TIMBERLAND ACQUISITIONS

Menasha Acquisition

The Company and Forest Investment Associates (“FIA”) formed Olympus Acquisition Company (“Olympus”) to acquire all the outstanding common stock of Menasha Forest Products Corporation (“Menasha”), a privately held company with approximately 132,000 acres of timberland located in Oregon and Washington (the “Menasha Acquisition”).

On May 10, 2016 (the “acquisition date”), essentially all of the net assets of Olympus were distributed to the Company and FIA, resulting in the Company owning an identified portfolio of 61,000 acres of the former Menasha timberland for a final purchase price of approximately $263 million.

Business Combination Accounting

The distribution of net assets from Olympus to Rayonier has been accounted for as a business combination. Accordingly, the consideration paid by the Company has been recorded to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. In determining the fair value of the timberlands, the Company utilized valuation methodologies including a discounted cash flow analysis. A sales comparison approach was utilized to determine the fair market value of property, plant and equipment. The carrying values for current assets and liabilities were deemed to approximate their fair values due to the short-term nature of these assets and liabilities. Rayonier’s share of acquisition costs of $1.3 million is included in “Other operating income, net.”

In the fourth quarter of 2016, the Company completed its valuation of the assets acquired and liabilities assumed in the business combination resulting in measurement period adjustments to the provisional amounts recorded at the acquisition date. The effect of these measurement period adjustments has been reflected in the consolidated financial statements for the period ended December 31, 2016.

The following table summarizes the measurement period adjustments to the fair value of assets acquired and liabilities assumed :



	Increase/(Decrease)
Timber and timberlands		$152
Other current and non-current liabilities	152

The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date:



	May 10, 2016
Timber and timberlands (a)		$263,225
Property, plant and equipment	1,554
Other current and non-current assets	280
Total identifiable assets acquired	265,059
Other current and non-current liabilities	1,655
Total liabilities assumed	1,655
Net identifiable assets (purchase price)		$263,404

(a) Timber and timberlands include $0.8 million of seeds and seedlings.

Operating Results and Unaudited Pro Forma Financial Information

The net income effect resulting from the Menasha acquisition for the year ended December 31, 2016 is impracticable to determine, as the Company immediately integrated Menasha into its ongoing operations. Additionally, pro forma information has not been provided, as the portion of Menasha acquired was a component of a larger legal entity and separate historical financial statements were not prepared. Since stand-alone financial information prior to the acquisition was not readily available, compilation of such data is impracticable.

Washington Disposition

In May 2016, the Company completed a disposition of approximately 55,000 acres located in Washington to FIA (the “Washington disposition”) for a sale price of approximately $130 million. The proceeds received from the disposition were used to finance a portion of the Menasha Acquisition. The remainder of the acquisition was financed by entering into an incremental term loan agreement with CoBank, ACB, as administrative agent, and a syndicate of Farm Credit institutions to provide a 10-year, $300 million incremental term loan. See Note 5 — Debt for additional information.

Other Acquisitions

In five additional transactions throughout 2016, Rayonier purchased approximately 50,000 acres of timberland located in Florida, Georgia and Texas for approximately $103.9 million. These acquisitions were funded with cash on hand, like-kind exchange proceeds from real estate and timberland sales, or through the revolving credit facility and were accounted for as asset purchases.

In eight separate transactions throughout 2015, Rayonier purchased approximately 35,000 acres of timberland located in Florida, Georgia, Louisiana, Mississippi and Oregon, for approximately $88.5 million. These acquisitions were funded with cash on hand, like-kind exchange proceeds from real estate and timberland sales, or through the revolving credit facility and were accounted for as asset purchases. Additionally, in one transaction during 2015, the Company acquired forestry rights covering approximately 1,800 acres of timberland with mature timber in New Zealand for approximately $9.9 million. This acquisition was funded with cash on hand.

The following table summarizes the timberland acquisitions at December 31, 2016 and 2015:



	2016			2015
	Cost		Acres	Cost		Acres
Florida		$14,323	6,937		$5,031	3,428
Georgia	12,485		5,427	1,495		1,443
Louisiana	—		—	47,840		24,494
Mississippi	—		—	42		40
Oregon	239,896		55,603	34,052		5,578
Texas	77,139		37,513	—		—
Washington	22,638		5,247	—		—
New Zealand (a)	—		—	9,949		1,767
Total Acquisitions		$366,481	110,727		$98,409	36,750


(a)	The 2015 New Zealand transaction represents the purchase of a forestry right.