RAYONIER INC
For the period ended Mar 31, 2025. Filed May 2, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 2, 2025
Contents
NOTE
- DISCONTINUED OPERATIONS
On March 9, 2025, Rayonier entered into a purchase and sale agreement with Taurus Forest Holdings Limited, pursuant to which Rayonier has agreed to sell its entire 77% interest in its New Zealand operations for $710 million, subject to net debt, working capital, and other adjustments. The transaction is expected to close in 2025, subject to the receipt of regulatory approvals and the satisfaction of other closing conditions.
We will not have a continuing involvement in the operations of New Zealand following the close of the sale. Accordingly, the financial results of the New Zealand Timber segment and the New Zealand portion of the Real Estate, Trading and Corporate segments are classified as discontinued operations in our Consolidated Statements of Income and Comprehensive Income (Loss) for all periods presented.
The following table summarizes the results of our New Zealand operations for the three months ended March 31, 2025 and 2024, as presented in “Income from discontinued operations, net of tax” in the Consolidated Statements of Income and Comprehensive Income (Loss):
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Sales | $56,760 | $54,392 |
| Costs and Expenses | ||
| Cost of sales | (50,589) | (47,057) |
| Other operating (expense) income, net (a) | (1,622) | 243 |
| (52,211) | (46,814) | |
| Operating income from discontinued operations | 4,549 | 7,578 |
| Interest expense, net | (728) | (796) |
| Interest income | 98 | 193 |
| Income from discontinued operations before income taxes | 3,919 | 6,975 |
| Income tax expense | (1,412) | (159) |
| Income from discontinued operations, net of tax | 2,507 | 6,816 |
| Less: Net income from discontinued operations attributable to noncontrolling interests in the Operating Partnership | (28) | (85) |
| Less: Net income from discontinued operations attributable to noncontrolling interests in consolidated affiliates | (385) | (939) |
| Net income from discontinued operations attributable to Rayonier Inc. | $2,094 | $5,792 |
(a)The three months ended March 31, 2025 includes $0.2 million of transaction costs which include legal, advisory, and other due diligence costs.
The major classes of the New Zealand operation’s assets and liabilities are as follows:
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| ASSETS | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | 16,093 | $20,093 |
| Trade receivables, less allowance for doubtful accounts of $0 and $0 | 18,634 | 18,935 |
| Inventory | 3,030 | 1,462 |
| Prepaid expenses | 6,107 | 6,206 |
| Other current assets | 205 | 624 |
| Total current assets | 44,069 | 47,320 |
| TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION | 342,899 | 339,724 |
| PROPERTY, PLANT AND EQUIPMENT | ||
| Buildings | 1,732 | 1,707 |
| Machinery and equipment | 173 | 171 |
| Total property, plant and equipment, gross | 1,905 | 1,878 |
| Less — accumulated depreciation | (980) | (935) |
| Total property, plant and equipment, net | 925 | 943 |
| RIGHT-OF-USE ASSETS | 71,128 | 64,082 |
| OTHER ASSETS | 24,332 | 23,850 |
| TOTAL ASSETS | $483,353 | $475,919 |
| LIABILITIES | ||
| CURRENT LIABILITIES | ||
| Accounts payable | 12,074 | $9,145 |
| Current maturities of long-term debt, net | 19,722 | 19,442 |
| Accrued taxes | 649 | 2,399 |
| Accrued payroll and benefits | 1,215 | 793 |
| Other current liabilities | 15,668 | 15,556 |
| Total current liabilities | 49,328 | 47,335 |
| LONG-TERM DEBT, NET | 46,015 | 45,360 |
| LONG-TERM LEASE LIABILITY | 67,055 | 60,038 |
| OTHER NON-CURRENT LIABILITIES | 65,593 | 65,443 |
| TOTAL LIABILITIES | $227,991 | $218,176 |
The following table summarizes the depreciation, depletion and amortization and capital expenditures of the Company’s discontinued operations related to the New Zealand operations:
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Depreciation, depletion and amortization | $4,334 | $4,020 |
| Capital expenditures | 2,654 | 3,608 |
- SEGMENT AND GEOGRAPHICAL INFORMATION
As of March 31, 2025, Rayonier operated infour reportable segments: Southern Timber, Pacific Northwest Timber, Real Estate, and Trading. Prior to the first quarter of 2025, we operated infive reportable business segments, which included New Zealand Timber. On March 9, 2025, we entered into a purchase and sale agreement to sell our entire 77% interest in the New Zealand joint venture and as a result, the New Zealand operations are shown as discontinued operations for all periods presented. See Note 2 — Discontinued Operationsfor additional information.
Sales between operating segments are made based on estimated fair market value, and intercompany sales, purchases and profits (losses) are eliminated in consolidation. Our chief operating decision maker (“CODM”), the Chief Executive Officer, evaluates segment operating performance based on Adjusted Earnings before Interest, Taxes, Depreciation, Depletion and Amortization (“Adjusted EBITDA”) to make decisions about allocating resources and assessing performance. Total assets by segment are not used by the CODM to assess the performance of or allocate resources to the segments, therefore total assets by segment are not disclosed.
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, income from discontinued operations, restructuring charges and Large Dispositions.
We believe that Operating income (loss), as defined by U.S. GAAP, is the most appropriate earnings measurement with which to reconcile Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to Operating income (loss) as determined in accordance with U.S. GAAP. Operating income (loss) as presented in the Consolidated Statements of Income and Comprehensive Income (Loss) is equal to segment income.
The following tables summarize the segment information for the three months ended March 31, 2025 and 2024:
| Three Months Ended · Southern Timber · Pacific Northwest Timber · Real Estate · Trading · Corporate and Other · Total | |||||||
|---|---|---|---|---|---|---|---|
| Sales | $50,944 | $21,404 | $10,167 | $407 | — | $82,922 | |
| Costs and Expenses | |||||||
| Cut & haul costs | (12,521) | (9,340) | — | — | — | (21,861) | |
| Port / freight costs | — | (14) | — | (4) | — | (18) | |
| Depreciation, depletion and amortization | (16,899) | (5,606) | (564) | — | (424) | (23,493) | |
| Non-cash cost of land and improved development | — | — | (2,399) | — | — | (2,399) | |
| Other costs and expenses (a) | (11,374) | (5,696) | (8,154) | (857) | (9,011) | (35,092) | |
| Operating income (loss) | $10,150 | $748 | ($950) | ($454) | ($9,435) | $59 | |
| Add: Restructuring charges (b) | — | — | — | — | 1,110 | 1,110 | |
| Add: Depreciation, depletion and amortization | 16,899 | 5,606 | 564 | — | 424 | 23,493 | |
| Add: Non-cash cost of land and improved development | — | — | 2,399 | — | — | 2,399 | |
| Adjusted EBITDA | $27,049 | $6,354 | $2,013 | ($454) | ($7,901) | $27,061 | |
| Reconciliation of segment results to consolidated income before taxes | |||||||
| Interest, net and miscellaneous income | ($3,518) | ||||||
| Depreciation, depletion and amortization | (23,493) | ||||||
| Non-cash cost of land and improved development | (2,399) | ||||||
| Non-operating expense | (1,842) | ||||||
| Restructuring charges (b) | (1,110) | ||||||
| Loss from Continuing Operations Before Income Taxes | ($5,301) | ||||||
| Income tax expense | (291) | ||||||
| Loss from Continuing Operations | ($5,592) | ||||||
| Income from discontinued operations, net of tax | 2,507 | ||||||
| Net Loss | ($3,085) | ||||||
(a)Other costs and expenses for each reportable segment primarily includes other direct and indirect cost of sales and selling and general expenses.
(b)Restructuring charges include severance costs related to workforce optimization initiatives. Restructuring charges are recorded within the Consolidated Statements of Income and Comprehensive Income (Loss) under the caption “Other operating (expense) income, net.”
| Three Months Ended · Southern Timber · Pacific Northwest Timber · Real Estate · Trading · Corporate and Other · Total | |||||||
|---|---|---|---|---|---|---|---|
| Sales | $69,978 | $25,192 | $15,564 | $2,970 | — | $113,704 | |
| Costs and Expenses | |||||||
| Cut & haul costs | (13,398) | (10,837) | — | — | — | (24,235) | |
| Port / freight costs | (1,216) | (1,239) | — | (1,327) | — | (3,782) | |
| Depreciation, depletion and amortization | (21,796) | (9,075) | (1,749) | — | (443) | (33,063) | |
| Non-cash cost of land and improved development | — | — | (2,953) | — | — | (2,953) | |
| Other costs and expenses (a) | (10,563) | (8,401) | (10,990) | (1,639) | (9,446) | (41,039) | |
| Operating income (loss) | $23,005 | ($4,360) | ($128) | $4 | ($9,889) | $8,632 | |
| Add: Depreciation, depletion and amortization | 21,796 | 9,075 | 1,749 | — | 443 | 33,063 | |
| Add: Non-cash cost of land and improved development | — | — | 2,953 | — | — | 2,953 | |
| Adjusted EBITDA | $44,801 | $4,715 | $4,574 | $4 | ($9,446) | $44,648 | |
| Reconciliation of segment results to consolidated income before taxes | |||||||
| Interest, net and miscellaneous income | ($7,054) | ||||||
| Depreciation, depletion and amortization | (33,063) | ||||||
| Non-cash cost of land and improved development | (2,953) | ||||||
| Non-operating expense | (7,079) | ||||||
| Loss from Continuing Operations Before Income Taxes | ($5,501) | ||||||
| Income tax benefit | 991 | ||||||
| Loss from Continuing Operations | ($4,510) | ||||||
| Income from discontinued operations, net of tax | 6,816 | ||||||
| Net Income | $2,306 | ||||||
(a)Other costs and expenses for each reportable segment primarily includes other direct and indirect cost of sales and selling and general expenses.
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Capital Expenditures | ||
| Southern Timber | $9,615 | $11,003 |
| Pacific Northwest Timber | 2,366 | 4,119 |
| Real Estate | 42 | 79 |
| Corporate and other | — | 59 |
| Total Capital Expenditures | $12,023 | $15,260 |
- REVENUE
PERFORMANCE OBLIGATIONS
We recognize revenue when control of promised goods or services (“performance obligations”) is transferred to customers, in an amount that reflects the consideration expected in exchange for those goods or services (“transaction price”). Unsatisfied performance obligations as of March 31, 2025 are primarily due to advances on stumpage contracts, unearned license revenue and unearned carbon capture and storage revenue. Of these performance obligations, $17.7 million is expected to be recognized within the next twelve months, with the remaining $12.4 million expected to be recognized thereafter as we satisfy our performance obligations. We generally collect payment within a year of satisfying performance obligations and therefore have elected not to adjust revenues for a financing component.
CONTRACT BALANCES
The timing of revenue recognition, invoicing and cash collections results in trade receivables and deferred revenue (contract liabilities) on the Consolidated Balance Sheets. Trade receivables are recorded when we have an unconditional right to consideration for completed performance under a contract. Contract liabilities relate to payments received in advance of performance under a contract. Contract liabilities are recognized as revenue as (or when) we perform under a contract.
The following table contains contract balances recorded in the Consolidated Balance Sheets at March 31, 2025 and December 31, 2024:
| March 31, 2025 | December 31, 2024 | Balance Sheet Location | |
|---|---|---|---|
| Contract assets | |||
| Trade receivables, net | $10,414 | $8,006 | Trade receivables |
| Contract liabilities | |||
| Deferred revenue, current | 17,732 | 20,902 | Deferred revenue |
| Deferred revenue, non-current | 12,354 | 10,697 | Long-term deferred revenue |
The following table summarizes revenue recognized during the three months ended March 31, 2025 and 2024 that was included in the contract liability balance at the beginning of each year:
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Revenue recognized from contract liability balance at the beginning of the year | $9,089 | $10,235 |
The following tables present our revenue from contracts with customers disaggregated by product type for the three months ended March 31, 2025 and 2024:
| Three Months Ended | Southern Timber | Pacific Northwest Timber | Real Estate | Trading | Total |
|---|---|---|---|---|---|
| Pulpwood | $19,798 | $1,265 | — | — | $21,063 |
| Sawtimber | 20,565 | 19,106 | — | 407 | 40,078 |
| Hardwood | 1,529 | — | — | — | 1,529 |
| Total Timber Sales | 41,892 | 20,371 | — | 407 | 62,670 |
| License Revenue, Primarily From Hunting | 5,235 | 91 | — | — | 5,326 |
| Land-Based Solutions (a) | 2,755 | 30 | — | — | 2,785 |
| Other Non-Timber Revenue | 1,062 | 912 | — | — | 1,974 |
| Total Non-Timber Sales | 9,052 | 1,033 | — | — | 10,085 |
| Improved Development | — | — | 3,294 | — | 3,294 |
| Rural | — | — | 5,274 | — | 5,274 |
| Deferred Revenue/Other (b) | — | — | 1,290 | — | 1,290 |
| Total Real Estate Sales | — | — | 9,858 | — | 9,858 |
| Revenue from Contracts with Customers | 50,944 | 21,404 | 9,858 | 407 | 82,613 |
| Lease Revenue | — | — | 309 | — | 309 |
| Total Revenue | $50,944 | $21,404 | $10,167 | $407 | $82,922 |
| Three Months Ended | Southern Timber | Pacific Northwest Timber | Real Estate | Trading | Total |
| Pulpwood | $25,931 | $1,551 | — | — | $27,482 |
| Sawtimber | 33,740 | 22,677 | — | 2,970 | 59,387 |
| Hardwood | 1,195 | — | — | — | 1,195 |
| Total Timber Sales | 60,866 | 24,228 | — | 2,970 | 88,064 |
| License Revenue, Primarily from Hunting | 5,275 | 95 | — | — | 5,370 |
| Land-Based Solutions (a) | 1,710 | — | — | — | 1,710 |
| Other Non-Timber Revenue | 2,127 | 869 | — | — | 2,996 |
| Total Non-Timber Sales | 9,112 | 964 | — | — | 10,076 |
| Improved Development | — | — | 1,825 | — | 1,825 |
| Rural | — | — | 8,728 | — | 8,728 |
| Timberland & Non-Strategic | — | — | 610 | — | 610 |
| Deferred Revenue/Other (b) | — | — | 4,112 | — | 4,112 |
| Total Real Estate Sales | — | — | 15,275 | — | 15,275 |
| Revenue from Contracts with Customers | 69,978 | 25,192 | 15,275 | 2,970 | 113,415 |
| Lease Revenue | — | — | 289 | — | 289 |
| Total Revenue | $69,978 | $25,192 | $15,564 | $2,970 | $113,704 |
(a) Consists primarily of sales from carbon capture and storage (“CCS”) and solar energy contracts.
(b) Includes deferred revenue adjustments, builder price participation and marketing fees related to Improved Development sales.
The following tables present our timber sales disaggregated by contract type for the three months ended March 31, 2025 and 2024:
| Three Months Ended | Southern Timber | Pacific Northwest Timber | Trading | Total |
|---|---|---|---|---|
| Stumpage Pay-as-Cut | $17,982 | — | — | $17,982 |
| Stumpage Lump Sum | 426 | 1,150 | — | 1,576 |
| Total Stumpage | 18,408 | 1,150 | — | 19,558 |
| Delivered Wood (Domestic) | 23,484 | 19,178 | 297 | 42,959 |
| Delivered Wood (Export) | — | 43 | 110 | 153 |
| Total Delivered | 23,484 | 19,221 | 407 | 43,112 |
| Total Timber Sales | $41,892 | $20,371 | $407 | $62,670 |
| Stumpage Pay-as-Cut | $33,530 | $3 | — | $33,533 |
| Stumpage Lump Sum | — | 1,981 | — | 1,981 |
| Total Stumpage | 33,530 | 1,984 | — | 35,514 |
| Delivered Wood (Domestic) | 25,113 | 19,559 | 7 | 44,679 |
| Delivered Wood (Export) | 2,223 | 2,685 | 2,963 | 7,871 |
| Total Delivered | 27,336 | 22,244 | 2,970 | 52,550 |
| Total Timber Sales | $60,866 | $24,228 | $2,970 | $88,064 |
- 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 412,000 legal acres of New Zealand timberland. Accordingly, we consolidate the New Zealand subsidiary’s balance sheet and results of operations. Income attributable to the New Zealand subsidiary’s 23% noncontrolling interests is reflected as an adjustment to income in our Consolidated Statements of Income and Comprehensive Income (Loss) under the caption “Net income attributable to noncontrolling interests in consolidated affiliates.” Rayonier New Zealand Limited (“RNZ”), a wholly-owned subsidiary, serves as the manager of the New Zealand subsidiary.
As of March 31, 2025, the New Zealand subsidiary is classified as discontinued operations in our Consolidated Statements of Income and Comprehensive Income (Loss) for all periods presented. See Note 2 — Discontinued Operations for additional information.
NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP
Noncontrolling interests in the Operating Partnership relate to the third-party ownership of Redeemable Operating Partnership Units. Net income attributable to the noncontrolling interests in the Operating Partnership is computed by applying the weighted average Redeemable Operating Partnership Units outstanding during the period as a percentage of the weighted average total units outstanding to the Operating Partnership’s net income for the period. If a noncontrolling unitholder redeems a unit for a registered common share of Rayonier or cash, the noncontrolling interests in the Operating Partnership will be reduced and the Company’s share in the Operating Partnership will be increased by the fair value of each security at the time of redemption.
The following table sets forth the Company’s noncontrolling interests in the Operating Partnership:
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Beginning noncontrolling interests in the Operating Partnership | $51,843 | $81,651 |
| Adjustment of noncontrolling interests in the Operating Partnership | 4,341 | 291 |
| Issuance of Redeemable Operating Partnership Units (a) | 2,681 | — |
| Conversions of Redeemable Operating Partnership Units to common shares | (28) | (11,511) |
| Net (loss) income attributable to noncontrolling interests in the Operating Partnership | (46) | 20 |
| Other comprehensive loss attributable to noncontrolling interests in the Operating Partnership | (53) | (265) |
| Distributions to noncontrolling interests in the Operating Partnership | (568) | (597) |
| Total noncontrolling interests in the Operating Partnership | $58,170 | $69,589 |
(a)Reflects the issuance of Redeemable Operating Partnership Units related to the Company’s special distribution of $1.80 per Operating Partnership unit, paid on January 30, 2025, to holders of record as of December 12, 2024. This distribution comprised a combination of cash and Redeemable Operating Partnership Units.
6.(LOSS) EARNINGS PER SHARE AND PER UNIT
Basic (loss) earnings per common share (“EPS”) is calculated by dividing net income attributable to Rayonier Inc. by the weighted average number of common shares outstanding. Diluted EPS is calculated by dividing net income attributable to Rayonier Inc., before net income attributable to noncontrolling interests (“NCI”) 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, noncontrolling interests in Operating Partnership units and contingently issuable shares and units.
The following table provides details of the calculation of basic (loss) earnings per common share of the Company:
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Basic (loss) earnings per common share | ||
| Numerator: | ||
| Net loss from continuing operations | ($5,592) | ($4,510) |
| Less: Net loss from continuing operations attributable to NCI in the Operating Partnership | 74 | 65 |
| Less: Net loss from continuing operations attributable to NCI in consolidated affiliates | — | 10 |
| Net loss from continuing operations attributable to Rayonier Inc. | ($5,518) | ($4,435) |
| Net income from discontinued operations, net of tax | 2,507 | 6,816 |
| Less: Net income from discontinued operations attributable to NCI in the Operating Partnership | (28) | (85) |
| Less: Net income from discontinued operations attributable to NCI in consolidated affiliates | (385) | (939) |
| Net income from discontinued operations attributable to Rayonier Inc. | $2,094 | $5,792 |
| Net (loss) income | ($3,085) | $2,306 |
| Less: Net loss (income) attributable to NCI in the Operating Partnership | 46 | (20) |
| Less: Net income attributable to NCI in consolidated affiliates | (385) | (929) |
| Net (loss) income attributable to Rayonier Inc. | ($3,424) | $1,357 |
| Denominator: | ||
| Denominator for basic earnings per common share - weighted average shares | 153,677,854 | 148,567,375 |
| Basic (loss) earnings per common share attributable to Rayonier Inc.: | ||
| Continuing operations | ($0.04) | ($0.03) |
| Discontinued operations | $0.01 | $0.04 |
| Basic (loss) earnings per common share | ($0.02) | $0.01 |
The following table provides details of the calculation of diluted (loss) earnings per common share of the Company:
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Diluted (loss) earnings per common share | ||
| Numerator: | ||
| Net loss from continuing operations | ($5,592) | ($4,510) |
| Less: Net loss from continuing operations attributable to NCI in the Operating Partnership (a) | 74 | 65 |
| Less: Net loss from continuing operations attributable to NCI in consolidated affiliates | — | 10 |
| Net loss from continuing operations attributable to Rayonier Inc. used for determining diluted loss per common share | ($5,518) | ($4,435) |
| Net income from discontinued operations, net of tax | 2,507 | 6,816 |
| Less: Net income from discontinued operations attributable to NCI in the Operating Partnership (a) | (28) | (85) |
| Less: Net income from discontinued operations attributable to NCI in consolidated affiliates | (385) | (939) |
| Net income from discontinued operations attributable to Rayonier Inc. used for determining diluted earnings per common share | $2,094 | $5,792 |
| Net (loss) income | (3,085) | 2,306 |
| Less: Net loss (income) attributable to NCI in the Operating Partnership (a) | 46 | (20) |
| Less: Net income attributable to NCI in consolidated affiliates | (385) | (929) |
| Net (loss) income attributable to Rayonier Inc. used for determining diluted (loss) earnings per common share | ($3,424) | $1,357 |
| Denominator: | ||
| Denominator for diluted earnings per common share - weighted average shares (b) | 153,677,854 | 148,567,375 |
| Diluted (loss) earnings per common share attributable to Rayonier Inc.: | ||
| Continuing operations | ($0.04) | ($0.03) |
| Discontinued operations | $0.01 | $0.04 |
| Diluted (loss) earnings per common share | ($0.02) | $0.01 |
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Anti-dilutive shares excluded from the computations of diluted (loss) earnings per common share: | ||
| Stock options, performance shares, restricted shares, restricted stock units, noncontrolling interests in Operating Partnership units, and contingently issuable shares and units from special dividend (b) | 5,019,873 | 2,902,249 |
(a)For the quarters ended March 31, 2025 and 2024, net (loss) income attributable to NCI in the Operating Partnership was included in the numerator for diluted (loss) earnings attributable to Rayonier Inc. due to a loss from continuing operations.
(b)For the quarters ended March 31, 2025 and 2024, the effect of anti-dilutive securities related to stock options, performance shares, restricted shares, restricted stock units and contingently issuable shares and units from the special dividend were not included in the denominator of calculating diluted loss (earnings) per share due to a loss from continuing operations. Also, as a result of the net loss from continuing operations attributable to Rayonier Inc. during the three months ended March 31, 2025 and 2024, the incremental shares related to noncontrolling interests in Operating Partnership units were excluded from the denominator of diluted loss per share.
Basic (loss) earnings per unit (“EPU”) is calculated by dividing net income available to unitholders of Rayonier, L.P. by the weighted average number of units outstanding. Diluted EPU is calculated by dividing net income available to unitholders of Rayonier, L.P. by the weighted average number of units outstanding adjusted to include the potentially dilutive effect of outstanding unit equivalents, including stock options, performance shares, restricted shares, restricted stock units and contingently issuable shares and units.
The following table provides details of the calculations of basic (loss) earnings per unit of the Operating Partnership:
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Basic (loss) earnings per unit | ||
| Numerator: | ||
| Net loss from continuing operations | ($5,592) | ($4,510) |
| Less: Net loss from continuing operations attributable to NCI in consolidated affiliates | — | 10 |
| Net loss from continuing operations available to unitholders | ($5,592) | ($4,500) |
| Net income from discontinued operations, net of tax | $2,507 | $6,816 |
| Less: Net income from discontinued operations attributable to NCI in consolidated affiliates | (385) | (939) |
| Net income from discontinued operations available to unitholders | $2,122 | $5,877 |
| Net (loss) income | ($3,085) | $2,306 |
| Less: Net income attributable to NCI in consolidated affiliates | (385) | (929) |
| Net (loss) income available to unitholders | ($3,470) | $1,377 |
| Denominator: | ||
| Denominator for basic earnings per unit - weighted average units | 155,731,594 | 150,745,614 |
| Basic (loss) earnings per unit attributable to Rayonier, L.P.: | ||
| Continuing operations | ($0.04) | ($0.03) |
| Discontinued operations | $0.01 | $0.04 |
| Basic (loss) earnings per unit | ($0.02) | $0.01 |
The following table provides details of the calculations of diluted (loss) earnings per unit of the Operating Partnership:
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Diluted (loss) earnings per unit | ||
| Numerator: | ||
| Net loss from continuing operations | ($5,592) | ($4,510) |
| Less: Net loss from continuing operations attributable to NCI in consolidated affiliates | — | 10 |
| Net loss from continuing operations available to unitholders | ($5,592) | ($4,500) |
| Net income from discontinued operations, net of tax | $2,507 | $6,816 |
| Less: Net income from discontinued operations attributable to NCI in consolidated affiliates | (385) | (939) |
| Net income from discontinued operations available to unitholders | $2,122 | $5,877 |
| Net (loss) income | ($3,085) | $2,306 |
| Less: Net income attributable to NCI in consolidated affiliates | (385) | (929) |
| Net (loss) income available to unitholders | ($3,470) | $1,377 |
| Denominator: | ||
| Denominator for diluted earnings per unit - weighted average units (a) | 155,731,594 | 150,745,614 |
| Diluted (loss) earnings per unit attributable to Rayonier, L.P.: | ||
| Continuing operations | ($0.04) | ($0.03) |
| Discontinued operations | $0.01 | $0.04 |
| Diluted (loss) earnings per unit | ($0.02) | $0.01 |
| Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Anti-dilutive unit equivalents excluded from the computations of diluted (loss) earnings per unit: | ||
| Stock options, performance shares, restricted shares, restricted stock units, and contingently issuable shares and units from special dividend (a) | 2,966,133 | 724,010 |
(a)For the quarters ended March 31, 2025 and March 31, 2024, the effect of anti-dilutive securities related to stock options, performance shares, restricted shares, restricted stock units and contingently issuable shares and units from the special dividend were not included in the denominator of calculating diluted loss (earnings) per unit due to a loss from continuing operations.
- DEBT
Our debt consisted of the following at March 31, 2025:
| March 31, 2025 | |
|---|---|
| Debt | |
| Senior Notes due 2031 at a fixed interest rate of 2.75% | $450,000 |
| 2015 Term Loan borrowings due 2028 at a variable interest rate of 5.93% | 200,000 |
| 2016 Incremental Term Loan borrowings due 2026 at a variable interest rate of 6.08% | 200,000 |
| 2021 Incremental Term Loan borrowings due 2029 at a variable interest rate of 5.98% | 200,000 |
| Total principal debt | 1,050,000 |
| Less: Unamortized discounts | (2,343) |
| Less: Deferred financing costs | (3,022) |
| Total long-term debt | $1,044,635 |
The following table contains information on the outstanding variable rate debt as of March 31, 2025:
| Debt | Periodic Interest Rate (a) | Effective Fixed Interest Rate (b) |
|---|---|---|
| 2015 Term Loan | Daily Simple SOFR + 1.60% | 2.11% |
| 2016 Incremental Term Loan | Daily Simple SOFR + 1.75% | 2.40% |
| 2021 Incremental Term Loan | Daily Simple SOFR + 1.65% | 1.46% |
(a) Includes credit spread adjustment of 0.1%.
(b) Effective interest rate is after consideration of interest rate swaps and estimated patronage.
Principal payments due during the next five years and thereafter are as follows:
| Total | |
|---|---|
| 2025 | — |
| 2026 | $200,000 |
| 2027 | — |
| 2028 | 200,000 |
| 2029 | 200,000 |
| Thereafter | 450,000 |
| Total Debt | $1,050,000 |
2025 DEBT ACTIVITY
During the three months ended March 31, 2025, we madeno borrowings or repayments on our Revolving Credit Facility. At March 31, 2025, we had available borrowings of $293.0 million under the Revolving Credit Facility, net of $7.0 million to secure our outstanding letters of credit.
DEBT COVENANTS
In connection with our 2015 Term Loan Agreement, 2016 Incremental Term Loan Agreement, 2021 Incremental Term Loan Agreement and Revolving Credit Facility, customary covenants must be met, the most significant of which include interest coverage and leverage ratios.
The covenants listed below, which are the most significant financial covenants in effect as of March 31, 2025, are calculated on a trailing 12-month basis:
| Covenant Requirement | Actual Ratio | Favorable | |
|---|---|---|---|
| Covenant EBITDA to consolidated interest expense should not be less than | 2.5 to 1 | 7.2 to 1 | 4.7 |
| Covenant debt to covenant net worth plus covenant debt shall not exceed | 65% | 36% | 29% |
In addition to the financial covenants listed above, the Senior Notes due 2031, 2015 Term Loan Agreement, 2016 Incremental Term Loan Agreement, 2021 Incremental Term Loan Agreement, and Revolving Credit Facility include customary covenants that limit the incurrence of debt and the disposition of assets, among others. At March 31, 2025, we were in compliance with all applicable covenants.
- DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
Our financial results are subject to market risk from potential changes in interest rates. To manage this exposure, we utilize derivative financial instruments.
We account for derivative financial instruments under ASC Topic 815, Derivatives and Hedging, (“ASC 815”), and record them at fair value as assets or liabilities in the Consolidated Balance Sheets. The accounting for changes in their fair value depends on their intended use. Gains and losses on derivatives designated and qualifying as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) and reclassified into earnings when the hedged transaction occurs. Similarly, gains and losses on derivatives designated and qualifying as net investment hedges are recorded in AOCI but are reclassified into earnings only upon partial or complete liquidation of the investment. Changes in the fair value of derivatives not designated as hedges or those that are no longer effective as hedges are recognized immediately in earnings.
INTEREST RATE PRODUCTS
We are exposed to cash flow interest rate risk on our variable-rate debt. To hedge this exposure, we use variable-to-fixed interest rate swaps. For these swaps, we report the gains or losses from changes in their fair value in AOCI and reclassify them to interest expense in the period the hedged interest payments affect earnings.
If we de-designate or terminate a cash flow hedge while the hedged item still exists, the unrealized gain or loss on the cash flow hedge at the time of de-designation remains in AOCI. This amount is then amortized to interest expense on a straight-line basis over the remaining life of the hedged item. However, if the hedged item becomes ineffective, the related gain or loss is immediately reclassified from AOCI to earnings.
INTEREST RATE SWAPS
The following table contains information on the outstanding interest rate swaps as of March 31, 2025:
| Outstanding Interest Rate Swaps (a) | ||||||
|---|---|---|---|---|---|---|
| Date Entered Into | Term | Notional Amount | Related Debt Facility | Fixed Rate of Swap | Bank Margin on Debt (b) | Total Effective Interest Rate (c) |
| April 2016 | 10 years | $100,000 | 2016 Incremental Term Loan | 1.50% | 1.75% | 3.25% |
| April 2016 | 10 years | 100,000 | 2016 Incremental Term Loan | 1.51% | 1.75% | 3.26% |
| February 2022 | 7 years | 200,000 | 2021 Incremental Term Loan | 0.67% | 1.65% | 2.32% |
| August 2024 | 4 years | 100,000 | 2015 Term Loan | 0.78% | 1.60% | 2.38% |
| August 2024 | 4 years | 50,000 | 2015 Term Loan | 0.64% | 1.60% | 2.24% |
| August 2024 | 4 years | 50,000 | 2015 Term Loan | 3.29% | 1.60% | 4.89% |
(a)All interest rate swaps are designated as cash flow hedges and qualify for hedge accounting.
(b)Includes the SOFR Credit Spread Adjustment component of 0.1%.
(c)Rate is before estimated patronage payments.
The following table demonstrates the impact, gross of tax, of our derivatives on the Consolidated Statements of Income and Comprehensive Income (Loss) for the three months ended March 31, 2025 and 2024:
| Three Months Ended March 31, | |||
|---|---|---|---|
| Income Statement Location | 2025 | 2024 | |
| Derivatives designated as cash flow hedges: | |||
| Interest rate products | Other comprehensive (loss) income, relating to continuing operations | ($4,247) | $15,041 |
| Interest expense, net | (4,511) | (7,278) | |
During the next 12 months, the amount of the AOCI balance, net of tax, expected to be reclassified into earnings is a gain of approximately $15.3 million. The following table provides details of these expected reclassifications:
| Amount expected to be reclassified into earnings in next 12 months | |
|---|---|
| Derivatives designated as cash flow hedges: | |
| Interest rate products (a) | $15,320 |
| Total estimated net gain on derivatives contracts | $15,320 |
(a) These reclassified amounts are expected to perfectly offset variable interest rate payments to debt holders, resulting in no net impact on our earnings or cash flows.
The following table contains the notional amounts of the derivative financial instruments recorded in the Consolidated Balance Sheets:
| Notional Amount | ||
|---|---|---|
| March 31, 2025 | December 31, 2024 | |
| Derivatives designated as cash flow hedges: | ||
| Interest rate swaps | $600,000 | $600,000 |
The following table contains the fair values of the derivative financial instruments recorded in the Consolidated Balance Sheets at March 31, 2025 and December 31, 2024:
| Location on Balance Sheet · Fair Value Assets / (Liabilities) (a) | |||
|---|---|---|---|
| March 31, 2025 · December 31, 2024 | |||
| Derivatives designated as cash flow hedges: | |||
| Interest rate swaps | Other assets | $40,367 | $49,353 |
(a) See Note 9 — Fair Value Measurements for further information on the fair value of our derivatives including their classification within the fair value hierarchy.
OFFSETTING DERIVATIVES
We present derivative financial instruments at their gross fair values in the Consolidated Balance Sheets. These instruments are not subject to master netting arrangements that would permit the right of offset.
- FAIR VALUE MEASUREMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
A three-level hierarchy that prioritizes the inputs used to measure fair value was established in the Accounting Standards Codification as follows:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following table presents the carrying amount and estimated fair values of our financial instruments as of March 31, 2025 and December 31, 2024, using market information valuation methodologies we believe are appropriate under GAAP:
| March 31, 2025 · December 31, 2024 | ||||||
|---|---|---|---|---|---|---|
| Asset (Liability) (a) · CarryingAmount · Fair Value · CarryingAmount · Fair Value | ||||||
| Level 1 · Level 2 · Level 1 · Level 2 | ||||||
| Cash and cash equivalents | $216,242 | $216,242 | — | $303,065 | $303,065 | — |
| Restricted cash, current (b) | — | — | — | 19,366 | 19,366 | — |
| Restricted cash, non-current (b) | 677 | 677 | — | 676 | 676 | — |
| Long-term debt (c) | (1,044,635) | — | (992,895) | (1,044,410) | — | (980,970) |
| Interest rate swaps (d) | 40,367 | — | 40,367 | 49,353 | — | 49,353 |
| Noncontrolling interests in the Operating Partnership (e) | 58,170 | — | 58,170 | 51,843 | — | 51,843 |
(a)We did not have Level 3 assets or liabilities at March 31, 2025 or December 31, 2024.
(b)Restricted cash includes proceeds from like-kind exchange sales held by a third-party intermediary and cash held in escrow. See Note 18 — Restricted Cash for additional information.
(c)The carrying amount of long-term debt is presented net of deferred financing costs and unamortized discounts on non-revolving debt. See Note 7 — Debt for additional information.
(d)See Note 8 — Derivative Financial Instruments and Hedging Activities for information regarding the Consolidated Balance Sheets classification of our derivative financial instruments.
(e)Noncontrolling interests in the Operating Partnership, representing ownership of Rayonier, L.P. units by parties other than the Company, are classified as temporary equity and are neither assets nor liabilities on the Company’s Consolidated Balance Sheets. See Note 5 — Noncontrolling Interests for additional information.
We use the following methods and assumptions in estimating the fair value of our financial instruments:
Cash and cash equivalents and Restricted cash — The carrying amount is equal to fair market value.
Debt — The fair value of fixed-rate debt is determined using quoted market prices for debt with comparable terms and maturities. For variable-rate debt, the carrying value approximates fair value as the interest rate adjusts with market changes.
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.
Noncontrolling interests in the Operating Partnership — The fair value of noncontrolling interests in the Operating Partnership is determined by using the period-end closing price of Rayonier Inc. common shares.
- 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.
- ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIES
Federal and state environmental laws in our operating areas hold current and former property owners liable for cleanup or restoration. These laws often impose “strict liability,” meaning owners or operators didn’t necessarily cause, or even been aware of, the release of contaminated materials. Similarly, certain environmental laws allow state, federal, and tribal trustees (collectively, the “Trustees”) to bring suit against property owners for natural resource damages (“NRD”) resulting from releases of contaminants on or from their property, regardless of culpability for the release. Like cleanup liability, NRD liability can attach to property due to such contamination.
Changes inenvironmental and NRD liabilities from December 31, 2024 to March 31, 2025 are shown below:
| Port Gamble, WA | |
|---|---|
| Non-current portion at December 31, 2024 | $3,610 |
| Plus: Current portion | 4,283 |
| Total Balance at December 31, 2024 | 7,893 |
| Expenditures charged to liabilities | (2,964) |
| Increase to liabilities (a) | 1,668 |
| Total Balance at March 31, 2025 | 6,597 |
| Less: Current portion | (1,765) |
| Non-current portion at March 31, 2025 | $4,832 |
(a)The increase in liabilities resulted from revised environmental and NRD cost estimates recognized during the three months ended March 31, 2025.
We anticipate the upland mill site cleanup and NRD restoration will occur over the nextone totwo years, while the monitoring of Port Gamble Bay, mill site, and landfills will continue for an additional 15 to 20 years. NRD costs are subject to change as the restoration projects progress. It is reasonably possible that these components of the liability may increase as construction continues. Management continues to monitor the Port Gamble cleanup process and will make adjustments as needed. Should any future circumstances result in a change to the estimated cost of the project, we will record an appropriate adjustment to the liability in the period it becomes known and when we can reasonably estimate the amount.
We do not currently anticipate any material loss in excess of the amounts accrued; however, we are not able to estimate a possible loss or range of loss, if any, in excess of the established liabilities. Our future remediation expenses may be affected by a number of uncertainties including, but not limited to, the difficulty in estimating the extent and method of remediation, the evolving nature of environmental regulations, and the availability and application of technology. We do not expect the resolution of such uncertainties to have a material adverse effect on our consolidated financial position or liquidity.
- GUARANTEES
We provide financial guarantees as required by creditors, insurance programs, and various governmental agencies.
As of March 31, 2025, the following financial guarantees were outstanding:
| Financial Commitments (a) | Maximum PotentialPayment |
|---|---|
| Standby letters of credit (b) | $6,996 |
| Surety bonds (c) | 45,412 |
| Total financial commitments | $52,408 |
(a)We have not recorded any liabilities for these financial commitments in our Consolidated Balance Sheets. The guarantees are not subject to measurement as the guarantees are dependent on our own performance.
(b)Approximately $6.3 million of the standby letters of credit provide credit support for real estate construction in our Wildlight development project. The remaining letters of credit support various insurance related agreements. These letters of credit will expire at various dates in 2025 and will be renewed as required.
(c)Surety bonds primarily secure performance obligations for various operational activities and provide collateral for our Wildlight (Nassau County, Florida) and Heartwood (Richmond Hill, Georgia) development projects. These surety bonds expire on various dates through 2027 and are expected to be renewed as required.
- HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS
We routinely assess potential alternative uses of our timberlands, as some properties may become more valuable for development, residential, recreation or other purposes. We periodically transfer, via a sale or contribution from the real estate investment trust (“REIT”) entities to taxable REIT subsidiaries (“TRS”), higher and better use (“HBU”) timberlands to enable land-use entitlement, development or marketing activities. We also acquire HBU properties in connection with timberland acquisitions. These properties are managed as timberlands until sold or developed. While the majority of HBU sales involve rural and recreational land, we also selectively pursue various land-use entitlements on certain properties for residential, commercial and industrial development in order to enhance the long-term value of such properties. For selected development properties, we also invest in targeted infrastructure improvements, such as roadways and utilities, to accelerate the marketability and improve the value of such properties.
Changes in higher and better use timberlands and real estate development investments from December 31, 2024 to March 31, 2025 are shown below:
| Higher and Better Use Timberlands and Real Estate Development Investments | |||
|---|---|---|---|
| Land and Timber | Development Investments | Total | |
| Non-current portion at December 31, 2024 | $86,832 | $22,778 | $109,610 |
| Plus: Current portion (a) | 1,402 | 28,206 | 29,608 |
| Total Balance at December 31, 2024 | 88,234 | 50,984 | 139,218 |
| Non-cash cost of land and improved development | (182) | (1,799) | (1,981) |
| Amortization of parcel real estate development investments | — | (180) | (180) |
| Timber depletion from harvesting activities and basis of timber sold in real estate sales | (359) | — | (359) |
| Capitalized real estate development investments (b) | — | 4,970 | 4,970 |
| Capital expenditures (silviculture) | 42 | — | 42 |
| Intersegment transfers | 3,287 | — | 3,287 |
| Total Balance at March 31, 2025 | 91,022 | 53,975 | 144,997 |
| Less: Current portion (a) | (1,950) | (30,179) | (32,129) |
| Non-current portion at March 31, 2025 | $89,072 | $23,796 | $112,868 |
(a)The current portion of Higher and Better Use Timberlands and Real Estate Development Investments is recorded in Inventory. See Note 14 — Inventory for additional information.
(b)Capitalized real estate development investments include $0.2 million of capitalized interest and $0.9 million of parcel real estate development investments. Parcel real estate development investments represent investments made for specific lots and/or commercial parcels that are currently under contract or expected to be ready for market within one year.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.