RAYONIER INC

RESULTS OF OPERATIONS

Summary of our results of operations for the three years ended December 31:

(a)Includes deferred revenue adjustments, builder price participation and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

(b)The year ended December 31, 2022 includes $0.7 million of timber write-offs resulting from casualty events.

(c)The year ended December 31, 2023 includes $2.3 million of timber write-offs resulting from casualty events.

(d)The years ended December 31, 2024, December 31, 2023 and December 31, 2022 include income of $291.1 million, $105.1 million and $16.6 million, respectively, from Large Dispositions. The year ended December 31, 2022 includes $16.0 million of equity income from the sale of a multi-family apartment complex in Bainbridge Island, Washington.

(e)The year ended December 31, 2024 includes $1.6 million of costs related to disposition initiatives and $1.1 million of restructuring charges.

(f)The year ended December 31, 2024 includes a $1.6 million gain from a terminated cash flow hedge.

(g)The year ended December 31, 2024 includes $8.0 million of net recoveries associated with legal settlements, which is partially offset by $6.0 million of pension settlement charges. The year ended December 31, 2023 includes $20.7 million of net recoveries associated with legal settlements, which is partially offset by a $2.0 million pension settlement charge.

(h)The year ended December 31, 2024 includes a $1.2 million income tax benefit related to the pension settlement.

(i)Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators.

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

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

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

(d)Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators.

(a)Includes volumes sold to third-party exporters.

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

(c)Direct exports through our log export program began in Q1 2022. Prior to Q4 2022, pricing reflects the transfer of logs on an FOB basis. Beginning in Q4 2022, pricing is reported on a CFR basis (i.e., inclusive of export costs and freight).

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

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

(f)Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators.

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

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

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

(c)Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators.

(d)Represents the period-average rate.

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

(b)Includes deferred revenue adjustments, builder price participation and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

(c)Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not reflect a demonstrable premium relative to timberland value.

(d)Excludes Large Dispositions.

(e)Excludes Improved Development and Large Dispositions.

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

(g)Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators.

(a)Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators.

(a)Represents investments in master infrastructure or entitlements in our real estate development projects. Real Estate Development Investments are amortized as the underlying properties are sold and included in Non-Cash Cost of Land and Improved Development.

RESULTS OF OPERATIONS, 2024 VERSUS 2023

(millions of dollars)

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

(a)For the Southern Timber segment, includes sales from carbon capture and storage ("CCS") and solar energy contracts. For the Pacific Northwest Timber segment, includes Conservation Easement sales for habitat protection in Q2 2023. For the New Zealand Timber segment, includes carbon credit sales.

(b)Net of currency hedging impact.

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

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

(e)Includes a $252.8 million increase in Large Dispositions as well as deferred revenue adjustments, builder price participation and marketing fees related to Improved Development sales in addition to Conservation Easement sales and residential and commercial lease revenue.

(a)For Timber segments, price reflects net stumpage realizations (i.e. net of cut and haul and shipping costs). For Real Estate, price is presented net of cash closing costs.

(b)For the Southern Timber segment, includes income from carbon capture and storage (“CCS”) and solar energy contracts. For the Pacific Northwest Timber segment, includes Conservation Easement sales for habitat protection in Q2 2023. For the New Zealand Timber segment, includes income from carbon credit sales.

(c)Net of currency hedging impact.

(d)Includes $2.3 million of timber write-offs resulting from casualty events in the prior year.

(e)Includes a $186.0 million increase in operating income from Large Dispositions in the current year as well as deferred revenue adjustments, builder price participation and marketing fees related Improved Development sales in addition to Conservation Easement sales and residential and commercial lease revenue.

(f)Includes $1.6 million of costs related to disposition initiatives and $1.1 million of restructuring charges.

(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)For the Southern Timber segment, includes income from carbon capture and storage (“CCS”) and solar energy contracts. For the Pacific Northwest Timber segment, includes Conservation Easement sales for habitat protection in Q2 2023. For the New Zealand Timber segment, includes income from carbon credit sales.

(d)Net of currency hedging impact.

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

SOUTHERN TIMBER

Full-year sales of $250.4 million decreased $13.7 million, or 5%, versus the prior year. Harvest volumes decreased 7% to 6.81 million tons versus 7.31 million tons in the prior year, primarily driven by wet ground conditions that constrained production, softer demand from lumber mills, and the impact of the Large Disposition completed in the fourth quarter. Average pine sawtimber stumpage realizations decreased 4% to $28.41 per ton versus $29.64 per ton in the prior year, while average pine pulpwood stumpage realizations increased 1% to $16.89 per ton versus $16.78 per ton in the prior year. The decrease in average pine sawtimber prices was primarily due to softer demand from sawmills, an unfavorable geographic mix, and the impact of salvage volume. The increase in average pine pulpwood prices was primarily driven by improved demand from pulp mills. Overall, weighted-average stumpage realizations (including hardwood) decreased 5% to $21.46 per ton versus $22.49 per ton in the prior year.

Operating income of$77.9 million increased$1.6 million versus the prior year due to higher non-timber income ($13.2 million), lower depletion rates ($1.1 million) andlower costs ($0.1 million), partially offset by lower net stumpage realizations ($7.0 million) andlower volumes ($5.8 million). Full-year Adjusted EBITDA of $151.3 million was $4.9 million below the prior year.

PACIFIC NORTHWEST TIMBER

Full-year sales of $100.8 million decreased $23.4 million, or 19%, versus the prior year. Harvest volumes decreased 7% to 1.22 million tons versus 1.31 million tons in the prior year, primarily due to the Large Dispositions completed in the region. Average delivered prices for domestic sawtimber decreased 8% to $89.79 per ton versus $97.71 per ton in the prior year due to a combination of weaker demand from domestic lumber mills, reduced export market tension, and an unfavorable species mix. Average delivered pulpwood prices decreased 23% to $29.88 per ton versus $38.78 per ton in the prior year due to softer mill demand in the region.

An operating loss of $6.3 million versus an operating loss of $9.0 million in the prior year was driven by lower depletion rates ($2.9 million) and lower costs ($2.1 million), partially offset by lower net stumpage realizations ($1.1 million), lower non-timber income ($0.7 million), and lower volumes ($0.5 million). Full-year Adjusted EBITDA of $25.4 million was $2.6 million below the prior year.

NEW ZEALAND TIMBER

Full-year sales of $238.6 million increased $3.1 million, or 1%, versus the prior year. Harvest volumes increased to 2.49 million tons versus 2.48 million tons in the prior year. Average delivered prices for export sawtimber increased 3% to $105.86 per ton versus $102.39 per ton in the prior year, as higher shipping costs were partially passed on to export customers through increased prices. Average delivered prices for domestic sawtimber of $66.05 per ton remained relatively consistent versus $66.31 per ton in the prior year.

Operating income of $33.5 million increased $7.4 million versus the prior year due to favorable foreign exchange impacts ($10.4 million), the prior year write-off of timber basis due to a tropical cyclone event ($2.3 million), lower depletion rates ($1.3 million), lower costs ($1.1 million), higher volumes ($0.2 million), and higher non-timber / carbon credit income ($0.1 million), partially offset by lower net stumpage realizations ($7.9 million). Full-year Adjusted EBITDA of $53.8 million was $3.8 million above the prior year.

Full-year sales of $643.8 million increased $253.8 million versus the prior year, while operating income of $340.4 million increased $183.8 million versus the prior year. Sales and operating income in the current year included $495.0 million and $291.1 million, respectively, from Large Dispositions. Prior year sales and operating income included $242.2 million and $105.1 million, respectively, from Large Dispositions. Sales increased primarily due to significantly higher volumes (226,731 acres sold versus 85,618 acres sold in the prior year), partially offset by lower weighted average prices ($2,766 per acre versus $4,392 per acre in the prior year). Full-year Adjusted EBITDA of $106.8 million was $7.5 million above the prior year.

TRADING

Full-year sales of $29.6 million decreased $14.1 million versus the prior year due to lower volumes and prices. Sales volumes decreased 30% to 265,000 tons versus 378,000 tons in the prior year. Operating income and Adjusted EBITDA decreased $0.6 million versus the prior year.

CORPORATE AND OTHER EXPENSE / ELIMINATIONS

Full-year corporate and other operating expense of $42.9 million increased $3.8 million versus the prior year, primarily due to $1.6 million of costs related to disposition initiatives and $1.1 million of restructuring charges, as well as higher compensation and benefit related expenses. The restructuring charges were related to a workforce optimization initiative designed to reduce overhead costs following the disposition of approximately 255,000 acres of timberlands in connection with our Initiatives to Enhance Shareholder Value.

INTEREST EXPENSE, NET

Full-year interest expense of $36.9 million decreased $11.4 million versus the prior year, primarily due to lower average outstanding debt and the gain from a terminated cash flow hedge.

INTEREST AND OTHER MISCELLANEOUS INCOME, NET

Full-year interest and other miscellaneous income of $10.4 million decreased $10.2 million versus the prior year. The decrease versus the prior year is primarily due to lower net recoveries associated with legal settlements ($12.7 million) and higher pension settlement charges ($4.0 million), partially offset by higher interest income ($6.8 million) due to higher cash on hand as a result of the completed Large Dispositions.

INCOME TAX EXPENSE

Full-year income tax expense of $7.0 million increased $1.9 million versus the prior year as a result of higher taxable income, partially offset by a $1.2 million tax benefit associated with the pension termination and settlement. The New Zealand subsidiary is the primary driver of income tax expense.

SHARE REPURCHASES

During the fourth quarter, the Company repurchased 488,017 shares at an average price of $30.10 per share, or $14.7 million in total. In December, the Company announced a new $300 million share repurchase authorization, replacing our previous $100 million share repurchase authorization.

RESULTS OF OPERATIONS, 2023 VERSUS 2022

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, 2023 for the results of operations discussion for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022.

OUTLOOK FOR 2025

In 2025, we expect to achieve full-year harvest volumes in our Southern Timber segment of 6.9 to 7.1 million tons—a modest increase in harvest volumes versus the prior year, primarily due to the carryover of some planned 2024 volume into 2025, partially offset by reduced volume from the recent disposition in Oklahoma. Further, while we expect pine stumpage realizations to trend higher as the year progresses, we anticipate that full-year realizations will be slightly lower versus the prior year, due in part to the continued impact of salvage volume on the market. Lastly, we expect slightly lower non-timber income for full-year 2025 as compared to the prior year, which benefited from significant pipeline easement activity.

In our Pacific Northwest Timber segment, we expect to achieve full-year harvest volumes of approximately 0.9 million tons, which reflects the reduction in our Pacific Northwest sustainable yield resulting from the recent dispositions in Washington. Further, we expect that full-year weighted average log pricing will increase modestly versus the prior year as a result of improving demand conditions.

In our New Zealand Timber segment, we expect full-year harvest volumes of 2.5 to 2.7 million tons. We expect that full-year domestic and export sawtimber pricing will improve modestly relative to the full-year pricing achieved in 2024 as supply-demand fundamentals continue to improve. We further anticipate a modest increase in carbon credit sales in 2025, as pricing appears to have stabilized following a period of unusual market volatility.

In our Real Estate segment, we are encouraged by the continued strong demand and value realizations for our HBU properties, and we expect another solid year in both our rural land sales program as well as our improved development projects based on our current pipeline of transactions. However, similar to 2024, we anticipate very light closing activity in the first quarter.

Our 2025 outlook is subject to a number of variables and uncertainties, including those discussed at Item 1A — Risk Factors.

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; however, 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.

On November 1, 2023, we announced an asset disposition and capital structure realignment plan (the “Plan”) targeting $1 billion of select asset sales to reduce our leverage to ≤3.0x Net Debt / Adjusted EBITDA and return capital to share and unit holders. Since the announcement, we have closed on approximately $737 million of timberland dispositions and have reduced Net Debt / Adjusted EBITDA to 2.6x, while also returning capital to share and unit holders in the form of special cash dividends and share repurchases. We believe we remain on-track to achieve the remainder of the $1 billion disposition target as planned.

While we currently anticipate to execute the remainder of Plan as announced, facts and circumstances could change in the future, which may change our strategy or preclude us from executing the Plan as intended. See Item 1A — Risk Factors in this Annual Report on Form 10-K for additional information.

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, 2024, 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

(a)Total debt as of December 31, 2024, 2023 and 2022 reflects the principal on long-term debt, net of fair market value adjustments and gross of deferred financing costs and unamortized discounts of $5.6 million, $6.9 million and $8.4 million, respectively.

(b)For a reconciliation of Adjusted EBITDA to net income see Item 7 — Performance and Liquidity Indicators.

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

(d)Enterprise value based on market capitalization (including Rayonier, L.P. “OP” units) plus net debt based on Rayonier’s share price of $26.10, $33.41, and $32.96 as of December 31, 2024, 2023 and 2022, respectively.

AT-THE-MARKET (“ATM”) EQUITY OFFERING PROGRAM

On November 4, 2022, we entered into a new distribution agreement with a group of sales agents through which we may sell common shares, from time to time, having an aggregate sales price of up to $300 million (the “2022 ATM Program”). As of December 31, 2024, $269.7 million remains available for issuance under the 2022 ATM Program.

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

CASH FLOWS

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):

CASH PROVIDED BY OPERATING ACTIVITIES

Cash provided by operating activities decreased $36.8 million versus the prior year primarily due to changes in working capital and lower net recoveries on legal settlements.

CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES

Cash provided by investing activities increased $229.9 million versus the prior year primarily due to higher proceeds from Large Dispositions ($244.9 million) and lower capital expenditures ($1.7 million), partially offset by higher cash used for timberland acquisitions ($8.7 million), higher real estate development investments ($2.7 million), and other investing activities ($5.2 million).

CASH USED FOR FINANCING ACTIVITIES

Cash used for financing activities increased $150.5 million from the prior year due to higher debt repayments ($100.0 million), higher dividends paid on common shares ($30.6 million), increases in share repurchases ($14.6 million), higher distributions to noncontrolling interests in consolidated affiliates ($5.4 million), and lower proceeds from the issuance of common shares under the incentive stock plan ($0.1 million), partially offset by lower distributions to noncontrolling interests in the Operating Partnership ($0.2 million), and lower costs associated with the issuance of common shares under the ATM Program ($0.1 million).

FUTURE USES OF CASH

We expect future uses of cash to include working capital requirements, principal and interest payments on long-term debt, lease payments, capital expenditures, real estate development investments, timberland acquisitions, dividends on Rayonier Inc. common shares and distributions on Rayonier, L.P. units, distributions to noncontrolling interests, repurchases of the Company’s common shares, or other expenditures as needed.

Significant long-term uses of cash include the following (in millions):

(a)The book value of long-term debt, net of deferred financing costs and unamortized discounts, is currently recorded at $1,089.8 million on our Consolidated Balance Sheets, but upon maturity the liability will be $1,095.4 million. See Note 7 — Debt for additional information.

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

(c)Excludes anticipated renewal options.

(d)Commitments — derivatives represent payments expected to be made on derivative financial instruments (foreign exchange contracts). See Note 8 — Derivative Financial Instruments and Hedging Activities for additional information.

(e)Commitments — environmental remediation represents our estimate of potential liability associated with environmental contamination and Natural Resource Damages in Port Gamble, Washington. See Note 12 — Environmental and Natural Resource Damage Liabilities for additional information.

(f)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. We believe we have sufficient sources of funding to meet our business requirements for the next 12 months and in the longer term.

EXPECTED 2025 EXPENDITURES

Capital expenditures in 2025 are forecasted to be between $72 million and $77 million, excluding any strategic timberland acquisitions we may make. Capital expenditures are expected to primarily consist of seedling planting, fertilization and other silvicultural activities, property taxes, lease payments, allocated overhead and other capitalized costs. Aside from capital expenditures, we may also acquire timberland as we actively evaluate acquisition opportunities.

Real estate development investments in 2025 are expected to be between $28 million and $32 million, net of reimbursements from community development bonds. Expected real estate development investments are primarily related to Wildlight, our mixed-use community development project located north of Jacksonville, Florida and Heartwood, our mixed-use development project located in Richmond Hill just south of Savannah, Georgia.

Our 2025 dividend payments on Rayonier Inc. common shares and distributions to Rayonier, L.P. unitholders are expected to be approximately $171.2 million and $2.3 million, respectively. These estimates exclude the additional dividend and distribution paid January 30, 2025, to shareholders of record on December 12, 2024. They assume no change in the quarterly dividend rate of $0.2725 per share or unit announced on February 5, 2025, and no material changes in outstanding common shares or partnership units. See the subsequent events section of Note 1 — Summary of Significant Accounting Policies for additional information regarding our quarterly dividend and distribution rate.

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.

Cash income tax payments in 2025 are expected to be between $6 million and $9 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 13 — Guarantees for additional information on the letters of credit and surety bonds as of December 31, 2024.

SUMMARY OF GUARANTOR FINANCIAL INFORMATION

In May 2021, Rayonier, L.P. issued $450 million of 2.75% Senior Notes due 2031 (the “Senior Notes due 2031”). Rayonier TRS Holdings Inc., 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 excluded in the table below to eliminate intercompany transactions between the issuer and guarantors and to exclude investments in non-guarantors. As a result, our ability to make required payments on the notes depends on the performance of our operating subsidiaries and their ability to distribute funds to us. There are no material restrictions on dividends from the operating subsidiaries.

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:

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:

LIQUIDITY FACILITIES

See Note 7 — 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 2031, 2015 Term Loan Agreement, 2016 Incremental Term Loan Agreement, 2021 Incremental Term Loan Agreement and Revolving Credit Facility.

RESTRICTED CASH

See Note 21 — Restricted Cash for further information regarding the funds deposited with a third-party intermediary and cash held in escrow.