SEGMENT AND GEOGRAPHICAL INFORMATION

Rayonier operates in five reportable segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate and Trading.

The Company’s timber businesses are disaggregated into Southern Timber, Pacific Northwest Timber and New Zealand Timber segments. Sales in the Timber segments include all activities related to the harvesting of timber in addition to lease and license activities, other non-timber activities and carbon credit sales.

Real Estate sales include all U.S. property sales, including those lands designated as higher and better use (HBU). The Company’s Real Estate sales categories include Improved Development, Unimproved Development, Rural, Non-Strategic / Timberlands and Large Dispositions. Large Dispositions include sales of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value. Improved development includes sales of development property for which Rayonier, through one of its taxable REIT subsidiaries, has invested in infrastructure to enhance the value and marketability of the property. The unimproved development sales category comprises properties sold for commercial, industrial or residential development purposes and for which Rayonier has not invested in site improvements such as infrastructure.

The Trading segment comprises log trading in New Zealand, conducted by the Company’s New Zealand JV in two core areas of business, managed export services on behalf of third parties and procured logs for export sale by the New Zealand JV. Sales in the Trading segment also include log agency fees. The Trading segment primarily complements the New Zealand Timber segment by adding scale and achieving cost savings that directly benefit the New Zealand Timber segment.

Sales between operating segments are made based on estimated fair market value, and intercompany sales, purchases and profits (losses) are eliminated in consolidation. The Company evaluates financial performance based on segment operating income and Adjusted EBITDA. Asset information is not reported by segment, as the company does not produce asset information by segment internally.

Operating income as presented in the Consolidated Statements of Income and Comprehensive Income is equal to segment income. Certain income (loss) items in the Consolidated Statements of Income and Comprehensive Income are not allocated to segments. These items, which include interest income (expense), miscellaneous income (expense) and income tax (expense) benefit, are not considered by management to be part of segment operations and are included under “Corporate and other.”

Segment information for each of the three years ended December 31, 2017 follows:



	Sales
	2017		2016		2015
Southern Timber		$144,510		$151,192		$157,845
Pacific Northwest Timber	91,877		77,802		80,214
New Zealand Timber	247,609		177,889		162,803
Real Estate (a)	183,016		299,350		86,493
Trading	152,584		109,682		81,445
Total		$819,596		$815,915		$568,800

(a) The years 2017 and 2016 include Large Dispositions of $95.4 million and $207.3 million, respectively.



	Operating Income/(Loss)
	2017			2016			2015
Southern Timber		$42,254			$43,098			$46,669
Pacific Northwest Timber	1,127			(3,992		)	6,917
New Zealand Timber	72,385			33,072			2,775
Real Estate (a)	116,038			202,379			44,263
Trading	4,578			2,002			1,247
Corporate and other	(20,891		)	(20,782		)	(24,087		)
Total Operating Income	215,491			255,777			77,784
Unallocated interest expense and other	(32,231		)	(32,943		)	(34,702		)
Total Income before Income Taxes		$183,260			$222,834			$43,082

(a) The years 2017 and 2016 include Large Dispositions of $67.0 million and $143.9 million, respectively.



	Gross Capital Expenditures
	2017		2016		2015
Capital Expenditures (a)
Southern Timber		$34,476		$33,487		$33,245
Pacific Northwest Timber	10,254		8,036		8,515
New Zealand Timber	17,046		16,095		15,143
Real Estate	1,348		315		313
Trading	—		—		—
Corporate and other	2,221		790		77
Total capital expenditures		$65,345		$58,723		$57,293

Timberland Acquisitions
Southern Timber		$220,051		$103,947		$54,408
Pacific Northwest Timber	1,483		262,534		34,052
New Zealand Timber	21,376		—		9,949
Real Estate	—		—		—
Trading	—		—		—
Corporate and other	—		—		—
Total timberland acquisitions		$242,910		$366,481		$98,409

Total Gross Capital Expenditures		$308,255		$425,204		$155,702


(a)	Excludes timberland acquisitions presented separately in addition to spending on the Rayonier office building of $6.1 million, $6.3 million and $0.9 million and real estate development investments of $15.8 million, $8.7 million and $2.7 million in the years 2017, 2016 and 2015, respectively.



	Depreciation, Depletion and Amortization
	2017		2016		2015
Southern Timber		$49,357		$49,747		$54,299
Pacific Northwest Timber	32,008		25,246		14,842
New Zealand Timber	36,363		23,447		29,741
Real Estate (a)	27,479		52,304		14,533
Trading	—		—		—
Corporate and other	794		402		293
Total		$146,001		$151,146		$113,708


(a)	The years 2017 and 2016 include Large Dispositions of $18.4 million and $36.1 million, respectively.



	Non-Cash Cost of Land and Improved Development
	2017		2016		2015
Southern Timber	—		—		—
Pacific Northwest Timber	—		—		—
New Zealand Timber	128		1,824		467
Real Estate (a)	23,370		32,038		12,042
Trading	—		—		—
Corporate and other	—		—		—
Total		$23,498		$33,862		$12,509

(a) The years 2017 and 2016 include Large Dispositions of $9.8 million and $22.2 million, respectively.



	Sales by Product Line
	2017		2016		2015
Southern Timber		$144,510		$151,192		$157,845
Pacific Northwest Timber	91,877		77,802		80,214
New Zealand Timber	247,609		177,889		162,803
Real Estate
Improved Development	6,348		1,740		2,610
Unimproved Development	16,405		5,540		6,399
Rural	18,632		18,672		22,653
Non-Strategic / Timberlands	46,280		66,133		54,831
Large Dispositions	95,351		207,265		—
Total Real Estate	183,016		299,350		86,493
Trading	152,584		109,682		81,445
Total Sales		$819,596		$815,915		$568,800



	Geographical Operating Information
	Sales						Operating Income						Identifiable Assets
	2017		2016		2015		2017		2016		2015		2017		2016
United States		$419,403		$528,344		$324,552		$138,528		$220,703		$73,749		$2,331,230		$2,181,658
New Zealand	400,193		287,571		244,248		76,963		35,074		4,035		527,251		504,102
Total		$819,596		$815,915		$568,800		$215,491		$255,777		$77,784		$2,858,481		$2,685,760