of
Revenue Recognition
General
Payment Terms
Stumpage Pay-as-Cut
Stumpage Lump Sum
Stumpage Agreed Volume
Right to harvest a unit (i.e.
ton, MBF, JAS m3) of
standing timber
Right to harvest an agreed
upon acreage of standing
timber
Right to harvest an agreed
upon volume of standing
timber
As timber is severed
(point-in-time)
Initial payment between
5% and 20% of estimated
contract value; collection
generally within 10 days of
severance
Contract execution
(point-in-time)
Full payment due upon
contract execution
As timber is severed
(over-time)
Delivered Wood (Domestic)
Delivery of a unit (i.e. ton,
MBF, JAS m3) of timber to
customer’s facility
Upon delivery to customer’s
facility
(point-in-time)
Delivered Wood (Export)
Delivery of a unit (i.e. ton,
MBF, JAS m3) onto export
vessel
Upon delivery onto export
vessel
(point-in-time)
NON-TIMBER SALES
Payments made throughout
contract term at the earlier of a
specified harvest percentage
or time elapsed
No initial payment and on open
credit terms; collection
generally within 30 days of
invoice
Letter of credit from an
approved bank; collection
generally within 30 days of
delivery
Non-timber sales are primarily comprised of hunting and recreational licenses, carbon credits and other auxiliary
income. Hunting and recreational license sales and any related costs are recognized ratably over the term of the
agreement and included in “Sales” and “Cost of sales,” respectively. Payment is generally due upon contract
execution. The New Zealand Emissions Trading Scheme (“NZ ETS”) incentivizes the lowering of greenhouse gas
emissions by providing carbon credits to certain organizations that lower carbon emissions. Our New Zealand
segment regularly sells carbon credits and recognizes income as they are sold to other carbon emitting entities.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
LOG TRADING
Log trading revenue is generally recognized when procured logs are delivered to the buyer and control has
passed. For domestic log trading, control is considered passed to the buyer as the logs are delivered to the
customer’s facility. For export log trading, control is considered passed to the buyer upon delivery onto the export
vessel. The Trading segment also includes sales from log agency contracts, whereby we act as an agent managing
export services on behalf of third parties. Revenue for log agency fees are recognized net of related costs.
REAL ESTATE
We recognize revenue on sales of real estate generally at the point in time when cash has been received, the
sale has closed and control has passed to the buyer. A deposit of 2% to 5% is generally required at the time a
purchase and sale agreement is executed, with the balance due at closing. On sales of development real estate
containing future performance obligations, revenue is recognized using the cost input method based on
development costs incurred to date relative to the total development costs allocated to the contract with the
customer. The aggregate amount of the transaction price allocated to unsatisfied obligations is recorded and
presented in “Deferred revenue” in the Consolidated Balance Sheets.
COST OF SALES
Cost of sales associated with timber operations primarily include the cost basis of timber sold (depletion),
logging and transportation costs (cut and haul) and ocean freight and demurrage costs (port and freight). Depletion
includes the amortization of capitalized costs (site preparation, planting and fertilization, real estate taxes,
timberland lease payments and certain payroll costs). Other costs include amortization of capitalized costs related
to road and bridge construction and software, depreciation of fixed assets and equipment, road maintenance,
severance and excise taxes and fire prevention.
Cost of sales associated with real estate sold includes the cost of the land, the cost of any timber on the
property that was conveyed to the buyer, any real estate development costs and any closing costs including sales
commissions that may be borne by us. We expense closing costs, including sales commissions, when incurred for
all real estate sales with future performance obligations expected to be satisfied within one year.
When developed residential or commercial land is sold, the cost of sales includes actual costs incurred and
estimates of future development costs benefiting the property sold through completion. Costs are allocated to each
sold acre or lot based upon the relative sales value of each acre or lot as compared to the estimated sales value of
the total project. For purposes of allocating development costs, estimates are reevaluated at least annually and
more frequently if warranted by market conditions, changes in the project’s scope or other factors, with any
adjustments being allocated prospectively to the remaining units available for sale.
EMPLOYEE BENEFIT PLANS
The determination of expense and funding requirements for our defined benefit pension plan, its unfunded
excess pension plan and its postretirement life insurance plan are largely based on a number of actuarial
assumptions. The key assumptions include discount rate, return on assets, mortality rates and longevity of
employees. See Note 20 — Employee Benefit Plans for assumptions used to determine benefit obligations, and the
net periodic benefit cost for the year ended December 31, 2021.
Periodic pension and other postretirement expense is included in “Cost of sales,” “Selling and general
expenses” and “Interest and other miscellaneous income, net” in the Consolidated Statements of Income and
Comprehensive Income. The service cost component of net periodic benefit cost is included in “Cost of sales” and
“Selling and general expenses” while the other components of net periodic benefit cost (interest cost, expected
return on plan assets and amortization of losses or gains) are presented outside of income from operations in
“Interest and other miscellaneous income, net.” At December 31, 2021 and 2020, our pension plans were in a net
liability position (underfunded) of $8.7 million and $21.6 million, respectively. The estimated amount to be paid in the
next 12 months is recorded in “Accrued payroll and benefits” on the Consolidated Balance Sheets, with the
remainder recorded as a long-term liability in “Pension and Other Postretirement Benefits.” Changes in the funded
status of our plans are recorded through other comprehensive (loss) income in the year in which the changes occur.
We measure plan assets and benefit obligations as of the fiscal year-end. See Note 20 — Employee Benefit Plans
for additional information.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
INCOME TAXES
We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets
and liabilities are recognized for the estimated future tax consequences attributable to differences between the
financial statement carrying amounts of assets and liabilities and their respective tax bases, operating loss
carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are measured pursuant to tax laws
using rates expected to apply to taxable income in the years in which the temporary differences are expected to be
recovered or settled. We recognize the effect of a change in income tax rates on deferred tax assets and liabilities in
the Consolidated Statements of Income and Comprehensive Income in the period that includes the enactment date
of the rate change. We record a valuation allowance to reduce the carrying amounts of deferred tax assets if it is
more-likely-than-not that such deferred tax assets will not be realized.
In determining the provision for income taxes, we compute an annual effective income tax rate based on annual
income by legal entity, permanent differences between book and tax, and statutory income tax rates by jurisdiction.
Inherent in the effective tax rate is an assessment of the ultimate outcome of current period uncertain tax positions.
We adjust our annual effective tax rate as additional information on outcomes or events becomes available. Discrete
items such as taxing authority examination findings or legislative changes are recognized in the period in which they
occur.
Our income tax returns are subject to audit by U.S. federal, state and foreign taxing authorities. In evaluating the
tax benefits associated with various tax filing positions, we record a tax benefit for an uncertain tax position if it is
more-likely-than-not to be realized upon ultimate settlement of the issue. We record a liability for an uncertain tax
position that does not meet this criterion. We adjust our liabilities for uncertain tax benefits in the period in which it is
determined the issue is settled with the taxing authorities, the statute of limitations expires for the relevant taxing
authority to examine the tax position or when new facts or information become available. See Note 22 — Income
Taxes for additional information.
NEW ACCOUNTING PRONOUNCEMENTS
In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate
Reform (Topic 848), which provides optional guidance to ease the potential burden in accounting due to reference
rate reform. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt,
leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as
reference rate reform activities occur. During Q2 2020, we elected to apply the hedge accounting expedients related
to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index
upon which future hedged transactions will be based matches the index on the corresponding derivatives.
Application of these expedients preserves the presentation of derivatives consistent with past presentation. We
continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes
in the market occur.
In August 2020, the FASB issued ASU 2020-06, Debt–Debt with Conversion and Other Options (Subtopic
470-20) and Derivatives and Hedging–Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for
Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for certain financial
instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt
instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with
Conversion and Other Options, that requires entities to account for beneficial conversion features and cash
conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope
exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features
that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria
required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to
calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition,
entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled
in cash or shares. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years,
beginning after December 15, 2021, with early adoption permitted. The pronouncement eliminates the requirement
that contracts legally permitting settlement in registered shares be classified as temporary equity. As a result,
Redeemable Operating Partnership Units may be classified as permanent partners’ capital in the Operating
partnership’s accompanying balance sheets and the related noncontrolling interest as permanent equity in the
accompanying balance sheets of Rayonier, Inc. However, the corresponding SEC guidance on equity classification
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RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
has remained unchanged. We will continue to monitor any developments in this area and will adopt this
pronouncement upon agreement in guidance.
SUBSEQUENT EVENTS
On January 3, 2022, we drew $200.0 million on our Revolving Credit Facility. On January 4, 2022, we repaid the
$325.0 million Senior Notes due 2022 with $125.0 million of cash and the $200.0 million previously drawn on the
Revolving Credit Facility. We then made a $200.0 million draw on our 2021 Incremental Term Loan Facility and
simultaneously repaid the outstanding principal on our Revolving Credit Facility. The periodic interest rate on the
2021 Incremental Term Loan agreement is subject to a pricing grid based on our leverage ratio, as defined in the
credit agreement. As of February 25, 2022, the periodic interest rate on the the 2021 Incremental Term Loan is
LIBOR plus 1.55%. Monthly payments of interest only are due on this loan through maturity. See Note 10 - Debt for
additional information.
On February 1, 2022, our $200.0 million notional forward-starting interest rate swap matured into an active
interest rate swap. This interest rate swap will fix the cost of the 2021 Incremental Term Loan Facility over its seven-
year term. We estimate the effective interest rate on the 2021 Incremental Term Loan Facility to be approximately
1.5% after consideration of interest rate swaps and estimated patronage refunds.
2.
MERGER WITH POPE RESOURCES
On May 8, 2020, Rayonier Inc. and Rayonier, L.P. acquired Pope Resources and became the general partner of
Pope Resources. Pope Resources was a master limited partnership that primarily owned and managed timberlands
in the U.S. Pacific Northwest. Pope Resources also managed and co-invested in three private equity timber funds
and developed and sold real estate properties.
The total purchase price was as follows:
Cash consideration ...............................................................................................................................
Equity consideration .............................................................................................................................
Redeemable Operating Partnership Unit consideration .................................................................
Fair value of Pope Resources units held by us (a) ..........................................................................
Total purchase price ...........................................................................................................................
$247,318
172,640
106,752
11,211
$537,921
(a) Based on the closing price of Pope Resources units on the NASDAQ on May 7, 2020.
We recognized approximately $17.2 million of merger-related costs that were expensed during the year ended
December 31, 2020. See Note 27 — Charges for Integration and Restructuring for descriptions of the components
of merger-related costs. The acquisition of Pope Resources was accounted for as a business combination under
ASC 805, Business Combinations, (“ASC 805”). Pursuant to ASC 805, we recorded an allocation of the assets
acquired and liabilities assumed in the merger with Pope Resources based on their fair values as of May 8, 2020.
We completed our assessment of the fair value of the assets acquired and liabilities assumed within the one-year
period from the date of acquisition. We recorded measurement period adjustments due to additional information
received primarily related to higher and better use timberlands and real estate development investments, as well as
timber and timberlands.
As a result of refinements to the purchase price allocation, higher and better use timberlands increased by
approximately $8.2 million. This includes development properties in the town of Port Gamble, Washington,
development projects in Gig Harbor, Kingston, and Bremerton, Washington and various other assets. Additionally,
refinements to the purchase price allocation resulted in an overall increase of $1.1 million to timber and timberlands,
with the valuation of core timberlands decreasing by $15.5 million and Timber Funds timber and timberlands
increasing by $16.6 million from the preliminary purchase price allocation reported in Note 2 - Merger with Pope
Resources in our 2020 Form 10-K.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
As a result of refinements to timberlands preliminarily recorded values, we recognized the following decreases
in depletion expense during the year ended December 31, 2021:
Depletion (a)
Total
Year ended December 31, 2021
Pacific Northwest
Timber
Timber Funds
Total
($182)
($182)
($1,202)
($1,202)
($1,384)
($1,384)
(a) Pacific Northwest Timber includes an immaterial increase in depletion expense related to the year ended December 31, 2020. Timber Funds
includes an increase in depletion expense of approximately $0.1 million related to the year ended December 31, 2020.
The fair values of the assets acquired and liabilities assumed were determined using the income, cost or market
approaches. The fair value measurements were generally based on significant inputs that are not observable in the
market and thus represent Level 3 measurements as defined in ASC 820, Fair Value Measurement, (“ASC 820”)
with the exception of certain long-term debt instruments assumed in the merger that can be valued using
observable market inputs and are therefore Level 2 measurements. See Note 12 — Fair Value Measurements for
further information on the fair value hierarchy.
The final allocation of purchase price to the identifiable assets acquired and liabilities assumed is as follows:
Core
Timberlands
Timber Funds
Total
Timberland and Real Estate Business
Cash
Accounts receivable
Other current assets
Timber and Timberlands
Higher and Better Use Timberlands and Real Estate
Development Investments
Property, plant and equipment
Other assets (a)
Total identifiable assets acquired
Accounts payable
Current maturities of long-term debt
Accrued interest
Other current liabilities
Long-term debt
Long-term environmental liabilities
Other non-current liabilities (b)
Total liabilities assumed
Net identifiable assets
Less: noncontrolling interests
Total net assets acquired
$7,380
2,459
703
498,630
34,748
11,616
3,737
$559,273
274
—
244
9,038
53,502
10,748
2,724
$76,530
$8,870
1,787
260
449,073
—
—
2,194
$462,184
293
25,084
275
2,080
35,759
—
461
$63,952
$482,743
(3,816)
$478,927
$398,232
(339,238)
$58,994
$16,250
4,246
963
947,703
34,748
11,616
5,931
$1,021,457
567
25,084
519
11,118
89,261
10,748
3,185
$140,482
$880,975
(343,054)
$537,921
(a) Other assets includes a $1.9 million intangible asset in connection with the Timberland Investment Management business.
(b) Other non-current liabilities includes a $3.2 million deferred income tax liability resulting from the fair value adjustment to Pope Resources’
assets and liabilities.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
Pursuant to ASC 805, unaudited supplemental pro forma results of operations for the years ended December
31, 2020 and 2019, assuming the acquisition had occurred as of January 1, 2019, are presented below (in
thousands, except per share and unit amounts):
Sales.................................................................................................................................................
$890,400
$821,500
2020
2019
Net income attributable to Rayonier Inc. ....................................................................................
$38,411
$28,640
Basic earnings per share attributable to Rayonier Inc. ............................................................
Diluted earnings per share attributable to Rayonier Inc. ..........................................................
$0.28
$0.28
$0.21
$0.21
Net income attributable to Rayonier, L.P. ...................................................................................
$39,658
$29,574
Basic earnings per unit attributable to Rayonier, L.P. ...............................................................
Diluted earnings per unit attributable to Rayonier, L.P. ............................................................
$0.28
$0.28
$0.21
$0.21
The unaudited pro forma results include certain pro forma adjustments to net earnings that were directly
attributable to the acquisition, assuming the acquisition had occurred on January 1, 2019, including the following:
•
•
•
additional depletion expense that would have been recognized relating to the basis increase in the acquired
Timber and Timberlands;
adjustment to interest expense to reflect the removal of Pope Resources debt and the additional borrowings
we incurred in conjunction with the acquisition; and
a reduction in expenses for year ended December 31, 2020 of $32.3 million for acquisition-related
transaction costs.
Pro forma data may not be indicative of the results that would have been obtained had these events occurred at
the beginning of the periods presented, nor is it intended to be a projection of future results.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
3.
SEGMENT AND GEOGRAPHICAL INFORMATION
Rayonier operates in six reportable segments: Southern Timber, Pacific Northwest Timber, New Zealand
Timber, Timber Funds, Real Estate, and Trading.
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 (loss) and 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 is equal
to segment income. Certain income (loss) items in the Consolidated Statements of Income and Comprehensive
Income are not allocated to segments. These items, which include interest income (expense), miscellaneous
income (expense) and income tax expense, are not considered by management to be part of segment operations
and are included under “unallocated interest expense and other.”
Segment information for each of the three years ended December 31 follows:
Sales by Product Line
2020
2019
2021
Southern Timber ...............................................................................................................................
$204,441
$191,831
$194,111
Pacific Northwest Timber .................................................................................................................
143,021
120,809
85,414
New Zealand Timber .........................................................................................................................
281,158
202,315
241,861
Timber Funds (a) ...............................................................................................................................
199,402
29,557
—
Real Estate
Improved Development .........................................................................................................
Unimproved Development ....................................................................................................
Rural .........................................................................................................................................
Timberland & Non-Strategic .................................................................................................
Conservation Easements ......................................................................................................
51,713
37,500
43,088
44
3,855
Deferred Revenue/Other .......................................................................................................
(2,380)
14,498
8,426
67,152
19,255
3,099
888
Large Dispositions ..................................................................................................................
56,048
116,027
5,882
19,476
47,647
1,338
—
544
—
Total Real Estate ...............................................................................................................................
189,868
229,345
74,887
Trading ................................................................................................................................................
95,364
88,973
115,438
Intersegment eliminations (b) ..........................................................................................................
(3,657)
(3,676)
(155)
Total Sales .............................................................................................................................
$1,109,597 $859,154
$711,556
(a)
(b)
The years ended December 31, 2021 and December 31, 2020 include $159.1 million and $22.7 million, respectively, of sales attributable to
noncontrolling interests in Timber Funds. Included in sales attributable to noncontrolling interests in Timber Funds for the year ended
December 31, 2021 is $125.4 million from Fund II Timberland Dispositions attributable to noncontrolling interests in Timber Funds. The
year ended December 31, 2021 also includes $31.4 million from Fund II Timberland Dispositions attributable to Rayonier.
Primarily consists of the elimination of timberland investment management fees paid to us by the timber funds which are initially
recognized as sales and cost of sales within the Timber Funds segment, as well as log marketing fees paid to our Trading segment from
our Southern Timber and Pacific Northwest Timber segments for marketing log export sales.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
Operating Income (Loss)
2020
2019
2021
Southern Timber (a) ..........................................................................................................................
Pacific Northwest Timber .................................................................................................................
New Zealand Timber ........................................................................................................................
Timber Funds (b) ...............................................................................................................................
$66,111
$41,247
$57,804
6,827
51,513
63,219
(9,979)
(12,427)
29,984
48,035
(13,195)
—
Real Estate (c) ...................................................................................................................................
112,540
71,951
38,665
Trading ................................................................................................................................................
144
(462)
8
Corporate and other (d) ...................................................................................................................
Total Operating Income .........................................................................................................
(30,579)
(45,158)
(25,058)
269,775
74,388
107,027
Unallocated interest expense and other ........................................................................................
(44,627)
(37,595)
(26,409)
Total Income before Income Taxes ................................................................................................
$225,148
$36,793
$80,618
(a)
(b)
(c)
(d)
The year ended December 31, 2020 includes $6.0 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 under the caption “Cost of
sales.”
The year ended December 31, 2021 includes $45.6 million of operating income attributable to noncontrolling interests in Timber Funds.
Included in operating income attributable to noncontrolling interests in Timber Funds for the year ended December 31, 2021 is
$41.2 million of income from Fund II Timberland Dispositions. The year ended December 31, 2021 also includes $10.3 million of income on
Fund II Timberland Dispositions attributable to Rayonier and a $7.5 million gain on investment in Timber Funds. The year ended December
31, 2020 includes $11.6 million of operating loss attributable to noncontrolling interests in Timber Funds. Included in operating loss
attributable to noncontrolling interests in Timber Funds for the year ended December 31, 2020 is $7.3 million related to timber write-offs
resulting from casualty events. The year ended December 31, 2020 also includes $1.8 million of timber write-offs resulting from casualty
events attributable to Rayonier. Timber write-offs resulting from casualty events are recorded within the Consolidated Statements of
Income and Comprehensive Income under the caption “Cost of sales.”
The years ended December 31, 2021 and December 31, 2020 include $44.8 million and $28.7 million, respectively, from Large
Dispositions.
The year ended December 31, 2020 includes $17.2 million of integration and restructuring costs related to the merger with Pope
Resources. See Note 27 — Charges for Integration and Restructuring for additional details.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
Gross Capital Expenditures
2019
2020
2021
Capital Expenditures (a)
Southern Timber .................................................................................................................................
Pacific Northwest Timber ..................................................................................................................
New Zealand Timber .........................................................................................................................
Timber Funds (b) ................................................................................................................................
Real Estate ..........................................................................................................................................
Corporate and other ...........................................................................................................................
$35,790
$35,505
$34,574
16,585
20,128
3,271
191
—
11,367
16,595
2,606
428
—
11,220
17,357
—
204
641
Total capital expenditures .......................................................................................................
$75,965
$66,500
$63,996
Timberland Acquisitions (c)
Southern Timber ................................................................................................................................
Pacific Northwest Timber ...................................................................................................................
New Zealand Timber ..........................................................................................................................
Total timberland acquisitions ..................................................................................................
$168,188
$24,241
$98,927
—
10,927
—
454
7,340
36,020
$179,115
$24,695
$142,287
Total Gross Capital Expenditures ................................................................................................
$255,080
$91,195
$206,283
(a) Excludes timberland acquisitions presented separately in addition to real estate development investments of $12.5 million, $6.5 million and
$6.8 million in the years ended December 31, 2021, 2020 and 2019, respectively.
(b) The years ended December 31, 2021 and December 31, 2020 include $2.8 million and $2.3 million, respectively, of capital expenditures
attributable to noncontrolling interests in Timber Funds.
(c) Excludes timberland acquired in the Pope Resources merger. For additional information, see Note 2 - Merger with Pope Resources.
Depreciation,
Depletion and Amortization
2019
2020
2021
Southern Timber .................................................................................................................................
$54,116
$61,827
$61,923
Pacific Northwest Timber ...................................................................................................................
New Zealand Timber ..........................................................................................................................
Timber Funds (a) ................................................................................................................................
Real Estate (b) ....................................................................................................................................
Corporate and other ..........................................................................................................................
50,487
27,005
97,943
17,746
1,208
47,107
25,030
11,884
53,093
1,427
29,165
27,761
—
8,229
1,157
Total ...........................................................................................................................................
$248,505
$200,368
$128,235
(a) The year ended December 31, 2021 includes $78.9 million of depreciation, depletion, and amortization attributable to noncontrolling
interests in Timber Funds. Included in depreciation, depletion, and amortization attributable to noncontrolling interests in Timber Funds for
the year ended December 31, 2021 is $66.4 million related to Fund II Timberland Dispositions. The year ended December 31, 2021 also
includes $16.6 million related to Fund II Timberland Dispositions attributable to Rayonier. The year ended December 31, 2020 includes
$10.3 million of depreciation, depletion and amortization attributable to noncontrolling interests in Timber Funds.
(b) The years ended December 31, 2021 and December 31, 2020 include $9.8 million and $35.4 million, respectively, from Large Dispositions.
94
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
Non-Cash Cost of Land and
Improved Development
2020
2019
2021
Timber Funds (a) ......................................................................................................................................
$20,239
—
—
Real Estate (b) ..........................................................................................................................................
Total .................................................................................................................................................
25,070
82,008
12,565
$45,309
$82,008
$12,565
(a) The year ended December 31, 2021 includes $20.2 million of non-cash cost of land and improved development from Fund II Timberland
Dispositions, of which $16.2 million was attributable to noncontrolling interests in Timber Funds and $4.0 million was attributable to
Rayonier.
(b) The years ended December 31, 2021 and December 31, 2020 include $0.1 million and $51.6 million, respectively, from Large Dispositions.
Geographical Operating Information
2021
Sales
2020
2019
2021
Operating Income
2020
2019
Identifiable Assets
2020
2021
United States ............
$732,995
$567,998
$354,395
$217,964
$44,877
$58,945
$3,046,707
$3,104,916
New Zealand ............
376,602
291,156
357,161
51,811
29,511
48,082
589,649
623,817
Total ................
$1,109,597 $859,154
$711,556
$269,775
$74,388
$107,027
$3,636,356
$3,728,733
4.
REVENUE
Contract Balances
The timing of revenue recognition, invoicing and cash collections results in accounts receivable and deferred
revenue (contract liabilities) on the Consolidated Balance Sheets. Accounts receivable 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 summarizes revenue recognized during the years ended December 31, 2021 and 2020 that
was included in the contract liability balance at the beginning of each year:
Revenue recognized from contract liability balance at the beginning of the year (a) ..............
$10,809
$10,857
(a) Revenue recognized was primarily from hunting licenses and the use of advances on pay-as-cut timber sales.
Year Ended December 31,
2021
2020
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RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
The following tables present our revenue from contracts with customers disaggregated by product type for the years ended
December 31, 2021, 2020 and 2019:
Year Ended
December 31, 2021
Pulpwood ......................................................................
Sawtimber ....................................................................
Hardwood .....................................................................
Total Timber Sales ..........................................
License Revenue, Primarily From Hunting .............
Other Non-Timber/Carbon Revenue ........................
Agency Fee Income ....................................................
Fund II Timberland Dispositions ...............................
Total Non-Timber Sales ................................
Improved Development ..............................................
Unimproved Development .........................................
Rural ..............................................................................
Timberland & Non-Strategic ......................................
Conservation Easements ...........................................
Deferred Revenue/Other (a) ......................................
Large Dispositions ......................................................
Total Real Estate Sales .................................
Revenue from Contracts with Customers ...............
Lease Revenue ...........................................................
Intersegment ................................................................
Southern
Timber
Pacific
Northwest
Timber
New
Zealand
Timber
Timber
Funds
Real
Estate
Trading
Elim.
Total
$95,995
79,154
4,671
179,820
18,116
6,505
—
—
24,621
—
—
—
—
—
—
—
—
204,441
—
—
$9,336
127,768
—
137,104
990
4,927
—
—
5,917
—
—
—
—
—
—
—
—
143,021
—
—
$42,836
237,262
—
280,098
385
675
—
—
1,060
—
—
—
—
—
—
—
—
281,158
—
—
$792
38,042
—
38,834
40
439
—
156,752
157,231
—
—
—
—
—
—
—
—
196,065
—
3,337
—
—
—
—
—
—
—
—
—
51,713
37,500
43,088
44
3,855
(3,532)
56,048
188,716
188,716
1,152
—
$11,369
82,276
—
93,645
—
—
1,399
—
1,399
—
—
—
—
—
—
—
—
95,044
—
320
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(3,657)
$160,328
564,502
4,671
729,501
19,531
12,546
1,399
156,752
190,228
51,713
37,500
43,088
44
3,855
(3,532)
56,048
188,716
1,108,445
1,152
—
Total Revenue ..................................................
$204,441
$143,021
$281,158
$199,402
$189,868
$95,364
($3,657)
$1,109,597
December 31, 2020
Pulpwood ......................................................................
Sawtimber ....................................................................
Hardwood .....................................................................
Total Timber Sales ..........................................
License Revenue, Primarily from Hunting ...............
Other Non-Timber/Carbon Revenue ........................
Agency Fee Income ....................................................
Total Non-Timber Sales ................................
Improved Development ..............................................
Unimproved Development .........................................
Rural ..............................................................................
Timberland & Non-Strategic ......................................
Conservation Easements ...........................................
Deferred Revenue/Other (a) ......................................
Large Dispositions ......................................................
Total Real Estate Sales .................................
Revenue from Contracts with Customers ...............
Lease Revenue ...........................................................
Intersegment ................................................................
$94,108
73,683
2,430
170,221
17,765
3,845
—
21,610
—
—
—
—
—
—
—
—
191,831
—
—
$10,581
106,051
—
116,632
843
3,334
—
4,177
—
—
—
—
—
—
—
—
120,809
—
—
$27,558
166,935
—
194,493
307
7,515
—
7,822
—
—
—
—
—
—
—
—
202,315
—
—
$784
25,195
—
25,979
17
124
—
141
—
—
—
—
—
—
—
26,120
—
3,437
—
—
—
—
—
—
—
—
14,498
8,426
67,152
19,255
3,099
283
116,027
228,740
228,740
605
—
$10,260
77,314
—
87,574
—
—
1,160
1,160
—
—
—
—
—
—
—
—
88,734
—
239
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(3,676)
$143,291
449,178
2,430
594,899
18,932
14,818
1,160
34,910
14,498
8,426
67,152
19,255
3,099
283
116,027
228,740
858,549
605
—
Total Revenue ..................................................
$191,831
$120,809
$202,315
$29,557
$229,345
$88,973
($3,676)
$859,154
December 31, 2019
Pulpwood ......................................................................
Sawtimber ....................................................................
Hardwood .....................................................................
Total Timber Sales ..........................................
License Revenue, Primarily from Hunting ...............
Other Non-Timber/Carbon Revenue ........................
Agency Fee Income ....................................................
Total Non-Timber Sales ................................
Improved Development ..............................................
Unimproved Development .........................................
Rural ..............................................................................
Timberland & Non-Strategic ......................................
Deferred Revenue/Other (a) ......................................
Total Real Estate Sales .................................
Revenue from Contracts with Customers ...............
Intersegment ................................................................
$86,537
67,360
5,259
159,156
18,270
16,685
—
34,955
—
—
—
—
—
—
194,111
—
$10,350
72,377
—
82,727
717
1,970
—
2,687
—
—
—
—
—
—
85,414
—
$32,925
198,481
—
231,406
361
10,094
—
10,455
—
—
—
—
—
—
241,861
—
Total Revenue ..................................................
$194,111
$85,414
$241,861
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,882
19,476
47,647
1,338
544
74,887
74,887
—
$13,351
101,255
—
114,606
—
—
677
677
—
—
—
—
—
—
115,283
155
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(155)
$143,163
439,473
5,259
587,895
19,348
28,749
677
48,774
5,882
19,476
47,647
1,338
544
74,887
711,556
—
$74,887
$115,438
($155)
$711,556
(a)
Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales.
96
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
The following tables present our timber sales disaggregated by contract type for the years ended December 31,
2021, 2020 and 2019:
Year Ended
December 31, 2021
Stumpage Pay-as-Cut ............
Stumpage Lump Sum ..............
Total Stumpage ................
Delivered Wood (Domestic) ....
Delivered Wood (Export) .........
Total Delivered .................
Southern
Timber
Pacific
Northwest
Timber
New Zealand
Timber
Timber Funds
Trading
Total
$68,471
6,890
75,361
81,803
22,656
104,459
—
10,769
10,769
126,335
—
126,335
—
—
—
73,543
206,555
280,098
$768
—
768
38,066
—
38,066
—
—
—
3,731
89,914
93,645
$69,239
17,659
86,898
323,478
319,125
642,603
Total Timber Sales ....................
$179,820
$137,104
$280,098
$38,834
$93,645
$729,501
December 31, 2020
Stumpage Pay-as-Cut ............
Stumpage Lump Sum ..............
Total Stumpage ................
Delivered Wood (Domestic) ....
Delivered Wood (Export) .........
Total Delivered .................
$68,684
2,027
70,711
85,996
13,514
99,510
—
8,142
8,142
108,490
—
108,490
—
—
—
62,568
131,925
194,493
$1,731
—
1,731
24,248
—
24,248
—
—
—
1,768
85,806
87,574
$70,415
10,169
80,584
283,070
231,245
514,315
Total Timber Sales ....................
$170,221
$116,632
$194,493
$25,979
$87,574
$594,899
December 31, 2019
Stumpage Pay-as-Cut ............
Stumpage Lump Sum ..............
Total Stumpage ................
Delivered Wood (Domestic) ....
Delivered Wood (Export) .........
Total Delivered .................
$71,943
7,428
79,371
71,054
8,731
79,785
—
2,749
2,749
79,978
—
79,978
—
—
—
80,974
150,432
231,406
Total Timber Sales ....................
$159,156
$82,727
$231,406
—
—
—
—
—
—
—
—
—
—
5,488
109,118
114,606
$71,943
10,177
82,120
237,494
268,281
505,775
$114,606
$587,895
5.
TIMBERLAND ACQUISITIONS
In 2021, we acquired approximately 100,000 acres of U.S. timberland located in Florida, Georgia, and Texas
through seven transactions for an aggregate value of $168.2 million, which were funded from operating cash flow,
proceeds from the sale of the Timber Funds business and use of the Company’s at-the-market equity offering
program. Additionally, during 2021, we acquired approximately 3,000 acres of timberland (including approximately
1,000 acres of leased land) in New Zealand for approximately $10.9 million. These acquisitions were funded from
operating cash flow.
In 2020, we acquired approximately 13,000 acres of U.S. timberland located in Alabama, Georgia, and
Louisiana through three transactions for an aggregate value of $24.2 million. Approximately $24.1 million of these
acquisitions were acquired using like-kind exchange proceeds while the remaining $0.1 million were funded from
operating cash flow. Additionally, during 2020, we acquired approximately 2,000 acres of timberland (including
approximately 2,000 acres of leased land) in New Zealand for approximately $0.5 million. These acquisitions were
funded from operating cash flow.
97
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
The following table summarizes the timberland acquisitions for the years ended December 31, 2021 and 2020:
Alabama ...........................................................................................................
Florida ..............................................................................................................
Georgia ............................................................................................................
Louisiana .........................................................................................................
Texas ...............................................................................................................
New Zealand ...................................................................................................
Total Acquisitions ........................................................................................
2021
Cost
—
31,342
38,339
—
98,507
10,927
$179,115
Acres
—
24,153
24,776
—
51,568
2,676
103,173
2020 (a)
Cost
Acres
$100
—
18
24,123
—
454
$24,695
56
—
20
12,558
—
2,378
15,012
(a)
Excludes acres and costs related to the Pope Resources merger. For more information on assets and liabilities acquired see Note 2 -
Merger with Pope Resources.
6.
LEASES
TIMBERLAND LEASES
U.S. timberland leases typically have initial terms of approximately 30 to 65 years, with renewal provisions in
some cases. New Zealand timberland lease terms typically range between 30 and 99 years. New Zealand lease
arrangements generally consist of Crown Forest Licenses (“CFLs”), forestry rights and land leases. A CFL is a
license arrangement to use government or privately owned lands to operate a commercial forest. CFLs generally
extend indefinitely and may only be terminated upon a 35-year termination notice. If no termination notice is given,
the CFLs renew automatically each year for a one-year term. Alternatively, some CFLs extend for a specific term.
Once a CFL is terminated, we may be able to obtain a forestry right from the subsequent owner. A forestry right is a
license arrangement with a private entity to use their lands to operate a commercial forest. Forestry rights terminate
either upon the issuance of a termination notice (which can last 35 to 45 years), completion of harvest, or a
specified termination date.
As of December 31, 2021, the New Zealand subsidiary has three CFLs comprising 11,000 gross acres or 9,000
net plantable acres under termination notice that are being relinquished as harvest activities are concluded, as well
as two fixed-term CFLs comprising 3,000 gross acres or 2,000 net plantable acres expiring in 2062. Additionally, the
New Zealand subsidiary has two forestry rights comprising 32,000 gross acres or 6,000 net plantable acres under
termination notice that are being relinquished as harvest activities are concluded.
OTHER NON-TIMBERLAND LEASES
In addition to timberland holdings, we lease properties for certain office locations. Significant leased properties
include a regional office in Lufkin, Texas; a Pacific Northwest Timber office in Hoquiam, Washington and a New
Zealand Timber and Trading headquarters in Auckland, New Zealand.
LEASE MATURITIES, LEASE COST AND OTHER LEASE INFORMATION
The following table details our undiscounted lease obligations as of December 31, 2021 by type of lease and
year of expiration:
Lease obligations
Total
2022
2023
2024
2025
2026
Thereafter
Operating lease liabilities
$188,388
$9,038
$8,864
$8,604
$7,889
$7,176
$146,817
Total Undiscounted Cash Flows
$188,388
$9,038
$8,864
$8,604
$7,889
$7,176
$146,817
Year of Expiration
Imputed interest
Balance at December 31, 2021
Less: Current portion
(86,540)
$101,848
(8,432)
Non-current portion at December 31, 2021
$93,416
98
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
The following table details components of our lease cost for the years ended December 31, 2021, 2020, and
2019:
Lease Cost Components
Operating lease cost
Variable lease cost (a)
Total lease cost (b)
Year Ended December 31,
2021
2020
2019
$10,166
196
$10,362
$9,647
230
$9,877
$10,870
235
$11,105
(a) The majority of timberland leases are subject to increases or decreases based on either the Consumer Price Index, Producer Price Index or
market rates.
(b) Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for these leases are
expensed on a straight line basis over the lease term. Short-term lease expense was not material for the year ended December 31, 2021.
The following table details components of our lease cost for the years ended December 31, 2021, 2020 and
2019:
Supplemental Cash Flow Information Related to Leases:
2021
2020
2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
Investing cash flows from operating leases
Total cash flows from operating leases
$2,389
7,777
$10,166
$2,127
7,520
$9,647
$2,567
8,303
$10,870
Year Ended December 31,
Weighted-average remaining lease term in years - operating leases
Weighted-average discount rate - operating leases
29
5%
29
5%
28
5%
Lessor Lease Information
In the Pope Resources merger, we acquired commercial and residential properties primarily concentrated in
Port Gamble, Washington, which generate lease income under operating leases. As of December 31, 2021,
properties subject to operating leases had an aggregate cost basis and accumulated depreciation of $3.5 million
and $0.5 million, respectively. These leases typically range a few years with the option to extend on a case by case
basis. Commercial and residential leases have non-lease components of taxes, insurance and common area
maintenance, which we have elected not to separate under the ASC 842 practical expedient.
The following table details our lease income for the years ended December 31, 2021, 2020 and 2019:
Lease Income Components
2021
2020
2019
Operating lease income
Total lease income
$1,152
$1,152
$605
$605
—
—
Year Ended December 31,
Future lease income as of December 31, 2021, based on payments due by period under the lease contracts,
are presented in the following table:
Year of Expiration
Lease assets
Operating lease Income
Total
2022
2023
2024
2025
2026
Thereafter
$638
$379
$173
$82
$2
$2
—
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RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
We apply the following practical expedients as allowed under ASC 842:
Practical Expedient
Short-term leases
Separation of lease and non-lease
components
Description
We do not record right-of-use assets or liabilities for short-term leases (a lease that
at commencement date has a lease term of 12 months or less and does not contain
a purchase option that is reasonably certain to be exercised).
We do not separate non-lease components from the associated lease components if
they have the same timing and pattern of transfer and, if accounted for separately,
would both be classified as an operating lease.
7.
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 419,000 legal acres of New Zealand timberland. Accordingly, we
consolidate the New Zealand subsidiary’s balance sheet and results of operations. The portions of the consolidated
financial position and results of operations attributable to the New Zealand subsidiary’s 23% noncontrolling interest
are reflected as an adjustment to income in our Consolidated Statements of Income and Comprehensive Income
under the caption “Net (income) loss 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.
The following table sets forth the income attributable to the New Zealand subsidiary’s noncontrolling interests:
Net income attributable to noncontrolling interests in the New Zealand subsidiary
$7,696
$4,920
$8,573
2021
2020
2019
ORM Timber Fund II, Inc. (Fund II), ORM Timber Fund III LLC (Fund III), and ORM Timber Fund IV LLC. (Fund IV)
(Collectively, the “Funds”)
Upon completion of the Pope Resources merger, we became the manager of three private equity timber funds,
Fund II, Fund III, and Fund IV, consisting of 141,000 acres in the Pacific Northwest, and obtained ownership
interests in the Funds of 20%, 5%, and 15%, respectively. Prior to the merger with Pope Resources, the Funds were
formed by ORM LLC for the purpose of generating a return on investment through the acquisition, management,
value enhancement and sale of timberland properties. Based upon an analysis under the variable interest entity
guidance, we determined that we had the power to direct the activities that most significantly impacted the Funds’
economic success. Therefore, we were considered the primary beneficiary and were required under ASC 810 —
Consolidation to consolidate the Funds. Income attributed to third-party investors is reflected as an adjustment to
income in our Consolidated Statements of Income and Comprehensive Income under the caption “Net (income) loss
attributable to noncontrolling interests in consolidated affiliates.”
On July 21, 2021, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both
funds to BTG Pactual’s Timberland Investment Group (TIG) for an aggregate sales price of $35.9 million and
recognized in our Consolidated Statements of Income and Comprehensive Income a gain on the sale of $3.7 million
under the caption of other operating income (expense), net. Due to the sale of our rights to manage Fund III and
Fund IV, we determined that we no longer have the power to direct the activities that most significantly impact the
success of Fund III and Fund IV. As a result, Timber Fund III and IV balance sheets and results of operations are
only included in our consolidated financial statements through the date of the sale.
In addition, we completed the liquidation of Fund II timberland assets through three separate transactions during
the third and fourth quarters of 2021 for an aggregate sales price of $156.8 million and recognized in our
Consolidated Statements of Income and Comprehensive Income an aggregate gain on the sales of $51.5 million, of
which $10.3 million was attributable to Rayonier. This consisted of a 13,000 acre sale in Washington on September
30, 2021 for a sales price and gain of $87.1 million and $35.9 million, respectively, a 5,000 acre sale in Oregon on
October 5, 2021 for a sales price and gain of $37.2 million and $11.0 million, respectively, and a 13,000 acre sale in
Oregon on November 1, 2021 for a sales price and gain of $32.5 million and $4.6 million, respectively.
100
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
As of December 31, 2021, we continue to manage and maintain a 20% ownership interest in Fund II, which is
scheduled to terminate in March 2023. Prior to the termination of Fund II, the remaining capital will be distributed to
Fund II investors. We continue to have the power to direct the activities that most significantly impact Fund II’s
economic success. Therefore, we are considered the primary beneficiary and consolidate Fund II under ASC 810 —
Consolidation. The obligations of Fund II do not have any recourse to the Company or the Operating Partnership
and the assets of Fund II are not available to satisfy the Company or the Operating Partnership’s liabilities.
Due to Timber Fund II distribution requirements, we classified the portion of proceeds from Fund II Timberland
Dispositions attributable to noncontrolling interests as a current asset under the caption “Restricted Cash, Timber
Funds” on our Consolidated Balance Sheets. Additionally, we recognized a current liability under the caption
“Distribution payable, Timber Funds” and a corresponding decrease in “Noncontrolling Interests in Consolidated
Affiliates” on our Consolidated Balance Sheets. See Note 1 — Summary of Significant Accounting Policies, Note 8
— Variable Interest Entities and Note 24 — Restricted Cash for additional information.
The following table sets forth the income (loss) attributable to the Funds’ noncontrolling interests:
Net income (loss) attributable to noncontrolling interests in the Funds: ................
$45,124
($12,221)
—
2021
2020
2019
Timber Fund II Carried Interest Incentive Fees
As a performance incentive to us as the manager and general partner of Timber Fund II, the Fund agreement
provides for a “carried interest,” permitting us to receive a greater allocable share of the Fund’s earnings from
investments relative to our capital contributions and correspondingly reducing the noncontrolling interests’ share of
those earnings. After distributions sufficient for the Fund to pay each stockholder a return of 8% on its average
investment and reduce its invested capital balance to zero, we are entitled to receive a 20% carried interest of any
further distributions. Carried interest is earned to the extent that cumulative investment returns are positive and
preferred dividend payment thresholds have been met.
Carried interest is recognized in our Consolidated Statements of Income and Comprehensive Income based on
the contractual conditions set forth in the agreements governing the Fund as if the Fund were terminated and
liquidated at the reporting date. In the year ended December 31, 2021, we recognized a gain on Fund II carried
interest incentive fees of $3.8 million in our Consolidated Statements of Income and Comprehensive Income under
the caption of other operating income (expense), net.
Ferncliff Investors
We maintain an ownership interest in Ferncliff Investors, a real estate joint venture entity. In 2017, Ferncliff
Management and Ferncliff Investors were formed for the purpose of raising capital from third parties to invest in an
unconsolidated real estate joint venture entity, Bainbridge Landing LLC, which is developing a five-acre parcel on
Bainbridge Island, Washington into a multi-family community containing apartments and townhomes. Ferncliff
Management is the manager and 33.33% owner of Ferncliff Investors, with the remaining ownership interest in
Ferncliff Investors held by third-party investors. Ferncliff Investors holds a 50% interest in Bainbridge Landing LLC,
the joint venture entity that owns and is developing the property.
Based upon an analysis under the variable interest entity guidance, we have the power to direct the activities
that most significantly impact Ferncliff Investor’s economic success. Therefore, we are considered the primary
beneficiary and are required under ASC 810 — Consolidation to consolidate Ferncliff Investors. The obligations of
Ferncliff Investors do not have any recourse to the Company or the Operating Partnership.
Bainbridge Landing LLC is considered a voting interests entity. Ferncliff Investors accounts for its interest in the
joint venture entity under the equity method because neither it nor the other member can exercise control over
Bainbridge Landing LLC.
The Ferncliff Investors joint venture agreement provides for liquidation rights and distribution priorities that are
disproportionate to each member’s ownership interest. Due to the complex nature of cash distributions to members,
net income of the joint venture is allocated to members, including us, using the Hypothetical Liquidation at Book
Value (HLBV) method. Under the HLBV method, Ferncliff Investors income or loss is allocated to the members
based on the period change in each member’s claim on the book value of net assets, excluding capital contributions
and distributions made during the period.
101
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
The following table sets forth the income (loss) attributable to Ferncliff Investors’ noncontrolling interests:
Net income (loss) attributable to noncontrolling interests in Ferncliff Investors: .....
$601
($526)
—
2021
2020
2019
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:
Beginning noncontrolling interests in the operating partnership
Issuances of redeemable operating partnership units
Adjustment of noncontrolling interests in the operating partnership
Conversions of redeemable operating partnership units to common shares
Net income attributable to noncontrolling interests in the operating partnership
Other comprehensive income attributable to noncontrolling interests in the
operating partnership
Distributions to noncontrolling interests in the operating partnership
2021
2020
$130,121
—
42,530
(40,676)
4,516
1,601
(4,269)
—
106,752
24,393
(496)
528
2,540
(3,596)
Total noncontrolling interests in the operating partnership
$133,823
$130,121
102
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
8.
VARIABLE INTEREST ENTITIES
ORM Timber Fund II, Inc. (Fund II), ORM Timber Fund III LLC (Fund III), and ORM Timber Fund IV LLC. (Fund IV)
(Collectively, the “Funds”)
As mentioned in Note 1 — Summary of Significant Accounting Policies and Note 7 — Noncontrolling Interests,
we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds in July 2021. As
a result, Timber Fund III and IV balance sheets and results of operations are only included in our consolidated
financial statements through the date of the sale. In addition, we completed the liquidation of Fund II timberland
assets through three separate transactions during the third and fourth quarters of 2021. As of December 31, 2021,
we continue to maintain a 20% ownership interest in Fund II, which is scheduled to terminate in March 2023. Prior
to the termination of Fund II, the remaining capital will be distributed to Fund II investors. We continue to have the
power to direct the activities that most significantly impact Fund II’s economic success. Therefore, we are
considered the primary beneficiary and consolidate Fund II under ASC 810 — Consolidation. For further information
on the Funds, see Note 7 — Noncontrolling Interests.
The assets, liabilities and equity of Fund II as of December 31, 2021, were as follows:
Timber Funds
Assets:
Cash and cash equivalents
Restricted cash, Timber Funds (Note 24)
Accounts receivable
Intercompany receivable (a)
Other current assets
Total current assets
Total assets
Liabilities and Equity:
Accounts payable
Accrued taxes
Distributions payable, Timber Funds (b)
Other current liabilities (c)
Total current liabilities
Funds’ equity
Total liabilities and equity
2021
$3,493
6,341
9
41
26
9,910
$9,910
$22
32
6,341
3,546
9,941
(31)
$9,910
Includes amounts due from other consolidated entities. These amounts are eliminated in the Consolidated Balance Sheets.
(a)
(b) Represents the portion of proceeds from Fund II Timberland Dispositions required to be distributed to noncontrolling interests.
(c)
Includes $3.5 million of proceeds from Fund II Timberland Dispositions required to be distributed to other consolidated entities. These
amounts are eliminated in the Consolidated Balance Sheets.
103
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
Ferncliff Investors
We maintain an ownership interest in Ferncliff Investors, a real estate joint venture entity. Based upon an
analysis under the variable interest entity guidance, we have the power to direct the activities that most significantly
impact the joint venture’s economic success. Therefore, we are considered the primary beneficiary and are required
under ASC 810 — Consolidation to consolidate Ferncliff Investors. For further information on Ferncliff Investors, see
Note 7 — Noncontrolling Interests.
The assets, liabilities and equity of Ferncliff Investors as of December 31, 2021, were as follows:
Ferncliff Investors
Assets:
Cash and cash equivalents
Total current assets
Total assets
Liabilities and equity:
Total current liabilities
Total non-current liabilities
Total liabilities
Ferncliff Investors’ equity
Total liabilities and equity
2021
$1,508
1,508
$1,508
$472
2,170
$2,642
(1,134)
$1,508
104
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
9.
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 during the year. 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 for the three years ended December 31:
2021
2020
2019
Earnings per common share - basic
Numerator:
Net Income ....................................................................................................
$210,487
$29,784
$67,678
Less: Net income attributable to noncontrolling interests in the
operating partnership ..................................................................................
Less: Net (income) loss attributable to noncontrolling interests in
consolidated affiliates ..................................................................................
Net income attributable to Rayonier Inc. .................................................
Denominator:
(4,516)
(528)
—
(53,421)
$152,550
7,828
$37,084
(8,573)
$59,105
Denominator for basic earnings per common share - weighted
average shares .............................................................................................
140,812,882
133,865,867
129,257,202
Basic earnings per common share attributable to Rayonier Inc.: ..............
$1.08
$0.28
$0.46
Earnings per common share - diluted
Numerator:
Net Income ....................................................................................................
$210,487
$29,784
$67,678
Less: Net (income) loss attributable to noncontrolling interests in
consolidated affiliates ..................................................................................
Net income attributable to Rayonier Inc., before net income
attributable to noncontrolling interests in the operating partnership ...
(53,421)
7,828
(8,573)
$157,066
$37,612
$59,105
Denominator:
Denominator for basic earnings per common share - weighted
average shares .............................................................................................
140,812,882
133,865,867
129,257,202
Add: Dilutive effect of:
Stock options .............................................................................................
Performance shares, restricted shares and restricted stock units ....
8,727
416,527
633
198,955
Noncontrolling interests in operating partnership units .......................
4,062,725
2,877,447
12,209
328,977
—
Denominator for diluted earnings per common share - adjusted
weighted average shares .................................................................................
145,300,861
136,942,902
129,598,388
Diluted earnings per common share attributable to Rayonier Inc.: ...........
$1.08
$0.27
$0.46
Anti-dilutive shares excluded from computations of diluted earnings per
share:
Stock options, performance shares, restricted shares and
restricted stock units .................................................................................
2021
2020
2019
149,705
450,551
450,681
105
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(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 during the year. 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 for the three years ended December 31:
2021
2020
2019
Earnings per unit - basic
Numerator:
Net Income ....................................................................................................
$210,487
$29,784
$67,678
Less: Net (income) loss attributable to noncontrolling interests in
consolidated affiliates ..................................................................................
Net income available to unitholders ..........................................................
(53,421)
$157,066
7,828
$37,612
(8,573)
$59,105
Denominator:
Denominator for basic earnings per unit - weighted average units ......
144,875,607
136,743,314
129,257,202
Basic earnings per unit attributable to Rayonier, L.P.: .................................
$1.08
$0.28
$0.46
Earnings per unit - diluted
Numerator:
Net Income ....................................................................................................
$210,487
$29,784
$67,678
Less: Net (income) loss attributable to noncontrolling interests in
consolidated affiliates ..................................................................................
Net income available to unitholders ..........................................................
(53,421)
$157,066
7,828
$37,612
(8,573)
$59,105
Denominator:
Denominator for basic earnings per unit - weighted average units ......
144,875,607
136,743,314
129,257,202
Add: Dilutive effect of unit equivalents:
Stock options .............................................................................................
Performance shares, restricted shares and restricted stock units ....
8,727
416,527
633
198,955
12,209
328,977
Denominator for diluted earnings per unit - adjusted weighted average
units .....................................................................................................................
145,300,861
136,942,902
129,598,388
Diluted earnings per unit attributable to Rayonier, L.P. ...............................
$1.08
$0.27
$0.46
Anti-dilutive unit equivalents excluded from computations of diluted
earnings per unit:
Stock options, performance shares, restricted shares and
restricted stock units .................................................................................
2021
2020
2019
149,705
450,551
450,681
106
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
10.
DEBT
Our debt consisted of the following at December 31, 2021 and 2020:
Debt, excluding Timber Funds: ............................................................................................................
Term Credit Agreement borrowings due 2028 at a variable interest rate of 1.7% at
December 31, 2021 .............................................................................................................................
Senior Notes due 2022 at a fixed interest rate of 3.75% ...............................................................
Senior Notes due 2031 at a fixed interest rate of 2.75% ...............................................................
2021
2020
$350,000
325,000
450,000
$350,000
325,000
—
Incremental Term Loan Agreement borrowings due 2026 at a variable interest rate of
1.75% at December 31, 2021 ............................................................................................................
200,000
300,000
2020 Incremental Term Loan Facility borrowings due 2025 at a variable interest rate of
2.0% at December 31, 2020 ..............................................................................................................
New Zealand subsidiary noncontrolling interest shareholder loan due 2025 at a fixed
interest rate of 2.95% ..........................................................................................................................
New Zealand subsidiary noncontrolling interest shareholder loan due 2026 at a fixed
interest rate of 3.64% ..........................................................................................................................
Northwest Farm Credit Services Credit Facility with quarterly interest-only payments,
collateralized by Core Timberlands, with the following tranches: (a) ..........................................
Due 2025 at a fixed interest rate of 6.1% ...................................................................................
Due 2028 at a fixed interest rate of 4.1% ...................................................................................
Due 2033 at a fixed interest rate of 5.3% ...................................................................................
Due 2036 at a fixed interest rate of 5.4% ...................................................................................
—
250,000
23,588
24,903
27,519
—
—
—
—
—
10,000
11,000
16,000
8,000
Total principal debt, excluding Timber Funds ..................................................................................
1,376,107
1,294,903
Add: Fair value adjustments, excluding Timber Funds ..................................................................
—
7,917
Less: Unamortized discounts, excluding Timber Funds ................................................................
(3,426)
Less: Current maturities of long-term debt, excluding Timber Funds .........................................
(124,965)
—
—
Less: Deferred financing costs, excluding Timber Funds .............................................................
(4,897)
(2,484)
Total long-term debt, excluding Timber Funds ................................................................................
1,242,819
1,300,336
Debt, Timber Funds: ..............................................................................................................................
Fund II Mortgages Payable, collateralized by Fund II timberlands with quarterly interest
payments, as follows: (a) ....................................................................................................................
Due 2022 at a fixed interest rate of 2.0% ...................................................................................
Due 2022 at a fixed interest rate of 2.0% ...................................................................................
Fund III Mortgages Payable, collateralized by Fund III timberlands with quarterly interest
payments, as follows: (a) ....................................................................................................................
Due 2023 at a fixed interest rate of 5.1% ...................................................................................
Due 2024 at a fixed interest rate of 4.5% ...................................................................................
Total principal debt, Timber Funds ....................................................................................................
Add: Fair value adjustments, Timber Funds ....................................................................................
Less: Deferred financing costs, Timber Funds ...............................................................................
Total long-term debt, Timber Funds ..................................................................................................
—
—
—
—
—
—
—
—
11,000
14,000
17,980
14,400
57,380
2,809
(10)
60,179
Total long-term debt ...............................................................................................................................
$1,242,819
$1,360,515
(a) See the section below labeled “Long-Term Debt Assumed in the Pope Resources Merger” for additional details.
107
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
Principal payments due during the next five years and thereafter are as follows:
2022 .............................................................................................................................................................................
$325,000
2023 .............................................................................................................................................................................
2024 .............................................................................................................................................................................
2025 .............................................................................................................................................................................
2026 .............................................................................................................................................................................
Thereafter ....................................................................................................................................................................
Total debt .....................................................................................................................................................................
—
—
23,588
227,519
800,000
$1,376,107
TERM CREDIT AGREEMENT
In August 2015, we entered into a credit agreement with CoBank, ACB, as administrative agent, and a syndicate
of Farm Credit institutions and other commercial banks to provide $550 million of new credit facilities, including a
nine-year $350 million term loan facility. In April 2020, the maturity date of the Term Credit Agreement was extended
from August 5, 2024 to April 1, 2028. In connection therewith, we recorded deferred financing costs in the amount of
$0.5 million, which are being amortized over the term of the Term Credit Agreement. The periodic interest rate on
the term loan facility is subject to a pricing grid based on our leverage ratio, as defined in the credit agreement. As
of December 31, 2021, the periodic interest rate on the term loan facility was LIBOR plus 1.600%. Monthly
payments of interest only are due on this loan through maturity. Following the closing of the term loan, we entered
into several interest rate swap transactions to fix the cost of the term loan facility over its nine-year term. The term
credit agreement allows us to receive annual patronage payments, which are profit distributions made by a
cooperative to its member-users based on the quantity or value of business done with the member-user. We
estimate the effective interest rate on the term loan facility to be approximately 3.0% after consideration of the
interest rate swaps and estimated patronage refunds. For additional information on our interest rate swaps see Note
11 — Derivative Financial Instruments and Hedging Activities.
3.75% SENIOR NOTES ISSUED MARCH 2012
In March 2012, Rayonier Inc. issued $325 million of 3.75% Senior Notes due 2022, guaranteed by certain
subsidiaries. Semi-annual payments of interest only are due on these notes through maturity. See the subsequent
events section of Note 1 - Summary of Significant Accounting Policies for information about the repayment of our
Senior Notes due 2022.
2.75% SENIOR NOTES ISSUED MAY 2021
In May 2021, Rayonier, L.P. issued $450 million of 2.75% Senior Notes due 2031, guaranteed by certain
subsidiaries. Semi-annual payments of interest only are due on these notes through maturity. The Senior Notes due
2031 were sold at an issue price of 99.195% of their face value, before underwriters discount. Our net proceeds
after deducting approximately $3.9 million of underwriting discounts and expenses, were approximately
$442.5 million. The discount and debt issuance costs will be amortized to interest expense over the term of the
notes using the effective interest method. A portion of the proceeds were used to repay $250 million outstanding
under our 2020 Incremental Term Loan Agreement.
108
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
INCREMENTAL TERM LOAN AGREEMENT
In April 2016, we entered into an incremental term loan agreement with CoBank, ACB, as administrative agent,
and a syndicate of Farm Credit institutions to provide a 10-year, $300 million incremental term loan. The periodic
interest rate on the incremental term loan agreement is subject to a pricing grid based on our leverage ratio, as
defined in the credit agreement. In June 2021, we entered into a Fourth Amendment to the Credit Agreement which
decreased the applicable margin from LIBOR plus 1.900% to LIBOR plus 1.6500%. As a result of the debt
modification, approximately $0.3 million in third-party expenses have been recognized in the Consolidated
Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous income,
net.” In June 2021, we prepaid $100 million on the $300 million Incremental Term Loan Agreement. In connection
with the partial prepayment, we recognized a loss on early extinguishment of debt of $0.1 million, representing the
write-off of one-third of the unamortized deferred financing costs. The loss on early extinguishment of debt has been
recorded in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and
other miscellaneous income, net.” As of December 31, 2021, the periodic interest rate on the incremental term loan
was LIBOR plus 1.650%. Monthly payments of interest only are due on this loan through maturity. Following the
closing of the incremental term loan, we entered into several interest rate swap transactions to fix the cost of the
facility over its 10-year term. We estimate the effective interest rate on the incremental term loan facility to be
approximately 2.4% after consideration of the interest rate swaps and estimated patronage payments. For additional
information on our interest rate swaps see Note 11 — Derivative Financial Instruments and Hedging Activities.
2020 INCREMENTAL TERM LOAN AGREEMENT
In April 2020, we entered into an Incremental Term Loan Agreement, which provided for the advancement of a
five-year $250 million senior unsecured incremental term loan facility. Proceeds from the 2020 Incremental Term
Loan Facility were used to fund our acquisition of Pope Resources. In May 2021, the Incremental Term Loan
Agreement was fully repaid. We recognized a loss on early extinguishment of debt of $0.6 million, representing the
write-off of unamortized deferred financing costs. The loss on early extinguishment of debt has been recognized in
the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other
miscellaneous income, net.”
2021 INCREMENTAL TERM LOAN AGREEMENT
In June 2021, we entered into an Incremental Term Loan Agreement, which provides us the ability to make an
advance of $200 million on or before June 1, 2022. As of December 31, 2021, no advance had been made under
this facility. We will use a future advance of $200 million under the 2021 Incremental Term Loan Facility to refinance
a portion of the 3.750% Senior Notes due 2022 on a long-term basis, and as such, have excluded $200 million of
principal from current maturities of long-term debt, net, in our Consolidated Balance Sheets. We deferred
$0.3 million of commitment fees, which are being amortized to interest expense over the term of the access period,
through June 1, 2022. Additionally, we deferred $0.2 million in debt issuance costs, which will be amortized to
interest expense over the term of the facility, once any future advance is made. See the subsequent events section
of Note 1 - Summary of Significant Accounting Policies information about activity on the 2021 Incremental Term
Loan subsequent to December 31, 2021.
REVOLVING CREDIT FACILITY
In June 2021, we amended our Revolving Credit Facility, originally entered into in 2015, with one amendment to
the credit agreement: the amendment decreased the applicable margin from LIBOR plus 1.500% to LIBOR plus
1.2500% and extended its maturity date from April 1, 2025 to June 1, 2026. As a result of the revolver modification,
approximately $0.3 million in lender fees have been deferred and are being amortized to interest expense over the
remaining term of the revolver. In April 2020, we previously amended our Revolving Credit Facility, with two
amendments to the credit agreement: the first amendment increased the limit on the Revolving Credit Facility from
$200 million to $250 million and extended its maturity date from August 5, 2020 to April 1, 2025, and the second
amendment further increased the limit to $300 million. In connection therewith, we recorded deferred financing costs
in the amount of $1.2 million, which are being amortized over the term of the Revolving Credit Facility. See Note 25 -
Other Assets for additional information about deferred financing costs related to revolving debt. The periodic interest
rate on the revolving credit facility is subject to a pricing grid based on our leverage ratio, as defined in the credit
agreement. As of December 31, 2021, the periodic interest rate on the revolving credit facility was LIBOR plus
109
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
1.250%, with an unused commitment fee of 0.175%. Monthly payments of interest only are due on this loan through
maturity.
During the year ended December 31, 2021, we made no borrowings or repayments on our Revolving Credit
Facility. At December 31, 2021, we had available borrowings of $299.1 million under the Revolving Credit Facility,
net of $0.9 million to secure our outstanding letters of credit.
NEW ZEALAND SUBSIDIARY DEBT
WORKING CAPITAL FACILITY
In June 2021, the New Zealand subsidiary renewed its NZ$20 million working capital facility for an additional 12-
month term. The NZ$20 million working capital facility is available for short-term operating cash flow needs of the
New Zealand subsidiary. This facility holds a variable interest rate indexed to the 90-day New Zealand Bank Bill rate
(“BKBM”). The margins are set for the term of the facility. During the year ended December 31, 2021, the New
Zealand subsidiary made no borrowings or repayments on its working capital facility. At December 31, 2021, there
was no outstanding balance on the working capital facility.
SHAREHOLDER LOAN DUE 2025
In September 2020, the New Zealand subsidiary made a capital distribution to its partners on a pro rata basis in
order to redeem certain equity interests. A portion of this capital distribution was reinvested by the partners in
shareholder loans to the New Zealand subsidiary. Our capital distribution and portion of the shareholder loan are
eliminated in consolidation. The capital distribution to the minority shareholder and its reinvestment in the
shareholder loan resulted in the recording of a noncontrolling interest share redemption of $5.1 million and a loan
payable by the New Zealand subsidiary in the amount of $23.3 million due in 2025 at a fixed interest rate of 2.95%.
As of December 31, 2021, the outstanding balance on the shareholder loan is $23.6 million. Except for changes in
the New Zealand foreign exchange rate, there have been no adjustments to the carrying value of the shareholder
loan since its inception.
SHAREHOLDER LOAN DUE 2026
In July 2021, the New Zealand subsidiary made a capital distribution to its partners on a pro rata basis in order
to redeem certain equity interests, which was reinvested by the partners in shareholder loans to the New Zealand
subsidiary. Our capital distribution and portion of the shareholder loan are eliminated in consolidation. The capital
distribution to the minority shareholder and its reinvestment in the shareholder loan resulted in the recording of a
loan payable by the New Zealand subsidiary in the amount of $28.1 million due in 2026 at a fixed interest rate of
3.64%. As of December 31, 2021, the outstanding balance on the shareholder loan due 2026 is $27.5 million.
Except for changes in the New Zealand foreign exchange rate, there have been no adjustments to the carrying
value of the shareholder loan since its inception. See Note 7 - Noncontrolling Interests for more information
regarding the New Zealand subsidiary.
LONG-TERM DEBT ASSUMED IN THE POPE RESOURCES MERGER
Northwest Farm Credit Services Credit Facility
We assumed five tranches of a credit facility payable to Northwest Farm Credit Services (the “NWFCS Credit
Facility”) totaling $45.0 million. In September 2021, we repaid the $45 million outstanding under our credit facility
with Northwest Farm Credit Services (NWFCS). We recognized a gain on early extinguishment of debt of
$7.2 million, representing the net write-off of unamortized deferred financing costs and fair market value
adjustments, partially offset by a $6.2 million loss related to a make-whole fee due to debt prepayment. The net gain
on early extinguishment of debt of approximately $0.9 million has been recognized in the Consolidated Statements
of Income and Comprehensive Income under the caption “Interest and other miscellaneous income, net.”
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
Fund II Mortgages Payable
We assumed Fund II’s two mortgages payable (the “Fund II Mortgages Payable”) to MetLife totaling
$25.0 million. In September 2021, we repaid the $25.0 million outstanding under the Fund II Mortgages payable to
MetLife. We recognized a loss on early extinguishment of debt of $6 thousand, representing the write-off of
unamortized deferred financing costs. The loss on early extinguishment of debt has been recognized in the
Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other
miscellaneous income, net.”
Fund III Mortgages Payable
We assumed Fund III’s two mortgages payable (the “Fund III Mortgages Payable”) to NWFCS totaling
$32.4 million. In July 2021, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in
both funds. Following the sale, Fund III’s two mortgages payable to NWFCS are no longer recognized in our
Consolidated Balance Sheets as of December 31, 2021. See Note 7 - Noncontrolling Interests for additional
information.
DEBT COVENANTS — EXCLUDING TIMBER FUNDS
In connection with our $350 million Term Credit Agreement, $200 million Incremental Term Loan Agreement,
$200 million 2021 Incremental Term Loan Agreement and $300 million 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 December 31,
2021, are calculated on a trailing 12-month basis:
Covenant EBITDA to consolidated interest expense should not be less than ..
Covenant debt to covenant net worth plus covenant debt shall not exceed .....
Covenant
Requirement
2.5 to 1
Actual
Ratio
12.6 to 1
Favorable
10.1
65%
43%
22%
In addition to these financial covenants listed above, the Senior Notes due 2022, Senior Notes due 2031, Term
Credit Agreement, Incremental Term Loan Agreement, 2021 Incremental Term Loan Facility, and Revolving Credit
Facility include customary covenants that limit the incurrence of debt and the disposition of assets, among others. At
December 31, 2021, we were in compliance with all applicable covenants.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
11.
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. We also
use derivative financial instruments to mitigate exposure to foreign currency risk due to the translation of the
investment in Rayonier’s New Zealand-based operations from New Zealand dollars to U.S. dollars.
Accounting for derivative financial instruments is governed by Accounting Standards Codification 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 (loss) 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.
FOREIGN CURRENCY EXCHANGE AND OPTION CONTRACTS
The New Zealand subsidiary’s export sales are predominantly denominated in U.S. dollars, and therefore its
cash flows are affected by fluctuations in the exchange rate between the New Zealand dollar and the U.S. dollar.
This exposure is partially managed by a natural currency hedge, as ocean freight payments and shareholder
distributions are also paid in U.S. dollars. We manage any excess foreign exchange exposure through the use of
derivative financial instruments. The New Zealand subsidiary typically hedges 50% to 90% of its estimated foreign
currency exposure with respect to the following twelve months forecasted sales and purchases less distributions
and up to 75% of the forward 12 to 18 months. Additionally, the New Zealand subsidiary will occasionally hedge up
to 50% of its estimated foreign currency exposure with respect to the following 18 to 48 months forecasted sales
and purchases, less distributions, when the New Zealand dollar is at a cyclical low versus the U.S. dollar. Foreign
currency exposure from the New Zealand subsidiary’s trading operations is typically hedged based on the following
three months forecasted sales and purchases. As of December 31, 2021, foreign currency exchange contracts and
foreign currency option contracts had maturity dates through December 2023.
Foreign currency exchange and option contracts hedging foreign currency risk on export sales and ocean
freight payments 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 accumulated in other comprehensive (loss) income 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
During the second quarter of 2021, we terminated and cash settled $250 million in notional value of our interest
rate swaps, maturing in 2030, in connection with the repayment of $250 million outstanding under the 2020
Incremental Term Loan. Upon termination of the swap, we received $6.8 million from our counterparty. As of
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
December 31, 2021, there was a $15.9 million gain recorded in accumulated other comprehensive loss in
connection with the terminated interest rate swap, which will be reclassified to earnings through interest expense
over the remaining life of the hedged items, as the originally hedged cash flows remain probable.
During the second quarter of 2021, we terminated and cash settled $100 million in notional value of our interest
rate swaps, maturing in 2026, in connection with the prepayment of $100 million on the 2026 Incremental Term
Loan. Upon termination of the swap, we paid $2.2 million to our counterparty that was recognized immediately into
earnings as interest expense, as the forecasted cash flows will no longer occur. See Note 10 — Debt for additional
information.
The following table contains information on the outstanding interest rate swaps as of December 31, 2021:
Outstanding Interest Rate Swaps (a)
Date Entered Into
Term
Notional
Amount
Related Debt Facility
Fixed Rate
of Swap
Bank Margin
on Debt
Total Effective
Interest Rate (b)
August 2015
August 2015
April 2016
April 2016
9 years
9 years
$170,000
Term Credit Agreement
180,000
Term Credit Agreement
10 years
100,000
Incremental Term Loan
10 years
100,000
Incremental Term Loan
2.20%
2.35%
1.60%
1.60%
1.60%
1.60%
1.65%
1.65%
3.80%
3.95%
3.25%
3.25%
(a) All interest rate swaps have been designated as interest rate cash flow hedges and qualify for hedge accounting.
(b) Rate is before estimated patronage payments.
TREASURY LOCKS
During the first quarter of 2020, we entered into three treasury lock agreements, which were designated and
qualified as cash flow hedges. Prior to expiration, we de-designated and settled the treasury locks by converting
them into interest rate swap lock agreements (discussed below).
As of December 31, 2021, there was a $17.3 million loss recorded in accumulated other comprehensive loss in
connection with the settled treasury locks, which will be reclassified to earnings as interest expense over the life of
the hedged item.
INTEREST RATE SWAP LOCKS
Upon de-designation, we converted the above treasury lock agreements to interest rate swap lock agreements,
which were designated and qualified as cash flow hedges. During the second quarter of 2020, we de-designated
and partially cash settled $11.1 million of the interest rate swap locks and converted them into an interest rate swap
agreement.
As of December 31, 2021, there was a $1.2 million loss recorded in accumulated other comprehensive loss in
connection with settled interest rate swap locks, which will be reclassified to earnings as interest expense over the
life of the hedged item.
FORWARD-STARTING INTEREST RATE SWAPS
During the second quarter of 2021, we de-designated and settled $325 million in notional value of our forward-
starting interest rate swap, maturing in 2032, by converting it into a new forward-starting interest rate swap
agreement. As of December 31, 2021, there was a $9.7 million gain recorded in accumulated other comprehensive
loss in connection with the converted forward-starting interest rate swap, which will be reclassified to earnings
through interest expense over the remaining life of the hedged item.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
The following table contains information on the outstanding forward-starting interest rate swaps as of
December 31, 2021:
Outstanding Forward-Starting Interest Rate Swaps (a)
Date Entered Into
Term
Notional
Amount
Fixed Rate
of Swap
April 2020
May 2020
4 years
$100,000
4 years
50,000
May 2021 (b)
7 years
200,000
0.88%
0.74%
0.77%
Related Debt Facility
Forward Date
Term Credit Agreement
August 2024
Term Credit Agreement
August 2024
Future Issuance
February 2022
Maximum Period
Ending for
Forecasted
Issuance Date
N/A
N/A
N/A
(a) All forward-starting interest rate swaps have been designated as interest rate cash flow hedges and qualify for hedge accounting.
(b) The forward-starting interest rate swap entered into in May 2021 contained an embedded mark-to-market gain, which we recovered through
a reduced charge in the fixed rate over what would have been charged for an at-market swap. See the subsequent events section of Note 1
- Summary of Significant Accounting Policies for additional information regarding the maturation of this forward-starting interest rate swap.
CARBON OPTIONS
The New Zealand subsidiary enters into carbon options from time to time to sell carbon assets. Changes in fair
value of the carbon option contracts are recorded in “Interest and other miscellaneous income, net” as the contracts
do not qualify for hedge accounting treatment. As of December 31, 2021, all existing carbon option contracts have
expired.
The following table demonstrates the impact, gross of tax, of our derivatives on the Consolidated Statements of
Income and Comprehensive Income for the years ended December 31, 2021, 2020 and 2019.
Location on Statement of Income and
Comprehensive Income
2021
2020
2019
Derivatives designated as cash flow hedges:
Foreign currency exchange contracts .................................. Other comprehensive income (loss)
($7,965)
$5,376
$2,211
Foreign currency option contracts ........................................ Other comprehensive income (loss)
(1,556)
1,211
159
Interest rate products .............................................................. Other comprehensive income (loss)
52,478
(76,567)
(29,893)
Interest rate products ..............................................................
Interest Expense
14,694
10,769
(2,296)
Derivatives not designated as hedging instruments:
Foreign currency exchange contracts ..................................
Carbon options
Interest and other miscellaneous income,
net
Interest and other miscellaneous income,
net
—
—
—
$135
563
(105)
During the next 12 months, the amount of the December 31, 2021 AOCI balance, net of tax, expected to be
reclassified into earnings is a loss of approximately $10.8 million. The following table contains details of the
expected reclassified amounts into earnings:
Derivatives designated as cash flow hedges:
Foreign currency exchange contracts ...................................................................................
Interest rate products ...............................................................................................................
Total estimated loss on derivatives contracts
($965)
(9,882)
($10,847)
Amount expected to be reclassified
into earnings in next 12 months
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(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 at December 31, 2021 and 2020:
Derivatives designated as cash flow hedges:
Foreign currency exchange contracts .......................................................................................
$149,250
Foreign currency option contracts ..............................................................................................
Interest rate swaps .......................................................................................................................
Forward-starting interest rate swaps
14,000
550,000
350,000
$49,000
28,000
900,000
475,000
Notional Amount
2021
2020
The following table contains the fair values of the derivative financial instruments recorded in the Consolidated
Balance Sheets at December 31, 2021 and 2020. Changes in balances of derivative financial instruments are
recorded as operating activities in the Consolidated Statements of Cash Flows:
Location on Balance Sheet
2021
2020
Fair Value Assets (Liabilities) (a)
Derivatives designated as cash flow hedges:
Foreign currency exchange contracts ...................................... Other current assets
Other assets
Other current liabilities
Other non-current liabilities
Foreign currency option contracts ............................................ Other current assets
Interest rate swaps ...................................................................... Other non-current liabilities
Forward-starting interest rate swaps ........................................ Other assets
Other assets
Other current liabilities
Other non-current liabilities
$721
86
(2,061)
(694)
—
228
—
(270)
(15,582)
11,482
$4,968
1,050
—
—
1,526
—
(11)
—
(51,580)
513
Other non-current liabilities
—
(13,042)
Total derivative contracts:
Other current assets .........................................................................................................................................
Other assets ......................................................................................................................................................
Total derivative assets ...............................................................................................................................
Other current liabilities .....................................................................................................................................
Other non-current liabilities .............................................................................................................................
Total derivative liabilities ...........................................................................................................................
$721
11,796
$12,517
(2,061)
(16,546)
($18,607)
$6,494
1,563
$8,057
(11)
(64,622)
($64,633)
(a) See Note 12 — 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
12.
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 at
December 31, 2021 and 2020, using market information and what we believe to be appropriate valuation
methodologies under generally accepted accounting principles:
December 31, 2021
December 31, 2020
Asset (Liability) (a)
Carrying
Amount
Fair Value
Level 1
Level 2
Carrying
Amount
Fair Value
Level 1
Level 2
Cash and cash equivalents, excluding
Timber Funds ......................................................
Cash and cash equivalents, Timber Funds ....
Restricted cash, Timber Funds (b) ...................
Restricted cash, excluding Timber Funds (c) .
$358,680
$358,680
3,493
6,341
625
3,493
6,341
625
—
—
—
—
$80,454
$80,454
4,053
—
2,975
4,053
—
2,975
Current maturities of long-term debt,
excluding Timber Funds (d) ..............................
(124,965)
Long-term debt, excluding Timber Funds (d) .
(1,242,819)
Long-term debt, Timber Funds (d) ...................
—
Interest rate swaps (e) .......................................
(15,582)
Forward-starting interest rate swaps (e) .........
11,482
Foreign currency exchange contracts (e) .......
Foreign currency option contracts (e) ..............
(1,948)
(42)
—
—
—
—
—
—
—
(125,288)
—
(1,245,148) (1,300,336)
—
(60,179)
(15,582)
(51,580)
11,482
(12,529)
(1,948)
(42)
6,018
1,515
—
—
—
—
—
—
—
—
—
—
—
—
(1,313,631)
(60,474)
(51,580)
(12,529)
6,018
1,515
Noncontrolling interests in the operating
partnership (f) ......................................................
133,823
133,823
—
130,121
130,121
—
(a) We did not have Level 3 assets or liabilities at December 31, 2021 and 2020.
(b) Restricted cash, Timber Funds represents the portion of proceeds from Fund II Timberland Dispositions required to be distributed to
noncontrolling interests. See Note 24 - Restricted Cash for additional information.
(c) Restricted cash, excluding Timber Funds represents cash held in escrow. See Note 24 - Restricted Cash for additional information.
(d) The carrying amount of long-term debt is presented net of deferred financing costs, unamortized discounts and fair value adjustments on
non-revolving debt.. See Note 10 — Debt for additional information.
(e) See Note 11 — Derivative Financial Instruments and Hedging Activities for information regarding the Balance Sheet classification of our
derivative financial instruments.
(f) 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
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.
13.
COMMITMENTS
At December 31, 2021, the future minimum payments under non-cancellable commitments were as follows:
2022 ...........................................................................
2023 ...........................................................................
2024 ...........................................................................
2025 ...........................................................................
2026 ...........................................................................
Thereafter ..................................................................
Environmental
Remediation (a)
$695
3,838
3,838
995
426
1,013
$10,805
Development
Projects (b)
$14,316
267
267
267
267
3,899
$19,283
Commitments (c)
$14,722
12,996
9,347
5,542
3,430
4,589
$50,626
Total
$29,733
17,101
13,452
6,804
4,123
9,501
$80,714
(a) Environmental remediation represents our estimate of potential liability associated with environmental contamination and Natural Resource
Damages (NRD) in Port Gamble, Washington. See Note 15 - Environmental and Natural Resource Damage Liabilities for additional
information.
(b) Primarily consisting of payments expected to be made on our Wildlight and Richmond Hill development projects.
(c) Commitments include payments expected to be made on derivative financial instruments (foreign exchange contracts, interest rate swaps
and forward-starting interest rate swaps) and other purchase obligations.
14.
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.
15.
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
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
resource damages (“NRD”) can attach to a property simply because an injury to natural resources resulted from
releases of contaminated materials on the owner’s property, regardless of culpability for the release.
In connection to the merger with Pope Resources, we assumed ownership of certain real estate in Port Gamble,
Washington, which requires environmental remediation under these laws.
An analysis of environmental and NRD liabilities from December 31, 2020 to December 31, 2021 is shown
below:
Non-current portion at December 31, 2020
Plus: Current portion
Total Balance at December 31, 2020
Expenditures charged to liabilities
Increase in liabilities
Total Balance at December 31, 2021
Less: Current portion
Non-current portion at December 31, 2021
Port Gamble, WA
$10,615
1,026
11,641
(941)
105
10,805
(695)
$10,110
These estimates were based on assumptions that we believe to be reasonable; however, actual results may
differ from these estimates. See Note 2 - Merger with Pope Resources for information regarding the final allocation
of fair value to environmental and NRD liabilities assumed in the merger with Pope Resources. It is expected that
the millsite cleanup and NRD restoration will occur over the next one to three years, while the monitoring of the Port
Gamble Bay, millsite and landfills will continue for an additional 10 to 15 years. NRD costs are subject to change as
the scope of the restoration projects become more clearly defined. It is reasonably possible that these components
of the liability may increase as the project progresses. 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. For further information on the timing and amount of future payments
related to our environmental remediation liabilities, see Note 13 - Commitments.
16.
GUARANTEES
We provide financial guarantees as required by creditors, insurance programs, and various governmental
agencies. As of December 31, 2021, the following financial guarantees were outstanding:
Financial Commitments (a)
Standby letters of credit ..........................................................................................................................
Surety bonds (b) .......................................................................................................................................
Total financial commitments ...................................................................................................................
Maximum Potential
Payment
$885
12,238
$13,123
(a) We have not recorded any liabilities for these financial commitments in the Consolidated Balance Sheets. The guarantees are not subject to
measurement, as the guarantees are dependent on our own performance.
(b) Surety bonds are issued primarily to secure performance obligations related to various operational activities, to provide collateral for our
Wildlight development project in Nassau County, Florida and in connection with pending and completed sales from the Harbor Hill project in
Gig Harbor, Washington. These surety bonds expire at various dates during 2022, 2023 and 2024 and are expected to be renewed as
required.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
17.
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS
We continuously 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,
2020 to December 31, 2021 are shown below:
Non-current portion at December 31, 2020
Plus: Current portion (a)
Total Balance at December 31, 2020
Non-cash cost of land and improved development
Amortization of parcel real estate development investments
Timber depletion from harvesting activities and basis of timber sold in real
estate sales
Capitalized real estate development investments (b)
Capital expenditures (silviculture)
Intersegment transfers
Purchase price allocation adjustment (c)
Total Balance at December 31, 2021
Less: Current portion (a)
Non-current portion at December 31, 2021
Higher and Better Use Timberlands and Real
Estate Development Investments
Land and
Timber
Development
Investments
Total
$79,901
$28,617
$108,518
212
80,113
6,544
35,161
6,756
115,274
(11,894)
(8,211)
(20,105)
—
(5,923)
(5,923)
(1,301)
—
191
13,281
8,238
88,628
—
21,963
—
—
—
(1,301)
21,963
191
13,281
8,238
42,990
131,618
(718)
(24,022)
(24,740)
$87,910
$18,968
$106,878
(a) The current portion of Higher and Better Use Timberlands and Real Estate Development Investments is recorded in Inventory. See Note 18
— Inventory for additional information.
(b) Capitalized real estate development investments includes $0.6 million of capitalized interest and $9.4 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 a year.
(c) Reflects measurement period adjustments on HBU properties acquired in the merger with Pope Resources. The final allocation of fair value
to HBU properties acquired in the merger is approximately $34.7 million. This includes development properties in the town of Port Gamble,
Washington, development projects in Gig Harbor, Kingston, and Bremerton, Washington and various other assets. See Note 2 - Merger with
Pope Resources for additional information.
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RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
18.
INVENTORY
As of December 31, 2021 and 2020, our inventory was solely comprised of finished goods, as follows:
2021
2020
Real estate inventory (a) ............................................................................................
Log inventory ................................................................................................................
Total inventory .........................................................................................................
$24,740
3,783
$28,523
$6,756
3,838
$10,594
(a) Represents the cost of HBU real estate (including capitalized development investments) under contract to be sold. See Note 17 — Higher
and Better Use Timberlands and Real Estate Development Investments for additional information.
19.
OTHER OPERATING INCOME (EXPENSE), NET
The following table provides the composition of Other operating income (expense), net for the three years
ended December 31:
Gain (loss) on foreign currency remeasurement, net of cash flow hedges .........
Gain on sale or disposal of property plant & equipment ........................................
Gain on investment in Timber Funds (a) ...................................................................
Log trading marketing fees ..........................................................................................
Cost related to the merger with Pope Resources (b) ..............................................
Equity income (loss) related to Bainbridge Landing LLC joint venture (c) ..........
Miscellaneous expense, net ........................................................................................
2021
$6,823
2020
($3,503)
2019
($3,077)
75
7,482
6
—
102
121
—
56
(17,166)
(721)
56
—
314
—
—
(404)
(472)
(1,826)
Total ......................................................................................................................... $14,084
($21,685)
($4,533)
(a) See Note 7 - Noncontrolling Interests and Note 8 - Variable Interest Entities for additional information on Timber Funds.
(b)
Includes legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources. See Note 2 - Merger with
Pope Resources and Note 27 - Charges for Integration and Restructuring for additional information.
(c) See Note 7 - Noncontrolling Interests and Note 8 - Variable Interest Entities for additional information on Ferncliff Investors.
120
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RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
20.
EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT PLANS
We have one qualified non-contributory defined benefit pension plan covering a portion of its 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.
The following tables set forth the change in the projected benefit obligation and plan assets and reconcile the
funded status and the amounts recognized in the Consolidated Balance Sheets for the pension and postretirement
benefit plans for the two years ended December 31:
Change in Projected Benefit Obligation
Pension
2021
2020
Postretirement
2020
2021
Projected benefit obligation at beginning of year ........................ $100,469
$90,261
Service cost ......................................................................................
—
—
Interest cost ......................................................................................
2,228
2,706
Actuarial loss (gain) .........................................................................
(5,112) 11,413
Benefits paid .....................................................................................
(3,519)
Expenses paid ..................................................................................
(267)
(3,413)
(498)
Projected benefit obligation at end of year ........................... $93,799
$100,469
$1,886
8
45
(35)
(14)
—
$1,890
$1,634
6
51
209
(14)
—
$1,886
Change in Plan Assets
Fair value of plan assets at beginning of year ............................. $78,883
Actual return on plan assets ...........................................................
9,896
Employer contributions ...................................................................
86
Benefits paid .....................................................................................
(3,519)
Other expense ..................................................................................
(267)
$66,460
13,329
3,005
(3,413)
(498)
Fair value of plan assets at end of year ............................ $85,079
$78,883
—
—
14
(14)
—
—
—
—
14
(14)
—
—
Funded Status at End of Year:
Net accrued benefit cost .................................................................
($8,720) ($21,586)
($1,890)
($1,886)
Amounts Recognized in the Consolidated
Balance Sheets Consist of:
Current liabilities ...............................................................................
Noncurrent liabilities ........................................................................
Net amount recognized ........................................................
($86)
(8,634)
($86)
(21,500)
($8,720) ($21,586)
($46)
(1,844)
($1,890)
($41)
(1,845)
($1,886)
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RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
For pension and postretirement plans with accumulated benefit obligations in excess of plan assets, the following
table sets forth the projected and accumulated benefit obligations and the fair value of plan assets for the two years
ended December 31:
Projected benefit obligation .................................................................................................................. $93,799
Accumulated benefit obligation ............................................................................................................ 93,799
1,890
Accumulated postretirement benefit obligation .................................................................................
Fair value of plan assets ....................................................................................................................... 85,079
2021
2020
$100,469
100,469
1,886
78,883
ACTUARIAL (GAIN) LOSS
PENSION
Key components of the actuarial gains and losses contributing to the period change in the benefit obligation
are as follows:
•
•
•
Changes in participant demographics resulted in an actuarial gain of approximately $0.5 million, which is
primarily due to high mortality among participants.
Changes in mortality assumptions resulted in an actuarial loss of approximately $0.3 million.
Changes in the discount rate from 2.26% to 2.65% resulted in an actuarial gain of approximately $5.1 million.
POSTRETIREMENT
Key components of the actuarial gains and losses contributing to the period change in the benefit obligation
are as follows:
•
•
Re-measurement of current census data resulted in a demographic loss of $0.1 million.
Changes in the discount rate from 2.42% to 2.75% resulted in an actuarial gain of approximately $0.1 million.
OTHER COMPREHENSIVE INCOME
Net gains or losses recognized in other comprehensive (loss) income for the three years ended December 31
are as follows:
Net gains (losses) .................................................. $11,262
2021
Pension
2020
($1,587)
2019
($1,514)
Postretirement
2020
($207)
2021
$40
2019
($285)
Net gains or losses reclassified from other comprehensive income and recognized as a component of pension
and postretirement expense for the three years ended December 31 are as follows:
Amortization of losses (gains) ................................... $1,154
$861
$449
$20
$8
—
2021
Pension
2020
2019
2021
Postretirement
2020
2019
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RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
ACCUMULATED OTHER COMPREHENSIVE INCOME (AOCI)
Net losses that have not yet been included in pension and postretirement expense for the two years ended
December 31, but have been recognized as a component of AOCI are as follows:
Pension
Postretirement
2021
2020
2021
2020
Net losses .................................................................................................... ($12,627) ($25,043)
Deferred income tax benefit .....................................................................
1,216
1,216
AOCI ................................................................................................... ($11,411) ($23,827)
($431)
6
($425)
($491)
6
($485)
NET PENSION AND POSTRETIREMENT BENEFIT (CREDIT) COST
The following tables set forth the components of net pension and postretirement benefit (credit) cost that have
been recognized during the three years ended December 31:
Components of Net Periodic Benefit (Credit) Cost
Pension
Postretirement
2021
2020
2019
2021
2020
2019
—
Service cost ........................................................
Interest cost ........................................................ 2,228
Expected return on plan assets .......................
Amortization of losses (gains) ......................... 1,154
(3,746)
Net periodic benefit (credit) cost ..............................
($364)
—
2,706
—
3,197
(3,504)
861
$63
(3,107)
449
$539
$8
45
—
20
$73
$6
51
—
8
$65
$6
54
—
—
$60
The service cost component of our benefit expense is recorded within the operating expense line item “Selling
and general expenses” within the Consolidated Statements of Income. All other components of the benefit costs
expense are included within the “Interest and miscellaneous income, net” line item of the Consolidated Statements of
Income.
VALUATION ASSUMPTIONS
The following table sets forth the principal assumptions inherent in the determination of benefit obligations and
net periodic benefit cost of the pension and postretirement benefit plans as of December 31:
Pension
Postretirement
2021
2020
2019
2021
2020
2019
Assumptions used to determine benefit obligations at December 31:
Discount rate ..........................................................................................
2.65 % 2.26 % 3.06 % 2.75 % 2.42 % 3.16 %
Assumptions used to determine net periodic benefit cost for years
ended December 31:
Discount rate .........................................................................................
2.26 % 3.06 % 4.11 % 2.42 % 3.16 % 4.18 %
Expected long-term return on plan assets ........................................
5.72 % 5.72 % 5.72 % —
—
—
DISCOUNT RATE
At December 31, 2021, the pension plan’s discount rate was 2.7%. The discount rate is derived from the
Financial Times Stock Exchange (FTSE) Pension Discount Curve (f/k/a Citigroup). The Pension Discount Curve
(PDC) is a set of yields on hypothetical AA, zero coupon bonds whose maturities range from 6 months up to 30
years. The yields of the PDC are used to discount pension liabilities. The PDC is calculated based on a universe of
AA rated corporate bonds from the FTSE US Broad Investment-Grade Bond Index and the yields of the FTSE
Treasury model curve.
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RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
The pension plan's future expected cash flows are then matched to the spot rates on the yield curve and a single
equivalent discount rate is determined, which produces the same present value as the spot rates.
EXPECTED LONG-TERM RETURN ON PLAN ASSETS
In 2021, the expected return on plan assets remained at 5.7%, which is based on historical returns on current
asset allocations and expected returns using the Black-Litterman method.
INVESTMENT OF PLAN ASSETS
Our Pension and Savings Plan Committee and the Audit Committee of the Board of Directors oversee the
pension plans’ investment program, which is designed to maximize returns and provide sufficient liquidity to meet
plan obligations while maintaining acceptable risk levels. The investment approach emphasizes diversification by
allocating the plans’ assets among asset categories and selecting investment managers whose various investment
methodologies will be minimally correlative with each other.
In 2020, we transitioned to a liability-driven investment (“LDI”) strategy. An LDI strategy focuses on maintaining a
close to fully-funded status over the long-term with minimal funded status risk. This is achieved by investing more of
the plan assets in fixed income instruments to more closely match the duration of the plan liability. The investment
allocation to fixed income instruments will increase as the plans' funded status increases. Investment target
allocation percentages for equity securities can range up to 80 percent.
Our pension plans’ asset allocation (excluding short-term investments) at December 31, 2021 and 2020 are as
follows:
Asset Category
Domestic equity securities ....................................................................................................................
International equity securities ...............................................................................................................
Domestic fixed income securities ........................................................................................................
International fixed income securities ...................................................................................................
Real estate fund ......................................................................................................................................
Total ..........................................................................................................................................................
Percentage of
Plan Assets
2021
2020
29%
18%
51%
—
2%
100%
44%
30%
21%
3%
2%
100%
Investments within the equity categories may include large capitalization, small capitalization and emerging
market securities. Pension assets did not include a direct investment in Rayonier common shares during the years
ended December 31, 2021 and 2020.
NET ASSET VALUE MEASUREMENTS
Separate investment accounts are measured using the unit value calculated based on the Net Asset Value
(“NAV”) of the underlying assets. The NAV is based on the fair value of the underlying investments held by each fund
less liabilities divided by the units outstanding as of the valuation date. These funds are not publicly traded; however,
the unit price calculation is based on observable market inputs of the funds’ underlying assets.
The following table sets forth the net asset value of the plan assets as of December 31, 2021 or 2020:
Asset Category
Investments at Net Asset Value:
Separate Investment Accounts ..............................................................
Total Investments at Net Asset Value ....................................................
$85,079
$85,079
$78,883
$78,883
December 31, 2021
December 31, 2020
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RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
CASH FLOWS
Our expected benefit payments to be made for the next 10 years are as follows:
2022 ..........................................................................................................................................
2023 ..........................................................................................................................................
2024 ..........................................................................................................................................
2025 ..........................................................................................................................................
2026 ..........................................................................................................................................
2027-2031 ................................................................................................................................
$3,896
4,077
4,242
4,389
4,498
23,525
$46
50
53
56
60
359
Pension
Benefits
Postretirement
Benefits
We have no mandatory pension contribution requirements in 2022.
DEFINED CONTRIBUTION PLANS
We provide a defined contribution plan to all of our eligible employees. Upon completion of the merger with Pope
Resources, former eligible Pope Resource employees were immediately eligible to participate in the Rayonier 401(k)
plan. Pope Resources employees’ year of service were credited to the 401(k) plan for vesting purposes. Company
match contributions charged to expense for these plans were $1.1 million, $1.1 million and $1.0 million for the years
ended December 31, 2021, 2020 and 2019, respectively. The defined contribution plan includes Rayonier common
shares with a fair market value of $11.0 million and $8.5 million at December 31, 2021 and 2020, respectively. As of
June 1, 2016, the Rayonier Inc. Common Stock Fund was closed to new contributions. Transfers out of the fund will
continue to be permitted, but no new investments or transfers into the fund are allowed.
As discussed above, the defined benefit pension plan is currently frozen. In lieu of the pension plan, employees
are eligible to receive an enhanced match contribution. Company enhanced match contributions charged to expense
for the years ended December 31, 2021, 2020 and 2019 were $1.2 million, $1.0 million and $0.9 million, respectively.
125
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
21.
INCENTIVE STOCK PLANS
The Rayonier Incentive Stock Plan (the “Stock Plan”) provides up to 15.8 million shares to be granted for
incentive stock options, non-qualified stock options, stock appreciation rights, performance shares, restricted stock
and restricted stock units, subject to certain limitations. At December 31, 2021, a total of 2.4 million shares were
available for future grants under the Stock Plan. Under the Stock Plan, shares available for issuance are reduced by
1 share for each option or right granted and by 2.27 shares for each performance share, restricted share or
restricted stock unit granted. We issue new shares of stock upon the exercise of stock options, the granting of
restricted stock, and the vesting of performance shares and restricted stock units.
A summary of our stock-based compensation cost is presented below:
Selling and general expenses .................................................................................
Cost of sales ..............................................................................................................
Timber and Timberlands, net (a) .............................................................................
Other operating expense, net (b) ............................................................................
Total stock-based compensation ............................................................................
2021
$8,255
816
206
—
$9,277
2020
$6,839
693
170
324
$8,026
2019
$6,416
378
110
—
$6,904
Tax benefit recognized related to stock-based compensation expense (c) .
$487
$421
$362
(a) Represents amounts capitalized as part of the overhead allocation of timber-related costs.
(b) Represents expense associated with the acceleration of share-based compensation on Pope replacement awards related to qualifying
terminations. See Note 27 - Charges for Integration and Restructuring for additional details.
(c) A valuation allowance is recorded against the tax benefit recognized as we do not expect to be able to realize the benefit in the future.
FAIR VALUE CALCULATIONS BY AWARD
RESTRICTED STOCK
Restricted stock granted to employees under the Stock Plan generally vests in fourths on the first, second, third
and fourth anniversary of the grant date. Restricted stock granted to senior management generally vests in thirds on
the third, fourth, and fifth anniversary of the grant date. Periodically, other one-time restricted stock grants are
issued to employees for special purposes, such as new hire, promotion or retention, and can vest ratably over, or
upon completion of, a defined period of time. Generally, holders of restricted stock receive dividend equivalent
payments on outstanding restricted shares. Restricted stock granted to members of the board of directors generally
vests immediately upon issuance and is subject to certain holding requirements. The fair value of each share
granted is equal to the share price of the Company’s stock on the date of grant. We have elected to value each
grant in total and recognize the expense on a straight-line basis from the grant date of the award to the latest
vesting date. As permitted, we do not estimate a forfeiture rate for non-vested shares. Accordingly, unexpected
forfeitures will lower stock-based compensation during the period in which they occur.
REPLACEMENT RESTRICTED STOCK AWARDS FROM THE MERGER WITH POPE RESOURCES
As a result of the merger with Pope Resources, Rayonier issued 69,176 shares of restricted stock awards
(“replacement awards”) in connection with unvested Pope Resources restricted units. Eligible outstanding Pope
Resources restricted units were canceled and exchanged for replacement awards, pursuant to an exchange ratio in
the merger agreement designed to maintain the intrinsic value of the awards immediately prior to the exchange.
The replacement awards issued have similar vesting provisions as the terms of existing Rayonier restricted
stock. Expense for the replacement awards that were not fully vested prior to the date of the merger is expected to
be recognized over a weighted average remaining service period of approximately 16 months unless a qualifying
termination occurs. A qualifying termination of an awardee will result in the acceleration of vesting and expense
recognition in the period that the qualifying termination occurs. Qualifying terminations during the years ended
December 31, 2021 and 2020 resulted in the accelerated vesting of 1,430 and 15,049 of the replacement awards
and recognition of approximately $0.1 million and $0.3 million of expense, respectively.
126
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
As of December 31, 2021, there was $0.7 million of unrecognized compensation cost attributable to our
restricted stock. We expect to recognize this cost over a weighted average period of 1 year.
A summary of our restricted stock is presented below:
Restricted shares granted (a) ..............................................................................................................
22,140
100,452
24,592
Weighted average price of restricted shares granted ......................................................................
$37.36
$23.15
$30.90
Intrinsic value of restricted stock outstanding (b) .............................................................................
$3,062
$4,666
$5,540
Grant date fair value of restricted stock vested ................................................................................
3,121
2,755
5,339
Cash used to purchase common shares from current and former employees to pay
withholding tax requirements on restricted shares vested ..........................................................
869
566
1,610
2021
2020
2019
(a) The year ended December 31, 2020 includes 69,176 replacement awards issued as a result of the merger with Pope Resources.
(b)
Intrinsic value of restricted stock outstanding is based on the market price of the Company’s stock at December 31, 2021.
2021
Number of
Shares
Weighted
Average Grant
Date Fair Value
Non-vested Restricted Shares at January 1, ..........................................................
Granted .........................................................................................................................
Vested (a) .....................................................................................................................
Cancelled ......................................................................................................................
Non-vested Restricted Shares at December 31, ....................................................
158,820
22,140
(104,917)
(181)
75,862
$28.47
37.36
29.74
34.71
$29.29
(a) The year ended December 31, 2021 includes 1,430 replacement awards vested as a result of acceleration due to qualifying terminations.
RESTRICTED STOCK UNITS
In April 2019, we began granting restricted stock units instead of restricted stock to employees. Most attributes
of our restricted stock described herein, including dividend payments, fair value measurement and expense
recognition, apply equally to restricted stock units granted under the Stock Plan. However, beginning with the
restricted stock units granted in 2021, there is no distinction between the vesting characteristics of restricted stock
units granted to senior management and those granted to all other employees. Restricted stock units generally vest
in fourths on the first, second, third and fourth anniversary of the grant date.
As of December 31, 2021, there was $7.1 million of unrecognized compensation cost attributable to our
restricted stock units. We expect to recognize this cost over a weighted average period of 2.9 years.
A summary of our restricted stock units is presented below:
Restricted stock units granted .............................................................................................................
129,290
171,409
103,634
Weighted average price of restricted stock units granted ...............................................................
$33.59
$22.58
$31.51
Intrinsic value of restricted stock units outstanding (a) ...................................................................
$15,095
$7,801
$3,351
Grant date fair value of restricted stock units vested ......................................................................
Cash used to purchase common shares from current and former employees to pay
withholding tax requirements on restricted stock units vested ...................................................
493
189
218
47
2
1
2021
2020
2019
(a)
Intrinsic value of restricted stock units outstanding is based on the market price of the Company’s stock at December 31, 2021.
127
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
2021
Number of
Shares
Weighted
Average Grant
Date Fair Value
Non-vested Restricted Stock Units at January 1, ...................................................
Granted .........................................................................................................................
Vested ...........................................................................................................................
Cancelled ......................................................................................................................
Non-vested Restricted Stock Units at December 31, ............................................
265,522
129,290
(18,998)
(1,798)
374,016
$25.75
33.59
25.94
29.37
$28.44
PERFORMANCE SHARE UNITS
Our performance share units generally vest upon completion of a three-year period. The number of shares, if
any, that are ultimately awarded is contingent upon our total shareholder return versus selected peer group
companies. The performance share payout is based on a market condition, and as such, the awards are valued
using a Monte Carlo simulation model. The model generates the fair value of the award at the grant date, which is
then recognized as expense on a straight-line basis over the vesting period. Additionally, we do not estimate a
forfeiture rate for non-vested units. As such, unexpected forfeitures will lower stock-based compensation during the
period in which they occur.
The Stock Plan allows for the cash settlement of the required withholding tax on performance share unit
awards. As of December 31, 2021, there was $5.5 million of unrecognized compensation cost related to our
performance share unit awards, which is attributable to awards granted in 2019, 2020 and 2021. This cost is
expected to be recognized over a weighted average period of 1.7 years.
A summary of our performance share units is presented below:
Common shares reserved for performance shares granted during year ......................................
191,203
361,870
232,684
Weighted average fair value of performance share units granted ..................................................
Intrinsic value of outstanding performance share units (a) ..............................................................
$36.10
$29.59
$35.99
$16,360
$11,711
$10,758
Fair value of performance shares vested ...........................................................................................
1,738
3,522
6,387
Cash used to purchase common shares from current and former employees to pay
withholding tax requirements on performance shares vested .....................................................
559
992
2,639
2021
2020
2019
(a)
Intrinsic value of outstanding performance share units is based on the market price of the Company's stock at December 31, 2021.
Outstanding Performance Share units at January 1, ...............................................
Granted ............................................................................................................................
Units Distributed .............................................................................................................
Outstanding Performance Share units at December 31, .........................................
2021
Number
of Units
398,607
109,259
(102,505)
405,361
Weighted
Average Grant
Date Fair Value
$34.17
36.10
40.27
$33.16
Expected volatility was estimated using daily returns on the Company’s common shares for the three-year
period ending on the grant date. The risk-free rate was based on the 3-year U.S. Treasury rate on the date of the
award. The dividend yield was not used to calculate fair value as awards granted receive dividend equivalents. The
following table provides an overview of the assumptions used in calculating the fair value of the awards granted for
the three years ended December 31, 2021:
Expected volatility ......................................................................................................................
Risk-free rate ..............................................................................................................................
2021
35.6%
0.4%
2020
32.6%
0.3%
2019
18.4%
2.3%
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RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
NON-QUALIFIED EMPLOYEE STOCK OPTIONS
The exercise price of each non-qualified stock option granted under the Stock Plan is equal to the closing
market price of the Company’s stock on the grant date. Under the Stock Plan, the maximum term is 10 years from
the grant date.
A summary of the status of our stock options as of and for the year ended December 31, 2021 is presented
below:
Options outstanding at January 1, ........................................
Exercised ........................................................................
Cancelled or expired .....................................................
Options outstanding at December 31, ..................................
Options exercisable at December 31, ..................................
2021
Weighted
Average Exercise
Price
(per common
share)
Weighted
Average
Remaining
Contractual Term
(in years)
Aggregate
Intrinsic
Value
$34.07
32.31
34.25
36.67
$36.67
1.27
1.27
$458
$458
Number of
Shares
340,985
(186,590)
(30,225)
124,170
124,170
A summary of additional information pertaining to our stock options is presented below:
Intrinsic value of options exercised (a) .............................................................................
Cash received from exercise of options ...........................................................................
$916
5,922
$108
1,368
$475
1,260
2021
2020
2019
(a)
Intrinsic value of options exercised is the amount by which the fair value of the stock on the exercise date exceeded the exercise price of the
option.
As of December 31, 2021, compensation cost related to stock options was fully recognized.
129
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
22.
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 December 31, 2021, Rayonier owns a 97.8% interest 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 unitholders (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 U.S. 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 FROM CONTINUING OPERATIONS
The provision for income taxes for each of the three years ended December 31 follows:
Current
U.S. federal ............................................................................................................
State .......................................................................................................................
Foreign ...................................................................................................................
Deferred
U.S. federal ............................................................................................................
State .......................................................................................................................
Foreign ...................................................................................................................
2021
2020
2019
($1,893)
(536)
(11,425)
(13,854)
($237)
(339)
(5,391)
(5,967)
$2
(122)
(1,542)
(1,662)
(6,288)
(1,623)
(2,007)
(9,918)
9,111
8,355
325
465
17
(3,027) (11,278)
(10,796)
5,653
(482)
(6,695)
($7,009) ($12,940)
Changes in valuation allowance ..................................................................................
Total .................................................................................................................................. ($14,661)
A reconciliation of the U.S. federal statutory income tax rate to the actual income tax rate for each of the three
years ended December 31 follows:
2021
2020
2019
U.S. federal statutory income tax rate .........................................
($47,280)
(21.0) % ($7,726)
(21.0) % ($16,930)
(21.0) %
U.S. and foreign REIT income ..................................................
44,316
19.7
16,569
45.0
19,902
24.7
Matariki Group and Rayonier New Zealand Ltd .....................
(12,927)
(5.7)
(7,698)
(20.8)
(11,181)
(13.9)
Change in valuation allowance .................................................
9,111
4.0
(6,695)
(18.2)
(482)
(0.6)
REIT Built-in Gain ........................................................................
(2,215)
(1.0)
State Net Operating Loss ...........................................................
Prepaid land sales .......................................................................
Internal transfer of assets deferred ..........................................
—
—
—
—
—
—
—
1,118
—
3.0
(1,084)
(2.9)
—
—
—
—
—
—
—
—
(1,815)
(2.3)
Foreign income tax withholding ................................................
(505)
(0.2)
(721)
(2.0)
(1,535)
(1.9)
Sale of Timber Funds ..................................................................
(2,399)
(1.1)
—
—
—
—
Other..............................................................................................
(2,762)
(1.2)
(772)
(2.1)
(899)
(1.1)
Income tax expense as reported for net income .......................
($14,661)
(6.5) % ($7,009)
(19.0) % ($12,940)
(16.1) %
The Company’s effective tax rate is below the 21 percent U.S. statutory rate primarily due to tax benefits
associated with being a REIT.
130
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
DEFERRED TAXES
Deferred income taxes result from differences between the timing of recognizing revenues and expenses for
financial book purposes versus income tax purposes. The nature of the temporary differences and the resulting net
deferred tax asset/liability for the two years ended December 31 follows:
2021
2020
Gross deferred tax assets:
$597
Pension, postretirement and other employee benefits .........................................................
New Zealand subsidiary ............................................................................................................ 21,790
CBPC tax credit carry forwards ................................................................................................ 13,701
Capitalized real estate costs .....................................................................................................
1,656
U.S. TRS net operating loss ...................................................................................................... 12,489
9,061
Land basis difference .................................................................................................................
Other .............................................................................................................................................
5,367
Total gross deferred tax assets ................................................................................................. 64,661
Less: Valuation allowance .........................................................................................................
Total deferred tax assets after valuation allowance .............................................................. $27,757
(36,904)
$1,403
23,461
14,555
1,459
18,363
9,468
5,502
74,211
(46,015)
$28,196
Gross deferred tax liabilities:
Accelerated depreciation ...........................................................................................................
New Zealand subsidiary ............................................................................................................
Other .............................................................................................................................................
Total gross deferred tax liabilities .............................................................................................
(38)
(98,245)
(4,884)
(97,493) (103,167)
Net deferred tax liability reported as noncurrent .............................................................................. ($69,736) ($74,971)
(46)
(91,388)
(6,059)
Net operating loss (“NOL”) and tax credit carryforwards as of the two years ended December 31 follows:
Tax Effected
Balance
Expiration
2021
U.S. Federal NOL Carryforwards- Post TCJA (a) ............................................................
U.S State NOL Carryforwards (b) .......................................................................................
Cellulosic Biofuel Producer Credit (c) ................................................................................
2020
U.S. Federal NOL Carryforwards- Pre TCJA (a) ..............................................................
U.S. Federal NOL Carryforwards- Post TCJA (a) ............................................................
U.S State NOL Carryforwards (b) .......................................................................................
Cellulosic Biofuel Producer Credit (c) ................................................................................
$10,687
1,802
13,701
$2,363
13,017
2,983
14,555
None
2033
2023
2036
None
2031
2023
(a) The Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017. The TCJA lifted the 20-year federal NOL Carryforward
period. Net operating losses generated after December 31, 2017 have an indefinite carryforward period.
(b) The U.S. state NOL is made up of several jurisdictions that expire in various future years. As of December 31, 2021, no state NOL is set to
expire before December 31, 2033. As of December 31, 2020, no state NOL was set to expire before December 31, 2031.
(c) The Further Consolidated Appropriations Act, 2020 was signed into law on December 20, 2019. The Further Consolidated Appropriations
Act, 2020 included the Taxpayer Certainty and Disaster Relief Act of 2019 (Tax Extenders Act), which temporarily renewed approximately
two dozen credits that previously expired or were set to expire at the end of 2019. The Cellulosic Biofuel Producer Credit was one of the
credits extended under this act.
We record a valuation allowance to reduce the carrying amounts of deferred tax assets if it is more likely than
not that such deferred tax assets will not be realized. Since 2015, we have had a 100% valuation allowance against
the U.S. taxable REIT subsidiary's deferred tax assets, net of deferred tax liabilities. During 2021, the net deferred
tax assets decreased by $9.1 million. As a result, we recorded a change in the valuation allowance of $9.1 million
related to the U.S. TRS's deferred tax assets, net of liabilities.
131
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
TAX STATUTES
The following table provides detail of the tax years that remain open to examination by the IRS and other
significant taxing jurisdictions:
Taxing Jurisdiction
U.S. Internal Revenue Service .......................................................................................................
New Zealand Inland Revenue ........................................................................................................
Open Tax Years
2018 - 2020
2016 - 2020
TAX CHARACTERISTICS OF DIVIDEND DISTRIBUTIONS
The taxable nature of the dividend distributions paid for each of the three years ended December 31 follows:
2019
$1.08
2021
$1.08
2020
$1.08
Total dividends/distributions paid per common share/unit
Tax characteristics: ........................................................................................................
Capital gain ......................................................................................................................
100%
100%
100%
132
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
23.
ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table summarizes the changes in AOCI by component for the years ended December 31, 2021
and 2020. All amounts are presented net of tax effect and exclude portions attributable to noncontrolling interest.
Foreign
currency
translation
gains/
(losses)
Net
investment
hedges of
New
Zealand
subsidiary
Cash
flow
hedges
Employe
e benefit
plans
Total
Rayonier,
L.P.
Allocation
of
Operating
Partnership
Total
Rayonier
Inc.
($226)
$1,321
($8,910)
($23,387)
($31,202)
—
($31,202)
22,928
—
(71,644)
(1,794)
(50,510)
—
(50,510)
—
—
9,498
869 (b)
10,367
(2,540)
7,827
22,928
—
(62,146)
(925)
(40,143)
(2,540) (42,683)
$22,702
$1,321
($71,056)
($24,312)
($71,345)
($2,540) ($73,885)
(18,487)
—
44,899 (a)
11,302
37,714
—
37,714
—
—
16,994
1,174 (b)
18,168
(1,601) 16,567
(18,487)
—
61,893
12,476
55,882
(1,601) 54,281
$4,215
$1,321
($9,163)
($11,836)
($15,463)
($4,141) ($19,604)
Balance as of December
31, 2019 ................................
Other comprehensive
(loss) income before
reclassifications ...............
Amounts reclassified from
accumulated other
comprehensive (loss)
income ..............................
Net other comprehensive
(loss) income .......................
Balance as of December
31, 2020 ................................
Other comprehensive
(loss) income before
reclassifications ...............
Amounts reclassified from
accumulated other
comprehensive (loss)
income ..............................
Net other comprehensive
(loss) income .......................
Balance as of December
31, 2021 ................................
(a)
Includes $52.5 million of other comprehensive gain related to interest rate swaps. See Note 11 — Derivative Financial Instruments and
Hedging Activities for additional information.
(b) This component of other comprehensive (loss) income is included in the computation of net periodic pension cost. See Note 20 —
Employee Benefit Plans for additional information.
The following table presents details of the amounts reclassified in their entirety from AOCI for the years
ended December 31, 2021 and 2020:
Details about accumulated other
comprehensive loss components
Realized loss (gain) on foreign currency
exchange contracts ........................................
Realized loss on foreign currency option
contracts ..........................................................
Noncontrolling interest ...................................
Realized loss on interest rate contracts ......
Income tax (benefit) expense from foreign
currency contracts ..........................................
Net loss on cash flow hedges reclassified
from accumulated other comprehensive
income ..............................................................
Amount reclassified from
accumulated other
comprehensive loss
2021
2020
Affected line item in the income
statement
$2,974
($2,324) Other operating income (expense), net
1,177
30
Other operating income (expense), net
(955)
14,694
528
Comprehensive (income) loss
attributable to noncontrolling interests
10,769
Interest expense
(896)
495
Income tax expense (Note 22)
$16,994
$9,498
133
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
24.
RESTRICTED CASH
Restricted cash, Timber Funds includes the portion of proceeds from Fund II Timberland Dispositions required
to be distributed to noncontrolling interests. Restricted cash, excluding Timber Funds includes cash balances held in
escrow as collateral for certain contractual obligations related to our Richmond Hill 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 years ended December 31:
Cash and cash equivalents ....................................................................................................
Restricted cash, Timber Funds ..............................................................................................
Restricted cash, excluding Timber Funds (Held in escrow) ..............................................
Total cash, cash equivalents and restricted cash shown in the Consolidated
Statements of Cash Flows ......................................................................................................
2021
$362,173
6,341
625
2020
$84,507
—
2,975
$369,139
$87,482
134
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
25.
OTHER ASSETS
Included in Other Assets are derivatives, long-term prepaid roads, goodwill in the New Zealand subsidiary,
patronage equity, capitalized software costs, carbon credits, long-term prepaid stumpage and other deferred
expenses including deferred financing costs related to revolving debt.
As of December 31, 2021 and 2020, our long-term derivative contracts follows:
Long-term derivative contracts
2021
$11,796
2020
$1,563
See Note 1 — Summary of Significant Accounting Policies and Note 11 — Derivative Financial Instruments and
Hedging Activities for further information on derivatives including their classification on the Consolidated Balance
Sheets.
As of December 31, 2021 and 2020, our prepaid logging and secondary roads follows:
Long-term and prepaid and secondary roads
Pacific Northwest long-term prepaid roads .............................................................................
New Zealand long-term secondary roads ...............................................................................
$4,131
6,730
Total long-term prepaid and secondary roads ................................................................... $10,861
$4,087
5,767
$9,854
See Note 1 — Summary of Significant Accounting Policies for additional information on prepaid logging roads.
2021
2020
Changes in goodwill for the years ended December 31, 2021 and 2020 were:
Balance, January 1 (net of $0 of accumulated impairment) .....................................................
Changes to carrying amount
2021
$8,943
2020
$8,611
Acquisitions .............................................................................................................................
Impairment ..............................................................................................................................
Foreign currency adjustment ...............................................................................................
Balance, December 31 (net of $0 of accumulated impairment) ...............................................
—
—
(486)
$8,457
—
—
332
$8,943
See Note 1 — Summary of Significant Accounting Policies for additional information on goodwill.
As of December 31, 2021 and 2020, Rayonier’s patronage equity follows:
Patronage Equity
2021
$7,322
2020
$6,685
See Note 1 — Summary of Significant Accounting Policies for additional information on patronage equity.
As of December 31, 2021 and 2020, our capitalized software costs follows:
Capitalized software costs .............................................................................................................
$3,117
2021
2020
$3,651
See Note 1 — Summary of Significant Accounting Policies for additional information on capitalized software
costs.
135
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
Changes in the basis of carbon credits for the years ended December 31, 2021 and 2020 were:
Balance, January 1 ..........................................................................................................................
Changes to carrying amount
2021
$1,346
2020
$1,544
Acquisitions .............................................................................................................................
Sales ........................................................................................................................................
Foreign currency adjustment ...............................................................................................
Balance, December 31 (net of $0 of accumulated impairment) ...............................................
698
—
(88)
$1,956
—
(286)
88
$1,346
See Note 1 — Summary of Significant Accounting Policies for additional information on carbon credits.
As of December 31, 2021 and 2020, our prepaid stumpage follows:
Long-term prepaid stumpage ........................................................................................................
$1,461
2021
2020
$3,137
See Note 1 — Summary of Significant Accounting Policies for additional information on prepaid stumpage.
As of December 31, 2021 and 2020, our deferred financing costs related to revolving debt follows:
Deferred financing costs related to revolving debt .....................................................................
$1,104
2021
2020
$1,040
See Note 1 — Summary of Significant Accounting Policies for additional information on deferred financing costs
related to revolving debt.
26.
ASSETS HELD FOR SALE
Assets held for sale is composed of properties not included in inventory which are under contract and expected
to be sold within the next 12 months that also meet the other relevant held-for-sale criteria in accordance with ASC
360-10-45-9. As of December 31, 2021 and December 31, 2020, the basis in properties meeting this classification
was $5.1 million and $3.4 million, respectively. Since the basis in these properties was less than the fair value,
including costs to sell, no impairment was recognized.
27.
CHARGES FOR INTEGRATION AND RESTRUCTURING
During 2020, we incurred and accrued for termination benefits (primarily severance) and accelerated share-
based payment costs based upon actual and expected qualifying terminations of certain employees as a result of
restructuring decisions made concurrent with and subsequent to the merger with Pope Resources. We also incurred
non-recurring professional services costs for investment banking, legal, consulting, accounting and certain other
fees directly attributable to the merger with Pope Resources.
A summary of the charges for integration and restructuring related to the merger with Pope Resources is
presented below:
Termination benefits ...............................................................................................................................................
Acceleration of share-based compensation related to qualifying terminations (Note 21) ...........................
Professional services .............................................................................................................................................
Other integration and restructuring costs ............................................................................................................
Total integration and restructuring charges related to the merger with Pope Resources .........................
2020
$625
324
14,314
1,903
$17,166
During the year ended December 31, 2020, we incurred $0.6 million in severance benefits related to
restructuring associated with the Pope Resources merger. As of December 31, 2020, there was $0.1 million of
accrued severance recorded within “Accrued Payroll and Benefits” in our Consolidated Balance Sheets. As of
December 31, 2021, all severance associated with the merger with Pope Resources has been paid.
136
RAYONIER INC. AND SUBSIDIARIES
RAYONIER, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollar amounts in thousands unless otherwise stated)
28.
RELATED PARTY
In January 2020, we entered into an agreement to sell developed lots to Mattamy Jacksonville LLC, a wholly
owned subsidiary of Mattamy Homes, for an aggregate base purchase price of $4.45 million (subject to multiple
takedowns over a 2 year period), plus additional consideration as to each lot to the extent the ultimate sales price of
each finished home exceeds agreed price thresholds (the “Mattamy Contract”). In May 2021, we entered into an
amendment to the original agreement, which sells additional lots to Mattamy for an aggregate base purchase price
of $1.0 million. The Mattamy contract also includes marketing fee revenue based on a percentage of the sales price
of each finished home.
In September 2020, Keith Bass, a member of our Board of Directors, was named the Chief Executive Officer of
Mattamy Homes US. Following this development, the Mattamy Contract and the ongoing obligations therein, were
reviewed by the Nominating and Corporate Governance Committee in accordance with established policies and
procedures regarding the authorization and approval of transactions with related parties.
The following table demonstrates the impact, gross of tax, of our related party transactions on the Consolidated
Statements of Income and Comprehensive Income for the three years ended December 31:
Related Party Transaction
Location on Statement of Income and
Comprehensive Income
Mattamy Contract
Sales (a)
2021
2020
2019
$2,656
$1,354
—
(a) The years ended December 31, 2021 and December 31, 2020 exclude approximately $0.3 million and $0.1 million, respectively, of cash
received from Mattamy Jacksonville LLC under this agreement for the reimbursement of local impact fees.
137
Table of Contents
Item 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
Item 9A. CONTROLS AND PROCEDURES
Rayonier Inc.
DISCLOSURE CONTROLS AND PROCEDURES
Rayonier management is responsible for establishing and maintaining adequate disclosure controls and
procedures. Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934 (the “Exchange Act”)) are designed with the objective of ensuring that information required to be disclosed by
the Company in reports filed under the Exchange Act, such as this Annual Report on Form 10-K, is (1) recorded,
processed, summarized and reported within the time periods specified in the SEC’s rules and forms and
(2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.
Because of the inherent limitations in all control systems, no control evaluation can provide absolute assurance
that all control exceptions and instances of fraud have been prevented or detected on a timely basis. Even systems
determined to be effective can provide only reasonable assurance that their objectives are achieved.
Based on an evaluation of our disclosure controls and procedures as of the end of the period covered by this
Annual Report on Form 10-K, our management, including the Chief Executive Officer and Chief Financial Officer,
concluded the design and operation of the disclosure controls and procedures were effective as of December 31,
2021.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
In the year ended December 31, 2021, based upon the evaluation required by paragraph (d) of Rule 13a-15,
there were no changes in our internal control over financial reporting that would materially affect or are reasonably
likely to materially affect our internal control over financial reporting.
Rayonier, L.P.
DISCLOSURE CONTROLS AND PROCEDURES
The Operating Partnership is responsible for establishing and maintaining adequate disclosure controls and
procedures. Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934 (the “Exchange Act”)) are designed with the objective of ensuring that information required to be disclosed by
Rayonier, L.P. in reports filed under the Exchange Act, such as this Annual Report on Form 10-K, is (1) recorded,
processed, summarized and reported within the time periods specified in the SEC’s rules and forms and
(2) accumulated and communicated to our management, including Rayonier’s Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Because of the inherent limitations in all control systems, no control evaluation can provide absolute assurance
that all control exceptions and instances of fraud have been prevented or detected on a timely basis. Even systems
determined to be effective can provide only reasonable assurance that their objectives are achieved.
Based on an evaluation of our disclosure controls and procedures as of the end of the period covered by this
Annual Report on Form 10-K, our management, including Rayonier’s Chief Executive Officer and Chief Financial
Officer, concluded the design and operation of the disclosure controls and procedures were effective as of
December 31, 2021.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
In the year ended December 31, 2021, based upon the evaluation required by paragraph (d) of Rule 13a-15,
there were no changes in our internal control over financial reporting that would materially affect or are reasonably
likely to materially affect our internal control over financial reporting.
Item 9B. OTHER INFORMATION
Not applicable.
138
Table of Contents
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
139
Table of Contents
PART III
Certain information required by Part III is incorporated by reference from the Company’s Definitive Proxy
Statement to be filed with the SEC in connection with the solicitation of proxies for the Company’s 2022 Annual
Meeting of Shareholders (the “Proxy Statement”). We will make the Proxy Statement available on our website at
www.rayonier.com as soon as it is filed with the SEC.
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
A list of our executive officers and their biographical information are found in Item 1 in this Annual Report on
Form 10-K. Additional information required by this Item with respect to directors and other governance matters is
incorporated herein by reference from the sections and subsections entitled “Proposal No. 1 - Election of Directors,”
“Corporate Governance,” “Named Executive Officers” and “Report of the Audit Committee” in the Proxy Statement.
Our Standard of Ethics and Code of Corporate Conduct, which is applicable to our principal executive, financial
and accounting officers, is available on our website, www.rayonier.com. Any amendments to or waivers of the
Standard of Ethics and Code of Corporate Conduct will also be disclosed on our website.
Item 11.
EXECUTIVE COMPENSATION
The information called for by Item 11 is incorporated herein by reference from the section and subsections
entitled “Compensation Discussion and Analysis,” “Summary Compensation Table,” “CEO Pay Ratio,” “Grants of
Plan-Based Awards,” “Outstanding Equity Awards at Fiscal Year-End,” “Option Exercises and Stock Vested,”
“Pension Benefits,” “Nonqualified Deferred Compensation,” “Potential Payments Upon Termination or Change in
Control,” “Director Compensation,” “Compensation Committee Interlocks and Insider Participation; Processes and
Procedures” and “Report of the Compensation and Management Development Committee” in the Proxy Statement.
Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information called for by Item 12 is incorporated herein by reference from the section and subsections
entitled “Ownership of and Trading in our Shares,” “Share Ownership of Certain Beneficial Owners,” “Share
Ownership of Directors and Executive Officers” and “Equity Compensation Plan Information” in the Proxy
Statement.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information called for by Item 13 is incorporated herein by reference from the section and subsections
entitled “Proposal No. 1 - Election of Directors,” “Director Independence” and “Related Person Transactions” in the
Proxy Statement.
Item 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The information called for by Item 14 is incorporated herein by reference from the subsection entitled
“Information Regarding Independent Registered Public Accounting Firm” in the Proxy Statement.
140
Table of Contents
Item 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
Documents filed as a part of this report:
PART IV
(i)
See Index to Financial Statements on page 60 for a list of the financial statements filed as part of this
report.
(ii)
Financial Statement Schedules:
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2021, 2020, and 2019
(In Thousands)
Description
Allowance for doubtful accounts:
Balance
at
Beginning
of Year
Additions
Charged
to Cost
and
Expenses
Deductions
Balance
at End
of Year
Year ended December 31, 2021 ....................................
Year ended December 31, 2020 ....................................
Year ended December 31, 2019 ....................................
$25
24
8
$34
1
16
—
—
—
$59
25
24
Deferred tax asset valuation allowance:
Year ended December 31, 2021 .................................... $46,015
39,320
Year ended December 31, 2020 ....................................
38,839
Year ended December 31, 2019 ....................................
—
6,695 (b)
481 (b)
($9,111) (a) $36,904
46,015
39,320
—
—
(a) The 2021 decrease in the valuation allowance is due to a reduction in TRS deferred tax assets.
(b) The 2020 and 2019 increase in the valuation allowance is due to an increase in TRS deferred tax assets.
All other financial statement schedules have been omitted because they are not applicable, the required
matter is not present or the required information has otherwise been supplied in the financial statements
or the notes thereto.
(i)
See Exhibit Index for a list of the exhibits filed or incorporated herein as part of this report. Exhibits
that are incorporated by reference to documents filed previously by the Company under the Securities
Exchange Act of 1934, as amended, are filed with the SEC under File No. 1-6780.
Item 16.
FORM 10-K SUMMARY
None.
141
Table of Contents
EXHIBIT INDEX
The following is a list of exhibits filed as part of the Form 10-K. As permitted by the rules of the SEC, the Company has
not filed certain instruments defining the rights of holders of long-term debt of the Company or its consolidated
subsidiaries under which the total amount of securities authorized does not exceed 10 percent of the total assets of the
Company and its consolidated subsidiaries. The Company agrees to furnish to the SEC, upon request, a copy of any
omitted instrument.
Exhibit No.
Description
Location
2.1 Contribution, Conveyance and Assumption Agreement dated
December 18, 2003 by and among Rayonier Inc., Rayonier
Timberlands Operating Company, L.P., Rayonier Timberlands,
L.P., Rayonier Timberlands Management, LLC, Rayonier
Forest Resources, LLC, Rayland, LLC, Rayonier TRS
Holdings Inc., Rayonier Minerals, LLC, Rayonier Forest
Properties, LLC, Rayonier Wood Products, LLC, Rayonier
Wood Procurement, LLC, Rayonier International Wood
Products, LLC, Rayonier Forest Operations, LLC, Rayonier
Properties, LLC and Rayonier Performance Fibers, LLC
Incorporated by reference to Exhibit
10.1 to the Registrant’s January 15,
2004 Form 8-K
2.2 Contribution, Conveyance and Assumption Agreement, dated
July 29, 2010, between Rayonier Inc. and Rayonier Operating
Company LLC
Incorporated by reference to Exhibit
10.7 to the Registrant’s June 30, 2010
Form 10-Q
2.3 Separation and Distribution Agreement, dated May 28, 2014,
by and between Rayonier Inc. and Rayonier Advanced
Materials Inc.**
Incorporated by reference to Exhibit 2.1
to the Registrant’s May 30, 2014 Form
8-K
2.4 Agreement and Plan of Merger, dated as of January 14, 2020,
by and among Rayonier Inc., Rayonier Operating Company
LLC, Pacific GP Merger Sub I, LLC, Pacific GP Merger Sub II,
LLC, Pacific LP Merger Sub III, LLC, Pope Resources, a
Delaware limited partnership, Pope MGP, Inc. and Pope EGP,
Inc.
2.5 Amendment No. 1, dated as of April 1, 2020, to the
Agreement and Plan of Merger, by and among Rayonier Inc.,
Rayonier, L.P., Rayonier Operating Company LLC, Rayonier
Operating Holdings, LLC, Pacific GP Merger Sub I, LLC,
Pacific GP Merger Sub II, LLC, Pacific LP Merger Sub III,
LLC, Pope Resources, a Delaware limited partnership, Pope
MGP, Inc. and Pope EGP, Inc.
3.1 Amended and Restated Articles of Incorporation
3.2 By-Laws
3.3 Limited Liability Company Agreement of Rayonier Operating
Company LLC
3.4 Amended and Restated Agreement of Limited Partnership of
Rayonier, L.P., dated as of May 8, 2020
Incorporated by reference to Exhibit 2.1
to the Registrant’s January 15, 2020
Form 8-K
Incorporated by reference to Exhibit 2.1
to the Registrant’s April 1, 2020 Form 8-
K
Incorporated by reference to Exhibit 3.1
to the Registrant’s May 23, 2012 Form
8-K
Incorporated by reference to Exhibit 3.2
to the Registrant’s October 21, 2009
Form 8-K
Incorporated by reference to Exhibit 3.3
to the Registrant’s June 30, 2010 Form
10-Q
Incorporated by reference to Exhibit 3.1
to the Registrant’s May 13, 2020 Form
8-K
3.5 Amendment No. 1 to the Amended and Restated Agreement
of Limited Partnership of Rayonier, L.P., dated as of May 21,
2021
Incorporated by reference to Exhibit 3.1
to the Registrant's June 30, 2021 Form
10-Q
4.1 Indenture among Rayonier, L.P., Rayonier Inc., the guarantors
party thereto from time to time and The Bank of New York
Mellon, N.A., as Trustee, dated as of September 9, 2020
Incorporated by reference to Exhibit 4.8
to the Registrant’s September 10, 2020
Registration Statement on Form S-3
Table of Contents
Exhibit No.
Description
4.2 First Supplemental Indenture, dated May 17, 2021, among
Rayonier, L.P., as issuer, the guarantors party thereto and the
Bank of New York Mellon Trust Company, N.A., as trustee
Location
Incorporated by reference to Exhibit 4.2
to the Registrant's May 17, 2021 Form
8-K
4.3 Form of Note for 2.750% Senior Notes due 2031 (contained in
Exhibit A to Exhibit 4.2)
4.4 Description of Registrant’s Securities Registered Pursuant to
Section 12 of the Securities Exchange Act of 1934
10.1 Rayonier Investment and Savings Plan for Salaried
Employees effective March 1, 1994, amended and restated
effective April 1, 2015 and further amended effective
September 8, 2015*
Incorporated by reference to Exhibit 4.2
to the Registrant's May 17, 2021 Form
8-K
Incorporated by reference to Exhibit 4.7
to the Registrant's December 31, 2020
Form 10-K
Incorporated by reference to Exhibit
10.2 to the Registrant’s December 31,
2015 Form 10-K
10.2 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of June 1, 2016, executed
February 25, 2016*
Incorporated by reference to Exhibit
10.1 to the Registrant’s March 31, 2016
Form 10-Q
10.3 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of June 1, 2016, executed
June 13, 2016*
Incorporated by reference to Exhibit
10.3 to the Registrant’s December 31,
2019 Form 10-K
10.4 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of January 1, 2017, executed
January 17, 2017*
Incorporated by reference to Exhibit
10.1 to the Registrant’s March 31, 2017
Form 10-Q
10.5 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of January 1, 2017, executed
July 20, 2017*
Incorporate by reference to Exhibit 10.1
to the Registrant’s June 30, 2017 Form
10-Q
10.6 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of April 1, 2017, executed
December 7, 2016*
Incorporated by reference to Exhibit
10.6 to the Registrant’s December 31,
2019 Form 10-K
10.7 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of October 1 2017, executed
November 9, 2017*
Incorporated by reference to Exhibit
10.6 to the Registrant’s December 31,
2017 Form 10-K
10.8 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of November 1, 2018,
executed December 21, 2018*
Incorporated by reference to Exhibit
10.7 to the Registrant’s December 31,
2018 Form 10-K
10.9 Amended and Restated Retirement Plan for Salaried
Employees of Rayonier Inc. effective January 1, 2014*
Incorporated by reference to Exhibit
10.9 to the Registrant’s December 31,
2015 Form 10-K
10.10 First Amendment to the Retirement Plan for Salaried
Employees of Rayonier Inc. effective as of December 31,
2016*
Incorporated by reference to Exhibit
10.2 to the Registrant’s September 30,
2016 Form 10-Q
10.11 Rayonier Inc. Excess Benefit Plan, as amended*
10.12 Form of Rayonier Outside Directors Compensation Program/
Cash Deferral Option Agreement*
Incorporated by reference to Exhibit
10.2 to the Registrant’s June 30, 2010
Form 10-Q
Incorporated by reference to Exhibit
10.24 to the Registrant’s December 31,
2006 Form 10-K
10.13 Trust Agreement for the Rayonier Inc. Legal Resources Trust* Incorporated by reference to Exhibit
10.1 to the Registrant’s September 30,
2014 Form 10-Q
Table of Contents
Exhibit No.
Description
Location
10.14 Amended and Restated Master Shareholder Agreement in
Relation to Matariki Forests Australia PTY Limited, Matariki
Forestry Group and Matariki Forests, dated February, 2010,
by and among SAS Trustee Corporation, Deutche Asset
Management (Australia) Limited, Rayonier Canterbury LLC,
Rayonier New Zealand Limited, Cameron and Company
Limited, Matariki Forests Australia Pty Limited, Matariki
Forestry Group and Matariki Forests
10.15 Deed of Amendment and Restatement of Shareholder
Agreement, dated March 31, 2016, by and among Rayonier
Canterbury LLC, Waimarie Forests Pty Limited, Matariki
Forestry Group, Matariki Forests and Phaunos Timber Fund
Limited
10.16 Intellectual Property Agreement, dated June 27, 2014, by and
between Rayonier Inc. and Rayonier Advanced Materials Inc.
10.17 Form of Indemnification Agreement between Rayonier Inc.
and its Officers and Directors*
10.18 Form of Indemnification Agreement between Rayonier Inc.
and its Officers
10.19 Rayonier Incentive Stock Plan, as amended*
10.20 Form of Rayonier Incentive Stock Plan Non-Qualified Stock
Option Award Agreement*
10.21 Form of Rayonier Incentive Stock Plan Restricted Stock
Award Agreement*
10.22 2019 Performance Share Award Program*
10.23 2020 Performance Share Award Program*
10.24 2021 Performance Share Award Program*
Incorporated by reference to Exhibit
10.14 to the Registrant’s December 31,
2019 Form 10-K
Incorporated by reference to Exhibit
10.15 to the Registrant’s December 31,
2019 Form 10-K
Incorporated by reference to Exhibit
10.4 to the Registrant’s June 30, 2014
Form 8-K
Incorporated by reference to Exhibit
10.8 to the Registrant’s June 30, 2014
Form 10-Q
Incorporated by reference to Exhibit
10.18 to the Registrant’s December 31,
2019 Form 10-K
Incorporate by reference to Exhibit 10.1
to the Registrant’s September 30, 2020
Form 10-Q
Incorporated by reference to Exhibit
10.19 to the Registrant’s December 31,
2008 Form 10-K
Incorporated by reference to Exhibit
10.5 to the Registrant’s March 31, 2015
Form 10-Q
Incorporated by reference to Exhibit
10.18 to the Registrant’s December 31,
2019 Form 10-K
Incorporated by reference to Exhibit
10.3 to the Registrant’s March 31, 2020
Form 10-Q
Incorporated by reference to Exhibit
10.1 to the Registrant's March 31, 2021
Form 10-Q
10.25 2022 Performance Share Award Program*
Filed herewith
10.26 Rayonier Inc. Supplemental Savings Plan effective March 1,
2016*
10.27 Credit Agreement dated as of August 5, 2015 among
Rayonier Inc., Rayonier TRS Holdings Inc. and Rayonier
Operating Company LLC, as Borrowers, CoBank, ACB as
Administrative Agent, Swing Line Lender and Issuing Bank,
JPMorgan Chase Bank, N.A. and Farm Credit of Florida, ACA
as Co-Syndication Agents, Credit Suisse AG and SunTrust
Bank as Co-Documentation Agents and CoBank, ACB as
Sole Lead Arranger and Sole Bookrunner
Incorporated by reference to Exhibit
10.2 to the Registrant’s March 31, 2016
Form 10-Q
Incorporated by reference to Exhibit
10.3 to the Registrant’s March 31, 2016
Form 10-Q
Table of Contents
Exhibit No.
Description
Location
10.28 Second Amendment to Credit Agreement, dated as of April 1,
2020, by and among Rayonier Inc., Rayonier TRS Holdings
Inc. and Rayonier Operating Company LLC, as borrowers, the
several banks, financial institutions and other institutional
lenders party thereto and CoBank, ACB as administrative
agent, swing line lender and issuing bank
10.29 Annex A to Second Amendment to Credit Agreement
10.30 First Amendment and Incremental Term Loan Agreement
dated as of April 28, 2016, by and among Rayonier Inc.,
Rayonier TRS Holdings Inc., Rayonier Operating Company
LLC, as Borrowers, CoBank, ACB, as Administrative Agent
and the several banks, financial institutions and other
institutional lenders party thereto
10.31 Third Amendment and Incremental Term Loan Agreement,
dated as of April 16, 2020, by and among Rayonier Inc.,
Rayonier TRS Holdings Inc., and Rayonier Operating
Company LLC, as borrowers, the several banks, financial
institutions and other institutional lenders party thereto and
CoBank, ACB as administrative agent
10.32 Fourth Amendment and Incremental Term Loan Agreement,
dated as of June 1, 2021, by and among Rayonier Inc.,
Rayonier TRS Holdings Inc., Rayonier Operating Company
LLC, and Rayonier L.P., as borrowers, the several banks,
financial institutions and other lenders party thereto and
CoBank, ACB, as administrative agent
Incorporated by reference to Exhibit
10.4 to the Registrant’s March 31, 2020
Form 10-Q
Incorporated by reference to Exhibit
10.5 to the Registrant’s March 31, 2020
Form 10-Q
Incorporated by reference to Exhibit
10.1 to the Registrant’s May 2, 2016
Form 8-K
Incorporated by reference to Exhibit
10.7 to the Registrant’s March 31, 2020
Form 10-Q
Incorporated by reference to Exhibit
10.1 to the Registrant's June 1, 2021
Form 8-K
10.33 2016 Guarantee Agreement dated as of April 28, 2016 among
Rayonier Inc., Rayonier TRS Holdings Inc. and COBANK,
ACB, as Administrative Agent
Incorporated by reference to Exhibit
10.2 to the Registrant’s May 2, 2016
Form 8-K
10.34 Amended and Restated Executive Severance Pay Plan
effective as of October 2020*
10.35 Trust Agreement for the Rayonier Inc. Executive Severance
Pay Plan*
10.36 Amendment to Trust Agreement for the Rayonier Inc.
Executive Severance Plan*
10.37 LTI Supplemental Terms Vesting in Event of Retirement*
10.38 Rayonier Incentive Stock Plan Restricted Stock Unit Award
Agreement, dated 2019*
10.39 Rayonier Non-Equity Incentive Plan, as amended, Effective
as of January 1, 2020*
10.40 Rayonier Incentive Stock Plan Performance Share Award
Agreement*
Incorporated by reference to Exhibit
10.2 to the Registrant’s September 30,
2020 Form 10-Q
Incorporated by reference to Exhibit
10.26 to the Registrant’s December 31,
2001 Form 10-K
Incorporated by reference to Exhibit
10.2 to the Registrant’s September 30,
2014 Form 10-Q
Incorporated by reference to Exhibit
10.30 to the Registrant’s December 31,
2019 Form 10-K
Incorporated by reference to Exhibit
10.31 to the Registrant’s December 31,
2019 Form 10-K
Incorporated by reference to Exhibit
10.32 to the Registrant’s December 31,
2019 Form 10-K
Incorporated by reference to Exhibit
10.35 to the Registrant's December 31,
2020 Form 10-K
Table of Contents
Exhibit No.
Description
Location
10.41 Accordion Increase Agreement, dated as of April 13, 2020, by
and among Rayonier Inc., Rayonier TRS Holdings Inc., and
Rayonier Operating Company LLC, as borrowers, the several
banks, financial institutions and other institutional lenders
party thereto and CoBank, ACB as administrative agent,
swing line lender and issuing bank
Incorporated by reference to Exhibit
10.6 to the Registrant’s March 31, 2020
Form 10-Q
10.42 Tax Protection Agreement, dated as of May 8, 2020, by and
among Rayonier Inc., Rayonier, L.P. and Pope Resources, A
Delaware Limited Partnership
Incorporated by reference to Exhibit
10.1 to the Registrant’s May 13, 2020
Form 8-K
10.43 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of April 1, 2020, executed
March 23, 2020*
Incorporated by reference to Exhibit
10.7 to the Registrant’s June 30, 2020
10-Q
10.44 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of May 8, 2020, executed
May 4, 2020*
Incorporated by reference to Exhibit
10.8 to the Registrant’s June 30, 2020
10-Q
10.45 Amendment to Rayonier Investment and Savings Plan for
Salaried Employees effective as of May 8, 2020, executed
May 8, 2020*
Incorporated by reference to Exhibit
10.9 to the Registrant’s June 30, 2020
10-Q
10.46 Pope Resources 2005 Unit Incentive Plan*
21.1 List of subsidiaries of Rayonier Inc
21.2 List of subsidiaries of Rayonier, L.P.
22.1 List of Guarantor Subsidiaries
Incorporated by reference to Exhibit 4.3
to the Registrant’s May 8, 2020
Registration Statement on Form S-8
Filed herewith
Filed herewith
Incorporated by reference to Exhibit
22.1 to the Registrant’s June 30, 2021
10-Q
23.1 Rayonier Inc. - Consent of Ernst & Young LLP
23.2 Rayonier, L.P. - Consent of Ernst & Young LLP
24 Powers of attorney
Filed herewith
Filed herewith
Filed herewith
31.1 Rayonier Inc. - Chief Executive Officer’s Certification
Filed herewith
Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Rayonier Inc. - Chief Financial Officer’s Certification Pursuant
Filed herewith
to Rule 13a-14(a)/15d-14-(a) and pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
31.3 Rayonier, L.P. - Chief Executive Officer’s Pursuant to Rule
Filed herewith
13a-14(a)/15d-14(a) and pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
31.4 Rayonier, L.P - Chief Financial Officer’s Certification Pursuant
Filed herewith
to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32.1 Rayonier Inc. - Certification of Periodic Financial Reports
Under Section 906 of the Sarbanes-Oxley Act of 2002
Furnished herewith
32.2 Rayonier, L.P. - Certification of Periodic Financial Reports
Under Section 906 of the Sarbanes-Oxley Act of 2002
Furnished herewith
Table of Contents
Exhibit No.
Description
Location
Filed herewith
101 The following financial information from our Annual Report on
Form 10-K for the fiscal year ended December 31, 2021,
formatted in Inline Extensible Business Reporting Language
(“iXBRL”), includes: (i) the Consolidated Statements of
Income and Comprehensive Income for the Years Ended
December 31, 2021, 2020 and 2019; (ii) the Consolidated
Balance Sheets as of December 31, 2021 and 2020; (iii) the
Consolidated Statements of Shareholders’ Equity/Statement
of Capital for the Years Ended December 31, 2021, 2020 and
2019; (iv) the Consolidated Statements of Cash Flows for the
Years Ended December 31, 2021, 2020 and 2019; and (v) the
Notes to the Consolidated Financial Statements.
104 The cover page from the Company’s Annual Report on Form
Filed herewith
10-K from the fiscal year ended December 31, 2021,
formatted in Inline XBRL (included as Exhibit 101)
Table of Contents
* Management contract or compensatory plan.
** Certain schedules and similar attachments have been omitted from this filing pursuant to Item 601(b)(2) of
Regulation S-K. Rayonier will furnish supplemental copies of any such schedules or attachments to the U.S.
Securities and Exchange Commission upon request.
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
RAYONIER INC.
By:
/s/ MARK MCHUGH
Mark McHugh
Senior Vice President and Chief Financial Officer
(Duly Authorized Officer, Principal Financial Officer)
RAYONIER, L.P.
By:
/s/ MARK MCHUGH
Mark McHugh
Senior Vice President and Chief Financial Officer
(Duly Authorized Officer, Principal Financial Officer)
February 25, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of Rayonier Inc., for itself and in its capacity as General Partner of Rayonier, L.P. and in the
capacities and on the dates indicated.
Signature
Title
Date
/s/ DAVID L. NUNES
President and Chief Executive Officer
February 25, 2022
David L. Nunes
(Principal Executive Officer)
/s/ MARK MCHUGH
Senior Vice President and Chief Financial Officer
February 25, 2022
Mark McHugh
(Principal Financial Officer)
/s/ APRIL TICE
Vice President and Chief Accounting Officer
February 25, 2022
April Tice
(Principal Accounting Officer)
*
Dod A. Fraser
*
Keith E. Bass
*
Ann C. Nelson
*
Scott R. Jones
*
V. Larkin Martin
*
Meridee A. Moore
*
Matthew J. Rivers
*
Andrew G. Wiltshire
*By:
/s/ MARK R. BRIDWELL
Mark R. Bridwell
Attorney-In-Fact
Chairman of the Board
Director
Director
Director
Director
Director
Director
Director
149
February 25, 2022
SUBSIDIARIES OF RAYONIER INC.
As of December 31, 2021
Name of Subsidiary
Matariki Forests
Matariki Forestry Group
Pope Resources, L.P.
Rayonier Forest Resources, L.P.
Rayonier, L.P.
Rayonier Operating Company Holding LLC
Rayonier Operating Company, LLC
Rayonier TRS Forest Operations, LLC
Rayonier TRS Holdings Inc.
Raydient LLC
EXHIBIT 21.1
State/Country of
Incorporation/
Organization
New Zealand
New Zealand
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
In accordance with Item 601(b)(21) of Regulation S–K, we have omitted some subsidiaries that, if considered in the aggregate
as a single subsidiary, would not constitute a significant subsidiary as of December 31, 2021 under Rule 1–02(w) of Regulation
S–X.
SUBSIDIARIES OF RAYONIER, L.P.
As of December 31, 2021
Name of Subsidiary
Matariki Forests
Matariki Forestry Group
Pope Resources, L.P.
Rayonier Forest Resources, L.P.
Rayonier Operating Company, LLC
Rayonier TRS Forest Operations, LLC
Rayonier TRS Holdings Inc.
Raydient LLC
EXHIBIT 21.2
State/Country of
Incorporation/
Organization
New Zealand
New Zealand
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
In accordance with Item 601(b)(21) of Regulation S–K, we have omitted some subsidiaries that, if considered in the aggregate
as a single subsidiary, would not constitute a significant subsidiary as of December 31, 2021 under Rule 1–02(w) of Regulation
S–X.
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the following Registration Statements:
1) Registration Statement (Form S-3 No. 333–248702) of Rayonier, Inc.,
2) Registration Statement (Form S-4 No. 333–114858) of Rayonier Inc.,
3) Registration Statement (Form S-8 No. 333–129175) pertaining to the Rayonier 1994 Incentive Stock
Plan,
4) Registration Statement (Form S-8 No. 333–129176) pertaining to the 2004 Rayonier Incentive Stock and
Management Bonus Plan,
5) Registration Statement (Form S-8 No. 333–152505) pertaining to the Rayonier Investment and Savings
Plan for Salaried Employees,
6) Registration Statement (Form S-4 No. 333–237246) pertaining to the registration of Rayonier shares and
Rayonier L.P. units issued to Pope unitholders, and
7) Registration Statement (Form S-8 No. 333–238097) pertaining to the Pope Resources 2005 Unit
Incentive Plan;
of our reports dated February 25, 2022, with respect to the consolidated financial statements and schedule of
Rayonier Inc. and the effectiveness of internal control over financial reporting of Rayonier Inc. included in this
Annual Report (Form 10-K) of Rayonier Inc. for the year ended December 31, 2021.
/s/ Ernst & Young LLP
Jacksonville, Florida
February 25, 2022
EXHIBIT 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the following Registration Statements:
1) Registration Statement (Form S-3 No. 333–248702) of Rayonier, Inc.,
2) Registration Statement (Form S-4 No. 333–114858) of Rayonier Inc.,
3) Registration Statement (Form S-8 No. 333–129175) pertaining to the Rayonier 1994 Incentive Stock
Plan,
4) Registration Statement (Form S-8 No. 333–129176) pertaining to the 2004 Rayonier Incentive Stock and
Management Bonus Plan,
5) Registration Statement (Form S-8 No. 333–152505) pertaining to the Rayonier Investment and Savings
Plan for Salaried Employees,
6) Registration Statement (Form S-4 No. 333–237246) pertaining to the registration of Rayonier shares and
Rayonier L.P. units issued to Pope unitholders, and
7) Registration Statement (Form S-8 No. 333–238097) pertaining to the Pope Resources 2005 Unit
Incentive Plan;
of our report dated February 25, 2022, with respect to the consolidated financial statements and schedule of
Rayonier, L.P. included in this Annual Report (Form 10-K) of Rayonier, L.P. for the year ended December 31, 2021.
/s/ Ernst & Young LLP
Jacksonville, Florida
February 25, 2022
EXHIBIT 31.1
I, David L. Nunes, certify that:
CERTIFICATION
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of Rayonier Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
b.
c.
d.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
a.
b.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.
Date: February 25, 2022
/S/ DAVID L. NUNES
David L. Nunes
President and Chief Executive Officer, Rayonier Inc.
EXHIBIT 31.2
I, Mark McHugh, certify that:
CERTIFICATION
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of Rayonier Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
b.
c.
d.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
a.
b.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.
Date: February 25, 2022
/s/ MARK MCHUGH
Mark McHugh
Senior Vice President and
Chief Financial Officer, Rayonier Inc.
EXHIBIT 31.3
I, David L. Nunes, certify that:
CERTIFICATION
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of Rayonier L.P.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
b.
c.
d.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
a.
b.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.
Date: February 25, 2022
/S/ DAVID L. NUNES
David L. Nunes
President and Chief Executive Officer, Rayonier Inc.
EXHIBIT 31.4
I, Mark McHugh, certify that:
CERTIFICATION
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of Rayonier L.P.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
b.
c.
d.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
a.
b.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.
Date: February 25, 2022
/s/ MARK MCHUGH
Mark McHugh
Senior Vice President and
Chief Financial Officer, Rayonier Inc.
EXHIBIT 32.1
CERTIFICATION
The undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that
to our knowledge:
1.
2.
The Annual Report on Form 10-K of Rayonier Inc. (the “Company”) for the period ended December 31, 2021
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
The information in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
February 25, 2022
/s/ DAVID L. NUNES
David L. Nunes
President and Chief Executive Officer,
Rayonier Inc.
/s/ MARK MCHUGH
Mark McHugh
Senior Vice President and
Chief Financial Officer, Rayonier Inc.
A signed original of this written statement required by Section 906 has been provided to Rayonier and will be retained by
Rayonier and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION
The undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that
to our knowledge:
1.
2.
The Annual Report on Form 10-K of Rayonier, L.P. (the “Rayonier Operating Partnership”) for the period
ended December 31, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
The information in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
February 25, 2022
/s/ DAVID L. NUNES
David L. Nunes
President and Chief Executive Officer,
Rayonier Inc.
/s/ MARK MCHUGH
Mark McHugh
Senior Vice President and
Chief Financial Officer, Rayonier Inc.
A signed original of this written statement required by Section 906 has been provided to Rayonier and will be retained by
Rayonier and furnished to the Securities and Exchange Commission or its staff upon request.
THIS PAGE INTENTIONALLY LEFT BLANK
Rayonier Inc. 2021
Board of Directors
Dod A. Fraser [A, N]
Chairman of the Board
President,
Sackett Partners
David L. Nunes
President and
Chief Executive Officer,
Rayonier Inc.
Keith E. Bass [A, C]
CEO, Mattamy Homes
US; Managing Partner,
Mill Creek Capital LLC
Scott R. Jones [C]
Retired President,
Forest Capital Partners
V. Larkin Martin [C, N]
Managing Partner,
Martin Farm;
Vice President,
The Albemarle Corporation
Meridee A. Moore [C, N]
Senior Managing
Member and Chief
Investment Officer,
Watershed Asset
Management, LLC
Ann C. Nelson [A, C]
Retired, Lead Audit
Partner, KPMG LLP
Matthew J. Rivers [A, N]
Part-time Director,
Alternative Fuel
Origination at Drax Group
Andrew G. Wiltshire [A, N]
Founding Partner,
Folium Capital LLC;
Principal in the management and
governance of private orchard
and farming companies located
in New Zealand
BOARD COMMITTEES: [A] Audit [C] Compensation and Management Development [N] Nominating and Corporate Governance
Executive Officers
David L. Nunes
President and
Chief Executive Officer
Mark D. McHugh
Senior Vice President and
Chief Financial Officer
Douglas M. Long
Senior Vice President,
Forest Resources
Christopher T. Corr
Senior Vice President,
Real Estate Development
Mark R. Bridwell
Vice President,
General Counsel and
Corporate Secretary
Shelby L. Pyatt
Vice President,
Human Resources and
Information Technology
W. Rhett Rogers
Vice President,
Portfolio Management
April J. Tice
Vice President,
Chief Accounting Officer
Corporate Information
Corporate Headquarters
Rayonier Inc.
1 Rayonier Way
Wildlight, FL 32097
904.357.9100
www.rayonier.com
Investor and Media Relations
Collin P. Mings
Vice President, Capital
Markets & Strategic Planning
Form 10-K
Additional copies of this report and Rayonier’s
report on Form 10-K are available without
charge upon written request to:
Rayonier Inc.
Investor Relations
1 Rayonier Way
Wildlight, FL 32097
Independent Registered
Public Accounting Firm
Ernst & Young, LLP
12926 Gran Bay Parkway West
Suite 500
Jacksonville, FL 32258
Stock Information
Listed: New York Stock Exchange
Symbol: RYN
CUSIP: 754 907 103
Transfer Agent
and Registrar
Rayonier Inc.
c/o Computershare
P.O. Box 505000
Louisville, KY 40233-5000
800.659.0158 (U.S.)
201.680.6578 (International)
www.computershare.com/investor
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Rayonier Inc.
1 Rayonier Way
Wildlight, Florida 32097