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Rayonier 2012 10Q 1Q2012
Table of Contents


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2012
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    
For the transition period from              to             
Commission File Number 1-6780
RAYONIER INC.
Incorporated in the State of North Carolina
I.R.S. Employer Identification No. 13-2607329
1301 RIVERPLACE BOULEVARD
JACKSONVILLE, FL 32207
(Principal Executive Office)
Telephone Number: (904) 357-9100

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES x        NO  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES x       NO  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  x
  
Accelerated filer  o
Non-accelerated filer  o
  
Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o        NO  x

As of April 17, 2012, there were outstanding 122,451,271 Common Shares of the registrant.

















Table of Contents

TABLE OF CONTENTS
 
Item
 
  
Page
 
 
PART I - FINANCIAL INFORMATION
 
1.
 
 
 
 
 
 
 
 
 
2.
 
3.
 
4.
 
 
 
PART II - OTHER INFORMATION
 
2.
 
6.
 
 
 
 

i

Table of Contents

PART I.        FINANCIAL INFORMATION

Item 1.         Financial Statements

RAYONIER INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 
Three Months Ended March 31,
 
2012
 
2011
SALES
$
355,780

 
$
357,731

Costs and Expenses
 
 
 
Cost of sales
253,313

 
257,511

Selling and general expenses
19,619

 
16,433

Other operating income, net
(1,148
)
 
(2,118
)
 
271,784

 
271,826

Equity in income of New Zealand joint venture
13

 
1,673

OPERATING INCOME
84,009

 
87,578

Interest expense
(11,825
)
 
(13,317
)
Interest and miscellaneous (expense) income, net
(23
)
 
293

INCOME BEFORE INCOME TAXES
72,161

 
74,554

Income tax expense
(18,724
)
 
(16,142
)
NET INCOME
53,437

 
58,412

OTHER COMPREHENSIVE INCOME (LOSS)
 
 
 
Foreign currency translation adjustment
5,825

 
288

New Zealand joint venture cash flow hedges
1,205

 
(567
)
Amortization of gains/losses from pension and postretirement plans, net of income tax expense of $1,368 and $928
3,140

 
2,093

Total other comprehensive income
10,170

 
1,814

COMPREHENSIVE INCOME
$
63,607

 
$
60,226

EARNINGS PER COMMON SHARE (Note 2)
 
 
 
Basic earnings per share
$
0.44

 
$
0.48

 
 
 
 
Diluted earnings per share
$
0.42

 
$
0.47

 
 
 
 
Dividends per share
$
0.40

 
$
0.36



See Notes to Condensed Consolidated Financial Statements.

1

Table of Contents

RAYONIER INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
 
March 31, 2012
 
December 31, 2011
ASSETS
CURRENT ASSETS
 
 
 
Cash and cash equivalents
$
236,575

 
$
78,603

Accounts receivable, less allowance for doubtful accounts of $350 and $399
97,198

 
95,008

Inventory
 
 
 
Finished goods
80,457

 
96,261

Work in progress
2,864

 
5,544

Raw materials
16,922

 
18,295

Manufacturing and maintenance supplies
2,074

 
1,898

Total inventory
102,317

 
121,998

Prepaid and other current assets
62,010

 
48,893

Total current assets
498,100

 
344,502

TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION
1,504,291

 
1,503,711

PROPERTY, PLANT AND EQUIPMENT
 
 
 
Land
26,952

 
26,917

Buildings
144,018

 
140,269

Machinery and equipment
1,350,939

 
1,355,897

Construction in progress
157,376

 
96,097

Total property, plant and equipment, gross
1,679,285

 
1,619,180

Less — accumulated depreciation
(1,157,275
)
 
(1,157,628
)
      Total property, plant and equipment, net
522,010

 
461,552

INVESTMENT IN JOINT VENTURE (Note 5)
74,388

 
69,219

OTHER ASSETS
195,094

 
190,364

TOTAL ASSETS
$
2,793,883

 
$
2,569,348

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
 
 
 
Accounts payable
$
100,681

 
$
72,873

Current maturities of long-term debt
50,512

 
28,110

Accrued taxes
17,350

 
5,223

Accrued payroll and benefits
20,322

 
26,846

Accrued interest
11,075

 
7,044

Accrued customer incentives
7,148

 
10,369

Other current liabilities
16,064

 
17,855

Current liabilities for dispositions and discontinued operations (Note 10)
9,931

 
9,931

Total current liabilities
233,083

 
178,251

LONG-TERM DEBT
973,717

 
819,229

NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS (Note 10)
79,194

 
80,893

PENSION AND OTHER POSTRETIREMENT BENEFITS (Note 12)
140,517

 
140,623

OTHER NON-CURRENT LIABILITIES
24,987

 
27,279

COMMITMENTS AND CONTINGENCIES (Note 9 and 11)

 

SHAREHOLDERS’ EQUITY
 
 
 
Common Shares, 240,000,000 shares authorized, 122,450,771 and 122,035,177 shares issued and outstanding
634,976

 
630,286

Retained earnings
810,687

 
806,235

Accumulated other comprehensive loss
(103,278
)
 
(113,448
)
TOTAL SHAREHOLDERS' EQUITY
1,342,385

 
1,323,073

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
2,793,883

 
$
2,569,348



See Notes to Condensed Consolidated Financial Statements.

2

Table of Contents

RAYONIER INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)

 
Three Months Ended March 31,
 
2012
 
2011
OPERATING ACTIVITIES
 
 
 
Net income
$
53,437

 
$
58,412

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
Depreciation, depletion and amortization
31,168

 
31,870

Non-cash cost of real estate sold
1,382

 
296

Stock-based incentive compensation expense
6,466

 
4,275

Amortization of debt discount/premium
1,890

 
2,152

Deferred income taxes
3,028

 
7,345

Amortization of gains/losses from pension and postretirement plans
4,508

 
3,021

Other
(1,909
)
 
(5,215
)
Changes in operating assets and liabilities:
 
 
 
Receivables
(1,911
)
 
(14,766
)
Inventories
17,035

 
9,161

Accounts payable
3,978

 
14,644

All other operating activities
(6,007
)
 
6,957

Expenditures for dispositions and discontinued operations
(1,711
)
 
(2,447
)
CASH PROVIDED BY OPERATING ACTIVITIES
111,354

 
115,705

INVESTING ACTIVITIES
 
 
 
Capital expenditures
(42,079
)
 
(34,761
)
Purchase of timberlands
(8,689
)
 
(2,942
)
Jesup mill cellulose specialties expansion (gross purchases of $41,051, net of purchases on account of $15,025)
(26,026
)
 
—

Change in restricted cash
(5,609
)
 
—

Other
8,736

 
6,882

CASH USED FOR INVESTING ACTIVITIES
(73,667
)
 
(30,821
)
FINANCING ACTIVITIES
 
 
 
Issuance of debt
340,000

 
—

Repayment of debt
(165,000
)
 
(75,000
)
Dividends paid
(49,249
)
 
(43,894
)
Proceeds from the issuance of common shares
2,061

 
5,399

Excess tax benefits on stock-based compensation
3,946

 
3,970

Debt issuance costs
(3,565
)
 
—

Repurchase of common shares
(7,783
)
 
(7,826
)
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
120,410

 
(117,351
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(125
)
 
116

CASH AND CASH EQUIVALENTS
 
 
 
Change in cash and cash equivalents
157,972

 
(32,351
)
Balance, beginning of year
78,603

 
349,463

Balance, end of period
$
236,575

 
$
317,112

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 
 
 
Cash paid (received) during the period:
 
 
 
Interest
$
5,213

 
$
4,671

Income taxes
$
325

 
$
(5,892
)
Non-cash investing activity:
 
 
 
Capital assets purchased on account
$
44,576

 
$
16,425



See Notes to Condensed Consolidated Financial Statements.

3

Table of Contents

RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)


1.
BASIS OF PRESENTATION
Basis of Presentation
The unaudited condensed consolidated financial statements and notes thereto of Rayonier Inc. and its subsidiaries ("Rayonier" or the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). In the opinion of management, these financial statements and notes reflect all adjustments necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. These statements and notes should be read in conjunction with the financial statements and supplementary data included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC.
Subsequent Events
The Company evaluated events and transactions that occurred after the balance sheet date but before financial statements were issued, and one subsequent event warranted disclosure. See Note 13 — Debt for additional information.

2.
EARNINGS PER COMMON SHARE
The impact of the August 24, 2011 three-for-two stock split is reflected for all periods presented in the following table which provides details of the calculations of basic and diluted earnings per common share:
 
Three Months Ended March 31,
 
2012
 
2011
Net income
$
53,437

 
$
58,412

Shares used for determining basic earnings per common share
122,352,435

 
121,420,046

Dilutive effect of:
 
 
 
Stock options
719,166

 
715,043

Performance and restricted shares
651,729

 
697,691

Assumed conversion of Senior Exchangeable Notes (a) (b)
2,967,187

 
1,462,679

Assumed conversion of warrants (b)
1,241,612

 
—

Shares used for determining diluted earnings per common share
127,932,129

 
124,295,459

Basic earnings per common share
$
0.44

 
$
0.48

Diluted earnings per common share
$
0.42

 
$
0.47


 
Three Months Ended March 31,
 
2012
 
2011
Anti-dilutive shares excluded from the computations of diluted earnings per share:
 
 
 
Stock options, performance and restricted shares
445,859

 
196,964

Assumed conversion of exchangeable note hedges (a)
2,967,187

 
1,462,679

Total
3,413,046

 
1,659,643

(a) Upon maturity of the Senior Exchangeable Notes (the "Notes"), Rayonier will not issue additional shares for the Notes due to the offsetting exchangeable note hedges (the "hedges"). However, Accounting Standards Codification 260, Earnings Per Share requires the assumed conversion of the Notes to be included in dilutive shares if the average stock price for the period exceeds the strike prices, while the assumed conversion of the hedges are excluded since they are anti-dilutive. Rayonier will distribute additional shares upon maturity of the warrants if the stock price exceeds the strike prices of $41.78 for the Notes due 2012 and $39.85 for the Notes due 2015. For additional information on the potential dilutive impact of the Senior Exchangeable Notes, warrants and exchangeable note hedges, see Note 11 — Debt in the 2011 Annual Report on Form 10-K and Note 13 — Debt of this Form 10-Q.
(b) The higher shares used for determining earnings per common share was primarily due to an increase in the average stock price from $39.71 in first quarter 2011 to $45.07 in first quarter 2012.

4

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

3.
INCOME TAXES
Rayonier is a real estate investment trust ("REIT"). 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. In 2011, the law provided a built-in-gains tax holiday. Accordingly, the provision for corporate income taxes relates principally to current and deferred taxes on taxable REIT subsidiaries' income and certain property sales.
The Company's effective tax rate is below the 35 percent U.S. statutory tax rate primarily due to tax benefits associated with being a REIT. Effective tax rates were 25.9 percent and 21.7 percent for the three months ended March 31, 2012 and 2011, respectively. The higher tax rate in 2012 was due to proportionately higher expected earnings from our taxable REIT subsidiaries.

4.
RESTRICTED DEPOSITS
In order to qualify for like-kind exchange ("LKE") treatment, the proceeds from real estate sales must be deposited with a third-party intermediary. These proceeds are accounted for as restricted cash until a suitable replacement property is acquired. In the event that the LKE purchases are not completed, the proceeds are returned to the Company after 180 days and reclassified as available cash. As of March 31, 2012 and December 31, 2011, the Company had $5.6 million and $0.0 million, respectively, of proceeds from real estate sales classified as restricted cash in Other Assets, which were deposited with an LKE intermediary.

5.
JOINT VENTURE INVESTMENT
The Company holds a 26 percent interest in Matariki Forestry Group ("Matariki"), a joint venture ("JV") that owns or leases approximately 0.3 million acres of New Zealand timberlands. In addition to the investment, Rayonier New Zealand Limited ("RNZ"), a wholly-owned subsidiary of Rayonier Inc., serves as the manager of the JV forests and operates a log trading business.
Rayonier’s investment in the JV is accounted for using the equity method of accounting. Income from the JV is reported in the Forest Resources segment as operating income since the Company manages the forests, and its JV interest is an extension of the Company’s operations. A portion of Rayonier’s equity method investment is recorded at historical cost which generates a difference between the book value of the Company’s investment and its proportionate share of the JV’s net assets. The difference represents the Company’s unrecognized gain from RNZ’s sale of timberlands to the JV in 2005. The deferred gain is recognized on a straight-line basis over the estimated number of years the JV expects to harvest the timberlands.

5

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

6.
SHAREHOLDERS’ EQUITY
 An analysis of shareholders’ equity for the three months ended March 31, 2012 and the year ended December 31, 2011 is shown below (share amounts not in thousands):
 
Common Shares
 
Retained
Earnings
 
Accumulated Other Comprehensive Loss
 
Shareholders’
Equity
 
Shares
 
Amount
 
Balance, December 31, 2010
121,023,140

 
$
602,882

 
$
717,058

 
$
(68,358
)
 
$
1,251,582

Net income
—

 
—

 
276,005

 
—

 
276,005

Dividends ($1.52 per share)
—

 
—

 
(186,828
)
 
—

 
(186,828
)
Issuance of shares under incentive stock plans
1,220,731

 
13,451

 
—

 
—

 
13,451

Stock-based compensation
—

 
16,181

 
—

 
—

 
16,181

Excess tax benefit on stock-based compensation
—

 
5,681

 
—

 
—

 
5,681

Repurchase of common shares
(208,694
)
 
(7,909
)
 
—

 
—

 
(7,909
)
Net loss from pension and postretirement plans
—

 
—

 
—

 
(46,263
)
 
(46,263
)
Foreign currency translation adjustment
—

 
—

 
—

 
3,546

 
3,546

Joint venture cash flow hedges
—

 
—

 
—

 
(2,373
)
 
(2,373
)
Balance, December 31, 2011
122,035,177

 
$
630,286

 
$
806,235

 
$
(113,448
)
 
$
1,323,073

Net income
—

 
—

 
53,437

 
—

 
53,437

Dividends ($0.40 per share)
—

 
—

 
(48,985
)
 
—

 
(48,985
)
Issuance of shares under incentive stock plans
585,351

 
2,061

 
—

 
—

 
2,061

Stock-based compensation
—

 
6,466

 
—

 
—

 
6,466

Excess tax benefit on stock-based compensation
—

 
3,946

 
—

 
—

 
3,946

Repurchase of common shares
(169,757
)
 
(7,783
)
 
—

 
—

 
(7,783
)
Amortization of gains/losses from pension and postretirement plans
—

 
—

 
—

 
3,140

 
3,140

Foreign currency translation adjustment
—

 
—

 
—

 
5,825

 
5,825

Joint venture cash flow hedges
—

 
—

 
—

 
1,205

 
1,205

Balance, March 31, 2012
122,450,771

 
$
634,976

 
$
810,687

 
$
(103,278
)
 
$
1,342,385

 
7.
SEGMENT AND GEOGRAPHICAL INFORMATION
Rayonier operates in four reportable business segments: Forest Resources, Real Estate, Performance Fibers, and Wood Products. Forest Resources sales include all activities that relate to the harvesting of timber. Real Estate sales include all property sales, including those designated for higher and better use ("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 Condensed Consolidated Statements of Income and Comprehensive Income is equal to segment income (loss). Certain income (loss) items in the Condensed 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 management to be part of segment operations.

6

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

Total assets, sales, operating income (loss) and depreciation, depletion and amortization by segment including Corporate were as follows:
 
March 31,
 
December 31,
ASSETS
2012
 
2011
Forest Resources
$
1,618,311

 
$
1,603,515

Real Estate
107,080

 
102,682

Performance Fibers
706,260

 
646,447

Wood Products
21,758

 
21,264

Other Operations
23,456

 
24,576

Corporate and other
317,018

 
170,864

Total
$
2,793,883

 
$
2,569,348

 
 
Three Months Ended March 31,
SALES
2012
 
2011
Forest Resources
$
52,195

 
$
48,180

Real Estate
12,647

 
13,462

Performance Fibers
250,855

 
251,163

Wood Products
19,209

 
15,790

Other Operations
21,140

 
30,412

Intersegment Eliminations (a)
(266
)
 
(1,276
)
Total
$
355,780

 
$
357,731

(a)
Intersegment eliminations primarily reflect sales from our Forest Resources segment to our Performance Fibers segment.
  
 
Three Months Ended March 31,
OPERATING INCOME (LOSS)
2012
 
2011
Forest Resources
$
8,005

 
$
11,050

Real Estate
6,478

 
7,372

Performance Fibers
80,630

 
75,710

Wood Products
923

 
453

Other Operations
(931
)
 
799

Corporate and other
(11,096
)
 
(7,806
)
Total
$
84,009

 
$
87,578


 
Three Months Ended March 31,
DEPRECIATION, DEPLETION AND AMORTIZATION
2012
 
2011
Forest Resources
$
16,833

 
$
15,404

Real Estate
1,845

 
2,691

Performance Fibers
11,361

 
12,715

Wood Products
755

 
821

Corporate and other
374

 
239

Total
$
31,168

 
$
31,870


7

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

8.
FAIR VALUE MEASUREMENTS
Fair Value of Financial Instruments
The following table presents the carrying amount and estimated fair values of financial instruments held by the Company at March 31, 2012 and December 31, 2011, using market information and what the Company believes to be appropriate valuation methodologies under generally accepted accounting principles:
 
March 31, 2012
 
December 31, 2011
Asset (liability)
Carrying
Amount
 
Fair Value
 
Carrying
Amount
 
Fair Value
Cash and cash equivalents
$
236,575

 
$
236,575

 
$
78,603

 
$
78,603

Current maturities of long-term debt
(50,512
)
 
(58,213
)
 
(28,110
)
 
(29,319
)
Long-term debt
(973,717
)
 
(1,123,502
)
 
(819,229
)
 
(994,851
)
Rayonier uses the following methods and assumptions in estimating the fair value of its financial instruments:
Cash and cash equivalents — The carrying amount is equal to fair market value.
Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities.
Variable Interest Entity
Rayonier holds a variable interest in a bankruptcy-remote, limited liability subsidiary ("special-purpose entity") which was created in 2004 when Rayonier monetized a $25.0 million installment note and letter of credit received in connection with a timberland sale. The Company contributed the note and a letter of credit to the special-purpose entity and using the installment note and letter of credit as collateral, the special-purpose entity issued $22.6 million of 15-year Senior Secured Notes and remitted cash of $22.6 million to the Company. There are no restrictions that relate to the transferred financial assets. Rayonier maintains a $2.6 million interest in the entity and receives immaterial cash payments equal to the excess of interest received on the installment note over the interest paid on the Senior Secured Notes. The Company's interest is recorded at fair value and is included in "Other Assets" in the Condensed Consolidated Balance Sheets. In addition, the Company calculated and recorded a de minimus guarantee liability to reflect its obligation of up to $2.6 million under a make-whole agreement pursuant to which it guaranteed certain obligations of the entity. This guarantee obligation is also collateralized by the letter of credit. The Company's interest in the entity, together with the make-whole agreement, represents the maximum exposure to loss as a result of the Company's involvement with the special-purpose entity. Upon maturity of the Senior Secured Notes in 2019 and termination of the special-purpose entity, Rayonier will receive the remaining $2.6 million of cash. The Company determined, based upon an analysis under the variable interest entity guidance, that it does not have the power to direct activities that most significantly impact the entity's economic success. Therefore, Rayonier is not the primary beneficiary and is not required to consolidate the entity.
Assets measured at fair value on a recurring basis are summarized below:
 
Asset
 
Carrying Value at
March 31, 2012
 
Level 2
 
Carrying Value at
December 31, 2011
 
Level 2
Investment in special-purpose entity
 
$
2,690

 
$
2,690

 
$
2,690

 
$
2,690

 
 
 
 
 
 
 
 
 
The fair value of the investment in the special-purpose entity is determined by summing the discounted value of future principal and interest payments that Rayonier will receive from the special-purpose entity. The interest rate of a similar instrument is used to determine the discounted value of the payments.


8

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

9.
GUARANTEES
 The Company provides financial guarantees as required by creditors, insurance programs, and state and foreign governmental agencies. As of March 31, 2012, the following financial guarantees were outstanding:
Financial Commitments
 
Maximum Potential
Payment
 
Carrying Amount
of Liability
Standby letters of credit (a)
$
43,477

 
$
38,110

Guarantees (b)
 
2,555

 
43

Surety bonds (c)
 
6,134

 
1,330

Total financial commitments
$
52,166

 
$
39,483

(a)
Approximately $39 million of the standby letters of credit serve as credit support for industrial revenue bonds. The remaining letters of credit support various insurance related agreements, primarily workers’ compensation and pollution liability policy requirements. These letters of credit will expire at various dates during 2012 and 2013 and will be renewed as required.
(b)
In conjunction with a timberland sale and note monetization in the first quarter of 2004, the Company issued a make-whole agreement pursuant to which it guaranteed $2.6 million of obligations of a special-purpose entity that was established to complete the monetization. At March 31, 2012, the Company has a de minimus liability to reflect the fair market value of its obligation to perform under the make-whole agreement.
(c)
Rayonier issues surety bonds primarily to secure timber harvesting obligations in the State of Washington and to provide collateral for the Company’s workers’ compensation self-insurance program in that state. These surety bonds expire at various dates between 2012 and 2014 and are expected to be renewed as required.
 
10.
LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS
An analysis of the liabilities for dispositions and discontinued operations follows:
 
March 31,
 
December 31,
 
 
2012
 
2011
 
Balance, beginning of period
$
90,824

 
$
93,160

 
Expenditures charged to liabilities
(1,711
)
 
(9,209
)
 
Increase to liabilities
12

 
6,873

 
Balance, end of period
89,125

 
90,824

 
Less: Current portion
(9,931
)
 
(9,931
)
 
Non-current portion
$
79,194

 
$
80,893

 
The Company is exposed to the risk of reasonably possible additional losses in excess of the established liabilities. As of March 31, 2012, this amount could range up to $29 million, allocable over several of the applicable sites, and arises from uncertainty over the availability, feasibility or effectiveness of certain remediation technologies, additional or different contamination that may be discovered, development of new or more effective environmental remediation technologies and the exercise of discretion in interpretation of applicable law and regulations by governmental agencies.
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.
 
11.
CONTINGENCIES
Rayonier is engaged in various legal actions, including certain environmental proceedings, and has been named as a defendant in various other lawsuits and claims arising in the normal course of business. While the Company has procured reasonable and customary insurance covering risks normally occurring in connection with its businesses, it has in certain cases retained some risk through the operation of self-insurance, primarily in the areas of workers’ compensation, property insurance and general liability. These other lawsuits and claims, either individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flow.

9

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

12.
EMPLOYEE BENEFIT PLANS
The Company has four qualified non-contributory defined benefit pension plans covering a significant majority of its employees and an unfunded plan that provides benefits in excess of amounts allowable under current tax law in the qualified plans. The Company closed enrollment in its pension plans to salaried employees hired after December 31, 2005, to Fernandina hourly employees hired after April 30, 2006, to Jesup hourly employees hired after March 4, 2009 and to Wood Products hourly employees hired after February 28, 2011. Currently, all plans are closed to new participants. 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.
The net pension and postretirement benefit costs that have been recognized during the stated periods are shown in the following table:
 
Pension
Postretirement
 
Three Months Ended March 31,
 
Three Months Ended March 31,
 
2012
 
2011
 
2012
 
2011
Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
Service cost
$
1,940

 
$
1,695

 
$
210

 
$
182

Interest cost
3,989

 
4,522

 
223

 
236

Expected return on plan assets
(5,879
)
 
(6,455
)
 
—

 
—

Amortization of prior service cost
302

 
340

 
6

 
22

Amortization of losses
4,056

 
2,593

 
144

 
66

Net periodic benefit cost
$
4,408

 
$
2,695

 
$
583

 
$
506

 
 
 
 
 
 
 
 
 
The Company made no discretionary contributions to the pension plans during the three months ended March 31, 2012. The Company has no mandatory pension contribution requirements for 2012, but may make discretionary contributions.

13.
DEBT
In March 2012, Rayonier issued $325 million of 3.75% Senior Notes due 2022. Approximately $150 million of the proceeds from these notes were used to repay borrowings outstanding under the Company's revolving credit facility. The Company had $445 million of available borrowings under the revolving credit facility at March 31, 2012.
As of March 31, 2012, the $172.5 million 4.50% Senior Exchangeable Notes due 2015 became exchangeable at the option of the holders for the calendar quarter ending June 30, 2012. Per the indenture, in order for the notes to become exchangeable, the Company's stock price must exceed 130 percent of the exchange price for 20 trading days in a period of 30 consecutive trading days as of the last day of the quarter. Of the $172.5 million in principal, $145.1 million remained classified as long-term debt due to the ability and intent of the Company to refinance it on a long-term basis.
There were no other significant changes to the Company's outstanding debt as reported in Note 11 — Debt of the Company's 2011 Annual Report on Form 10-K.
Subsequent Event
An asset sales covenant in the Rayonier Forest Resources ("RFR") $112.5 million installment note agreement 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 April 2012, the excess proceeds exceeded the $50 million limit and as a result, repayment of $59.9 million has been offered to the note holders through May 15, 2012, at which time the excess proceeds will reset to zero.

10

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

14.
ACCUMULATED OTHER COMPREHENSIVE LOSS
Accumulated Other Comprehensive Loss was comprised of the following:
 
March 31, 2012
 
December 31, 2011
Foreign currency translation adjustments (a)
$
40,302

 
$
34,477

Joint venture cash flow hedges
(2,636
)
 
(3,841
)
Unrecognized components of employee benefit plans, net of tax
(140,944
)
 
(144,084
)
Total
$
(103,278
)
 
$
(113,448
)
(a) During the three months ended March 31, 2012, the increase in net foreign currency translation adjustments was due to the strengthening of the New Zealand dollar against the U.S. dollar.





11

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

15.
CONSOLIDATING FINANCIAL STATEMENTS
The consolidating financial information below follows the same accounting policies as described in the consolidated financial statements, except for the use of the equity method of accounting to reflect ownership interests in wholly-owned subsidiaries, which are eliminated upon consolidation, and the allocation of certain expenses of Rayonier Inc. incurred for the benefit of its subsidiaries.
In 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 fully and unconditionally guaranteed by Rayonier Inc. as the Parent Guarantor and Rayonier Operating Company LLC ("ROC") as the Subsidiary Guarantor. 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.

 
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the Three Months Ended March 31, 2012
 
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
$
—

 
$
—

 
$
—

 
$
335,438

 
$
38,171

 
$
(17,829
)
 
$
355,780

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales
—

 
—

 
—

 
247,054

 
26,818

 
(20,559
)
 
253,313

Selling and general expenses
—

 
3,311

 
—

 
15,512

 
796

 
—

 
19,619

Other operating expense  (income), net
—

 
121

 
—

 
1,512

 
(2,781
)
 
—

 
(1,148
)
 
—

 
3,432

 
—

 
264,078

 
24,833

 
(20,559
)
 
271,784

Equity in income (loss) of New Zealand joint venture
—

 
—

 
—

 
171

 
(158
)
 
—

 
13

OPERATING (LOSS) INCOME
—

 
(3,432
)
 
—

 
71,531

 
13,180

 
2,730

 
84,009

Interest expense
(1,249
)
 
(238
)
 
(10,226
)
 
687

 
(799
)
 
—

 
(11,825
)
Interest and miscellaneous income (expense), net
1,912

 
1,327

 
(1,208
)
 
(3,904
)
 
1,850

 
—

 
(23
)
Equity in income from subsidiaries
52,774

 
55,446

 
45,745

 
—

 
—

 
(153,965
)
 
—

INCOME BEFORE INCOME TAXES
53,437

 
53,103

 
34,311

 
68,314

 
14,231

 
(151,235
)
 
72,161

Income tax (expense) benefit
—

 
(329
)
 
4,174

 
(22,569
)
 
—

 
—

 
(18,724
)
NET INCOME
$
53,437

 
$
52,774

 
$
38,485

 
$
45,745

 
$
14,231

 
$
(151,235
)
 
$
53,437

OTHER COMPREHENSIVE INCOME
10,170

 
10,170

 
102

 
102

 
7,132

 
(17,506
)
 
10,170

COMPREHENSIVE INCOME
$
63,607

 
$
62,944

 
$
38,587

 
$
45,847

 
$
21,363

 
$
(168,741
)
 
$
63,607

 

12

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

 
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the Three Months Ended March 31, 2011
 
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
$
—

 
$
—

 
$
—

 
$
328,265

 
$
42,833

 
$
(13,367
)
 
$
357,731

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales
—

 
—

 
—

 
244,297

 
27,997

 
(14,783
)
 
257,511

Selling and general expenses
—

 
2,716

 
—

 
13,070

 
647

 
—

 
16,433

Other operating expense (income), net
—

 
49

 
—

 
298

 
(2,464
)
 
(1
)
 
(2,118
)
 
—

 
2,765

 
—

 
257,665

 
26,180

 
(14,784
)
 
271,826

Equity in income of New Zealand joint venture
—

 
—

 
—

 
194

 
1,479

 
—

 
1,673

OPERATING (LOSS) INCOME
—

 
(2,765
)
 
—

 
70,794

 
18,132

 
1,417

 
87,578

Interest expense
—

 
(130
)
 
(13,050
)
 
(112
)
 
(25
)
 
—

 
(13,317
)
Interest and miscellaneous income (expense), net
—

 
1,337

 
(1,073
)
 
(5,024
)
 
5,053

 
—

 
293

Equity in income from subsidiaries
58,412

 
60,044

 
44,435

 
—

 
—

 
(162,891
)
 
—

INCOME BEFORE INCOME TAXES
58,412

 
58,486

 
30,312

 
65,658

 
23,160

 
(161,474
)
 
74,554

Income tax (expense) benefit
—

 
(74
)
 
5,155

 
(21,223
)
 
—

 
—

 
(16,142
)
NET INCOME
$
58,412

 
$
58,412

 
$
35,467

 
$
44,435

 
$
23,160

 
$
(161,474
)
 
$
58,412

OTHER COMPREHENSIVE INCOME (LOSS)
1,814

 
1,814

 
149

 
149

 
(191
)
 
(1,921
)
 
1,814

COMPREHENSIVE INCOME
$
60,226

 
$
60,226

 
$
35,616

 
$
44,584

 
$
22,969

 
$
(163,395
)
 
$
60,226

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 



13

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

 
CONDENSED CONSOLIDATING BALANCE SHEETS
As of March 31, 2012
 
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
$
131,626

 
$
27,671

 
$
60,750

 
$
8,520

 
$
8,008

 
$
—

 
$
236,575

Accounts receivable, less allowance for doubtful accounts
—

 
24

 
—

 
94,699

 
2,475

 
—

 
97,198

Inventory
—

 
—

 
—

 
110,274

 
—

 
(7,957
)
 
102,317

Intercompany interest receivable
—

 
—

 
—

 
—

 
3,111

 
(3,111
)
 
—

Prepaid and other current assets
—

 
974

 
796

 
53,540

 
6,700

 
—

 
62,010

Total current assets
131,626

 
28,669

 
61,546

 
267,033

 
20,294

 
(11,068
)
 
498,100

TIMBER AND TIMBERLANDS,
NET OF DEPLETION AND AMORTIZATION
—

 
—

 
—

 
40,154

 
1,462,277

 
1,860

 
1,504,291

NET PROPERTY, PLANT AND EQUIPMENT
—

 
2,484

 
—

 
517,340

 
2,186

 
—

 
522,010

INVESTMENT IN JOINT VENTURE
—

 
—

 
—

 
(11,281
)
 
85,669

 
—

 
74,388

INVESTMENT IN SUBSIDIARIES
1,328,752

 
1,524,491

 
1,202,519

 
—

 
—

 
(4,055,762
)
 
—

INTERCOMPANY NOTES RECEIVABLE
204,420

 
—

 
19,262

 
—

 
—

 
(223,682
)
 
—

OTHER ASSETS
3,535

 
26,802

 
5,750

 
699,073

 
12,469

 
(552,535
)
 
195,094

TOTAL ASSETS
$
1,668,333

 
$
1,582,446

 
$
1,289,077

 
$
1,512,319

 
$
1,582,895

 
$
(4,841,187
)
 
$
2,793,883

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
—

 
$
2,058

 
$
9

 
$
97,448

 
$
1,166

 
$
—

 
$
100,681

Current maturities of long-term debt
—

 
—

 
50,512

 
—

 
—

 
—

 
50,512

Accrued taxes
—

 
525

 
—

 
14,188

 
2,637

 
—

 
17,350

Accrued payroll and benefits
—

 
8,211

 
—

 
10,572

 
1,539

 
—

 
20,322

Accrued interest
948

 
366

 
8,818

 
334

 
609

 
—

 
11,075

Accrued customer incentives
—

 
—

 
—

 
7,148

 
—

 
—

 
7,148

Other current liabilities
—

 
2,237

 
—

 
7,367

 
6,460

 
—

 
16,064

Current liabilities for dispositions and discontinued operations
—

 
—

 
—

 
9,931

 
—

 
—

 
9,931

Total current liabilities
948

 
13,397

 
59,339

 
146,988

 
12,411

 
—

 
233,083

LONG-TERM DEBT
325,000

 
—

 
560,420

 
—

 
88,297

 
—

 
973,717

NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS
—

 
—

 
—

 
79,194

 
—

 
—

 
79,194

PENSION AND OTHER POSTRETIREMENT BENEFITS
—

 
113,491

 
—

 
27,026

 
—

 
—

 
140,517

OTHER NON-CURRENT LIABILITIES
—

 
17,557

 
—

 
6,809

 
621

 
—

 
24,987

INTERCOMPANY PAYABLE
—

 
109,249

 
—

 
49,783

 
215,307

 
(374,339
)
 
—

TOTAL LIABILITIES
325,948

 
253,694

 
619,759

 
309,800

 
316,636

 
(374,339
)
 
1,451,498

TOTAL SHAREHOLDERS’ EQUITY
1,342,385

 
1,328,752

 
669,318

 
1,202,519

 
1,266,259

 
(4,466,848
)
 
1,342,385

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
1,668,333

 
$
1,582,446

 
$
1,289,077

 
$
1,512,319

 
$
1,582,895

 
$
(4,841,187
)
 
$
2,793,883


14

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

 
CONDENSED CONSOLIDATING BALANCE SHEETS
As of December 31, 2011
 
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
$
—

 
$
8,977

 
$
59,976

 
$
7,398

 
$
2,252

 
$
—

 
$
78,603

Accounts receivable, less allowance for doubtful accounts
—

 
3

 
—

 
94,399

 
606

 
—

 
95,008

Inventory
—

 
—

 
—

 
133,300

 
—

 
(11,302
)
 
121,998

Intercompany interest receivable
—

 
—

 
—

 
—

 
3,848

 
(3,848
)
 
—

Prepaid and other current assets
—

 
2,328

 
808

 
36,937

 
8,820

 
—

 
48,893

Total current assets
—

 
11,308

 
60,784

 
272,034

 
15,526

 
(15,150
)
 
344,502

TIMBER AND TIMBERLANDS,
NET OF DEPLETION AND AMORTIZATION
—

 
—

 
—

 
39,824

 
1,462,027

 
1,860

 
1,503,711

NET PROPERTY, PLANT AND EQUIPMENT
—

 
2,551

 
—

 
456,754

 
2,247

 
—

 
461,552

INVESTMENT IN JOINT VENTURE
—

 
—

 
—

 
(11,006
)
 
80,225

 
—

 
69,219

INVESTMENT IN SUBSIDIARIES
1,238,661

 
1,490,444

 
1,156,896

 
—

 
—

 
(3,886,001
)
 
—

INTERCOMPANY NOTES RECEIVABLE
204,420

 
—

 
19,073

 
—

 
—

 
(223,493
)
 
—

OTHER ASSETS
—

 
26,850

 
6,491

 
702,087

 
6,856

 
(551,920
)
 
190,364

TOTAL ASSETS
$
1,443,081

 
$
1,531,153

 
$
1,243,244

 
$
1,459,693

 
$
1,566,881

 
$
(4,674,704
)
 
$
2,569,348

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
—

 
$
1,801

 
$
10

 
$
69,648

 
$
1,414

 
$
—

 
$
72,873

Current maturities of long-term debt
—

 
—

 
28,110

 
—

 
—

 
—

 
28,110

Accrued taxes
—

 
(27
)
 
—

 
3,934

 
1,316

 
—

 
5,223

Accrued payroll and benefits
—

 
13,810

 
—

 
10,563

 
2,473

 
—

 
26,846

Accrued interest
8

 
246

 
5,442

 
739

 
609

 
—

 
7,044

Accrued customer incentives
—

 
—

 
—

 
10,369

 
—

 
—

 
10,369

Other current liabilities
—

 
1,886

 
—

 
9,199

 
6,770

 
—

 
17,855

Current liabilities for dispositions and discontinued operations
—

 
—

 
—

 
9,931

 
—

 
—

 
9,931

Total current liabilities
8

 
17,716

 
33,562

 
114,383

 
12,582

 
—

 
178,251

LONG-TERM DEBT
120,000

 
30,000

 
580,647

 
—

 
88,582

 
—

 
819,229

NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS
—

 
—

 
—

 
80,893

 
—

 
—

 
80,893

PENSION AND OTHER POSTRETIREMENT BENEFITS
—

 
112,904

 
—

 
27,719

 
—

 
—

 
140,623

OTHER NON-CURRENT LIABILITIES
—

 
20,210

 
—

 
6,396

 
673

 
—

 
27,279

INTERCOMPANY PAYABLE
—

 
111,662

 
—

 
73,406

 
203,208

 
(388,276
)
 
—

TOTAL LIABILITIES
120,008

 
292,492

 
614,209

 
302,797

 
305,045

 
(388,276
)
 
1,246,275

TOTAL SHAREHOLDERS’ EQUITY
1,323,073

 
1,238,661

 
629,035

 
1,156,896

 
1,261,836

 
(4,286,428
)
 
1,323,073

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
1,443,081

 
$
1,531,153

 
$
1,243,244

 
$
1,459,693

 
$
1,566,881

 
$
(4,674,704
)
 
$
2,569,348

 

15

Table of Contents
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands unless otherwise stated)

 
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2012
 
Rayonier Inc.
(Parent
Guarantor)
 
ROC (Subsidiary Guarantor)
 
Rayonier TRS
Holdings Inc.
(Issuer)
 
Subsidiaries of
Rayonier TRS
Holdings Inc.
(Non-