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Rayonier Reports Strong First Quarter 2004 Results

April 28, 2004

JACKSONVILLE, Fla.--(BUSINESS WIRE)--April 28, 2004--Rayonier (NYSE:RYN) today reported first quarter net income of $75.5 million, or $1.49 per share, compared to $2.0 million, or 4 cents per share, in fourth quarter 2003 and $8.2 million, or 20 cents per share, in first quarter 2003.

First quarter 2004 results included a net tax benefit of 98 cents per share relating to the company's January 1 conversion to a Real Estate Investment Trust (REIT). Excluding the tax benefit, net income was $25.9 million, or 51 cents per share. First quarter 2004 and fourth quarter 2003 results were impacted by 7 cents and 3 cents per share, respectively, for REIT conversion costs.

Lee Nutter, Chairman, President and CEO said: "As expected, first quarter results improved significantly from the fourth quarter due to strong performance in our two core segments, Timber and Land, and Performance Fibers, as well as the tax benefits inherent in our REIT structure. Our continued strong cash flow supports the recent decision to increase our dividend 150 percent to approximately $111 million annually, or $2.24 per share. In addition, it enabled us to end the quarter with $63 million in cash and cash equivalents."

Cash flow provided by operating activities increased to $82 million from $35 million in the fourth quarter and $39 million in first quarter 2003 primarily due to higher earnings and lower working capital requirements. Cash Available for Distribution was $63 million, an increase of $57 million and $39 million from fourth and first quarter 2003, respectively. Adjusted EBITDA was $88 million, an increase of $42 million and $23 million from fourth and first quarter 2003, respectively. (Cash Available for Distribution and Adjusted EBITDA are non-GAAP measures defined and reconciled to GAAP in the attached exhibits.)

First quarter earnings were significantly above fourth quarter primarily due to higher land sales, stronger U.S. timber volumes and prices, improved cellulose specialties prices and lower performance fibers manufacturing costs. Results were above first quarter 2003 mainly due to stronger land sales, higher U.S. timber prices and volume, and improved pricing for performance fibers and lumber.

Sales of $294 million were $22 million above fourth quarter and $28 million above first quarter 2003.

Debt at quarter-end of $618 million was flat to fourth quarter and $9 million below first quarter 2003. The debt-to-capital ratio of 44.6 percent improved from 46.5 percent and 47 percent at year-end and first quarter 2003, respectively, due to the positive impact on shareholders' equity of the aforementioned net tax benefit.

Timber and Land

Sales of $85 million and operating income of $47 million were $38 million and $25 million above fourth quarter, and $24 million and $21 million better than first quarter 2003, respectively, due to strong land sales and improved U.S. timber volume and prices. A portion of the timber volume increase was attributable to fourth quarter Northwest timber sales offerings being deferred into 2004 to take advantage of our REIT status.

Performance Fibers

Sales of $133 million were $9 million below fourth quarter primarily due to typically lower first quarter cellulose specialties volume partially offset by higher cellulose specialties prices and absorbent materials volume. Operating income of $6 million was a $12 million improvement over fourth quarter due to reduced manufacturing costs and higher cellulose specialties prices partly offset by lower cellulose specialties volume. Compared to first quarter 2003, sales and operating income increased by $4 million and $7 million, respectively. Sales improved due to higher prices and stronger cellulose specialties volume partly offset by lower absorbent materials volume. Operating income increased due to improved prices and product mix, partly offset by higher manufacturing costs.

Manufacturing costs declined from fourth quarter largely due to reduced hardwood costs and improved operational performance, but remained above first quarter 2003.

Wood Products

Sales of $38 million and operating income of $1 million were $4 million and $2 million below fourth quarter, respectively. Sales declined primarily due to lower volumes while operating income was also adversely impacted by higher manufacturing costs. Compared to first quarter 2003, sales and operating income improved $8 million and $3 million, respectively, due to higher prices and stronger lumber volume, partly offset by higher MDF manufacturing costs on a U.S. dollar basis.

Other Operations

Sales of $39 million declined $3 million and $8 million, while operating income of $2 million improved $1 million and $2 million compared to fourth quarter and first quarter 2003, respectively, as lower trading activity was more than offset by higher margins.

Other Items

Corporate expenses of $13.2 million were $2.3 million above fourth quarter primarily due to higher REIT conversion costs partly offset by lower stock price-based incentive compensation expense. Compared to first quarter 2003, corporate expenses increased $8.2 million primarily due to the REIT conversion and higher legal costs.

Interest expense of $11.1 million was $0.7 million and $1.3 million below fourth quarter and first quarter 2003, respectively, due to reduced debt and lower rates.

The company's tax provision included a net tax benefit of $49.7 million, or 98 cents per share, resulting from the reversal of timber-related deferred tax liabilities of $77.9 million, or $1.53 per share, no longer required as a result of our REIT conversion, and a provision of $28.2 million, or 55 cents per share, for the eventual repatriation of foreign earnings due to the company's post-REIT strategy of focusing its new timberland investments in the U.S. Excluding these items, first quarter 2004 reflected an effective tax rate of 19.4 percent. This was below the U.S. statutory rate, primarily due to tax benefits associated with our REIT structure, partially offset by approximately $9.4 million in interest and corporate administrative expenses associated with REIT activities that no longer carry a tax benefit. Fourth quarter included a tax benefit of $3.6 million related to the settlement of an inter-company loan and first quarter 2003 reflected a one-time tax benefit of $2.3 million resulting from an interim tax audit settlement.

Outlook

Second quarter 2004 earnings are expected to be above first quarter (excluding the 98 cents per share net tax benefit) primarily due to higher land sales, lower REIT conversion costs and slightly stronger performance fibers volumes and prices. Timber volume will most likely be lower as the deferred 2003 Northwest volume diminishes. Depending on the timing of closing contracted land sales, earnings per share should be reasonably close to last year's strong second quarter on a pro-forma (post E&P dividend) basis, notwithstanding a large land sale (51 cents per share) in that quarter.

Nutter said, "We are experiencing improved market conditions in all of our product lines and continued strong cash flow. In particular, demand remains very strong for our higher-and-better use properties while Performance Fibers continues its turnaround as prices, volumes and costs improve. We are also well positioned to actively pursue timberland acquisition opportunities."

Rayonier has more than 2 million acres of timber and land in the U.S. and New Zealand and is the world's premier supplier of high performance specialty cellulose fibers. Approximately 40 percent of the company's sales are outside the U.S. to customers in more than 50 countries.

Reported results are preliminary and not final until filing of the first quarter 2004 Form 10-Q with the Securities and Exchange Commission. Comments about anticipated demand, pricing, volumes, expenses, earnings and dividends are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The following important factors, among others, could cause actual results to differ materially from those expressed in the forward-looking statements: changes in global market trends and world events; interest rate and currency movements; fluctuations in demand for cellulose specialties, absorbent materials, timber, wood products or real estate; adverse weather conditions; changes in production costs for wood products or performance fibers, particularly for raw materials such as wood, energy and chemicals; unexpected delays in the closing of land sale transactions; the Company's ability to satisfy complex rules in order to qualify as a REIT; and implementation or revision of governmental policies and regulations affecting the environment, import and export controls or taxes, including changes in tax laws that could reduce the benefits associated with REIT status. For additional factors that could impact future results, please see the company's most recent Form 10-K on file with the Securities and Exchange Commission.

A conference call will be held on Thursday, April 29 at 4:15 p.m. EDT to discuss these results. Interested parties are invited to listen to the live webcast by logging onto http://www.rayonier.com and following the link. Supplemental materials will be available at the website. A replay will be available on the site shortly after the call where it will be archived for one month. Also, investors may access the "listen only" conference call by dialing 913-981-5584.

For further information, visit the company's web site at http://www.rayonier.com. Complimentary copies of Rayonier press releases and other financial documents are also available by mail or fax by calling 1-800-RYN-7611.

                               RAYONIER
                         FINANCIAL HIGHLIGHTS
                      MARCH 31, 2004 (unaudited)

         (millions of dollars, except per share information)

                                         Three Months Ended
                               --------------------------------------
                                March 31,   December 31,   March 31,
                                    2004           2003      2003 (1)
                               ----------  -------------  -----------
 Profitability
     Sales                        $293.7         $271.5       $265.9
     Operating income              $42.5           $7.7        $19.2
     Net income (a)                $75.5           $2.0         $8.2
     Net income per diluted
      common share (a)             $1.49          $0.04        $0.20
     Operating income
      as a percent of sales         14.5%           2.8%         7.2%
     ROE (annualized) (b)           10.3%           1.6%         2.4%

 Capital Resources and
  Liquidity
     Cash provided by
      operating activities         $82.0          $35.4        $39.3
     Cash used for investing
      activities                  $(19.5)        $(31.9)      $(18.2)
     Cash used for financing
      activities                  $(21.0)        $(68.8)      $(35.6)
     Adjusted EBITDA (c)           $88.2          $46.1        $64.8
     Cash Available for
      Distribution (d)             $62.6           $5.6        $23.3
     Repayment of debt, net         $0.8           $0.8        $25.8
     Debt                         $618.3         $618.5       $627.5
     Debt / capital                 44.6%          46.5%        47.0%


(a)  March 31, 2004 includes reversal of deferred taxes not
     required after REIT conversion of $77.9 million or $1.53 per
     share and additional taxes for repatriation of foreign earnings
     of ($28.2) million or ($0.55) per share.

(b)  Major land sales and REIT conversion costs are not annualized.

(c)  Adjusted EBITDA is defined as earnings from continuing operations
     before interest expense, income taxes, depreciation, depletion,
     amortization and the non-cash cost basis of land sold.  Adjusted
     EBITDA is a non-GAAP measure of operating cash generating
     capacity of the Company.  See reconciliation on Schedule G.

(d)  Cash Available for Distribution is defined as cash provided by
     operating activities less custodial capital spending and the tax
     benefit on the exercise of stock options.  Cash Available for
     Distribution is a non-GAAP measure of cash generated during a
     period that is available for dividend distribution,
     discretionary capital expenditures, repurchasing the Company's
     common shares and/or reducing debt within the period.  See
     reconciliation on Schedule H.

(1)  Per share data has been restated for the June 12, 2003
     three-for-two stock split, but not for the December 19, 2003
     15.1% E&P stock dividend.

                                - A -
                               RAYONIER
             CONDENSED STATEMENTS OF CONSOLIDATED INCOME
                      MARCH 31, 2004 (unaudited)

         (millions of dollars, except per share information)

                                         Three Months Ended
                               --------------------------------------
                                March 31,   December 31,   March 31,
                                  2004         2003        2003 (1)
                               ----------- -------------- -----------

 Sales                             $293.7         $271.5      $265.9
                               ----------- -------------- -----------
 Costs and expenses
    Cost of sales                   234.4          249.2       238.3
    Selling and general
     expenses                        18.1           16.9        10.0
    Other operating expense
     (income)                        (1.3)          (2.3)       (1.6)
                               ----------- -------------- -----------
 Operating income                    42.5            7.7        19.2

 Interest expense                   (11.1)         (11.8)      (12.4)

 Interest and miscellaneous
  income (expense), net               0.7           (0.4)        1.1
                               ----------- -------------- -----------
 Income before income taxes          32.1           (4.5)        7.9
 Income tax benefit (a)              43.4            6.5         0.3
                               ----------- -------------- -----------
 Net income (a)                     $75.5           $2.0        $8.2
                               =========== ============== ===========

 Net income per Common Share (b)
     Basic EPS                      $1.53          $0.05       $0.20
                               =========== ============== ===========
     Diluted EPS                    $1.49          $0.04       $0.20
                               =========== ============== ===========

 Weighted average Common
 Shares used for determining
     Basic EPS                 49,340,565     43,424,436  41,667,969
                               =========== ============== ===========
     Diluted EPS               50,776,436     44,556,647  42,200,169
                               =========== ============== ===========

(a)  March 31, 2004 includes reversal of deferred taxes not required
     after REIT conversion of $77.9 million and additional taxes for
     repatriation of foreign earnings of ($28.2) million.

(b)  March 31, 2004 includes reversal of deferred taxes not required
     after REIT conversion of $1.58 per basic share and $1.53 per
     diluted share and additional taxes for repatriation of foreign
     earnings of ($0.57) per basic share and ($0.55) per diluted
     share.

(1)  Per share data has been restated for the June 12, 2003
     three-for-two stock split, but not for the December 19, 2003
     15.1% E&P stock dividend.

                                - B -
                               RAYONIER
         BUSINESS SEGMENT SALES AND OPERATING INCOME (LOSS)
                      MARCH 31, 2004 (unaudited)

                        (millions of dollars)

                                         Three Months Ended
                               --------------------------------------
                                 March 31,   December 31,   March 31,
                                  2004          2003         2003
                               ------------ -------------  ----------
 Sales
    Timber and Land
     Timber                          $51.6         $38.5       $43.6
     Land                             33.3           8.7        17.6
                               ------------ -------------  ----------
      Total Timber and Land           84.9          47.2        61.2
                               ------------ -------------  ----------

    Performance Fibers
     Cellulose specialties            93.1         105.3        87.1
     Absorbent materials              39.8          36.5        41.4
                               ------------ -------------  ----------
      Total Performance Fibers       132.9         141.8       128.5
                               ------------ -------------  ----------

    Wood Products                     37.5          41.3        30.0

    Other Operations                  38.9          42.2        46.5

    Intersegment eliminations         (0.5)         (1.0)       (0.3)
                               ------------ -------------  ----------

      Total sales                   $293.7        $271.5      $265.9
                               ============ =============  ==========

 Operating income  (loss)
    Timber and Land
     Timber                          $22.9         $14.7       $16.7
     Land                             23.7           6.8         9.1
                               ------------ -------------  ----------
      Total Timber and Land           46.6          21.5        25.8

    Performance Fibers                 6.1          (5.7)       (1.2)

    Wood Products                      0.7           2.6        (2.6)

    Other Operations                   2.2           0.8           -

    Corporate                        (13.2)        (10.9)       (5.0)

    Intersegment eliminations
     and other (Including
     Corporate FX)                     0.1          (0.6)        2.2
                               ------------ -------------  ----------

      Total operating income         $42.5          $7.7       $19.2
                               ============ =============  ==========

                                 - C -
                               RAYONIER
  CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF CASH FLOWS
                      MARCH 31, 2004 (unaudited)
                         (millions of dollars)

 CONDENSED CONSOLIDATED BALANCE SHEETS
                                             March 31,    December 31,
                                              2004           2003
                                            ----------   -------------
 Assets
 Current assets                                $282.5          $244.6
 Timber, timberlands and logging roads,
  net of depletion and amortization             987.7           994.8
 Property, plant and equipment                1,423.9         1,414.5
 Less accumulated depreciation                  932.6           912.3
                                            ----------   -------------
                                                491.3           502.2
                                            ----------   -------------
 Other assets                                    99.9            97.1
                                            ----------   -------------
                                             $1,861.4        $1,838.7
                                            ==========   =============
 Liabilities and Shareholders' Equity
 Current liabilities                           $168.9          $147.3
 Deferred income taxes                           68.0           121.8
 Long-term debt                                 614.8           614.9
 Non-current reserves for dispositions and
  discontinued operations                       138.2           140.2
 Other non-current liabilities                  104.0           103.4
 Shareholders' equity                           767.5           711.1
                                            ----------   -------------
                                             $1,861.4        $1,838.7
                                            ==========   =============

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                Three Months Ended
                                            --------------------------
                                             March 31,     March 31,
                                              2004           2003
                                            ----------   -------------
 Cash provided by operating activities:
    Net Income                                  $75.5            $8.2
    Depreciation, depletion, amortization
     and non-cash cost basis of land sold        45.0            44.5
    Other non-cash items included in income     (53.8)(1)        (0.8)
    Changes in working capital and other
     assets and liabilities                      15.3           (12.6)
                                            ----------   -------------
                                                 82.0            39.3
                                            ----------   -------------
 Cash used for investing activities:
                                            ----------   -------------
    Capital expenditures, net of sales and
     retirements                                (19.5)          (18.2)
                                            ----------   -------------

 Cash used for financing activities:
    Repayment of debt, net                       (0.8)          (25.8)
    Dividends paid                              (27.7)          (10.0)
    Shares issued                                 7.5             0.2
                                            ----------   -------------
                                                (21.0)          (35.6)
                                            ----------   -------------
 Cash and cash equivalents:
    Increase in cash and cash equivalents        41.5           (14.5)
    Balance, beginning of year                   21.4            18.9
                                            ----------   -------------
    Balance, end of period                      $62.9            $4.4
                                            ==========   =============


(1)  Mainly reversal of deferred taxes not required after REIT
     conversion of ($77.9) million and additional taxes for
     repatriation of foreign earnings of $28.2 million.
                                 - D -
                               RAYONIER
                SELECTED SUPPLEMENTAL FINANCIAL DATA
                     MARCH 31, 2004  (unaudited)

                        (millions of dollars)

                                         Three Months Ended
                               --------------------------------------
                                 March 31,   December 31,  March 31,
                                  2004          2003         2003
                               ------------ ------------- -----------

 Geographical Data (Non-U.S.)
     Sales
        New Zealand                  $19.8         $22.6       $18.5
        Other                          6.0           2.6         4.6
                               ------------ ------------- -----------
           Total                     $25.8         $25.2       $23.1
                               ============ ============= ===========

     Operating income (loss)
        New Zealand                  $(1.0)        $(0.3)       $1.5
        Other                         (0.5)          0.8        (0.4)
                               ------------ ------------- -----------
           Total                     $(1.5)         $0.5        $1.1
                               ============ ============= ===========

 Timber
     Sales
        Northwest U.S.               $24.2         $14.2       $20.3
        Southeast U.S.                23.5          18.7        19.4
        New Zealand                    3.9           5.6         3.9
                               ------------ ------------- -----------
           Total                     $51.6         $38.5       $43.6
                               ============ ============= ===========

     Operating income (loss)
        Northwest U.S.               $13.9          $5.0       $12.6
        Southeast U.S.                 8.3           7.6         4.2
        New Zealand                    0.7           2.1        (0.1)
                               ------------ ------------- -----------
           Total                     $22.9         $14.7       $16.7
                               ============ ============= ===========

 Adjusted EBITDA by Segment
     Timber and Land                 $69.9         $35.8       $48.5
     Performance Fibers               24.5          14.4        17.5
     Wood Products                     4.1           6.4         0.4
     Other Operations                  2.3           1.1         0.2
     Corporate and other             (12.6)        (11.6)       (1.8)
                               ------------ ------------- -----------
        Total                        $88.2         $46.1       $64.8
                               ============ ============= ===========

                                - E -
                               RAYONIER
                   SELECTED OPERATING INFORMATION
                      MARCH 31, 2004 (unaudited)

                                          Three Months Ended
                                -------------------------------------
                                 March 31,  December 31,   March 31,
                                  2004         2003          2003
                                ---------- -------------  -----------
 Timber and Land
     Sales volume - Timber
        Northwest U.S.,
         in millions of board
          feet                         88            47           77
        Southeast U.S.,
         in thousands of short
          green tons                1,249         1,036        1,194
        New Zealand,
         in thousands of metric
          tons                        110           186          111

     Timber sales volume -
     Intercompany
        Southeast U.S.,
         in thousands of short
          green tons                    -            24            3
        New Zealand,
         in thousands of metric
          tons                         30            41           19

     Acres sold                    17,050         2,728       19,708

 Performance Fibers
     Sales Volume
        Cellulose specialties,
         in thousands of metric
          tons                        101           121           99
        Absorbent materials,
         in thousands of metric
          tons                         68            64           78
    Production as a percent of
     capacity                        97.9%         89.0%        97.7%

 Wood Products
     Lumber sales volume,
      in millions of board feet        83            88           71
     Medium-density fiberboard
      sales volume, in
       thousands of cubic
       meters                          39            46           41


                                - F -

                               RAYONIER
               RECONCILIATION OF NON-GAAP MEASURES (a)
                      MARCH 31, 2004 (unaudited)

                         (millions of dollars)

                  Timber Perfor            Other    Corp
                   and   -mance    Wood    Oper     -orate
                  Land   Fibers  Products -ations   and other    Total
                 ------ ------- --------- -------- ----------   ------
 Adjusted EBITDA

 Three Months
  Ended
 March 31, 2004
  Cash provided
   by operating
   activities    $75.0   $15.7      $1.4     $5.6     $(15.7)   $82.0
  Income tax
   benefit           -       -         -        -      (43.4)   (43.4)
  Interest
   expense           -       -         -        -       11.1     11.1
  Working
   capital
   increases
   (decreases)    (8.8)    7.6       2.8     (2.8)     (17.4)(1)(18.6)
  Other balance
   sheet changes   3.7     1.2      (0.1)    (0.5)      52.8 (2) 57.1
                 ------ ------- --------- -------- ----------   ------
  Adjusted
   EBITDA        $69.9   $24.5      $4.1     $2.3     $(12.6)   $88.2
                 ====== ======= ========= ======== ==========   ======

 December 31, 2003
  Cash provided
   by operating
   activities    $37.2   $21.8      $9.1    $(5.7)    $(27.0)   $35.4
  Income tax
   benefit           -       -         -        -       (6.5)    (6.5)
  Interest
   expense           -       -         -        -       11.8     11.8
  Working
   capital
   increases
   (decreases)    (2.6)   (7.4)     (3.2)     8.6       19.2 (3) 14.6
  Other balance
   sheet changes   1.2       -       0.5     (1.8)      (9.1)    (9.2)
                 ------ ------- --------- -------- ----------   ------
  Adjusted
   EBITDA        $35.8   $14.4      $6.4     $1.1     $(11.6)   $46.1
                 ====== ======= ========= ======== ==========   ======

 March 31, 2003
  Cash provided
   by operating
   activities    $49.4   $11.4     $(2.2)    $5.4     $(24.7)   $39.3
  Income tax
   benefit           -       -         -        -       (0.3)    (0.3)
  Interest
   expense           -       -         -        -       12.4     12.4
  Working
   capital
   increases
   (decreases)    (0.1)    5.8       2.0     (5.0)       3.5      6.2
  Other balance
   sheet changes  (0.8)    0.3       0.6     (0.2)       7.3      7.2
                 ------ ------- --------- -------- ----------   ------
  Adjusted
   EBITDA        $48.5   $17.5      $0.4     $0.2      $(1.8)   $64.8
                 ====== ======= ========= ======== ==========   ======


(a)  Unusual, non-trade intercompany items between the segments have
     been eliminated.

(1)  Mainly higher taxes and interest payable.

(2)  Includes reversal of deferred taxes not required after REIT
     conversion partly offset by additional taxes for repatriation of
     foreign earnings.

(3)  Lower accrued taxes and disposition reserve.


                                 - G -

                               RAYONIER
                 RECONCILIATION OF NON-GAAP MEASURES
                      MARCH 31, 2004 (unaudited)

                        (millions of dollars)

                                          Three Months Ended
                                -------------------------------------
                                 March 31,   December 31,  March 31,
                                   2004         2003         2003
                                ----------- ------------- -----------
     Cash Available for
      Distribution
     Cash provided by operating
      activities                     $82.0         $35.4       $39.3
     Custodial capital spending      (18.3)        (28.6)      (16.0)
     Tax benefit on exercise of
      stock options                   (1.1)         (1.2)          -
                                ----------- ------------- -----------
     Cash Available for
      Distribution                   $62.6          $5.6       $23.3
                                =========== ============= ===========


     Custodial Capital Spending
     Capital expenditures,
      net of sales and
      retirements                    $19.5         $31.9       $18.2
     Discretionary capital
      expenditures                    (1.2)         (3.3)       (2.2)
                                ----------- ------------- -----------
     Custodial Capital Spending
      (a)                            $18.3         $28.6       $16.0
                                =========== ============= ===========

(a)  Custodial Capital Spending, a non-GAAP measure, is defined as
     capital expenditures, net of proceeds from retirements, required
     to maintain the Company's current earnings level over the cycle
     and to keep facilities and equipment in safe and reliable
     condition as well as in compliance with regulatory requirements.


                                - H -
                               RAYONIER
    RECONCILIATION OF STATUTORY INCOME TAX TO REPORTED INCOME TAX
                     MARCH 31, 2004  (unaudited)

              (millions of dollars, except percentages)

                                        Three Months Ended
                            -----------------------------------------
                               March 31,    December 31,   March 31,
                                2004           2003         2003
                            -------------- ------------- ------------
                               $      %      $      %      $      %
                            ------- ------ ------ ------ ------ -----

  Income tax provision at
   the U.S. statutory rate   $11.2   35.0  $(1.6) (35.0)  $2.8  35.0

  REIT income not subject
   to federal tax             (6.9) (21.5)     -      -      -     -

  Lost deduction on REIT
   interest expense and
   overhead expenses
   associated with REIT
   activities                  1.8    5.7      -      -      -     -

  State and local income
   taxes, permanent
   differences, tax credits
   and foreign rate
   differentials               0.2    0.2   (1.3) (28.8)  (0.8) (9.8)
                            ------- ------ ------ ------ ------ -----

  Income tax provision
   (benefit) before
   discrete items             $6.3   19.4  $(2.9) (63.8)  $2.0  25.2

  Reversal of deferred tax
   liability                 (77.9)   N/M      -      -      -     -

  Tax on prior
   undistributed foreign
   earnings                   28.2    N/M      -      -      -     -

  Tax benefit from foreign
   denominated intercompany
   loan and interim partial
   audit settlements             -      -   (3.6)   N/M   (2.3)  N/M
                            ------- ------ ------ ------ ------ -----

  Income tax benefit        $(43.4)   N/M  $(6.5)   N/M  $(0.3)  N/M
                            ======= ====== ====== ====== ====== =====

  N/M = Not Meaningful


                                - I -

    CONTACT: Rayonier, Jacksonville
             Media Contact:
             Jay Fredericksen, 904-357-9106
             or
             Investor Contact:
             Parag Bhansali, 904-357-9155

    SOURCE: Rayonier

Contact

Mark McHugh

Senior Vice President and Chief Financial Officer

Phone: (904) 357-9100

investorrelations@rayonier.com

Transfer Agent

For essential services such as change of address, lost certificates or dividend checks, or change in registered ownership, please write or call:

  • Regular Mail
  • Computershare
  • P.O. Box 43006
  • Providence, RI 02940-3006
  • United States
  • Overnight Delivery
  • Computershare
  • 250 Royall Street
  • Canton, MA 02021
  • United States

Inside the U.S.: (800) 659-0158

Outside the U.S.: (201) 680-6587

For online inquiries, please visit https://www-us.computershare.com.

Please include your name, address, account number and telephone number with all correspondence.

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