RAYONIER INC

20. OTHER OPERATING EXPENSE, NET

The following table provides the composition of other operating expense, net for the three and six months ended June 30, 2026 and 2025:

(a)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. See Note 2 — Merger with PotlatchDeltic Corporation and Note 21 — Integration and Merger-Related Costs for additional information.

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

21. INTEGRATION AND MERGER-RELATED COSTS

On January 30, 2026, we completed our merger with PotlatchDeltic Corporation and concurrently began formulating and implementing integration plans. During the three and six months ended June 30, 2026, we incurred integration and merger-related costs consisting of (i) employee-related costs, including those for employees whose employment terminated or is expected to terminate, (ii) accelerated stock-based compensation (see Note 19), and (iii) non-recurring professional service fees directly attributable to the merger. We expect the majority of these costs to be incurred within the next twelve months. These costs are recorded within Other operating expense, net, and are not allocated to our reportable segments (see Note 20).

The following table summarizes integration and merger-related costs incurred during the three and six months ended June 30, 2026:

Changes in accrued employee-related costs associated with the merger during the six months ended June 30, 2026 are summarized in the table below. Charges represent termination benefits recognized upon communication of termination, along with other compensation costs recognized ratably over the required service period. Accelerated stock-based compensation of $12.9 million is excluded as it is a non-cash charge with no corresponding accrued liability (see Note 19). Professional services and other integration costs are also excluded, as these are acquisition-related costs expensed as incurred under ASC 805 and do not represent exit or disposal cost obligations; the amounts accrued but unpaid at June 30, 2026 are not material.

The current portion of accrued employee-related costs are recorded within “Accrued payroll and benefits” on our Consolidated Balance Sheets. The majority of accrued employee-related costs as of June 30, 2026 are expected to be paid within one year. Total expected charges have not yet been determined. Estimates will be provided in future periods as integration plans are finalized.

22. INCOME TAXES

Rayonier is a REIT under the Internal Revenue Code and generally is not subject to U.S. federal or state income tax on income distributed to shareholders. As of June 30, 2026, Rayonier owns a 99.5% interest in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership. The taxable income or loss generated by the Operating Partnership is passed through and reported to its unitholders (including the Company) on a Schedule K-1 for inclusion in each unitholder’s income tax return.

Certain operations, including wood products manufacturing, log trading and certain real estate activities, such as the entitlement, development and sale of HBU properties, are conducted through our TRS(s). The TRS subsidiaries are subject to United States federal and state corporate income tax. Therefore, income tax expense or benefit is primarily due to pre-tax book income or loss of the TRS, as well as permanent book versus tax differences and discrete items.

PROVISION FOR INCOME TAXES

The Company’s interim income tax provision is computed in accordance with ASC 740‑270, Income Taxes—Interim Reporting. Following the merger, management determined that estimating an annual effective tax rate for 2026 was not a reasonable basis for allocating income tax expense due to the increased complexity in forecasting annual taxable income of the newly merged companies. Accordingly, in 2026, the Company is recording income tax expense based on year‑to‑date pre-tax income and applicable statutory tax rates, with discrete items recognized in the period incurred. As a result, the Company is not disclosing an estimated annual effective tax rate for 2026 interim periods.

This change in methodology is applied prospectively and does not have a material impact on the Company's consolidated financial statements for the periods presented. The Company's effective tax rate is generally lower than the 21% U.S. statutory rate primarily due to its qualification as a REIT, whereby the majority of consolidated income is generated at the REIT level and not subject to U.S. federal or state income taxes. Income attributable to the Company's taxable REIT subsidiaries (TRS) is subject to corporate income tax at applicable statutory rates.

RELEASE OF VALUATION ALLOWANCE FOLLOWING MERGER

The Company assesses the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that some or all of such deferred tax assets will not be realized.

In connection with the PotlatchDeltic merger, the Company reassessed the realizability of its deferred tax assets. As a result of the transaction, the Company recorded net deferred tax liabilities, primarily related to taxable temporary differences associated with acquired tangible assets. These taxable temporary differences are expected to reverse in periods that support the realization of existing deferred tax assets. Based on this reassessment that it is more likely than not that certain deferred tax assets will be realized, the Company released a portion of its valuation allowance, resulting in an income tax benefit of $40.3 million upon completion of the merger on January 30, 2026.

23. ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table presents the changes in AOCI by component for the six months ended June 30, 2026 and the year ended December 31, 2025. All amounts are presented net of tax and exclude portions attributable to noncontrolling interests.

(a)The six months ended June 30, 2026 includes $20.2 million of other comprehensive income related to interest rate products. The year ended December 31, 2025 included $3.8 million of other comprehensive loss related to interest rate products. See Note 9 — Derivative Financial Instruments and Hedging Activities for additional information.

(b)This component of other comprehensive income (loss) is included in the computation of net periodic pension and postretirement costs. See Note 18 — Pension and Other Postretirement Employee Benefits for additional information.

(c)The year ended December 31, 2025 includes $29.1 million reclassified from AOCI to “Gain on sale of discontinued operations” in the Consolidated Statements of Income and Comprehensive Income (Loss) upon deconsolidation of our New Zealand operations on June 30, 2025.

The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the six months ended June 30, 2026 and June 30, 2025: