CONSOLIDATING FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2019

Condensed Financial Information Disclosure [Abstract]

The condensed consolidating financial information below follows the same accounting policies as described in the consolidated financial statements, except for the use of the equity method of accounting to reflect ownership interests in wholly-owned subsidiaries, which are eliminated upon consolidation, and the allocation of certain expenses of Rayonier Inc. incurred for the benefit of its subsidiaries.

In March 2012, Rayonier Inc. issued $325 million of 3.75% Senior Notes due 2022. In connection with these notes, the Company provides the following condensed consolidating financial information in accordance with SEC Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.

The subsidiary guarantors, Rayonier Operating Company LLC (“ROC”) and Rayonier TRS Holdings Inc., are wholly-owned by the parent company, Rayonier Inc. The notes are fully and unconditionally guaranteed on a joint and several basis by the guarantor subsidiaries.



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
	For the Three Months Ended June 30, 2019
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$184,800		—				$184,800
Costs and Expenses
Cost of sales	—			—			(140,454		)	—			(140,454		)
Selling and general expenses	—			(5,660		)	(5,324		)	—			(10,984		)
Other operating expense, net	—			(1,091		)	(878		)	—			(1,969		)
	—			(6,751		)	(146,656		)	—			(153,407		)
OPERATING (LOSS) INCOME	—			(6,751		)	38,144			—			31,393
Interest expense	(3,140		)	(4,769		)	(13		)	—			(7,922		)
Interest and miscellaneous income (expense), net	(457		)	928			586			—			1,057
Equity in income from subsidiaries	22,349			33,071			—			(55,420		)	—
INCOME BEFORE INCOME TAXES	18,752			22,479			38,717			(55,420		)	24,528
Income tax expense	—			(130		)	(3,478		)	—			(3,608		)
NET INCOME	18,752			22,349			35,239			(55,420		)	20,920
Less: Net income attributable to noncontrolling interest	—			—			(2,168		)	—			(2,168		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	18,752			22,349			33,071			(55,420		)	18,752
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustment, net of income tax	(4,305		)	—			(5,604		)	4,305			(5,604		)
Cash flow hedges, net of income tax	(19,465		)	(19,284		)	(235		)	19,465			(19,519		)
Amortization of pension and postretirement plans, net of income tax	112			112			—			(112		)	112
Total other comprehensive (loss) income	(23,658		)	(19,172		)	(5,839		)	23,658			(25,011		)
COMPREHENSIVE (LOSS) INCOME	(4,906		)	3,177			29,400			(31,762		)	(4,091		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			(815		)	—			(815		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.		($4,906	)		$3,177			$28,585			($31,762	)		($4,906	)



	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
	Six Months Ended June 30, 2019
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$376,346		—				$376,346
Costs and Expenses
Cost of sales	—			—			(283,705		)	—			(283,705		)
Selling and general expenses	—			(10,503		)	(10,291		)	—			(20,794		)
Other operating expense, net	—			(1,090		)	(844		)	—			(1,934		)
	—			(11,593		)	(294,840		)	—			(306,433		)
OPERATING (LOSS) INCOME	—			(11,593		)	81,506			—			69,913
Interest expense	(6,278		)	(9,316		)	(38		)	—			(15,632		)
Interest and miscellaneous income (expense), net	(913		)	1,892			1,411			—			2,390
Equity in income from subsidiaries	50,737			70,501			—			(121,238		)	—
INCOME BEFORE INCOME TAXES	43,546			51,484			82,879			(121,238		)	56,671
Income tax expense	—			(747		)	(7,211		)	—			(7,958		)
NET INCOME	43,546			50,737			75,668			(121,238		)	48,713
Less: Net income attributable to noncontrolling interest	—			—			(5,167		)	—			(5,167		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	43,546			50,737			70,501			(121,238		)	43,546
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustment, net of income tax	374			(90		)	520			(375		)	429
Cash flow hedges, net of income tax	(30,349		)	(30,832		)	627			30,349			(30,205		)
Amortization of pension and postretirement plans, net of income tax	224			224			—			(224		)	224
Total other comprehensive (loss) income	(29,751		)	(30,698		)	1,147			29,750			(29,552		)
COMPREHENSIVE INCOME	13,795			20,039			76,815			(91,488		)	19,161
Less: Comprehensive income attributable to noncontrolling interest	—			—			(5,366		)	—			(5,366		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.		$13,795			$20,039			$71,449			($91,488	)		$13,795



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
	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 (LOSS) INCOME
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 (loss) income	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 BALANCE SHEETS
	As of June 30, 2019
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$84		$92,874			$37,998		—				$130,956
Accounts receivable, less allowance for doubtful accounts	—		1,919			43,012			—			44,931
Inventory	—		—			23,597			—			23,597
Prepaid expenses	—		2,286			18,295			—			20,581
Other current assets	—		97			593			—			690
Total current assets	84		97,176			123,495			—			220,755
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—			2,392,389			—			2,392,389
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS	—		—			77,072			—			77,072
NET PROPERTY, PLANT AND EQUIPMENT	—		16,439			5,605			—			22,044
RESTRICTED CASH	—		—			3,754			—			3,754
RIGHT-OF-USE ASSETS	—		35,291			68,725			—			104,016
INVESTMENT IN SUBSIDIARIES	1,771,540		3,009,380			—			(4,780,920		)	—
INTERCOMPANY RECEIVABLE	56,257		(644,161		)	587,904			—			—
OTHER ASSETS	2		169			40,850			—			41,021
TOTAL ASSETS		$1,827,883		$2,514,294			$3,299,794			($4,780,920	)		$2,861,051
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	—			$4,227			$20,717		—				$24,944
Accrued taxes	—		170			5,765			—			5,935
Accrued payroll and benefits	—		3,123			2,328			—			5,451
Accrued interest	3,046		1,885			—			—			4,931
Deferred revenue	—		—			19,798			—			19,798
Other current liabilities	—		5,793			19,233			—			25,026
Total current liabilities	3,046		15,198			67,841			—			86,085
LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS	323,987		648,861			—			—			972,848
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		30,067			(684		)	—			29,383
LONG-TERM LEASE LIABILITY	—		30,130			63,619			—			93,749
OTHER NON-CURRENT LIABILITIES	—		18,498			60,190			—			78,688
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY	1,500,850		1,771,540			3,009,380			(4,780,920		)	1,500,850
Noncontrolling interest	—		—			99,448			—			99,448
TOTAL SHAREHOLDERS’ EQUITY	1,500,850		1,771,540			3,108,828			(4,780,920		)	1,600,298
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$1,827,883		$2,514,294			$3,299,794			($4,780,920	)		$2,861,051



	CONDENSED CONSOLIDATING BALANCE SHEETS
	As of December 31, 2018
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$361		$104,777			$43,236		—				$148,374
Accounts receivable, less allowance for doubtful accounts	—		3,752			22,399			—			26,151
Inventory	—		—			15,703			—			15,703
Prepaid expenses	—		977			16,039			—			17,016
Other current assets	—		108			501			—			609
Total current assets	361		109,614			97,878			—			207,853
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—			2,401,327			—			2,401,327
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS	—		—			85,609			—			85,609
NET PROPERTY, PLANT AND EQUIPMENT	—		16,940			5,811			—			22,751
RESTRICTED CASH	—		—			8,080			—			8,080
INVESTMENT IN SUBSIDIARIES	1,833,899		3,022,875			—			(4,856,774		)	—
INTERCOMPANY RECEIVABLE	49,461		(638,424		)	588,963			—			—
OTHER ASSETS	2		19,244			35,800			—			55,046
TOTAL ASSETS		$1,883,723		$2,530,249			$3,223,468			($4,856,774	)		$2,780,666
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	—			$1,616			$16,403		—				$18,019
Accrued taxes	—		8			3,170			—			3,178
Accrued payroll and benefits	—		5,848			4,568			—			10,416
Accrued interest	3,047		1,960			—			—			5,007
Deferred revenue	—		—			10,447			—			10,447
Other current liabilities	—		216			16,258			—			16,474
Total current liabilities	3,047		9,648			50,846			—			63,541
LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS	323,803		648,764			—			—			972,567
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		30,484			(684		)	—			29,800
OTHER NON-CURRENT LIABILITIES	—		7,454			52,754			—			60,208
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY	1,556,873		1,833,899			3,022,875			(4,856,774		)	1,556,873
Noncontrolling interest	—		—			97,677			—			97,677
TOTAL SHAREHOLDERS’ EQUITY	1,556,873		1,833,899			3,120,552			(4,856,774		)	1,654,550
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$1,883,723		$2,530,249			$3,223,468			($4,856,774	)		$2,780,666



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2019
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments		Total Consolidated
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES		($14,180	)		$25,406			$105,728		—			$116,954
INVESTING ACTIVITIES
Capital expenditures	—			—			(29,505		)	—		(29,505		)
Real estate development investments	—			—			(999		)	—		(999		)
Purchase of timberlands	—			—			(26,396		)	—		(26,396		)
Investment in subsidiaries	—			832			—			(832	)	—
Other	—			(7,539		)	3,651			—		(3,888		)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	—			(6,707		)	(53,249		)	(832	)	(60,788		)
FINANCING ACTIVITIES
Dividends paid	(69,798		)	(1,309		)				—		(71,107		)
Proceeds from the issuance of common shares under incentive stock plan	774			—			—			—		774
Repurchase of common shares	(4,241		)	—			—			—		(4,241		)
Other	—			—			133			—		133
Distribution to minority shareholder	—			—			(3,594		)	—		(3,594		)
Intercompany distributions	87,168			(29,293		)	(58,707		)	832		—
CASH USED FOR FINANCING ACTIVITIES	13,903			(30,602		)	(62,168		)	832		(78,035		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			125			—		125
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Change in cash, cash equivalents and restricted cash	(277		)	(11,903		)	(9,564		)	—		(21,744		)
Balance, beginning of year	361			104,777			51,316			—		156,454
Balance, end of period		$84			$92,874			$41,752		—			$134,710



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
	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