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 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 For the Year Ended December 31, 2015
	Rayonier Inc.(Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$544,874		—				$544,874
Costs and Expenses
Cost of sales	—			—			441,099			—			441,099
Selling and general expenses	—			20,468			25,282			—			45,750
Other operating income, net	—			(404		)	(19,355		)	—			(19,759		)
	—			20,064			447,026			—			467,090
OPERATING (LOSS) INCOME	—			(20,064		)	97,848			—			77,784
Interest expense	(12,703		)	(9,135		)	(9,861		)	—			(31,699		)
Interest and miscellaneous income (expense), net	7,789			2,612			(13,404		)	—			(3,003		)
Equity in income from subsidiaries	51,079			75,532			—			(126,611		)	—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	46,165			48,945			74,583			(126,611		)	43,082
Income tax benefit (expense)	—			2,134			(1,275		)	—			859
NET INCOME	46,165			51,079			73,308			(126,611		)	43,941
Less: Net loss attributable to noncontrolling interest	—			—			(2,224		)	—			(2,224		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	46,165			51,079			75,532			(126,611		)	46,165
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment	(21,567		)	7,922			(40,373		)	21,567			(32,451		)
New Zealand joint venture cash flow hedges	(10,042		)	(10,195		)	234			10,042			(9,961		)
Actuarial change and amortization of pension and postretirement plan liabilities	2,933			2,933			—			(2,933		)	2,933
Total other comprehensive (loss) income	(28,676		)	660			(40,139		)	28,676			(39,479		)
COMPREHENSIVE INCOME	17,489			51,739			33,169			(97,935		)	4,462
Less: Comprehensive loss attributable to noncontrolling interest	—			—			(13,027		)	—			(13,027		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.		$17,489			$51,739			$46,196			($97,935	)		$17,489



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Year Ended December 31, 2014
	Rayonier Inc.(Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$603,521		—				$603,521
Costs and Expenses
Cost of sales	—			—			483,860			—			483,860
Selling and general expenses	—			14,578			33,305			—			47,883
Other operating expense (income), net	—			3,275			(29,786		)	—			(26,511		)
	—			17,853			487,379			—			505,232
OPERATING (LOSS) INCOME	—			(17,853		)	116,142			—			98,289
Interest expense	(13,247		)	(23,571		)	(7,430		)	—			(44,248		)
Interest and miscellaneous income (expense), net	9,186			(3,100		)	(15,285		)	—			(9,199		)
Equity in income from subsidiaries	103,398			138,719			—			(242,117		)	—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	99,337			94,195			93,427			(242,117		)	44,842
Income tax benefit	—			9,203			398			—			9,601
INCOME FROM CONTINUING OPERATIONS	99,337			103,398			93,825			(242,117		)	54,443
DISCONTINUED OPERATIONS, NET
Income from discontinued operations, net of income tax	—			—			43,403			—			43,403
NET INCOME	99,337			103,398			137,228			(242,117		)	97,846
Less: Net loss attributable to noncontrolling interest	—			—			(1,491		)	—			(1,491		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	99,337			103,398			138,719			(242,117		)	99,337
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment	(11,525		)	(11,527		)	(15,847		)	23,052			(15,847		)
New Zealand joint venture cash flow hedges	(1,206		)	(1,206		)	(1,855		)	2,412			(1,855		)
Actuarial change and amortization of pension and postretirement plan liabilities	54,046			54,046			88,174			(142,220		)	54,046
Total other comprehensive income	41,315			41,313			70,472			(116,756		)	36,344
COMPREHENSIVE INCOME	140,652			144,711			207,700			(358,873		)	134,190
Less: Comprehensive loss attributable to noncontrolling interest	—			—			(6,462		)	—			(6,462		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.		$140,652			$144,711			$214,162			($358,873	)		$140,652



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Year Ended December 31, 2013
	Rayonier Inc.(Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$659,718		—				$659,718
Costs and Expenses
Cost of sales	—			—			530,772			—			530,772
Selling and general expenses	—			9,821			45,612			—			55,433
Other operating (income) expense, net	(1,701		)	4,730			(21,516		)	—			(18,487		)
	(1,701		)	14,551			554,868			—			567,718
Equity in income of New Zealand joint venture	—			—			562			—			562
OPERATING INCOME (LOSS) BEFORE GAIN RELATED TO CONSOLIDATION OF NEW ZEALAND JOINT VENTURE	1,701			(14,551		)	105,412			—			92,562
Gain related to consolidation of New Zealand joint venture	—			—			16,098			—			16,098
OPERATING INCOME (LOSS)	1,701			(14,551		)	121,510			—			108,660
Interest expense	(13,088		)	(28,430		)	577			—			(40,941		)
Interest and miscellaneous income (expense), net	9,828			(4,297		)	(3,092		)	—			2,439
Equity in income from subsidiaries	373,455			407,722			—			(781,177		)	—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	371,896			360,444			118,995			(781,177		)	70,158
Income tax benefit	—			13,011			22,674			—			35,685
INCOME FROM CONTINUING OPERATIONS	371,896			373,455			141,669			(781,177		)	105,843
DISCONTINUED OPERATIONS, NET
Income from discontinued operations, net of income tax	—			—			267,955			—			267,955
NET INCOME	371,896			373,455			409,624			(781,177		)	373,798
Less: Net income attributable to noncontrolling interest	—			—			1,902			—			1,902
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	371,896			373,455			407,722			(781,177		)	371,896
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment	(1,915		)	(1,915		)	(5,710		)	3,830			(5,710		)
New Zealand joint venture cash flow hedges	3,286			3,286			3,629			(6,572		)	3,629
Actuarial change and amortization of pension and postretirement plan liabilities	61,869			61,869			20,589			(82,458		)	61,869
Total other comprehensive income	63,240			63,240			18,508			(85,200		)	59,788
COMPREHENSIVE INCOME	435,136			436,695			428,132			(866,377		)	433,586
Less: Comprehensive loss attributable to noncontrolling interest	—			—			(1,550		)	—			(1,550		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.		$435,136			$436,695			$429,682			($866,377	)		$435,136



	CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2015
	Rayonier Inc.(Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$2,472			$13,217			$36,088		—				$51,777
Accounts receivable, less allowance for doubtful accounts	—			1,870			18,352			—			20,222
Inventory	—			—			15,351			—			15,351
Prepaid logging roads	—			—			10,563			—			10,563
Prepaid expenses	—			443			1,648			—			2,091
Other current assets	—			4,876			805			—			5,681
Total current assets	2,472			20,406			82,807			—			105,685
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—			—			2,066,780			—			2,066,780
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT COSTS	—			—			65,450			—			65,450
NET PROPERTY, PLANT AND EQUIPMENT	—			330			6,412			—			6,742
INVESTMENT IN SUBSIDIARIES	1,321,681			2,212,405			—			(3,534,086		)	—
INTERCOMPANY RECEIVABLE	34,567			(610,450		)	575,883			—			—
OTHER ASSETS	2,305			19,741			52,560			—			74,606
TOTAL ASSETS		$1,361,025			$1,642,432			$2,849,892			($3,534,086	)		$2,319,263
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$609			$1,463			$19,407		—				$21,479
Accrued taxes	—			(10		)	3,695			—			3,685
Accrued payroll and benefits	—			3,594			3,443			—			7,037
Accrued interest	3,047			666			2,440			—			6,153
Other current liabilities	—			262			20,841			—			21,103
Total current liabilities	3,656			5,975			49,826			—			59,457
LONG-TERM DEBT	325,000			282,000			226,879			—			833,879
PENSION AND OTHER POSTRETIREMENT BENEFITS	—			34,822			(685		)	—			34,137
OTHER NON-CURRENT LIABILITIES	—			16,914			13,136			—			30,050
INTERCOMPANY PAYABLE	(255,715		)	(18,960		)	274,675			—			—
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY	1,288,084			1,321,681			2,212,405			(3,534,086		)	1,288,084
Noncontrolling interest	—			—			73,656			—			73,656
TOTAL SHAREHOLDERS’ EQUITY	1,288,084			1,321,681			2,286,061			(3,534,086		)	1,361,740
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$1,361,025			$1,642,432			$2,849,892			($3,534,086	)		$2,319,263



	CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2014
	Rayonier Inc.(Parent Issuer)		Subsidiary Guarantors		Non- guarantors			Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$102,218		$8,105		$51,235		—				$161,558
Accounts receivable, less allowance for doubtful accounts	—		1,409		22,609			—			24,018
Inventory	—		—		8,383			—			8,383
Prepaid logging roads	—		—		12,665			—			12,665
Prepaid expenses	—		1,926		3,123			—			5,049
Other current assets	—		83		1,948			—			2,031
Total current assets	102,218		11,523		99,963			—			213,704
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—		2,088,501			—			2,088,501
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT COSTS	—		—		77,433			—			77,433
NET PROPERTY, PLANT AND EQUIPMENT	—		433		6,273			—			6,706
INVESTMENT IN SUBSIDIARIES	1,463,303		2,053,911		—			(3,517,214		)	—
INTERCOMPANY RECEIVABLES	248,233		21,500		—			(269,733		)	—
OTHER ASSETS	2,763		18,369		45,639			—			66,771
TOTAL ASSETS		$1,816,517		$2,105,736		$2,317,809			($3,786,947	)		$2,453,115
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	—			$2,810		$17,401		—				$20,211
Current maturities of long-term debt	—		129,706		—			—			129,706
Accrued taxes	—		11		11,394			—			11,405
Accrued payroll and benefits	—		3,253		3,137			—			6,390
Accrued interest	3,047		2,517		31,281			(28,412		)	8,433
Other current liabilities	—		1,073		24,784			—			25,857
Total current liabilities	3,047		139,370		87,997			(28,412		)	202,002
LONG-TERM DEBT	325,000		31,000		265,849			—			621,849
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		34,161		(684		)	—			33,477
OTHER NON-CURRENT LIABILITIES	—		6,436		14,200			—			20,636
INTERCOMPANY PAYABLE	—		431,466		(153,754		)	(277,712		)	—
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY	1,488,470		1,463,303		2,017,520			(3,480,823		)	1,488,470
Noncontrolling interest	—		—		86,681			—			86,681
TOTAL SHAREHOLDERS’ EQUITY	1,488,470		1,463,303		2,104,201			(3,480,823		)	1,575,151
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$1,816,517		$2,105,736		$2,317,809			($3,786,947	)		$2,453,115



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2015
	Rayonier Inc.(Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments		Total Consolidated
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES		($4,890	)		($21,421	)		$203,475		—			$177,164
INVESTING ACTIVITIES
Capital expenditures	—			(78		)	(57,215		)	—		(57,293		)
Real estate development investments	—			—			(2,676		)	—		(2,676		)
Strategic purchase of timberlands and other	—			—			(98,409		)	—		(98,409		)
Proceeds from settlement of foreign currency hedge	—			—			2,804			—		2,804
Change in restricted cash	—			—			(16,836		)	—		(16,836		)
Investment in subsidiaries	—			126,242			—			(126,242	)	—
Other	—			—			6,101			—		6,101
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	—			126,164			(166,231		)	(126,242	)	(166,309		)
FINANCING ACTIVITIES
Issuance of debt	61,000			353,000			58,558			—		472,558
Repayment of debt	(61,000		)	(232,973		)	(70,429		)	—		(364,402		)
Dividends paid	(124,936		)	—			—			—		(124,936		)
Proceeds from the issuance of common shares	2,117			—			—			—		2,117
Proceeds from repurchase of common shares	(100,000		)	—			—			—		(100,000		)
Debt issuance costs	—			(1,678		)	—			—		(1,678		)
Issuance of intercompany notes	(35,500		)	—			35,500			—		—
Intercompany distributions	163,585			(217,980		)	(71,847		)	126,242		—
Other	(122		)	—			—			—		(122		)
CASH USED FOR FINANCING ACTIVITIES	(94,856		)	(99,631		)	(48,218		)	126,242		(116,463		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(4,173		)	—		(4,173		)
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	(99,746		)	5,112			(15,147		)	—		(109,781		)
Balance, beginning of year	102,218			8,105			51,235			—		161,558
Balance, end of year		$2,472			$13,217			$36,088		—			$51,777



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2014
	Rayonier Inc.(Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES		$269,653			$293,193			$47,727			($290,157	)		$320,416
INVESTING ACTIVITIES
Capital expenditures	—			(400		)	(63,313		)	—			(63,713		)
Capital expenditures from discontinued operations	—			—			(60,955		)	—			(60,955		)
Real estate development investments	—			—			(3,674		)	—			(3,674		)
Strategic purchase of timberlands and other	—			—			(130,896		)	—			(130,896		)
Change in restricted cash	—			—			62,256			—			62,256
Investment in subsidiaries	—			798,875			—			(798,875		)	—
Other	—			—			306			—			306
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	—			798,475			(196,276		)	(798,875		)	(196,676		)
FINANCING ACTIVITIES
Issuance of debt	—			201,000			1,225,464			—			1,426,464
Repayment of debt	—			(1,002,500		)	(287,137		)	—			(1,289,637		)
Dividends paid	(257,517		)	—			—			—			(257,517		)
Proceeds from the issuance of common shares	5,579			—			—			—			5,579
Proceeds from repurchase of common shares	(1,858		)	—			—			—			(1,858		)
Debt issuance costs	—			—			(12,380		)	—			(12,380		)
Net cash disbursed upon spin-off of Performance Fibers business	(31,420		)	—			—			—			(31,420		)
Issuance of intercompany notes	(12,400		)	—			12,400			—			—
Intercompany distributions	—			(293,086		)	(795,946		)	1,089,032			—
Other	—			—			(680		)	—			(680		)
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES	(297,616		)	(1,094,586		)	141,721			1,089,032			(161,449		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(377		)	—			(377		)
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	(27,963		)	(2,918		)	(7,205		)	—			(38,086		)
Balance, beginning of year	130,181			11,023			58,440			—			199,644
Balance, end of year		$102,218			$8,105			$51,235		—				$161,558



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2013
	Rayonier Inc.(Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES		$407,712			$417,074			$493,382			($771,375	)		$546,793
INVESTING ACTIVITIES
Capital expenditures	—			(663		)	(62,540		)	—			(63,203		)
Capital expenditures from discontinued operations	—			—			(103,092		)	—			(103,092		)
Real estate development investments	—			—			(1,292		)	—			(1,292		)
Purchase of additional interest in New Zealand joint venture	—			—			(139,879		)	—			(139,879		)
Strategic purchase of timberlands and other	—			—			(20,401		)	—			(20,401		)
Proceeds from settlement of foreign currency hedge	—			1,701			—			—			1,701
Jesup mill cellulose specialties expansion	—			—			(148,262		)	—			(148,262		)
Proceeds from disposition of Wood Products business	—			—			62,720			—			62,720
Change in restricted cash	—			—			(58,385		)	—			(58,385		)
Investment in subsidiaries	(138,178		)	(385,292		)	—			523,470			—
Other	—			—			(447		)	—			(447		)
CASH USED FOR INVESTING ACTIVITIES	(138,178		)	(384,254		)	(471,578		)	523,470			(470,540		)
FINANCING ACTIVITIES
Issuance of debt	175,000			390,000			57,885			—			622,885
Repayment of debt	(325,000		)	(151,525		)	(72,960		)	—			(549,485		)
Dividends paid	(237,016		)	—			—			—			(237,016		)
Proceeds from the issuance of common shares	10,101			—			—			—			10,101
Excess tax benefits on stock-based compensation	—			—			8,413			—			8,413
Proceeds from repurchase of common shares	(11,326		)	—			—			—			(11,326		)
Issuance of intercompany notes	(4,000		)	—			4,000			—			—
Intercompany distributions	—			(283,596		)	35,691			247,905			—
Other	—			—			(713		)	—			(713		)
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES	(392,241		)	(45,121		)	32,316			247,905			(157,141		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(64		)	—			(64		)
CASH AND CASH EQUIVALENTS
Change in cash and cash equivalents	(122,707		)	(12,301		)	54,056			—			(80,952		)
Balance, beginning of year	252,888			23,324			4,384			—			280,596
Balance, end of year		$130,181			$11,023			$58,440		—				$199,644