CONSOLIDATING FINANCIAL STATEMENTS

9 Months Ended

Sep. 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 September 30, 2019
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$156,417		—				$156,417
Costs and Expenses
Cost of sales	—			—			(134,463		)	—			(134,463		)
Selling and general expenses	—			(4,725		)	(5,377		)	—			(10,102		)
Other operating expense, net	—			(17		)	(848		)	—			(865		)
	—			(4,742		)	(140,688		)	—			(145,430		)
OPERATING (LOSS) INCOME	—			(4,742		)	15,729			—			10,987
Interest expense	(3,139		)	(4,843		)	(14		)	—			(7,996		)
Interest and miscellaneous income (expense), net	(457		)	742			503			—			788
Equity in income from subsidiaries	3,163			12,660			—			(15,823		)	—
(LOSS) INCOME BEFORE INCOME TAXES	(433		)	3,817			16,218			(15,823		)	3,779
Income tax expense	—			(654		)	(1,597		)	—			(2,251		)
NET (LOSS) INCOME	(433		)	3,163			14,621			(15,823		)	1,528
Less: Net income attributable to noncontrolling interest	—			—			(1,961		)	—			(1,961		)
NET (LOSS) INCOME ATTRIBUTABLE TO RAYONIER INC.	(433		)	3,163			12,660			(15,823		)	(433		)
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustment, net of income tax	(21,918		)	—			(28,524		)	21,918			(28,524		)
Cash flow hedges, net of income tax	(11,899		)	(10,141		)	(2,283		)	11,899			(12,424		)
Amortization of pension and postretirement plans, net of income tax	112			112			—			(112		)	112
Total other comprehensive loss	(33,705		)	(10,029		)	(30,807		)	33,705			(40,836		)
COMPREHENSIVE (LOSS) INCOME	(34,138		)	(6,866		)	(16,186		)	17,882			(39,308		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			5,169			—			5,169
COMPREHENSIVE LOSS ATTRIBUTABLE TO RAYONIER INC.		($34,138	)		($6,866	)		($11,017	)		$17,882			($34,139	)



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
	For the Three Months Ended September 30, 2018
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$200,890		—				$200,890
Costs and Expenses
Cost of sales	—			—			(143,261		)	—			(143,261		)
Selling and general expenses	—			(5,094		)	(5,706		)	—			(10,800		)
Other operating (expense) income, net	—			(50		)	(401		)	—			(451		)
	—			(5,144		)	(149,368		)	—			(154,512		)
OPERATING (LOSS) INCOME	—			(5,144		)	51,522			—			46,378
Interest expense	(3,138		)	(4,676		)	(24		)	—			(7,838		)
Interest and miscellaneous income (expense), net	1,743			1,755			(3,003		)	—			495
Equity in income from subsidiaries	24,827			33,539			—			(58,366		)	—
INCOME BEFORE INCOME TAXES	23,432			25,474			48,495			(58,366		)	39,035
Income tax expense	—			(647		)	(7,749		)	—			(8,396		)
NET INCOME	23,432			24,827			40,746			(58,366		)	30,639
Less: Net income attributable to noncontrolling interest	—			—			(7,207		)	—			(7,207		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	23,432			24,827			33,539			(58,366		)	23,432
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustment, net of income tax	(8,090		)	—			(10,527		)	8,090			(10,527		)
Cash flow hedges, net of income tax	4,379			5,174			(1,032		)	(4,379		)	4,142
Amortization of pension and postretirement plans, net of income tax	(542		)	(542		)	—			542			(542		)
Total other comprehensive (loss) income	(4,253		)	4,632			(11,559		)	4,253			(6,927		)
COMPREHENSIVE INCOME	19,179			29,459			29,187			(54,113		)	23,712
Less: Comprehensive loss attributable to noncontrolling interest	—			—			(4,533		)	—			(4,533		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.		$19,179			$29,459			$24,654			($54,113	)		$19,179



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
	Nine Months Ended September 30, 2019
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$532,764		—				$532,764
Costs and Expenses
Cost of sales	—			—			(418,169		)	—			(418,169		)
Selling and general expenses	—			(15,228		)	(15,668		)	—			(30,896		)
Other operating expense, net	—			(1,107		)	(1,692		)	—			(2,799		)
	—			(16,335		)	(435,529		)	—			(451,864		)
OPERATING (LOSS) INCOME	—			(16,335		)	97,235			—			80,900
Interest expense	(9,417		)	(14,160		)	(52		)	—			(23,629		)
Interest and miscellaneous income (expense), net	(1,370		)	2,634			1,914			—			3,178
Equity in income from subsidiaries	53,899			83,161			—			(137,060		)	—
INCOME BEFORE INCOME TAXES	43,112			55,300			99,097			(137,060		)	60,449
Income tax expense	—			(1,401		)	(8,807		)	—			(10,208		)
NET INCOME	43,112			53,899			90,290			(137,060		)	50,241
Less: Net income attributable to noncontrolling interest	—			—			(7,129		)	—			(7,129		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	43,112			53,899			83,161			(137,060		)	43,112
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustment, net of income tax	(21,544		)	(90		)	(28,005		)	21,544			(28,095		)
Cash flow hedges, net of income tax	(42,248		)	(40,973		)	(1,656		)	42,248			(42,629		)
Amortization of pension and postretirement plans, net of income tax	337			337			—			(337		)	337
Total other comprehensive loss	(63,455		)	(40,726		)	(29,661		)	63,455			(70,387		)
COMPREHENSIVE (LOSS) INCOME	(20,343		)	13,173			60,629			(73,605		)	(20,146		)
Less: Comprehensive loss attributable to noncontrolling interest	—			—			(197		)	—			(197		)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO RAYONIER INC.		($20,343	)		$13,173			$60,432			($73,605	)		($20,343	)



	CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
	Nine Months Ended September 30, 2018
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
SALES	—			—				$649,991		—				$649,991
Costs and Expenses
Cost of sales	—			—			(466,167		)	—			(466,167		)
Selling and general expenses	—			(14,953		)	(16,351		)	—			(31,304		)
Other operating (expense) income, net	(12		)	545			2,044			—			2,577
	(12		)	(14,408		)	(480,474		)	—			(494,894		)
OPERATING (LOSS) INCOME	(12		)	(14,408		)	169,517			—			155,097
Interest expense	(9,417		)	(14,229		)	(346		)	—			(23,992		)
Interest and miscellaneous income (expense), net	7,105			3,265			(6,350		)	—			4,020
Equity in income from subsidiaries	102,553			128,786			—			(231,339		)	—
INCOME BEFORE INCOME TAXES	100,229			103,414			162,821			(231,339		)	135,125
Income tax expense	—			(861		)	(21,582		)	—			(22,443		)
NET INCOME	100,229			102,553			141,239			(231,339		)	112,682
Less: Net income attributable to noncontrolling interest	—			—			(12,453		)	—			(12,453		)
NET INCOME ATTRIBUTABLE TO RAYONIER INC.	100,229			102,553			128,786			(231,339		)	100,229
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustment, net of income tax	(23,341		)	452			(31,051		)	23,341			(30,599		)
Cash flow hedges, net of income tax	22,476			26,460			(5,175		)	(22,476		)	21,285
Amortization of pension and postretirement plans, net of income tax	(204		)	(204		)	—			204			(204		)
Total other comprehensive (loss) income	(1,069		)	26,708			(36,226		)	1,069			(9,518		)
COMPREHENSIVE INCOME	99,160			129,261			105,013			(230,270		)	103,164
Less: Comprehensive loss attributable to noncontrolling interest	—			—			(4,004		)	—			(4,004		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.		$99,160			$129,261			$101,009			($230,270	)		$99,160



	CONDENSED CONSOLIDATING BALANCE SHEETS
	As of September 30, 2019
	Rayonier Inc. (Parent Issuer)		Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$6,181		$32,926			$17,839		—				$56,946
Accounts receivable, less allowance for doubtful accounts	—		2,894			23,165			—			26,059
Inventory	—		—			8,352			—			8,352
Prepaid expenses	—		2,056			12,838			—			14,894
Other current assets	—		97			182			—			279
Total current assets	6,181		37,973			62,376			—			106,530
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	—		—			2,408,310			—			2,408,310
HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS	—		—			89,456			—			89,456
NET PROPERTY, PLANT AND EQUIPMENT	—		16,803			5,397			—			22,200
RESTRICTED CASH	—		—			2,988			—			2,988
RIGHT-OF-USE ASSETS	—		33,893			63,539			—			97,432
INVESTMENT IN SUBSIDIARIES	1,692,797		2,994,568			—			(4,687,365		)	—
INTERCOMPANY RECEIVABLE	56,257		(644,851		)	588,594			—			—
OTHER ASSETS	2		(2,735		)	42,895			—			40,162
TOTAL ASSETS		$1,755,237		$2,435,651			$3,263,555			($4,687,365	)		$2,767,078
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	—			$3,381			$16,175		—				$19,556
Accrued taxes	—		227			7,869			—			8,096
Accrued payroll and benefits	—		4,217			2,342			—			6,559
Accrued interest	6,094		1,882			—			—			7,976
Deferred revenue	—		—			15,320			—			15,320
Other current liabilities	—		4,747			21,515			—			26,262
Total current liabilities	6,094		14,454			63,221			—			83,769
LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS	324,079		648,910			—			—			972,989
PENSION AND OTHER POSTRETIREMENT BENEFITS	—		24,637			(684		)	—			23,953
LONG-TERM LEASE LIABILITY	—		29,619			58,768			—			88,387
OTHER NON-CURRENT LIABILITIES	—		25,234			57,125			—			82,359
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY	1,425,064		1,692,797			2,994,568			(4,687,365		)	1,425,064
Noncontrolling interest	—		—			90,557			—			90,557
TOTAL SHAREHOLDERS’ EQUITY	1,425,064		1,692,797			3,085,125			(4,687,365		)	1,515,621
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$1,755,237		$2,435,651			$3,263,555			($4,687,365	)		$2,767,078



	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
	Nine Months Ended September 30, 2019
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments		Total Consolidated
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES		($14,637	)		$15,495			$163,335		—			$164,193
INVESTING ACTIVITIES
Capital expenditures	—			(619		)	(44,652		)	—		(45,271		)
Real estate development investments	—			—			(3,349		)	—		(3,349		)
Purchase of timberlands	—			—			(81,913		)	—		(81,913		)
Investment in subsidiaries	—			(3,945		)	—			3,945		—
Other	—			(7,304		)	5,085			—		(2,219		)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	—			(11,868		)	(124,829		)	3,945		(132,752		)
FINANCING ACTIVITIES
Dividends paid	(104,667		)	(25,983		)	24,525			—		(106,125		)
Proceeds from the issuance of common shares under incentive stock plan	831			—			—			—		831
Repurchase of common shares	(4,249		)	—			—			—		(4,249		)
Repurchase of common shares made under repurchase program	—			(8,430		)	—			—		(8,430		)
Proceeds from shareholder distribution hedge	—			—			135			—		135
Distribution to minority shareholder	—			—			(7,315		)	—		(7,315		)
Intercompany distributions	128,542			(41,065		)	(83,532		)	(3,945	)	—
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	20,457			(75,478		)	(66,187		)	(3,945	)	(125,153		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(2,808		)	—		(2,808		)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Change in cash, cash equivalents and restricted cash	5,820			(71,851		)	(30,489		)	—		(96,520		)
Balance, beginning of year	361			104,777			51,316			—		156,454
Balance, end of period		$6,181			$32,926			$20,827		—			$59,934



	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
	Nine Months Ended September 30, 2018
	Rayonier Inc. (Parent Issuer)			Subsidiary Guarantors			Non- guarantors			Consolidating Adjustments		Total Consolidated
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES		($16,590	)		$165,283			$112,358		—			$261,051
INVESTING ACTIVITIES
Capital expenditures	—			(58		)	(44,079		)	—		(44,137		)
Real estate development investments	—			—			(6,889		)	—		(6,889		)
Purchase of timberlands	—			—			(38,978		)	—		(38,978		)
Investment in subsidiaries	—			40,554			—			(40,554	)	—
Other	—			—			2,132			—		2,132
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	—			40,496			(87,814		)	(40,554	)	(87,872		)
FINANCING ACTIVITIES (a)
Issuance of debt	—			—			1,014			—		1,014
Repayment of debt	—			(50,000		)	(4,416		)	—		(54,416		)
Dividends paid	(101,839		)	—			—			—		(101,839		)
Proceeds from the issuance of common shares under incentive stock plan	8,216			—			—			—		8,216
Repurchase of common shares	(2,980		)	—			—			—		(2,980		)
Proceeds from shareholder distribution hedge	—			—			610			—		610
Distribution to minority shareholder	—			—			(3,122		)	—		(3,122		)
Issuance of intercompany notes	(9,000		)	—			9,000			—		—
Intercompany distributions	79,874			(88,074		)	(32,354		)	40,554		—
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	(25,729		)	(138,074		)	(29,268		)	40,554		(152,517		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(1,341		)	—		(1,341		)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Change in cash, cash equivalents and restricted cash	(42,319		)	67,705			(6,065		)	—		19,321
Balance, beginning of year	48,564			25,042			98,750			—		172,356
Balance, end of period		$6,245			$92,747			$92,685		—			$191,677

(a) Non-cash financing activity: In August 2018, Rayonier Inc. waived $308.7 million and $67.2 million of intercompany loans and accrued interest,

respectively, due from non-guarantors.