RAYONIER INC

3. DISCONTINUED OPERATIONS

On June 30, 2025, we completed the sale of our entire 77% interest in our New Zealand operations to Taurus Forest Holdings Limited for a purchase price of $710 million, resulting in net proceeds of $699.3 million and a gain on disposal of $404.5 million. The results of the New Zealand Timber segment and the New Zealand portion of the Real Estate, former Trading and Corporate segments are classified as discontinued operations in the Consolidated Statements of Income and Comprehensive Income (Loss) for all periods presented. There was no activity related to the discontinued operations during the three months ended March 31, 2026. Following the closing, we have no significant continuing involvement with the divested operations. See Note 2 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information.

The following table summarizes the results of our New Zealand operations for the three months ended March 31, 2026 and 2025, as presented in “Income from operations of discontinued operations, net of tax” in the Consolidated Statements of Income and Comprehensive Income (Loss):

(a)The three months ended March 31, 2025 includes transaction costs of $0.2 million.

The following table summarizes the depreciation, depletion and amortization and capital expenditures of our New Zealand operations for the three months ended March 31, 2026 and 2025:

4. SEGMENT AND GEOGRAPHICAL INFORMATION

As of March 31, 2026, Rayonier operated infour reportable segments: Southern Timber, Northwest Timber, Wood Products and Real Estate.

On January 30, 2026, we completed the merger with PotlatchDeltic Corporation, which added the Wood Products segment and expanded the geographic scope of our Pacific Northwest Timber segment, renamed Northwest Timber to reflect the addition of Idaho timberland assets. The Wood Products segment manufactures and sells lumber, plywood, and residual products at seven mills located in Arkansas, Idaho, Michigan and Minnesota. The segment’s products are largely commodity products, which are sold through our sales team to end users, retailers or wholesalers for nationwide distribution primarily for use in homebuilding, repair and remodeling, industrial products and other construction activity. Our Southern Timber and Northwest Timber segments supply a portion of the Wood Products segment’s wood fiber needs, which typically represents a sizable portion of the Southern Timber and Northwest Timber segments’ total revenues. Intersegment sales are based on estimated fair market value and are eliminated in consolidation.

The operations of our former New Zealand Timber segment are classified as discontinued operations in the prior-year comparative periods. See Note 3 — Discontinued Operationsfor additional information.

The 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 disclosed as they are not used by the CODM for resource allocation or performance assessment.

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, costs related to the merger with PotlatchDeltic, an inventory purchase price adjustment in cost of sales, income from operations of discontinued operations, restructuring charges, and Large Dispositions.

We believe that Operating (loss) income, as defined by U.S. GAAP, is the most appropriate earnings measurement for reconciling Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to Operating loss as determined in accordance with U.S. GAAP. Operating (loss) income as presented in the Consolidated Statements of Income and Comprehensive Income (Loss) includes the results of both reportable segments and corporate activities. Segment Operating income (loss) represents the operating results of the company’s reportable segments only and does not include corporate-level amounts. As a result, segment Operating income (loss) may differ from the total Operating income (loss) reported in the consolidated financial statements.

The following tables summarize the segment information for the three months ended March 31, 2026 and 2025:

(a)Intersegment revenue reflects logs sold from the Timber segments to Wood Products.

(b)Other costs and expenses for each reportable segment primarily includes other direct and indirect cost of sales and selling and general expenses.

(c)Inventory purchase price adjustment in cost of sales reflects a non-cash, one-time charge reflecting the excess of fair value over PotlatchDeltic’s historical cost on acquired finished goods inventory sold post-closing. The inventory purchase price adjustment is recorded within the Consolidated Statements of Income and Comprehensive Income (Loss) under the caption “Cost of sales.”

(d)All other EBITDA includes corporate and other expenses.

(e)Intersegment eliminations reflects the elimination of profit on log sales from the Timber segments to Wood Products that remain in inventory at the end of the period.

(f)Costs related to the merger with PotlatchDeltic include professional services fees, employee-related costs, accelerated stock-based compensation, and other integration-related costs incurred in connection with the merger, which closed on January 30, 2026. Costs related to the merger with PotlatchDeltic are recorded within the Consolidated Statements of Income and Comprehensive Income (Loss) under the caption “Other operating expense, net.”

(g)Includes a $40.3 million tax benefit from our valuation allowance release. See Note 22 — Income Taxes for additional information.

(a)Other costs and expenses for each reportable segment primarily includes other direct and indirect cost of sales and selling and general expenses.

(b)All other EBITDA includes general corporate expenses.

(c)Non-operating expense includes $1.7 million of net costs associated with legal settlements. Net costs associated with legal settlements are recorded within the Consolidated Statements of Income (Loss) under the caption “Other miscellaneous income (expense), net.”

(d)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, net.”

(a)Excludes real estate development investments of $4.5 million and $4.1 million in the three months ended March 31, 2026 and 2025, respectively.

5. 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 we expect to receive in exchange for those goods or services (“transaction price”).

Unsatisfied performance obligations as of March 31, 2026 primarily consist of advances on stumpage contracts, unearned license revenue, unearned carbon capture and storage revenue, hunting and other access rights on our timberlands, payments received for shipments where control of goods have not transferred, member related activities at an owned country club and certain post-close obligations for real estate sales. Of these performance obligations, $26.3 million is expected to be recognized within the next twelve months, with the remaining $14.2 million expected to be recognized thereafter as we satisfy our performance obligations. We generally collect payment within one year of satisfying a performance obligation; therefore, we have elected the practical expedient not to adjust revenue 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 and are recognized as revenue as, or when, we perform under a contract.

The following table summarizes revenue recognized during the three months ended March 31, 2026 and 2025 that was included in the contract liability balance at the beginning of each year:

(a) Revenue recognized during the three months ended March 31, 2026, from contract liabilities at the beginning of the year excludes amounts related to PotlatchDeltic Corporation, as the merger was completed on January 30, 2026, and PotlatchDeltic’s contract liabilities were not included in our contract liability balance as of December 31, 2025.

The following tables present our revenue from contracts with customers disaggregated by product type for the three months ended March 31, 2026 and 2025:

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

(b) Includes deferred revenue adjustments, builder price participation and other fees related to Improved Development sales, as well as revenue from our country club operations.

(c) Intersegment revenues represent logs sold from the Timber segments to Wood Products.

The following table presents our timber sales disaggregated by contract type for the three months ended March 31, 2026 and 2025:

6. NONCONTROLLING INTERESTS

NONCONTROLLING INTERESTS IN CONSOLIDATED AFFILIATES

Matariki Forestry Group

Prior to the sale of our New Zealand operations on June 30, 2025, we maintained a 77% controlling financial interest in Matariki Forestry Group (the “New Zealand subsidiary”), a joint venture that owns and leases New Zealand timberland. Accordingly, we consolidated 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.”

Due to the sale of the New Zealand subsidiary, we deconsolidated its balance sheet as of June 30, 2025, and its results of operations through the sale date have been classified as discontinued operations in our Consolidated Statements of Income and Comprehensive Income (Loss). See Note 3 — Discontinued Operations for additional information.

NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP

Noncontrolling interests in the Operating Partnership represent the third-party ownership of Redeemable Operating Partnership Units (“OP Units”). Net loss attributable to these noncontrolling interests is calculated based on the weighted average OP Units outstanding during the period as a percentage of the total weighted average units outstanding to the Operating Partnership’s net loss for the period.

These OP Units are classified as temporary equity in the Consolidated Balance Sheets because they are redeemable at the option of the unitholder. 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:

7.(LOSS) EARNINGS PER SHARE AND PER UNIT

Basic (loss) earnings per common share (“EPS”) is calculated by dividing net income (loss) 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 performance 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:

The following table provides details of the calculation of diluted (loss) earnings per common share of the Company:

(a)For the quarters ended March 31, 2026 and 2025, net loss 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, 2026 and 2025, the effect of anti-dilutive securities related to performance 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, 2026 and 2025, the incremental shares related to noncontrolling interests in Operating Partnership units were excluded from the denominator of diluted (loss) earnings per share.

Basic (loss) earnings per unit (“EPU”) is calculated by dividing net income (loss) 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 performance shares, restricted stock units and contingently issuable shares and units.

The following table provides details of the calculation of basic (loss) earnings per unit of the Operating Partnership:

The following table provides details of the calculation of diluted (loss) earnings per unit of the Operating Partnership:

(a)For the quarters ended March 31, 2026 and 2025, the effect of anti-dilutive securities related to performance 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.

8. DEBT

Our debt consisted of the following at March 31, 2026:

Principal payments due during the next five years and thereafter are as follows:

2026 DEBT ACTIVITY

During the three months ended March 31, 2026, we madeno borrowings on our Revolving Credit Facility. At March 31, 2026, we had available capacity of $198.8 million under the Revolving Credit Facility, net of $1.2 million reserved to securing outstanding letters of credit.

Repayment of 2016 Incremental Term Loan

On April 28, 2026, the $200.0 million 2016 Incremental Term Loan matured and was repaid in full with cash on hand.

LONG-TERM DEBT ASSUMED IN THE POTLATCHDELTIC CORPORATION MERGER

On January 30, 2026, in connection with the merger, we entered into the Second Amended and Restated Credit Agreement, assuming fifteen variable-rate term loans of PotlatchDeltic Corporation (Term Loans I through X, excluding Term Loan J) with $1,037.0 million in aggregate principal at closing. These loans bear interest at Adjusted 1-Month Term SOFR, 1-Month Term SOFR, or Daily Simple SOFR plus margins of 1.59% to 2.30% and mature between 2027 and 2035. Also at closing, Term Loan I (principal of $27.5 million, due February 1, 2026) was repaid in full with cash on hand, and PotlatchDeltic's $300.0 million undrawn revolving credit facility was terminated.

Effective fixed rates below reflect the contractual rate, interest rate swaps, and estimated patronage payments on variable-rate debt outstanding as of March 31, 2026:

(a)Effective interest rate is after consideration of interest rate swaps and estimated patronage.

(b)The applicable margin is subject to periodic adjustment based on the lender’s actual cost of funds for each funding period.

PATRONAGE REFUNDS AND INTEREST RATE SWAPS

Our term credit facilities, including the term loans assumed in the PotlatchDeltic merger, are held by Farm Credit System lenders and provide for annual patronage refunds, which are profit distributions made by the lending cooperative to its member-borrowers. We account for patronage refunds as a reduction to interest expense in the period the amounts are earned and become reasonably estimable.

We have also entered into interest rate swap agreements that fix the variable-rate exposure on the entirety of our outstanding term debt, including all term debt assumed in the PotlatchDeltic merger. See Note 9 — Derivative Financial Instruments and Hedging Activities for additional information.

DEBT COVENANTS

In connection with our Second Amended and Restated Credit Agreement, we are subject to certain restrictive covenants. The most significant financial covenants, which are calculated on a trailing 12-month basis as of March 31, 2026, are summarized below:

In addition to the financial covenants listed above, our senior notes and credit facilities include customary covenants that limit the incurrence of debt and the disposition of assets, among others. At March 31, 2026, we were in compliance with all applicable covenants under our debt agreements.

9. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

RISK MANAGEMENT OBJECTIVE AND STRATEGY

We are exposed to market risk from changes in benchmark interest rates on our variable-rate term loans. To manage this exposure, we use variable-to-fixed interest rate swaps designated as cash flow hedges to convert floating-rate interest payments into fixed rate payments and reduce the variability of cash flows attributable to interest rate movements. We do not use derivative financial instruments for speculative or trading purposes. As of March 31, 2026, all outstanding derivatives are interest rate swaps designated as cash flow hedges.

POTLATCHDELTIC MERGER — ACQUIRED HEDGING INSTRUMENTS

In connection with the January 30, 2026 merger with PotlatchDeltic, we acquired 18 pay-fixed / receive-floating interest rate swaps with an aggregate notional amount of $1,037.0 million (the “PotlatchDeltic Merger Swaps”). One swap with a notional amount of $27.5 million matured on February 1, 2026, leaving 17 swaps with an aggregate notional amount of $1,009.5 million outstanding as of March 31, 2026. The acquired swaps were recorded at fair value on the acquisition date and concurrently re-designated as cash flow hedges of forecasted variable-rate interest payments on the assumed loans under our Second Amended and Restated Credit Agreement. The acquisition-date fair value is being amortized to interest expense over the remaining swap terms, such that hedge accounting reflects only changes in fair value subsequent to re-designation in accumulated other comprehensive income (“AOCI”). All re-designated hedging relationships were determined to be highly effective as of January 30, 2026 and as of March 31, 2026.

ACCOUNTING FOR DERIVATIVES

We record derivatives as assets or liabilities in the Consolidated Balance Sheets in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”). Gains and losses on derivatives designated and qualifying as cash flow hedges are recorded in AOCI and reclassified into earnings when the hedged transaction affects earnings. For derivatives not designated as hedges, changes in fair value are recognized immediately in earnings. Upon de-designation, the AOCI balance is reclassified into earnings over the original term of the forecasted transaction if the transaction remains probable, or immediately if probability is no longer met. As of March 31, 2026, all outstanding derivative instruments qualify for hedge accounting.

INTEREST RATE SWAPS

The hedged forecasted transactions are the monthly variable-rate interest payments on the Company’s combined post-merger loan portfolio, assessed on an aggregate basis for purposes of the ASC 815-20 notional adequacy (over-hedging) assessment. As of March 31, 2026, we are hedging exposure to variability in future cash flows on forecasted interest payments over a maximum period of approximately nine years.

The following table contains information on the outstanding interest rate swaps as of March 31, 2026:

(a)All interest rate swaps are designated as cash flow hedges and qualify for hedge accounting.

(b)Rate is before estimated patronage payments.

IMPACT ON THE CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

The following table presents the pre-tax impact of our derivatives on the Consolidated Statements of Income and Comprehensive Income (Loss) for the three months ended March 31, 2026 and 2025:

AMOUNT EXPECTED TO BE RECLASSIFIED FROM AOCI INTO EARNINGS IN THE NEXT 12 MONTHS

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 $12.7 million. These reclassified amounts are expected to offset variable interest rate payments to debt holders, resulting in no net impact on our earnings or cash flows.

NOTIONAL AMOUNTS

The following table contains the notional amounts of the derivative financial instruments recorded in the Consolidated Balance Sheets at March 31, 2026 and December 31, 2025:

(a)The period-over-period increase in notional outstanding of $1,009,500 is attributable to the 17 PotlatchDeltic Merger Swaps re-designated as cash flow hedges on January 30, 2026.

FAIR VALUES

The following table contains the fair values of the derivative financial instruments recorded in the Consolidated Balance Sheets at March 31, 2026 and December 31, 2025. The Company classifies the fair value of its derivative instruments as current or non-current based on the contractual settlement timing of each individual derivative:

(a) See Note 10 — 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. Our derivatives are not subject to master netting arrangements that permit a right of offset, and no collateral has been received from, or pledged to, counterparties under any of the outstanding interest rate swap agreements.

CREDIT RISK CONTINGENT FEATURES

Our interest rate swap agreements are executed under ISDA Master Agreements that contain customary credit-risk-related provisions that permit the counterparty to terminate the swap and require settlement at the net liability position upon a default on our underlying senior indebtedness. As of March 31, 2026, no derivative instruments containing such features were in a net liability position.

COUNTERPARTY CREDIT RISK

Counterparties to the Company's interest rate swap agreements are investment-grade commercial banks and Farm Credit System institutions, and the Company monitors counterparty credit quality on an ongoing basis. The Company does not consider its exposures to any individual counterparty to represent a significant concentration of credit risk.

10. 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, 2026 and December 31, 2025, using market information valuation methodologies we believe are appropriate under GAAP:

(a)We did not have Level 3 assets or liabilities at March 31, 2026 or December 31, 2025.

(b)Restricted cash includes cash held in escrow. See Note 24 — 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 8 — Debt for additional information.

(d)See Note 9 — 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 6 — 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.

11. COMMITMENTS

At March 31, 2026, future minimum payments under non-cancellable commitments were as follows. Amounts include the obligations assumed in connection with the PotlatchDeltic merger. Lease and long-term debt obligations are excluded below and presented in Note 17 — Leases and Note 8 — Debt, respectively.

(a)Primarily represents our estimate of potential liability associated with environmental contamination and Natural Resource Damages (NRD) in Port Gamble, Washington. See Note 13 — Environmental and Natural Resource Damage Liabilities for additional information.

(b)Primarily consists of payments expected to be made on our real estate development projects.

(c)Consists of payments expected to be made under timber cutting contracts to supply logs to the Company’s Wood Product’s manufacturing facilities.

(d)Includes other purchase obligations.

12. CONTINGENCIES

We have been named as a defendant in various lawsuits and claims arising in the normal course of business. While we maintain 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. Except as discussed in Note 13 — Environmental and Natural Resource Damage Liabilities, 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, liquidity, or cash flows.

13. ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIES

We are subject to federal and state environmental laws that impose liability on current and former property owners for cleanup, restoration, and natural resource damages (“NRD”) generally on a strict-liability basis. For a description of the legal framework governing these obligations, see Note 13 — Environmental and Natural Resource Damage Liabilities in our 2025 Form 10-K.

Changes in environmental and NRD liabilities from December 31, 2025 to March 31, 2026 are shown below:

(a)The decrease in liabilities resulted from revised environmental and NRD cost estimates recognized during the three months ended March 31, 2026.

Port Gamble, Washington

Upland mill site cleanup is complete, and NRD restoration is expected to conclude within the next year. The remaining liability primarily reflects estimated costs of completing the NRD restoration and long-term monitoring of the bay, mill site, and landfills, which is expected to continue for an additional 15 to 20 years. It is reasonably possible the recorded liability may increase as restoration progresses due to changes in scope, field conditions, or regulatory requirements. Monitoring obligations may also extend in duration or scope over the multi-decade monitoring period. We do not expect any loss in excess of amounts accrued to be material to our consolidated financial position or liquidity. See Note 11 — Commitments.

14. GUARANTEES

We provide financial guarantees as required by creditors, insurance programs, and various governmental agencies.

As of March 31, 2026, the following financial guarantees were outstanding:

(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)The letters of credit primarily support various insurance-related agreements. These letters of credit will expire at various dates in 2026 and 2027 and will be renewed as required.

(c)Surety bonds primarily secure performance obligations for various operational activities, including obligations assumed in connection with the PotlatchDeltic merger, and provide collateral for our Wildlight (Nassau County, Florida) and Heartwood (Richmond Hill, Georgia) development projects, as well as environmental remediation activities at Port Gamble (Kitsap County, Washington). These bonds provide financial assurance to regulatory agencies and municipalities that we will complete specified infrastructure and restoration work. Our surety bonds expire at various dates through 2028 and are expected to be renewed as required to meet ongoing obligations.

15. 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.

In the merger with PotlatchDeltic, we assumed HBU properties with an estimated fair value of $59.6 million, including assets in Chenal Valley (Little Rock, Arkansas) and other development properties.

Changes in higher and better use timberlands and real estate development investments from December 31, 2025 to March 31, 2026 are shown below:

(a)The current portion of Higher and Better Use Timberlands and Real Estate Development Investments is recorded in Inventory. See Note 16 — Inventory for additional information.

(b)Capitalized real estate development investments include $0.4 million of capitalized interest and $5.2 million of parcel real estate development investments. Parcel real estate development investments represent investments made for specific lots and/or commercial parcels that are under contract or expected to be ready for market within one year.

(c)Based on preliminary estimates of fair value as of January 30, 2026. See Note 2 — Merger with PotlatchDeltic Corporation for additional information.