RAYONIER INC

14. INVENTORY

As of June 30, 2025 and December 31, 2024, our inventory consisted entirely of finished goods, as follows:

(a)Represents the cost of HBU real estate expected to be sold, including capitalized development investments. See Note 13 — Higher And Better Use Timberlands and Real Estate Development Investments for additional information.

15. OTHER OPERATING EXPENSE, NET

Other operating expense, net consisted of the following:

(a)Restructuring charges include severance costs related to workforce optimization initiatives.

(b)Costs related to disposition initiatives include legal, advisory, and other due diligence costs incurred in connection with our asset disposition plan, which was announced in November 2023.

16. INCOME TAXES

Rayonier is a REIT under the Internal Revenue Code and therefore generally does not pay U.S. federal or state income tax. As of June 30, 2025, Rayonier owns a 98.7% 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 unit holders (including the Company) on a Schedule K-1 for inclusion in each unitholder’s income tax return.

Certain operations, including log trading and certain real estate activities, such as the entitlement, development and sale of HBU properties, are conducted through our TRS. The TRS subsidiaries are subject to United States federal and state corporate income tax.

PROVISION FOR INCOME TAXES

The Company’s tax expense for continuing operations is principally related to state income tax. The following table contains the income tax (expense) benefit recognized on the Consolidated Statements of Income and Comprehensive Income (Loss):

(a)The six months ended June 30, 2024 included a $1.2 million income tax benefit related to the pension settlement.

ANNUAL EFFECTIVE TAX RATE

The Company’s effective tax rate after discrete items is below the 21.0% U.S. statutory rate due to tax benefits associated with being a REIT. The following table contains the Company’s annualized effective tax rate after discrete items for its continuing operations:

(a)The effective tax rate for the six months ended June 30, 2024 was positive despite a pre-tax book loss, primarily due to a $1.2 million income tax benefit related to the pension settlement. This tax benefit, when applied to a pre-tax book loss, results in a positive effective tax rate.

17. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes in AOCI by component for the six months ended June 30, 2025 and the year ended December 31, 2024. All amounts are presented net of tax and exclude portions attributable to noncontrolling interests.

(a)The six months ended June 30, 2025 includes $5.7 million of other comprehensive loss related to interest rate products. The year ended December 31, 2024 included $21.8 million of other comprehensive income related to interest rate products. See Note 8 — 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 and post-retirement costs. The year ended December 31, 2024 includes a pension settlement charge of $4.6 million, net of tax of $1.2 million.

(c)The six months ended June 30, 2025 includes $29.1 million of other comprehensive loss related to the deconsolidation of discontinued operations that was reclassified from AOCI to gain on sale of discontinued operations in the Consolidated Statements of Income and Comprehensive Income (Loss).

The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the six months ended June 30, 2025 and June 30, 2024:

18. RESTRICTED CASH

Restricted cash includes cash deposited with a like-kind exchange (“LKE”) intermediary. In order to qualify for LKE treatment, the proceeds from real estate sales must be deposited with a third-party intermediary. These proceeds are accounted for as restricted cash until a suitable replacement property is acquired. In the event LKE purchases are not completed, the proceeds are returned to the Company after 180 days and reclassified as available cash. Additionally, restricted cash includes cash balances held in escrow as collateral for certain contractual obligations related to our Heartwood development project as well as cash held in escrow for real estate sales.

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Consolidated Balance Sheets that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows:

19. ASSETS HELD FOR SALE (EXCLUDING DISCONTINUED OPERATIONS)

Assets held for sale (excluding discontinued operations) comprise properties not included in inventory that are expected to be sold within 12 months and meet the held-for-sale criteria of ASC 360-10-45-9. The basis of these properties was $4.7 million and $5.4 million, as of June 30, 2025, and December 31, 2024, respectively. We recognized animmaterial impairment charge on these assets during the six months ended June 30, 2025, which is recorded in the Consolidated Statements of Income and Comprehensive Income (Loss) under the caption “Other operating expense, net.”