x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Large accelerated filer x | Accelerated filer o | |||
Non-accelerated filer o | Smaller reporting company o | Emerging growth company o |
Item | Page | ||
PART I - FINANCIAL INFORMATION | |||
1. | |||
2. | |||
3. | |||
4. | |||
PART II - OTHER INFORMATION | |||
1. | |||
2. | |||
6. | |||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
SALES | $245,906 | $200,964 | $449,101 | $395,455 | |||||||||||
Costs and Expenses | |||||||||||||||
Cost of sales | 184,418 | 144,610 | 322,906 | 281,438 | |||||||||||
Selling and general expenses | 11,502 | 10,246 | 20,504 | 19,836 | |||||||||||
Other operating income, net (Note 15) | (1,659 | ) | (785 | ) | (3,029 | ) | (1,973 | ) | |||||||
194,261 | 154,071 | 340,381 | 299,301 | ||||||||||||
OPERATING INCOME | 51,645 | 46,893 | 108,720 | 96,154 | |||||||||||
Interest expense | (8,102 | ) | (8,631 | ) | (16,155 | ) | (17,046 | ) | |||||||
Interest and other miscellaneous income, net | 2,905 | 4 | 3,525 | 522 | |||||||||||
INCOME BEFORE INCOME TAXES | 46,448 | 38,266 | 96,090 | 79,630 | |||||||||||
Income tax expense (Note 8) | (7,110 | ) | (7,493 | ) | (14,047 | ) | (13,774 | ) | |||||||
NET INCOME | 39,338 | 30,773 | 82,043 | 65,856 | |||||||||||
Less: Net income attributable to noncontrolling interest | 3,080 | 4,612 | 5,246 | 5,853 | |||||||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC. | 36,258 | 26,161 | 76,797 | 60,003 | |||||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | |||||||||||||||
Foreign currency translation adjustment, net of income tax expense of $0, $0, $0 and $0 | (29,760 | ) | 21,484 | (20,072 | ) | 23,916 | |||||||||
Cash flow hedges, net of income tax (expense) benefit of ($2,008), $1,180, ($1,640) and $1,148 | 529 | (1,988 | ) | 17,143 | 565 | ||||||||||
Amortization of pension and postretirement plans, net of income tax expense of $0, $0, $0 and $0 | 178 | 116 | 338 | 233 | |||||||||||
Total other comprehensive (loss) income | (29,053 | ) | 19,612 | (2,591 | ) | 24,714 | |||||||||
COMPREHENSIVE INCOME | 10,285 | 50,385 | 79,452 | 90,570 | |||||||||||
Less: Comprehensive (loss) income attributable to noncontrolling interest | (5,011 | ) | 9,595 | (528 | ) | 11,247 | |||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC. | $15,296 | $40,790 | $79,980 | $79,323 | |||||||||||
EARNINGS PER COMMON SHARE (Note 11) | |||||||||||||||
Basic earnings per share attributable to Rayonier Inc. | $0.28 | $0.20 | $0.60 | $0.48 | |||||||||||
Diluted earnings per share attributable to Rayonier Inc. | $0.28 | $0.20 | $0.59 | $0.47 | |||||||||||
Dividends declared per share | $0.27 | $0.25 | $0.52 | $0.50 |
June 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $106,611 | $112,653 | |||||
Accounts receivable, less allowance for doubtful accounts of $23 and $23 | 54,340 | 27,693 | |||||
Inventory (Note 16) | 19,125 | 24,141 | |||||
Prepaid expenses | 15,774 | 15,993 | |||||
Other current assets | 2,840 | 3,047 | |||||
Total current assets | 198,690 | 183,527 | |||||
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION | 2,406,425 | 2,462,066 | |||||
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS (NOTE 6) | 86,955 | 80,797 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Land | 3,962 | 3,962 | |||||
Buildings | 23,142 | 23,618 | |||||
Machinery and equipment | 4,432 | 4,440 | |||||
Construction in progress | 545 | 627 | |||||
Total property, plant and equipment, gross | 32,081 | 32,647 | |||||
Less — accumulated depreciation | (9,149 | ) | (9,269 | ) | |||
Total property, plant and equipment, net | 22,932 | 23,378 | |||||
RESTRICTED CASH (NOTE 17) | 69,638 | 59,703 | |||||
OTHER ASSETS | 66,422 | 49,010 | |||||
TOTAL ASSETS | $2,851,062 | $2,858,481 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $27,692 | $25,148 | |||||
Current maturities of long-term debt (Note 5) | — | 3,375 | |||||
Accrued taxes | 5,299 | 3,781 | |||||
Accrued payroll and benefits | 6,690 | 9,662 | |||||
Accrued interest | 4,995 | 5,054 | |||||
Deferred revenue | 17,674 | 9,721 | |||||
Other current liabilities | 21,538 | 11,807 | |||||
Total current liabilities | 83,888 | 68,548 | |||||
LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS (NOTE 5) | 972,285 | 1,022,004 | |||||
PENSION AND OTHER POSTRETIREMENT BENEFITS (NOTE 14) | 30,230 | 31,905 | |||||
OTHER NON-CURRENT LIABILITIES | 51,782 | 43,084 | |||||
SHAREHOLDERS’ EQUITY | |||||||
Common Shares, 480,000,000 shares authorized, 129,451,268 and 128,970,776 shares issued and outstanding | 880,560 | 872,228 | |||||
Retained earnings | 716,328 | 707,378 | |||||
Accumulated other comprehensive income (Note 18) | 16,601 | 13,417 | |||||
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY | 1,613,489 | 1,593,023 | |||||
Noncontrolling interest | 99,388 | 99,917 | |||||
TOTAL SHAREHOLDERS’ EQUITY | 1,712,877 | 1,692,940 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $2,851,062 | $2,858,481 |
Common Shares | Retained Earnings | Accumulated Other Comprehensive Income | Non-controlling Interest | Shareholders’ Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balance, December 31, 2016 | 122,904,368 | $709,867 | $700,887 | $856 | $85,142 | $1,496,752 | ||||||||||||||||
Cumulative-effect adjustment due to adoption of ASU No. 2016-16 | — | — | (14,365 | ) | — | — | (14,365 | ) | ||||||||||||||
Net income | — | — | 148,842 | — | 12,737 | 161,579 | ||||||||||||||||
Dividends ($1.00 per share) | — | — | (127,986 | ) | — | — | (127,986 | ) | ||||||||||||||
Issuance of shares under incentive stock plans | 322,314 | 4,751 | — | — | — | 4,751 | ||||||||||||||||
Stock-based compensation | — | 5,396 | — | — | — | 5,396 | ||||||||||||||||
Repurchase of common shares | (5,906 | ) | (176 | ) | — | — | — | (176 | ) | |||||||||||||
Actuarial change and amortization of pension and postretirement plan liabilities | — | — | — | (208 | ) | — | (208 | ) | ||||||||||||||
Foreign currency translation adjustment | — | — | — | 7,416 | 1,698 | 9,114 | ||||||||||||||||
Cash flow hedges | — | — | — | 5,353 | 340 | 5,693 | ||||||||||||||||
Issuance of shares under equity offering, net of costs | 5,750,000 | 152,390 | — | — | — | 152,390 | ||||||||||||||||
Balance, December 31, 2017 | 128,970,776 | $872,228 | $707,378 | $13,417 | $99,917 | $1,692,940 | ||||||||||||||||
Net income | — | — | 76,797 | — | 5,246 | 82,043 | ||||||||||||||||
Dividends ($0.52 per share) | — | — | (67,847 | ) | — | — | (67,847 | ) | ||||||||||||||
Issuance of shares under incentive stock plans | 561,475 | 7,824 | — | — | — | 7,824 | ||||||||||||||||
Stock-based compensation | — | 3,474 | — | — | — | 3,474 | ||||||||||||||||
Repurchase of common shares | (80,983 | ) | (2,966 | ) | — | — | — | (2,966 | ) | |||||||||||||
Amortization of pension and postretirement plan liabilities | — | — | — | 338 | — | 338 | ||||||||||||||||
Foreign currency translation adjustment | — | — | — | (15,251 | ) | (4,821 | ) | (20,072 | ) | |||||||||||||
Cash flow hedges | — | — | — | 18,097 | (954 | ) | 17,143 | |||||||||||||||
Balance, June 30, 2018 | 129,451,268 | $880,560 | $716,328 | $16,601 | $99,388 | $1,712,877 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
OPERATING ACTIVITIES | |||||||
Net income | $82,043 | $65,856 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 80,920 | 67,895 | |||||
Non-cash cost of land and improved development | 14,936 | 7,359 | |||||
Stock-based incentive compensation expense | 3,474 | 2,892 | |||||
Deferred income taxes | 13,653 | 15,214 | |||||
Amortization of losses from pension and postretirement plans | 338 | 233 | |||||
Gain on sale of large disposition of timberlands | — | (28,183 | ) | ||||
Other | (5,466 | ) | 1,719 | ||||
Changes in operating assets and liabilities: | |||||||
Receivables | (26,203 | ) | (10,421 | ) | |||
Inventories | 1,014 | (1,772 | ) | ||||
Accounts payable | 4,448 | 5,141 | |||||
Income tax receivable/payable | (84 | ) | (126 | ) | |||
All other operating activities | 12,510 | 2,508 | |||||
CASH PROVIDED BY OPERATING ACTIVITIES | 181,583 | 128,315 | |||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (25,920 | ) | (29,840 | ) | |||
Real estate development investments | (4,501 | ) | (5,599 | ) | |||
Purchase of timberlands | (31,234 | ) | (237,235 | ) | |||
Net proceeds from large disposition of timberlands | — | 42,029 | |||||
Rayonier office building under construction | — | (5,573 | ) | ||||
Other | 113 | 1,033 | |||||
CASH (USED FOR) INVESTING ACTIVITIES | (61,542 | ) | (235,185 | ) | |||
FINANCING ACTIVITIES | |||||||
Issuance of debt | 1,014 | 63,389 | |||||
Repayment of debt | (54,389 | ) | (60,422 | ) | |||
Dividends paid | (67,053 | ) | (62,825 | ) | |||
Proceeds from the issuance of common shares under incentive stock plan | 7,824 | 3,206 | |||||
Proceeds from the issuance of common shares from equity offering, net of costs | — | 152,390 | |||||
Repurchase of common shares | (2,966 | ) | — | ||||
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES | (115,570 | ) | 95,738 | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (578 | ) | 1,855 | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (a) | |||||||
Change in cash, cash equivalents and restricted cash | 3,893 | (9,277 | ) | ||||
Balance, beginning of year | 172,356 | 157,617 | |||||
Balance, end of period | $176,249 | $148,340 | |||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||
Cash paid during the period: | |||||||
Interest (b) | $14,858 | $16,546 | |||||
Income taxes | 302 | 376 | |||||
Non-cash investing activity: | |||||||
Capital assets purchased on account | 6,646 | 5,284 |
(a) | Due to the adoption of ASU No. 2016-18, restricted cash is now included with cash and cash equivalents when reconciling the beginning-of-year and end-of-period total amounts shown and therefore changes in restricted cash are no longer reported as investing activities. Prior period amounts have been restated to conform to current period presentation. For additional information and a reconciliation of cash, see Note 17 — Restricted Cash. |
(b) | Interest paid is presented net of patronage payments received of $3.8 million and $3.0 million for the six months ended June 30, 2018 and June 30, 2017, respectively. For additional information on patronage payments, see Note 5 — Debt in the 2017 Form 10-K. |
1. | BASIS OF PRESENTATION |
Three Months Ended | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Elim. | Total | ||||||||||||||||||||
June 30, 2018 | |||||||||||||||||||||||||||
Pulpwood | $20,300 | $4,625 | $7,788 | — | $3,804 | — | $36,517 | ||||||||||||||||||||
Sawtimber | 15,776 | 26,654 | 61,219 | — | 42,162 | — | 145,811 | ||||||||||||||||||||
Hardwood | 1,214 | — | — | — | — | — | 1,214 | ||||||||||||||||||||
Total Timber Sales | 37,290 | 31,279 | 69,007 | — | 45,966 | — | 183,542 | ||||||||||||||||||||
License Revenue, Primarily From Hunting | 3,936 | 103 | 142 | — | — | — | 4,181 | ||||||||||||||||||||
Other Non-Timber/Carbon Revenue | 6,589 | 749 | 504 | — | — | — | 7,842 | ||||||||||||||||||||
Agency Fee Income | — | — | — | — | 167 | — | 167 | ||||||||||||||||||||
Total Non-Timber Sales | 10,525 | 852 | 646 | — | 167 | — | 12,190 | ||||||||||||||||||||
Improved Development | — | — | — | 1,345 | — | — | 1,345 | ||||||||||||||||||||
Unimproved Development | — | — | — | — | — | — | — | ||||||||||||||||||||
Rural | — | — | — | 4,827 | — | — | 4,827 | ||||||||||||||||||||
Non-strategic / Timberlands | — | — | — | 43,688 | — | — | 43,688 | ||||||||||||||||||||
Large Dispositions | — | — | — | — | — | — | — | ||||||||||||||||||||
Total Real Estate Sales | — | — | — | 49,860 | — | — | 49,860 | ||||||||||||||||||||
Revenue from Contracts with Customers | 47,815 | 32,131 | 69,653 | 49,860 | 46,133 | — | 245,592 | ||||||||||||||||||||
Other Non-Timber Sales, Primarily Lease | 232 | 82 | — | — | — | — | 314 | ||||||||||||||||||||
Intersegment | — | — | — | — | 29 | (29 | ) | — | |||||||||||||||||||
Total Revenue | $48,047 | $32,213 | $69,653 | $49,860 | $46,162 | ($29 | ) | $245,906 | |||||||||||||||||||
June 30, 2017 | |||||||||||||||||||||||||||
Pulpwood | $15,170 | $2,803 | $6,450 | — | $3,711 | — | $28,134 | ||||||||||||||||||||
Sawtimber | 14,580 | 16,648 | 46,403 | — | 37,996 | — | 115,627 | ||||||||||||||||||||
Hardwood | 1,027 | — | — | — | — | — | 1,027 | ||||||||||||||||||||
Total Timber Sales | 30,777 | 19,451 | 52,853 | — | 41,707 | — | 144,788 | ||||||||||||||||||||
License Revenue, Primarily from Hunting | 3,808 | 93 | 72 | — | — | — | 3,973 | ||||||||||||||||||||
Other Non-Timber Revenue | 753 | 858 | 86 | — | — | — | 1,697 | ||||||||||||||||||||
Agency Fee Income | — | — | — | — | 330 | — | 330 | ||||||||||||||||||||
Total Non-Timber Sales | 4,561 | 951 | 158 | — | 330 | — | 6,000 | ||||||||||||||||||||
Improved Development | — | — | — | 143 | — | — | 143 | ||||||||||||||||||||
Unimproved Development | — | — | — | 2,500 | — | — | 2,500 | ||||||||||||||||||||
Rural | — | — | — | 5,493 | — | — | 5,493 | ||||||||||||||||||||
Non-strategic / Timberlands | — | — | 24,311 | 17,484 | — | — | 41,795 | ||||||||||||||||||||
Large Dispositions | — | — | — | — | — | — | — | ||||||||||||||||||||
Total Real Estate Sales | — | — | 24,311 | 25,620 | — | — | 49,931 | ||||||||||||||||||||
Revenue from Contracts with Customers | 35,338 | 20,402 | 77,322 | 25,620 | 42,037 | — | 200,719 | ||||||||||||||||||||
Other Non-Timber Sales, Primarily Lease | 190 | 55 | — | — | — | — | 245 | ||||||||||||||||||||
Total Revenue | $35,528 | $20,457 | $77,322 | $25,620 | $42,037 | — | $200,964 |
Six Months Ended | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Elim. | Total | ||||||||||||||||||||
June 30, 2018 | |||||||||||||||||||||||||||
Pulpwood | $41,904 | $8,044 | $13,632 | — | $8,062 | — | $71,642 | ||||||||||||||||||||
Sawtimber | 31,713 | 53,721 | 105,964 | — | 76,987 | — | 268,385 | ||||||||||||||||||||
Hardwood | 1,811 | — | — | — | — | — | 1,811 | ||||||||||||||||||||
Total Timber Sales | 75,428 | 61,765 | 119,596 | — | 85,049 | — | 341,838 | ||||||||||||||||||||
License Revenue, Primarily From Hunting | 8,024 | 128 | 194 | — | — | — | 8,346 | ||||||||||||||||||||
Other Non-Timber/Carbon Revenue | 7,781 | 1,554 | 2,827 | — | — | — | 12,162 | ||||||||||||||||||||
Agency Fee Income | — | — | — | — | 289 | — | 289 | ||||||||||||||||||||
Total Non-Timber Sales | 15,805 | 1,682 | 3,021 | — | 289 | — | 20,797 | ||||||||||||||||||||
Improved Development | — | — | — | 2,465 | — | — | 2,465 | ||||||||||||||||||||
Unimproved Development | — | — | — | 7,446 | — | — | 7,446 | ||||||||||||||||||||
Rural | — | — | — | 6,480 | — | — | 6,480 | ||||||||||||||||||||
Non-strategic / Timberlands | — | — | — | 69,533 | — | — | 69,533 | ||||||||||||||||||||
Large Dispositions | — | — | — | — | — | — | — | ||||||||||||||||||||
Total Real Estate Sales | — | — | — | 85,924 | — | — | 85,924 | ||||||||||||||||||||
Revenue from Contracts with Customers | 91,233 | 63,447 | 122,617 | 85,924 | 85,338 | — | 448,559 | ||||||||||||||||||||
Other Non-Timber Sales, Primarily Lease | 402 | 140 | — | — | — | — | 542 | ||||||||||||||||||||
Intersegment | — | — | — | — | 35 | (35 | ) | — | |||||||||||||||||||
Total Revenue | $91,635 | $63,587 | $122,617 | $85,924 | $85,373 | ($35 | ) | $449,101 | |||||||||||||||||||
June 30, 2017 | |||||||||||||||||||||||||||
Pulpwood | $34,146 | $6,162 | $11,611 | — | $6,547 | — | $58,466 | ||||||||||||||||||||
Sawtimber | 27,603 | 38,081 | 81,982 | — | 69,137 | — | 216,803 | ||||||||||||||||||||
Hardwood | 1,743 | — | — | — | — | — | 1,743 | ||||||||||||||||||||
Total Timber Sales | 63,492 | 44,243 | 93,593 | — | 75,684 | — | 277,012 | ||||||||||||||||||||
License Revenue, Primarily from Hunting | 7,638 | 190 | 119 | — | — | — | 7,947 | ||||||||||||||||||||
Other Non-Timber Revenue | 3,142 | 1,804 | 173 | — | — | — | 5,119 | ||||||||||||||||||||
Agency Fee Income | — | — | — | — | 618 | — | 618 | ||||||||||||||||||||
Total Non-Timber Sales | 10,780 | 1,994 | 292 | — | 618 | — | 13,684 | ||||||||||||||||||||
Improved Development | — | — | — | 143 | — | — | 143 | ||||||||||||||||||||
Unimproved Development | — | — | — | 2,500 | — | — | 2,500 | ||||||||||||||||||||
Rural | — | — | — | 12,232 | — | — | 12,232 | ||||||||||||||||||||
Non-strategic / Timberlands | — | — | 24,311 | 23,083 | — | — | 47,394 | ||||||||||||||||||||
Large Dispositions | — | — | — | 41,951 | — | — | 41,951 | ||||||||||||||||||||
Total Real Estate Sales | — | — | 24,311 | 79,909 | — | — | 104,220 | ||||||||||||||||||||
Revenue from Contracts with Customers | 74,272 | 46,237 | 118,196 | 79,909 | 76,302 | — | 394,916 | ||||||||||||||||||||
Other Non-Timber Sales, Primarily Lease | 394 | 145 | — | — | — | — | 539 | ||||||||||||||||||||
Total Revenue | $74,666 | $46,382 | $118,196 | $79,909 | $76,302 | — | $395,455 |
Contract Type | Performance Obligation | Timing of Revenue Recognition | General Payment Terms | |||
Stumpage Pay-as-Cut | Right to harvest a unit (i.e. ton, MBF, JAS m3) of standing timber | As timber is severed (point-in-time) | Initial payment between 5% and 20% of estimated contract value; collection generally within 10 days of severance | |||
Stumpage Lump Sum | Right to harvest an agreed upon volume of standing timber | Contract execution (point-in-time) | Full payment due upon contract execution | |||
Stumpage Agreed Volume | Right to harvest an agreed upon acreage of standing timber | As timber is severed (over-time) | Payments made throughout contract term at the earlier of a specified harvest percentage or time elapsed | |||
Delivered Wood (Domestic) | Delivery of a unit (i.e. ton, MBF, JAS m3) of timber to customer’s facility | Upon delivery to customer’s facility (point-in-time) | No initial payment and on open credit terms; collection generally within 30 days of invoice | |||
Delivered Wood (Export) | Delivery of a unit (i.e. ton, MBF, JAS m3) onto export vessel | Upon delivery onto export vessel (point-in-time) | Letter of credit from an approved bank; collection generally within 30 days of delivery |
Three Months Ended | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Trading | Total | ||||||||||||||
June 30, 2018 | |||||||||||||||||||
Stumpage Pay-as-Cut | $19,855 | — | — | — | $19,855 | ||||||||||||||
Stumpage Lump Sum | 256 | 4,605 | — | — | 4,861 | ||||||||||||||
Stumpage Agreed Volume | — | — | — | — | — | ||||||||||||||
Total Stumpage | 20,111 | 4,605 | — | — | 24,716 | ||||||||||||||
Delivered Wood (Domestic) | 15,166 | 26,674 | 25,647 | 1,567 | 69,054 | ||||||||||||||
Delivered Wood (Export) | 2,013 | — | 43,360 | 44,399 | 89,772 | ||||||||||||||
Total Delivered | 17,179 | 26,674 | 69,007 | 45,966 | 158,826 | ||||||||||||||
Total Timber Sales | $37,290 | $31,279 | $69,007 | $45,966 | $183,542 | ||||||||||||||
June 30, 2017 | |||||||||||||||||||
Stumpage Pay-as-Cut | $18,249 | — | — | — | $18,249 | ||||||||||||||
Stumpage Lump Sum | 2,247 | — | — | — | 2,247 | ||||||||||||||
Stumpage Agreed Volume | — | 54 | — | — | 54 | ||||||||||||||
Total Stumpage | 20,496 | 54 | — | — | 20,550 | ||||||||||||||
Delivered Wood (Domestic) | 10,281 | 19,397 | 20,598 | 1,317 | 51,593 | ||||||||||||||
Delivered Wood (Export) | — | — | 32,255 | 40,390 | 72,645 | ||||||||||||||
Total Delivered | 10,281 | 19,397 | 52,853 | 41,707 | 124,238 | ||||||||||||||
Total Timber Sales | $30,777 | $19,451 | $52,853 | $41,707 | $144,788 |
Six Months Ended | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Trading | Total | ||||||||||||||
June 30, 2018 | |||||||||||||||||||
Stumpage Pay-as-Cut | $42,364 | — | — | — | $42,364 | ||||||||||||||
Stumpage Lump Sum | 2,074 | 9,711 | — | — | 11,785 | ||||||||||||||
Stumpage Agreed Volume | — | — | — | — | — | ||||||||||||||
Total Stumpage | 44,438 | 9,711 | — | — | 54,149 | ||||||||||||||
Delivered Wood (Domestic) | 28,543 | 52,054 | 45,750 | 2,504 | 128,851 | ||||||||||||||
Delivered Wood (Export) | 2,447 | — | 73,846 | 82,545 | 158,838 | ||||||||||||||
Total Delivered | 30,990 | 52,054 | 119,596 | 85,049 | 287,689 | ||||||||||||||
Total Timber Sales | $75,428 | $61,765 | $119,596 | $85,049 | $341,838 | ||||||||||||||
June 30, 2017 | |||||||||||||||||||
Stumpage Pay-as-Cut | $38,352 | — | — | — | $38,352 | ||||||||||||||
Stumpage Lump Sum | 5,043 | 2,580 | — | — | 7,623 | ||||||||||||||
Stumpage Agreed Volume | — | 1,234 | — | — | 1,234 | ||||||||||||||
Total Stumpage | 43,395 | 3,814 | — | — | 47,209 | ||||||||||||||
Delivered Wood (Domestic) | 20,097 | 40,429 | 39,443 | 2,324 | 102,293 | ||||||||||||||
Delivered Wood (Export) | — | — | 54,150 | 73,360 | 127,510 | ||||||||||||||
Total Delivered | 20,097 | 40,429 | 93,593 | 75,684 | 229,803 | ||||||||||||||
Total Timber Sales | $63,492 | $44,243 | $93,593 | $75,684 | $277,012 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue recognized from contract liability balance at the beginning of the year (a) | $5,429 | $3,809 | $11,800 | $8,592 |
(a) | Revenue recognized was primarily from hunting licenses and the use of advances on pay-as-cut timber sales. |
3. | JOINT VENTURE INVESTMENT |
4. | SEGMENT AND GEOGRAPHICAL INFORMATION |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
SALES | 2018 | 2017 | 2018 | 2017 | |||||||||||
Southern Timber | $48,047 | $35,528 | $91,635 | $74,666 | |||||||||||
Pacific Northwest Timber | 32,213 | 20,457 | 63,587 | 46,382 | |||||||||||
New Zealand Timber | 69,653 | 77,322 | 122,617 | 118,196 | |||||||||||
Real Estate (a) | 49,860 | 25,620 | 85,924 | 79,909 | |||||||||||
Trading | 46,162 | 42,037 | 85,373 | 76,302 | |||||||||||
Intersegment Eliminations | (29 | ) | — | (35 | ) | — | |||||||||
Total | $245,906 | $200,964 | $449,101 | $395,455 |
(a) | The six months ended June 30, 2017 includes $42.0 million of Large Dispositions. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
OPERATING INCOME (LOSS) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Southern Timber | $15,651 | $9,655 | $27,878 | $23,594 | |||||||||||
Pacific Northwest Timber | 5,625 | (1,535 | ) | 10,299 | (2,413 | ) | |||||||||
New Zealand Timber | 17,768 | 26,804 | 33,725 | 37,046 | |||||||||||
Real Estate (a) | 18,864 | 16,133 | 46,918 | 45,798 | |||||||||||
Trading | 227 | 1,141 | 376 | 2,239 | |||||||||||
Corporate and other | (6,490 | ) | (5,305 | ) | (10,476 | ) | (10,110 | ) | |||||||
Total Operating Income | 51,645 | 46,893 | 108,720 | 96,154 | |||||||||||
Unallocated interest expense and other | (5,197 | ) | (8,627 | ) | (12,630 | ) | (16,524 | ) | |||||||
Total Income before Income Taxes | $46,448 | $38,266 | $96,090 | $79,630 |
(a) | The six months ended June 30, 2017 includes $28.2 million of Large Dispositions. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
DEPRECIATION, DEPLETION AND AMORTIZATION | 2018 | 2017 | 2018 | 2017 | |||||||||||
Southern Timber | $14,940 | $11,904 | $30,919 | $24,356 | |||||||||||
Pacific Northwest Timber | 9,381 | 7,075 | 18,885 | 17,285 | |||||||||||
New Zealand Timber (a) | 8,026 | 15,456 | 13,743 | 20,863 | |||||||||||
Real Estate (b) | 13,739 | 2,596 | 16,805 | 13,303 | |||||||||||
Trading | — | — | — | — | |||||||||||
Corporate and other | 297 | 92 | 568 | 192 | |||||||||||
Total | $46,383 | $37,123 | $80,920 | $75,999 |
(a) | The three and six months ended June 30, 2017 includes $8.9 million of timber cost basis expensed in conjunction with a timberland sale. |
(b) | The six months ended June 30, 2017 includes $8.1 million from Large Dispositions. |
NON-CASH COST OF LAND AND IMPROVED DEVELOPMENT | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Southern Timber | — | — | — | — | |||||||||||
Pacific Northwest Timber | — | — | — | — | |||||||||||
New Zealand Timber | — | 128 | — | 128 | |||||||||||
Real Estate (a) | 13,312 | 2,752 | 14,936 | 12,974 | |||||||||||
Trading | — | — | — | — | |||||||||||
Total | $13,312 | $2,880 | $14,936 | $13,102 |
(a) | The six months ended June 30, 2017 includes $5.7 million from Large Dispositions. |
5. | DEBT |
June 30, 2018 | |||
Term Credit Agreement borrowings due 2024 at a variable interest rate of 3.6% at June 30, 2018 (a) | $350,000 | ||
Senior Notes due 2022 at a fixed interest rate of 3.75% | 325,000 | ||
Incremental Term Loan Agreement borrowings due 2026 at a variable interest rate of 3.9% at June 30, 2018 (b) | 300,000 | ||
Total debt | 975,000 | ||
Less: Deferred financing costs | (2,715 | ) | |
Long-term debt, net of deferred financing costs | $972,285 |
2018 | — | ||
2019 | — | ||
2020 | — | ||
2021 | — | ||
2022 | 325,000 | ||
Thereafter | 650,000 | ||
Total Debt | $975,000 |
6. | HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS |
Higher and Better Use Timberlands and Real Estate Development Investments | |||||||||||
Land and Timber | Development Investments | Total | |||||||||
Non-current portion at December 31, 2017 | $59,653 | $21,144 | $80,797 | ||||||||
Plus: Current portion (a) | 6,702 | 11,648 | 18,350 | ||||||||
Total Balance at December 31, 2017 | 66,355 | 32,792 | 99,147 | ||||||||
Non-cash cost of land and improved development | (1,034 | ) | (1,853 | ) | (2,887 | ) | |||||
Timber depletion from harvesting activities and basis of timber sold in real estate sales | (929 | ) | — | (929 | ) | ||||||
Capitalized real estate development investments (b) | — | 4,500 | 4,500 | ||||||||
Capital expenditures (silviculture) | 47 | — | 47 | ||||||||
Intersegment transfers | 1,325 | — | 1,325 | ||||||||
Total Balance at June 30, 2018 | 65,764 | 35,439 | 101,203 | ||||||||
Less: Current portion (a) | (4,241 | ) | (10,007 | ) | (14,248 | ) | |||||
Non-current portion at June 30, 2018 | $61,523 | $25,432 | $86,955 |
(a) | The current portion of Higher and Better Use Timberlands and Real Estate Development Investments is recorded in Inventory. See Note 16 — Inventory for additional information. |
(b) | Capitalized real estate development investments include $0.3 million of capitalized interest. |
Operating Leases | Timberland Leases (a) | Commitments (b) | Total | ||||||||||||
Remaining 2018 | $590 | $5,689 | $7,641 | $13,920 | |||||||||||
2019 | 1,032 | 8,873 | 5,121 | 15,026 | |||||||||||
2020 | 850 | 8,495 | 3,403 | 12,748 | |||||||||||
2021 | 736 | 8,497 | 1,573 | 10,806 | |||||||||||
2022 | 705 | 8,260 | 956 | 9,921 | |||||||||||
Thereafter (c) | 708 | 147,321 | 1,510 | 149,539 | |||||||||||
$4,621 | $187,135 | $20,204 | $211,960 |
(a) | The majority of timberland leases are subject to increases or decreases based on either the Consumer Price Index, Producer Price Index or market rates. |
(b) | Commitments include $1.7 million of pension contribution requirements remaining in 2018 based on actuarially determined estimates and IRS minimum funding requirements, payments expected to be made on derivative financial instruments (foreign exchange contracts and interest rate swaps), construction of the Company’s Wildlight development project and other purchase obligations. For additional information on the pension contribution see Note 15 — Employee Benefit Plans in the 2017 Form 10-K. |
(c) | Includes 20 years of future minimum payments for perpetual Crown Forest Licenses (“CFL”). A CFL consists of a license to use public or government owned land to operate a commercial forest. The CFL's extend indefinitely and may only be terminated upon a 35-year termination notice from the government. If no termination notice is given, the CFLs renew automatically each year for a one-year term. As of June 30, 2018, the New Zealand JV has three CFL’s under termination notice that are currently being relinquished as harvest activities are concluding, as well as two fixed term CFL’s expiring in 2062. The annual license fee is determined based on current market rental value, with triennial rent reviews. |
9. | CONTINGENCIES |
10. | GUARANTEES |
Financial Commitments | Maximum Potential Payment | Carrying Amount of Associated Liability | ||||||
Standby letters of credit (a) | $10,353 | — | ||||||
Guarantees (b) | 2,254 | 43 | ||||||
Surety bonds (c) | 1,284 | — | ||||||
Total financial commitments | $13,891 | $43 |
(a) | Approximately $9.2 million of the irrevocable standby letters of credit serve as credit support for infrastructure at the Company’s Wildlight development project. The remaining letters of credit support various insurance related agreements, primarily workers’ compensation. These letters of credit will expire at various dates during 2018 and 2019 and will be renewed as required. |
(b) | In conjunction with a timberland sale and note monetization in 2004, the Company issued a make-whole agreement pursuant to which it guaranteed $2.3 million of obligations of a special-purpose entity that was established to complete the monetization. At June 30, 2018, the Company has a de minimis liability to reflect the fair market value of its obligation to perform under the make-whole agreement. |
(c) | Rayonier issues surety bonds primarily to secure timber harvesting obligations in the State of Washington and to provide collateral for outstanding claims under the Company’s previous workers’ compensation self-insurance programs in Washington and Florida. Rayonier has also obtained performance bonds to secure the development activity at the Company’s Wildlight development project. These surety bonds expire at various dates during 2018 and 2019 and are expected to be renewed as required. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Income | $39,338 | $30,773 | $82,043 | $65,856 | |||||||||||
Less: Net income attributable to noncontrolling interest | 3,080 | 4,612 | 5,246 | 5,853 | |||||||||||
Net income attributable to Rayonier Inc. | $36,258 | $26,161 | $76,797 | $60,003 | |||||||||||
Shares used for determining basic earnings per common share | 129,067,325 | 128,548,218 | 128,935,003 | 126,081,762 | |||||||||||
Dilutive effect of: | |||||||||||||||
Stock options | 103,154 | 92,513 | 90,815 | 99,602 | |||||||||||
Performance and restricted shares | 540,808 | 447,448 | 606,760 | 337,862 | |||||||||||
Shares used for determining diluted earnings per common share | 129,711,287 | 129,088,179 | 129,632,578 | 126,519,226 | |||||||||||
Basic earnings per common share attributable to Rayonier Inc.: | $0.28 | $0.20 | $0.60 | $0.48 | |||||||||||
Diluted earnings per common share attributable to Rayonier Inc.: | $0.28 | $0.20 | $0.59 | $0.47 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Anti-dilutive shares excluded from the computations of diluted earnings per share: | |||||||||||
Stock options | 254,663 | 586,017 | 213,241 | 589,335 |
12. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
Outstanding Interest Rate Swaps (a) | |||||||||
Date Entered Into | Term | Notional Amount | Related Debt Facility | Fixed Rate of Swap | Bank Margin on Debt | Total Effective Interest Rate (b) | |||
August 2015 | 9 years | $170,000 | Term Credit Agreement | 2.20 | % | 1.63 | % | 3.83 | % |
August 2015 | 9 years | 180,000 | Term Credit Agreement | 2.35 | % | 1.63 | % | 3.98 | % |
April 2016 | 10 years | 100,000 | Incremental Term Loan | 1.60 | % | 1.90 | % | 3.50 | % |
April 2016 | 10 years | 100,000 | Incremental Term Loan | 1.60 | % | 1.90 | % | 3.50 | % |
July 2016 | 10 years | 100,000 | Incremental Term Loan | 1.26 | % | 1.90 | % | 3.16 | % |
(a) | All interest rate swaps have been designated as interest rate cash flow hedges and qualify for hedge accounting. |
(b) | Rate is before estimated patronage payments. |
Three Months Ended June 30, | |||||||||
Income Statement Location | 2018 | 2017 | |||||||
Derivatives designated as cash flow hedges: | |||||||||
Foreign currency exchange contracts | Other comprehensive (loss) income | ($6,630 | ) | $3,261 | |||||
Foreign currency option contracts | Other comprehensive (loss) income | (539 | ) | 976 | |||||
Interest rate swaps | Other comprehensive (loss) income | 5,690 | (5,022 | ) | |||||
Derivatives designated as a net investment hedge: | |||||||||
Foreign currency exchange contract | Other comprehensive (loss) income | (454 | ) | — | |||||
Derivatives not designated as hedging instruments: | |||||||||
Foreign currency exchange contracts | Interest and other miscellaneous income, net | 2,479 | (462 | ) |
Six Months Ended June 30, | |||||||||
Income Statement Location | 2018 | 2017 | |||||||
Derivatives designated as cash flow hedges: | |||||||||
Foreign currency exchange contracts | Other comprehensive (loss) income | ($5,398 | ) | $3,189 | |||||
Foreign currency option contracts | Other comprehensive (loss) income | (359 | ) | 935 | |||||
Interest rate swaps | Other comprehensive (loss) income | 21,287 | (2,388 | ) | |||||
Derivatives designated as a net investment hedge: | |||||||||
Foreign currency exchange contract | Other comprehensive (loss) income | (344 | ) | — | |||||
Derivatives not designated as hedging instruments: | |||||||||
Foreign currency exchange contracts | Interest and other miscellaneous income, net | 2,608 | (327 | ) |
Notional Amount | |||||||
June 30, 2018 | December 31, 2017 | ||||||
Derivatives designated as cash flow hedges: | |||||||
Foreign currency exchange contracts | $134,250 | $107,400 | |||||
Foreign currency option contracts | 24,000 | 48,000 | |||||
Interest rate swaps | 650,000 | 650,000 | |||||
Derivative not designated as a hedging instrument: | |||||||
Foreign currency exchange contracts | 33,870 | 18,439 |
Location on Balance Sheet | Fair Value Assets / (Liabilities) (a) | ||||||||
June 30, 2018 | December 31, 2017 | ||||||||
Derivatives designated as cash flow hedges: | |||||||||
Foreign currency exchange contracts | Other current assets | $5 | $2,286 | ||||||
Other assets | — | 538 | |||||||
Other current liabilities | (1,951 | ) | (37 | ) | |||||
Other non-current liabilities | (664 | ) | — | ||||||
Foreign currency option contracts | Other current assets | 81 | 389 | ||||||
Other assets | — | 137 | |||||||
Other current liabilities | (116 | ) | (119 | ) | |||||
Other non-current liabilities | — | (55 | ) | ||||||
Interest rate swaps | Other assets | 36,727 | 17,473 | ||||||
Other non-current liabilities | — | (2,033 | ) | ||||||
Derivative not designated as a hedging instrument: | |||||||||
Foreign currency exchange contracts | Other current assets | 2,492 | 209 | ||||||
Other current liabilities | — | (189 | ) | ||||||
Total derivative contracts: | |||||||||
Other current assets | $2,578 | $2,884 | |||||||
Other assets | 36,727 | 18,148 | |||||||
Total derivative assets | $39,305 | $21,032 | |||||||
Other current liabilities | (2,067 | ) | (345 | ) | |||||
Other non-current liabilities | (664 | ) | (2,088 | ) | |||||
Total derivative liabilities | ($2,731 | ) | ($2,433 | ) |
(a) | See Note 13 — Fair Value Measurements for further information on the fair value of the Company’s derivatives including their classification within the fair value hierarchy. |
13. | FAIR VALUE MEASUREMENTS |
June 30, 2018 | December 31, 2017 | ||||||||||||||||||||
Asset (Liability) (a) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||
Level 1 | Level 2 | Level 1 | Level 2 | ||||||||||||||||||
Cash and cash equivalents | $106,611 | $106,611 | — | $112,653 | $112,653 | — | |||||||||||||||
Restricted cash (b) | 69,638 | 69,638 | — | 59,703 | 59,703 | — | |||||||||||||||
Current maturities of long-term debt | — | — | — | (3,375 | ) | — | (3,375 | ) | |||||||||||||
Long-term debt (c) | (972,285 | ) | — | (973,505 | ) | (1,022,004 | ) | — | (1,030,135 | ) | |||||||||||
Interest rate swaps (d) | 36,727 | — | 36,727 | 15,440 | — | 15,440 | |||||||||||||||
Foreign currency exchange contracts (d) | (118 | ) | — | (118 | ) | 2,807 | — | 2,807 | |||||||||||||
Foreign currency option contracts (d) | (35 | ) | — | (35 | ) | 352 | — | 352 |
(a) | The Company did not have Level 3 assets or liabilities at June 30, 2018 and December 31, 2017. |
(b) | Restricted cash represents the proceeds from like-kind exchange sales deposited with a third-party intermediary and cash held in escrow for a real estate sale. See Note 17 — Restricted Cash for additional information. |
(c) | The carrying amount of long-term debt is presented net of capitalized debt costs on non-revolving debt. |
(d) | See Note 12 — Derivative Financial Instruments and Hedging Activities for information regarding the Consolidated Balance Sheets classification of the Company’s derivative financial instruments. |
14. | EMPLOYEE BENEFIT PLANS |
Components of Net Periodic Benefit (Credit) Cost | Income Statement Location (a) | Pension | Postretirement | ||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Components of Net Periodic Benefit (Credit) Cost | |||||||||||||||||
Service cost | Selling and general expenses | — | — | $2 | $2 | ||||||||||||
Interest cost | Interest and other miscellaneous income, net | 759 | 815 | 13 | 13 | ||||||||||||
Expected return on plan assets (b) | Interest and other miscellaneous income, net | (984 | ) | (945 | ) | — | — | ||||||||||
Amortization of losses | Interest and other miscellaneous income, net | 178 | 116 | — | — | ||||||||||||
Net periodic benefit (credit) cost | ($47 | ) | ($14 | ) | $15 | $15 | |||||||||||
Components of Net Periodic Benefit (Credit) Cost | Income Statement Location (a) | Pension | Postretirement | ||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Components of Net Periodic Benefit (Credit) Cost | |||||||||||||||||
Service cost | Selling and general expenses | — | — | $3 | $3 | ||||||||||||
Interest cost | Interest and other miscellaneous income, net | 1,510 | 1,630 | 25 | 26 | ||||||||||||
Expected return on plan assets (b) | Interest and other miscellaneous income, net | (1,968 | ) | (1,891 | ) | — | — | ||||||||||
Amortization of losses | Interest and other miscellaneous income, net | 338 | 233 | 1 | — | ||||||||||||
Net periodic benefit (credit) cost | ($120 | ) | ($28 | ) | $29 | $29 | |||||||||||
(a) | Due to the adoption of ASU No. 2017-07, the service cost component of net periodic benefit (credit) cost is now recorded to “Selling and general expenses” in the Consolidated Statements of Income and Comprehensive Income with other compensation costs arising from services rendered by employees during the period. The other components of net periodic benefit (credit) cost (interest cost, expected return on plan assets and amortization of losses) are now recorded to “Interest and other miscellaneous income, net” in the Consolidated Statements of Income. Prior period amounts have been reclassified to conform to current period presentation. See Note 1 — Basis of Presentation for additional information. |
(b) | The weighted-average expected long-term rate of return on plan assets used in computing 2018 net periodic benefit cost for pension benefits is 7.2%. |
15. | OTHER OPERATING INCOME, NET |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Foreign currency income (expense) | $1,267 | ($1,470 | ) | $514 | ($1,233 | ) | |||||||||
Gain (loss) on sale or disposal of property and equipment | 12 | (7 | ) | 27 | (6 | ) | |||||||||
Gain on foreign currency exchange and option contracts | 386 | 1,536 | 1,819 | 2,264 | |||||||||||
Log trading marketing fees | 62 | 329 | 131 | 508 | |||||||||||
Income from the sale of unused Internet Protocol addresses | — | — | 646 | — | |||||||||||
Income from New Zealand Timber settlement | — | — | — | 420 | |||||||||||
Miscellaneous (expense) income, net | (68 | ) | 397 | (108 | ) | 20 | |||||||||
Total | $1,659 | $785 | $3,029 | $1,973 |
16. | INVENTORY |
June 30, 2018 | December 31, 2017 | ||||||
Finished goods inventory | |||||||
Real estate inventory (a) | $14,248 | $18,350 | |||||
Log inventory | 4,877 | 5,791 | |||||
Total inventory | $19,125 | $24,141 |
(a) | Represents cost of HBU real estate (including capitalized development investments) expected to be sold within 12 months. See Note 6 — Higher And Better Use Timberlands and Real Estate Development Investments for additional information. |
17. | RESTRICTED CASH |
June 30, 2018 | ||
Restricted cash deposited with LKE intermediary | $69,088 | |
Restricted cash held in escrow | 550 | |
Total restricted cash shown in the Consolidated Balance Sheets | 69,638 | |
Cash and cash equivalents | 106,611 | |
Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows | $176,249 |
18. | ACCUMULATED OTHER COMPREHENSIVE INCOME |
Foreign currency translation gains | Net investment hedges of New Zealand JV | Cash flow hedges | Employee benefit plans | Total | |||||||||||||||
Balance as of December 31, 2016 | $8,559 | $1,665 | $10,831 | ($20,199 | ) | $856 | |||||||||||||
Other comprehensive income before reclassifications | 7,416 | — | 7,321 | (673 | ) | 14,064 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | (1,968 | ) | 465 | (b) | (1,503 | ) | |||||||||||
Net other comprehensive income/(loss) | 7,416 | — | 5,353 | (208 | ) | 12,561 | |||||||||||||
Balance as of December 31, 2017 | $15,975 | $1,665 | $16,184 | ($20,407 | ) | $13,417 | |||||||||||||
Other comprehensive (loss)/income before reclassifications | (14,907 | ) | (344 | ) | 19,106 | (a) | — | 3,855 | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | (1,009 | ) | 338 | (b) | (671 | ) | |||||||||||
Net other comprehensive (loss)/income | (14,907 | ) | (344 | ) | 18,097 | 338 | 3,184 | ||||||||||||
Balance as of June 30, 2018 | $1,068 | $1,321 | $34,281 | ($20,069 | ) | $16,601 |
(a) | Includes $21.3 million of other comprehensive income related to interest rate swaps. See Note 12 — Derivative Financial Instruments and Hedging Activities for additional information. |
(b) | This component of other comprehensive income is included in the computation of net periodic pension cost. See Note 14 — Employee Benefit Plans for additional information. |
Details about accumulated other comprehensive income components | Amount reclassified from accumulated other comprehensive income | Affected line item in the income statement | ||||||||
June 30, 2018 | June 30, 2017 | |||||||||
Realized gain on foreign currency exchange contracts | ($1,654 | ) | ($1,730 | ) | Other operating income, net | |||||
Realized gain on foreign currency option contracts | (165 | ) | (534 | ) | Other operating income, net | |||||
Noncontrolling interest | 419 | 521 | Comprehensive (loss) income attributable to noncontrolling interest | |||||||
Income tax expense from gain on foreign currency contracts | 391 | 488 | Income tax expense | |||||||
Net gain from accumulated other comprehensive income | ($1,009 | ) | ($1,255 | ) |
19. | CONSOLIDATING FINANCIAL STATEMENTS |
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||||||||||||||||
For the Three Months Ended June 30, 2018 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
SALES | — | — | $245,906 | — | $245,906 | ||||||||||||||
Costs and Expenses | |||||||||||||||||||
Cost of sales | — | — | 184,418 | — | 184,418 | ||||||||||||||
Selling and general expenses | — | 5,471 | 6,031 | — | 11,502 | ||||||||||||||
Other operating expense (income), net | — | 40 | (1,699 | ) | — | (1,659 | ) | ||||||||||||
— | 5,511 | 188,750 | — | 194,261 | |||||||||||||||
OPERATING (LOSS) INCOME | — | (5,511 | ) | 57,156 | — | 51,645 | |||||||||||||
Interest expense | (3,139 | ) | (4,900 | ) | (63 | ) | — | (8,102 | ) | ||||||||||
Interest and miscellaneous income (expense), net | 2,734 | 746 | (575 | ) | — | 2,905 | |||||||||||||
Equity in income from subsidiaries | 36,663 | 46,419 | — | (83,082 | ) | — | |||||||||||||
INCOME BEFORE INCOME TAXES | 36,258 | 36,754 | 56,518 | (83,082 | ) | 46,448 | |||||||||||||
Income tax expense | — | (91 | ) | (7,019 | ) | — | (7,110 | ) | |||||||||||
NET INCOME | 36,258 | 36,663 | 49,499 | (83,082 | ) | 39,338 | |||||||||||||
Less: Net income attributable to noncontrolling interest | — | — | 3,080 | — | 3,080 | ||||||||||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC. | 36,258 | 36,663 | 46,419 | (83,082 | ) | 36,258 | |||||||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | |||||||||||||||||||
Foreign currency translation adjustment, net of income tax | (22,856 | ) | 341 | (30,101 | ) | 22,856 | (29,760 | ) | |||||||||||
Cash flow hedges, net of income tax | 1,716 | 5,690 | (5,161 | ) | (1,716 | ) | 529 | ||||||||||||
Amortization of pension and postretirement plans, net of income tax | 178 | 178 | — | (178 | ) | 178 | |||||||||||||
Total other comprehensive (loss) income | (20,962 | ) | 6,209 | (35,262 | ) | 20,962 | (29,053 | ) | |||||||||||
COMPREHENSIVE INCOME | 15,296 | 42,872 | 14,237 | (62,120 | ) | 10,285 | |||||||||||||
Less: Comprehensive loss attributable to noncontrolling interest | — | — | (5,011 | ) | — | (5,011 | ) | ||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC. | $15,296 | $42,872 | $19,248 | ($62,120 | ) | $15,296 | |||||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||||||||||||||||
For the Three Months Ended June 30, 2017 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
SALES | — | — | $200,964 | — | $200,964 | ||||||||||||||
Costs and Expenses | |||||||||||||||||||
Cost of sales | — | — | 144,610 | — | 144,610 | ||||||||||||||
Selling and general expenses | — | 4,248 | 5,998 | — | 10,246 | ||||||||||||||
Other operating expense (income), net | — | 20 | (805 | ) | — | (785 | ) | ||||||||||||
— | 4,268 | 149,803 | — | 154,071 | |||||||||||||||
OPERATING (LOSS) INCOME | — | (4,268 | ) | 51,161 | — | 46,893 | |||||||||||||
Interest expense | (3,139 | ) | (4,883 | ) | (609 | ) | — | (8,631 | ) | ||||||||||
Interest and miscellaneous income (expense), net | 2,345 | 695 | (3,036 | ) | — | 4 | |||||||||||||
Equity in income from subsidiaries | 26,955 | 35,580 | — | (62,535 | ) | — | |||||||||||||
INCOME BEFORE INCOME TAXES | 26,161 | 27,124 | 47,516 | (62,535 | ) | 38,266 | |||||||||||||
Income tax expense | — | (169 | ) | (7,324 | ) | — | (7,493 | ) | |||||||||||
NET INCOME | 26,161 | 26,955 | 40,192 | (62,535 | ) | 30,773 | |||||||||||||
Less: Net income attributable to noncontrolling interest | — | — | 4,612 | — | 4,612 | ||||||||||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC. | 26,161 | 26,955 | 35,580 | (62,535 | ) | 26,161 | |||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
Foreign currency translation adjustment, net of income tax | 17,199 | — | 21,484 | (17,199 | ) | 21,484 | |||||||||||||
Cash flow hedges, net of income tax | (2,686 | ) | (5,021 | ) | 3,033 | 2,686 | (1,988 | ) | |||||||||||
Amortization of pension and postretirement plans, net of income tax | 116 | 116 | — | (116 | ) | 116 | |||||||||||||
Total other comprehensive income (loss) | 14,629 | (4,905 | ) | 24,517 | (14,629 | ) | 19,612 | ||||||||||||
COMPREHENSIVE INCOME | 40,790 | 22,050 | 64,709 | (77,164 | ) | 50,385 | |||||||||||||
Less: Comprehensive income attributable to noncontrolling interest | — | — | 9,595 | — | 9,595 | ||||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC. | $40,790 | $22,050 | $55,114 | ($77,164 | ) | $40,790 | |||||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||||||||||||||||
For the Six Months Ended June 30, 2018 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
SALES | — | — | $449,101 | — | $449,101 | ||||||||||||||
Costs and Expenses | |||||||||||||||||||
Cost of sales | — | — | 322,906 | — | 322,906 | ||||||||||||||
Selling and general expenses | — | 9,859 | 10,645 | — | 20,504 | ||||||||||||||
Other operating expense (income), net | 12 | (595 | ) | (2,446 | ) | — | (3,029 | ) | |||||||||||
12 | 9,264 | 331,105 | — | 340,381 | |||||||||||||||
OPERATING (LOSS) INCOME | (12 | ) | (9,264 | ) | 117,996 | — | 108,720 | ||||||||||||
Interest expense | (6,278 | ) | (9,555 | ) | (322 | ) | — | (16,155 | ) | ||||||||||
Interest and miscellaneous income (expense), net | 5,362 | 1,511 | (3,348 | ) | — | 3,525 | |||||||||||||
Equity in income from subsidiaries | 77,725 | 95,246 | — | (172,971 | ) | — | |||||||||||||
INCOME BEFORE INCOME TAXES | 76,797 | 77,938 | 114,326 | (172,971 | ) | 96,090 | |||||||||||||
Income tax expense | — | (213 | ) | (13,834 | ) | — | (14,047 | ) | |||||||||||
NET INCOME | 76,797 | 77,725 | 100,492 | (172,971 | ) | 82,043 | |||||||||||||
Less: Net income attributable to noncontrolling interest | — | — | 5,246 | — | 5,246 | ||||||||||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC. | 76,797 | 77,725 | 95,246 | (172,971 | ) | 76,797 | |||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
Foreign currency translation adjustment, net of income tax | (15,252 | ) | 452 | (20,524 | ) | 15,252 | (20,072 | ) | |||||||||||
Cash flow hedges, net of income tax | 18,097 | 21,287 | (4,144 | ) | (18,097 | ) | 17,143 | ||||||||||||
Amortization of pension and postretirement plans, net of income tax | 338 | 338 | — | (338 | ) | 338 | |||||||||||||
Total other comprehensive income (loss) | 3,183 | 22,077 | (24,668 | ) | (3,183 | ) | (2,591 | ) | |||||||||||
COMPREHENSIVE INCOME | 79,980 | 99,802 | 75,824 | (176,154 | ) | 79,452 | |||||||||||||
Less: Comprehensive loss attributable to noncontrolling interest | — | — | (528 | ) | — | (528 | ) | ||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC. | $79,980 | $99,802 | $76,352 | ($176,154 | ) | $79,980 | |||||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||||||||||||||||
For the Six Months Ended June 30, 2017 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
SALES | — | — | $395,455 | — | $395,455 | ||||||||||||||
Costs and Expenses | |||||||||||||||||||
Cost of sales | — | — | 281,438 | — | 281,438 | ||||||||||||||
Selling and general expenses | — | 7,784 | 12,052 | — | 19,836 | ||||||||||||||
Other operating expense (income), net | — | 131 | (2,104 | ) | — | (1,973 | ) | ||||||||||||
— | 7,915 | 291,386 | — | 299,301 | |||||||||||||||
OPERATING (LOSS) INCOME | — | (7,915 | ) | 104,069 | — | 96,154 | |||||||||||||
Interest expense | (6,278 | ) | (9,741 | ) | (1,027 | ) | — | (17,046 | ) | ||||||||||
Interest and miscellaneous income (expense), net | 4,547 | 1,383 | (5,408 | ) | — | 522 | |||||||||||||
Equity in income from subsidiaries | 61,734 | 78,323 | — | (140,057 | ) | — | |||||||||||||
INCOME BEFORE INCOME TAXES | 60,003 | 62,050 | 97,634 | (140,057 | ) | 79,630 | |||||||||||||
Income tax expense | — | (316 | ) | (13,458 | ) | — | (13,774 | ) | |||||||||||
NET INCOME | 60,003 | 61,734 | 84,176 | (140,057 | ) | 65,856 | |||||||||||||
Less: Net income attributable to noncontrolling interest | — | — | 5,853 | — | 5,853 | ||||||||||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC. | 60,003 | 61,734 | 78,323 | (140,057 | ) | 60,003 | |||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
Foreign currency translation adjustment, net of income tax | 19,202 | — | 23,916 | (19,202 | ) | 23,916 | |||||||||||||
Cash flow hedges, net of income tax | (115 | ) | (2,389 | ) | 2,954 | 115 | 565 | ||||||||||||
Amortization of pension and postretirement plans, net of income tax | 233 | 233 | — | (233 | ) | 233 | |||||||||||||
Total other comprehensive income (loss) | 19,320 | (2,156 | ) | 26,870 | (19,320 | ) | 24,714 | ||||||||||||
COMPREHENSIVE INCOME | 79,323 | 59,578 | 111,046 | (159,377 | ) | 90,570 | |||||||||||||
Less: Comprehensive income attributable to noncontrolling interest | — | — | 11,247 | — | 11,247 | ||||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC. | $79,323 | $59,578 | $99,799 | ($159,377 | ) | $79,323 | |||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEETS | |||||||||||||||||||
As of June 30, 2018 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||
Cash and cash equivalents | $76,980 | $11,964 | $17,667 | — | $106,611 | ||||||||||||||
Accounts receivable, less allowance for doubtful accounts | 1,995 | 1,814 | 50,531 | — | 54,340 | ||||||||||||||
Inventory | — | — | 19,125 | — | 19,125 | ||||||||||||||
Prepaid expenses | — | 1,924 | 13,850 | — | 15,774 | ||||||||||||||
Other current assets | — | 106 | 2,734 | — | 2,840 | ||||||||||||||
Total current assets | 78,975 | 15,808 | 103,907 | — | 198,690 | ||||||||||||||
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION | — | — | 2,406,425 | — | 2,406,425 | ||||||||||||||
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS | — | — | 86,955 | — | 86,955 | ||||||||||||||
NET PROPERTY, PLANT AND EQUIPMENT | — | 17,459 | 5,473 | — | 22,932 | ||||||||||||||
RESTRICTED CASH | — | — | 69,638 | — | 69,638 | ||||||||||||||
INVESTMENT IN SUBSIDIARIES | 1,516,631 | 2,757,876 | — | (4,274,507 | ) | — | |||||||||||||
INTERCOMPANY RECEIVABLE | 37,826 | (628,749 | ) | 590,923 | — | — | |||||||||||||
OTHER ASSETS | 3 | 32,274 | 34,145 | — | 66,422 | ||||||||||||||
TOTAL ASSETS | $1,633,435 | $2,194,668 | $3,297,466 | ($4,274,507 | ) | $2,851,062 | |||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||
Accounts payable | — | $3,980 | $23,712 | — | $27,692 | ||||||||||||||
Accrued taxes | — | 8 | 5,291 | — | 5,299 | ||||||||||||||
Accrued payroll and benefits | — | 3,864 | 2,826 | — | 6,690 | ||||||||||||||
Accrued interest | 3,047 | 1,948 | — | — | 4,995 | ||||||||||||||
Deferred revenue | — | — | 17,674 | — | 17,674 | ||||||||||||||
Other current liabilities | 1,995 | 593 | 18,950 | — | 21,538 | ||||||||||||||
Total current liabilities | 5,042 | 10,393 | 68,453 | — | 83,888 | ||||||||||||||
LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS | 323,618 | 648,667 | — | — | 972,285 | ||||||||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | — | 30,914 | (684 | ) | — | 30,230 | |||||||||||||
OTHER NON-CURRENT LIABILITIES | — | 7,025 | 44,757 | — | 51,782 | ||||||||||||||
INTERCOMPANY PAYABLE | (308,714 | ) | (18,962 | ) | 327,676 | — | — | ||||||||||||
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY | 1,613,489 | 1,516,631 | 2,757,876 | (4,274,507 | ) | 1,613,489 | |||||||||||||
Noncontrolling interest | — | — | 99,388 | — | 99,388 | ||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 1,613,489 | 1,516,631 | 2,857,264 | (4,274,507 | ) | 1,712,877 | |||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $1,633,435 | $2,194,668 | $3,297,466 | ($4,274,507 | ) | $2,851,062 |
CONDENSED CONSOLIDATING BALANCE SHEETS | |||||||||||||||||||
As of December 31, 2017 | |||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||
Cash and cash equivalents | $48,564 | $25,042 | $39,047 | — | $112,653 | ||||||||||||||
Accounts receivable, less allowance for doubtful accounts | — | 3,726 | 23,967 | — | 27,693 | ||||||||||||||
Inventory | — | — | 24,141 | — | 24,141 | ||||||||||||||
Prepaid expenses | — | 759 | 15,234 | — | 15,993 | ||||||||||||||
Other current assets | — | 14 | 3,033 | — | 3,047 | ||||||||||||||
Total current assets | 48,564 | 29,541 | 105,422 | — | 183,527 | ||||||||||||||
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION | — | — | 2,462,066 | — | 2,462,066 | ||||||||||||||
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS | — | — | 80,797 | — | 80,797 | ||||||||||||||
NET PROPERTY, PLANT AND EQUIPMENT | — | 21 | 23,357 | — | 23,378 | ||||||||||||||
RESTRICTED CASH | — | — | 59,703 | — | 59,703 | ||||||||||||||
INVESTMENT IN SUBSIDIARIES | 1,531,156 | 2,814,408 | — | (4,345,564 | ) | — | |||||||||||||
INTERCOMPANY RECEIVABLE | 40,067 | (628,167 | ) | 588,100 | — | — | |||||||||||||
OTHER ASSETS | 2 | 12,680 | 36,328 | — | 49,010 | ||||||||||||||
TOTAL ASSETS | $1,619,789 | $2,228,483 | $3,355,773 | ($4,345,564 | ) | $2,858,481 | |||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||
Accounts payable | — | $2,838 | $22,310 | — | $25,148 | ||||||||||||||
Current maturities of long-term debt | — | — | 3,375 | — | 3,375 | ||||||||||||||
Accrued taxes | — | 48 | 3,733 | — | 3,781 | ||||||||||||||
Accrued payroll and benefits | — | 5,298 | 4,364 | — | 9,662 | ||||||||||||||
Accrued interest | 3,047 | 1,995 | 12 | — | 5,054 | ||||||||||||||
Deferred revenue | — | — | 9,721 | — | 9,721 | ||||||||||||||
Other current liabilities | — | 564 | 11,243 | — | 11,807 | ||||||||||||||
Total current liabilities | 3,047 | 10,743 | 54,758 | — | 68,548 | ||||||||||||||
LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS | 323,434 | 663,570 | 35,000 | — | 1,022,004 | ||||||||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | — | 32,589 | (684 | ) | — | 31,905 | |||||||||||||
OTHER NON-CURRENT LIABILITIES | — | 9,386 | 33,698 | — | 43,084 | ||||||||||||||
INTERCOMPANY PAYABLE | (299,715 | ) | (18,961 | ) | 318,676 | — | — | ||||||||||||
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY | 1,593,023 | 1,531,156 | 2,814,408 | (4,345,564 | ) | 1,593,023 | |||||||||||||
Noncontrolling interest | — | — | 99,917 | — | 99,917 | ||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 1,593,023 | 1,531,156 | 2,914,325 | (4,345,564 | ) | 1,692,940 | |||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $1,619,789 | $2,228,483 | $3,355,773 | ($4,345,564 | ) | $2,858,481 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS | ||||||||||||||||||
For the Six Months Ended June 30, 2018 | ||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | ||||||||||||||
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES | ($7,491 | ) | $57,280 | $131,794 | — | $181,583 | ||||||||||||
INVESTING ACTIVITIES | ||||||||||||||||||
Capital expenditures | — | (58 | ) | (25,862 | ) | — | (25,920 | ) | ||||||||||
Real estate development investments | — | — | (4,501 | ) | — | (4,501 | ) | |||||||||||
Purchase of timberlands | — | — | (31,234 | ) | — | (31,234 | ) | |||||||||||
Investment in subsidiaries | — | 40,441 | — | (40,441 | ) | — | ||||||||||||
Other | — | — | 113 | — | 113 | |||||||||||||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | — | 40,383 | (61,484 | ) | (40,441 | ) | (61,542 | ) | ||||||||||
FINANCING ACTIVITIES | ||||||||||||||||||
Issuance of debt | — | — | 1,014 | — | 1,014 | |||||||||||||
Repayment of debt | — | (50,000 | ) | (4,389 | ) | — | (54,389 | ) | ||||||||||
Dividends paid | (67,053 | ) | — | — | — | (67,053 | ) | |||||||||||
Proceeds from the issuance of common shares under incentive stock plan | 7,824 | — | — | — | 7,824 | |||||||||||||
Repurchase of common shares | (2,966 | ) | — | — | — | (2,966 | ) | |||||||||||
Issuance of intercompany notes | (9,000 | ) | — | 9,000 | — | — | ||||||||||||
Intercompany distributions | 107,102 | (60,741 | ) | (86,802 | ) | 40,441 | — | |||||||||||
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES | 35,907 | (110,741 | ) | (81,177 | ) | 40,441 | (115,570 | ) | ||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | (578 | ) | — | (578 | ) | |||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||||||||||||||||||
Change in cash, cash equivalents and restricted cash | 28,416 | (13,078 | ) | (11,445 | ) | — | 3,893 | |||||||||||
Balance, beginning of year | 48,564 | 25,042 | 98,750 | — | 172,356 | |||||||||||||
Balance, end of period | $76,980 | $11,964 | $87,305 | — | $176,249 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS | ||||||||||||||||||
For the Six Months Ended June 30, 2017 | ||||||||||||||||||
Rayonier Inc. (Parent Issuer) | Subsidiary Guarantors | Non- guarantors | Consolidating Adjustments | Total Consolidated | ||||||||||||||
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES | ($7,648 | ) | $59,557 | $76,406 | — | $128,315 | ||||||||||||
INVESTING ACTIVITIES | ||||||||||||||||||
Capital expenditures | — | — | (29,840 | ) | — | (29,840 | ) | |||||||||||
Real estate development investments | — | — | (5,599 | ) | — | (5,599 | ) | |||||||||||
Purchase of timberlands | — | — | (237,235 | ) | — | (237,235 | ) | |||||||||||
Net proceeds from large disposition | — | — | 42,029 | — | 42,029 | |||||||||||||
Rayonier office building under construction | — | — | (5,573 | ) | — | (5,573 | ) | |||||||||||
Investment in subsidiaries | — | 6,932 | — | (6,932 | ) | — | ||||||||||||
Other | — | — | 1,033 | — | 1,033 | |||||||||||||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | — | 6,932 | (235,185 | ) | (6,932 | ) | (235,185 | ) | ||||||||||
FINANCING ACTIVITIES | ||||||||||||||||||
Issuance of debt | — | 25,000 | 38,389 | — | 63,389 | |||||||||||||
Repayment of debt | — | (15,000 | ) | (45,422 | ) | — | (60,422 | ) | ||||||||||
Dividends paid | (62,825 | ) | — | — | — | (62,825 | ) | |||||||||||
Proceeds from the issuance of common shares under incentive stock plan | 3,206 | — | — | — | 3,206 | |||||||||||||
Proceeds from the issuance of common shares from equity offering, net of costs | 152,390 | — | — | — | 152,390 | |||||||||||||
Issuance of intercompany notes | — | — | — | — | — | |||||||||||||
Intercompany distributions | (25,419 | ) | (73,365 | ) | 91,852 | 6,932 | — | |||||||||||
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES | 67,352 | (63,365 | ) | 84,819 | 6,932 | 95,738 | ||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | 1,855 | — | 1,855 | |||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||||||||||||||||||
Change in cash, cash equivalents and restricted cash | 59,704 | 3,124 | (72,105 | ) | — | (9,277 | ) | |||||||||||
Balance, beginning of year | 21,453 | 9,461 | 126,703 | — | 157,617 | |||||||||||||
Balance, end of period | $81,157 | $12,585 | $54,598 | — | $148,340 |
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”) |
(acres in 000s) | As of June 30, 2018 | As of December 31, 2017 | |||||||||||||||
Owned | Leased | Total | Owned | Leased | Total | ||||||||||||
Southern | |||||||||||||||||
Alabama | 229 | 14 | 243 | 229 | 14 | 243 | |||||||||||
Arkansas | — | 11 | 11 | — | 11 | 11 | |||||||||||
Florida | 280 | 82 | 362 | 274 | 83 | 357 | |||||||||||
Georgia | 622 | 82 | 704 | 622 | 82 | 704 | |||||||||||
Louisiana | 129 | — | 129 | 144 | 1 | 145 | |||||||||||
Mississippi | 67 | — | 67 | 67 | — | 67 | |||||||||||
Oklahoma | 92 | — | 92 | 92 | — | 92 | |||||||||||
South Carolina | 18 | — | 18 | 18 | — | 18 | |||||||||||
Tennessee | 1 | — | 1 | 1 | — | 1 | |||||||||||
Texas | 181 | — | 181 | 182 | — | 182 | |||||||||||
1,619 | 189 | 1,808 | 1,629 | 191 | 1,820 | ||||||||||||
Pacific Northwest | |||||||||||||||||
Oregon | 61 | — | 61 | 61 | — | 61 | |||||||||||
Washington | 316 | 1 | 317 | 316 | 1 | 317 | |||||||||||
377 | 1 | 378 | 377 | 1 | 378 | ||||||||||||
New Zealand (a) | 179 | 232 | 411 | 179 | 231 | 410 | |||||||||||
Total | 2,175 | 422 | 2,597 | 2,185 | 423 | 2,608 |
(a) | Represents legal acres owned and leased by the New Zealand JV, in which Rayonier owns a 77% interest. As of June 30, 2018, legal acres in New Zealand were comprised of 294,000 plantable acres and 117,000 non-productive acres. |
(acres in 000s) | Acres Owned | ||||||||||
December 31, 2017 | Acquisitions | Sales | June 30, 2018 | ||||||||
Southern | |||||||||||
Alabama | 229 | — | — | 229 | |||||||
Florida | 274 | 13 | (8 | ) | 280 | ||||||
Georgia | 622 | 1 | (1 | ) | 622 | ||||||
Louisiana | 144 | — | (15 | ) | 129 | ||||||
Mississippi | 67 | — | — | 67 | |||||||
Oklahoma | 92 | — | — | 92 | |||||||
South Carolina | 18 | — | — | 18 | |||||||
Tennessee | 1 | — | — | 1 | |||||||
Texas | 182 | — | (1 | ) | 181 | ||||||
1,629 | 14 | (25 | ) | 1,619 | |||||||
Pacific Northwest | |||||||||||
Oregon | 61 | — | — | 61 | |||||||
Washington | 316 | — | — | 316 | |||||||
377 | — | — | 377 | ||||||||
New Zealand (a) | 179 | — | — | 179 | |||||||
Total | 2,185 | 14 | (25 | ) | 2,175 |
(a) | Represents legal acres owned by the New Zealand JV, in which Rayonier has a 77% interest. |
(acres in 000s) | Acres Leased | ||||||||||
December 31, 2017 | New Leases | Sold/Expired Leases (a) | June 30, 2018 | ||||||||
Southern | |||||||||||
Alabama | 14 | — | — | 14 | |||||||
Arkansas | 11 | — | — | 11 | |||||||
Florida | 83 | — | (1 | ) | 82 | ||||||
Georgia | 82 | — | — | 82 | |||||||
Louisiana | 1 | — | (1 | ) | — | ||||||
191 | — | (2 | ) | 189 | |||||||
Pacific Northwest | |||||||||||
Washington | 1 | — | — | 1 | |||||||
New Zealand (b) | 231 | 2 | (1 | ) | 232 | ||||||
Total | 423 | 2 | (3 | ) | 422 |
(a) | Includes acres previously under lease that have been harvested and activity for the relinquishment of leased acres. |
(b) | Represents legal acres leased by the New Zealand JV, in which Rayonier has a 77% interest. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Financial Information (in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales | |||||||||||||||
Southern Timber | $48.0 | $35.5 | $91.6 | $74.7 | |||||||||||
Pacific Northwest Timber | 32.2 | 20.5 | 63.6 | 46.4 | |||||||||||
New Zealand Timber | 69.7 | 77.4 | 122.6 | 118.2 | |||||||||||
Real Estate | |||||||||||||||
Improved Development | 1.3 | 0.1 | 2.5 | 0.1 | |||||||||||
Unimproved Development | — | 2.5 | 7.4 | 2.5 | |||||||||||
Rural | 4.8 | 5.5 | 6.5 | 12.2 | |||||||||||
Non-Strategic / Timberlands | 43.7 | 17.5 | 69.5 | 23.1 | |||||||||||
Large Dispositions | — | — | — | 42.0 | |||||||||||
Total Real Estate | 49.9 | 25.6 | 85.9 | 79.9 | |||||||||||
Trading | 46.2 | 42.0 | 85.4 | 76.3 | |||||||||||
Total Sales | $245.9 | $201.0 | $449.1 | $395.5 | |||||||||||
Operating Income (Loss) | |||||||||||||||
Southern Timber | $15.7 | $9.7 | $27.9 | $23.6 | |||||||||||
Pacific Northwest Timber | 5.6 | (1.5 | ) | 10.3 | (2.4 | ) | |||||||||
New Zealand Timber | 17.8 | 26.8 | 33.7 | 37.1 | |||||||||||
Real Estate (a) | 18.9 | 16.1 | 46.9 | 45.8 | |||||||||||
Trading | 0.2 | 1.1 | 0.4 | 2.2 | |||||||||||
Corporate and other | (6.5 | ) | (5.3 | ) | (10.5 | ) | (10.1 | ) | |||||||
Operating Income | 51.6 | 46.9 | 108.7 | 96.2 | |||||||||||
Interest expense, interest income and other | (5.2 | ) | (8.6 | ) | (12.7 | ) | (16.6 | ) | |||||||
Income tax expense | (7.1 | ) | (7.5 | ) | (14.0 | ) | (13.7 | ) | |||||||
Net Income | 39.3 | 30.8 | 82.0 | 65.9 | |||||||||||
Less: Net income attributable to noncontrolling interest | 3.0 | 4.6 | 5.2 | 5.9 | |||||||||||
Net Income Attributable to Rayonier Inc. | $36.3 | $26.2 | $76.8 | $60.0 | |||||||||||
Adjusted EBITDA (b) | |||||||||||||||
Southern Timber | $30.6 | $21.6 | $58.8 | $48.0 | |||||||||||
Pacific Northwest Timber | 15.0 | 5.5 | 29.2 | 14.9 | |||||||||||
New Zealand Timber | 25.8 | 42.3 | 47.5 | 58.0 | |||||||||||
Real Estate | 45.9 | 21.5 | 78.7 | 30.1 | |||||||||||
Trading | 0.2 | 1.1 | 0.4 | 2.2 | |||||||||||
Corporate and Other | (6.2 | ) | (5.2 | ) | (9.9 | ) | (9.2 | ) | |||||||
Total Adjusted EBITDA | $111.3 | $86.8 | $204.6 | $144.0 |
(a) | The six months ended June 30, 2017 include $28.2 million from a Large Disposition. |
(b) | Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Southern Timber Overview | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales Volume (in thousands of tons) | |||||||||||||||
Pine Pulpwood | 905 | 764 | 1,848 | 1,587 | |||||||||||
Pine Sawtimber | 503 | 520 | 1,083 | 1,025 | |||||||||||
Total Pine Volume | 1,408 | 1,284 | 2,931 | 2,612 | |||||||||||
Hardwood | 82 | 73 | 127 | 124 | |||||||||||
Total Volume | 1,490 | 1,357 | 3,058 | 2,736 | |||||||||||
Percentage Delivered Sales | 29 | % | 20 | % | 26 | % | 20 | % | |||||||
Percentage Stumpage Sales | 71 | % | 80 | % | 74 | % | 80 | % | |||||||
Net Stumpage Pricing (dollars per ton) | |||||||||||||||
Pine Pulpwood | $16.05 | $15.62 | $16.59 | $16.50 | |||||||||||
Pine Sawtimber | 26.23 | 25.66 | 26.27 | 26.01 | |||||||||||
Weighted Average Pine | $19.69 | $19.68 | $20.17 | $20.23 | |||||||||||
Hardwood | 12.12 | 11.65 | 11.54 | 11.36 | |||||||||||
Weighted Average Total | $19.27 | $19.25 | $19.80 | $19.83 | |||||||||||
Summary Financial Data (in millions of dollars) | |||||||||||||||
Timber Sales | $37.3 | $30.8 | $75.4 | $63.5 | |||||||||||
Less: Cut, Haul & Freight | (8.6 | ) | (4.7 | ) | (14.8 | ) | (9.3 | ) | |||||||
Net Stumpage Sales | $28.7 | $26.1 | $60.6 | $54.2 | |||||||||||
Non-Timber Sales | 10.8 | 4.8 | 16.2 | 11.2 | |||||||||||
Total Sales | $48.0 | $35.5 | $91.6 | $74.7 | |||||||||||
Operating Income | $15.7 | $9.7 | $27.9 | $23.6 | |||||||||||
(+) Depreciation, depletion and amortization | 14.9 | 11.9 | 30.9 | 24.4 | |||||||||||
Adjusted EBITDA (a) | $30.6 | $21.6 | $58.8 | $48.0 | |||||||||||
Other Data | |||||||||||||||
Period-End Acres (in thousands) | 1,808 | 1,903 | 1,808 | 1,903 |
(a) | Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Pacific Northwest Timber Overview | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales Volume (in thousands of tons) | |||||||||||||||
Pulpwood | 94 | 71 | 169 | 160 | |||||||||||
Sawtimber | 281 | 204 | 585 | 514 | |||||||||||
Total Volume | 374 | 275 | 753 | 674 | |||||||||||
Sales Volume (converted to MBF) | |||||||||||||||
Pulpwood | 8,859 | 6,745 | 16,029 | 15,009 | |||||||||||
Sawtimber | 37,414 | 26,758 | 76,224 | 66,216 | |||||||||||
Total Volume | 46,273 | 33,503 | 92,253 | 81,225 | |||||||||||
Percentage Delivered Sales | 81 | % | 99 | % | 80 | % | 88 | % | |||||||
Percentage Sawtimber Sales | 75 | % | 74 | % | 78 | % | 76 | % | |||||||
Delivered Log Pricing (in dollars per ton) | |||||||||||||||
Pulpwood | $49.76 | $39.38 | $47.49 | $39.03 | |||||||||||
Sawtimber | 103.38 | 81.93 | 99.24 | 78.08 | |||||||||||
Weighted Average Log Price | $88.45 | $70.88 | $86.41 | $68.29 | |||||||||||
Summary Financial Data (in millions of dollars) | |||||||||||||||
Timber Sales | $31.3 | $19.4 | $61.8 | $44.2 | |||||||||||
Less: Cut and Haul | (11.6 | ) | (9.9 | ) | (23.0 | ) | (20.2 | ) | |||||||
Net Stumpage Sales | $19.6 | $9.5 | $38.7 | $24.0 | |||||||||||
Non-Timber Sales | 0.9 | 1.0 | 1.8 | 2.1 | |||||||||||
Total Sales | $32.2 | $20.5 | $63.6 | $46.4 | |||||||||||
Operating Income (Loss) | $5.6 | ($1.5 | ) | $10.3 | ($2.4 | ) | |||||||||
(+) Depreciation, depletion and amortization | 9.4 | 7.0 | 18.9 | 17.3 | |||||||||||
Adjusted EBITDA (a) | $15.0 | $5.5 | $29.2 | $14.9 | |||||||||||
Other Data | |||||||||||||||
Period-End Acres (in thousands) | 378 | 378 | 378 | 378 | |||||||||||
Sawtimber (in dollars per MBF) | $770 | $638 | $767 | $623 | |||||||||||
Estimated Percentage of Export Volume | 27 | % | 25 | % | 24 | % | 25 | % |
(a) | Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
New Zealand Timber Overview | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales Volume (in thousands of tons) | |||||||||||||||
Domestic Pulpwood (Delivered) | 141 | 104 | 254 | 205 | |||||||||||
Domestic Sawtimber (Delivered) | 235 | 217 | 420 | 413 | |||||||||||
Export Pulpwood (Delivered) | 22 | 32 | 38 | 55 | |||||||||||
Export Sawtimber (Delivered) | 340 | 263 | 584 | 443 | |||||||||||
Total Volume | 738 | 616 | 1,297 | 1,116 | |||||||||||
Delivered Log Pricing (in dollars per ton) | |||||||||||||||
Domestic Pulpwood | $38.28 | $33.31 | $37.26 | $34.00 | |||||||||||
Domestic Sawtimber | 86.21 | 79.04 | 86.57 | 78.76 | |||||||||||
Export Sawtimber | 120.80 | 111.05 | 119.51 | 110.10 | |||||||||||
Weighted Average Log Price | $93.46 | $85.78 | $92.24 | $83.60 | |||||||||||
Summary Financial Data (in millions of dollars) | |||||||||||||||
Timber Sales | $69.0 | $52.9 | $119.6 | $93.6 | |||||||||||
Less: Cut and Haul | (24.6 | ) | (19.5 | ) | (42.9 | ) | (35.5 | ) | |||||||
Less: Port and Freight Costs | (14.5 | ) | (9.6 | ) | (23.1 | ) | (15.6 | ) | |||||||
Net Stumpage Sales | $30.0 | $23.8 | $53.6 | $42.5 | |||||||||||
Land / Other Sales | — | 24.3 | — | 24.3 | |||||||||||
Non-Timber Sales / Carbon Credits | 0.6 | 0.2 | 3.0 | 0.3 | |||||||||||
Total Sales | $69.7 | $77.4 | $122.6 | $118.2 | |||||||||||
Operating Income | $17.8 | $26.8 | $33.7 | $37.1 | |||||||||||
(+) Depreciation, depletion and amortization | 8.0 | 15.5 | 13.7 | 20.8 | |||||||||||
(+) Non-cash cost of land sold | — | — | — | 0.1 | |||||||||||
Adjusted EBITDA (a) | $25.8 | $42.3 | $47.5 | $58.0 | |||||||||||
Other Data | |||||||||||||||
New Zealand Dollar to U.S. Dollar Exchange Rate (b) | 0.7104 | 0.6985 | 0.7170 | 0.7067 | |||||||||||
Net Plantable Period-End Acres (in thousands) | 294 | 294 | 294 | 294 | |||||||||||
Export Sawtimber (in dollars per JAS m3) | $140.46 | $129.06 | $138.95 | $127.97 | |||||||||||
Domestic Sawtimber (in $NZD per tonne) | $133.60 | $124.47 | $132.91 | $122.70 |
(a) | Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators. |
(b) | Represents the average period rate. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Real Estate Overview | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales (in millions of dollars) | |||||||||||||||
Improved Development | $1.3 | $0.1 | $2.5 | $0.1 | |||||||||||
Unimproved Development | — | 2.5 | 7.4 | 2.5 | |||||||||||
Rural | 4.8 | 5.5 | 6.5 | 12.2 | |||||||||||
Non-Strategic / Timberlands | 43.7 | 17.5 | 69.5 | 23.1 | |||||||||||
Large Dispositions (a) | — | — | — | 42.0 | |||||||||||
Total Sales | $49.9 | $25.6 | $85.9 | $79.9 | |||||||||||
Acres Sold | |||||||||||||||
Improved Development | 4.1 | 1.3 | 8.2 | 1.3 | |||||||||||
Unimproved Development | — | 130 | 625 | 130 | |||||||||||
Rural | 1,071 | 1,728 | 1,486 | 4,012 | |||||||||||
Non-Strategic / Timberlands | 14,729 | 5,733 | 21,910 | 9,656 | |||||||||||
Large Dispositions (a) | — | — | — | 24,954 | |||||||||||
Total Acres Sold | 15,804 | 7,592 | 24,029 | 38,753 | |||||||||||
Gross Price per Acre (dollars per acre) | |||||||||||||||
Improved Development | $317,008 | $324,427 | $299,005 | $324,427 | |||||||||||
Unimproved Development | — | 19,195 | 11,922 | 19,195 | |||||||||||
Rural | 4,509 | 3,178 | 4,361 | 3,049 | |||||||||||
Non-Strategic / Timberlands | 2,966 | 3,050 | 3,174 | 2,390 | |||||||||||
Large Dispositions (a) | — | — | — | 1,681 | |||||||||||
Weighted Average (Total) (b) | $3,153 | $3,411 | $3,575 | $2,771 | |||||||||||
Weighted Average (Adjusted) (c) | $3,071 | $3,356 | $3,474 | $2,741 | |||||||||||
Sales (Excluding Large Dispositions) | $49.9 | $25.6 | $85.9 | $37.9 | |||||||||||
Operating Income | $18.9 | $16.1 | $46.9 | $45.8 | |||||||||||
(+) Depreciation, depletion and amortization | 13.7 | 2.6 | 16.8 | 5.2 | |||||||||||
(+) Non-cash cost of land and improved development | 13.3 | 2.8 | 14.9 | 7.3 | |||||||||||
(–) Large Dispositions (a) | — | — | — | (28.2 | ) | ||||||||||
Adjusted EBITDA (d) | $45.9 | $21.5 | $78.7 | $30.1 |
(a) | Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value. In January 2017, the Company completed a disposition of approximately 25,000 acres located in Alabama for a sale price and gain of approximately $42.0 million and $28.2 million, respectively. |
(b) | Excludes Large Dispositions. |
(c) | Excludes Improved Development and Large Dispositions. |
(d) | Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators below. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Capital Expenditures By Segment (in millions of dollars) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Timber Capital Expenditures | |||||||||||||||
Southern Timber | |||||||||||||||
Reforestation, silviculture and other capital expenditures | $3.8 | $2.7 | $6.4 | $5.9 | |||||||||||
Property taxes | 1.7 | 1.8 | 3.2 | 4.4 | |||||||||||
Lease payments | 0.5 | 0.7 | 2.1 | 2.5 | |||||||||||
Allocated overhead | 0.9 | 0.8 | 2.0 | 1.8 | |||||||||||
Subtotal Southern Timber | $6.9 | $6.0 | $13.7 | $14.6 | |||||||||||
Pacific Northwest Timber | |||||||||||||||
Reforestation, silviculture and other capital expenditures | 1.0 | 2.0 | 3.5 | 3.9 | |||||||||||
Property taxes | 0.2 | 0.2 | 0.4 | 0.4 | |||||||||||
Allocated overhead | 0.6 | 0.5 | 1.2 | 1.0 | |||||||||||
Subtotal Pacific Northwest Timber | $1.7 | $2.7 | $5.0 | $5.3 | |||||||||||
New Zealand Timber | |||||||||||||||
Reforestation, silviculture and other capital expenditures | 2.0 | 2.5 | 3.8 | 3.9 | |||||||||||
Property taxes | 0.1 | 0.2 | 0.3 | 0.4 | |||||||||||
Lease payments | 1.1 | 1.4 | 1.5 | 2.0 | |||||||||||
Allocated overhead | 0.7 | 0.7 | 1.4 | 1.4 | |||||||||||
Subtotal New Zealand Timber | $4.0 | $4.8 | $7.1 | $7.7 | |||||||||||
Total Timber Segments Capital Expenditures | $12.6 | $13.5 | $25.8 | $27.6 | |||||||||||
Real Estate | 0.1 | 0.3 | 0.1 | 0.4 | |||||||||||
Corporate | — | 1.6 | — | 1.8 | |||||||||||
Total Capital Expenditures | $12.7 | $15.4 | $25.9 | $29.8 | |||||||||||
Timberland Acquisitions | |||||||||||||||
Southern Timber | $24.4 | $213.8 | $24.4 | $214.3 | |||||||||||
Pacific Northwest Timber | — | — | — | 1.5 | |||||||||||
New Zealand Timber | 6.8 | 12.1 | 6.8 | 21.4 | |||||||||||
Subtotal Timberland Acquisitions | $31.2 | $225.9 | $31.2 | $237.2 | |||||||||||
Real Estate Development Investments | $2.2 | $3.4 | $4.5 | $5.6 | |||||||||||
Rayonier Office Building | — | $3.0 | — | $5.6 |
Sales | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Total | ||||||||||||||||||
Three Months Ended June 30, 2017 | $35.5 | $20.5 | $77.4 | $25.6 | $42.0 | $201.0 | ||||||||||||||||||
Volume/Mix | 2.6 | 3.4 | 10.3 | 28.1 | 1.0 | 45.4 | ||||||||||||||||||
Price | — | 6.7 | 5.5 | (4.1 | ) | 3.3 | 11.4 | |||||||||||||||||
Non-timber sales (a) | 6.0 | (0.1 | ) | 0.4 | — | (0.1 | ) | 6.2 | ||||||||||||||||
Foreign exchange (b) | — | — | 0.4 | — | — | 0.4 | ||||||||||||||||||
Other | 3.9 | (c) | 1.7 | (c) | (24.3 | ) | (d) | 0.3 | (e) | — | (18.5 | ) | ||||||||||||
Three Months Ended June 30, 2018 | $48.0 | $32.2 | $69.7 | $49.9 | $46.2 | $245.9 |
Sales | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Total | ||||||||||||||||||
Six Months Ended June 30, 2017 | $74.7 | $46.4 | $118.2 | $79.9 | $76.3 | $395.5 | ||||||||||||||||||
Volume/Mix | 6.4 | 2.8 | 15.0 | 28.3 | 3.0 | 55.5 | ||||||||||||||||||
Price | (0.1 | ) | 11.9 | 10.5 | 19.3 | 6.4 | 48.0 | |||||||||||||||||
Non-timber sales (a) | 5.0 | (0.3 | ) | 2.7 | — | (0.3 | ) | 7.1 | ||||||||||||||||
Foreign exchange (b) | — | — | 0.5 | — | 0.5 | |||||||||||||||||||
Other | 5.6 | (c) | 2.8 | (c) | (24.3 | ) | (d) | (41.6 | ) | (e) | — | (57.5 | ) | |||||||||||
Six Months Ended June 30, 2018 | $91.6 | $63.6 | $122.6 | $85.9 | $85.4 | $449.1 |
Operating Income | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total | |||||||||||||||||||||
Three Months Ended June 30, 2017 | $9.7 | ($1.5 | ) | $26.8 | $16.1 | $1.1 | ($5.3 | ) | $46.9 | |||||||||||||||||||
Volume/Mix | 1.4 | 0.3 | 3.4 | 21.5 | — | — | 26.6 | |||||||||||||||||||||
Price | — | 6.7 | 1.6 | (4.1 | ) | — | — | 4.2 | ||||||||||||||||||||
Cost | 0.3 | (0.1 | ) | (0.9 | ) | 0.9 | (0.9 | ) | (1.0 | ) | (1.7 | ) | ||||||||||||||||
Non-timber income | 6.2 | — | 0.5 | — | — | — | 6.7 | |||||||||||||||||||||
Foreign exchange (a) | — | — | 1.3 | — | — | — | 1.3 | |||||||||||||||||||||
Depreciation, depletion & amortization | (1.9 | ) | 0.2 | (0.1 | ) | (8.5 | ) | — | (0.2 | ) | (10.5 | ) | ||||||||||||||||
Non-cash cost of land and improved development | — | — | — | (7.0 | ) | — | — | (7.0 | ) | |||||||||||||||||||
Other | — | — | (14.8 | ) | (b) | — | — | — | (14.8 | ) | ||||||||||||||||||
Three Months Ended June 30, 2018 | $15.7 | $5.6 | $17.8 | $18.9 | $0.2 | ($6.5 | ) | $51.6 |
Operating Income | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total | |||||||||||||||||||||
Six Months Ended June 30, 2017 | $23.6 | ($2.4 | ) | $37.1 | $45.8 | $2.2 | ($10.1 | ) | $96.2 | |||||||||||||||||||
Volume/Mix | 3.4 | 0.3 | 5.0 | 18.3 | — | — | 27.0 | |||||||||||||||||||||
Price | (0.1 | ) | 11.9 | 4.4 | 19.3 | — | — | 35.5 | ||||||||||||||||||||
Cost | (0.3 | ) | 0.4 | (1.2 | ) | 1.4 | (1.8 | ) | — | (1.5 | ) | |||||||||||||||||
Non-timber income | 5.0 | (0.3 | ) | 2.5 | — | — | — | 7.2 | ||||||||||||||||||||
Foreign exchange (a) | — | — | 0.9 | — | — | — | 0.9 | |||||||||||||||||||||
Depreciation, depletion & amortization | (3.7 | ) | 0.4 | 0.2 | (7.9 | ) | — | (0.4 | ) | (11.4 | ) | |||||||||||||||||
Non-cash cost of land and improved development | — | — | — | (1.8 | ) | — | — | (1.8 | ) | |||||||||||||||||||
Other | — | — | (15.2 | ) | (b) | (28.2 | ) | (c) | — | — | (43.4 | ) | ||||||||||||||||
Six Months Ended June 30, 2018 | $27.9 | $10.3 | $33.7 | $46.9 | $0.4 | ($10.5 | ) | $108.7 |
(c) | Real Estate includes $28.2 million of operating income from Large Dispositions in 2017. |
Adjusted EBITDA (a) | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total | |||||||||||||||||||||
Three Months Ended June 30, 2017 | $21.6 | $5.5 | $42.3 | $21.5 | $1.1 | ($5.2 | ) | $86.8 | ||||||||||||||||||||
Volume/Mix | 2.5 | 2.9 | 4.6 | 27.3 | — | — | 37.3 | |||||||||||||||||||||
Price | — | 6.7 | 1.6 | (4.1 | ) | — | — | 4.2 | ||||||||||||||||||||
Cost | 0.3 | (0.1 | ) | (0.9 | ) | 0.9 | (0.9 | ) | (1.0 | ) | (1.7 | ) | ||||||||||||||||
Non-timber income | 6.2 | — | 0.5 | — | — | — | 6.7 | |||||||||||||||||||||
Foreign exchange (b) | — | — | 1.5 | — | — | — | 1.5 | |||||||||||||||||||||
Other | — | — | (23.8 | ) | (c) | 0.3 | (d) | — | — | (23.5 | ) | |||||||||||||||||
Three Months Ended June 30, 2018 | $30.6 | $15.0 | $25.8 | $45.9 | $0.2 | ($6.2 | ) | $111.3 |
(a) | Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators below. |
(b) | Net of currency hedging impact. |
(c) | New Zealand Timber includes $24.3 million of timberland sold less cash costs of $0.5 million in Q2 2017. |
(d) | Real Estate includes $0.3 million of deferred revenue in Q2 2017. |
Adjusted EBITDA (a) | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total | |||||||||||||||||||||
Six Months Ended June 30, 2017 | $48.0 | $14.9 | $58.0 | $30.1 | $2.2 | ($9.2 | ) | $144.0 | ||||||||||||||||||||
Volume/Mix | 6.2 | 2.3 | 6.7 | 27.6 | — | — | 42.8 | |||||||||||||||||||||
Price | (0.1 | ) | 11.9 | 4.4 | 19.3 | — | — | 35.5 | ||||||||||||||||||||
Cost | (0.3 | ) | 0.4 | (1.2 | ) | 1.4 | (1.8 | ) | (0.7 | ) | (2.2 | ) | ||||||||||||||||
Non-timber income | 5.0 | (0.3 | ) | 2.5 | — | — | — | 7.2 | ||||||||||||||||||||
Foreign exchange (b) | — | — | 1.5 | — | — | — | 1.5 | |||||||||||||||||||||
Other | — | — | (24.4 | ) | (c) | 0.3 | (d) | — | — | (24.1 | ) | |||||||||||||||||
Six Months Ended June 30, 2018 | $58.8 | $29.2 | $47.5 | $78.7 | $0.4 | ($9.9 | ) | $204.6 |
(a) | Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators below. |
(b) | Net of currency hedging impact. |
(c) | New Zealand Timber includes $24.3 million of timberland sold in 2017 less cash costs of $0.5 million and $0.4 million of operating income from a settlement received in 2017. |
(d) | Real Estate includes $0.3 million of deferred revenue in 2017. |
ADJUSTED EBITDA GUIDANCE (a): | |||||||||||
2018 | |||||||||||
Revised Full-Year Guidance | Year-to-Date Results | ||||||||||
Net Income to Adjusted EBITDA Reconciliation | |||||||||||
Net income | $91.5 | - | $99.0 | $82.0 | |||||||
Less: Net income attributable to noncontrolling interest | (10.0 | ) | - | (10.5 | ) | (5.2 | ) | ||||
Net income attributable to Rayonier Inc. | $81.5 | - | $88.5 | $76.8 | |||||||
Interest, net | 32.0 | - | 32.0 | 15.3 | |||||||
Income tax expense | 14.5 | - | 15.5 | 14.0 | |||||||
Depreciation, depletion and amortization | 141.0 | - | 146.5 | 80.9 | |||||||
Non-cash cost of land and improved development | 21.0 | - | 22.0 | 14.9 | |||||||
Non-operating income | — | — | (2.7 | ) | |||||||
Net income attributable to noncontrolling interest | 10.0 | - | 10.5 | 5.2 | |||||||
Adjusted EBITDA (a) | $300.0 | - | $315.0 | $204.6 | |||||||
Diluted Earnings per Share | $0.63 | - | $0.68 | $0.59 |
(a) | Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, costs related to shareholder litigation and Large Dispositions. Adjusted EBITDA is a non-GAAP measure that management uses to make strategic decisions about the business and that investors can use to evaluate the operational performance of the assets under management. It removes the impact of specific items that management believes do not directly reflect the core business operations on an ongoing basis. |
June 30, | December 31, | ||||||
(millions of dollars) | 2018 | 2017 | |||||
Cash and cash equivalents | $106.6 | $112.7 | |||||
Total debt (a) | 975.0 | 1,028.4 | |||||
Shareholders’ equity | 1,712.9 | 1,693.0 | |||||
Total capitalization (total debt plus equity) | 2,687.9 | 2,721.4 | |||||
Debt to capital ratio | 36 | % | 38 | % | |||
Net debt to enterprise value (b) | 15 | % | 18 | % |
(a) | Total debt as of June 30, 2018 and December 31, 2017 is presented gross of deferred financing costs of $2.7 million and $3.0 million, respectively. |
(b) | Enterprise value is calculated as the number of shares outstanding multiplied by the Company’s share price plus net debt as of June 30, 2018 and December 31, 2017. |
(millions of dollars) | 2018 | 2017 | |||||
Cash provided by (used for): | |||||||
Operating activities | $181.6 | $128.3 | |||||
Investing activities (a) | (61.5 | ) | (235.2 | ) | |||
Financing activities | (115.6 | ) | 95.7 |
(a) | Due to the adoption of ASU No. 2016-18, restricted cash is now included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown and therefore changes in restricted cash are no longer reported as investing activities. Prior period amounts have been restated to conform to current period presentation. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Income to Adjusted EBITDA Reconciliation | |||||||||||||||
Net income | $39.3 | $30.8 | $82.0 | $65.9 | |||||||||||
Interest, net | 7.6 | 8.2 | 15.3 | 16.3 | |||||||||||
Income tax expense | 7.1 | 7.5 | 14.0 | 13.7 | |||||||||||
Depreciation, depletion and amortization | 46.4 | 37.1 | 80.9 | 67.9 | |||||||||||
Non-cash cost of land and improved development | 13.3 | 2.8 | 14.9 | 7.4 | |||||||||||
Non-operating (income) expense | (2.5 | ) | 0.4 | (2.7 | ) | 0.3 | |||||||||
Costs related to shareholder litigation | — | — | — | 0.7 | |||||||||||
Large Dispositions (a) | — | — | — | (28.2 | ) | ||||||||||
Adjusted EBITDA | $111.3 | $86.8 | $204.6 | $144.0 |
(a) | Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value. In January 2017, the Company completed a disposition of approximately 25,000 acres located in Alabama for a sale price and gain of approximately $42.0 million and $28.2 million, respectively. |
Three Months Ended | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and other | Total | ||||||||||||||||||||
June 30, 2018 | |||||||||||||||||||||||||||
Operating income | $15.7 | $5.6 | $17.8 | $18.9 | $0.2 | ($6.5 | ) | $51.6 | |||||||||||||||||||
Depreciation, depletion and amortization | 14.9 | 9.4 | 8.0 | 13.7 | — | 0.3 | 46.4 | ||||||||||||||||||||
Non-cash cost of land and improved development | — | — | — | 13.3 | — | — | 13.3 | ||||||||||||||||||||
Adjusted EBITDA | $30.6 | $30.6 | $25.8 | $45.9 | $0.2 | ($6.2 | ) | $111.3 | |||||||||||||||||||
June 30, 2017 | |||||||||||||||||||||||||||
Operating income (loss) | $9.7 | ($1.5 | ) | $26.8 | $16.1 | $1.1 | ($5.3 | ) | $46.9 | ||||||||||||||||||
Depreciation, depletion and amortization | 11.9 | 7.0 | 15.5 | 2.6 | — | 0.1 | 37.1 | ||||||||||||||||||||
Non-cash cost of land and improved development | — | — | — | 2.8 | — | — | 2.8 | ||||||||||||||||||||
Adjusted EBITDA | $21.6 | $5.5 | $42.3 | $21.5 | $1.1 | ($5.2 | ) | $86.8 |
Six Months Ended | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and other | Total | ||||||||||||||||||||
June 30, 2018 | |||||||||||||||||||||||||||
Operating income | $27.9 | $10.3 | $33.7 | $46.9 | $0.4 | ($10.5 | ) | $108.7 | |||||||||||||||||||
Depreciation, depletion and amortization | 30.9 | 18.9 | 13.7 | 16.8 | — | 0.6 | 80.9 | ||||||||||||||||||||
Non-cash cost of land and improved development | — | — | — | 14.9 | — | — | 14.9 | ||||||||||||||||||||
Adjusted EBITDA | $58.8 | $29.2 | $47.5 | $78.7 | $0.4 | ($9.9 | ) | $204.6 | |||||||||||||||||||
June 30, 2017 | |||||||||||||||||||||||||||
Operating income (loss) | $23.6 | ($2.4 | ) | $37.0 | $45.8 | $2.2 | ($10.1 | ) | $96.2 | ||||||||||||||||||
Depreciation, depletion and amortization | 24.4 | 17.3 | 20.8 | 5.2 | — | 0.2 | 67.9 | ||||||||||||||||||||
Non-cash cost of land and improved development | — | — | 0.1 | 7.3 | — | — | 7.4 | ||||||||||||||||||||
Costs related to shareholder litigation | — | — | — | — | — | 0.7 | 0.7 | ||||||||||||||||||||
Large Dispositions (a) | — | — | — | (28.2 | ) | — | — | (28.2 | ) | ||||||||||||||||||
Adjusted EBITDA | $48.0 | $14.9 | $58.0 | $30.1 | $2.2 | ($9.2 | ) | $144.0 |
(a) | Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value. In January 2017, the Company completed a disposition of approximately 25,000 acres located in Alabama for a sale price and gain of approximately $42.0 million and $28.2 million, respectively. |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash provided by operating activities | $181.6 | $128.3 | |||||
Capital expenditures (a) | (25.9 | ) | (29.8 | ) | |||
Working capital and other balance sheet changes | 7.8 | (1.2 | ) | ||||
CAD | 163.5 | 97.3 | |||||
Mandatory debt repayments | — | — | |||||
Mandatory pension requirements | (2.9 | ) | — | ||||
CAD after mandatory debt repayments and pension requirements | 160.6 | 97.3 |
Cash used for investing activities (b) | ($61.5 | ) | ($235.2 | ) | |||
Cash (used for) provided by financing activities | ($115.6 | ) | $95.7 |
(a) | Capital expenditures exclude timberland acquisitions during the six months ended June 30, 2018 and June 30, 2017 and spending on the Rayonier office building during the six months ended June 30, 2017. |
(b) | Due to the adoption of ASU No. 2016-18, restricted cash is now included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown and therefore changes in restricted cash are no longer reported as investing activities. Prior period amounts have been restated to conform to current period presentation. |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Purchase of timberlands | ($31.2 | ) | ($237.2 | ) | |||
Real Estate Development Investments | (4.5 | ) | (5.6 | ) | |||
Distributions to New Zealand minority shareholder (a) | (3.4 | ) | (7.6 | ) | |||
Rayonier Office Building | — | (5.6 | ) |
(a) | Includes debt repayments on the New Zealand JV noncontrolling interest shareholder loan. See Note 5 — Debt for additional information. |
Contractual Financial Obligations (in millions) | Total | Payments Due by Period | |||||||||||||||||
Remaining 2018 | 2019-2020 | 2021-2022 | Thereafter | ||||||||||||||||
Long-term debt (a) | $975.0 | — | — | $325.0 | $650.0 | ||||||||||||||
Interest payments on long-term debt (b) | 214.2 | 18.3 | 73.1 | 63.9 | 58.9 | ||||||||||||||
Operating leases — timberland | 187.2 | 5.7 | 17.4 | 16.8 | 147.3 | ||||||||||||||
Operating leases — PP&E, offices | 4.6 | 0.6 | 1.9 | 1.4 | 0.7 | ||||||||||||||
Commitments — derivatives (c) | 8.4 | 2.4 | 2.6 | 1.9 | 1.5 | ||||||||||||||
Commitments — other (d) | 11.8 | 5.2 | 6.0 | 0.6 | — | ||||||||||||||
Total contractual cash obligations | $1,401.2 | $32.2 | $101.0 | $409.6 | $858.4 |
(a) | The book value of long-term debt, net of deferred financing costs, is currently recorded at $972.3 million on the Company’s Consolidated Balance Sheet, but upon maturity the liability will be $975.0 million. |
(b) | Projected interest payments for variable rate debt were calculated based on outstanding principal amounts and interest rates as of June 30, 2018. |
(c) | Commitments — derivatives represents payments expected to be made on derivative financial instruments (foreign exchange contracts and interest rate swaps). See Note 12 — Derivative Financial Instruments and Hedging Activities. |
(d) | Commitments — other includes $1.7 million of pension contribution requirements remaining in 2018 based on actuarially determined estimates and IRS minimum funding requirements, payments expected to be made on the Company’s Wildlight development project and other purchase obligations. For additional information on the pension contribution see Note 15 — Employee Benefit Plans in the 2017 Form 10-K. |
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
(Dollars in thousands) | 2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | Total | Fair Value | |||||||
Variable rate debt: | |||||||||||||||
Principal amounts | — | — | — | — | — | $650,000 | $650,000 | $650,000 | |||||||
Average interest rate (a)(b) | — | — | — | — | — | 3.75% | 3.75% | — | |||||||
Fixed rate debt: | |||||||||||||||
Principal amounts | — | — | — | — | $325,000 | — | $325,000 | $323,505 | |||||||
Average interest rate (b) | — | — | — | — | 3.75% | — | 3.75% | — | |||||||
Interest rate swaps: | |||||||||||||||
Notional amount | — | — | — | — | — | $650,000 | $650,000 | $36,727 | |||||||
Average pay rate (b) | — | — | — | — | — | 1.91% | 1.91% | — | |||||||
Average receive rate (b) | — | — | — | — | — | 1.99% | 1.99% | — |
(Dollars in thousands) | 0-1 months | 1-2 months | 2-3 months | 3-6 months | 6-12 months | 12-18 months | Total | Fair Value | |||||||
Foreign exchange contracts to sell U.S. dollar for New Zealand dollar | |||||||||||||||
Notional amount | $12,250 | $11,500 | $8,750 | $24,750 | $42,000 | $35,000 | $134,250 | ($2,611) | |||||||
Average contract rate | 1.4503 | 1.4480 | 1.4527 | 1.4431 | 1.4412 | 1.4413 | 1.4437 | ||||||||
Foreign currency option contracts to sell U.S. dollar for New Zealand dollar | |||||||||||||||
Notional amount | $4,000 | $4,000 | $4,000 | $6,000 | $6,000 | — | $24,000 | ($35) | |||||||
Average strike price | 1.4557 | 1.4566 | 1.4692 | 1.4715 | 1.4711 | — | 1.4659 | ||||||||
Foreign exchange contracts to sell New Zealand dollar for U.S. dollar | |||||||||||||||
Notional amount (NZ$) | $22,500 | — | $17,500 | $10,000 | — | — | $50,000 | $2,492 | |||||||
Average contract rate | 0.7200 | — | 0.7331 | 0.7338 | — | — | 0.7273 |
Item 4. | CONTROLS AND PROCEDURES |
Item 1. | LEGAL PROCEEDINGS |
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (b) | |||||||||
April 1 to April 30 | 80,158 | 36.77 | — | 6,436,445 | |||||||||
May 1 to May 31 | 14 | 37.36 | — | 6,436,445 | |||||||||
June 1 to June 30 | — | — | — | 6,436,445 | |||||||||
Total | 80,172 | — |
(a) | Includes 80,172 shares of the Company’s common shares purchased in April, May and June from current and former employees in non-open market transactions. The shares were sold by current and former employees of the Company in exchange for cash that was used to pay withholding taxes associated with the vesting of restricted stock awards and performance share awards under the Company’s stock incentive plan. The price per share surrendered is based on the closing price of the company’s common shares on the respective vesting dates of the awards. |
(b) | Maximum number of shares authorized to be purchased as of June 30, 2018 include 3,869,621 under the 1996 anti-dilutive program and approximately 2,566,824 under the share repurchase program. |
Item 6. | EXHIBITS |
31.1 | Filed herewith | ||
31.2 | Filed herewith | ||
32 | Furnished herewith | ||
101 | The following financial information from our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2018, formatted in Extensible Business Reporting Language (“XBRL”), includes: (i) the Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended June 30, 2018 and 2017; (ii) the Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017; (iii) the Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2018 and the Years Ended December 31, 2017 and 2016; (iv) the Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017; and (v) the Notes to Consolidated Financial Statements | Filed herewith |
RAYONIER INC. | ||
(Registrant) | ||
By: | /s/ APRIL TICE | |
April Tice Director, Financial Services and Corporate Controller (Duly Authorized Officer, Principal Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Rayonier Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/S/ DAVID L. NUNES | |
David L. Nunes President and Chief Executive Officer, Rayonier Inc. |
1. | I have reviewed this quarterly report on Form 10-Q of Rayonier Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ MARK MCHUGH | |
Mark McHugh Senior Vice President and Chief Financial Officer, Rayonier Inc. |
1. | The quarterly report on Form 10-Q of Rayonier Inc. (the "Company") for the period ended June 30, 2018 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ DAVID L. NUNES | /s/ MARK MCHUGH | |
David L. Nunes | Mark McHugh | |
President and Chief Executive Officer, Rayonier Inc. | Senior Vice President and Chief Financial Officer, Rayonier Inc. |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 27, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | RAYONIER INC. | |
Trading Symbol | RYN | |
Entity Central Index Key | 0000052827 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 129,459,659 |
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustment, tax expense | $ 0 | $ 0 | $ 0 | $ 0 |
Cash flow hedges, income tax (expense) benefit | (2,008) | 1,180 | (1,640) | 1,148 |
Amortization of pension and postretirement plans, tax expense | $ 0 | $ 0 | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Current Assets: | ||
Allowance for doubtful accounts | $ 23 | $ 23 |
Shareholders’ Equity: | ||
Common shares, shares authorized (in shares) | 480,000,000 | 480,000,000 |
Common shares, shares issued (in shares) | 129,451,268 | 128,970,776 |
Common shares, shares outstanding (in shares) | 129,451,268 | 128,970,776 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Statement of Stockholders' Equity [Abstract] | |||||
Dividends declared (in dollars per share) | $ 0.27 | $ 0.25 | $ 0.52 | $ 0.5 | $ 1.00 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
||||||
OPERATING ACTIVITIES | |||||||
Net income | $ 82,043 | $ 65,856 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 80,920 | 67,895 | |||||
Non-cash cost of land and improved development | 14,936 | 7,359 | |||||
Stock-based incentive compensation expense | 3,474 | 2,892 | |||||
Deferred income taxes | 13,653 | 15,214 | |||||
Amortization of losses from pension and postretirement plans | 338 | 233 | |||||
Gain on sale of large disposition of timberlands | 0 | (28,183) | |||||
Other | (5,466) | 1,719 | |||||
Changes in operating assets and liabilities: | |||||||
Receivables | (26,203) | (10,421) | |||||
Inventories | 1,014 | (1,772) | |||||
Accounts payable | 4,448 | 5,141 | |||||
Income tax receivable/payable | (84) | (126) | |||||
All other operating activities | 12,510 | 2,508 | |||||
CASH PROVIDED BY OPERATING ACTIVITIES | 181,583 | 128,315 | |||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (25,920) | (29,840) | |||||
Real estate development investments | (4,501) | (5,599) | |||||
Purchase of timberlands | (31,234) | (237,235) | |||||
Net proceeds from large disposition of timberlands | 0 | 42,029 | |||||
Rayonier office building under construction | 0 | (5,573) | |||||
Other | 113 | 1,033 | |||||
CASH (USED FOR) INVESTING ACTIVITIES | (61,542) | (235,185) | |||||
FINANCING ACTIVITIES | |||||||
Issuance of debt | 1,014 | 63,389 | |||||
Repayment of debt | (54,389) | (60,422) | |||||
Dividends paid | (67,053) | (62,825) | |||||
Proceeds from the issuance of common shares under incentive stock plan | 7,824 | 3,206 | |||||
Proceeds from the issuance of common shares from equity offering, net of costs | 0 | 152,390 | |||||
Repurchase of common shares | (2,966) | 0 | |||||
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES | (115,570) | 95,738 | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (578) | 1,855 | |||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | |||||||
Change in cash, cash equivalents and restricted cash | [1] | 3,893 | (9,277) | ||||
Balance, beginning of year | [1] | 172,356 | 157,617 | ||||
Balance, end of period | [1] | 176,249 | 148,340 | ||||
Cash paid during the period: | |||||||
Interest | [2] | 14,858 | 16,546 | ||||
Income taxes | 302 | 376 | |||||
Non-cash investing activity: | |||||||
Capital assets purchased on account | $ 6,646 | $ 5,284 | |||||
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions |
6 Months Ended | |
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Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Cash Flows [Abstract] | ||
Patronage refunds received, netted with interest paid | $ 3.8 | $ 3.0 |
BASIS OF PRESENTATION |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The unaudited consolidated financial statements and notes thereto of Rayonier Inc. and its subsidiaries (“Rayonier” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The year-end balance sheet information was derived from audited financial statements not included herein. In the opinion of management, these financial statements and notes reflect any adjustments (all of which are normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. These statements and notes should be read in conjunction with the financial statements and supplementary data included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC (the “2017 Form 10-K”). SUMMARY OF UPDATES TO SIGNIFICANT ACCOUNTING POLICIES REVENUE See Note 2 — Revenue for significant accounting policies related to revenue that were revised upon adoption of Accounting Standards Codification (“ASC”) 606. COST OF SALES Cost of sales associated with real estate sold includes the cost of the land, the cost of any timber on the property that was conveyed to the buyer, any real estate development costs and any closing costs including sales commissions that may be borne by the Company. As allowed under GAAP, the Company expenses closing costs, including sales commissions, when incurred for all real estate sales with future performance obligations expected to be satisfied within one year. When developed residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs benefiting the property sold through completion. Costs are allocated to each sold unit or lot based upon the relative sales value. For purposes of allocating development costs, estimates of future revenues and development costs are re-evaluated periodically throughout the year, with adjustments being allocated prospectively to the remaining units available for sale. For a full description of our significant accounting policies, see Note 2 — Summary of Significant Accounting Policies in the 2017 Form 10-K. RECENTLY ADOPTED STANDARDS The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), on January 1, 2018. The Company elected to use the modified retrospective method to contracts that were not completed at the date of adoption. The Company also elected not to retrospectively restate contracts modified prior to January 1, 2018. A cumulative effect of adoption adjustment to the opening balance of retained earnings was not recorded as there was no accounting impact to any contracts with customers not completed at the date of adoption. See Note 2 — Revenue for additional information. In March 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires that an employer report the service cost component of net periodic benefit cost in the Consolidated Statements of Income in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Additionally, the other components of net periodic benefit cost (interest cost, expected return on plan assets and amortization of losses or gains) are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. ASU No. 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, and is required to be applied retrospectively to all periods presented beginning in the period of adoption. Rayonier adopted ASU No. 2017-07 during the first quarter ended March 31, 2018 and applied the update retrospectively to all periods presented. See Note 14 — Employee Benefit Plans for the components of net periodic benefit cost and the location of these items in the Consolidated Statements of Income and Comprehensive Income. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Consolidated Statements of Cash Flows. ASU No. 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. ASU No. 2016-18 is required to be applied retrospectively to all periods presented beginning in the period of adoption. Rayonier adopted ASU No. 2016-18 in the first quarter ended March 31, 2018 and applied the update retrospectively to all periods presented. Restricted cash is now included with cash and cash equivalents when reconciling the beginning-of-year and end-of-period total amounts shown on the Consolidated Statements of Cash Flows and therefore changes in restricted cash are no longer reported as cash flow activities. See Note 17 — Restricted Cash for additional information, including the nature of restrictions on the Company’s cash, cash equivalents, and restricted cash. Rayonier adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments in the first quarter ended March 31, 2018 with no material impact on the consolidated financial statements. NEW ACCOUNTING STANDARDS In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which currently requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. ASU No. 2016-02 also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. In January 2018, the FASB issued ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. This update provides an optional transition practical expedient not to evaluate under ASU No. 2016-02 existing or expired land easements that were not previously accounted for as leases under the current leases guidance. An entity that elects this practical expedient should evaluate new or modified land easements under ASU No. 2016-02, once adopted. An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with the adoption of ASU No. 2016-02 to assess whether they meet the definition of a lease. This standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and is required to be applied on a modified retrospective basis beginning at the earliest period presented. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which will make more financial and non-financial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU No. 2017-12 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted and the amended presentation and disclosure guidance is required to be applied on a prospective basis. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendments in this update also require certain disclosures about stranded tax effects. ASU No. 2018-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU No. 2018-02 is required to be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Early adoption is permitted in any interim period for which financial statements have not yet been issued. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments —Overall (Subtopic 825-10), to clarify certain provisions of ASU No. 2016-01 and amend other provisions. ASU No. 2018-03 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. Early adoption is permitted for entities that have adopted ASU 2016-01. The Company anticipates the adoption of this standard will not have a significant impact on the Company’s consolidated financial statements. SUBSEQUENT EVENTS The Company has evaluated events occurring from June 30, 2018 to the date of issuance of these Consolidated Financial Statements for potential recognition or disclosure in the consolidated financial statements. No events were identified that warranted recognition or disclosure. |
REVENUE |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE ADOPTION OF ASC 606 For information on the adoption of ASC 606, including changes to significant accounting policies and required transition disclosures, see Note 1 — Basis of Presentation. REVENUE RECOGNITION The Company recognizes revenues when control of promised goods or services (“performance obligations”) is transferred to customers, in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services (“transaction price”). The Company generally satisfies performance obligations within a year of entering into a contract and therefore has applied the disclosure exemption found under ASC 606-10-50-14. Unsatisfied performance obligations as of June 30, 2018 are primarily due to advances on stumpage contracts and unearned license revenue. These performance obligations are expected to be satisfied within the next twelve months. The Company generally collects payment within a year of satisfying performance obligations and therefore has elected not to adjust revenues for a financing component. The following table presents our revenue from contracts with customers disaggregated by product type for the three and six months ended June 30, 2018 and 2017:
REVENUE RECOGNITION FOR TIMBER SALES AND NON-TIMBER INCOME Revenue from the sale of timber is recognized when control passes to the buyer. The Company utilizes two primary methods or sales channels for the sale of timber, a stumpage or standing timber model and a delivered log model. The sales method the Company employs depends upon local market conditions and which method management believes will provide the best overall margins. Under the stumpage model, standing timber is sold primarily under pay-as-cut contracts, with specified duration (typically one year or less) and fixed prices, whereby revenue is recognized as timber is severed and the sales volume is determined. The Company also sells stumpage under lump-sum contracts for specified parcels where the Company receives cash for the full agreed value of the timber prior to harvest and control passes to the buyer upon signing the contract. The Company retains interest in the land, slash products, and the use of the land for recreational and other purposes. Any uncut timber remaining at the end of the contract period reverts to the Company. Revenue is recognized for lump-sum timber sales when payment is received, the contract is signed and control passes to the buyer. A third type of stumpage sale the Company utilizes is an agreed-volume sale, whereby revenue is recognized using the output method, as periodic physical observations are made of the percentage of acreage harvested. Under the delivered log model, the Company hires third-party loggers and haulers to harvest timber and deliver it to a buyer. Sales of domestic logs generally do not require an initial payment and are made to third-party customers on open credit terms. Sales of export logs generally require a letter of credit from an approved bank. Revenue is recognized when the logs are delivered and control has passed to the buyer. For domestic log sales, control is considered passed to the buyer as the logs are delivered to the customer’s facility. For export log sales (primarily in New Zealand), control is considered passed to the buyer upon delivery onto the export vessel. Non-timber income is primarily comprised of hunting and recreational licenses. Such income and any related cost are recognized ratably over the term of the agreement and included in “Sales” and “Cost of sales”, respectively. Payment is generally due upon contract execution. The following table summarizes revenue recognition and general payment terms for timber sales:
The following table presents our timber sales disaggregated by contract type for the three and six months ended June 30, 2018 and 2017:
REVENUE RECOGNITION FOR REAL ESTATE SALES The Company recognizes revenue on sales of real estate generally at the point in time when cash has been received, the sale has closed, and control has passed to the buyer. A deposit of 5% is generally required at the time a purchase and sale agreement is executed, with the balance due at closing. On sales of real estate containing future performance obligations, revenue is recognized using the input method based on costs incurred to date relative to the total costs expected to fulfill the performance obligations in the contract with the customer. REVENUE RECOGNITION FOR LOG TRADING Log trading revenue is generally recognized when procured logs are delivered to the buyer and control has passed. For domestic log trading, control is considered passed to the buyer as the logs are delivered to the customer’s facility. For export log trading, control is considered passed to the buyer upon delivery onto the export vessel. The Trading segment also includes sales from log agency contracts, whereby the Company acts as an agent managing export services on behalf of third parties. Revenue for log agency fees are recognized net of related costs. Contract Balances The timing of revenue recognition, invoicing and cash collections results in accounts receivable and deferred revenue (contract liabilities) on the Consolidated Balance Sheets. Accounts receivable are recorded when the Company has an unconditional right to consideration for completed performance under the contract. Contract liabilities relate to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. The following tables summarizes revenue recognized during the three and six months ended June 30, 2018 and 2017 that was included in the contract liability balance at the beginning of each year:
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JOINT VENTURE INVESTMENT |
6 Months Ended |
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Jun. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
JOINT VENTURE INVESTMENT | JOINT VENTURE INVESTMENT MATARIKI FORESTRY GROUP The Company maintains a controlling financial interest in Matariki Forestry Group (the “New Zealand JV”), a joint venture that owns or leases approximately 411,000 legal acres of New Zealand timberland. Accordingly, the Company consolidates the New Zealand JV’s balance sheet and results of operations. The portions of the consolidated financial position and results of operations attributable to the New Zealand JV’s 23% noncontrolling interest are shown separately within the Consolidated Statements of Income and Comprehensive Income and Consolidated Statements of Changes in Shareholders’ Equity. Rayonier New Zealand Limited (“RNZ”), a wholly-owned subsidiary of Rayonier Inc., serves as the manager of the New Zealand JV. |
SEGMENT AND GEOGRAPHICAL INFORMATION |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT AND GEOGRAPHICAL INFORMATION | SEGMENT AND GEOGRAPHICAL INFORMATION 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 expense, interest and other miscellaneous income and income tax expense, are not considered by management to be part of segment operations and are included under “Corporate and other” or “unallocated interest expense and other.” The following tables summarize the segment information for the three and six months ended June 30, 2018 and 2017:
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DEBT |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Rayonier’s debt consisted of the following at June 30, 2018:
(a) As of June 30, 2018, the periodic interest rate on the term loan facility was LIBOR plus 1.625%. The Company estimates the effective fixed interest rate on the term loan facility to be approximately 3.3% after consideration of interest rate swaps and estimated patronage refunds. (b) As of June 30, 2018, the periodic interest rate on the incremental term loan was LIBOR plus 1.900%. The Company estimates the effective fixed interest rate on the incremental term loan facility to be approximately 2.8% after consideration of interest rate swaps and estimated patronage refunds. Principal payments due during the next five years and thereafter are as follows:
2018 DEBT ACTIVITY During the six months ended June 30, 2018, the Company made a repayment of $50.0 million on the Revolving Credit Facility. As of June 30, 2018, the Company had available borrowings of $189.6 million under the Revolving Credit Facility, net of $10.4 million to secure its outstanding letters of credit. In addition, the New Zealand JV made borrowings and repayments of $1.0 million on its working capital facility. As of June 30, 2018, draws totaling NZ$40.0 million remain available on the working capital facility. The New Zealand JV also fully repaid its shareholder loan held by the noncontrolling interest party during the six months ended June 30, 2018. DEBT COVENANTS In connection with the Company’s $350 million term credit agreement (the “Term Credit Agreement”), $300 million incremental term loan agreement (the “Incremental Term Loan Agreement”) and $200 million revolving credit facility (the “Revolving Credit Facility”), customary covenants must be met, the most significant of which include interest coverage and leverage ratios. In addition to these financial covenants listed above, the Senior Notes, Term Credit Agreement, Incremental Term Loan Agreement and Revolving Credit Facility include customary covenants that limit the incurrence of debt and the disposition of assets, among others. At June 30, 2018, the Company was in compliance with all applicable covenants. |
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS |
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Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS | HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS Rayonier continuously assesses potential alternative uses of its timberlands, as some properties may become more valuable for development, residential, recreation or other purposes. The Company periodically transfers, via a sale or contribution from the real estate investment trust (“REIT”) entities to taxable REIT subsidiaries (“TRS”), higher and better use (“HBU”) timberlands to enable land-use entitlement, development or marketing activities. The Company also acquires HBU properties in connection with timberland acquisitions. These properties are managed as timberlands until sold or developed. While the majority of HBU sales involve rural and recreational land, the Company also selectively pursues various land-use entitlements on certain properties for residential, commercial and industrial development in order to enhance the long-term value of such properties. For selected development properties, Rayonier also invests in targeted infrastructure improvements, such as roadways and utilities, to accelerate the marketability and improve the value of such properties. An analysis of higher and better use timberlands and real estate development investments from December 31, 2017 to June 30, 2018 is shown below:
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COMMITMENTS |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS | COMMITMENTS The Company leases certain buildings, machinery, and equipment under various operating leases. The Company also has long-term lease agreements on certain timberlands in the Southern U.S. and New Zealand. U.S. leases typically have initial terms of approximately 30 to 65 years, with renewal provisions in some cases. New Zealand timberland lease terms range between 30 and 99 years. Such leases are generally non-cancellable and require minimum annual rental payments. At June 30, 2018, the future minimum payments under non-cancellable operating leases, timberland leases and other commitments were as follows:
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INCOME TAXES |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The operations conducted by the Company’s REIT entities are generally not subject to U.S. federal and state income tax. The New Zealand JV is subject to corporate level tax in New Zealand. Non-REIT qualifying operations are conducted by the Company’s TRS. The primary businesses performed in Rayonier’s TRS include log trading and certain real estate activities, such as the sale, entitlement and development of HBU properties. For the three and six months ended June 30, 2018, the Company recorded income tax expense of $7.1 million and $14.0 million, respectively. For the three and six months ended June 30, 2017, the Company recorded income tax expense of $7.5 million and $13.8 million, respectively. PROVISION FOR INCOME TAXES The Company’s effective tax rate is below the 21.0% U.S. statutory rate due to tax benefits associated with being a REIT. The Company’s annualized effective tax rate (“AETR”) as of June 30, 2018 and June 30, 2017 was 14.5% and 17.3%, respectively. The increase in income tax expense and the decrease in AETR for the three and six months ended June 30, 2018 is principally related to the New Zealand JV. In accordance with GAAP, the Company recognizes the impact of a tax position if a position is “more-likely-than-not” to prevail. For the six months ended June 30, 2018, there were no material changes in uncertain tax positions. U.S. TAX REFORM The Tax Cuts and Jobs Act (the “Act”) was signed into law on December 22, 2017 making significant changes to the Internal Revenue Code. Changes include a permanent reduction in the U.S. statutory corporate income tax rate from 35% to 21% beginning January 1, 2018 and a one-time transition tax on the deemed repatriation of deferred foreign earnings in 2017. The SEC issued Staff Accounting Bulletin 118 (“SAB 118”), which provides additional clarification regarding the application of ASC Topic 740 when registrants do not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act for the reporting period in which the Act was enacted. SAB 118 provides a measurement period beginning in the reporting period that includes the Act’s enactment date and ending when the registrant has obtained, prepared, and analyzed the information needed in order to complete the accounting requirements, but in no circumstances should the measurement period extend beyond one year from the enactment date. The Company has not completed its assessment of the accounting implications of the Act. However, the Company reasonably calculated an estimate of the impact of the Act in the 2017 year end income tax provision and recorded $0.1 million of additional income tax expense as of December 31, 2017. This amount was offset by the Alternative Minimum Tax credit benefit, resulting in a zero net effect to income tax expense. This provisional amount is related to the one-time transition tax on the deemed repatriation of deferred foreign earnings as of December 31, 2017. The remeasurement of certain deferred tax assets and liabilities resulting from the permanent reduction in the U.S. statutory corporate tax rate resulted in a provisional amount of zero as the change in rate was offset by a change in the valuation allowance. As the Company completes its analysis of the Act, it may make adjustments to the provisional amounts. No adjustments have been made to the provisional amounts as of the six months ended June 30, 2018. However, any subsequent adjustments to these amounts will be recorded to current tax expense in the quarter the analysis is complete. The Act subjects a U.S. shareholder to current tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries effective January 1, 2018. For the current year, the Company’s REIT entity has a GILTI income inclusion of $1.7 million. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. Due to the Company’s REIT status and the corresponding distribution requirement, the Company has neither a deferred tax related to GILTI nor any current tax expense. |
CONTINGENCIES |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Following the Company’s November 10, 2014 earnings release and filing of the restated interim financial statements for the quarterly periods ended March 31 and June 30, 2014, (the “November 2014 Announcement”), on November 26, 2014, December 29, 2014, January 26, 2015, February 13, 2015, and May 12, 2015, the Company received separate letters from shareholders requesting that the Company investigate or pursue derivative claims against certain officers and directors related to the November 2014 Announcement (the “Derivative Claims”). Although these demands do not identify any claims against the Company, the Company has certain obligations to advance expenses and provide indemnification to certain current and former officers and directors of the Company. The Company has also incurred expenses as a result of costs arising from the investigation of the claims alleged in the various demands. Following the Company’s receipt of the Derivative Claims, it entered into a series of tolling agreements with the shareholders from whom it received demands (the “Demand Shareholders”). The last of these tolling agreements ended in March of 2017. On October 13, 2017, one of the Demand Shareholders filed an action in the United States District Court for the Middle District of Florida, currently styled Molloy v. Boynton, et al., Civil Action No. 3:17-cv-01157-TJC-MCR (the “Derivative Lawsuit”). The complaint alleges breaches of fiduciary duties and unjust enrichment and names as defendants former officers, Paul G. Boynton, Hans E. Vanden Noort and N. Lynn Wilson, and former directors, C. David Brown, II, Mark E. Gaumond, James H. Miller, Thomas I. Morgan and Ronald Townsend (the former officers and directors named as defendants are collectively the “Individual Defendants”). In November 2017, the parties reached an agreement to resolve all claims brought in the Derivative Lawsuit and agreed to negotiate in good faith regarding the amount of attorneys’ fees and expenses to be paid to the Demand Shareholders’ counsel, subject to court approval. The parties executed a term sheet on November 27, 2017, and agreed to schedule a mediation regarding the amount of attorneys’ fees and expenses. On November 30, 2017, Rayonier and certain of the Individual Defendants who had been served with the complaint filed an unopposed Motion to Stay or, in the Alternative, to Extend Time to Respond to the Complaint in order to allow the parties time to attempt to resolve the Derivative Lawsuit without further litigation. On December 6, 2017, the Court entered an order staying the case, directing that the case be administratively closed, and ordering the parties to file a joint status report with the Court not later than March 15, 2018. At December 31, 2017, the case was stayed, some of the Individual Defendants had not yet been served, none of the defendants had filed any responsive pleading or dispositive motion, and the Company could not determine whether there was a likelihood a material loss had been incurred nor could the range of any such loss be estimated. On March 13, 2018, the Demand Shareholders, Rayonier, certain of Rayonier’s directors’ and officers’ insurance carriers, and certain of the Individual Defendants participated in a mediation, at the conclusion of which the parties reached an agreement in principle to settle the case and amended the term sheet to memorialize such agreement. On April 17, 2018, Plaintiff filed with the Court Plaintiff’s Unopposed Motion for Preliminary Approval of Derivative Settlement and Memorandum of Legal Authority in Support (“Motion for Preliminary Approval”). The terms of the proposed settlement (the “Settlement”) are contained in the Stipulation and Agreement of Settlement (the “Stipulation”), which was attached to the Motion for Preliminary Approval and filed with the Court. The Stipulation, executed by all parties, included the material terms of the term sheet. Pursuant to the terms of the Settlement, which is subject to Court approval and objections by shareholders, the Company agreed to certain governance reforms and to cause certain of its directors’ and officers’ liability insurance carriers to fund a settlement payment for the Demand Shareholders’ attorneys’ fees and expenses as well as incentive awards to the Demand Shareholders in the aggregate amount of $1.995 million. The payments agreed to on March 13, 2018, including the realized amount to be funded by the insurance carriers, were reflected in the Company’s Consolidated Financial Statements as of June 30, 2018. The Company has also been named as a defendant in various other lawsuits and claims arising in the normal course of business. While the Company has procured reasonable and customary insurance covering risks normally occurring in connection with its businesses, it has in certain cases retained some risk through the operation of large deductible insurance plans, primarily in the areas of executive risk, property, automobile and general liability. These pending lawsuits and claims, either individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flow. |
GUARANTEES |
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Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GUARANTEES | GUARANTEES The Company provides financial guarantees as required by creditors, insurance programs, and various governmental agencies. As of June 30, 2018, the following financial guarantees were outstanding:
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EARNINGS PER COMMON SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The following table provides details of the calculations of basic and diluted earnings per common share:
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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to market risk related to potential fluctuations in foreign currency exchange rates and interest rates. The Company uses derivative financial instruments to mitigate the financial impact of exposure to these risks. Accounting for derivative financial instruments is governed by ASC Topic 815, Derivatives and Hedging, (“ASC 815”). In accordance with ASC 815, the Company records its derivative instruments at fair value as either assets or liabilities in the Consolidated Balance Sheets. Changes in the instruments’ fair value are accounted for based on their intended use. Gains and losses on derivatives that are designated and qualify for cash flow hedge accounting are recorded as a component of accumulated other comprehensive income (“AOCI”) and reclassified into earnings when the hedged transaction materializes. Gains and losses on derivatives that are designated and qualify for net investment hedge accounting are recorded as a component of AOCI and will not be reclassified into earnings until the Company’s investment in its New Zealand operations is partially or completely liquidated. The ineffective portion of any hedge, changes in the fair value of derivatives not designated as hedging instruments and those which are no longer effective as hedging instruments, are recognized immediately in earnings. The Company’s hedge ineffectiveness was de minimis for all periods presented. FOREIGN CURRENCY EXCHANGE AND OPTION CONTRACTS The functional currency of Rayonier’s wholly owned subsidiary, Rayonier New Zealand Limited, and the New Zealand JV is the New Zealand dollar. The New Zealand JV is exposed to foreign currency risk on export sales and ocean freight payments which are mainly denominated in U.S. dollars. The New Zealand JV typically hedges 35% to 90% of its estimated foreign currency exposure with respect to the following three months forecasted sales and purchases, 25% to 75% of forecasted sales and purchases for the forward three to 12 months and up to 50% of the forward 12 to 18 months. Foreign currency exposure from the New Zealand JV’s trading operations is typically hedged based on the following three months forecasted sales and purchases. As of June 30, 2018, foreign currency exchange contracts and foreign currency option contracts had maturity dates through December 2019 and March 2019, respectively. Foreign currency exchange and option contracts hedging foreign currency risk on export sales and ocean freight payments qualify for cash flow hedge accounting. The fair value of foreign currency exchange contracts is determined by a mark-to-market valuation which estimates fair value by discounting the difference between the contracted forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate. The fair value of foreign currency option contracts is based on a mark-to-market calculation using the Black-Scholes option pricing model. The Company may de-designate these cash flow hedge relationships in advance or at the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously accumulated in other comprehensive income for de-designated hedges remains in accumulated other comprehensive income until the forecasted transaction affects earnings. Changes in the value of derivative instruments after de-designation are recorded in earnings. Through our ownership in the New Zealand JV, the Company is exposed to foreign currency risk on shareholder distribution payments which are denominated in N.Z. dollars. On behalf of the Company, the New Zealand JV typically hedges 60% to 100% of its estimated foreign currency exposure with respect to the following three months anticipated distributions, up to 75% of anticipated distributions for the forward three to six months and up to 50% of the forward six to 12 months. For the three and six months ended June 30, 2018, the change in fair value of the foreign exchange forward contracts of $2.5 million and $2.6 million, respectively, was recorded in “Interest and other miscellaneous income, net” as the contracts did not qualify for hedge accounting treatment. As of June 30, 2018, foreign exchange forward contracts had maturity dates through December 2018. In March 2018, the Company entered into a foreign currency exchange contract (notional amount of NZ$37 million) to mitigate the risk of fluctuations in foreign currency exchange rates when translating the New Zealand JV’s balance sheet to U.S. dollars. This contract hedged the cash portion of the Company’s net investment in New Zealand and qualified as a net investment hedge. The fair value of this contract was determined by a mark-to-market valuation, which estimates fair value by discounting the difference between the contracted forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate. This hedge qualified for hedge accounting whereby fluctuations in fair market value during the life of the hedge are recorded in AOCI and remain there permanently unless a partial or full liquidation of the investment is made. At each reporting period, the Company reviews the hedge for ineffectiveness. Ineffectiveness can occur when changes to the investment or the hedged instrument are made such that the risk of foreign exchange movements are no longer mitigated by the hedging instrument. At that time, the amount related to the ineffectiveness of the hedge is recorded into earnings. The Company did not have any ineffectiveness during the life of the hedge. In April 2018, the foreign currency exchange contract matured and the Company repatriated the cash. INTEREST RATE SWAPS The Company is exposed to cash flow interest rate risk on its variable-rate Term Credit Agreement and Incremental Term Loan Agreement (as discussed below), and uses variable-to-fixed interest rate swaps to hedge this exposure. For these derivative instruments, the Company reports the gains/losses from the fluctuations in the fair market value of the hedges in AOCI and reclassifies them to earnings as interest expense in the same period in which the hedged interest payments affect earnings. The following table contains information on the outstanding interest rate swaps as of June 30, 2018:
The following tables demonstrate the impact of the Company’s derivatives on the Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2018 and 2017.
During the next 12 months, the amount of the June 30, 2018 AOCI balance, net of tax, expected to be reclassified into earnings as a result of the maturation of the Company’s derivative instruments is a loss of approximately $1.4 million. The following table contains the notional amounts of the derivative financial instruments recorded in the Consolidated Balance Sheets:
The following table contains the fair values of the derivative financial instruments recorded in the Consolidated Balance Sheets:
OFFSETTING DERIVATIVES Derivative financial instruments are presented at their gross fair values in the Consolidated Balance Sheets. The Company’s derivative financial instruments are not subject to master netting arrangements, which would allow the right of offset. |
FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS FAIR VALUE OF FINANCIAL INSTRUMENTS A three-level hierarchy that prioritizes the inputs used to measure fair value was established in the Accounting Standards Codification as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. (a) The following table presents the carrying amount and estimated fair values of financial instruments held by the Company at June 30, 2018 and December 31, 2017, using market information and what the Company believes to be appropriate valuation methodologies under GAAP:
Rayonier uses the following methods and assumptions in estimating the fair value of its financial instruments: Cash and cash equivalents and Restricted cash — The carrying amount is equal to fair market value. Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities. The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value. Interest rate swap agreements — The fair value of interest rate contracts is determined by discounting the expected future cash flows, for each instrument, at prevailing interest rates. Foreign currency exchange contracts — The fair value of foreign currency exchange contracts is determined by a mark-to-market valuation which estimates fair value by discounting the difference between the contracted forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate. Foreign currency option contracts — The fair value of foreign currency option contracts is based on a mark-to-market calculation using the Black-Scholes option pricing model. |
EMPLOYEE BENEFIT PLANS |
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Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS The Company has one qualified non-contributory defined benefit pension plan covering a portion of its employees and an unfunded plan that provides benefits in excess of amounts allowable under current tax law in the qualified plan. Both plans are closed to new participants. Effective December 31, 2016, the Company froze benefits for all employees participating in the pension plan. In lieu of the pension plan, the Company provides those employees with an enhanced 401(k) plan match. Employee benefit plan liabilities are calculated using actuarial estimates and management assumptions. These estimates are based on historical information, along with certain assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause the estimates to change. As of June 30, 2018, the Company has paid $1.2 million of the approximately $2.9 million in current year mandatory pension contribution requirements (based on actuarially determined estimates and IRS minimum funding requirements). The net pension and postretirement benefit (credit) costs that have been recorded are shown in the following table:
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OTHER OPERATING INCOME, NET |
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OTHER OPERATING INCOME, NET | OTHER OPERATING INCOME, NET Other operating income, net comprised the following:
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INVENTORY |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORY | INVENTORY As of June 30, 2018 and December 31, 2017, Rayonier’s inventory was solely comprised of finished goods, as follows:
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RESTRICTED CASH |
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Restricted Cash and Investments [Abstract] | |||||||||||||||||||||||||
RESTRICTED CASH | RESTRICTED CASH In order to qualify for like-kind exchange (“LKE”) treatment, the proceeds from real estate sales must be deposited with a third-party intermediary. These proceeds are accounted for as restricted cash until a suitable replacement property is acquired. In the event LKE purchases are not completed, the proceeds are returned to the Company after 180 days and reclassified as available cash. As of June 30, 2018 and December 31, 2017, the Company had $69.6 million and $59.7 million, respectively, of proceeds from real estate sales classified as restricted cash which were deposited with an LKE intermediary as well as cash held in escrow for a real estate sale. The following table contains the amounts of restricted cash recorded in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows for the six months ended June 30, 2018:
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ACCUMULATED OTHER COMPREHENSIVE INCOME |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME The following table summarizes the changes in AOCI by component for the six months ended June 30, 2018 and the year ended December 31, 2017. All amounts are presented net of tax and exclude portions attributable to noncontrolling interest.
The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the six months ended June 30, 2018 and June 30, 2017:
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CONSOLIDATING FINANCIAL STATEMENTS |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONSOLIDATING FINANCIAL STATEMENTS | 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.
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BASIS OF PRESENTATION (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | BASIS OF PRESENTATION The unaudited consolidated financial statements and notes thereto of Rayonier Inc. and its subsidiaries (“Rayonier” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The year-end balance sheet information was derived from audited financial statements not included herein. In the opinion of management, these financial statements and notes reflect any adjustments (all of which are normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. These statements and notes should be read in conjunction with the financial statements and supplementary data included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC (the “2017 Form 10-K”). |
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Recently Adopted Standards | RECENTLY ADOPTED STANDARDS The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), on January 1, 2018. The Company elected to use the modified retrospective method to contracts that were not completed at the date of adoption. The Company also elected not to retrospectively restate contracts modified prior to January 1, 2018. A cumulative effect of adoption adjustment to the opening balance of retained earnings was not recorded as there was no accounting impact to any contracts with customers not completed at the date of adoption. See Note 2 — Revenue for additional information. In March 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires that an employer report the service cost component of net periodic benefit cost in the Consolidated Statements of Income in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Additionally, the other components of net periodic benefit cost (interest cost, expected return on plan assets and amortization of losses or gains) are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. ASU No. 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, and is required to be applied retrospectively to all periods presented beginning in the period of adoption. Rayonier adopted ASU No. 2017-07 during the first quarter ended March 31, 2018 and applied the update retrospectively to all periods presented. See Note 14 — Employee Benefit Plans for the components of net periodic benefit cost and the location of these items in the Consolidated Statements of Income and Comprehensive Income. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Consolidated Statements of Cash Flows. ASU No. 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. ASU No. 2016-18 is required to be applied retrospectively to all periods presented beginning in the period of adoption. Rayonier adopted ASU No. 2016-18 in the first quarter ended March 31, 2018 and applied the update retrospectively to all periods presented. Restricted cash is now included with cash and cash equivalents when reconciling the beginning-of-year and end-of-period total amounts shown on the Consolidated Statements of Cash Flows and therefore changes in restricted cash are no longer reported as cash flow activities. See Note 17 — Restricted Cash for additional information, including the nature of restrictions on the Company’s cash, cash equivalents, and restricted cash. Rayonier adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments in the first quarter ended March 31, 2018 with no material impact on the consolidated financial statements. |
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New Accounting Standards | NEW ACCOUNTING STANDARDS In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which currently requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. ASU No. 2016-02 also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. In January 2018, the FASB issued ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. This update provides an optional transition practical expedient not to evaluate under ASU No. 2016-02 existing or expired land easements that were not previously accounted for as leases under the current leases guidance. An entity that elects this practical expedient should evaluate new or modified land easements under ASU No. 2016-02, once adopted. An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with the adoption of ASU No. 2016-02 to assess whether they meet the definition of a lease. This standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and is required to be applied on a modified retrospective basis beginning at the earliest period presented. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which will make more financial and non-financial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU No. 2017-12 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted and the amended presentation and disclosure guidance is required to be applied on a prospective basis. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendments in this update also require certain disclosures about stranded tax effects. ASU No. 2018-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU No. 2018-02 is required to be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Early adoption is permitted in any interim period for which financial statements have not yet been issued. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments —Overall (Subtopic 825-10), to clarify certain provisions of ASU No. 2016-01 and amend other provisions. ASU No. 2018-03 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. Early adoption is permitted for entities that have adopted ASU 2016-01. The Company anticipates the adoption of this standard will not have a significant impact on the Company’s consolidated financial statements. |
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Subsequent Events | SUBSEQUENT EVENTS The Company has evaluated events occurring from June 30, 2018 to the date of issuance of these Consolidated Financial Statements for potential recognition or disclosure in the consolidated financial statements. No events were identified that warranted recognition or disclosure. |
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Revenue Recognition | REVENUE RECOGNITION The Company recognizes revenues when control of promised goods or services (“performance obligations”) is transferred to customers, in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services (“transaction price”). The Company generally satisfies performance obligations within a year of entering into a contract and therefore has applied the disclosure exemption found under ASC 606-10-50-14. Unsatisfied performance obligations as of June 30, 2018 are primarily due to advances on stumpage contracts and unearned license revenue. These performance obligations are expected to be satisfied within the next twelve months. The Company generally collects payment within a year of satisfying performance obligations and therefore has elected not to adjust revenues for a financing component. |
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Revenue Recognition for Timber Sales and Non-Timber Income | REVENUE RECOGNITION FOR TIMBER SALES AND NON-TIMBER INCOME Revenue from the sale of timber is recognized when control passes to the buyer. The Company utilizes two primary methods or sales channels for the sale of timber, a stumpage or standing timber model and a delivered log model. The sales method the Company employs depends upon local market conditions and which method management believes will provide the best overall margins. Under the stumpage model, standing timber is sold primarily under pay-as-cut contracts, with specified duration (typically one year or less) and fixed prices, whereby revenue is recognized as timber is severed and the sales volume is determined. The Company also sells stumpage under lump-sum contracts for specified parcels where the Company receives cash for the full agreed value of the timber prior to harvest and control passes to the buyer upon signing the contract. The Company retains interest in the land, slash products, and the use of the land for recreational and other purposes. Any uncut timber remaining at the end of the contract period reverts to the Company. Revenue is recognized for lump-sum timber sales when payment is received, the contract is signed and control passes to the buyer. A third type of stumpage sale the Company utilizes is an agreed-volume sale, whereby revenue is recognized using the output method, as periodic physical observations are made of the percentage of acreage harvested. Under the delivered log model, the Company hires third-party loggers and haulers to harvest timber and deliver it to a buyer. Sales of domestic logs generally do not require an initial payment and are made to third-party customers on open credit terms. Sales of export logs generally require a letter of credit from an approved bank. Revenue is recognized when the logs are delivered and control has passed to the buyer. For domestic log sales, control is considered passed to the buyer as the logs are delivered to the customer’s facility. For export log sales (primarily in New Zealand), control is considered passed to the buyer upon delivery onto the export vessel. Non-timber income is primarily comprised of hunting and recreational licenses. Such income and any related cost are recognized ratably over the term of the agreement and included in “Sales” and “Cost of sales”, respectively. Payment is generally due upon contract execution. The following table summarizes revenue recognition and general payment terms for timber sales:
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Revenue Recognition for Real Estate Sales | COST OF SALES Cost of sales associated with real estate sold includes the cost of the land, the cost of any timber on the property that was conveyed to the buyer, any real estate development costs and any closing costs including sales commissions that may be borne by the Company. As allowed under GAAP, the Company expenses closing costs, including sales commissions, when incurred for all real estate sales with future performance obligations expected to be satisfied within one year. When developed residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs benefiting the property sold through completion. Costs are allocated to each sold unit or lot based upon the relative sales value. For purposes of allocating development costs, estimates of future revenues and development costs are re-evaluated periodically throughout the year, with adjustments being allocated prospectively to the remaining units available for sale. REVENUE RECOGNITION FOR REAL ESTATE SALES The Company recognizes revenue on sales of real estate generally at the point in time when cash has been received, the sale has closed, and control has passed to the buyer. A deposit of 5% is generally required at the time a purchase and sale agreement is executed, with the balance due at closing. On sales of real estate containing future performance obligations, revenue is recognized using the input method based on costs incurred to date relative to the total costs expected to fulfill the performance obligations in the contract with the customer. |
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Revenue Recognition for Log Trading | REVENUE RECOGNITION FOR LOG TRADING Log trading revenue is generally recognized when procured logs are delivered to the buyer and control has passed. For domestic log trading, control is considered passed to the buyer as the logs are delivered to the customer’s facility. For export log trading, control is considered passed to the buyer upon delivery onto the export vessel. The Trading segment also includes sales from log agency contracts, whereby the Company acts as an agent managing export services on behalf of third parties. Revenue for log agency fees are recognized net of related costs. |
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Segment Reporting | 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 expense, interest and other miscellaneous income and income tax expense, are not considered by management to be part of segment operations and are included under “Corporate and other” or “unallocated interest expense and other.” |
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Derivatives | Accounting for derivative financial instruments is governed by ASC Topic 815, Derivatives and Hedging, (“ASC 815”). In accordance with ASC 815, the Company records its derivative instruments at fair value as either assets or liabilities in the Consolidated Balance Sheets. Changes in the instruments’ fair value are accounted for based on their intended use. Gains and losses on derivatives that are designated and qualify for cash flow hedge accounting are recorded as a component of accumulated other comprehensive income (“AOCI”) and reclassified into earnings when the hedged transaction materializes. Gains and losses on derivatives that are designated and qualify for net investment hedge accounting are recorded as a component of AOCI and will not be reclassified into earnings until the Company’s investment in its New Zealand operations is partially or completely liquidated. The ineffective portion of any hedge, changes in the fair value of derivatives not designated as hedging instruments and those which are no longer effective as hedging instruments, are recognized immediately in earnings. |
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Offsetting Derivatives | OFFSETTING DERIVATIVES Derivative financial instruments are presented at their gross fair values in the Consolidated Balance Sheets. The Company’s derivative financial instruments are not subject to master netting arrangements, which would allow the right of offset. |
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Fair Value of Financial Instruments | The fair value of foreign currency exchange contracts is determined by a mark-to-market valuation which estimates fair value by discounting the difference between the contracted forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate. The fair value of foreign currency option contracts is based on a mark-to-market calculation using the Black-Scholes option pricing model. Rayonier uses the following methods and assumptions in estimating the fair value of its financial instruments: Cash and cash equivalents and Restricted cash — The carrying amount is equal to fair market value. Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities. The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value. Interest rate swap agreements — The fair value of interest rate contracts is determined by discounting the expected future cash flows, for each instrument, at prevailing interest rates. Foreign currency exchange contracts — The fair value of foreign currency exchange contracts is determined by a mark-to-market valuation which estimates fair value by discounting the difference between the contracted forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate. Foreign currency option contracts — The fair value of foreign currency option contracts is based on a mark-to-market calculation using the Black-Scholes option pricing model. |
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Consolidation, Subsidiaries or Other Investments, Consolidated Entities | 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. |
REVENUE (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue by Product | The following table presents our revenue from contracts with customers disaggregated by product type for the three and six months ended June 30, 2018 and 2017:
The following table presents our timber sales disaggregated by contract type for the three and six months ended June 30, 2018 and 2017:
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Revenue Performance Obligation, Expected Timing of Satisfaction | The following table summarizes revenue recognition and general payment terms for timber sales:
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Contract with Customer, Liabilities | The following tables summarizes revenue recognized during the three and six months ended June 30, 2018 and 2017 that was included in the contract liability balance at the beginning of each year:
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SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following tables summarize the segment information for the three and six months ended June 30, 2018 and 2017:
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DEBT (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt Instruments | Rayonier’s debt consisted of the following at June 30, 2018:
(a) As of June 30, 2018, the periodic interest rate on the term loan facility was LIBOR plus 1.625%. The Company estimates the effective fixed interest rate on the term loan facility to be approximately 3.3% after consideration of interest rate swaps and estimated patronage refunds. (b) As of June 30, 2018, the periodic interest rate on the incremental term loan was LIBOR plus 1.900%. The Company estimates the effective fixed interest rate on the incremental term loan facility to be approximately 2.8% after consideration of interest rate swaps and estimated patronage refunds. |
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Schedule of Maturities of Long-Term Debt | Principal payments due during the next five years and thereafter are as follows:
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HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Costs for Land, Timber and Real Estate Development | An analysis of higher and better use timberlands and real estate development investments from December 31, 2017 to June 30, 2018 is shown below:
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COMMITMENTS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Payments | At June 30, 2018, the future minimum payments under non-cancellable operating leases, timberland leases and other commitments were as follows:
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GUARANTEES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Guarantor Obligations | As of June 30, 2018, the following financial guarantees were outstanding:
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EARNINGS PER COMMON SHARE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table provides details of the calculations of basic and diluted earnings per common share:
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share |
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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Derivatives | The following table contains information on the outstanding interest rate swaps as of June 30, 2018:
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following tables demonstrate the impact of the Company’s derivatives on the Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2018 and 2017.
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Schedule of Notional Amounts of Outstanding Derivative Positions | The following table contains the notional amounts of the derivative financial instruments recorded in the Consolidated Balance Sheets:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table contains the fair values of the derivative financial instruments recorded in the Consolidated Balance Sheets:
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FAIR VALUE MEASUREMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping | The following table presents the carrying amount and estimated fair values of financial instruments held by the Company at June 30, 2018 and December 31, 2017, using market information and what the Company believes to be appropriate valuation methodologies under GAAP:
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EMPLOYEE BENEFIT PLANS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Net Periodic Benefit Cost | The net pension and postretirement benefit (credit) costs that have been recorded are shown in the following table:
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OTHER OPERATING INCOME, NET (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and Other Income | Other operating income, net comprised the following:
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INVENTORY (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | As of June 30, 2018 and December 31, 2017, Rayonier’s inventory was solely comprised of finished goods, as follows:
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RESTRICTED CASH (Tables) |
6 Months Ended | ||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||
Restricted Cash and Investments [Abstract] | |||||||||||||||||||||||||
Schedule of Restricted Cash | The following table contains the amounts of restricted cash recorded in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows for the six months ended June 30, 2018:
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Schedule of Cash and Cash Equivalents | The following table contains the amounts of restricted cash recorded in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows for the six months ended June 30, 2018:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in AOCI by component for the six months ended June 30, 2018 and the year ended December 31, 2017. All amounts are presented net of tax and exclude portions attributable to noncontrolling interest.
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Reclassification out of Accumulated Other Comprehensive Income | The following table presents details of the amounts reclassified in their entirety from AOCI to net income for the six months ended June 30, 2018 and June 30, 2017:
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CONSOLIDATING FINANCIAL STATEMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Consolidating Statements of Income and Comprehensive Income |
|
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Schedule of Condensed Consolidating Balance Sheets |
|
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Schedule of Condensed Consolidating Statements of Cash Flows |
|
REVENUE (Narrative) (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018
USD ($)
method
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
method
|
Jun. 30, 2017
USD ($)
|
|
Revenue from Contract with Customer [Abstract] | ||||
Number of sales categories | method | 2 | 2 | ||
Contract duration | 1 year | |||
Retail estate sales, deposit required | 5.00% | 5.00% | ||
Contract balances, recognized during period | $ | $ 5,429 | $ 3,809 | $ 11,800 | $ 8,592 |
JOINT VENTURE INVESTMENT (Details) - Matariki Forestry Group |
Jun. 30, 2018
a
|
---|---|
Schedule of Equity Method Investments [Line Items] | |
Acres of timberland owned (acres) | 411,000 |
Step acquisition percentage equity interest in acquiree | 23.00% |
DEBT (Schedule of Long Term Maturities) (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2018 | $ 0 |
2019 | 0 |
2020 | 0 |
2021 | 0 |
2022 | 325,000 |
Thereafter | 650,000 |
Total Debt | $ 975,000 |
COMMITMENTS (Narrative) (Details) - Timberland Leases |
Jun. 30, 2018 |
---|---|
United States | Minimum | |
Loss Contingencies [Line Items] | |
Contract terms, in years | 30 years |
United States | Maximum | |
Loss Contingencies [Line Items] | |
Contract terms, in years | 65 years |
New Zealand | Minimum | |
Loss Contingencies [Line Items] | |
Contract terms, in years | 30 years |
New Zealand | Maximum | |
Loss Contingencies [Line Items] | |
Contract terms, in years | 99 years |
COMMITMENTS (Future Minimum Payments) (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
lease
| |
Commitments | |
Remaining 2018 | $ 7,641 |
2019 | 5,121 |
2020 | 3,403 |
2021 | 1,573 |
2022 | 956 |
Thereafter | 1,510 |
Commitments, total | 20,204 |
Total | |
Remaining 2018 | 13,920 |
2019 | 15,026 |
2020 | 12,748 |
2021 | 10,806 |
2022 | 9,921 |
Thereafter | 149,539 |
Total | 211,960 |
Pension contribution requirements remaining in fiscal year | $ 1,700 |
Matariki Crown Forest Licenses | |
Total | |
Future minimum payments | 20 years |
Number of leases under termination notice | lease | 3 |
Number of leases expiring in 2062 | lease | 2 |
Operating Leases | |
Leases | |
Remaining 2018 | $ 590 |
2019 | 1,032 |
2020 | 850 |
2021 | 736 |
2022 | 705 |
Thereafter | 708 |
Operating leases, total | 4,621 |
Timberland Leases | |
Leases | |
Remaining 2018 | 5,689 |
2019 | 8,873 |
2020 | 8,495 |
2021 | 8,497 |
2022 | 8,260 |
Thereafter | 147,321 |
Operating leases, total | $ 187,135 |
Timberland Leases | Matariki Crown Forest Licenses | |
Total | |
Operating lease, termination notice | 35 years |
Operating lease, renewal term | 1 year |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||||
Income tax benefit (expense) | $ (7,110) | $ (7,493) | $ (14,047) | $ (13,774) | |
Effective income tax rate | 14.50% | 17.30% | |||
Income tax provision related to Tax Cuts and Jobs Act | $ 100 | ||||
Global intangible low-taxed income | $ 1,700 | $ 1,700 |
CONTINGENCIES (Details) $ in Thousands |
Oct. 13, 2017
claim
|
Jun. 30, 2018
USD ($)
|
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Number of claims filed | claim | 1 | |
Insurance settlement payable | $ | $ 1,995 |
EARNINGS PER COMMON SHARE (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Earnings Per Share [Abstract] | |||||
Net income | $ 39,338 | $ 30,773 | $ 82,043 | $ 65,856 | $ 161,579 |
Less: Net income attributable to noncontrolling interest | 3,080 | 4,612 | 5,246 | 5,853 | |
NET INCOME ATTRIBUTABLE TO RAYONIER INC. | $ 36,258 | $ 26,161 | $ 76,797 | $ 60,003 | |
Shares used for determining basic earnings per common share (in shares) | 129,067,325 | 128,548,218 | 128,935,003 | 126,081,762 | |
Dilutive effect of: | |||||
Stock options (in shares) | 103,154 | 92,513 | 90,815 | 99,602 | |
Performance and restricted shares (in shares) | 540,808 | 447,448 | 606,760 | 337,862 | |
Shares used for determining diluted earnings per common share (in shares) | 129,711,287 | 129,088,179 | 129,632,578 | 126,519,226 | |
Basic earnings per common share attributable to Rayonier Inc. (in dollars per share) | $ 0.28 | $ 0.20 | $ 0.60 | $ 0.48 | |
Diluted earnings per common share attributable to Rayonier Inc. (in dollars per share) | $ 0.28 | $ 0.20 | $ 0.59 | $ 0.47 |
EARNINGS PER COMMON SHARE (Antidilutive Securities) (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from the computations of diluted earnings per share | 254,663 | 586,017 | 213,241 | 589,335 |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Notional Amounts) (Details) $ in Thousands, $ in Millions |
Jun. 30, 2018
USD ($)
|
Jun. 30, 2018
NZD ($)
|
Dec. 31, 2017
USD ($)
|
---|---|---|---|
Foreign currency exchange contracts | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | $ 37 | ||
Designated as Hedging Instrument | Cash Flow Hedging | Foreign currency exchange contracts | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | $ 134,250 | $ 107,400 | |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign currency option contracts | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | 24,000 | 48,000 | |
Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swaps | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | 650,000 | 650,000 | |
Not Designated as Hedging Instrument | Foreign currency exchange contracts | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | $ 34 | $ 18,439 |
EMPLOYEE BENEFIT PLANS (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
pension_plan
|
Jun. 30, 2017
USD ($)
|
|
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||||
Number of qualified defined benefit plans | pension_plan | 1 | |||
Weighted-average expected long-term rate of return on plan assets | 7.20% | |||
Pension | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension contributions paid | $ 1,200 | |||
Minimum annual pension contribution | $ 2,900 | 2,900 | ||
Service cost | 0 | $ 0 | 0 | $ 0 |
Interest cost | 759 | 815 | 1,510 | 1,630 |
Expected return on plan assets | (984) | (945) | (1,968) | (1,891) |
Amortization of losses | 178 | 116 | 338 | 233 |
Net periodic benefit (credit) cost | (47) | (14) | (120) | (28) |
Postretirement | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 2 | 2 | 3 | 3 |
Interest cost | 13 | 13 | 25 | 26 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of losses | 0 | 0 | 1 | 0 |
Net periodic benefit (credit) cost | $ 15 | $ 15 | $ 29 | $ 29 |
OTHER OPERATING INCOME, NET (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Other Income and Expenses [Abstract] | ||||
Foreign currency income (expense) | $ 1,267 | $ (1,470) | $ 514 | $ (1,233) |
Gain (loss) on sale or disposal of property and equipment | 12 | (7) | 27 | (6) |
Gain on foreign currency exchange and option contracts | 386 | 1,536 | 1,819 | 2,264 |
Log trading marketing fees | 62 | 329 | 131 | 508 |
Income from the sale of unused Internet Protocol addresses | 0 | 0 | 646 | 0 |
Income from New Zealand Timber settlement | 0 | 0 | 0 | 420 |
Miscellaneous (expense) income, net | (68) | 397 | (108) | 20 |
Total | $ 1,659 | $ 785 | $ 3,029 | $ 1,973 |
INVENTORY (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory [Line Items] | ||
Inventory | $ 19,125 | $ 24,141 |
Real Estate Inventory | ||
Inventory [Line Items] | ||
Inventory | 14,248 | 18,350 |
Log inventory | ||
Inventory [Line Items] | ||
Inventory | $ 4,877 | $ 5,791 |
RESTRICTED CASH - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Restricted Cash and Investments [Abstract] | ||
Maximum time period proceeds from LKE sale maintained with third party intermediary, days | 180 days | |
Restricted deposits | $ 69.6 | $ 59.7 |
RESTRICTED CASH - Schedule of Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
||
---|---|---|---|---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||
Total restricted cash shown in the Consolidated Balance Sheets | $ 69,638 | $ 59,703 | ||||
Cash and cash equivalents | 106,611 | 112,653 | ||||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows | [1] | 176,249 | $ 172,356 | $ 148,340 | $ 157,617 | |
Deposited with intermediary | ||||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||
Total restricted cash shown in the Consolidated Balance Sheets | 69,088 | |||||
Held in escrow | ||||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||
Total restricted cash shown in the Consolidated Balance Sheets | $ 550 | |||||
|
CONSOLIDATING FINANCIAL STATEMENTS (Narrative) (Details) - Senior Notes due 2022 at a fixed interest rate of 3.75% |
Mar. 31, 2012
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Face amount | $ 325,000,000 |
Stated interest rate | 3.75% |
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