CONSOLIDATING FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2019

Condensed Financial Information Disclosure [Abstract]

The condensed consolidating financial information below follows the same accounting policies as described in the consolidated financial statements, except for the use of the equity method of accounting to reflect ownership interests in wholly-owned subsidiaries, which are eliminated upon consolidation, and the allocation of certain expenses of Rayonier Inc. incurred for the benefit of its subsidiaries.

In March 2012, Rayonier Inc. issued $325 million of 3.75% Senior Notes due 2022. In connection with these notes, the Company provides the following condensed consolidating financial information in accordance with SEC Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.

The subsidiary guarantors, Rayonier Operating Company LLC (“ROC”) and Rayonier TRS Holdings Inc., are wholly-owned by the parent company, Rayonier Inc. The notes are fully and unconditionally guaranteed on a joint and several basis by the guarantor subsidiaries.



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
	Three Months Ended March 31, 2019
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$191,546		—				$191,546
Costs and Expenses
Cost of sales	—			—			(143,251		)	—			(143,251		)
Selling and general expenses	—			(4,843		)	(4,967		)	—			(9,810		)
Other operating (loss) income, net	—			—			35			—			35
	—			(4,843		)	(148,183		)	—			(153,026		)
OPERATING (LOSS) INCOME	—			(4,843		)	43,363			—			38,520
Interest expense	(3,138		)	(4,547		)	(25		)	—			(7,710		)
Interest and miscellaneous income (expense), net	(457		)	964			825			—			1,332
Equity in income from subsidiaries	28,389			37,432			—			(65,821		)	—
INCOME BEFORE INCOME TAXES	24,794			29,006			44,163			(65,821		)	32,142
Income tax expense	—			(617		)	(3,732		)	—			(4,349		)
NET INCOME	24,794			28,389			40,431			(65,821		)	27,793
Less: Net income attributable to noncontrolling interest	—			—			(2,999		)	—			(2,999		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	24,794			28,389			37,432			(65,821		)	24,794
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment, net of income tax	4,679			(90		)	6,122			(4,678		)	6,033
Cash flow hedges, net of income tax	(10,884		)	(11,548		)	862			10,884			(10,686		)
Amortization of pension and postretirement plans, net of income tax	112			112			—			(112		)	112
Total other comprehensive income (loss)	(6,093		)	(11,526		)	6,984			6,094			(4,541		)
COMPREHENSIVE INCOME	18,701			16,863			47,415			(59,727		)	23,252
Less: Comprehensive loss attributable to noncontrolling interest	—			—			(4,551		)	—			(4,551		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.		$18,701			$16,863			$42,864			($59,727	)		$18,701



	Three Months Ended March 31, 2018
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$203,196		—				$203,196
Costs and Expenses
Cost of sales	—			—			(138,488		)	—			(138,488		)
Selling and general expenses	—			(4,389		)	(4,614		)	—			(9,003		)
Other operating (loss) income, net	(13		)	635			747			—			1,369
	(13		)	(3,754		)	(142,355		)	—			(146,122		)
OPERATING (LOSS) INCOME	(13		)	(3,754		)	60,841			—			57,074
Interest expense	(3,139		)	(4,653		)	(260		)	—			(8,052		)
Interest and miscellaneous income (expense), net	2,628			765			(2,773		)	—			620
Equity in income from subsidiaries	41,063			48,828			—			(89,891		)	—
INCOME BEFORE INCOME TAXES	40,539			41,186			57,808			(89,891		)	49,642
Income tax expense	—			(123		)	(6,813		)	—			(6,936		)
NET INCOME	40,539			41,063			50,995			(89,891		)	42,706
Less: Net income attributable to noncontrolling interest	—			—			(2,167		)	—			(2,167		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	40,539			41,063			48,828			(89,891		)	40,539
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment, net of income tax	7,606			111			9,577			(7,606		)	9,688
Cash flow hedges, net of income tax	16,381			15,598			1,017			(16,381		)	16,615
Amortization of pension and postretirement plans, net of income tax	159			159			—			(159		)	159
Total other comprehensive income (loss)	24,146			15,868			10,594			(24,146		)	26,462
COMPREHENSIVE INCOME	64,685			56,931			61,589			(114,037		)	69,168
Less: Comprehensive income attributable to noncontrolling interest	—			—			(4,483		)	—			(4,483		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.		$64,685			$56,931			$57,106			($114,037	)		$64,685



	CONDENSED CONSOLIDATING BALANCE SHEETS
	As of March 31, 2019
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$16,590		$98,805			$39,218		—				$154,613
Accounts receivable, less allowance for doubtful accounts	—		1,017			31,014			—			32,031
Inventory	—		—			26,221			—			26,221
Prepaid expenses	—		1,130			16,153			—			17,283
Other current assets	—		99			639			—			738
Total current assets	16,590		101,051			113,245			—			230,886
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—			2,395,625			—			2,395,625
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS	—		—			76,287			—			76,287
NET PROPERTY, PLANT AND EQUIPMENT	—		16,690			5,851			—			22,541
RESTRICTED CASH	—		—			9,867			—			9,867
RIGHT OF USE ASSETS	—		35,236			70,509			—			105,745
INVESTMENT IN SUBSIDIARIES	1,799,713		3,014,476			—			(4,814,189		)	—
INTERCOMPANY RECEIVABLE	56,251		(643,442		)	587,191			—			—
OTHER ASSETS	2		10,030			33,227			—			43,259
TOTAL ASSETS		$1,872,556		$2,534,041			$3,291,802			($4,814,189	)		$2,884,210
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	—			$4,403			$21,555		—				$25,958
Accrued taxes	—		64			3,964			—			4,028
Accrued payroll and benefits	—		3,093			1,639			—			4,732
Accrued interest	6,094		2,012			—			—			8,106
Deferred revenue	—		—			8,468			—			8,468
Other current liabilities	—		5,765			21,285			—			27,050
Total current liabilities	6,094		15,337			56,911			—			78,342
LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS	323,895		648,812			—			—			972,707
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		30,497			(685		)	—			29,812
LONG-TERM LEASE LIABILITY	—		30,078			64,931			—			95,009
OTHER NON-CURRENT LIABILITIES	—		9,604			57,536			—			67,140
INTERCOMPANY PAYABLE	—		—			—			—			—
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY	1,542,567		1,799,713			3,014,476			(4,814,189		)	1,542,567
Noncontrolling interest	—		—			98,633			—			98,633
TOTAL SHAREHOLDERS’ EQUITY	1,542,567		1,799,713			3,113,109			(4,814,189		)	1,641,200
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$1,872,556		$2,534,041			$3,291,802			($4,814,189	)		$2,884,210



	CONDENSED CONSOLIDATING BALANCE SHEETS
	As of December 31, 2018
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$361		$104,777			$43,236		—				$148,374
Accounts receivable, less allowance for doubtful accounts	—		3,752			22,399			—			26,151
Inventory	—		—			15,703			—			15,703
Prepaid expenses	—		977			16,039			—			17,016
Other current assets	—		108			501			—			609
Total current assets	361		109,614			97,878			—			207,853
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—			2,401,327			—			2,401,327
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS	—		—			85,609			—			85,609
NET PROPERTY, PLANT AND EQUIPMENT	—		16,940			5,811			—			22,751
RESTRICTED CASH	—		—			8,080			—			8,080
INVESTMENT IN SUBSIDIARIES	1,833,899		3,022,875			—			(4,856,774		)	—
INTERCOMPANY RECEIVABLE	49,461		(638,424		)	588,963			—			—
OTHER ASSETS	2		19,244			35,800			—			55,046
TOTAL ASSETS		$1,883,723		$2,530,249			$3,223,468			($4,856,774	)		$2,780,666
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	—			$1,616			$16,403		—				$18,019
Accrued taxes	—		8			3,170			—			3,178
Accrued payroll and benefits	—		5,848			4,568			—			10,416
Accrued interest	3,047		1,960			—			—			5,007
Deferred revenue	—		—			10,447			—			10,447
Other current liabilities	—		216			16,258			—			16,474
Total current liabilities	3,047		9,648			50,846			—			63,541
LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS	323,803		648,764			—			—			972,567
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		30,484			(684		)	—			29,800
OTHER NON-CURRENT LIABILITIES	—		7,454			52,754			—			60,208
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY	1,556,873		1,833,899			3,022,875			(4,856,774		)	1,556,873
Noncontrolling interest	—		—			97,677			—			97,677
TOTAL SHAREHOLDERS’ EQUITY	1,556,873		1,833,899			3,120,552			(4,856,774		)	1,654,550
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$1,883,723		$2,530,249			$3,223,468			($4,856,774	)		$2,780,666



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
	Three Months Ended March 31, 2019
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments		Total Consolidated
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES		($7,623	)		($2,265	)		$80,805		—			$70,917
INVESTING ACTIVITIES
Capital expenditures	—			—			(14,122		)	—		(14,122		)
Real estate development investments	—			—			(1,677		)	—		(1,677		)
Purchase of timberlands	—			—			(12,349		)	—		(12,349		)
Investment in subsidiaries	—			6,495			—			(6,495	)	—
Other	—			—			2,337			—		2,337
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	—			6,495			(25,811		)	(6,495	)	(25,811		)
FINANCING ACTIVITIES
Dividends paid	(34,858		)	(19		)	—			—		(34,877		)
Proceeds from the issuance of common shares under incentive stock plan	597			—			—			—		597
Repurchase of common shares	(33		)	—						—		(33		)
Other	—			—			(16		)	—		(16		)
Distribution to minority shareholder	—			—			(3,594		)	—		(3,594		)
Intercompany distributions	58,146			(10,183		)	(54,458		)	6,495		—
CASH USED FOR FINANCING ACTIVITIES	23,852			(10,202		)	(58,068		)	6,495		(37,923		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			843			—		843
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Change in cash, cash equivalents and restricted cash	16,229			(5,972		)	(2,231		)	—		8,026
Balance, beginning of year	361			104,777			51,316			—		156,454
Balance, end of period		$16,590			$98,805			$49,085		—			$164,480



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
	For Three Months Ended March 31, 2018
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments		Total Consolidated
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES		($701	)		$37,055			$41,881		—			$78,235
INVESTING ACTIVITIES
Capital expenditures	—			(35		)	(13,157		)	—		(13,192		)
Real estate development investments	—			—			(2,340		)	—		(2,340		)
Purchase of timberlands	—			—			(12		)	—		(12		)
Investment in subsidiaries	—			31,654			—			(31,654	)	—
Other	—			—			(2,105		)	—		(2,105		)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	—			31,619			(17,614		)	(31,654	)	(17,649		)
FINANCING ACTIVITIES
Repayment of debt	—			(26,000		)	(3,375		)	—		(29,375		)
Dividends paid	(32,123		)	—			—			—		(32,123		)
Proceeds from the issuance of common shares under incentive stock plan	5,455			—			—			—		5,455
Repurchase of common shares	(18		)	—			—			—		(18		)
Intercompany distributions	13,660			(49,065		)	3,751			31,654		—
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	(13,026		)	(75,065		)	376			31,654		(56,061		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			807			—		807
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Change in cash, cash equivalents and restricted cash	(13,727		)	(6,391		)	25,450			—		5,332
Balance, beginning of year	48,564			25,042			98,750			—		172,356
Balance, end of period		$34,837			$18,651			$124,200		—			$177,688