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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2010	Feb. 11, 2011	Jun. 30, 2010
Document and Entity Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2010
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	FY
Trading Symbol	RYN
Entity Registrant Name	RAYONIER INC
Entity Central Index Key	0000052827
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding		81,072,140
Entity Public Float			$ 3,497,091,557

Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Consolidated Statements of Income and Comprehensive Income
SALES	$ 1,315,233	$ 1,168,567	$ 1,271,048
Costs and Expenses
Cost of sales	990,099	914,772	991,894
Selling and general expenses	67,102	62,633	64,503
Other operating income, net (Note 3)	(10,519)	(221,172)	(12,500)
Costs and expenses, total	1,046,682	756,233	1,043,897
Equity in income (loss) of New Zealand joint venture	1,033	(2,826)	(715)
OPERATING INCOME BEFORE GAIN ON SALE OF A PORTION OF THE INTEREST IN THE NEW ZEALAND JOINT VENTURE	269,584	409,508	226,436
Gain on sale of a portion of the interest in the New Zealand joint venture (Note 6)	12,367
OPERATING INCOME	281,951	409,508	226,436
Interest expense	(50,463)	(52,441)	(50,729)
Interest and miscellaneous income, net	1,315	1,810	2,312
INCOME BEFORE INCOME TAXES	232,803	358,877	178,019
Income tax expense	(15,217)	(46,336)	(29,436)
NET INCOME	217,586	312,541	148,583
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment	4,162	15,980	(23,508)
Joint venture cash flow hedges	837	(2,305)
Employee Benefit Plans
Retiree benefit plan amendment, net of income tax expense of $7,662 in 2008			16,377
Gain (loss) from amortization of pension and postretirement plans, net of income tax benefit (expense) of $1,570, ($1,401), and $27,120	6,385	4,879	(65,527)
COMPREHENSIVE INCOME	$ 228,970	$ 331,095	$ 75,925
EARNINGS PER COMMON SHARE
Basic earnings per share	$ 2.71	$ 3.95	$ 1.89
Diluted earnings per share	$ 2.68	$ 3.91	$ 1.87

Consolidated Balance Sheets - USD ($) $ in Thousands	12 Months Ended
Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2010	Dec. 31, 2009
CURRENT ASSETS
Cash and cash equivalents	$ 349,463	$ 74,964
Accounts receivable, less allowance for doubtful accounts of $387 and $1,150	82,640	103,740
Inventory (Note 10)	110,035	88,504
Income tax and alternative fuel mixture credit receivable	21,734	192,579
Prepaid and other current assets	45,314	49,909
Total current assets	609,186	509,696
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION	1,137,931	1,188,559
PROPERTY, PLANT AND EQUIPMENT
Land	24,752	24,789
Buildings	131,100	126,443
Machinery and equipment	1,350,812	1,275,955
Total property, plant and equipment	1,506,664	1,427,187
Less - accumulated depreciation	(1,121,360)	(1,082,248)
Total property, plant and equipment, net	385,304	344,939
INVESTMENT IN JOINT VENTURE (NOTE 6)	68,483	50,999
OTHER ASSETS	162,749	158,738
TOTAL ASSETS	2,363,653	2,252,931
CURRENT LIABILITIES
Accounts payable	57,985	58,584
Bank loans and current maturities	93,057	4,650
Accrued taxes	10,337	11,994
Accrued payroll and benefits	25,466	23,764
Accrued interest	6,206	6,512
Accrued customer incentives	9,759	25,644
Accrued professional fees	10,276	10,483
Other current liabilities	20,362	22,832
Current liabilities for dispositions and discontinued operations (Note 14)	11,500	10,648
Total current liabilities	244,948	175,111
LONG-TERM DEBT	675,103	694,999
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS (Note 14)	81,660	87,943
PENSION AND OTHER POSTRETIREMENT BENEFITS (Note 19)	66,335	111,662
OTHER NON-CURRENT LIABILITIES	$ 44,025	$ 37,010
COMMITMENTS AND CONTINGENCIES (Notes 15, 16 and 17)
SHAREHOLDERS' EQUITY
Common Shares, 240,000,000 and 120,000,000 shares authorized, 80,682,093 and 79,541,974 shares issued and outstanding	$ 602,882	$ 561,962
Retained earnings	717,058	663,986
Accumulated other comprehensive loss	(68,358)	(79,742)
TOTAL SHAREHOLDERS' EQUITY	1,251,582	1,146,206
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 2,363,653	$ 2,252,931

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
OPERATING ACTIVITIES
Net income	$ 217,586	$ 312,541	$ 148,583
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization	143,406	158,371	168,239
Non-cash cost of real estate sold	6,692	7,634	11,145
Stock-based incentive compensation expense	15,223	15,754	13,344
Gain on sale of a portion of interest in the New Zealand joint venture	(11,545)
Amortization of convertible debt discount	8,160	6,517	5,437
Deferred income taxes	14,936	(6,260)	11,576
Excess tax benefits on stock-based compensation	(5,411)	(2,720)	(3,248)
Other	11,309	11,080	6,255
Changes in operating assets and liabilities:
Receivables	20,774	(26,863)	1,794
Inventories	(27,693)	9,202	(15,946)
Accounts payable	(4,606)	(12,552)	6,128
Income tax and alternative fuel mixture credit receivable	170,845	(190,694)	9,513
Other current assets	2,573	(3,793)	(4,383)
Accrued liabilities	(12,805)	28,317	(7,245)
Other assets	(1,863)	1,422	4,736
Other non-current liabilities	(43,559)	7,438	(8,080)
Expenditures for dispositions and discontinued operations	(8,632)	(8,095)	(7,660)
CASH PROVIDED BY OPERATING ACTIVITIES	495,390	307,299	340,188
INVESTING ACTIVITIES
Capital expenditures	(138,449)	(91,667)	(104,806)
Purchase of timberlands	(5,360)		(229,701)
Purchase of real estate			(4,336)
Change in restricted cash	(8,231)	1,399	8,523
Other	9,384	(2,476)	(71)
CASH USED FOR INVESTING ACTIVITIES	(142,656)	(92,744)	(330,391)
FINANCING ACTIVITIES
Issuance of debt (Note 11)	157,000	267,500	173,800
Repayment of debt	(96,650)	(307,643)	(152,685)
Dividends paid	(163,673)	(158,218)	(156,978)
Proceeds from the issuance of common shares	26,314	11,115	8,265
Excess tax benefits on stock-based compensation	5,411	2,720	3,248
Purchase of exchangeable note hedge (Note 11)		(23,460)
Proceeds from issuance of warrant (Note 11)		12,506
Debt issuance costs	(561)	(4,678)
Repurchase of common shares	(6,028)	(1,388)	(3,979)
CASH USED FOR FINANCING ACTIVITIES	(78,187)	(201,546)	(128,329)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(48)	270	(864)
CASH AND CASH EQUIVALENTS
Increase (decrease) in cash and cash equivalents	274,499	13,279	(119,396)
Balance, beginning of year	74,964	61,685	181,081
Balance, end of year	349,463	74,964	61,685
Cash paid during the year:
Interest	39,991	41,433	42,691
Income taxes	11,776	8,824	12,752
Non-cash investing activity:
Capital assets purchased on account	$ 12,388	$ 8,722	$ 8,675

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2010

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Rayonier and its subsidiaries, in which it has a majority ownership or controlling interest. All intercompany balances and transactions are eliminated. For income tax purposes, the Company files two U.S. federal income tax returns, one for REIT operations and a consolidated filing for TRS operations, as well as numerous state, local and foreign income tax returns.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. There are risks inherent in estimating and therefore actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include time deposits with original maturities of three months or less.

Inventory

Inventories are valued at the lower of cost or market. The costs of manufactured performance fibers are determined on the first-in, first-out basis. Other products are valued on an average cost basis. Inventory costs include material, labor and manufacturing overhead. Physical counts of inventories are taken at least annually. The need for a provision for estimated losses from obsolete, excess or slow-moving inventories is reviewed periodically.

HBU real estate properties that are expected to be sold within one year are included in inventory, while properties that are expected to be sold after one year are included in "Other assets."

Equity Method Investments

The Company accounts for its interest in a New Zealand joint venture ("JV") in accordance with generally accepted accounting principles under the equity method of accounting. Rayonier does not have a controlling financial interest but exerts significant influence over the JV's operating and financial policies as manager of the JV.

Timber

Timber is stated at the lower of cost or market value. Costs relating to acquiring, planting and growing of timber including real estate taxes, lease rental payments and site preparation are capitalized. Such accumulated costs attributed to merchantable timber are charged to cost of goods sold (depletion) at the time the timber is harvested or when the underlying timberland is sold based on the relationship of timber sold to the estimated volume of currently merchantable timber. Upon the acquisition of timberland, the Company makes a determination on whether to combine the newly acquired merchantable timber with an existing depletion pool or to create a new separate pool. This determination is based on the geographic location of the new timber, the customers/markets that will be served and the species mix. If the acquisition is similar, the cost of th e acquired timber is combined into an existing depletion pool and a new depletion rate is calculated for the pool. This determination and depletion rate adjustment normally occurs in the quarter following the acquisition, concurrent with the harvesting of the acquired timber.

Property, Plant, Equipment and Depreciation

Property, plant and equipment additions are recorded at cost, including applicable freight, taxes, interest, construction and installation costs. Pulp mill assets are depreciated using the units-of-production method. The Company depreciates its non-production Performance Fiber assets, including office, lab and transportation equipment, using the straight-line depreciation method over 3 to 25 years. In addition, all of the assets at the Company's sawmills are depreciated using the straight-line method over 3 to 15 years. Buildings and land improvements are depreciated using the straight-line method over 15 to 35 years and 5 to 30 years, respectively.

Gains and losses on the retirement of assets are included in operating income. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets that are held and used is measured by net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value exceeds the fair value of the assets, which is based on a discounted cash flow model. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy that prioritizes the inputs used to measure fair value was established as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

See Note 5 — Fair Value Measurements and Note 19 — Employee Benefit Plans for additional information on the Company's fair value disclosures.

Foreign Currency Translation

The functional currency of the Company's New Zealand-based operations and its JV investment is the New Zealand dollar. All assets and liabilities are translated into U.S. dollars at the exchange rate in effect at the respective balance sheet dates with the resulting translation gain or loss recorded as a separate component of Accumulated Other Comprehensive Income/(Loss), ("AOCI"), within Shareholders' Equity.

Financial Instruments

The Company is exposed to various market risks, including changes in interest rates and commodity prices. The Company's objective is to partially mitigate the economic impact of these market risks. Derivatives are used, as noted below, in accordance with policies and procedures approved by the Audit Committee of the Board of Directors and are managed by a senior executive committee, whose responsibilities include initiating, managing and monitoring resulting exposures. The Company does not enter into such financial instruments for trading or speculative purposes.

Derivative financial instruments such as commodity swap agreements are recognized in the financial statements and measured at fair value regardless of the purpose or intent for holding them. Transactions that provide for the forward purchase or sale of raw materials are not included in the financial statements until physical delivery of the product, as these transactions are done in the normal course of business and qualify for treatment under the normal purchases and sales scope exception under generally accepted accounting principles.

The Company periodically enters into commodity forward contracts to fix some of its fuel oil and natural gas costs at its Performance Fibers mills. The forward contracts partially mitigate the risk of a change in Performance Fibers' margins resulting from an increase or decrease in fuel oil and natural gas prices. The Company's commodity agreements do not qualify for hedge accounting and are marked to market. Gains or losses resulting from the valuation are recorded in "Other operating income, net."

See Note 5 — Fair Value Measurements for additional information on the Company's derivative financial instruments.

Revenue Recognition

The Company generally recognizes revenues when the following criteria are met: (i) persuasive evidence of an agreement exists, (ii) delivery has occurred, (iii) the Company's price to the buyer is fixed and determinable, and (iv) collectibility is reasonably assured.

Revenue from the sale of timber is recorded when title passes to the buyer. Timber sales are either sales of delivered logs or stumpage sales. Stumpage sales in the Eastern and Western regions are primarily made on a pay-as-cut basis. These contracts generally require a minimum 15 percent initial payment and title and risk of loss are transferred when the timber is cut. Sales of delivered logs generally do not require an initial payment and are made to third-party customers on open credit terms.

Real estate sales are recorded when title passes, full payment or a minimum down payment of 25 percent is received and full collectibility is assured. If a down payment of less than 25 percent is received at closing or if full collectibility is not reasonably assured, the Company typically records revenue based on the installment method or cost recovery method.

Revenue from domestic sales of Performance Fibers products is recorded when title passes which, depending on the contract, is either at time of shipment or when the customer receives goods. Foreign sales of Performance Fibers products are recorded when the customer or agent receives the goods and title passes.

Lumber sales are recorded when the goods are shipped and title passes.

The Company's Other segment includes log trading sales. Revenue is recorded when the goods are received by the customer and title passes.

Environmental Costs

Rayonier expenses environmental costs related to ongoing businesses resulting from current operations. Expenditures that meaningfully extend the life or increase the efficiency of operating assets are capitalized.

The Company has established liabilities to remediate and monitor sites related to dispositions or discontinued operations from which no current or future benefit is discernible. These obligations are established based on payments over the next 20 years and require significant estimates to determine the proper amount at any point in time. Generally, monitoring expense obligations are fixed once remediation projects are at or near completion. The projected period, from 2011 through 2030, reflects the time in which potential future costs are both estimable and probable. As new information becomes available, these cost estimates are updated and the Company adjusts its recorded liabilities appropriately. Environmental liabilities are accounted for on an undiscounted basis and are reflected in current and non-current "Liabilities for dispositions and disco ntinued operations" in the Consolidated Balance Sheet.

Income Taxes

The Company accounts for income taxes using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured pursuant to tax laws using rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The Company recognizes the effect of a change in income tax rates on deferred tax assets and liabilities in the Consolidated Statement of Income and Comprehensive Income in the period that includes the enactment date of the rate change. The Company records a va luation allowance to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized.

In determining the provision for income taxes, the Company computes an annual effective income tax rate based on annual income by legal entity, permanent differences between book and tax, and statutory income tax rates by jurisdiction. The effective tax rate also reflects an assessment of the ultimate outcome of uncertain tax positions. The Company adjusts its annual effective tax rate as additional information on outcomes or events becomes available. Discrete items such as audit settlements are recognized in the period in which they occur.

The Company's income tax returns are subject to audit by U.S. federal, state and foreign taxing authorities. In evaluating the tax benefits associated with various tax filing positions, the Company records a tax benefit for an uncertain tax position if it is more-likely-than-not to be realized upon ultimate settlement of the issue. The Company records a liability for an uncertain tax position that does not meet this criterion. The Company adjusts its liabilities for unrecognized tax benefits in the period in which it is determined the issue is settled with the taxing authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position or when new facts or information becomes available. Liabilities for unrecognized tax benefits are included in "Other current liabilities" and "Other non-current liabilities" in t he Company's Consolidated Balance Sheets. See Note 8 — Income Taxes for additional information.

New or Recently Adopted Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board ("FASB") issued new guidance related to consolidation which replaced the quantitative-based risks and rewards calculation for determining which enterprise has a controlling interest in a variable interest entity with an approach primarily qualitative in nature. This Standard requires additional disclosures about an enterprise's involvement in variable interest entities and was effective January 1, 2010 for Rayonier. The Company's application of this guidance had no effect on the accompanying consolidated financial statements. See Note 5 — Fair Value Measurements for additional information about the Company's variable interest entity.

Also in June 2009, the FASB issued new guidance related to the accounting for transfers of financial assets. The new standard eliminates the concept of a "qualifying special-purpose entity" ("QSPE") and associated guidance and creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale. Entities formerly classified as QSPEs are now evaluated for consolidation under the provisions related to the consolidation of controlling and non-controlling interests in an entity. Under the new guidance, the Company's investment in a special-purpose entity does not require consolidation. See Note 5 — Fair Value Measurements for additional information about this entity.

Segment and Geographical Information

12 Months Ended

Dec. 31, 2010

Segment and Geographical Information

Segment and Geographical Information

4.	SEGMENT AND GEOGRAPHICAL INFORMATION

Rayonier operates in four reportable business segments: Timber, Real Estate, Performance Fibers, and Wood Products. Timber sales include all activities that relate to the harvesting of timber. Real Estate sales include all property sales, including those designated as HBU. The assets of the Real Estate segment include HBU property held by the Company's real estate subsidiary, TerraPointe LLC. The Performance Fibers segment includes two major product lines, cellulose specialties and absorbent materials. The Wood Products segment is comprised of lumber operations. The Company's remaining operations include harvesting and selling timber acquired from third parties (log trading). These operations are reported in "Other Operations." Sales between operating segments are made based on fair market value, and intercompany sales, purchases and profits (losses) are eliminated in consolidation. The Company evaluates financial performance based on the operating income of the segments.

Operating income (loss) as presented in the Consolidated Statements of Income and Comprehensive Income is equal to segment income (loss). Certain income (loss) items in the Consolidated Statements of Income and Comprehensive Income are not allocated to segments. These items, which include gains (losses) from certain asset dispositions, interest income (expense), miscellaneous income (expense) and income tax (expense) benefit, are not considered by Company management to be part of segment operations.

Two customers in the Performance Fibers segment represented 14 percent and 10 percent of the Company's consolidated sales in 2010, respectively. Three customers in the Performance Fibers segment represented 13 percent, 12 percent and 11 percent of the Company's consolidated sales in 2009, respectively, and two customers in the Performance Fibers segment represented 12 percent and 10 percent of the Company's consolidated sales in 2008.

Segment information for each of the three years ended December 31, 2010 follows (in millions of dollars):


	Sales
	2010			2009			2008
Timber	$	177		$	159		$	199
Real Estate		96			101			127
Performance Fibers		881			839			798
Wood Products		68			51			86
Other Operations		102			38			61
Intersegment Eliminations(a)		(9	)		(19	)		—

Total	$	1,315		$	1,169		$	1,271

(a)	Intersegment eliminations reflect sales from our Timber segment to our Performance Fibers segment.


	Operating Income/(Loss)
	2010			2009			2008
Timber	$	33		$	7		$	31
Real Estate		53			56			80
Performance Fibers		214			184			149
Wood Products		2			(11	)		(7	)
Other Operations(a)		1			(3	)		3
Corporate and other(b)		(21	)		177			(30	)

Total	$	282		$	410		$	226

(a)	2010, 2009, and 2008 include a $1.1 million loss, a $2.3 million loss and a $3.2 million gain, respectively, for foreign currency transaction gains or losses related to the Company's foreign operations.

(b)

2010 includes a $12 million gain from the sale of a portion of the Company's interest in its New Zealand JV. 2009 includes $205 million related to the AFMC. See Note 6 — Joint Venture Investment and Note 3 — Alternative Fuel Mixture Credit ("AFMC") and Cellulosic Biofuel Producer Credit ("CBPC") for additional information.


	Gross Capital Expenditures
	2010		2009		2008
Timber(a)	$	41	$	32	$	265
Real Estate		—		—		4
Performance Fibers		98		59		67
Wood Products		1		1		2
Corporate and other		4		—		1

Total	$	144	$	92	$	339

(a)	Includes strategic timberland acquisitions of $5 million, $0 and $230 million in 2010, 2009 and 2008, respectively.


	Depreciation, Depletion and Amortization
	2010		2009		2008
Timber	$	59	$	70	$	85
Real Estate		22		24		21
Performance Fibers		58		58		56
Wood Products		3		5		5
Corporate and other		1		1		1

Total	$	143	$	158	$	168


	Identifiable Assets
	2010		2009
Timber	$	1,260	$	1,260
Real Estate		86		71
Performance Fibers		551		518
Wood Products		20		22
Other Operations		26		19
Corporate and other		421		363

Total	$	2,364	$	2,253


	Sales by Product Line
	2010		2009		2008
Timber	$	177	$	159	$	199
Real Estate
Development		3		3		5
Rural		28		32		48
Non-Strategic Timberlands		65		66		74

Total Real Estate		96		101		127

Performance Fibers
Cellulose specialties		686		658		600
Absorbent materials		195		181		198

Total Performance Fibers		881		839		798

Wood Products		68		51		86
Other		93		19		61

Total Sales	$	1,315	$	1,169	$	1,271


	Geographical Operating Information
	Sales						Operating Income							Identifiable Assets
	2010		2009		2008		2010		2009			2008		2010		2009
United States	$	1,228	$	1,136	$	1,220	$	268	$	416		$	223	$	2,266	$	2,176
New Zealand		87		33		39		14		(6	)		3		97		77
All other		—		—		12		—		—			—		1		—

Total	$	1,315	$	1,169	$	1,271	$	282	$	410		$	226	$	2,364	$	2,253


	Sales by Destination
	2010		%		2009		%		2008		%
United States	$	693		53	$	626		53	$	720		57
China		213		16		189		16		149		12
Europe		152		12		159		14		163		13
Japan		129		10		107		9		122		10
Other Asia		49		4		30		3		47		4
Latin America		35		3		23		2		31		2
New Zealand		17		1		12		1		15		1
Canada		10		1		6		1		6		—
All other		17		—		17		1		18		1

Total Sales	$	1,315		100	$	1,169		100	$	1,271		100

The majority of sales to foreign countries are denominated in U.S. dollars.

Income Taxes

12 Months Ended

Dec. 31, 2010

Income Taxes

Income Taxes

8.	INCOME TAXES

In general, only the taxable REIT subsidiaries, whose businesses include the Company's non-REIT qualified activities, are subject to corporate income taxes. However, the Company is subject to U.S. federal corporate income tax on built-in gains (the excess of fair market value over tax basis for property held upon REIT election at January 1, 2004) on taxable sales of such property during calendar years 2004 through 2010 and 2012 through 2013. Accordingly, the provision for corporate income taxes relates principally to current and deferred taxes on TRS income and certain property sales.

Like-Kind Exchanges

Under current tax law, the built-in gain tax from the sale of REIT property can be deferred and eliminated if sale proceeds from "relinquished" properties are reinvested in similar property consistent with the LKE requirements of the Internal Revenue Code, as long as the "replacement" property is owned through the end of the built-in gain period (10-year period which began on January 1, 2004). The LKE requirements do not restrict the Company's ability to harvest timber on a pay-as-cut basis from such replacement property during the built-in gain period.

Provision for Income Taxes

The (provision for)/benefit from income taxes consisted of the following:


	2010			2009			2008
Current
U.S. federal	$	973		$	(50,586	)	$	(16,335	)
State		(12	)		(1,493	)		(600	)
Foreign		(1,242	)		(517	)		1,367

		(281	)		(52,596	)		(15,568	)

Deferred
U.S. federal		(14,554	)		4,829			605
State		(1,283	)		567			(265	)
Foreign		69			839			(6,750	)

		(15,768	)		6,235			(6,410	)

Changes in valuation allowance		832			25			(7,458	)

Total	$	(15,217	)	$	(46,336	)	$	(29,436	)

A reconciliation of the U.S. federal statutory income tax rate to the actual income tax rate is as follows:


	2010			2009			2008
U.S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
REIT income not subject to federal tax		(16.8	)		(13.0	)		(19.7	)
Permanent differences/other		0.3			(0.4	)		(0.3	)

Income tax rate before discrete items		18.5	%		21.6	%		15.0	%
Taxing authority settlements and unrecognized tax benefit adjustments		(1.1	)		4.6			(2.9	)
Change in valuation allowance		(0.4	)		—			4.2
CBPC and AFMC(a)		(10.5	)		(13.3	)		—
Return to accrual adjustment/other		—			—			0.2

Income tax rate as reported		6.5	%		12.9	%		16.5	%

(a)	The CBPC impacted the 2010 tax rate, while the AFMC impacted the 2009 tax rate. See Note 3 — Alternative Fuel Mixture Credit ("AFMC") and Cellulosic Biofuel Producer Credit ("CBPC") for additional information.

The effective tax rate, before discrete items, decreased in 2010 from 2009 due to proportionately higher earnings from the REIT. The effective tax rate, before discrete items, increased in 2009 from 2008 mainly due to proportionately higher earnings from TRS. The Company's effective tax rate is below the 35 percent U.S. statutory rate primarily due to tax benefits associated with being a REIT, and the CBPC and AFMC.

Deferred Taxes

Deferred income taxes result from recording revenues and expenses in different periods for financial reporting versus tax reporting. The nature of the temporary differences and the resulting net deferred tax asset (liability) for the two years ended December 31, were as follows:


	2010			2009
Gross deferred tax assets:
Liabilities for dispositions and discontinued operations	$	34,416		$	36,353
Pension, postretirement and other employee benefits		37,653			49,918
Foreign and state NOL carryforwards		18,225			18,561
Foreign and state tax credit carryforwards		13,795			8,513
Other		18,726			22,922

Total gross deferred tax assets		122,815			136,267
Less: Valuation allowance		(23,944	)		(25,035	)

Total deferred tax assets after valuation allowance		98,871			111,232

Gross deferred tax liabilities:
Accelerated depreciation		(65,683	)		(56,741	)
Repatriation of foreign earnings		(4,959	)		(4,589	)
Other		(5,309	)		(13,270	)

Total gross deferred tax liabilities		(75,951	)		(74,600	)

Net deferred tax asset	$	22,920		$	36,632

Current portion of deferred tax asset	$	15,506		$	13,047
Noncurrent portion of deferred tax asset		14,190			31,021
Current portion of deferred tax liability		—			—
Noncurrent portion of deferred tax liability		(6,776	)		(7,436	)

Net deferred tax asset	$	22,920		$	36,632

Included above are the following foreign and state net operating loss ("NOL") and tax credit carryforwards as of December 31, 2010:


Item	Gross Amount		Valuation Allowance			Expiration
New Zealand NOL Carryforwards	$	18,727	$	(5,243	)		None
State NOL Carryforwards		226,850		(12,982	)		15 years
State and Foreign Tax Credits		8,430		(5,719	)		10 years
Cellulosic Biofuel Producer Credit		5,365		—			5 years

In 2010 and 2009, the Company recorded excess tax benefits of $5.4 million and $2.7 million, respectively, related to stock-based compensation. These amounts were credited directly to shareholders' equity and are not included in the consolidated tax provisions.

Tax Statutes

The following table provides detail of the tax years that remain open to examination by the IRS and other significant taxing jurisdictions:


Taxing Jurisdiction		Open Tax Periods
U.S. Internal Revenue Service		2007 – 2010
State of Alabama		2005 – 2010
State of Florida		2003 – 2010
State of Georgia		2005 – 2010
New Zealand Inland Revenue		2006 – 2010

The IRS has indicated it intends to examine the Company's tax returns for 2008 and 2009. The Company believes its reported tax positions are technically sound and its uncertain tax position liabilities at December 31, 2010 adequately reflect the probable resolution of these items.

Unrecognized Tax Benefits

In accordance with generally accepted accounting principles, we recognize the impact of a tax position if a position is "more likely than not" to prevail.

(a)

A reconciliation of the beginning and ending unrecognized tax benefits for the three years ended December 31 is as follows:


	2010			2009			2008
Balance at January 1,	$	17,973		$	3,906		$	11,030
Decreases related to prior year tax positions		(1,057	)		(533	)		(233	)
Increases related to current year tax positions		5,780			16,000			—
Payments		(116	)		(1,400	)		(3,156	)
Settlements		—			—			(3,767	)
Reclassifications		—			—			32

Balance at December 31,	$	22,580		$	17,973		$	3,906

(b)

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate at December 31, 2010, 2009 and 2008 is $18.6 million, $18.0 million, and $2.8 million, respectively. At December 31, 2010 the amount of unrecognized tax benefits that, if recognized, would decrease prepaid tax assets is $4.0 million. Prepaid tax assets are reported in "Other assets" on the Company's Consolidated Balance Sheet.

(c)

The Company records interest (and penalties, if applicable) related to unrecognized tax benefits in non-operating expenses. For the year ended December 31, 2010, the Company recorded a benefit of $0.3 million for interest on the above unrecognized tax benefits. For the years ended December 31, 2009 and 2008, the Company recorded interest expense of $0.3 million and $0.4 million, respectively. The Company has recorded liabilities of approximately $0.6 million and $0.9 million for the payment of interest and penalties at December 31, 2010 and 2009, respectively.

(d)

It is reasonably possible that within 12 months of December 31, 2010 the following unrecognized tax benefits could significantly decrease:

(i)

U.S. federal tax issue relating to refundable income tax credits.

•

The event that would cause such a change is an examination of the refundable tax credits by the IRS.

•

An estimate of the reasonably possible change is a decrease in income tax liability of $15.0 million.

(e)

It is reasonably possible that within 12 months of December 31, 2010 the following uncertain tax position could result in a change in tax benefits previously recognized:

(i)

U.S. federal tax issue relating to refundable income tax credits.

•

The event that would cause such a change is an examination of the refundable tax credits by the IRS.

•

An estimate of the reasonably possible change is an increase in income tax liability of $60.4 million.

Debt

12 Months Ended

Dec. 31, 2010

Debt

Debt

11.

DEBT

Rayonier's debt consisted of the following at December 31, 2010 and 2009:


	2010			2009
Revolving credit facility borrowings at a weighted average interest rate of 3.25% at December 31, 2009	$	—		$	10,000
Senior Exchangeable Notes due 2012 at a fixed interest rate of 3.75%(a)		288,135			282,020
Senior Exchangeable Notes due 2015 at a fixed interest rate of 4.50%(a)		161,358			159,312
Installment notes due 2011-2014 at fixed interest rates of 8.49% to 8.64%		205,557			205,557
Pollution control and solid waste bonds due 2012-2020 at variable interest rates of 2.54% to 2.55% at December 31, 2010		38,110			38,110
Pollution control and industrial revenue bonds at a fixed interest rate of 6.20% (retired in January 2010)		—			4,650
Term loan due 2015 at a variable interest rate of 3.02% at December 31, 2010		75,000			—

Total debt		768,160			699,649
Less: Current maturities and short-term borrowings		(93,057	)		(4,650	)

Long-term debt	$	675,103		$	694,999

Principal payments due during the next five years and thereafter are as follows:


2011	$	93,057
2012		323,110	(a)
2013		—
2014		112,500
2015		247,500	(a)
Thereafter		15,000

Total Debt	$	791,167

(a)

Our Senior Exchangeable Notes maturing in 2012 were discounted by $11.9 million and $18.0 million as of December 31, 2010 and 2009, respectively, but upon maturity the liability will be $300.0 million. Our Senior Exchangeable Notes maturing in 2015 were discounted by $11.1 million and $13.2 million as of December 31, 2010 and 2009, but upon maturity the liability will be $172.5 million.

The Company has a $250 million unsecured revolving credit facility at an interest rate of LIBOR plus 40 basis points. We plan to refinance the facility before it expires in August 2011. The Company had $245 million and $235 million of available borrowings at December 31, 2010 and 2009, respectively.

$75 Million Five-Year Term Loan Agreement

In March 2010, TRS borrowed $75 million under a five-year term loan agreement with a group of banks at LIBOR plus 275 basis points.

4.50% Convertible notes issued August 2009

In August 2009, TRS issued $172.5 million of 4.50% Senior Exchangeable Notes due 2015. The notes are guaranteed by Rayonier, and are non-callable. The $172.5 million in principal will be settled in cash and any excess exchange value will be settled at the option of the Company in either cash or stock of Rayonier. Note holders may convert their notes to common stock of Rayonier, subject to certain provisions including the market price of the stock and the trading price of the convertible notes. The initial exchange rate is 19.91 shares per $1,000 principal based on an exchange price equal to 122.5 percent of the stock's closing price of $41.01 on August 6, 2009, or $50.24 per share.

In separate transactions, TRS and Rayonier purchased exchangeable note hedges and sold warrants, respectively, based on 3,433,699 underlying shares of Rayonier. These transactions had the effect of increasing the conversion premium from 22.5 percent to 46 percent or to $60.00 per share. The exchangeable note hedge and warrant transactions are intended to limit exposure of potential dilution to Rayonier shareholders from note holders who could exchange the notes for Rayonier common shares. On exercise of the hedges, TRS will receive shares of Rayonier common stock equal to the difference between the then market price and the strike price of $50.24. The holders of the warrants will receive net shares from Rayonier if the share price is above $60.00 at maturity of the warrants.

The purchased hedges and sold warrants are not part of the terms of the notes and will not affect the note holders' rights. Likewise, the note holders will not have any rights with respect to the hedge or the warrants. The purchased hedges and the sold warrants do not meet the definition of a derivative instrument because they are indexed to the Company's own stock. They were recorded in shareholders' equity in the Consolidated Balance Sheet and are not subject to mark-to-market adjustments.

3.75% Convertible notes issued October 2007

In October 2007, TRS issued $300 million of 3.75% Senior Exchangeable Notes due 2012. The notes are guaranteed by Rayonier and are non-callable. The $300 million in principal will be settled in cash and any excess exchange value will be settled at the option of the Company in either cash or stock of Rayonier. Note holders may convert their notes subject to certain conversion provisions including the market price of the Company's common stock and the trading price of the convertible notes. The initial exchange rate is 18.24 shares per $1,000 principal based on an exchange price equal to 122 percent of the stock's closing price of $44.93 on October 10, 2007, or $54.81 per share.

In separate transactions, TRS and Rayonier, purchased an exchangeable note hedge and sold warrants, respectively, based on 5,472,991 underlying shares of Rayonier. These transactions had the effect of increasing the conversion premium from 22 percent to 40 percent or to $62.90 per share. On exercise of the hedge, TRS will receive shares of Rayonier common stock equal to the difference between the then market price and the strike price of $54.81. The holders of the warrants will receive net shares from Rayonier if the share price is above $62.90 at maturity of the warrants.

The purchased hedge and sold warrants are not part of the terms of the notes and will not affect the note holders' rights. Likewise, the note holders will not have any rights with respect to the hedge or the warrants. The purchased hedge and the sold warrants do not meet the definition of a derivative instrument because they are indexed to the Company's own stock. They were recorded in shareholders' equity in the Consolidated Balance Sheet and are not subject to mark-to-market adjustments.

The amounts related to convertible debt in the Consolidated Balance Sheets as of December 31, 2010 and 2009 are as follows:


	2010			2009
Liabilities:
Principal amount of debt
4.50% Senior Exchangeable Notes	$	172,500		$	172,500
3.75% Senior Exchangeable Notes		300,000			300,000
Unamortized discount
4.50% Senior Exchangeable Notes		(11,142	)		(13,187	)
3.75% Senior Exchangeable Notes		(11,865	)		(17,980	)

Net carrying amount of debt	$	449,493		$	441,333
Equity:
Common stock	$	28,092		$	28,092

The unamortized discounts for the 4.50% and 3.75% Senior Exchangeable Notes will be amortized through August 2015 and October 2012, respectively. The amount of interest related to the convertible debt recognized in the Consolidated Statements of Income and Comprehensive Income for the three years ended December 31 is as follows:


	2010		2009		2008
Contractual interest coupon
4.50% Senior Exchangeable Notes	$	7,763	$	2,911	$	—
3.75% Senior Exchangeable Notes		11,250		11,250		11,250
Amortization of debt discount
4.50% Senior Exchangeable Notes		2,045		750		—
3.75% Senior Exchangeable Notes		6,115		5,767		5,437

Total interest expense recognized	$	27,173	$	20,678	$	16,687

The effective interest rate on the liability component of both issues for the years ended December 31, 2010, 2009 and 2008 was 6.21%.

Debt Covenants

In connection with the Company's installment notes, term loan and the $250 million revolving credit facility, covenants must be met, including ratios based on the facility's definition of EBITDA ("Covenant EBITDA"). Covenant EBITDA consists of earnings from continuing operations before the cumulative effect of accounting changes and any provision for dispositions, income taxes, interest expense, depreciation, depletion, amortization and the non-cash cost basis of real estate sold. The Company's dividend restriction covenant limits the sum of dividends in any period of four fiscal quarters to 90 percent of Covenant Funds from Operations ("Covenant FFO") plus the aggregate amount of dividends permitted under Covenant FFO in excess of the amount of dividends paid during the prior four fiscal quarters. Covenant FFO is defined as Consolidated Net Income ex cluding gains or losses from debt restructuring and investments in marketable securities plus depletion, depreciation and amortization and the non-cash cost basis of real estate sold. Under a covenant relating to the $206 million of installment notes, RFR may not incur additional debt unless, at the time of incurrence, and after giving pro forma effect to the receipt and application of the proceeds of such debt, RFR meets or exceeds a minimum ratio of cash flow to fixed charges. RFR's ability to make certain quarterly distributions to Rayonier Inc. is limited to an amount equal to RFR's "available cash," which consists of its opening cash balance plus proceeds from permitted borrowings. At December 31, 2010, the Company is in compliance with all covenants.

The covenants listed below, which are the most significant financial covenants in effect as of December 31, 2010, are calculated on a trailing 12-month basis:


	Covenant Requirement			Actual ratio			Favorable
Covenant EBITDA to consolidated interest expense should not be less than		2.50 to 1			8.59 to 1			6.09
Total debt to Covenant EBITDA should not exceed		4.00 to 1			1.83 to 1			2.17
RFR cash flow available for fixed charges to RFR fixed charges should not be less than		2.50 to 1			11.32 to 1			8.82
Dividends paid should not exceed 90 percent of Covenant FFO		90	%		40	%		50	%

In addition to the financial covenants listed above, the installment notes, term loan and credit facility include customary covenants that limit the incurrence of debt, the disposition of assets, and the making of certain payments between RFR and Rayonier, among others. An asset sales covenant in the RFR installment note related agreements requires the Company, subject to certain exceptions, to either reinvest cumulative timberland sale proceeds for individual sales greater than $10 million (the "excess proceeds") in timberland-related investments or, once the amount of excess proceeds not reinvested exceeds $50 million, to offer the note holders prepayment of the notes ratably in the amount of the excess proceeds. During March 2010, the excess proceeds exceeded the $50 million limit and as a result, repayment of $53 million was offered to the note h olders. The note holders declined the offer and the excess proceeds were reset to zero. The amount of excess proceeds was $27.2 million and $19.8 at December 31, 2010 and 2009, respectively.

Liabilities for Dispositions and Discontinued Operations

12 Months Ended

Dec. 31, 2010

Liabilities for Dispositions and Discontinued Operations

Liabilities for Dispositions and Discontinued Operations

14.

LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS

The Company's dispositions and discontinued operations include its Port Angeles, Washington former dissolving pulp mill site, which was closed in 1997; Southern Wood Piedmont Company ("SWP"), which ceased operations in 1989 except for investigation and remediation activities; the Eastern Research Division, which primarily relates to a former research and development facility in Whippany, New Jersey which ceased operations in 1981; and other miscellaneous assets held for disposition. SWP owns or has liability for ten inactive former wood treating sites that are subject to the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and/or other similar federal or state statutes relating to the investigation and remediation of environmentally-impacted sites.

An analysis of activity in the liabilities for dispositions and discontinued operations for the three years ended December 31, 2010 follows:


	2010			2009			2008
Balance, January 1	$	98,591		$	104,575		$	113,685
Expenditures charged to liabilities		(8,632	)		(8,095	)		(7,660	)
Increase (reduction) to liabilities		3,201			2,111			(1,450	)

Balance, December 31		93,160			98,591			104,575
Less: Current portion		(11,500	)		(10,648	)		(8,214	)

Non-current portion	$	81,660		$	87,943		$	96,361

The Company discloses specific site liabilities that exceed 10 percent of the total liabilities for dispositions and discontinued operations at December 31, 2010. An analysis of the activity for the two years ended December 31, 2010 is as follows:


	Activity (in millions) as of December 31,
Sites	Liability 2008		Expenditures			Revisions to Estimates			Liability 2009		Expenditures			Revisions to Estimates			Liability 2010
Augusta, Georgia	$	14.0	$	(0.9	)	$	2.0		$	15.1	$	(1.3	)	$	1.1		$	14.9
Spartanburg, South Carolina		15.6		(0.5	)		(0.2	)		14.9		(0.8	)		0.2			14.3
East Point, Georgia		13.0		(1.2	)		2.9			14.7		(1.1	)		(1.3	)		12.3
Baldwin, Florida		7.4		(0.7	)		1.7			8.4		(0.8	)		2.4			10.0
Other SWP sites		44.5		(2.5	)		(6.6	)		35.4		(2.0	)		(1.6	)		31.8

Total SWP		94.5		(5.8	)		(0.2	)		88.5		(6.0	)		0.8			83.3
All other sites		10.1		(2.3	)		2.3			10.1		(2.6	)		2.4			9.9

TOTAL	$	104.6	$	(8.1	)	$	2.1		$	98.6	$	(8.6	)	$	3.2		$	93.2

A brief description of each of these sites is as follows:

Augusta, Georgia — SWP operated a wood treatment plant at this site from 1928 to 1988. The majority of visually contaminated surface soils have been removed, and remediation activities currently consist of a groundwater recovery system. The site operates under a 10-year hazardous waste permit issued pursuant to RCRA, which expires in 2014. Current cost estimates could change if recovery or discharge volumes increase or decrease drastically, or if changes to current remediation activities are required in the future. Total spending-to-date as of December 31, 2010 was $65.3 million. The Company's recorded liabilities cover its obligations for estimated remaining remedial and monitoring activities through 2030.

Spartanburg, South Carolina — SWP operated a wood treatment plant at this site from 1925 to 1989. Remediation activities include: (1) a recovery system and biological wastewater treatment plant, (2) an ozone-sparging system treating soil and groundwater and (3) an ion-exchange resin system treating groundwater. The cost estimate includes potential remediation of identified off-site areas which appear to have been impacted from a portion of the former operating plant. SWP is currently negotiating a consent decree with the South Carolina Department of Health and Environmental Control which will govern future investigatory activities at the site. Additional remedial actions may be required in the future. Total spending-to-date as of December 31, 2010 was $36.9 mill ion. The Company's recorded liabilities cover its obligations for estimated remaining remedial and monitoring activities through 2030.

East Point, Georgia — SWP operated a wood treatment plant at this site from 1908 to 1984. This site operates under a 10-year RCRA hazardous waste permit, which is currently in the renewal process. In 2009, SWP entered into a consent order with the Environmental Protection Division of the Georgia Department of Natural Resources which requires that SWP perform certain additional investigatory, analytical and potentially, remedial activity. Therefore, while active remedial measures are currently ongoing, additional remedial measures may be necessary in the future. Total spending-to-date as of December 31, 2010 was $18.8 million. The Company's recorded liabilities cover its obligations for estimated remaining remedial and monitoring activities through 2030.

Baldwin, Florida — SWP operated a wood treatment plant at this site from 1954 to 1987. This site operates under a 10-year hazardous waste permit issued pursuant to RCRA, which expires in 2016. Visually contaminated surface soils have been removed, and current remediation activities primarily consist of a groundwater recovery system. Investigation and assessment of other potential areas of concern are ongoing in accordance with the facility's RCRA permit and additional remedial activities may be necessary in the future. Therefore, current cost estimates could change. Total spending-to-date as of December 31, 2010 was $19.0 million. The Company's recorded liabilities cover its obligations for estimated remaining remedial and monitoring activities through 2025.

The Company estimates that expenditures for environmental investigation, remediation, monitoring and other costs for all dispositions and discontinued operations will be approximately $12 million in 2011 and $9 million in 2012. Such costs will be charged against its liabilities for dispositions and discontinued operations, which include environmental investigation, remediation and monitoring costs. The Company believes established liabilities are sufficient for costs expected to be incurred over the next 20 years with respect to its dispositions and discontinued operations. Remedial actions for these sites vary, but include on-site (and in certain cases off-site) removal or treatment of contaminated soils and sediments, recovery and treatment/remediation of groundwater, and source remediation and/or control.

In addition, the Company is exposed to the risk of reasonably possible additional losses in excess of the established liabilities. As of December 31, 2010, this amount could range up to $40 million, allocable over several of the applicable sites, and arises from uncertainty over the availability or effectiveness of certain remediation technologies, additional or different contamination that may be discovered, development of new or improved environmental remediation technologies and the exercise of discretion in interpretation of applicable law and regulations by governmental agencies.

Incentive Stock Plans

12 Months Ended

Dec. 31, 2010

Incentive Stock Plans

Incentive Stock Plans

18.

INCENTIVE STOCK PLANS

At December 31, 2010, the Company had two stock-based employee compensation plans. The 1994 Rayonier Incentive Stock Plan ("the 1994 Plan") provided for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, performance shares and restricted stock, subject to certain limitations. The Company no longer issues shares under the 1994 Plan. The Rayonier Incentive Stock Plan ("the Stock Plan") provides for up to 6.4 million shares to be granted for incentive stock options, non-qualified stock options, stock appreciation rights, performance shares and restricted stock, subject to certain limitations. At December 31, 2010 a total of 0.9 million shares were available for future grants under the Stock Plan. The Company issues new shares of stock upon the exercise of stock option s, the granting of restricted stock, and the vesting of performance shares.

Total stock-based compensation cost recorded in "Selling and general expenses" was $14.9 million, $15.4 million and $13.0 million for the years ended December 31, 2010, 2009 and 2008, respectively. For the years ended December 31, 2010, 2009 and 2008, stock-based compensation expense of $0.3 million, $0.4 million and $0.4 million, respectively, was recorded in "Cost of sales."

Tax benefits recognized related to stock-based compensation expense for the three years ended December 31, 2010 were $4.2 million, $3.6 million and $3.1 million, respectively.

Fair Value Calculations by Award

Restricted Stock

Restricted stock granted under the Stock Plan generally vests upon completion of a one to three year period. The fair value of each share granted is equal to the share price of the Company's stock on the date of grant. As of December 31, 2010, there was $1.0 million of unrecognized compensation cost related to the Company's outstanding restricted stock. This cost is expected to be recognized over a weighted average period of 0.7 years.

A summary of the Company's restricted shares is presented below:


	2010		2009		2008
Restricted shares granted		28,120		15,271		38,696
Weighted average price of restricted shares granted	$	44.87	$	36.75	$	45.62

(Amounts in millions)
Intrinsic value of restricted stock outstanding	$	4.9	$	5.9	$	4.4
Fair value of restricted stock vested		3.2		0.6		1.0
Cash used to pay the minimum withholding tax requirements in lieu of receiving common shares		0.8		—		0.4


	2010
	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested Restricted Shares at January 1,		141,018		$	44.24
Granted		28,120			44.87
Cancelled		(1,000	)		46.59
Vested		(74,355	)		43.31

Non-vested Restricted Shares at December 31,		93,783			45.14

Performance Share Units

The Company's performance share units generally vest upon completion of a three-year period. The number of shares, if any, that are ultimately awarded is contingent upon Rayonier's total shareholder return versus selected peer group companies. The performance share payout is based on a market condition and as such, the awards are valued using a Monte Carlo simulation model. The model generates the fair value of the award at the grant date, which is then amortized over the vesting period.

The Stock Plan allows for the cash settlement of the minimum required withholding tax on performance share unit awards. As of December 31, 2010, there was $11.3 million of unrecognized compensation cost related to the Company's performance share unit awards. This cost is expected to be recognized over a weighted average period of 1.7 years.

A summary of the Company's performance share units is presented below:


	2010		2009		2008
Common shares of Company stock reserved for performance shares		404,120		610,908		445,778
Weighted average fair value of performance share units granted	$	58.87	$	32.64	$	48.92

(Amounts in millions)
Intrinsic value of outstanding performance share units	$	40.3	$	34.3	$	19.3
Fair value of performance shares vested		19.7		16.0		6.2
Cash used to pay the minimum withholding tax requirements in lieu of receiving common shares		5.3		1.4		3.2


	2010
	Number of Units			Weighted Average Grant Date Fair Value
Outstanding Performance Share units at January 1,		814,275		$	40.70
Granted		202,060			58.87
Units Distributed		(216,615	)		44.02
Cancelled/Adjustments		(32,699	)		39.20

Outstanding Performance Share units at December 31,		767,021			44.61

Expected volatility and dividend yield were estimated using daily returns on the Company's common stock for the three-year period ending on the grant date. The following chart provides a tabular overview of the assumptions used in calculating the fair value of the awards granted for the three years ended December 31, 2010:


	2010			2009			2008
Expected volatility		51.7	%		43.6	%		22.3	%
Dividend yield		n/a	(a)		6.4	%		4.3	%
Risk-free rate		1.4	%		1.1	%		3.1	%

(a)	The 2010 awards receive dividend equivalents, so the dividend yield was not used to calculate the fair value.

Non-Qualified Employee Stock Options

The exercise price of each non-qualified stock option granted under both the 1994 and Stock Plans are equal to the closing market price of the Company's stock on the grant date. Under the 1994 Plan, the maximum term is 10 years and two days from the grant date while under the Stock Plan, the maximum term is 10 years from the grant date. Awards vest ratably over three years. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The expected volatility is based on historical volatility for each grant and is calculated using the historical change in the daily market price of the Company's common stock over the expected life of the award. The expected life is based on prior exercise behavior. The Company has elected to value each grant in total and recognize the expense for stock options on a s traight-line basis over three years.

The following chart provides a tabular overview of the weighted average assumptions and related fair value calculations of options granted for the three years ended December 31, 2010:


	2010			2009			2008
Expected volatility		37.8	%		34.1	%		23.8	%
Dividend yield		4.7	%		6.6	%		4.3	%
Risk-free rate		3.2	%		1.9	%		3.5	%
Expected life (in years)		6.7			6.6			5.7
Fair value per share of options granted	$	10.60		$	4.72		$	7.58
Fair value of options granted (in millions)		2.8			2.3			2.5

A summary of the status of the Company's stock options as of and for the year ended December 31, 2010 is presented below:


	2010
	Number of Shares			Weighted Average Exercise Price (per common share)		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
Options outstanding at January 1,		2,380,182		$	34.21
Granted		263,630			42.36
Exercised		(870,029	)		30.25
Cancelled		(18,354	)		38.75

Options outstanding at December 31,		1,755,429			37.35		6.5	$	26.6

Options vested and expected to vest		1,752,508		$	37.35		6.5	$	26.6

Options exercisable at December 31,		1,209,149		$	37.29		5.7	$	18.4

A summary of additional information pertaining to the Company's stock options is presented below:


	2010		2009		2008
(Amounts in millions)
Intrinsic value of options exercised	$	15.6	$	12.0	$	11.3
Fair value of options vested		2.4		2.5		2.7

As of December 31, 2010, there was $1.9 million of unrecognized compensation cost related to the Company's stock options. This cost is expected to be recognized over a weighted average period of 1.3 years.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2010

Employee Benefit Plans

Employee Benefit Plans

19.

EMPLOYEE BENEFIT PLANS

The Company has four qualified non-contributory defined benefit pension plans covering substantially all of its employees and an unfunded plan that provides benefits in excess of amounts allowable under current tax law in the qualified plans. Employee benefit plan liabilities are calculated using actuarial estimates and management assumptions. These estimates are based on historical information, along with certain assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause the estimates to change.

In September 2008, the Company changed its postretirement medical plan for active and retired salaried employees to shift retiree medical costs to the plan participants over a three year phase-out period. Accordingly, at the beginning of 2012, the Company's intent is to no longer incur retiree medical costs for retired salary plan participants. The change was accounted for as a negative plan amendment and curtailment which resulted in a reduction to the retiree medical liability. The net impact of the reduction was an unrecognized gain in accumulated other comprehensive income of $7.7 million which was amortized over 1.9 years, the average remaining service period of the remaining active participants. As a result of the plan change, a gain of $2.4 million, $4.0 million and $1.3 million was included in the Company's net periodic benefit cost in 2010, 2009 and 2008, respectively.

The following tables set forth the change in the projected benefit obligation and plan assets and reconcile the funded status and the amounts recognized in the Consolidated Balance Sheets for the pension and postretirement benefit plans for the two years ended December 31:


	Pension						Postretirement
	2010			2009			2010			2009
Change in Projected Benefit Obligation
Projected benefit obligation at beginning of year	$	324,554		$	287,504		$	21,361		$	22,226
Service cost		6,196			6,489			587			482
Interest cost		17,740			18,082			1,029			1,144
Actuarial loss (gain)		11,766			21,209			965			533
Plan amendments		1,704			5,352			—			—
Employee contributions		—			—			1,042			1,161
Benefits paid		(15,496	)		(14,082	)		(3,826	)		(4,185	)

Projected benefit obligation at end of year	$	346,464		$	324,554		$	21,158		$	21,361

Change in Plan Assets
Fair value of plan assets at beginning of year	$	231,686		$	185,432		$	—		$	—
Actual return on plan assets		35,636			51,245			—			—
Employer contributions		51,510			9,921			2,784			3,024
Employee contributions		—			—			1,042			1,161
Benefits paid		(15,496	)		(14,082	)		(3,826	)		(4,185	)
Other expense		(872	)		(830	)		—			—

Fair value of plan assets at end of year	$	302,464		$	231,686		$	—		$	—

Funded Status at End of Year:
Net accrued benefit cost	$	(44,000	)	$	(92,868	)	$	(21,158	)	$	(21,361	)

Amounts Recognized in the Consolidated
Balance Sheets Consist of:
Noncurrent assets	$	3,032		$	—		$	—		$	—
Current liabilities		(1,475	)		(1,476	)		(1,566	)		(2,277	)
Noncurrent liabilities		(45,557	)		(91,392	)		(19,592	)		(19,084	)

Net amount recognized	$	(44,000	)	$	(92,868	)	$	(21,158	)	$	(21,361	)

Net gains or losses and prior service costs or credits recognized in other comprehensive income for the three years ended December 31 are as follows:


	Pension									Postretirement
	2010			2009			2008			2010			2009			2008
Net gains (losses)	$	1,348		$	7,778		$	(99,390	)	$	(965	)	$	(533	)	$	276
Prior service cost		(1,704	)		(5,352	)		—			—			—			—
Negative plan amendment		—			—			—			—			—			24,039

Net gains or losses and prior service costs or credits reclassified from other comprehensive income and recognized as a component of pension and postretirement expense for the three years ended December 31 are as follows:


	Pension						Postretirement
	2010		2009		2008		2010			2009			2008
Amortization of losses	$	6,456	$	6,196	$	4,845	$	3,357		$	5,841		$	2,838
Amortization of prior service cost (benefit)		1,657		1,830		1,426		(5,334	)		(9,480	)		(2,642	)

Net losses and prior service costs or credits that have not yet been included in pension and postretirement expense for the two years ended December 31, which have been recognized as a component of AOCI as follows:


	Pension						Postretirement
	2010			2009			2010			2009
Prior service (cost) credit	$	(9,729	)	$	(9,681	)	$	(532	)	$	4,801
Net losses		(126,138	)		(133,942	)		(7,137	)		(9,529	)
Deferred income tax benefit		43,056			42,505			2,659			1,640

AOCI	$	(92,811	)	$	(101,118	)	$	(5,010	)	$	(3,088	)

The accumulated benefit obligation for all of the Company's defined benefit plans was $329.3 million and $300.6 million at December 31, 2010 and 2009, respectively.

For pension and postretirement plans with accumulated benefit obligations in excess of plan assets, the following table sets forth the projected and accumulated benefit obligations and the fair value of plan assets for the two years ended December 31:


	2010		2009
Projected benefit obligation	$	323,918	$	345,915
Accumulated benefit obligation		285,590		300,553
Fair value of plan assets		255,728		231,686

The following tables set forth the components of net pension and postretirement benefit cost that have been recognized during the three years ended December 31:


	Pension									Postretirement
	2010			2009			2008			2010			2009			2008
Components of Net Periodic Benefit Cost
Service cost	$	6,196		$	6,489		$	6,872		$	587		$	482		$	656
Interest cost		17,740			18,082			16,569			1,029			1,144			2,182
Expected return on plan assets		(21,651	)		(21,427	)		(21,072	)		—			—			—
Amortization of prior service cost (benefit)		1,657			1,830			1,426			(5,334	)		(9,480	)		(2,642	)
Amortization of losses		6,456			6,196			4,845			3,357			5,841			2,838

Net periodic benefit cost (benefit)	$	10,398		$	11,170		$	8,640		$	(361	)	$	(2,013	)	$	3,034

The estimated pre-tax amounts that will be amortized from AOCI into net periodic benefit cost in 2011 are as follows:


	Pension		Postretirement
Amortization of loss	$	8,609	$	703
Amortization of prior service cost		1,359		87

Total amortization of AOCI loss	$	9,968	$	790

The following table sets forth the principal assumptions inherent in the determination of benefit obligations and net periodic benefit cost of the pension and postretirement benefit plans as of December 31:


	Pension						Postretirement
	2010			2009			2010			2009
Assumptions used to determine benefit obligations at December 31:
Discount rate		5.25	%		5.80	%		5.10	%		5.50	%
Rate of compensation increase		4.50	%		4.50	%		—			—
Assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate		5.80	%		6.15	%		5.50	%		6.15	%
Expected long-term return on plan assets		8.50	%		8.50	%		—			—
Rate of compensation increase		4.50	%		4.50	%		—			—

At December 31, 2010, the plans' discount rate was 5.25 percent, which closely approximates interest rates on high quality, long-term obligations. Effective December 31, 2010, the expected return on plan assets remained at 8.5 percent, which is based on historical and expected long-term rates of return on broad equity and bond indices and consideration of the actual annualized rate of return. The Company's external consultants utilize this information in developing assumptions for returns, risks and correlation of asset classes which are then used to establish the asset allocation ranges.

The following table sets forth the assumed health care cost trend rates at December 31:


	Postretirement
	2010			2009
Health care cost trend rate assumed for next year		8.50	%		9.00	%
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)		5.00	%		5.00	%
Year that the rate reaches the ultimate trend rate		2017			2017

Assumed health care cost trend rates have a significant effect on the amounts reported for the postretirement benefit plans. The following table shows the effect of a one percentage point change in assumed health care cost trends:


	1 Percent
Effect on:	Increase		Decrease
Total of service and interest cost components	$	147	$	(124	)
Accumulated postretirement benefit obligation		1,319		(1,149	)

Investment of Plan Assets

The Company's pension plans' asset allocation at December 31, 2010 and 2009, and target allocation ranges by asset category are as follows:


	Percentage of Plan Assets						Target Allocation Range
Asset Category	2010			2009			Target Allocation Range
Domestic equity securities		44	%		38	%		40-45	%
International equity securities		23	%		27	%		20-30	%
Domestic fixed income securities		25	%		27	%		25-30	%
International fixed income securities		5	%		5	%		4-6	%
Real estate fund		3	%		3	%		2-4	%

Total		100	%		100	%

The Pension and Savings Plan Committee and the Audit Committee of the Board of Directors oversee the pension plans' investment program which is designed to maximize returns and provide sufficient liquidity to meet plan obligations while maintaining acceptable risk levels. The investment approach emphasizes diversification by allocating the plans' assets among asset categories and selecting investment managers whose various investment methodologies will be minimally correlative with each other. Investments within the equity categories may include large capitalization, small capitalization and emerging market securities, while the international fixed income portfolio may include emerging markets debt. Pension assets did not include a direct investment in Rayonier common stock at December 31, 2010 or 2009.

Fair Value Measurements

The following table sets forth by level, within the fair value hierarchy (see Note 2 — Summary of Significant Accounting Policies for definition), the assets of the plans as of December 31, 2010 and 2009:


Asset Category	Fair Value at December 31, 2010 Level 1		Fair Value at December 31, 2009 Level 1
Domestic equity securities	$	130,274	$	86,610
International equity securities		68,878		61,807
Domestic fixed income securities		75,090		60,955
International fixed income securities		14,410		11,306
Real estate fund		8,986		6,945
Short-term investments		4,826		4,063

Total	$	302,464	$	231,686

The valuation methodology used for assets measured at fair value for these funds is the net asset value in an observable market. There have been no changes in the methodology used during the years ended December 31, 2010 and 2009.

Cash Flows

Expected benefit payments in future years are as follows:


	Pension Benefits		Postretirement Benefits
2011	$	16,306	$	1,566
2012		17,183		1,276
2013		18,322		1,483
2014		19,355		1,586
2015		20,337		1,677
2016 - 2020		116,501		8,315

The Company has no mandatory pension contributions 2011 and does not expect to make any discretionary contributions.

Defined Contribution Plans

The Company provides defined contribution plans to all of its hourly and salaried employees. Company contributions charged to expense for these plans were $2.4 million, $2.2 million and $2.4 million for the years ended December 31, 2010, 2009 and 2008, respectively. Rayonier Hourly and Salaried Defined Contribution Plans include Rayonier common stock with a fair market value of $66.4 million and $64.2 million at December 31, 2010 and 2009, respectively.

The Company closed enrollment in its pension and postretirement medical plans to salaried employees hired after December 31, 2005, to Jesup hourly employees hired after March 4, 2009 and to Fernandina hourly employees hired after April 30, 2006. These employees are immediately eligible to participate in the Company's 401(k) plan and receive an enhanced contribution. Company contributions related to this plan enhancement for the years ended December 31, 2010, 2009 and 2008 were $0.6 million, $0.4 million and $0.3 million, respectively.

Consolidating Financial Statements

12 Months Ended

Dec. 31, 2010

Consolidating Financial Statements

Consolidating Financial Statements

21. CONSOLIDATING FINANCIAL STATEMENTS

In October 2007, TRS issued $300 million of 3.75% Senior Exchangeable Notes due 2012, and in August 2009 TRS issued $172.5 million of 4.50% Senior Exchangeable Notes due 2015. The notes for both transactions are guaranteed by Rayonier Inc. and are non-callable. In connection with these exchangeable notes, the Company provides the following condensed consolidating financial information in accordance with SEC Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use of the equity method of accounting to reflect ownership interests in wholly-owned subsidiaries, which are eliminated upon consolidation, and the allocation of certain expenses of Rayonier Inc. incurred for the benefit of its subsidiaries.

Reclassifications

On July 29, 2010, Rayonier Inc. reorganized its operating structure by creating a new wholly-owned operating entity Rayonier Operating Company LLC ("ROC"), and entering into a contribution agreement under which Rayonier Inc. contributed all assets and liabilities to ROC. As part of this agreement, ROC guarantees the TRS notes mentioned above. Rayonier Inc.'s guarantee of the TRS notes was unchanged by the transaction. Accordingly, the Company has revised its presentation of previously reported consolidating financial statements to reflect ROC as a subsidiary guarantor.

Subsequent to the issuance of the supplemental condensed consolidating financial information for the years ended December 31, 2009, 2008 and 2007 the Company determined that certain amounts had been incorrectly allocated between the entities. For the year ended December 31, 2009 cash of $68 million and debt of $244 million was previously allocated to the TRS non-guarantor subsidiaries instead of the TRS (Issuer) entity. This resulted in an understatement of interest expense of $25 million and $28 million for the years ended December 31, 2009 and 2008 for TRS and an overstatement for the same amounts for TRS non-guarantor subsidiaries. Additionally, an equity investment totaling $75 million had previously been allocated to Rayonier Inc. (Parent Guarantor) instead of to the Other non-guarantor subsidiaries. Consequently, Parent Guarantor and Issuer investment in subsidiaries and equity in earnings of unconsolidated affiliates and Issuer and Non-guarantor subsidiaries income tax expense, as previously reported, were also impacted by these misallocations in lesser amounts. The information below gives effect to the correction of these matters. The aforementioned items do not impact the Company's Consolidated Balance Sheet, Consolidated Statements of Income and Comprehensive Income or Consolidated Statements of Cash Flows for any of the periods. Management believes the effects of these corrections are not material to the Company's previously issued consolidated financial statements and intends, for those prior period supplemental condensed consolidated financial information not presented as part of this footnote, to reflect corrections in future filings.


	CONDENSED CONSOLIDATING STATEMENTS OF INCOME For the Year Ended December 31, 2010
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
SALES	$	—	$	—		$	—		$	1,234,254		$	225,524		$	(144,545	)	$	1,315,233

Costs and Expenses
Cost of sales		—		—			—			992,543			119,682			(122,126	)		990,099
Selling and general expenses		—		10,122			—			53,874			3,106			—			67,102
Other operating expense (income), net		—		385			—			3,184			(14,043	)		(45	)		(10,519	)

		—		10,507			—			1,049,601			108,745			(122,171	)		1,046,682
Equity in income of New Zealand joint venture		—		—			—			810			223			—			1,033

OPERATING (LOSS) INCOME BEFORE GAIN ON SALE OF A PORTION OF THE INTEREST IN THE NEW ZEALAND JOINT VENTURE		—		(10,507	)		—			185,463			117,002			(22,374	)		269,584
Gain on sale of a portion of the interest in the New Zealand joint venture		—		—			—			7,697			4,670			—			12,367

OPERATING (LOSS) INCOME		—		(10,507	)		—			193,160			121,672			(22,374	)		281,951
Interest expense		—		239			(50,313	)		(256	)		(133	)		—			(50,463	)
Interest and miscellaneous income (expense), net		—		12,952			(4,309	)		(26,955	)		19,627			—			1,315
Equity in income from subsidiaries		217,586		221,578			137,471			—			—			(576,635	)		—

INCOME BEFORE INCOME TAXES		217,586		224,262			82,849			165,949			141,166			(599,009	)		232,803
Income tax (expense) benefit		—		(6,676	)		19,937			(28,478	)		—			—			(15,217	)

NET INCOME	$	217,586	$	217,586		$	102,786		$	137,471		$	141,166		$	(599,009	)	$	217,586


	CONDENSED CONSOLIDATING STATEMENTS OF INCOME For the Year Ended December 31, 2009
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
SALES	$	—	$	—		$	—		$	1,016,463		$	193,019		$	(40,915	)	$	1,168,567

Costs and Expenses
Cost of sales		—		—			—			831,167			129,165			(45,560	)		914,772
Selling and general expenses		—		11,349			—			47,953			3,331			—			62,633
Other operating expense (income), net		—		84			—			(204,268	)		(15,388	)		(1,600	)		(221,172	)

		—		11,433			—			674,852			117,108			(47,160	)		756,233
Equity in income (loss) of New Zealand joint venture		—		—			—			357			(3,183	)		—			(2,826	)

OPERATING (LOSS) INCOME		—		(11,433	)		—			341,968			72,728			6,245			409,508
Interest expense		—		(113	)		(47,761	)		64			(4,631	)		—			(52,441	)
Interest and miscellaneous income (expense), net		—		5,244			(3,832	)		(4,518	)		4,981			(65	)		1,810
Equity in income from subsidiaries		312,541		328,682			282,186			—			—			(923,409	)		—

INCOME BEFORE INCOME TAXES		312,541		322,380			230,593			337,514			73,078			(917,229	)		358,877
Income tax (expense) benefit		—		(9,839	)		18,831			(55,328	)		—			—			(46,336	)

NET INCOME	$	312,541	$	312,541		$	249,424		$	282,186		$	73,078		$	(917,229	)	$	312,541


	CONDENSED CONSOLIDATING STATEMENTS OF INCOME For the Year Ended December 31, 2008
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
SALES	$	—	$	—		$	—		$	1,121,576		$	376,287		$	(226,815	)	$	1,271,048

Costs and Expenses
Cost of sales		—		—			—			948,675			163,555			(120,336	)		991,894
Selling and general expenses		—		10,610			—			50,626			3,267			—			64,503
Other operating expense (income), net		—		150			—			602			(12,944	)		(308	)		(12,500	)

		—		10,760			—			999,903			153,878			(120,644	)		1,043,897
Equity in income (loss) of New Zealand joint venture		—		—			—			159			(874	)		—			(715	)

OPERATING (LOSS) INCOME		—		(10,760	)		—			121,832			221,535			(106,171	)		226,436
Interest expense		—		1,121			(45,957	)		(234	)		(5,663	)		4			(50,729	)
Interest and miscellaneous income (expense), net		—		3,453			(1,794	)		(4,828	)		5,619			(138	)		2,312
Equity in income from subsidiaries		148,583		152,216			67,353			—			—			(368,152	)		—

INCOME BEFORE INCOME TAXES		148,583		146,030			19,602			116,770			221,491			(474,457	)		178,019
Income tax benefit (expense)		—		2,553			17,428			(49,417	)		—			—			(29,436	)

NET INCOME	$	148,583	$	148,583		$	37,030		$	67,353		$	221,491		$	(474,457	)	$	148,583


	CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2010
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)		Rayonier TRS Holdings Inc. (Issuer)		Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	—	$	29,759	$	283,258	$	1,280		$	35,166		$	—		$	349,463
Accounts receivable, less allowance for doubtful accounts		—		1		—		81,288			1,351			—			82,640
Inventory		—		—		—		123,432			—			(13,397	)		110,035
Intercompany interest receivable		—		—		—		—			4,320			(4,320	)		—
Income tax and alternative fuel mixture credit receivable		—		1,750		—		19,984			—			—			21,734
Prepaid and other current assets		—		1,273		842		38,697			4,502			—			45,314

Total current assets		—		32,783		284,100		264,681			45,339			(17,717	)		609,186

TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION		—		—		—		37,398			1,098,870			1,663			1,137,931
NET PROPERTY, PLANT AND EQUIPMENT		—		2,819		—		380,577			1,711			197			385,304
INVESTMENT IN JOINT VENTURE		—		—		—		(12,282	)		80,765			—			68,483
INVESTMENT IN SUBSIDIARIES		1,251,582		1,392,465		987,381		—			—			(3,631,428	)		—
OTHER ASSETS		—		26,642		9,351		664,664			13,153			(551,061	)		162,749

TOTAL ASSETS	$	1,251,582	$	1,454,709	$	1,280,832	$	1,335,038		$	1,239,838		$	(4,198,346	)	$	2,363,653

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	823	$	20	$	55,052		$	2,090		$	—		$	57,985
Bank loans and current maturities		—		—		93,057		—			—			—			93,057
Accrued taxes		—		—		—		8,283			2,054			—			10,337
Accrued payroll and benefits		—		13,507		—		9,590			2,369			—			25,466
Accrued interest		—		12		5,591		603			—			—			6,206
Accrued customer incentives		—		—		—		9,759			—			—			9,759
Accrued professional fees		—		375		—		9,901			—			—			10,276
Other current liabilities		—		2,233		—		10,170			7,959			—			20,362
Current liabilities for dispositions and discontinued operations		—		—		—		11,500			—			—			11,500

Total current liabilities		—		16,950		98,668		114,858			14,472			—			244,948

LONG-TERM DEBT		—		—		675,103		—			—			—			675,103
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS		—		—		—		81,660			—			—			81,660
PENSION AND OTHER POSTRETIREMENT BENEFITS		—		63,759		—		2,576			—			—			66,335
OTHER NON-CURRENT LIABILITIES		—		19,811		—		23,552			662			—			44,025
INTERCOMPANY PAYABLE		—		102,607		—		125,011			(3,751	)		(223,867	)		—

TOTAL LIABILITIES		—		203,127		773,771		347,657			11,383			(223,867	)		1,112,071

TOTAL SHAREHOLDERS' EQUITY		1,251,582		1,251,582		507,061		987,381			1,228,455			(3,974,479	)		1,251,582

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,251,582	$	1,454,709	$	1,280,832	$	1,335,038		$	1,239,838		$	(4,198,346	)	$	2,363,653


	CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2009
	Rayonier Inc. (Parent Guarantor)		ROC (Subsidiary Guarantor)		Rayonier TRS Holdings Inc. (Issuer)		Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)		Consolidating Adjustments			Total Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	—	$	2,895	$	67,494	$	2,228		$	2,347	$	—		$	74,964
Accounts receivable, less allowance for doubtful accounts		—		—		—		101,710			2,030		—			103,740
Inventory		—		—		—		114,187			—		(25,683	)		88,504
Intercompany interest receivable		—		—		—		—			1,081		(1,081	)		—
Income tax and alternative fuel mixture credit receivable		—		—		—		192,579			—		—			192,579
Prepaid and other current assets		—		1,430		768		44,712			2,999		—			49,909

Total current assets		—		4,325		68,262		455,416			8,457		(26,764	)		509,696

TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION		—		1,807		—		87,747			1,099,005		—			1,188,559
NET PROPERTY, PLANT AND EQUIPMENT		—		1,493		—		341,790			1,147		509			344,939
INVESTMENT IN JOINT VENTURE		—		—		—		(24,249	)		75,248		—			50,999
INVESTMENT IN SUBSIDIARIES		1,146,206		1,248,504		1,049,823		—			—		(3,444,533	)		—
OTHER ASSETS		—		23,135		12,159		495,704			4,313		(376,573	)		158,738

TOTAL ASSETS	$	1,146,206	$	1,279,264	$	1,130,244	$	1,356,408		$	1,188,170	$	(3,847,361	)	$	2,252,931

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	—	$	3,057	$	39	$	54,832		$	656	$	—		$	58,584
Bank loans and current maturities		—		—		4,650		—			—		—			4,650
Accrued taxes		—		2,553		—		6,643			2,798		—			11,994
Accrued payroll and benefits		—		13,223		—		9,327			1,214		—			23,764
Accrued interest		—		519		5,579		414			—		—			6,512
Accrued customer incentives		—		—		—		25,644			—		—			25,644
Accrued professional fees		—		631		—		9,852			—		—			10,483
Other current liabilities		—		2,478		—		11,904			8,450		—			22,832
Current liabilities for dispositions and discontinued operations		—		—		—		10,648			—		—			10,648

Total current liabilities		—		22,461		10,268		129,264			13,118		—			175,111

LONG-TERM DEBT		—		5,000		684,999		—			5,000		—			694,999
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS		—		—		—		87,943			—		—			87,943
PENSION AND OTHER POSTRETIREMENT BENEFITS		—		86,522		—		25,140			—		—			111,662
OTHER NON-CURRENT LIABILITIES		—		13,352		—		23,035			23,553		(22,930	)		37,010
INTERCOMPANY PAYABLE		—		5,723		—		41,203			8,706		(55,632	)		—

TOTAL LIABILITIES		—		133,058		695,267		306,585			50,377		(78,562	)		1,106,725

TOTAL SHAREHOLDERS' EQUITY		1,146,206		1,146,206		434,977		1,049,823			1,137,793		(3,768,799	)		1,146,206

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,146,206	$	1,279,264	$	1,130,244	$	1,356,408		$	1,188,170	$	(3,847,361	)	$	2,252,931


	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2010
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	143,387		$	177,502		$	30,000		$	307,384		$	181,333		$	(344,216	)	$	495,390

INVESTING ACTIVITIES
Capital expenditures		—			(2,251	)		—			(103,421	)		(32,777	)		—			(138,449	)
Purchase of timberlands		—			—			—			—			(5,360	)		—			(5,360	)
Intercompany purchase of timberlands		—			—			—			—			(46,700	)		46,700			—
Intercompany purchase of real estate		—			—			—			(41,253	)		—			41,253			—
Change in restricted cash		—			—			—			—			(8,231	)		—			(8,231	)
Investment In Subsidiaries		—			—			145,975			—			—			(145,975	)		—
Other		—			—			—			11,589			(2,205	)		—			9,384

CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES		—			(2,251	)		145,975			(133,085	)		(95,273	)		(58,022	)		(142,656	)

FINANCING ACTIVITIES
Issuance of debt		—			—			75,000			—			82,000			—			157,000
Repayment of debt		—			(5,000	)		(4,650	)		—			(87,000	)		—			(96,650	)
Dividends paid		(163,673	)		—			—			—			—			—			(163,673	)
Proceeds from the issuance of common shares		26,314			—			—			—			—			—			26,314
Excess tax benefits on stock-based compensation		—			—			—			5,411			—			—			5,411
Debt issuance costs		—			—			(561	)		—			—			—			(561	)
Repurchase of common shares		(6,028	)		—			—			—			—			—			(6,028	)
Distributions to / from Parent		—			(143,387	)		(30,000	)		(180,610	)		(48,241	)		402,238			—

CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES		(143,387	)		(148,387	)		39,789			(175,199	)		(53,241	)		402,238			(78,187	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		—			—			—			(48	)		—			—			(48	)

CASH AND CASH EQUIVALENTS
Increase (decrease) in cash and cash equivalents		—			26,864			215,764			(948	)		32,819			—			274,499
Balance, beginning of year		—			2,895			67,494			2,228			2,347			—			74,964

Balance, end of year	$	—		$	29,759		$	283,258		$	1,280		$	35,166		$	—		$	349,463


	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2009
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	135,985		$	144,143		$	38,000		$	133,320		$	185,400		$	(329,549	)	$	307,299

INVESTING ACTIVITIES
Capital expenditures		—			(4	)		—			(62,018	)		(32,239	)		2,594			(91,667	)
Change in restricted cash		—			—			—			—			1,399			—			1,399
Investment in Subsidiaries		—			—			37,362			—			—			(37,362	)		—
Other		—			—			—			(3,980	)		1,504			—			(2,476	)

CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES		—			(4	)		37,362			(65,998	)		(29,336	)		(34,768	)		(92,744	)

FINANCING ACTIVITIES
Issuance of debt		—			5,000			177,500			—			85,000			—			267,500
Repayment of debt		—			(20,000	)		(155,064	)		—			(132,579	)		—			(307,643	)
Dividends paid		(158,218	)		—			—			—			—			—			(158,218	)
Proceeds from the issuance of common shares		11,115			—			—			—			—			—			11,115
Excess tax benefits on stock-based compensation		—			—			—			2,720			—			—			2,720
Purchase of exchangeable note hedge		—			—			(23,460	)		—			—			—			(23,460	)
Proceeds from issuance of warrant		12,506			—			—			—			—			—			12,506
Debt issuance costs		—			—			(4,678	)		—			—			—			(4,678	)
Repurchase of common shares		(1,388	)		—			—			—			—			—			(1,388	)
Distributions to / from Parent		—			(135,985	)		(38,000	)		(79,332	)		(111,000	)		364,317			—

CASH USED FOR FINANCING ACTIVITIES		(135,985	)		(150,985	)		(43,702	)		(76,612	)		(158,579	)		364,317			(201,546	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		—			—			—			270			—			—			270

CASH AND CASH EQUIVALENTS
(Decrease) increase in cash and cash equivalents		—			(6,846	)		31,660			(9,020	)		(2,515	)		—			13,279
Balance, beginning of year		—			9,741			35,834			11,248			4,862			—			61,685

Balance, end of year	$	—		$	2,895		$	67,494		$	2,228		$	2,347		$	—		$	74,964


	CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2008
	Rayonier Inc. (Parent Guarantor)			ROC (Subsidiary Guarantor)			Rayonier TRS Holdings Inc. (Issuer)			Subsidiaries of Rayonier TRS Holdings Inc. (Non- guarantors)			All Other Subsidiaries (Non- guarantors)			Consolidating Adjustments			Total Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	152,692		$	88,222		$	45,000		$	195,722		$	359,729		$	(501,177	)	$	340,188

INVESTING ACTIVITIES
Capital expenditures		—			—			—			(70,033	)		(34,773	)		—			(104,806	)
Purchase of timberlands		—			—			—			(246,399	)		(172,958	)		189,656			(229,701	)
Purchase of real estate		—			—			—			(4,336	)		—			—			(4,336	)
Change in restricted cash		—			—			—			—			8,523			—			8,523
Investment In Subsidiaries		—			—			(186,616	)		—			—			186,616			—
Other		—			—			—			(71	)		—			—			(71	)

CASH USED FOR INVESTING ACTIVITIES		—			—			(186,616	)		(320,839	)		(199,208	)		376,272			(330,391	)

FINANCING ACTIVITIES
Issuance of debt		—			20,000			138,800			—			15,000			—			173,800
Repayment of debt		—			—			(82,685	)		—			(70,000	)		—			(152,685	)
Dividends paid		(156,978	)		—			—			—			—			—			(156,978	)
Proceeds from the issuance of common shares		8,265			—			—			—			—			—			8,265
Excess tax benefits on stock-based compensation		—			—			—			3,248			—			—			3,248
Repurchase of common shares		(3,979	)		—			—			—			—			—			(3,979	)
Issuance of short-term intercompany notes		—			50,000			—			—			(50,000	)		—			—
Distributions to / from Parent		—			(152,692	)		(45,000	)		127,287			(54,500	)		124,905			—

CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES		(152,692	)		(82,692	)		11,115			130,535			(159,500	)		124,905			(128,329	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		—			—			—			(864	)		—			—			(864	)

CASH AND CASH EQUIVALENTS
Increase (decrease) in cash and cash equivalents		—			5,530			(130,501	)		4,554			1,021			—			(119,396	)
Balance, beginning of year		—			4,211			166,335			6,694			3,841			—			181,081

Balance, end of year	$	—		$	9,741		$	35,834		$	11,248		$	4,862		$	—		$	61,685

Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Consolidated Statements of Income and Comprehensive Income
Retiree benefit plan amendment, income tax expense			$ 7,662
Amortization of pension and postretirement benefit costs, income tax expense (benefit)	$ 1,570	$ (1,401)	$ 27,120

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2010	Dec. 31, 2009
Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts	$ 387	$ 1,150
Common Shares, shares authorized	240,000,000	120,000,000
Common Shares, shares issued	80,682,093	79,541,974
Common Shares, shares outstanding	80,682,093	79,541,974