CONSOLIDATING FINANCIAL STATEMENTS

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 August 2009 TRS issued $172.5 million of 4.50% Senior Exchangeable Notes due 2015. The notes are 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 AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2014
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Non- guarantors			Consolidating Adjustments			Total Consolidated
	(Restated)			(Restated)						(Restated)			(Restated)			(Restated)
SALES	$	—		$	—		$	—		$	386,686		$	—		$	386,686
Costs and Expenses
Cost of sales	—			—			—			304,619			—			304,619
Selling and general expenses	—			2,150			—			13,341			—			15,491
Other operating expense, net	—			2,375			—			1,162			—			3,537
	—			4,525			—			319,122			—			323,647
OPERATING (LOSS) INCOME	—			(4,525		)	—			67,564			—			63,039
Interest expense	(3,193		)	(243		)	(6,690		)	(2,843		)	—			(12,969		)
Interest and miscellaneous income (expense), net	2,698			814			(1,047		)	(3,480		)	—			(1,015		)
Equity in income from subsidiaries	41,921			46,478			31,110			—			(119,509		)	—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	41,426			42,524			23,373			61,241			(119,509		)	49,055
Income tax (expense) benefit	—			(603		)	2,824			(9,933		)	—			(7,712		)
NET INCOME	41,426			41,921			26,197			51,308			(119,509		)	41,343
Less: Net loss attributable to noncontrolling interest	—			—			—			(83		)	—			(83		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	41,426			41,921			26,197			51,391			(119,509		)	41,426
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment	12,894			12,893			766			17,795			(26,545		)	17,803
New Zealand joint venture cash flow hedges	1,112			1,112			1,112			1,711			(3,336		)	1,711
Amortization of pension and postretirement plans, net of income tax	2,097			2,097			1,620			1,620			(5,337		)	2,097
Total other comprehensive income	16,103			16,102			3,498			21,126			(35,218		)	21,611
COMPREHENSIVE INCOME	57,529			58,023			29,695			72,434			(154,727		)	62,954
Less: Comprehensive income attributable to noncontrolling interest	—			—			—			5,425			—			5,425
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.	$	57,529		$	58,023		$	29,695		$	67,009		$	(154,727	)	$	57,529



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2013
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	$	—		$	—		$	—		$	393,719		$	—		$	393,719
Costs and Expenses
Cost of sales	—			—			—			266,018			—			266,018
Selling and general expenses	—			2,401			—			13,698			—			16,099
Other operating (income) expense, net	(1,881		)	523			—			(2,145		)	—			(3,503		)
	(1,881		)	2,924			—			277,571			—			278,614
Equity in income of New Zealand joint venture	—			—			—			258			—			258
OPERATING INCOME (LOSS)	1,881			(2,924		)	—			116,406			—			115,363
Interest (expense) income	(3,275		)	(252		)	(6,618		)	2,428			—			(7,717		)
Interest and miscellaneous income (expense), net	2,419			529			(751		)	(2,140		)	—			57
Equity in income from subsidiaries	146,710			148,765			123,469			—			(418,944		)	—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	147,735			146,118			116,100			116,694			(418,944		)	107,703
Income tax benefit (expense)	—			592			2,690			(7,727		)	—			(4,445		)
INCOME FROM CONTINUING OPERATIONS	147,735			146,710			118,790			108,967			(418,944		)	103,258
DISCONTINUED OPERATIONS, NET
Income from discontinued operations, net of income tax	—			—			—			44,477			—			44,477
NET INCOME	147,735			146,710			118,790			153,444			(418,944		)	147,735
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment	975			975			240			975			(2,190		)	975
New Zealand joint venture cash flow hedges	554			554			—			554			(1,108		)	554
Amortization of pension and postretirement plans, net of income tax	4,969			4,969			4,012			—			(8,981		)	4,969
Total other comprehensive income	6,498			6,498			4,252			1,529			(12,279		)	6,498
COMPREHENSIVE INCOME	$	154,233		$	153,208		$	123,042		$	154,973		$	(431,223	)	$	154,233



	CONDENSED CONSOLIDATING BALANCE SHEETS As of March 31, 2014
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)		Rayonier TRS Holdings Inc. (Issuer)			Non- guarantors		Consolidating Adjustments			Total Consolidated
	(Restated)		(Restated)					(Restated)		(Restated)			(Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	93,840	$	4,494	$	(178	)	$	57,915	$	—		$	156,071
Accounts receivable, less allowance for doubtful accounts	—		10		689			110,998		—			111,697
Inventory	—		—		—			141,928		—			141,928
Deferred tax assets	—		—		646			30,934		—			31,580
Prepaid and other current assets	—		6,582		3			47,992		—			54,577
Total current assets	93,840		11,086		1,160			389,767		—			495,853
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—		—			2,067,549		—			2,067,549
NET PROPERTY, PLANT AND EQUIPMENT	—		2,698		—			859,271		—			861,969
INVESTMENT IN SUBSIDIARIES	1,675,347		1,851,260		1,170,755			—		(4,697,362		)	—
INTERCOMPANY NOTES RECEIVABLE	216,844		—		20,866			—		(237,710		)	—
OTHER ASSETS	3,569		32,705		3,496			177,688		—			217,458
TOTAL ASSETS	$	1,989,600	$	1,897,749	$	1,196,277		$	3,494,275	$	(4,935,072	)	$	3,642,829
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	1,054	$	2,102		$	83,126	$	—		$	86,282
Current maturities of long-term debt	—		—		112,500			1,819		—			114,319
Accrued taxes	—		14		—			11,360		—			11,374
Accrued payroll and benefits	—		8,038		—			11,223		—			19,261
Accrued interest	5,777		669		3,723			25,112		(21,424		)	13,857
Accrued customer incentives	—		—		—			10,082		—			10,082
Other current liabilities	—		9,058		—			26,812		—			35,870
Current liabilities for dispositions and discontinued operations	—		—		—			6,446		—			6,446
Total current liabilities	5,777		18,833		118,325			175,980		(21,424		)	297,491
LONG-TERM DEBT	325,000		—		768,228			300,659		—			1,393,887
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS	—		—		—			67,456		—			67,456
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		91,807		—			3,291		—			95,098
OTHER NON-CURRENT LIABILITIES	—		13,763		—			17,491		—			31,254
INTERCOMPANY PAYABLE	—		97,999		—			151,938		(249,937		)	—
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY	1,658,823		1,675,347		309,724			2,678,640		(4,663,711		)	1,658,823
Noncontrolling interest	—		—		—			98,820		—			98,820
TOTAL SHAREHOLDERS’ EQUITY	1,658,823		1,675,347		309,724			2,777,460		(4,663,711		)	1,757,643
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,989,600	$	1,897,749	$	1,196,277		$	3,494,275	$	(4,935,072	)	$	3,642,829



	CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2013
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)		Rayonier TRS Holdings Inc. (Issuer)		Non- guarantors		Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	130,181	$	304	$	10,719	$	58,440	$	—		$	199,644
Accounts receivable, less allowance for doubtful accounts	—		10		2,300		92,646		—			94,956
Inventory	—		—		—		138,818		—			138,818
Deferred tax assets	—		—		681		38,419		—			39,100
Prepaid and other current assets	—		2,363		6		44,207		—			46,576
Total current assets	130,181		2,677		13,706		372,530		—			519,094
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—		—		2,049,378		—			2,049,378
NET PROPERTY, PLANT AND EQUIPMENT	—		2,612		—		858,209		—			860,821
INVESTMENT IN SUBSIDIARIES	1,627,315		1,837,760		1,148,221		—		(4,613,296		)	—
INTERCOMPANY NOTES RECEIVABLE	228,032		—		20,659		—		(248,691		)	—
OTHER ASSETS	3,689		32,519		3,739		216,261		—			256,208
TOTAL ASSETS	$	1,989,217	$	1,875,568	$	1,186,325	$	3,496,378	$	(4,861,987	)	$	3,685,501
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	1,522	$	1,564	$	66,207	$	—		$	69,293
Current maturities of long-term debt	—		—		112,500		—		—			112,500
Accrued taxes	—		4,855		—		3,696		—			8,551
Accrued payroll and benefits	—		11,382		—		13,566		—			24,948
Accrued interest	3,047		538		2,742		22,816		(19,612		)	9,531
Accrued customer incentives	—		—		—		9,580		—			9,580
Other current liabilities	—		8,765		—		26,109		—			34,874
Current liabilities for dispositions and discontinued operations	—		—		—		6,835		—			6,835
Total current liabilities	3,047		27,062		116,806		148,809		(19,612		)	276,112
LONG-TERM DEBT	325,000		—		847,749		288,975		—			1,461,724
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS	—		—		—		69,543		—			69,543
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		91,471		—		4,183		—			95,654
OTHER NON-CURRENT LIABILITIES	—		11,493		—		15,732		—			27,225
INTERCOMPANY PAYABLE	—		118,227		—		125,921		(244,148		)	—
TOTAL SHAREHOLDERS’ EQUITY	1,661,170		1,627,315		221,770		2,843,215		(4,598,227		)	1,755,243
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,989,217	$	1,875,568	$	1,186,325	$	3,496,378	$	(4,861,987	)	$	3,685,501



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2014
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Non- guarantors			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	25,931		$	32,794		$	—		$	67,759		$	(27,210	)	$	99,274
INVESTING ACTIVITIES
Capital expenditures	—			(170		)	—			(36,585		)	—			(36,755		)
Purchase of timberlands	—			—			—			(10,637		)	—			(10,637		)
Change in restricted cash	—			—			—			45,312			—			45,312
Investment in Subsidiaries	—			—			69,103			—			(69,103		)	—
Other	—			—			—			1,592			—			1,592
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES	—			(170		)	69,103			(318		)	(69,103		)	(488		)
FINANCING ACTIVITIES
Issuance of debt	—			—			30,000			1,819			—			31,819
Repayment of debt	—			—			(110,000		)	—			—			(110,000		)
Dividends paid	(62,545		)	—			—			—			—			(62,545		)
Proceeds from the issuance of common shares	2,027			—			—			—			—			2,027
Excess tax deficiencies on stock-based compensation	—			—			—			(1,240		)	—			(1,240		)
Repurchase of common shares	(1,754		)	—			—			—			—			(1,754		)
Intercompany distributions	—			(28,434		)	—			(67,879		)	96,313			—
Other	—			—			—			(679		)	—			(679		)
CASH USED FOR FINANCING ACTIVITIES	(62,272		)	(28,434		)	(80,000		)	(67,979		)	96,313			(142,372		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			—			13			—			13
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	(36,341		)	4,190			(10,897		)	(525		)	—			(43,573		)
Balance, beginning of year	130,181			304			10,719			58,440			—			199,644
Balance, end of period	$	93,840		$	4,494		$	(178	)	$	57,915		$	—		$	156,071



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2013
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Non- guarantors			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	13,984		$	22,259		$	—		$	58,980		$	(5,563	)	$	89,660
INVESTING ACTIVITIES
Capital expenditures	—			(89		)	—			(32,575		)	—			(32,664		)
Purchase of timberlands	—			—			—			(1,560		)	—			(1,560		)
Jesup mill cellulose specialties expansion	—			—			—			(36,734		)	—			(36,734		)
Proceeds from disposition of Wood Products business	—			—			—			83,741			—			83,741
Change in restricted cash	—			—			—			9,908			—			9,908
Investment in Subsidiaries	—			—			32,391			—			(32,391		)	—
Other	—			—			—			1,790			—			1,790
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES	—			(89		)	32,391			24,570			(32,391		)	24,481
FINANCING ACTIVITIES
Issuance of debt	100,000			—			—			—			—			100,000
Repayment of debt	(150,000		)	—			(20,000		)	—			—			(170,000		)
Dividends paid	(57,744		)	—			—			—			—			(57,744		)
Proceeds from the issuance of common shares	4,091			—			—			—			—			4,091
Excess tax benefits on stock-based compensation	—			—			—			6,191			—			6,191
Repurchase of common shares	(11,241		)	—			—			—			—			(11,241		)
Intercompany distributions	—			(5,206		)	—			(32,748		)	37,954			—
CASH USED FOR FINANCING ACTIVITIES	(114,894		)	(5,206		)	(20,000		)	(26,557		)	37,954			(128,703		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			—			(17		)	—			(17		)
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	(100,910		)	16,964			12,391			56,976			—			(14,579		)
Balance, beginning of year	252,888			3,966			19,358			4,384			—			280,596
Balance, end of period	$	151,978		$	20,930		$	31,749		$	61,360		$	—		$	266,017

In March 2012, Rayonier Inc. issued $325 million of 3.75% Senior Notes due 2022. The notes are fully and unconditionally guaranteed by ROC and Rayonier TRS Holdings Inc. In connection with these notes, the Company provides the following 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 AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2014
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
	(Restated)			(Restated)			(Restated)			(Restated)			(Restated)
SALES	$	—		$	—		$	386,686		$	—		$	386,686
Costs and Expenses
Cost of sales	—			—			304,619			—			304,619
Selling and general expenses	—			2,150			13,341			—			15,491
Other operating expense, net	—			2,375			1,162			—			3,537
	—			4,525			319,122			—			323,647
OPERATING (LOSS) INCOME	—			(4,525		)	67,564			—			63,039
Interest expense	(3,193		)	(6,933		)	(2,843		)	—			(12,969		)
Interest and miscellaneous income (expense), net	2,698			(233		)	(3,480		)	—			(1,015		)
Equity in income from subsidiaries	41,921			51,391			—			(93,312		)	—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	41,426			39,700			61,241			(93,312		)	49,055
Income tax benefit (expense)	—			2,221			(9,933		)	—			(7,712		)
NET INCOME	41,426			41,921			51,308			(93,312		)	41,343
Less: Net loss attributable to noncontrolling interest	—			—			(83		)	—			(83		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	41,426			41,921			51,391			(93,312		)	41,426
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment	12,894			12,892			17,795			(25,778		)	17,803
New Zealand joint venture cash flow hedges	1,112			1,112			1,711			(2,224		)	1,711
Amortization of pension and postretirement plans, net of income tax	2,097			2,097			1,620			(3,717		)	2,097
Total other comprehensive income	16,103			16,101			21,126			(31,719		)	21,611
COMPREHENSIVE INCOME	57,529			58,022			72,434			(125,031		)	62,954
Less: Comprehensive income attributable to noncontrolling interest	—			—			5,425			—			5,425
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.	$	57,529		$	58,022		$	67,009		$	(125,031	)	$	57,529



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2013
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	$	—		$	—		$	393,719		$	—		$	393,719
Costs and Expenses
Cost of sales	—			—			266,018			—			266,018
Selling and general expenses	—			2,401			13,698			—			16,099
Other operating (income) expense, net	(1,881		)	523			(2,145		)	—			(3,503		)
	(1,881		)	2,924			277,571			—			278,614
Equity in income of New Zealand joint venture	—			—			258			—			258
OPERATING INCOME (LOSS)	1,881			(2,924		)	116,406			—			115,363
Interest (expense) income	(3,275		)	(6,870		)	2,428			—			(7,717		)
Interest and miscellaneous income (expense), net	2,419			(222		)	(2,140		)	—			57
Equity in income from subsidiaries	146,710			153,444			—			(300,154		)	—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	147,735			143,428			116,694			(300,154		)	107,703
Income tax benefit (expense)	—			3,282			(7,727		)	—			(4,445		)
INCOME FROM CONTINUING OPERATIONS	147,735			146,710			108,967			(300,154		)	103,258
DISCONTINUED OPERATIONS, NET
Income from discontinued operations, net of income taxes	—			—			44,477			—			44,477
NET INCOME	147,735			146,710			153,444			(300,154		)	147,735
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment	975			975			975			(1,950		)	975
New Zealand joint venture cash flow hedges	554			554			554			(1,108		)	554
Amortization of pension and postretirement plans, net of income tax	4,969			4,969			—			(4,969		)	4,969
Total other comprehensive income	6,498			6,498			1,529			(8,027		)	6,498
COMPREHENSIVE INCOME	$	154,233		$	153,208		$	154,973		$	(308,181	)	$	154,233



	CONDENSED CONSOLIDATING BALANCE SHEETS As of March 31, 2014
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors		Non- guarantors		Consolidating Adjustments			Total Consolidated
	(Restated)		(Restated)		(Restated)		(Restated)			(Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	93,840	$	4,316	$	57,915	$	—		$	156,071
Accounts receivable, less allowance for doubtful accounts	—		699		110,998		—			111,697
Inventory	—		—		141,928		—			141,928
Deferred tax asset	—		646		30,934		—			31,580
Prepaid and other current assets	—		6,585		47,992		—			54,577
Total current assets	93,840		12,246		389,767		—			495,853
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—		2,067,549		—			2,067,549
NET PROPERTY, PLANT AND EQUIPMENT	—		2,698		859,271		—			861,969
INVESTMENT IN SUBSIDIARIES	1,675,347		2,712,291		—		(4,387,638		)	—
INTERCOMPANY NOTES RECEIVABLE	216,844		20,866		—		(237,710		)	—
OTHER ASSETS	3,569		36,201		177,688		—			217,458
TOTAL ASSETS	$	1,989,600	$	2,784,302	$	3,494,275	$	(4,625,348	)	$	3,642,829
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	3,156	$	83,126	$	—		$	86,282
Current maturities of long-term debt	—		112,500		1,819		—			114,319
Accrued taxes	—		14		11,360		—			11,374
Accrued payroll and benefits	—		8,038		11,223		—			19,261
Accrued interest	5,777		4,392		25,112		(21,424		)	13,857
Accrued customer incentives	—		—		10,082		—			10,082
Other current liabilities	—		9,058		26,812		—			35,870
Current liabilities for dispositions and discontinued operations	—		—		6,446		—			6,446
Total current liabilities	5,777		137,158		175,980		(21,424		)	297,491
LONG-TERM DEBT	325,000		768,228		300,659		—			1,393,887
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS	—		—		67,456		—			67,456
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		91,807		3,291		—			95,098
OTHER NON-CURRENT LIABILITIES	—		13,763		17,491		—			31,254
INTERCOMPANY PAYABLE	—		97,999		151,938		(249,937		)	—
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY	1,658,823		1,675,347		2,678,640		(4,353,987		)	1,658,823
Noncontrolling interest	—		—		98,820		—			98,820
TOTAL SHAREHOLDERS’ EQUITY	1,658,823		1,675,347		2,777,460		(4,353,987		)	1,757,643
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,989,600	$	2,784,302	$	3,494,275	$	(4,625,348	)	$	3,642,829



	CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2013
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors		Non- guarantors		Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	130,181	$	11,023	$	58,440	$	—		$	199,644
Accounts receivable, less allowance for doubtful accounts	—		2,310		92,646		—			94,956
Inventory	—		—		138,818		—			138,818
Deferred tax assets	—		681		38,419		—			39,100
Prepaid and other current assets	—		2,369		44,207		—			46,576
Total current assets	130,181		16,383		372,530		—			519,094
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—		2,049,378		—			2,049,378
NET PROPERTY, PLANT AND EQUIPMENT	—		2,612		858,209		—			860,821
INVESTMENT IN SUBSIDIARIES	1,627,315		2,764,211		—		(4,391,526		)	—
INTERCOMPANY NOTES RECEIVABLE	228,032		20,659		—		(248,691		)	—
OTHER ASSETS	3,689		36,258		216,261		—			256,208
TOTAL ASSETS	$	1,989,217	$	2,840,123	$	3,496,378	$	(4,640,217	)	$	3,685,501
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	3,086	$	66,207	$	—		$	69,293
Current maturities of long-term debt	—		112,500		—		—			112,500
Accrued taxes	—		4,855		3,696		—			8,551
Accrued payroll and benefits	—		11,382		13,566		—			24,948
Accrued interest	3,047		3,280		22,816		(19,612		)	9,531
Accrued customer incentives	—		—		9,580		—			9,580
Other current liabilities	—		8,765		26,109		—			34,874
Current liabilities for dispositions and discontinued operations	—		—		6,835		—			6,835
Total current liabilities	3,047		143,868		148,809		(19,612		)	276,112
LONG-TERM DEBT	325,000		847,749		288,975		—			1,461,724
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS	—		—		69,543		—			69,543
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		91,471		4,183		—			95,654
OTHER NON-CURRENT LIABILITIES	—		11,493		15,732		—			27,225
INTERCOMPANY PAYABLE	—		118,227		125,921		(244,148		)	—
TOTAL SHAREHOLDERS’ EQUITY	1,661,170		1,627,315		2,843,215		(4,376,457		)	1,755,243
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,989,217	$	2,840,123	$	3,496,378	$	(4,640,217	)	$	3,685,501



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2014
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	25,931		$	32,794		$	67,759		$	(27,210	)	$	99,274
INVESTING ACTIVITIES
Capital expenditures	—			(170		)	(36,585		)	—			(36,755		)
Purchase of timberlands	—			—			(10,637		)	—			(10,637		)
Change in restricted cash	—			—			45,312			—			45,312
Investment in Subsidiaries	—			69,103			—			(69,103		)	—
Other	—			—			1,592			—			1,592
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	—			68,933			(318		)	(69,103		)	(488		)
FINANCING ACTIVITIES
Issuance of debt	—			30,000			1,819			—			31,819
Repayment of debt	—			(110,000		)	—			—			(110,000		)
Dividends paid	(62,545		)	—			—			—			(62,545		)
Proceeds from the issuance of common shares	2,027			—			—			—			2,027
Excess tax deficiencies on stock-based compensation	—			—			(1,240		)	—			(1,240		)
Repurchase of common shares	(1,754		)	—			—			—			(1,754		)
Intercompany distributions	—			(28,434		)	(67,879		)	96,313			—
Other	—			—			(679		)	—			(679		)
CASH USED FOR FINANCING ACTIVITIES	(62,272		)	(108,434		)	(67,979		)	96,313			(142,372		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			13			—			13
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	(36,341		)	(6,707		)	(525		)	—			(43,573		)
Balance, beginning of year	130,181			11,023			58,440			—			199,644
Balance, end of period	$	93,840		$	4,316		$	57,915		$	—		$	156,071



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2013
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	13,984		$	22,259		$	58,980		$	(5,563	)	$	89,660
INVESTING ACTIVITIES
Capital expenditures	—			(89		)	(32,575		)	—			(32,664		)
Purchase of timberlands	—			—			(1,560		)	—			(1,560		)
Jesup mill cellulose specialties expansion	—			—			(36,734		)	—			(36,734		)
Proceeds from disposition of Wood Products business	—			—			83,741			—			83,741
Change in restricted cash	—			—			9,908			—			9,908
Investment in Subsidiaries	—			32,391			—			(32,391		)	—
Other	—			—			1,790			—			1,790
CASH PROVIDED BY INVESTING ACTIVITIES	—			32,302			24,570			(32,391		)	24,481
FINANCING ACTIVITIES
Issuance of debt	100,000			—			—			—			100,000
Repayment of debt	(150,000		)	(20,000		)	—			—			(170,000		)
Dividends paid	(57,744		)	—			—			—			(57,744		)
Proceeds from the issuance of common shares	4,091			—			—			—			4,091
Excess tax benefits on stock-based compensation	—			—			6,191			—			6,191
Repurchase of common shares	(11,241		)	—			—			—			(11,241		)
Intercompany distributions	—			(5,206		)	(32,748		)	37,954			—
CASH USED FOR FINANCING ACTIVITIES	(114,894		)	(25,206		)	(26,557		)	37,954			(128,703		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(17		)	—			(17		)
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	(100,910		)	29,355			56,976			—			(14,579		)
Balance, beginning of year	252,888			23,324			4,384			—			280,596
Balance, end of period	$	151,978		$	52,679		$	61,360		$	—		$	266,017