Sale of Wood Products Business

12 Months Ended

Dec. 31, 2013

Discontinued Operations and Disposal Groups [Abstract]

Sale of Wood Products Business

SALE OF WOOD PRODUCTS BUSINESS

On March 1, 2013, Rayonier completed the sale of its Wood Products business (consisting of three lumber mills in Baxley, Swainsboro and Eatonton, Georgia) to International Forest Products Limited (“Interfor”) for $80 million plus a working capital adjustment. The sale is consistent with the Company’s strategic plan to fully position its manufacturing operations in the specialty chemicals sector. Rayonier will not have significant continuing involvement in the operations of the Wood Products business. Accordingly, the operating results of the Wood Products business, formerly reported as a separate operating segment, are classified as discontinued operations in the Company’s Consolidated Statements of Income and Comprehensive Income for all periods presented. Certain administrative and general costs historically allocated to the Wood Products segment, which will remain with the Company after the sale, are reported in continuing operations.

Rayonier recognized an after-tax gain of $42.1 million on the sale, which includes a fourth quarter adjustment for the acceleration of pension settlement costs of $0.5 million resulting from a lump sum distribution to Wood Products participants. The gain is included in “Income from discontinued operations, net” on the Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2013.

The operating results and gain on the sale of the Wood Products business are included in “Income from discontinued operations, net” in the Consolidated Statements of Income and Comprehensive Income for the three years ended December 31, 2013. Additionally, environmental remediation activities related to Southern Wood Piedmont Company are currently classified as discontinued operations in the Consolidated Statements of Income and Comprehensive Income.

Operating results of the discontinued operations are summarized below:

	2013			2012			2011
Sales	$	16,968		$	87,510		$	67,682
Cost of sales and other	(17,102		)	(76,619		)	(68,682		)
Gain on sale of discontinued operations	63,217			—			—
Income (loss) from discontinued operations before income taxes	63,083			10,891			(1,000		)
Income tax (expense) benefit	(21,050		)	(3,648		)	331
Income (loss) from discontinued operations, net	$	42,033		$	7,243		$	(669	)

The sale did not meet the “held for sale” criteria prior to the period it was completed. The major classes of Wood Products assets and liabilities included in the sale were as follows:

	March 1, 2013
Accounts receivable, net	$	4,127
Inventory	4,270
Prepaid and other current assets	2,053
Property, plant and equipment, net	9,990
Total assets	$	20,440
Total liabilities	$	596

Cash flows from discontinued operations are immaterial both individually and in the aggregate. As such, they are included with cash flows from continuing operations in the Consolidated Statements of Cash Flows.

Pursuant to the purchase and sale agreement, Rayonier provided Interfor with saw timber procurement services for the three lumber mills through December 31, 2013. Rayonier also contracted with Interfor to purchase wood chips produced at the lumber mills for use at Rayonier’s Jesup mill and market other wood chips produced by the mills to third parties on Interfor’s behalf. The Company will purchase 100 percent of the Baxley mill chips for five years and purchased a minimum of 25 percent of the Swainsboro mill chips in 2013. The purchase price of these chips will be based on the average price paid by the Company to unrelated third parties.

Prior to the Wood Products sale, saw timber procurement services for and wood chip purchases from the lumber mills were intercompany transactions eliminated in consolidation as follows:

	2013		2012		2011
Wood chip purchases	$	1,650	$	12,526	$	12,600
Saw timber procurement services	231		1,125		1,023
Total intercompany	$	1,881	$	13,651	$	13,623