
15.	CONSOLIDATING FINANCIAL STATEMENTS

The 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 October 2007, TRS issued $300 million of 3.75% Senior Exchangeable Notes due 2012, and in August 2009 TRS issued $172.5 million of 4.50% Senior Exchangeable Notes due 2015. The notes for both transactions are fully and unconditionally guaranteed by Rayonier Inc. as the Parent Guarantor and Rayonier Operating Company LLC ("ROC") as the Subsidiary Guarantor. In connection with these exchangeable 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.



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME For the Three Months Ended March 31, 2012
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
SALES	$	—		$	—		$	—		$	335,438		$	38,171		$	(17,829	)	$	355,780
Costs and Expenses
Cost of sales	—			—			—			247,054			26,818			(20,559		)	253,313
Selling and general expenses	—			3,311			—			15,512			796			—			19,619
Other operating expense (income), net	—			121			—			1,512			(2,781		)	—			(1,148		)
	—			3,432			—			264,078			24,833			(20,559		)	271,784
Equity in income (loss) of New Zealand joint venture	—			—			—			171			(158		)	—			13
OPERATING (LOSS) INCOME	—			(3,432		)	—			71,531			13,180			2,730			84,009
Interest expense	(1,249		)	(238		)	(10,226		)	687			(799		)	—			(11,825		)
Interest and miscellaneous income (expense), net	1,912			1,327			(1,208		)	(3,904		)	1,850			—			(23		)
Equity in income from subsidiaries	52,774			55,446			45,745			—			—			(153,965		)	—
INCOME BEFORE INCOME TAXES	53,437			53,103			34,311			68,314			14,231			(151,235		)	72,161
Income tax (expense) benefit	—			(329		)	4,174			(22,569		)	—			—			(18,724		)
NET INCOME	$	53,437		$	52,774		$	38,485		$	45,745		$	14,231		$	(151,235	)	$	53,437
OTHER COMPREHENSIVE INCOME	10,170			10,170			102			102			7,132			(17,506		)	10,170
COMPREHENSIVE INCOME	$	63,607		$	62,944		$	38,587		$	45,847		$	21,363		$	(168,741	)	$	63,607



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME For the Three Months Ended March 31, 2011
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
SALES	$	—	$	—		$	—		$	328,265		$	42,833		$	(13,367	)	$	357,731
Costs and Expenses
Cost of sales	—		—			—			244,297			27,997			(14,783		)	257,511
Selling and general expenses	—		2,716			—			13,070			647			—			16,433
Other operating expense (income), net	—		49			—			298			(2,464		)	(1		)	(2,118		)
	—		2,765			—			257,665			26,180			(14,784		)	271,826
Equity in income of New Zealand joint venture	—		—			—			194			1,479			—			1,673
OPERATING (LOSS) INCOME	—		(2,765		)	—			70,794			18,132			1,417			87,578
Interest expense	—		(130		)	(13,050		)	(112		)	(25		)	—			(13,317		)
Interest and miscellaneous income (expense), net	—		1,337			(1,073		)	(5,024		)	5,053			—			293
Equity in income from subsidiaries	58,412		60,044			44,435			—			—			(162,891		)	—
INCOME BEFORE INCOME TAXES	58,412		58,486			30,312			65,658			23,160			(161,474		)	74,554
Income tax (expense) benefit	—		(74		)	5,155			(21,223		)	—			—			(16,142		)
NET INCOME	$	58,412	$	58,412		$	35,467		$	44,435		$	23,160		$	(161,474	)	$	58,412
OTHER COMPREHENSIVE INCOME (LOSS)	1,814		1,814			149			149			(191		)	(1,921		)	1,814
COMPREHENSIVE INCOME	$	60,226	$	60,226		$	35,616		$	44,584		$	22,969		$	(163,395	)	$	60,226



	CONDENSED CONSOLIDATING BALANCE SHEETS As of March 31, 2012
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)		Rayonier TRS Holdings Inc. (Issuer)		Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)		Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	131,626	$	27,671	$	60,750	$	8,520		$	8,008	$	—		$	236,575
Accounts receivable, less allowance for doubtful accounts	—		24		—		94,699			2,475		—			97,198
Inventory	—		—		—		110,274			—		(7,957		)	102,317
Intercompany interest receivable	—		—		—		—			3,111		(3,111		)	—
Prepaid and other current assets	—		974		796		53,540			6,700		—			62,010
Total current assets	131,626		28,669		61,546		267,033			20,294		(11,068		)	498,100
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—		—		40,154			1,462,277		1,860			1,504,291
NET PROPERTY, PLANT AND EQUIPMENT	—		2,484		—		517,340			2,186		—			522,010
INVESTMENT IN JOINT VENTURE	—		—		—		(11,281		)	85,669		—			74,388
INVESTMENT IN SUBSIDIARIES	1,328,752		1,524,491		1,202,519		—			—		(4,055,762		)	—
INTERCOMPANY NOTES RECEIVABLE	204,420		—		19,262		—			—		(223,682		)	—
OTHER ASSETS	3,535		26,802		5,750		699,073			12,469		(552,535		)	195,094
TOTAL ASSETS	$	1,668,333	$	1,582,446	$	1,289,077	$	1,512,319		$	1,582,895	$	(4,841,187	)	$	2,793,883
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	2,058	$	9	$	97,448		$	1,166	$	—		$	100,681
Current maturities of long-term debt	—		—		50,512		—			—		—			50,512
Accrued taxes	—		525		—		14,188			2,637		—			17,350
Accrued payroll and benefits	—		8,211		—		10,572			1,539		—			20,322
Accrued interest	948		366		8,818		334			609		—			11,075
Accrued customer incentives	—		—		—		7,148			—		—			7,148
Other current liabilities	—		2,237		—		7,367			6,460		—			16,064
Current liabilities for dispositions and discontinued operations	—		—		—		9,931			—		—			9,931
Total current liabilities	948		13,397		59,339		146,988			12,411		—			233,083
LONG-TERM DEBT	325,000		—		560,420		—			88,297		—			973,717
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS	—		—		—		79,194			—		—			79,194
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		113,491		—		27,026			—		—			140,517
OTHER NON-CURRENT LIABILITIES	—		17,557		—		6,809			621		—			24,987
INTERCOMPANY PAYABLE	—		109,249		—		49,783			215,307		(374,339		)	—
TOTAL LIABILITIES	325,948		253,694		619,759		309,800			316,636		(374,339		)	1,451,498
TOTAL SHAREHOLDERS’ EQUITY	1,342,385		1,328,752		669,318		1,202,519			1,266,259		(4,466,848		)	1,342,385
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,668,333	$	1,582,446	$	1,289,077	$	1,512,319		$	1,582,895	$	(4,841,187	)	$	2,793,883



	CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2011
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)		Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)		Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	—	$	8,977		$	59,976	$	7,398		$	2,252	$	—		$	78,603
Accounts receivable, less allowance for doubtful accounts	—		3			—		94,399			606		—			95,008
Inventory	—		—			—		133,300			—		(11,302		)	121,998
Intercompany interest receivable	—		—			—		—			3,848		(3,848		)	—
Prepaid and other current assets	—		2,328			808		36,937			8,820		—			48,893
Total current assets	—		11,308			60,784		272,034			15,526		(15,150		)	344,502
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—			—		39,824			1,462,027		1,860			1,503,711
NET PROPERTY, PLANT AND EQUIPMENT	—		2,551			—		456,754			2,247		—			461,552
INVESTMENT IN JOINT VENTURE	—		—			—		(11,006		)	80,225		—			69,219
INVESTMENT IN SUBSIDIARIES	1,238,661		1,490,444			1,156,896		—			—		(3,886,001		)	—
INTERCOMPANY NOTES RECEIVABLE	204,420		—			19,073		—			—		(223,493		)	—
OTHER ASSETS	—		26,850			6,491		702,087			6,856		(551,920		)	190,364
TOTAL ASSETS	$	1,443,081	$	1,531,153		$	1,243,244	$	1,459,693		$	1,566,881	$	(4,674,704	)	$	2,569,348
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	1,801		$	10	$	69,648		$	1,414	$	—		$	72,873
Current maturities of long-term debt	—		—			28,110		—			—		—			28,110
Accrued taxes	—		(27		)	—		3,934			1,316		—			5,223
Accrued payroll and benefits	—		13,810			—		10,563			2,473		—			26,846
Accrued interest	8		246			5,442		739			609		—			7,044
Accrued customer incentives	—		—			—		10,369			—		—			10,369
Other current liabilities	—		1,886			—		9,199			6,770		—			17,855
Current liabilities for dispositions and discontinued operations	—		—			—		9,931			—		—			9,931
Total current liabilities	8		17,716			33,562		114,383			12,582		—			178,251
LONG-TERM DEBT	120,000		30,000			580,647		—			88,582		—			819,229
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS	—		—			—		80,893			—		—			80,893
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		112,904			—		27,719			—		—			140,623
OTHER NON-CURRENT LIABILITIES	—		20,210			—		6,396			673		—			27,279
INTERCOMPANY PAYABLE	—		111,662			—		73,406			203,208		(388,276		)	—
TOTAL LIABILITIES	120,008		292,492			614,209		302,797			305,045		(388,276		)	1,246,275
TOTAL SHAREHOLDERS’ EQUITY	1,323,073		1,238,661			629,035		1,156,896			1,261,836		(4,286,428		)	1,323,073
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,443,081	$	1,531,153		$	1,243,244	$	1,459,693		$	1,566,881	$	(4,674,704	)	$	2,569,348



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2012
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES	$	(14,838	)	$	33,980		$	12,000		$	61,546		$	44,070		$	(25,404	)	$	111,354
INVESTING ACTIVITIES
Capital expenditures	—			(55		)	—			(33,158		)	(8,866		)	—			(42,079		)
Purchase of timberlands	—			—			—			—			(8,689		)	—			(8,689		)
Jesup mill cellulose specialties expansion	—			—			—			(26,026		)	—			—			(26,026		)
Change in restricted cash	—			—			—			—			(5,609		)	—			(5,609		)
Investment in Subsidiaries	—			—			774			—			—			(774		)	—
Other	—			(69		)	—			8,955			(150		)	—			8,736
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES	—			(124		)	774			(50,229		)	(23,314		)	(774		)	(73,667		)
FINANCING ACTIVITIES
Issuance of debt	325,000			—			—			—			15,000			—			340,000
Repayment of debt	(120,000		)	(30,000		)	—			—			(15,000		)	—			(165,000		)
Dividends paid	(49,249		)	—			—			—			—			—			(49,249		)
Proceeds from the issuance of common shares	2,061			—			—			—			—			—			2,061
Excess tax benefits on stock-based compensation	—			—			—			3,946			—			—			3,946
Debt issuance costs	(3,565		)	—			—			—			—			—			(3,565		)
Repurchase of common shares	(7,783		)	—			—			—			—			—			(7,783		)
Intercompany distributions	—			14,838			(12,000		)	(14,016		)	(15,000		)	26,178			—
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	146,464			(15,162		)	(12,000		)	(10,070		)	(15,000		)	26,178			120,410
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			—			(125		)	—			—			(125		)
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	131,626			18,694			774			1,122			5,756			—			157,972
Balance, beginning of year	—			8,977			59,976			7,398			2,252			—			78,603
Balance, end of period	$	131,626		$	27,671		$	60,750		$	8,520		$	8,008		$	—		$	236,575



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2011
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	46,321		$	26,146		$	15,000		$	69,566		$	36,292		$	(77,620	)	$	115,705
INVESTING ACTIVITIES
Capital expenditures	—			(62		)	—			(24,701		)	(9,998		)	—			(34,761		)
Purchase of timberlands	—			—			—			—			(2,942		)	—			(2,942		)
Investment in Subsidiaries	—			—			26,011			—			—			(26,011		)	—
Other	—			—			—			6,107			775			—			6,882
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES	—			(62		)	26,011			(18,594		)	(12,165		)	(26,011		)	(30,821		)
FINANCING ACTIVITIES
Repayment of debt	—			—			(75,000		)	—			—			—			(75,000		)
Dividends paid	(43,894		)	—			—			—			—			—			(43,894		)
Proceeds from the issuance of common shares	5,399			—			—			—			—			—			5,399
Excess tax benefits on stock-based compensation	—			—			—			3,970			—			—			3,970
Repurchase of common shares	(7,826		)	—			—			—			—			—			(7,826		)
Intercompany distributions	—			(46,321		)	(15,000		)	(42,310		)	—			103,631			—
CASH USED FOR FINANCING ACTIVITIES	(46,321		)	(46,321		)	(90,000		)	(38,340		)	—			103,631			(117,351		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			—			116			—			—			116
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	—			(20,237		)	(48,989		)	12,748			24,127			—			(32,351		)
Balance, beginning of year	—			29,759			283,258			1,280			35,166			—			349,463
Balance, end of period	$	—		$	9,522		$	234,269		$	14,028		$	59,293		$	—		$	317,112

In March 2012, Rayonier Inc. issued $325 million of 3.75% Senior Notes due 2022. The notes are fully and unconditionally guaranteed by the following subsidiaries of Rayonier Inc.: ROC, Rayonier Louisiana Timberlands LLC, Rayonier TRS Holdings Inc. and substantially all domestic subsidiaries of TRS Holdings Inc. 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.



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME For the Three Months Ended March 31, 2012
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
SALES	$	—		$	312,642		$	60,967		$	(17,829	)	$	355,780
Costs and Expenses
Cost of sales	—			227,508			46,364			(20,559		)	253,313
Selling and general expenses	—			15,698			3,921			—			19,619
Other operating expense (income), net	—			980			(2,128		)	—			(1,148		)
	—			244,186			48,157			(20,559		)	271,784
Equity in income of New Zealand joint venture	—			—			13			—			13
OPERATING INCOME	—			68,456			12,823			2,730			84,009
Interest expense	(1,249		)	(9,778		)	(798		)	—			(11,825		)
Interest and miscellaneous income (expense), net	1,912			(3,789		)	1,854			—			(23		)
Equity in income from subsidiaries	52,774			16,655			—			(69,429		)	—
INCOME BEFORE INCOME TAXES	53,437			71,544			13,879			(66,699		)	72,161
Income tax (expense) benefit	—			(18,770		)	46			—			(18,724		)
NET INCOME	$	53,437		$	52,774		$	13,925		$	(66,699	)	$	53,437
OTHER COMPREHENSIVE INCOME	10,170			10,170			7,030			(17,200		)	10,170
COMPREHENSIVE INCOME	$	63,607		$	62,944		$	20,955		$	(83,899	)	$	63,607



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME For the Three Months Ended March 31, 2011
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
SALES	$	—	$	296,251		$	74,847		$	(13,367	)	$	357,731
Costs and Expenses
Cost of sales	—		215,566			56,728			(14,783		)	257,511
Selling and general expenses	—		12,769			3,664			—			16,433
Other operating expense (income), net	—		1,060			(3,177		)	(1		)	(2,118		)
	—		229,395			57,215			(14,784		)	271,826
Equity in income of New Zealand joint venture	—		—			1,673			—			1,673
OPERATING INCOME	—		66,856			19,305			1,417			87,578
Interest expense	—		(13,292		)	(25		)	—			(13,317		)
Interest and miscellaneous (expense) income, net	—		(4,762		)	5,055			—			293
Equity in income from subsidiaries	58,412		25,374			—			(83,786		)	—
INCOME BEFORE INCOME TAXES	58,412		74,176			24,335			(82,369		)	74,554
Income tax expense	—		(15,764		)	(378		)	—			(16,142		)
NET INCOME	$	58,412	$	58,412		$	23,957		$	(82,369	)	$	58,412
OTHER COMPREHENSIVE INCOME (LOSS)	1,814		1,814			(281		)	(1,533		)	1,814
COMPREHENSIVE INCOME	$	60,226	$	60,226		$	23,676		$	(83,902	)	$	60,226



	CONDENSED CONSOLIDATING BALANCE SHEETS As of March 31, 2012
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors		All Other Subsidiaries (Non- guarantors)		Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	131,626	$	83,099	$	21,850	$	—		$	236,575
Accounts receivable, less allowance for doubtful accounts	—		89,582		7,616		—			97,198
Inventory	—		109,244		1,030		(7,957		)	102,317
Intercompany interest receivable	—		—		3,111		(3,111		)	—
Prepaid and other current assets	—		54,679		7,331		—			62,010
Total current assets	131,626		336,604		40,938		(11,068		)	498,100
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		116,728		1,385,703		1,860			1,504,291
NET PROPERTY, PLANT AND EQUIPMENT	—		518,933		3,077		—			522,010
INVESTMENT IN JOINT VENTURE	—		—		74,388		—			74,388
INVESTMENT IN SUBSIDIARIES	1,328,752		796,030		—		(2,124,782		)	—
INTERCOMPANY NOTES RECEIVABLE	204,420		—		—		(204,420		)	—
OTHER ASSETS	3,535		706,429		37,666		(552,536		)	195,094
TOTAL ASSETS	$	1,668,333	$	2,474,724	$	1,541,772	$	(2,890,946	)	$	2,793,883
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	97,059	$	3,622	$	—		$	100,681
Current maturities of long-term debt	—		50,512		—		—			50,512
Accrued taxes	—		14,736		2,614		—			17,350
Accrued payroll and benefits	—		18,065		2,257		—			20,322
Accrued interest	948		9,518		609		—			11,075
Accrued customer incentives	—		7,148		—		—			7,148
Other current liabilities	—		8,700		7,364		—			16,064
Current liabilities for dispositions and discontinued operations	—		9,931		—		—			9,931
Total current liabilities	948		215,669		16,466		—			233,083
LONG-TERM DEBT	325,000		560,420		88,297		—			973,717
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS	—		79,194		—		—			79,194
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		140,517		—		—			140,517
OTHER NON-CURRENT LIABILITIES	—		23,554		1,433		—			24,987
INTERCOMPANY PAYABLE	—		126,618		228,460		(355,078		)	—
TOTAL LIABILITIES	325,948		1,145,972		334,656		(355,078		)	1,451,498
TOTAL SHAREHOLDERS’ EQUITY	1,342,385		1,328,752		1,207,116		(2,535,868		)	1,342,385
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,668,333	$	2,474,724	$	1,541,772	$	(2,890,946	)	$	2,793,883



	CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2011
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors		All Other Subsidiaries (Non- guarantors)		Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	—	$	58,132	$	20,471	$	—		$	78,603
Accounts receivable, less allowance for doubtful accounts	—		90,658		4,350		—			95,008
Inventory	—		132,323		977		(11,302		)	121,998
Intercompany interest receivable	—		—		3,848		(3,848		)	—
Prepaid and other current assets	—		39,366		9,527		—			48,893
Total current assets	—		320,479		39,173		(15,150		)	344,502
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		117,243		1,384,608		1,860			1,503,711
NET PROPERTY, PLANT AND EQUIPMENT	—		458,497		3,055		—			461,552
INVESTMENT IN JOINT VENTURE	—		—		69,219		—			69,219
INVESTMENT IN SUBSIDIARIES	1,238,661		801,838		—		(2,040,499		)	—
INTERCOMPANY NOTES RECEIVABLE	204,420		—		—		(204,420		)	—
OTHER ASSETS	—		710,663		31,622		(551,921		)	190,364
TOTAL ASSETS	$	1,443,081	$	2,408,720	$	1,527,677	$	(2,810,130	)	$	2,569,348
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	65,732	$	7,141	$	—		$	72,873
Current maturities of long-term debt	—		28,110		—		—			28,110
Accrued taxes	—		3,838		1,385		—			5,223
Accrued payroll and benefits	—		23,070		3,776		—			26,846
Accrued interest	8		6,427		609		—			7,044
Accrued customer incentives	—		10,369		—		—			10,369
Other current liabilities	—		10,319		7,536		—			17,855
Current liabilities for dispositions and discontinued operations	—		9,931		—		—			9,931
Total current liabilities	8		157,796		20,447		—			178,251
LONG-TERM DEBT	120,000		610,647		88,582		—			819,229
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS	—		80,893		—		—			80,893
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		140,623		—		—			140,623
OTHER NON-CURRENT LIABILITIES	—		25,894		1,385		—			27,279
INTERCOMPANY PAYABLE	—		154,206		214,997		(369,203		)	—
TOTAL LIABILITIES	120,008		1,170,059		325,411		(369,203		)	1,246,275
TOTAL SHAREHOLDERS’ EQUITY	1,323,073		1,238,661		1,202,266		(2,440,927		)	1,323,073
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,443,081	$	2,408,720	$	1,527,677	$	(2,810,130	)	$	2,569,348



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2012
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES	$	(14,838	)	$	86,628		$	39,726		$	(162	)	$	111,354
INVESTING ACTIVITIES
Capital expenditures	—			(33,204		)	(8,875		)	—			(42,079		)
Purchase of timberlands	—			(102		)	(8,587		)	—			(8,689		)
Jesup mill cellulose specialties expansion	—			(26,026		)	—			—			(26,026		)
Change in restricted cash	—			—			(5,609		)	—			(5,609		)
Other	—			8,887			(151		)	—			8,736
CASH USED FOR INVESTING ACTIVITIES	—			(50,445		)	(23,222		)	—			(73,667		)
FINANCING ACTIVITIES
Issuance of debt	325,000			—			15,000			—			340,000
Repayment of debt	(120,000		)	(30,000		)	(15,000		)	—			(165,000		)
Dividends paid	(49,249		)	—			—			—			(49,249		)
Proceeds from the issuance of common shares	2,061			—			—			—			2,061
Excess tax benefits on stock-based compensation	—			3,946			—			—			3,946
Debt issuance costs	(3,565		)	—			—			—			(3,565		)
Repurchase of common shares	(7,783		)	—			—			—			(7,783		)
Intercompany distributions	—			14,838			(15,000		)	162			—
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	146,464			(11,216		)	(15,000		)	162			120,410
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(125		)	—			(125		)
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	131,626			24,967			1,379			—			157,972
Balance, beginning of year	—			58,132			20,471			—			78,603
Balance, end of period	$	131,626		$	83,099		$	21,850		$	—		$	236,575



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2011
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	46,321		$	73,960		$	41,745		$	(46,321	)	$	115,705
INVESTING ACTIVITIES
Capital expenditures	—			(24,759		)	(10,002		)	—			(34,761		)
Purchase of timberlands	—			—			(2,942		)	—			(2,942		)
Other	—			6,107			775			—			6,882
CASH USED FOR INVESTING ACTIVITIES	—			(18,652		)	(12,169		)	—			(30,821		)
FINANCING ACTIVITIES
Repayment of debt	—			(75,000		)	—			—			(75,000		)
Dividends paid	(43,894		)	—			—			—			(43,894		)
Proceeds from the issuance of common shares	5,399			—			—			—			5,399
Excess tax benefits on stock-based compensation	—			3,970			—			—			3,970
Repurchase of common shares	(7,826		)	—			—			—			(7,826		)
Intercompany distributions	—			(46,321		)	—			46,321			—
CASH USED FOR FINANCING ACTIVITIES	(46,321		)	(117,351		)	—			46,321			(117,351		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			116			—			116
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	—			(62,043		)	29,692			—			(32,351		)
Balance, beginning of year	—			303,746			45,717			—			349,463
Balance, end of period	$	—		$	241,703		$	75,409		$	—		$	317,112