# Rayonier Inc: Form 10-Q for the period ended Jun 30, 2023

- Company: [Rayonier Inc](/companies/ryn.md) (CIK 52827)
- Form: 10-Q
- Filed: 2023-08-04
- Accepted by EDGAR: Aug 4, 2023, 17:13 ET
- Period: 2023-06-30
- Accession: 0000052827-23-000189
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/52827/000005282723000189/ryn-20230630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/52827/000005282723000189/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-04-01 to 2023-06-30 | $208.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2023-01-01 to 2023-06-30 | $387.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2023-04-01 to 2023-06-30 | $168.4m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2023-01-01 to 2023-06-30 | $317.6m | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2023-04-01 to 2023-06-30 | $19.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2023-01-01 to 2023-06-30 | $35.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2023-04-01 to 2023-06-30 | $20.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2023-01-01 to 2023-06-30 | $30.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-04-01 to 2023-06-30 | $12.5m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2023-01-01 to 2023-06-30 | $24.2m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-04-01 to 2023-06-30 | $193.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2023-01-01 to 2023-06-30 | $1.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-04-01 to 2023-06-30 | $19.0m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-01-01 to 2023-06-30 | $27.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-04-01 to 2023-06-30 | $0.13 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-01-01 to 2023-06-30 | $0.18 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-04-01 to 2023-06-30 | $0.13 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-01-01 to 2023-06-30 | $0.18 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-04-01 to 2023-06-30 | 150,965,191 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2023-01-01 to 2023-06-30 | 151,028,340 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2023-01-01 to 2023-06-30 | $126.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 6 months, 2023-01-01 to 2023-06-30 | $85.2m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 6 months, 2023-01-01 to 2023-06-30 | $4.2m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-06-30 | $88.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-06-30 | $197.3m | us-gaap:AssetsCurrent |
| Total assets | at 2023-06-30 | $3.72bn | us-gaap:Assets |
| Current liabilities | at 2023-06-30 | $102.8m | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2023-06-30 | $1.51bn | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2023-06-30 | $1.83bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 69,872 characters.

*When we refer to “Rayonier” or “the Company” we mean Rayonier Inc. and its consolidated subsidiaries. References to the “Operating Partnership” mean Rayonier, L.P. and its consolidated subsidiaries. References to “we,” “us,” or “our,” mean collectively Rayonier Inc., the Operating Partnership and entities/subsidiaries owned or controlled by Rayonier Inc. and/or the Operating Partnership. References herein to “Notes to Financial Statements” refer to the Notes to Consolidated Financial Statements of Rayonier Inc. and Rayonier, L.P. included in Item 1 of this report.*

*This MD&A is intended to provide a reader of our financial statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity, and certain other factors which may affect future results. Our MD&A should be read in conjunction with our Consolidated Financial Statements included in Item 1 of this report, our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) and information contained in our subsequent reports filed with the Securities and Exchange Commission (the “SEC”).*

### FORWARD-LOOKING STATEMENTS

Certain statements in this document regarding anticipated financial outcomes, including our earnings guidance, if any, business and market conditions, outlook, expected dividend rate, our business strategies, expected harvest schedules, timberland acquisitions and dispositions, the anticipated benefits of our business strategies, and other similar statements relating to our future events, developments, or financial or operational performance or results, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as “may,” “will,” “should,” “expect,” “estimate,” “believe,” “intend,” “project,” “anticipate” and other similar language. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking. While management believes that these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. The risk factors contained in Item 1A — *Risk Factors* in our 2022 Form 10-K, Part II, and similar discussions included in other reports that we subsequently file with the SEC, among others, could cause actual results or events to differ materially from our historical experience and those expressed in forward-looking statements made in this document.

Forward-looking statements are only as of the date they are made, and we undertake no duty to update our forward-looking statements except as required by law. You are advised, however, to review any subsequent disclosures we make on related subjects in subsequent reports filed with the SEC.

### NON-GAAP MEASURES

To supplement our financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP measures, including “Cash Available for Distribution,” and “Adjusted EBITDA,” which are defined and further explained in *Performance and Liquidity Indicators* below. Reconciliation of such measures to the nearest GAAP measures can also be found in *Performance and Liquidity Indicators* below. Our definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.

### OBJECTIVE

The objective of the Management’s Discussion and Analysis is to detail material information, events, uncertainties and other factors impacting the Company and the Operating Partnership and to provide investors an understanding of “Management’s perspective.” Item 7, Management’s Discussion and Analysis (“MD&A”) highlights the critical areas for evaluating the Company’s performance which includes a discussion on the reportable segments, liquidity and capital, and critical accounting estimates. The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and notes.

### OUR COMPANY

We are a leading timberland real estate investment trust (“REIT”) with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand. We invest in timberlands and actively manage them to provide current income and attractive long-term returns to our shareholders. We conduct our business through an umbrella partnership real estate investment trust (“UPREIT”) structure in which our assets are owned by our Operating Partnership and its subsidiaries. Rayonier manages the Operating Partnership as its sole general partner. Our revenues, operating income and cash flows are primarily derived from the following core business segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate, and Trading. As of June 30, 2023, we owned or leased under long-term agreements approximately 2.8 million acres of timberlands located in the U.S. South (1.91 million acres), U.S. Pacific Northwest (474,000 acres) and New Zealand (419,000 gross acres or 297,000 net plantable acres).

### SEGMENT INFORMATION

The Southern Timber, Pacific Northwest Timber and New Zealand Timber segments include all activities related to the harvesting of timber and other non-timber income activities, such as the licensing of properties for hunting, granting land access for carbon capture and storage, the leasing of properties for mineral extraction and cell towers, and carbon credit sales. Our New Zealand operations are conducted by Matariki Forestry Group, a joint venture (the “New Zealand subsidiary”), in which we maintain a 77% ownership interest. See Note 4 - Noncontrolling Interests for additional information regarding our noncontrolling interests in the New Zealand Timber segment.

The Real Estate segment includes all U.S. and New Zealand land or leasehold sales disaggregated into six sales categories: Improved Development, Unimproved Development, Rural, Timberland & Non-Strategic, Conservation Easements and Large Dispositions. It also includes residential and commercial lease activity, primarily in the town of Port Gamble, Washington.

The Trading segment primarily reflects log trading activities in New Zealand and Australia conducted by our New Zealand subsidiary. It also includes log trading activities conducted from the U.S. South and Pacific Northwest. Our Trading segment activities include an export services joint venture with a third-party forest manager in which Matariki Forests Trading Ltd maintains a 50% ownership interest. The Trading segment complements the New Zealand Timber segment by providing added market intelligence, increasing the scale of export operations and achieving cost savings that directly benefit the New Zealand Timber segment. This additional market intelligence also benefits our Southern and Pacific Northwest export log marketing.

### ENVIRONMENTAL MATTERS

For a full description of our environmental matters, see Item 1 - “Business” in our Annual Report on Form 10-K for the year ended December 31, 2022 and our sustainability report located at our Responsible Stewardship webpage.

### INDUSTRY AND MARKET CONDITIONS

The demand for timber is directly related to the underlying demand for pulp, paper, packaging, lumber and other wood products. The significant majority of timber sold in our Southern Timber segment is consumed domestically. With a higher proportion of pulpwood, our Southern Timber segment relies heavily on downstream markets for pulp and paper, and to a lesser extent wood pellet markets. Our Pacific Northwest Timber segment relies primarily on domestic customers but also exports a significant volume of timber, particularly to Japan and China. The Southern Timber and Pacific Northwest Timber segments rely on the strength of U.S. lumber markets as well as underlying housing starts. Our New Zealand Timber segment sells timber to domestic New Zealand wood products mills and also exports a significant portion of its volume to Asian markets, particularly in China and South Korea. In addition to market dynamics in the Pacific Rim, the New Zealand Timber segment is subject to foreign exchange fluctuations, which can impact the operating results of the segment in U.S. dollar terms.

During the first half of 2023, each of our timber segments experienced challenging market conditions due to ongoing market headwinds and weaker end-market demand relative to the prior year. In our Southern Timber segment, weaker demand for pulp and lumber coupled with drier weather conditions has resulted in lower net stumpage prices. In our Pacific Northwest Timber segment, softer domestic lumber demand and decreased competition from export markets has negatively impacted domestic sawtimber prices. In our New Zealand Timber segment, weaker demand in China has driven lower export sawtimber prices.

We are also subject to the risk of price fluctuations in certain of our cost components, primarily logging and transportation (cut and haul), ocean freight and demurrage costs. Other major components of our cost of sales are the cost basis of timber sold (depletion) and the cost basis of real estate sold. Depletion includes the amortization of capitalized site preparation, planting and fertilization, real estate taxes, timberland lease payments and certain payroll costs. The cost basis of real estate sold includes the cost basis in land and costs directly associated with the development and construction of identified real estate projects, such as infrastructure, roadways, utilities, amenities and/or other improvements. Other costs include amortization of capitalized costs related to road and bridge construction and software, depreciation of fixed assets and equipment, road maintenance, severance and excise taxes, fire prevention and real estate commissions and closing costs.

Our Real Estate segment is exposed to changes in interest and mortgage rates as higher rates could negatively impact buyer demand for the properties we sell. However, current demand for our rural and development real estate properties has not been significantly impacted by the higher interest rate environment.

For additional information on market conditions impacting our business, see Results of Operations.

### CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements requires us to make estimates, assumptions and judgments that affect our assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. We base these estimates and assumptions on historical data and trends, current fact patterns, expectations and other sources of information we believe are reasonable. Actual results may differ from these estimates. For a full description of our critical accounting policies, see Item 7 — *Management’s Discussion and Analysis of Financial Condition and Results of Operations* in our 2022 Form 10-K.

### REVENUE RECOGNITION

See Note 1 – Basis of Presentation.

### DISCUSSION OF TIMBER INVENTORY AND SUSTAINABLE YIELD

See Item 1 — *Business — Discussion of Timber Inventory and Sustainable Yield* in our 2022 Form 10-K.

### OUR TIMBERLANDS

Our timber operations are disaggregated into three geographically distinct segments: Southern Timber, Pacific Northwest Timber and New Zealand Timber. The following tables provide a breakdown of our timberland holdings as of June 30, 2023 and December 31, 2022:

| (acres in 000s) Southern | As of June 30, 2023 Owned | Leased | Total | As of December 31, 2022 Owned | Leased | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Alabama | 258 | 5 | 263 | 258 | 14 | 272 |
| Arkansas | — | 2 | 2 | — | 2 | 2 |
| Florida | 349 | 47 | 396 | 347 | 47 | 394 |
| Georgia | 646 | 64 | 710 | 647 | 64 | 711 |
| Louisiana | 147 | — | 147 | 148 | — | 148 |
| Oklahoma | 91 | — | 91 | 91 | — | 91 |
| South Carolina | 16 | — | 16 | 16 | — | 16 |
| Texas | 282 | — | 282 | 285 | — | 285 |
|  | 1,789 | 118 | 1,907 | 1,792 | 127 | 1,919 |
| **Pacific Northwest** |  |  |  |  |  |  |
| Oregon | 61 | — | 61 | 61 | — | 61 |
| Washington | 410 | 3 | 413 | 410 | 3 | 413 |
|  | 471 | 3 | 474 | 471 | 3 | 474 |
| **New Zealand (a)** | 188 | 231 | 419 | 188 | 229 | 417 |
| **Total** | 2,448 | 352 | 2,800 | 2,451 | 359 | 2,810 |

(a) Represents legal acres owned and leased by the New Zealand subsidiary, in which we own a 77% interest. As of June 30, 2023, legal acres in New Zealand consisted of 297,000 plantable acres and 122,000 non-productive acres.

The following tables detail activity for owned and leased acres in our timberland holdings by state from December 31, 2022 to June 30, 2023:

| (acres in 000s) Southern | Acres Owned December 31, 2022 | Acquisitions | Sales | Other | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: |
| Alabama | 258 | — | — | — | 258 |
| Florida | 347 | 2 | — | — | 349 |
| Georgia | 647 | — | (1) | — | 646 |
| Louisiana | 148 | — | (1) | — | 147 |
| Oklahoma | 91 | — | — | — | 91 |
| South Carolina | 16 | — | — | — | 16 |
| Texas | 285 | — | (3) | — | 282 |
|  | 1,792 | 2 | (5) | — | 1,789 |
| **Pacific Northwest** |  |  |  |  |  |
| Oregon | 61 | — | — | — | 61 |
| Washington | 410 | — | — | — | 410 |
|  | 471 | — | — | — | 471 |
| **New Zealand (a)** | 188 | — | — | — | 188 |
| **Total** | 2,451 | 2 | (5) | — | 2,448 |

(a) Represents legal acres owned by the New Zealand subsidiary, in which we have a 77% interest.

| (acres in 000s) Southern | Acres Leased December 31, 2022 | New Leases | Sold/Expired Leases (a) | Other | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: |
| Alabama | 14 | — | (9) | — | 5 |
| Arkansas | 2 | — | — | — | 2 |
| Florida | 47 | — | — | — | 47 |
| Georgia | 64 | — | — | — | 64 |
|  | 127 | — | (9) | — | 118 |
| **Pacific Northwest** |  |  |  |  |  |
| Washington (b) | 3 | — | — | — | 3 |
| **New Zealand (c)** | 229 | — | — | 2 | 231 |
| **Total** | 359 | — | (9) | 2 | 352 |

(a) Includes acres previously under lease that have been harvested and activity for the relinquishment of leased acres.

(b) Primarily timber reservations acquired in the merger with Pope Resources.

(c) Represents legal acres leased by the New Zealand subsidiary, in which we have a 77% interest.

### RESULTS OF OPERATIONS

### CONSOLIDATED RESULTS

The following table provides key financial information by segment and on a consolidated basis:

| Financial Information (in millions) Sales | Three Months Ended June 30, 2023 | 2022 | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Southern Timber | $68.3 | $66.3 | $140.2 | $143.0 |
| Pacific Northwest Timber | 32.3 | 39.2 | 66.7 | 85.4 |
| New Zealand Timber | 60.9 | 78.9 | 105.0 | 130.3 |
| Real Estate |  |  |  |  |
| Improved Development | 12.2 | 11.6 | 17.0 | 16.5 |
| Rural | 15.6 | 23.4 | 22.1 | 40.4 |
| Timberland & Non-Strategic | 0.3 | — | 1.9 | 11.4 |
| Deferred Revenue/Other (a) | 3.9 | (0.6) | 7.3 | 0.3 |
| Total Real Estate | 32.0 | 34.4 | 48.3 | 68.6 |
| Trading | 15.4 | 27.7 | 28.0 | 41.1 |
| Intersegment Eliminations | (0.1) | (0.1) | (0.2) | (0.1) |
| **Total Sales** | $208.9 | $246.3 | $387.9 | $468.4 |
| **Operating Income (Loss)** |  |  |  |  |
| Southern Timber | $21.7 | $24.1 | $43.9 | $54.4 |
| Pacific Northwest Timber | (2.4) | 2.9 | (5.9) | 9.5 |
| New Zealand Timber (b) | 2.4 | 8.0 | 1.7 | 13.4 |
| Real Estate (a) | 8.6 | 11.0 | 9.5 | 21.2 |
| Trading | 0.1 | (0.4) | 0.4 | (0.1) |
| Corporate and Other | (10.3) | (10.1) | (18.9) | (17.7) |
| **Operating Income** | 20.1 | 35.5 | 30.7 | 80.8 |
| Interest expense, interest income and other (c) | (0.8) | (8.9) | (2.9) | (17.7) |
| Income tax expense | (0.2) | (1.3) | (1.3) | (6.8) |
| **Net Income** | 19.1 | 25.3 | 26.5 | 56.3 |
| Less: Net loss (income) attributable to noncontrolling interests in consolidated affiliates | 0.2 | (0.6) | 1.3 | (1.7) |
| **Net Income Attributable to Rayonier, L.P.** | $19.3 | $24.7 | $27.8 | $54.6 |
| Less: Net income attributable to noncontrolling interests in the operating partnership | (0.3) | (0.6) | (0.5) | (1.2) |
| **Net Income Attributable to Rayonier Inc.** | $19.0 | $24.1 | $27.3 | $53.4 |
| **Adjusted EBITDA (d)** |  |  |  |  |
| Southern Timber | $43.6 | $38.7 | $86.4 | $87.1 |
| Pacific Northwest Timber | 6.9 | 14.3 | 14.0 | 35.8 |
| New Zealand Timber | 8.3 | 14.9 | 14.4 | 25.3 |
| Real Estate | 20.3 | 25.4 | 26.9 | 50.1 |
| Trading | 0.1 | (0.4) | 0.4 | (0.1) |
| Corporate and Other | (9.9) | (9.8) | (18.1) | (17.0) |
| **Total Adjusted EBITDA** | $69.2 | $83.0 | $124.0 | $181.1 |

(a) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

(b) The six months ended June 30, 2023 includes a $2.3 million timber write-off resulting from a casualty event.

(c) The three and six months ended June 30, 2023 includes $11.4 million and $20.5 million, respectively, of net recoveries associated with legal settlements.

(d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators.

| Southern Timber Overview Sales Volume (in thousands of tons) | Three Months Ended June 30, 2023 | 2022 | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Pine Pulpwood | 1,036 | 962 | 2,015 | 2,133 |
| Pine Sawtimber | 932 | 458 | 1,818 | 1,080 |
| **Total Pine Volume** | 1,969 | 1,420 | 3,833 | 3,213 |
| Hardwood | 41 | 103 | 69 | 206 |
| **Total Volume** | 2,009 | 1,523 | 3,903 | 3,419 |
| % Delivered Volume (vs. Total Volume) | 30% | 47% | 33% | 40% |
| % Pine Sawtimber Volume (vs. Total Pine Volume) | 47% | 32% | 47% | 34% |
| % Export Volume (vs. Total Volume) (a) | 1% | 3% | 1% | 2% |
| **Net Stumpage Pricing (dollars per ton)** |  |  |  |  |
| Pine Pulpwood | $15.78 | $21.46 | $16.53 | $22.93 |
| Pine Sawtimber | 29.07 | 34.09 | 30.29 | 34.86 |
| Weighted Average Pine | $22.07 | $25.54 | $23.06 | $26.94 |
| Hardwood | 11.06 | 25.70 | 14.79 | 25.88 |
| Weighted Average Total | $21.85 | $25.55 | $22.91 | $26.87 |
| **Summary Financial Data (in millions of dollars)** |  |  |  |  |
| Timber Sales | $58.4 | $58.2 | $120.9 | $129.2 |
| Less: Cut and Haul | (13.4) | (17.6) | (29.0) | (33.2) |
| Less: Port and Freight | (1.2) | (1.8) | (2.7) | (4.1) |
| **Net Stumpage Sales** | $43.8 | $38.9 | $89.1 | $91.9 |
| Non-Timber Sales | 9.9 | 8.1 | 19.3 | 13.8 |
| **Total Sales** | $68.3 | $66.3 | $140.2 | $143.0 |
| Operating Income | $21.7 | $24.1 | $43.9 | $54.4 |
| (+) Depreciation, depletion and amortization | 21.9 | 14.7 | 42.5 | 32.7 |
| **Adjusted EBITDA (b)** | $43.6 | $38.7 | $86.4 | $87.1 |
| **Other Data** |  |  |  |  |
| Period-End Acres (in thousands) | 1,907 | 1,791 | 1,907 | 1,791 |

(a) Estimated percentage of export volume, which includes volumes sold to third-party exporters in addition to direct exports through our log export program.

(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators.

| Pacific Northwest Timber Overview Sales Volume (in thousands of tons) | Three Months Ended June 30, 2023 | 2022 | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Pulpwood | 61 | 80 | 138 | 155 |
| Domestic Sawtimber (a) | 251 | 255 | 535 | 681 |
| Export Sawtimber | 21 | 41 | 43 | 45 |
| **Total Volume** | 332 | 376 | 716 | 881 |
| % Delivered Volume (vs. Total Volume) | 100% | 99% | 98% | 90% |
| % Sawtimber Volume (vs. Total Volume) | 82% | 79% | 81% | 82% |
| % Export Volume (vs. Total Volume) (b) | 10% | 16% | 12% | 9% |
| **Delivered Log Pricing (in dollars per ton)** |  |  |  |  |
| Pulpwood | $36.21 | $45.17 | $42.90 | $41.83 |
| Domestic Sawtimber | 97.37 | 120.44 | 95.16 | 111.97 |
| Export Sawtimber (c) | 144.25 | 93.01 | 154.14 | 92.94 |
| Weighted Average Log Price | $89.10 | $101.62 | $88.61 | $98.32 |
| **Summary Financial Data (in millions of dollars)** |  |  |  |  |
| Timber Sales | $30.0 | $37.9 | $63.5 | $83.0 |
| Less: Cut and Haul | (15.5) | (16.5) | (32.7) | (32.8) |
| Less: Port and Freight | (1.3) | (0.4) | (2.7) | (0.4) |
| **Net Stumpage Sales** | $13.2 | $21.0 | $28.1 | $49.8 |
| Non-Timber Sales | 2.3 | 1.3 | 3.3 | 2.4 |
| **Total Sales** | $32.3 | $39.2 | $66.7 | $85.4 |
| Operating (Loss) Income | ($2.4) | $2.9 | ($5.9) | $9.5 |
| (+) Depreciation, depletion and amortization | 9.2 | 11.3 | 19.9 | 26.2 |
| **Adjusted EBITDA (d)** | $6.9 | $14.3 | $14.0 | $35.8 |
| **Other Data** |  |  |  |  |
| Period-End Acres (in thousands) | 474 | 486 | 474 | 486 |
| Sawtimber (in dollars per MBF) (e) | $711 | $905 | $720 | $873 |

(a) Includes volumes sold to third-party exporters.

(b) Estimated percentage of export volume, which includes volumes sold to third-party exporters in addition to direct exports through our log export program.

(c) Prior to Q4 2022, pricing reflects the transfer of logs on an FOB basis, while periods after Q4 2022 reflect pricing on a CFR basis (i.e., inclusive of export costs and freight).

(d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators.

(e) Delivered Sawtimber excluding chip-n-saw.

| New Zealand Timber Overview Sales Volume (in thousands of tons) | Three Months Ended June 30, 2023 | 2022 | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Domestic Pulpwood (Delivered) | 50 | 105 | 105 | 199 |
| Domestic Sawtimber (Delivered) | 155 | 188 | 291 | 323 |
| Export Pulpwood (Delivered) | 70 | 55 | 112 | 91 |
| Export Sawtimber (Delivered) | 398 | 355 | 645 | 604 |
| **Total Volume** | 673 | 703 | 1,154 | 1,217 |
| % Delivered Volume (vs. Total Volume) | 100% | 100% | 100% | 100% |
| % Sawtimber Volume (vs. Total Volume) | 82% | 77% | 81% | 76% |
| % Export Volume (vs. Total Volume) (a) | 70% | 58% | 66% | 57% |
| **Delivered Log Pricing (in dollars per ton)** |  |  |  |  |
| Domestic Pulpwood | $37.92 | $34.56 | $35.52 | $34.76 |
| Domestic Sawtimber | 69.29 | 76.82 | 70.36 | 76.48 |
| Export Sawtimber | 103.81 | 140.44 | 107.31 | 135.13 |
| Weighted Average Log Price | $89.49 | $106.88 | $90.11 | $102.53 |
| **Summary Financial Data (in millions of dollars)** |  |  |  |  |
| Timber Sales | $60.2 | $75.1 | $104.0 | $124.8 |
| Less: Cut and Haul | (24.3) | (26.7) | (41.8) | (45.8) |
| Less: Port and Freight | (20.1) | (31.4) | (31.6) | (46.8) |
| **Net Stumpage Sales** | $15.8 | $16.9 | $30.6 | $32.2 |
| Non-Timber Sales / Carbon Credits | 0.7 | 3.8 | 1.0 | 5.5 |
| **Total Sales** | $60.9 | $78.9 | $105.0 | $130.3 |
| Operating Income | $2.4 | $8.0 | $1.7 | $13.4 |
| (+) Timber write-off resulting from a casualty event (b) | — | — | 2.3 | — |
| (+) Depreciation, depletion and amortization | 5.9 | 6.9 | 10.4 | 11.9 |
| **Adjusted EBITDA (c)** | $8.3 | $14.9 | $14.4 | $25.3 |
| **Other Data** |  |  |  |  |
| New Zealand Dollar to U.S. Dollar Exchange Rate (d) | 0.6151 | 0.6628 | 0.6221 | 0.6650 |
| Net Plantable Period-End Acres (in thousands) | 297 | 296 | 297 | 296 |
| Export Sawtimber (in dollars per JAS m3) | $120.70 | $163.29 | $124.77 | $157.11 |
| Domestic Sawtimber (in $NZD per tonne) | $123.92 | $127.50 | $124.42 | $126.51 |

(a) Percentage of export volume reflects direct exports through our log export program.

(b) Timber write-off resulting from a casualty event includes the write-off of merchantable and pre-merchantable timber volume damaged by a casualty event which cannot be salvaged.

(c) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators.

(d) Represents the period-average rate.

| Real Estate Overview Sales (in millions of dollars) | Three Months Ended June 30, 2023 | 2022 | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Improved Development (a) | $12.2 | $11.6 | $17.0 | $16.5 |
| Rural | 15.6 | 23.4 | 22.1 | 40.4 |
| Timberland & Non-Strategic | 0.3 | — | 1.9 | 11.4 |
| Deferred Revenue/Other (b) | 3.9 | (0.6) | 7.3 | 0.3 |
| **Total Sales** | $32.0 | $34.4 | $48.3 | $68.6 |
| **Acres Sold** |  |  |  |  |
| Improved Development (a) | 267.5 | 60.8 | 295.3 | 77.0 |
| Rural | 3,411 | 4,633 | 4,942 | 9,385 |
| Timberland & Non-Strategic | 76 | — | 604 | 3,966 |
| **Total Acres Sold** | 3,754 | 4,694 | 5,841 | 13,428 |
| **Gross Price per Acre (dollars per acre)** |  |  |  |  |
| Improved Development (a) | $45,732 | $190,136 | $57,679 | $214,841 |
| Rural | 4,582 | 5,054 | 4,477 | 4,302 |
| Timberland & Non-Strategic | 3,344 | — | 3,131 | 2,874 |
| **Weighted Average (Total)** | $7,489 | $7,453 | $7,028 | $5,087 |
| **Weighted Average (Adjusted) (c)** | $4,555 | $5,054 | $4,331 | $3,878 |
| Operating Income | $8.6 | $11.0 | $9.5 | $21.2 |
| (+) Depreciation, depletion and amortization | 2.2 | 2.6 | 3.7 | 11.7 |
| (+) Non-cash cost of land and improved development | 9.4 | 11.8 | 13.6 | 17.1 |
| **Adjusted EBITDA (d)** | $20.3 | $25.4 | $26.9 | $50.1 |

(a) Reflects land with capital invested in infrastructure improvements.

(b) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

(c) Excludes Improved Development.

(d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators.

| Trading Overview Sales Volume (in thousands of tons) | Three Months Ended June 30, 2023 | 2022 | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| U.S. | 17 | 27 | 30 | 43 |
| NZ | 118 | 182 | 209 | 278 |
| **Total Volume** | 135 | 209 | 239 | 320 |
| **Summary Financial Data (in millions of dollars)** |  |  |  |  |
| Trading Sales | $15.0 | $27.3 | $27.1 | $40.4 |
| Non-Timber Sales | 0.5 | 0.4 | 0.9 | 0.8 |
| **Total Sales** | $15.4 | $27.7 | $28.0 | $41.1 |
| Operating Income (Loss) | $0.1 | ($0.4) | $0.4 | ($0.1) |
| **Adjusted EBITDA (a)** | $0.1 | ($0.4) | $0.4 | ($0.1) |

(a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators.

| Capital Expenditures By Segment (in millions of dollars) Timber Capital Expenditures Southern Timber | Three Months Ended June 30, 2023 | 2022 | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Reforestation, silviculture and other capital expenditures | $6.6 | $3.6 | $13.5 | $6.1 |
| Property taxes | 2.0 | 1.9 | 4.0 | 3.7 |
| Lease payments | 0.2 | 0.2 | 0.6 | 0.9 |
| Allocated overhead | 1.2 | 1.1 | 2.7 | 2.4 |
| **Subtotal Southern Timber** | $10.0 | $6.8 | $20.8 | $13.1 |
| Pacific Northwest Timber |  |  |  |  |
| Reforestation, silviculture and other capital expenditures | 2.1 | 1.5 | 5.0 | 5.2 |
| Property taxes | 0.3 | 0.3 | 0.5 | 0.5 |
| Allocated overhead | 1.3 | 1.4 | 2.6 | 2.7 |
| **Subtotal Pacific Northwest Timber** | $3.6 | $3.2 | $8.2 | $8.4 |
| New Zealand Timber |  |  |  |  |
| Reforestation, silviculture and other capital expenditures | 2.6 | 3.0 | 4.6 | 5.5 |
| Property taxes | 0.2 | 0.2 | 0.4 | 0.4 |
| Lease payments | 0.9 | 0.9 | 1.3 | 1.4 |
| Allocated overhead | 0.7 | 0.7 | 1.4 | 1.4 |
| **Subtotal New Zealand Timber** | $4.3 | $4.8 | $7.6 | $8.6 |
| **Total Timber Segments Capital Expenditures** | $18.0 | $14.7 | $36.7 | $30.2 |
| Real Estate | 0.1 | — | 0.1 | 0.1 |
| **Total Capital Expenditures** | $18.1 | $14.7 | $36.8 | $30.3 |
| **Timberland Acquisitions** |  |  |  |  |
| Southern Timber | $0.6 | $0.4 | $5.7 | $3.2 |
| Pacific Northwest Timber | — | — | 3.6 | — |
| **Timberland Acquisitions** | $0.6 | $0.4 | $9.3 | $3.2 |
| **Real Estate Development Investments (a)** | $7.0 | $2.9 | $14.8 | $6.0 |

(a) Represents investments in master infrastructure or entitlements in our real estate development projects. Real Estate Development Investments are amortized as the underlying properties are sold and included in Non-Cash Cost of Land and Improved Development.

The following tables summarize sales, operating income (loss) and Adjusted EBITDA variances for June 30, 2023 versus June 30, 2022 (millions of dollars):

| Sales | Southern Timber |  | Pacific Northwest Timber |  | New Zealand Timber |  | Real Estate | Trading | Intersegment Eliminations | Total |
| --- | ---: | --- | ---: | --- | ---: | --- | ---: | ---: | ---: | ---: |
| **Three Months Ended June 30, 2022** | $66.3 |  | $39.2 |  | $78.9 |  | $34.4 | $27.7 | ($0.1) | $246.3 |
| Volume | 12.4 |  | (2.4) |  | (3.2) |  | (6.7) | (9.7) | — | (9.6) |
| Price | (7.4) |  | (5.9) |  | (1.5) |  | 0.4 | (2.7) | — | (17.1) |
| Non-timber sales | 1.9 |  | 1.1 |  | (2.8) |  | — | 0.1 | — | 0.3 |
| Foreign exchange (a) | — |  | — |  | (1.6) |  | — | — | — | (1.6) |
| Other | (4.8) | (b) | 0.3 | (b) | (8.9) | (c) | 3.9 | — | — | (9.5) |
| **Three Months Ended June 30, 2023** | $68.3 |  | $32.3 |  | $60.9 |  | $32.0 | $15.4 | ($0.1) | $208.9 |

(a) Net of currency hedging impact.

(b) Includes variance due to stumpage versus delivered sales.

(c) Includes variance due to domestic versus export sales.

| Sales | Southern Timber |  | Pacific Northwest Timber |  | New Zealand Timber |  | Real Estate | Trading | Intersegment Eliminations | Total |
| --- | ---: | --- | ---: | --- | ---: | --- | ---: | ---: | ---: | ---: |
| **Six Months Ended June 30, 2022** | $143.0 |  | $85.4 |  | $130.3 |  | $68.6 | $41.1 | ($0.1) | $468.4 |
| Volume | 13.0 |  | (9.3) |  | (6.4) |  | (37.0) | (10.2) | — | (49.9) |
| Price | (15.5) |  | (12.9) |  | (1.5) |  | 11.0 | (3.1) | — | (22.0) |
| Non-timber sales | 5.5 |  | 0.8 |  | (4.1) |  | — | 0.2 | — | 2.4 |
| Foreign exchange (a) | — |  | — |  | (2.4) |  | — | — | — | (2.4) |
| Other | (5.8) | (b) | 2.7 | (b) | (10.9) | (c) | 5.7 | — | (0.1) | (8.5) |
| **Six Months Ended June 30, 2023** | $140.2 |  | $66.7 |  | $105.0 |  | $48.3 | $28.0 | ($0.2) | $387.9 |

(a) Net of currency hedging impact.

(b) Includes variance due to stumpage versus delivered sales.

(c) Includes variance due to domestic versus export sales.

| Operating Income | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| **Three Months Ended June 30, 2022** | $24.1 | $2.9 | $8.0 | $11.0 | ($0.4) | ($10.1) | $35.5 |
| Volume | 7.6 | (0.8) | (0.5) | (3.6) | — | — | 2.7 |
| Price (a) | (7.4) | (5.9) | (1.5) | 0.4 | — | — | (14.4) |
| Cost | (1.0) | (0.5) | — | (2.8) | 0.5 | (0.1) | (3.9) |
| Non-timber income (b) | 1.0 | 1.1 | (2.8) | — | — | — | (0.7) |
| Foreign exchange (c) | — | — | (1.0) | — | — | — | (1.0) |
| Depreciation, depletion & amortization | (2.6) | 0.8 | 0.2 | (0.1) | — | (0.1) | (1.8) |
| Non-cash cost of land and improved development | — | — | — | 1.3 | — | — | 1.3 |
| Other (d) | — | — | — | 2.4 | — | — | 2.4 |
| **Three Months Ended June 30, 2023** | $21.7 | ($2.4) | $2.4 | $8.6 | $0.1 | ($10.3) | $20.1 |

(a) For Timber segments, price reflects net stumpage realizations (i.e., net of cut and haul and shipping costs). For Real Estate, price is presented net of cash closing costs.

(b) For the New Zealand Timber segment, includes carbon credit sales.

(c) Net of currency hedging impact.

(d) Real Estate includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

| Operating Income | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| **Six Months Ended June 30, 2022** | $54.4 | $9.5 | $13.4 | $21.2 | ($0.1) | ($17.7) | $80.8 |
| Volume | 8.2 | (3.4) | (1.2) | (20.2) | — | — | (16.6) |
| Price (a) | (15.5) | (12.9) | (1.5) | 11.0 | — | — | (18.9) |
| Cost | (2.7) | (1.5) | (0.8) | (3.1) | 0.4 | (1.1) | (8.8) |
| Non-timber income (b) | 4.7 | 0.8 | (4.1) | — | 0.1 | — | 1.5 |
| Foreign exchange (c) | — | — | (2.0) | — | — | — | (2.0) |
| Depreciation, depletion & amortization | (5.2) | 1.6 | 0.2 | 1.6 | — | (0.1) | (1.9) |
| Non-cash cost of land and improved development | — | — | — | (5.1) | — | — | (5.1) |
| Other (d) | — | — | (2.3) | 4.1 | — | — | 1.7 |
| **Six Months Ended June 30, 2023** | $43.9 | ($5.9) | $1.7 | $9.5 | $0.4 | ($18.9) | $30.7 |

(a) For Timber segments, price reflects net stumpage realizations (i.e., net of cut and haul and shipping costs). For Real Estate, price is presented net of cash closing costs.

(b) For the New Zealand Timber segment, includes carbon credit sales.

(c) Net of currency hedging impact.

(d) New Zealand Timber includes a $2.3 million in timber write-offs resulting from a casualty event. Real Estate includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

| Adjusted EBITDA (a) | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| **Three Months Ended June 30, 2022** | $38.7 | $14.3 | $14.9 | $25.4 | ($0.4) | ($9.8) | $83.0 |
| Volume | 12.3 | (2.1) | (0.8) | (6.7) | — | — | 2.7 |
| Price (b) | (7.4) | (5.9) | (1.5) | 0.4 | — | — | (14.4) |
| Cost | (1.0) | (0.5) | — | (2.8) | 0.5 | (0.1) | (3.9) |
| Non-timber income (c) | 1.0 | 1.1 | (2.8) | — | — | — | (0.7) |
| Foreign exchange (d) | — | — | (1.5) | — | — | — | (1.5) |
| Other (e) | — | — | — | 4.0 | — | — | 4.0 |
| **Three Months Ended June 30, 2023** | $43.6 | $6.9 | $8.3 | $20.3 | $0.1 | ($9.9) | $69.2 |

(a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators below.

(b) For Timber segments, price reflects net stumpage realizations (i.e., net of cut and haul and shipping costs). For Real Estate, price is presented net of cash closing costs.

(c) For the New Zealand Timber segment, includes carbon credit sales.

(d) Net of currency hedging impact.

(e) Real Estate includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

| Adjusted EBITDA (a) | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| **Six Months Ended June 30, 2022** | $87.1 | $35.8 | $25.3 | $50.1 | ($0.1) | ($17.0) | $181.1 |
| Volume | 12.8 | (8.2) | (1.8) | (37.0) | — | — | (34.2) |
| Price (b) | (15.5) | (12.9) | (1.5) | 11.0 | — | — | (18.9) |
| Cost | (2.7) | (1.5) | (0.8) | (3.1) | 0.4 | (1.1) | (8.8) |
| Non-timber income (c) | 4.7 | 0.8 | (4.1) | — | 0.1 | — | 1.5 |
| Foreign exchange (d) | — | — | (2.7) | — | — | — | (2.7) |
| Other (e) | — | — | — | 5.9 | — | — | 5.9 |
| **Six Months Ended June 30, 2023** | $86.4 | $14.0 | $14.4 | $26.9 | $0.4 | ($18.1) | $124.0 |

(a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Performance and Liquidity Indicators below.

(b) For Timber segments, price reflects net stumpage realizations (i.e., net of cut and haul and shipping costs). For Real Estate, price is presented net of cash closing costs.

(c) For the New Zealand Timber segment, includes carbon credit sales.

(d) Net of currency hedging impact.

(e) New Zealand Timber includes a $2.3 million in timber write-offs resulting from a casualty event. Real Estate includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue.

#### SOUTHERN TIMBER

Second quarter sales of $68.3 million increased $2.0 million, or 3%, versus the prior year period. Harvest volumes increased 32% to 2.01 million tons versus 1.52 million tons in the prior year period, primarily driven by the additional volume contribution from the U.S. South acquisitions completed at the end of 2022. Average pine sawtimber stumpage realizations decreased 15% to $29.07 per ton versus $34.09 per ton in the prior year period, primarily due to drier weather conditions, weaker demand from sawmills, and decreased competition from pulp mills for chip-n-saw volume. Average pine pulpwood stumpage realizations decreased 26% to $15.78 per ton versus $21.46 per ton in the prior year period as weaker end-market demand, drier weather conditions, and extended maintenance outages at pulp mills all contributed to softer market conditions. Overall, weighted-average stumpage realizations (including hardwood) decreased 14% to $21.85 per ton versus $25.55 per ton in the prior year period. Operating income of $21.7 million decreased $2.4 million versus the prior year period due to lower net stumpage realizations ($7.4 million), higher depletion rates ($2.6 million), and higher overhead and other costs ($1.0 million), partially offset by higher volumes ($7.6 million) and higher non-timber income ($1.0 million). Second quarter Adjusted EBITDA of $43.6 million was 13%, or $4.9 million, above the prior year period.

Year-to-date sales of $140.2 million decreased $2.9 million, or 2%, versus the prior year period. Harvest volumes increased 14% to 3.90 million tons versus 3.42 million tons in the prior year period driven by the additional volume contribution from the U.S. South acquisitions completed at the end of 2022. Average pine sawtimber stumpage realizations decreased 13% to $30.29 per ton versus $34.86 per ton in the prior year period, primarily due to drier weather conditions, softer demand from sawmills, and decreased competition from pulp mills for chip-n-saw volume. Average pine pulpwood stumpage realizations decreased 28% to $16.53 per ton versus $22.93 per ton in the prior year period as weaker end-market demand, drier weather conditions, and extended maintenance outages at pulp mills all contributed to softer market conditions. Overall, weighted-average stumpage realizations (including hardwood) decreased 15% to $22.91 per ton versus $26.87 per ton in the prior year period. Operating income of $43.9 million decreased $10.5 million versus the prior year period due to lower net stumpage realizations ($15.5 million), higher depletion rates ($5.2 million), and higher overhead and other costs ($2.7 million), partially offset by higher volumes ($8.2 million) and higher non-timber income ($4.7 million). Year-to-date Adjusted EBITDA of $86.4 million was 1%, or $0.7 million, below the prior year period.

#### PACIFIC NORTHWEST TIMBER

Second quarter sales of $32.3 million decreased $6.8 million, or 17%, versus the prior year period. Harvest volumes decreased 11% to 332,000 tons versus 376,000 tons in the prior year period as some planned harvests were deferred in response to soft market conditions. Average delivered prices for domestic sawtimber decreased 19% to $97.37 per ton versus $120.44 per ton in the prior year period due to weaker domestic and export market demand. Average delivered pulpwood prices decreased 20% to $36.21 per ton versus $45.17 per ton in the prior year period as the prior year period benefited from much more favorable end-market demand. An operating loss of $2.4 million versus operating income of $2.9 million in the prior year period was driven by lower net stumpage realizations ($5.9 million), lower volumes ($0.8 million) and higher costs ($0.5 million), partially offset by higher non-timber income ($1.1 million) and lower depletion rates ($0.8 million). Second quarter Adjusted EBITDA of $6.9 million was 52%, or $7.4 million, below the prior year period.

Year-to-date sales of $66.7 million decreased $18.7 million, or 22%, versus the prior year period. Harvest volumes decreased 19% to 716,000 tons versus 881,000 tons in the prior year period as some planned harvests were deferred in response to soft market conditions. Average delivered prices for domestic sawtimber decreased 15% to $95.16 per ton versus $111.97 per ton in the prior year period due to weaker export markets and softer domestic demand. Average delivered pulpwood prices increased 3% to $42.90 per ton versus $41.83 per ton in the prior year period due to lower sawmill operating rates and increased competition for a limited supply of smaller-sized logs. Operating loss of $5.9 million decreased $15.4 million versus the prior year period due to lower net stumpage realizations ($12.9 million), lower volumes ($3.4 million), and higher costs ($1.5 million), partially offset by lower depletion rates ($1.6 million) and higher non-timber income ($0.8 million). Year-to-date Adjusted EBITDA of $14.0 million was 61%, or $21.8 million, below the prior year period.

#### NEW ZEALAND TIMBER

Second quarter sales of $60.9 million decreased $18.0 million, or 23%, versus the prior year period. Harvest volumes decreased 4% to 673,000 tons versus 703,000 tons in the prior year period, as some planned harvests were deferred in response to soft market conditions. Average delivered prices for export sawtimber decreased 26% to $103.81 per ton versus $140.44 per ton in the prior year period, driven by increased salvage volume from Cyclone Gabrielle and weaker demand in China; however, export sawtimber net stumpage realizations were relatively flat due to significantly lower port and freight costs versus the prior year period. Average delivered prices for domestic sawtimber declined 10% to $69.29 per ton versus $76.82 per ton in the prior year period. The decrease in domestic sawtimber prices (in U.S. dollar terms) was primarily driven by the decline in the NZ$/US$ exchange rate (US$0.62 per NZ$1.00 versus US$0.66 per NZ$1.00). Excluding the impact of foreign exchange rates, domestic sawtimber prices decreased 3% versus the prior year period, reflecting weaker domestic demand and decreased competition from export markets. Operating income of $2.4 million decreased $5.6 million versus the prior year period due to lower carbon credit sales ($2.8 million), lower net stumpage realizations ($1.5 million), unfavorable foreign exchange impacts ($1.0 million), and lower volumes ($0.5 million), partially offset by lower depletion rates ($0.2 million). Second quarter Adjusted EBITDA of $8.3 million was 44%, or $6.6 million, below the prior year period.

Year-to-date sales of $105.0 million decreased $25.3 million, or 19%, versus the prior year period. Harvest volumes decreased 5% to 1,154,000 tons versus 1,217,000 tons in the prior year period, primarily due to lost production days resulting from Cyclone Gabrielle in the first quarter and deferred planned harvests in response to soft market conditions. Average delivered prices for export sawtimber decreased 21% to $107.31 per ton versus $135.13 per ton in the prior year period, driven by weaker demand in China. Average delivered prices for domestic sawtimber decreased 8% to $70.36 per ton versus $76.48 per ton in the prior year period. The decrease in domestic sawtimber prices (in U.S. dollar terms) was primarily driven by the decline in the NZ$/US$ exchange rate (US$0.62 per NZ$1.00 versus US$0.67 per NZ$1.00). Excluding the impact of foreign exchange rates, domestic sawtimber prices decreased 2% versus the prior year period, reflecting weaker domestic demand and decreased competition from export markets. Operating income of $1.7 million decreased $11.7 million versus the prior year period as a result of lower carbon credit sales ($4.1 million), a timber write-off resulting from a tropical cyclone casualty event ($2.3 million), unfavorable foreign exchange impacts ($2.0 million), lower net stumpage realizations ($1.5 million), lower volumes ($1.2 million), and higher costs ($0.8 million), partially offset by lower depletion rates ($0.2 million). Year-to-date Adjusted EBITDA of $14.4 million was 43% or $10.9 million, below the prior year period.

#### REAL ESTATE

Second quarter sales of $32.0 million decreased $2.4 million, or 7%, versus the prior year period, while operating income of $8.6 million decreased $2.4 million versus the prior year period. Sales and operating income decreased versus the prior year period primarily due to a lower number of acres sold (3,754 acres sold versus 4,694 acres sold in the prior year period), partially offset by a slight increase in weighted-average prices ($7,489 per acre versus $7,453 per acre in the prior year period).

Improved Development sales of $12.2 million included $6.9 million from the Heartwood development project south of Savannah, Georgia and $5.3 million from the Wildlight development project north of Jacksonville, Florida. Sales in Heartwood consisted of a 101-acre parcel for $3.0 million ($30,000 per acre) sold to a national homebuilder for the first phase of an active-adult community, two residential pod sales totaling 62 acres for $1.8 million ($29,000 per acre), and 47 finished residential lots for $2.1 million ($44,000 per lot or $258,000 per acre). Sales in Wildlight consisted of a 97-acre parcel for $5.3 million ($55,000 per acre) sold to a national homebuilder for the second phase of an active-adult community. This compares to Improved Development sales of $11.6 million in the prior year period.

Rural sales of $15.6 million consisted of 3,411 acres at an average price of $4,582 per acre. This compares to prior year period sales of $23.4 million, which consisted of 4,633 acres at an average price of $5,054 per acre.

Timberland & Non-Strategic sales of $0.3 million consisted of a 76-acre transaction for $3,344 per acre. There were no Timberland & Non-Strategic sales in the prior year period.

Second quarter Adjusted EBITDA of $20.3 million decreased $5.1 million, or 20%, versus the prior year period.

Year-to-date sales of $48.3 million decreased $20.3 million versus the prior year period, while operating income of $9.5 million decreased $11.7 million versus the prior year period. Sales and operating income decreased in the first six months primarily due to lower volumes (5,841 acres sold versus 13,428 acres sold in the prior year period), partially offset by higher weighted-average prices ($7,028 per acre versus $5,087 per acre in the prior year period). Year-to-date Adjusted EBITDA of $26.9 million decreased $23.2 million versus the prior year period.

#### TRADING

Second quarter sales of $15.4 million decreased $12.3 million versus the prior year period due to lower volumes and prices. Sales volumes decreased 35% to 135,000 tons versus 209,000 tons in the prior year period. The Trading segment generated operating income of $0.1 million versus an operating loss of $0.4 million in the prior year period as improved margins more than offset reduced trading volume. Second quarter Adjusted EBITDA of $0.1 million increased $0.5 million versus the prior year period.

Year-to-date sales of $28.0 million decreased $13.2 million versus the prior year period due to lower volumes and prices. Sales volumes decreased 25% to 239,000 tons versus 320,000 tons in the prior year period. The Trading segment generated operating income of $0.4 million versus an operating loss of $0.1 million in the prior year period. Year-to-date Adjusted EBITDA of $0.4 million increased $0.5 million versus the prior year period.

### OTHER ITEMS

#### CORPORATE AND OTHER EXPENSE / ELIMINATIONS

Second quarter corporate and other operating expenses of $10.3 million increased $0.2 million versus the prior year period, primarily driven by higher compensation and benefits expense ($0.8 million) and higher travel and transportation costs ($0.2 million), partially offset by lower legal expenses ($0.8 million).

Year-to-date corporate and other operating expenses of $18.9 million increased $1.3 million versus the prior year period, primarily due to higher compensation and benefits expense ($1.1 million), higher IT related expenses ($0.5 million), higher travel and transportation expense ($0.3 million) and higher other overhead expenses ($0.4 million), partially offset by lower legal expenses ($1.0 million).

#### INTEREST EXPENSE

Second quarter and year-to-date interest expense of $12.4 million and $24.1 million increased $3.4 million and $6.7 million, respectively, versus the prior year period, primarily due to higher average outstanding debt and a higher weighted-average interest rate.

#### INTEREST AND OTHER MISCELLANEOUS INCOME (EXPENSE), NET

Second quarter and year-to-date interest and other miscellaneous income included $11.4 million and $20.5 million, respectively, of net recoveries associated with legal settlements.

#### INCOME TAX EXPENSE

Second quarter and year-to-date income tax expense of $0.2 million and $1.2 million decreased $1.1 million and $5.6 million, respectively, versus the prior year period, primarily due to lower anticipated full-year results from our New Zealand subsidiary, which is the primary driver of income tax expense.

### OUTLOOK

In our Southern Timber segment, we now expect full-year harvest volumes of 7.2 to 7.4 million tons as dry weather conditions have contributed to stronger-than-expected production levels. However, we anticipate lower quarterly harvest volumes for the remainder of 2023 compared to the first half of the year. We further expect a modest decline in weighted-average net stumpage realizations during the second half of 2023 compared to the second quarter driven by geographic mix and a seasonal increase in the proportion of thinning volume. We continue to anticipate higher non-timber income for full-year 2023 as compared to full-year 2022, driven by growth in our Nature-Based Solutions businesses.

In our Pacific Northwest Timber segment, we now expect full-year harvest volumes of 1.4 to 1.5 million tons as we have deferred some planned harvests in response to soft market conditions. We anticipate modestly higher weighted-average delivered log prices in the second half of 2023 compared to the first half based on improved end-market demand and lumber prices.

In our New Zealand Timber segment, we now expect full-year harvest volumes of 2.3 to 2.5 million tons as we have deferred some planned harvest volume in response to unfavorable market conditions. Over the balance of the year, we anticipate that weighted-average delivered log prices will be modestly lower as compared to the first half of 2023, primarily due to weaker demand in both export and domestic markets as well as increased supply from Cyclone Gabrielle salvage operations. However, we expect that lower port and freight costs will partially offset these headwinds. Further, while we have tempered our full-year expectations for carbon credit sales based on significant market volatility and limited transaction activity in the first half of the year, we expect to be more active in the carbon market in the second half of the year following the recent uptick in NZU pricing in response to governmental action to stabilize the market.

In our Real Estate segment, the demand for HBU properties and timberland assets has remained remarkably strong despite the higher interest rate environment. Based on the timing of anticipated closings, we expect that second half transaction volume and operating results in the Real Estate segment will be heavily weighted to the fourth quarter.

### LIQUIDITY AND CAPITAL RESOURCES

Our principal source of cash is cash flow from operations, primarily the harvesting of timber and sales of real estate. As an UPREIT, our main use of cash is dividends and unitholder distributions. We also use cash to maintain the productivity of our timberlands through replanting and silviculture. Our operations have generally produced consistent cash flow and required limited capital resources. Short-term borrowings have helped fund working capital needs, while acquisitions of timberlands generally require funding from external sources or Large Dispositions.

### SUMMARY OF LIQUIDITY AND FINANCING COMMITMENTS

| (millions of dollars) | June 30, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Cash and cash equivalents | $88.4 | $114.3 |
| Total debt (a) | 1,520.0 | 1,523.1 |
| Noncontrolling interests in the operating partnership | 77.5 | 105.8 |
| Shareholders’ equity | 1,838.7 | 1,880.7 |
| Total capitalization (total debt plus permanent and temporary equity) | 3,436.2 | 3,509.6 |
| Debt to capital ratio | 44% | 43% |
| Net debt to enterprise value (b)(c) | 23% | 22% |

(a) Total debt as of June 30, 2023 and December 31, 2022 reflects principal on long-term debt, gross of deferred financing costs and unamortized discounts.

(b) Net debt is calculated as total debt less cash and cash equivalents.

(c) Enterprise value based on market capitalization (including Rayonier, L.P. “OP” units) plus net debt based on Rayonier’s share price of $31.40 and $32.96 as of June 30, 2023 and December 31, 2022, respectively.

#### AT-THE-MARKET (“ATM”) EQUITY OFFERING PROGRAM

On November 4, 2022 we entered into a new distribution agreement with a group of sales agents through which we may sell common shares, from time to time, having an aggregate sales price of up to $300 million (the “2022 ATM Program”). As of June 30, 2023, $270.7 million remains available for issuance under the program.

The following table outlines common share issuances pursuant to our ATM program (dollars in millions):

|  | Three Months Ended June 30, 2023 | 2022 | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Shares of common stock issued under the ATM program | — | — | 400 | 726,248 |
| Average price per share sold under the ATM program | — | — | $34.03 | $41.46 |
| Gross proceeds from common shares issued under the ATM program | — | — | — | $30.1 |

### CASH FLOWS

The following table summarizes our cash flows from operating, investing and financing activities for the six months ended June 30, 2023 and 2022:

| (millions of dollars) Cash provided by (used for): | 2023 | 2022 |
| --- | ---: | ---: |
| Operating activities | $126.3 | $148.5 |
| Investing activities | (56.5) | (34.5) |
| Financing activities | (91.0) | (184.9) |

### CASH PROVIDED BY OPERATING ACTIVITIES

Cash provided by operating activities decreased $22.2 million from the prior year period primarily due to lower operating results and changes in working capital.

### CASH USED FOR INVESTING ACTIVITIES

Cash used for investing activities increased $22.0 million from the prior year period due to higher timberland acquisitions ($6.1 million), higher real estate development investments ($8.7 million), higher capital expenditures ($6.5 million), and lower proceeds from other investing activities ($0.7 million).

### CASH USED FOR FINANCING ACTIVITIES

Cash used for financing activities decreased $93.9 million from the prior year period. This is primarily due to lower net repayments ($124.9 million), lower distributions to consolidated affiliates ($6.7 million), and lower distributions to noncontrolling interests in the operating partnership ($0.2 million), partially offset by lower net proceeds from the issuance of common shares under the ATM equity offering program ($32.0 million), higher dividends paid on common shares ($3.4 million), and lower proceeds from the issuance of common shares under the Company’s incentive stock plan ($2.6 million).

### FUTURE USES OF CASH

We expect future uses of cash to include working capital requirements, principal and interest payments on long-term debt, lease payments, capital expenditures, real estate development investments, timberland acquisitions, dividends on Rayonier Inc. common shares and distributions on Rayonier, L.P. units, distributions to noncontrolling interests, and repurchases of the Company’s common shares to satisfy other commitments.

Significant long-term uses of cash include the following (in millions):

| Future uses of cash (in millions) 2023 | Total 2024-2025 | Payments Due by Period 2026-2027 | Thereafter |  |  |
| --- | ---: | ---: | ---: | ---: | ---: |
| Long-term debt (a) | $1,520.0 | — | $21.0 | $499.0 | $1,000.0 |
| Interest payments on long-term debt (b) | 415.3 | 41.8 | 166.9 | 138.4 | 68.2 |
| Operating leases — timberland (c) | 181.6 | 5.6 | 16.2 | 14.5 | 145.3 |
| Operating leases — PP&E, offices (c) | 6.3 | 0.6 | 2.0 | 0.9 | 2.8 |
| Commitments — real estate projects | 40.0 | 22.7 | 7.2 | 2.3 | 7.8 |
| Commitments — derivatives (d) | 5.1 | 3.1 | 1.8 | 0.2 | — |
| Commitments — environmental remediation (e) | 15.3 | 1.2 | 10.0 | 1.2 | 2.9 |
| Commitments — other (f) | 11.0 | 0.7 | 10.2 | 0.1 | — |
| Total | $2,194.6 | $75.7 | $235.3 | $656.6 | $1,227.0 |

(a) The book value of long-term debt, net of deferred financing costs and unamortized discounts, is currently recorded at $1,512.2 million on our Consolidated Balance Sheets, but upon maturity the liability will be $1,520.0 million. See Note 6 - Debt for additional information.

(b) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of June 30, 2023.

(c) Excludes anticipated renewal options.

(d) Commitments — derivatives represent payments expected to be made on derivative financial instruments (foreign exchange contracts). See Note 7 — Derivative Financial Instruments and Hedging Activities for additional information.

(e) Commitments — environmental remediation represents our estimate of potential liability associated with environmental contamination and Natural Resource Damages in Port Gamble, Washington. See Note 10 - Environmental and Natural Resource Damage Liabilities for additional information.

(f) Commitments — other includes $8.9 million related to pension plan termination. See Note 15 - Employee Benefit Plans for additional information.

We expect to fund future uses of cash with a combination of existing cash balances, cash generated by operating activities, the remaining issuances available under the Company’s ATM Program, Large Dispositions and the use of our revolving credit facilities. We believe we have sufficient sources of funding to meet our business requirements for the next 12 months and in the longer term.

### EXPECTED 2023 EXPENDITURES

Capital expenditures in 2023 are expected to be between $83 million and $87 million, excluding any strategic timberland acquisitions we may make. Capital expenditures are expected to primarily consist of seedling planting, fertilization and other silvicultural activities, property taxes, lease payments, allocated overhead and other capitalized costs. Aside from capital expenditures, we may also acquire timberland as we actively evaluate acquisition opportunities.

We anticipate real estate development investments in 2023 to be between $22 million and $25 million, net of reimbursements from community development bonds. Expected real estate development investments are primarily related to Wildlight, our mixed-use community development project located north of Jacksonville, Florida and Heartwood, our mixed-use development project located in Richmond Hill just south of Savannah, Georgia.

Our 2023 dividend payments on Rayonier Inc. common shares and distributions to Rayonier, L.P. unitholders are expected to be approximately $169 million and $3 million, respectively, assuming no change in the quarterly dividend rate of $0.285 per share or partnership unit, or material changes in the number of shares or partnership units outstanding.

Future share repurchases, if any, will depend on the Company’s liquidity and cash flow, as well as general market conditions and other considerations including capital allocation priorities.

Full-year 2023 cash tax payments are expected to be between $3.5 million and $5.5 million, primarily related to the New Zealand subsidiary.

### OFF-BALANCE SHEET ARRANGEMENTS

We utilize off-balance sheet arrangements to provide credit support for certain suppliers and vendors in case of their default on critical obligations, and collateral for outstanding claims under our previous workers’ compensation self-insurance programs. These arrangements consist of standby letters of credit and surety bonds. As part of our ongoing operations, we also periodically issue guarantees to third parties. Off-balance sheet arrangements are not considered a source of liquidity or capital resources and do not expose us to material risks or material unfavorable financial impacts. See Note 11 — Guarantees for details on the letters of credit and surety bonds as of June 30, 2023.

### SUMMARY OF GUARANTOR FINANCIAL INFORMATION

In May 2021, Rayonier, L.P. issued $450 million of 2.75% Senior Notes due 2031 (the “Senior Notes due 2031”). Rayonier TRS Holdings Inc., Rayonier Inc., and Rayonier Operating Company, LLC agreed to irrevocably, fully and unconditionally guarantee jointly and severally, the obligations of Rayonier, L.P. in regards to the Senior Notes due 2031. As a general partner of Rayonier, L.P., Rayonier Inc. consolidates Rayonier, L.P. and has no material assets or liabilities other than its interest in Rayonier, L.P. These notes are unsecured and unsubordinated and will rank equally with all other unsecured and unsubordinated indebtedness from time to time outstanding.

Rayonier, L.P. is a limited partnership, in which Rayonier Inc. is the general partner. The operating subsidiaries of Rayonier, L.P. conduct all of our operations. Rayonier, L.P.’s most significant assets are its interest in operating subsidiaries, which have been excluded in the table below to eliminate intercompany transactions between the issuer and guarantors and to exclude investments in non-guarantors. As a result, our ability to make required payments on the notes depends on the performance of our operating subsidiaries and their ability to distribute funds to us. There are no material restrictions on dividends from the operating subsidiaries.

The summarized balance sheet information for the consolidated obligor group of debt issued by Rayonier, L.P. for the six months ended June 30, 2023 and year ended December 31, 2022 are provided in the table below:

*(in millions)*

|  | June 30, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Current assets | $85.3 | $112.2 |
| Non-current assets | 121.0 | 122.8 |
| Current liabilities | 18.9 | 19.8 |
| Non-current liabilities | 2,118.0 | 2,001.9 |
| Due to non-guarantors | 642.7 | 520.4 |

The summarized results of operations information for the consolidated obligor group of debt issued by Rayonier, L.P. for the six months ended June 30, 2023 and year ended December 31, 2022 are provided in the table below:

*(in millions)*

|  | June 30, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Cost and expenses | ($15.8) | ($28.9) |
| Operating loss | (15.8) | (28.9) |
| Net loss | (33.9) | (54.3) |
| Revenue from non-guarantors | 387.9 | 977.9 |

### PERFORMANCE AND LIQUIDITY INDICATORS

The discussion below is presented to enhance the reader’s understanding of our operating performance, liquidity, and ability to generate cash and satisfy rating agency and creditor requirements. This information includes two measures of financial results: Adjusted Earnings before Interest, Taxes, Depreciation, Depletion and Amortization (“Adjusted EBITDA”) and Cash Available for Distribution (“CAD”). These measures are not defined by Generally Accepted Accounting Principles (“GAAP”), and the discussion of Adjusted EBITDA and CAD is not intended to conflict with or change any of the GAAP disclosures described above.

Management uses CAD as a liquidity measure. CAD is a non-GAAP measure of cash generated during a period that is available for common share dividends, distributions to operating partnership unitholders, distributions to noncontrolling interests, repurchase of the Company’s common shares, debt reduction, timberland acquisitions and real estate development investments. CAD is defined as cash provided by operating activities adjusted for capital spending (excluding timberland acquisitions and real estate development investments) and working capital and other balance sheet changes. CAD is not necessarily indicative of the CAD that may be generated in future periods.

Management uses Adjusted EBITDA as a performance measure. 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 excludes specific items that management believes are not indicative of the Company’s ongoing operating results. We define Adjusted EBITDA as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, timber write-offs resulting from casualty events and Large Dispositions.

We reconcile Adjusted EBITDA to Net Income for the consolidated Company and to Operating Income for the segments, as those are the most comparable GAAP measures for each. The following table provides a reconciliation of Net Income to Adjusted EBITDA for the respective periods (in millions of dollars):

| Net Income to Adjusted EBITDA Reconciliation | Three Months Ended June 30, 2023 | 2022 | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Net Income | $19.1 | $25.3 | $26.5 | $56.3 |
| Interest, net and miscellaneous income | 12.3 | 8.9 | 23.6 | 17.1 |
| Income tax expense | 0.2 | 1.3 | 1.3 | 6.8 |
| Depreciation, depletion and amortization | 39.7 | 35.8 | 77.3 | 83.2 |
| Non-cash cost of land and improved development | 9.4 | 11.8 | 13.6 | 17.1 |
| Non-operating (income) expense (a) | (11.5) | — | (20.6) | 0.6 |
| Timber write-off resulting from a casualty event (b) | — | — | 2.3 | — |
| Adjusted EBITDA | $69.2 | $83.0 | $124.0 | $181.1 |

(a) The three and six months ended June 30, 2023 includes $11.4 million and $20.5 million, respectively, of net recoveries associated with legal settlements.

(b) Timber write-off resulting from a casualty event includes the write-off of merchantable and pre-merchantable timber volume damaged by a casualty event which cannot be salvaged.

The following tables provide a reconciliation of Operating Income by segment to Adjusted EBITDA by segment for the respective periods (in millions of dollars):

| Three Months Ended June 30, 2023 | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Operating income (loss) | $21.7 | ($2.4) | $2.4 | $8.6 | $0.1 | ($10.3) | $20.1 |
| Depreciation, depletion and amortization | 21.9 | 9.2 | 5.9 | 2.2 | — | 0.4 | 39.7 |
| Non-cash cost of land and improved development | — | — | — | 9.4 | — | — | 9.4 |
| Adjusted EBITDA | $43.6 | $6.9 | $8.3 | $20.3 | $0.1 | ($9.9) | $69.2 |
| **June 30, 2022** |  |  |  |  |  |  |  |
| Operating income (loss) | $24.1 | $2.9 | $8.0 | $11.0 | ($0.4) | ($10.1) | $35.5 |
| Depreciation, depletion and amortization | 14.7 | 11.3 | 6.9 | 2.6 | — | 0.3 | 35.8 |
| Non-cash cost of land and improved development | — | — | — | 11.8 | — | — | 11.8 |
| Adjusted EBITDA | $38.7 | $14.3 | $14.9 | $25.4 | ($0.4) | ($9.8) | $83.0 |

56

| Six Months Ended June 30, 2023 | Southern Timber | Pacific Northwest Timber | New Zealand Timber | Real Estate | Trading | Corporate and Other | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Operating income (loss) | $43.9 | ($5.9) | $1.7 | $9.5 | $0.4 | ($18.9) | $30.7 |
| Timber write-off resulting from a casualty event (a) | — | — | 2.3 | — | — | — | 2.3 |
| Depreciation, depletion and amortization | 42.5 | 19.9 | 10.4 | 3.7 | — | 0.8 | 77.3 |
| Non-cash cost of land and improved development | — | — | — | 13.6 | — | — | 13.6 |
| Adjusted EBITDA | $86.4 | $14.0 | $14.4 | $26.9 | $0.4 | ($18.1) | $124.0 |
| **June 30, 2022** |  |  |  |  |  |  |  |
| Operating income (loss) | $54.4 | $9.5 | $13.4 | $21.2 | ($0.1) | ($17.7) | $80.8 |
| Depreciation, depletion and amortization | 32.7 | 26.2 | 11.9 | 11.7 | — | 0.6 | 83.2 |
| Non-cash cost of land and improved development | — | — | — | 17.1 | — | — | 17.1 |
| Adjusted EBITDA | $87.1 | $35.8 | $25.3 | $50.1 | ($0.1) | ($17.0) | $181.1 |

(a) Timber write-off resulting from a casualty event includes the write-off of merchantable and pre-merchantable timber volume damaged by a casualty event which cannot be salvaged.

The following table provides a reconciliation of Cash Provided by Operating Activities to Adjusted CAD (in millions of dollars):

|  | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: |
| Cash provided by operating activities | $126.3 | $148.5 |
| Capital expenditures (a) | (36.8) | (30.3) |
| Working capital and other balance sheet changes | (26.8) | 1.3 |
| CAD | $62.7 | $119.5 |
| Mandatory debt repayments | — | (0.6) |
| CAD after mandatory debt repayments | $62.7 | $118.9 |

|  |  |  |
| --- | ---: | ---: |
| Cash used for investing activities | ($56.5) | ($34.5) |
| Cash used for financing activities | ($91.0) | ($184.9) |

(a) Capital expenditures exclude timberland acquisitions of $9.3 million and $3.2 million during the six months ended June 30, 2023 and June 30, 2022, respectively.

The following table provides supplemental cash flow data (in millions of dollars):

|  | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: |
| Purchase of timberlands | ($9.3) | ($3.2) |
| Real Estate Development Investments | (14.8) | (6.0) |
| Distributions to noncontrolling interests in consolidated affiliates | — | (6.7) |

### LIQUIDITY FACILITIES

### 2023 DEBT ACTIVITY

See Note 6 — Debt for additional information.

## Market risk

As filed, 6,709 characters.

We are exposed to various market risks, including changes in interest rates, commodity prices and foreign exchange rates. Our objective is to minimize the economic impact of these market risks. We use derivatives in accordance with policies and procedures approved by the Audit Committee of the Board of Directors. Derivatives are managed by a senior executive committee whose responsibilities include initiating, managing and monitoring resulting exposures. We do not enter into financial instruments for trading or speculative purposes.

#### Interest Rate Risk

Due to the discontinuation of LIBOR on June 30, 2023, we amended our outstanding variable rate debt agreements and active interest rate swaps to change the interest rate benchmark from LIBOR to Daily Simple SOFR in December 2022. In March 2023, we modified our benchmark rates from LIBOR to Daily Simple SOFR for our forward-starting interest rates swaps. We are exposed to interest rate risk through our variable rate debt due to changes in SOFR. However, we use interest rate swaps to manage our exposure to interest rate movements on our term credit agreements by swapping existing and anticipated future borrowings from floating rates to fixed rates. As of June 30, 2023, we had $1 billion of U.S. long-term variable rate debt outstanding on our term credit agreements.

The notional amount of outstanding interest rate swap contracts with respect to our term credit agreements at June 30, 2023 was $850 million. The $350 million 2015 Term Loan Facility matures in April 2028, with the associated interest rate swaps maturing in August 2024. We have entered into forward starting interest rate swaps to cover $200 million of the 2015 Term Loan Facility through the extended maturity date. The 2016 Incremental Term Loan Facility and associated interest rate swaps mature in May 2026, and the 2021 Incremental Term Loan Facility and associated interest rate swaps mature in June 2029. We have entered into an interest rate swap agreement to cover $100 million of borrowings under the 2022 Incremental Term Loan Facility through the maturity date in December 2027. At this borrowing level, a hypothetical one-percentage point increase/decrease in interest rates would result in a corresponding increase/decrease in interest payments and expense of approximately $1.5 million over a 12-month period.

The fair market value of our fixed interest rate debt is also subject to interest rate risk. The estimated fair value of our fixed rate debt at June 30, 2023 was $429.2 million compared to the $520.0 million principal amount. We use interest rates of debt with similar terms and maturities to estimate the fair value of our debt. Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise. A hypothetical one-percentage point increase/decrease in prevailing interest rates at June 30, 2023 would result in a corresponding decrease/increase in the fair value of our fixed rate debt of approximately $25 million and $27 million, respectively.

We estimate the periodic effective interest rate on our long-term fixed and variable rate debt to be approximately 3.1% after consideration of interest rate swaps and estimated patronage refunds, excluding unused commitment fees on the revolving credit facility.

The following table summarizes our outstanding debt, interest rate swaps and average interest rates, by year of expected maturity and their fair values at June 30, 2023:

*(Dollars in thousands)*

| Variable rate debt: | 2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | Fair Value |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Principal amounts | — | — | — | $200,000 | $250,000 | $550,000 | $1,000,000 | $1,000,000 |
| Average interest rate (a)(b) | — | — | — | 6.81% | 6.76% | 6.74% | 6.76% |  |
| **Fixed rate debt:** |  |  |  |  |  |  |  |  |
| Principal amounts | — | — | $21,009 | $24,511 | $24,511 | $450,000 | $520,031 | $429,173 |
| Average interest rate (b) | — | — | 2.95% | 3.64% | 6.48% | 2.75% | 2.98% |  |
| **Interest rate swaps:** |  |  |  |  |  |  |  |  |
| Notional amount | — | $350,000 | — | $200,000 | $100,000 | $200,000 | $850,000 | $59,192 |
| Average pay rate (b) | — | 2.18% | — | 1.50% | 3.72% | 0.67% | 1.85% |  |
| Average receive rate (b) | — | 5.06% | — | 5.06% | 5.06% | 5.06% | 5.06% |  |
| **Forward-starting interest rate swaps** |  |  |  |  |  |  |  |  |
| Notional amount | — | — | — | — | — | $200,000 | $200,000 | $13,441 |
| Average pay rate (b) | — | — | — | — | — | 1.37% | 1.37% |  |
| Average receive rate (b) | — | — | — | — | — | 5.06% | 5.06% |  |

(a) Excludes estimated patronage refunds.

(b) Interest rates as of June 30, 2023.

#### Foreign Currency Exchange Rate Risk

The New Zealand subsidiary’s export sales are predominately denominated in U.S. dollars, and therefore its cash flows are affected by fluctuations in the exchange rate between the New Zealand dollar and the U.S. dollar. This exposure is partially managed by a natural currency hedge, as ocean freight payments and shareholder distributions are also paid in U.S. dollars. We manage any excess foreign exchange exposure through the use of derivative financial instruments.

#### Foreign Exchange Exposure

At June 30, 2023, the New Zealand subsidiary had foreign currency exchange contracts with a notional amount of $124.6 million and foreign currency option contracts with a notional amount of $82.0 million outstanding related to foreign export sales. The amount hedged represents a portion of forecasted U.S. dollar denominated export timber and log trading sales proceeds over the next 36 months and next 2 months, respectively.

The following table summarizes our outstanding foreign currency exchange rate risk contracts at June 30, 2023:

*(Dollars in thousands)*

| Foreign exchange contracts to sell U.S. dollar for New Zealand dollar | 0-1 months | 1-2 months | 2-3 months | 3-6 months | 6-12 months | 12-18 months | 18-24 months | 24-36 months | Total | Fair Value |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Notional amount | $7,000 | $7,100 | $7,000 | $18,000 | $32,000 | $23,000 | $8,500 | $22,000 | $124,600 | ($4,541) |
| Average contract rate | 1.5027 | 1.4881 | 1.5110 | 1.5230 | 1.5812 | 1.6363 | 1.7140 | 1.6366 | 1.5881 |  |
| **Foreign currency option contracts to sell U.S. dollar for New Zealand dollar** |  |  |  |  |  |  |  |  |  |  |
| Notional amount | $2,000 | $2,000 | $2,000 | $6,000 | $6,000 | $20,000 | $24,000 | $20,000 | $82,000 | ($312) |
| Average strike price | 1.4769 | 1.4795 | 1.4924 | 1.5053 | 1.5684 | 1.6416 | 1.6602 | 1.7236 | 1.6401 |  |

59

## Controls and procedures

As filed, 3,567 characters.

#### DISCLOSURE CONTROLS AND PROCEDURES

#### Rayonier Inc.

Rayonier’s management is responsible for establishing and maintaining adequate disclosure controls and procedures. Disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934 (the “Exchange Act”), are designed with the objective of ensuring information required to be disclosed by the Company in reports filed under the Exchange Act, such as this quarterly report on Form 10-Q, is (1) recorded, processed, summarized and reported or submitted within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Because of the inherent limitations in all control systems, no control evaluation can provide absolute assurance that all control exceptions and instances of fraud have been prevented or detected on a timely basis. Even systems determined to be effective can provide only reasonable assurance that their objectives are achieved.

Based on an evaluation of the Company’s disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q, our management, including the Chief Executive Officer and Chief Financial Officer, concluded the design and operation of the disclosure controls and procedures were effective as of June 30, 2023.

In the quarter ended June 30, 2023, based upon the evaluation required by Rule 13a-15(d) under the Exchange Act, there were no changes in our internal control over financial reporting that would materially affect or are reasonably likely to materially affect our internal control over financial reporting.

#### Rayonier, L.P.

The Operating Partnership is responsible for establishing and maintaining adequate disclosure controls and procedures. Disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934 (the “Exchange Act”), are designed with the objective of ensuring information required to be disclosed by Rayonier, L.P. in reports filed under the Exchange Act, such as this quarterly report on Form 10-Q, is (1) recorded, processed, summarized and reported or submitted within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including Rayonier’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Because of the inherent limitations in all control systems, no control evaluation can provide absolute assurance that all control exceptions and instances of fraud have been prevented or detected on a timely basis. Even systems determined to be effective can provide only reasonable assurance that their objectives are achieved.

Based on an evaluation of the Operating Partnership’s disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q, management, including Rayonier’s Chief Executive Officer and Chief Financial Officer, concluded the design and operation of the disclosure controls and procedures were effective as of June 30, 2023.

In the quarter ended June 30, 2023, based upon the evaluation required by Rule 13a-15(d) under the Exchange Act, there were no changes in internal controls over financial reporting that would materially affect or are reasonably likely to materially affect internal controls over financial reporting.

Filed Aug 4, 2023.
Source: SEC EDGAR, the filing index for accession 0000052827-23-000189. Last ingested by Listed: Nov 4, 2026, 17:30 ET. No prices; not investment advice.